Opinion
H033977
08-24-2011
JANET SKOLD et al., Plaintiffs and Appellants, v. INTEL CORPORATION et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Santa Clara County Super. Ct. No. CV039231)
The trial court's order did not set forth reasons for denying plaintiffs' motion for class certification, but instead referred to all the papers filed on three certification motions and the transcripts of three hearings. Those transcripts reveal that the trial court improperly resolved the merits in response to what the court viewed as plaintiffs' request "for the court to create an extension of existing law, creating new law." Because of this error, we reverse and remand.
PROCEDURAL HISTORY
I. Pleadings and Legal Theories
Suing on behalf of themselves and a putative class, in August 2006 plaintiffs Janet Skold and David Dossantos filed their fourth amended complaint, the operative pleading here, against defendants Intel Corporation (Intel) and Hewlett Packard Company (Hewlett Packard). The complaint targets Intel's marketing of its first-generation Pentium 4 processor, code-named "Willamette," and asserts causes of action for violation of the Consumer Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.), the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.), and the False Advertising Law (FAL) (Bus. & Prof. Code, § 17500 et seq.). In the complaint, plaintiffs proposed a class and a subclass, defined as all persons or entities residing in the United States who purchased or leased specified Pentium 4 processors, or computers containing those processors, for any purpose other than resale.
Plaintiffs proposed four theories for class certification. The first theory is based on price inflation, and posits that Intel engaged in an unfair business practice in violation of the UCL by manipulating the performance scores for the Pentium 4 processor, resulting in an overcharge to consumers. Plaintiffs' next theory is based on omissions: that Intel violated the UCL and the CLRA by omitting or failing to disclose material facts. The third of plaintiffs' theories is a deceit claim, which asserts that Intel violated the UCL and the FAL by engaging in deceptive marketing. Lastly, plaintiffs assert an aiding and abetting theory against Hewlett Packard, which posits that Hewlett Packard violated the UCL by aiding and abetting Intel's unfair business practices.
Defendants assert that plaintiffs abandoned this theory in the trial court, citing their statements at the third class certification hearing that they were no longer pursuing certification of their affirmative misrepresentation claims. Plaintiffs respond that they decided not to press that theory at the third hearing because "the trial court had made clear its belief that class members would have to prove reliance on specific representations, making class-wide relief impractical." Given our decision to remand the matter, we need not and do not address defendants' claim that this theory was abandoned.
II. Class Certification Motions
Plaintiffs moved for class certification three times: the first two motions were denied without prejudice, and the third (which is the subject of this appeal) was denied with prejudice. The trial court's written order on the third motion referred to the court's review of all three sets of motion papers, and recited that the order was based on counsel's arguments at all three hearings and "the reasons stated on the record at those hearings." Accordingly, we review in detail the entire history of plaintiffs' class certification efforts concerning the fourth amended complaint.
A. The First Motion: June 2007 to March 2008
Concerning Intel, plaintiffs proposed the following class: "All residents of the United States who purchased a desktop computer containing a first-generation Pentium 4 (Willamette) processor." (Bolding omitted.) Concerning Hewlett Packard, plaintiffs proposed the following subclass: "All residents of the United States who purchased a desktop computer containing a first-generation Pentium 4 (Willamette) processor from HP or HP Shopping." (Bolding & fn. omitted.)
At a March 2008 hearing, the trial court denied the certification motion without prejudice. In doing so, the court first commented on the "expansive" nature of the proposed class, characterizing it as "very, very overbroad." The court then expressed its "serious concerns" over certification of a nation-wide class, given choice of law issues. The court also questioned whether there was "sufficient commonality and typicality." On that point, the court cited such factors as "the uses for which the processors were to be made, why they were acquired, and what they were going to do with them." The court also mentioned that purchasers acquired the processors or computers "with various understandings, and various levels of knowledge about what it was they were acquiring." Counsel for Intel pointed out that Intel had not challenged typicality and would stipulate that the named plaintiffs are typical of the class.
The court concluded by saying: "What I have here is far too broad. I would not certify this class." Plaintiffs' counsel agreed to amend the class definition and to "come back with a much narrower class."
B. The Second Motion: May to October 2008
Plaintiffs filed a renewed motion for class certification, seeking "certification of the following class, or any other class which the Court may in its discretion decide is propriate: [¶] All natural persons residing in the United States, excepting those residing in Illinois, who purchased a desktop computer equipped with Intel's first-generation Pentium 4 (Willamette) processor for personal, family, or household use."
