Joyce Walker v. Life Ins. Co. of the Southwest ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOYCE WALKER; KIM BRUCE Nos. 19-55241
HOWLETT; MURIEL SPOONER; 19-55242
TALINE BEDELIAN; OSCAR
GUEVARA, on behalf of themselves D.C. No.
and all others similarly situated, 2:10-cv-09198-
Plaintiffs-Appellees/ JVS-JDE
Cross-Appellants,
v. OPINION
LIFE INSURANCE COMPANY OF THE
SOUTHWEST, a Texas corporation,
Defendant-Appellant/
Cross-Appellee.
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Argued and Submitted February 10, 2020
Pasadena, California
Filed March 23, 2020
Before: Marsha S. Berzon, Richard C. Tallman,
and Ryan D. Nelson, Circuit Judges.
Opinion by Judge Tallman
2 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
SUMMARY *
Class Certification
The panel affirmed the district court’s class certification
order, and dismissed plaintiffs’ untimely and procedurally
improper attempts to cross-appeal, in a diversity action
alleging a life insurance company violated California law
concerning policy investment information.
In the course of purchasing a policy, a prospective
policyholder receives at least one type of illustration, which
is an informational document projecting a policy’s returns:
(1) a “pre-application” illustration, which the applicant may,
but is not required to, receive before or at the same time as
obtaining the policy application; and/or (2) a “batch”
illustration, which is delivered to the applicant along with a
copy of the policy, after the applicant submits her application
and the insurer approves it.
The named plaintiffs received pre-application and batch
illustrations, and allegedly relied on the illustrations in
deciding to purchase policies. Plaintiffs alleged that the
insurer’s illustrations of potential earnings violated
California’s Unfair Competition Law (“UCL”).
Fed. R. Civ. P. 23(b)(3) requires that “questions of law
and fact common to class members predominate over any
questions affecting only individual members, and that a class
action is superior to other methods.” The district court
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 3
certified a narrow class of California residents who were pre-
application illustration recipients, and which effectively
excluded those policyholders who received only batch
illustrations when their policies were delivered.
Considering the insurer’s challenge to the class
certification order, the panel held that any misunderstanding
on the district court’s behalf in interpreting Briseno v.
ConAgra Foods, Inc., 844 F.3d 1121, 1133 (9th Cir. 2017),
did not meaningfully influence its predominance analysis.
The panel concluded that there was no separate error related
to the class definition. To bring a UCL claim, a plaintiff
must establish he suffered as a result of the defendant’s
conduct. The panel held that the district court considered the
key issue – whether each plaintiff was exposed to, and
thereby could have relied on, the deficient illustrations. The
panel further concluded that in UCL cases: exposure is
relevant to predominance, but only to establish reliance; and
a district court does not err per se by not considering the
class membership question under the predominance prong of
UCL analysis. The panel rejected the insurer’s two specific
concerns to the class certification order: the district court’s
reliance on Briseno; and the class definition. The panel held
as an issue of first impression in this circuit that a district
court can, as it did here, define a class in a way that
automatically gives rise to a presumption of reliance.
The panel held that plaintiffs’ attempted appeals of the
district court’s class certification and reconsideration orders
were untimely and procedurally improper, respectively. The
panel did not reach the merits of plaintiffs’ arguments. The
panel further denied plaintiffs’ motion to take judicial notice
of their petition to appeal, and the insurer’s answer thereto.
4 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
COUNSEL
Noah A. Levine (argued), Wilmer Cutler Pickering Hale &
Dorr LLP, New York, New York; Andrea J. Robinson and
Timothy J. Perla, Wilmer Cutler Pickering Hale & Dorr
LLP, Boston, Massachusetts; Matthew T. Martens, Wilmer
Cutler Pickering Hale & Dorr LLP, Washington, D.C.;
Jonathan A. Shapiro, Baker Botts LLP, San Francisco,
California; for Defendant-Appellant.
Brian P. Brosnahan (argued), Cornerstone Law Group, San
Francisco, California; Lyn R. Agre, Margaret A. Ziemianek,
and Veronica Nauts, Kasowitz Benson Torres LLP, San
Francisco, California; for Plaintiffs-Appellees.
Xavier Becerra, Attorney General; Diane S. Shaw, Senior
Assistant Attorney General; Lisa W. Chao, Supervising
Deputy Attorney; Office of the Attorney General, Los
Angeles, California; for Amicus Curiae Ricardo Lara,
Insurance Commissioner of the State of California.
OPINION
TALLMAN, Circuit Judge:
Life Insurance Company of the Southwest (“LSW”)
appeals in case number 19-55241 a class-certification order,
arguing the district court committed legal error by granting
certification in a case featuring predominantly
individualized questions. Joyce Walker and four other
named plaintiffs in case number 19-55242 challenge, on
behalf of the certified class (“Plaintiffs”), the same
certification order. Plaintiffs seek to enlarge the class. LSW
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 5
counters that Plaintiffs’ appeal is either too late or
procedurally improper.
