Class can be certified when product is allegedly worthless

Ortega v. Natural Balance, Inc., 2014 WL 2782329, No. CV 13–5942  (C.D. Cal. June 19, 2014)

The court granted class certification for a California class of consumers of Cobra Sexual Energy, a dietary supplement containing various herbs, extracts, and other plant-based materials, which was allegedly falsely marketed as having beneficial health and aphrodisiac properties and being scientifically formulated to improve virility.  Plaintiffs alleged the usual California claims.

The court found the class ascertainable by objective criteria: whether they purchased the products during the class period in California for personal use (and weren’t persons connected to Natural Balance). Only those who lost money buying Cobra were included, so the class was defined as people who’d have standing.  The fact that there were no purchase records was irrelevant; “identifying individual class members is not germane to ascertainability.”

Typicality: Natural Balance argued that the class representatives’ claims weren’t typical because they had unrealistic expectations of the product and unreasonably interpreted the packaging.  But the particulars of their understanding didn’t make them atypical: “even if each Plaintiff and class member had somewhat varying conceptions of the results he could expect from a product marketed as virility-enhancing, each had the same marketing-induced expectation that the product would be virility-enhancing.”  Plaintiffs alleged that it wasn’t.  That made their claims typical, except as to class members whose claims would be barred by the statute of limitations. They couldn’t add to the period by arguing delayed discovery that tolled the limitations period, because that would add “a significant dimension in which the named Plaintiffs have no personal interest.”

Common issues predominated: falsity/misleadingness of the packaging itself, which would be determined based on a reasonable consumer standard and not on an individual basis.  “Plaintiffs’ other evidence—consumer surveys and expert testimony regarding the inefficacy of Cobra’s ingredients—is also applicable on a class-wide basis.” 

Classwide causation could be presumed upon a showing of materiality.  The allegedly misleading statements were nearly all of the statements on Cobra’s packaging, and it strained credulity to think that a manufacturer would put only immaterial statements on its packaging.  Thus, if plaintiffs chould show misleadingness, they could likely show materiality as well; certainly this couldn’t be ruled out as a matter of law.  It could be determined classwide because the packaging was uniform over the entire class period.

Natural Balance argues that individual questions predominated because plaintiffs couldn’t show that everyone was misled by the exact same statements—the named plaintiffs allegedly relied on the package’s image of a cobra snake and not on other statements.  But both plaintiffs testified to other statements on which they relied.  And the presumption of reliance and causation could moot any issue about which component any individual plaintiff read or remembered.

Nor did individualized damages defeat predominance.  Even if that could, by itself, defeat certification—which it can’t—plaintiffs had a tenable theory of how to ascertain classwide monetary relief.  What they spent on Cobra could be readily calculated using Defendant’s sales numbers and an average retail price.  Natural Balance argued that this didn’t take into account the actual value of the product to each individual. But plaintiffs argued that the product was valueless because it provided none of the advertised benefits and was illegal, entitling them to recover the full price.  Natural Balance’s “theoretically available defense” to this relief didn’t render damages an individualized issue that predominates over the common issues. 

The challenge of identifying class members was also insufficient to make individual issues predominate.  “[G]iven that one of the purposes of the class action procedure is to facilitate small claims, that it is likely Defendant’s aggregate liability could be reliably determined without imposing excess liability, and that all parties would be bound by the litigation, individual issues arising out of identifying class members do not predominate over common issues and the class procedure does not unfairly prejudice Defendant.”

Unsurprisingly, the court also found superiority.  Small individual claims would be difficult, wasteful, and unlikely.  Overall, certification was appropriate.

However, the court did reject two unusual features of the proposed notice—that Natural Balance be required to pay for it, and that it also be required to include the notice within Cobra’s packaging.  Nothing justified departing from the ordinary plaintiff-pays rule, and requiring notice within Cobra’s packaging “would be akin to issuing a mandatory injunction, a drastic step not warranted by the record before the Court.”