Antitrust Law Daily Wrap Up, ADVERTISING—E.D. Cal.: Class certification granted in suit challenging efficacy of pre-cold products, (Apr 1, 2016)

By Michael Menzhuber, J.D., LL.M.

The federal district court in Sacramento, California granted class certification in an action by a consumer that alleged Zicam pre-cold products were falsely advertised. However, a motion for summary judgment challenging the plaintiff’s claims was denied (Melgar v. Zicam LLC, March 31, 2016, England, M.).

After purchasing a Zicam pre-cold product, Yesenia Melgar brought an action against Zicam and Matrixx Initiatives, Inc. that challenged the efficacy of Zicam’s pre-cold products. Melgar’s complaint set forth several causes of action including violations of California’s Consumer Legal Remedies Act (CLRA), False Advertising Law (FAL), and Unfair Competition Law (UCL).

Melgar subsequently filed a motion for class certification. The defendants filed a motion for summary judgment challenging the merits of Melgar’s claims.

Class certification. The court determined that all of the prerequisites of Federal Rules of Civil Procedure 23(a) were satisfied. The numerosity requirement was met because over 25 million units of Zicam pre-cold products had been sold to consumers since 2010. The commonality requirement was met because: (1) every class member had the same basic claims (that they purchased the pre-cold products because of the statements in the products’ advertising and the advertising was false); and (2) resolution of the claims depended upon a critical common question of fact, were the defendants’ statements false.

The typicality requirement was met because Melgar’s claim, that she purchased one of the pre-cold products in California based on the defendants’ misrepresentations, was typical of the proposed classes. The adequacy of representation was met because: (1) there was no evidence that Melgar’s friendship with one of the attorneys representing her created any conflict of interest with other class members; and (2) allegations regarding Melgar’s “standing problems” and “willingness to subordinate the interests of the class members” were forced, unsubstantiated and not compelling.

The court determined that the requirements of Federal Rule of Civil Procedure 23(b) were also met. It found that: (1) common questions predominated over individual questions; (2) the proposed class action was the superior method for resolving the dispute; (3) that it was unlikely that class members would have any interest in individually prosecuting separate actions; (4) there was no similar suit elsewhere raising similar issues; and (5) there was no reason why concentrating the litigation would be undesirable.

The court also determined that the proposed classes were sufficiently ascertainable, such that certification was appropriate, because the objective class definitions allowed prospective plaintiffs to determine whether they were class members with a potential right to recover.

Summary judgment. The court denied the defendants’ motion for summary judgment attacking the merits of Melgar’s claim. It found that: (1) Melgar’s therapeutic efficacy claim was not barred under California law because the opinions of her experts were sufficient to substantiate the claim; (2) there was a genuine issue of material fact as to the efficacy claim based on the testimony of Melgar’s experts; and (3) there was a genuine issue of material fact as to the cold prophylactic claims because Melgar presented sufficient evidence to establish that a reasonable consumer would think that the defendants’ products prevented colds.

The case is No. 2:14-cv-00160-MCE-AC.

Attorneys: Annick Marie Persinger (Bursor & Fisher, PA) for Yesenia Melgar. Alan J. Lazarus (Drinker Biddle & Reath LLP) for Zicam LLC.

Companies: Zicam LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews