Downey v. Public Storage, Inc. ( 2020 )

Filed 2/6/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
CHERYL DOWNEY et al., B291662
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC575661)
v.
PUBLIC STORAGE, INC.,
Defendant and
Respondent.
APPEAL from an order of the Superior Court of Los
Angeles County, Carolyn B. Kuhl, Judge. Affirmed.
Baker, Burton & Lundy, Brad Baker and Albro Lundy;
Dale E. Washington; and Raymond Zakari for Plaintiffs and
Appellants.
Keker, Van Nest & Peters, John W. Keker, Erin E. Meyer,
Eduardo E. Santacana, Christopher S. Sun; Willkie Farr &
Gallagher and Simona A. Agnolucci for Defendant and
Respondent.
******
A trial court may certify a class in a proposed class action
lawsuit only if, among other things, the court finds a “‘community
of interest’” among the proposed class members (Duran v. U.S.
Bank National Assn. (2014) 59 Cal.4th 1, 28 (Duran)), which in
part means that “‘“common questions of law or fact”’”
“‘“predominate”’” because “the elements necessary to establish
liability are susceptible of common proof” (Brinker Restaurant
Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021, 1024
(Brinker)). Where, as here, a proposed class action lawsuit seeks
restitution for violations of the Unfair Competition Law (Bus. &
Prof. Code, § 17200 et seq.) and false advertising law (id., § 17500
et seq.) based on a series of allegedly deceptive advertisements
offering a special promotional rate but defines the class as
everyone who received the special promotional rate, must the
plaintiffs establish that the following “elements” are “susceptible
of common proof”—namely, (1) that the class members were
exposed to the advertisements, and (2) that the various
permutations of the advertisements were deceptive? We conclude
that the answer is “yes,” and that language in In re Tobacco II
Cases (2009) 46 Cal.4th 298 (Tobacco II) is not to the contrary.
Because the trial court’s finding that the issues of exposure and
deceptiveness were not susceptible of common proof is supported
by substantial evidence, we affirm its order denying class
certification.
FACTS AND PROCEDURAL BACKGROUND
I. Facts
A. Public Storage and its procedures for renting
space
Defendant Public Storage, Inc. (Public Storage) rents
storage units to the public, and has more than 400 storage
facilities throughout California.
2
A person who rents a unit from Public Storage must pay (1)
a monthly rent, and (2) a one-time “New Account Administration
Fee” of $22 or $24 (new account fee). The renter must also (1)
supply his or her own lock for the space, and (2) have insurance
that covers the items to be stored. Rather than supplying their
own locks or insurance, renters have the option of purchasing a
lock or an insurance policy from Public Storage. Between 2011
and 2016, Public Storage used four different insurance rider
forms: The form used from 2011 through March 2012 stated that
renters could “elect[] to obtain” an insurance policy from Public
Storage; the form used from March 2012 through July 2013
clarified that any policy obtained from Public Storage might be
duplicative of homeowner’s or renter’s insurance; the form used
from July 2013 through January 2016 further clarified that the
insurance requirement could be met by “[an]other applicable
insurance” policy; and the form used from January 2016 onward
even further clarified that a policy from Public Storage was “not
required in order to store . . . goods.”
B. Public Storage’s $1 first month’s rent promotion
From 1983 to the present, Public Storage has offered the
public a promotional rate of $1 for the “First Month” or “First
Month[’s] Rent” of a storage unit.
The $1 promotional rate has appeared in a variety of
different media: Public Storage advertised the $1 promotional
rate “sporadic[ally]” on commercials on local television in 2011
and 2012 and on select weeks on national cable channels from
2013 through 2017; on banners affixed to some of the storage
facilities; on various Internet-based outlets, including Google,
Yahoo and similar search engines as paid responses to certain
search queries, Facebook and other social media sites, and
3
YouTube—all of which referred the viewer to Public Storage’s
website; on some webpages of Public Storage’s own website;
briefly on radio commercials on Los Angeles Dodgers Radio in
2010 and 2011; and sometimes in conjunction with other
businesses, such as Budget Rental Trucks and Six Flags
amusement parks.
The “wording” of the advertisements “has varied over time
and in [this] different media.” Some of the television ads stated
that the $1 promotional rate “does not include applicable deposits
or fees”; some of the YouTube ads stated that “Other restrictions,
taxes and fees apply”; and many of the banners, any of the
Internet ads on platforms that allows for asterisked text, and
Public Storage’s website itself (to which all Internet ads funneled
a viewer), placed an asterisk next to many $1 promotional rate
advertisements with a second asterisk at the bottom of the
website explaining that rate was subject to “fees,” “taxes” or
“restrictions.”
The $1 promotional rate is automatically applied to certain
storage units regardless of whether the renter invokes (or
otherwise knows about) the rate. A renter who reserves a unit
online will (1) see a webpage that displays the $1 rate for the
remainder of the calendar month as well as pro-rated into the
next month as well as the $22 or $24 new account fee, and (2)
receive a confirmatory email setting forth the $1 rate and the
new account fee. A renter who reserves a unit by calling Public
Storage and who provides an email address will receive a
confirmatory email setting forth the $1 rate and the new account
fee. And all renters—whether they reserve online, reserve by
phone, or simply walk in and rent a space—are told, before they
sign any rental contract, that they will be charged the new
4
account fee. Public storage also mandates that its employees
follow a script that tells renters, before they sign a rental
contract, that they must have a lock and insurance, but they have
the option of using their own locks and insurance or buying a lock
or insurance policy from Public Storage.
