Metropolitan News-Enterprise


Wednesday, November 5, 2014


Page 1


C.A. Upholds Order Decertifying Class Action Against CashCall




A lawsuit charging CashCall, Inc. with secretly monitoring phone calls in violation of state law will not proceed as a class action, the Fourth District Court of Appeal has ruled.

Div. One yesterday ordered publication of its Oct. 9 opinion affirming a San Diego Superior Court judge’s order decertifying a class of CashCall customers. The panel agreed with Judge Lorna Alksne that a prior appellate ruling changed the nature of the case to one in which individual, rather than class-wide, issues predominate.

The suit was brought in 2006 by several borrowers, alleging CashCall—a money lender well known as a result of its ubiquitous television advertising—taped their phone conversations without their consent. The complaint pled several causes of action, including one, as to which a class was certified, for violation of Penal Code §632.

The statute imposes liability on a “person” who intentionally listens in on or records a “confidential communication” without consent of all parties. A plaintiff whose rights are violated may recover up to $5,000 per violation, or three times actual damages, whichever is greater, and the defendant may be enjoined from continuing to violate the section.

Prior Appeals

In the case’s first trip to the Court of Appeal, the court approved a procedure by which those whose calls had been monitored would be informed of that fact and permitted to join the litigation. CashCall then moved for summary adjudication on the §632 claim, and obtained a ruling that the statute was not violated because the employee who allegedly monitored the conversation and the fellow employee who participated in the call were the same “person” as a matter of law.

The Court of Appeal reversed in 2011. Besides holding that separate employees of the same corporation are separate persons under the statute, it rejected the company’s alternative argument that the calls were not confidential as a matter of law, and said there were triable issues as to whether the plaintiffs had an “objectively reasonable expectation” of confidentiality.

CashCall argued on remand that in order to determine which, if any, of the class members had such an expectation, the court would have to engage in individual factfinding inappropriate to a class action. Alksne agreed and ordered the class decertified.

Justice Judith Haller, writing for the Court of Appeal, said the trial judge acted well within her discretion.

Different Experiences

Haller noted that each of the named plaintiffs described different experiences with CashCall as to whether they heard a pre-recorded disclosure from the company’s automated answering system on any of their calls, whether they had prior experience with business call monitoring systems, and that the number of times each plaintiff called or was called by CashCall varied.

There is, the justice wrote, no requirement that a moving party show a “compelling justification” for decertification of a class, only “changed circumstances,” although Haller said CashCall would have prevailed under the stricter standard as well.

“CashCall persuasively argued that each plaintiff’s factual circumstances must be considered, and cross-examination must be permitted, to determine whether each monitored telephone call was a confidential communication subject to section 632’s statutory prohibition,” the jurist wrote. While the presence of individual issues will not necessarily preclude class certification, she explained, the state Supreme Court has warned that a class action is inappropriate “if every member of the alleged class would be required to litigate numerous and substantial questions determining his individual right to recover.”

The case is Kight v. CashCall, Inc., 14 S.O.S. 4952.


Copyright 2014, Metropolitan News Company