Monday, November 04, 2013

No class action against payment processor for multiple sites

Yordy v. Plimus, Inc., No. C12-0229, 2013 WL 5832225 (N.D. Cal. Oct. 29, 2013)

Yordy went to, which allegedly promised her unlimited downloads of bestselling eBooks for a one-time $49.99 fee, which she paid, only to discover that the website didn’t offer the promised books for download, but rather only had links to eBooks that were already available elsewhere on the internet for free (some in violation of copyright law).  That site was allegedly one of 19 such “Unlimited Download Websites” that utilized the same fraudulent advertising scheme. She alleged that Plimus controlled this scheme and profited by taking a percentage of each one-time fee as a payment processing fee. She brought the usual California claims.  Plimus denied that it was involved in the design or implementation of the marketing and advetising, but was just a processor.

The court denied Yordy’s motion for class certification.  It first rejected Plimus’s argument that the class was unascertainable because the court would have to determine if each individual had been exposed to the allegedly false advertising.  But the alleged misrepresentations here were not “communicated only to select individuals, but to the public at large on the face of the UDWs.”  Screenshots showed these and similar statements: “Members have unlimited access, no restrictions,” and “MILLIONS of titles available!”  The websites included images of popular (and in fact unavailable) titles such as Lord of the Rings and The Da Vinci Code. All putative class members were exposed to this allegedly false advertising, so no individualized inquiry would be required to determine class membership.  Numerosity was also satisfied.

The problem was commonality.  Yordy argued that the common questions were: (1) whether Plimus is liable for facilitating and promoting the UDWs, and (2) whether Plimus had knowledge of the fraudulent nature of the UDWs.  But questions weren’t enough; Yordy needed to show “the capacity of a classwide proceeding to generate common answers.”  She didn’t.  After the court requested Yordy to identify evidence linking Plimus to the UDWs’ advertising, she identified communications between Plimus and only one UDW.  Consumer complaints received by Plimus didn’t demonstrate that it was involved in advertising or promotion.  (Why not contributory liability?  That would seem possible on a classwide basis.)  “While Yordy need not prove Plimus’s involvement with all the UDWs’ misrepresentations at this stage, she must present sufficient evidence to satisfy the Court that the putative class has common claims.”  She didn’t.

Typicality was also absent, for similar reasons.  Yordy failed to show that Plimus’s involvement in the UDW she visited was similar to its involvement with the 18 UDWs she didn’t visit.  Though the misrepresentations may have been similar, there was no evidence that Plimus’s conduct in bringing about those misrepresentations was similar.  “The Court is cognizant of not reaching too far into the merits in requiring Yordy to prove Plimus’s involvement in advertising, but, as with commonality, Yordy must at least establish that Plimus’s involvement in each UDW was substantially similar such that Yordy’s claims against Plimus relating to are representative.”  Also, without commonality and typicality, there couldn’t be adequacy.

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