C. Implementation of the $1 Promotional Rate
Between March 6, 2011 and February 8, 2016, Public
Storage applied the $1 promotional rate to units rented by
650,296 customers. Of these customers, 40 percent made an
online reservation for a storage unit and 33.4 percent simply
“walked in” without any existing reservation. A total of 57
percent of the 650,296 customers received a confirmatory email
detailing the $1 promotional rate and the new account fee.
Although four customers (three of whom, as described below,
became the plaintiffs pertinent to the claim at issue in this
appeal) reported that Public Storage employees told them that
they had to buy a Public Storage lock, only 69 percent of the
650,296 customers during the five-year window bought a lock
from Public Storage; the remaining 31 percent used their own
locks. And although the same four customers reported that
Public Storage employees told them that they had to purchase a
Public Storage insurance policy, only 86.7 percent of the 650,296
customers during the five-year window purchased a Public
Storage policy; the remaining 13.3 percent, including one of the
customers himself on one of the three occasions he rented a
storage unit, relied upon another insurance policy.
II. Procedural Background
A. Operative complaint
In March 2015, a handful of Public Storage customers
brought a lawsuit alleging that Public Storage’s $1 promotional
5
rate was deceptive. In the operative fourth amended complaint,
named plaintiffs Roderick Goff II (Goff), Heather Granado
(Granado) and Scott Mueller (Mueller) (collectively, plaintiffs)
allege, among other things, that the $1 promotional rate violates
the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.)
and constitutes a false advertisement (id., § 17500 et seq).1
Specifically, plaintiffs allege that Public Storage’s $1 promotional
rate advertisements constitute a deceptive “bait and switch”
because customers were promised a $1 rate but ultimately had to
pay more than $1 for their first month due to (1) having to pay
the new account fee, (2) being charged a second month’s rent on
the first day of the next calendar month, even if the first 28 to 31
days (at the $1 promotional rate) were not yet over, (3) having to
buy a lock, and (4) having to provide insurance coverage for the
items in the storage unit. Plaintiffs sought to bring a class
action.
B. Class certification motion
In December 2017, plaintiffs moved to certify a class
defined as “all California tenants who rented storage units from a
California Public Storage facility under the $1 Special
1 These plaintiffs and/or other named plaintiffs also allege
claims for (1) unfair competition and false advertising in relation
to Public Storage’s sale of insurance policies, (2) injunctive relief
against Public Storage’s alleged practices of cutting customers’
non-Public Storage-purchased locks, prematurely locking
customers out of their spaces, not providing customers with
copies of their rental contracts, and selling insurance without a
license, and (3) declaratory relief regarding Public Storage’s sale
of insurance. These claims have been split off into a different
lawsuit or are otherwise no longer at issue in this case.
6
[P]romotion from March 6, 2011 through February 8, 2016 and
paid over and above the $1 advertised for the $1 Special” by
paying (1) “an extra ‘administrative fee;’” (2) “purchas[ing] locks;”
(3) “purchas[ing] insurance;” and/or (4) “not receiv[ing] a full
month’s rent (a full month being 28-31 consecutive days
depending on the month) without further charges.”
After Public Storage filed an opposition and plaintiffs filed
their reply, the trial court held a hearing to entertain argument.
At that hearing, plaintiffs clarified that they were seeking to
certify a class only for purposes of obtaining restitutionary relief,
not injunctive relief.
In a 10-page order, the trial court denied plaintiff’s motion
for class certification. The court found that plaintiffs had not
“show[n] that common issues of fact and law predominate” in two
respects. First, plaintiffs “ha[d] not shown that all class
members were exposed to” the $1 promotional rate
advertisements. Those advertisements, the court found, were
“frequently disconnected from the rental process” because
customers could “walk in” and rent a space without seeing a
banner on the Public Storage facility or could reserve a unit on
Public Storage’s website without seeing the ad. Because the class
was defined to encompass anyone who had “rented under the $1
Special rate” irrespective of whether they had ever seen the
advertisements for that rate, the issue of whether class members
had been exposed to the advertisements at issue was not
susceptible of common proof. Second, plaintiffs had “admit[ted]
that the advertisements at issue are not uniform.” Because many
of the specific advertisements made further disclosures, making
it possible that “one type of advertisement is . . . deceptive but
another is not,” the issue of whether the class members had been
7
exposed to deceptive—and hence, actionable—advertisements was
also not susceptible of common proof.