At the outset of the October 2008 hearing, the court stated: "This is a—it's called a renewed motion for class certification. As I indicated, there's no carryover from the previous motion. This is a new motion for class certification." (Italics added.)
At the conclusion of the hearing, the court once again denied the certification motion without prejudice. In framing the issues, the court returned to the question of commonality, commenting: "[Whether there is a predominance of common issues is] what it comes down to and that's the ultimate question in terms of this motion because I'm not looking at the merits." The court observed that "to the extent that the common— the issues are not common to all of the members of the class it seems to me that you cannot say that the common issues predominate." In response, plaintiffs' counsel explained that their theory focuses on conduct up to the point of sale, as proved by defendants' internal conduct and documents. After denying the motion without prejudice, the court told plaintiffs' counsel, "if you believe that you can provide the court with a motion to certify a class where the—the common issues predominate, factually and legally, I would be happy to give you that opportunity."
C. The Third Motion: January to February 2009
Plaintiffs filed a second renewed motion for class certification, stating with respect to the proposed class: "Plaintiffs seek certification of the following class, or any other class which the Court may in its discretion decide is appropriate: [¶] All residents of the United States, other than those residing in Illinois, who purchased a HP Pavilion desktop computer that was sold factory-equipped with a first-generation (Willamette) Pentium 4 processor; who purchased that computer between November 20, 2000 and June 30, 2002; and who purchased that computer for personal, family, or household use." Plaintiffs thus proposed a "consumer-only class" excluding Illinois residents.
At the February 2009 hearing, the court invited argument from counsel. Plaintiffs' counsel started with "the primary point" that the case, as narrowed by the court, was now "focused on what we believe is the price inflation, the overpayment that people made that purchased computers that have these chips in them. We think that—those inflated prices were—were the result of unlawful conduct that happened prior to the point of sale. That's our case." The court questioned the existence of a manufacturer's duty "to tell the public about its own testing, its standards, its performance of the product." Plaintiffs' counsel then described in more detail how the price inflation approach related to the stated legal claims. Intel's counsel responded by offering to answer questions if the court thought plaintiffs had gotten "over the hurdles it had before . . . ." The court replied: "Well, it's different. This is a different focus than we have had previously."
Plaintiffs' counsel further explained the theory that defendants' conduct constituted an unfair business practice, framing the inquiry as "did they manipulate the underlying test, testing methodology . . . that doesn't accurately reflect performance of this chip and introduced the chip based on that testing methodology and then in turn achieve a higher price point for that chip." Counsel stated: "This isn't a claim made under the fraudulent prong or affirmative misrepresentation made under the UCL but challenging the underlying conduct and saying that conduct as a whole through the sales process harmed consumers. And there's a way to measure the overcharge." The court responded: "I think if you have that type of unfair competition issue that you've got to show there's a relationship between that conduct and the purchase of the product by the consumer."
The court denied plaintiffs' second renewed motion for class certification, this time with prejudice. In announcing its ruling, the court commented: "I think you are really asking the court to go beyond existing law in finding a duty to disclose when none exists. And I think that all of the other reasons that I expressed when I denied the previous motions also are applicable here because you still have those causes of action alleged in that fashion. So I am going to deny the motion to certify the class. [¶] I think that you're asking for the court to create an extension of existing law, creating new law. I don't really think I can go that far on the facts of this case. This may be a perfect case for the appellate court to weigh in and say that the Mirken [sic]case really doesn't mean what it says, we should do something beyond the facts in that case and go into the price inflation field. [¶] But I think—I think that's beyond California law and I think that if we were in the federal courts we might have a different answer."
The trial court was referring to Mirkin v. Wasserman (1993) 5 Cal.4th 1082. In affirming dismissal after a demurrer was sustained, Mirkin rejected plaintiffs' argument "that the so-called 'fraud-on-the-market' doctrine obviates the need to plead and prove actual reliance in cases where material misrepresentations are alleged to have affected the market price of stock." (Id. at pp. 1088, 1091.) The court also held that "actual reliance can be proved on a class-wide basis when each class member has read or heard the same misrepresentations," but that case law does not support the proposition "that a plaintiff may plead a cause of action for deceit without alleging actual reliance." (Id. at p. 1095.)
