SUPERIOR COURT OF CALIFORNIA

COUNTY OF SANTA CLARA

RAYMOND AND MICHELLE PLATA, individually and on behalf of other members of a class of similarly situated residents and taxpayers,

Plaintiffs,

vs.

CITY OF SAN JOSE, a California municipal corporation, and DOES 1 THROUGH 100,

Defendants.

Case No. 2017-1-CV-311789

TENTATIVE RULING RE: MOTION FOR CLASS CERTIFICATION

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on November 22, 2019, at 2:00 p.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION
II.
Plaintiffs Raymond and Michelle Plata (together, “Plaintiffs”) bring this class action against defendant City of San Jose (“Defendant” or the “City”), which owns and operates the San Jose Municipal Water System (“Muni Water”). (Complaint for Refund and Injunctive Relief (“Complaint”), ¶¶ 1, 6.) Plaintiffs allege Muni Water is the exclusive water utility for approximately 10 percent of the population of San Jose. (Id. at ¶ 7.) Plaintiffs allege the City has used and transferred Muni Water funds for purposes other than those for which the funds were collected, in violation of Proposition 218. (Id. at ¶¶ 10, 12.)

The Complaint, filed on June 13, 2017, sets forth a single cause of action titled Violation of Article XIII D of the California Constitution. Plaintiffs now move for class certification.

III. LEGAL STANDARD
IV.
As explained by the California Supreme Court,

The certification question is essentially a procedural one that does not ask whether an action is legally or factually meritorious. A trial court ruling on a certification motion determines whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.

(Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326, internal quotation marks, ellipses, and citations omitted.)

California Code of Civil Procedure section 382 authorizes certification of a class “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court. . . .” As interpreted by the California Supreme Court, Section 382 requires: (1) an ascertainable class; and (2) a well-defined community of interest among the class members. (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) The “community-of-interest” requirement encompasses three factors: (1) predominant questions of law or fact; (2) class representatives with claims or defenses typical of the class; and, (3) class representatives who can adequately represent the class. (Sav-On Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.)

“Other relevant considerations include the probability that each class member will come forward ultimately to prove his or her separate claim to a portion of the total recovery and whether the class approach would actually serve to deter and redress alleged wrongdoing.” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435.) The plaintiff has the burden of establishing that class treatment will yield “substantial benefits” to both “the litigants and to the court.” (Blue Chip Stamps v. Superior Court (1976) 18 Cal.3d 381, 385.)

V. DISCUSSION
VI.
A. Prior Action
B.
As an initial matter, the Court acknowledges that this case is not the first time these parties have litigated these (or very similar) issues. The case of Plata v. City of San Jose (Plata I), Case No. 2014-1-CV-258879 (consolidated with Case No. 2016-1-CV-294032), also alleged violations of Proposition 218. The parties both refer to Plata I in their papers for the motion for class certification in this case.

In Plata I, the Court granted class certification on June 19, 2015. In the Court’s June 19, 2018, Statement of Decision and Judgment, however, the Court granted the City’s motion to decertify the class.

It is important to note that, at this time, the Court does not have the same evidence before it in this case as it did when it granted decertification in the prior case, which followed a lengthy trial. Therefore, while the Court is aware of what has previously transpired, the motion now before the Court must be evaluated on its own merits through the lens of being a new case.

C. Government Claims Act
D.
Defendant asserts Plaintiffs are pursuing a theory of liability based on Defendant’s tiered rate system for providing water services. Defendant argues Plaintiffs are barred by the Government Claims Act from raising a tiered rate theory because it was not included in Plaintiffs’ government claim. Defendant’s argument is an attack on an issue outside the scope of a class certification motion and is not properly before the Court. If Defendant seeks to establish Plaintiffs’ tiered rate theory is barred by the Government Claims Act, Defendant must do so in a separate motion.

E. Ascertainable Class
F.
“The trial court must determine whether the class is ascertainable by examining (1) the class definition, (2) the size of the class, and (3) the means of identifying class members.” (Miller v. Woods (1983) 148 Cal.App.3d 862, 873.) “Class members are ‘ascertainable’ where they may be readily identified without unreasonable expense or time by reference to official records.” (Rose v. City of Hayward (1981) 126 Cal.App.3d 926, 932.)

Plaintiffs seek certification of the following class:

All residential customers of the San Jose Municipal Water System who were charged for water service from the San Jose Municipal Water System anytime from July 2016 to June 2017.

(Memorandum of Points and Authorities in Support of Plaintiffs Raymond and Michelle Plata’s Motion for Class Certification (“Opening Brief”), p. 5:7-9.)

Defendant argues Plaintiffs have failed to show any way to identify a class of Muni Water customers that have suffered harm under Proposition 218. Defendant cites to Miller v. Bank of America, N.A. (2013) 213 Cal.App.4th 1, for the proposition that a class must be defined to include a group of class members subjected to unlawful activity. Miller concerned debits of the accounts of bank customers. (Id. at p. 7.) The court of appeal found the class was overbroad and encompassed a far broader range of transactions than the alleged unlawful activity. (Id. at p. 8.) In other words, the class included individuals subjected to entire categories of legal activity. (Ibid.) Here, in contrast, the alleged unlawful conduct might affect all members of the proposed class. Consequently, Miller is inapposite.