Plaintiffs filed a timely notice of appeal.2
DISCUSSION
Plaintiffs argue that the trial court erred in denying their
motion to certify their proposed class. Because the decision
whether to certify a class falls “‘squarely within the discretion of
[a] trial court,’” our review is limited to whether that decision
constitutes an abuse of discretion. (Brinker, supra, 53 Cal.4th at
pp. 1017, 1022.) In conducting this review, we look solely to the
“reasons given by the trial court for denial of class certification”
and may reverse only if those reasons (1) “rest[] on improper
criteria” or “erroneous legal assumptions” or (2) are “unsupported
by substantial evidence.” (Id. at p. 1022; Davis-Miller v.
Automobile Club of Southern California (2011) 201 Cal.App.4th
106, 120-121 (Davis-Miller).) We review a trial court’s specific
finding that “common questions of law and fact” are not
“predominant” for substantial evidence. (Brinker, at pp. 1021-
1022.)
I. Law Governing Class Certification
A lawsuit may proceed as a class action if there is (1) “‘an
ascertainable class,’” and (2) “‘a well-defined community of
interest among the class members.’” (Duran, supra, 59 Cal.4th at
p. 28, quoting Washington Mutual Bank v. Superior Court (2001)
24 Cal.4th 906, 913; see generally Code Civ. Proc., § 382.) The
community of interest requirement requires a showing, among
2 We have jurisdiction over the denial of a class certification
motion under the so-called “death knell” doctrine. (E.g., Fierro v.
Landry’s Restaurant Inc. (2019) 32 Cal.App.5th 276, 280, fn. 4.)
8
other things, that “common questions of law or fact”
“predominate” as to the class members.3 (Brinker, supra, 53
Cal.4th at pp. 1021, 1025.)
In deciding whether common questions predominate, we
ask whether “the issues framed by the pleadings and the law
applicable to the causes of action alleged” will be “susceptible of
common proof” for all members of the proposed class or, instead,
whether the class members will “‘be required to litigate
numerous and substantial questions determining [their]
individual right to recover following [a] ‘class judgment’ on
common issues.’” (Brinker, supra, 53 Cal.4th at p. 1024; Duran,
supra, 59 Cal.4th at p. 28; In re Vioxx Cases (2009) 180
Cal.App.4th 116, 128 (Vioxx).) The “‘ultimate question’” is which
will predominate—“‘issues which may be jointly tried’” or “‘those
requiring separate adjudication.’” (Brinker, at p. 1021.) The
focus of the predominance inquiry is on the facts and “the
elements necessary to establish” “‘“the defendant’s liability”’”
rather than the amount of damages. (Duran, at p. 28; Brinker, at
pp. 1021, 1024.) Given these principles, the pertinent questions
then become: (1) What elements must be proven to establish the
defendant’s liability, and (2) Are these elements susceptible of
common proof?
The predominance requirement is a critical limitation on
the scope of the class action mechanism. Although class actions
enforcing the Unfair Competition Law “‘serve [an] important
3 The community of interest requirement also requires a
showing that the class representatives (1) have “claims or
defenses typical of the class” and (2) “can adequately represent
the class.” (Brinker, at p. 1021.) These requirements are not at
issue in this appeal.
9
role[] in the enforcement of consumers’ rights’” by enabling
consumers to bring a collective action when “the relatively small
individual recovery” would make a single-plaintiff lawsuit
infeasible (Tobacco II, supra, 46 Cal.4th at p. 313; Fletcher v. Sec.
Pac. Nat’l Bank (1979) 23 Cal.3d 442, 452 (Fletcher)), “the class
action procedural device” cannot alter “a party’s substantive
rights” by “foreclos[ing] . . . litigation of . . . defenses turn[ing] on
individual questions” (Duran, supra, 59 Cal.4th at p. 34).
The burden of establishing that common issues
predominate, like all prerequisites for class certification, rests
with the plaintiff. (Kaldenbach v. Mutual of Omaha Life Ins. Co.
(2009) 178 Cal.App.4th 830, 843 (Kaldenbach).)
II. Analysis
A. What must be proven?
Plaintiffs’ proposed class seeks restitution under the Unfair
Competition Law for a “fraudulent” business practice and under
the false advertising law.4 (Bus. & Prof. Code, §§ 17200, 17500.)
“[T]o state a claim under either the [Unfair Competition Law] or
the false advertising law, based on false advertising . . . practices,
‘it is necessary only to show that “members of the public are
likely to be deceived.”’” (Kasky v. Nike, Inc. (2002) 27 Cal.4th
939, 951, quoting Committee on Children’s Television, Inc. v.
General Foods Corp. (1983) 35 Cal.3d 197, 211 (Committee on
Children’s Television), superseded by statute on other grounds as
stated in Branick v. Downey Savings & Loan Assn. (2006) 39
4 The Unfair Competition Law also defines unfair
competition to include business practices that are “unlawful” and
“unfair.” (Id., § 17200). Although plaintiffs initially proceeded
under all three prongs, they now characterize the $1 promotional
rate solely as a “fraudulent” business practice.
10
Cal.4th 235, 242; see generally, Zhang v. Superior Court (2013)
57 Cal.4th 364, 370 [noting substantive overlap of two claims];
Tobacco II, supra, 46 Cal.4th at p. 312, fn. 8 [same].)
