Conde v. Sensa Products

Filing 128

ORDER denying without prejudice 115 Plaintiff Susan Grace Stokes' motion for class certification. Signed by Judge Janis L. Sammartino on 9/10/2018. (All non-registered users served via U.S. Mail Service)(jpp)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JOSE CONDE, et al., Case No.: 14-cv-51 JLS WVG Plaintiffs, 12 13 14 ORDER DENYING WITHOUT PREJUDICE PLAINTIFF SUSAN GRACE STOKES’ MOTION FOR CLASS CERTIFICATION v. SENSA, et al., 15 Defendants. (ECF No. 115) 16 17 Presently before the Court is Plaintiff Susan Grace Stokes’ Motion for Class 18 Certification (“Mot.,” ECF No. 115). Also before the Court is Defendants IB Holding, 19 LLC and TechStyle, Inc.’s Opposition to Plaintiff’s Motion (“Opp’n,” ECF No. 119) and 20 Plaintiff’s Reply in Support of Her Motion (“Reply,” ECF No. 123). The Court heard oral 21 argument on September 4, 2018. After considering the Parties arguments’ and the law, the 22 Court DENIES WITHOUT PREJUDICE Plaintiff’s Motion for Class Certification. 23 BACKGROUND 24 This case was originally brought by José Conde against Sensa Products, LLC 25 (“Sensa”). ECF No. 1. There were three pending related cases: Conde v. Sensa et al., 26 Case No. 14-CV-51 JLS (WVG) (S.D. Cal., filed Jan. 7, 2014), Delaney et al. v. Sensa et 27 al., Case No. 14-CV-2120 JLS (WVG) (S.D. Cal., filed Sept. 8, 2014), and Stokes v. Sensa 28 et al., Case No. 14-CV-2325 JLS (WVG) (S.D. Cal., filed Oct. 1, 2014). The plaintiffs in 1 14-cv-51 JLS WVG 1 Delaney moved the Court for an order consolidating the three cases. ECF No. 17. 1 The 2 Court granted the motion and consolidated the cases. ECF No. 32. All cases were brought 3 against Sensa, but GNC was another named defendant in the Delaney case. 4 consolidation, all plaintiffs then filed an amended complaint against Sensa, Dr. Alan Hirsh, 5 and GNC. ECF No. 33. The Delaney Plaintiffs and GNC settled, and Delaney dismissed 6 the class claims against GNC. ECF No. 53. It appears that all named plaintiffs except 7 Stokes were a part of the settlement, because after the settlement and dismissal of GNC, 8 only Stokes moved to file an amended complaint. ECF No. 56. The Court granted the 9 request, and Stokes filed an amended complaint against Sensa and various other companies 10 After and individuals. ECF No. 60. 11 In 2014, the Federal Trade Commission (“FTC”) filed a complaint against Sensa, 12 Adam Goldenberg, and Dr. Hirsch, (collectively, “FTC Defendants”) alleging unfair or 13 deceptive acts or practices and false advertisements.2 Request for Judicial Notice (“RJN”), 14 ECF No. 119-3 at 13. 3 The FTC and the FTC Defendants entered into a stipulated 15 judgment for $46.5 million. 16 Complaint (“TAC”), ECF No. 76 ¶ 13. As part of the settlement, the FTC Defendants were 17 restrained from, among other things, falsely representing that any product causes weight 18 loss. RJN 20. The amount owed was later reduced to $26.5 million because of Sensa’s 19 “deteriorating financial condition.” Opp’n at 10. The FTC then mailed over 477,000 20 refund checks to consumers who bought Sensa’s products. Id. In connection with the FTC 21 matter, in late 2013 or early 2014, “Sensa Products changed the ‘lose up to 30lbs or more Id. at 25; Third Consolidated Amended Class Action 22 23 1 24 2 25 26 27 28 Unless otherwise indicated, ECF numbers relate to filings in the lead case, Case Number 14-CV-51. Mr. Goldenberg is a director and officer of Sensa, and Dr. Hirsch conducted studies regarding the Sensa products. 3 Defendants request the Court take judicial notice of the FTC Settlement (ECF No. 119-3). The same settlement is attached to Plaintiff’s Complaint (ECF No. 70-2, at 20–44). The Court may take judicial notice of documents incorporated into the complaint by reference. N.M. State Inv. Council v. Ernst & Young LLP, 641 F.3d 1089, 1094 (9th Cir. 2011). The Court therefore GRANTS Defendants’ request for judicial notice. 2 14-cv-51 JLS WVG 1 in just 6 months’ statement to ‘9.5 pounds in 6 months’ and/or ‘10 pounds in 3+ months.’” 2 Declaration of Kristin Chadwick in Support of Mot. (“Chadwick Decl.”), ECF No. 119-1 3 ¶ 6. In October 2014, Sensa declared bankruptcy. Opp’n at 14. 4 The bankruptcy did not end this case. Plaintiff Stokes’ TAC is brought against Sensa 5 Products, LLC; Sensa, Inc. (f/k/a Intelligent Beauty, Inc.); IB Holding, LLC (a/k/a 6 Intelligent Beauty Holding, LLC); TechStyle, Inc. (f/k/a JustFab, Inc. and Just Fabulous, 7 Inc.); Dr. Alan R. Hirsch; Don Ressler; Adam Goldenberg; Kristen Chadwick; TCV VI, 8 L.P; TCV Technology Crossover Ventures; and John Drew. See generally ECF No. 76. 9 Plaintiff alleges Sensa was part of an “interconnected web of entities” operating as a single 10 enterprise. Mot. at 7. Plaintiff alleges “the enterprise, acting through IB Holding, LLC 11 (“IBH”), and TechStyle, Inc., f/k/a JustFab, Inc.’s (“JustFab”) (collectively, the “Solvent 12 Defendants”) used unrecoverable or forgiven loans to systematically strip the assets of 13 IB[H] and Sensa Products.” Id. 14 The summary of the allegations are as follows: Sensa produced various weight-loss 15 products, which were “tastant crystals” or “sprinkles” that users would sprinkle on their 16 food. TAC ¶ 2. As marketed by Sensa, when the users smelled and tasted the crystals, the 17 crystals would trigger the user’s “I feel full” signal and the user would therefore eat less 18 food. Id. ¶ 3. Originally, Sensa marketed that the products would allow users to “lose up 19 to 30lbs or more in just 6 months” without requiring the user to diet or exercise. TAC ¶¶ 4– 20 5; Opp’n at 12. As noted above, this marketing was changed in 2013/2014 to lose “‘9.5 21 pounds in 6 months’ and/or ‘10 pounds in 3+ months.’” Chadwick Decl. ¶ 6. 22 Plaintiff brings causes of action generally alleging false and misleading 23 advertising/marketing, unfair competition, and breach of warranties. The products at issue 24 are: 25 Advanced Weight-Loss System (hereinafter, the “Class Products”). (Mot. at 7 n.1.) 26 Plaintiff states she relied on the labeling for the Class Products and alleges the Products 27 are ineffective, the Products have not been “clinically shown” to cause weight loss, and the 28 system is not “supported by impressive clinical results.” TAC ¶¶ 7–8. Plaintiff seeks Sensa Weight-Loss System; Sensa for Men Weight-Loss System; and Sensa 3 14-cv-51 JLS WVG 1 certification of a nationwide class defined as “all persons in the United States who 2 purchased Defendants’ Sensa Weight-Loss System, on or after August 22, 2012.” 3 LEGAL STANDARD 4 Motions for class certification proceed under Rule 23(a) of the Federal Rules of Civil 5 Procedure. Rule 23(a) provides four prerequisites to a class action: (1) the class is so 6 numerous that joinder of all members is impracticable (“numerosity”), (2) there are 7 questions of law or fact common to the class (“commonality”), (3) the claims or defenses 8 of the representative parties are typical of the claims or defenses of the class (“typicality”), 9 and (4) the representative parties will fairly and adequately protect the interests of the class 10 (“adequate representation”). Fed. R. Civ. P. 23(a). 11 A proposed class must also satisfy one of the subdivisions of Rule 23(b). Here, 12 Plaintiff seeks to proceed under Rule 23(b)(3), which requires that “the court find[] that 13 the [common questions] predominate over any questions affecting only individual 14 members [‘predominance’], and that a class action is superior to other available methods 15 for fairly and efficiently adjudicating the controversy [‘superiority’].” The relevant factors 16 in this inquiry include the class members’ interest in individually controlling the litigation, 17 other litigation already commenced, the desirability (or not) of consolidating the litigation 18 in this forum, and manageability. Fed. R. Civ. P. 23(b)(3)(A)–(D). 19 “In determining the propriety of a class action, the question is not whether the 20 plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather 21 whether the requirements of Rule 23 are met.” Eisen v. Carlisle & Jacquelin, 417 U.S. 22 156, 178 (1974) (internal quotations omitted). “Rule 23 does not set forth a mere pleading 23 standard.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). Rather, “[a] party 24 seeking class certification must affirmatively demonstrate his compliance with the Rule— 25 that is, he must be prepared to prove that there are in fact sufficiently numerous parties, 26 common questions of law or fact, etc.” Id. The court is “at liberty to consider evidence 27 which goes to the requirements of Rule 23 even though the evidence may also relate to the 28 underlying merits of the case.” Hanon v. Dataproducts Corp., 976 F.2d 497, 509 (9th Cir. 4 14-cv-51 JLS WVG 1 1992). A weighing of competing evidence, however, is inappropriate at this stage of the 2 litigation. Staton v. Boeing Co., 327 F.3d 938, 954 (9th Cir. 2003); Wang v. Chinese Daily 3 News, Inc., 231 F.R.D. 602, 605 (C.D. Cal. 2005). 