## Facts

- Midland National Life Insurance Company marketed fixed annuities to senior citizens in Hawaii through independent brokers from 2001 to 2005.
- Plaintiffs alleged Midland used deceptive marketing by promoting annuities as suitable for seniors.
- The claims centered on standardized written brochures and marketing materials, not individualized oral statements by brokers.
- Plaintiffs brought a putative class action under Hawaii’s Unfair and Deceptive Practices Act, Haw. Rev. Stat. § 480-2.
- The district court denied Rule 23(b)(3) class certification, reasoning § 480-2 required each class member to prove subjective, individualized reliance on the alleged deception.

## Issues

1. Whether claims under Haw. Rev. Stat. § 480-2 require proof of individualized, subjective reliance.
2. Whether the district court erred under Rule 23(b)(3) by denying certification on the ground that individual reliance issues defeated predominance and superiority where the alleged deception was in standardized brochures.

## Decision

- The Ninth Circuit vacated the order denying class certification and remanded.
- The court held that Haw. Rev. Stat. § 480-2 does not require individualized, subjective reliance.
- The district court applied the wrong legal standard by treating reliance as an element of the § 480-2 claim for purposes of Rule 23(b)(3).
- Because the alleged deception was contained in standardized written marketing materials, the central liability question was common and amenable to class-wide resolution.

## Legal Principles

- Under Haw. Rev. Stat. § 480-2, liability turns on whether the challenged practice is likely to mislead consumers acting reasonably under the circumstances; proof of actual deception or individualized reliance is not required.
- A federal court assessing Rule 23(b)(3) predominance may not impose an individualized reliance requirement when the governing state consumer-protection statute uses an objective “capacity to deceive” standard.
- When deception is alleged in uniform written marketing materials, the question whether the materials are deceptive to a reasonable consumer is typically a common issue supporting predominance as to liability.

## Conclusion

The Ninth Circuit concluded that Hawaii’s consumer-protection statute applies an objective reasonable-consumer standard and does not demand individualized proof of reliance, so the district court’s reliance-based denial of class certification rested on legal error and had to be vacated and remanded.


Yokoyama v. Midland Nat'l Life Ins. Co., 594 F.3d 1087 (9th Cir. 2010)