In Re WorldCom, Inc.

OPINION REGARDING DEBTORS’ SUPPLEMENTAL OBJECTION TO, AND MOTION TO DENY CLASS CERTIFICATION OF, THAT PORTION OF PROOF OF CLAIM NUMBER 31079 THAT ASSERTS A CLAIM ON BEHALF OF PUTATIVE CLASS OR AS A PRIVATE ATTORNEY GENERAL UNDER CALIFORNIA LAW

I. Introduction

Paul Chiptoff (“Chiptoff’) filed a proof of claim (the “Proof of Claim”) on behalf of himself and a putative class (the “Class”) in the chapter 11 cases of the above-captioned debtors (collectively, the “Debtors,” ‘WorldCom,” or “MCI”). The Complaint alleges that MCI switched the class members (the “Members,” except when referred to individually which is hereinafter defined as the “Member”) and Chiptoffs long-distance telephone provider (“Provider,” or “Providers”) to MCI without their consent and knowledge, a practice that is referred to as slamming (“Slamming” or “Wrongful Switching,” when used in past tense “Slammed,” or “Wrongfully Switched”). Chiptoff seeks to represent all persons in the United States who suffered from MCI’s Slamming. In addition, in the Complaint, Chiptoff seeks relief as a private attorney general on behalf of himself and all consumers pursuant to California Business and Professions Code section 17200 et seq. (the “UCL” or “Section 17200”).

II. Background

On July 21, 2002 (the “Commencement Date”) and November 8, 2002, the Debtors commenced cases under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). By orders dated July 22, 2002 and November 12, 2002, the Debtors’ chapter 11 cases were consolidated for procedural purposes. By order dated October 29, 2002, the Court established January 23, 2003 as the deadline for the filing of proofs of claim against the Debtors (the “Bar Date”). By order dated October 31, 2003, the Court confirmed the Debtors’ Modified Second Amended Joint Plan of Reorganization (the “Plan”). On April 20, 2004, the Plan became effective (the “Effective Date”). Upon the Effective Date, WorldCom changed its name to MCI, Inc. On January 6, 2006, Verizon Communications, Inc. and MCI merged. Under the *590 merger agreement, MCI, Inc. merged with and into Eli Acquisition, LLC, as a direct, wholly owned subsidiary of Verizon Communications Inc. Eli Acquisition LLC, as the surviving entity, was immediately renamed MCI, LLC.

Chiptoff filed a motion to certify the Class (“Motion for California State Certification”) in the Superior Court of the State of California for Sonoma County (the “Superior Court”). In the proceeding seeking certification of the Class (the “Superior Court Proceeding”), there was an extensive exchange of discovery between Chip-toff and MCI. However, prior to discovery, MCI filed a motion in the Superior Court to strike all nationwide class references in the Complaint. The Superior Court denied the motion in September 2000. Subsequent to discovery 1 MCI filed a motion in the Superior Court for summary judgment or, alternatively, a motion for summary adjudication that Chiptoff was not damaged. 2 In November 2001, the Superi- or Court denied MCI’s motion for summary judgment and motion for summary adjudication.

The amended complaint (the “Complaint”) was filed in the Superior Court in November 2000. 3 Chiptoff seeks to represent a class for the period of “August 7, 1993 through the present” (the “Class Period”). 4 The Complaint describes the action as a “consumer fraud action.” While the Complaint includes causes of action predicated upon negligence and contains some broad allegations regarding negligence, 5 the specific allegations of negligence focus upon MCI’s failure to supervise its representatives or agents. However, the Complaint also includes a cause of action predicated upon negligent misrepresentation, alleging that “[MCI] knew or should have known that their representations were false, misleading and/or omitted to provide material information.” Compl. ¶ 51. 6 The Complaint alleges that MCI Slammed Chiptoff and the Members “by falsely and fraudulently changing their telecommunications service carrier to MCI” through misleading and/or fraudulent marketing (“Wrongful Marketing”) and that Chiptoff and the Members were not aware that their service was switched to MCI. 7 Compl. ¶ 35. (As discussed infra, Chiptoffs Claim is not based on the common facts and legal theories. Therefore, the Court finds that he is not a member of the Class.) As a result of MCI’s alleged misrepresentation, omission of material fact, fraud, or negli *591 gence (1) the Members were switched to MCI without the Member’s proper authorization (“Wrongful Selling”), or (2) individuals who were not authorized to make long-distance decisions on behalf of the Member (“Unauthorized Individuals”, except when referred to individually which is hereinafter defined as “Unauthorized Individual”) 8 consented to switch the Member’s Provider to MCI (“Unauthorized Switching”). 9 The Complaint further alleges that as part of MCI’s Wrongful Marketing, MCI mailed promotional checks to the class members that authorized the switching of their Providers to MCI upon cashing the checks (the “Checks,” except when referred to individually which is hereinafter defined as the “Check”). The Complaint alleges the Checks were misleading and/or were signed by Unauthorized Individuals. (The Complaint fails to allege how many or what portion of the Members were switched as result of Wrongful Marketing and the Unauthorized Switching.) In support of the existence of the Class, Chiptoff has identified databases maintained by the Debtors that listed the Members who complained of Slamming and the resolution of their complaints (whether MCI issued a refund to the Members).

