A. Reyes v. Educational Credit Management

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 23 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
A. J. REYES, on behalf of himself, and all No. 17-56930
others similarly situated,
D.C. No.
Plaintiff-Appellee, 3:15-cv-00628-BAS-AGS
v.
MEMORANDUM*
EDUCATIONAL CREDIT
MANAGEMENT CORPORATION,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of California
Cynthia A. Bashant, District Judge, Presiding
Argued and Submitted July 8, 2019
Pasadena, California
Before: M. SMITH and FRIEDLAND, Circuit Judges, and AMON,** District
Judge.
Educational Credit Management Corporation (“ECMC”) appeals the district
court’s order certifying a class action brought by named plaintiff A.J. Reyes.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Carol Bagley Amon, United States District Judge for
the Eastern District of New York, sitting by designation.
Reyes alleges that ECMC unlawfully recorded some of his and other class
members’ cellular telephone conversations with ECMC in violation of California’s
Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq. Because we hold
that the district court abused its discretion in certifying the class without resolving
whether Reyes heard ECMC’s warning that his call would be recorded and thus
consented to such recording, we vacate the class certification order and remand to
the district court for further proceedings.
Before certification, the district court “must conduct a ‘rigorous analysis’ to
determine whether the party seeking certification has met the prerequisites of Rule
23.” Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir. 2001)
(quoting Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1233 (9th Cir. 1996)).
As part of this inquiry, the district court has an obligation to ensure that the named
plaintiff is a member of the class he seeks to represent, which sometimes involves
delving into the merits to resolve factual disputes to the extent necessary to
determine whether the Rule 23 elements have been met. See Wal-Mart Stores, Inc.
v. Dukes, 564 U.S. 338, 350-51 (2011); Gen. Tel. Co. of Sw. v. Falcon, 457 U.S.
147, 156 (1982). Because a class action cannot go forward without a named
plaintiff, a putative class action lacking an appropriate named plaintiff should be
dismissed. Lierboe v. State Farm Mut. Auto. Ins. Co., 350 F.3d 1018, 1023 (9th
Cir. 2003) (dismissing a class action because the named plaintiff lacked a
2
cognizable claim under state law and therefore could not represent the class); see
also NEI Contracting & Eng’g, Inc. v. Hanson Aggregates Pac. Sw., Inc., 926 F.3d
528, 532 (9th Cir. 2019) (reaffirming Lierboe).
Here, the district court certified a class of callers who were recorded by
ECMC without consent. But the court then did not decide whether Reyes heard the
warning that the call was being recorded, which, under state law, plainly would
constitute consent to recording. See Kearney v. Salomon Smith Barney, Inc., 137
P.3d 914, 930 (Cal. 2006) (“A business that adequately advises all parties to a
telephone call, at the outset of the conversation, of its intent to record the call
would not violate” CIPA’s prohibition on recording telephone conversations.).
Consequently, it is not clear that Reyes is a member of the class he seeks to
represent or has a CIPA claim at all. We therefore vacate and remand so the
district court may determine whether Reyes has met his burden of proving that he
did not hear the recording warning.1 If he did hear the warning, he cannot be a
member of the class as currently defined and the lawsuit should be dismissed. See
Lierboe, 350 F.3d at 1023.
1
It appears that, under California law, the plaintiff bringing a CIPA claim
has the burden to prove that the defendant lacked consent to record. See Judicial
Council of Cal. Civil Jury Instruction 1809 (Pen. Code §§ 632, 637.2) (Mar. 2019)
(“To establish this claim, [name of plaintiff] must prove… [t]hat [name of
defendant] did not have the consent of all parties to the conversation to [eavesdrop
on/record] it.” (first and fourth alterations in original)).
3
The district court’s class certification order is VACATED and
REMANDED for further proceedings.
4