1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 Case No.: 19-cv-264-DMS-MSB
12 KRISTEN SCHERTZER; et al., on behalf ORDER GRANTING PLAINTIFF’S 13 of themselves and all others similarly RENEWED MOTION FOR CLASS situated, CERTIFICATION 14 Plaintiffs, 15 v. 16 BANK OF AMERICA, N.A.; et al., 17 Defendants. 18 19 This case comes to the Court following Plaintiff Brittany Covell’s appeal and the 20 Ninth Circuit’s remand to reconsider class certification. After receipt of the Ninth Circuit’s 21 mandate, this case was randomly reassigned to the undersigned district judge. Thereafter, 22 Plaintiff filed her Renewed Motion for Class Certification.1 (Plaintiff’s Motion (“Pl.’s 23 Mot.”), ECF No. 311). Defendant Bank of America, N.A. (“BOA”) filed an Opposition, 24 (Defendant’s Opposition (“Opp’n”), ECF No. 312), and Plaintiff filed a Reply, (Plaintiff’s 25 Reply (“Reply”), ECF No. 313). For the following reasons, Plaintiff’s Motion is 26 GRANTED. 27 1 Kristen Schertzer was a named plaintiff, but since the appeal of this action, it has been maintained solely 28 1 I. BACKGROUND 2 The background of this case has been summarized in numerous prior orders. In a 3 nutshell, Plaintiff alleges that Defendant “charged Plaintiff two separate $2.50 out-of- 4 network (“OON”) balance inquiry fees when she used her BOA debit card at a non-BOA 5 ATM.” (See ECF No. 307); Schertzer v. Bank of Am., NA, 109 F.4th 1200, 1203 (9th Cir. 6 2024). Plaintiff claims the second fee is invalid because the parties’ contract allows 7 Defendant to charge fees only in response to a card holder’s “balance inquiry” at a non- 8 BOA ATM. See id. at 1203–04. The second fee, according to Plaintiff, was not a balance 9 inquiry. (Third Amended Class Action Complaint (“TAC”), ECF No. 96 at 27–28). As a 10 result, Defendant allegedly “breached its agreements with Plaintiff[] and [c]lass members 11 by assessing [OON] balance inquir[y] fees when customers did not intend to make balance 12 inquiries or were told that the inquiries would be free”. (Id. at 24). The case has narrowed 13 over time and “now consists solely of claims against [Defendant] for breach of contract 14 and breach of the implied covenant of good faith and fair dealing.” (See ECF No. 307); 15 Schertzer, 109 F.4th at 1205. 16 On October 16, 2021, Plaintiff filed her first Motion for Class Certification. (ECF 17 No. 198). The district court denied Plaintiff’s Motion, finding that Plaintiff failed to meet 18 the predominance requirement of Federal Rule of Civil Procedure 23(b)(3). (See ECF No. 19 271); Schertzer v. Bank of America, 2022 WL 1004559, at *20 (S.D. Cal. Apr. 4, 2022) 20 (“All of the predominance issues highlighted provide compelling reasons why these 21 proposed classes should not be certified under Rule 23(b)(3).”). The court “cited three 22 areas in which . . . individual considerations predominated over common ones: (1) the 23 subjective intent of each class plaintiff; (2) variations in the ATM prompts that different 24 class plaintiffs saw; [and] (3) different states’ laws that applied to different plaintiffs.” (See 25 ECF No. 307); Schertzer, 109 F.4th at 1215 (citing Schertzer, 2022 WL 1004559, at *17– 26 20). On appeal, the Ninth Circuit held: 27 Our interpretation of “balance inquiry” ameliorates the “subjective intent” concern 28 [because it] does not require probing the subjective intent of individual ATM 1 customers. For this reason, we vacate the district court’s denial of class certification. It is unclear how our holding might affect the other two concerns identified by the 2 district court. We remand for the district court to reconsider class certification. 3 4 Id. Pending now is Plaintiff’s Renewed Motion. Plaintiff seeks to certify the following 5 class: “All [BOA] checking account holders in the United States who were assessed more 6 than one [OON] balance inquiry fee during the same visit to a FCTI, Inc.-owned ATM 7 located in a 7-Eleven store from May 1, 2018, to November 16, 2021”. (Pl.’s Mot. 16). 8 II. LEGAL STANDARD 9 “The class action is ‘an exception to the usual rule that litigation is conducted by and 10 on behalf of the individual named parties only.’” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 11 338, 348 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700–01 (1979)). It is within 12 the discretion of district courts to certify a class. Bouman v. Block, 940 F.2d 1211, 1232 13 (9th Cir. 1991). “Parties seeking class certification must satisfy each of the four 14 requirements of [Federal] Rule [of Civil Procedure] 23(a) . . . and at least one of the 15 requirements of Rule 23(b).” Briseno v. ConAgra Foods, Inc., 844 F.3d 1121, 1124 (9th 16 Cir. 2017). The burden is on the plaintiff to prove, by a preponderance of the evidence, 17 that she meets the requirements of Rule 23. Olean Wholesale Grocery Cooperative, Inc. 18 v. Bumble Bee Foods LLC, 31 F.4th 651, 665 (9th Cir. 2022), cert. denied, 143 S.Ct. 424 19 (2022). If a court is not satisfied that the plaintiff has met the requirements of Rule 23(a) 20 and (b), certification should be refused. Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 21 161 (1982). 