Opinion
18-cv-05841-BLF
03-09-2022
STEVE R. ROJAS and ANDREA N. ROJAS, on behalf of themselves and all others similarly situated, Plaintiffs, v. BOSCH SOLAR ENERGY CORPORATION, Defendant.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR CLASS CERTIFICATION
[RE: ECF 165]
BETH LABSON FREEMAN, UNITED STATES DISTRICT JUDGE
In this putative consumer class action, Plaintiffs Steve and Andrea Rojas (“Plaintiffs”) claim that certain solar panels manufactured by Defendant Bosch Solar Energy Corporation (“Defendant” or “Bosch”) are defective and do not generate the amount of power promised. Specifically, Plaintiffs allege that excessive heat generated at the panels' solder joints creates a fire hazard; delamination causes peeling and cracking of the panels' protective back sheets; and the panels' power output degrades too much over time. Based on these allegations, Plaintiffs assert claims for breach of warranty and unjust enrichment against Bosch. They seek certification of a nationwide class and a California subclass of persons and entities who are consumers, final customers, end users, subsequent buyers, and subsequent owners of Bosch's model number c-Si M 60 NA30119 solar panels.
Bosch does not dispute the existence of defects in their c-Si M 60 NA30119 solar panels (“119 Panels”), also referred to as solar modules. However, Bosch argues that a class action is unnecessary in light of Bosch's voluntary recall of its 119 Panels. Bosch also argues that certification of a nationwide class would be contrary to the Court's prior ruling that Plaintiffs lack standing to assert claims on behalf of residents of states other than California. Finally, Bosch argues that Plaintiffs have not satisfied the requirements of Federal Rule of Civil Procedure 23 for certification of any class.
For the reasons discussed below, Plaintiffs' motion for class certification is GRANTED IN PART AND DENIED IN PART.
I. BACKGROUND
Bosch's 119 Panels
Bosch's 119 Panels were manufactured in Korea and shipped to the United States in 2011 and 2012. See Report dated 11/3/2016 at 2-5, Birka-White Decl. Exh. K, ECF 166-11. Approximately 44, 500 of the 119 Panels were manufactured in all. See id. at 5. They were sold exclusively to dealers and installers, who installed them primarily in the United States. See id. at 5-6. Bosch estimates that 27, 250 units were installed on rooftops in the United States, 200 were installed on rooftops in Canada, 15, 850 were ground-mounted in the United States, and the remainder were left in a Bosch warehouse. Id. at 5. Bosch has exited the solar panel business in the United States. See id.
Bosch provides a “Limited Warranty” for its 119 Panels, covering both material and workmanship (“Product Warranty”) and loss of performance (“Performance Warranty”). See Limited Warranty, Birka-White Decl. Exh. P, ECF 166-16. The Product Warranty guarantees that the 119 Panels are free of defects in material and workmanship for a period of ten years from the date of delivery. See id. ¶ A. The Performance Warranty guarantees that the 119 Panels will deliver specified amount of power for a period of twenty-five years. See Id. ¶ B.
Installation of 119 Panels on Plaintiffs' Property
In 2012, Plaintiffs Steve and Andrea Rojas began considering a solar panel installation at their home in Moreno Valley, California. See Steve Rojas Decl. ¶¶ 5-7, ECF 167. They met with a representative of a solar installment company, Sullivan Electric (“Sullivan”), at their home on October 23, 2012. See id. Later that month, Plaintiffs entered into a Prepaid Solar Power Agreement with Kilowatt Systems, LLC (“Kilowatt”), under which Plaintiffs acquired the use of 42 Bosch panels installed on their property by Sullivan. See Steve Rojas Decl. ¶¶ 8-12; Prepaid Solar Power Agmt, Mueller Decl. Exh. A, ECF 189-6. Sullivan installed 42 119 Panels on Plaintiffs' property in a ground array, and Kilowatt retained ownership of the panels. See Steve Rojas Decl. ¶ 9; Prepaid Solar Power Agmt. The cost to Plaintiffs was approximately $25,000. See Steve Rojas Decl. ¶ 11; Prepaid Solar Power Agmt.
Bosch's Recall of Roof-Mounted 119 Panels
In November 2016, Bosch submitted a report to the U.S. Consumer Product Safety Commission, advising that its 119 Panels posed a possible fire hazard due to overheating at the solder joints. See Report dated 11/3/2016, Birka-White Decl. Exh. K, ECF 166-11. The report described Bosch's proposed corrective action plan, which included instructing distributers/installers not to ship or install 119 Panels; replacing all roof-mounted 119 Panels; and monitoring all ground-mounted 119 Panels for signs of solder degradation. See id. at 7-8. Bosch explained the difference in approach with respect to roof-mounted and ground-mounted panels as follows: “This program differs from the rooftop-mounted replacement program because the risk of injury from a ground-mounted module is low (there is no building to be ignited, and people do not live or work beneath the ground-mounted panels, which are used exclusively as part of commercial solar energy farms) and because only a fraction of the modules are expected to experience any solder degradation.” Id. at 8.
On April 13, 2017, Bosch voluntarily recalled all roof-mounted 119 Panels due to the solder defect and potential fire hazard. See Recall Summary, Birka-White Decl. Exh. X, ECF 166-24. An estimated 28, 000 roof-mounted panels were subject to the recall. See id. The U.S. Consumer Product Safety Commission accepted Bosch's proposed corrective action plan as adequate. See CPSC Letter dated 5/16/2017, Birka-White Decl. Exh. L, ECF 166-12. As noted above, that plan required notice of the recall to distributors/installers, but not to homeowners or other end users. See id.
Plaintiffs' Attempts to Participate in the Recall
Plaintiffs did not receive notification of the recall from Bosch. See Steve Rojas Decl. ¶ 14. They learned of the recall from putative class counsel David M. Birka-White in September 2017. See Id. ¶ 15. Mr. Birka-White advised Plaintiffs that he was investigating a potential lawsuit against Bosch and had gotten Plaintiffs' name from Sullivan. See Id. Plaintiffs called Sullivan, the company that had installed the solar panels on Plaintiffs' property, but Sullivan had not been informed of the recall. See Id. ¶ 20. Sullivan reached out to Kilowatt, the company from which Plaintiffs purchased solar power, but Kilowatt did not know of the recall either. See Id. ¶ 21.
Plaintiffs then contacted Bosch, which agreed to replace the solar panels on Plaintiffs' property even though the panels were ground-mounted. See Steve Rojas Decl. ¶¶ 25-30. However, months passed without any action by Bosch. See Id. ¶¶ 31-33. On May 31, 2018, Plaintiffs were contacted by a company called Baker Electric Solar to schedule an inspection of their property prior to replacement of the solar panels. See Id. ¶ 34. The inspection occurred on June 6, 2018. See Id. ¶ 35. After the inspection, another four months passed without action. See Id. ¶ 36. On August 31, 2018, Plaintiffs received an email from Bosch stating that the panels on their property were owned by a third party, and that a qualified installer would contact them about replacement. See Id. ¶ 37. Plaintiffs previously had informed Bosch that the panels on their property were owned by a third party. See Id. Plaintiffs felt that Bosch was simply stalling on replacing the panels. See id.
