Bobadilla v. Loan Factory, Inc.

Plaintiff contends the purpose and effect of this practice was to inflate the apparent size of Loan Factory’s sales force and to harvest search-engine traffic from consumers looking for particular officers by name, diverting that traffic to Loan Factory.

Plaintiff Bobadilla is a California-licensed mortgage loan officer, and he alleges he discovered his name and photograph on Loan Factory’s website without his consent. Another loan officer, Alan Eidinger, attests to a virtually identical experience in that he searched his own name on Google and found his Loan Factory profile ranked above his own website. Loan Factory has produced a list identifying at least 7,490 putative class members by name and contact information.

Defendant Loan Factory disputes the factual basis of the motion. (Opposition, pp. 10:22–15:10.) It contends that the profile pages were dynamically generated rather than static; that there is no reliable proof that consumers ever viewed the individual profiles or that search engines crawled and indexed them; and that much of the apparent web traffic reflects non-human “bot” activity, including sessions of zero-to-two seconds’ duration and sessions originating outside the United States. Loan Factory further contends the officers’ circumstances differ because some may have consented, some may have benefited from the exposure, and some suffered no harm.

Loan Factory argues that neither liability nor injury can be resolved on a class-wide basis. The parties have submitted competing expert declarations on the search-engine indexing questions: Bill Hartzer for Plaintiff; Dr. McDonald for Loan Factory. Plaintiff has also submitted an expert declaration (Kevin Herzberg) on the damages issue.

II. Requests for Judicial Notice and Evidentiary Objections

A. Plaintiff’s Request for Judicial Notice

Plaintiff seeks judicial notice of two items pertaining to the legislative history of Civil Code section 3344: Exhibit 18 (the 1971 enactment: Statutes 1971, Chapter 1595, Assembly Bill 826); and Exhibit 19 (the 1984 amendment: Statutes 1984, Chapter 1704, Senate Bill 613). Defendant does not oppose the request. These are proper subjects of judicial notice under Evidence Code section 452(c) as official acts of the Legislature. (City of Rocklin v. Legacy Family Adventures-Rocklin, LLC (2022) 86 Cal.App.5th 713, 732–733, fn. 8; X.M. v. Superior Court (2021) 68 Cal.App.5th 1014, 1026, fn. 3; Miller v. Collectors Universe, Inc. (2008) 159 Cal.App.4th 988, 999, 1002– 1004.)

Nevertheless, while the Court takes judicial notice of the existence and content of these official legislative-history documents, it does not take judicial notice of the truth of any disputed factual assertions, hearsay statements, or argumentative characterizations contain therein, and the weight given to them regarding legislative intent remains for the Court. (See Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Cal.App.4th 26, 30; Rose v. County of San Benito (2022) 77 Cal.App.5th 688, 717–718.) Accordingly, Plaintiff’s request for judicial notice is GRANTED, subject to the limitations set forth above.

B. Defendant’s Objections to Class-Certification Evidence (Nos. 1–20)

Defendant interposes various objections to the following declarations submitted by Plaintiff in support of the motion for class certification: Declaration of Douglas L. Johnson (“Johnson Decl.”) (Nos. 1 –3); Declaration of Alan Eidinger (“Eidinger Decl.”) (Nos. 4–6); Declaration of Bill Hartzer (“Hartzer Decl.”) (Nos. 7–8); Declaration of Derek Bobadilla (“Bobadilla Decl.”) (Nos. 9–13); Declaration of Kevin Herzberg (“Herzberg Decl.”) (Nos. 14– 20).

1. Hearsay (Nos. 1 –3, 10)

These objections are OVERRULED IN PART and SUSTAINED IN PART. They are OVERRULED to the extent that the Court considers the subject statements as part of its classcertification analysis as evidence that the challenged conduct was experienced uniformly across the putative class. They are SUSTAINED to the extent the statements in question are offered for their truth, which would be inadmissible hearsay, and the Court does not rely on them for that purpose.

2. Foundation/Personal Knowledge (Nos. 4–6, 9, 11–13)

These objections are OVERRULED IN PART and SUSTAINED IN PART. They are OVERRULED to the extent that the challenged statements describe what the declarant personally observed and are within the declarant’s own professional experience. They are SUSTAINED to the extent that they characterize Loan Factory’s knowledge and intent and assert specific licensing or regulatory consequences (Eidinger Decl., ¶¶ 5, 7; Bobadilla Decl., ¶¶ 6–7.)

