“Reliance can be established on a classwide basis by materiality. 11 In short, if the trial court finds that material misrepresentations have been made to the 12 entire class, an inference of reliance arises as to the class.”
How later courts described this case
- “Reliance can be established on a classwide basis by materiality. 11 In short, if the trial court finds that material misrepresentations have been made to the 12 entire class, an inference of reliance arises as to the class.”
- “[I]f a misrepresentation is not material as to all class 28 members, the issue of reliance ‘var[ies] from consumer to consumer,’ and no classwide 1 inference arises.”
Written by the judges who cited it.
The opinion
1
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3
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5
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7
8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
10
11 DONIECE DRAKE, individually and on Case No. 22-cv-1085-MMA (JLB)
behalf of all others similarly situated,
12
et al., ORDER:
13
Plaintiffs,
(1) GRANTING MOTIONS TO FILE
14
v. UNDER SEAL;
15
BAYER HEALTHCARE LLC, [Doc. Nos. 87; 94; 102; 108]
16
Defendant. (2) GRANTING MOTION FOR
17 CLASS CERTIFICATION; AND
18 [Doc. No. 90]
19 (3) DENYING MOTIONS FOR
SANCTIONS
20
21 [Doc. Nos. 104; 107]
22
23 Pending before the Court is Plaintiffs Doniece Drake’s and Deborah Bowling’s
24 (“Plaintiffs”) motion for class certification. Doc. No. 90. Defendant Bayer Healthcare
25 LLC (“Defendant”) filed an opposition, Doc. No. 96, to which Plaintiffs replied, Doc.
26 No. 110. In addition, the Court granted Defendant leave to file a sur-reply, to which the
27 Court also allowed Plaintiffs to respond. Doc. Nos. 117–119. Also pending before the
28 Court are the parties’ respective Rule 11 motions for sanctions, which are fully briefed.
1 Doc. Nos. 104; 107. The Court found the matters suitable for determination on the
2 papers and without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and
3 Civil Local Rule 7.1.d.1. See Doc. Nos. 115; 117. For the reasons set forth below, the
4 Court GRANTS Plaintiffs’ motion for class certification and DENIES the parties’
5 motions for sanctions.
6 I. BACKGROUND
7 This case involves Defendant’s popular “One A Day” (“OAD”) line of
8 multivitamins. Doc. No. 85 (Second Amended Complaint, the “SAC”) ¶ 1. Specifically,
9 Plaintiffs’ SAC concerns Defendant’s OAD Natural Fruit Bites Multivitamin products
10 (the “Products”), including the following “four varieties: Men’s, Women’s, Men’s 50+,
11 and Women’s 50+.” Id. ¶ 1 n.1. Plaintiffs allege Defendant’s “advertising and marketing
12 campaign is false, deceptive, and misleading” because it holds its Products out as
13 “natural” even though they “contain non-natural, synthetic ingredients.” Id. ¶¶ 1–2.
14 Named Plaintiffs Drake and Bowling are two adult women who purchased
15 Defendant’s Products. See id. ¶¶ 8, 11. Drake purchased the Products in 2020 in retail
16 outlets in Queens, New York, where she is a resident. Id. ¶ 8; Doc. No. 110-4 at 2.
17 Bowling is a resident of Riverside County, California, and she purchased the Products in
18 retail outlets in Los Angeles County, California in or around 2020. Id. ¶ 11; Doc. No.
19 110-5 at 3. Both Named Plaintiffs have stated that they read the word “natural” on the
20 Products’ labels and relied on the word “natural” in purchasing the Products. Id. ¶¶ 9, 12;
21 Doc. No. 110-6 at 3–4; Doc. No. 110-7 at 2–3.
22 Named Plaintiffs bring suit as individuals as well as on behalf of two statewide
23 classes in California and New York. SAC ¶¶ 41–76. The classes that Plaintiffs seek to
24 certify are defined as follows in the instant motion:
25 California Class. All persons who purchased at least one of the following
Products in the State of California from March 1, 2020, to May 30, 2023:
26
• One-A-Day Natural Fruit Bites Women’s
27 • One-A-Day Natural Fruit Bites Men’s
28 • One-A-Day Natural Fruit Bites Women’s 50+
1 • One-A-Day Natural Fruit Bites Men’s 50+
2
New York Class. All persons who purchased at least one of the following
3 Products in the State of New York from May 31, 2020, to May 30, 2023:
4 • One-A-Day Natural Fruit Bites Women’s
• One-A-Day Natural Fruit Bites Men’s
5 • One-A-Day Natural Fruit Bites Women’s 50+
6 • One-A-Day Natural Fruit Bites Men’s 50+
7
Doc. No. 90-1 at 14.
