Van v. LLR, Inc. et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
KATIE VAN, individually and on
behalf of all others similarly situated,
Plaintiff,
vs.
LLR, INC., d/b/a LuLaRoe; and
LULAROE, LLC,
Defendants.
Case No. 3:18-cv-00197-JMK
ORDER REGARDING CLASS
CERTIFICATION
At Docket 167, Plaintiff Katie Van, individually and on behalf of others
similarly 	situated, 	files 	a 	Renewed 	and 	Amended 	Motion 	for 	Class 	Certification.
Defendants LLR, Inc., and LuLaRoe, LLC (collectively “LLR”), respond in opposition at
Docket 176. 	Ms. Van then, at Docket 190, objected to evidence proffered in support of
LLR’s opposition. 	The Court took the motion under advisement after hearing oral
argument on November 14, 2023.
As explained below, the Court DENIES Ms. Van’s Motion for Class
Certification.
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I. 	BACKGROUND
A. 	Factual Background
LLR is a multi-level marketing company that sells clothing to purchasers
across the United States through “independent fashion retailers” located in all fifty states.1
These 	retailers 	purchase 	LLR 	products 	wholesale 	and 	later 	sell 	those 	products 	to
consumers.2 	Retailers manage most aspects of their businesses, including ordering,
inventory, advertising, marketing, pricing, invoicing, shipping, and returns.3
In 2014, LLR, through a software developer, created a customized “point of
sale” system called “Audrey” to collect sales taxes for retailers, among other things.4 In
2015, LLR introduced Audrey to retailers and began collecting and remitting sales taxes
on their behalf.5 However, Audrey did not allow sales taxes to be assessed based on the
location where retailers shipped merchandise in interstate sales.6 Rather, Audrey was only
capable of assessing sales taxes based on the taxing jurisdiction that corresponded with a
retailer’s address.7
In response to this flaw, LLR installed a toggle switch in Audrey which
retailers could engage to override the system’s tax calculation and charge a different
amount or no tax at all.8 Nonetheless, by 2016, LLR concluded that Audrey had proved
1 Docket 108-1 at ¶ 3.
2 See Docket 96-2 at 5–6; Docket 108-1 at ¶ 3.
3 Docket 108-1 at ¶ 5.
4 Id. at ¶ 9.
5 Id.; Docket 108-2 at ¶ 3.
6 Docket 108-1 at ¶ 11.
7 Id.
8 Id. at ¶ 12.
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unworkable for collecting sales taxes on inter-jurisdictional sales and took steps to address
the issue, including implementing a new tax policy for its retailers.9 The policy informed
retailers that Audrey would collect sales taxes from consumers based on the location of the
retailer.10
Ultimately, LLR also 	concluded that Audrey could not be fixed and
developed a new system called “Bless,” which it launched in January 2017.11 	Retailers
transitioned to Bless by May 2017, and LLR disabled Audrey.12
From Audrey’s introduction in April 2015 until Bless was fully implemented
in May 2017, every transaction processed using Audrey charged sales tax based on the
location of the retailer making the sale.13 	As a result, Alaskans who purchased LLR
products from retailers located outside Alaska were systematically charged a sales tax that
they did not owe.
During this period, consumers questioned the tax or complained about its
application to retailers.14 	Retailers often explained LLR’s interim tax policy and
consumers nonetheless decided to purchase LLR products.15 Additionally, some retailers
responded to inquiries about the improper sales tax by providing offsetting discounts on
9 Id. at ¶¶ 13–16.
10 Docket 96-10.
11 Docket 108-1 at ¶ 17.
12 Id. at ¶¶ 17–18.
13 Id. at ¶ 18.
14 Docket 108-2 at ¶ 9.
15 Docket 108-21 at 18–19; Docket 176-7 at 4–6; Docket 176-9 at 4–6; Docket 176-10 at
4; Docket 176-11 at 4–5; Docket 176-12 at 4–5; Docket 176-13 at 4; Docket 176-14 at 4;
Docket 176-15 at 4; Docket 176-16 at 5–6.
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the price of merchandise, free shipping, free products, credit on future purchases, or
vouchers.16
Beginning in June 2016, LLR analyzed and identified transactions in which
consumers were charged a tax not owed in their jurisdictions, including transactions
involving consumers in Alaska.17 Then, beginning in March 2017, LLR issued refunds of
erroneously assessed sales taxes.18 LLR continued to review transactions and issue sales
tax refunds for all transactions that occurred until Audrey was disabled on May 31, 2017.19
B. 	Procedural History
In 2018, Ms. Van initiated this suit on behalf of a putative class of 10,606
Alaskans who made 72,373 separate purchases from LLR retailers in which a sales tax was
improperly assessed. In an amended complaint, she alleged two causes of action: one for
violation of the Alaska Unfair Trade Practices and Consumer Protection Act, and one for
conversion and misappropriation.20
This case has twice been appealed to the Ninth Circuit Court of Appeals. In
the first appeal (“Van I”), the panel reversed the district court’s order dismissing the case
for lack of jurisdiction.21 It held that “the temporary loss of use of one’s money constitutes
16 E.g., Docket 176-7 at 4–6 (discounts, credit, and vouchers); Docket 176-9 at 4–5
(discounts noted on invoices when consumers asked for discounts or when the retailer offered on
their own); Docket 176-10 at 5 (same); Docket 176-11 at 5 (discounts, free shipping, or free
merchandise); Docket 176-12 at 5 (discounts, free shipping, free merchandise, or promotional
codes); Docket 176-13 at 4–5 (discounts or free shipping).
