Postpichal v. Cricket Wireless, LLC

Background

Jamie Postpichal and other plaintiffs alleged that Cricket Wireless, LLC marketed and sold 4G-capable phones and 4G plans in geographic markets where Cricket did not provide 4G service. The plaintiffs contended that Cricket’s advertising and sales strategy caused customers to believe they would receive 4G service and allowed Cricket to charge more for phones and plans than they were worth.

The court described evidence that Cricket promoted 4G nationwide despite having a limited 4G footprint, used 4G-related advertising in non-4G markets, and blocked customers in those markets from using available Sprint 4G roaming service. The named plaintiffs included Ursula Freitas, who lived in a non-4G market and did not receive the 4G speeds she expected, and Jamie Postpichal, who purchased a 4G phone expecting 4G service but saw only a 3G signal and later was refused a return.

By the time of this order, the case had been reduced to two plaintiffs and one claim under the Racketeer Influenced and Corrupt Organizations Act, commonly called RICO. The court had previously dismissed the plaintiffs’ California Consumers Legal Remedies Act claim for lack of notice, while the RICO claim survived.

Class-Certification Standard

The plaintiffs sought certification under Federal Rule of Civil Procedure 23. They had to prove that the proposed class was sufficiently numerous, shared common legal or factual questions, had representative claims typical of the class, and had representatives and counsel who could adequately protect absent class members. They also had to show that common questions predominated over individual questions and that a class action was the superior way to resolve the dispute.

Class Certification

The court found that the proposed class contained hundreds of thousands of consumers, satisfying the numerosity requirement. It found that the alleged nationwide 4G marketing strategy presented common questions, including whether Cricket’s advertising and marketing materials misled customers in non-4G markets and whether the alleged scheme caused customers to pay more than the phones and plans were worth.

The court rejected Cricket’s argument that individual differences in advertisements, sales conversations, coverage-map use, customer motivations, and reliance made class treatment improper. The court reasoned that the plaintiffs’ RICO theory did not require every customer to have directly relied on Cricket’s representations. Instead, the plaintiffs could attempt to show that a critical mass of consumers relied on the representations, artificially supporting higher prices for the phones and plans.

The court also found a workable classwide damages theory based on the amount Cricket allegedly overcharged customers compared with the actual value of the phones and plans. Although damages could vary according to the phone and plan purchased, the court found that the relevant amounts could be determined from Cricket’s records and comparisons with non-4G phones and plans.

The court found Ursula Freitas’s claims typical of the proposed class because she alleged that she bought a 4G phone and plan to obtain faster service but did not receive it. Differences such as her receiving a rebate or viewing a coverage map did not defeat typicality. The court also found class counsel adequate.

The court ruled that Jamie Postpichal could not serve as a class representative. It cited her criminal history, including convictions and arrests related to failing to appear for court hearings and probation appointments, and concluded that she was not suitable for the fiduciary responsibilities of representing absent class members. Ursula Freitas remained the viable class representative.

The court found that a class action was superior because individual damages were unlikely to motivate consumers to bring separate cases. It also found that prior related litigation was no longer pending and that the proposed class members did not appear to have substantially different or conflicting claims.

Arbitration and Class Definition

Cricket identified several possible ways customers could have agreed to arbitration, including materials inside phone boxes, later terms-and-conditions booklets, text messages sent on or around May 22, 2014, and electronic acceptance of terms after May 2017.

The court held that arbitration issues did not defeat class certification. It found that whether materials inside phone boxes effectively imposed arbitration agreements presented common issues, although some sub-issues might require state-by-state analysis. The court excluded from the class customers who continued using Cricket after receiving the May 22, 2014 text-message notice, customers who electronically accepted arbitration terms after May 2017, and any other class member Cricket could prove was subject to an arbitration agreement.

The certified nationwide class consisted of people in the United States whose customer address was in a geographic market without Cricket 4G/LTE network coverage and who, between November 1, 2012, and September 30, 2014, purchased from Cricket a 4G/LTE monthly plan for service on Cricket’s legacy network or later activated such a plan with the device for service on that network. The order also excluded Cricket and related personnel and entities, people whose addresses were outside Cricket’s network footprint but in markets with Sprint LTE coverage, governmental entities, and the assigned judge or judges and their immediate family members.

Expert Motions and Disposition

Cricket moved to exclude and disqualify the plaintiffs’ experts, Mallinson and Browne. The court declined to consider those challenges because the expert reports were not needed to decide class certification. It therefore denied as moot Cricket’s motion to exclude Mallinson and Browne, while stating that challenges to their final expert reports could be raised later.

The court certified the nationwide class, with the modified definition and exclusions described above. It ordered counsel to submit a proposed notice and proposed distribution plan, including first-class mail, within 14 calendar days.