Miller v. Basic Research, LLC
Miller v. Basic Research, LLC
Opinion of the Court
MEMORANDUM DECISION AND ORDER GRANTING PLAINTIFFS’ MOTION TO CERTIFY THE CLASS AND DENYING DEFENDANTS’ MOTION TO STRIKE
This matter is before the Court on Plaintiffs’ Motion to Certify the Class and Defendants’ Motion to Strike the declaration of Dr. Elaine Barrett. Plaintiffs propose class certification under Rule 23(b) for a nationwide class consisting of consumers who purchased Akavar 20/50. For the purposes of class certification, Plaintiffs allege violations of Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Utah Pattern of Unlawful Activity Act (“UPUAA”), and the Utah Consumer Sales Practices Act (“UCSPA”).
I. Facts
Plaintiffs allege that Defendants operate a common business enterprise engaged in fraudulent and deceptive acts in relation to the marketing and advertising of Akavar.
Plaintiff Pamela Miller is a resident of Gilbert, Arizona. Plaintiff Miller purchased Akavar during the summer of 2007 through Defendants’ website based on an advertisement she stumbled across on the internet with “EAT ALL YOU WANT & STILL LOSE WEIGHT,” in bold print.
Plaintiff Randy Howard is a resident of Morton, Illinois. Sometime around October 2007, he observed an Akavar in-store display, at a Wal-Mart, representing that users of Akavar could “Eat All You Want and Still Lose Weight.”
Plaintiff Donna Patterson, is a resident of Washington, DC.
Defendants began marketing and selling Akavar in February 2007.
Although Defendants do not state the number of customers overall who have purchased Akavar, they do state that at least 20,006 of those who have purchased Akavar have requested and received cash refunds.
Defendant Basie Research is a limited liability company established under Utah law.
Plaintiffs allege that although Defendants asserted Akavar was a “New! European Weight Loss Breakthrough,” whose “results” were based on “scientific fact, documented by published medical findings,” and that “a team of doctors working in a recognized medical university discovered the potent calorie-restricting qualities,” Akavar was actually developed in Salt Lake City, Utah by Defendants’ own employees.
In June of 2006, the United Stated Federal Trade Commission (“FTC”) issued a permanent injunction against all Defendants prohibiting the marketing and sale of alleged weight loss products unless competent and reliable scientific evidence support the claims
Defendant Western Holdings licenses trademarks including, the phrase in question, “Eat All You Want & Still Lose Weight,” “and we couldn’t say it in print,” and “we couldn’t say it in print if it wasn’t true,” to Defendant Basic Research for the development and manufacturing of cosmetics, nutritional supplements and dietary supplements.
II. Class Certification
1. Standard of Review
“In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met.”
Rule 23(a) states:
One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.34
Numerosity exists if the proposed class is “so numerous that joinder of all class members is impracticable.”
“The interests and claims of Named Plaintiffs and class members need not be identical to satisfy typicality.”
2. Discussion
Plaintiffs seek to certify the following class: “All persons in the United States who purchased, for consumption and not for resale or assignment, Akavar 20/50 from a retail sales establishment, directly from Defendants, or from a website controlled or operated by Defendants.” Excluded from the Class are Defendants, their directors, officers, employees and immediate family members in addition to any person claiming damages for personal injury. Plaintiffs’ proposed class action seeks to redress Defendants unlawful practices of marketing, advertising and selling the purported weight loss “miracle” Akavar. Plaintiffs argue the proposed class action meets the requirements of Rule 23(a) because the class consists of thousands of consumers; common issues exist as to the truth or falsity of Defendants’ claims about Akavar; the proposed class representatives are typical of class members; and Plaintiffs and their counsel are adequate representatives with experience in litigating this type of claim.
Defendants argue that the class must not be certified for two reasons. First, Utah law prohibits class actions involving state or local law relating to consumer transactions unless certain preconditions are met and Defendants argue none of those conditions have been met in this case. Second, Defendants argue that Plaintiffs have failed to show that the Rule 23 requirements of certification are satisfied.
A. Utah Consumer Sales Practices Act
Defendants argue that Utah’s Consumer Sales Practices Act (“UCSPA”) bars the certification of the class action.
Plaintiffs counter that although Defendants specifically state there are three exceptions under Section 13-11-19, they disregard the third exception authorizing consumer class actions when plaintiffs allege a wrongful “act or practice” that was prohibited by the terms of a consent judgment before the transaction upon which the action was based.