In March 2009, plaintiffs filed a notice of appeal from the court's oral order entered in the minutes. The following month, the court entered a written order which, without stating reasons, recited that the order was based on "the argument of counsel at [the three] hearings, the papers submitted in support of and in opposition to Plaintiffs' Motion and the reasons stated on the record at those hearings."
DISCUSSION
To establish the proper framework for our analysis, we first summarize the governing legal principles and then apply them to the case before us.
I. Legal Principles Concerning Class Actions, Certification and Review
A. Class Actions
"The class action is a product of the court of equity—codified in section 382 of the Code of Civil Procedure." (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 458.) Under that statute, "when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all." (Code Civ. Proc., § 382.) Class actions under the CLRA are governed by a different statute, Civil Code section 1781. (Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1287.)
The class action "rests on considerations of necessity and convenience, adopted to prevent a failure of justice." (City of San Jose v. Superior Court, supra, 12 Cal.3d at p. 458.) Public policy favors its use. (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 340.) "Generally, a class suit is appropriate 'when numerous parties suffer injury of insufficient size to warrant individual action and when denial of class relief would result in unjust advantage to the wrongdoer.' [Citations.]" (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435 (Linder); accord, Hewlett-Packard Co. v. Superior Court (2008) 167 Cal.App.4th 87, 93.)
B. Class Certification
"Class certification requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts, i.e., that proceeding as a class is superior to other methods." (Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089.) "In turn, the 'community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.' [Citation.]" (Ibid.) For class actions under the CLRA, questions of law or fact likewise must predominate over questions affecting individual class members. (Massachusetts Mutual Life Ins. Co. v. Superior Court, supra, 97 Cal.App.4th at p. 1287; Quacchia v. DaimlerChrysler Corp. (2004) 122 Cal.App.4th 1442, 1449.)
"In California it is settled that the class action proponent bears the burden of establishing the propriety of class certification." (Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 922.) The "determinations of predominance and manageability may vary case by case, depending upon individual factors such as the number and nature of the legal theories and evidentiary issues presented in the case, as well as the size and scope of the proposed class." (Id. at p. 929, fn. omitted.)
While "issues affecting the merits of a case may be enmeshed with class action requirements, such as whether substantially similar questions are common to the class and predominate over individual questions" (Linder, supra, 23 Cal.4th at p. 443), any evaluation of the merits must be thus limited. This court recently held that legal principles that may bar all or part of a plaintiff's claims nevertheless do not affect a determination of class certification; whether some of plaintiff's claims may be substantively invalid is "not a proper consideration on the question of class certification." (Hewlett-Packard Co. v. Superior Court, supra, 167 Cal.App.4th at pp. 95-96.) "The certification question is 'essentially a procedural one that does not ask whether an action is legally or factually meritorious.' [Citation.]" (Sav-on Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) For that reason, in considering a class certification motion, the trial court generally should not determine the merits of the claim. (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 829; see also, e.g., Quacchia v. DaimlerChrysler Corp., supra, 122 Cal.App.4th at p. 1454; Lebrilla v. Farmers Group, Inc. (2004) 119 Cal.App.4th 1070, 1084; Lewis v. Robinson Ford Sales, Inc. (2007) 156 Cal.App.4th 359, 367.)
C. Appellate Review
1. Appealability and Timeliness
An order denying class certification is immediately appealable if individual claims survive. (In re Baycol Cases I and II (2011) 51 Cal.4th 751; Linder, supra, 23 Cal.4th at p. 435.) An appeal predating entry of a formal order denying class certification is premature but nevertheless cognizable. (Cf. Los Altos Golf and Country Club v. County of Santa Clara (2008) 165 Cal.App.4th 198, 202 [premature notice of appeal liberally construed].) Accordingly, plaintiffs' March 2009 notice of appeal from the order entered in the February 2009 minutes is proper, even though it was filed before the court's April 2009 written order.
2. Standard of Review
"A certification order generally will not be disturbed unless (1) it is unsupported by substantial evidence, (2) it rests on improper criteria, or (3) it rests on erroneous legal assumptions." (Fireside Bank v. Superior Court, supra, 40 Cal.4th at p. 1089; accord, Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, 575-576; In re Tobacco II Cases (2009) 46 Cal.4th 298, 311.) Conversely, "an order based upon improper criteria or incorrect assumptions calls for reversal ' "even though there may be substantial evidence to support the court's order." ' " (Linder, supra, 23 Cal.4th at p. 436.) In other words, the trial court's "latitude in ruling on certification matters does not encompass discretion to misstate or misapply the law." (Weinstat v. Dentsply Intern., Inc. (2010) 180 Cal.App.4th 1213, 1225.)
