Certification decision Medrazo v. Honda of North Hollywood discusses commonality, ascertainability requisites and the prohibition on merits-based denials

With all the class certification decisions over the years, one might think that there isn't much left to say on the topic that hasn't been said before.  While there is a kernel of truth to that sentiment, many of the governing principles of class action law aren't put into practice by trial courts in a consistent manner.  Reviewing courts occasionally take such opportunities to emphasize what should be well-settled principles.  In Medrazo v. Honda of North Hollywood, the Court of Appeal (Second Appellate District, Division Four) used just such an opportunity to reinforce the appropriate analyses that apply to the "commonality" and "ascertainability" requisites of class certification.  In addition, the Court of Appeal emphasized the prohibtion on merits-based denials by trial courts.

In Medrazo, the Plaintiff alleged that Honda of North Hollywood violated Vehicle Code sections 11712.5 and 24014 by failing to attach a suggested retail price and costs label to motorcycles.  The trial court denied a motion for class certification and an appeal followed.  Starting with the standard for evaluating motions for certification, the Court said:

““As the focus in a certification dispute is on what type of questions -- common or individual -- are likely to arise in the action, rather than on the merits of the case [citations], in determining whether there is substantial evidence to support a trial court’s certification order, we consider whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On Drug, supra, 34 Cal.4th at p. 327.)

(Slip op., at pp. 7-8.)  After articulating the standard, the Court held that the trial court erred when it considered the merits of an affirmative defense as a basis for denying certification.

Next, Medrazo addressed the trial court's determination that common issues of fact or law did not predominate.  Explaining predominance, Medrazo reminded courts and litigants that predominance is not requirement that demands an absence of individualized issues:

““Predominance is a comparative concept, and ‘the necessity for class members to individually establish eligibility and damages does not mean individual fact questions predominate.’ [Citations.] Individual issues do not render class certification inappropriate so long as such issues may effectively be managed. [Citations.] [] Nor is it a bar to certification that individual class members may ultimately need to itemize their damages.” (Sav-On Drug, supra, 34 Cal.4th at p. 334.)

It is true that in this case, each Honda purchaser will be required to establish that there was no hanger tag attached to the motorcycle he or she purchased and/or that the dealer-added costs were not disclosed on the hanger tag [footnote omitted], and all purchasers will be required to establish the suggested retail price of their motorcycles and the amount of dealer-added costs included in their purchases (if it is determined that the class is entitled to a monetary recovery measured by those items). But those individual issues must be compared to the issues that are subject to classwide (or sub-classwide) treatment. Those issues include: (1) whether HNH violated section 11712.5 and section 24014 by selling motorcycles without hanger tags; (2) whether a purchaser who buys a motorcycle sold in violation of section 11712.5 and section 24014 is entitled to restitution, disgorgement, and/or damages, and if so, what is the proper measure of restitution, disgorgement, and/or damages; (3) whether the alleged injury to the purchaser is mitigated by the disclosure of dealer-added costs in a sales agreement; and (4) whether HNH is excused from the requirements of section 11712.5 and section 24014 if the manufacturer does not supply a hanger tag that complies with section 24014.

There is nothing in the record to suggest that the individual issues cannot be effectively managed. Indeed, the record suggests that the resolution of the individual issues will involve mostly undisputed evidence -- presumably, the class members will attest that there were no hanger tags on the motorcycles they purchased, and HNH has admitted it did not attach hanger tags on any Suzuki or Yamaha motorcycles, did not attach them to some of the Honda motorcycles, and has no evidence to show there were hanger tags on any specific motorcycles. That HNH may be hampered in its ability to challenge the class members’ evidence due to its failure to keep records of its casual approach to affixing hanger tags is not a valid reason to deny class certification on the ground that individual issues predominate. In short, the substance and scope of the individual issues pale in comparison to the substance and scope of the common issues.

(Slip op., at pp. 12-13.)  Significantly for plaintiffs, this analysis provides a very concrete roadmap for presenting certification motion for claims based on statutory violations.

Finally, Medrazo explains yet again the fact that ascertainability does not require the Plaintiff to identify the class members at the time certification is determined:

““A class is ascertainable if it identifies a group of unnamed plaintiffs by describing a set of common characteristics sufficient to allow a member of that group to identify himself or herself as having a right to recover based on the description.” (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 828.) While often it is said that “[c]lass members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932; accord, Aguiar v. Cintas Corp. No. 2, supra, 144 Cal.App.4th at p. 135), that statement must be considered in light of the purpose of the ascertainability requirement.

“Ascertainability is required in order to give notice to putative class members as to whom the judgment in the action will be res judicata.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 914; accord, Aguiar v. Cintas Corp. No. 2, supra, 144 Cal.App.4th at p. 135.) The representative plaintiff need not identify the individual members of the class at the class certification stage in order for the class members to be bound by the judgment. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 706.) As long as the potential class members may be identified without unreasonable expense or time and given notice of the litigation, and the proposed class definition offers an objective means of identifying those persons who will be bound by the results of the litigation, the ascertainability requirement is met.

(Slip op., at pp. 13-14.)  This, too, is an important point.  It has been my observation that the ascertainability requirement is often twisted beyond recognition, until a trial court concludes that no class definition is workable.  As Bartold notes, what is important at the outset is that the definition be sufficiently specific that a class member viewing the definition knows whether he or she falls within the class definition.  Nobody else needs to know the answer to that question at the point of certification.  Thanks to Medrazo, the context added to the Rose decision may help resolve disingenuos challenges to ascertainability.