A consumer class action was brought against Nutramax under the California Consumers Legal Remedies Act in connection with the marketing of Cosequin, a pet food, promoting healthy joints in dogs, when in fact it provided no such benefits. The District Court certified a class of California purchasers who were exposed to the allegedly misleading statements, and Nutramax appealed on two grounds:
First, Nutramax challenges the District Court’s reliance upon the proposed damages model of plaintiffs’ expert, Dr. Jean-Pierre Dubé, which had not actually been applied to the proposed class.
Second, Nutramax contends that the District Court incorrectly concluded that the element of reliance was susceptible to common proof.
Nevertheless, the Ninth Circuit Court of Appeals affirmed.
As to the first issue, the Court of Appeals concluded that there is no general requirement that an expert actually apply to the proposed class an otherwise reliable damages model in order to demonstrate that damages are susceptible to common proof at the class certification stage. Rather, the Court held that class action plaintiffs may rely on a reliable though not-yet-executed damages model to demonstrate that damages are susceptible to common proof so long as the district court finds that the model is reliable and, if applied to the proposed class, will be able to calculate damages in a manner common to the class at trial. Specifically: “The focus of the predominance inquiry is whether the method of proof would apply in common to all class members, not whether the method of proof would or could prevail. The theoretical possibility that Dr. Dubé’s model, when executed, will reveal no damages thus does not undermine predominance, because that result would nonetheless be common to the class. Nor does the possibility Dr. Dubé’s analysis might reveal damages with respect to some, but not all, of the challenged statements undermine predominance, because the very structure of the conjoint survey allows for an overcharge to be associated with each individual statement and label, allowing the amount each class member is entitled to recover to be easily assessed based solely on the product the class member purchased. And the possibility that an ascertainable portion of the class may be unable to recover—those not exposed to a statement with any attributable overcharge—does not in itself demonstrate class certification was improper. The question a district court must ask is whether the model will likely be able to generate common answers at trial. The fact that a model is underdeveloped may weigh against a finding that it will provide a reliable form of proof. Merely gesturing at a model or describing a general method will not suffice to meet this standard. Rather, plaintiffs—or their expert—must chart out a path to obtain all necessary data and demonstrate that the proposed method will be viable as applied to the facts of a given case. Here there is no dispute that a conjoint analysis is capable of measuring classwide damages, at least in the abstract, and the only real question at this stage is whether Dr. Dubé will properly apply the method to the facts of the case.
Nutramax cites a variety of potential errors Dr. Dubé might commit in executing his damages model. While unanswered questions such as these, and the attendant possibility of errors, are certainly relevant, Nutramax offers no reason to think that Dr. Dubé will commit any of these errors. Dr. Dubé’s qualifications are undisputed, he has successfully conducted conjoint analyses in the past, and Dr. Dubé testified he did not envision anything particularly unique about this survey. The speculative possibility that Dr. Dubé might slip up in executing his model, standing alone, is insufficient to defeat class certification.”
As to the second issue, the district court properly found that class-wide reliance under the CLRA may be established through proof that a misrepresentation is material. While the presumption of reliance is rebuttable, the District Court did not abuse its discretion in concluding Nutramax had failed to rebut the presumption here.
Lytle v. Nutramax, No.22-55744, 2024 WL 1710663 (9th Cir. April 22, 2024).
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