Floyd v. Saratoga Diagnostics, Inc.

Opinion

8 UNITED STATES DISTRICT COURT

9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11

12 LOUIS FLOYD, individually and on behalf Case No. 20-CV-01520-LHK of others similarly situated, 13 Plaintiff, ORDER DENYING WITHOUT PREJUDICE PLAINTIFF’S MOTION 14 v. FOR CLASS CERTIFICATION 15 SARATOGA DIAGNOSTICS, INC., and 16 THOMAS PALLONE 17 Defendants. 18 Plaintiff Louis Floyd (“Plaintiff”) brings this putative class action against Defendants 19 Saratoga Diagnostics, Inc. (“Saratoga”) and Thomas Pallone (collectively, “Defendants”) under 20 the Telephone Consumer Protection Act, as amended by the Junk Fax Prevention Act. Complaint, 21 ECF No. 1, at ¶ 4 (“Comp.”). Before the Court is Plaintiff’s motion for class certification. ECF 22 No. 35 (“Mot.”).1 Having considered Plaintiff’s submissions, the relevant law, and the record in 23 this case, the Court DENIES without prejudice Plaintiff’s motion for class certification. 24 25 1 Plaintiff’s motion for class certification contains a notice of motion paginated separately from the 26 points and authorities in support of the motion. ECF No. 35, at i. Civil Local Rule 7-2(b) provides that the notice of motion and points and authorities must be contained in one document 27 with the same pagination. I. BACKGROUND 1 A. Factual Background 2 Plaintiff Floyd is a resident of Campbell, California. Comp. at ¶ 1. Defendant Saratoga is 3 a California corporation with its principal place of business in Saratoga, California. Id. at ¶ 2. 4 Defendant Pallone is the President of Saratoga. Id. at ¶ 27. 5 On March 12, 2019, Defendants transmitted a facsimile advertisement by fax to Plaintiff. 6 Id. at ¶ 18. This fax advertised continuing medical education seminars. Id. Plaintiff did not 7 provide permission or invite Defendants to send a fax to Plaintiff and Plaintiff has no prior 8 relationship with Defendants. Id. at ¶ 23. 9 Plaintiff alleges on information and belief that Defendants faxed the same unsolicited 10 facsimile to more than 40 other recipients without those recipients’ permission or invitation. Id. at 11 ¶ 24. 12 B. Procedural History 13 Plaintiff filed a complaint in the instant action on March 1, 2020. ECF No. 1. Plaintiff’s 14 complaint alleges a single cause of action for violation of the Telephone Consumer Protection Act 15 (“TCPA”), as amended by the Junk Fax Prevention Act (“JFPA”), 47 U.S.C. § 227, et seq. Id. at ¶ 16 42. 17 Plaintiff served Pallone by mail on July 13, 2020. ECF No. 24. Plaintiff served Saratoga 18 via the California Secretary of State on August 17, 2020. ECF No. 27. To date, neither Defendant 19 has appeared in this case. 20 On October 14, 2020, Plaintiff filed a motion for entry of default against both Defendants. 21 ECF No. 28. On October 14, 2020, the Clerk of the Court entered default against both 22 Defendants. ECF No. 29, 33. 23 On November 25, 2020, Plaintiff filed the instant motion for class certification. ECF No. 24 35 (“Mot.”). Plaintiff seeks to certify the following class under Federal Rule of Civil Procedure 25 23(b)(2) or 23(b)(3): 26 All persons who (1) on or after four years prior to the filing of this action, (2) 27 were sent, by Defendants or on Defendants’ behalf, (3) a telephone facsimile message substantially similar to Exhibit A, (4) from whom Defendants claim 1 they obtained prior express permission or invitation to send those faxes in the same manner as Defendants claim they obtained prior express permission or 2 invitation to fax the Plaintiff, and (5) for whom Defendants had no prior business relationship. 3 Mot. at 1; Comp. at ¶ 32. Furthermore, Plaintiff seeks to have Plaintiff’s counsel, Patrick H. 4 Peluso and Taylor T. Smith of Woodrow & Peluso, LLC, appointed as class counsel. Id. at 12. 5 Finally, Plaintiff requests a 120-day period to conduct limited discovery. Specifically, Plaintiff 6 seeks to conduct third-party discovery to “establish a notice plan, class wide damages, and 7 determine what assets Defendants possess.” Id. 8 II. LEGAL STANDARD 9 Class actions are governed by Rule 23 of the Federal Rules of Civil Procedure. Rule 23 10 does not set forth a mere pleading standard. To obtain class certification, a plaintiff bears the 11 burden of showing that he has affirmatively met each of the four requirements of Rule 23(a) and at 12 least one subsection of Rule 23(b). Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186, 13 amended by 273 F.3d 1266 (9th Cir. 2001). After an entry of default, the Court accepts the well- 14 pleaded factual allegations in the complaint as true. See TeleVideo Systems, Inc. v. Heidenthal, 15 826 F.2d 915, 917–18 (9th Cir. 1987). However, “[a] party seeking class certification must 16 affirmatively demonstrate . . . compliance with the Rule[.]” Wal-Mart Stores, Inc. v. Dukes, 564 17 U.S. 338, 350 (2011). 18 Rule 23(a) provides that a district court may certify a class only if: “(1) the class is so 19 numerous that joinder of all members is impracticable; (2) there are questions of law or fact 20 common to the class; (3) the claims or defenses of the representative parties are typical of the 21 claims or defenses of the class; and (4) the representative parties will fairly and adequately protect 22 the interests of the class.” Fed. R. Civ. P. 23(a)(1)-(4). That is, the class must satisfy the 23 requirements of numerosity, commonality, typicality, and adequacy of representation to maintain a 24 class action. Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012). 25 If all four prerequisites of Rule 23(a) are satisfied, the Court must also find that Plaintiff 26 “satisfy[ies] through evidentiary proof” at least one of the three subsections of Rule 23(b). 27 1 Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013). Rule 23(b) sets forth three general types of 2 class actions. See Fed. R. Civ. P. 23(b)(1)–(b)(3). As relevant here, Plaintiff seeks certification 3 under Rule 23(b)(3) or Rule 23(b)(2). A class may be certified under 23(b)(3) if a court finds that 4 “questions of law or fact common to class members predominate over any questions affecting only 5 individual members, and that a class action is superior to other available methods for fairly and 6 efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). A class may be certified under 7 23(b)(2) if a court finds that “the party opposing the class has acted or refused to act on grounds 8 that apply generally to the class, so that final injunctive or corresponding declaratory relief is 9 appropriate respecting the class as a whole.” Fed. R. Civ. P. 23(b)(2). 10 “[A] court’s class-certification analysis must be ‘rigorous’ and may ‘entail some overlap 11 with the merits of the plaintiff’s underlying claim[.]’” Amgen Inc. v. Conn. Ret. Plans & Trust 12 Funds, 568 U.S. 455, 465–66 (2013) (quoting Dukes, 564 U.S. at 351). This “rigorous” analysis 13 applies to both Rule 23(a) and Rule 23(b). Comcast, 569 U.S. at 34. (discussing how Congress 14 included “addition[al] . . . procedural safeguards for (b)(3) class members beyond those provided 15 for (b)(1) or (b)(2) class members (e.g., an opportunity to opt out),” and how a court has a “duty to 16 take a ‘close look’ at whether common questions predominate over individual ones”). When 17 conducting this rigorous analysis, the Court may be required to “judg[e] the persuasiveness of the 18 evidence presented.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011). 19 Nevertheless, “Rule 23 grants courts no license to engage in free-ranging merits inquiries 20 at the certification stage.” Amgen, 568 U.S. at 466. “Merits questions may be considered to the 21 extent—but only to the extent—that they are relevant to determine whether the Rule 23 22 prerequisites for class certification are satisfied.” Id. If a court concludes that the moving party 23 has met its burden of proof, then the court has broad discretion to certify the class. Zinser, 253 24 F.3d at 1186. 25 III. DISCUSSION 26 Plaintiff contends that he has met all threshold requirements for class certification under 27 Rule 23(a), and therefore seeks certification of a damages class under Rule 23(b)(3) or an 1 injunctive relief class under Rule 23(b)(2). 2 The Court first addresses the numerosity requirement of Rule 23(a)(1) below. Because 3 Plaintiff’s failure to establish numerosity is sufficient to require denial of class certification, the 4 Court need not reach Plaintiff’s further arguments for class certification under Rule 23(a) and Rule 5 23(b). 6 A. Plaintiff Has Failed to Establish Numerosity under Rule 23(a)(1) 7 In order to establish numerosity under Federal Rule of Civil Procedure 23(a)(1), Plaintiff 8 must show that “the class is so numerous that joinder of all members is impracticable.” Fed. R. 9 Civ. P. 23(a)(1). When evaluating numerosity, the Court considers the specific facts of the case 10 and the rule itself “imposes no absolute limitations.” Gen. Tel. Co. of the Nw., Inc. v. EEOC, 446 11 U.S. 318, 330 (1980). However, “[a]s a general rule, classes of 20 are too small, classes of 20–40 12 may or may not be big enough depending on the circumstances of each case, and classes of 40 or 13 more are numerous enough.” Keegan v. Am. Honda Motor Co., Inc., 284 F.R.D. 504, 522 (C.D. 14 Cal. 2012). In analyzing numerosity “a court may make common-sense assumptions and 15 reasonable inferences.” The Civil Rights Educ. & Enforcement Ctr. v. RLJ Lodging Trust, 2016 16 WL 314400, at *6 (N.D. Cal. 2016). 