22 When considering class certification, district courts must engage in “a rigorous 23 analysis”. Wal-Mart, 564 U.S. at 350–51 (citing Falcon, 457 U.S. at 161). “[T]he merits 24 of the class members’ substantive claims are often highly relevant when determining 25 whether to certify a class.” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 981 (9th Cir. 26 2011). However, “[a] court . . . is merely to decide a suitable method of adjudicating the 27 case and should not turn class certification into a mini-trial on the merits.” Edwards v. 28 First Am. Corp., 798 F.3d 1172, 1178 (9th Cir. 2015). A court’s review of the merits 1 should be limited to those aspects relevant to making the certification decision on an 2 informed basis. See Fed. R. Civ. P. 23 Advisory Committee Notes. 3 III. DISCUSSION 4 A. Scope 5 As an initial matter, the parties dispute the scope of this Court’s review. Plaintiff 6 alleges that the Ninth Circuit “issued a mandate to this Court to simply rule on the two . . . 7 issues regarding predominance” that it identified. (Pl.’s Mot. 21); (see also id. at 6) (“As 8 part of its order, the Ninth Circuit identified the . . . sole issues necessary to be resolved in 9 ruling on class certification[.]”). Defendant responds that “as with remands generally, the 10 [Court] is free to review any grounds not expressly or impliedly decided on appeal, and 11 certainly any grounds that did not exist at the time of the appeal.” (Opp’n 18). The Court 12 agrees with Defendant. 13 “[W]hile the mandate of an appellate court forecloses the lower court from 14 reconsidering matters determined in the appellate court, it leaves to the district court any 15 issue not expressly or impliedly disposed of on appeal.” San Francisco Herring Ass’n v. 16 Dep’t of the Interior, 946 F.3d 564, 574 (9th Cir. 2019) (internal quotation marks and 17 citations omitted); see also Quern v. Jordan, 440 U.S. 332, 348 n.18 (1979) (“While a 18 mandate is controlling as to matters within its compass, on the remand a lower court is free 19 as to other issues.”) (internal citation omitted). The Ninth Circuit held that the subjective 20 intent of each class member is not relevant to the predominance analysis under Rule 21 23(b)(3). (See ECF No. 307); Schertzer, 109 F.4th at 1215. It then directed the Court to 22 reconsider the predominance requirement and class certification more generally. Id. 23 The district court’s initial Order did not address whether Plaintiff satisfied the four 24 requirements of Rule 23(a) for class certification. (See ECF No. 271); Schertzer, 2022 WL 25 1004559, at *17–20. To grant class certification, this Court must determine that Plaintiff’s 26 proposed class meets all applicable requirements. It will do so here, examining relevant 27 issues raised by the parties. 28 1 B. Rule 23(a) 2 “[Federal] Rule [of Civil Procedure] 23(a) states four threshold requirements 3 applicable to all class actions: (1) numerosity (a class so large that joinder of all members 4 is impracticable); (2) commonality (questions of law or fact common to the class); (3) 5 typicality (named parties’ claims or defenses are typical of the class); and (4) adequacy of 6 representation (representatives will fairly and adequately protect the interests of the class).” 7 Amchem Prods, Inc. v. Windsor, 521 U.S. 591, 613 (1997) (internal quotation marks, 8 brackets, and ellipses omitted). The Rule “ensures that the named plaintiffs are appropriate 9 representatives of the class whose claims they wish to litigate.” Wal-Mart, 564 U.S. at 10 359. Plaintiff contends all four requirements are met. (Pl.’s Mot. 16). Defendant argues 11 that Plaintiff has failed to allege typicality and adequacy. (Opp’n 19). 12 a. Numerosity 13 Rule 23(a)(1) requires the class to be “so numerous that joinder of all members is 14 impracticable”. Fed. R. Civ. P. 23(a)(1); Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 15 2003). Plaintiffs need not state the exact number of potential class members; nor is a 16 specific minimum number required. Arnold v. United Artists Theatre Circuit, Inc., 158 17 F.R.D. 439, 448 (N.D. Cal. 1994). Rather, whether joinder is impracticable depends on 18 the facts and circumstances of each case. Id. 19 Plaintiff points to data between May 2018 and June 2018 showing a total of 65,000 20 class members. (Pl.’s Mot. 17, Olsen Decl.). Because the class period is from May 1, 21 2018, to November 16, 2021, Plaintiff contends—and Defendant does not dispute—that 22 the proposed class “would likely be multiples of that figure.” (Id. at 17). Given the size 23 of this class, the Court finds the numerosity requirement satisfied. See Ikonen v. Hartz 24 Mountain Corp., 122 F.R.D. 258, 262 (S.D. Cal. 1988) (“As a general rule, classes of 20 25 are too small, classes of 20–40 may or may not be big enough depending on the 26 circumstances of each case, and classes of 40 or more are numerous enough.”) (citing 3B 27 J. Moore & J. Kennedy, Moore’s Federal Practice ¶ 23–05[1] (2d ed. 1987)). 