United States District Court, D. Arizona
G. Campbell United States District Judge.
Mark Schellenbach and William Ryder, on behalf of themselves
and a proposed class and subclass, bring this action against
Defendant GoDaddy.com, LLC. Docs. 1, 33. Plaintiffs move to
certify a class and subclass of persons who purchased a
“Dedicated Server” from GoDaddy, alleging that
GoDaddy failed to disclose that the server was virtualized
and not a free-standing machine. Doc. 127 at
The motion is fully briefed (Docs. 127, 128, 129), and the
Court heard oral argument on June 14, 2017 (Doc. 125). For
reasons stated below, the Court will deny class
Plaintiffs' Proposed Class and Sub-Class.
seek certification of the following class: “All persons
who, between October 23, 2014 and March 18, 2017, purchased
GoDaddy Dedicated Servers through the GoDaddy.com website or
who purchased Dedicated Servers after viewing the GoDaddy.com
website. Excluded from the Class are purchasers who purchased
via the https://www.godaddy.com/servers
webpage.” Doc. 127 at 6. Plaintiffs further move to
certify a California subclass: “All persons in the
state of California who, between October 23, 2014 and March
18, 2017, purchased GoDaddy Dedicated Servers through the
GoDaddy.com website or who purchased Dedicated Servers after
viewing the GoDaddy.com website. Excluded from the Class are
purchasers who purchased via the
Id. The definitions of these two classes are
identical, except that the subclass includes only California
residents. For the sake of simplicity, the Court will refer
to both classes as “the class” throughout this
order, except where a distinction between the class and
subclass is necessary.
Rule 23 Requirements.
Rule 23(a), a district court may certify a class only if (1)
it is so numerous that joinder of all members is impractical,
(2) there are questions of law or fact common to the class,
(3) the claims of the representative parties are typical of
the claims of the class, and (4) the representatives will
fairly and adequately protect the interests of the class.
Fed.R.Civ.P. 23(a)(1)-(4). The Court must also find that one
of the requirements of Rule 23(b) has been met. Plaintiffs
rely primarily on Rule 23(b)(3), which requires that
questions of law or fact common to the class predominate over
questions affecting only individual class members, and that a
class action is superior to other available methods for
resolving the controversy. Fed.R.Civ.P. 23(b)(3). Plaintiffs
also contend, briefly, that the class can be certified under
Rule 23(b)(2). The Court must rigorously analyze the proposed
class to ensure it comports with Rule 23. See Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011)
Individual Issues Prevent Certification Under Rule
opposes class certification under Rule 23(b)(3) on the
grounds that (1) the class does not satisfy the commonality,
typicality, or adequacy requirements of Rule 23(a); (2) the
class is overbroad and unascertainable, and putative class
members lack standing to assert a claim; and (3) the class
does not satisfy the predominance requirement of Rule
23(b)(3). Doc. 128. The Court finds that the class does not
satisfy the predominance requirement of Rule 23(b)(3), and
need not address GoDaddy's other arguments.
may be certified under Rule 23(b)(3) only if questions of law
or fact common to the class will predominate over questions
affecting only individual class members. This predominance
inquiry “asks whether proposed classes are sufficiently
cohesive to warrant adjudication by representation.”
In re Wells Fargo Home Mortg. Overtime Pay Litig.,
571 F.3d 953, 957 (9th Cir. 2009) (internal quotation marks
and citation omitted). “This calls upon courts to give
careful scrutiny to the relation between common and
individual questions in a case.” Tyson Foods, Inc.
v. Bouaphakeo, 136 S.Ct. 1036, 1045 (2016). “An
individual question is one where ‘members of a proposed
class will need to present evidence that varies from member
to member, ' while a common question is one where
‘the same evidence will suffice for each member to make
a prima facie showing [or] the issue is susceptible to
generalized, class-wide proof.'” Id.