Present Lawsuit
Plaintiffs contacted Mr. Birka-White in September 2018 and requested representation. See Steve Rojas Decl. ¶ 38. That same month, Plaintiffs filed the present suit against Bosch and filed a separate suit against Kilowatt. See Id. ¶ 48. Plaintiffs settled the action against Kilowatt in October 2018 in return for title to the 119 Panels on their property. See Id. ¶ 49. Since being made aware of potential issues with the 119 Panels, Plaintiffs have noticed that the back sheets of their solar panels are cracked. See Id. ¶ 54. Plaintiffs also have noticed a 50% reduction in the power output of their solar panels. See Id. ¶ 52. Almost a year into this litigation, Bosch offered to replace Plaintiffs' solar panels. See Id. ¶ 39. Plaintiffs declined on the grounds that the offer was “too little too late, ” and would impair their ability to act as class representatives in the present suit. See Id. ¶ 40.
The operative pleading is the second amended complaint (“SAC”), which asserts claims under the laws of California, Arizona, Hawaii, Missouri, and North Carolina on behalf of residents of those states. See SAC, ECF 53. On March 6, 2020, the Court issued an order granting in part and denying in part Bosch's motion to dismiss the SAC (“Dismissal Order”). See Dismissal Order, ECF 89. The Court determined that Plaintiffs, who are California residents, lack standing to assert claims on behalf of residents of states other than California. See Dismissal Order at 7. Accordingly, the Court dismissed all claims asserted on behalf of residents of Arizona, Hawaii, Missouri, and North Carolina. See id. at 28. The Court also dismissed all claims other than Claim 1 for breach of warranty under state common law, Claim 2 for breach of warranty under the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2310, Claim 3 for breach of warranty under state statutory law, and Claim 5 for unjust enrichment. See Id. Finally, the Court found persuasive Bosch's argument that Plaintiffs' warranty claims are governed by Michigan law under a choice of law provision contained in the Limited Warranty. See Id. at 13. The Court determined that Plaintiffs' unjust enrichment claim is governed by California law. See Id. Bosch filed an answer to the SAC on April 17, 2020. See Answer, ECF 96.
Plaintiffs now seek class certification with respect to the warranty and unjust enrichment claims remaining in the SAC. However, rather than seeking certification of a California class, Plaintiffs seek to amend their class definition to encompass a nationwide class on the warranty claims and a California subclass on the unjust enrichment claim. See Prop. Order, ECF 171.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 23 governs class certification. “The party seeking class certification has the burden of affirmatively demonstrating that the class meets the requirements of [Rule] 23.” Stromberg v. Qualcomm Inc., 14 F.4th 1059, 1066 (9th Cir. 2021) (internal quotation marks and citation omitted). “As a threshold matter, a class must first meet the four requirements of Rule 23(a): (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation.” Id. “In addition to Rule 23(a)'s requirements, the class must meet the requirements of at least one of the three different types of classes set forth in Rule 23(b).” Id. (internal quotation marks and citation omitted).
III. DISCUSSION
Plaintiffs seek certification of a nationwide class on the warranty claims and a California subclass on the unjust enrichment claim, defined as follows:
All persons or entities in the United States who are the consumers, final customers, end users, subsequent buyers, and subsequent owners of Bosch solar panels module number NA30119, on breach of warranty claims.
All persons or entities in the State of California who are the consumers, final customers, end users, subsequent buyers, and subsequent owners of Bosch solar panels module number NA30119, on unjust enrichment claims.Prop. Order, ECF 171. Plaintiffs acknowledge that the SAC does not allege a nationwide class, and they request leave to amend their class definition to encompass a nationwide class and a California subclass. In the alternative, Plaintiffs seek certification of a five-state class consisting of California, Arizona, Hawaii, Missouri, and North Carolina. Plaintiffs argue that that the Rule 23 requirements are satisfied with respect to the proposed nationwide class and California subclass or, alternatively, a five-state class.
In opposition, Bosch objects to Plaintiffs' proposed amendment of the class definition as a blatant end-run around the Court's Dismissal Order. Bosch contends that the proposed amendment would prejudice it and derail the case schedule. Bosch also contends that the Rule 23 requirements are not satisfied with respect to any class.
The Court first addresses Plaintiffs' request to amend the class definition. Next, the Court summarizes evidentiary rulings it previously issued with respect to evidence submitted with Plaintiffs' reply in support of their motion for class certification. The Court then turns to the Rule 23 requirements.
A. Plaintiffs' Request to Amend the Class Definition
Some district courts have found it appropriate to allow amendment of the class definition at the certification stage where “the proposed modifications are minor, require no additional discovery, and cause no prejudice to defendants.” In re TFT-LCD (Flat Panel) Antitrust Litig., 267 F.R.D. 583, 591 (N.D. Cal. 2010). However, amendment is inappropriate where the plaintiffs seek to certify “a completely different class” from that alleged in the complaint, particularly where the defendant would be prejudiced and additional discovery would be required. See Davis v. AT&T Corp., No. 15cv2342-DMS (DHB), 2017 WL 1155350, at *4 (S.D. Cal. Mar. 28, 2017).
In the present case, the Court has no difficulty concluding that the requested amendment goes far beyond allowable “minor” modifications to the class definition. Plaintiffs propose to expand the California class contemplated by the Dismissal Order to a nationwide class with a California subclass or, alternatively, to the very five-state class the Court expressly rejected in the Dismissal Order. Plaintiffs have not cited, and the Court has not discovered, any authority permitting such a major amendment to the class definition at the certification stage.
Plaintiffs assert that a nationwide class on the warranty claims would be consistent with the Court's ruling that all warranty claims are subject to Michigan law. See Dismissal Order at 13. Plaintiffs argue that if all warranty claims are governed by Michigan law, Plaintiffs' individual standing to sue on the Limited Warranty gives them standing to represent anyone in the country suing on the same Limited Warranty. While that argument may have merit, a motion for class certification is not the appropriate vehicle for it.
Plaintiffs' request to amend the class definition to encompass a nationwide class, or alternatively a five-state class, is DENIED. The Court will consider Plaintiffs' motion for class certification only with respect to a California class. This ruling is without prejudice to a properly noticed motion for leave to amend the class definition.
B. Ruling on Bosch's Objections to Reply Evidence
After Plaintiffs filed their reply in support of their motion for class certification, Bosch filed an objection to certain reply evidence. See Def.'s Obj., ECF 197. The Court ruled on Bosch's objection in a separate order issued on November 23, 2021. See Order Sustaining Objection, ECF 204. The Court summarizes its ruling here to make clear what evidence it has and has not considered in addressing Plaintiffs' class certification motion.
Bosch objected to three pieces of reply evidence: (1) the affidavit of Plaintiffs' notice expert, Todd B. Hilsee, ECF 196-12; (2) Paragraphs 2-10 and Exhibits A and D to the supplemental declaration of David M. Birka-White, ECF 196-1, 196-2, 196-5; and (3) the reply declaration of Michael V. Garcia, ECF 196-13. The Court SUSTAINED Bosch's objection in its entirety. See Order Sustaining Objection at 3. Mr. Hilsee has not previously been disclosed as an expert in this case and now offers expert opinion on a key issue, the adequacy of Bosch's recall of the 119 Panels. See Id. at 1-2. The identified portions of Mr. Birka-White's supplemental declaration and Mr. Garcia's reply declaration contain new factual matter on the issue of damages. See Id. at 2. Accordingly, the Court has not considered Mr. Hilsee's affidavit or the identified declaration evidence submitted by Mr. Birka-White and Mr. Garcia.