4 5 ANALYSIS I. Standing 6 Under Article III of the United States Constitution, a federal court may only 7 adjudicate an action if it constitutes a justiciable “case” or a “controversy” that has real 8 consequences for the parties. Raines v. Byrd, 521 U.S. 811, 818 (1997); Lujan v. Defenders 9 of Wildlife, 504 U.S. 555, 560 (1992). A threshold requirement for justiciability in federal 10 court is that the plaintiff have standing to assert the claims brought. Id. “[S]tanding 11 requires that (1) the plaintiff suffered an injury in fact . . . , (2) the injury is fairly traceable 12 to the challenged conduct, and (3) the injury is likely to be redressed by a favorable 13 decision.” Mazza v. Am. Honda Motor Co., 666 F.3d 594–95 (9th Cir. 2012) (quoting 14 Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007)). 15 Defendants contest Plaintiff’s standing in various regards: (1) Plaintiff is a Florida 16 resident who neither purchased any Sensa products in California during the class period 17 nor visited or purchased products from the Sensa websites; (2) Plaintiff did not suffer an 18 injury because she was happy with the products and accomplished her goal of maintaining 19 her weight; and (3) Plaintiff never purchased two of the Class Products: Sensa for Men 20 and Sensa Advanced. Opp’n at 15–17. The Court addresses each argument in turn. 21 A. 22 Plaintiff does not contest that she is a Florida resident and that she did not purchase 23 the Class Product in California or from the Sensa website. See TAC ¶ 27. She purchased 24 the Class Product multiple times, first after watching an infomercial on ShopNBC and later 25 at a GNC store. ECF No. 119-2, at 38, 44. Plaintiff argues, however, that this does not 26 negate her standing as she was deceived by a California defendant’s conduct and 27 subsequently purchased the Product. 28 /// Florida Residency and Purchase 5 14-cv-51 JLS WVG 1 The Court in Forcellati v. Hyland’s Inc., 876 F. Supp. 2d 1155 (C.D. Cal. 2012), 2 addressed a similar issue. In that case, the defendants, which were headquartered in 3 California, argued that the plaintiff, a New Jersey resident, lacked standing to bring 4 consumer protection claims in California. Id. at 1160. The court distinguished two issues: 5 the ability of a nonresident plaintiff to assert a claim under California law and a choice-of- 6 law analysis. Id. The court determined that the defendants were making a choice-of-law 7 argument rather than a standing argument and that the plaintiff did not lack standing to 8 bring claims under California law. 9 Here, Defendants similarly make a choice-of-law argument, not a proper standing 10 argument. As in Forcellati, Defendants do not argue that any of the Article III standing 11 requirements are not met. See id. at 1060. Rather, Plaintiff here seeks to certify a 12 nationwide class of persons who purchased a product in the United States during the 13 relevant time period. Plaintiff Stokes certainly did this. This confers standing on her; 14 whether California law applies is a separate issue. Further, the argument that Stokes did 15 not purchase a product through the website does not mean she has no standing to bring this 16 case. The purposed class Plaintiff Stokes seeks to certify does not specify that the members 17 purchased the product through the website, even if it turns out most of them did so. See 18 Opp’n at 9 (stating 84% of purchasers bought the product online). This argument goes 19 towards the typicality requirement, which will be addressed below. See infra Section II.C. 20 B. 21 Defendants cite to Ms. Stokes’ deposition, at which she testified that she was 22 satisfied with the Class Product, purchased it continually for five years, and achieved her 23 goal of maintaining her weight even though she was not exercising due to an injury. Opp’n 24 at 16.4 Defendants argue that Ms. Stokes therefore lacks standing to bring this case. To Satisfaction With the Product 25 26 4 27 28 To contest this, Plaintiff submitted a declaration attached to her Reply, in which she states that she “purchased Sensa for approximately four years because [she] believed the advertisements that said it was an effective weight loss product.” “Stokes Decl.,” ECF No. 123-1 ¶ 4. She states that, although she believed the advertisements at the time, she “now know[s] that Sensa did not work.” Id. ¶ 5. 6 14-cv-51 JLS WVG 1 support this argument, Defendants cite to Hovsepian v. Apple, Inc., in which the court 2 determined the class was not ascertainable because “it includes members who have not 3 experienced any problems with their [Class Products]. Such members have no injury and 4 no standing to sue.” No. 08-5788 JF (PVT), 2009 WL 5069144, at *6 (N.D. Cal. Dec. 17, 5 2009); see also Moheb v. Nutramax Labs. Inc., No. CV 12-3633-JFW (JCx), 2012 WL 6 6951904, at *3 (C.D. Cal. Sept. 4, 2012) (determining members who derived benefit from 7 the product and “are satisfied users” have no injury and no standing to sue). Hovespian 8 and Moheb, like the present case, also involved false advertising claims. The courts in 9 those cases, however, provided little analysis supporting their finding of no standing, nor 10 did they define what constituted an “injury in fact” for standing purposes. 11 In contrast, other courts have held that standing is not negated in situations similar 12 to the present case simply because the purchaser was satisfied with the product. In 13 McCrary v. Elations Co., No. EDCV 13-242 JGB (OPx), 2014 WL 1779243 (C.D. Cal. 14 Jan. 13, 2014), the court found “unpersuasive” the defendant’s “concern that some putative 15 class members were happy with [the product] and thus were uninjured.” Id. at *14. The 16 court cited In re Google AdWords Litigation, No. 5:08–CV–3369, 2012 WL 28068, at *10 17 (N.D. Cal. Jan. 5, 2012), which held “the requirement of concrete injury is satisfied when 18 the Plaintiffs and class members in UCL and FAL actions suffer an economic loss caused 19 by the 20 misrepresentations.” The court in McCrary also cited Ries v. Arizona Beverages USA, 287 21 F.R.D. 523 (N.D. Cal. 2012), which held: 22 23 24 25 26 27 28 defendant, namely the purchase of defendant’s product containing The focus of the [Unfair Competition Law (“UCL”)] and [False Advertising Law (“FAL”)] is on the actions of the defendants, not on the subjective state of mind of the class members. All of the proposed class members would have purchased the product bearing the alleged misrepresentations. Such a showing of concrete injury under the UCL and FAL is sufficient to establish Article III standing. Ries, 287 F.R.D. at 536 (internal citation omitted). 7 14-cv-51 JLS WVG 1 The Court agrees with the analysis of Google and Ries. Plaintiff Stokes’ alleged 2 satisfaction with the Class Product at the time she was using it, or the fact that she did not 3 gain weight while using the Class Product, is insufficient to strip her of standing. 4 Satisfaction (or lack thereof) is not the focus of the “injury” requirement for a false 5 advertising claim: A product can be falsely advertised even if people enjoy it. Plaintiff 6 Stokes purchased the Class Product after viewing the advertisements and has standing to 7 claim that the advertisements were false and that she was damaged thereby. 8 C. 9 Plaintiff testified that she has never heard of or purchased Sensa for Men or Sensa 10 Advanced. ECF No. 119-2, at 11–12. Defendants argue that Plaintiff lacks standing to 11 bring claims based on the two Class Products different than the one she purchased. Opp’n 12 at 17. Cases regarding multiple Class Products and how this relates to standing vary. The Three Class Products 13 In Azimpour v. Sears, Roebuck & Co., 15cv2798-JLS (WVG), 2017 WL 1496255 14 (S.D. Cal. Apr. 26, 2017), for example, this Court found that the named representative had 15 standing despite the fact that she purchased a different pillow than the class members. See 16 id. at *5. The Court found that “[p]laintiff’s allegations are based on Defendant’s allegedly 17 deceptive pricing scheme[,] which uniformly applies to and affects all products.” Id. In 18 sum, the case “is not about a pillow—it is about a price tag.” Id. In that decision, the Court 19 cited Branca v. Nordstrom, Inc., No. 14CV2062-MMA (JMA), 2015 WL 10436858 (S.D. 20 Cal. Oct. 9, 2015), in which the court had found that “it is immaterial for the purposes of 21 [plaintiff’s] claims whether one purchased a pair of shoes versus a hat, so long as the item 22 bore a ‘Compare At’ tag. . . . Rather, his claims relate to the consistent format of the tags.” 23 Id. at *5. These cases lead to the conclusion that even if the products are different, as long 24 as the alleged problem with the products (such as the marketing or misrepresentation) is 25 the same, the plaintiff has standing to bring the case. 26 In Tria v. Innovation Ventures, LLC, No. CV 11-7135-GW(PJWx), 2013 WL 27 12324181 (C.D. Cal. Feb. 25, 2013), by contrast, the court held that “a plaintiff has no 28 injury-in-fact with respect to products she has not purchased, although she has purchased 8 14-cv-51 JLS WVG 1 similar products, at least where the products she has and has not purchased are not 2 effectively identical for purposes of the type of case brought.” Id. at *3. The plaintiff did 3 not have standing to pursue claims related to a product she did not purchase when there 4 were “unquestionable distinctions in the types of statements that have been used to market 5 or advertise” the two products. Id. Similarly, in Dysthe v. Basic Research LLC, No. CV 6 09-8013 AG (SSx), 2011 WL 5868307 (C.D. Cal. June 13, 2011), the court found the 7 plaintiff did not have standing to pursue claims regarding Relacore when she purchased 8 Relacore Extra. Id. at *4. The court reviewed the ingredients of the products and found 9 “significant differences” between the products and the products’ packaging and that the 10 products are “marketed and sold separately by Defendants.” Id. at *5. 