The Ninth Circuit recently denied class certification to a putative class of individuals who rented tools from Home Depot stores in California.  In Berger, et al v. The Home Depot, Inc., No. 11-55592, February 3, 2014, the named plaintiff alleged that Home Depot automatically imposed a ten percent surcharge for a damage waiver on tool rentals in its California stores and failed to inform its customers that the surcharge was optional and could be declined.  The plaintiff alleged various causes of action against Home Depot, including a claim for unfair competition. 

When Home Depot rents tools to customers, it offers a “damage waiver.” If purchased, the damage waiver allows the customer to avoid liability if a tool is damaged during the period of the rental. The plaintiff alleged that when he rented a tool from Home Depot in April of 2004, he purchased the damage waiver without notice that the waiver was optional.  Plaintiff complains that Home Depot does not tell its customers the waiver is optional and adds the charge automatically unless the customers specifically declines it – which obviously requires the customer have notice of his or her options.  Home Depot admitted that its registers default to adding the damage waiver to a customer’s charge, but says informs customers of the right to decline the waiver in three ways: 1) verbally by the sales associate, 2) by signs posted in Home Depot stores, and 3) by the language of the final sales contract.

Among other requirements to obtain class certification, the plaintiff was required to prove “‘that the questions of law and fact common to class members predominate over any questions affecting only individual members.’” Mazza v. American Honda Motor Co., Inc.,666 F.3d 581, 589 (9th Cir. 2012) (quoting Fed. R. Civ. P.23(b)(3)). To meet this requirement, the common questions must be “a significant aspect of the case . . . [that] can be resolved for all members of the class in a single adjudication.” Id. (quoting Hanlon v. Chrysler Corp.,150 F.3d 1011, 1022 (1998)).

The Court found several key issues required individualized inquiry.  The first involved contract construction utilized five different versions of the rental contract during the rental period, each containing variations in the language setting forth the damage waiver.   The Court reasoned that individualize inquiry would be needed to determine whether the language and design of each contract alerted customers that the damage waiver was an optional purchase.  Similarly, individualized inquiry would be needed to determine what notice, if any, signs in the different Home Depot stores at various times provided customers concerning the optional damage waiver. Finally, the Court explained that any verbal notice given by Home Depot employees about the optional nature of the damage waiver during a particular rental transaction would necessarily be a unique occurrence for each customer, also requiring individualized inquiry.

The Berger case illustrates the difficulty in proving the necessary commonality needed to certify a class of retail purchasers over time unless each customer had the exact same, which would seem unlikely in many instances.