In disposing of the issues before us, we are guided by
well-established canons of class-certification law, which
collectively—and as specifically applied here—remind us
that the class-action mechanism is remedial, but not
absolute. On one hand, the district court’s order certifying a
class properly enables the mechanism to serve its intended
purpose: providing individual plaintiffs with a vehicle
through which they can efficiently protect their rights and
overcome potentially prohibitive economic barriers to seek
legal relief. On the other hand, those equitable justifications
for the class-action mechanism do not save Plaintiffs’ case
from the straightforward, even if unforgiving, timing and
procedural requirements that serve practical case-
management purposes.
We invoke these principles in affirming the district
court’s certification order and declining to consider
Plaintiffs’ cross-appeal.
I
LSW sells life insurance policies, which also double as
investment vehicles, two of which are challenged here. In
the course of purchasing a policy, a prospective policyholder
receives at least one type of “illustration,” which is an
informational document projecting a policy’s returns, over
the life of the policy, on premiums in addition to the payment
of a lump-sum benefit at death. The first kind of illustration
is a “pre-application” illustration, which the applicant may,
but is not required to, receive before or at the same time as
obtaining the policy application. A “batch” illustration, in
contrast, typically is delivered to the applicant along with a
copy of the policy, after the applicant submits her application
6 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
and LSW approves it. LSW does not always provide an
applicant with a batch illustration. But it must do so under
California law if either a pre-application illustration was
never given to the applicant, or the policy as issued reflected
different underwriting criteria from the pre-application
illustration. All five named Plaintiffs received pre-
application and batch illustrations.
Plaintiffs argue that LSW’s illustrations of potential
earnings violate California’s Unfair Competition Law
(“UCL”) because they do not define or detail the meaning of
policy column headings reading “Guaranteed Values at
2.00%” and “Guaranteed Values at 2.50%.” Plaintiffs also
allege the illustrations promised to eliminate a certain
administrative fee after ten years, and that the illustrations
fail to describe this “nonguaranteed” element in violation of
California law. Plaintiffs allegedly relied on the illustrations
in deciding to purchase policies.
Plaintiffs’ UCL case has taken a circuitous path. The
district court originally dismissed the very claims underlying
this appeal, finding that the part of the UCL under which
Plaintiffs sued did not create a private right of action.
Around the same time, in November 2012, the district court
certified two classes advancing related but distinct claims.
One class consisted of policyholders advancing common-
law fraud claims against LSW. The other was made up of
policyholders who received pre-application illustrations and
brought claims under a different part of the UCL. The
district court subsequently decertified the latter class,
concluding that the task of determining on a plaintiff-by-
plaintiff basis who received pre-application illustrations
would predominate over questions common to the class,
rendering class treatment inappropriate.
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 7
After a jury returned a defense verdict on the fraud and
UCL claims, a panel of this Court reversed the district
court’s dismissal order. Plaintiffs then sought to litigate the
reinstated UCL claims through yet another class action.
They proposed two alternative class definitions, both
describing California residents who purchased certain LSW
policies during a specified period. The narrower of the two
classes was limited to recipients of pre-application
illustrations:
All persons who purchased a Provider Policy
or Paragon Policy from Life Insurance
Company of the Southwest that was issued
between September 24, 2006[,] and April 27,
2014, who resided in California at the time
the Policy was issued, and who received an
illustration on or before the date of policy
application.
By extending membership only to pre-application
illustration recipients, the proposed class—like the class the
district court decertified—effectively excluded those
policyholders who received only batch illustrations when
their policies were delivered.
The district court certified the narrow class over the same
objection LSW advanced in 2012 and 2013 regarding the
later-decertified class: that Plaintiffs’ claims were incapable
of class-wide proof because the court would have to
individually establish each Plaintiff’s receipt of a pre-
application illustration. LSW argued that certification would
be improper under Rule 23(b)(3) of the Federal Rules of
Civil Procedure because individualized questions
predominated over class-wide ones. The court rejected
LSW’s concern and responded to it, in part by citing our
8 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
decision in Briseno v. ConAgra Foods, Inc., 844 F.3d 1121,
1133 (9th Cir. 2017), which clarified that “Rule 23 neither
provides nor implies that demonstrating an administratively
feasible way to identify class members is a prerequisite to
class certification.” Based on Briseno, the district court held
that “the concerns motivating [its] prior Decertification
Order [of the pre-application illustration recipient class] are
no longer valid justifications to find a lack of
predominance.”