8
Plaintiffs allege unlawful and deceptive business practices in violation of
9
California’s Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750 et seq., on
10
behalf of Bowling and the California class, deceptive acts and practices in violation of the
11
New York General Business Law (“GBL”) § 349 on behalf of Drake and the New York
12
class, and false advertising in violation of the New York GBL § 350 on behalf of Drake
13
and the New York class. See SAC ¶¶ 41–76.
14
II. LEGAL STANDARD
15
Federal Rule of Civil Procedure 23 governs class actions. “Before certifying a
16
class, the trial court must conduct a rigorous analysis to determine whether the party
17
seeking certification has met the prerequisites of Rule 23.”1 Mazza v. Am. Honda Motor
18
Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012) (internal quotation marks omitted). The
19
burden is on the party seeking certification to show, by a preponderance of the evidence,
20
that the prerequisites have been met. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,
21
350 (2011); Conn. Ret. Plans & Trust Funds v. Amgen Inc., 660 F.3d 1170, 1175 (9th
22
Cir. 2011).
23
Certification under Rule 23 is a two-step process. The party seeking certification
24
must first satisfy the four threshold requirements of Rule 23(a): numerosity,
25
commonality, typicality, and adequacy. Specifically, Rule 23(a) requires a showing that:
26
27
28
1 (1) the class is so numerous that joinder of all members is impracticable;
2
(2) there are questions of law or fact common to the class;
3
(3) the claims or defenses of the representative parties are typical of the claims
4
or defenses of the class; and
5
(4) the representative parties will fairly and adequately protect the interests of
6
the class.
7
Fed. R. Civ. P. 23(a). The party seeking certification must then establish that one of the
8
three grounds for certification applies. See Fed. R. Civ. P. 23(b). As stated in their
9
motion, Plaintiffs invoke only Rule 23(b)(3) because they are no longer seeking
10
injunctive relief.2 See Doc. No. 90-1 at 14 n.2.
11
Rule 23(b)(3) provides that a class action may be maintained where “the court
12
finds that the questions of law or fact common to class members predominate over any
13
questions affecting only individual members, and that a class action is superior to other
14
available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P.
15
23(b)(2)(3). The matters pertinent to these findings include:
16
(A) the class members’ interests in individually controlling the prosecution or
17
defense of separate actions;
18
(B) the extent and nature of any litigation concerning the controversy already
19
begun by or against class members;
20
(C) the desirability or undesirability of concentrating the litigation of the
21
claims in the particular forum; and
22
(D) the likely difficulties in managing a class action.
23
24 Id. In considering a motion for class certification, the substantive allegations of the
25 complaint are accepted as true, but “the court need not accept conclusory or generic
26
27
28
1 allegations regarding the suitability of the litigation for resolution through a class action.”
2 Hanni v. Am. Airlines, Inc., No. 08-cv-00732-CW, 2010 WL 289297, at *8 (N.D. Cal.
3 Jan. 15, 2010); see also Jordan v. Paul Fin., LLC, 285 F.R.D. 435, 447 (N.D. Cal. 2012)
4 (“[Courts] need not blindly rely on conclusory allegations which parrot Rule 23
5 requirements.”). Accordingly, “the court may consider supplemental evidentiary
6 submissions of the parties.” Hanni, 2010 WL 289297, at *8; see also Blackie v. Barrack,
7 524 F.2d 891, 901 n.17 (9th Cir. 1975).
8 “A court’s class-certification analysis . . . may entail some overlap with the merits
9 of the plaintiff’s underlying claim.” Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 568
10 U.S. 455, 465–66 (2013) (internal quotation marks omitted). However, “Rule 23 grants
11 courts no license to engage in free-ranging merits inquiries at the certification stage.” Id.
12 at 466. “Merits questions may be considered to the extent—but only to the extent—that
13 they are relevant to determining whether the Rule 23 prerequisites for class certification
14 are satisfied.” Id.
15 III. MOTIONS TO FILE UNDER SEAL
16 The parties have moved to file under seal a number of documents in conjunction
17 with the briefing on Plaintiffs’ motion for class certification. See Doc. Nos. 87, 94, 108.
18 In addition, Defendant has moved to file under seal portions of the deposition transcript
19 of Plaintiff Bowling in connection with its Rule 11 motion for sanctions. Doc. No. 102.
20 “Historically, courts have recognized a ‘general right to inspect and copy public records
21 and documents, including judicial records and documents.’” Kamakana v. City & County
22 of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (quoting Nixon v. Warner Commc’ns,
23 Inc., 435 U.S. 589, 597 & n.7 (1978)). This is “because court records often provide
24 important, sometimes the only, bases or explanations for a court’s decision.” Oliner v.
