Margolin v. Vital Pharmaceuticals
Filed 3/15/13 Margolin v. Vital Pharmaceuticals CA4/1
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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publication or ordered published for purposes of rule 8.1115
COURT
OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION
ONE
STATE
OF CALIFORNIA
MATTHEW MARGOLIN,
Plaintiff and Appellant,
v.
VITAL PHARMACEUTICALS, INC.,
Defendant and Respondent.
D060947
(Super. Ct.
No. 37-2010-00051561-CU-BT-NC)
APPEAL from
an order of the Superior Court
of
County, Earl H. Maas III, Judge. Affirmed.
Matthew Margolin appeals an order
denying his motion to certify a class of purchasers of a dietary supplement
called "NO Shotgun" in a false advertising action against its
manufacturer, Vital Pharmaceuticals, Inc. (Vital). Margolin alleged that Vital falsely stated on
product labels and its Web site that NO Shotgun contained an esterified
form of creatine that was more effective than the monohydrate form at building
muscle, increased muscle cell DNA, and induced formation of new muscle cells
("hyperplasia"). The trial
court ruled Margolin had not presented sufficient evidence to establish several
of the procedural requirements for certification of the proposed class. We affirm.
I.
BACKGROUND
A. Margolin's Operative
Complaint
In a second
amended complaint, Margolin alleged that Vital manufactures, markets and sells
NO Shotgun, a creatine-based dietary supplement. According to Margolin, creatine is a
performance-enhancing substance that can increase strength and power during
high-intensity aerobic exercise. He
alleged the target market for NO Shotgun includes body builders, weight
lifters, athletes and other consumers conscious of health and fitness.
Margolin alleged Vital falsely
claimed that NO Shotgun contained an esterified form of creatine (creatine
ethyl ester) that was superior to the common form (creatine monohydrate)
because the esterified form was better absorbed into the bloodstream and
delivered intact to muscle cells, where it could be transported across the
muscle cell membrane to " 'cause
explosive muscle growth!' " Margolin also alleged Vital falsely claimed
that creatine ethyl ester, in combination with other ingredients in NO Shotgun,
increased muscle cell DNA and caused muscle cell hyperplasia. According to Margolin, the scientific study
that Vital cited to support its "outrageous and false claims" did not
use criteria generally acceptable as reliable in the scientific community. Margolin further alleged that Vital priced
NO Shotgun two to three times higher than other creatine-based dietary
supplements, even though scientific studies have shown the esterified form of
creatine is greatly inferior to creatine monohydrate at promoting muscle
growth.
In describing his own experience
with NO Shotgun, Margolin alleged that he read the product label and
marketing information on Vital's Web site; relied on Vital's claims about the
efficacy of NO Shotgun; used the product for almost two years; but noticed
no extraordinary increase in muscle mass or any effect that was not
attributable to his normal workout regimen.
He further alleged that in reliance on Vital's false claims concerning
the superiority of creatine ethyl ester over creatine monohydrate at building
muscle, he paid two or three times as much for NO Shotgun as he would have
paid for other similar products containing creatine monohydrate. "In short," Margolin complained, "N.O. Shotgun
is yet another 'snake oil' product based on non-existent science, and thus does
not warrant a price more than the price charged for regular creatine
products."
Margolin sued Vital for violations
of the Consumers Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq.), the
unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.), and
the false advertising law (FAL; Bus. & Prof. Code, § 17500 et
seq.). He also asserted claims for
"common law restitution,"
name="_ftnref1" title="">[1]
breach of express warranty, and breach of implied warranty. On behalf of himself and a putative class of
California purchasers of NO Shotgun, Margolin sought (1) to enjoin
the "ongoing deceptions" contained in Vital's product labeling and
Web site marketing, and (2) "to recover for the economic harms
suffered by [Margolin] and the putative class as a result of [Vital's] false
and misleading advertising claims" that induced them to buy
NO Shotgun.
B. Margolin's Motion for
Class Certification
1.
Margolin
moved to certify a class of all persons residing in California
who purchased NO Shotgun at any time during the period from February 23, 2006, through the date
of certification of a class in this action.
Margolin argued certification of such a class was appropriate
because: (1) there were at least
100 class members who were readily identifiable by their purchase of
NO Shotgun; (2) common questions regarding the falsity and
materiality of Vital's labeling and Web site marketing statements predominated
over individual questions; (3) his claim was typical of the class because
Vital deceived him and absent class members in the same manner; and (4) he
would adequately represent the class because he had no conflicts with other
class members regarding the litigation, and his counsel was experienced in
prosecuting class actions.