Under the “Predominance” sub-heading of the
certification order, the court determined Plaintiffs were
entitled to a legal presumption that all class members relied
on the illustrations before purchase. It reasoned, “[E]very
member of the class was exposed to an illustration
containing [UCL] violations prior to his or her purchase of
an LSW policy” because the class definition excluded
policyholders who did not obtain pre-application
illustrations. The court rejected LSW’s argument that other
information provided to applicants could have corrected any
misimpression the illustrations caused.
LSW petitioned for permission to appeal the July 31,
2018, certification order on August 14. On the same day,
Plaintiffs moved the district court to reconsider its
certification order and adopt the broader of the two class
definitions originally proposed, which did not limit class
membership to pre-application illustration recipients and
therefore included batch illustration recipients. The district
court denied Plaintiffs’ motion on September 10, without
prejudice, for failure to satisfy a local meet-and-confer rule.
Plaintiffs re-noticed their motion for reconsideration on
September 18, and the district court denied it on October 22,
2018. Plaintiffs petitioned our Court for permission to
appeal the October 22 order fourteen days later. We granted
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 9
LSW’s petition to appeal and Plaintiffs’ petition to appeal on
a conditional basis.
II
The district court had jurisdiction under 28 U.S.C.
§ 1332(d)(2)(A). We have jurisdiction pursuant to 28 U.S.C.
§ 1292(e).
Two standards guide our review of class-certification
decisions. The abuse-of-discretion standard applies to “any
particular underlying Rule 23 determination involving a
discretionary determination,” Yokoyama v. Midland Nat’l
Life Ins. Co., 594 F.3d 1087, 1091 (9th Cir. 2010), including
whether the district court “relies upon an improper factor,
omits consideration of a factor entitled to substantial weight,
or mulls the correct mix of factors but makes a clear error of
judgment in assaying them,” Wolin v. Jaguar Land Rover N.
Am., LLC, 617 F.3d 1168, 1171 (9th Cir. 2010) (quoting
Parra v. Bashas’, Inc., 536 F.3d 975, 977–78 (9th Cir.
2008)). The Court “accord[s] the district court noticeably
more deference” to a grant of certification “than when [it]
review[s] a denial.” Wolin, 617 F.3d at 1171 (quoting In re
Salomon Analyst Metromedia Litig., 544 F.3d 474, 480 (2d
Cir. 2008)). But we grant no deference to the district court’s
legal conclusions, which we review de novo. See Yokoyama,
594 F.3d at 1091. “Further, this [C]ourt has oft repeated that
an error of law is an abuse of discretion.” Id. “[W]e may,”
however, “sustain the court’s ruling [on class certification]
on any ground supported by the record.” Hanon v.
Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992).
III
LSW asks us to reverse the district court’s certification
order. It alleges the district court committed legal error by
10 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
(1) misapplying Briseno and (2) manipulating the class
definition to certify the narrower of Plaintiffs’ two proposed
classes even though individualized issues predominate over
common ones in contravention of Rule 23(b)(3). While we
do not agree with the district court’s apparent interpretation
of Briseno, we find that any misunderstanding on the court’s
part did not meaningfully influence its predominance
analysis. We conclude there is no separate error related to
the class definition.
A
A plaintiff pursuing class certification must satisfy each
prerequisite of Rule 23(a) and establish an appropriate
ground for maintaining the class action under Rule 23(b).
Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1019 (9th Cir.
2011), abrogated on other grounds by Comcast Corp. v.
Behrend, 569 U.S. 27 (2013). Rule 23(b)(3) in turn requires
that “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.”
To assess Rule 23(b)(3) predominance, we ask “whether
proposed classes are sufficiently cohesive to warrant
adjudication by representation.” Stearns, 655 F.3d at 1019
(quoting In re Wells Fargo Home Mortg. Overtime Pay
Litig., 571 F.3d 953, 957 (9th Cir. 2009)). We focus on
whether “common questions present a significant aspect of
the case and they can be resolved for all members of the class
in a single adjudication”; if so, “there is clear justification
for handling the dispute on a representative rather than on an
individual basis.” Hanlon v. Chrysler Corp., 150 F.3d 1011,
1022 (9th Cir. 1998) (quoting 7A Charles Alan Wright et al.,
Federal Practice & Procedure § 1778 (2d ed. 1986)),
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 11
overruled on other grounds by Wal-Mart Stores, Inc. v.
Dukes, 564 U.S. 338 (2011).
A district court’s assessment of predominance “begins,
of course, with the elements of the underlying cause of
action.” Stearns, 655 F.3d at 1020 (quoting Erica P. John
Fund, Inc. v. Halliburton Co., 563 U.S. 804, 809 (2011)).
The focus of the inquiry accordingly varies depending on the
nature of the underlying claims. In UCL cases, district
courts must consider whether class members were exposed
to the defendant’s alleged misrepresentations, but for a
single, critical purpose: establishing reliance.