17 Docket 108-2 at ¶¶ 16–22.
18 Id. at ¶ 23.
19 Id. at ¶ 24–27.
20 Docket 4.
21 Van v. LLR, Inc., 962 F.3d 1160 (9th Cir. 2020) (Van I).
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an injury in fact for purposes of Article III” standing, reversed the district court’s dismissal
order, and remanded for further proceedings.22
Following further proceedings on remand, Judge Holland certified a class.23
LLR appealed the certification order.24 On the second appeal (“Van II”), the Ninth Circuit
addressed three issues: 	whether (1) class members who suffered small injuries lacked
standing; (2) class certification should be reversed because some class members voluntarily
paid the sales tax; and (3) class certification should be reversed because some retailers
offset the tax via individual discounts.25
With respect to the first question, the panel held that “[a]ny monetary loss,
even one as small as a fraction of a cent, is sufficient to support standing” and that “the
presence of class members who suffered only a fraction of a cent of harm does not create
individualized issues that could predominate over class issues.”26
With respect to the second question, the panel acknowledged that “[i]t is
questionable whether a purchaser’s voluntary payment of an improperly charged sales tax
is a defense . . . to a UTPCPA [Unfair Trade Practices and Consumer Protection Act] claim
under Alaska law.”27 	Nonetheless, it assumed the defense was valid for the purpose of
argument and concluded that “LuLaRoe’s minimal proffers of evidence supporting this
defense were insufficient to raise individualized questions that could predominate over
22 Id. at 1164.
23 Docket 127.
24 Docket 131.
25 Van v. LLR, Inc., 61 F.4th 1053 (9th Cir. 2023) (Van II).
26 Id. at 1064.
27 Id. at 1066.
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common questions . . . .”28 Specifically, the panel held that invoices in the record reflected
that purchasers did not pay an improper tax at all and did not show that any class members
“knew of the sales tax and then paid it.”29 Furthermore, the panel found that declarations
from LLR retailers did “not state with certainty that any member of this Alaska class was
informed of the nature of the improper sales tax, was not provided a discount, and paid the
sales tax nonetheless.”30
Finally, the panel held that the district court was obliged to determine
whether 	common 	questions 	predominated 	over 	individualized 	questions 	related 	to
individual discounts. 	LLR provided 18 declarations that demonstrated that retailers
provided discounts to purchasers to offset the improper tax.31 	This evidence sufficed to
substantiate that individualized issues existed regarding standing and “ascertainable loss”
and should have triggered the district court to determine “whether a class-member-by-
class-member assessment of the individualized issue will be unnecessary or workable.”32
The panel therefore concluded that “the district court clearly erred in its
assessment of whether the individualized issues generated by the retailer discounts—some
of which were provided to offset the improper sales tax—defeat the predominance of class
issues.”33 It then vacated the district court’s order certifying the class and remanded “[t]o
28 Id.
29 Id.
30 Id. at 1068.
31 Id. at 1068 n.13.
32 Id. at 1069.
33 Id. at 1058.
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afford the district court a new opportunity to weigh the predominance of class issues
against this individualized issue . . . .”34
Judge Christen also filed a partial concurrence in which she concluded the
court lacked appellate jurisdiction to consider the “voluntary payment” defense as the
district court had decided the issue in an order striking the defense prior to certification.35
Moreover, in a footnote, she expressed serious doubts as to whether such a defense exists
under Alaska law.36
II. 	LEGAL STANDARD
Before certifying a class, a court must conduct a “rigorous analysis” and
“probe behind the pleadings” to determine if plaintiffs have carried their burden of
establishing that the proposed class action meets the requirements of Rule 23.37 	“This
rigorous analysis requires judging the persuasiveness of the evidence presented for and
against certification.”38 “Courts must resolve all factual and legal disputes relevant to class
certification, even if doing so overlaps with the merits.”39
34 Id.
35 Id. at 1070.
36 Id. at 1070 n.1 (“There is no indication that the voluntary payment doctrine has ever
been applied in a case involving the Alaska UTPCPA, and as far as I can tell, no other state that
has adopted this uniform code has recognized the voluntary payment doctrine as a defense.”).
37 Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350–51 (2011); Wang v. Chinese Daily
News, Inc., 737 F.3d 538, 543–44 (9th Cir. 2013).
38 Olean Wholesale Grocery Cooperative, Inc. v. Bumble Bee Foods LLC, 993 F.3d 774,
784 (9th Cir. 2021) (internal citation and quotation marks omitted).