28 1 b. Commonality 2 The second element of Rule 23(a) requires the existence of “questions of law or fact 3 common to the class”. Fed. R. Civ. P. 23(a)(2). This element has “‘been construed 4 permissively,’ and ‘[a]ll questions of fact and law need not be common to satisfy the rule.’” 5 Ellis, 657 F.3d at 981 (quoting Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 6 1998)). “However, it is insufficient to merely allege any common question”. Id. Instead, 7 the plaintiff must allege the existence of a “common contention” that is of “such a nature 8 that it is capable of classwide resolution”. Wal-Mart, 564 U.S. at 350. As summarized by 9 the Supreme Court: “[w]hat matters to class certification . . . is not the raising of common 10 questions—even in droves—but rather, the capacity of a class-wide proceeding to generate 11 common answers apt to drive the resolution of the litigation. Dissimilarities within the 12 proposed class are what have the potential to impede the generation of common answers.” 13 Id. (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 14 N.Y.U. L. Rev. 97, 132 (2009)) (internal quotation marks omitted). Because “Rule 15 23(a)(2)’s ‘commonality’ requirement is subsumed under, or superseded by, the more 16 stringent Rule 23(b)(3) requirement that questions common to the class ‘predominate over’ 17 other questions”, Amchem Prods., 521 U.S. at 609, the Court addresses commonality in its 18 discussion of Rule 23(b)(3) below. 19 c. Typicality 20 Typicality means that “the claims or defenses of the representative parties are typical 21 of the claims or defenses of the class”. Fed. R. Civ. P. 23(a)(3). Rule 23(a)(3) focuses on 22 the relationship of facts and issues between the class and its representatives. “The test of 23 typicality is whether other members have the same or similar injury, whether the action is 24 based on conduct which is not unique to the named plaintiffs, and whether other class 25 members have been injured by the same course of conduct.” Evon v. Law Offices of Sidney 26 Mickell, 688 F.3d 1015, 1030 (9th Cir. 2012); see also Petersen v. Costco Wholesale Co., 27 312 F.R.D. 565, 577 (C.D. Cal. 2016) (“Courts assess typicality by determining whether 28 the class representatives and the rest of the putative class have similar injuries and 1 conduct.”). “[R]epresentative claims are ‘typical’ if they are reasonably co-extensive with 2 those of absent class members; they need not be substantially identical.” Hanlon, 150 F.3d 3 at 1020. 4 Plaintiff alleges that she is a typical representative because her claims “arise out of 5 the same course of conduct and are based on the same legal theories” as the proposed class. 6 (Pl.’s Mot. 18). The Court agrees. Plaintiff’s proposed class is narrow, including only 7 individuals who used an ATM machine at 7-Eleven, saw the same FCTI prompt, and 8 incurred a second OON fee by Defendant. (Id. at 16). Class members suffered the same 9 injury—an overcharge—by the same course of conduct—the display of a balance inquiry 10 prompt. (See generally id.). The typicality requirement is therefore met. See Farrell v. 11 Bank of Am., N.A., 327 F.R.D. 422, 428 (S.D. Cal. 2018), aff’d sub nom. Farrell v. Bank 12 of Am. Corp., N.A., 827 F.App’x 628 (9th Cir. 2020) (“Here, the named plaintiffs are typical 13 of the class they seek to represent. They suffered the same injury from the same course of 14 conduct as did unnamed members. To wit, like the unnamed members, BoA charged them 15 with EOBCs.”); see also Petersen, 312 F.R.D. at 577 (“Here, the named Plaintiffs have 16 alleged injuries that are the same, or at the least very similar, to the injuries of absent class 17 members. And Plaintiffs have also alleged their injuries derive from the same course of 18 conduct—namely, Defendants’ manufacturing and sale of the Townsend berry mix.”) 19 (internal quotation marks omitted). 20 d. Adequacy 21 Adequacy requires a showing that “the representative parties will fairly and 22 adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This requirement 23 is grounded in constitutional due process concerns: “absent class members must be 24 afforded adequate representation before entry of a judgment which binds them.” Hanlon, 25 150 F.3d at 1020 (citing Hansberry v. Lee, 311 U.S. 32, 42–43 (1940)). In reviewing this 26 issue, courts must resolve two questions: “(1) do the named plaintiffs and their counsel 27 have any conflicts of interest with other class members and (2) will the named plaintiffs 28 and their counsel prosecute the action vigorously on behalf of the class?” Id. (citing Lerwill 1 v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978)). The named plaintiffs 2 and their counsel must have “zeal and competence” to protect the interests of the class. 3 Fendler v. Westgate-Cal. Corp., 527 F.2d 1168, 1170 (9th Cir. 1975). 4 Plaintiff asserts she is an adequate representative because she has “done all she has 5 been asked to do” in acting as representative, has no conflicts of interest with class 6 members, and has “retained qualified and competent counsel with extensive experience 7 and expertise prosecuting complex class actions”. (Pl.’s Mot. 19). Defendant argues that 8 Plaintiff’s lack of standing renders her inadequate.2 (Opp’n 19–20). The Court will 9 consider Defendant’s standing argument before assessing adequacy more broadly. 