Under the Unfair Competition Law and the false
advertising law, plaintiffs may seek (1) injunctive relief and/or (2)
restitution. (Bus. & Prof. Code, §§ 17203, 17535; see Korea
Supply Co v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134,
1144.) These forms of relief are “wholly independent remedies”
(Clayworth v. Pfizer, Inc. (2010) 49 Cal.4th 758, 790), and each
requires a different showing. While a party seeking injunctive
relief need only prove that “‘members of the public are likely to be
deceived’” by the defendant’s false advertisements (Committee on
Children’s Television, supra, 35 Cal.3d at p. 211), a party seeking
restitution must also prove that the defendant “may have
. . . acquired” “money or property” “by means of [its] unfair
competition” or false advertising. (Bus. & Prof. Code, §§ 17203,
17535; Tucker v. Pacific Bell Mobile Services (2012) 208
Cal.App.4th 201, 228 (Tucker) [“‘[I]n order to obtain classwide
restitution under the [Unfair Competition Law], plaintiffs need
establish not only a misrepresentation that was likely to deceive
. . . but also the existence of a “measurable amount” of
restitution, supported by the evidence.’”]; Colgan v. Leatherman
Tool Group, Inc. (2006) 135 Cal.App.4th 663, 698 [same]).
Consequently, where plaintiffs seek to certify a class aimed
solely at recovering restitution under the Unfair Competition
Law or false advertising law and define the members of the class
as anyone who purchased the good or service to which the
advertisement pertains, those plaintiffs must prove that (1) the
class members were exposed to the advertisement, (2) the
advertisement was deceptive, and (3) the deception was material.
11
Unless the class members were exposed to the
advertisement, they could not have been deceived by it and the
defendant responsible for that advertisement could not have
acquired the class members’ “money or property” by means of
that allegedly deceptive advertisement. (Pfizer Inc. v. Superior
Court (2010) 182 Cal.App.4th 622, 631 (Pfizer) [“one who was not
exposed to the alleged misrepresentations . . . could not possibly
have lost money or property as a result of the unfair
competition”]; Cohen v. DIRECTV, Inc. (2009) 178 Cal.App.4th
966, 980 (Cohen) [no relief if the “consumer . . . was never
exposed in any way to an allegedly wrongful business practice”];
Tucker, supra, 208 Cal.App.4th at p. 229 [exposure required];
Davis-Miller, supra, 201 Cal.App.4th at pp. 124-125 [same];
Knapp v. AT&T Wireless Services, Inc. (2011) 195 Cal.App.4th
932, 945-946 (Knapp) [same]; American Honda Motor Co., Inc. v.
Superior Court (2011) 199 Cal.App.4th 1367, 1379 [same]
(American Honda); Fairbanks v. Farmers New World Life Ins. Co.
(2011) 197 Cal.App.4th 544, 562 [same] (Fairbanks); Sevidal v.
Target Corp. (2010) 189 Cal.App.4th 905, 926 (Sevidal) [same];
see also, Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310,
327-328 (Kwikset) [class valid at demurrer stage based on
allegation that “plaintiffs saw . . . the labels”]; Weinstat v.
Dentsply Internat., Inc. (2010) 180 Cal.App.4th 1213, 1219-1220
(Weinstat) [class valid where consumers all exposed to the
misrepresentation]; McAdams v. Monier, Inc. (2010) 182
Cal.App.4th 174, 179 [re-defining class to include only those
consumers who had “been exposed” to the deceptive
representation].)
Unless the advertisement is deceptive, the advertisement
does not constitute a “fraudulent” business practice or false
12
advertising. (In re Ins. Installment Fee Cases (2012) 211
Cal.App.4th 1395, 1417 [no “fraudulent” business practice where
ad is neither “misleading [n]or deceptive”]; Tucker, supra, 208
Cal.App.4th at p. 229 [no “fraudulent” business practice where
consumers are aware of facts omitted from advertisement].)
However, once the plaintiffs establish that the class has
been exposed to a deceptive advertisement, the sole remaining
element is proof that the falsity or omission that makes the
advertisement deceptive is “material,” at least when plaintiffs
define the class as those who have purchased the good or service
to which the advertisement pertains. In this instance, proof that
the advertisement is material itself satisfies the element of
reliance. That is because a falsity or omission in an
advertisement is “material” if “‘“a reasonable [person] would
attach importance to”’” that falsity or omission “‘“in determining
his [or her] choice of action in the transaction in question.”’”
