Howard v. Trans >Union>

 

 

 

 

 

 

 

 

 

Filed 6/4/13  Howard v. Trans Union CA1/1

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>NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b).  This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

 

 

IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

 

FIRST
APPELLATE DISTRICT

 

DIVISION
ONE

 

 
>

RICHARD HOWARD,             Plaintiff and Appellant, v. TRANS UNION, LLC,             Defendant and Respondent.

A133650         (Contra Costa County       Super. Ct. No. C07-02572)

 

            Plaintiff
Richard Howard sought to certify a class of California consumers who allegedly
received from defendant Trans Union, LLC, boilerplate descriptions of how it
investigated complaints about credit reports—descriptions allegedly lacking the
detail required by California’s Consumer Credit Reporting Agencies Act (CCCRAA)
(Civ. Code, § 1785.1 et seq.).href="#_ftn1"
name="_ftnref1" title="">[1]  The trial
court denied Howard’s motion for class certification on numerous
grounds.  We conclude the trial court did
not abuse its discretion in denying his motion, and affirm.

Factual and Procedural
Background

            In 2004,
Howard sued Trans Union because, among other things, his credit report from
that agency listed a Wells Fargo loan account he claimed was not his.  (See Howard
v. Blue Ridge Bank (N.D. Cal. 2005) 371 F.Supp.2d 1139, 1141–1142 [ruling
on motions in that lawsuit].)  As part of
a 2005 settlement agreement, Trans
Union agreed to remove the disputed account from Howard’s report. 

            In 2007,
according to Howard, Trans Union “reinserted” the Wells Fargo account into his
credit record.  While the reinserted
account had a different account number from the original, both accounts were
for an April 2003 automobile loan from Wells Fargo Financial Acceptance, called
for monthly payments of $412, and had high balances either equal to each other
or within one dollar (the original account had a high balance of $19,178 or
$19,179, and the reinserted account had a high balance of $19,178).  The reinserted account was not being paid
off, had been charged off as bad debt, and was a negative mark on Howard’s
credit.

            Howard
disputed the reinserted account by letter from his attorney dated June 12,
2007.  Trans Union’s response is not in
the record, but further correspondence by Howard indicates Trans Union refused
to remove the account.  Howard then
requested, by letter from his attorney dated July 9, 2007, that a dispute
statement be placed on his credit report and that Trans Union provide a
description of the procedure it had used to complete its investigation of the
disputed account—or “reinvestigation,” as it is called in the industry and in
the CCCRAA.  The CCCRAA requires consumer
credit reporting agencies conducting a reinvestigation to provide, within 15
days of a consumer request, “a description of the procedure used to determine
the accuracy and completeness of the information [in the credit report] . . . ,
including the name, business address, and telephone number of any furnisher of
information contacted in connection with that information.”href="#_ftn2" name="_ftnref2" title="">>[2]  (§ 1785.16, subd. (d).)

            Trans Union
responded in by latter dated July 25, 2007. 
The letter began by informing Howard’s attorney that “[t]o process your
request and protect the confidentiality of the above-referenced consumer’s
[Howard’s] credit report, please send us verification of his or her current
address,” such as a driver’s license or utility bill.  The letter also went on, nevertheless, to
reference the Wells Fargo account and stated “our records show the information
disputed . . . does not currently appear on [Howard’s] TransUnion credit
report.”href="#_ftn3" name="_ftnref3" title="">[3]  Then, under a heading termed “General
Policy,” the letter stated:

 

TransUnions’s
procedure for investigating disputed information is to contact, by mail,
electronic means, or telephone, the source of the information.  Each source is advised of the
above-referenced consumer’s dispute and is requested to verify the accuracy
and/or completeness of the information reported.  Once the verification responses are received,
the disputed information is updated accordingly.  Changes are reflected on the updated credit
report that is sent to the consumer at the conclusion of our
investigation.  If the consumer has any
questions regarding the results of the investigation, please have him/her
contact the creditor(s) directly.

The record contains no evidence Howard or his attorney
provided the proof of address Trans Union requested or engaged in any further
correspondence with Trans Union.

            On November
20, 2007, Howard filed the instant putative class action, seeking relief for
himself and for similarly situated California consumers, based upon Trans
Union’s alleged violations of the CCCRAA and California’s Unfair Competition
Law (UCL). 

