In a number of recent district court decisions from across the country, courts have denied requests to certify nationwide or statewide classes in cases involving consumer products. These decisions could prove helpful in opposing class certification in other false advertising cases. Significantly, the courts in both Chow and In re Celexa & Lexapro read exposure/causation requirements for unnamed class members into California’s Unfair Competition Law (UCL) and False Advertising Law (FAL), and found that individualized issues relating to exposure and causation predominated over any common issues. Further, the court in Chow found that an inference of reliance was not appropriate under the California Consumer Legal Remedies Act (CLRA) since a significant number of the class members were repeat purchasers of the product. The court in In re Celexa & Lexapro also continued the trend (see, e.g., Mazza v. Am. Honda Motor Co., Inc., 666 F. 3d 581 (9th Cir. 2012)) of courts declining to certify nationwide classes of consumers alleging claims under state consumer protection statutes given the significant differences in those laws. And to the extent a representative plaintiff did not rely on the advertising alleged to be false, Rapczynski is instructive since it outlines how the typicality requirement can be used to defeat class certification.
Chow v. Neutrogena Corp., No. 12-04624, 2013 U.S. Dist. LEXIS 17670 (C.D. Cal. Jan. 22, 2013): Chow alleged that the defendant falsely advertised products from its Healthy Skin Anti-Wrinkle line, claiming that they were “clinically proven” and cause a person to look younger in just one week. Chow asserted claims under California’s CLRA, UCL, and FAL and for breach of express warranty on behalf of a nationwide class of consumers who purchased the product, or in the alternative, a class of California purchasers.
The court denied plaintiff’s motion for class certification finding that individual issues predominate over common questions of law and fact and that the proposed classes were unmanageable. The court stated that with respect to each of the claims at issue, Chow “must demonstrate that each class member was exposed to the advertisements, and that as to each class member, the advertisements were false or misleading – that is, that each class member suffered the same injury” and that also with respect to her CLRA and express warranty claims, she “must demonstrate that class member relied upon the representations in the advertisements.” The court found that the predominance requirement could not be met since there were significant individualized questions as to whether the product worked as advertised for each individual class member, and that “[b]ecause those class members for whom the product worked as advertised would not have suffered the same injury as Plaintiff, the class cannot be sustained without resorting to individualized inquires into the merits of each class members’ claims, and therefore the class device is not appropriate.” In addition, the court found that the Chow’s CLRA and express warranty claims “suffered from the additional individualized issues of demonstrating reliance” and that an inference of classwide reliance was not appropriate because, among other things, “a significant portion of consumers who purchased the product were repeat purchasers.” The plaintiff, according to the court, did not provide significant proof to distinguish between “mere favorability toward products bearing the Neutrogena brand name, for example, and reliance upon specific advertised benefits of the products in the case.” Finally, the court found that a class action was not superior because the class definition did not exclude uninjured class members for whom the product provided advertised benefits, and that the proposed classes were therefore unmanageable.
In re Celexa and Lexapro Marketing and Sales Practices Litigation, MDL No. 09-02067, 2013 U.S. Dist. LEXIS 15419 (D. Mass. Feb. 5, 2013): This action arose out of a number of lawsuits alleging the defendant promoted antidepressants Celexa and Lexapro for off-label use in minors, even though the Food and Drug Administration (FDA) had only approved the drugs for use in adult patients. Two of the plaintiffs, Jaeckal and Palumbo, brought cases in different courts alleging violations of the Missouri Merchandising Practices Act and common law claims for fraud, fraudulent concealment and misrepresentation, and unjust enrichment. They sought to certify nationwide classes of individuals who purchased Celexa or Lexapro for a minor. A third plaintiff, Wilcox, brought a separate case asserting claims under the California’s UCL and FAL, and sought to certify a statewide class of individuals who purchased Celexa for a minor.