(Kwikset, supra, 51 Cal.4th at p. 332; Engalla v. Permanente
Medical Group, Inc. (1997) 15 Cal.4th 951, 977.) And if a
reasonable person would “attach importance” to the falsity or
omission, courts can safely and logically “infer” or “presume” that
“members of the public” (from which the putative class members
are drawn) will rely on that falsity or omission in deciding
whether to purchase the good or service. (Tobacco II, supra, 46
Cal.4th at p. 327 [“a presumption, or at least an inference, of
reliance arises whenever there is a showing that a
misrepresentation was material”]; Chapman v. Skype Inc. (2013)
220 Cal.App.4th 217, 229 [“actual reliance, or causation, is
inferred from the misrepresentation of a material fact”]; Tucker,
supra, 208 Cal.App.4th at p. 226 [noting “inference” of reliance];
Keilholtz v. Lennox Hearth Prods. Inc. (N.D. Cal. 2010) 268
13
F.R.D. 330, 342 (Keilholtz) [same].) And in this instance, defining
the class as only those persons who purchased the good or service
at issue itself satisfies the element of injury—that is, the outlay
of money for that good or service—as to all class members. (E.g.,
Pfizer, supra, 182 Cal.App.4th at p. 626 [so defining a class];
American Honda, supra, 199 Cal.App.4th at p. 1379 [same];
Steroid Hormone Product Cases (2010) 181 Cal.App.4th 145, 149
[same] (Steroid); Kaldenbach, supra, 178 Cal.App.4th at p. 836
[same]; Krueger v. Wyeth, Inc. (S.D. Cal. 2011) 2011 U.S. Dist.
LEXIS 154472, *2 (Krueger) [same].)
B. Are the elements susceptible of common proof?
The trial court found the elements of exposure and
deceptiveness were not susceptible of common proof. We examine
each.
1. Exposure
Common issues do not predominate (and class certification
is properly denied) when the evidence demonstrates variations in
how—and, critically, whether—class members were exposed to an
allegedly deceptive advertisement. (Stearns v. Ticketmaster
Corp. (9th Cir. 2011) 655 F.3d 1013, 1020 (Stearns) [where class
members “exposed to quite disparate information” from
defendant, “it might well be that there was no cohesion among
the [class] members”]; see Kaldenbach, supra, 178 Cal.App.4th at
pp. 846, 848 [variations in “what was actually said or
demonstrated in any individual sales transaction”; common
issues do not predominate]; cf. Massachusetts Mutual Life Ins.
Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1289-1292
[defendant made identical representations or nondisclosures to
all class members; common issues predominate], superseded on
other grounds by Proposition 64 as stated in Steroid, supra, 181
14
Cal.App.4th at p. 154; Steroid, at p. 149 [defendant omitted
information from labels on every purchased bottle of steroids;
common issues predominate].)
Substantial evidence supports the trial court’s finding that
common issues of fact do not predominate on the issue of
exposure because “members of the class stand in a myriad of
different positions” vis-à-vis how and whether they were exposed
to Public Storage’s $1 promotional rate. (Cohen, supra, 178
Cal.App.4th at p. 979.) Because plaintiffs’ proposed class is
defined by who obtained the $1 rate (rather than who saw or
heard Public Storage’s advertisements for that rate), and because
Public Storage applied the $1 rate to particular storage units
whether or not the renters of those units invoked that rate
(presumably because they had been exposed to an ad for that
rate), membership in the class is not a proxy for exposure to the
advertisement. Nor was exposure to the advertisement a
practical inevitability, as the evidence showed that people could
make in-person reservations without seeing a banner advertising
the $1 promotional rate and that people could make online or
phone reservations without ever seeing advertisements for that
rate on television, online or elsewhere. Given this variation in
exposure, the trial court had ample basis to fear it would be
“required to litigate numerous and substantial questions
determining . . . individual [class members’] right to recover.”
(Duran, supra, 59 Cal.4th at p. 931.)
2. Deceptiveness
Common issues do not predominate (and class certification
is properly denied) when the evidence demonstrates a “lack of
commonality” or “uniform[ity]” in the content of an allegedly
deceptive advertisement, particularly where some of the
15
advertisements made full disclosures and were accordingly not
deceptive. (Fairbanks, supra, 197 Cal.App.4th at p. 562 [“a class
action cannot proceed for a fraudulent business practice under
the [Unfair Competition Law] when it cannot be established that
the defendant engaged in uniform conduct likely to mislead the
entire class.”]; see Knapp, supra, 195 Cal.App.4th at p. 943 [no
predominance of common issues where “alleged
misrepresentations were not uniformly made to proposed class
members”]; Kaldenbach, supra, 178 Cal.App.4th at p. 846 [no
predominance of common issues where “what was actually said or
demonstrated” was “not uniform”]; Pfizer, supra, 182 Cal.App.4th
at pp. 631-632 [no predominance of common issues where
allegedly deceptive label was not on all bottles of mouthwash sold
to class members]; American Honda, supra, 199 Cal.App.4th at p.
1379 [no predominance of common issues where “representations
made to class members” were “variable”]; cf. Weinstat, supra, 180
Cal.App.4th at pp. 1219-1220 [predominance of common issues
where each product sold by the defendant contained the
directions alleged to be deceptive].)
Substantial evidence supports the trial court’s finding that
common issues of fact do not predominate on the issue of
deception because Public Storage’s advertisements for its $1
promotional rate varied over time and across different media, and
not all of those various ads contained the falsities and omissions
that plaintiffs claim render those ads deceptive. Several of the
advertisements touting the $1 promotional rate—including those
on various banners, on Public Storage’s website, and on the
Internet—expressly informed consumers that other “fees,” “taxes”
“restrictions” or “deposits” applied, and thus that the charge for
the first month would not be only $1. Suffice it to say, an
16
advertisement is not deceptive for omitting certain information if
it actually discloses that information. (Accord, Freeman v. Time,
Inc. (9th Cir. 1995) 68 F.3d 285, 289 (Freeman) [“qualifying
language” in an advertisement may negate deceptiveness];
Sperling v. Stein Mart, Inc. (C.D. Cal. 2016) 2016 U.S. Dist.
