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Wakefield v. Visalus, Inc.

United States District Court, D. Oregon

August 21, 2019

LORI WAKEFIELD, individually and on behalf of a class of others similarly situated, Plaintiff,
VISALUS, INC., Defendant.

          Scott F. Kocher and Stephen J. Voorhees, Forum Law Group, Benjamin H. Richman, Rafey S. Balabanian, Eve-Lynn J. Rapp, J. Aaron Lawson, and Lily E. Hough, Edelson pc, Of Attorneys for Plaintiff and the Certified Class.

          Joshua M. Sasaki. Jonathan H. Singer, and Nicholas H. Pyle, Miller Nash Graham & Dunn LLP, John M. O'Neal and Zachary S. Foster, Quarles & Brady LLP, and Christine M. Reilly, Manatt, Phelps & Phillips LLP, Of Attorneys for Defendant.


          Michael H. Simon, United States District Judge.

         After a three-day jury trial that resulted in a verdict for Plaintiff Lori Wakefield on behalf of herself and a certified class of others similarly situated, Defendant ViSalus, Inc. (“ViSalus”) has moved to decertify the class. In its motion, ViSalus raises several challenges to class certification, the evidence supporting the jury verdict, and the requirements for establishing liability under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. After considering whether class certification remains appropriate in light of the evidence introduced at trial, the Court finds that it is and denies Defendant's motion.


         An order granting or denying class certification may be altered or amended at any time before the entry of final judgment. Fed.R.Civ.P. 23(c)(1)(C). Until a final judgment has entered, a class certification order is “not final or irrevocable, but rather, it is inherently tentative.” Officers for Justice v. Civil Serv. Comm'n of the City & Cty. of S.F., 688 F.2d 615, 633 (9th Cir. 1982). This rule provides district courts with broad discretion to determine whether a class should be certified and to revisit that certification as appropriate “throughout the legal proceedings before the court.” Armstrong v. Davis, 275 F.3d 849, 871 n.28 (9th Cir. 2001). “[T]he judge remains free to modify [a certification order] in the light of subsequent developments in the litigation.” Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 160 (1982). This gives the district court flexibility to address problems with a certified class as they arise up to and even after a jury trial. See, e.g., Tyson Foods, Inc. v. Bouaphakeo, 136 S.Ct. 1036 (2016) (reviewing class certification order after jury trial). “A district court may decertify a class at any time.” Rodriguez v. W. Publ'g Corp., 563 F.3d 948, 966 (9th Cir. 2009).

         The same standards used for analyzing class certification under Rule 23 of the Federal Rules of Civil Procedure are applied when determining whether to decertify a class. Marlo v. United Parcel Serv., Inc., 639 F.3d 942, 947 (2011). Because “[t]he party seeking [to maintain] class certification bears the burden of demonstrating that the requirements of Rules 23(a) and (b) are met, ” United Steel, Paper, Forestry, Rubber, Mfg. Energy, Allied Indus. & Serv. Workers Int'l Union v. ConocoPhillips Co., 593 F.3d 802, 807 (9th Cir. 2010), a plaintiff bears the burden throughout litigation to establish that certification remains proper, Marlo, 639 F.3d at 947-48; accord Lightfoot v. District of Columbia, 246 F.R.D. 326, 332 (D.D.C. 2007) (“As the proponent of continued class certification, Plaintiffs [retain] the burden of establishing that [all] of the requirements for class certification . . . are met.”).

         The district court also retains an independent obligation to perform a “rigorous analysis” to ensure that the requirements of Rule 23 are satisfied. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350-51 (2011). To pursue her claim on behalf of a class, “a plaintiff must demonstrate numerosity, commonality, typicality, and adequate representation of the class interest.” Marlo, 639 F.3d at 946 (2009) (citing Fed.R.Civ.P. 23(a)). In addition to these requirements, Rule 23(b) requires that a class may be maintained only if “the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3).

         “Normally, the district court resolves factual issues related to class certification, making its findings based on the preponderance of the evidence, even if they overlap with the merits of the case.” Mazzei v. Money Store, 829 F.3d 260, 268 (2d Cir. 2016) (citing Amgen v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 465-66 (2013)). Although the Ninth Circuit has not directly addressed how a jury's factual findings should be treated when determining factual issues in a post-trial motion for decertification, the Court finds the reasoning of the Second Circuit in Mazzei persuasive. In that case, the court similarly was faced with a post-trial motion for decertification that involved factual questions “both relevant to the (de)certification motion and an element of the class's merits claim.” Id. (emphasis in original). The Second Circuit held that “when a district court considers decertification (or modification) of a class after a jury verdict, the district court must defer to any factual findings the jury necessarily made unless those findings were ‘seriously erroneous,' a ‘miscarriage of justice,' or ‘egregious, '” thus applying the same standard used in a motion for a new trial based on the weight of the evidence. Id. at 269. When the Court must make factual findings on issues not necessarily decided by the jury's verdict, it should do so using the preponderance of the evidence standard that normally applies when making a determination on class certification. Id.


         ViSalus is a multi-level marketing company that sells weight-loss products and other nutritional dietary supplements, including energy drinks. Individual members sign up with ViSalus to be “promoters, ” and promoters purchase products from ViSalus and re-sell them to customers of the promoter. Plaintiff Lori Wakefield signed up to be a promoter with ViSalus in late 2012 but did not sell any ViSalus products and decided to cancel her ViSalus membership after two months. Although Plaintiff cancelled her account in March 2013, she received telephone solicitation calls from ViSalus in April 2015. Plaintiff brought claims against Defendant for violating the TCPA, alleging that she and a class of similarly situated individuals had received telephone calls promoting ViSalus products or services using an artificial or prerecorded voice without their consent. In an opinion issued on June 23, 2017, U.S. District Judge Anna Brown, who presided over this action until she took senior status in 2018, granted certification of a class consisting of:

All individuals in the United States who received a telephone call made by or on behalf of ViSalus: (1) promoting ViSalus's products or services; (2) where such call featured an artificial or prerecorded voice; and (3) where neither ViSalus nor its agents had any current record of prior express written consent to place such call at the time such call was made.

