The Central District of California denied certification of a class that otherwise met the requirements of Rule 23 because the damages model proposed by plaintiff’s expert did not establish a reliable method for calculating classwide damages. Plaintiff sought to certify a class of purchasers of Fuhu’s “Nabi” line of rechargeable tablets for children. Plaintiff claimed that the tablets’ charging capabilities were defective and that Fuhu misrepresented the tablets’ recharging capabilities to retailers and direct consumers. Plaintiff asserted claims under a variety of consumer protection and common law misrepresentation and warranty theories.

In its analysis, the court found that plaintiff had satisfied his burden under all elements of Rule 23 (a) and (b) except to provide a sufficiently reliable method for measuring damages to the class resulting from the alleged defect in the tablets. Citing Comcast v. Behrend, 133 S. Ct. 1426 (2013), the court noted that plaintiff was required to “bring forth a measurement method that can be applied classwide and ties the plaintiff’s legal theory to the impact of the defendant’s allegedly illegal conduct.” Plaintiff’s damages expert identified two measures of classwide damages: full refund and a diminution of value. For diminution of value, the expert identified two approaches to measuring actual diminution and one method of calculating “contingent valuation.” The court rejected each.

The court first held that the full refund measure was inapplicable because many (perhaps the majority) of tablets have not manifested a defect, and still other users were able to gain some benefit from their tablets even where the recharging capabilities did not work as advertised. The court rejected both measures of actual “diminution in value” based on the absence of facts to support the expert’s reasoning. The expert first suggested actual diminution could be calculated by determining the cost to repair the tablets, but the court noted the record did not establish that a viable means of repair existed. The expert then suggested that actual diminution be calculated by determining the cost of a replacement charger for the subject tablets, but the record did not demonstrate that a replacement charger would cure the complained of defects either.

Finally, the court rejected the expert’s “contingent valuation” approach in which his expert planned to conduct consumer surveys to determine the values consumers placed on particular qualities of the tablet product. While acknowledging that this approach has been recognized by a number of other courts, the court nonetheless rejected the methodology because the expert could not provide sufficient details regarding the proposed survey to assure the court of its reliability under Daubert.  Indeed, plaintiff’s expert had not yet even performed nor designed any such survey.

The court denied plaintiff’s motion to certify without prejudice. The court recognized that plaintiff’s proposed damages methodology could work “in theory” should his expert provide more concrete details about the proposed contingent valuation survey.

Miller v. Fuhu Inc., et al., No. 2:14-cv-06119-CAS-AS (C.D. Ca. December 1, 2015)