LEXIS 111227, *20, *24 (Sperling) [same].)
The evidence also indicates that even those advertisements
that did not on their face mention other “fees” or “taxes” might
still not be deceptive because Public Storage disclosed the charge
and requirements plaintiffs allege were deceptively omitted from
those ads before class members rented their units. Public
Storage disclosed the new account fee to many class members
before they ever drove down to a Public Storage facility: Any
person who received a confirmatory email (as did 57 percent of
the class) or who reserved a storage unit online (as did 40 percent
of the class) were informed that they were being charged the new
account fee. Public Storage disclosed its requirement that each
renter use a lock on its website, and the purchase of a Public
Storage lock was not mandatory, even though all three named
plaintiffs bought Public Storage locks, because (1) 31 percent of
the putative class did not buy one (and hence did not have to buy
one) and (2) the script Public Storage employees were to use
required them to explain that renters “can use [their] own” lock.
Public Storage disclosed its requirement that each renter have
insurance in the rental agreement, and the purchase of a Public
Storage insurance policy was not mandatory, even though all
three named plaintiffs bought a Public Storage policy at least
once, because (1) 13.3 percent of the putative class did not
purchase such a policy (including Mueller on one occasion), (2)
the insurance rider itself expressly indicated that Public
17
Storage’s insurance policy was optional, and (3) the script Public
Storage employees were to use required them to explain that
renters can use their own insurance policy. And Public Storage’s
practice of sending new renters a bill on the first day of the next
calendar month did not render the $1 promotional rate
advertisements deceptive because Public Storage (1) pro-rated
the next month’s rent bill to charge renters only $1 for however
many days of the first month spilled into the next month; and (2)
imposed no fee if the renter opted not to pay the next month’s
rent bill until the following month.
Given this variation in disclosures that directly affect
whether the allegedly deceptive advertisements were, in fact,
deceptive, the trial court also had ample basis to fear it would be
“required to litigate numerous and substantial questions
determining . . . individual [class members’] right to recover” on
the issue of deceptiveness. (Duran, supra, 59 Cal.4th at p. 931.)
III. Plaintiffs’ Counter-Arguments
A. The Effect of Tobacco II
Plaintiffs argue that the trial court was wrong to require
them to prove that exposure and deceptiveness are susceptible of
common proof. For support, they cite our Supreme Court’s
decision in Tobacco II, supra, 46 Cal.4th 298. Plaintiffs assert
that the trial court relied upon improper criteria in denying class
certification by insisting that “each class member . . . have seen
the same or substantially the same advertising copy” because
Tobacco II stated that a “plaintiff is not required to plead with an
unrealistic degree of specificity that [he] relied on particular
advertisements or statements” when there is a “long-term
advertising campaign.” (Tobacco II, at p. 328; see also id. at p.
306.) Because Public Storage’s $1 promotional rate campaign is a
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36-year-old ad campaign, plaintiffs reason, “[i]t is enough that
[its] advertising campaign . . . presents a pervasive common
theme that misleads.” Plaintiffs further assert that the trial
court erred in requiring proof of deception because Tobacco II,
drawing on earlier cases, reaffirmed that “‘relief under the
[Unfair Competition Law] is available without individualized
proof of deception, reliance and injury.’ [Citation.]” (Id. at pp. 320
& fn. 14, 326; see also Committee on Children’s Television, supra,
35 Cal.3d at p. 211; Bank of the West v. Superior Court (1992) 2
Cal.4th 1254, 1267.)
We disagree with plaintiffs that Tobacco II abrogated the
requirements of exposure and deception that, as described above,
must be proven when plaintiffs seek to recover restitution under
the Unfair Competition Law and false advertising law.
To begin, Tobacco II’s holding is inapt. Tobacco II
addressed the standing requirements of class representatives in
class actions under the Unfair Competition Law and false
advertising law after the enactment of Proposition 64. (Tobacco
II, supra, 46 Cal.4th at p. 306; see also, Bus. & Prof. Code,
§§ 17204, 17535.) The court ruled that Proposition 64 limits class
representatives to those persons who have actually relied on an
unfair business practice (or false advertisement) and
“person[ally] . . . suffered” economic harm due to that reliance.
(Tobacco II, at p. 330; Kwikset, supra, 51 Cal.4th at pp. 321, 323.)
The court further ruled that these additional standing
requirements apply only to class representatives, not to the
members of the class. (Tobacco II, at p. 306.) Because Tobacco II
deals with the standing requirements for class representatives,
courts have repeatedly “concluded Tobacco II is ‘irrelevant’ to a
class certification motion ‘because the issue of “standing” simply
19
is not the same thing as the issue of “commonality.”’” (Kizer v.
