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Ventures Edge Legal PLLC v. GoDaddy.Com LLC

United States District Court, D. Arizona

January 30, 2018

Ventures Edge Legal PLLC, Plaintiff,
v.
GoDaddy.com LLC, Defendant.

          ORDER

          Honorable G. Murray Snow United States District Judge.

         Pending before the Court is the Motion to Certify Class of Plaintiff Ventures Edge Legal PLLC (Doc. 86).[1] For the following reasons, the motion is denied.

         BACKGROUND

         Microsoft sells an office-services product known as Office 365. This product is a software system that provides its buyers with various computer programs and functionalities. Consumers may purchase Office 365 directly from Microsoft, but Microsoft also authorizes other retailers to sell the product. In 2014, Microsoft and GoDaddy entered into a partnership that allowed GoDaddy to sell Office 365. GoDaddy's version of Office 365 aimed to serve the small business market. In its version of Office 365, GoDaddy “consolidated setup, billing and support processes” to result in a simplified user interface specifically intended for small business customers. This simplified user interface offers a different configuration of Office 365 than that offered by Microsoft. Despite bearing the same name, Plaintiff alleges that Microsoft and GoDaddy's Office 365 Business Premium plans contain different functionalities. Some of the Microsoft functionalities are absent in GoDaddy's plan, and some functionalities are added to GoDaddy's plan that do not exist in the Microsoft version. For example, a GoDaddy purchaser of Business Premium received Microsoft Access--a Microsoft product not available for Microsoft Business Premium purchasers. On the other hand, a GoDaddy purchaser of Business Premium lacks access to Microsoft Sharepoint, Single Sign-In, among other capabilities-Microsoft functionalities that are available to Microsoft Business Premium purchasers.

         GoDaddy markets and sells its version of Office 365 Business Premium to prospective customers in different ways. GoDaddy's marketing strategy focused on the accessibility of the Office 365 products and their use for small business owners. GoDaddy consumers can buy Office 365 products from the Office 365 landing page of GoDaddy's website, from the consumer's personal account, or by contacting GoDaddy customer support. GoDaddy supports an online chat function where customers can ask questions about products to company representatives. Customers can also make purchases of products through the assistance of the company representatives in the chat. GoDaddy's chat employees are trained on the functionalities of the product, and GoDaddy asserts that the functionalities of GoDaddy's Office 365 Business Premium including the differences in functionalities might be disclosed to customers during the chat. There is evidence that GoDaddy representatives do in fact disclose the different functionalities when asked. In Plaintiff's own conversations with GoDaddy representatives through the chat feature, GoDaddy representatives told Plaintiff that there were differences between the Microsoft and GoDaddy product and discussed which functionalities were not supported by GoDaddy. (Doc. 103). In Plaintiff's case, however, these conversations did not occur until after Plaintiff had already purchased GoDaddy's product. Customers, however, may use the chat function prior to purchasing the product through the website or otherwise.

         Plaintiff argues that GoDaddy's alleged failure to disclose these different functionalities on its website is an omission of a material fact, and therefore a violation of the Arizona Consumer Fraud Act (ACFA). Plaintiff seeks to certify a class of “[a]ll individuals and entities who purchased the Office 365 Business Premium plan through GoDaddy's website since November 13, 2014.” (Doc. 86, pg. 2).

         DISCUSSION

         I. Rule 23 Requirements

         A class may not be certified unless it meets each of the four requirements of Rule 23(a), typically referred to as numerosity, commonality, typicality, and adequacy of representation. Fed.R.Civ.P. 23(a). In addition, a class action must satisfy at least one of the three requirements of Rule 23(b), one of which is “that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). The party seeking certification bears the burden of demonstrating that it has met all of these requirements, and “the trial court must conduct a ‘rigorous analysis'” to determine whether it had met that burden. Zinser v. Accufix Research Inst., 253 F.3d 1180, 1186 (9th Cir. 2001) (quoting Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1233) (9th Cir. 1996)).

         II. Analysis

         A. Motion to Strike

         In Plaintiff's Reply in Support of Plaintiff's Motion for Class Certification (Doc. 116), Plaintiff attaches three exhibits consisting of expert reports. Exhibit 3 of Dwight Duncan calculates damages. Exhibit 8 of Ilan Srendi sets forth the different functionalities of Microsoft and GoDaddy's Office 365 Business Premium products. Exhibit 13 of Thomas Maronick discusses the monetary value consumers place on the Microsoft functionalities that are not present in the GoDaddy product. Plaintiff's Motion for Class Certification (Doc. 86) contained declarations of all three experts, each asserting their qualifications and the work they sought to produce in their expert reports. Defendants move to strike the expert reports attached to Doc. 116 as consisting of new arguments and evidence, or for leave to file a surreply. In light of the Court's denial of the Motion to Certify Class, the Motion to Strike is moot.

         B. Individual Questions Predominate, Preventing Certification Under Rule 23(b)(3)

         Plaintiffs have not shown predominance--that questions common to the class predominate over individual questions. Therefore, ...


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