C. Rule 23(a) Requirements
1. Numerosity
Rule 23(a)(1) requires that the size of the proposed class be “so numerous that joinder of all the class members is impracticable.” Fed.R.Civ.P. 23(a)(1). “No exact numerical cut-off is required; rather, the specific facts of each case must be considered.” Litty v. Merrill Lynch & Co., No. CV 14-0425 PA (PJWx), 2015 WL 4698475, at *3 (C.D. Cal. Apr. 27, 2015). “[N]umerosity is presumed where the plaintiff class contains forty or more members.” Id. However, a class as small as twenty properly may be certified when the other Rule 23 factors are satisfied. See Rannis v. Recchia, 380 Fed.Appx. 646, 651 (9th Cir. 2010) (affirming district court's certification of 20-member class).
Plaintiffs submit evidence that 4, 086 119 Panels were sold to distributers and installers in California. See Birka-White Reply Decl. ¶ 13 & Exh. N, ECF 196-1, 196-4. Although it is impossible to tell precisely how many homes or commercial sites were outfitted with those 4, 086 panels, it is reasonable to infer that the number exceeds 40. Plaintiffs assert that the average residential solar array consists of approximately 25 panels, see Mot. at 13, ECF 165, and Bosch does not dispute that assertion, see Opp. at 11-12, ECF 189. If all panels distributed in California were used in residential arrays, an average residential array of 25 panels would result in approximately 160 homes with 119 Panels in California. An average residential array of 42 panels, as at Plaintiffs' residence, would result in approximately 97 homes with 119 Panels in California. Even if the Court were to assume that a substantial number of the panels were used in commercial arrays, it appears that the number of end users would exceed 40. The Court notes that Plaintiffs' proposed class definition encompasses both residential and commercial end users.
At the hearing, Plaintiffs' counsel suggested that the number of panels sold in California might be closer to 3, 500 panels. See Hrg. Tr. 12:5-10, ECF 211. If the lower number is correct, an average residential array of 25 panels would result in 140 homes with 119 Panels in California, and an average residential array of 42 panels, as at Plaintiffs' residence, would result in approximately 83 homes with 119 Panels in California.
Bosch does not suggest that its 119 Panels are installed in fewer than 40 residential or commercial arrays in California. Instead, Bosch argues that not all of those end users are class members. Bosch contends that the class must be limited to end users who are entitled to enforce the Limited Warranty, who have made a claim under the warranty that was not honored, and who have not been offered complete relief under the recall. As discussed below with respect to the predominance and superiority requirements of Rule 23(b)(3), Plaintiffs contend that all end users are entitled to enforce the Limited Warranty under a third party beneficiary theory, that any notice requirements under Michigan warranty law or the MMWA are excused, and that the recall has been ineffective. Given Plaintiffs' theory of the case, all end users of 119 Panels are potential class members, with the exception of those who already have received replacement panels from Bosch through the recall.
As of April 30, 2020, Bosch had replaced only 12, 276 of the 44, 500 panels shipped to the United States. See Def.'s Resp. to Interrog. No. 9, Birka-White Reply Decl. Exh. F, ECF 196-7. In California, the company hired to store 119 Panels as they are replaced by Bosch has received a total of 66 panels. See Rodio Decl. ¶¶ 1, 12-16, ECF 170. In their papers, Plaintiffs represent that Bosch has removed and destroyed an additional 300 panels in California, although no evidence is cited for this representation. See Reply at 1, ECF 202. Bosch does not dispute Plaintiffs' representation and does not provide any information as to how many 119 panels it has replaced in California. Accepting Plaintiffs' undisputed figures, it appears that Bosch has replaced only a small fraction of the 119 panels installed in California, and that the number of end users in California exceeds 40.
Based on this record, the Court finds that the numerosity requirement is satisfied.
2. Commonality
Rule 23(a)(2) requires the plaintiff to show that “there are questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). The requirement cannot be satisfied with any common question, however. See Dukes, 564 U.S. at 349. “Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury.” Id. at 349-50 (internal quotation marks and citation omitted). The claim of common injury must depend on a common contention “of such a nature that it is capable of classwide resolution - which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Id. at 350. “[F]or purposes of Rule 23(a)(2) even a single common question will do.” Id. at 359 (internal quotation marks, citation, and alterations omitted); see also Mazza v. Am. Honda Motor Co., 666 F.3d 581, 589 (9th Cir. 2012) (“[C]ommonality only requires a single significant question of law or fact.”).
a. Claims 1-3 for Breach of Express Warranty
Claims 1 and 3 are for breach of express warranty under state common law and state statutory law, respectively. Claim 2, for breach of express warranty under the MMWA, is based on Claim 1 for breach of express warranty under state common law. The Court has held that Michigan law applies to all three warranty claims. See Dismissal Order at 13.
Plaintiffs assert claims under the Product Warranty provision of the Limited Warranty based on two defects, the solder defect and the delamination defect. The claims of all prospective class members involve the same solder and delamination defects, based on the same warranty, regarding the same solar panel model. In Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1172 (9th Cir. 2010), the Ninth Circuit found that the plaintiffs had “easily” satisfied the commonality requirement where “[t]he claims of all prospective class members involve the same alleged defect, covered by the same warranty, and found in vehicles of the same make and model.” Applying the reasoning of Wolin to the present case, the Court concludes that the commonality requirement is satisfied as to claims under the Product Warranty provision of the Limited Warranty. Common questions include whether all 119 Panels have the solder defect, whether all 119 Panels have the delamination defect, and whether Bosch is obligated to pay for or replace class members' 119 Panels under its express warranty.
Plaintiffs also assert claims under the Performance Warranty provision of the Limited Warranty based on a significant reduction in the panels' power output over time. The claims of all prospective class members involve reduction in power output, based on the same warranty provision, regarding the same model solar panel. Common questions include whether there is a defect in the 119 Panels that causes reduction in power output over time, and whether Bosch is obligated to pay for or replace the 119 Panels under its express warranty. While Plaintiffs' claims under the Performance Warranty clearly will involve individual questions regarding the extent that power output has been reduced, and the cause of that reduction, the Court concludes that the common questions identified by Plaintiffs satisfy “their limited burden under Rule 23(a)(2) to show that there are ‘questions of law or fact common to the class.'” Mazza, 666 F.3d at 589.
The Court is unpersuaded by Bosch's argument that the commonality requirement is not satisfied because Bosch has conceded the alleged defects in the 119 Panels and its obligation to replace roof-mounted 119 Panels. That Bosch has conceded issues central to Plaintiffs' claims does not negate the commonality of those issues, and Bosch cites no authority to the contrary. The Court observes that Bosch has litigated this case vigorously since its inception, and has given no previous indication that it would concede central issues. While those concessions will simplify Plaintiffs' task in meeting their burden of proof going forward, Plaintiffs still must meet that burden with respect to the common issues identified above.
The Court finds that the commonality requirement is satisfied with respect to Plaintiffs' warranty claims.
b. Claim 5 for Unjust Enrichment
Claim 5, pled in the alternative to Plaintiffs' express warranty claims, asserts that Bosch was unjustly enriched by receiving the purchase price of the solar panels and retaining that benefit at Plaintiffs' expense. California law applies to the unjust enrichment claim. See Dismissal Order at 13. Under California law, “[t]he elements of an unjust enrichment claim are the receipt of a benefit and [the] unjust retention of the benefit at the expense of another.” Peterson v. Cellco P'ship, 164 Cal.App.4th 1583, 1593 (2008) (internal quotation marks and citation omitted).