The Complaint alleges that Chiptoffs long-distance service was switched twice without his knowledge, 10 once on August 24, 1996 (the “August Switch”), and again on November 25, 1996 (the “November Switch”), Chiptoff alleges that he first found out about the changes when he received his telephone bills. In the Complaint, Chiptoff denies signing any Checks for the two allegedly unauthorized switches. Moreover, Chiptoff alleges in the Complaint that he is currently paying Pacific Bell (“PAC Bell”), his local telephone provider, for the local and long-distance charges he incurred in the last months of 1996, including the amounts overcharged by MCI. Finally, Chiptoff avers in the Complaint that he and the Members have been forced to pay MCI or have had their credit status damaged or threatened. Based on the aforementioned, the Complaint contains six causes of action (i) fraud (the “Fraud Count”), (ii) fraudulent concealment (the “Fraudulent Concealment Count”), (iii) interference with business and contractual relations (the “Interference with Business and Contractual Relations Count,” or “Tortious Interference Count”), (iv) negligent misrepresentation (the “Negligent Misrepresentation Count”), (v) negligence (the “Negligence Count”), and (vi) unjust enrichment (the “Unjust Enrichment Count”). 11

*592 Chiptoff conducted extensive discovery-prior to filing the Claim. Chiptoff found that MCI’s database includes records of the Members who complained of Slamming and whether MCI issued a credit. 12 Additionally, Chiptoff alleges that MCI settled and entered into consent decrees with state and federal agencies and paid fines for the Wrongful Switching. Moreover, Chiptoff alleges from September 1995 through January 2000 MCI was required by the FCC to re-rate customers who complained of slamming if MCI could not verify authorization for the switch. Despite that requirement, Chiptoff alleges that MCI failed to re-rate customers, as demonstrated by MCI’s failure to re-rate his claim. 13 Chiptoff alleges that prior to 1995, the Slamming complaints were essentially not regulated. 14 Additionally, Chiptoff alleges that MCI has identified 200 employees who were engaged in Slamming and that Slamming generated a significant percentage of MCI’s sales. 15

Regarding Chiptoffs allegation that his phone service was switched without authorization twice, once on August 24, 1996 (the “August Switch”) and again on November 25, 1996 (the “November Switch”), the Debtors produced the Check signed by Chiptoff authorizing his switch to MCI. Chiptoff has not alleged the Check he signed was misleading. 16 Chiptoff avers that the Check produced by MCI authorized the change in service on July 19, 1996. 17 Chiptoff alleges that on August 7, 1996 he switched his service to an AT & T plan prior to the August Switch. 18 Howev *593 er, at the oral argument Chiptoff conceded that there is a question whether the August Switch was a result of Chiptoff signing the Check. Chiptoff maintains that even if the August Switch was authorized by his signing the Check, the November Switch was clearly unauthorized. MCI concedes that the November Switch was an error and that Chiptoff should have been re-rated for any overcharge that may have resulted from the November Switch. The Complaint alleges that MCI initially argued that both the August Switch and November Switch were the result of Chip-toff signing the Checks.

Before the Superior Court ruled on the Motion for California State Certification, the Superior Court Proceeding was stayed as a result of the Debtors’ filing for relief under Chapter 11 of the United States Bankruptcy Code on July 21, 2002. On January 23, 2003, Chiptoff filed the Claim purporting to represent the Class. On October 15, 2004, the Debtors objected to the Claim in the Debtors’ Seventy-Second Omnibus Objection to Proofs of Claims (the “Claim Objection”). Chiptoff filed the Response by Paul Chiptoff to the Debtors’ Objection to Proof of Claim Number 31079 and Cross Motion for Abstention (the “Response to Claim Objection”), dated January 4, 2005. The Debtors filed the Reorganized Debtors’ Supplemental Objection to, and Motion to Deny Class Certification of Paul Chiptoff, Proof of Claim Number 31079 (the “Debtors’ Supplemental Objection”), dated May 24, 2005. Chiptoff filed the Response by Paul Chiptoff to the Reorganized Debtors’ Supplemental Objection to, and Motion to Deny Class Certification of Proof of Claim Number 31079 (the “Response to Supplemental Objection”), dated July 22, 2005. Memoranda filed in the Superior Court were appended to the Response to Supplemental Objection (the “Superior Court Papers”). 19 On March 28, 2006, the Court denied Chip-toffs motion for abstention. On May 9, 2006, the Court heard the instant matter and took it under advisement.