3. Expert Basis and Qualification (Nos. 7–8, 14)

These objections are OVERRULED. Hartzer is adequately qualified in search-engine optimization and web analytics, and Herzberg is adequately qualified in damages calculations and methodology. The asserted deficiencies in the basis for the opinions go to their weight rather than their admissibility.

4. Improper Legal Opinion (Nos. 15–20)

These objections are OVERRULED IN PART and SUSTAINED IN PART. They are OVERRULED to the extent the challenged paragraphs of the Herzberg Declaration describe a fair-market value and unjust-enrichment damages methodology, which the Court considers solely as to question of whether damages may be calculated on a class-wide basis. They are SUSTAINED to the extent of Herzberg’s opinions on ultimate legal conclusions, which are reserved to the Court, including: that Loan Factory was required to pay fair market value; that class members suffered a common injury, and that Loan Factory’s conduct exposed class members to violations of the law.

C. Objections to the Supplemental Declaration of Bill Hartzer (Nos. 1–5)

Loan Factory objects to five paragraphs of the Supplemental Declaration of Bill Hartzer (“Supp. Hartzer Decl.”), submitted with the reply, on the grounds of foundation, lack of personal knowledge, insufficient basis, and as a “sham” declaration under Vatalaro v. County of Sacramento (2022) 79 Cal.App.5th 367, 381, and Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087–1089. The Court is not persuaded. The supplemental declaration is proper reply evidence because it responds directly to contentions Loan Factory made in opposition, namely, that the profile pages were dynamically generated, that there is no proof consumers viewed them, and that the traffic was bot driven.

New evidence offered in reply is permissible when it fills in gaps created by the opposition. (RGC Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc. (2020) 56 Cal.App.5th 413, 431; Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1538.) Further, the sham-affidavit doctrine does not apply here because Hartzer is a non-party expert, this not a summary judgment motion, and the supplemental declaration does not directly contradict his deposition testimony but rather draws further inferences from analytics data.

The Court appropriately discounts Hartzer’s opinions based on his testimony that Google’s algorithms are unknown, finding that such limitations go to the weight rather than the admissibility of his opinions. Accordingly, the objections are OVERRULED.

III.

Legal Standard

California Code of Civil Procedure section 382 authorizes certification of a class “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court ... .” The certification question is essentially a procedural one that does not ask whether an action is legally or factually meritorious. A trial court ruling on a certification motion determines whether the issues which may be jointly tried, when compared with those requiring separate adjudication, are so numerous or substantial that the maintenance of a class action would be advantageous to the judicial process and to the litigants. (Sav-On Drug Stores, Inc. v.

Superior Court (2004) 34 Cal.4th 319, 326 (Sav-On), internal punctuation and citations omitted.) The movant “has the burden to establish the existence of both an ascertainable class and a well-defined community of interest among class members.” (Ibid.)

IV.

Discussion

Plaintiff moves to certify a class defined as: “All California-licensed loan officers whose names and images were used by Loan Factory, as part of its “Find a Loan Officer” webpage, without their consent.” (Notice of Motion and Motion, p. 1.)

As the moving party, Plaintiff has the burden to demonstrate the following: (A) an ascertainable class; (B) a well-defined community of interest; and (C) substantial benefits of class litigation. (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021.)

A. Ascertainable Class

A class is ascertainable “when it is defined in terms of objective characteristics and common transactional facts that make the ultimate identification of class members possible when that identification becomes necessary.” (Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 955, 980.) Plaintiff contends the proposed class is objectively ascertainable and sufficiently numerous. (Memorandum, pp. 7:16 –8:14.) Loan Factory argues the class is not ascertainable or sufficiently numerous because there are too many variations regarding whether and under what circumstances the profile for any loan officer was displayed on its website. (Opposition, pp. 21:27 –22:24.)

Here, the proposed class is ascertainable because it is defined by objective criteria and membership can be determined from Loan Factory’s own records. Indeed, Loan Factory does not dispute that it has already produced a list of at least 7,490 loan officers. This is plainly a numerous amount, and joinder of so many individuals would be impracticable. The “without their consent” qualifier does not render the class an impermissible “fail-safe” or require a merits determination to define membership.

The class is defined by the objective criteria of the use of each officer’s name and image on the page. Consent is an affirmative fact capable of proof, and there is no evidence that any unaffiliated officers consented to the use of their name and image on Loan Factory’s website. While it is possible that a small number of officers may have consented, that is a question for the merits or for claims administration rather than an obstacle to the ascertainability requirement. (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 915 [“ascertainability can better be achieved by defining the class in terms of objective characteristics and common transactional facts making the ultimate identification of class members possible when that identification becomes necessary. [¶] ...A class is still ascertainable even if the definition pleads ultimate facts or conclusions of law”].)

