California Court Refuses to Certify Class Against Payday Lenders

On December 12, the U.S. District Court for the Southern District of California denied a motion for class certification by a putative class of Spanish-speaking borrowers in a suit brought against payday lenders. Stone v. Advance America, Cash Advance Centers, Inc., No. 08-1549, 2011 WL 6151636 (S.D. Cal. Dec. 12, 2011). Plaintiffs allege, among other things, that the lenders violated the California Deferred Deposit Transaction Law by failing to disclose borrower rights and written loan agreements in Spanish, the language that the borrowers allegedly principally used during loan negotiations. Relying on the U.S. Supreme Court's decision earlier this year in Wal-Mart v. Dukes, 131 S. Ct. 241 (2011), the district court held that the proposed class does not satisfy the commonality element required to certify a class of plaintiffs under Federal Rule of Civil Procedure 23(a)(1)(2). The court found that the dissimilarities in the proposed class "'impeded the generation of common answers'" because evaluating whether Spanish was principally used would require determining on a case-by-case basis each potential class member's use of Spanish during the loan process. The court concluded that such an inquiry is necessarily fact intensive and not conducive to class treatment.