Ill Discussion

The Debtors argue that Chiptoff failed to apply Rule 23 of the Federal Rules of Civil Procedure Rule (“Rule 23”), 20 incor *594 porated into the Bankruptcy Rules by Rule 7023 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), to the facts of the case. See In re Chateaugay Corp., 104 B.R. 626, 634 (S.D.N.Y.1989)(permitting class proof of claim pursuant to Rule 7023 of the Bankruptcy Rules). The Debtors assert that for certification Chiptoff relies on the Superior Court Papers that address the California Code of Civil Procedure and, as stated above, fails to address Rule 23. Chiptoff argues that the case was initially filed in the Superior Court and, as such, this proceeding is a California class action and California state laws should govern certification. Additionally, Chiptoff asserts that the arguments and cases in the Superior Court Papers are relevant to certification under Rule 23. Further, Chip-toff argues that the Debtors’ arguments to deny certification recycle arguments that the Superior Court rejected. Therefore, Chiptoff asserts that the Court should adopt the Superior Court’s rulings and deny Debtors’ Supplemental Objection.

A prerequisite for a class action claim to proceed is that the claim satisfies the requirements of Rule 23. 21 The Class was never certified in the Superior Court Proceeding. 22 Even if the Superior Court *595 certified the Class, the Court is not bound by that certification. 23

Regarding the Superior Court Papers, the Court considers the arguments and case law contained in those papers that are relevant to certification under Rule 23. The Court first addresses whether Chip-toff meets the requirements for a class representative under Rule 23. If Chiptoff fails to meet those requirements, class certification is not appropriate and it is not necessary to address the other Rule 23 requirements.

Prerequisites of Rule 23

Rule 23 provides:

(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Class requirements

“[Chiptoff] bears the burden of proving that [his] action satisfies all four prerequisites to a class action enumerated in Rule 23(a) and falls within one of the three categories of permissible class actions defined by Rule 23(b).” Luedke v. Delta Airlines, Inc., 155 B.R. 327, 329 (S.D.N.Y.1993).

Requirements for the Class Representative

The Court’s initial inquiry is whether Chiptoff is an appropriate representative. If Chiptoff is not an appropriate representative than “[i]t is not necessary for the court to continue its analysis of the remaining class certification requirements.” Walker v. Asea Brown Boveri, Inc., 214 F.R.D. 58, 66 (D.Conn.2003). “A finding that [Chiptoff is not a member of the Class or is] atypical will result in the dispositive conclusion that class certification is inappropriate in this case.” Newman v. RCN Telecom Servs., Inc., 238 F.R.D. 57, 63 (S.D.N.Y.2006). 24 Similarly, a finding that Chiptoff fails to meet the adequacy of representation requirement of Rule 23(a)(4) is dispositive that class certification is inappropriate and it is not necessary for the Court to reach the other requirements of Rule 23. 25 See Savino v. *596 Computer Credit, 173 F.R.D. 346, 357 (E.D.N.Y.1997) (declining to address the defendants other arguments in opposition to certification because named plaintiff failed to meet adequacy of representation requirement of Rule 23(a)(4)) ajfd in part, vacated on other grounds, 164 F.3d 81 (2d Cir.1998). Finally, “[t]he standing analysis in the context of a class action looks to the status of the named plaintiff, not the standing of unidentified class members. A named plaintiff may only represent absent class members if he personally has standing to litigate his own claim.” Salsitz v. Peltz, 210 F.R.D. 95, 99 (S.D.N.Y.2002). 26 If Chiptoff was not damaged by MCI, he lacks standing to represent the Class. Cent. States Southeast & Southwest Areas Health & Welfare Fund v. Merck-Medco Managed Care, L.L.C., 433 F.3d 181, 199 (2d Cir.2005). 27

*597 Requirements for the Class Representative

“The class-action suit is a procedural device for joining parties. It permits single-action litigation of multiple claims involving similar or identical questions of fact and law that arise from a common set of operative facts.” 5-23 Moore’s Federal Practice—Civil § 23.02 (citing Eyak Native Village v. Exxon Corp., 25 F.3d 773, 781 (9th Cir.1994)). “The class-action device was designed as an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Gen. Tel. Co. of the Southwest v. Falcon, 457 U.S. 147, 155, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)(internal citations omitted).