Accordingly, Plaintiff meets his burden as to ascertainability.

B. Community of Interest

The “community of interest” requirement encompasses three factors: (1) predominant questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. (Sav-On, supra, 34 Cal.4th at p. 326.)

1. Predominant Questions of Law or Fact

“As a general rule if the defendant’s liability can be determined by facts common to all members of the class, a class will be certified even if the members must individually prove their damages.” (Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908, 916, citation omitted.) “In order to determine whether common questions of fact predominate the trial court must examine the issues framed by the pleadings and the law applicable to the causes of action alleged.” (Ibid.) The answer hinges on “whether the theory of recovery advanced by the proponents of certification is, as an analytical matter, likely to prove amenable to class treatment.” (Sav-On, supra, 34 Cal.4th at p. 327.)

Plaintiff contends common questions of law and fact predominate because there is common evidence that Loan Factory intended to use the class members’ identities uniformly and commercially and because the class members were injured in similar manner. (Memorandum, pp. 8:15–18:19.) Loan Factory argues that common questions of law and fact do not predominate because individual issues predominate regarding proof of commercial use and proof of injury. (Opposition, pp. 15:26–21:26.)

i. Commercial Use

Plaintiff alleges both statutory misappropriation (Civil Code, § 3344) and misappropriation at common law (Orthopedic Systems, Inc. v. Schlein (2011) 202 Cal.App.4th 529, 544). The central “commercial use” question is whether Loan Factory’s alleged misappropriation is common to every class member and answerable with common proof. Plaintiff contends there is common evidence that Loan Factory intended to use class members’ identities uniformly and commercially. (Memorandum, pp. 9:11–10:18.) Plaintiff contends that Loan Factory and its expert have admitted that the motive behind the “Find a Loan Officer” feature was to use class members’ identities to help Loan Factory improve its search-engine optimization, and further, that such efforts were successful.

Loan Factory contends there are individualized issues as to whether commercial use exists. (Opposition, pp. 6:27–7:22.) It argues that Plaintiff has not provided any evidence that the profiles contained false statements, teasers about other products, comparative advertising, or that the “Find a Loan Officer” was the primary means by which customers made purchasing decisions. Loan Factory contends that it cannot be liable under a commercial use theory merely for housing a database of public professional profile information that potentially could be accessed even if the profile were never displayed to a consumer or user.

Here, the commercial use question is a common question yielding a common answer because Loan Factory used all the profiles in the same way, for the same purpose, on the same part of the same website, and pursuant to the same course of conduct. Whether the use of the Loan Factory’s website resulted in some profiles being “displayed” more than others is not material to this question because Loan Factory published the profiles uniformly when its “Find a Loan Officer” website went live. As the court observed in Nolen v.

PeopleConnect, Inc. (N.D. Cal., June 30, 2023) 2023 U.S. Dist. LEXIS 113630 at *8: “The internet is not Schrödinger’s cat, only existing once it has been seen. Webpages do not rest up in the ether until a viewer’s click jolts them into being; rather, a webpage is published once it is publicly accessible. [Citations.]” Whether Loan Factory’s uniform course of conduct constitutes an actionable commercial use will be answered identically for all members. Loan Factory’s emphasis on individualized issues, including the precise visibility of any given profile, the extent of any class member’s awareness or subjective harm, or minor variations in commercial impact, do not defeat predominance.

To the extent such issues are not subsumed within the common liability determination, they are suitable for individualized damages proceedings after class-wide liability is established. The commercial character of the use is fixed by Loan Factory’s purpose and the nature of the website are both issues common to the class. The parties’ debate regarding online-directory authorities (e.g., Ambrozewicz v. 6Sense Insights, Inc. (N.D. Cal. 2025) 804 F.Supp.3d 1026; Ridgeway v. Spokeo, Inc. (C.D. Cal. 2023) 697 F.Supp.3d 979; Vrdolyak v.

Avvo, Inc. (N.D. Ill. 2016) 206 F.Supp.3d 1384) sets forth a common issue on the merits and does not convert the central liability question into an individualized one.

ii. Injury

Loan Factory contends that individual issues predominate regarding proof of injury. (Opposition, pp. 19:4–20:23.) It argues that both statutory and common law misappropriation theories require proof of injury, and that any such injury is inherently individualized, and proof will require mini trials because some officers may have benefited from the exposure, some may have suffered reputational harm, and some may have suffered no harm. Loan Factory points to a number of authorities in arguing that injury under Civil Code section 3344 must be shown on a person-by-person basis, including the following: Miller, supra, 159 Cal.App.4th 988, 1002; Block v.