Plaintiffs' theory is that the distribution chain for 119 Panels worked in such a way that when an end user contracted with a power supplier like Kilowatt, or an installer like Sullivan, for installment of a solar panel array, the end user's money was funneled to Bosch to pay for the panels. See SAC ¶ 315. Plaintiffs allege that in their case, they paid Kilowatt in excess of $25,000 to purchase solar power; Kilowatt transmitted that money to Sullivan; Sullivan used that money to purchase the panels from a Bosch subsidiary; and the money thereafter was transmitted to Bosch. See Id. ¶¶ 310-14. Plaintiffs claim that Bosch's retention of that money is unfair given defects in their solar panels. See Id. ¶ 317.
The claims of all prospective class members involve the same defects discussed above with respect to the warranty claims, namely the solder defect, the delamination defect, and the reduction in power output. This is sufficient to establish commonality. While there will be individual questions regarding each putative class members' payment, and tracing that payment to Bosch, the existence of some individual questions does not defeat commonality under Rule 23(a)(2). See Mazza, 666 F.3d at 589. Moreover, it is the Court's view that individual questions regarding each putative class member's transaction goes “to preponderance under Rule 23(b)(3), not to whether there are common issues under Rule 23(a)(2).” Id. Bosch does not address the commonality requirement with respect to Plaintiffs' unjust enrichment claim.
The Court finds that the commonality requirement is satisfied with respect to Plaintiffs' unjust enrichment claim.
3. Typicality
Rule 23(a)(3) requires that “the [legal] claims or defenses of the representative parties [be] typical of the claims or defenses of the class.” Typicality is satisfied “when each class member's claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendants' liability.” Rodriguez v. Hayes, 591 F.3d 1105, 1124 (9th Cir. 2010) (internal quotation marks and citation omitted). “The requirement is permissive, such that representative claims are typical if they are reasonably coextensive with those of absent class members; they need not be substantially identical.” Just Film, Inc. v. Buono, 847 F.3d 1108, 1116 (9th Cir. 2017) (internal quotation marks and citation omitted). However, “[a] court should not certify a class if there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.” Id. (internal quotation marks and citation omitted).
Plaintiffs argue that the typicality requirement is met because all claims, including their own and those of class members, arise from the same alleged defects in the 119 Panels and Bosch's alleged breaches of its express warranties. Plaintiffs assert that there is no difference between the defects in roof-mounted panels and ground-mounted panels.
In opposition, Bosch asserts that there are several bases for concluding that Plaintiffs' claims are not typical and that they are subject to unique defenses. First, Bosch contends that Plaintiffs' 119 Panels are ground-mounted but Plaintiffs have not identified any other residential ground-mounted arrays. Bosch fails to explain why that makes any difference. It is undisputed that all 119 Panels were uniformly designed and manufactured, whether they ultimately were ground-mounted or roof-mounted. See Report dated 11/3/2016 at 2-5, Birka-White Decl. Exh. K, ECF 166-11. Under those circumstances, there does not appear to be any reason why Plaintiffs cannot assert warranty and unjust enrichment claims on behalf of all end users, whether their panels are roof-mounted or ground-mounted. Moreover, the Court is puzzled by Bosch's emphasis on Plaintiffs' asserted failure to identify any other residential ground-mounted arrays. Plaintiffs' claims are not limited to residential arrays. They seek to represent “[a]ll persons or entities in the United States who are the consumers, final customers, end users, subsequent buyers, and subsequent owners of Bosch solar panels module number NA30119. . . .” Prop. Order, ECF 171. Accordingly, this attack on Plaintiffs' typicality is without merit.
Second, Bosch argues that Plaintiffs have not identified any other putative class members who notified Bosch of defects subject to the Limited Warranty but did not receive replacement panels. Bosch ignores Plaintiffs' theory that notice requirements under Michigan warranty law and the MMWA are excused. If Plaintiffs prevail on that theory, any differences among putative class members regarding notice to Bosch will be irrelevant.
Third, Bosch contends that Plaintiffs are subject to a unique defense because they took title to their 119 Panels with knowledge that they were defective. Bosch argues that under these circumstances, Plaintiffs may not be able to bring a warranty claim at all, because under Michigan law a defect of which the plaintiff had knowledge cannot be relied on as a basis for an action for breach of warranty. See Upjohn Co. v. Rachelle Lab'ys, Inc., 661 F.2d 1105, 1109 (6th Cir. 1981). The authorities filed by Bosch are factually distinguishable from the present case. Plaintiffs filed this suit in September 2018, before they took title to the panels, based on their status as an end user of the panels as of the time of installation. Plaintiffs could have maintained the suit as an end user even if they had never acquired title to the panels. None of the authorities cited by Bosch suggest that Plaintiffs' acquisition of title to the panels during this litigation, in settlement of a separate lawsuit against Kilowatt, would subject them to a unique defense.
Fourth, Bosch argues that Plaintiffs cannot prevail on a claim for breach of warranty under Michigan law, because Bosch offered to replace Plaintiffs' 119 Panels but Plaintiffs refused. See Computer Network, Inc. v. AM Gen. Corp., 265 Mich.App. 309, 314 (2005) (affirming summary judgment for defendant on express warranty claim where warranty repairs were made each time plaintiff presented vehicle for service). Bosch asserts that to the extent Plaintiffs are suffering an ongoing injury with respect to their 119 Panels, it is an injury of their own making. In response, Plaintiffs contend that Bosch's offer to replace their panels was an impermissible attempt to pick them off as class representatives.
In Pitts v. Terrible Herbst, Inc., 653 F.3d 1081, 1086 (9th Cir. 2011), the Ninth Circuit held that a rejected Rule 68 offer of judgment made before the filing of a motion for class certification does not moot the putative class action claims. Recognizing that a defendant may use a Rule 68 offer of judgment to “pick off” lead plaintiffs and avoid class actions, the Pitts court held that class certification would relate back to the filing of the complaint so class claims could not evade review simply because the defendant had offered the representative plaintiff all the individual relief she sought. See Id. at 1090-91. Pitts is not directly on point, because Bosch did not make a formal Rule 68 offer of judgment. However, the rationale of Pitts applies here, as it appears that Bosch sought to pick off Plaintiffs as class representatives by offering to replace their panels. Plaintiffs' counsel inquired whether Bosch would forego a challenge to Plaintiffs' status of class representatives if they accepted replacement panels, and Bosch did not agree. See Birka-White Decl. ¶ 38. Under these circumstances, Bosch's assertion that Plaintiffs' continuing injury is “of their own making” is not well-taken.
Fifth, Bosch asserts that Plaintiffs are subject to the defense of untimely notice. Under Michigan law, “a buyer who seeks to assert a warranty claim must within a reasonable time after he [or she] discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.” Danielkiewicz v. Whirlpool Corp., 426 F.Supp.3d 426, 433 (E.D. Mich. 2019) (internal quotation marks and citation omitted). The Limited Warranty on the 119 Panels requires that a warranty claim must be submitted to Bosch within three months after the consumer is placed on notice that a warranty claim may have arisen. See Limited Warranty ¶ 3.4, Birka-White Decl. Exh. P, ECF 166-16. Bosch contends that Plaintiffs were on notice of their warranty claim in October 2016, pointing to Steve Rojas's deposition testimony that Plaintiffs received notice from Kilowatt in October 2016 that their solar panel array was underperforming. See Steve Rojas Dep. 71:23-72:11, Mueller Decl. Exh. A, ECF 189-6. Plaintiffs did not contact Bosch for replacement of their panels until November 2017. See Id. at 126:16-19.
