Plaintiffs sued L’Oreal for falsely advertising Garnier
Fructis Sleek & Shine Anti-Frizz Serum by failing to disclose its
flammability after 2007, when L’Oreal removed a flammability warning; they
contended that the Serum was flammable even with denatured alcohol removed, as
it had been in late 2006. The court granted a motion for class certification,
but then found that the existing class representatives weren’t typical. Plaintiffs were then added for putative NY
and California classes. The court certified
the former but not the latter.
Numerosity was easily satisfied, with 9.9 million units sold
nationwide, implying about 1.1 million units in California and 800,000 in NY.
Common questions centered around the factual and legal
questions relating to the omission of the flammability warning, consumers’
reasonable expectations, etc. “Because
Serum was packaged and sold uniformly across the nation, these questions can be
resolved ‘in one stroke.’ Moreover, answers to these questions are ‘central to
the validity’ of each class member's claims because … each class member's claim
hinges on (1) whether a reasonable consumer would have been deceived by Serum's
packaging, (2) what information L'Oreal knew or had access to regarding Serum's
flammability, and (3) what the true market value of Serum was given its alleged
flammability.” Thus commonality was also
satisfied; putative class members’ individual reasons for purchasing a product
don’t bear on commonality under the UCL under Tobacco II, which allows presumptions of reliance.
Typicality requires plaintiffs’ claims to be reasonably
coextensive with those of absent class members, not substantially
identical. Each putative class
representative bought Serum during the class period in a relevant state, and
said that she wouldn’t have bought it at its market price if she’d known it was
flammable. L’Oreal argued that each was
subject to unique defenses, but the court only agreed with respect to one. One NY plaintiff, Germann, bought at least
one pre-2007 bottle containing a flammability warning and didn’t notice the
warning at that time; thus, L’Oreal could argue that she would’ve bought the
product after 2007 anyway. Thus, she’d
been exposed to a warning label, while many class members who only bought after
2007 wouldn’t have been, and an individual defense of nonreliance might well succeed
under NY law, rendering her atypical.
L’Oreal argued that another plaintiff, Baisley, was uniquely
subject to a laches defense because she didn’t know that the Serum was
flammable before she spoke to plaintiffs’ counsel and generally knew little
about the facts. But that didn’t mean
that laches applied, or that L’Oreal suffered any prejudice; Baisley’s claims
hadn’t been shown to be atypical of the class.
L’Oreal argued that another plaintiff was atypical because she said she
might’ve bought Serum even with the warning, but that was a misreading of her
deposition testimony, which was that flammability was a relevant consideration
to her. She might have been somewhat
tentative in deposition, but she never said she would’ve bought a flammable
product. And though she wasn’t primarily
motivated by seeking a refund of the purchase price—what she said she sought
was a warning to others—that was understandable in light of the low price. That wasn’t atypical, just the practical
reality that only a zealot would sue just for $30.
Adequacy of representation was also satisfied. Though counsel found the substitute
plaintiffs, “[a] representative plaintiff's lack of detailed, comprehensive
knowledge about the legal technicalities of the claims asserted in class litigation
… provides no basis on which to deny a motion for class certification.” Rudimentary knowledge of the claims asserted
was enough, provided typicality was present. Here, there was no indication that
the proposed class representatives were ignorant of the basic facts or of their
duties as class representatives. “While
they may have first learned about Serum's alleged flammability from plaintiffs'
counsel, this is not disqualifying, especially in light of counsel's
explanation that the key facts underlying this case were only uncovered after
costly testing.”
The court turned to Rule 23(b)(3)’s requirements of
predominance and superiority and also found them satisfied for liability and
damages for the NY class, but not for damages for the California class. Whether
the omission of a warning violated the UCL, CLRA, FAL, Song–Beverly Act, and NY
GBL presented common factual and legal issues, since the consumer protection
laws protected “reasonable consumers,” defined objectively, and didn’t require
each and every class member to be deceived in actuality as long as the omission
here was material.
The court rejected L’Oreal’s arguments based on Mazza, whose facts were
distinguishable. In Mazza, it was likely that many class members were never exposed to the
allegedly misleading ads, but here the challenged advertising wasn’t a limited
campaign that only affected some class members.
Rather, the claims here were based on the packaging, which hadn’t
changed materially over the course of the class period, and thus class members
were necessarily exposed to the advertising at issue.
But without expert testimony on plaintiffs’ theory of
classwide relief, certification was improper for the California class. Under NY law, each injured consumer may
recover $50 upon proof of injury; thus common issues predominated regarding
proof of damages. But under California
law, L’Oreal argued that inquiry was required into whether each individual
class member would’ve purchased the product if properly labeled, and how much they
would’ve been willing to pay. Plaintiffs
argued that they’d use expert testimony to determine actual market value for a
flammable product not labeled as such.
Each class member could then be awarded the difference between
historical market price and true market price.
This was a legally justifiable theory of restitutionary relief that
didn’t depend on individualized inquiries and that could be used under
California consumer protection law as well as to compute relief for breach of
the implied warranty of merchantability.
But the Supreme Court’s recent Comcast decision held that it was improper to accept a method of
computing damages that didn’t differentiate between harm caused by different
forms of antitrust injury when the court had accepted only one theory of
antitrust injury. At the class
certification stage, a model supporting damages must be consistent with the
plaintiff’s liability case.
Certification therefore requires “evidence demonstrating the existence
of a classwide method of awarding relief that is consistent with the
plaintiffs' theory of liability.” Without
actual expert testimony, plaintiffs didn’t meet their burden of showing that common
questions predominated over individual issues regarding classwide relief. If the false advertising had a measurable
impact on the Serum’s market price, then there’s a classwide method of awarding
relief. But without a quantifiable impact on the market price, certification
would be inappropriate, because plaintiffs didn’t show any other method of awarding
relief based on common proof. Plaintiffs could renew their motion when the
expert report was in hand.
NY, with its statutory damages, posed no such barrier. Under NY’s procedural rules, a class action
for statutory damages under §349 can’t be maintained. But controlling precedent makes clear that
this rule doesn’t apply to class actions in federal court, even though that
produces forum-shopping.
With that out of the way, superiority was also easily shown.
L’Oreal argued that the class wasn’t ascertainable. Some courts have found that classes aren’t
ascertainable when some members might have known the truth about the falsely
advertised product. L’Oreal argued that the class here could contain people who
didn’t care about flammability. But
that’s not really about ascertainability, which is satisfied when the class can
be defined through objective criteria, here whether they bought the product
within a certain period. L’Oreal’s
argument was about similarity, already analyzed. Anyway, there was no suggestion that class
members knew that the Serum was flammable, and no evidence that consumers don’t
care about flammability. Under California law, “[n]ondisclosures about safety
considerations of consumer products are material,” suggesting that a broad
class definition was appropriate in cases involving omissions about consumer
safety.
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