The UCL bans “unlawful, unfair or fraudulent business
act[s] or practice[s] and unfair, deceptive, untrue or
misleading advertising.” Cal. Bus. & Prof. Code § 17200.
To bring a UCL claim, a plaintiff must establish he suffered
“as a result of” the defendant’s conduct. Id. § 17204. In the
seminal California case on UCL class actions, In re Tobacco
II Cases, the defendants moved to decertify a UCL class for
the reason that individualized issues—i.e., whether all class
members were exposed to, relied on, and were injured by
allegedly false and deceptive advertisements—
predominated over common ones. 207 P.3d 20, 28 (Cal.
2009). The California Supreme Court interpreted this statute
to mean that named plaintiffs, but not absent ones, must
show proof of “actual reliance” at the certification stage. Id.
at 38. Relying on California cases, wherein courts
“repeatedly and consistently . . . h[eld] that relief under the
UCL is available without individualized proof of deception,
reliance and injury,” the court reasoned that “requiring all
unnamed members of a class action to individually establish
standing would effectively eliminate the class action lawsuit
as a vehicle for the vindication” of rights under the UCL. Id.
at 35–36.
12 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
We have repeatedly relied on Tobacco II in recognizing
“what amounts to a conclusive presumption” of reliance in
UCL cases. Stearns, 655 F.3d at 1021 n.13. The
presumption serves to relieve UCL plaintiffs of their
obligation to establish absent class members’ reliance, see
2 Newberg on Class Actions § 4:60 (5th ed. 2019)—an issue
that, in other contexts, can raise so many individualized
questions as to defeat predominance, id. § 4:58.
We have been careful to clarify, however, that the
presumption will not arise in every UCL case. “For
example, it might well be that there was no cohesion among
the members because they were exposed to quite disparate
information from various representatives of the defendant.”
Stearns, 655 F.3d at 1020. To establish a reliance
presumption, the operative question has become whether the
defendant so pervasively disseminated material
misrepresentations that all plaintiffs must have been exposed
to them. See id. at 1020–21 (rejecting district court’s
conclusion that individual reliance issues predominated for
purposes of UCL claim, where plaintiffs alleged website
automatically enrolled customers in a program that charged
a monthly fee); Berger v. Home Depot USA, Inc., 741 F.3d
1061, 1069 (9th Cir. 2014) (affirming district court’s
conclusion that Rule 23(b) was not satisfied where Plaintiff
“ha[d] not alleged that all of the members of his proposed
class were exposed to Home Depot’s alleged deceptive
practices”), abrogated on other grounds by Microsoft Corp.
v. Baker, 137 S. Ct. 1702 (2017); Mazza v. Am. Honda Motor
Co., 666 F.3d 581, 595–96 (9th Cir. 2012) (vacating district
court’s certification order where Honda’s advertising
program “f[e]ll short of the ‘extensive and long-term
[fraudulent] advertising campaign’ at issue in Tobacco II”
(quoting Tobacco II, 207 P.3d at 41)).
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 13
B
Against this backdrop, there was no legal error in the
form of the district court’s analysis. Contrary to LSW’s
characterization of the certification order, the district court
considered the key issue—whether each Plaintiff was
exposed to, and thereby could have relied on, the deficient
illustrations.
Under the certification order’s sub-heading
“Predominance,” the court expressly acknowledged LSW’s
arguments “that predominance is lacking because Plaintiffs’
claims raise individualized questions about the varied
purchase processes,” and “that Plaintiffs must show that all
policyholders saw the illustrations, had the alleged
misunderstandings, and did not receive other information to
eliminate the potential misunderstandings.” The district
court undertook a detailed recounting of relevant Ninth
Circuit class-certification cases; adopted a class definition
that limits membership to only those policyholders who
received pre-application illustrations, thereby ensuring all
Plaintiffs would have been exposed to the illustrations; and
ultimately rejected LSW’s argument that it mattered whether
other information provided to applicants could have
corrected any misimpression the illustrations caused. The
court found that LSW’s evidence did not “detract[]
sufficiently from the predominance of the other common
issues to warrant a refusal to certify the class.”
LSW is technically correct that the district court did not
consider, under the predominance rubric, the logistical
difficulties of determining whether each Plaintiff was
exposed to an illustration. But that was not the court’s
burden.
14 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
Our case law makes clear that Rule 23(b)(3)’s
predominance inquiry does concern itself with exposure, but
for the limited purpose of satisfying the UCL’s standing
requirement of reliance. See supra § III(A); accord Rikos v.
Procter & Gamble Co., 799 F.3d 497, 509–13 (6th Cir.