While the panels' underperformance perhaps could have put Plaintiffs on notice that they had a claim under the Performance Warranty, Steve Rojas's testimony certainly does not establish as much. Moreover, Bosch has not explained how the panels' underperformance could have put Plaintiffs on notice of the solder and delamination defects, which give rise to claims under the Product Warranty. Steve Rojas testified that Plaintiffs did not suspect that the panels were defective until they learned of the recall, and they contacted Bosch promptly after that. See Steve Rojas Decl. ¶¶ 14, 25-30.
In conclusion, the Court finds that Plaintiffs have established that their claims are coextensive with those of absent putative class members, and that Bosch has not identified any unique defenses that would call into doubt their ability to represent the class. Plaintiffs have satisfied the typicality requirement.
4. Adequacy
To determine Plaintiffs' adequacy as a class representative, the Court “must resolve two questions: (1) do the named plaintiffs and their counsel have any conflicts of interest with other class members and (2) will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the class?” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 985 (9th Cir. 2011) (internal quotation marks and citation omitted). There do not appear to be any conflicts of interest, and Plaintiffs and class counsel have demonstrated the ability and intention of prosecuting this action vigorously on behalf of the class.
Bosch asserts that Plaintiffs lack credibility based on “purportedly detailed recollection of a single conversation six years prior to filing suit, ” their failure to mitigate the fire hazard posed by their solar panel array, and “their motivation in taking extreme measures to preserve their ability to prosecute this action.” Opp. at 11, ECF 189.
In is unclear what “single conversation” Bosch is referencing as a basis for its attack on Plaintiffs' credibility. The Court presumes that Bosch is alluding to a conversation that Plaintiffs had with a Sullivan representative who met with Plaintiffs at their home. The Court perceives no basis for questioning Plaintiffs' credibility based on their recollection of that conversation. Steve Rojas is a pipe welder in his mid-60s and Andrea Rojas is a full-time caregiver to the Rojas's adult disabled daughter. Steve Rojas Decl. ¶¶ 3-4. Steve Rojas explains in his declaration he and his wife have lived in the same home for almost twenty years, which they purchased for $215,000.00, and that deciding to spend more than $25,000 on a solar panel array was a big financial decision for them. See Id. ¶ 5. Under those circumstances, it is understandable that Plaintiffs remember the details surrounding their decision to go solar.
As to Plaintiffs' asserted failure to mitigate and “extreme measures” to continue with this litigation, Andrea Rojas explains as follows:
17. In August, 2019, about a year after we filed the lawsuit, Mr. Birka-White informed us that Bosch corresponded with him and offered to replace our panels. However, Bosch would not agree that they would not challenge our ability to serve as class representatives if they replaced our panels.
18. My husband and I discussed their offer to replace the panels. Because we had made this commitment to serve as class representatives, we felt it would not be right to accept the panels and walk away from the class. We felt the Bosch offer was dishonest and a trap. We were worried about the fire hazard that the panels posed but, as I said in my deposition, it was too little too late.
Andrea Rojas Decl. ¶¶ 17-18, ECF 168. This explanation is entirely plausible. Nothing in the record before the Court suggests that Plaintiffs are less than honest or that their motives for pursuing this lawsuit are other than those expressed above. Plaintiffs and their counsel have demonstrated the ability and the will to provide excellent representation for the putative class, in the face of notably aggressive litigation tactics on the part of Bosch.
The adequacy requirement is satisfied.
D. Rule 23(b)
“In addition to satisfying Rule 23(a)'s prerequisites, parties seeking class certification must show that the action is maintainable under Rule 23(b)(1), (2), or (3).” Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 614 (1997). Plaintiffs initially sought certification under both Rule 23(b)(2), which permits certification where injunctive or declaratory relief is appropriate for the class as a whole, and Rule 23(b)(3), which permits certification where common questions of law or fact predominate over individual questions. See Fed. R. Civ. P. 23(b)(2), (b)(3). However, Plaintiffs did not argue Rule 23(b)(2) in their reply brief, and at the hearing Plaintiffs' counsel advised the Court that Plaintiffs no longer seek injunctive relief. See Hrg. Tr. 10:17-25, ECF 211. As Plaintiffs no longer seek certification under Rule 23(b)(2), Plaintiffs' motion turns on their showing with respect to Rule 23(b)(3).
A class may be certified under Rule 23(b)(3) only if “the court finds that 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). “Further, parties seeking to certify a Rule 23(b)(3) class must also demonstrate that the class is sufficiently ascertainable.” Datta v. Asset Recovery Sols., LLC, No. 15-CV-00188-LHK, 2016 WL 1070666, at *2 (N.D. Cal. Mar. 18, 2016).
1. Ascertainability
“[A] class is ascertainable if the class is defined with objective criteria and if it is administratively feasible to determine whether a particular individual is a member of the class.” Huynh v. Harasz, No. 14-CV-02367-LHK, 2015 WL 7015567, at *13 (N.D. Cal. Nov. 12, 2015) (internal quotation marks and citation omitted). Plaintiffs point out that the class definitions in this case rely on objective criteria, use or ownership of 119 panels. That criteria can be verified based on panel serial number, panel model number, or date of purchase of panels or power generated by panels. Verification should be straightforward in light of the Court's limitation of the class definition to a California class. Bosch does not dispute the ascertainability of the class.
The Court finds that the putative California class is ascertainable.
2. Predominance of Common Questions
Plaintiffs assert that common questions of law and fact predominate over individual questions with respect to both liability and damages. In opposition, Bosch contends that Plaintiffs have not shown that common questions predominate as to either liability or damages.
a. Liability
As discussed herein, Plaintiffs assert warranty claims and a claim for unjust enrichment.
i. Claims 1-3 for Breach of Express Warranty
Plaintiff asserts three warranty claims: Claim 1 for breach of warranty under state common law, Claim 2 for breach of warranty under the MMWA, Claim 3 for breach of warranty under state statutory law. The Court has determined that all three claims are governed by Michigan law. See Dismissal Order at 13, ECF 89. The warranty claims are based on two separate provisions contained within the Limited Warranty on the 119 Panels, the Product Warranty and the Performance Warranty. For the following reasons, the Court finds that common questions predominate as to claims under the Product Warranty, but not as to claims under the Performance Warranty.
In distinguishing between the Product Warranty and Performance Warranty, this Court relies on the Ninth Circuit's discussion of two warranty provisions in Wolin. In Wolin, the Ninth Circuit considered automobile owners' claims under two separate warranties issued by the defendant, Jaguar Land Rover North America, LLC (“Land Rover”). See Wolin, 617 F.3d at 1170. The “Limited Warranty” covered repairs to correct defects in factory supplied materials or workmanship with the exception of tires. The “Tire Warranty” covered replacement of tires and vehicle realignment in the event that excessive tire wear was caused by a manufacturing defect elsewhere in the vehicle. See Id. The plaintiffs asserted claims under both warranties based on an “alignment geometry defect” that caused tires to wear prematurely. See Id. The Ninth Circuit held that the predominance requirement of Rule 23(b)(3) was satisfied with respect to claims under the Limited Warranty, as all proposed class members claimed that their vehicles suffer from the same defect in alignment. See Id. at 1174. The Wolin court held that those claims required “common proof of the existence of the defect and a determination whether Land Rover violated the terms of its Limited Warranty.” Id. The plaintiffs were not required to prove manifestation of the defect to go forward with their claim under the Limited Warranty. See id.