The FTC Order states:
[Defendants], directly or through any corporation, subsidiary, division, or other devise, in connection with manufacturing, labeling, advertising, promotion, offering for sale, sale or distribution of any food, drug, dietary supplement, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, including through use of trade names or endorsements, about the effect of such food, drug or dietary supplement on any disease, or about the effect of such food, drug or dietary supplement on the structure or function of the human body or other health benefits or weight loss benefits, unless at the time the representation was made respondents possess and rely upon a reasonable basis for the representation, which shall consist of competent and reliable scientific evidence.51
[Defendants], directly or through any corporation, subsidiary, division, or other devise, in connection with manufacturing, labeling, advertising, promotion, offering for sale, sale or distribution of any product, service or program in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, including through the use of endorsements or trade names, the existence, contents, validity, results, conclusions, or interpretations of any test, study or research.52
The FTC Order defines “[c]ompetent and reliable scientific evidence” as “mean tests, analyses, research studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”
Plaintiffs allege Defendants have and continue to engage in unlawful practices of marketing, advertising and selling Akavar as the ultimate cure for fat, despite the absence of any evidence of clinical or scientific support. Because this type of behavior, if true, is prohibited by the FTC Order, the Court finds Plaintiffs’ claim meets the specific exception under the third prong of Section 13-11-19(4) and is therefore not barred by the
B. Rule 23
i. Rule 23(a)
Plaintiffs argue that they meet all the requirements of Rule 23(a) and thus should be permitted to pursue their claim in a class action. Defendants acknowledge that at least 29,850 customers have purchased Akavar directly from them.
Commonality requires only one question of law or fact common to the entire class.
The third prong, typicality, requires the claims or defenses of the representatives be typical of the class. This prong is satisfied if the named plaintiffs’ claims arise from the same events or practices giving rise to the claims of other class members and are based on the same law.
Finally, Plaintiffs argue they meet the adequacy requirement because they have retained seasoned and experienced class action attorneys who have already been conscientiously and vigorously representing their rights for the past two years in this litigation. With their previous experience and success in this type of litigation, Plaintiffs argue their representation is adequate. Plaintiffs further argue that they are adequate class representatives because all of their interests and objectives are the same as the class. Plaintiffs also assert there are no competing or antagonistic interests going to the subject matter of the Complaint.
The Court finds that Plaintiffs have satisfied the requirements of Rule 23(a). The class is so numerous that joinder is impracticable, common questions of law and fact exist, the claims are typical of the class and the representation is adequate. Therefore, the Court will turn to the analysis of Rule 23(b).
ii. Rule 23(b)
Plaintiffs seek certification pursuant to Rule 23(b)(3) which states:
[a] class action may be maintained if Rule 23(a) is satisfied and if ... the court finds that the questions of law or fact common to*657 class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include:
(A) the class members’ interests in individually controlling the prosecution or defense or 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.58
Predominance ensures that the class is “sufficiently cohesive to warrant adjudication by representation.”
Superiority looks to ensure the litigation is carried out as efficiently and fairly as possible for all parties.
Additionally at least one other case has already been consolidated into this case. Two other cases were also recently filed, one filed by the FTC in this District, and another filed in a California federal district court. Because one of the actions is already in this District, and one has already been consolidated, concentrating the new actions will further “eliminate[] duplicative discovery, prevent! ] inconsistent pretrial rulings ... and con-serven the resources of the parties, their counsel and the judiciary.”
Plaintiffs have submitted a bifurcated trial plan, consolidating the proof consistent with all class members including the marketing materials used in the promotion of Akávar, expert testimony regarding the effects of the
Hi Rule 23(c)(2)
The last requirement in the certification process is notice.
iv. Defendants’ Opposition
Defendants spend much of their opposition arguing the merits of the case. However, as acknowledged by both parties, class certification is not based on the merits of the claim, but rather on whether the proposed class in question meets the requirements of Rule 23.
Defendants argue that Plaintiffs have a strict burden of proof to show they satisfy the numerosity, commonality, typicality and adequacy of representation requirements of Rule 23.