2015) (for UCL claim, concluding predominance inquiry
after determining case facts supported reliance
presumption). Our cases do not additionally task district
courts with analyzing, for predominance purposes, the
logistical difficulties attendant to identifying plaintiffs who
were exposed to misrepresentations and therefore may be
entitled to class membership. To the contrary, we have
suggested—without mentioning predominance—that the
superiority prong might best lend itself to considering that
issue. See Briseno, 844 F.3d at 1126 (declining to impose a
separate administrability requirement to assess the difficulty
of identifying class members, in part, because the superiority
criterion already mandates considering “the likely
difficulties in managing a class action”).
But even Briseno does not speak in certain terms. Nor
do the cases LSW relies on. Some of those cases instead
demonstrate that courts overall “have been inconsistent in
how they have accounted for difficulties in identifying class
members.” Sandusky Wellness Ctr., LLC v. ASD Specialty
Healthcare, Inc., 863 F.3d 460, 471 (6th Cir. 2017). For
instance, while the Second Circuit has employed the
predominance requirement to analyze issues arguably
bearing on class membership, see In re Petrobras Sec.,
862 F.3d 250, 270–74 (2d Cir. 2017), the Sixth Circuit in a
UCL case considered the issue solely under a standalone
ascertainability requirement, Rikos, 799 F.3d at 524–27. The
Eighth Circuit, in contrast, took a middle ground in Sandusky
Wellness Center, LLC v. Medtox Scientific, Inc., assessing
under the predominance criterion the binary question of
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 15
whether common legal and factual questions predominated,
but saving for its separate ascertainability analysis the more
specific issue of member-identification difficulties. See
821 F.3d 992, 996–98 (8th Cir. 2016).
In light of the significant degree of variation in federal
courts’ approaches to member identification, we find
wisdom in the Sixth Circuit’s conclusion that a district
court’s class-certification analysis would have been “equally
sufficient,” “regardless of whether th[e] [member-
identification] concern [was] properly articulated as part of
ascertainability, Rule 23(b)(3) predominance, or Rule
23(b)(3) superiority.” ASD Specialty Healthcare, 863 F.3d
at 466. We accordingly decline today to impugn the district
court’s class-certification analysis by mandating a one-size-
fits-all approach to class-member identification. We
conclude only that, in UCL cases, (1) exposure is relevant to
predominance, but only to establish reliance, and (2) a
district court does not err per se by not considering the class-
membership question under the predominance prong.
C
LSW articulates two specific concerns, neither of which
changes our decision to affirm.
1
First, LSW argues that (1) Briseno had no impact on
Rule 23(b)(3)’s predominance requirement, and (2) the
district court improperly relied on Briseno in declining to
consider certain issues as part of its predominance analysis.
We agree with LSW’s reading of Briseno but conclude that
the district court’s apparent misunderstanding of the case
wrought no legal error.
16 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
In Briseno we considered a narrow issue: whether
consumers, bringing fraud claims against ConAgra for
allegedly misleading cooking-oil labels, needed to
demonstrate that there is an “administratively feasible”
means of identifying absent class members before reaching
Rule 23(a) and (b)’s class-certification requirements. See
844 F.3d at 1123. ConAgra argued that absent consumers
would not be able to reliably identify themselves as class
members and opposed certification on that basis. Id. at 1124.
We rejected ConAgra’s argument. We concluded that a
freestanding administrability requirement would conflict
with the plain language of Rule 23, because the rule sets
forth exhaustive factors a district court must consider in
deciding whether to certify a class—none of them a
freestanding administrability requirement. Id. at 1125–26.
We further determined, in support of our holding, that Rule
23 already calls upon the district court to consider the likely
difficulties of managing a class action as part of its
comparative superiority analysis, thereby rendering a
separate administrability requirement superfluous. Id. at
1128.
Briseno also took stock of the practical, negative
consequences of a standalone administrability requirement.
We reasoned that such a requirement “would invite courts to
consider the administrative burdens of class litigation ‘in a
vacuum,’” whereas the Rule 23(b)(3) superiority analysis
appropriately “calls for a comparative assessment of the
costs and benefits of class adjudication, including the
availability of ‘other methods’ for resolving the
controversy.” Id. (quoting Mullins v. Direct Digital, LLC,
795 F.3d 654, 663 (7th Cir. 2015)). Our primary concern
was that a standalone requirement would improperly bar
certification in cases like Briseno, where administrability is
difficult to demonstrate but for which the class action
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 17
remains the only realistic way to litigate the case. See id. To
avoid this result, we joined the Sixth, Seventh, and Eighth
Circuits in declining to adopt a separate administrability
requirement. Id. at 1133. That is the central holding of
Briseno.
We agree with LSW that Briseno was narrow in focus.
The case does not expressly excuse a district court from
considering exposure under the predominance rubric.
Briseno, in fact, did not directly bear on predominance at all.
We also share LSW’s concern that the district court may
have misapplied Briseno to preclude consideration of certain
issues under predominance. The court in 2013 decertified a
class, which appears to have been identical in composition
to the class at issue here, based on predominance problems.