(quoting Newberg on Class Actions, § 4:50 (5th
ed. 2012)). “If the main issues in a case require the
separate adjudication of each class member's individual
claim or defense, a Rule 23(b)(3) action would be
inappropriate.” Zinser v. Accufix Research Inst.,
Inc., 253 F.3d 1180, 1189 (9th Cir. 2001) (citation
The Nature of Plaintiffs' Claims.
predominance inquiry begins with the elements of the
underlying cause of action. Erica P. John Fund, Inc. v.
Halliburton Co., 563 U.S. 804, 809 (2011). Plaintiffs
allege violations of the Arizona Consumer Fraud Act
(“ACFA”), California Unfair Competition Law
(“CUCL”), and California False Advertising Law
(“CFAL”). Doc. 127. Because these are all state
law claims, the Court must look to state law to determine
whether individual issues will predominate over common
issues. See Yokoyama v. Midland Nat'l Life Ins.
Co., 594 F.3d 1087, 1089 (9th Cir. 2010) (holding that
the “dispositive issue is thus an issue of Hawaii state
law, namely whether Hawaii's Deceptive Practices Act
requires a showing of individualized reliance”).
ACFA prohibits fraudulent, deceptive, or misleading conduct
in connection with the sale or advertisement of consumer
goods and services. A.R.S. § 44-1522(A). To prevail
under the ACFA, a plaintiff must establish that (1) the
defendant made a misrepresentation or omission in violation
of the Act, and (2) the defendant's conduct proximately
caused the plaintiff to suffer damages. Parks v.
Macro-Dynamics, Inc., 591 P.2d 1005, 1008 (Ariz.Ct.App.
1979). It is not necessary for the plaintiff to show that the
defendant made an affirmative misstatement. Material
omissions are actionable under the AFCA. Maurer v.
Cerkvenik-Anderson Travel, Inc., 890 P.2d 69, 72
CUCL provides civil remedies for unfair competition, which it
defines as “any unlawful, unfair or fraudulent business
act or practice.” Cal. Bus. & Prof. Code §
17200. It protects “both consumers and competitors by
promoting fair competition in commercial markets for goods
and services.” Kwikset Corp. v. Superior
Court, 51 Cal.4th 310, 320 (2011) (citations omitted).
The California legislature framed the CUCL's provisions
in “‘broad, sweeping language.'”
Id. (citing Cel-Tech Commc'ns., Inc. v. Los
Angeles Cellular Tel. Co., 20 Cal.4th 163, 181 (1999)).
The CFAL “is equally comprehensive within the narrower
field of false and misleading advertising.”
Id. (citations omitted). The CFAL prohibits
advertising that “is untrue or misleading, and which is
known, or which by the exercise of reasonable care should be
known, to be untrue or misleading.” Cal. Bus. &
Prof. Code § 17500. A party wishing to bring a claim
under the CUCL or CFAL must show: (1) “a loss or
deprivation of money or property sufficient to qualify as
injury in fact, i.e., economic injury, and (2)  that
economic injury was the result of, i.e., caused by, the
unfair business practice or false advertising that is the
gravamen of the claim.” Kwikset, 51 Cal.4th at
Plaintiffs' Key Omission and the Need for Individual
case rests on a single omission. Plaintiffs allege that class
members were not told that the Dedicated Servers were virtual
- that the servers were not standalone boxes, but instead
were portions of physical servers shared by others and
“dedicated” to the class member only through
virtualization software. This is the material omission
Plaintiffs allege under the ACFA and the unfair practice they
allege under the CUCL and CFAL. Plaintiffs do not claim that
GoDaddy made any other misrepresentations or omissions.
Plaintiffs assert that this omission was highly relevant
because, according to their expert, virtualized servers
function less effectively than standalone servers and
Plaintiffs therefore paid too much for their Dedicated
primary webpage for the Dedicated Servers was
www.godaddy.com/pro /dedicated-server. This page
will be referred to this order as the
“/pro/dedicated-server webpage.” GoDaddy concedes
that this webpage did not disclose at the beginning of the
class period, October 23, 2014, that the Dedicated Servers
were virtual. But as of December 15, 2015, it did describe
the servers as “Single-Tenant VM.” Doc. 127 at 9.
