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From Antitrust Law Daily, August 21, 2013

Certification of class of purchasers of Bayer’s WeightSmart diet supplement vacated due to ascertainability concerns

By Peter Reap, J.D., LL.M.

The federal district court in Newark’s certification of a class of consumers who purchased Bayer Corporation’s and Bayer Healthcare, LLC’s (“Bayer’s”) One-A-Day WeightSmart diet supplement in Florida has been vacated by the U.S. Court of Appeals in Philadelphia because the class was not sufficiently ascertainable (Carrera v. Bayer Corporation, August 21, 2013, Scirica, A.). Because the basis for the court’s decision, Marcus v. BMW of North America, LLC, 687 F.3d 583, 593 (3d Cir. 2012), was decided after the court’s certification of the class, on remand the named plaintiff, Gabriel Carrera, should be allowed to conduct further, limited discovery on the issue of ascertainability and afforded another opportunity to satisfy the ascertainability requirement, the court explained.

Background. Gabriel Carrera brought this class action against Bayer, claiming that Bayer falsely and deceptively advertised its product, One-A-Day WeightSmart. WeightSmart was promoted as a multivitamin and dietary supplement that had metabolism-enhancing effects.

Bayer sold WeightSmart in retail stores, such as CVS, until January 2007. Bayer did not sell it directly to consumers. Carrera alleges Bayer falsely claimed that WeightSmart enhanced metabolism by its inclusion of epigallocatechin gallate, a green tea extract.

Carrera moved to certify a Rule 23(b)(3) class of Florida consumers under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). One of Bayer’s challenges to certification, and the issue on this appeal, was whether the class members were ascertainable. In this case, there was no dispute that class members were unlikely to have documentary proof of purchase, such as packaging or receipts, the court noted. And Bayer had no list of purchasers because, as noted, it did not sell WeightSmart directly to consumers.

Carrera advanced two ways to ascertain the class: first, by retailer records of online sales and sales made with store loyalty or rewards cards; and second, by affidavits of class members, attesting they purchased WeightSmart and stating the amount they purchased. Bayer challenged this latter method on the ground that memories of putative class members will be unreliable. Bayer argued that, in Carrera’s own deposition testimony, he failed to remember when he purchased WeightSmart and that he confused it with WeightSmart Advanced and other generic or similar products (none of which were part of this litigation). In response, Carrera produced a declaration of James Prutsman, who works for a company that verifies and processes class settlement claims, in which Prutsman stated there are ways to verify the types of affidavits at issue here and screen out fraudulent claims.

The district court certified the class, defined as all persons who purchased WeightSmart in Florida. It characterized the issue of ascertainability as one of manageability, stating “speculative problems with case management” were insufficient to prevent class certification.

Ascertainability. Ascertainability mandates a rigorous approach at the outset because of the key roles it plays as part of a Rule 23(b)(3) class action lawsuit, the court observed. First, at the commencement of a class action, ascertainability and a clear class definition allow potential class members to identify themselves for purposes of opting out of a class. Second, it ensures that a defendant’s rights are protected by the class action mechanism. Third, it ensures that the parties can identify class members in a manner consistent with the efficiencies of a class action.

While this interlocutory appeal was pending, the Third Circuit decided Marcus, in which it held “[i]f class members are impossible to identify without extensive and individualized fact-finding or ‘mini-trials,’ then a class action is inappropriate.” 687 F.3d 583, 593 (3d Cir. 2012). The court in Marcusexplained that if class members cannot be ascertained from a defendant’s records, there must be “a reliable, administratively feasible alternative,” but it cautioned “against approving a method that would amount to no more than ascertaining by potential class members’ say so.” Id. at 594. Further, a defendant must be permitted to challenge the evidence used to prove class membership.

In light of Marcus, the class certification order was vacated and the dispute remanded.

In this case, the ascertainability question was whether each class member purchased WeightSmart in Florida. If this were an individual claim, a plaintiff would have to prove at trial he purchased WeightSmart. A defendant in a class action has a due process right to raise individual challenges and defenses to claims, and a class action cannot be certified in a way that eviscerates this right or masks individual issues.

Carrera first argued that he would be able to show class membership using retailer’s records of sales made with loyalty cards, e.g., CVS ExtraCare cards, and records of online sales. Carrera pointed to a Federal Trade Commission (FTC) settlement with CVS regarding the sale of a supplement that was falsely advertised as boosting immune systems. The supplement was sold only at CVS. The FTC stated in its press release regarding the settlement that “[p]urchasers will be identified through the CVS ExtraCare card program and sales on cvs.com.”

Here, however, the evidence put forth by Carrera was insufficient to show that retailer records in this case could be used to identify class members, the court held. Depending on the facts of a case, retailer records could be a perfectly acceptable method of proving class membership. But there was no evidence that a single purchaser of WeightSmart could be identified using records of customer membership cards or records of online sales. There is no evidence that retailers even had records for the relevant period. Further, the FTC’s press release did not support a finding that these records could determine class membership on the facts of this case. Moreover, there was no evidence the FTC’s method was successful.

Carrera also contended the class was ascertainable using affidavits of class members. This argument failed because it does not address a core concern of ascertainability: that a defendant must be able to challenge class membership, the court explained. This was especially true where the named plaintiff’s deposition testimony suggested that individuals would have difficulty accurately recalling their purchases of WeightSmart.

Carrera also argued that ascertainability was less important in this case because Bayer’s total liability would be determined at trial, and would not increase or decrease based on the affidavits submitted. This argument was rejected because Bayer’s ultimate liability would not be based on the affidavits, according to the court. If fraudulent or inaccurate claims materially reduced true class members’ relief, these class members could argue the named plaintiff did not adequately represent them because he proceeded with the understanding that absent members could get less than full relief. These inadequately represented class members could then bring a new action against Bayer and, perhaps, apply the principles of issue preclusion to prevent Bayer from re-litigating whether it was liable under the FDUTPA. Bayer had a substantial interest in ensuring this does not happen.

Finally, Carrera argued that a screening method such as the one described in the Prutsman Declaration would ensure that Bayer paid claims based only on reliable affidavits. However, the Prutsman Declaration did not show the affidavits would be reliable, the court noted. Nor did it propose a model for screening claims that was specific to this case. And even if Prutsman produced a model that was specific to this case, the court doubted whether it could satisfy the ascertainability requirement. Thus, the argument was rejected.

The case is No. 12-2621.

Attorneys: Mathew R. Ford (Bartlit, Beck, Herman, Palenchar & Scott) for Bayer Corporation. Caroline F. Bartlett (Patton Boggs) for Gabriel Carrera.

Companies: Bayer Corporation; Bayer Healthcare, LLC

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