            In March
2009, Howard moved for class certification. 
He sought to certify two classes for relief, solely under the CCCRAA.href="#_ftn4" name="_ftnref4" title="">[4]  The first was denominated a “Reinsertion
Class,” defined as:  “All California
consumers who disputed and had information removed from their credit reports as
a result of the dispute, and who subsequently had such disputed information
reinserted in their credit reports without the notice required by Civil Code
section 1785.16(c) in the statutory period.”href="#_ftn5" name="_ftnref5" title="">>[5]  The second was denominated a “Description
Class,” defined as:  “All California
consumers who requested a description of the reinvestigation process and were
provided a form description of the procedure used to determine the accuracy and
completeness of the disputed information in the statutory period.”href="#_ftn6" name="_ftnref6" title="">[6]  On appeal, Howard has abandoned his efforts
to certify a Reinsertion Class, and we therefore do not discuss this proposed
class further. 

            As to the
Description Class, Howard argued Trans Union “systematically sends out the same
form language” he received, and between May 1, 2005 and May 31, 2007, it did so
in 270,365 form letters.  His sole
evidentiary support for this contention was a discovery response Trans Union
made in a separate case, Carvalho v.
Credit Consulting Services, Inc. (Monterey Co. Superior Ct. No.
M90093).  An interrogatory asked the
company to “[s]tate the number of times [it] received a request from a
California consumer for a description of the procedure used to determine the
accuracy and completeness of the information upon reinvestigation in the period
between four years before this complaint was filed and the present.”  Trans Union, subject to objections,
responded:  “Between May 1, 2005 and May
31, 2007, Trans Union sent out 270,365 copies of the form letter represented by
TU0723 and TU0724.”  TU0723 and TU0724
were English and Spanish versions of a document, appearing to be an unaddressed
draft form letter, containing a short sentence thanking a hypothetical consumer
for contacting Trans Union and providing essentially the same “General Policy”
language included in the July 25 sent to Howard’s lawyer. 

            Howard
argued the sheer volume of form letters sent between May 1, 2005 and May 31,
2007, established numerosity and that all recipients of such letters shared the
same claim based on the formulaic and allegedly deficient language.  He did not, however, provide a copy of a
single one of the 270,365 letters 
supposedly sent to other putative class members during a time period
that ended nearly two months before the July 25 letter sent to Howard’s
attorney. 

            The
following month, in April 2009, Trans Union filed written opposition to
Howard’s motion.  The company argued
Howard had not shown how he, or any of the proposed class members, could
plausibly state a violation of the CCCRAA based on the allegedly boilerplate
language.  It also argued individuals
would have adequate incentive to pursue CCCRAA claims because of the remedies
available under the statute, so class treatment was not necessary and should be
denied. 

            There is
mention in the record, but no transcript, of a July 2009 hearing, at which the
trial court appears to have postponed ruling on the motion to allow for
discovery.  The first hearing for which a
transcript is provided did not take place until June 10, 2011, nearly two years
later.  In advance of the June 10
hearing, the court issued a tentative ruling that provided in part:

 

“With respect to
the [Description Class] . . . , plaintiff seems to have met the burden of
showing numerosity.  (See Exhibit D to
the Declaration of Ron Bochner filed March 12, 2009 [providing evidence Trans
Union sent 270,365 copies of a form letter including the ‘General Policy’
language it also sent to Howard].) 
However plaintiff has not addressed the issue of ascertainability.  In addition, the Court wishes to have the
parties address the issue of manageability and superiority.  What relief is plaintiff seeking as to the
second issue?  How would that case be
managed?  Why would a class action be
superior to non-class adjudication?” 

            At the
hearing, the court expressed concern that, in their briefing, the parties had
not adequately addressed the Description Class. 
For example, the court found the briefing lacking on numerosity (despite
the tentative ruling), as well as on ascertainability.  It also noted there might be concerns about
typicality or commonality of issues if the CCCRAA’s description obligation
could only be enforced in court by consumers who had sought a description of a
reinvestigation of an inaccurate
account: the inaccuracy issue would be specific to each individual.  (See Trujillo
v. First American Registry, Inc. (2007) 157 Cal.App.4th 628, 637–638 (>Trujillo) [the CCCRAA “expressly limits
its scope to consumers who have been ‘aggrieved’—that is, consumers who have
been actually injured” and “does not, as plaintiffs urge, allow plaintiffs,
uninjured by violations that have already occurred, to bring CCCRAA causes of
action seeking injunctive relief”]; Carvalho
v. Equifax Information Services, LLC (N.D. Cal. 2008) 588 F.Supp.2d
1089, 1099–1100 (Carvalho) [“the
rationale for imposing an inaccuracy requirement on reinvestigation claims
favors applying that requirement to claims under § 1681i(a)(6)(B)(iii) and
its California counterpart, § 1785.16(d)(4)”].)