Defendants argue that Plaintiffs cannot establish their claim is typical of the proposed class. Defendants quote Plaintiffs’ memorandum in support and argue they are unable to show the claims are focused on its “uniform, consumer-directed course of conduct that affected each consumer in the same way” because the advertising was not uniform and it cannot be said to have affected each consumer in the same way. This snippet, however, was taken from Plaintiffs’ discussion on predominance, not their section on typicality. Predominance focuses on Defendants’ course of conduct. Moreover, all of the named Plaintiffs stated they had purchased the product because of an advertisement informing them they could “Eat all they wanted and still lose weight.”
Although Defendants attempt to establish, through expert testimony, that advertisements affect every individual differently,
Defendants also argue that Plaintiffs cannot establish typicality because most consumers who actually purchased Akavar did lose weight and although the named Plaintiffs allege it did not work for them, they must also show it did not work for the unnamed class members. The Court is not persuaded by this argument because the issue is whether Defendants misrepresented their claims regarding the product and whether they had adequate scientific support for those claims. Defendants also spend almost two pages discussing the efficacy of the product, the testing performed on the product, and the testing they were not required to perform. The validity and efficacy of Akavar as a weight loss product goes to the merits of the case and is irrelevant for the purposes of establishing a class.
Defendants further argue that the typicality requirement is not met because “a class representative must possess the same interest and the same injury as the class members.”
separate action, that where a defendant made multiple representations that plaintiff did not see or hear, “plaintiff could not satisfy the typicality requirement for misrepresentation claims because he would be ‘unable to prove the claims of absent class members who saw different representations.’ ”
In losello, the court recognized that “[t]yp-icality may be found even where ‘there are factual distinctions between the claims of the named plaintiffs and those of other class members.’ ”
In Teflon Products Liability Litigation,
The facts alone distinguish the situation in Teflon from the current case. The time period in question is barely three years as the first advertisement for Akávar appeared in Star Magazine on February 5, 2007.
The Court finds Plaintiffs have met their burden of proving typicality. They allege that they, along with the other class members, were induced by the marketing and advertising conduct, and specifically through a single core message, of Defendants to purchase Akávar. The Court further finds that all of Defendants alleged “individual defenses” relate to the Plaintiffs’ not relying on advertising from or approved by them. Finally, the Court finds that individual reliance is an issue for the determination of damages, the issue to be determined by the class action is whether there was a violation.
The Court finds that adequacy under Rule 23(a)(4) is met because Plaintiffs have established a predominate issue, mainly the representation of “Eat all you want and still lose weight,” and the defense to that issue will be the same for all Class members. Further, because one main questions persists, the Court finds Plaintiffs have satisfied both predominance and superiority.
Defendants argue that the ease would be unmanageable because it will be too difficult to find users of Akávar, determine their grievances, etc. Given Plaintiffs’ planned comprehensive notice plan, and because the named Plaintiffs themselves responded to an internet advertisement, the Court finds that
The Court finds that Plaintiffs have met all the requirements for class certification, and therefore, class certification on the issue of liability is appropriate. Individual damages and reliance will be handled separately after the determination of liability through the class.
III. Motion to Strike
Defendants argue that Dr. Barrett’s declarations offer three opinions that each must be stricken based on Fed.R.Evid. 702 and Daubert and its progeny.
Defendants first argue that Dr. Barrett is not qualified as an expert in the field because she lacks expertise in the fields of obesity research and weight loss. Defendants next argue that Dr. Barrett’s first opinion regarding six advertising claims were not based on the correct factual or legal assumptions. Defendants final argument is that Dr. Barrett’s opinions have no bearing on class certification or the merits of the case. The Court finds Defendants’ Motion goes to the merits of the case. Because the merits are not to be decided at the class certification stage, the Court will not address any arguments related to the merits at this time, and the motion will be denied.
IV. Conclusion
Based on the above, it is hereby
ORDERED that Plaintiffs’ Motion to Certify Class (Docket No. 114) is GRANTED in accordance with this ORDER. The Court will certify a class limited to those persons who purchased Akávar in reliance of the slogan “Eat all you want and still lose weight.” It is further
ORDERED that Defendants’ Motion to Strike (Docket No. 114) is DENIED. It is further ORDERED that the parties meet and confer regarding notice and submit a proposed order within 60 days. It is further
ORDERED that this Order shall be filed under seal and served only on counsel for Plaintiff and Defendant. Plaintiff and Defendant shall have 7 days from the entry of this Order to submit a notice of any specific information herein they seek to retain under seal as set forth above. Said Notice shall be hand-delivered to the undersigned’s chambers, 350 South Main Street, Rm. 148, Salt Lake City, Utah, clearly marked as SEALED RE: NOTICE OF UNSEALING no later than 7 days following entry of this Order.
