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Ninth Circuit takes jurisdiction, denies class certification in class action against Home Depot

By Kyla Asbury | Mar 13, 2014

SAN FRANCISCO (Legal Newsline) - An appeal involving Home Depot USA Inc.'s tool damage waiver at the U.S. Court of Appeals for the Ninth Circuit has been decided on.

Benjamin Berger appealed from the stipulated dismissal with prejudice of his putative class action claims against Home Depot USA Inc.

Berger alleged that Home Depot automatically imposed a 10 percent surcharge for a damage waiver on tool rentals in its California stores, and although the fee was to be optional, Home Depot's failure to inform customers of their ability to decline the surcharge was a violation of California's Unfair Competition Law, the California Consumer Legal Remedies Act and common-law theories of unjust enrichment and money had and received.

"We affirm the denial of class certification because the district court did not abuse its discretion in holding that the proposed classes that Berger is capable of representing do not meet the requirement that common questions predominate over individual issues under Fed. R. Civ. P. 23(b)(3), and that was the only sub-part of Rule 23(b) on which Berger relied," the decision states.

The district court denied Berger's motion for class certification, concluding that the proposed class and subclasses were not ascertainable and that Berger did not meet the commonality, typicality and adequacy of representation requirements of Federal Rule of Civil Procedure Rule 23(a), according to the decision.

Berger then stipulated with Home Depot to dismiss the action with prejudice, noting his intent to appeal the denial of class certification. In the stipulation, Home Depot contested his ability to appeal and the district court dismissed the action under Rule 41(a)(2) and Berger filed a timely notice of appeal.

The district court had jurisdiction over Berger's complaint under the Class Action Fairness Act because the parties met the minimal diversity and the amount of controversy exceeded $5 million.

The U.S. Court of Appeals for the Ninth Circuit has jurisdiction under U.S. Code Title 28, Section 1291, because a dismissal of an action with prejudice, even when such dismissal is the product of a stipulation, is a sufficiently adverse, and thus appealable, final decision, according to the decision.

Home Depot had challenged the appeal court's jurisdiction. However, the appeals court has concluded that "this stipulated dismissal is sufficiently adverse to his [Berger's] interest to allow him to appeal."

"Whether Home Depot's receipt of funds for the damage waiver was unjust or inequitable, thereby justifying restitution, depends on whether Home Depot told its tool rental customers that the waiver was an optional product," according to the decision.

This determination necessarily rests on individualized determinations about the language of the contract signed by the customer, the placement and content of any signs and the oral representations from Home Depot employees relating to the damage waiver, the decision says.

"We conclude that we have jurisdiction over this appeal, despite Berger's stipulation on dismissal after the negative class action ruling. We also conclude that the district court did not abuse its discretion in denying class certification because the record did not show that the requirements of Rule 23(b)(3) were satisfied; common questions did not predominate over individual issues in any of Berger's claims," the decision says.

The appeal was assigned to circuit judges Ronald M. Gould and Johnnie B. Rawlinson and District Judge Ivan L.R. Lemelle.

U.S. Court of Appeals for the Ninth Circuit case number: 11-55592

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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