39 Id.
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The party seeking class certification bears the burden of showing that they
have met the four requirements of Rule 23(a) and that their class action may be maintained
as one of the types of such actions defined in Rule 23(b).40
In a “predominance” class action under Rule 23(b)(3), a plaintiff must
demonstrate that six prerequisites under Rule 23 are met: (1) the class is so numerous that
joinder of all members is impracticable (“numerosity”); (2) there are questions of law or
fact common to the class (“commonality”); (3) the claims or defenses of the representative
parties are typical of the claims or defenses of the class (“typicality”); (4) the representative
parties will fairly and adequately protect 	the interests of 	the class (“adequacy 	of
representation”); (5) common questions of law or fact predominate over any questions
affecting only individual members (“predominance”); and (6) the class-action mechanism
is 	“superior 	to 	other 	available 	methods 	for 	fairly 	and 	efficiently 	adjudicating 	the
controversy” 	(“superiority”).41 	In 	a 	Rule 	23(b)(3) 	class 	action, 	“Rule 	23(a)(2)’s
‘commonality’ requirement is subsumed under, or superseded by, the more stringent
Rule 23(b)(3) requirement that questions common to the class ‘predominate over’ other
questions.”42
At the class certification stage, a district court’s consideration of whether a
plaintiff has met the requirements for certification “should not be limited to only admissible
40 Zinser v. Accufix Research Institute, Inc., 253 F.3d 1180, 1186 (9th Cir. 2001), opinion
amended on denial of reh’g, 273 F.3d 1266 (9th Cir. 2001).
41 Fed. R. Civ. P. 23(a), (b)(3); Zinser, 253 F.3d at 1186.
42 Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 609 (1997).
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evidence.”43 	“When conducting its ‘rigorous analysis’ into whether the Rule 23(a)
requirements 	are 	met, 	the 	district 	court 	need 	not 	dispense 	with 	the 	standards 	of
admissibility entirely.”44 	“Instead, an inquiry into the evidence’s ultimate admissibility
should go to the weight that evidence is given at the class certification stage.”45
III. 	DISCUSSION
A. 	Ms. Van’s Evidentiary Objections
As a preliminary matter, the Court must address several objections Ms. Van
raises to evidence adduced in support of LLR’s opposition to class certification. Ms. Van
argues that declarations produced in support of LLR’s opposition to class certification
should be given limited weight.
At this stage, the Court may consider evidence in connection with class
certification, 	even if 	it ultimately may 	not 	be admissible. 	“[E]vidence’s ultimate
admissibility should go to the weight that evidence is given at the class certification
stage.”46
As explained below, the evidentiary objections Ms. Van raises do not sway
the Court’s decision regarding class certification.
1. 	The retailer declarations deserve weight in the Court’s class certification
analysis
Ms. Van argues that the declarations of LLR retailers submitted in support
of LLR’s opposition to class certification (“the retailer declarations”) are generic, lack
43 Sali v. Corona Reg’l Med. Ctr., 909 F.3d 996, 1005 (9th Cir. 2018).
44 Id. at 1006.
45 Id.
46 Id. at 1005.
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personal knowledge, and do not address specific sales to any Alaska customer.47 	She
highlights that many of the retailers, during depositions, could not identify specific
transaction in Alaska for which they provided a discount.48 Furthermore, she asserts that
the declarations are “boilerplate” and thus warrant skeptical treatment.49
LLR responds that the Retailer declarations are not speculative and do not
suffer from a lack of personal knowledge as they are based on each retailer’s experience
selling to Alaska customers.50 It also asserts that the fact that retailers do not recall specific
details regarding their transactions with Alaska customers reinforces its contention that
individualized inquiry that will be required to identify those who received discounts and
those who did not.51 Moreover, LLR insists that the retailer declarations are not boilerplate
or “cookie-cutter” and that their similarity reinforces that the provision of discounts was
widespread.52
The Court finds the retailer declarations at issue are based on personal
knowledge and are not speculative. 	Each retailer declaration addresses the declarant’s
experience managing their LLR sales and includes assertions that the retailer made sales to
customers in Alaska in particular. In at least one case, a retailer knew that they had made
sales in Alaska because they had previously lived in the state and made sales to members
47 Docket 190 at 6–9.
48 Docket 201 (SEALED) at 4.
49 Docket 190 at 6.
50 Docket 197 at 9.
51 Id. at 10.
52 Id. at 13.
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of their previous community.53 In another, the retailer sold in all 50 states.54 Thus, while
some of the declarations are framed generally, it is clear that the declarants made sales to
Alaska customers. Furthermore, it is understandable that the declarants could not identify
specific transactions involving Alaska customers as the sales at issue constituted a few
among many and took place years prior to their depositions.