11 Here, Defendants attempt to distinguish the three Class Products: the original Sensa 12 product contains “primarily maltodextrin, tricalcium phosphate, silica, and certain natural 13 and artificial flavors,” whereas Sensa for Men is “specially formulated for men” and 14 “contained or concentrated and/or different flavors than the original product” and Sensa 15 Advanced contained a new ingredient, chromium, “to provide metabolism support.” Opp’n 16 at 12. Defendants also argue that “[t]he accompanying marketing and representations 17 about these three products were correspondingly different and tailored to the product.” Id. 18 The three Class Products are clearly marketed under the same general theme: use 19 Sensa and lose weight. The fact that the Class Products contain different “flavors” or one 20 additional ingredient does not mean that the Class Products are significantly different. See 21 Dysthe, 2011 WL 5868307, at *5. Further, the only evidence to support Defendants’ 22 argument that the marketing for the Products differed is the change in marketing in 2013 23 or 2014: Sensa Advanced did not promote as much weight loss as did the other Products. 24 But, the three Class Products are “effectively identical” with regards to the underlying 25 purpose of this case—alleged false labeling and misrepresentation. Tria, 2013 WL 26 12324181, at *3. Because the ingredients of the three Class Products are very similar and 27 the Class Products are marketed to consumers for similar purposes, the Court finds Plaintiff 28 has standing to bring claims relating to all three Class Products. 9 14-cv-51 JLS WVG 1 2 The Court therefore finds that Plaintiff has standing to bring this case. II. Rule 23(a) Requirements 3 Plaintiff must establish that the proposed class satisfies the four requirements of Rule 4 23(a). Defendants do not contest that Plaintiff’s proposed class meets the Rule 23(a) 5 requirements of numerosity and commonality. The Court analyzes these requirements 6 briefly, focusing on the contested elements of typicality and adequacy. 7 A. 8 “[A] proposed class must be ‘so numerous that joinder of all members is 9 impracticable.’” Rannis v. Recchia, 380 Fed. App’x 646, 650 (9th Cir. 2010) (quoting Fed. 10 R. Civ. P. 23(a)(1)). While “[t]he numerosity requirement is not tied to any fixed numerical 11 threshold[,] . . . [i]n general, courts find the numerosity requirement satisfied when a class 12 includes at least 40 members.” Id. at 651. Numerosity 13 Plaintiff does not provide the Court with an approximate number of class members, 14 instead providing the confidential sum of money that Defendants have earned through sale 15 of the Class Products. Mot. at 20. Given this large value, and given that Defendants do 16 not dispute the numerosity of the proposed class, the Court finds that the number of 17 members is sufficiently numerous that joinder is impracticable, and therefore finds that this 18 requirement is fulfilled. See Astiana v. Kashi Co., 291 F.R.D. 493, 501 (S.D. Cal. 2013) 19 (“In ruling on a class action a judge may consider reasonable inferences drawn from facts 20 before him at that stage of the proceedings.”). 21 B. 22 Rule 23(a)(2) requires that “there are questions of law or fact common to the class.” 23 Fed. R. Civ. P. 23(a)(2). To satisfy this requirement, “[a]ll questions of fact and law need 24 not be common to satisfy the rule. The existence of shared legal issues with divergent 25 factual predicates is sufficient, as is a common core of salient facts coupled with disparate 26 legal remedies within the class.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019 (9th Cir. 27 1998). The common contention, however, “must be of such a nature that it is capable of 28 classwide resolution—which means that determination of its truth or falsity will resolve an Commonality 10 14-cv-51 JLS WVG 1 issue that is central to the validity of each one of the claims in one stroke.” Dukes, 564 2 U.S. at 350. 3 Plaintiff asserts that classwide liability hinges on many common questions, 4 including whether the marketing and advertisements for Sensa were false, whether 5 Defendants’ conduct violated various laws, whether Defendants’ conduct breached 6 warranties, and whether Defendants made negligent misrepresentations. Mot. at 21; TAC 7 ¶ 147. There therefore exists at least one common question as to Plaintiff’s claims, and the 8 Court finds that the commonality requirement is satisfied. 9 C. Typicality 10 The Ninth Circuit has explained, “representative claims are ‘typical’ if they are 11 reasonably co-extensive with those of absent class members; they need not be substantially 12 identical.” Staton, 327 F.3d at 957; Hanlon, 150 F.3d at 1019. The test of typicality “is 13 whether other members have the same or similar injury, whether the action is based on 14 conduct which is not unique to the named plaintiffs, and whether other class members have 15 been injured by the same course of conduct.” Schwartz v. Harp, 108 F.R.D. 279, 282 (C.D. 16 Cal. 1985). 17 Plaintiff Stokes alleges typicality is satisfied because she and the class members 18 purchased a Class Product and “were exposed to the same name (‘Sensa Weight-Loss 19 System’) and a uniform branded message.” Mot. at 23. Defendants make various 20 arguments against this, many of which echo Defendants’ dispute against Plaintiff’s 21 standing. Opp’n at 18–21. The Court addresses each of Defendants’ arguments in turn. 22 23 1. Plaintiff Did Not Purchase the Class Product to Lose Weight But to Maintain Her Weight at a Time When She Was Unable to Exercise 24 Although Plaintiff Stokes may have purchased the Product for a different reason than 25 other class members, i.e., maintaining her weight vs. losing weight, she still suffered the 26 same injury as the class members: monetary loss from purchasing a product based on 27 alleged misrepresentations. Typicality does not turn on the “specific facts from which [the 28 claim] arose.” Hanon, 976 F.2d at 508. Thus, the Court finds that Plaintiff is not atypical 11 14-cv-51 JLS WVG 1 for this reason. 2 2. Plaintiff Experienced Side Effects From the Class Product 3 Defendants argue that Plaintiff Stokes is not typical because she experienced side 4 effects from the Class Product. Plaintiff has filed a declaration stating she “is not seeking 5 relief for the side effects [she] experienced from using Sensa. [She is] seeking a full refund 6 of the purchase product of the product for [her]self and the other class members.” Stokes 7 Decl. ¶ 6. Therefore, Plaintiff Stokes is seeking the same relief as the class members and 8 is not atypical for this reason. 9 10 3. Plaintiff Spent $5,000 on the Class Product, Used the Class Product for Five Years, and Was Satisfied With the Class Product 11 Defendants argue that Plaintiff Stokes was a satisfied customer who continued to 12 purchase the Class Product over a five-year period and therefore is atypical of the other 13 class members. Plaintiff now states she was not satisfied with the Class Product and was 14 deceived by Defendants. Reply at 9. This contradicts her deposition testimony where she 15 testified she was “satisfied with Sensa while . . . using it” and “Sensa was the answer for 16 [her] to . . . be able to eat what [she] wanted without exercising.” ECF No. 119-2 at 35. 