Luna v. Renewal by Andersen

Background

John Luna filed a proposed class action alleging that Renewal by Andersen, LLC; Andersen Corporation; Jemico LLC, doing business as Renewal by Andersen of San Francisco; Long Island Custom Windows LLC, doing business as Renewal by Andersen of Long Island; and Moore Holdings LLC violated California Penal Code section 632.7. The claim concerned alleged recordings of outgoing calls to customers using cellular or mobile phones without disclosure that the calls were being recorded.

The case was filed in California state court and later removed to the U.S. District Court for the Northern District of California. Andersen Corporation had previously been dismissed from the federal case without prejudice. The remaining defendants denied the allegations.

The Parties’ Request

Before the proposed class was certified, Luna and the remaining defendants jointly asked the court to dismiss Luna’s individual claims with prejudice and the putative class claims without prejudice. “With prejudice” means the dismissed claims cannot be brought again in that form; “without prejudice” means the dismissal does not bar absent class members from pursuing their claims.

The parties cited a California Court of Appeal decision, Smith v. LoanMe, Inc., which held that section 632.7 applies only to third-party eavesdroppers and not to alleged participants in the call. The defendants said that decision precluded Luna’s claim as a matter of law. The opinion states that Luna and his counsel, after investigating the facts and the likelihood of recovery, believed dismissal was the best course for resolving his individual claims without harming absent class members. The court did not decide the merits of the recording claim.

Notice to Absent Class Members

The court’s standing order required court approval for dismissal of a proposed class action before certification and required consideration of whether absent class members needed notice. The opinion applied factors concerning whether class members relied on the lawsuit, whether they faced a rapidly approaching filing deadline, and whether the class representative or counsel had given up class interests for their own benefit.

The request stated that there had been no publicity about the lawsuit and that counsel had received no communications from putative class members. It also stated that filing the class action had paused the applicable filing deadlines for covered individual claims, so absent class members would not face an immediate deadline because of the dismissal. Finally, the proposed dismissal of the class claims was without prejudice, and the parties stated that no class interests had been conceded or compromised.

Ruling

Judge Vince Chhabria ordered, pursuant to the parties’ stipulation, that the action be dismissed with prejudice as to Luna’s claims and without prejudice as to claims of absent or unnamed members of the putative class. The order did not require notice to the putative class. Because the order approved a pre-certification dismissal rather than deciding the underlying statutory question, it was a procedural disposition.