The retailer declarations are not boilerplate or “cookie cutter” in a way that
fundamentally undercuts their reliability. That the declarations are similarly structured and
use similar language suggests that they are litigation driven. 	But this Court need not
indulge the fiction that a declarant’s statements are the organic product of an uninterested
party. The declarations are not unreliable or unhelpful for purposes of class certification
because they were drafted for the purpose of litigation. At bottom, the declarations point
to inconsistent, idiosyncratic practices among LLR retailers when providing discounts to
Alaska customers. Although the declarations may be taken with a grain of salt, this basic
point is sufficiently substantiated.
2. 	The retailer declarations are not replete with hearsay
Ms. Van further argues that the retailers’ assertions related to their prior
communications with Alaska consumers and other retailers are inadmissible hearsay.55
LLR replies that any statements made concerning communications between the retailers
53 See Docket 176-9 at ¶ 5.
54 See Docket 176-11 at ¶ 2.
55 Docket 190 at 8.
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and putative class members are statements of a party opponent under Federal Rule of
Evidence 801(d)(2).56
The Ninth Circuit has not adopted “a blanket rule of admissibility for the
statements of absent class members pursuant to Fed. R. Evid. 801(d)(2)(A).”57 	“Absent
class members are considered ‘parties for some purposes and not for others,’” so whether
their statements constitute those of a party opponent depends on the context in which those
statements are made.58 	When a putative or absent class member’s statement is obtained
within a process with “adequate strictures . . . to ensure that the requirements of Fed. R.
Evid. 801 were met,” those statements are treated as those of a party opponent.59 In Pierce,
the Court found there were adequate strictures to treat the statements of an absent class
member as those of a party opponent because there was notice to counsel, disclosure of the
nature of the suit, and counsel’s presence when the statements were taken.60
Here, the putative class members’ statements are not those of a party
opponent as they were made prior to litigation and without any strictures like those that
existed in Pierce.
However, the retailer declarations are not replete with hearsay as the Alaska
customer statements referenced are not needed for their truth. The Court is concerned with
the retailers’ conduct—namely, whether retailers provided discounts—rather than whether
56 Docket 197 at 15.
57 Pierce v. Cnty. of Orange, 526 F.3d 1190, 1202 n.9 (9th Cir. 2008).
58 See id. (quoting Devlin v. Scardelletti, 536 U.S. 1, 10 (2002)).
59 Id.
60 Id.
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Alaska customers inquired about the tax or requested a discount. These are ancillary issues
which are not relevant to the Court’s predominance inquiry.
3. 	The retailer declarations do not contain inadmissible habit or routine
evidence
Ms. Van also argues that the declarations are not admissible as evidence of
habit or routine business practices.61 	LLR responds that it does not proffer these
declarations as evidence of habit or routine business practices, but rather to generally show
what types of discounts retailers applied to offset the improper tax.62
LLR need not show the provision of discounts was a habit or a routine
business practice under Federal Rule of Evidence 406. 	Rule 406 provides that of “a
person’s habit or an organizations routine practice may be admitted to prove that on a
particular occasion the person or organization acted in accordance with the habit or routine
practice.”63 	LLR’s retailer declarations are not proffered for the purpose of proving that
an individual retailer acted in accordance with a habit or practice on any particular
occasion.
4. 	Jaime Ellis’s supplemental declaration is entitled to some weight
Additionally, Ms. Van argues that the supplemental declaration of LLR
Representative Jaime Ellis lacks personal knowledge and is speculative.64 	In her view,
Mr. Ellis’s assertions regarding the discounts provided by retailers to Alaskans cannot be
based on his personal knowledge because the discounts were given by independent LLR
61 Docket 190 at 5.
62 Docket 197 at 11.
63 Fed. R. Evid. 406.
64 Docket 190 at 9.
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retailers and not the result of any LLR practice.65 LLR responds that Mr. Ellis has shown
personal 	knowledge 	in 	his 	declaration 	and 	that 	Ms. 	Van 	had 	not 	identified 	any
contradictory evidence or basis to conclude that Mr. Ellis’s declaration is unreliable.66
Mr. Ellis’s supplemental declaration purports to provide a wider view of the
putative class and the range of discounts that LLR retailers applied to transactions
involving putative class members.67 In part, it seeks to correct a prior declaration in which
Mr. Ellis indicated that there were approximately 13,680 transactions with retailers in
Alaska where a retailer provided a discount.68 In his supplemental declaration, Mr. Ellis
clarifies that this number was inaccurate because it only identified transactions where a
discount was noted on the invoice.69
Mr. Ellis’s supplemental declaration deserves weight. 	The Court need not
consider Mr. Ellis’s characterization of the types of discounts retailers offered, as that
information is adequately expressed in other declarations.
5. 	The 	collateral 	source 	benefits 	rule 	does 	not 	preclude 	LLR 	from
introducing evidence of offsetting discounts
Ms. Van argues that discounts that offset sales taxes for Alaska customers
constitute gratuitous benefits and evidence of these offsets may not be admitted under
Alaska’s collateral source benefit rule.70 	LLR responds that Ms. Van misapplies the
collateral source rule, which it asserts is a post-verdict procedure for reducing a damages
65 Id.
66 Docket 197 at 20.
67 See Docket 176-2.
68 Docket 176-2 at ¶ 4 (discussing Mr. Ellis’s prior declaration at Docket 108-2).
69 Id. at ¶¶ 4–6.
70 Docket 190 at 7–8.
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award where a plaintiff has received a collateral source benefit for the same injury that is
the basis of their suit and is inapplicable.71
Alaska’s common law collateral source benefits rule provides that “damages
may not be diminished or mitigated on account of payments received by plaintiff from a
source other than the defendant.”72 “Evidence of payments from collateral sources is thus
generally excluded at trial as more prejudicial than probative” and this “exclusion is based
on the assumption that if the jury knows that the plaintiff has been or will be compensated
for the injuries by someone other than the defendant, this information will more likely than
not influence the jury against the plaintiff on the issues of liability and damages.”73
Alaska statute modifies this common law rule and creates a “post-verdict
procedure for reducing a damage award if the plaintiff has received amounts ‘as
compensation for the same injury from collateral sources that do not have a right of
subrogation by law or contract.’”74 Notwithstanding this procedure, a defendant may not
introduce evidence of “gratuitous benefits provided to the claimant.”75
The collateral source benefits rule is inapplicable. LLR seeks to introduce
evidence of discounts LLR retailers provided to putative class members because a discount
that offsets erroneously assessed taxes may vitiate an individual class member’s standing
to assert a claim for violation of the UTPCPA.76 	In turn, the presence of individualized
71 Docket 197 at 6–7.
72 Beaulieu v. Elliott, 434 P.2d 665, 673 (Alaska 1967).
73 Weston v. AKHappytime, LLC, 445 P.3d 1015, 1021 (Alaska 2019) (internal quotations
and citations omitted).
74 Id. (quoting Alaska Stat. § 09.17.070(a)).
75 Alaska Stat. § 09.17.070(d)(3).
76 See Van II, 61 F.4th at 1068 n.12.
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issues of standing may bear on whether common issues predominate such that the Court
may certify a class. 	The evidence of discounts is not proffered to diminish or mitigate
damages, but to demonstrate that many individual class members may lack standing and
that the court will need to assess standing on a class-member-by-class-member basis.
Furthermore, the evidence will not be introduced to a jury as the Court will
assess standing as a threshold matter. 	At this stage, there is no risk that a jury will be
influenced. 	Accordingly, it is not appropriate to limit the weight accorded to the retailer
declarations on this basis.
B. 	Ms. Van’s Motion for Class Certification
Having considered Ms. Van’s evidentiary objections, the Court turns to the
issue of class certification. Ms. Van requests that the Court certify a class of:
All persons who, on at least one occasion, paid a “tax” on a
purchase of LuLaRoe products and: 	(1) had no discount
identified 	on 	the 	transaction; 	and 	(2) 	had 	the 	purchase
delivered to a location in Alaska that does not assess sales or
use tax on such purchase.
Here, the Court focuses its analysis on the “predominance” inquiry required by
Rule 23(b)(3). 	The Court previously found that the four Rule 23(a) requirements are
present in this case and that the class action mechanism was superior to other methods of
adjudication.77 	The 	Ninth 	Circuit 	did 	not 	disturb 	the 	reasoning 	underlying 	those
conclusions and the parties did not raise them in briefing this motion. Therefore, for the
reasons explained in the Court’s prior certification order, these requirements are met. The
77 Docket 127 at 13–29.
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remaining issue is whether common questions of law or fact predominate over any
questions affecting only individual members in Ms. Van’s proposed class.
As Ms. Van laid out in her prior motion for class certification, several
questions of law and fact are common to all putative class members: 	whether (1) LLR
charged them a tax, whether this tax was authorized by law; (2) this conduct was unfair,
deceptive, or likely to deceive consumers; and (3) they are entitled to damages under the
UTPCPA.78 	In her renewed motion, Ms. Van argues that an amended class should be
certified, as the proposed class definition ensures that she and other class members will
only recover UTPCPA damages for transactions in which there was an improper tax
charged and no discount that could have offset the tax.79
LLR responds that individualized issues predominate over the common
issues and preclude class certification.80 Specifically, LLR argues that the Court will need
to individually assess whether putative class members who received discounts that offset
the tax suffered “ascertainable loss” or have Article III standing.81 	Furthermore, LLR
asserts that individualized inquiry will be required to determine whether individual class
members knew of the tax and chose to pay it anyway, eliminating the causal connection
between LLR’s acts and class members’ alleged loss.82
78 See Docket 97 at 11; see also Docket 167-1 at 6 (explicitly incorporating these
arguments).
