Gordon v. Robinhood Financial LLC

CourtDistrict Court, E.D. Washington
DecidedJanuary 25, 2021
Docket2:19-cv-00390
StatusUnknown

This text of Gordon v. Robinhood Financial LLC (Gordon v. Robinhood Financial LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gordon v. Robinhood Financial LLC, (E.D. Wash. 2021).

Opinion

1 2

3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6

7 ISAAC GORDON, individually and on behalf of all those similarly NO. 2:19-CV-0390-TOR 8 situated, ORDER GRANTING PLAINTIFF’S 9 Plaintiff, MOTION FOR CLASS CERTIFICATION 10 v.

11 ROBINHOOD FINANCIAL LLC, a Delaware limited liability company, 12 Defendant. 13

14 BEFORE THE COURT is Plaintiff’s Motion for Class Certification (ECF 15 No. 58). This matter was submitted for consideration with telephonic oral 16 argument on January 21, 2021. Kirk D. Miller appeared on behalf of Plaintiff. 17 Kenneth E. Payson and Eric Franz appeared on behalf of Defendant. The Court 18 has reviewed the record and files herein, and is fully informed. For the reasons 19 discussed below, Plaintiff’s Motion for Class Certification (ECF No. 58) is 20 GRANTED. 1 BACKGROUND 2 A. Factual Background

3 This case concerns the “Refer a Friend” (“RAF”) marketing feature from 4 Defendant’s online investment brokerage application, which Plaintiff alleges 5 violates the Washington Consumer Protection Act (“CPA”) by way of the

6 Washington Commercial Electronic Mail Act (“CEMA”). The material facts are 7 largely undisputed for the purpose of this motion, and the Court must accept as true 8 the substantive allegations of the class claim. See Blackie v. Barrack, 524 F.2d 9 891, 901 n.7 (9th Cir. 1975).

10 Defendant is an online investment brokerage service that enables customers 11 to invest commission-free in stocks, exchange-traded funds, and options. ECF No. 12 58 at 10; ECF No. 65 at 10. Defendant created a referral program, RAF, where

13 customers can refer someone to sign up for Defendant’s services whereby both the 14 customer and referee receive one share of free stock after the referee signs up. 15 ECF No. 65 at 10. Defendant provides various methods to customers to send a 16 referral, including via electronic text message. ECF No. 65 at 11-12.1 Essentially,

17 when a customer opts to send a referral, Defendant creates an automated message 18

1 Plaintiff objects on the basis that Defendant describes current methods, not 19 methods available at the time Plaintiff received his referral. ECF No. 68 at 8-10. 20 1 with a referral hyperlink to sign up that a customer may edit before sending. ECF 2 No. 65 at 10-13.

3 In July 2019, Plaintiff, a Washington resident, received an unsolicited text 4 message from the RAF program, inviting Plaintiff to sign up for Defendant’s 5 services via a hyperlink and stating “Your free stock is waiting for you! Join

6 Robinhood and we’ll both get a stock like Apple, Ford, or Facebook for free. Sign 7 up with my link.” ECF No. 58 at 10-11. The text message did not include an “opt- 8 out” or “stop” option to preclude further receipts of similar text messages. ECF 9 No. 58 at 11-12.

10 B. Procedural Background 11 Plaintiff initially filed a putative class action complaint against Defendants 12 Robinhood Financial LLC and Robinhood Markets Inc. in Spokane County

13 Superior Court. ECF No. 1-1 at 5-16. Defendants removed the action to federal 14 court on the basis of class action diversity jurisdiction under the Class Action 15 Fairness Act (“CAFA”). ECF No. 1 at 1-6. 16 Following removal, Plaintiff filed an Amended Complaint. ECF No. 9.

17 Defendants then filed a Motion to Dismiss for lack of personal jurisdiction over 18 Defendant Robinhood Markets and a Motion to Dismiss for failure to adequately 19 allege a CEMA violation. ECF Nos. 11-12. The Court granted Defendants’

20 Motions to Dismiss without prejudice and granted Plaintiff leave to amend. ECF 1 No. 18. In the Order, the Court concluded that the amount-in-controversy was not 2 sufficient to support diversity jurisdiction. Id. Upon reviewing the parties’ cross

3 motions for reconsideration (ECF Nos. 19, 22), the Court granted the parties leave 4 to submit evidence establishing the amount-in-controversy. ECF No. 29. On June 5 3, 2020, the Court found Defendant Robinhood Financial LLC substantiated that

6 the amount-in-controversy exceeds $5 million by potentially involving over 1,000 7 RAF recipients with Washington addresses. ECF Nos. 34-35. 8 On November 23, 2020, Plaintiff filed the present Motion to Certify Class. 9 ECF No. 58. Plaintiff proposes the following class definition:

10 All persons, as that term is defined in RCW 19.190.010(11) and RCW 19.86.010(a); who are Washington residents; to whom the Defendant 11 initiated or assisted in the transmission or one or more commercial electronic text messages; to a cellular phone or pager service that is 12 equipped with short message capability or any similar capability allowing the transmission of text messages; without obtaining the 13 recipients’ clear and affirmative consent to receive such messages in advance; within the previous four (4) years; through the date that the 14 class is certified.

15 The parties filed their respective response and reply (ECF Nos. 65, 68) 16 before the matter was heard with oral argument. 17 DISCUSSION 18 A. Class Certification Standard 19 Certification of a class action lawsuit is governed by Rule 23 of the Federal 20 Rules of Civil Procedure. See Marlo v. UPS, Inc., 639 F.3d 942, 947 (9th Cir. 1 2011) (“Federal Rule of Civil Procedure Rule 23 governs the class-certification 2 issue even if the underlying claim arises under state law.”). Pursuant to Rule 23(a),

3 the party seeking class certification must demonstrate that “(1) the class is so 4 numerous that joinder of all members is impracticable; (2) there are questions of 5 law or fact common to the class; (3) the claims or defenses of the representative

6 parties are typical of the claims or defenses of the class; and (4) the representative 7 parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 8 23(a). 9 Provided the proposed class satisfies the above criteria, courts must further

10 determine whether certification is appropriate under Rule 23(b). Where a party 11 seeks certification of a so-called “damages class” under Rule 23(b)(3), as here, he 12 or she must demonstrate that (1) “questions of law or fact common to class

13 members predominate over any questions affecting only individual members;” and 14 (2) “a class action is superior to other available methods for fairly and efficiently 15 adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). As the party moving for 16 certification, the plaintiff bears the burden of establishing that the foregoing

17 requirements have been satisfied. Mazza v. Am. Honda Motor Co., Inc., 666 F.3d 18 581, 588 (9th Cir. 2012). 19 A court presented with a class certification motion must perform a “rigorous

20 analysis” to determine whether each of these prerequisites has been satisfied. Gen. 1 Tel. Co. v. Falcon, 457 U.S. 147, 161 (1982). “Frequently that ‘rigorous analysis’ 2 will entail some overlap with the merits of the plaintiff’s underlying claim.” Wal-

3 Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011); see also Ellis v. Costco 4 Wholesale Corp.,

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