17 She testified her goal in buying Sensa was to maintain her weight, and she did indeed 18 maintain her weight. Id. She continued to buy the product because she was satisfied with 19 it. Id. at 74. Indeed, while Plaintiff Stokes’s first purchase of the Class Product was 20 induced by Defendants’ advertisements, it appears Plaintiff’s continued purchase of the 21 Class Product was because she believed it was working for her. 22 “In determining whether typicality is met, the focus should be ‘on the defendants’ 23 conduct and plaintiff’s legal theory.’” Simpson v. Fireman’s Fund Ins. Co., 231 F.R.D. 24 391, 396 (N.D. Cal. 2005) (citation omitted). Here, the legal theory is that Defendants 25 falsely labeled the Class Products and that the Class Products do not deliver what is 26 promised. Plaintiff also suffered the “same injury” as the class members—being subjected 27 to false labeling and losing money. See Gen. Tel. Co. of S.W. v. Falcon, 457 U.S. 147, 156 28 (1983); Bruno v. Quten Research Inst., LLC, 280 F.R.D. 524, 534 (C.D. Cal. 2011) (holding 12 14-cv-51 JLS WVG 1 that “individual experience with a product is irrelevant” because “the injury under the 2 [Unfair Competition Law], [False Advertising Law,] and [Consumer Legal Remedies Act] 3 is established by an objective test. Specifically, this objective test states that injury is 4 shown where the consumer has purchased a product that is marketed with a material 5 misrepresentation, that is, in a manner such that ‘members of the public are likely to be 6 deceived’”). 7 It is irrelevant that Plaintiff Stokes liked the Class Product during the time she was 8 using it—she is not seeking to represent a class of people who gained weight as a result of 9 Sensa or disliked the Class Product. The Court therefore finds that Plaintiff Stokes is not 10 atypical for this reason. See Rikos v. Procter & Gamble Co., 799 F.3d 497, 507 (6th Cir. 11 2015) (holding that, “although [defendant] argues that some class members were not 12 injured because they kept buying [the Class Product]—a sign that [the Class Product] 13 works, says [Defendant]—that is not the right way to think about ‘injury’ in the false- 14 advertising context. The false-advertising laws at issue punish companies that sell products 15 using advertising that misleads the reasonable consumer”). 16 4. Plaintiff Used Only One of the Three Class Products 17 It is undeniable that Plaintiff used only one of three of the Class Products. In general, 18 “[t]he typicality requirement does not mandate that the products purchased . . . must be the 19 same as those of absent class members.” In re TFT–LCD (Flat Panel) Antitrust Litig., 267 20 F.R.D. 583, 593 (N.D. Cal. Mar. 28, 2010). But “[i]n cases involving a variety of products, 21 courts, emphasizing that different products have different functions and different 22 consumers, have held that a named plaintiff that purchased a different product than that 23 purchased by unnamed plaintiffs fails to satisfy the typicality requirement of Rule 24 23(a)(3).” Wiener v. Dannon Co., 255 F.R.D. 658, 666 (C.D. Cal. 2009). 25 In Wiener, the court determined that the proposed class representative had not 26 established typicality because she only purchased one of the products, Activia, and did not 27 purchase DanActive or Activia Light. Id. at 666. The defendant had made “different health 28 benefit claims” for the three products, and the products “target[ed] consumers with 13 14-cv-51 JLS WVG 1 different health issues.” Id. In sum, “the evidence needed to prove [plaintiff’s] claims 2 involving Activia, namely proof that Dannon’s claim that Bifidus Regularis is clinically 3 proven to regulate digestion is false or misleading, is not probative of the claims of 4 unnamed class members who purchased DanActive, which require evidence that the claim 5 that L. Casei Immunitas is clinically proven to strengthen the immune system is false or 6 misleading.” Id. 7 Here, unlike in Wiener, the Class Products all boast the same result: weight loss. 8 And, while Sensa for Men obviously targeted males, there is no evidence that this Class 9 Product was marketed any differently than the other two Class Products. As analyzed 10 above, the marketing and ingredients for the three products are substantially similar. See 11 supra Section I.C. Accordingly, the “various products purchased . . . do not negate a 12 finding of typicality” because Plaintiff Stokes alleges that the class members’ injuries 13 “arise[] from a common wrong.” See Pecover v. Elec. Arts Inc., No. C 08-2820 VRW, 14 2010 WL 8742757, at *11 (N.D. Cal. Dec. 21, 2010). Plaintiff’s claims are therefore 15 “reasonably co-extensive with those of absent class members,” Hanlon, 150 F.3d at 1020, 16 and the Court finds that Plaintiff is not atypical for this reason. 17 5. 18 Plaintiff Did Not See and Rely on All Representations by Sensa Because Sensa Changed Its Weight Loss Representations in 2013 or 2014 19 Defendants state that in late 2013 or early 2014, “Sensa Products changed the ‘lose 20 up to 30lbs or more in just 6 months’ statement to ‘9.5 pounds in 6 months’ and/or ‘10 21 pounds in 3+ months.’” Chadwick Decl. ¶ 6. Defendants state Plaintiff Stokes never saw 22 or read these new representations. Plaintiff Stokes argues this minor change is immaterial, 23 and that the same evidence will be used to prove that both representations are false. Reply 24 at 9. 25 misrepresentations were false or misleading. This will be the issue regardless of the change 26 in advertising, as the advertising uniformly claims that users will lose weight after using 27 the Class Product. 28 /// The Court agrees with Plaintiff: what is important is whether Defendants’ 14 14-cv-51 JLS WVG 1 6. 2 Plaintiff Did Not Purchase the Product Online and Never Saw Sensa’s Website 3 As mentioned above, Plaintiff Stokes purchased her product from a retail store and 4 over the phone, not online. Defendants state that 84% of the class members purchased the 5 Class Product online and Plaintiff Stokes is therefore atypical. Opp’n at 20. In support of 6 their argument, Defendants cite to McCrary, in which the court excluded class members 7 who purchased the product online because the proposed class definition required that the 8 putative member be exposed to the “packaging and/or labeling of’ the product.” 2014 WL 9 1779243, at *11. The court reasoned that “[m]ost, if not all, online consumers would not 10 have seen the packaging or labeling on the product prior to purchase.” Id. 11 McCrary is clearly different from the present case. The class definition here does 12 not include a requirement that a class member be exposed to a certain advertisement. In 13 any event, Plaintiff Stokes testified she saw the Class Product advertised on an informercial 14 on ShopNBC and saw ads on television. ECF No. 119-2 at 46, 73. Plaintiff Stokes also 15 purchased the Class Product at the retail store and saw the box or advertisement there that 16 stated it was a weight-loss product. The class members who purchased the Class Products 17 online also saw ads similarly stating that the Class Products would help with weight loss. 18 Given the uniform marketing, the different avenues of purchase here do not defeat 19 typicality. See Greenwood v. Compucredit Corp., No. C 08-4878 CW, 2010 WL 291842, 20 at *4 (N.D. Cal. Jan. 19, 2010) (“The typicality requirement does not mandate that the 21 products purchased [or] methods of purchase . . . be the same as those of the absent class 22 members.”) (quoting In re Vitamins Antitrust Litig., 209 F.R.D. 251, 261 (D.D.C. 2002)). 23 In sum, the Court finds that Plaintiff Stokes has established the “typicality” 24 requirement for a class representative. 25 D. 26 Federal Rule of Civil Procedure 23(a)(4) requires that “the representative parties will 27 fairly and adequately protect the interests of the class.” “To determine whether the 28 representation meets this standard, [courts] ask two questions: (1) Do the representative Adequacy 15 14-cv-51 JLS WVG 1 plaintiffs and their counsel have any conflicts of interest with other class members, and 2 (2) will the representative plaintiffs and their counsel prosecute the action vigorously on 3 behalf of the class?” Staton, 327 F.3d at 957. 4 Defendants argue Plaintiff Stokes cannot adequately fulfill her duties as class 5 representative because of her health issues. Opp’n at 21. Defendants state that, “[d]ue to 6 health reasons, Stokes was not able to travel from Florida to California (i) in July 2015 for 7 an Early Neutral Evaluation, (ii) in July 2017 for a second Early Neutral Evaluation, or 8 (iii) in January 2018 for her deposition.” Id. Plaintiff Stokes does not contest that she 9 could not travel to these events, but states she was able to appear telephonically and that 10 she was deposed in Florida. 11 Defendants further state that “Stokes also cannot attend trial in California,” but this 12 misrepresents Plaintiff’s deposition testimony. Plaintiff testified that, “[i]f this case were 13 to go to trial in California,” she “would have to make arrangements.” ECF No. 119-2 at 14 60. She testified that she does not know when she will be able to travel to California 15 because she does not know what is going to happen. Id. at 61–62. Defendants cite to Tria, 16 where the court found various reasons why the plaintiff was not a suitable class 17 representative, one of which being the plaintiff testified she did not know whether she was 18 willing to go to trial in the case. 2013 WL 12324181, at *8. Tria is inapplicable where, as 19 here, the plaintiff appears to be willing to go to trial and willing to make arrangements 20 should the time come. This does not make Plaintiff Stokes an inadequate representative. 