Court of Appeal Confirms that Individual Determination of Damages does not Preclude Class Certification

In Cobos v. National General Ins. Co., et al., 2025 WL 2080748, filed July 1, 2025, although finding that Plaintiffs demonstrated the proposed class was ascertainable and sufficiently numerous, the named Plaintiffs' claims were identical to the class claims, Plaintiffs' counsel was well-qualified to represent the class and had no conflicts of interest, and common questions predominated over individual issues with respect to liability, the trial court had concerns regarding damages. Given these concerns, the trial court ordered Plaintiffs' counsel to prepare a trial plan focusing on the damages phase of trial. After reviewing the trial plan, and considering the arguments regarding same, the trial court denied Plaintiffs' motion for class certification based on its determination that many of the damage issues were individualized, and its conclusion that it was improper for Plaintiffs to forgo certain categories of damages to render the case more manageable.

Holding that the trial court applied "improper legal criteria" when denying Plaintiffs' motion for class certification, the Court of Appeal reversed the trial court's decision. So doing, the Court of Appeal iterated "it is well established that an individual determination of damages does not preclude class certification when common issues of liability predominate." (Citing Brinker Rest. Corp. v. Superior Court, 53 Cal. 4th 1004, 1022 (2012); Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal. 4th 332-33 (2004); ABM Industs. Overtime Cases, 19 Cal. App. 5th 277, 308 (2017)). The Court of Appeal also recognized the basic tenets that "individuals who are dissatisfied with the potential relief available in a class action have various remedies, including opting out of the class, (Citing Hicks v. Kaufman & Broad Home Corp., 89 Cal. App. 4th 908, 925-26 (2001)), and the trial court could have "certified a class action to determine liability followed by individual hearings on damages." (Citing Brinker, 53 Cal. 4th at 1022). Summing up its reasoning, the Court of Appeal emphasized that "[t]he possibility that some class members might prefer to assert individualized claims is not a valid basis for denying certification . . ." The Court also made clear that "[o]ur Supreme Court did not hold that a class representative must pursue all conceivable claims. Where, as here, certain damages are inherently individualized and not amendable to class-wide adjudication, a representative's decision not to pursue them does not breach any duty to the class." The Court of Appeals, in stating the obvious, recognized that "[t]o hold otherwise would discourage class actions in cases involving egregious conduct, effectively shielding defendants whose misconduct causes harm."