79 Docket 167-1 at 6–8.
80 Docket 176 at 20–30.
81 Id. at 22–27.
82 Id. at 27–30.
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At the class certification stage, the party seeking certification bears the
burden of proving that class issues predominate over individualized issues, though they
“need not rebut every individualized issue that could possibly be raised.”83 	They must
“demonstrate by a preponderance of the evidence that a common question of law or fact
exists—an issue that is capable of class-wide resolution.”84 “If the plaintiff demonstrates
that class issues exist, the defendant must invoke individualized issues and provide
sufficient evidence that the individualized issues bar recovery on at least some claims, thus
raising the spectre of class-member-by-class-member adjudication of the issue.”85 “If the
defendant provides evidence that a valid defense—affirmative or otherwise—will bar
recovery on some claims, then the district court must determine, based on the particular
facts of the case, ‘whether individualized questions . . . will overwhelm common ones and
render class certification inappropriate under Rule 23(b)(3).’”86
Ultimately, “[p]redominance is not . . . a matter of nose-counting. 	Rather,
more important questions apt to drive the resolution of the litigation are given more weight
in the predominance analysis over individualized questions which are of considerably less
significance to the claims of the class.”87 	“Therefore, even if just one common question
83 Van II, 61 F.4th at 1066 (citing Olean Wholesale Grocery Cooperative, Inc. v. Bumble
Bee Foods LLC, 31 F.4th 651, 664–65 (9th Cir. 2022) (en banc)).
84 Id. at 1066–67.
85 Id. at 1067 (citing True Health Chiropractic, Inc. v. McKesson Corp., 896 F.3d 923,
932 (9th Cir. 2018)).
86 Id. (quoting Olean Wholesale Grocery Cooperative, Inc., 31 F.4th at 669).
87 Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1134 (9th Cir. 2016) (internal citation
omitted).
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predominates, the action may be considered proper under Rule 23(b)(3) even though other
important matters will have to be tried separately.”88
Although Ms. Van has demonstrated that common questions of law and fact
are capable of class-wide resolution, the existence of individualized questions of Article III
standing 	counsels 	that 	certification 	of 	the 	amended 	class 	Ms. 	Van 	proposes 	is
inappropriate.
1. 	Ms. Van demonstrates that common questions of fact and law exist
Ms. Van has demonstrated that class issues exist. In the Court’s prior order
certifying a class, it found that whether LLR committed an unfair trade practice, whether
its conduct took place in commerce, whether Ms. Van and the proposed class suffered a
loss of money, and how many transactions were the subject of LLR’s conduct were issues
of fact and law that “do not require individual proof, but rather, are subject to proof by
common evidence as to LLR’s operation of its Audrey POS system.”89 This remains true.
2. 	LLR raises the spectre of class-member-by-class-member adjudication
For its part, LLR produced sufficient evidence to show that there are
individualized 	issues 	with 	respect 	to 	Article 	III 	standing 	and 	the 	existence 	of 	an
“ascertainable loss” for purposes of the UTPCPA. Rather, LLR’s evidence demonstrates
that 	there 	is 	a 	risk 	that 	these 	issues 	will 	require 	class-member-by-class-member
adjudication.
88 In re Hyundai & Kia Fuel Econ. Litig., 926 F.3d 539, 557 (9th Cir. 2019) (internal
citations and quotations omitted).
89 Docket 127 at 17–18.
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In Van II, the Ninth Circuit held that LLR’s 18 retailer declarations “invoked
an individualized issue—that retailer discounts left some class members uninjured—and
provided evidence that at least some class members lack meritorious claims because of this
issue, thus summoning the spectre of class-member-by-class-member adjudication.”90 	It
then instructed the Court that it “must determine whether the plaintiff has proven by a
preponderance of the evidence that the questions of law or fact common to class members
predominate over any questions affecting only individual members—that is, whether a
class-member-by-class-member assessment of the individualized issue will be unnecessary
or workable.”91
On remand, LLR strengthened its showing with respect to the discount issue
by submitting more specific retailer declarations.92 	These declarations substantiate that
retailers who sold LLR products to Alaska customers applied discounts and gave other
benefits that they intended to offset an improper tax. Moreover, the retailers’ declarations
show that they did so in several different ways that were not consistently recorded on
customer invoices.
90 Van II, 61 F.4th at 1069.
91 Id.
92 See Docket 176-7; Docket 176-9; Docket 176-10; Docket 176-11; Docket 176-12;
Docket 176-13; Docket 176-14; Docket 176-15; Docket 176-16.
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3. 	The 	presence 	of 	discounts 	that 	may 	vitiate 	standing 	requires
individualized inquiries that will overwhelm the common questions
The potential application of individual discounts that eliminate Article III
standing for putative class members will require individualized inquiry and precludes the
certification of the amended class sought here.93
It remains an open question whether a class representative must demonstrate
that all putative class members have standing before a class may be certified.94 However,
“[e]very class member must have Article III standing in order to recover individual
damages.”95 As such, “[w]hen individualized questions relate to the injury status of class
members, Rule 23(b)(3) requires that the court determine whether individualized inquiries
about such matters would predominate over common questions.”96 “Rule 23 . . . requires
a district court to determine whether individualized inquiries into this standing issue would
predominate over common questions.”97
The Van II panel noted “[b]oth parties and the district court agree that any
class member who received a discount in an amount greater than or equal to the improper
sales tax for the purpose of offsetting the improper sales tax has no claim against
93 The Court addresses the Article III standing issue and does not discuss “ascertainable
loss” for the purposes of the UTPCPA because this issue was not substantively briefed. However,
the inquiries are likely similar as the UTPCPA permits civil actions when “[a] person who suffers
an ascertainable loss of money or property as a result of another person’s act or practice declared
unlawful by AS 45.50.471 . . . .” Alaska Stat. § 45.50.531(a).