25 Kontrabecki, 745 F.3d 1024, 1025 (9th Cir. 2014) (quotation omitted). Accordingly,
26 when considering a sealing request, “a strong presumption in favor of access” is generally
27 a court's “starting point.” United States v. Bus. of Custer Battlefield Museum & Store,
28 658 F.3d 1188, 1194 (9th Cir. 2011) (quotation omitted). That presumption can be
1 overcome only by a showing of a “compelling reason,” that “outweighs the general
2 history of access and the public policies favoring disclosure.” Id. at 1194–95.
3 “Despite this strong preference for public access,” courts have “carved out an
4 exception” for certain court filings. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d
5 1092, 1097 (9th Cir. 2016) (quotation omitted). Filings that are not “more than
6 tangentially related to the merits of a case” need only satisfy “the less exacting ‘good
7 cause’ standard” of Federal Rule of Civil Procedure 26(c). Id. The “good cause”
8 standard requires a “particularized showing” that “specific prejudice or harm will result”
9 if the information is disclosed. Phillips ex rel. Estates of Byrd v. Gen. Motors Corp., 307
10 F.3d 1206, 1210–11 (9th Cir. 2002) (citation omitted); see also Fed. R. Civ. P. 26(c).
11 “Unless the denial of a motion for class certification would constitute the death knell of a
12 case, the vast majority of courts within this Circuit treat motions for class certification as
13 non-dispositive motions to which the ‘good cause’ sealing standard applies.” Ramirez v.
14 GEO Grp., No. 18CV2136-LAB-MSB, 2019 WL 6782920, at *3 (S.D. Cal. Dec. 11,
15 2019) (quotation omitted).
16 However, some courts have recognized that the good cause standard may not be
17 appropriate where a class certification motion is effectively dispositive because the stakes
18 of the litigation are such that proceeding individually would not be viable from a practical
19 perspective, and that in such circumstances a party must present compelling reasons for
20 sealing. See, e.g., In re High–Tech Emp. Antitrust Litig., 2013 WL 5486230, at *2 n.1
21 (citing Prado-Steiman ex rel. Prado v. Bush, 221 F.3d 1266 (11th Cir. 2000) ); see also
22 In re Google Inc. Gmail Litig., No. 13-MD-02430-LHK, 2014 WL 10537440, at *3 (N.D.
23 Cal. Aug. 6, 2014) (holding that the case at issue “present[ed] such a circumstance”).
24 Although Plaintiffs have not indicated that the denial of their motion for class
25 certification would constitute the death knell of the case, the Court finds that this is such
26 a case because the Products sold for significantly less than the filing fee to bring an action
27 in this Court, and therefore, individual litigation would not be practical and class
28
1 certification would be effectively dispositive. Accordingly, the parties must show
2 particularized compelling reasons to seal documents.
3 Here, the documents attached to and paragraphs referenced in the parties’ briefing
4 on Plaintiff’s motion for class certification include personal information of Named
5 Plaintiffs and information from third-party Circana Inc. and Defendant that is the type “of
6 business information that might harm a litigant’s competitive standing” if they were made
7 publicly available. Nixon, 435 U.S. at 598 (citation omitted). The Court finds that
8 compelling reasons have been shown to seal the business information of Circana Inc. and
9 Defendant, as well as Plaintiffs’ personal information. Therefore, the Court GRANTS
10 the parties’ motions to seal.3 However, as seen below, the Court does rely on certain
11 facts contained in the sealed documents that relate to numerosity and materiality. The
12 public has a strong interest in the disclosure of these facts and compelling reasons for
13 their confidentiality do not exist.
14 IV. DISCUSSION
15 As explained below, the Court finds that Plaintiffs have satisfied the standards set
16 forth in Rule 23(a) and Rule 23(b)(3).
17 A. Rule 23(a)
18 Rule 23(a) enumerates four prerequisites for class certification, referred to as
19 (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy.
20 1. Numerosity
21 Rule 23(a)(1) requires that the “the class is so numerous that joinder of all
22 members is impracticable.” Fed. R. Civ. P. 23(a)(1). The party seeking certification
23 “do[es] not need to state the exact number of potential class members, nor is a specific
24 number of class members required for numerosity.” In re Rubber Chemicals Antitrust
25
26
3 The Court’s ruling on the sealing of these documents and this information only applies at this stage in
27 the proceedings and to the documents and briefing portions currently filed on the docket and has no
bearing on the sealing of these documents or information at a later stage in the proceedings.
28
1 Litig., 232 F.R.D. 346, 350 (N.D. Cal. 2005). However, courts generally find that
2 numerosity is satisfied if the class includes forty or more members. See Villalpando v.
