Cole v. Asurion Corp: Class Certification Based on Presumption of Reliance

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With the proliferation of expensive cell phones, customers regularly buy insurance that will pay for a replacement phone in the event of loss, theft, or destruction, which typically includes a deductable. In Cole v. Asurion Corp., No. 06-6649 (C.D. Cal. filed Oct. 18, 2006), the plaintiff alleged that, as a result of a change in her cell phone insurance carrier, her deductable suddenly increased from $35 to $110. Her complaint included claims under California’s consumer protection statutes as well as common law claims for misrepresentation, breach of contract, and unjust enrichment. Significantly, in addition to alleging affirmative misrepresentations, the plaintiff also alleged material omissions which, if established, give rise to a class-wide presumption of reliance, obviating the most common and potent argument against class certification: that common questions of law or fact do not predominate.

Defendants made the familiar argument that variations in particular representations made to consumers precluded class certification altogether. Rejecting the defendants’ argument, the court granted certification on the omission-based theory of liability. Cole v. Asurion Corporation, 267 F.R.D. 322 (C.D. Cal. 2010). In so ruling, Central District Judge Phillip S. Gutierrez reinforced the trend of distinguishing misrepresentation- and omission-based theories of class-wide liability, and enforcing the presumption of reliance that attaches to material omissions. See, e.g., Wolin v. Jaguar Land Rover North America, LLC, 617 F.3d 1168 (9th Cir. 2010) (reversing denial of certification where district court abused discretion; common questions predominated as to defendant’s duty to disclose under consumer protection statutes).