"The appeal of an order denying class certification presents an exception to the general rule that a reviewing court will look to the trial court's result, not its rationale." (Bartold v. Glendale Federal Bank, supra, 81 Cal.App.4th at p. 828; Weinstat v. Dentsply Intern., Inc., supra, 180 Cal.App.4th at pp. 1223-1224.) "Accordingly, we examine the stated reasons for the order to determine whether the court relied on improper criteria to deny certification." (Evans v. Lasco Bathware, Inc. (2009) 178 Cal.App.4th 1417, 1423; see also, e.g., Lockheed Martin Corp. v. Superior Court (2003) 29 Cal.4th 1096, 1106.) While any valid, pertinent, stated reason will suffice to support the ruling (Linder, supra, 23 Cal.4th at pp. 435-436), "[o]ur review is limited to the grounds stated, and we ignore any other grounds that might have supported the ruling." (Evans v. Lasco Bathware, Inc., supra, at pp. 1422-1423; Weinstat v. Dentsply Intern., Inc., supra, at p. 1224.)
II. The Order Denying Class Certification Must Be Reversed.
A. The Trial Court Erred in Evaluating the Merits.
The trial court did not articulate the reasons for its ruling, either in a written order or in an oral statement on the record. Over the course of the three hearings, the trial court expressed reservations, in the form of musing comments or questions, in four areas: choice of law issues, the breadth of the proposed class, commonality, and the merits of the legal issue of duty to disclose.
The first two issues were addressed by the court only at the first hearing. The court expressed its "serious concerns" over certification of a nation-wide class given choice of law considerations, and specifically noted the lack of information about other jurisdictions' consumer laws and whether they vary from California law. Also at the first hearing, the court expressed concern over the "expansive" nature of the proposed class, describing it as including "manufacturers, distributors, retailers" and consumers, and characterizing it as "very, very overbroad."
Even though the court's written order references all three motions and hearings, it is far from clear that the trial court's ruminations on these issues, raised only at the first hearing, had any bearing at all on its decision on the third motion, over a year later. The court's comments concerning a "very, very overbroad" class were addressed, at least to some extent, by the subsequent redefinitions of the class. Moreover, the order's sweeping reliance on all three hearings is at odds with the court's own comment, at the outset of the second hearing, that "there's no carryover from the previous motion. This is a new motion for class certification." In any event, there is nothing in the record specifying that either choice of law or class breadth was a stated reason for the ruling on the third motion.
Although the issue of commonality was addressed at all three hearings, the court never made a finding on whether common or individual issues predominate or explicitly stated that lack of commonality was a basis for its denial of certification. When questioned at oral argument whether the court had ever made such a finding, counsel for Intel pointed to the court's comment that "to the extent that the common—the issues are not common to all of the members of the class it seems to me that you cannot say that the common issues predominate." That response is, on its own face, qualified and tentative. In any event, the court made this comment at the second hearing—before the extensive dialogue between plaintiffs' counsel and the court at the third hearing on the subject of why the different patterns of computer usage among class members are not material under the price inflation theory. At the conclusion of that discussion, when Intel's counsel referred to "the hurdles [plaintiffs] had before" (which, according to defendants, included commonality), the court dismissively rejoined: "Well, it's different. This is a [very] different focus than we have had [before]."
The court's discursive comments about choice of law, breadth, and commonality stand in contrast to its pointed comments, made at the time of ruling on the third motion, on the legal issue of duty to disclose. Indeed, that issue was the gist of the third hearing. Just before and just after announcing its ruling denying class certification, the court returned again to the merits, stating twice its concern about creating new law or extending existing law on the issue of duty to disclose as it relates to unfair competition and omissions.
Although the trial court acknowledged at the first and second hearings its obligation not to base a certification ruling on the merits, ultimately the court did just that. By declining certification to avoid creating new law, the court ventured into the merits of plaintiffs' price inflation theory. This is not a case where the court simply examined the evidence necessary to support the elements of the class proponent's theory. (Compare Quacchia v. DaimlerChrysler Corp., supra, 122 Cal.App.4th at p. 1455 ["the trial court in this case did not address the merits of the claim"]; Caro v. Procter & Gamble Co. (1993) 18 Cal.App.4th 644, 656 ["the court did not rule on the merits of the lawsuit"].) Rather, the trial court here refused certification based on the perceived novelty of plaintiffs' price inflation theory.