10 A plaintiff who sues in federal court must have standing. See Lujan v. Defs. of 11 Wildlife, 504 U.S. 555, 560 (1992) (“[S]tanding is an essential and unchanging part of the 12 case-or-controversy requirement of Article III.”). The fact that a lawsuit is a class action 13 “adds nothing to the question of standing, for even named plaintiffs who represent a class 14 ‘must allege and show that they personally have been injured, not that injury has been 15 suffered by other, unidentified members of the class to which they belong and which they 16 purport to represent.’” Martinez v. Newsom, 46 F.4th 965, 970 (9th Cir. 2022) (quoting 17 Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 26, 40 n.20 (1976)). “[A] named plaintiff who 18 has not been harmed by a defendant is generally an inadequate and atypical class 19 representative for purposes of Federal Rule of Civil Procedure 23”. Id.; see also Lierboe 20 v. State Farm Mut. Auto. Ins. Co., 350 F.3d 1018, 1022 (9th Cir. 2003) (“Stated another 21 22 2 Aside from standing, Defendant criticizes Plaintiff’s alleged pursuit of duplicative litigation. Citing 23 Seventh Circuit caselaw, Defendant contends that Plaintiff’s proposal to “certify a duplicative class action—with its attendant (and significant) transaction costs—separately renders her an inadequate 24 representative.” (Opp’n 20); (see also id. at 21) (“This Court should reject Plaintiff’s suggestion that 25 another round of administrative costs, attorneys’ fees, and costs should be borne to offer these same class members a refund that they already had the opportunity to obtain.”). Defendant’s argument relies on the 26 Weiss settlement. (See id. at 20–21). Because the Weiss case is a source of dispute between the parties in their Rule 23(b)(3) analysis as well, the Court will discuss Weiss’ impact on granting class certification 27 below. See infra III.C.a. For the purposes of this section, the Court finds that Plaintiff has not brought duplicative litigation because she was not involved in the later actions against FCTI. (Reply Carpenter 28 1 way, if Lierboe has no stacking claim, she cannot represent others who may have such a 2 claim, and her bid to serve as a class representative must fail.”). This is a bright-line rule: 3 even “when a class is certified and the class representatives are subsequently found to lack 4 standing, the class should be decertified and the case dismissed”. NEI Contracting & 5 Eng’g, Inc. v. Hanson Aggregates Pac. Sw., Inc., 926 F.3d 528, 532 (9th Cir. 2019); see 6 also Carpenter v. PetSmart, Inc., 441 F.Supp.3d 1028, 1038 (S.D. Cal. 2020) (“The Court 7 should address standing prior to class certification.”). 8 “[T]he irreducible constitutional minimum of standing contains three elements”: (1) 9 an “injury in fact”; (2) a “causal connection between the injury and the conduct complained 10 of”; and (3) redressability. Lujan, 504 U.S. at 560–61. At issue is the redressability prong, 11 which requires that it be “‘likely,’ as opposed to merely ‘speculative,’ that the injury will 12 be ‘redressed by a favorable decision.’” Id. at 561 (quoting Simon, 426 U.S. at 38, 43). 13 Defendant argues that Plaintiff’s settlement with FCTI in this action has redressed 14 her injury. (Opp’n 19) (“[Plaintiff] has already recouped that second OON fee through her 15 settlement with FCTI and, as a result, has been fully redressed.”). Plaintiff criticizes 16 Defendant’s argument as speculative because the settlement is confidential. (Reply 6). 17 Plaintiff further responds that “Plaintiff did not receive any financial compensation for her 18 settlement”. (Id.). 19 The Court has reviewed Plaintiff’s confidential settlement with FCTI in camera. 20 (See ECF No. 315). Plaintiff did not recoup the second OON fee through this settlement. 21 Instead, she obtained injunctive relief. (See also Reply Carpenter Decl.) (“Plaintiff and 22 [FCTI] reached a confidential settlement to resolve Plaintiff’s claims against FCTI. 23 Plaintiff did not receive any compensation for her settlement but benefited from FCTI’s 24 decision to alter its ATM prompt.”). She thus has not redressed her pocketbook injury. 25 The Court finds that Plaintiff meets the constitutional requirements of standing. 26 Defendant’s argument to the contrary is moot. 27 Aside from having standing, Plaintiff is adequate because she has diligently 28 represented absent class members. This includes her successful appeal of the district 1 court’s prior Order denying class certification to the Ninth Circuit (and her timely filing of 2 a Renewed Motion for Class Certification following that success, at issue here). See 3 Farrell, 327 F.R.D. at 428 (finding adequacy met because “[n]amed plaintiffs and [c]lass 4 [c]ounsel have demonstrated their ability to vigorously prosecute this action on behalf of 5 the class”). Her counsel’s familiarity with this dispute points to their competence, not their 6 inadequacy. (Pl.’s Mot. Carpenter Decl.); see Raines v. U.S. Healthworks Med. Grp., 2024 7 WL 3850812, at *7 (S.D. Cal. Aug. 16, 2024) (“[T]here is no dispute that Plaintiffs’ 8 counsel has extensive experience litigating class action cases and has vigorously protected 9 the interests of the class. This matter has been thoroughly litigated, and Plaintiffs’ counsel 10 has secured favorable results before the California Supreme Court and Ninth Circuit. The 11 adequacy requirement of Rule 23 is therefore met.”). To the Court’s knowledge, Plaintiff 12 has no conflicts of interest with those she seeks to represent. Hanlon, 150 F.3d at 1020. 