Duane Morris Class Action Review - 2023 - Report - Page 300
F.
Rulings Adjudicating Decertification Motions
The case of Freitas, et al. v. Cricket Wireless, LLC, 2022 U.S. Dist. LEXIS 135370 (N.D.
Cal. July 29, 2022), also sparked a decertification battle in 2022.
The plaintiffs, a group of cellular telephone user, filed a class action alleging that
Defendant advertised 4G service and sold 4G-capable phone in markets in which
Defendant did not actually provide 4G coverage in violation of the RICO. Following
discovery, the defendant moved to decertify the class, and the court granted the motion.
The defendant contended that decertification was warranted because: (i) the plaintiffs’
damages model does not comport with either of the theories of class-wide liability; and
(ii) the named plaintiff was inadequate to represent the class because she fell outside
the class definition. The plaintiffs contended that their “expert [could] use econometric
tools to isolate the value of 4G/LTE.” Id. at *9. The plaintiffs subsequently provided a
damages model to the defendant, which the defendant moved to exclude from the
pleadings record. The plaintiffs’ expert, Browne, calculated the difference between the
average price of the phones, converted the price differences to percentages, and took
the average for each pair of phones over the entire class period. Thereafter, based on
the number of sales of each type of 4G-capable phone during the class period, Browne
calculated a weighted average percentage for the price difference across all phone
pairs of 36%. Id. at *10. For each 4G-capable phone, Browne multiplied the percentage,
by the number of phone sales by the average price of the phone over the class period,
for damages of approximately $65.6 million. The defendant contended that the
damages model did not isolate those damages attributable only to overcharges due to
alleged misrepresentations about 4G coverage. The Court agreed. It opined that
Browne did not control for price differentials based on criteria other than 4G coverage,
including process speed, memory, or battery life. The court noted that Browne also
failed to consider brand premium prices in the consideration. The plaintiffs also
submitted expert analysis regarding the price premium for 4G plans, and alleged that
the defendant overcharged class members $10, $20, or $30 per month depending on
the rate plan that class members had selected. Id. at *16. The defendant asserted that
that model did not isolate those damages attributable only to overcharges due to
alleged misrepresentations about 4G coverage. Id. The court sides with the defense
position. It observed that the plaintiffs’ damages model did not control for numerous
potential differences between the defendant’s plans and benchmark plans. For
example, all of the defendant’s plans included unlimited access to a certain music
service, which competitors’ plans lacked. The Court further agreed that the plaintiffs’
damages model did not attempt to control for confounding variables. For these reasons,
the court found that the plaintiffs failed to establish a class-wide damages model, and
therefore it granted the motion to decertify the class.
G.
Appellate Rulings On Class Certification Orders
The Fifth Circuit reversed a class certification order in a RICO class action in 2022. As
such, it was the sole federal appellate ruling in 2022 dealing with a class certification
order in a RICO class action.
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Duane Morris Class Action Review – 2023