17 Plaintiff argues that he has satisfied Rule 23(a)(1) because Plaintiff has adequately pled 18 that Defendants sent faxes to hundreds if not thousands of individuals who fall into the putative 19 class. Mot. at 6. Plaintiff also argues that “common sense dictates that for a facsimile advertising 20 scheme to have any worthwhile result, Defendants would have had to fax hundreds if not 21 thousands of individuals.” Id. 22 However, Plaintiff’s complaint is not clear on the number of individuals that Defendants 23 faxed with the unsolicited advertisement. In the factual background section of Plaintiff’s 24 complaint, Plaintiff alleges that “[o]n information and belief, Defendants faxed the same 25 unsolicited facsimile to Plaintiff and more than 40 other recipients without first receiving the 26 recipients’ express permission or invitation.” CAC at ¶ 24. By contrast, in the class action section 27 of the complaint, Plaintiff states that “Plaintiff is informed and believes, and upon such 1 information and belief avers, that the number of class members is in the thousands.” Id. at ¶ 36. 2 At no point does Plaintiff explain the discrepancy between these two allegations in the complaint. 3 This lack of clarity undermines Plaintiff’s argument that he has affirmatively demonstrated “that 4 there are in fact sufficiently numerous parties” under Rule 23(a)(1). Dukes, 564 U.S. at 350. 5 Moreover, despite the fact that Plaintiff argues that hundreds if not thousands of other 6 individuals received the same unsolicited advertisement by fax from Defendants, Plaintiff has not 7 provided evidence that a single other individual received the same fax from Defendants. This lack 8 of supporting evidence of numerosity is fatal to Plaintiff’s argument that he has affirmatively met 9 the numerosity requirement of Rule 23(a)(1). “Rule 23 does not set forth a mere pleading 10 standard. A party seeking class certification must affirmatively demonstrate his compliance with 11 the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, 12 common questions of law or fact, etc.” Dukes, 564 U.S. at 350. As such, Plaintiff must provide 13 specific evidence of numerosity beyond a mere assertion that hundreds if not thousands of putative 14 class members exist. 15 Comparing this case to other cases where class certification has been granted or denied 16 after default confirms the Court’s conclusion. For example, in Whitaker v. Bennett Law the court 17 granted class certification after defendant defaulted on a TCPA claim. Whitaker v. Bennett Law, 18 PLLC, 2014 WL 5454398, at *7 (S.D. Cal. Oct. 27, 2014). The court found that there was 19 sufficient evidence to demonstrate that the class would be of such a size that joinder of all 20 members would be impractical. Id. Specifically, the court based its finding of numerosity on: (1) 21 plaintiff’s allegation that there were thousands of putative class members; and (2) the fact that 22 “[n]umerous online forums exist where a vast amount of complaints have been lodged against 23 [defendant] regarding unethical debt collection endeavors, ranging from allegations of harassment 24 to violations of the TCPA.” Id. at *4. In light of the numerous online complaints against 25 defendant complaining of the same violation of the TCPA, the court found that plaintiff had met 26 Rule 23(a)(1)’s numerosity requirement. Id. 27 Similarly, in Jackson v. Paycron the court granted class certification after defendant 1 defaulted on a TCPA claim. 2019 WL 2085430, at *4 (M.D. Fla. May 13, 2019). The court found 2 that there was sufficient evidence of numerosity because: (1) “telemarketing campaigns generally 3 place calls to hundreds of thousands or even millions of potential customers”; (2) there were a 4 large number of online complaints regarding defendant’s unsolicited calls; and (3) “[d]efendant 5 used an autodialer, which is used precisely because of its capacity to call consumers en masse.” 