Plaintiffs alleged that defendants misrepresented the actual number of usable airtime minutes in their advertised wireless plans. The basic challenge was to disclosures relating to the practice of billing for airtime in full minute increments, with partial minutes rounded up as is standard. The trial court sustained defendants’ demurrer to the class action allegations, and the court of appeals largely affirmed, but reversed the dismissal of equitable claims under the UCL.
The key question was whether the complaint adequately alleged predominant common questions of law or fact. A previous decision rejecting a complaint over the same practices, Knapp, held that the class members lacked the requisite commonality because the alleged misrepresentations weren’t made uniformly—some were oral and others written. Plaintiffs alleged that there were common, standardized misrepresentations in the contract documents, claiming that subscrubers could get a package of x number of airtime minutes at a price per month of y. Defendants argued that plan information was communicated in a variety of ways, including brochures, mail, websites, on the phone, and in retail stores, and that the brochures had prominent disclosure of the partial minute policy.
The court agreed that the alleged misrepresentations were made to the proposed class members in a variety of ways, and individual members may or may not have seen or relied on any of them. One named plaintiff picked the cheapest plan available and didn’t recall any discussion of how minutes were calculated. (Isn’t that the “failure to disclose” argument?) At least in some cases, consumers received the disclosures in the same documents that allegedly misrepresented available minutes, and a consumer who saw “or was otherwise aware” of the disclosures couldn’t have been deceived.
Common-law fraud and CLRA claims require actual reliance for damages. Classwide causation may be shown by materiality, but if materiality or reliance would vary from consumer to consumer the issue wouldn’t be subject to common proof and the case wouldn’t be suitable as a class action. Here, the named plaintiffs offered different reasons to choose particular service plans. In fact, the gist of their claims was not that the undisclosed rounding up induced any particular choice, but rather that they received less than what was promised.
Given that the service agreements all disclosed the rounding up practice, other members of the class may well have seen the disclosure or discussed it with a sales rep. This necessarily involved individualized inquiries and meant a lack of commonality.
The UCL analysis was slightly different. Plaintiffs argued that, under Tobacco II, they were entitled to a presumption or inference of reliance if there was a material misrepresentation. Some cases have held that a complaint alleging false advertising under the UCL should survive pleading challenges unless it can be said as a matter of law that the purported misrepresentations were immaterial. But other cases suggest that commonality and factual questions of reliance can be addressed early on, at least as to people who weren’t exposed to the alleged misrepresentations and therefore couldn’t have lost money or property from them. If materiality or reliance would vary from consumer to consumer, then it shouldn’t be a class action. Given the record here, the court didn’t find an inference of common reliance justified.
Even assuming a common, material misrepresentation, the UCL restitution claims would fail. People aware of the rounding up practice wouldn’t be entitled to the return of any money. And those who were unaware wouldn’t be entitled to anything if they never exceeded their available minutes. However, there might be a claim for equitable relief under the UCL. The adequacy of the disclosures and whether at least some members of the public were likely to be deceived couldn’t be resolved as a matter of law on a demurrer.