Tristar Risk Management (2017) 13 Cal.App.5th 830, 849; Cohen,
supra, 178 Cal.App.4th at p. 981; Davis-Miller, supra, 201
Cal.App.4th at p. 124; Knapp, supra, 195 Cal.App.4th at p. 945.)
More to the point, even if we ignore Tobacco II’s context
and focus on the language plaintiffs cite, that language does not
do away with the requirement that class members be exposed to
an allegedly deceptive advertisement and that the advertisement
be deceptive.
Tobacco II’s acknowledgement that a plaintiff need not
“plead with an unrealistic degree of specificity” that he or she
“relied on particular advertisements or statements” within a
“long-term advertising campaign” does no more than excuse a
plaintiff who was exposed to a series of deceptive advertisements
from having to spell out which deceptive ad(s) he actually saw or
heard. This language does not purport to excuse a plaintiff from
having to prove that he or she was actually exposed to at least
one deceptive advertisement. Contrary to what plaintiffs assert,
the trial court did not insist that every class member “see[] the
same or substantially the same advertising copy.” Instead, the
court found not all class members had been exposed to Public
Storage’s $1 promotional rate advertisements, and that this
variation in exposure meant that individual issues predominated
and counseled against class certification. This conclusion is
consistent with Tobacco II.
The statement in Tobacco II and prior cases that relief is
available under the Unfair Competition Law and false
advertising law “without individualized proof of deception,
reliance and injury” does no more than reaffirm that the focus of
both the Unfair Competition Law and false advertisement law is
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the “reasonable consumer” and whether the content of the
challenged advertisement is “likely to deceive” that “reasonable
consumer” (Vioxx, supra, 180 Cal.App.4th at p. 130; Fletcher,
supra, 23 Cal.3d at p. 451), such that there is no need for
plaintiffs to prove that “individual” class members were actually,
subjectively deceived or actually, subjectively relied on a deceptive
advertisement (Fletcher, at p. 451 [disclaiming need to prove “the
individual’s lack of knowledge of the fraudulent practice in each
transaction”]; Davis-Miller, supra, 201 Cal.App.4th at p. 121 [“A
representative plaintiff need not prove that members of the
public were actually deceived by the practice, relied on the
practice, or suffered damages.”]; Pfizer, supra, 182 Cal.App.4th at
p. 630 [same]; Prata v. Superior Court (2001) 91 Cal.App.4th
1128, 1145 [same]). Indeed, Tobacco II would have been an
especially poor vehicle for dispensing with the requirement of
having to prove that class members were exposed to a deceptive
advertisement because the class in Tobacco II was defined as
persons who were exposed to the cigarette industry’s deceptive
ads at issue in that case. (Tobacco II, supra, 46 Cal.4th at p. 324
[so noting].)
Two further reasons counsel against reading Tobacco II’s
language as abrogating the requirements that plaintiffs seeking
restitutionary class relief establish that class members were
exposed to deceptive advertisements. First, doing so would allow
class members to recover restitution from a defendant even if
they have never been exposed to its deceptive advertising. While
the Unfair Competition Law and false advertising law authorize
restitution for money or property “which may have been
acquired” by means of a fraudulent business practice or deceptive
advertisement (Bus. & Prof. Code, §§ 17203, 17535), they do not
21
authorize restitution for money or property definitively not
acquired through such means; to so hold is to render this
language “meaningless.” (Sevidal, supra, 189 Cal.App.4th at p.
924; Vioxx, supra, 180 Cal.App.4th at p. 131 [“the ‘may have been
acquired’ language . . . is not so broad as to allow recovery
without any evidentiary support”].) Second, reading Tobacco II’s
language as overriding the requirement to show exposure and
deception would contradict the solid wall of precedent, cited
above, that holds to the contrary.
B. Challenges to the susceptibility of common proof
Plaintiffs assert that Public Storage’s advertisements are
uniformly deceptive, and hence that the trial court erred in
finding that the issue of deceptiveness was not susceptible of
common proof. Plaintiffs make two specific contentions. First,
they contend that the $1 promotional rate advertisements that
refer to “fees,” “taxes,” “restrictions” or “deposits” do so in a
footnoted asterisk, and that such an oblique disclosure does not
constitute a disclosure that cures the more prominent promise of
a $1 charge. For support, they cite Brady v. Bayer Corp. (2018)
26 Cal.App.5th 1156 (Brady) and Title 16, Code of Federal
Regulations, section 251.1. Second, they contend that any post-
advertisement disclosures of the new account fee as well as the
need to have a lock and insurance (and to buy a Public Storage
lock and insurance) cannot cure the omission of this information
from the advertisement, citing Veera v. Banana Republic, LLC
(2016) 6 Cal.App.5th 907 (Veera).
Plaintiffs’ assertions do not undermine the trial court’s
denial of class certification.
To begin, these assertions do not speak to the absence of
common proof of exposure, which is an independent and sufficient
22
basis to conclude that common issues do not predominate (and
hence that the class should not be certified).