Major League Baseball (1998) 65 Cal.App.4th 538; Alberghetti v. Corbis Corp. (C.D. Cal. 2010) 263 F.R.D. 571; Bennett v. Regents of University of California (2005) 133 Cal.App.4th 347; In re Vioxx Class Cases (2009) 180 Cal.App.4th 116; Fairfield v. American Photocopy Equipment Co. (1955) 138 Cal.App.2d 82, 86–87; Cohen v. Facebook, Inc. (N.D. Cal. 2011) 798 F.Supp.2d 1090; and Perkins v. LinkedIn Corp. (N.D. Cal. 2014) 53 F.Supp.3d 1222.

According to Loan Factory, it is well established by both California and federal authority that emotional distress claims are individualized and incompatible with class certification. (Opposition, pp. 20:5–21:26.) Loan Factory states that California courts have found that the injury underlying a Section 3344 claim premised on emotional or psychological harm is mental and subjective by its nature. Loan factory also argues the harm being alleged by Plaintiff with respect to potential licensure violations is speculative. Loan Factory maintains that Plaintiff cannot show through common facts and law that the class members suffered injury.

Plaintiff sets forth three theories in arguing that he has met his burden of showing that injury is susceptible to common proof. (Memorandum, pp. 10:19–18:19.) First, Plaintiff argues that Section 3344 entitled a prevailing plaintiff to the greater of actual damages or a statutory minimum of $750 and that emotional injury is not required to recovery such statutory damages. (Id. at pp. 10:19–12:7.) Second, Plaintiff sets forth a theory that damages are recoverable based on the class members’ loss of the right to control the use of their identity. (Id. at pp. 12:2–15:1.) Finally, Plaintiff articulates an unjust-enrichment theory, arguing that the value that Loan Factory derived from using the officers’ identities can be calculated classwide through a common methodology. (Id. at pp. 16:2–18:14.)

Here, the Court finds Plaintiff’s arguments more persuasive. Regarding Plaintiff’s first theory, if Loan Factory is liable under section 3344, every class member is entitled to at least $750 without individualized proof of actual harm, and that liability turns on the common course of conduct. Authorities holding that such injury is “individualized” largely concern actual or emotional damages, not the statutory floor; the statutory minimum exists to fill the gap for noncelebrity plaintiffs whose names lack established market value and whose harm is difficult to quantify. (Fraley v.

Facebook, Inc. (N.D. Cal. 2011) 830 F.Supp.2d 785, 807 [section 3344 “can be read to presume” injury, particularly as to the statutory minimum]; Miller, supra, 159 Cal.App.4th at pp. 995, 1002.) Loan Factory’s application of Miller is misguided. Miller limited a single plaintiff to a single $750 award where his one name appeared on many certificates – a single-cause-of-action holding. Here each of the 7,490 members is a different person whose distinct identity was used; Miller supports rather than defeats common treatment here because it confirms that each class member holds a section 3344 claim.

Regarding Plaintiff’s loss-of-control and unjust-enrichment theories, whether these theories ultimately prevail is a merits question not resolved here. In sum, the common questions identified by the parties with respect to the instant motion include: (1) whether Loan Factory engaged in a uniform practice of “scraping” and using class members’ names and images on its website; (2) whether such use was “knowing” and without consent; (3) whether such use was for purposes of advertising, selling, or soliciting the purchase of Loan Factory’s service (“commercial use”); and (4) whether and how injury may be established on class-wide basis.

For the reasons discussed above, the Court finds that these questions are common to the entire class and can be resolved through class-wide argument and evidence.

2. Typicality and Adequacy of Representation

“The typicality requirement’s purpose is to assure that the interest of the named representative aligns with the interests of the class.” (Martinez v. Joe’s Crab Shack Holdings (2014) 231 Cal.App.4th 362, 375, internal quotations and citations omitted.) “Although the questions whether a plaintiff has claims typical of the class and will be able to adequately represent the class are related, they are not synonymous.” (Ibid.) “The adequacy of representation component of the community of interest requirement for class certification comes into play when the party opposing certification brings forth evidence indicating widespread antagonism to the class suit.” (Ibid., internal quotation omitted.)

Plaintiff attests he is willing and able to prosecute this action, and Plaintiff’s attorneys maintain they have adequate experience. (Memorandum, pp. 18:20–19:21.) Plaintiff asserts that there is no meaningful dispute that his claims are typical of the class and that Loan Factory has not raised a conflict or unique defense that would challenge typicality or adequacy. In opposition, Loan Factory contends that Plaintiff is not typical of the class or adequate because discovery has shown that he was “drafted” by his employer to by class representative by his employer, NEXA, a Loan Factory competitor. (Opposition, pp. 22:25– 24:2.)