As the California Supreme Court has recently clarified, “a class as ascertainable when it is defined in terms of objective characteristics and common transactional facts that make the ultimate identification of class members possible when that identification becomes necessary.” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980, quotation marks omitted.) It is not required that the identification of class members must occur without unreasonable expense or time. (Id. at p. 985.) Here, Plaintiffs’ proposed definition uses objective characteristics that would permit the identification of class members. Further, the potential inclusion of uninjured class members does not necessarily render a class unascertainable. (In re NJOY, Inc. Consumer Class Action Litigation (C.D. Cal. 2015) 120 F.Supp.3d 1050, 1094.) Therefore, the Court finds there is, at least at present, an ascertainable class.

G. Community-of-Interest
H.
As noted above, the “community-of-interest” requirement encompasses three factors: (1) predominant questions of law or fact; (2) class representatives with claims or defenses typical of the class; and, (3) class representatives who can adequately represent the class. Regarding the predominance of questions of law or fact:

The ultimate question in every case of this type is whether . . . the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants.

(Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1104-1105, quoting Collins v. Rocha (1972) 7 Cal.3d 232, 238.)

Plaintiffs argue there are many facts common among all putative class members, such as the facts that they were Muni Water customers; they were billed using the same billing procedures; and water rates were set at certain tiers for all customers. Plaintiffs also contend there are common questions of law, specifically whether Defendant will be able to show its tiered rates met the requirements of Proposition 218. They assert this case is analogous to wage and hour cases in which an employer has an illegal common policy.

In opposition, Defendant contends liability cannot be determined based on common issues of fact. Defendant argues that individual evaluations will be required to determine whether a ratepayer was injured as a result of tiered rates and, if so, in what amount. Defendant argues the individual issues relate not just to the amount of damages, but also to whether a particular ratepayer was injured at all – i.e., the question of liability. Defendant is correct that as a general matter “[u]ncertainty of the fact whether any damages were sustained is fatal to recovery, but uncertainty as to the amount is not.” (Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1, 40, italics in original, quoting Bruckman v. Parliament Escrow Corp. (1987) 190 Cal.App.3d 1051, 1061.) In other words, “class treatment is not appropriate ‘if every member of the alleged class would be required to litigate numerous and substantial questions determining his individual right to recover following the “class judgment”’ on common issues.” (Id. at p. 28, citing City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 459.)

As best the Court can tell, the parties appear to rely on the Court’s familiarity with the issues in this case based on its work on Plata I. For example, the parties submitted documents from that case as exhibits. But evidence of what happened in that case is not admissible evidence in this motion. Moreover, to the extent Plaintiffs rely on the Court’s knowledge from Plata I, it is important to remember that only after a lengthy trial did the Court decertify the Plata I class. For these reasons, references to Plata I and the evidence or theories presented in that case are unhelpful here. Rather, the Court must rely only on substantial evidence regarding the theory or theories Plaintiffs present in this action.

The party moving for class certification has the burden to provide evidence showing common issues predominate, and “when assessing whether the plaintiff has satisfied that burden, the evidence must be evaluated under the prism of the plaintiff’s theory of recovery.” (Department of Fish & Game v. Superior Court (2011) 197 Cal.App.4th 1323, 1349.) A court must consider the evidence “in order to determine if the plaintiff’s evidence establishes the predominance of common issues on the merits of the case.” (Id. at p. 1351.) “Were it otherwise, a ‘plaintiff could pick and choose among the facts to present to the court, providing an incomplete picture of the litigable issues, in order to ensure a certification.’” (Ibid., citing Quacchia v. DaimlerChrysler Corp. (2004) 122 Cal.App.4th 1442, 1448.)

Plaintiffs contend this case involves a simple theory regarding an alleged violation of Proposition 218. The allegations in the Complaint are very general. (See, e.g., Complaint, ¶¶ 10-16, 23-27.) It is clear from the papers, however, that Plaintiffs’ theory is focused on “the administration of the City’s tiered-rate system.” (Opening Brief, p. 5:5-6; see also Reply in Support of Plaintiffs Raymond and Michelle Plata’s Motion for Class Certification, p. 6:5-6 [“This suit seeks relief not only as to tiered rates, but also the imposition of late fees. . . .”].)

The Complaint makes no mention of the tiered rate system or late fees. Aside from attaching several of the Plaintiffs’ water bills, Plaintiffs provide no evidence regarding the tiered rate system or late fees in moving for class certification. A court’s “certification ruling not supported by substantial evidence cannot stand.” (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at p. 1106.) Moreover, there must be substantial evidence that proving both the existence of a uniform policy or practice and the alleged illegal effects of the conduct can be accomplished efficiently and manageably in a class setting. (Dailey v. Sears, Roebuck & Co. (2013) 214 Cal.App.4th 974, 989.)

Plaintiffs have the burden of proving certification of the proposed class is warranted. Plaintiffs have not presented any evidence, let alone “substantial evidence,” regarding their theories and the common evidence that can be used to evaluate those theories. In their briefs the parties spar over the consequences of having tiered water rates, but their points and counterpoints are not supported by substantial evidence, and thus cannot be evaluated. In the absence of such evidence, the Court cannot determine whether common evidence will predominate and whether there will need to be numerous individual determinations regarding the right to recover as opposed to the amount of damages. (See Hale v. Sharp Healthcare (2014) 232 Cal.App.4th 50, 62.)

For all of these reasons, Plaintiffs’ motion for class certification is DENIED. The Court does not reach the parties’ arguments regarding typicality, adequacy of representation, and substantial benefits of class litigation.

The Court will prepare the final order if this tentative ruling is not contested.