Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—W.D. Wash.: Class certification denied in suit against mobile messaging companies, (Jun 27, 2016)

By Michael Menzhuber, J.D., LL.M.

A motion for class certification, in a case alleging that Mobile Messenger violated the "unfair practices" prong of the Washington Consumer Protection Act (CPA), was denied by the federal district court in Seattle because the class was not ascertainable, individual issues predominated over common ones, and a class action was not the superior method of resolution (Geier v. M-Qube, Inc., June 24, 2016, Zilly, T.).

Mobile Messenger served as billing aggregator that linked content carriers, which interacted directly with cell phone subscribers and cell carriers. Richard Geier filed a class action suit which alleged that Mobile Messenger, among others, violated the "deceptive practices" prong of the CPA by charging class member cell phone subscribers for products that they never used. Specifically, Geier alleged that the "double opt-in process" used to enroll cell phone subscribers in the content providers’ advertised games led to the unknown billing of many cell subscribers.

After his motion to certify the class was denied, Geier renewed his motion for class certification for the following class that focused on the "unfair practices" prong of the CPA: "All residents of Washington who, at any time from October 17, 2008, to the present, were charged for one of Mobile Messenger’s white-label PSMS programs associated with a website double opt-in subscription even though the program was never accessed in relation to the subscription."

The defendants argued that the proposed class was not ascertainable because there were insufficient records to satisfactorily identify all class members. The court noted that, although Federal Rule of Civil Procedure 23(a) did not explicitly require that a class be ascertainable, the vitality of the requirement has been evident in numerous cases. Since the class was limited to those subscribers who never accessed the programs that they signed up for, the court reasoned that objective evidence was required to identify whether an individual accessed a program. Despite there being evidence that Mobile Messenger may have "tracked" program log-ins, there was no evidence that a record of these log-ins was created and maintained.

With respect to Rule 23(b), the court found that the proposed class did not meet the "predominance" requirement. For purposes of the Rule 23(b) requirement, the court noted two elements of the "unfair practices" test: (1) whether the injury was reasonably avoidable by consumers; and (2) whether the practice provided countervailing benefits. The court agreed with the defendants that whether an injury was "reasonably avoidable" turned on what information was available to the class members and that any benefits varied between class members and could not be resolved with common proof.

Finally, the court concluded that a class action was not the superior method of resolving the controversy. Each cell carrier had reached a prior settlement with federal agencies that provided a refund pool of millions of dollars to affected subscribers. Geier’s suit sought to replicate an award of damages which had already been made available through regulatory settlements.

The case is No. 2:13-cv-00354-TSZ.

Attorneys: Jennifer Rust Murray (Terrell Marshall Law Group PLLC) for Richard A. Geier. Stephen M. Rummage (Davis Wright Tremaine) for M-Qube Inc. and Mobile Messenger Americas Inc.

Companies: M-Qube Inc.; Mobile Messenger Americas Inc.

Cases: StateUnfairTradePractices WashingtonNews