Author - Alunda Edmonds

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.