6 Id. at *2. The court found that this evidence, taken together, was sufficient to demonstrate that 7 plaintiff had affirmatively met the numerosity requirements of Rule 23(a)(1). Id. 8 In both Whitaker and Jackson, plaintiff provided specific evidence that numerous other 9 individuals had posted online complaints after receiving the same unsolicited call that gave rise to 10 plaintiff’s TCPA claim. This specific evidence that numerous other individuals had suffered the 11 violation as plaintiff demonstrated that the putative class was in fact sufficiently numerous as 12 required by Rule 23(a)(1). In the instant case, Plaintiff has provided no evidence that a single 13 other individual received the same unsolicited fax that Plaintiff received from Defendants. 14 As such, the instant case is more similar to two recent cases in which courts have denied 15 class certification after default. In Wang v. Defense Tax Group, the court denied class certification 16 after defendant defaulted on a TCPA claim. 2020 WL 6204578, at *3 (C.D. Cal. Aug. 10, 2020). 17 The Court denied class certification because of “[p]laintiff’s failure to present any evidence that 18 even a single other person received unwanted text messages like the ones [plaintiff] received.” Id. 19 at *2. Much like the instant case, plaintiff sought to establish numerosity by alleging that 20 defendant “sent at least three text message advertisements to 2,000 of its current or former 21 clients.” Id. The court found that these allegations were insufficient to affirmatively demonstrate 22 that plaintiff had met Rule 23(a)(1)’s numerosity requirement. Id. at *3. As such, the court denied 23 class certification. Id. 24 Similarly, in Yarger v. Fresh Farms, the court denied class certification after defendant 25 defaulted on a TCPA claim. 2020 WL 4673229, at *8 (D. Kan. Aug. 12, 2020). The court found 26 that plaintiff had failed to demonstrate numerosity because plaintiff’s only evidence that joinder 27 was impracticable was plaintiff’s allegation that “the number of class members is substantial and 1 may include hundreds if not thousands of persons.” Id. at *7. Plaintiff further alleged that 2 numerosity was “evidenced by the impersonal, pro forma advertising content of the subject 3 unsolicited text messages.” Id. The Court found that these allegations on their own were 4 insufficient to establish numerosity under Rule 23(a)(1). 5 Plaintiff’s allegations in the instant case are much closer to those in Wang and Yarger than 6 Whitaker or Jackson. In contrast to the plaintiffs in Whitaker and Jackson, Plaintiff has provided 7 no evidence that other individuals received Defendants’ unsolicited advertisement by fax. As 8 such, Plaintiff has failed to “prove that there are in fact sufficiently numerous parties” as required 9 by Rule 23(a)(1). Dukes, 564 U.S. at 350–51. The Court must therefore find that Plaintiff has 10 failed to establish that the putative class “is so numerous that joinder of all members is 11 impracticable.” Fed. R. Civ. P. 23(a)(1). 12 Accordingly, Plaintiff has failed to establish numerosity under Rule 23(a)(1). The Court 13 must therefore deny Plaintiff’s motion for class certification. See Mazza, 666 F.3d at 588 (“Rule 14 23(a) requires that plaintiffs demonstrate numerosity, commonality, typicality and adequacy of 15 representation in order to maintain a class action.”). 16 However, the Court notes the unique posture of this case. Defendants have failed to appear 17 in this case, and Defendants’ lack of appearance has hindered Plaintiff’s ability to conduct 18 discovery to identify the size of any putative class. Because of the unique posture of this case, the 19 Court DENIES without prejudice Plaintiff’s motion for class certification. 20 Furthermore, the Court GRANTS Plaintiff’s request for a 120-day period to conduct 21 limited discovery. See Mot. at 12. Thus, Plaintiff may conduct limited discovery until September 22 23, 2021. If Plaintiff chooses to file a renewed motion for class certification, he must do so by 23 October 14, 2021. 24 B. Class Counsel 25 Plaintiff also requests that Plaintiff’s counsel, Woodrow & Peluso, LLC, be appointed 26 class counsel. Mot. at 13. However, Plaintiff’s request to appoint Woodrow & Peluso, LLC as 27 class counsel is moot because the Court denies Plaintiff’s motion to certify a class. IV. CONCLUSION 1 In sum, the Court finds that Plaintiff has failed to satisfy the requirements of Rule 23(a)(1) 2 with respect to Plaintiff’s putative class. Accordingly, the Court DENIES without prejudice 3 Plaintiff’s motion for class certification. 4 IT IS SO ORDERED. 5 Dated: May 26, 2021 6 ______________________________________ 7 LUCY H. KOH United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27