Further, plaintiffs’ authority does not render Public
Storage’s $1 promotional rate advertisements universally
deceptive (and hence susceptible of common proof). The federal
regulation addresses when ads for “free” goods or services are
deceptive under federal law, and is for that reason doubly
irrelevant. Brady holds that disclosures made in “miniscule”
“print” on a product’s back label do not cure omissions on its front
label. (Brady, supra, 26 Cal.App.5th at p. 1159.) We question
whether Brady governs here, where Public Storage’s additional
disclosures are only a few words long and make clear that
additional “fees” and “taxes” may apply, where those disclosures
are on the same banner or page as the $1 promotional rate, and
where many of the them also point the viewer to Public Storage’s
website where the disclosures are spelled out in detail. (Accord,
Freeman, supra, 68 F.3d at p. 289; Sperling, supra, 2016 U.S.
Dist. LEXIS 111227, at *20, *24; cf. Cuisinarts, Inc. v. Robot-
Coupe Int’l Corp. (S.D.N.Y. 1981) 509 F. Supp. 1036, 1044
[“small-type footnote” with lots of text connected to an asterisk
may be “insufficient” when heading is “prominent”].)
But even if we assume for the sake of argument that Brady
means that Public Storage’s advertisements with footnotes
warning of additional charges are still deceptive, this still does
not render all of Public Storage’s advertisements deceptive
because Public Storage in many instances went on to disclose the
additional costs after prospective customers saw the ads but
before they signed a lease contract. Plaintiffs respond that Veera
renders all post-advertising disclosures ineffective, but that is not
what Veera holds. Veera held that a post-advertisement
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disclosure was ineffective where the disclosure was made at a
time when the “consumer” was “invested in the decision to buy
and swept up in the momentum of events” (in Veera itself, when
the plaintiff learned of the disclosure at the counter after
standing in line to buy the product). (Veera, supra, 6 Cal.App.5th
at p. 921.) Here, however, 57 percent of the class received emails
confirming the new account fee upon reserving a storage unit and
before traveling to the facility to sign a lease, other putative class
members learned about the lock requirement from the website,
and other putative class members learned about the insurance
requirement before they executed the rental contract. In short,
substantial evidence continues to support the trial court’s finding
that common issues do not predominate on the question of
whether the ads that class members saw were deceptive.
C. Plaintiffs’ remaining arguments
Plaintiffs make what boil down to three further arguments
assailing the trial court’s reasoning.
First, they argue that several federal cases support their
position that Tobacco II, supra, 46 Cal.4th 298 eliminates any
need to establish that class members seeking restitution were
exposed to a deceptive advertisement. However, none of those
cases so hold. Half involve classes comprised of consumers who
were uniformly exposed to deceptive advertisements or labels.
(Krueger, supra, 2011 U.S. Dist. LEXIS 154472, *33, *38; Pratt v.
Whole Foods Mkt. Cal., Inc. (N.D. Cal. 2014) 2014 U.S. Dist.
LEXIS 46409, *28.) The other half do not involve deceptive
advertising or labeling at all. (Keilholtz, supra, 268 F.R.D. at p.
342 [class action deals with defendant-manufacturer’s failure to
disclose its product’s hidden defects]; Menagerie Prods. v.
Citysearch (C.D. Cal. 2009) 2009 U.S. Dist. LEXIS 108768 [class
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action deals with defendant’s failure to reveal to its customers its
methodology for tracking compensable “clicks” for internet ads].)
Second, plaintiffs cite Ninth Circuit authority that reads
California law as “creat[ing] what amounts to a conclusive
presumption that when a defendant puts out tainted bait and a
person sees it and bites, the defendant has caused an injury;
[and] restitution is the remedy.” (Stearns, supra, 655 F.3d at p.
1021, fn. 13; see also Pulaski & Middleman, LLC v. Google, Inc.
(9th Cir. 2015) 802 F.3d 979, 986 [quoting Stearns on this point].)
To the extent plaintiffs read this language as stating that
California law does not require a showing that consumers be
exposed to a deceptive advertisement before “bit[ing],” that
reading is inconsistent with the case’s language (which expressly
requires that the “person” “see” the “tainted” “bait”) and is
inconsistent with California law set forth in this opinion.
Lastly, plaintiffs fall back on the maxim that every wrong
must have a remedy (Civ. Code, § 3523), and urge that the trial
court’s denial of class certification has effectively denied them a
remedy because their individual losses are too small to feasibly
bring suit individually. We decline to employ that maxim as a
basis for certifying a class notwithstanding the predominance of
individual issues because doing so would confer a remedy upon
those class members who have not been wronged and therefore
have no right to restitutionary relief. This not only turns the
maxim on its head, but also impermissibly turns the Unfair
Competition Law and false advertising law into fulcrums for
“creat[ing] substantive rights” that do not otherwise exist (The
MEGA Life & Health Ins. Co. v. Superior Court (2009) 172
Cal.App.4th 1522, 1526).
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DISPOSITION
The order is affirmed. Public Storage is entitled to its costs
on appeal.
CERTIFIED FOR PUBLICATION.
______________________, J.
HOFFSTADT
We concur:
_________________________, P.J.
LUI
_________________________, J.
ASHMANN-GERST
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