21 Defendants also claim Plaintiff Stokes lacks sufficient knowledge to be the 22 representative in this case. Opp’n at 21. In support, Defendants cite to Plaintiff Stokes’ 23 deposition, at which she testified she is not aware of any settlements with anybody in this 24 case or dismissals of any defendants from the case. ECF No. 119-2 at 34. She testified 25 that she does not know the “geographic parameters” of the proposed class, nor does she 26 know whether she is seeking to represent men and women, a certain age group, or 27 purchases made in a certain time period. Id. at 64–65. She was unable to define “alter 28 ego” and does not know whether the concept has anything to do with the case. Id. at 71. 16 14-cv-51 JLS WVG 1 She also testified she believes there are other class representatives in the case. Id. at 164. 2 “Just where the dividing line is between what a class representative plaintiff should 3 know herself and what she can safely leave to her counsel is somewhat unclear.” Tria, 4 2013 WL 12324181, at *8. On the one hand, “[c]ourts have held that a class representative 5 who is unfamiliar with the case will not serve the necessary role of check[ing] the otherwise 6 unfettered discretion of counsel in prosecuting the suit. Courts have developed a standard 7 of ‘striking unfamiliarity’ to assess a representative’s adequacy in policing the prosecution 8 of his or her lawsuit.” Welling v. Alexy, 155 F.R.D. 654, 659 (N.D. Cal. 1994) (citations 9 omitted). On the other hand, courts have found named representatives to be adequate if 10 they understand the alleged violations, the “underlying legal basis” of the action, or “the 11 gist of the suit.” Stuart v. Radioshack Corp., No. C-07-4499 EMC, 2009 WL 281941, at 12 *11 (N.D. Cal. Feb. 5, 2009) (collecting cases). 13 Here, Plaintiff Stokes has demonstrated that she has a general understanding of her 14 claims. She testified that “[t]his is a class action.” ECF No. 119-2 at 12. She also testified 15 that she and the class members “believed in something,” bought the Class Product, and lost 16 money. Id. at 65. She testified that the class members “believed in what they were doing, 17 and it was not true” and the Class Product “didn’t work for them for some reason for 18 another.” Id. 19 Although the Court has some reservations regarding Plaintiff Stokes’ knowledge of 20 the complicated history of this case, it concludes that Plaintiff Stokes would adequately 21 represent the class. Plaintiff Stokes could not travel to California for her deposition, but 22 she did sit for a lengthy deposition in Florida. 23 telephonically at both conferences with Magistrate Judge Gallo. Reply at 9. The Court is 24 also encouraged by Plaintiff Stokes’ statement that she “will do everything in [her] ability 25 to attend” trial if it occurs and will do “what is necessary as the class representative in this 26 case.” Stokes Decl. ¶ 8. Further, Plaintiff Stokes understands the “gravamen of the claim” 27 in this case. See Moeller v. Taco Bell Corp., 220 F.R.D. 604, 611 (N.D. Cal. 2004). The 28 Court finds that Plaintiff Stokes is sufficiently familiar with their claims to adequately She was available to participate 17 14-cv-51 JLS WVG 1 represent the members of the proposed class. 2 Class counsel also appears to be adequate, and the Court has already appointed 3 Bursor & Fisher as interim class counsel in this case. ECF No. 32, at 7 (finding “Bursor 4 & Fisher has demonstrated that it is capable of adequately and fairly representing Plaintiffs 5 in this case”). Defendants have raised no concerns in this regard. Class counsel represent 6 that they have extensive experience, and have thus far litigated the case vigorously. 7 Consequently, the court concludes that Bursor & Fisher are able adequately to represent 8 the class. 9 In sum, the Court finds that Plaintiff Stokes has demonstrated that she is an adequate 10 class representative and that class counsel are also adequate. The adequacy requirement is 11 therefore satisfied. Plaintiff Stokes has satisfied the four requirements of Rule 23(a) and 12 the Court proceeds to analyze the requirements of Rule 23(b)(3). 13 III. Rule 23(b)(3) Requirements 14 Rule 23(b)(3) states that a class may be maintained if the requirements of Rule 23(a) 15 are fulfilled and if “the court finds that the questions of law or fact common to the class 16 members predominate over any questions affecting only individual members, and that a 17 class action is superior to other available methods for fairly and efficiently adjudicating the 18 controversy.” Fed. R. Civ. P. 23(b)(3). 19 A. 20 The predominance analysis focuses on “the legal or factual questions that qualify 21 each class member’s case as a genuine controversy” to determine “whether proposed 22 classes are sufficiently cohesive to warrant adjudication by representation.” Amchem 23 Prods. Inc. v. Windsor, 521 U.S. 591, 623 (1997); see also Fed. R. Civ. P. 23(b)(3) (to 24 certify a class, the court must find that “questions of law or fact common to class members 25 predominate over any questions affecting only individual members”). 26 whether questions of law or fact common to class members predominate begins . . . with 27 the elements of the underlying cause of action.” Erica P. John Fund, Inc. v. Halliburton 28 Co., 563 U.S. 804, 809 (2011) (quotation marks omitted). A court must analyze these Predominance of Common Issues “Considering 18 14-cv-51 JLS WVG 1 elements to “determine which are subject to common proof and which are subject to 2 individualized proof.” In re TFT-LCD I, 267 F.R.D. at 310–11. Defendants argue that 3 individual legal and factual issues will predominate in this matter and thus this requirement 4 is not satisfied. Opp’n at 24. 5 1. Arbitration 6 Defendants first cite to the arbitration clause on Sensa’s website, arguing this causes 7 predominance issues. Sensa’s website contains a provision that states all purchasers agree 8 to arbitrate their claims on an individual basis. Opp’n at 24; see ECF No. 119-1 at 32 (term 9 on the website stating: “Any controversy, claim or dispute arising out of or relating tin any 10 way to . . . products purchased through the Site shall be resolved by final and binding 11 arbitration”). According to Defendants, approximately 84% of the purchases made during 12 the class period were through Sensa’s website. Plaintiff Stokes does not contest this high 13 percentage of online purchasers nor the existence of the arbitration agreement, but argues 14 the Court should create subclasses or exclude certain members later. Reply at 11. 15 One court has held that “[t]he fact that some members of a putative class may have 16 signed arbitration agreements or released claims against a defendant does not bar class 17 certification,” and that “class certification should not be denied merely because some class 18 members may be subject to the defense that their claims are barred by valid documents 19 releasing the defendant from liability.” Herrera v. LCS Fin. Servs. Corp., 274 F.R.D. 666, 20 681 (N.D. Cal. 2011) (quoting Coleman v. GMAC, 220 F.R.D. 64, 91 (N.D. Tenn. 2004)). 21 The court in Coleman decided to proceed “by ruling on the merits of the class certification 22 and reserving the right to create subclasses or exclude members from the class at a later 23 juncture.” 220 F.R.D. at 91. 24 This path, however, has been rejected by another court. In Pablo v. ServiceMaster 25 Global Holdings Inc., No. C 08-3894 SI, 2011 WL 3476473 (N.D. Cal. Aug. 9, 2011), the 26 court declined to resolve the arbitration issue at a later juncture because, “in this case[,] 27 plaintiffs’ legal claims are already complex, defendants have presented significant 28 evidence of numerous enforceable arbitration agreements, intervening Supreme Court case 19 14-cv-51 JLS WVG 1 law has complicated the issue of waiver and enforcement, and this case was filed 2 approximately three years ago.” Id. at *3. The court reasoned that “a significant portion 3 of this litigation would be devoted to discovering which class members signed such 4 agreements and enforcing those agreements, rather than to the resolution of plaintiffs’ legal 5 claims—which themselves are complex.” Id. at *2. The court therefore denied the motion 6 for class certification. 