Regarding the named plaintiff, “the Supreme Court has held that if none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendant [..], none may seek relief on behalf of himself or any other member of the class.” Cent. States Southeast & Southwest Areas Health & Welfare Fund v. Merck-Medco Managed Care, L.L.C., 433 F.3d 181, 199 (2d Cir.2005)(quoting O’Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974))(internal citations omitted). “A named plaintiff cannot acquire standing to sue by bringing his action on behalf of others who suffered injury which would have afforded them standing had they been named plaintiffs; it bears repeating that a person cannot predicate standing on injury which he does not share. Standing cannot be acquired through the back door of a class action.” Id. (quoting Allee v. Medrano, 416 U.S. 802, 828-29, 94 S.Ct. 2191, 40 L.Ed.2d 566 (1974)).

“The commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiffs claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.” Falcon, 457 U.S. at 158, 102 S.Ct. 2364. Rule 23(a)(3) requires that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” Rule 23(a)(3). “Rule 23(a)(3) is satisfied when each class member’s claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant’s liability.” In re Drexel Burnham Lambert Group, 960 F.2d 285, 291 (2d Cir.1992).

“If a proposed class representative is subject to a defense that is unique to the representative and that could become a focus of the litigation, the class representative will not satisfy the adequacy-of-representation requirement.” 5-23 Moore’s Federal Practice-Civil § 23.25. 28 Similarly, “if the credibility or honesty of the class representatives threatens to become a focus of the litigation, the class representatives will be inadequate representatives.” Id.

Application of the Requirements for the Class Representative to Chiptoff

The Debtors argue that Chiptoffs claim *598 is unique from the Members’ claims. 29 Specifically, the Debtors argue that Chip-toffs claim is unique from the Members who never subscribed. 30 Chiptoff counters that his claim arises from the same conduct, MCI’s practice of allegedly switching the Members without their consent and, as a result, he and the Members were forced to pay higher telecommunications costs or their credit was damaged or threatened. Therefore, Chiptoff concludes that he and the Members share the same interest in proving the allegations in the Complaint.

As will be discussed in more detail infra, the application of the requirements for a named plaintiff to Chiptoff demonstrates that he is inappropriate as a named plaintiff. Chiptoff has the burden of proving that he meets the requirements of Rule 23. See Luedke v. Delta Airlines, Inc., 155 B.R. 327, 329 (S.D.N.Y.1993). Chiptoff has failed to demonstrate that the November Switch and the Members’ switches arose from the same course of events and entail similar questions of law. As a result, Chiptoff is not a member of the Class. Moreover, Chiptoff is subject to a unique defense that the November Switch was not the result of a pattern and practice of the alleged Slamming but rather the result of an error based upon a unique set of facts and circumstances.

Chiptoff as a Member of the Class

“The standard for meeting the Rule 23(a)(2) prerequisite is [..] there need only be a single issue common to all members of the class.” Becher v. Long Island Lighting Co., 164 F.R.D. 144, 150 (E.D.N.Y.1996). However, “[i]t is not every common question that will suffice, however; at a sufficiently abstract level of generalization, almost any set of claims can be said to display commonality.” Sprague v. General Motors Corp., 133 F.3d 388, 397 (6th Cir.1998) (en banc).

“The commonality and typicality requirement [..] serve as guideposts for determining whether [..] the named plaintiffs claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.” General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 158, 102 S.Ct. 2364, 72 L.Ed.2d 740, (1982). 31 “The commonality and typicality requirements tend to merge into one another, so that similar considerations animate analysis of Rules 23(a)(2) and (3).” Marisol A. ex rel. Forbes v. Giuliani 126 F.3d 372, 376 (2d Cir.l997)(citing Falcon, 457 U.S. at 157, 102 S.Ct. 2364; Rossini v. Ogilvy & Mather, Inc., 798 F.2d 590, 597 (2d Cir.1986)). “23(a)(3)’s typicality requirement is satisfied when each class member’s claim arises from the same course of events and each class member makes similar legal arguments to prove the defendant’s liability from the same course of events, and each class member makes similar legal arguments to prove the defendant’s liability.” In re Drexel Burnham Lambert Group, 960 F.2d 285, 291 (2d Cir.1992). 32

*599 As discussed, Chiptoffs arguments before the Court focused on the November Switch. However, the Court notes that the August Switch would not provide a basis for certification. Chiptoff has failed to meet his burden of demonstrating the August Switch is typical of the claims alleged by the Members. Moreover, Chiptoff has failed to meet his burden of demonstrating that he did not authorize the August Switch by cashing the Check or that the August Switch emanated from the marketing department. 33