However, the Ninth Circuit opined that “[c]laims for breach of the Tire Warranty do not easily satisfy the predominance test.” Wolin, 617 F.3d at 1174. “[T]he Tire Warranty, provides that when tire wear is caused by a defect in the vehicles, Land Rover will replace the tires and/or pay for realignment.” Id. The Ninth Circuit stated that “[a] determination whether the defective alignment caused a given class member's tires to wear prematurely requires proof specific to that individual litigant.” Id. Explaining that “[t]ires deteriorate at different rates depending on where and how they are driven, ” the Wolin court observed that “[w]hether each proposed class member's tires wore out, and whether they wore out prematurely and as a result of the alleged alignment defect, are individual causation and injury issues that could make classwide adjudication inappropriate.” Id. The Ninth Circuit directed the district court to address this issue on remand. See id.
Product Warranty
Turning to the Product Warranty in the present case, that provision guarantees that the 119 Panels are free of defects in material and workmanship for a period of ten years from the date of delivery. See Limited Warranty ¶ A, Birka-White Decl. Exh. P, ECF 166-16. Plaintiffs claim that the 119 Panels have two defects in material and workmanship, the solder defect and the delamination defect; all of the 119 Panels were identically designed and manufactured such that all of the 119 Panels have these defects; and these defects constitute a breach of the Product Warranty as to all end users. Plaintiffs argue that their claims are subject to common proof as to whether all 119 Panels have the solder defect, whether all 119 Panels have the delamination defect, and whether Bosch is obligated to pay for or replace class members' 119 Panels under the Product Warranty provision of the Limited Warranty.
Plaintiffs argue that their warranty claims present common questions similar to those presented by Wolin, and that the predominance requirement is satisfied here for the same reasons found by the Ninth Circuit as to the Limited Warranty in Wolin in that case. The Court agrees.
Bosch does not dispute that the common questions identified by Plaintiffs exist with respect to their claims under the Product Warranty. However, Bosch contends that other issues will require individualized inquiries that will overwhelm the common questions. Bosch argues that each putative class member must establish a contractual right to enforce the Limited Warranty. The Limited Warranty is “granted to the Consumer or shall transfer from the Consumer to subsequent buyers / end users for the remainder of the warranty period, provided the subsequent buyers / end users can show that the Modules have not been modified or relocated from their originally installed location.” Limited Warranty ¶ C.1.1. Bosch asserts that whether any particular class member comes within this provision is a question of contract formation governed by the law of the state in which the contract was made or was to be performed, and that factual inquiries regarding contract formation would be compounded by differences in state laws in a nationwide or multi-state class. Because the Court has limited any potential class to California residents, the Court need not consider complications relating to application of the laws of multiples states.
With respect to the putative California class, the parties disagree whether contract formation issues would be governed under California law (Bosch's view) or Michigan law (Plaintiffs' view). However, Plaintiffs contend that under either California law or Michigan law, common questions govern whether class members have the right to enforce the Limited Warranty. For example, Plaintiffs contend that all end users are entitled to enforce the Limited Warranty under a third party beneficiary theory. Both California and Michigan recognize the rights of intended third party beneficiaries to enforce an express warranty. See Balsam v. Tucows Inc., 627 F.3d 1158, 1161 (9th Cir. 2010) (“Under California law, a contract, made expressly for the benefit of a third party, may be enforced by him at any time before the parties thereto rescind it.” (internal quotation marks and citation omitted)); Koenig v. City of S. Haven, 460 Mich. 667, 679-80 (1999) (under Michigan law, third party beneficiaries may enforce a contract if the class of intended third party beneficiaries is reasonably identifiable from the contract). Plaintiffs' third party beneficiary theory presents a common question that could give all putative class members rights under the Limited Warranty.
Bosch argues that individual questions regarding putative class members' compliance with statutory and contractual notice requirements for warranty claims will predominate over common questions. Those notice requirements, which do not relate to contract formation, clearly are governed by Michigan law under this Court's prior Dismissal Order. Under Michigan's Uniform Commercial Code, “‘the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy'” for breach of warranty. Johnston v. PhD Fitness, LLC, No. 16-CV-14152, 2018 WL 646683, at *3 (E.D. Mich. Jan. 31, 2018) (quoting Mich. Comp. Laws § 440.2607(3)(a)). Moreover, the Limited Warranty on the 119 Panels requires that a warranty claim be submitted to Bosch within three months after the consumer is placed on notice that a warranty claim may have arisen. See Limited Warranty ¶ 3.4. Plaintiffs argue that Bosch is estopped from enforcing any warranty notice requirements based on its knowledge of the defects. That theory presents a common question that could obviate the individual inquiries identified by Bosch. Plaintiffs need not “prove that the predominating question will be answered in their favor” in order to meet the requirements of Rule 23(b)(3). Amgen Inc. v. Connecticut Ret. Plans & Tr. Funds, 568 U.S. 455, 468 (2013).
The Court is satisfied that common questions of law and fact predominate individual questions with respect to liability on the warranty claims asserted under the Product Warranty.
Performance Warranty
The Performance Warranty guarantees that the 119 Panels will deliver specified amount of power for a period of twenty-five years. See Limited Warranty ¶ B. Plaintiffs claims that the panels are defective in that the power output degrades more over time than promised. Unlike the claims under the Product Warranty, which do not depend on manifestation of the manufacturing defects, this claim depends on a manifestation of power loss suffered after installation of the 119 Panels. In the Court's view, the claims under the Performance Warranty are akin to the claims under the Tire Warranty in Wolin. Putative class members seeking recovery under the Performance Warranty in this case will have to demonstrate, on an individualized basis, that their power loss was caused by a defect in the 119 Panels, just as class members in Wolin had to demonstrate that their tire wear was caused by a defect in the vehicles. See Wolin, 617 F.3d at 1174. The Ninth Circuit suggested that the individual issues attendant upon such showing could make classwide adjudication inappropriate, and this Court concludes that classwide adjudication would be inappropriate here with respect to claims under the Performance Warranty.
The Court's conclusion is strengthened by Plaintiffs' concession that they do not seek Rule 23(b)(3) certification as to damages under the Performance Warranty. See Reply at 12 n. 1, ECF 202. Plaintiffs suggest that the Court could certify a Rule 23(b)(3) class on liability with respect to claims under the Performance Warranty, and leave the question of damages for “individual prove-ups” by class members. Id. The Court declines to do so. In the Court's view, individual questions would predominate with respect to both liability and damages on Plaintiffs' warrant claims for power loss under the Performance Warranty.
ii. Claim 5 for Unjust Enrichment
Claim 5 is for unjust enrichment. Under applicable California law, Plaintiffs must show that Bosch received and unjustly retained a benefit at their expense. See Peterson, 164 Cal.App.4th at 1593. Plaintiffs' theory is that the $25,000 they paid Kilowatt under the Prepaid Solar Power Agreement was transmitted to Sullivan, and then to a Bosch subsidiary, and then to Bosch. Plaintiffs claim that Bosch's retention of that money is unfair given defects in their solar panels. It is Plaintiffs' contention that the monies paid by all putative class members in their solar panel transactions likewise were funneled to Bosch, and that Bosch's retention of those monies is unjust as to all class members for the same reason, the defects in the 119 Panels. Plaintiffs argue that any individual questions regarding tracing class members' payments through distributors/installers to Bosch will be resolvable through Bosch's own records and the records of its distributors.