94 See TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2208 (2021) (emphasis in original)
(“We do not here address the distinct question whether every class member must demonstrate
standing before a court certifies a class.”).
95 Id. at 2208.
96 Olean Wholesale Grocery Cooperative, Inc., 31 F.4th at 668.
97 Id. at 668 n.12.
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LuLaRoe.”98 But it further indicated in a footnote that “the district court may be required
to address this issue on remand.”99 	In particular, it suggested that the district court may
need to decide whether putative class members who received a discount to offset the
improperly assessed sales tax have suffered a loss or injury sufficient to support Article III
standing.100
In Transunion, the U.S. Supreme Court made clear that although a plaintiff
may have a statutory cause of action to sue a defendant over a violation of law, they must
also have suffered a concrete harm to satisfy the injury-in-fact prong of the Article III
standing inquiry. “[U]nder Article III, an injury in law is not an injury in fact.”101 “Only
those plaintiffs who have been concretely harmed by a defendant’s statutory violation may
sue that private defendant over that violation in federal court.”102
Putative class members who paid an improper sales tax, but received a
discount in an amount equal to or greater than the tax did not suffer any injury in fact. The
Transunion court recognized that “certain harms readily qualify as concrete injuries under
Article III” and that “[t]he most obvious are traditional tangible harms, such as physical
harms and monetary harms.”103 	And the Ninth Circuit has already instructed this Court
that Ms. Van “suffered a cognizable and concrete injury: the loss of a significant amount
98 Van II, 61 F.4th at 1068.
99 Id. at 1068 n.12.
100 Id.
101 TransUnion, 141 S. Ct. at 2205.
102 Id.
103 Id. at 2204.
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of money (over $500) for a substantial amount of time (months with respect to some
purchases, over a year with respect to others).”104
However, some class members were charged an improper sales tax but were
given a discount in at least the amount of the tax. They therefore paid no more to purchase
LLR products than they otherwise would have. As a result, they did not suffer the monetary
harm contemplated here: 	the loss of the use of their money until the tax was later
refunded.105
Some putative class members did not receive discounts, but received other
benefits that retailers intended to offset the improper assessed tax. 	LLR submits
declarations from retailers indicating that some provided free shipping, free products, credit
on future purchases, or vouchers to customers who were assessed a sales tax they did not
owe. 	It is not clear whether purchasers who received these benefits suffered a monetary
harm or some other injury sufficient to constitute Article III standing. 	In cases where a
retailer offset the tax by providing free shipping, a purchaser did not spend any more money
than they otherwise would have in purchasing LLR products and therefore did not suffer a
temporary loss of the use of their money.
On the other hand, the Court cannot say with certainty that a purchaser who
received a benefit like a voucher, a promotional code, or free products did not temporarily
lose the use of the money they paid to cover the improper tax, even if they received a
104 Van I, 962 F.3d at 1162.
105 See id. at 1162–65 (indicating Ms. Van’s standing is based on the loss of the use of her
money).
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benefit of equal or greater value. 	In those cases, an individual who received a non-
monetary benefit, like free merchandise, or a monetary benefit that could only be applied
to future purchases, like a voucher, did temporarily lose the use of the money they paid to
cover the improper tax. As such, they may have standing.
Adjudicating these individual questions of standing is necessary and “apt to
drive 	the 	resolution 	of 	the 	litigation.”106 	The 	standing 	inquiry 	is 	a 	compulsory,
jurisdictional analysis that the trial court must undertake and that may be dispositive in
many 	cases. 	Ultimately, 	identifying 	class 	members 	who 	lack 	standing 	requires
individualized analysis and “will overwhelm common [questions] and render class
certification inappropriate under Rule 23(b)(3).’”107
As the retailer declarations show, putative class members received discounts
that could vitiate standing in several different ways. 	Crucially, discounts were not
consistently reflected on invoices or provided in the same ways to all customers. 	As a
result, there appears to be no means of common proof that would allow LLR to litigate
whether an individual class member has standing and may recover damages. Instead, LLR
would need to take testimony from each putative class member and potentially the retailer
from whom they made their LLR purchase to determine whether an offsetting discount had
been applied. 	Similar testimony would be required to identify those cases in which a
purchaser received free shipping and then determine whether this was provided to offset
106 Torres v. Mercer Canyons Inc., 835 F.3d 1125, 1134 (9th Cir. 2016) (internal citation
omitted).
