Courts have been and likely always will be reluctant to strike class allegations or deny class certification before class discovery. Indeed, over-aggressive attempts to strike class allegations can often do more harm than good when the court, in denying a motion to strike, gives the plaintiff a roadmap of how to proceed at the class certification stage. Custom photography company Shutterfly was recently reminded of that tendency when a California district court denied its attempt to strike class allegations based on evidence outside the four corners of the complaint.
To be sure, the claim was weak. The plaintiff alleged that she purchased a Groupon deal that offered $75 to spend at Shutterfly for $50. According to the plaintiff, however, the promotion failed to notify her that the $75 would not operate as a dollar credit, gift card, or coupon, but instead, as a promotional code, which could not be combined with any other sales or promotion. She asserted that Shutterfly should have warned her and putative class members of this restriction on the Groupon website.
Shutterfly moved to strike the class definition as too broad because it included uninjured class members who purchased Groupon deals within the claimed time frame that did include a disclaimer alerting consumers that the promotion could not be combined with any other offers or credits. To support the argument, Shutterfly offered examples of Shutterfly Groupon promotions within the alleged time frame containing such a disclaimer.
The court denied the motion to strike, holding that the exemplar promotions offered by Shutterfly were not included in the complaint and could not be incorporated by reference. The incorporation by reference doctrine allows a court to treat an outside document as though it were part of the complaint if the plaintiff extensively refers to the document or the document forms the basis of the plaintiff’s claim and the authenticity of the document is undisputed. The doctrine did not apply in Shutterfly’s case because the plaintiff never relied upon, much less mentioned, the promotions identified by Shutterfly in her pleading.
The court also rejected Shutterfly’s argument that no class could ever be certified because the plaintiff’s injury was not typical of the claims of allegedly uninjured class members and the plaintiff was not an adequate representative for such class members. This argument was premature. Indeed, making it at the motion to dismiss stage likely tipped off the plaintiff as to how to modify its class definition going forward. As the court noted, “even if some members of the proposed class are found to be uninjured, there is no dispute at this stage that thousands of other consumers purchased deals similar to the one Plaintiff purchased.” Once the parties conducted class discovery and the record was further developed, the court explained, the class definition could be modified.
Taylor v. Shutterfly, Inc., No. 5:18-cv-00266 (N.D. Cal. Mar. 19, 2020).
