Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—11th Cir.: Denial of class certification in action over “fat burner” supplement advertising upheld, (Jun 15, 2015)

By Linda O’Brien, J.D., LL.M.

In a purchaser’s Florida Deceptive and Unfair Trade Practices Act (DUTPA) class action claim against dietary supplement manufacturer Vital Pharmaceuticals for false advertising of its fat loss product, the purchaser failed to propose an administratively feasible method of identifying class members, the U.S. Court of Appeals in Atlanta has ruled in an unpublished opinion. Thus, the district court’s denial of class certification was affirmed (Karhu v. Vital Pharmaceuticals, Inc., June 9, 2015, Goldberg, R.).

Vital manufactures and markets a dietary supplement called VPX Meltdown Fat Incinerator as a product that can help customers “burn fat” and achieve rapid fat loss. Adam Karhu, who purchased the product, brought a class action suit, alleging that he purchased Meltdown in reliance on Vital’s advertising and that the advertising was false as the supplement did not aid fat loss. In March 2014, Karhu moved to certify a class of nationwide purchasers of Meltdown and a subclass of New York purchasers. The district court denied the motion, holding that the proposed classes failed to satisfy the ascertainability requirement of Federal Rule of Civil Procedure 23. Karhu’s motion to alter or amend the order denying class certification was also denied. Karhu appealed.

The district court properly determined that the plaintiff failed to establish that his proposed classes were ascertainable, the appellate court found. Rule 23 implicitly requires that the proposed class is adequately defined and clearly ascertainable and the class definition must contain objective criteria that allows for class members to be identified in an administratively feasible manner.

According to the appellate court, the plaintiff’s proposal to identify class members using the sales data of the defendant was incomplete, since Karhu did not explain how the data would assist class member identification. Vital sold its products primarily to third-party retailers. In his motion for class certification, Karhu failed to explain to the court that he envisioned a three-step identification process of (1) using sales data to identify third-party retailers, (2) subpoenaing the retailers for their records, and (3) using the subpoenaed records to identify class members.

Karhu’s argument that the district court construed the ascertainabilty requirement too strictly was rejected. The court noted that individualized issues--such as reliance, causation, and damages—that implicated the manageability of the case would be insufficient to prevent certification of a class, since ascertainability addresses whether class members can be identified in an administratively feasible or manageable way.

Karhu might have satisfied the ascertainability requirement in his motion to alter or amend the order denying class certification when he proposed to identify class members by subpoenaing the records of third-party retailers, the court also noted. However, the district court held that Karhu should have proposed the method in its class certification motion instead of relying solely upon moving to alter or amend. Thus, Karhu’s bare proposed that the class be ascertained through the defendant’s sales data was insufficient to set forth an administratively feasible method by which class members could be identified, the court determined.

The case is No. 14-11648.

Attorneys: Barry L. Davis (Thornton Davis & Fein, PA) for Adam Karhu. Marc J. Kesten, and Michael J. Weber (Weber Law Office) for Vital Pharmaceuticals, Inc.

Companies: Vital Pharmaceuticals, Inc.

Cases: StateUnfairTradePractices AlabamaNews FloridaNews GeorgiaNews