Denying class certification in a kitty litter class action, the Northern District of California take a substantive step forward in aligning the District with the current trend of heightening the bar for ascertaining putative class members in consumer class actions. The Court also laid out a multi-state examination with respect to the standard for determining whether common question predominate over individualized issues when class members are not exposed to (or rely upon) uniform statements that are allegedly misleading. See In re: Clorox Consumer Litig., No. 12-00280 (N.D. Cal. July 28, 2014).
The underlying facts are relatively simple: Clorox’s “Fresh Step” cat litter uses carbon to eliminate odors, whereas most other brands use baking soda. Clorox advertised its product as being more effective than other brands that do not use carbon. The lead plaintiffs filed suit against Clorox, alleging that Clorox’s statements were false and misleading. The lead plaintiffs (each from one of five different states) sought to represent subclasses from their respective states of California, Florida, New Jersey, New York, and Texas.
The District Court denied class certification, holding that the putative class failed due to lack of ascertainability and also because individualized issues predominated over common questions of fact.
Ascertainability
Recognizing that there is split amongst the Districts in California (and the Ninth Circuit) on the issue of ascertainability, the District Court adopted the approach set forth by the Third Circuit last year in Carrera v. Bayer Corp. (as previously reported here). Following Carrera, the Court held that in consumer class actions where a plaintiff intended to rely upon a retailer’s sales records to identify class members, the plaintiff must prove that the retailers’ records can in fact be used to identify class members, and cannot rely upon individuals’ affidavits claiming to be class members.
Clorox sold its Fresh Step cat litter to sixteen retailers. However, only two of the sixteen retailers produced sales data, by which approximately 75,000 putative class members (i.e., end-consumers who purchased the product from retail locations) could be identified. Despite the individuals that could be identified, the District Court recognized that this represented only a “tiny fraction” of the overall purchases, and thus identified only a fraction of putative class members. Without any other way to contact or identify the “vast majority of potential members,” the District Court held that the plaintiffs failed to prove that their proposed class was ascertainable.
Predominance
The District Court also held that individualized issues predominated over common questions in the proposed class, as the plaintiff failed to prove that most, or even many, of the proposed class members saw or were otherwise exposed to the allegedly misleading claims.
The plaintiffs pointed to several different mediums through which the advertisements were transmitted; however, Clorox offered its own marketing evidence that those advertisements reached a very limited audience and were generally ineffective. The plaintiffs also argued that the statements were on the back of the packaging itself, creating a “uniform message” that was misleading to consumers who purchased the package. Clorox, however, offered evidence that the message was not always on the back of the packages during the putative class period, and also offered evidence that only a small percentage of consumers ever read the back packaging.
The District Court, while recognizing that some states do not require “reliance” on the allegedly material in order to be misleading, examined the distinction between “exposure” to misleading material and “causation” (or reliance) on the misleading material. Indeed, in some states, there is a class-wise presumption that class members relied on misleading material. Nonetheless, the District Court held that even where class-wide reliance is presumed.
Simply put, the District Court held that even in states that do not require reliance on the misleading material, “a plaintiff can only reasonably rely upon information he actually received. The problem Plaintiffs face is that there is powerful evidence that most members of the proposed class never saw the allegedly misleading statements.” The Court concluded that while class-wide reliance may be presumed under some states’ laws, this does not include a class-wide presumption that class members were uniformly “exposed to the misleading statements.” Because the putative class could only include members who were actually exposure to the misleading statements, and because the plaintiffs failed to propose any class-wide means of determining exposure to the allegedly misleading statements, individualized issues of whether class members were actually exposure to the statements predominated over any questions common to the class, again warranting a denial of class certification.