Loan Factory states that the class action is part of an anti-competitive effort by NEXA and that Plaintiff faces questions as to whether he is informed about the case and adequately representing other class members. Loan Factory further argues that adequacy is not met because Plaintiff’s counsel may be more interested in harming Loan Factory than in obtaining the best relief for the class. (Id. at pp. 10:5–15.)

Here, Plaintiff Bobadilla’s claim is typical of the proposed class. His name and photograph were used on the same pages, in the same manner, for the same purpose, as those of the other members, and he asserts the same legal theories. Typicality requires only that the representative’s claims arise from the same course of conduct and rest on the same legal theory. It does not require identical claims or damages. Loan Factory’s contention that Bobadilla is atypical because a competing brokerage encouraged his suit, or because his individual damages differ, does not defeat typicality: the source of a plaintiff’s motivation to sue does not change whether his legal claim is typical, and differences in damages is not a bar to certification.

Loan Factory raises stronger arguments regarding adequacy: that NEXA is controlling the litigation and Plaintiff is disengaged from and unfamiliar with the case. Nevertheless, there is no evidence that NEXA is controlling the litigation or that its interests diverge in any from the class’s interests in maximizing recovery. Plaintiff is not required to be closely involved with the litigation, and Loan Factory raises no serious concern that Plaintiff has interests antagonistic to the class. Accordingly, the typicality and adequacy factors are satisfied.

C. Superiority of Class Treatment

“[A] class action should not be certified unless substantial benefits accrue both to litigants and the courts... .” (Basurco v. 21st Century Ins. (2003) 108 Cal.App.4th 110, 120, internal quotation marks omitted.) The question is whether a class action would be superior to individual lawsuits. (Ibid.) “Thus, even if questions of law or fact predominate, the lack of superiority provides an alternative ground to deny class certification.” (Ibid.) Generally, “a class action is proper where it provides small claimants with a method of obtaining redress and when numerous parties suffer injury of insufficient size to warrant individual action.” (Id. at pp. 120–121, internal quotation marks omitted.)

Plaintiff contends a class action is superior to individual actions because of the large class size (over 7,000) and because of the limited number of core disputes. (Memorandum, pp. 19:22–20:19.) Plaintiff also argues there is a risk of inconsistency in damage awards arising from the same conduct, a result disfavored by courts. Loan Factory again asserts that the class action was really brought by its competitor and not to protect class interests. (Opposition, p. 24:3–25.)

In this case, class treatment is superior to the alternatives. The class includes at least 7,490 individuals, many of whom hold a claim worth little more than the $750 statutory minimum and a share of any disgorged profit. Because claims of this value are not economically feasible to pursue individually, Loan Factory’s alleged conduct would likely go unreviewed without a class action. On the other hand, if many of the individual class members do decide to pursue the claims, this could drain judicial resources and potentially result in inconsistent rulings.

The common questions (including commercial use, knowing use, consent, and a class-wide damages methodology) can be tried once for the entire class, conserving judicial resources and avoiding inconsistent results. The manageability concerns raised by Loan Factory that are not merits questions can be resolved through claim forms and a damages model. Accordingly, the superiority requirement is satisfied.

V.

Conclusion

For the reasons stated, the Court tentatively rules as follows:

1. Plaintiff’s motion for class certification is GRANTED.

2. Pursuant to Code of Civil Procedure section 382, the Court certifies the following Class: “All California-licensed loan officers whose names and images were used by Loan Factory, Inc. as part of its ‘Find a Loan Officer’ webpage, without their consent.”

3. Plaintiff Derek Daniel Bobadilla is appointed as representative of the Class.

4. Pursuant to California Rules of Court, rule 3.764, Johnson & Johnson, LLP and Pearson Warshaw, LLP are appointed co-lead Class Counsel.

5. Loan Factory’s evidentiary objections to Plaintiff’s class certification evidence, Nos. 1–20, are OVERRULED IN PART and SUSTAINED IN PART, as set forth above. Loan Factory’s objections to the Supplemental Declaration of Bill Hartzer, Nos. 1–5, are OVERRULED as set forth above.

6. Counsel shall meet and confer, and within 30 days of the entry of the order, shall submit a proposed plan for class notice under California Rules of Court, rules 3.766 and 3.767, together with a proposed trial plan which addresses the damages theories and the management of any individualized issues.

Plaintiff shall prepare the order in accordance with California Rules of Court, rule 3.1312.

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