The Court also reminds the parties of the page length rules. The Court warns the parties that argument couched in the facts section of future filings will not be tolerated.
. Plaintiffs do not seek certification of their fraud and negligent misrepresentation claims.
. Amended Complaint, Docket No. 50 at ¶ 1.
. Id. at ¶ 4.
. Docket No. 50 at ¶ 10.
. Id.
. Mat ¶11.
. Id.
. Id.
. Id.
. Id. at ¶ 12.
. Id.
. Id.
. Memorandum in Opposition, Docket No. 128 at xx, ¶ 42.
. Id.
. Id. at ¶¶ 43-44.
. Id. at ¶ 46.
. Id. at ¶ 49.
. Defendants’ Memorandum in Opposition, Docket No. 128 at vi.
. Id. at ¶ 51.
. Id. at 1152.
. Id. at ¶ 13.
. Id.
. Id. at ¶ 77.
. Docket No. 50 at ¶ 55.
. Id. at ¶¶ 16, 56.
. Id. at ¶¶ 65, 67.
. Id. at V 17; In the Matter of Basic Research, L.L.C., A.G. Waterhouse, L.L.C., Klein-Becker USA, L.L.C., NutraSport, L.L.C., Sovage Dermalogic Laboratories, L.L.C., BAN, L.L.C., d/b/a/ Basic Research, L.L.C., Old Basic Research, L.L.C., Basic Research, A.G. Waterhouse, Klein-Becker USA, Butra Sport, and Sovage Dermalogic Laboratories, Dennis Gay, Daniel B. Mowrey, dlblal American Phytotherapy Research Laboratory, and Mitchell K. Friedlander, FTC Docket No. 9318 (June 19, 2006). Defendants did not begin marketing Aka-var until 2007, so Akávar specifically was not mentioned in the Order.
. Docket No. 50 at ¶ 23.
. DG v. Devaughn, 594 F.3d 1188, 1193 (10th Cir. 2010) (quoting Shook v. El Paso County, 386 F.3d 963, 971 (10th Cir. 2004) (internal citations omitted)).
. Id. at 1194.
. Id. (citing Shook, 386 F.3d at 968).
. Id. (citing Shook, 386 F.3d at 968) (quoting J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1290 n. 7 (10th Cir. 1999)).
. Id. (quoting Shook, 386 F.3d at 968).
. Fed R.Ctv.P. 23(a)(l)-(4).
. Id. at (1) — (4).
. Ditty v. Check Rite, Ltd., 182 F.R.D. 639, 641 (D.Utah 1998).
. DG, 594 F.3d at 1195 (citing J.B., 186 F.3d at 1288).
. Id.
. Id. (quoting Milonas v. Williams, 691 F.2d 931, 938 (10th Cir. 1982)).
. Id. (citing Penn v. San Juan Hospital, Inc., 528 F.2d 1181, 1189 (10th Cir. 1975)).
. Id. at 1199 (citing Anderson v. City of Albuquerque, 690 F.2d 796, 800 (10th Cir. 1982)).
. Id. at 1198-99.
. id. at 1199.
. Plaintiffs also seem to begin arguing the merits of their case which they argue later in their memorandum, in regards to Defendants attempts to confuse the issues hy doing the same, is inappropriate at this juncture.
. See Howard Depo. Tr. at 21:21-25; 22:1-2 ("I could continued to eat what I had and still lose the weight”); Patterson Depo. Tr. at 33:24-34 ("That it ... automatically makes you lose weight when you take it without exercise and restricting your intake of food").
. Utah Code Ann. § 13-11-1 et seq.; Utah Code Ann. § 13-11-23 ("The remedies of this act are in addition to remedies otherwise available for the same conduct under state or local law, except that a class action relating to a [consumer transaction] may be brought only as prescribed by this act.”).
. Utah Code Ann. § 13-11-19(4)(a).