13 Because Plaintiff has “taken [her] obligations to the Court seriously”, the Court finds her 14 adequate. Petersen, 312 F.R.D. at 578. Plaintiff satisfies all four requirements of Rule 15 23(a).3 16 C. Rule 23(b) 17 a. Rule 23(b)(3) 18 Plaintiff first seeks certification under Federal Rule of Civil Procedure 23(b)(3). 19 (Pl.’s Mot. 19–20). To qualify for class certification under this Rule, the plaintiff must 20 show that “‘the questions of law or fact common to class members predominate over any 21 questions affecting only individual members, and that a class action is superior to other 22 available methods for fairly and efficiently adjudicating the controversy.’” Olean, 31 F.4th 23 at 663–64 (quoting Fed. R. Civ. P. 23(b)(3)). Plaintiff alleges that both predominance and 24 superiority are met. (Pl.’s Mot. 20). Defendant argues that Plaintiff meets neither element 25 of Rule 23(b)(3). (Opp’n 22, 25). 26 27 3 Plaintiff has demonstrated that there are common questions to the class, satisfying Rule 23(a)(2). See 28 1 i. Predominance 2 Predominance assesses “whether proposed classes are sufficiently cohesive to 3 warrant adjudication by representation.” Amchem Prods., 521 U.S. at 594. “The 4 requirements of Rule 23(b)(3) overlap with the requirements of Rule 23(a): the plaintiff[ ] 5 must prove that there are questions of law or fact common to class members that can be 6 determined in one stroke, in order to prove that such common questions predominate over 7 individualized ones”. Olean, 31 F.4th at 664 (internal quotation marks and citations 8 omitted). “If anything, Rule 23(b)(3)’s predominance criterion is even more demanding 9 than Rule 23(a).” Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013) (internal citation 10 omitted). Ultimately, the “predominance inquiry asks whether the common, aggregation- 11 enabling, issues in the case are more prevalent or important than the non-common, 12 aggregation-defeating, individual issues.” Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 13 453 (2016) (internal quotation marks and citations omitted). Plaintiffs must prove by a 14 preponderance of evidence that common questions predominate over questions affecting 15 only individual members, and that the common questions relate to “a central issue in the 16 plaintiffs’ claim.” Olean, 31 F.4th at 665. The Court will address points made in the prior 17 Order before moving onto Defendant’s new arguments about why Plaintiff has not shown 18 predominance. 19 1. Variation 20 When analyzing Plaintiff’s prior Motion for Class Certification, the district court 21 held that the predominance requirement was not met because of the variation in balance 22 inquiry prompts that class members saw and in states’ laws about latent ambiguities and 23 extrinsic evidence. (See ECF No. 271); Schertzer, 2022 WL 1004559, at *19–20. Plaintiff 24 addressed the district court’s prior Order in her Renewed Motion. (Pl.’s Mot. 20–25). 25 Defendant did not. (See Opp’n 25–29). 26 The first issue—the variation in balance inquiry prompts—is now moot. Plaintiff’s 27 first Motion for Class Certification sought to certify two classes, one for individuals who 28 were assessed two OON fees at FCTI, Inc. ATM machines and one for individuals who 1 experienced the same at Cardtronics, Inc. ATM machines. (See ECF No. 271); Schertzer, 2 2022 WL 1004559, at *17. The district court’s reasoning relied on the “lack of uniformity 3 among the Cardtronics ATM screens”, not FCTI ATM screens. Id. at *19 (emphasis 4 added); see also id. (“Thus, to suggest that Cardtronics has only deployed one or two 5 default BBI ATM screens at the company’s 70,000+ ATMs vastly oversimplifies 6 Cardtronics’ business model and branding partnerships. Rather, . . . BANA customers 7 would have been presented with a number of screen variations associated with the balance 8 inquiry process[.]”). Plaintiff’s Renewed Motion seeks certification of only the FCTI class. 9 There is no dispute that FCTI showed the same prompt at its machines, which makes the 10 class “sufficiently cohesive to warrant adjudication by representation.” Amchem Prods., 11 521 U.S. at 594; see also Polvay v. FCTI, Inc., 713 F.Supp.3d 1, 9 (S.D.N.Y. 2024) (noting 12 in related case that “the Continue/Cancel Prompt screen was uniformly displayed at FCTI’s 13 ATMs during the class period”). 14 The second issue—the variation in states’ laws—has been resolved by the Ninth 15 Circuit’s interpretation of balance inquiry. The Ninth Circuit did not view the term as 16 “ambiguous”. (See ECF No. 307); Schertzer, 109 F.4th at 1213. Rather, it interpreted 17 balance inquiry according to its “ordinary and popular meaning”, which “requires an 18 objectively clear customer request for balance information from the ATM.” Id. at 1209. 