107 Olean Wholesale Grocery Cooperative, Inc., 31 F.4th at 669.
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the tax or was given for an independent reason. 	The evidence required to conduct this
individualized analysis would dwarf that required to adjudicate common questions in this
case.108
District courts have declined to certify classes in similar circumstances. For
example, in True Health Chiropractic, Inc. v. McKesson Corporation, 896 F.3d 923 (9th
Cir. 2018), the Ninth Circuit affirmed a district court’s denial of class certification with
respect a subclass of individuals who allegedly suffered violations of the Telephone
Consumer Protection Act. 	At issue was whether an affirmative defense—that class
members 	consented 	to 	receive 	communications 	that 	violated 	the 	TCPA—required
individualized analysis.109 Ultimately, the court found that class members who may have
consented to receive communications in individual communications with McKesson
representatives could not form a subclass because the defense would require individualized
analysis of putative class members’ communications and relationships with McKesson
representatives.110 	By contrast, other possible subclasses, such as members who had
consented in product registrations, could be formed because the defense was subject to
common proof.111
Here, as in McKesson, individualized analyses of communications and
relationships between LLR retailers and putative class members would be required to
108 Even assuming putative class members who received benefits like vouchers or free
merchandise had standing and did not need to be screened from the class, the magnitude of the
individual analysis required to determine whether discounts or free shipping eliminated individuals
from the class renders certification improper.
109 Id. at 932–33.
110 Id. at 933.
111 Id.
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adjudicate 	the 	standing 	defense 	to 	each 	class 	member’s 	claim. 	Accordingly, 	the
individualized question of standing predominates over the common questions of law and
fact Ms. Van identifies, rendering class certification impracticable.
4. 	Putative class members’ voluntary payment of the improper sales tax is
not an issue that requires individualized inquiry
LLR argues that a second question persists that demands individualized
analysis: whether Van and class members can prove any loss was caused by LLR’s conduct
because they paid the sales tax with full knowledge that it was an improper, out-of-state
sales tax.112 	Ms. Van insists that this Court has already ruled that this defense is
unavailable.113 	Failing that, Ms. Van argues that LLR’s voluntary payment argument
misconceives the UTPCPA’s objective standard and that LLR had not produced sufficient
evidence to show any individualized issue of voluntary payment.114
The Court has already ruled out the voluntary payment defense in this case.
It is therefore not an individualized issue that will bar recovery on the UTPCPA claims.
At Docket 94, the Court struck the voluntary payment defense and addressed it detail why
the defense cannot apply to UTPCPA claims.115 Further, in its order certifying a class at
Docket 127, the Court again rejected LLR’s “voluntary payment” argument because it was
“largely a recast of LLR’s voluntary payment defense (VPD), a defense the court has
previously considered and rejected as to plaintiff’s UTPCPA claim.”116 There, the Court
112 Docket 176 at 22.
113 Docket 200 (SEALED) at 16–17.
114 Id. at 17–18.
115 Docket 94 at 10–16.
116 Docket 127 at 22.
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noted its prior decision striking the defense at Docket 94 and that “neither intent nor actual
deception is necessary to show deception under the UTPCPA.”117 Ultimately, it held that
“whether any of the proposed class members knew that they should not have been paying
a sales tax on their LLR purchases but paid it anyway is not an individualized inquiry that
will need to be made.”118
Although this issue was addressed in LLR’s appeal and the Ninth Circuit’s
decision in Van II, the panel did not disturb the Court’s decision striking the voluntary
payment doctrine as a defense. Instead, the panel reasoned that, assuming, arguendo, that
the Court had erred, LLR had not provided sufficient evidence to show that this
individualized issue predominated over class issues.119 Indeed, at the outset, the appellate
court indicated that, on remand, the trial court was to address only one of the three issues
raised in the appeal. It wrote, “the district court clearly erred in its assessment of whether
the individualized issues generated by the retailer discounts—some of which were provided
to offset the improper sales tax—defeat the predominance of class issues.”120 	It then
vacated the class certification order and remanded “[t]o afford the district court a new
opportunity to weigh the predominance of class issues against this individualized issue
. . . .”121
117 Id.
118 Id.
119 Van II, 61 F.4th at 1066 (“[W]e need not delve into this murky area of state law. Even
assuming, arguendo, that such a defense is valid under Alaska law, applies to the UTPCPA, and
that the communications by some retailers were sufficient to make the defense applicable,
LuLaRoe’s minimal proffers of evidence supporting this defense were insufficient to raise
individualized questions that could predominate over the common questions raised by Van.”).
120 Id. at 1058.
121 Id. (emphasis added).
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As it did in its prior certification order, this Court refuses to indulge LLR’s
recast of an issue that has been litigated and decided. 	Having previously concluded that
LLR may not raise “voluntary payment” as a defense to its alleged violations of the
UTPCPA, the fact that some individual class members may have purchased LLR products
knowing that they were being assessed a tax that they did not owe is not an individualized
issue that defeats the predominance of class issues.
IV. 	CONCLUSION
Ms. Van’s Renewed Motion for Class Certification is DENIED.
IT IS SO ORDERED this 5th day of December, 2023, at Anchorage, Alaska.
/s/ Joshua M. Kindred
JOSHUA M. KINDRED
United States District Judge
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