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Waller v. Hewlett-Packard Co.

United States District Court for the Southern District of California

September 29, 2013, Decided; September 29, 2013, Filed

CASE NO. 11cv0454-LAB (RBB)



The Court previously stayed this case pending the appeal of the denial of class certification in O'Shea v. Epson America, Inc., Case No. 9-CV-8063 (C.D. Cal.). It expected that on appeal the Ninth Circuit would confront and resolve a question that has become a kind of spike strip in the class certification of lawsuits brought under California's Unfair Competition Law. See Case No. 11-57105. That question, which hovers at the intersection of substantive state law and federal constitutional law,  [**2] is whether absent members of a putative class action removed to federal court must have Article III standing, and if so, what constitutes that standing.

The answer to the first prong is of substantial consequence, especially where, as here, the underlying claim has no injury requirement but Article III standing does. A putative class may have standing under state law, and a winning claim, but then run into serious trouble in federal court when confronted with Article III standing requirements. Simple removal by the defendant would be a game-changer. It is also of substantial consequences because although the Ninth Circuit has held that "a district court's . . . denial of Rule 23 class certification does not divest the court of jurisdiction," United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int'l Union, AFL-CIO, CLC v. Shell Oil Co., 602 F.3d 1087, 1092 (9th Cir. 2010), it might be otherwise if class certification fails at the outset for lack of standing, which is jurisdictional. Id. at 1092 n.3.

A lot also turns on the answer to the second prong of the question. Is it enough for Article III standing that a consumer bought a product with misleading packaging,  [**3] or must the consumer have actually relied on the labeling to his or her detriment? These are very different standards. If the answer is the latter, it will be nearly impossible to certify these kinds of UCL cases because the reliance and injury inquiry will always be individualized. That is, a defendant will always be able to argue that whether consumers  [*475]  actually saw and relied on the labeling, and suffered some injury as a result, can't be resolved universally.

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295 F.R.D. 472 *; 2013 U.S. Dist. LEXIS 141729 **; 86 Fed. R. Serv. 3d (Callaghan) 1279; 2013 WL 5551642

ROBERT A. WALLER, JR., on behalf of himself and all others similarly situated, Plaintiff, vs. HEWLETT-PACKARD COMPANY, etc., et al., Defendants.

Prior History: Waller v. Hewlett-Packard Co., 2013 U.S. Dist. LEXIS 74790 (S.D. Cal., May 24, 2013)


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