Bosch offers no argument in opposition to Plaintiffs' Rule 23(b)(3) predominance argument with respect liability on the unjust enrichment claim. Bosch's opposition mentions the unjust enrichment claim only in opposition to certification of a Rule 23(b)(2) class. As noted above, Plaintiff has abandoned its motion for certification under Rule 23(b)(2). District courts within the Ninth Circuit have certified unjust enrichment claims under circumstances similar to those presented here. See, e.g., Cartwright v. Viking Indus., Inc., No. 2:07-CV-02159-FCD-EFB, 2009 WL 2982887 (E.D. Cal. Sept. 14, 2009). In Cartwright, cited by Plaintiffs, homeowners brought a class action on behalf of themselves and persons who owned homes in which Viking Window Products were installed, asserting that the windows were defective in that they failed to resist water and air intrusion. See Id. at *1. Like the solar panels in the present case, the Viking Window Products were purchased through distributors. See Id. The district court found that the Rule 23(b)(3) predominance requirement was satisfied with respect to the putative unjust enrichment claim certified a class as to that claim, among others. See Id. at 13-16.
Based on this authority, and absent opposition as to this aspect of Plaintiffs' motion, the Court finds that common questions of law and fact predominate individual questions with respect to liability on the unjust enrichment claim.
iii. Conclusion Re Predominance Showing on Liability
In conclusion, the Court finds that Plaintiffs have demonstrated that common questions predominate with respect to liability on Claims 1-3 for breach of warranty to the extent those claims are brought under the Product Warranty, and with respect to liability on Claim 5 for unjust enrichment. Plaintiffs have not established that common questions predominate with respect to liability on Claims 1-3 to the extent those claims are brought under the Performance Warranty.
b. Damages
“Rule 23(b)(3)'s predominance requirement takes into account questions of damages.” Just Film, 847 F.3d at 1120. The Supreme Court has held that absent an appropriate methodology for measuring damages on a classwide basis, “[q]uestions of individual damage calculations will inevitably overwhelm questions common to the class.” Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013). “Calculations need not be exact.” Id. at 35. In fact, the Ninth Circuit has made clear both before and after Comcast that “‘damage calculations alone cannot defeat certification.'” Leyva v. Medline Indus. Inc., 716 F.3d 510, 513 (9th Cir. 2013) (quoting Yokoyama v. Midland Nat'l Life Ins. Co., 594 F.3d 1087, 1094 (9th Cir. 2010)). However, “at the class-certification stage (as at trial), any model supporting a plaintiff's damages case must be consistent with its liability case.” Id. (internal quotation marks and citation omitted). “If the plaintiffs cannot prove that damages resulted from the defendant's conduct, then the plaintiffs cannot establish predominance.” Vaquero v. Ashley Furniture Indus., Inc., 824 F.3d 1150, 1154 (9th Cir. 2016).
As noted above, the Court has determined that, with respect to liability, Plaintiffs have established the requisite predominance of common questions only as to Claims 1-3, and those only to the extent they are brought under the Product Warranty. Accordingly, with respect to damages, the Court limits its predominance inquiry to Claims 1-3 for breach of warranty to the extent those claims are brought under the Product Warranty based on the alleged solder and delamination defects.
Under applicable Michigan law, “[t]he measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.” Mich. Comp. Laws Ann. § 440.2714(2). In certain cases, incidental and consequential damages also may be recovered. See Mich. Comp. Laws Ann. §§ 440.2714(3), § 440.2715. Recoverable consequential damages include “any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise.” Mich. Comp. Laws Ann. § 440.2715(2)(a). Thus, “[u]nder Michigan law, as generally, consequential damages are available in breach of warranty suits if the standard criterion for an award of such damages - foreseeability - is satisfied.” Vidimos, Inc. v. Laser Lab Ltd., 99 F.3d 217, 220 (7th Cir. 1996).
Plaintiffs contend that all 119 Panels need to be replaced in light of the nature of the undisputed solder and delamination defects posing a fire hazard. See Mot. at 2, 18, ECF 165. Plaintiffs' expert Bill Brooks, an engineer who works in the field of solar systems, opines that the solder and delamination defects require that all 119 Panels be replaced, whether roof-mounted or ground-mounted. See Brooks Report at 5, Exh. U to Birka-White Decl., ECF 166-21 (“[A]ll 119 modules be removed from service and replaced.”). Plaintiffs' expert Joseph Zicherman, a fire safety engineer, agrees that all 119 Panels should be removed even if ground-mounted rather than roof-mounted. See Zicherman Report at 8, Exh. W to Birka-White Decl., ECF 166-23 (“The subject NA30119 Solar Panels are known to be defective. In my opinion with a reasonable degree of scientific certainty, their continued use poses a clear fire safety threat when installed directly over grassy ground surfaces.”). Although Bosch limited its voluntary recall to only roof-mounted panels, Bosch now appears to concede that all 119 Panels “are prone to failure, and should be replaced.” Opp. at 1, ECF 189. Based on this evidence, it appears that replacement cost is at least one appropriate method for calculating damages.
Plaintiffs submit the report of their expert Michael V. Garcia to show the cost of replacing the 119 Panels. See Garcia Report, Exh. Z to Birka-White Decl., ECF 166-26. Mr. Garcia is a renewable energy industry expert with experience in the installation, installation training, sales, and sales training of solar energy systems. He opines that the replacement cost of a NA30119 solar module is $1,079.00 per panel (module), including inspection, labor and material. See Id. at 5. He provides a chart showing “replacement cost and inspection breakdown.” Id. Mr. Garcia states that “[t]he cost to replace a solar module such as NA3011 for all class members can be calculated using the methodology discussed” in his report. Id.
Bosch argues that Plaintiffs' showing does not satisfy Comcast, pointing to some unfortunately vague language in Plaintiffs' motion: “While the exact contours of what will be awarded is not known yet, it will consist of some or all of: the panels' purchase price, the difference in power generation between the allegedly defective panels and properly functioning panels, and the inspection and replacement of panels.” Mot. at 23. As is clear from the context, that statement reflected Plaintiffs' initial request for certification as to both the solder and delamination defects under the Product Warranty, and the power loss under the Performance Warranty. Plaintiffs subsequently abandoned their request for certification of damages as to the power loss theory. Plaintiffs' briefing as a whole, and the reports of their experts, establish that cost of replacement is a viable damages model for Bosch's warranty claims for breach of the Product Warranty. “At this stage, Plaintiffs need only show that such damages can be determined without excessive difficulty and attributed to their theory of liability, and have proposed as much here.” Just Film, 847 F.3d at 1121.
