Jabbari v. Farmer

965 F.3d 1001

Shahriar JABBARI; Kaylee Heffelfinger, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

v.Chad Michael FARMER, Objector-Appellant,

v.Wells Fargo & Company; Wells Fargo Bank, N.A., Defendants-Appellees.

Shahriar Jabbari; Kaylee Heffelfinger, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

v.Barbara Cochran, Objector-Appellant,

v.Wells Fargo & Company; Wells Fargo Bank, N.A., Defendants-Appellees.

Shahriar Jabbari; Kaylee Heffelfinger, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

v.Lydia LaBelle de Rios, Objector-Appellant,

v.Wells Fargo & Company; Wells Fargo Bank, N.A., Defendants-Appellees.

Shahriar Jabbari; Kaylee Heffelfinger, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

v.Mike Murphy, Objector-Appellant,

v.Wells Fargo & Company; Wells Fargo Bank, N.A., Defendants-Appellees.

Shahriar Jabbari; Kaylee Heffelfinger, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

v.Charles Darbyshire, Guardian of Roy Geiersbach, Objector-Appellant,

v.Wells Fargo & Company; Wells Fargo Bank, N.A., Defendants-Appellees.

Shahriar Jabbari; Kaylee Heffelfinger, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

Jill Piazza, Objector-Appellant,

v.Wells Fargo & Company; Wells Fargo Bank, N.A., Defendants-Appellees.

Shahriar Jabbari; Kaylee Heffelfinger, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees,

v.Scott Johnston, Objector-Appellant,

v.Wells Fargo & Company; Wells Fargo Bank, N.A., Defendants-Appellees.

No. 18-16213

No. 18-16223

No. 18-16236

No. 18-16284

No. 18-16285

No. 18-16315

No. 18-16317

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 13, 2020 San Francisco, California

Filed July 20, 2020

Robert Clore (argued) and Christopher A. Bandas, Bandas Law Firm P.C., Corpus Christi, Texas, for Objector-Appellant Chad Michael Farmer.

N. Albert Bacharach Jr. (argued) and Charles Darbyshire, N. Albert Bacharach Jr. P.A., Gainesville, Florida, for Objector-Appellant Charles Darbyshire.

John J. Pentz (argued), Law Offices of John J. Pentz, Sudbury, Massachusetts, for Objector-Appellant Jill Piazza.

Cameron S. Christensen (argued) and Steven Alden Christensen, Christensen Young & Associates PLLC, Sandy, Utah, for Objector-Appellant Scott Johnston.

George W. Cochran, Streetsboro, Ohio, for Objector-Appellant Barbara Cochran.

Steve Scow, Koch & Scow, Henderson, Nevada, for Objector-Appellant Mike Murphy.

Annette Borzakian, Los Angeles, California, for Objector-Appellant Lydia LaBelle de Rios.

Benjamin J. Horwich (argued), David H. Fry, and Nick M. Axelrod, Munger Tolles & Olson LLP, San Francisco, California; Erin J. Cox, Munger Tolles & Olson LLP, Los Angeles, California; for Defendants-Appellees.

Derek W. Loeser (argued), Gretchen Freeman Cappio, and Benjamin Gould, Keller Rohrback LLP, Seattle, Washington; for Plaintiffs-Appellees.

Before: Ronald M. Gould and Mary H. Murguia, Circuit Judges, and Gary Feinerman,^** District Judge.

OPINION

GOULD, Circuit Judge:

This appeal presents objections to the settlement of a nationwide class action against Wells Fargo. We have jurisdiction pursuant to 28 U.S.C. § 1291. In a separately filed memorandum disposition, we affirm the district court. Here, we specifically affirm the district court's holding that the class satisfied Rule 23(b)(3) ’s predominance requirement under the precedent set by our recent en banc decision in In re Hyundai & Kia Fuel Economy Litigation , 926 F.3d 539 (9th Cir. 2019).

I

The class action complaint alleged that Wells Fargo & Company and Wells Fargo Bank, N.A. (Wells Fargo), pressured their employees to meet arbitrary and unrealistic sales quotas unrelated to true consumer demand. This allegedly resulted in Wells Fargo's systematic exploitation of its customers for profit. The crux of the alleged scheme was that Wells Fargo employees would open multiple accounts in a customer's name without the customer's consent.

According to the complaint, Wells Fargo directly harmed its customers to benefit itself. Once Wells Fargo opened an unauthorized account, it charged fees to the customers. Customers soon fielded the calls of debt collectors seeking payment of debts of which the customers were unaware. The outstanding debts and unmonitored bank accounts also harmed the customers’ credit. Wells Fargo then offered to sell its credit-protection products to the customers whose credit it was harming.

Plaintiffs Shahriar Jabbari and Kaylee Heffelfinger sued Wells Fargo in a putative class action. The complaint alleged violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, et seq. ; the Electronic Fund Transfer Act, 15 U.S.C. § 1693, et seq. ; California and Arizona statutory law; and common law.