It reversed course in 2018, ostensibly based on Briseno. In
the relevant part of its certification order, the district court
rejected LSW’s argument—that predominance is lacking
because determining pre-application receipt requires
individualized inquiries—by relying on that case.
The district court’s reliance on Briseno is concerning
but, ultimately, inconsequential. The reliance in the end did
not prevent the court from undertaking a legally correct
class-certification analysis. The court properly considered
the key exposure issue—whether the allegations supported a
reliance presumption—under predominance, holding they
did. In the context of superiority, the court further analyzed
the logistical difficulties inherent in identifying class
members by establishing plaintiff-by-plaintiff exposure to
LSW’s illustrations. This analysis conforms with Briseno
and class-certification law more broadly. The court’s
reliance on Briseno caused no legal error.
18 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
2
Second, LSW objects to the class definition. It argues
the district court avoided analyzing the key predominance
question—whether class members were exposed to the
illustrations—in part by limiting class membership to pre-
application illustration recipients and thereby improperly
embedding the exposure issue into the class definition. The
argument is unpersuasive. LSW cites no directly supportive
authority, and the contention directly conflicts with Ninth
Circuit precedent obligating district courts to tailor class
definitions in a way that avoids predominance issues. See,
e.g., Mazza, 666 F.3d at 596 (“In the absence of the kind of
massive advertising campaign at issue in Tobacco II, the
relevant class must be defined in such a way as to include
only members who were exposed to advertising that is
alleged to be materially misleading.”); Torres v. Mercer
Canyons Inc., 835 F.3d 1125, 1139 (9th Cir. 2016) (holding
that class definition was not overly broad so as to defeat
predominance and acknowledging that “the district court
may . . . adjust the scope of the class definition, if it later
finds that the inclusiveness of the class exceeds the limits of
[the defendant’s] legal liability”).
The more apt and complicated question, we think, is
whether a district court can, as it did here, define a class in a
way that automatically gives rise to a presumption of
reliance. This question appears to be one of first impression
in our circuit. In our prior UCL class-certification cases, we
have relied on allegations and evidence establishing class-
wide dissemination of alleged misrepresentations to
determine whether a presumption of reliance applies. See
Stearns, 655 F.3d at 1020–21; Berger, 741 F.3d at 1069;
Mazza, 666 F.3d at 595–96. Can a class definition, which
extends membership only to those who were exposed to
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 19
alleged misrepresentations, automatically trigger the
presumption? We cannot think of any good reason why not,
or any evils that allegations and evidence of class-wide
dissemination could cure that a class definition cannot.
We similarly decline to grapple with other related
questions lurking in the background—including the extent to
which a district court must engage with argument or
evidence offered to rebut an established presumption of
reliance. LSW’s appeal concerns a specific issue: whether
the district court considered the right questions under the
predominance analysis. It does not raise a related issue,
which we would review for abuse of discretion if properly
raised: whether the district court reached the right answers.
IV
Plaintiffs also challenge the certification decision,
arguing that the district court erroneously excluded
approximately one quarter of Plaintiffs’ desired class,
consisting of policyholders who received only batch
illustrations and not pre-application illustrations. We do not
reach the merits of Plaintiffs’ argument, because their
attempted appeals of the district court’s certification and
reconsideration orders are untimely and procedurally
improper, respectively.
Appealing a certification decision is usually
straightforward: a party must petition this Court for
permission to appeal within fourteen days of the district
court order. Fed. R. Civ. P. 23(f). We strictly enforce Rule
23(f)’s deadlines to ensure that interlocutory review of
certification orders remains a “rare occurrence.”
Chamberlan v. Ford Motor Co., 402 F.3d 952, 955 (9th Cir.
2005) (per curiam). The strictures of Rule 23(f) relax in only
two scenarios. First, a timely filed motion for
20 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
reconsideration extends the deadline for appealing the
certification decision. The motion renders the original
decision non-final until the district court grants or denies it.
Nutraceutical Corp. v. Lambert, 139 S. Ct. 710, 717 (2019).
The parties then have fourteen days from the reconsideration
order to appeal the original certification decision. See Briggs
v. Merck Sharp & Dohme, 796 F.3d 1038, 1046 (9th Cir.
2015) (“It has long been accepted that the time period to file
an appeal generally runs from the denial of a timely motion
for reconsideration, rather than from the date of the initial
order.”); Nutraceutical, 139 S. Ct. at 717 (acknowledging
that “every Court of Appeals to have considered the question
would accept a Rule 23(f) petition filed within 14 days of the
resolution of a motion for reconsideration that was itself
filed within 14 days of the original order”).
Second, if the reconsideration order materially changes
the original certification decision, the reconsideration order
itself—as distinct from the original decision—becomes
appealable. See infra § IV(B). Plaintiffs in such a case
effectively are entitled to more time to petition for appeal
after they file, and the district court rules on, their motion for
reconsideration.