            After a
lunch break, the trial court further explored the issues of ascertainability and
typicality and asked about the 270,365 form letters Trans Union had apparently
admitted sending.  It wanted to know if
Trans Union could identify the recipients. 
Trans Union’s counsel responded “I called at lunchtime and asked about
that.  It’s extremely difficult to find,
but it could be probably done manually and would take 200 hours.”  The court also observed the July 25, 2007,
letter to Howard’s attorney included not only the boilerplate language, but
also additional paragraphs, most notably (1) the paragraph conditioning a
further response on proof of identity and (2) the paragraph suggesting there
was no entry remaining on Howard’s report to investigate.  The court was concerned Howard’s own
situation was not typical of the class he sought to certify—“if the response
from Trans Union is to just include the boiler plate along with a more tailored
response, then how on earth do we deal with 270,000 responses . . . ?”  There was no way to know, the trial court stated,
if those 270,000 people got just the boilerplate language, or something else,
like Howard, or something different even from the kind of response Howard
received.  Counsel for Trans Union stated
that while some consumers may have gotten the boilerplate language, alone, each
of the 270,365 notices was likely to contain additional information.

            Based on
the parties’ lackluster briefing on the Description Class and the discussion
during the hearing, the court ordered the parties to submit further briefing
and any, relevant evidence, and scheduled another hearing.  It told Howard’s counsel “it’s your job to
carry the burden of showing me numerosity, typicality, ascertainability, et
cetera.  If you don’t carry the burden,
I’m not certifying [the Description Class].” 
The court was emphatic:  “I’m going
to want evidence.” 

            The parties
submitted additional briefing, but Howard submitted no new evidence pertaining
to the Description Class.  During the
next hearing on July 29, 2011, the trial court expressed concerns the
Description Class was unworkable, because it would include consumers who
received the allegedly defective boilerplate language but who ultimately had no
inaccuracy on their credit report—and thus would not have suffered cognizable
injury under Carvalho, >supra, 588 F.Supp.2d at pages 1099–1100.  (See also Trujillo,
supra, 157 Cal.App.4th at pp.
637–638.)  The court also stated Howard
failed to show typicality because the letter sent to him requested further
information, and there was no evidence any of the 270,365 form letters sent out
were similar enough so a class could properly be fashioned.  The court similarly found no ascertainability
or numerosity.  On September 7, 2011, the
court issued a written order, consistent with its statements from the bench,
denying class certification.  Howard
filed a notice of appeal on November
4, 2011.

Discussion

            Code of Civil Procedure
section 382 provides for class actions, stating in part “when the question is
one of a common or general interest, of many persons, or when the parties are
numerous, and it is impracticable to bring them all before the court, one or
more may sue . . . for the benefit of all.” 
(Code Civ. Proc., § 382.) 
“The party advocating class treatment must demonstrate the existence of an
ascertainable and sufficiently numerous class, a well-defined community of
interest, and substantial benefits from certification that render proceeding as
a class superior to the alternatives.”  (>Brinker Restaurant Corp. v. Superior Court
(2012) 53 Cal.4th 1004, 1021 (Brinker).)  “The community of interest requirement
embodies three factors:  (1) predominant
common questions of law or fact; (2) class representatives with claims or
defenses typical of the class; and (3) class representatives who can adequately
represent the class.” (Richmond v. Dart Industries, Inc. (1981) 29
Cal.3d 462, 470; accord, Brinker, >supra, 53 Cal.4th at p. 1021; Sav-on
Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326.) 

            Our review of a “class
certification order . . . is narrowly circumscribed.”  (Brinker, supra, 53 Cal.4th at p. 1022.)  “ ‘The decision to certify a class rests
squarely within the discretion of the trial court, and we afford that decision
great deference on appeal, reversing only for a manifest abuse of
discretion:  “Because trial courts are
ideally situated to evaluate the efficiencies and practicalities of permitting
group action, they are afforded great discretion in granting or denying
certification.”  [Citation.]  A certification order generally will not be
disturbed unless (1) it is unsupported by substantial evidence, (2) it rests on
improper criteria, or (3) it rests on erroneous legal assumptions.  [Citations.]’ 
[Citations.]  Predominance is a
factual question; accordingly, the trial court’s finding that common issues
predominate generally is reviewed for substantial evidence.  [Citation.] 
We must ‘[p]resum[e] in favor of the certification order . . . the
existence of every fact the trial court could reasonably deduce from the record
. . . .’ 
[Citation.]”  (>Ibid.)