GoDaddy's Rule 30(b)(6) witness testified that a person
with technical knowledge, such as a web designer or web
developer, would know that VM stood for “virtual
machine.” Doc. 127-1 at 67.
acknowledge that another GoDaddy webpage -
www.godaddy.com /servers - did disclose throughout
the class period that the servers were virtualized. This page
will be referred to in this order as the “/servers
webpage.” From the beginning of the class period, it
described the Dedicated Server as “Your very own
single-tenant virtual machine.” Doc. 116-2,
¶ 5 (emphasis added). Paul Bindel, a Senior Director of
Web Marketing for GoDaddy, submitted a declaration explaining
that this webpage was accessible directly from the main
GoDaddy webpage from August 2014 to September 2015, and
thereafter was accessible through various other GoDaddy
webpages, 13 of which are listed in his declaration.
Id., ¶ 8. In addition, searches for
“GoDaddy” and “server” on widely-used
search engines such as Google or Yahoo! would return the
/servers webpage as one of the top two non-paid hits.
Id., ¶¶ 7-9.
the virtual nature of the servers was disclosed on the
/servers webpage, Plaintiffs define the class to exclude all
persons “who purchased via” the /servers webpage.
Doc. 127 at 6. Plaintiffs made clear during oral argument
that this exclusion applies to persons who actually used the
/servers webpage as the method for purchasing the Dedicated
Servers. The class does not exclude persons who visited the
/servers webpage but purchased their Dedicated Server through
another method, such as by phone or through another webpage.
Bindel states that the /servers webpage had 373, 114 unique
visitors between October 1, 2014 and November 4, 2016, a time
period that largely overlaps Plaintiffs' proposed class
period. Doc. 116-2, ¶ 11; see also Doc. 127-8
at 14. The /pro/dedicated-server webpage - from which
Plaintiffs allege material information was omitted - received
881, 763 unique visitors during the class period.
Id. at 13. Thus, of the 1, 254, 877 visits
to these two webpages during the relevant time frame, 30%
visited the page where the virtualized nature of the Dedicate
Servers was clearly disclosed. And if most visitors to the
/servers webpage also visited the /pro/dedicated-servers
webpage, as is likely, then the percentage would be even
higher. If the more conservative 30% figure is applied to the
proposed class, which Plaintiffs describe as potentially
including 10, 039 purchasers of Dedicated Servers (Doc. 127
at 12), then approximately 3, 000 class members visited the
webpage where the virtual nature of the servers was
disclosed. Such class members would not have been exposed to
the omission on which Plaintiffs' case rests. And yet
because Plaintiffs' class definition excludes only those
who actually made their purchases through the /servers
webpage, not those who visited it and purchased through other
means, a class-member by class-member inquiry would be
required to determine which class members actually were
subjected to the key omission.
addition, because the /pro/dedicated server webpage on which
Plaintiffs rely included the phrase “Single-Tenant
VM” for more than half of the class period, an
individualized inquiry would be needed to determine whether
class members understood this to mean that they were
acquiring a virtualized machine. Plaintiffs argue that the VM
acronym was never defined, and note that GoDaddy's Rule
30(b)(6) witness stated that understanding the acronym would
require someone with technical knowledge. Doc. 127 at 9. But
the class almost certainly includes persons with technical
knowledge. Dedicated Servers were marketed to persons with
web-design expertise. The October 23, 2014 press release that
launched the Dedicated Server marketing effort (and triggered
the start of the class period) referred to the Dedicated
Server as an “Advanced Hosting Product” and
said it was “designed specifically for Web designers
and developers.” Doc. 109-3 at 2. The Dedicated Servers
webpages “specifically catered to tech-savvy developers
and designers.” Id. Given this target market,
it is likely that the class includes sophisticated computer
users, and an individualized inquiry would be required to
determine whether class members had the sophistication to
understand that VM meant virtualized machine even if they did
not visit the /servers webpage.
these are not the only ways class members could have learned
that the servers were virtualized. Prospective purchasers
could also talk with a GoDaddy representative by phone or web
chat. GoDaddy provided live customer service representatives
24 hours a day, seven days a week. Doc. 128 at 60, ¶ 5.
