Putative class of ratepayers claim that defendants bribed the former Chairman of the Arizona Corporation Commission to induce the agency to approve inflated rates for the wastewater management company that largely remain in effect today. The District Court certified the class, and the Court of Appeal affirmed.
“First, the ratepayers’ damages model – that each class member is owed the difference between the allegedly inflated rates paid and the fair rates each would have paid but for Appellants’ alleged bribery scheme – is reasonably administrable. Individual class members purchased different volumes of water and wastewater services from Johnson Utilities across different timeframes within the class period. But each class member’s damages may easily be calculated using simple arithmetic because the alleged increase in monthly rates applies class wide….
“Second, the ratepayers’ damages model is consistent with their theory of liability – that Appellants’ alleged bribery scheme induced the ACC to approve higher rates for Johnson Utilities than would otherwise have been permitted. As alleged, the same course of conduct on the part of Appellants caused each class member to suffer the same legally cognizable injury. Whether the ratepayers will be able to prove Appellants’ alleged bribery scheme caused the ACC to approve increased rates for Johnson Utilities is a question for another day. It is enough for the purposes of this interlocutory class certification appeal that the ratepayers demonstrated the nexus between their legal theory and their damages model….
“Appellants argue class certification was improper because the Supreme Court’s decision in Comcast interpreted Rule 23(b)(3) as requiring plaintiffs to demonstrate their damages model is ‘legally valid’. The ratepayers class failed to meet this requirement, Appellants maintain, because their class claims are barred by the Filed Rate Doctrine, a common law rule that bars suits against regulated entities for charging rates validly approved by a public ratemaking agency. This argument misunderstands the Rule 23(b)(3) predominance inquiry. Nothing in the Supreme Court’s decision in Comcast suggests plaintiffs must demonstrate their allegations are ‘legally valid’ at the class certification stage. Comcast held only that Rule 23(b)(3) requires that any model supporting a plaintiff’s damages case must be consistent with its liability case and must avoid identifying damages that are not the result of the wrong…. Indeed, the existence of a common defense fatal to the claims of each member of the putative class tends to prove certification is proper because common issues predominate…. To be clear, our decision to affirm the grant of class certification in this case should not be read as opining on the merits of Appellants’ Filed Rate defense…. Appellants may raise their Filed Rate defense in a motion for summary judgment and, if necessary, seek to appeal an adverse decision at that juncture.”
Castillo v. Johnson, No.20-15814, 2021 WL 1592350 (9th Cir. April 23, 2021).
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