Even assuming plaintiff's claim is novel, that is not a basis for refusing class certification. The California Supreme Court made that point clear in Linder, supra, 23 Cal.4th 429. There, the court squarely rejected the defendant's argument that "the novelty of a claim for relief should weigh heavily against certification . . . ." (Linder, supra, 23 Cal.4th at p. 442.) To the contrary, the court concluded: "we are not convinced that certification should be conditioned upon a showing that class claims for relief are likely to prevail." (Id. at p. 443.) The court also noted that such a "holding is consistent with the weight of authority in other jurisdictions. Not only does federal law generally bar preliminary merit assessments for certification purposes, but a significant number of our sister states impose similar restrictions." (Ibid.)Although the court did "not foreclose the possibility that, in the exceptional case where the defense has no other reasonable pretrial means to challenge the merits of a claim to be asserted by a proposed class, the trial court may, after giving the parties notice and an opportunity to brief the merits question, refuse class certification because the claim lacks merit as a matter of law" (ibid., italics added), those circumstances were not present in Linder nor are they present here.
We acknowledge that not every legal theory proposed for certification must be accommodated. "Class actions are provided only as a means to enforce substantive law. Altering the substantive law to accommodate procedure would be to confuse the means with the ends—to sacrifice the goal for the going." (City of San Jose, supra, 12 Cal.3d at p. 462, fn. omitted; accord, Mirkin v. Wasserman, supra, 5 Cal.4th 1082, 1103 [rejecting "plaintiffs' argument that we should reshape the law of deceit"].) But in this case, plaintiffs' theory is based on violation of the UCL, a substantive law whose "scope is broad." (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) The UCL " 'was intentionally framed in its broad, sweeping language, precisely to enable judicial tribunals to deal with the innumerable " 'new schemes which the fertility of man's invention would contrive.' " ' " (Id. at p. 181.) The UCL's reach may well be broad enough to accommodate plaintiffs' theory.
Plaintiffs' second theory of recovery is that Intel violated the UCL and the CLRA by omitting or failing to disclose material facts. Duty is an element of this claim, and is a legal question that goes to the action's merit. (Lockheed Martin Corp. v. Superior Court, supra, 29 Cal.4th at p. 1106.) That question may be "susceptible of common proof." (Ibid.; Bomersheim v. Los Angeles Gay And Lesbian Center (2010) 184 Cal.App.4th 1471, 1482.)
From the transcript of the third hearing, it is difficult to discern whether and when the court separately considered plaintiffs' omissions theory for class certification.
On this record, we conclude that the trial court erred in considering the motion to certify a class as to plaintiffs' price inflation and omissions theories, because its decision was premised on an assessment of the viability of those claims. A merits-based decision is improper in the certification context. (Sav-on Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 326.) The possibility that some claims may not be viable "is not a proper consideration on the question of class certification." (Hewlett-Packard Co. v. Superior Court, supra, 167 Cal.App.4th at p. 96.) Nothing in the record or in the parties' briefs suggests that "the merits of the claim are enmeshed with class action requirements," rendering a consideration of the merits permissible. (Bartold v. Glendale Federal Bank, supra, 81 Cal.App.4th at p. 829.) It was therefore improper for the court to involve itself with the merits of the underlying action in considering class certification. (Lebrilla v. Farmers Group, Inc., supra, 119 Cal.App.4th at p. 1084; Capitol People First v. Department of Developmental Services (2007) 155 Cal.App.4th 676, 696.) B. The Trial Court's Error Compels Reversal and Remand.
Given the trial court's error in evaluating the merits, the proper course for this court is to reverse the order and to remand the matter to the trial court. "[C]ertification may not be denied based upon improper criteria." (Linder, supra, 23 Cal.4th at p. 437.) Based on its determination that the lower courts had prejudged the legal merits of the class action, the Linder court reversed the appellate court's judgment with instructions for remand to the trial court. (Id. at p. 449.)
