Clean Energy Homeowners Seek En Banc Review of Class Certification Denial

Woolley v. Ygrene Energy Fund, Inc.

Summary: A group of borrowers who claim they were misled by terms of clean energy loans were denied class certification for failure to show they had actually viewed various versions of the company’s contracts and alleged misrepresentations. A three-panel judge affirmed, and the borrowers now seek en banc review.

Key Takeaway: In fraud actions, satisfying the required element of predominant commonality poses a major hurdle to class certification because of differences among the putative class on issues of what representations were made to or received by a given class member, and the extent to which the class members relied on the purported misrepresentations. While reliance is easier to establish where the purported class members were exposed to massive and pervasive advertising campaigns (In re Tobacco II Cases, 46 Cal.4th 298 (2009)), the plaintiffs must define the class to include only members who were exposed to such misleading advertising, or, in the absence of a pervasive marketing campaign, the plaintiffs must demonstrate that the alleged misrepresentations affected their decision to enter into the loan contract.


In a California putative class action, Woolley v. Ygrene Energy Fund, Inc., a group of homeowners sued Ygrene Energy for violations of consumer protection statutes and fraud relating to Property Assessed Clean Energy (“PACE”) loans that finance environmental upgrades. The plaintiffs claim Ygrene Energy misrepresented that the loans would attach to their properties, and failed to reveal that the loans would have to be repaid when a property was sold or refinanced.

Plaintiffs’ proposed classes include all persons in California who entered into a PACE loan originated and/or financed by Ygrene Energy and paid a penalty or fee. Woolley v. Ygrene Energy Fund, Inc., No. 20-16608, 2021 WL 4690971, at *1 (9th Cir. Oct. 7, 2021). Citing variations in the company’s marketing materials, the District Court found no evidence of uniform representations, or class-wide exposure or actual reliance, and accordingly, denied class certification.

The Ninth Circuit three-judge panel affirmed, stating even the named plaintiffs had not shown that they had read their loan contracts, let alone reliance on a class-wide basis. The Court rejected the borrowers’ argument that they did not need to show that all putative class members relied on misleading ads and contracts before taking out the loans. “Where there is no indication that awareness of the written contract terms necessarily did or would have impacted Plaintiffs’ decision to enter into the contract, Plaintiffs cannot establish actual reliance on a class-wide basis.” Id. at 2.

Plaintiffs’ request for en banc review is pending.

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