This month, we have yet another District Court – this time in New York – refusing to certify a consumer class for failure to satisfy Rule 23. See Sept. Blog on class cert. denial in Texas. These arguments may be useful for defense attorneys attempting to defeat class certification in suits alleging false or deceptive practices, especially where the product at issue has a variety of brochures and materials used to make a sale.
Just a few weeks ago, the Southern District of New York – in a witty opinion, full of clever puns – denied a motion for class certification for lack of both predominance and ascertainability. In In re Avon Anti-aging Skincare Creams and Products Marketing and Sales Practices Litigation, 13-CV-150 (JPO) (S.D.N.Y. Sept. 30, 2015), Plaintiffs filed a class action against Avon Products, Inc. (“Avon”) claiming that the cosmetic company marketed its products with false and misleading advertising. The products at issue are part of Avon’s ANEW brand, which includes products designed to reduce the effects of aging on the skin. Avon sells its products primarily through independent sales representatives (“ISRs”) and through its website.
Plaintiffs sought certification on behalf of a nationwide class and state specific classes and subclasses comprised of residents who purchased one of Avon’s products at issue, either through an ISR or through Avon’s website. All of Plaintiffs’ claims centered around the same theory that Avon sold its products by making false or misleading claims about their “scientific anti-aging properties.” Plaintiffs took issue with particular statements made by Avon including, “reverse wrinkles,” “repair wrinkles,” and “rebuild collagen.” Plaintiffs claimed that the products do not perform as promised.
In attempting to certify the class, Plaintiffs argued that one question was amenable to class-wide proof – the so-called “Falsity Question” – whether Avon’s representations that its products are able to “reverse wrinkles” and “repair wrinkles” are false and deceptive. Not surprisingly, Plaintiffs urged the Court that individual consumer experiences are not relevant because Avon made “scientific claims” and thus, the proper question is whether the products “biologically and chemically have an effect on collagen…such that wrinkles are reversed and repaired.” As the Court cleverly put it, “[t]heir concern is whether Dorian Gray ages biologically, regardless of whether he looks forever young.”
In addressing Plaintiffs’ position, the Court focused on the predominance and ascertainability requirements for class certification. For predominance, the court must consider whether “the common issues can profitably be tried on a class-wide basis, or whether they will be overwhelmed by individual issues.” As for ascertainability, the question is “whether the class is sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member.” A class is not ascertainable “when its identifying members would require a mini-hearing on the merits of each case.”
Applying these principles, the District Court found two flaws in Plaintiffs’ arguments. First, Plaintiffs could not prove that the Falsity Question in the brochure context is amenable to class-wide proof. In fact, Avon introduced new brochures every two weeks, many of which did not contain any scientific claims. Second, Plaintiffs did not show that the brochures were regularly given to customers who purchased products through ISRs. In fact, ISRs were under no obligation to use any brochures at all. While some customers may have relied on a brochure, many others may never have even seen a brochure in making their purchasing decision.
Furthermore, the Court found that Plaintiffs could not satisfy the ascertainability prong for class certification because Avon does not keep records of individual customers who make purchases through ISR’s. Although Plaintiffs set forth multiple alternative ways to ascertain the class – for example, receipts or sworn affidavits – the Court found these options insufficient. Many customers do not keep receipts and are unlikely to remember when they made purchases or more importantly, when they reviewed the allegedly false brochures (if ever). The Court analogized the verification process required to being similar to “attempting to verify a particular number in the phone book using the area code 212 and the first name ‘Courtney’ – the risk of false positives is great.”
In addition, the District Court concluded that Plaintiffs’ claims for deceptive acts and practices under New York law (the law to be applied pursuant to Avon’s website “Terms and Conditions”) asserted by internet purchasers were similarly flawed. Although the Court found the Internet statements to be more consistent than the brochure statements, it still concluded that predominance could not be met. Indeed, each Plaintiff would have to show that the deceptive act caused actual harm, which is simply not possible with class-wide proof since some consumers may have been satisfied with their Avon product. The Court explained that “[j]ust as beauty is in the eye of the beholder, purchasing decisions like this one are inherently individualized.” In sum, the District Court found too many “wrinkles” in Plaintiffs’ suit to be amenable to class treatment.
On October 14th, Plaintiffs filed a Notice of Appeal, indicating their intent to file a petition for permission to appeal this decision to the Second Circuit. We will continue to monitor this case and other successful class certification decisions as they arise.