Chiptoff alleges that he is a member of the Class. Chiptoff argues to meet the commonality requirement of Rule 23(a)(2), the Court is only required to find one common question and whether the Members’ switch was authorized is a question common to the entire Class. 34 Chip-toff asserts that MCI conceded that the November Switch was unauthorized. MCI argues that Chiptoffs claim is not a result of a pattern and practice of the alleged Slamming but rather the result of an acci *600 dent. 35 Prior to the November Switch, MCI alleges that he was a customer of MCI with a large unpaid bill. MCI further alleges that when Chiptoff called to change his long-distance telephone service from MCI to another Provider, his long-distance telephone service from MCI was already subject to be canceled because of his large unpaid bills. MCI alleges the “discontinuance was rescinded (although he never paid his bill) and the restoration of service inadvertently trumped the disconnect initiated as a result of [Chitptoff s] complaint.” MCI argues that Chiptoffs November Switch was not the result of the alleged “systematic pattern of slamming customers.” 36 Rather, MCI argues that the November Switch was due to internal miscommunications. Whether Chiptoff disputes the validity of the bills does not affect this analysis, Chiptoff does not dispute that MCI’s records reflected high-unpaid international toll charges. 37 MCI has demonstrated that the November Switch resulted from an action taken by the high toll department and was not part of an alleged systematic scheme to switch customers by the marketing department.

The Complaint alleges that the Member where Slammed as a result of MCI’s aggressive marketing and selling telephone service to consumers throughout the United States. Likewise, the Complaint alleges that it is consumer fraud action. (As discussed, the Negligent Misrepresentation Count includes conduct that was negligent and not fraudulent. However, that count is based on Wrongful Marketing.) While some of the language in the Complaint is broad enough to include switching not done through Wrongful Marketing, the specific allegations of how Members were switched details Wrongful Marketing. 38 Moreover in Debtors’ Supplemental Objection, MCI argues that the Complaint was based on marketing. Chip-toff never specifically denies that it was based on marketing in his subsequent pleadings or at the oral argument. While the Claim includes the Negligence Count, the Negligence Count focuses primarily on MCI’s failure to supervise employees. 39 *601 Finally, Chiptoff had the benefit of extensive discovery to determine whether the November Switch was the result of Wrongful Marketing. Based on the aforementioned, the Class is limited to consumers who suffered as a result of Wrongful Marketing. 40

In contrast, Chiptoffs claim was not the result of Wrongful Marketing or the result of an intentional action but rather the result of an accident. 41 All of the Complaints allegations contain boilerplate language referring to the “plaintiff [Chiptoff] and the members of the class.” Likewise, the pleadings allege that the November Switch was part of an alleged scheme. However, the specific factual allegations in the Complaint and the pleading demonstrate that the November Switch was not the result of Wrongful Marketing. Chiptoff denies authorizing the November Switch. He alleges that he was never contacted regarding the November Switch. However, he does not allege that an Unauthorized Individual switched him or that he was switched as a result of Wrongful Advertising. Chiptoff has exchanged extensive discovery with MCI and he has failed to allege that a particular marketing effort led to the November Switch or was the result of an intentional act by one of MCI’s agents or representatives. Chiptoff does not dispute MCI’s allegations that the November Switch was the result of an error. Additionally, as discussed infra, the Court finds that Chip-toff has failed to demonstrate that he overpaid for the service that he received from MCI and, as a result, that his payments did not unjustly enriched MCI. 42 Based on *602 the aforementioned, the Court finds that Chiptoff is not a Member of the Class.

A Class that includes Members who were switched irrespective of whether the Members were switched as a result of Wrongful Marketing and were switched accidentally has not been addressed in the Complaint or the pleadings. The Court notes that Chiptoff has failed to demonstrate how a class with such a diverse membership would meet the requirements of Rule 23. A claim based upon an accidental switch is significantly different than one based upon an intentional wrongdoing or a marketing program to switch consumers. For consumers alleging Wrongful Marketing, 43 MCI may be subject to strict liability and punitive damages. 44 Moreover, for such consumers MCI may lack the defense of waiver. Including such consumers in a class that is not predicated upon intentional wrongdoing unfairly prevents these consumers from collecting on a class-wide basis damages predicated upon being purposefully switched or a marketing program to switch customers. 45 More *603 over, Chiptoff has failed to demonstrate how a class with this diverse membership would be manageable. Based on the aforementioned, Chiptoff has failed to demonstrate that a class could be composed of consumers whose service was switched both through Wrongful Marketing and as the result of factual circumstances similar to the November Switch.

