In a significant decision, the Southern District of Ohio granted, in full, the defendant’s motion to strike class allegations in a consumer false advertising class action before any significant discovery had taken place or the plaintiffs filed a motion for class certification. Loreto v. The Procter & Gamble Company, No. 1:09-cv-815, 2013 U.S. Dist. LEXIS 162752 (S.D. Ohio Nov. 15, 2013). In addition to the fact the court granted an early motion to strike, the decision contains favorable rulings for defendants on the Article III requirement for absent class members, class overbreadth, the commonality requirement, and the individual nature of the causation (and/or reliance) elements contained in most consumer protection statutes.
The complaint alleged that P&G falsely advertised two over-the-counter cold and flu remedies in violation of each of the fifty state’s consumer protection laws. P&G moved to dismiss and in September 2010, the district court granted the motion with prejudice. 737 F. Supp. 2d 909 (S.D. Ohio 2010). The plaintiffs appealed, and in February 2013, the Sixth Circuit Court of Appeals affirmed the dismissal of all claims except for one claim asserted under the New Jersey Consumer Fraud Act (“NJCFA”) with respect to a single advertising statement (that Vitamin C “won’t cure a cold, but . . . can help blunt its effects”). 515 Fed. Appx. 576 (6th Cir. 2013).
After the Sixth Circuit’s decision, P&G moved to strike the class allegations, relying on Rule 23(c)(1)(A) of Federal Rule of Civil Procedure, and the Sixth Circuit’s decision in Pilgrim v. Universal Health Card, LLC, 660 F.3d 943 (6th Cir. 2011), which confirmed the principle that a district court should determine “[a]t an early practicable time” in a case whether class treatment is appropriate. P&G argued that the putative class consisting of all New Jersey residents who purchased the products was overbroad, and that the commonality, typicality, and predominance requirements could not be met. In support of its motion, P&G submitted evidence, including the packaging and advertisements for the products, copies of Vicks.com web pages from the Internet Archive, and Vicks.com website page view records. The plaintiffs responded that the motion was premature, that further discovery was required for the court to make a determination as to whether the class could be certified, and that a motion to strike could only be granted if it was clear from the face of the complaint that a class could not be certified.
In granting the motion to strike class allegations, the court rejected the plaintiffs’ arguments. It noted that P&G had provided the court with all of the packaging and advertisements for the products which showed that the “blunt its effects” statement was not in any of the advertisements, the web pages from the Vicks.com website which showed that the statement only appeared on a “tips” page among other general health and wellness tips, and the page view records for the Vicks.com website which showed that the “tips” page received only a few thousand page views during the time the statement was on the website. The court found that the plaintiffs did not contest or dispute any of these facts or identify any further discovery that could alter the fact that the statement did not appear in the products’ advertisements. Instead, citing to Pilgrim, the court concluded that “further discovery and briefing on the certification issue would simply postpone the inevitable conclusion that the putative class cannot be certified,” and noted that the case “is precisely the type of case that Pilgrim anticipated.”
The court then addressed its decision to strike the class allegations. First, it stated that “[w]hile individual class members do not have to submit evidence of personal standing, a class cannot be certified if any members in the class would lack Article III standing.” Most class members lacked Article III standing because they “did not suffer an injury that is causally connected” to the “blunt its effects” statement since most were never even exposed to that statement. Second, the court found, independent of the Article III requirement, that “[a] class is overbroad if it includes significant numbers of consumers who have not suffered any injury or harm.” The putative class was overly broad because it “would consist primarily of uninjured class members,” most of whom had never been exposed to the “blunt its effects” statement. Third, the court cited the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2551 (2011), and ruled that found that the “commonality requirement was not met “because there is no actionable representation that was uniformly communicated to all or most putative class members,” and given that most consumers who purchased the products never saw the “blunt its effects” statement, they “could not have suffered an injury as a result of that statement.” Fourth, the typicality requirement was not met because “very few, if any, putative class members were ever even exposed to, let alone injured by the ‘blunt its effects’ statement, and therefore have no claim against P&G.” Finally, the court found that individual issues would predominate. The court stated that an NJCFA claim “require[s] a ‘causal relationship’ between the allegedly unlawful conduct (the advertising) and class members’ injuries,” which could not be established on a classwide basis because the “blunt its effects” statement was not uniformly communicated to the entire class, and because “individual inquiries would be required to determine whether the ‘blunt its effects’ statement played a role in each class member’s decision to purchase the Products.”
While early motions to strike class allegations have generally been disfavored, the recent Loreto and Pilgrim decisions, along with others, indicate that defendants should consider filing an early motion to strike class allegations. Although the success of a motion to strike will depend on the jurisdiction in which the case is pending (for example, the case law is particularly favorable in the Sixth Circuit), and the facts of the case, there is a growing body of case law that supports the notion that a court should decide the certification question early, if possible, to avoid the unnecessary expense of additional discovery and briefing where it is clear that the requirements for certification cannot be met. In addition, the Loreto decision highlights a number of arguments that can be used to attack certification, whether in the context of a motion to strike or in opposition to a motion for class certification. The standing of absent class members, (over)breadth of the class, and the individual nature of causation (and/or reliance) elements present in most consumer protection statutes, are important considerations for defendants in the class certification context.