After conducting applicable choice-of-law analyses in the Jaeckal and Palumbo cases, the court determined that it must apply the law of each purchaser’s home state to their claims. As a result, and despite the fact the court found that there were advantages to litigating the claims on a class-wide basis, the court found that given its “determination that the law of plaintiffs’ home states must apply in both the Jaeckal and Palumbo cases, a class action applying the law of many (presumably all 50 states) would simply be unmanageable.” The court noted that “[c]ourts have been particularly unwilling to certify classes under the laws of multiple states in cases involving state consumer-protection laws on the grounds that those laws vary widely state to state.” Because the class failed to meet the superiority requirement of Rule 23(b)(3), the court denied plaintiffs’ motion for class certification.
With respect to the Wilcox motion for class certification, the court found that under the UCL and FAL, class members must prove that they, or in this case, the prescribing physicians, were exposed to the alleged false or misleading advertising. The court stated that each plaintiff is required to show that each physician who prescribed Celexa was exposed to the allegedly false statements made by the defendant’s representatives and that it was not “not sufficient simply to presume” that they all received those representations. The court found that “[b]ecause the UCL and FAL claims require individual, plaintiff-specific determination, those claims are not subject to common proof.” Accordingly, the court determined that certification was not appropriate under Rule 23(b)(3).
Rapczynski v. Skinnygirl Cocktails, L.L.C. et al., 11 Civ. 6546, 2013 U.S. Dist. LEXIS 5635 (S.D.N.Y. Jan. 9, 2013): Rapczynski alleged that defendants falsely advertised the Skinnygirl Margarita drink as “all natural” even though it contained preservatives. Rapczynski brought claims under New York General Business Law § 349, claims for breach of express warranty and promissory estoppel, and claims under the New York Agriculture and Markets Law on behalf of a class of consumers who purchased the product in Massachusetts or New York.
The district court denied plaintiff’s motion for class certification, finding that Rapczynski’s claims were atypical of the putative class and subject to unique defenses. The court stated that “[a]t bottom, the typicality requirement concerns the fairness of allowing an entire class’s claim to rise or fall with the fate of the named representative’s claims; thus, that representative’s claims must be typical of the class so as to prevent a false prophet from bearing the standard for an entire class of claims.” The court found that to maintain claims under the New York statutes, a person must have suffered an injury within the state. Rapczynski, however, testified that he purchased the beverage twice in Massachusetts. The court found that “where a plaintiff purchased the product at issue in Massachusetts, he cannot be the typical representative of a class asserting claims under New York law. Thus, at least as to the New York statutory claims, this Court would do a disservice to the putative class by certifying it with Rapczynski as the named plaintiff.”
The court further found typicality lacking with respect to the breach of express warranty claim. The court noted that express warranty claims in both New York and Massachusetts required some showing of reliance on the part of the plaintiff. Rapczynski, however, testified in his deposition that he bought the product to thank his wife after hearing that she liked it and would have paid any price for the product. The court concluded that defendants will assert as a defense that there was no causation to with respect to the alleged breach of warranty because (1) Rapczynski testified that he would have bought the product regardless of price, (2) that his belief concerning the naturalness of the product did not appear to be relevant to his purchasing decision given his statements about the circumstances of the purchase. The court found that “[s]uch defenses are unique to Rapczynski’s claims and underscore the atypicality of Rapczynski’s alleged reliance.”
Finally, the court determined that Rapczynski’s atypical reliance and causation issues and defenses would become the focus of the promissory estoppel claim, whether New York or Massachusetts law applied, since reliance and causation are required elements of that claim under either state’s law. The court concluded that Rapczynski’s “injury – namely whatever premium he may have paid or unnatural substance he may have imbibed – suffers from a causal break that will focus the litigation on the particularities and factual circumstances of Rapczynski’s own purchase. Such a result would be an unjust one for any putative class, whose success, in no small part, would depend on the typicality of their representative’s claims, which are to serve as the voice for all.”