Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—NDIll: Consumer Asserting Fraud, Deception Claims Against Dexatrim Makers Not Entitled to Class Certification, (Feb 12, 2013)

By E. Darius Sturmer, J.D.

An Illinois consumer alleging that Chattem, Inc. violated the state’s Consumer Fraud and Deceptive Practices Act and numerous other laws by selling her a weight loss product (Dexatrim Max) that was contaminated with a toxic substance—hexavalent chromium—was denied class certification for her claims by the federal district court in Chicago (Lipton v. Chattem , Inc., February 8, 2013, Feinerman, G.). The plaintiff failed to show that she was an adequate class representative under Federal Rule of Civil Procedure 23(a)(4), the court found. Therefore, she failed to meet her burden of satisfying each of Rule 23(a)’s and 23(b)’s requirements.

The complaining consumer was an inadequate representative for the class because her claims were subject to particular defenses that were not applicable to the class as a whole. The court noted that at her deposition, the plaintiff consumer had testified that she would have bought Dexatrim even if hexavalent chromium had been listed as an ingredient. This divulgence cast into serious doubt her ability to prove materiality, causation, reliance, or any connection between the detriment to her and the benefit to Chattem arising from Chattem’s alleged misconduct. The consumer “would have had to devote substantial attention to overcoming her deposition testimony, and if she failed to do so, she would sink each absent member’s claims even through they might have prevailed” if another individual without such “baggage” had been representing the class.

The court added that even if the consumer had satisfied Rule 23(a)’s requirements, her motion would have foundered under 23(b). The consumer contended that certification could proceed under Rule 23(b)(2) because the putative class sought injunctive and declaratory relief to enjoin Dexatrim containing hexavalent chromium without disclosing its presence. However, Chattem had already stopped distributing Dexatrim with any form of the substance and there was “no reasonable expectation that the wrong would be repeated.” Moreover, the litigation did not fall within the boundaries envisioned for Rule 23(b)(2) certification because it sought actual damages, statutory damages, and punitive or treble damages that far exceeded monetary relief “incidental to the equitable remedy,” the court explained.

In addition, the plaintiff could satisfy neither the predominance nor the superiority requirement of Rule 23(b)(3), the court said. To prevail on their claims, each class member would have had to prove that he or she was deceived by Chattem’s labeling of Dexatrim and suffered damages as a result. Such matters could not be proved on a classwide basis, the court concluded, given that the proposed class included not only individuals who were aware of the hexavalent chromium and bought Dexatrim anyway, but also groups that were unaware of the presence of the substance and may or may not have bought the product had they known about it. Thus, the key liability issues could be resolved only on an individual basis.

It naturally followed that because individual issues predominated, the plaintiff’s proposed class was not superior to other methods of adjudication. The consumer did not put forth “any practicable way for the court to resolve efficiently the individual factual issues that bear on liability without conducting hundreds or thousands of mini-trials,” the court remarked.

The case is No. 11 C 2952.

Companies: Chattem, Inc.

Attorneys: Michael Robert Reese (Reese Richman LLP) for Tracey Lipton. Chester C. Townsend (Miller & Martin Pllc) for Chattem, Inc.

Cases: StateUnfairTradePractices IllinoisNews