            We first
turn to the community of interest requirement, and in particular, the
requirement that the class representative have claims typical of the putative
class.  “ â€˜ â€œThe cases
uniformly hold that a plaintiff seeking to maintain a class action must be a
member of the class he claims to represent. 
[Citations.]”  [Citation.]’  (Chern v. Bank of America (1976) 15
Cal.3d 866, 874 . . . .)”  (Caro v.
Procter & Gamble Co. (1993) 18 Cal.App.4th 644, 663 (>Caro).) 
“ ‘It is the fact that the class plaintiff’s claims are typical and his
representation of the class adequate which gives legitimacy to permitting him
to bind class members who have notice of the action.  [Citations.]’ 
[Citation.]”  (>Id. at p. 664.)>

            To be typical, it is not enough
that some aspect of the claims arise from identical conduct.  In Fairbanks v. Farmers New World Life
Ins. Co. (2011) 197 Cal.App.4th 544, 564–565, for example, the plaintiff
sought to certify a class of consumers who were fraudulently induced to purchase
insurance policies.  Affirming denial of
certification, the Court of Appeal held “even if plaintiffs were permitted . .
. to proceed with a class action based solely on the allegedly misleading
language of the policies, it is still impossible to consider the language of
the policies without considering the information conveyed by the . . .  agents in the process of selling them.”  (Id.
at p. 564.)  Because evidence showed
“further explanations were provided to many members of the prospective class,
and the trial court accepted this evidence . . . plaintiffs cannot obtain a
reversal of the denial of class certification on this basis.”  (Id.
at pp. 564–565; see also Kaldenbach v.
Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850; >Soderstedt v. CBIZ Southern California, LLC
(2011) 197 Cal.App.4th 133, 154 [“although
CBIZ maintained uniform internal policies and was subject to professional
standards, the evidence showed that the manner in which those policies and
standards were implemented . . . varied depending on multiple factors”]; >City of San Jose v. Superior Court
(1974) 12 Cal.3d 447, 461 [“While landing or departure [of aircraft] may be a
fact common to all” landowners near the airport “liability” for nuisance or
inverse condemnation “can be established only after extensive examination of
the circumstances surrounding each party.”].)

            Similarly,
in Caro, the plaintiff alleged the
class was deceived by defendant’s claim its orange juice was “fresh.”  The evidence, however, indicated the plaintiff
was not deceived by this claim, but was misled by defendant’s claim the juice
was “premium.”  (Caro, supra,
18 Cal.App.4th at p. 664.)  “Because
Caro did not claim to be misled in the manner the class was allegedly deceived,
the court could not ‘decide the issue of the rights of such individuals that
might possibly exist.’  [Citation.]”  (Ibid.)  His claims were not typical, and “[s]uch
determination alone was sufficient to defeat class certification on all Caro’s
causes of action.”  (Id. at p. 666.)

            The trial
court’s lack of typicality determination here is supported by the record, or
perhaps more accurately, is supported by a lack of substantial evidence from
Howard.  (See Soderstedt v. CBIZ Southern California, LLC, supra, 197 Cal.App.4th at p. 143 [“ â€˜party seeking
certification has the burden to establish . . . a well-defined community of
interest’ â€].)  The sum total of the
evidence Howard provided on typicality was (1) the July 25, 2007, letter
Trans Union sent to his attorney and (2) Trans Union’s discovery response in >another case, indicating it had sent
270,365 copies of a form letter containing the challenged “General Policy”
language.  In its written ruling, the
trial court observed “it is clear” Howard “received a letter that is different”
from the form letter he asserted was sent to other putative class members.  Howard was “asked to provide some more
information.”  He was also told the
claimed inaccurate information was no longer on his credit report, implying
there was no meaningful re-investigation to describe.  There was no evidence whatsoever regarding
the circumstances of any of the
purported recipients of the 270,365 letters containing the “General Policy”
boilerplate language.  Thus, there was no
evidence any of the form letters similarly sought identifying information
and/or indicated there was no credit report entry to investigate.  The mere
fact all the letters may have contained the “General Policy” language is not
enough, standing alone, to create typicality. 
(See, e.g., Fairbanks v. Farmers New World Life Ins. Co., >supra, 197 Cal.App.4th at pp.
564–565.) 