Evidence in the record shows that GoDaddy representatives did
disclose in conversations with customers that Dedicated
Servers were virtualized. Id. at 82, 94. Evidence
also shows that GoDaddy fielded more than 31 million phone
calls and participated in over 8 million web chat sessions
with customers and potential customers during the class
period. Id. at 60, ¶ 6. This amounts to an
average of 35, 556 calls and 8, 772 web chats per day.
Id. Thus, even if a class member did not visit the
/servers webpage, an individualized inquiry would be required
to determine whether she spoke with a GoDaddy representative
and learned that the servers were virtualized.
GoDaddy manager, Noah Madieros, explained the ways in which
potential customers could use the GoDaddy call-in resources:
A large number of GoDaddy customers . . . utilize the
customer service line and chat feature to discuss and/or
initiate new purchase transactions. In my experience, it is
common for GoDaddy customers to call the customer service
line or initiate a chat discussion after reviewing
GoDaddy's website, in order to inquire about the
specifications of a certain product prior to purchase. It is
also common for GoDaddy customers to call the customer
service line or initiate a chat discussion to request a
consultation related to the customer's current needs,
without having reviewed a specific product offering on
GoDaddy's website. It is also my experience that
customers will frequently call GoDaddy's customer service
line with questions about our server products but will
eventually purchase on their own through the website at a
Doc. 128 at 60.
named Plaintiffs in this case, Mark Schellenbach and William
Ryder, provide apt examples of the varied means by which
purchasers could acquire Dedicated Servers. Plaintiffs
operate SetMySite.com, a business involved in website design
and management. Id. at 12, 98 (Zechinni
Declaration), 170-71 (Schellenbach Declaration); 194-95
(Ryder Declaration). Plaintiffs researched dedicated server
options using Google and GoDaddy's website. Id.
at 177-78, 182-83, 199. Although they viewed webpages on
GoDaddy's website before making their purchase, they made
the purchase over the phone and discussed the Dedicated
Server with a GoDaddy agent during that call. Id. at
short, GoDaddy customers do not have a uniform buying
experience when purchasing Dedicate Servers, and many would
have been exposed to information beyond that contained in the
/pro/dedicated-servers webpage on which Plaintiffs wish to
rely. And this does not even account for other means by which
class members could have learned that the servers were
virtualized, such as word of mouth or trade publications.
on the very first element of Plaintiffs' claims - the
existence of a material omission - individual issues would
predominate if the class were certified. The class therefore
cannot be certified under Rule 23(b)(3). See Berger v.
Home Depot USA, Inc., 741 F.3d 1061, 1069 (9th Cir.
2014), abrogated on other grounds by Microsoft Corp. v.
Baker, 137 S.Ct. 1702 (2017) (finding class
certification inappropriate because plaintiff could not show
“that all of the members of his proposed class were
exposed to Home Depot's alleged deceptive
practices”); McKinnon v. Dollar Thrifty Auto. Grp.,
Inc., No. 12-cv-04457-SC, 2015 WL 4537957, at *9 (N.D.
Cal. July 27, 2015) (denying certification because there was
no evidence all class members were exposed to deceptive
conduct when claims were based upon individual transactions
at the rental counter); Herskowitz v. Apple, Inc.,
301 F.R.D. 460, 481 (N.D. Cal. 2014) (rejecting class
certification in case involving “Apple's variable
conduct in the course of diverse, individualized
transactions”); Mahfood v. QVC, Inc., No. SACV
06-0659-AG(ANx), 2008 WL 5381088, at *4-5 (C.D. Cal. Sept.
22, 2008) (denying certification because “there exists
far too much variation in individual purchasing