7 Defendants here also point the Court to choice of law issues relating to the arbitration 8 agreement. The arbitration agreement on Sensa’s website states that “any controversy, 9 claim or dispute arising out of . . . products purchased through the Site shall be governed 10 by the laws of your home state of residence.” ECF No. 119-1 at 37. In Lozano v. AT&T 11 Wireless Services, Inc., 504 F.3d 718 (9th Cir. 2007), the Ninth Circuit affirmed the denial 12 of a motion for class certification. Id. at 728. The district court below “found the class 13 action waiver to be unconscionable under California law . . . [and] recognized that the 14 waiver may not be unconscionable under other states’ laws.” Id. Therefore, common 15 issues did not predominate because the defendant’s “intent to seek arbitration of the class 16 would necessitate a state-by-state review of contract conscionability jurisprudence.” Id. 17 The Ninth Circuit found the district court did not abuse its discretion in declining to certify 18 the class on this basis. Id. Citing Lozano, Defendants here argue that challenges to the 19 enforceability of the arbitration provision could be governed by the law of each state of the 20 class member, Opp’n at 25; Plaintiff Stokes does not respond to this specific argument. 21 If the proposed class is certified, the Court will be forced to determine which of the 22 class members may be subject to the arbitration provision (i.e., those who purchased 23 online), and those who are not (i.e., all others). The Court also may have to analyze the 24 legality of the arbitration clause and whether it binds all, some, or none of the purchasers. 25 See Lozano, 504 F.3d at 728. In the end, it is possible that approximately 84% of the class 26 members would not be able to participate in the class action due to their online purchase. 27 The Court therefore agrees with the reasoning by the court in Pablo: These individual 28 issues would overshadow the common issues of whether Defendants’ advertisements were 20 14-cv-51 JLS WVG 1 false and whether Defendants violated certain laws. Consequently, the Court finds that 2 Plaintiff Stokes has not satisfied the predominance requirement for this reason. The Court 3 proceeds in analyzing Defendants’ further arguments so it may point out other issues with 4 the proposed class. 5 2. State Law Variations 6 Plaintiff proposes certifying a nationwide class and applying California law to the 7 case. Mot. at 18–19. Defendants point to predominance problems with this proposal, 8 arguing in reliance on Mazza, 666 F.3d 581, that California law will not apply to the class 9 claims because “the laws of each state govern the claims of the putative class members.” 10 Opp’n at 26. 11 The class action proponent bears the initial burden of showing that California has a 12 sufficient aggregation of contacts to the claims of the putative class. See Mazza, 666 F.3d 13 at 589. “Such a showing is necessary to ensure that application of California law is 14 constitutional.” Id. (citing Allstate Ins. Co. v. Hague, 449 U.S. 302, 310–13 (1981)). 15 “Once the class action proponent makes this showing, the burden shifts to the other side to 16 demonstrate that foreign law, rather than California law, should apply to class claims.” Id. 17 (internal quotation marks omitted). 18 “California law may only be used on a classwide basis if the interests of other states 19 are not found to outweigh California’s interest in having its law applied.” Id. at 589–90. 20 To determine whether the interests of other states outweigh California’s interest, courts 21 apply a three-step governmental interest test: 22 23 First, the court determines whether the relevant law of each of the potentially affected jurisdictions with regard to the particular issue in question is the same or different. 24 25 26 27 Second, if there is a difference, the court examines each jurisdiction’s interest in the application of its own law under the circumstances of the particular case to determine whether a true conflict exists. 28 21 14-cv-51 JLS WVG 1 2 3 4 5 6 Third, if the court finds that there is a true conflict, it carefully evaluates and compares the nature and strength of the interest of each jurisdiction in the application of its own law to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state and then ultimately applies the law of the state whose interest would be more impaired if its law were not applied. Id. (quoting McCann v. Foster Wheeler LLC, 48 Cal. 4th 68, 87–88 (2010)). 7 The Ninth Circuit in Mazza reviewed the application of California consumer 8 protection laws, specifically the Unfair Competition Law, the False Advertising Law, and 9 the Consumer Legal Remedies Act, to a nationwide class. Id. at 587, 590. The court 10 performed California’s choice-of-law analysis and determined: (1) there are material 11 differences between California consumer protection laws and the laws of other states, 12 including requirements of scienter, reliance, and available remedies; (2) foreign 13 jurisdictions have a significant interest in regulating interactions between their citizens and 14 corporations doing business within their state, insofar as consumer protection laws affect a 15 state’s ability to attract industry; and (3) applying California law to those jurisdictions 16 would significantly impair their “ability to calibrate liability to foster commerce,” while 17 “California’s interest in applying its law to residents of foreign states is attenuated.” Id. at 18 591–94. Based on this analysis, the court held that “each class member’s consumer 19 protection claim should be governed by the consumer protection laws of the jurisdiction in 20 which the transaction took place” and vacated the district court’s certification of a 21 nationwide class. Id. at 594. 22 Other courts similarly have declined to apply California consumer protection law to 23 a nationwide class. See, e.g., Brazil v. Dole Packaged Foods, LLC, No. 12-cv-1831-LHK, 24 2014 WL 2466559, at *14 (N.D. Cal. May 30, 2014) (declining to certify a nationwide 25 class and narrowing the proposed class to exclusively California consumers); Astiana, 291 26 F.R.D. at 510; Thurston v. Bear Naked, Inc., No. 3:11-cv-2890-H (BGS), 2013 WL 27 5664985, at *12 (S.D. Cal. July 30, 2013); Gustafson v. BAC Home Loans Servicing, LP, 28 294 F.R.D. 529, 539 (C.D. Cal. 2013). 22 14-cv-51 JLS WVG 1 a. Conflicts Between States’ Laws 2 Plaintiff brings causes of action for: (1) violation of the Magnuson-Moss Warranty 3 Act; (2) breach of express warranty; (3) breach of implied warranties; (4) violation of 4 California’s Consumers Legal Remedies Act; (5) violation of California’s False 5 Advertising Law; (6) unlawful business practices in violation of California’s Unfair 6 Competition Law (unlawful, unfair, and fraudulent and deceptive practices); (7) violation 7 of Florida’s Deceptive and Unfair Trade Practices Act; and (8) negligent misrepresentation. 8 See generally TAC. 9 Defendants identify various “material conflicts” between the laws of California and 10 other states for Plaintiff’s causes of action. Opp’n at 26. Defendants state that the 11 consumer protection laws vary as follows: (1) allowing vs. barring class actions, (2) proof 12 of causation and reliance, and (3) proof of actual injury and damages. Id. Warranty laws 13 vary as well; for express warranties, for example, the elements of reliance and the notice 14 requirements vary among states. Id. at 27. For implied warranties, privity is required 15 between the consumer and the manufacturer in some states. Id. The elements of negligent 16 misrepresentation also vary. Defendants have attached a chart showing the relevant 17 differences for all causes of action and remedies. See ECF No. 119-2 at 110–33. Plaintiff 18 does not contest that there are differences, but argues they are not material in this case as 19 applied to the facts. Reply at 11. 20 Defendants have demonstrated that there are differences between California’s and 21 other states’ laws on material issues for many, if not all, of Plaintiff Stokes’ causes of 22 action. Issues such as privity, the statute of limitations, the notice requirement, etc., are 23 material in this case because each could be dispositive of the individual class members’ 24 cases.5 25 26 27 28 5 Plaintiff Stokes contests Defendants’ argument regarding reliance, arguing that of course the consumers relied on the advertising, or else they would have been purchasing a random box of sprinkles. Mot. at 9. While this may be true and it is likely that the consumers relied on the weight loss advertisements, Plaintiff Stokes does not present any argument as to why other elements are not material to this case, such as privity, statute of limitations, etc. 23 14-cv-51 JLS WVG 1 b. States’ Interests 2 Defendants argue each state has an interest in applying its own law for issues 3 involving conduct that impacts its residents. Opp’n at 27. Indeed, the court in Mazza held 4 that “each state has an interest in setting the appropriate level of liability for companies 5 conducting business within its territory.” 666 F.3d at 592. Plaintiff Stokes does not appear 6 to contest this, arguing only why California would be more impaired if its own law were 7 not applied. The Court finds that all states have an interest in applying their own laws to 8 protect their residents. 