ECF 81 at 6.

         The case proceeded to a three-day jury trial. At trial, the jury received evidence about ViSalus's Progressive Outreach Manager (“POM”) system that ViSalus's outbound marketing department used to automatically make telephone calls. The jury heard prerecorded messages promoting ViSalus' products and saw spreadsheets documenting the results of each calling campaign as recorded by the POM system's disposition codes. The jury saw the forms filled out by all individual members who signed up to be promoters or customers of ViSalus- forms that asked for either a home telephone number or a mobile telephone number and contained no provision for giving consent to receive automated or prerecorded telephone marketing calls. The jury heard testimony from Ms. Wakefield, the named plaintiff, and heard how she had signed up to be a promoter with ViSalus and shortly thereafter cancelled her membership but continued to receive telephone calls and voicemails promoting ViSalus products. The jury also heard from Ms. Wakefield that she runs an informal daycare business out of her home watching the children of a few of her husband's coworkers but does not use her home telephone to conduct any business related to her daycare work.

         On April 12, 2019, the jury returned a special verdict, finding that (1) Ms. Wakefield had proven by a preponderance of the evidence that ViSalus made or initiated four telemarketing calls using an artificial or prerecorded voice to a residential telephone line (residential landline) belonging or registered to Ms. Wakefield in violation of the TCPA and (2) that Plaintiff, as class representative, had proven by a preponderance of the evidence that ViSalus made or initiated 1, 850, 436 telemarketing calls using an artificial or prerecorded voice to either (a) a mobile (cellular) telephone or (b) a residential telephone line (residential landline), belonging or registered to one or more class members, other than Ms. Wakefield, in violation of the TCPA. ECF 282. The jury also concluded that it could not tell from the evidence presented exactly how many of the 1, 850, 436 violative calls were specifically made to cellular phones or to landlines. ECF 282. In other words, the jury found that a total of 1, 850, 436 violative calls were made to either cell phones or landlines, but could not be more precise as to how many calls were made to each.

         In 2012, the Federal Communications Commission (“FCC”) issued a rule requiring that all requests for a consumer's written consent to receive telemarketing robocalls must include the telephone number that the consumer authorizes may be called with telemarketing messages, and clear and conspicuous disclosures informing the consumer that: (1) the consumer authorizes the seller to deliver telemarketing calls to that number using an automatic telephone dialing system or an artificial or prerecorded voice; and (2) the consumer is not required, directly or indirectly, to provide written consent as a condition of purchasing any property, goods, or services. See Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 27 FCC Rcd. 1830, 1833 ¶ 7 (2012).

         Promptly after the effective date of the new rule (October 16, 2013), two companies petitioned the FCC for a retroactive waiver of the new written consent requirements. These companies previously had obtained written consent from consumers, but the consent obtained did not meet the more demanding requirements set out in the new rule. In 2015, the FCC issued a declaratory ruling granting a retroactive waiver to those companies and allowing them to rely on previously obtained written consents for a limited period of time. See In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 30 FCC Rcd. 7961 (2015). In reaching its decision, the FCC concluded that there was evidence in the record that the petitioners could have been reasonably confused as to whether their previously obtained written consents would remain valid after the new rule became effective. The 2015 declaratory ruling granted the companies a grace period through October 7, 2015 to come into compliance with the more demanding written consent requirements in the new rule. After October 7, 2015, the petitioners were required to come into full compliance with the new rule. The FCC also granted waivers to seven additional petitioners who demonstrated that they were similarly situated to the first two petitioners.

         On September 14, 2017, nearly two years after Plaintiff filed her complaint and the FCC granted its first retroactive waiver, ViSalus petitioned the FCC for a retroactive waiver of the express written consent requirements created by the 2012 FCC rule. On June 13, 2019, nearly two months after the jury returned its verdict, the FCC granted ViSalus's petition for retroactive waiver but only as it applied to “calls for which the petitioner had obtained some form of written consent.” ECF 321-1 at 2 (FCC Order) (emphasis in original).


         ViSalus argues that the FCC's retroactive waiver given to ViSalus requires the Court to decertify the class because in light of the FCC waiver, the named Plaintiff lacks standing and consent becomes an individualized issue that predominates over class-wide issues. ViSalus also makes several arguments challenging the propriety of class certification not based on the FCC order, which can largely be grouped into six categories. First, ViSalus argues there are insufficient questions of law or fact common to the class and those common questions do not predominate over questions affecting only individual members. Second, ViSalus argues that the class is unmanageable because it will be too difficult to determine which class members heard which messages, and that a class action is not superior because it is procedurally unfair to ViSalus. Third, ViSalus argues that the class lacks numerosity because Plaintiff did not introduce evidence showing how many individuals both received and heard a prerecorded telemarketing message. Fourth, ViSalus argues that Ms. Wakefield's claims are not typical of the class. Fifth, ViSalus argues that Ms. Wakefield is not an adequate class representative. Finally and sixth, ViSalus argues that the class, as certified, constituted an impermissible “fail-safe” class.

         A. FCC ...

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