            We
similarly conclude the record supports the trial court’s conclusions that
Howard’s evidence falls short of establishing numerosity and
ascertainability.  (See >Soderstedt v. CBIZ Southern California, LLC,
supra, 197 Cal.App.4th at p. 155
[“Nor did Krogh’s declaration constitute evidence of numerosity.  He declared that there were a total of 119
accountants employed in CBIZ’s three offices, but did not specify how many of those
accountants were associates and senior associates.  Nor did he make any effort to identify how
many former CBIZ employees would fit the putative class description contained
in appellants’ complaint.”].)  Further,
as to ascertainability, Howard presented no evidence on how he would identify
the recipients of the 270,365 form letters and determine if he was typical of
any of them.  Yet, it was Howard’s burden
to make the requisite showing on this point. 
The only information in the record is Trans Union’s counsel’s unsworn,
hearsay statement at the June 10, 2011, court hearing that identifying
recipients would take 200 hours of manual labor.  Thus, not only did Howard make no effort to
carry his burden on ascertainability, but it appears there may be serious
problems in this regard.  (See >Sotelo v. MediaNews Group, Inc. (2012)
207 Cal.App.4th 639, 648 [“ â€˜Class members are “ascertainable” where they
may be readily identified without unreasonable expense or time by reference to
official records.’ â€].)

            Howard also
failed to carry his burden of establishing that a class action is a superior
procedural device in this case.  (See >Brinker, supra, 53 Cal.4th at p. 1021 [“The party advocating class treatment
must demonstrate . . . substantial benefits from certification that render
proceeding as a class superior to the alternatives.”].)  For example, should Howard succeed in
obtaining declaratory and injunctive relief that the “General Policy” language
fails to comply with the CCCRAA, it is hard to see how, in practice, Trans
Union could avoid changing its practices as to other consumers as well.  (See § 1785.31, subd. (b) [authorizing
individuals to recover injunctive relief].) 
The CCCRAA also allows individual consumers to recover actual damages,
“including court costs, loss of wages, attorney’s fees and, when applicable,
pain and suffering,” and if the violation is willful, not merely negligent,
punitive damages between $100-$5,000. 
(§ 1785.31, subd. (a).) 
These remedies provide sufficient incentive for a consumer to
individually vindicate his or her rights. 
(See Gardner v. Equifax
Information Services, LLC (D. Minn., Aug. 6, 2007, No. CIV.06-3102ADM/AJB)
2007 WL 2261688 [collecting cases and finding class action not superior for
Federal Fair Credit Reporting Act because of attorney fees provision]; >Hyderi v. Washington Mut. Bank, FA (N.D.
Ill. 2006) 235 F.R.D. 390, 404 [“Precedent teaches that the availability
of statutory damages plus the ability to recover attorneys fees and costs
provides substantial incentives to bring meritorious individual suits.”]; cf. >AT&T Mobility LLC v. Concepcion
(2011) 179 L.Ed.2d 742, 758–759 [“the arbitration agreement provides that
AT&T will pay claimants a minimum of $7,500 and twice their attorney’s
fees” and agreeing “this scheme [is] sufficient to provide incentive for the
individual prosecution of meritorious claims” and “the Concepcions were >better off under their arbitration
agreement with AT&T than they would have been as participants in a class
action”].)

            Howard
lastly contends the trial court did not give him an adequate opportunity to
conduct discovery related to class certification.  To begin with, Howard never appropriately
raised this issue with the trial court. 
While Howard’s counsel, at the end of the final hearing on class
certification, asked the trial court to confirm “this is with prejudice; in
other words, we don’t have any right to do any further discovery on these
issues, this is the final order,” this was by no means a request for another
continuance and additional discovery. 
Accordingly, Howard has waived the issue.  (See Arguelles-Romero
v. Superior Court (2010) 184 Cal.App.4th 825, 832, fn. 5 [failure to
request additional discovery waives review on petition for writ of
mandate].)  Moreover, Howard had four
years to conduct discovery to meet his burden as a class action proponent.  If there was any doubt about what evidence he
needed to muster, it was eliminated by the lengthy discussions between counsel
and the court at the June 10, 2011 hearing. 
The trial court made it very clear to Howard it needed to see more
evidence in conjunction with the additional briefing, yet Howard presented no
additional evidence.  Thus, there was no
abuse of discretion by the trial court in connection with discovery during the class
certification proceedings. 

>Disposition

            The order
denying class certification is affirmed. 
Respondent to recover its costs on appeal.

 

                                                                                    _________________________

                                                                                    Banke,
J.

 

We concur:

 

_________________________

Margulies, Acting P. J.

 

_________________________

Dondero, J.