. Uniform Consumer Sales Practices Act § 11; see also Workman v. Nagle Constr., Inc., 802 P.2d 749, 755 (Utah Ct.App. 1990); Marrone v. Philip Morris USA, Inc., 110 Ohio St.3d 5, 850 N.E.2d 31, 34, 36 (2006).
. Utah Code Ann. § 13-11-19.
. Docket No. 50, Ex. C.
. Id. at 4.
. Id. at 5.
. Id. at 4.
. Docket No. 128 at ¶¶ 46, 49.
. Id. at 47.
. DG, 594 F.3d at 1195.
. Fed.R.Civ.P. 23(a)(3); Barnes v. Am. Tobacco Co., 161 F.3d 127, 141 (3d Cir. 1998).
. Fed.R.Civ.P. 23(b)(3).
. Amchem Prod., Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997).
. Esplin v. Hirschi, 402 F.2d 94, 99 (10th Cir. 1968).
. Mercedes-Benz Antitrust Litig., 213 F.R.D. 180, 187 (D.NJ. 2003).
. Owner-Operator Indep. Drivers Ass’n, Inc. v. C.R. England, Inc., 2005 WL 2098919, at *6 (D.Utah Aug. 29, 2005) (finding predominance where the question of basic liability can be established readily by common issues); Elias v. Un-gar's Food Prods., 252 F.R.D. 233, 249 (D.N.J. 2008) (finding predominance where focus is on defendant's representations on whether product is different from what was promised); Perry v. FleetBoston Fin. Corp., 229 F.R.D. 105, 113 (E.D.Pa. 2005).
. Hillis v. Equifax Consumer Servs., Inc., 237 F.R.D. 491, 504 (N.D.Ga. 2006).
. In re Cmty. Bank of N. Va., 418 F.3d 277, 309 (3d Cir. 2005) (quoting Georgine v. Amchen Prods., Inc., 83 F.3d 610, 632 (3d Cir. 1996), aff'd, 521 U.S. 591, 117 S.Ct. 2231).
. In re Prudential Ins. Co. of America Sales Practices Litigation, 962 F.Supp. 450, 518 (D.N.J. 1997).
. Docket No. 116, Ex. 19.
. Fed R. Civ. P. 23(c)(2).
. Stoffels v. SBC Commc’ns, Inc., 254 F.R.D. 294, 298 (W.D.Tex. 2008) (internal citations omitted).
. Docket No. 116, at 18. (citing id., Ex. 18).
. See e.g., Stoffels, 254 F.R.D. at 298-300; In Re Simon II Litig., 211 F.R.D. 86, 183 (E.D.N.Y. 2002).
. DG, 594 F.3d at 1193; Docket No. 130 (citing Shook, 543 F.3d at 612).
. Trevizo v. Adams, 455 F.3d 1155, 1161-62 (10th Cir. 2006).
. Docket No. 128 at xxvi (citing id. Ex. 15 at ¶¶ 6-7).
. Id.; Ex. 15 at V 8.
. Id. at 7 (quoting Dilley v. Academy Credit, LLC, 2008 WL 4527053, at *4 (D.Utah Sept. 29, 2008)).
. Dilley, 2008 WL 4527053, at *5.
. Id., at *4 (quoting Hillis v. Equifax Consumer Servs., Inc., 237 F.R.D. 491, 497 (N.D.Ga. 2006)).
. losello v. Lawrence, 2005 WL 2007147 (N.D.Ill. Aug. 18, 2005).
. Id. at *5.
. Id.
. 254 F.R.D. 354 (S.D.Iowa 2008).
. Id. at 364.
. Id. at 365 (quoting Elizabeth M. v. Montenez, 458 F.3d 779, 787 (8th cir. 2006)).
. Id.
. Id. at 357.
. Id. at 358.
. Id.
. Id.
. Daines Depo., at 12:1-7, 18:13-21, 36:9-13.
. Teflon, 254 F.R.D. at 365.
. Tylka v. Gerber Prods. Co., 178 F.R.D. 493, 499 (N.D.Ill. 1998).
Reference
- Full Case Name
- Pamela MILLER Randy Howard and Donna Patterson on behalf of themselves and all others similarly situated v. BASIC RESEARCH, LLC Dynakor Pharmacal, LLC Western Holdings, LLC Dennis Gay Daniel B. Mowrey, Ph.D. Mitchell K. Friedlander and Does 1 through 50
- Cited By
- 4 cases
- Status
- Published