Further, Chiptoff s infirmities cannot be solved by the use of sub-classes. Regarding nationwide certification, Chiptoff argues that if the Court finds that some states do not allow for punitive damages the Court could use sub-classes to address those states. Here, Chiptoff serving as a named Plaintiff effectively limits the Members’ ability to collect punitive damages from the use of a class action.

The Court finds that Chiptoff is not a member of the Class and Chiptoff has failed to identify a class comprised of the Members and himself that meets the Rule 23 requirements for certification. 46

Subject to a Unique Defense

Chiptoff is subject to a unique defense that the November Switch was accidental and was not the result of a systematic marketing plan to switch customers. 47 “Regardless of whether the issue is framed in terms of the typicality of the representative’s claims, Rule 23(a)(3), Fed.R.Civ.P., or the adequacy of its representation, Rule 23(a)(4), Fed.R.Civ.P., there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.” Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir.1990)(internal citations omitted). ‘While it is settled that the mere existence of individualized factual questions with respect to the class representative’s claim will not bar class certification, class certification is inappropriate where a putative class representative is subject to unique defenses which threaten to become the focus of the litigation.” Baffa v. Donaldson, 222 F.3d 52, 59 (2d Cir.2000). 48 Chiptoff is subject to the defense that the November Switch was accidental and his claim arises from factual circumstances that are unique to Chip-toff. 49 As a result, Chiptoff fails to meet *604 the typicality requirement of Rule 23(a)(3). 50

Credibility

“To determine the adequacy of representation by class representatives, courts generally consider only those challenges to the personal characteristics of the class representatives that arise out of or touch on the prosecution of the class action litigation. Furthermore, some courts hold that the personal characteristics of class representatives are relevant only if a reasonable fact finder might focus on those characteristics to the detriment of absent class members.” 5-23 Moore’s Federal Practice-Civil § 23.25. “The fact that Savino offered differing accounts about the letters that form the very basis for his lawsuit surely would create serious concerns as to his credibility at any trial.” Savino v. Computer Credit, 164 F.3d 81, 87 (2d Cir.1998). Similarly, courts “deny certification where knowledge or credibility questions do not implicate a central issue but are particularly severe.” Harrison v. Great Springwaters of Am., Inc., 1997 WL 469996, at *7, 1997 U.S. Dist. LEXIS 23267, at *16-21 (E.D.N.Y.1997).

MCI argues that “[Chiptoff] has not been truthful in his pleadings put before the [Superior Court].” 51 In the Complaint Chiptoff alleges, “Chiptoff is presently paying off his outstanding balance with the local carrier under protest, including the amounts overcharged by MCI.” 52 Compl. ¶31. As a result, MCI alleges that it engaged in extensive discovery. Chiptoff mailed one payment, a money order for $40.00 to PAC Bell on August 7, 1997. MCI alleges that this Check was for local services. Regardless, of whether the payment was made to MCI, the Complaint was filed in November 2000, three years after Chiptoff made a single payment. At best, Chiptoffs allegation paying off his bill is misleading.

Chiptoffs allegation that he is paying off the amount overcharged by MCI raises questions regarding Chiptoffs credibility. However, these questions do not seem to of to a critical element in his cause of action. Kline v. Wolf, 702 F.2d 400, 403 (2d Cir.1983). A finding that Chiptoff exaggerated his alleged payment efforts to MCI 53 would not affect MCI’s liability for the Unauthorized Switch. It is not necessary for the Court to address whether the questions regarding Chiptoffs credibility are so severe that they preclude certification because the Court finds that Chiptoff is not a member of the Class and he is subject to unique defenses. As discussed above, the Court finds that Chiptoff fails to meet the requirements to be a class representative and he fails to meet the typicality requirement of Rule 23.

Damages

In order to be a proper representative, Chiptoff must be able to prove he *605 has standing to sue MCI. 54 Chiptoff argues that he was damaged as a result of his unauthorized switch. Chiptoff alleges that he made a partial payment to MCI for his long-distance service. Additionally, he alleges MCI sued him for recovery of the funds, he was reported to a credit-reporting agency because he refused to pay MCI’s inflated charges, 55 he received collection letters, MCI representatives threatened him, and his telephone service was disconnected. Finally, he alleges that after the commencement of the class action, MCI sent him a check for $476.85, 56 which he alleges represents the amount that he was overcharged by MCI. 57 Chip-toff argues that based on the aforementioned, the Superior Court found that there was a triable issue of fact whether he was damaged. 58

