A. Reyes v. Educational Credit Management

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 23, 2019
• Docket: 17-56930
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 23 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

A. J. REYES, on behalf of himself, and all No. 17-56930 others similarly situated, D.C. No. Plaintiff-Appellee, 3:15-cv-00628-BAS-AGS

v. MEMORANDUM* EDUCATIONAL CREDIT MANAGEMENT CORPORATION,

Defendant-Appellant.

Appeal from the United States District Court for the Southern District of California Cynthia A. Bashant, District Judge, Presiding

Argued and Submitted July 8, 2019 Pasadena, California

Before: M. SMITH and FRIEDLAND, Circuit Judges, and AMON,** District Judge.

Educational Credit Management Corporation (“ECMC”) appeals the district

court’s order certifying a class action brought by named plaintiff A.J. Reyes.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Carol Bagley Amon, United States District Judge for the Eastern District of New York, sitting by designation. Reyes alleges that ECMC unlawfully recorded some of his and other class

members’ cellular telephone conversations with ECMC in violation of California’s

Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq. Because we hold

that the district court abused its discretion in certifying the class without resolving

whether Reyes heard ECMC’s warning that his call would be recorded and thus

consented to such recording, we vacate the class certification order and remand to

the district court for further proceedings.

Before certification, the district court “must conduct a ‘rigorous analysis’ to

determine whether the party seeking certification has met the prerequisites of Rule

23.” Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001)

(quoting Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1233 (9th Cir. 1996)).

As part of this inquiry, the district court has an obligation to ensure that the named

plaintiff is a member of the class he seeks to represent, which sometimes involves

delving into the merits to resolve factual disputes to the extent necessary to

determine whether the Rule 23 elements have been met. See Wal-Mart Stores, Inc.

v. Dukes, 564 U.S. 338, 350-51 (2011); Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.

147, 156 (1982). Because a class action cannot go forward without a named

plaintiff, a putative class action lacking an appropriate named plaintiff should be

dismissed. Lierboe v. State Farm Mut. Auto. Ins. Co., 350 F.3d 1018, 1023 (9th

Cir. 2003) (dismissing a class action because the named plaintiff lacked a

2 cognizable claim under state law and therefore could not represent the class); see

also NEI Contracting & Eng’g, Inc. v. Hanson Aggregates Pac. Sw., Inc., 926 F.3d

528, 532 (9th Cir. 2019) (reaffirming Lierboe).

Here, the district court certified a class of callers who were recorded by

ECMC without consent. But the court then did not decide whether Reyes heard the

warning that the call was being recorded, which, under state law, plainly would

constitute consent to recording. See Kearney v. Salomon Smith Barney, Inc., 137

P.3d 914, 930 (Cal. 2006) (“A business that adequately advises all parties to a

telephone call, at the outset of the conversation, of its intent to record the call

would not violate” CIPA’s prohibition on recording telephone conversations.).

Consequently, it is not clear that Reyes is a member of the class he seeks to

represent or has a CIPA claim at all. We therefore vacate and remand so the

district court may determine whether Reyes has met his burden of proving that he

did not hear the recording warning.1 If he did hear the warning, he cannot be a

member of the class as currently defined and the lawsuit should be dismissed. See

Lierboe, 350 F.3d at 1023.

1 It appears that, under California law, the plaintiff bringing a CIPA claim has the burden to prove that the defendant lacked consent to record. See Judicial Council of Cal. Civil Jury Instruction 1809 (Pen. Code §§ 632, 637.2) (Mar. 2019) (“To establish this claim, [name of plaintiff] must prove… [t]hat [name of defendant] did not have the consent of all parties to the conversation to [eavesdrop on/record] it.” (first and fourth alterations in original)).

3 The district court’s class certification order is VACATED and

REMANDED for further proceedings.