After proceedings in the district court, the parties reached a settlement. The district court certified a settlement class and approved the settlement. The settlement class included

[a]ll Persons for whom Wells Fargo or Wells Fargo's current or former subsidiaries, affiliates, principals, officers, directors, or employees opened an Unauthorized Account or submitted an Unauthorized Application, or who obtained Identity Theft Protection Services from Wells Fargo during the period from May 1, 2002 to April 20, 2017.

In addressing the objections to the certification and the settlement, the district court held that "[d]ifferences among state laws do not bar certification of the class here, as Plaintiffs have asserted a claim under a federal statute (the Fair Credit Reporting Act) that is equally applicable in all states."

Some Objectors appealed. Among the objections is that the class did not satisfy Rule 23(b)(3) ’s predominance requirement because the district court did not do a choice-of-law analysis. As support, Objectors cited our opinions Mazza v. American Honda Motor Co. , 666 F.3d 581 (9th Cir. 2012), and the later-reversed three-judge panel's opinion in In re Hyundai & Kia Fuel Economy Litigation , 881 F.3d 679 (9th Cir. 2018), rev'd en banc , 926 F.3d 539 (9th Cir. 2019). We now address this case's position in that line of cases.

II

"We review for abuse of discretion the district court's decision to certify a class for settlement purposes, limiting our review ‘to whether the district court correctly selected and applied Rule 23 ’s criteria.’ " In re Hyundai & Kia Fuel Econ. Litig. , 926 F.3d 539, 556 (9th Cir. 2019) (en banc) (quoting Parra v. Bashas’, Inc. , 536 F.3d 975, 977 (9th Cir. 2008) ). "When reviewing an order granting class certification, ‘we accord the district court noticeably more deference than when we review a denial.’ " Torres v. Mercer Canyons Inc. , 835 F.3d 1125, 1132 (9th Cir. 2016) (quoting Abdullah v. U.S. Sec. Assocs., Inc. , 731 F.3d 952, 956 (9th Cir. 2013) ).

III

Federal Rule of Civil Procedure 23(b)(3) requires "that the questions of law or fact common to class members predominate over any questions affecting only individual members." To determine whether a class satisfies the requirement, a court pragmatically compares the quality and import of common questions to that of individual questions. See Tyson Foods, Inc. v. Bouaphakeo , ––– U.S. ––––, 136 S. Ct. 1036, 1045, 194 L.Ed.2d 124 (2016) ; see also 2 William B. Rubenstein, Newberg on Class Actions § 4:50 (5th ed. 2018) ("[A] court must first characterize the issues in the case as common or individual and then weigh which predominate." (emphasis omitted)).

This task is not an exact science. Rather, a court must determine which questions are likely "to drive the resolution of the litigation." Torres v. Mercer Canyons Inc. , 835 F.3d 1125, 1134 (9th Cir. 2016). If a common question will drive the resolution, even if there are important questions affecting only individual members, then the class is "sufficiently cohesive to warrant adjudication by representation." Amchem Prods., Inc. v. Windsor , 521 U.S. 591, 623–24, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) ; see also Tyson Foods , 136 S. Ct. at 1045.

Also relevant is whether a district court certifies a class for settlement or for trial. In re Hyundai & Kia Fuel Econ. Litig. (Hyundai II ), 926 F.3d 539, 558 (9th Cir. 2019) (en banc). Settlement may "obviate[ ] the need to litigate individualized issues that would make a trial unmanageable," id. , making common questions more important in the relative analysis.

The potential applicability of variations in state law can complicate the predominance determination. See Senne v. Kansas City Royals Baseball Corp. , 934 F.3d 918, 928 (9th Cir. 2019) ("[P]otentially varying state laws may defeat predominance in certain circumstances."), petition for cert. filed , (U.S. June 4, 2020) (No. 19-1339); see also Mazza v. Am. Honda Motor Co. , 666 F.3d 581, 591–94 (9th Cir. 2012) ; Zinser v. Accufix Research Inst., Inc. , 253 F.3d 1180, 1189 (9th Cir.), amended on denial of reh'g , 273 F.3d 1266 (9th Cir. 2001). When the relevant state laws differ in material ways, a court may have to decide which state's or states’ law applies before it can determine whether common questions of law or fact predominate. See Zinser , 253 F.3d at 1189.

In our prior decisions, we have outlined the contours of the predominance determination in the context of variations in state law. In Hanlon v. Chrysler Corp. , we affirmed the district court's certification of a settlement class asserting various consumer protection causes of action without requiring a choice-of-law analysis. 150 F.3d 1011, 1023–24 (9th Cir. 1998), overruled on other grounds by Wal-Mart Stores, Inc. v. Dukes , 564 U.S. 338, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011). We held that variations in "products liability, breaches of express and implied warranties, and ‘lemon laws’ " across the states did not defeat predominance because "there were still sufficient common issues to warrant a class action, particularly questions of Chrysler's...