19 The district court’s prior analysis about variation in states’ laws examined only contract 20 laws about ambiguous terms and extrinsic evidence, which now do not apply to Plaintiff’s 21 breach of contract claim. (See ECF No. 271); Schertzer, 2022 WL 1004559, at *20; see 22 also In re Conseco Life Ins. Co. LifeTrend Ins. Sales & Mktg. Litig., 270 F.R.D. 521, 529 23 (N.D. Cal. 2010) (“[A]s neither party has asserted that the form policy contract contains 24 ambiguous terms . . . , admission of extrinsic evidence should not be necessary to interpret 25 the contractual provisions at issue.”). The elements of a breach of contract claim do not 26 vary so greatly between states such that individualized concerns will trump common ones. 27 Accordingly, the concerns previously raised by the district court do not impede the 28 certification of Plaintiff’s proposed class. 1 2. Weiss 2 Defendant alleges that the settlement in Weiss v. FCTI, Inc., No. 237-2024- 3 00016908-CU-BT-NC (Cal. Sup. Ct., Cnty. San Diego) creates individualized concerns for 4 class members who are also a part of the Weiss class action. (Opp’n 26–28). Plaintiff 5 argues that Weiss has no bearing on this Court’s predominance inquiry and Plaintiff’s class 6 action more generally. (Reply 8–13). 7 Defendant contends that “any claimants from Weiss in the putative class here face 8 individualized Article III standing problems, as well as the prohibition on double 9 recoveries.” (Opp’n 26); (see also id. at 26–27) (“[T]he Weiss settlement redresses the 10 alleged injury—i.e., the OON fee—and then some.”). Defendant’s argument reflects a 11 misunderstanding of the claims in Weiss. In Weiss, the plaintiffs sought restitution from 12 FCTI for violating California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code 13 §§ 17200, et seq. (Reply Carpenter Decl. Exhibit 1) (“As a result of Defendant’s unfair 14 and deceptive conduct, FCTI has been unjustly enriched and should be required to disgorge 15 its unjust profits and make restitution to Plaintiffs and Class members pursuant to Cal. Bus. 16 & Prof. Code §§ 17203 and 17204.”). Specifically, the plaintiffs requested restitution in 17 the amount of “all relevant interchange fees paid to FCTI as a portion of the unwarranted 18 OON balance inquiry fees assessed to [p]laintiffs and the [c]lasses”. (See id.). The 19 interchange fee amounted to approximately $0.17 of the $2.50 OON fee. (Id. at Carpenter 20 Decl.); Polvay v. FCTI, Inc., 2023 WL 2456813, at *1 (S.D.N.Y. Mar. 10, 2023) (“When 21 a customer checks their balance through an FCTI ATM, FCTI receives a portion—on 22 average, $0.17—of the fee assessed by the customer’s bank.”). The approved settlement 23 agreement provided members of the nationwide class who submitted a valid claim “up to 24 $15.00”, presumably determined by the number of times class members incurred the 25 wrongful OON fee and FCTI profited $0.17.4 (Opp’n Obi Decl. Exhibit H) (emphasis 26 added). 27 4 The Court’s understanding is that a class member who was assessed one wrongful fee would be entitled 28 1 The Court fails to see how recovery for a different legal remedy (restitution) against 2 a different wrongdoer (FCTI) under a different cause of action (violation of the UCL) 3 means that individuals who overlap between the Weiss nationwide class and the proposed 4 class here have already had their injuries redressed.5 Weiss’ settlement agreement did not 5 release claims against Defendant and thereby left another avenue for individuals who were 6 assessed a wrongful OON fee to fully remedy their harm. (See id.). For redressability to 7 be implicated, class members must have recouped the total amount of their pocketbook 8 injury, not only the amount attributable to FCTI. Cf. Van v. LLR, Inc., 61 F.4th 1053, 1064 9 (9th Cir. 2023) (“Any monetary loss, even one as small as a fraction of a cent, is sufficient 10 to support standing. Thus, the presence of class members who suffered only a fraction of 11 a cent of harm does not create an individualized issue that could predominate over class 12 issues.”) (internal citation omitted). Accordingly, there are no individualized questions of 13 standing that defeat predominance. 14 3. Defenses 15 Defendant argues that it can raise two mitigation defenses that are individualized 16 and unamenable to resolution on a classwide basis. (Opp’n 27–29). First, according to 17 Defendant, “every putative class member in this case has had a reasonable—and in fact, 18 simple—step to mitigate damages: make a claim in Weiss.” (Id. at 27). However, by 19 Defendant’s own admission, Defendant is entitled to invoke this defense “as to every 20 putative class member”, which raises a common issue that the Court can address in one 21 stroke. (Id. at 27–28) (emphasis added); Beaver v. Omni Hotels Mgmt. Corp., 2023 WL 22 6120685, at *7 (S.D. Cal. Sept. 18, 2023) (“In addition, failure to mitigate is a defense 23 Defendants can likely raise against all class members.”). Even if the reasons why class 24 members did not submit a claim in Weiss are individualized, (Opp’n 28), “there is no reason 25
26 class member who was assessed three wrongful fees would be entitled to $0.51, and so on. The $15.00 is merely a cap on the maximum amount a class member could recover. 27 5 This analysis also applies to the New York class in Weiss, which refers to individuals in Polvay v. FCTI, Inc., No. 1:22-cv-04315-JSR (S.D.N.Y.) who recovered statutory damages under New York’s General 28 1 to think that these questions will overwhelm common ones and render class certification 2 inappropriate under Rule 23(b)(3),” Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 3 258, 276 (2014). “That [Defendant] might attempt to pick off the occasional class member 4 here or there through individualized rebuttal does not cause individual questions to 5 predominate.” Id. 6 Second, Defendant alleges that it will have a mitigation-of-damages defense for 7 “class members who incurred more than one OON fee on multiple occasions.” (Opp’n 28); 8 (see also id.) (“That is, if a customer transacted at an FCTI ATM and incurred two OON 9 fees during the same visit, that customer was thereafter aware of the consequences of 10 selecting ‘Continue’ at the FCTI ATM screens.”). Like Defendant’s first alleged defense, 11 this defense does not overpower common questions. Van, 61 F.4th at 1066 (“[A] plaintiff 12 need not rebut every individualized issue that could possibly be raised.”). Even if it did, 13 Defendant has presented no evidence regarding the applicability of this defense, e.g., the 14 number of class members who were assessed a second OON fee on more than one occasion. 15 True Health Chiropractic, Inc. v. McKesson Corp., 896 F.3d 923, 932 (9th Cir. 2018) 16 (“[W]e do not consider the consent defenses that [the defendant] might advance or for 17 which it has presented no evidence.”); accord Bridging Communities Inc. v. Top Flite Fin. 18 Inc., 843 F.3d 1119, 1125 (6th Cir. 2016) (“We are unwilling to allow such speculation 19 and surmise to tip the decisional scales in a class certification ruling[.]”). A failure to 20 mitigate does not undermine typicality. See, e.g., Beaver, 2023 WL 6120685, at *7; 21 Longest v. Green Tree Servicing LLC, 308 F.R.D. 310, 324 (C.D. Cal. 2015); Ellsworth v. 22 U.S. Bank, N.A., 2014 WL 2734953, at *17 (N.D. Cal. June 13, 2014). So too in the 23 predominance context. See id. at *29 (holding same for predominance because failure to 24 mitigate damages “is not a defense that requires substantial cross-examination on 25 individual facts”). Therefore, Defendant’s mention of defenses it might advance is 26 insufficient. 27 28 1 4. Jury Waiver 2 According to Defendant, the agreements governing class members’ accounts with 3 Defendant include a jury waiver provision that undermines predominance because “the 4 jury waiver’s enforceability varies based on the state where the class members’ accounts 5 are located, so some class members will be entitled to a jury trial and others will not.” 6 (Opp’n 29). The Court is unconvinced. Defendant has not yet indicated an intent to enforce 7 this waiver provision. Moreno v. JCT Logistics, Inc., 2019 WL 3858999, at *19 (C.D. Cal. 8 May 29, 2019) (rejecting argument that forum-selection clause defeats class certification 9 because defendants did not “express an intent to enforce the new forum-selection clause”). 10 “[T]he potential enforceability of [the provision] as to some class members does not defeat 11 class certification”. Id.; see also Kleen Prods. LLC v. Int’l Paper, 306 F.R.D. 585, 607 12 (N.D. Ill. 2015), aff’d sub nom. Kleen Prods. LLC v. Int’l Paper Co., 831 F.3d 919 (7th 13 Cir. 2016) (“[T]he majority of cases hold that the existence of contractual provisions does 14 not automatically defeat class certification.”).6 15 Neither the district court’s previous concerns nor Defendant’s new arguments 16 sufficiently challenges Plaintiff’s assertion that “questions of law or fact common to class 17 members predominate over any questions affecting only individual members”. Fed. R. 18 Civ. P. 23(b)(3). Instead, “common questions present a significant aspect of th[is] case” 19 because class members suffered the same pocketbook injury from Defendant collecting an 20 OON fee based on the same FCTI prompt. Hanlon, 150 F.3d at 1022. A determination of 21 whether FCTI’s prompt amounts to a balance inquiry as the Ninth Circuit has interpreted 22 23 24 25
26 6 Defendant’s reliance on In re LIBOR-Based Financial Instruments Antitrust Litigation is unpersuasive because the district court listed jury waiver provisions as one reason amongst many that, when considered 27 together, “confirmed” its “skepticism” that “common questions will predominate over individual ones”. 