Chiptoff mailed a $40.00 payment to PAC Bell, which billed him for both the long-distance and local services. 59 Chip-toff conceded that other than this payment to MCI, he did not suffer any other out of pocket expenses as a result of MCI’s alleged Wrongful Switching. 60 Chiptoff alleges that the payment was earmarked for MCI and was paid in protest because MCI overcharged him. MCI disputes that the payment was earmarked for MCI. Even if the entire payment was earmarked for MCI, Chiptoff has failed to demonstrate that he was damaged as a result of making the payment. Chiptoff received long-distance services from MCI during the period that Chiptoff alleges that MCI was not authorized to provide long-distance service. During this period, Chiptoff would have been required to pay AT & T or a different Provider for the long-distance service that he received. Chiptoff has failed to demonstrate that his bill with AT & T or a different Provider would have been less than $40.00 with any portion of the PAC Bell payment that should be attributed to MCI. Moreover, it appears from the Complaint that the entire $40.00 did not go to MCI. Chiptoff alleges in the Complaint that he was paying off his local carrier. As this was the only payment Chiptoff made for his local and long-distance telephone services during the period, presumably part of the $40.00 payment went to pay PAC Bell for the local telephone services. As such, Chiptoff paid less than $40.00 for the long-distance services he received from MCI during this *606 period. 61 In order to prove he was damaged because he overpaid MCI, as stated above, Chiptoff bears the burden of proving that the amount he paid MCI was greater than the amount he would have paid AT & T or another Provider for the long-distance services that he received from MCI. 62 Chiptoff has failed to meet that burden. Based upon the aforementioned, Chiptoff has failed to establish that he suffered any pecuniary damages.

Chiptoff argues that his credit rating has been damaged as a result of MCI’s Wrongful Switching. 63 Chiptoff alleges that PAC Bell set up a collection account for the entire amount of Chiptoff s unpaid local and long-distance telephone bills. 64 Moreover, he alleges that he received mail from a collection agency. MCI argues that Chiptoff did not suffer any damage. MCI alleges that Chiptoff never actually saw a negative credit report and that he has not had difficulty obtaining credit. Even if Chiptoffs credit was damaged, Chiptoff has not demonstrated that MCI was the cause of the damage. PAC Bell demanded payment for its local service. PAC Bell warned Chiptoff that whatever his dispute with MCI regarding his long-distance service, he is still required to pay PAC Bell. Chiptoff ignored that demand. Chiptoff has failed to demonstrate that his failure to pay MCI caused PAC Bell to report his unpaid bill. Similarly, Chiptoff has failed to demonstrate that the collection letter was a result of his failure to pay whatever portion of the bill was attributable to MCI. 65

The determination of whether Chiptoff was damaged involves complex question of fact and law as to whether Chiptoff was damaged as a result of the November Switch. 66 It is not necessary to address *607 whether Chiptoff was damaged. 67 The Court finds that Chiptoff fails to meet the requirements to be a class representative and he fails to meet the typicality requirement of Rule 23. 68

IV. Private Attorney General

The Proof of Claim listed the basis for the claim as a class action complaint. Chiptoff attached the Complaint, which included the UCL allegations, to the Proof of Claim. Additionally, in the Complaint, Chiptoff seeks to serve as a private attorney general. Likewise, in the pleadings Chiptoff refers to the UCL allegations. The Court addresses the UCL allegations to the extent they are included in the Proof of Claim. “Proposition 64 amended certain provisions of the UCL and the false advertising law. As amended by Proposition 64, the UCL now authorizes the filing of an injunctive or restitutionary relief action only by [..] any person who has suffered injury in fact and has lost money or property as a result of such unfair competition. In addition, the UCL now authorizes a person to pursue a representative action only if he or she meets the class certification requirements of section 382 of the Code of Civil Procedure.” California Consumer Health Care Council v. Kaiser Foundation Health Plan, Inc., 142 Cal.App.4th 21, 33, 47 Cal.Rptr.3d 593 (Cal.Ct.App.2006). Proposition 64 amended the UCL after Chiptoff filed his suit. During the oral argument, Chiptoff stated that there were conflicting California appellate rulings whether Proposition 64 applies retroactively to Chiptoffs claim. Chiptoff argued that if the California Supreme Court rules that the requirement is not retroactive then the denial of class certification would not affect Chiptoffs ability to serve as a private attorney general. 69

Subsequent to the oral argument, “[the California Supreme Court in Californians for Disability Rights v. Mervyn’s, LLC 39 Cal.4th 223, 46 Cal.Rptr.3d 57, 138 P.3d 207 (2006)] held that UCL standing provisions apply to cases that were pending when Proposition 64 took effect.” California Consumer Health Care Council, 142 Cal.App.4th at 24, 47 Cal.Rptr.3d 593. Therefore, Chiptoff is required to meet the class certification requirements of California Code of Civil Procedure to serve as a private attorney general.

Section 17200 states

*608 As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500 [False or misleading statements]) of Part 3 of Division 7 of the Business and Professions Code.

“[T]he statute is not confined to anticompetitive business practice but is equally directed toward the right of the public to protection from fraud and deceit.” Stoiber v. Honeychuck, 101 Cal. App.3d 903, 162 Cal.Rptr. 194 (5th Dist. 1980). 70 “§§ 17200 and 17500, as these sections are the basic tools of the Attorney General and the district attorneys in combating consumer fraud.” Lavie v. Procter & Gamble Co., 105 Cal.App.4th 496, 129 Cal.Rptr .2d 486 (Cal.Ct.App.2003).

“The proscription in the statute against unfair competition is not restricted to deceptive or fraudulent conduct but extends to any unlawful business practice.” Stoiber, 101 Cal.App.3d 903, 162 CaLRptr. 194. “An unlawful business activity includes anything that can properly be called a business practice and that at the same time is forbidden by law.” People v. McKale 25 Cal.3d 626, 159 CaLRptr. 811, 602 P.2d 731 (1979). However, the UCL cause of action (the “UCL Claim”) is predicated upon consumer fraud. The UCL Claim refer specifically to the “defendants’ practices of fraudulently changing the telecommunication carrier of consumers.” Moreover, UCL Claim alleges, “that the defendants’ misconduct is likely to mislead consumers and consequently, constitutes a fraudulent business act.” Compl. ¶ 66. Finally, the Complaint alleges wrongful conduct based upon marketing. Based on the aforementioned, the Complaint’s UCL allegation is a consumer fraud action.

Chiptoff cannot act as a private attorney general on behalf of a class of consumers that have allegedly been harmed by consumer fraud or Wrongful Marketing. Moreover, the UCL Claim only specifically alleges fraudulent actions. As discussed, Chiptoff has failed to allege that the November Switch was the result of consumer fraud or Wrongful Marketing. Likewise, Chiptoff has failed to allege that the November Switch was the result of business act or practice. Based on the aforementioned, Chiptoff cannot act as a private attorney general. 71

Moreover, California Code of Civil Procedure requires that “the questions of law or fact common to the class are substantially similar and predominate over the questions affecting the individual members.” Cal Civ Code § 1781. “[I]t uniformly has been held that [,.]there must be a well defined community of interest in the questions of law and fact involved affecting the parties to be represented.” Daar v. Yellow Cab Co., 67 Cal.2d 695, 704, 63 CaLRptr. 724, 433 P.2d 732 (Cal.1967) “The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class represen *609 tatives who can adequately represent the class.” Richmond v. Dart Industries, Inc., 29 Cal.3d 462, 470, 174 CalRptr. 515, 629 P.2d 23 (Cal.1981).

Based on the Court’s conclusion that Chiptoff is not appropriate as a named plaintiff, Chiptoff fails to meet the requirements of California Code of Civil Procedure section 382. As discussed, the November Switch was the result of an accident and is unique from the switches alleged in the Complaint that were a result of MCI’s marketing efforts or where the result of a purposeful action. Thus, Chip-toff fails to meet the requirement that “the questions of law or fact common to the class are substantially similar and predominate over the questions affecting the individual members.” Cal Civ Code § 1781. Moreover, as discussed Chiptoff is subject to a unique defense that the November Switch was accidental. As such, Chiptoff is subject to a defense that is not typical of the class. Based on the aforementioned, Chiptoff cannot act as a private attorney general because Chiptoff fails to meet the California Code of Civil Procedure’s requirements for a class representative.

V. Conclusion

Based on the forgoing, Chiptoff has failed to meet the burdens imposed by Rule 23 and the Court denies certification of the Class. The Court finds that Chip-toff is not a member of the Class. The Debtors have established that Chiptoff is subject to a unique defense that renders him not appropriate as a named plaintiff because he fails to meet the typicality requirement of Rule 23(a)(3). While MCI’s alleged fraudulent or misleading practices are the basis of the Complaint’s UCL allegations, Chiptoff claim is unrelated to those alleged practices. Similarly, regarding his assertion that he qualifies as a private attorney general under the California Statute, Chiptoff fails to meet the requirements for certification under California Code of Civil Procedure for the same reason he fails to meet the Rule 23 requirements. As such, Chiptoff cannot serve as a private attorney general under the California Statute on behalf of consumers alleging fraudulent or misleading practices. Therefore, the Debtors’ supplemental objection to class proof of claim number 31079 is granted and the class proof of claim and the UCL claim are disallowed and expunged.

Counsel for the Debtors is to settle an order consistent with this opinion.