9 c. Which Law Applies? 10 This issue now becomes which state’s interest would be more impaired should their 11 law not apply. Plaintiff Stokes argues that Sensa was headquartered in California, so most 12 class members purchased the Class Products online from a California-based company. 13 Reply at 13. Plaintiff Stokes notes that Defendants had no physical locations in other states, 14 and “did not pay taxes to foreign states for the online sales of Sensa.” Id. In sum, Plaintiff 15 Stokes claims that the foreign states, “to whom sales of Sensa provided virtually no tax 16 revenue or jobs, face minimal impairment from the application of California to 17 Defendants.” Id. 18 The Court disagrees with Plaintiff Stokes’ reasoning. Simply because Defendants 19 are not located in and do not pay taxes in foreign states does not mean that those states do 20 not have an interest in protecting their own residents. The Court must look at the interests 21 of all states. 22 It is true that Sensa was located in California, and California has an interest in 23 ensuring false advertising and unfair business practices do not emanate from companies 24 within its borders. See Pecover v. Elec. Arts Inc., No. C 08-2820 VRW, 2010 WL 8742757, 25 at *20 (N.D. Cal. Dec. 21, 2010) (noting that California courts have “recognized 26 California’s interest in entertaining claims by nonresident plaintiffs against resident 27 defendants”). California “has a legitimate interest in extending state-created remedies to 28 out-of-state parties harmed by wrongful conduct occurring in California.” Norwest Mortg., 24 14-cv-51 JLS WVG 1 Inc. v. Super. Ct., 72 Cal. App. 4th 214 (1999). Nonetheless, “every state has an interest 2 in having its law applied to its resident claimants.” Mazza, 666 F.3d at 592–93 (citing 3 Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1187 (9th Cir.), amended on denial 4 of reh’g, 273 F.3d 1266 (9th Cir. 2001)). Further, both California courts and the Ninth 5 Circuit have held that “the place of the wrong” has the predominant interest in regulating 6 the conduct at issue. Hernandez v. Burger, 102 Cal. App. 3d 795, 801–02 (1980), 7 Abogados v. AT & T, Inc., 223 F.3d 932, 935 (9th Cir. 2000). The Restatement (First) of 8 Conflict of Laws defines the “place of wrong” as “the state where the last event necessary 9 to make an actor liable for an alleged tort takes place.” See Zinn v. Ex-Cell-O Corp., 148 10 Cal. App. 2d 56, 80 n.6 (1957) (citing Restatement (First) of Conflict of Laws § 377 11 (1934)). Note 4 to the Restatement further elaborates that “[w]hen a person sustains loss 12 by fraud, the place of wrong is where the loss is sustained, not where fraudulent 13 representations are made.” Thus, the “place of the wrong” occurs where the potential class 14 members sustains their loss. See Guzman, 305 F.R.D. at 617 (finding same). Here, this 15 would be where the members saw the advertisements and subsequently purchased the 16 product, regardless of where the company selling the product was located at the time. Thus, 17 as the place of the wrong, these states would have a greater interest than does California in 18 applying their law to this case. 19 The Court therefore concludes that, under California’s choice-of-law analysis, the 20 claims of the potential classmembers should be governed by the laws of the jurisdiction in 21 which the loss was sustained. For purchases made outside California, the Court finds that 22 other states’ interests would be more impaired by applying California law than would 23 California’s interests by applying the laws of other states. Applying California law for the 24 nationwide class is therefore inappropriate. Because adjudication of the nationwide claims 25 could require application of the laws of 50 states, common questions of law would not 26 predominate for the proposed nationwide class, as is required by Rule 23(b)(3). In sum, 27 the Court finds that Plaintiff has not satisfied the predominance requirement. 28 /// 25 14-cv-51 JLS WVG 1 B. 2 The final requirement for class certification is “that a class action [be] superior to 3 other available methods for fairly and efficiently adjudicating the controversy.” Fed R. 4 Civ. P. 23(b)(3). “In determining superiority, courts must consider the four factors of Rule 5 23(b)(3).” Zinser, 253 F.3d at 1190. The Rule 23(b)(3) factors are: 6 Superiority (A) [T]he class members’ interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action. 7 8 9 10 11 Fed. R. Civ. P. 23(b)(3). The superiority inquiry focuses “on the efficiency and economy 12 elements of the class action so that cases allowed under [Rule 23(b)(3)] are those that can 13 be adjudicated most profitably on a representative basis.” Zinser, 253 F.3d at 1190 14 (internal quotation marks omitted). A district court has “broad discretion” in determining 15 whether class treatment is superior. Kamm v. Cal. City Dev. Co., 509 F.2d 205, 210 (9th 16 Cir. 1975). 17 Defendants argue that a class action is not superior to other methods here because of 18 the prior FTC settlement. Opp’n at 21. Defendants primarily rely on Kamm v. California 19 City Development in support of this argument. In Kamm, the plaintiffs brought a putative 20 class action for claims arising out of the defendants’ land promotion scheme. 509 F.2d at 21 206. Prior to the initiation of the plaintiffs’ suit, the Attorney General and the Real Estate 22 Commissioner of California had brought an action against four of the nine defendants, in 23 which a permanent injunction and final judgment on a settlement agreement had already 24 been filed. Id. at 207–08. The settlement agreement provided for offers of restitution of 25 principal payment to certain purchasers, as well as an agreement that the defendant would 26 use its “best efforts to establish and implement a program to settle future disputes,” 27 including rendering quarterly reports to the Attorney General setting forth the names of 28 complainants, the general nature of the complaints, and the disposition. Id. at 208. The 26 14-cv-51 JLS WVG 1 defendants were also permanently enjoined from engaging in the fraudulent conduct at 2 issue. Id. The state court retained jurisdiction over the matter, and nothing precluded any 3 purchaser from instituting an individual action against the defendants for any alleged 4 damage. Id. 5 Under those circumstances, the Ninth Circuit upheld the district court’s dismissal of 6 the plaintiffs’ class complaints for lack of superiority, citing seven factors supporting the 7 holding. Id. at 212. First, “[a] class action would require a substantial expenditure of 8 judicial time which would largely duplicate and possibly to some extent negate the work” 9 in the prior action. Second, the class action would involve thousands of buyers “in separate 10 transactions over a 14 year period.” Third, “[s]ignificant relief had been realized in the 11 state action through:” (a) restitution, (b) defendant’s “agreement to establish a program to 12 settle future disputes,” (c) a permanent injunction, and (d) a “guarantee of funds for off- 13 site improvements.” Fourth, the state court retained continuing jurisdiction. Fifth, no 14 member of the class was barred from initiating a suit on his or her own behalf. Sixth, 15 “[a]lthough the class action aspects of the case ha[d] been dismissed, appellants’ action 16 [was] still viable.” And seventh, “[d]efending a class action would prove costly to the 17 defendants and duplicate in part the work expended over a considerable period of time in 18 the state action.” Id. 19 Applying Kamm to a situation similar to that of the present case, the court in Imber- 20 Gluck v. Google Inc., No. 5:14-cv-1070-RMW, 2015 WL 1522076 (N.D. Cal. Apr. 3, 21 2015), analyzed the superiority requirement for a proposed class when an FTC settlement 22 was already in place. After applying the Kamm factors, the court in Imber-Gluck found 23 the class action was not superior because the relief plaintiffs sought, i.e., refunds for their 24 purchases from Google, was already available through the FTC settlement. Id. at *2. 25 Plaintiff Stokes argues the Court should not consider the FTC settlement superior to 26 the class action for two reasons. First, she distinguishes Kamm by stating that she estimates 27 that classwide damages are more than $170 million, so “tens of thousands of class 28 members” are still owed money despite the $26.5 million obtained by the FTC. Reply at 27 14-cv-51 JLS WVG 1 10.6 This argument, however, was specifically rejected by the Ninth Circuit in Kamm, in 2 which the settlement totaled $3.3 million for losses of up to $200 million. 