In circumstances different from those in this case, such legal error may not always compel reversal. "We may not reverse, however, simply because some of the court's reasoning was faulty, so long as any of the stated reasons are sufficient to justify the order." (Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 844, citing Caro v. Procter & Gamble Co., supra, 18 Cal.App.4th at pp. 655-656.) However, the record in this case is materially different than in Kaldenbach where the trial court issued a detailed written order explaining the determination that the plaintiff had failed to demonstrate numerosity, typicality, or commonality. (Kaldenbach v. Mutual of Omaha Life Ins. Co., supra, 178 Cal.App.4th at pp. 841-843.) Here, by contrast, neither the court's written order nor the hearing transcript sets forth a statement of reasons. On this record, we can discern one stated reason, which is a legally improper one.
Kaldenbach turned on the question of substantial evidence, and did not involve application of improper criteria as our case does. (Kaldenbach v. Mutual of Omaha Life Ins. Co., supra, 178 Cal.App.4th at pp. 844, 848.) The plaintiff attacked "the court's reasoning, asserting that because he presented evidence supporting each requisite for class certification, denial of class certification was not justified." (Id. at p. 844.) But as the reviewing court explained, "we are concerned with whether substantial evidence supports the court's reasoning, not with whether there was evidence that might have supported a different conclusion." (Ibid.)Additionally, with respect to his UCL claim, the plaintiff had argued that "the trial court improperly premised its order denying class certification on the complexities of establishing each absent class members' reliance on the representations made and their injury." (Id. at p. 848.) But the reviewing court likewise rejected that argument, explaining that reliance "was only one of the individualized issues the court found predominated and could not be proven on a class-wide basis." (Ibid.)
It is our job to "examine the stated reasons for the order to determine whether the court relied on improper criteria to deny certification." (Evans v. Lasco Bathware, Inc., supra, 178 Cal.App.4th at p. 1423; italics added.) We therefore decline to imply findings here. (See In re V.F. (2007) 157 Cal.App.4th 962, 973 [where dependency statute requires express findings, "the better practice is to remand the matter to the trial court where that court has not considered the facts within the appropriate statutory provision"]; McGinley v. Herman (1996) 50 Cal.App.4th 936, 945 [trial court's "conclusionary finding falls far short of providing reasons why the level of support that the trial court awarded is consistent with the child's interests"].)
When the record reveals that the trial court has applied improper criteria, the speculative possibility of an alternative unarticulated reason, even one supported by substantial evidence, does not prevent reversal. "[A]n order based upon improper criteria or incorrect assumptions calls for reversal" even in the face of substantial evidentiary support. (Linder, supra, 23 Cal.4th at p. 436; see also, Weinstat v. Dentsply Intern., Inc., supra, 180 Cal.App.4th at p. 1218 [trial court's legal error "mandates reversal"]; Harper v. 24 Hour Fitness, Inc. (2008) 167 Cal.App.4th 966, 969 [decertification order reversed because it was "largely predicated on its erroneous legal assumptions concerning the scope of relief available"]; Capitol People First v. Department of Developmental Services, supra, 155 Cal.App.4th at p. 702 ["order denying class certification cannot stand because it was based on improper criteria and incorrect legal assumptions"]; Lebrilla v. Farmers Group, Inc., supra, 119 Cal.App.4th at p. 1072 ["the matter must be reversed because the court applied the wrong legal criteria"].)
Because the trial court committed legal error by making a merits-based decision, the appropriate course is reversal and remand, which will permit the court to consider class certification under the proper criteria and to state its reasons on the record. "Although the trial court may conclude that certification is appropriate after eliminating the improper criteria and erroneous assumptions from consideration, upon a fresh look it may discern valid reasons for denying [the] certification motion." (Linder, supra, 23 Cal.4th at pp. 448-449.) We express no opinion on the outcome of any such future proceeding.
In light of our decision to remand the matter to the trial court, we need not and do not reach plaintiffs' remaining contentions. At such time as plaintiffs bring a new certification motion, the applicable legal assumptions will depend on the theories then proposed for certification. (See Sav-on Drug Stores, Inc. v. Superior Court, supra, 34 Cal.4th at p. 327 [court considers "the theory of recovery advanced by the proponents of certification"].) For similar reasons, we need not and do not reach Hewlett Packard's argument that plaintiffs' aiding and abetting theory against it is procedurally improper. If and when plaintiffs reassert that theory for certification in a new motion following remand, Hewlett Packard can challenge it at that time on any available grounds.
DISPOSITION:
The order denying class certification is reversed and the matter is remanded to the trial court for further proceedings. Plaintiffs shall have costs on appeal.
Judge of the Santa Clara County Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
WE CONCUR:
RUSHING, P.J.
ELIA, J.