3 Exel Direct Inc., 303 F.R.D. 588, 605–06 (N.D. Cal. 2014); In re Facebook, Inc., PPC
4 Adver. Litig., 282 F.R.D. 446, 452 (N.D. Cal. 2012). Here, Plaintiffs contend that the
5 proposed classes consist of “thousands” of members. Doc. No. 89 at 17. In addition,
6 Defendant does not dispute that the proposed classes satisfy the numerosity requirement.
7 Therefore, the Court finds that this element has been satisfied.
8 2. Commonality
9 Rule 23(a)(2) requires questions of law or fact common to the class. According to
10 Plaintiffs, common issues include whether Defendant’s “natural” representation on its
11 Products’ labels was deceptive and likely to deceive the public. Doc. No. 90-1 at 18; see
12 Wiener v. Dannon Co., Inc., 255 F.R.D. 658, 664–65 (C.D.Cal.2009) (“The proposed
13 class members clearly share common legal issues regarding [Defendant’s] alleged
14 deception and misrepresentations in its advertising and promotion of the Products.”).
15 Defendant contends that commonality fails because individual issues predominate
16 over common issues. Doc. No. 96 at 19. Because this argument overlaps with the Rule
17 23(b)(3) predominance analysis, the Court addresses it below, concluding that Plaintiffs
18 have demonstrated both commonality and predominance.
19 3. Typicality and Adequacy
20 Typicality requires that the claims or defenses of the representative parties be
21 typical of the claims or defenses of the class. Fed. R. Civ. P. 23(a)(3). Adequacy of
22 representation requires that the representative parties will fairly and adequately protect
23 the interests of the class. Fed. R. Civ. P. 23(a)(4). Adequacy is satisfied where
24 (i) counsel for the class is qualified and competent to vigorously prosecute the action, and
25 (ii) the interests of the proposed class representatives are not antagonistic to the interests
26 of the class. See Johns v. Bayer Corp., 280 F.R.D. 551, 557 (S.D. Cal. 2012).
27 Here, Plaintiffs claim typicality is met because they and the proposed class assert
28 exactly the same claim, arising from the same course of conduct—the “natural”
1 representation on the Products’ labels. Doc. No. 90-1 at 26. Likewise, Plaintiffs claim
2 adequacy is met because their interests and class members’ interests are fully aligned in
3 determining whether the Products’ labels were likely to deceive a reasonable consumer.
4 Id. at 27. In addition, Plaintiffs note that they have been engaged in the litigation,
5 responding to multiple discovery requests and attending depositions. Id. at 28.
6 Defendant argues Plaintiffs are atypical and inadequate. Doc. No. 96 at 14–17.
7 Defendants assert that it is “unlikely” that Plaintiffs purchased the Products, the word
8 “natural” on the labels “was not material” to Plaintiffs’ purchasing decisions, and that
9 Plaintiffs are “overwhelmingly ignoran[t] regarding the nature of this action.” Id. at 14–
10 17. However, as Plaintiffs note, they testified multiple times that they purchased the
11 Products and that they purchased the Products because of the “natural” representation on
12 the labels. Doc. Nos. 110 at 3–4; 110-6; 110-7. This is enough to “assure that the
13 interest of the named representative aligns with the interests of the class.” Hanon v.
14 Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992). Typicality may be a bar to
15 certification if other members would suffer because the named plaintiffs would be
16 “preoccupied with defenses unique to” them. Just Film, Inc. v. Buono, 847 F.3d 1108,
17 1116 (9th Cir. 2017) (quoting Hanon, 976 F.2d at 508). That is not the situation here. In
18 addition, the Court does not find that this is a case where Named Plaintiffs “are startlingly
19 unfamiliar with the case.” Dufour v. Be LLC, 291 F.R.D. 413, 419 (N.D. Cal. 2013)
20 (internal quotations omitted). And in any event, objections to adequacy based on a
21 named representative’s alleged ignorance are disfavored. See Surowitz v. Hilton Hotels
22 Corp., 383 U.S. 363, 370–74 (1966).
23 Defendant also argues that Plaintiffs’ counsel are inadequate. Doc. No. 96 at 17–
24 18. However, the Court finds that the complained-of behaviors, such as certain discovery
25 violations, do not rise to a level that suggest Plaintiffs’ counsel are inadequate given that
26 counsel has ample experience with consumer class actions and no conflicts with the
27 proposed classes. Accordingly, the Court finds that typicality and adequacy have been
28 met.
1 B. Rule 23(b)(3)
2 In addition to the prerequisites set forth in Rule 23(a), a class must be maintainable
3 under Rule 23(b). Under Rule 23(b)(3), certification is appropriate if: (1) questions of
4 law or fact common to the members of the class predominate over any questions affecting
5 only individual members; and (2) a class action is superior to other available methods for
6 the fair and efficient adjudication of the controversy. Fed. R. Civ. P. 23(b)(3).
