Antitrust Law Daily Wrap Up, ADVERTISING—6th Cir.: Class certification proper in Procter & Gamble probiotics suit, (Aug 21, 2015)

By Greg Hammond, J.D.

The Procter & Gamble Co. (P&G) could not overturn a district court order granting class certification in a class action alleging P&G’s probiotic nutritional supplement—Align—did not work as advertised. The U.S. Court of Appeals in Cincinnati affirmed the lower court’s order, finding that consumers satisfied the requirements of Federal Rule of Civil Procedure 23(a) and had Article III standing and that the proposed class was sufficiently ascertainable (Rikos v. The Procter & Gamble Co., August 20, 2015, Moore, K.).

P&G markets Align to the general public as a supplement that “naturally helps build and support a healthy digestive system, maintain digestive balance, and fortify your digestive system with healthy bacteria.” Consumers Dino Rikos, Tracey Burns, and Leo Jarzembrowksi allege that they purchased Align at various stores in California, Illinois, North Carolina, Florida, and New Hampshire. They filed suit against P&G, claiming that they suffered injury in fact and lost money as a result of P&G’s unfair competition after finding that Align did not provide them with the digestive benefits it promised to provide. The district court granted class certification, and P&G timely appealed.

Rule 23(a). P&G first challenged the lower court’s Rule 23(a) findings, arguing that the plaintiffs failed to sufficiently demonstrate commonality and the claims are not typical of the class. The court disagreed, first noting that the consumers identified a common question that will yield a common answer for the entire class and that, if true, will make P&G liable to the entire class. The question was whether Align is “snake oil” and does not yield benefits to anyone. Because P&G’s arguments concerning typicality essentially repeated its arguments against commonality, the lower court did not abuse its discretion in finding that the claims or defenses of the representative parties are typical of the claims or defenses of the class, the appellate court concluded.

Common questions predominate. P&G argued that the lower court erred in concluding that common questions will predominate over individualized inquiries in assessing the merits of the consumers’ claims, for four reasons: (1) some individuals were not actually exposed to P&G’s marketing campaign; (2) under the state laws at issue, individual issues of causation and reliance predominate over the common questions that allegedly affect all members of the class; (3) Align does actually work for many purchasing it, demonstrating the consumers cannot prove injury on a classwide basis; and (4) the consumers’ damages model is inconsistent with their theory of liability and that individual calculation of damages will be necessary.

The court rejected all four arguments, first finding that, regardless of how customers first heard about Align, they nonetheless decided to purchase the product based on its single purported health benefit—that it will help promote digestive health. Second, the consumers provided causation and/or reliance on a classwide basis for each state because: (1) there is only one reason to buy Align—to promote digestive health—and thus the alleged misrepresentation would be material to or likely to deceive a reasonable consumer; and (2) P&G undertook a comprehensive marketing strategy with a generally uniform core message such that all class members were likely exposed to the alleged misrepresentation.

Next, the court concluded that the consumers presented sufficient evidence in the form of testimony that Align is worthless, which is capable of resolution through classwide scientific proof such that common issues predominate. The court lastly found the consumers’ damages model is consistent with their liability theory. Specifically, it noted that the consumers are claiming that Align works for no one. If they are correct, all class member will have suffered from the same injury—buying a product that does not work as advertised.

Standing. P&G’s argument that the class is overbroad and raises Article III standing issues because plaintiffs have failed to produce evidence that most of the class suffered an injury also failed. There is no reason to purchase Align except for its promised digestive health benefits, the court stated. If the supplement does not work as advertised for anyone, then every purchaser was harmed and a direct line can be drawn from P&G’s advertising campaign and the decision to buy Align. The class was therefore not overbroad.

Ascertainability. In its last argument against class certification, P&G contended that the proposed class is not ascertainable because the consumers failed to demonstrate that there is a reliable and administratively feasible method for identifying the class members. The court, once again, rejected P&G’s argument, finding that class members could be ascertained through the use of receipts, affidavits, and a special master to review individual claims. Over half of the proposed class purchased the supplement online and could be identified using records of online sales. The lower court consequently did not err in granting class certification, the appellate court concluded.

The case number is 14-4088.

Attorneys: Brian J. Murray (Jones Day) for The Procter & Gamble Co. Timothy G. Blood (Blood Hurst & O’Reardon) for Plaintiffs-Appellees.

Companies: The Procter & Gamble Co.

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