299 F.Supp.3d 430, 606 (S.D.N.Y. 2018). The jury waiver provisions were not the focal point of the 28 1 the term will drive resolution of the contract claims writ large. Plaintiff thus satisfies Rule 2 23(b)(3)’s predominance requirement.7 3 ii. Superiority 4 The superiority inquiry “requires determination of whether the objectives of the 5 particular class action procedure will be achieved in the particular case.” Id. at 1023 6 (internal citation omitted). “This determination necessarily involves a comparative 7 evaluation of alternative mechanisms of dispute resolution.” Id. “Generally, the factors 8 relevant to assessing superiority include ‘(A) the class members’ interests in individually 9 controlling the prosecution or defense of separate actions; (B) the extent and nature of any 10 litigation concerning the controversy already begun by or against class members; (C) the 11 desirability or undesirability of concentrating the litigation of the claims in the particular 12 forum; and (D) the likely difficulties in managing a class action.’” Wolin v. Jaguar Land 13 Rover N. Am., LLC, 617 F.3d 1168, 1175 (9th Cir. 2010) (quoting Fed. R. Civ. P. 14 23(b)(3)(A)–(D)). “Where classwide litigation of common issues will reduce litigation 15 costs and promote greater efficiency, a class action may be superior to other methods of 16 litigation.” Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996). 17 This matter is most suitable for adjudication as a class action. Given that individual 18 lawsuits are expensive, class members would likely have minimal interest in pursuing 19 separate actions and are better served through representative litigation. Just Film, Inc. v. 20 Buono, 847 F.3d 1108, 1123 (9th Cir. 2017) (“This case vividly points to the need for class 21 treatment. The individual damages of each merchant are too small to make litigation cost 22 effective in a case against funded defenses and with a likely need for expert testimony.”); 23 Amchem Prods., 521 U.S. at 617 (“The policy at the very core of the class action 24 mechanism is to overcome the problem that small recoveries do not provide the incentive 25 for any individual to bring a solo action prosecuting his or her rights.”); Smith v. Microsoft 26
27 7 “To the extent individualized inquiries might arise, the Court can either handle such issues in the context of classwide proceedings or, if necessary, revisit certification.” Bee, Denning, Inc. v. Cap. All. Grp., 310 28 1 Corp., 297 F.R.D. 464, 468–69 (S.D. Cal. 2014) (“The most compelling rationale for 2 finding superiority in a class action is the existence of a negative value suit.”) (internal 3 quotation marks and citations omitted). Evaluating Defendant’s conduct in one trial is also 4 more efficient than having numerous individual trials repetitively addressing the same 5 conduct. Just Film, 847 F.3d at 1123–24. Judicial economy would be better served through 6 a class action. 7 Contrary to Defendant’s contention, Plaintiff does not seek “double recovery [that] 8 flies in the face of reducing the possibility of multiple lawsuits.” (Opp’n 23) (internal 9 quotation marks and citation omitted). As explained above, the Weiss settlement covered 10 only the interchange fee received by FCTI, not the rest of the OON fee retained by 11 Defendant. This class action does not duplicate Weiss; rather, it is a vehicle to address 12 (likely) thousands of claims for damages against Defendant. There is no concern that there 13 will be inconsistent judgments because the other suits were against FCTI, not Defendant. 14 Smith, 297 F.R.D. at 469 (noting that “[a] class action may be inappropriate if multiple 15 actions are already pending due to the risk of inconsistent judgments”) (internal citation 16 omitted). Additionally, “courts often certify [concurrent] class actions arising from similar 17 facts”. Cohen v. Trump, 303 F.R.D. 376, 389 (S.D. Cal. 2014) (internal quotation marks 18 and citation omitted). The Court therefore finds that the superiority requirement is met. 19 Plaintiff fulfills the elements of Rule 23(b)(3). 20 b. Rule 23(b)(2) 21 As an alternative, Plaintiff seeks certification under Rule 23(b)(2). (Pl.’s Mot. 25– 22 26). Rule 23(b)(2) allows class certification if “the party opposing the class has acted or 23 refused to act on grounds that apply generally to the class, so that final injunctive relief or 24 corresponding declaratory relief is appropriate respecting the class as a whole”. Fed. R. 25 Civ. P. 23(b)(2). Because Plaintiff satisfies Rule 23(b)(3), the Court need not consider 26 Rule 23(b)(2). See Fed. R. Civ. P. 23(b) (test is disjunctive); see also Briseno, 844 F.3d at 27 1124 (explaining that parties seeking class certification must satisfy “one of the 28 requirements of Rule 23(b)”). 1 Accordingly, Plaintiff meets all applicable requirements for class certification under 2 || Federal Rule of Civil Procedure 23. The Court GRANTS Plaintiff's Motion. 3 IV. CONCLUSION AND ORDER 4 For the foregoing reasons, the Court GRANTS Plaintiff's Renewed Motion for 5 Class Certification. The Court certifies a class of all Defendant checking account holders 6 ||in the United States who were assessed more than one OON balance inquiry fee during the 7 ||same visit to a FCTI, Inc.-owned ATM located in a 7-Eleven store from May 1, 2018, to 8 || November 16, 2021. Within thirty (30) days from the filing of this Order, the parties shall 9 ||meet and confer on the form of class notice to be provided for this Court’s approval and 10 || contact the assigned magistrate judge to schedule a case management conference, at which 11 || time all dates will be set. 12 IT IS SO ORDERED. 13 ||Dated: February 27, 2025 2» 14 rr, YW. 15 Hon. Dana M. Sabraw, District Judge 6 United States District Court
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