7 1. Predominance
8 “In order to satisfy the predominance requirement, a plaintiff must demonstrate
9 that the claims are ‘capable of proof at trial through evidence that is common to the class
10 rather than individual to its members.’” Campion v. Old Republic Home Prot. Co., 272
11 F.R.D. 517, 528 (S.D. Cal. 2011) (quoting In re Hydrogen Peroxide Antitrust Litig., 552
12 F.3d 305, 311–12 (3rd Cir. 2008)). In analyzing predominance, “the Court must first
13 examine the substantive issues raised by [p]laintiffs and second inquire into the proof
14 relevant to each issue.” Jimenez v. Domino’s Pizza, Inc., 238 F.R.D. 241, 251 (C.D. Cal.
15 2006). Additionally, in order to satisfy Rule 23(b)(3), “plaintiffs must show that
16 ‘damages are capable of measurement on a classwide basis.’” In re 5-Hour Energy Mktg.
17 & Sales Practices Litig., No. ML 13-2438 PSG (PLAx), 2017 WL 2559615, at *9 (C.D.
18 Cal. June 7, 2017) (quoting Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013)).
19 “For purposes of class certification, the . . . CLRA [is] materially indistinguishable.
20 [The] statute allows Plaintiffs to establish the required elements of reliance, causation,
21 and damages by proving that Defendant[ ] made what a reasonable person would
22 consider a material misrepresentation.” Forcellati v. Hyland’s, Inc., No. CV 12-1983-
23 GHK (MRWx), 2014 WL 1410264, at *9 (C.D. Cal. Apr. 9, 2014); see also Townsend v.
24 Monster Bev. Corp., 303 F. Supp. 3d 1010, 1043 (C.D. Cal. 2018). The same is
25 essentially true for Plaintiffs’ GBL causes of action. See Sharpe v. A&W Concentrate
26 Co., No. 19-CV-768 (BMC), 2021 WL 3721392, at *5 (E.D.N.Y. July 23, 2021) (noting
27 that the element of materiality raises common questions, and “the centrality of those
28 questions is strong evidence of predominance).
1 Here, Defendant argues there is no predominance because (1) Plaintiffs cannot
2 show that the disputed claims were material, (2) Plaintiffs cannot show classwide
3 deception/reliance, and (3) Plaintiffs fail to present a proper damages model. Doc. No.
4 96 at 20–30. The Court addresses each argument in turn.
5 a. Materiality
6 Defendant argues that Plaintiffs cannot establish predominance because they
7 cannot show that Defendant’s alleged misrepresentation—using the word “natural” on its
8 gummy vitamin bottles that contain synthetic ingredients—was material to a reasonable
9 consumer, a required element of each of Plaintiffs’ causes of actions. Doc. No. 96 at 23–
10 26; see also Kosta v. Del Monte Foods, Inc., 308 F.R.D. 217, 224 (N.D. Cal. 2015).
11 “A representation is ‘material’ . . . if a reasonable consumer would attach
12 importance to it or if the maker of the representation knows or has reason to know that its
13 recipient regards or is likely to regard the matter as important in determining his choice
14 of action.” Id. (citing Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1107 (9th Cir. 2013), as
15 amended on denial of reh’g and reh’g en banc (July 8, 2013)) (internal quotation marks
16 omitted). “[P]laintiffs must offer some means of providing materiality and reliance by a
17 reasonable consumer on a classwide basis in order to certify a class.” Del Monte Foods,
18 308 F.R.D. at 225.
19 Here, Plaintiffs offer several means of showing materiality, including Named
20 Plaintiffs’ depositions, internal documents from Defendant, and a materiality survey from
21 one of Plaintiffs’ experts, Dr. Andrea Lynn Matthews. Doc. No. 90-1 at 22. Although
22 Defendant argues “Plaintiffs’ own testimony makes clear that the word ‘Natural’ is not
23 material to them when they make purchasing decision,” the Court agrees with Plaintiffs
24 that both Drake and Bowling testified in their depositions that they bought the Products
25 because the label had the word “natural” on them. See Doc. Nos. 110-6 at 2–3; 110-7 at
26 2–3. As to Defendant’s internal documents, Plaintiffs include emails from Defendant’s
27 marketing team and its “senior brand manager” indicating that Defendant had discussions
28 on whether to include the word “natural” on its labels. For example, Defendant’s senior
1 brand manager stated in an email that the “Regulatory [department] did not support” the
2 use of the word “natural” on the labels “based on the presence of vitamins (which are
3 synthetic) in the formula.” Doc. No. 88-3 at 2. In another email, Defendant’s vice
4 president of marketing mentioned that she “would keep [the word “natural”] to test . . .”
5 because “[c]onsumers loved those words . . .” Doc. No. 88-4 at 2. In opposition,
6 Defendant argues that Plaintiffs “misrepresent the views” of its regulatory department.
7 Doc. No. 96. Based on its review of Plaintiffs’ evidence, the Court finds that at this
8 juncture, Defendant’s internal documents support that a reasonable consumer would
9 attach importance to the claims at issue, and that Defendant knew that its consumers
10 would regard these claims as important, which renders these claims material.
