Rikos v. Procter & Gamble Co.

• Decision Date: 20 August 2015
• Docket Number: No. 14–4088.,14–4088.
• Citation: 799 F.3d 497
• Parties: Dino RIKOS et al., Plaintiffs–Appellees, v. The PROCTER & GAMBLE COMPANY, Defendant–Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

799 F.3d 497

Dino RIKOS et al., Plaintiffs–Appellees

v.The PROCTER & GAMBLE COMPANY, Defendant–Appellant.

No. 14–4088.

United States Court of Appeals, Sixth Circuit.

Argued: June 16, 2015.

Decided and Filed: Aug. 20, 2015.

Rehearing En Banc Denied Sept. 29, 2015.^*

ARGUED:Brian J. Murray, Jones Day, Chicago, Illinois, for Appellant. Timothy G. Blood, Blood Hurst & O'Reardon, San Diego, California, for Appellees. ON BRIEF:Brian J. Murray, Jones Day, Chicago, Illinois, D. Jeffrey Ireland, Faruki Ireland & Cox P.L.L., Cincinnati, Ohio, Joanne Lichtman, Baker & Hostetler LLP, Cleveland, Ohio, Chad A. Readler, Rachel Bloomekatz, Jones Day, Columbus, Ohio, for Appellant. Timothy G. Blood, Leslie E. Hurst, Thomas J. O'Reardon II, Blood Hurst & O'Reardon, San Diego, California, for Appellees.

Before: MOORE and COOK, Circuit Judges; COHN, District Judge.^**

MOORE, J., delivered the opinion of the court in which COHN, D.J., joined. COHN, D.J. (pg. 527), delivered a separate concurring opinion. COOK, J. (pp. 527–29), delivered a separate dissenting opinion.

OPINION

KAREN NELSON MOORE, Circuit Judge.

The named plaintiffs-appellees (“Plaintiffs”) are three individuals who purchased Align, Procter & Gamble's (“P & G”) probiotic nutritional supplement

, and found that the product did not work as advertised—that is, it did not promote their digestive health. Plaintiffs subsequently brought suit, alleging violations by P & G of various state unfair or deceptive practices statutes because it has not been proven scientifically that Align promotes digestive health for anyone. On June 19, 2014, the district court certified five single-state classes from California, Illinois, Florida, New Hampshire, and North Carolina under Federal Rule of Civil Procedure 23(b)(3) comprised of “[a]ll consumers who purchased Align ... from March 1, 2009, until the date notice is first provided to the Class.” On appeal, P & G contends that the district court abused its discretion in granting Plaintiffs' motion for class certification. For the reasons set forth below, we AFFIRM the district court's judgment granting class certification to Plaintiffs.

I. BACKGROUND

A. Facts

Align contains a patented probiotic strain, Bifidobacterium infantis 35624 (“Bifantis”), which it developed in the 1990s and early 2000s in partnership with Alimentary Health, a company based in Ireland. Sealed App. at 497. According to the World Health Organization, probiotics are “live microorganisms ... which when administered in adequate amounts confer a health benefit to the host.” R. 108–8 (Komanduri Decl. ¶ 12) (Page ID # 1596). “While there is a consensus within the medical and scientific communities that utilizing bacteria as a therapeutic measure in human disease is promising, current knowledge of the use of bacteria for these purposes remains fairly primitive.” Id. ¶ 13 (Page ID # 1596). Although a limited number of probiotics have been approved as prescription treatments for pouchitis

and infectious diarrhea, the overall “[m]edical understanding of probiotics in humans is still in its infancy.” Id. ¶¶ 13–14 (Page ID # 1596–97).

Align is not a prescription probiotic. Instead, it is marketed to the general public as a supplement that “naturally helps build and support a healthy digestive system, maintain digestive balance, and fortify your digestive system with healthy bacteria.” Appellant Br. at 12 (alterations omitted). In addition, unlike some other non-prescription probiotics, Align is not included as an add-on ingredient to another consumer product (e.g., yogurt), but is rather sold in a capsule that is “filled with bacteria and [otherwise] inert ingredients.” R. 140 (Dist. Ct. Order at 30) (Page ID # 6444).

P & G began selling Align in various test markets in October 2005, with sales representatives dropping off samples to doctors' offices in St. Louis, Boston, and Chicago. Sealed App. at 410. P & G was also able to sell a limited amount of product online, although “physician-driven sales outpaced internet-driven sales by about 2:1.” Id. One of the initial hurdles faced by P & G was convincing consumers of the product's value, particularly given Align's premium price point. See id. at 535 (company document noting that “[v]alue is a trial barrier due to the premium price point of $29.99. Probiotics on shelf at major retailers range from $9.99–$29.99. Of note, other probiotics detailed through physicians cost upwards of $45”) (emphasis added). After a successful rollout across multiple markets, P & G launched Align nationwide in 2009, promoting Align through a comprehensive advertising campaign, which included in-person physician visits, television and print advertisements, in-store displays, and product packaging. Appellant Br. at 11–12.