A
Plaintiffs here cannot appeal the district court’s original
certification order. Plaintiffs moved the court to reconsider
its certification order on August 14, thereby rendering the
certification order non-final. See Nutraceutical, 139 S. Ct.
at 717. But the original order became final after the court
denied Plaintiffs’ reconsideration motion (for failure to
satisfy local meet-and-confer requirements), without
prejudice, on September 10. The September 10 denial
thereafter would have triggered a fourteen-day period,
expiring on September 24, within which Plaintiffs could
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 21
have appealed the original certification order. See Briggs,
796 F.3d at 1046. Plaintiffs did not appeal within this period
and instead re-noticed their reconsideration motion on
September 18.
It is true that the district court permitted Plaintiffs to re-
notice their motion. But that right does not translate into the
additional right to file a Rule 23(f) appeal petition beyond
the fourteen-day period, which here expired on September
24. To be clear: the district court’s September 10 order,
denying Plaintiffs’ improper reconsideration motion without
prejudice, cannot extend the Rule 23(f) deadline beyond the
fourteen-day period starting from the date of denial. As a
more general rule, a district court’s authority to manage its
docket does not reach Rule 23(f)’s deliberately harsh
deadlines. See Lambert v. Nutraceutical Corp., 870 F.3d
1170, 1179 (9th Cir. 2017) (recognizing that appeals courts
have routinely held that “a motion for reconsideration filed
more than fourteen days after a certification order will not
toll the deadline even when the district court set or
influenced that deadline”), rev’d on other grounds,
Nutraceutical, 139 S. Ct. 710; Gutierrez v. Johnson &
Johnson, 523 F.3d 187, 194 n.6 (3d Cir. 2008) (“[W]hile the
District Court has the power to control its docket and was
well within its authority to extend the time for Petitioners to
file their Motion to Reconsider, it did not have the authority
to extend the time to file a Rule 23(f) petition.”). And
equitable tolling principles will not save an otherwise
untimely class-certification appeal. Nutraceutical, 139 S.
Ct. at 715.
It is also true that Plaintiffs did re-notice their motion for
reconsideration within the fourteen-day window that began
when the district court entered its September 10 order. But
only a “timely” motion for reconsideration—filed within
22 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
fourteen days of an order denying or granting certification—
can extend the fourteen-day appeal period. See, e.g.,
Lambert, 870 F.3d at 1178 (“[A] motion for reconsideration
filed within fourteen days of a certification decision tolls the
Rule 23(f) deadline.”); accord Gutierrez, 523 F.3d at 193
(“[A] motion to reconsider a class certification decision that
is filed more than [fourteen] days after the order granting or
denying class certification is ‘untimely’ with respect to Rule
23(f) and will not toll the period for filing a Rule 23(f)
petition.”); Nucor Corp. v. Brown, 760 F.3d 341, 343 (4th
Cir. 2014); In re DC Water & Sewer Auth., 561 F.3d 494,
496 (D.C. Cir. 2009); Jenkins v. BellSouth Corp., 491 F.3d
1288, 1291–92 (11th Cir. 2007); Carpenter v. Boeing Co.,
456 F.3d 1183, 1190–92 (10th Cir. 2006); McNamara v.
Felderhof, 410 F.3d 277, 281 (5th Cir. 2005); Gary v.
Sheahan, 188 F.3d 891, 892 (7th Cir. 1999). A motion for
reconsideration filed within fourteen days of a prior
reconsideration order, as distinct from a certification order,
is not “timely” and therefore cannot restart the clock. See
Gary, 188 F.3d at 893 (Easterbrook, J.) (“A second or
successive motion for reconsideration is just a motion filed
after [fourteen] days: it does not restart the clock for
appellate review.”). The practical and, we think, sensible
effect of this rule is that litigants may not repeatedly extend
Rule 23(f)’s stringent deadlines by re-noticing denied
reconsideration motions.
B
Plaintiffs cannot appeal the district court’s
reconsideration order either. Rule 23(f) allows parties to
appeal an “order granting or denying class-action
certification.” Every circuit to consider the question has
interpreted the rule to allow appeals of reconsideration
orders—but only those that materially change the original
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 23
certification order and thereby affect the status quo. These
cases rely on the language of Rule 23(f), holding that an
order that leaves the status quo of a prior certification order
unchanged neither “grant[s]” nor “den[ies]” class-action
certification, as required to render an order appealable under
Rule 23(f). See In re Wholesale Grocery Prods. Antitrust
Litig., 849 F.3d 761, 765–66 (8th Cir. 2017); Phillips v.