11 As to Plaintiffs’ expert, Defendant argues that Dr. Matthews’s survey is flawed and
12 that its own expert report from Dr. Ran Kivetz “proves that the word ‘Natural’ on the
13 [P]roducts’ label is not material to consumers.” Doc. No. 96 at 24. At this stage in the
14 proceedings, the Court agrees with Plaintiffs that Defendant’s attacks on Plaintiffs’ expert
15 presents common questions that cannot be resolved at this juncture and do not preclude
16 certification. In re JUUL Labs, Inc., Mktg. Sales Pracs. & Prod. Liab. Litig., 609 F.
17 Supp. 3d 942, 958 (N.D. Cal. 2022). Indeed, the Court finds that Defendant’s arguments
18 hinge on a classic “battle of the experts” that must be resolved by the trier of fact.
19 Accordingly, the Court finds that Plaintiffs have presented sufficient evidence to
20 establish materiality at this stage of the proceedings.
21 b. Reliance
22 Next, Defendant argues that Plaintiffs cannot show predominance because
23 Plaintiffs cannot show that there is a common, classwide interpretation of each disputed
24 claim, such that individualized inquiries into how each consumer interpreted the claims
25 are not necessary. As noted above, this inquiry is intertwined with the question of
26 materiality for CLRA and GBL claims. See In re ConAgra Foods, Inc., 302 F.R.D. 537,
27 576–77 (C.D. Cal. 2014) (“[I]f a misrepresentation is not material as to all class
28 members, the issue of reliance ‘var[ies] from consumer to consumer,’ and no classwide
1 inference arises.”); Thurston v. Bear Naked, Inc., No. 3:11-CV-02890-H, 2013 WL
2 5664985, at *8 (S.D. Cal. July 30, 2013).
3 While Defendant argues that Plaintiffs have failed to present expert testimony or
4 survey evidence showing uniform interpretation of each claim, Plaintiffs have established
5 materiality, and in doing so, have offered evidence that the “natural” representation on
6 the Products’ labels was intended to meet consumers’ desires. Because Plaintiffs have
7 already established materiality of the claims as to all class members, this is sufficient to
8 show that the issue of reliance does not vary from consumer to consumer. See ConAgra
9 Foods, 302 F.R.D. at 576–77; see also Ehret v. Uber Techs., Inc., 148 F. Supp. 3d 884,
10 902 (N.D. Cal. 2015) (“Reliance can be established on a classwide basis by materiality.
11 In short, if the trial court finds that material misrepresentations have been made to the
12 entire class, an inference of reliance arises as to the class.”) (internal quotation marks
13 omitted).
14 c. Damages Model
15 The predominance inquiry “tests whether proposed classes are sufficiently
16 cohesive to warrant adjudication by representation.” Amchem Prod., Inc. v. Windsor, 521
17 U.S. 591, 623 (1997). As part of this inquiry, plaintiffs must demonstrate that “damages
18 are capable of measurement on a classwide basis.” Comcast, 569 U.S. at 34. Plaintiffs
19 must present a damages model consistent with their theory of liability—that is, a damages
20 model “purporting to serve as evidence of damages in this class action must measure only
21 those damages attributable to that theory.” Id. at 35. “Calculations need not be exact,”
22 id., nor is it necessary “to show that [the] method will work with certainty at this time,”
23 Khasin v. R. C. Bigelow, Inc., No. 12-CV-02204-WHO, 2016 WL 1213767, at *1 (N.D.
24 Cal. Mar. 29, 2016).
25 In cases involving deceptive claims, plaintiffs can satisfy the injury-in-fact
26 requirement by showing that they paid more for a product than they otherwise would
27 have paid (e.g., a price premium), or that they would not have purchased a product at all
28 absent the deceptive claims. See Mazza, 666 F.3d at 595.
1 As an initial matter, it should be noted that “class wide damages calculations under
2 the CLRA are particularly forgiving[,]” because “California law requires only that some
3 reasonable basis of computation of damages be used, and the damages may be computed
4 even if the result reached is an approximation.” Nguyen v. Nissan N. Am., Inc., 932 F.3d
5 811, 818 (9th Cir. 2019) (cleaned up). Here, Plaintiffs’ theory of liability in this case is
6 that Defendant misrepresented that the Products are “natural” even though they contain
7 synthetic ingredients, and that this alleged misrepresentation caused consumers to pay a
8 higher price for the Products. Doc. No. 90-1 at 24; see, e.g., McMorrow v. Mondelez
9 Int’l, Inc., 2021 WL 859137, *6 (S.D. Cal. 2021) (“Plaintiffs’ action is a classic
10 mislabeling case, and their allegation is that the defendant’s mislabeling of the Products
11 caused Plaintiffs and the putative class members to pay more than they would have if the
12 Products were properly labeled.”). As a method for measuring class-wide damages,
13 Plaintiffs point to their expert Dr. William Ingersoll’s proposed “choice-based conjoint
14 survey methodology,” which will “measure the value of an individual product attribute,
15 such as a specific understanding of the label” and in turn will help “determine the price
16 premium attributable” to the label claims. Doc. No. 90-1 at 24.
