Posted by Rebecca Tushnet
http://tushnet.blogspot.com/2012/02/neither-dukes-nor-honda-bar.html
Johns v. Bayer Corp., 2012 WL 368032 (S.D. Cal.)
The court granted plaintiffs’ motion for certification,
indicating that the recent Honda case
isn’t the death knell for consumer class actions in California. Plaintiffs,
alleging reliance, challenged statements Bayer made for its OAD Men's Health
Formula and OAD Men's 50+ Advantage vitamins.
“On the front, back, and sides of the Men's Vitamins' packages and in
its advertising, Bayer stated that taking Men's Vitamins daily would ‘support
prostate health’” because the vitamins contained lycopene and later, selenium. Plaintiffs alleged that Bayer charged a price
premium over other multivitamins, even though the claimed benefits were absent
and, in fact, recent clinical studies have shown that for some men, increased selenium
consumption may increase their prostate cancer risk.
Plaintiffs alleged that Bayer focused on prostate health to
make money rather than because it possessed competent and reliable scientific
support. They sought certification of
UCL and CLRA claims.
Numerosity was easy: between 2005 and 2009, Bayer's national
net sales of Men's Health were over $189 million, and between 2007 and 2009,
its national net sales of Men's 50+ were over $39 million. It was reasonable to
assume a sufficiently big California class.
Commonality: plaintiffs argued that common issues included
whether Bayer's advertising of the Men's Vitamins was deceptive and likely to
deceive the public. Bayer basically argued lack of predominance, of which more
below.
Typicality/adequacy: Bayer argued that, since plaintiffs
didn’t allege physical harm, they couldn’t be typical of class members who
did. But the class didn’t include claims
for personal injury. Bayer also argued
that the named plaintiffs were subject to unique defenses on lack of reliance,
credibility, proof of injury, or damages. “They also failed to read the FDA
disclaimer, lack retail receipts for their purchases, and testified that
reasons in addition to Bayer's advertising caused them to buy the Men's
Vitamins. But as Plaintiffs note, if anything, these factors may make them more
typical (not less) of other class members.”
(Heh.) Moreover, the packages
that they, and all class members, bought “prominently and repeatedly featured
the identical ‘supports prostate health’ claim.” They were all exposed to the same alleged
misrepresentations; typicality and adequacy were satisfied.
The court agreed that common questions predominated,
specifically whether there were misrepresentations likely to deceive a
reasonable consumer. These were binary issues
capable of classwide resolution. “Importantly,
California consumer protection laws take an objective approach of the
reasonable consumer, not the particular consumer.” In addition, class reliance could be presumed
under both the UCL and CLRA, the latter when a material misrepresentation was
made to the class.
Bayer argued that reliance, materiality, timing, and damages
were all individual issues.
Reliance: Bayer argued that reasons for purchasing the
products were individual, and exposure to ads would vary by consumer in terms
of the mix of TV, radio, and print ads each one saw. “But at a minimum,
everyone who purchased the Men's Vitamins would have been exposed to the
prostate claim that appeared on every package from 2002 to 2009. This is the
predominant issue, not whether or not consumers also saw television or print
advertisements.” More generally, “when
plaintiffs are exposed to a common advertising campaign, common issues
predominate.” Reliance could therefore
be presumed.
Materiality: the same thing.
California evaluates materiality using a reasonable person standard, not
individually. The court also noted that
the prostate health claim appeared on four panels of each package and could
very well have been material, but that’s a question of fact. In a footnote, the court characterized the
claim as “very prominent[]” on the packaging: “the prostate claim was
frequently listed first among purported benefits, and in more than one
instance, the packaging stated prominently that the product contained ‘five
times the amount of Selenium in Centrum® or Centrum® Silver®.’” This supported plaintiffs’ argument that
prostate health “was the ‘reason to believe’ the product offered something its
competitors did not,” undercutting Bayer’s argument that prostate health was
just one of many different claims on the packaging.
Timing: Bayer argued that the relevant science was in flux
during the class period, but that went to the merits and not certification.
Damages: Bayer argued that individual issues predominated on
damages. But damages are often an individual question that doesn’t defeat
certification. Here, one could calculate
the damages by subtracting the value of the product without the claimed health
benefit, which could be calculated using market information, from the price the
class member paid.
The class action form was also superior in terms of judicial
economy and the inability of class members to pursue individual claims for
small amounts.
Bayer then argued that the named plaintiffs lacked standing
because there were two distinct types of health claims, a qualified health
claim using language proposed by the FDA that appeared on some of the packages,
noting that the FDA had determined the correlation between selenium and reduced
cancer risk was not conclusive; and the more general “supports prostate health”
claim. Because plaintiffs never saw the
qualified health claim before purchase, Bayer argued, it couldn’t have hurt
them. The court didn’t see the
relevance. “Plaintiffs assert that they
can demonstrate on a class-wide basis that Bayer conveyed a deceptive
advertising message on its labeling and in its other advertisements. It is this
overall message conveyed that matters.”
Not done, Bayer also argued that some class members’ claims
were time-barred, but the legal and factual questions surrounding tolling were
appropriate merits-based, classwide issues.
Finally, Bayer argued that Dukes barred certification because Bayer had a right to prove
defenses to individual claims, such as that particular class members didn’t
rely on the prostate health claim, “perhaps because they were aware of conflicting
scientific studies.” To the contrary,
the court reasoned, Bayer was free to raise those defenses against individual
claimants, then quoted another court for the point that “Bayer gives itself too
little credit; the overwhelming majority of consumers probably trusted Bayer—a
well-known company—and believed that there was some prostate-health benefit
from taking the vitamins.”
Certification granted.
http://tushnet.blogspot.com/2012/02/neither-dukes-nor-honda-bar.html
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