Sheriff of Cook Cty., 828 F.3d 541, 559–60 (7th Cir. 2016);
Nucor, 760 F.3d at 343; Fleischman v. Albany Med. Ctr., 639
F.3d 28, 31–32 (2d Cir. 2011); In re DC Water & Sewer
Auth., 561 F.3d at 496–97; Gutierrez, 523 F.3d at 193–94;
Jenkins, 491 F.3d at 1291–92; Carpenter, 456 F.3d at 1191;
see also McNamara, 410 F.3d at 281 (holding that district
court reconsideration order “merely reaffirmed its prior
ruling” and therefore “was not ‘an order . . . granting or
denying class action certification’ under Rule 23(f)”).
Because the only Ninth Circuit decision applying that test is
unpublished, see Lambert v. Nutraceutical Corp., 783 F.
App’x 720, 723 (9th Cir. 2019) (holding reconsideration
order that maintained the status quo of class certification was
not itself appealable), we now formally join our sister
circuits and adopt the material-change / status-quo test.
The test as applied here bars Plaintiffs from appealing
the reconsideration order. Although the district court in its
reconsideration order changed its legal analysis, it declined
to change its original certification order in any way
notwithstanding Plaintiffs’ motion: the same class definition
controls, the same Plaintiffs make up the class, and the status
quo remains unchanged.
Plaintiffs argue they properly appealed the
reconsideration order because it contains a rationale for the
certification decision not present in the original order. The
material-change / status-quo test obviates Plaintiffs’
24 WALKER V. LIFE INS. CO. OF THE SOUTHWEST
argument. The cases subscribing to that test demonstrate
that our sister circuits concern themselves not with the words
used in the reconsideration order, but rather with the order’s
practical effect on the class. See, e.g., In re Wholesale
Grocery Prods. Antitrust Litig., 849 F.3d at 765 (rejecting
attempted appeal of reconsideration order that “left the status
quo—no class certification for the New England plaintiffs—
untouched”); Carpenter, 456 F.3d at 1191 (“An order that
leaves class-action status unchanged from what was
determined by a prior order is not an order ‘granting or
denying class action certification’” under Rule 23(f).). Only
where the district court certifies a class it previously declined
to certify, decertifies an existing class, or changes the
composition of an existing class—usually by increasing or
decreasing its size—will a reconsideration order become
appealable. See, e.g., Matz v. Household Int’l Tax Reduction
Inv. Plan, 687 F.3d 824, 825 (7th Cir. 2012) (allowing
appeal of partial decertification order reducing the size of the
originally certified class by between 57 and 71 percent);
Glover v. Standard Fed. Bank, 283 F.3d 953, 959 (8th Cir.
2002) (holding reconsideration order appealable where it
“open[ed] up the class to individuals working through an
entire network of mortgage brokers across the nation beyond
the more limited group”). That did not happen here.
Plaintiffs should have sought to appeal the district
court’s original certification order by August 14. They
should have indicated in their August 14 appeal petition that
they had also moved the district court to reconsider its
certification order, and that, if appropriate, they would later
amend their appeal petition to request that we also consider
the district court’s reconsideration order. See, e.g., S.O.S.,
Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir. 1989)
(concluding that amended appeal notice properly
“expand[ed] the factual record on appeal” to include denial
WALKER V. LIFE INS. CO. OF THE SOUTHWEST 25
of reconsideration order); Lienhart v. Dryvit Sys., Inc., 255
F.3d 138, 142 n.1 (4th Cir. 2001) (acknowledging Dryvit’s
filing of an appeal petition and, later, an amended petition of
a class-certification order). Alternatively, of course,
Plaintiffs could have followed the local meet-and-confer
requirements when they filed their motion for
reconsideration, eliminating the need to re-notice the motion
after it was denied, and then filed a timely appeal when the
motion was denied on the merits. Plaintiffs took neither
approach and instead gambled their ability to appeal on the
possibility that the district court would materially change its
original certification decision on reconsideration. The
subsequent reconsideration order maintained the status quo,
and so it is not appealable. Plaintiffs lost their bet. Rule
23(f) cannot hedge it.
V
We further deny Plaintiffs’ motion to take judicial notice
of their petition to appeal and LSW’s answer thereto.
Plaintiffs’ briefs appear to rely on some of the facts
contained in the petition and answer, which may be subject
to “reasonable dispute” and therefore are not judicially
noticeable under Federal Rule of Evidence 201(b). See Lee
v. City of Los Angeles, 250 F.3d 668, 689–90 (9th Cir. 2001)
(explaining that a court can take notice of the existence of
pleadings, but not the truth of the facts recited therein).
We leave undisturbed the district court’s legally sound,
if imperfect, certification order. And we dismiss Plaintiffs’
untimely and procedurally improper attempts to appeal.
Each party shall bear its own costs.
AFFIRMED IN NO. 19-55241, DISMISSED IN NO.
19-55242.