17 Conjoint surveys, like the one proposed by Plaintiffs’ expert, are a well-established
18 method for measuring class-wide damages in mislabeling cases. See, e.g., Bailey v. Rite
19 Aid Corp., 338 F.R.D. 390, 409 (N.D. Cal. 2021) (“In mislabeling cases where the injury
20 suffered by consumers was in the form of an overpayment resulting from the alleged
21 misrepresentation at issue, . . . courts routinely hold that choice-based conjoint models
22 that are designed to measure the amount of overpayment satisfy Comcast’s
23 requirements.”); Hadley v. Kellogg Sales Co., 324 F. Supp. 3d 1084, 1110 (N.D. Cal.
24 2018) (noting that “[i]t is well-established that the ‘price premium attributable to’ an
25 alleged misrepresentation on product labeling or packaging is a valid measure of damages
26 in a mislabeling case under the [ ] CLRA,” and that “conjoint analysis is widely-accepted
27 as a reliable economic tool for isolating price premia”) (quoting Brazil v. Dole Packaged
28 Foods, LLC, 660 F. App’x 531, 534 (9th Cir. 2016); Briseno v. ConAgra Foods, Inc., 674
1 F. App’x 654, 657 (9th Cir. 2017) (recognizing that a “conjoint analysis to segregate the
2 portion of th[e] premium attributable to” a contested label claim was a “well-established
3 damages model [ ]”); Krommenhock v. Post Foods, LLC, 334 F.R.D. 552, 575 (N.D. Cal.
4 2020) (“[C]onjoint surveys and analyses have been accepted against Comcast and
5 Daubert challenges by numerous courts in consumer protection cases challenging false or
6 misleading labels.”); McMorrow, 2021 WL 859137, at *14 (finding that the plaintiff’s
7 proposed conjoint survey, which would “isolate and measure the price premium attached
8 only to the term ‘nutritious,’” satisfied Comcast).
9 Relevant here, Defendant criticizes Dr. Ingersoll’s proposed model because his
10 conjoint analysis has not been applied yet to the proposed classes and because his report
11 refers to “natural ingredients” rather than “natural vitamins.” Doc. No. 96 at 28–29.
12 First, the Court agrees with Plaintiffs’ that the proposed model is sufficient even though it
13 does not inquire as to “natural vitamins.” Doc. No. 109 at 11. Indeed, Plaintiffs’ have
14 “always argued that the ‘natural’ label is deceptive because the Product[s] contain[ ]
15 synthetic ingredients.” Id.; see, e.g., SAC ¶¶ 2, 9, 12. Second, the Ninth Circuit has held
16 that “there is no general requirement that an expert actually apply to the proposed class
17 an otherwise reliable damages model in order to demonstrate that damages are
18 susceptible to common proof at the class certification stage.” Lytle v. Nutramax Lab’ys,
19 Inc., No. 22-55744, 2024 WL 3915361, at *2 (9th Cir. Aug. 23, 2024). In addition, the
20 Lytle Court held “that class action plaintiffs may rely on a reliable though not-yet-
21 executed damages model to demonstrate that damages are susceptible to common proof
22 so long as the district court finds that the model is reliable and, if applied to the proposed
23 class, will be able to calculate damages in a manner common to the class at trial.” Id.
24 Upon review of Plaintiffs’ proposed model, the Court is satisfied that Plaintiffs
25 have sufficiently shown that their proposed damages model is reliable and consistent with
26 their theory of liability under Comcast. See, e.g., Bailey, 338 F.R.D. at 409 (Plaintiffs’
27 proposed choice-based conjoint survey “seeks to measure the premium that consumers
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1 paid, on average, as a result of the allegedly misleading conduct at issue and is therefore
2 directly tied to the theory of liability in the case.”).
3 For these reasons, the Court agrees with Plaintiffs that common questions of fact
4 and law predominate over individualized inquiries, and will thus evaluate whether class
5 litigation is a superior method to adjudicate this controversy.