Contrary to Bosch's assertion, Comcast does not require more. In Comcast, the plaintiffs initially relied on four theories of antitrust liability and calculated aggregate damages based on those four theories. See Comcast, 569 U.S. at 36-37. However, the district court certified the class based on only one of the four theories. See Id. at 35. Plaintiff did not offer a method of calculating damages for liability stemming from that theory alone. See Id. Pointing out that “a model purporting to serve as evidence of damages in this class action must measure only those damages attributable to that [surviving] theory, ” the Supreme Court determined that “[i]f the model does not even attempt to do that, it cannot possibly establish that damages are susceptible of measurement across the entire class for purposes of Rule 23(b)(3).” Id. The Ninth Circuit has “interpreted Comcast to mean that plaintiffs must be able to show that their damages stemmed from the defendant's actions that created the legal liability.” Vaquero, 824 F.3d at 1154 (internal quotation marks and citation omitted). Plaintiffs' proposed damages in the form of replacement costs for the 119 Panels clearly flow from Bosch's allege breach of the Product Warranty.
Bosch quibbles with Mr. Garcia's calculations, relying on its own expert's opinion that Mr. Garcia did not take all relevant factors into account, such as regional labor cost variations and market survey data, and that Mr. Garcia improperly assumed that the entire installation would have to be replaced. Mr. Garcia's expertise in the field of solar panel systems and installation qualifies him to opine as to the cost of replacing 119 Panels, and Bosch does not challenge that expertise. Mr. Garcia unequivocally states his opinion that the replacement cost of each 119 Panel is $1,079.00. See Garcia Report at 5. “[E]ven if the measure of damages proposed here is imperfect, it cannot be disputed that the damages (if any are proved) stemmed from Defendants' actions.” Vaquero, 824 F.3d at 1155. Moreover, the presence of some individualized questions regarding each putative class member's specific recovery “cannot, by itself, defeat class certification under Rule 23(b)(3).” Leyva, 716 F.3d at 514.
The Court finds that Plaintiffs have satisfied the Rule 12(b)(3) commonality requirement with respect to damages.
3. Superiority of Class Action
To satisfy Rule 23(b)(3), Plaintiffs also must demonstrate that “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). Rule 23 lists the following factors that Courts should consider in making this determination: “(A) the class members' interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action.” Fed.R.Civ.P. 23(b)(3).
Plaintiffs assert that a class action is superior to other methods for adjudicating the controversy. As Plaintiffs point out, the cost of litigation would be relatively high in comparison to the individual recovery of each class member (factor A). Plaintiffs are not aware of any other litigation concerning the 119 Panels (factor B). Estimating that at minimum, there are hundreds of putative class members, Plaintiffs contend that litigation in a single forum would be most efficient for the class and the federal courts (factor C). Even as limited to a California class, the Court agrees that litigation of the claims of forty-plus claimants would be more efficient than requiring putative class members to pursue their claims individually. Finally, Plaintiffs foresees no difficulties in managing a class action in this forum (factor D). The Court agrees that the class action would be manageable, particularly given the reduction of the putative class from a nationwide or multi-state class to a California class.
In opposition, Bosch contends that a class action is not superior to their voluntary recall, and that the Court should deny certification on the basis that the recall is the most appropriate method for resolving the controversy. District courts within the Ninth Circuit are split as to whether private processes should be considered when determining whether a class action is the superior method for adjudicating a controversy. Some have concluded that, “Pursuant to the plain language of Fed.R.Civ.P. 23(b)(3), [t]he analysis is whether the class action format is superior to other methods of adjudication, not whether a class action is superior to an out-of-court, private settlement program.” Martin v. Monsanto Co., No. ED CV 16-2168-JFW (SPx), 2017 WL 1115167, at *9 (C.D. Cal. Mar. 24, 2017) (internal quotation marks and citation omitted); see also Allen v. Hyland's Inc., 300 F.R.D. 643, 672 (C.D. Cal. 2014) (finding that defendants' voluntary refund program was not a method for adjudicating the controversy). Others have found that voluntary remedial measures instituted by the defendant may be considered in the context of determining superiority and other Rule 23 requirements. In Waller v. Hewlett-Packard Co., 295 F.R.D. 472, 487 (S.D. Cal. 2013), cited by Bosch, the district court found it appropriate to consider Hewlett-Packard's release of a free software update that addressed the plaintiff's grievance that was the basis of the class action.
Assuming without deciding that Bosch's voluntary recall appropriately can be considered when evaluating the Rule 23(b)(3) superiority requirements, the Court cannot conclude on this record that the recall is the superior method for adjudicating the claims of the putative class members. The Court's analysis is quite simple: the recall was implemented in 2017, and a relatively small number of the 119 Panels have been replaced to date. If the recall has not worked to resolve the controversy in the last five years, there is no basis to conclude that it would be superior to class certification going forward.
Bosch voluntarily recalled all roof-mounted 119 Panels due to the solder defect and potential fire hazard on April 13, 2017. See Recall Summary, Birka-White Decl. Exh. X, ECF 166-24. As of April 30, 2020, Bosch had replaced only 12, 276 of the 44, 500 panels shipped to the United States. See Def.'s Resp. to Interrog. No. 9, Birka-White Reply Decl. Exh. F, ECF 196-7. With respect to California, the record indicates that 4, 086 119 Panels were sold to distributers and installers in California. See Birka-White Reply Decl. ¶ 13 & Exh. N, ECF 196-1, 196-4. There is evidence that Bosch has replaced at least 66 panels in California. See Rodio Decl. ¶¶ 1, 12-16, ECF 170. Plaintiffs represent that Bosch replaced and destroyed an additional 300 panels in California, for a total of 366 panels replaced in California out of 4, 086 panels distributed in California. See Reply at 1, ECF 202. Plaintiffs argue that Bosch's replacement of only 9% of the 119 Panels distributed in California in almost five years does not inspire confidence in the recall. The Court agrees.
Bosch presents substantial evidence on the favorability of the recall terms, asserting that the recall affords more complete relief. However, it does not matter how favorable the terms of the recall are if it is not effective. Bosch does not offer evidence, or even argue, that it has replaced more than 9% of the 119 Panels in California to date. Under these circumstances, the Court concludes that going forward, class certification is the superior method of adjudicating the controversy.
IV. ORDER
(1) Plaintiffs' motion for class certification is GRANTED IN PART AND DENIED IN PART, as set forth herein. Class certification is GRANTED with respect to a California class as to Claims 1, 2, and 3, to the extent those claims are based on the Product Warranty, and as to Claim 5. Class certification is DENIED as to Claims 1, 2, and 3, to the extent those claims are based on the Performance Warranty.
(2) The following class is certified (“the Class”):
All persons or entities in the State of California who are the consumers, final customers, end users, subsequent buyers, and subsequent owners of Bosch solar panels module number NA30119, on claims for breach of the Product Warranty and unjust enrichment.
(3) The Court appoints Steve R. Rojas and Andrea N. Rojas as class representatives for the Class (“Class Representatives”). proposed plan for providing notice to the Classes pursuant to Rule 23(c)(2) within 30 days of the issuance of this Order.
(4) The Court finds that Birka-White Law Offices, Farella Braun + Martel LLP, and Levin Sedran and Berman satisfy the requirement of Rule 23(g) and are hereby appointed as Class Counsel.
(5) Plaintiffs shall submit a proposed plan for providing notice to the Class pursuant to Rule 23(c)(2) within 30 days of the issuance of this Order.