509 F.2d at 207– 3 08. The court noted “[i]t is true that not all members of the class appellants seek to 4 represent will be protected by the California settlement; nor will the class recover an 5 amount that is even close to that sought in the class action.” Id. at 211. The settlement did 6 not cover all putative class members, and required the defendant to “use its best efforts to 7 establish and implement a program to settle future disputes.” Id. at 208. Similarly, here, 8 although the FTC settlement did not provide as much money as Plaintiff and the class 9 members seek, this disparity does not prevent the Court from considering the FTC 10 settlement in analyzing superiority. 11 Plaintiff also argues that the FTC settlement did not involve the solvent Defendants 12 in this action, IBH or JustFab, so there is no duplication as to those Defendants. Reply at 13 10. Again, the court in Kamm rejected a similar argument, noting that “the state action did 14 not involve the same controversy, [and] did not include five of the defendants named in 15 this action.” 509 F.2d at 213. Although there were differences between the two actions, 16 both “involve[d] the same fraudulent conduct of the defendants and both seek to provide 17 relief for those injured thereby.” Id. In sum, the court concluded that the differences did 18 not “render the state action so different a controversy that it should not have been 19 considered by the district court in determining whether the class action was superior to 20 alternative methods.” Id. Therefore, despite the different parties, the Court may still 21 consider the FTC settlement in analyzing superiority. The Court now analyzes the Kamm 22 factors in the context of this case: 23 First, the class action would “require a substantial expenditure of judicial time which 24 would largely duplicate” the work of the FTC investigation and resulting settlement. See 25 26 6 27 28 Plaintiff Stokes argues that the FTC settlement was paid to people who purchased Sensa at any time from 2008 to 2014, and therefore many class members are not covered. Reply at 10 n.1. Plaintiff Stokes’ proposed class covers those who purchased Sensa on or after August 22, 2012. Therefore, the FTC settlement and proposed class are therefore at least duplicative for the overlapping time. 28 14-cv-51 JLS WVG 1 Kamm, 509 F.2d at 212. Second, the class would involve thousands of purchasers of the 2 Class Products over a period of approximately six years. Third, the FTC settlement has 3 provided “significant relief” to some class members to the tune of $26.5 million. The 4 difference between this case and Kamm, however, is that here there is no “agreement [by 5 the defendants] to settle future disputes.” Fourth, the district court in the FTC matter 6 retained jurisdiction “for purposes of construction, modification, and enforcement of this 7 Order.” See Ex. I to TAC, ECF No. 76-2 at 41. Fifth, the FTC settlement does not state 8 whether it bars class action claims; however, it appears that it does not, as the Court 9 assumes that Defendants would have raised this argument. Sixth, Plaintiff Stokes’ claims 10 (as well as other individual claims) are still viable. Seventh, as the Court assumes to be 11 true generally, defending a class action “would prove costly to the defendants.” See Kamm, 12 509 F.2d at 212. 13 In sum, the Kamm factors weigh almost exclusively in favor of finding that the 14 superiority requirement has not been met here. Although it is true that the main distinction 15 between the facts in this case and those in Kamm, i.e., that there is no agreement here to 16 settle future disputes, weighs in favor of Plaintiff Stokes, the Court finds that because 17 Plaintiff Stokes and other members may still bring individual suits, this is an adequate way 18 to resolve future disputes. This leads the Court to conclude that Plaintiff Stokes has failed 19 to establish that the proposed class action is superior to other methods for adjudication of 20 the controversy. 21 IV. Ascertainable Class 22 Although usually analyzed before the Rule 23 factors, the Court now analyzes 23 whether the class is ascertainable so it may point out one final flaw in Plaintiff Stokes’ 24 proposed class. “As a threshold matter, and apart from the explicit requirements of Rule 25 23(a), the party seeking class certification must demonstrate that an identifiable and 26 ascertainable class exists.” Mazur v. eBay, Inc., 257 F.R.D. 563, 567 (N.D. Cal. 2009). 27 Certification is improper if there is “no definable class.” Lozano, 504 F.3d at 730. “A 28 class should be precise, objective, and presently ascertainable,” though “the class need not 29 14-cv-51 JLS WVG 1 be so ascertainable that every potential member can be identified at the commencement of 2 the action.” O’Connor v. Boeing N. Am. Inc., 184 F.R.D. 311, 319 (C.D. Cal. 1998) 3 (internal quotation marks omitted). “A class is ascertainable if it is defined by ‘objective 4 criteria’ and if it is ‘administratively feasible’ to determine whether a particular individual 5 is a member of the class.” Bruton v. Gerber Prods. Co., No. 12-CV-02412-LHK, 2014 6 WL 2860995, at *4 (N.D. Cal. June 23, 2014). On the other hand, “[a] class definition is 7 inadequate if a court must make a determination of the merits of the individual claims to 8 determine whether a person is a member of the class.” Hanni v. Am. Airlines, Inc., No. C 9 08-00732, 2010 WL 289297, at *9 (N.D. Cal. Jan. 15, 2010). “It is not fatal for a class 10 definition to require some inquiry into individual records, as long as the inquiry is not so 11 daunting as to make the class definition insufficient.” Herrera v. LCS Fin. Servs. Corp., 12 274 F.R.D. 666, 673 (N.D. Cal. 2011) (internal quotation marks omitted). 13 Defendants did not address the ascertainability of the proposed class; however, the 14 problems recognized by the Court above also pose problems for this requirement, and the 15 Court briefly repeats them here. First, the Court finds that Plaintiff Stokes has failed to 16 establish an ascertainable class because 84% of the class purchased the Class Product from 17 the website and therefore may be subject to arbitration. This statistic has been presented 18 by Defendants and not refuted by Plaintiff Stokes, nor has she argued that the arbitration 19 provision on the website is invalid or inapplicable. See Guzman v Bridgepoint Educ., Inc., 20 305 F.R.D. 594, 612 (S.D. Cal. Mar. 26, 2015) (determining that “Plaintiff fails to 21 demonstrate an identifiable and ascertainable class in light of evidence suggesting that up 22 to 96% of the proposed class may not even be eligible to participate in this class action” 23 due to an arbitration agreement). 24 Second, the Court finds that Plaintiff Stokes has failed to establish an ascertainable 25 class because the proposed class does not exclude purchasers who have already received 26 funds from the FTC settlement. In Algarin, the court found that the class was “overbroad 27 and not ascertainable” because the class “does not exclude purchasers who have already 28 received refunds through [defendant’s] Refund program. 300 F.R.D. at 455. The court 30 14-cv-51 JLS WVG 1 noted that, “[a]s the [Unfair Competition Law] only permits recovery or 2 restitution/disgorgement, for purchasers who have already received refunds, they have 3 already been compensated well over any potential disgorgement. These purchasers have 4 no claims.” Id.; see a;sp Stearns v. Select Comfort Retail Corp., 763 F. Supp. 2d 1128, 5 1151 (N.D. Cal. 2010) (finding a class not ascertainable where the definition includes 6 persons who have received refunds, replacements, or who have not suffered any damages 7 at all). 8 In sum, Plaintiff Stokes has failed to demonstrate her proposed class is ascertainable. 9 CONCLUSION 10 The Court finds Plaintiff Stokes has not met her burden in establishing that: (1) the 11 class is ascertainable, (2) common issues predominate over individual issues, and (3) the 12 class action is superior to other methods. The Court therefore DENIES Plaintiff Stokes’ 13 Motion for Class Certification (ECF No. 115). 14 The Court is within its discretion to give Plaintiff Stokes a second opportunity to 15 show that the proposed class fulfills all requirements of Federal Rule of Civil Procedure 16 23. See, e.g., Newberry v. Cnty. of San Bernardino, No. EDCV 14-2298 JGB (SPx), 2015 17 WL 9701153, at *7 (C.D. Cal. July 23, 2015); Deirmenjian v. Deutsche Bank, A.G., No. 18 CV 06-00774, 2010 WL 3034060, at *1 (C.D. Cal. July 30, 2010), aff’d, 548 Fed. App’x 19 461 (9th Cir. 2013) (denying without prejudice motion for class certification where 20 plaintiffs failed to show ascertainability and further evidence may cure deficiency). The 21 Court finds that Plaintiff Stokes may be able to cure the deficiencies noted herein. Any 22 further motion for class certification shall address the issues detailed above. 23 24 25 26 The Court ORDERS the parties to meet and confer and, by October 15, 2018, jointly propose a briefing schedule for Plaintiff Stokes’ renewed motion for class certification. IT IS SO ORDERED. Dated: September 10, 2018 27 28 31 14-cv-51 JLS WVG

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