6 2. Superiority
7 The Court also agrees with Plaintiffs that a class action is superior to other
8 available methods of adjudicating these issues. Judicial economy weighs in favor of a
9 class action where, as here, liability turns on whether products’ labels were false or
10 misleading. Likewise, it would be economically infeasible for class members to pursue
11 their claims individually, since the expense of litigating the scientific adequacy of
12 Defendant’s claims would be exponentially larger than the small amount in controversy
13 for each individual consumer (around $11–$13 per purchase). See, e.g., Wiener, 255
14 F.R.D. at 671. It is far more efficient to resolve the common questions regarding
15 materiality and scientific substantiation in a single proceeding rather than to have
16 individual courts separately hear these issues. The Court therefore concludes that
17 Plaintiffs have met all the requirements of Rule 23(b)(3), as well as Rule 23(a).
18 V. RULE 11 MOTIONS FOR SANCTIONS
19 Both parties have filed Rule 11 motions for sanctions. Doc. Nos. 104; 107.
20 Federal Rule of Civil Procedure 11 provides in pertinent part that “[b]y presenting to the
21 court a pleading, written motion, or other paper . . . an attorney . . . certifies that to the
22 best of the person’s knowledge, information, and belief, formed after an inquiry
23 reasonable under the circumstances . . . the factual contentions have evidentiary support.”
24 Fed. R. Civ. P. 11(b)(3). Rule 11 authorizes a court to sanction a party and the party’s
25 counsel for filing a pleading, written motion, or other paper lacking evidentiary support.
26 Fed. R. Civ. P. 11(c). The sanction may take many forms, including reasonable
27 attorney’s fees and expenses, but must “must be limited to what suffices to deter
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1 repetition of the conduct or comparable conduct by others similarly situated.” Fed. R.
2 Civ. P. 11(c)(4).
3 Rule 11 sanctions are an extraordinary measure. Defendant argues that Plaintiffs’
4 “class certification motion and class action complaint are frivolous” requiring dismissal
5 of this case with prejudice and attorneys’ fees. Doc. No. 104-1 at 6–7. Given that the
6 Court has denied two motions to dismiss in this case and has now granted class
7 certification, the Court finds imposition of sanctions is not warranted, as this case is not
8 frivolous. As discussed above, although Defendant contends that Plaintiffs’ expert report
9 from Dr. Matthews is flawed, the Court finds that those arguments are better suited for
10 the trier of fact and that Plaintiffs presented other evidence sufficient to establish
11 materiality at this stage of the proceedings. Indeed, “neither the possibility that a plaintiff
12 will be unable to prove his allegations, nor the possibility that the later course of the suit
13 might unforeseeably prove the original decision to certify the class wrong, is a basis for
14 declining to certify a class which apparently satisfies.” Lytle, 2024 WL 3915361, at *7.
15 In addition, although the Court finds Plaintiffs’ counsel’s conduct disconcerting
16 regarding the original named plaintiff, the Court declines to impose sanctions with the
17 expectation that counsel will refrain from such conduct in the future.
18 In response to Defendant’s Rule 11 motion, Plaintiffs filed their own Rule 11
19 motion against Defendant and its counsel for improperly threatening sanction for tactical
20 purposes and for “knowingly misstating facts in signed filings with the Court.” Doc. No.
21 107-1 at 2. First, the Court does not find that Defendant brought its motion for sanctions
22 for an improper purpose. Second, the Court agrees with Defendant that Plaintiffs’
23 arguments regarding “misstating facts” in a deposition is not applicable to a Rule 11
24 motion for sanctions. See e.g., Patelco Credit Union v. Sahni, 262 F.3d 897, 913 (9th
25 Cir. 2011) (explaining “Rule 11(d) specifically exempts discovery motions and
26 objections from its procedural requirements.”); see also Christian v. Mattel, 286 F.3d
27 1118, 1131 (9th Cir. 2002) (reversing imposition of Rule 11 sanctions because the award
28 was based, in part, on discovery abuse).
1 Therefore, the Court DENIES both parties’ motions for Rule 11 sanctions. Doc.
2 || Nos. 104; 107.
3 VI. CONCLUSION
4 For the foregoing reasons, the Court GRANTS Plaintiffs’ motion for class
5 || certification, Doc. No. 90, and DENIES the parties’ motions for sanctions, Doc. Nos.
6 || 104, 107. In addition, the Court GRANTS the pending motions to seal, Doc. Nos. 87,
7 102, and 108. Accordingly, it is hereby ORDERED that Document Numbers 88-89,
8 103, and 109 shall remain under seal as proposed documents.
9 As stated in U.S. Magistrate Judge Jill L. Burkhardt’s November 1, 2023 Order,
10 No. 81, the parties aae ORDERED to contact Judge Burkhardt’s chambers no later
11 September 19, 2024 to request another Case Management Conference.
12 IT IS SO ORDERED.
13 || Dated: September 16, 2024 at WMhikuk Ld = ; hikt
HON. MICHAEL M. ELLO
14 United States District Judge
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