B. Procedural History

Dino Rikos, Tracey Burns, and Leo Jarzembrowski, the named plaintiffs-appellees, are residents of Illinois, Florida, and New Hampshire, respectively. From 2009 to 2011, Rikos, Burns, and Jarzembrowski were “exposed to and saw Procter & Gamble's claims by reading the Align label.” R. 85 (Second Amended Class Action Compl. ¶¶ 10–12) (Page ID # 963–64). In reliance on P & G's claims of Align's effectiveness, they proceeded to purchase Align at various stores in California, Illinois, North Carolina, Florida, and New Hampshire.

In their complaint, Plaintiffs allege that they “suffered injury in fact and lost money as a result of the unfair competition described [t]herein” after finding that Align did not provide them with the digestive benefits that it promised to provide. Id. Plaintiffs initially filed suit in the United States District Court for the Southern District of California, but the case was eventually transferred to the Southern District of Ohio. R. 25 (S.D. Cal. Dist. Ct. Order at 4) (Page ID # 374). In January 2014, Plaintiffs filed a motion and memorandum in support of class certification. Sealed App. at 15–63. In their motion, Plaintiffs requested that the district court certify the following five single-state classes and appoint them as class representatives:

California Class (Represented by Plaintiff Dino Rikos) : All consumers who purchased Align in California from March 1, 2009, until the date notice is first provided to the Class.

Illinois Class (Represented by Plaintiff Dino Rikos) : All consumers who purchased Align in Illinois from March 1, 2009, until the date notice is first provided to the Class.

Florida Class (Represented by Plaintiff Tracey Burns) : All consumers who purchased Align in Florida from March 1, 2009, until the date notice is first provided to the Class.

New Hampshire Class (Represented by Plaintiff Leo Jarzenbowski [sic] ) : All consumers who purchased Align in New Hampshire from March 1, 2009, until the date notice is first provided to the Class.

North Carolina Class (Represented by Plaintiff Tracey Burns) : All consumers who purchased Align in North Carolina from March 1, 2009, until the date notice is first provided to the Class.

Excluded from each of the Classes are the defendant, its officers, directors, and employees, and those who purchased Align for the purpose of resale.

Id. at 16.

After hearing oral argument from both sides, the district court issued an order granting Plaintiffs' motion for class certification. In its order, the district court made clear that it was not attempting to provide a ruling on the merits of the case (i.e., whether or not Align promotes digestive health), but was instead reviewing only whether Plaintiffs had presented sufficient evidence to satisfy Federal Rule of Civil Procedure 23. R. 140 (Dist. Ct. Order at 5–6) (Page ID # 6419–20). It then determined that class certification was proper. Id. at 1, 38 (Page ID # 6415, 6452). P & G has timely appealed.

II. ANALYSIS

A. Standard of Review

“Class certification is appropriate if the [district] court finds, after conducting a ‘rigorous analysis,’ that the requirements of Rule 23 have been met.” In re Whirlpool Corp. Front–Loading Washer Prods. Liab. Litig., 722 F.3d 838, 851 (6th Cir.2013) (quoting Wal–Mart Stores, Inc. v. Dukes, ––– U.S. ––––, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011) ). Nonetheless, we have noted that “[t]he district court maintains substantial discretion in determining whether to certify a class, as it possesses the inherent power to manage and control its own pending litigation.” Beattie v. CenturyTel, Inc., 511 F.3d 554, 559 (6th Cir.2007) (internal quotation marks omitted). We review the district court's decision to grant or deny class certification under an abuse-of-discretion standard. Id. “An abuse of discretion occurs when we are left with the definite and firm conviction that the [district] court ... committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors or where it improperly applies the law or uses an erroneous legal standard.” United States v. Haywood, 280 F.3d 715, 720 (6th Cir.2002) (alterations in original) (internal quotation marks omitted).

B. Rule 23(a)¹

1. Plaintiffs Have Sufficiently Demonstrated Commonality

Federal Rule of Civil Procedure 23(a)(2) states that “[o]ne or more members of a class may sue or be sued as representative parties on behalf of all members only if ... there are questions of law or fact common to the class.” “Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury.” Dukes, 131 S.Ct. at 2551 (internal quotation marks omitted).

P & G contends that, like the plaintiffs in Dukes, Plaintiffs here have failed sufficiently to demonstrate commonality. According to P & G, Dukes requires that named plaintiffs present evidence proving that class members suffered an actual common injury to establish commonality. Appellant Br. at 25–26. P & G argues that Plaintiffs here have presented only anecdotal evidence that Align does not work for them —Plaintiffs have “presented no evidence that the reported consumer benefits [of Align to all purchasers] were due solely to the placebo...