In support
of his motion for class certification, Margolin submitted several
declarations. In his own, Margolin
stated that he had purchased NO Shotgun several times from 2008 to 2010 in
reliance on Vital's claims that it caused muscle cell hyperplasia and contained
an esterified form of creatine that provided better results than creatine
monohydrate. Margolin also stated that,
during the two years he used NO Shotgun, he noticed no extraordinary
increase in muscle mass or other effects not attributable to his normal workout
regimen, and would not have purchased the product had he known it would not
perform as Vital had advertised.
Margolin's counsel submitted a declaration in which she described her
experience litigating class actions and attached several exhibits, including a
label from NO Shotgun and a printout of information from Vital's Web
site. Margolin also submitted
declarations from two expert witnesses.
One expert, a former employee of the Food and Drug Administration,
declared that Vital's advertising of NO Shotgun contained "statements
that classify this product as a drug."
The other expert, a president of a biotechnology consulting firm who
holds a doctoral degree in pharmaceutical chemistry, asserted that the claims
made in NO Shotgun's labeling and marketing materials regarding muscle
cell hyperplasia and the efficacy of creatine ethyl ester were
"false" or "wholly fallacious."
2.
Vital
opposed Margolin's class certification motion.
Vital argued Margolin had not met his burden to obtain certification
because, among other reasons, (1) issues that would require individualized
litigation (e.g., reliance and amount of restitution) predominated over issues
that could be litigated in common (e.g., "science issues");
(2) Margolin's claim was not typical of the class; (3) the proposed
class included a large number of retail purchasers who could not be identified
reliably; and (4) class certification was unnecessary to obtain the
requested injunctive relief.
As part of
its opposition papers, Vital submitted a declaration from its chief executive
officer, John H. Owoc. Owoc stated
that in 2011, creatine ethyl ester was removed as an ingredient of
NO Shotgun for cost reasons, but the product has always contained
significant amounts of other forms of creatine, including creatine
monohydrate. Owoc asserted that
NO Shotgun is a proprietary blend of many active ingredients, any one or
combination of which may motivate a consumer to buy the product.
lawsuit, Vital has never received any complaint about the effectiveness of
NO Shotgun. Owoc also declared that
of the many tens of thousands of units of NO Shotgun Vital has sold, it
has no records to identify the ultimate retail purchasers because it sold less
than 1 percent directly to retail purchasers and sold the rest at
wholesale to distributors and retailers.
Attached to Owoc's declaration were product labels, ingredient lists,
and pricing information for NO Shotgun and comparable dietary supplements.
Vital also
submitted a declaration from Joel T. Cramer, a university professor with a
doctoral degree in exercise physiology.
Cramer listed 24 of the active ingredients in NO Shotgun and
described their physiological effects.
He also declared that Vital's marketing statements about the efficacy of
creatine ethyl ester, muscle cell hyperplasia, and increases in muscle DNA and
gene proteins are truthful and supported by valid scientific studies.
3.
In his
reply papers, Margolin argued that individual issues concerning reliance and
injury were susceptible to common proof, and the amount of damages could be
calculated easily. Margolin also argued
the class was ascertainable because class members could use the class
definition to identify themselves, and his claim was typical because he and the
other class members had identical claims arising from the same material facts.
As part of
its reply papers, Vital submitted evidentiary objections to much of the
substance of the Owoc and Cramer declarations.
The record contains no rulings by the trial court, however, and Margolin
makes no mention of the objections in his appellate briefing. We therefore deem the objections
abandoned. (See, e.g.,
Cal.App.4th 304, 316, fn. 7 [issues raised in trial court but not on
appeal are forfeited]; Reyes v. Kosha (1998)
65 Cal.App.4th 451, 466, fn. 6 ["Issues not raised in an appellant's
brief are deemed waived or abandoned."].)
4. Order
Denying Motion
After
hearing argument from counsel, the trial court took the matter under
submission. The court later issued the
following minute order:
"The Motion for Class Certification
by Plaintiff Margolin is denied without prejudice. The court finds insufficient evidence as to
the ascertainable nature of the class, the community of interest, typicality,
numerosity, and the ability of the Plaintiff to adequately represent the
class. This is based on the total lack
of evidence as to the character of the other class members. [¶]
The case will otherwise proceed in due course."
Although
the order states the denial is "without prejudice," it sets out the
reason for the denial: insufficiency of
the evidence to establish several of the procedural requirements of
certification. Thus, the denial was on
the merits, and the order is appealable.
(Guenter v. Lomas & Nettleton
Co. (1983) 140 Cal.App.3d 460, 465-466.)
II.
DISCUSSION
Margolin
argues the trial court abused its discretion by denying his motion for class
certification. He contends the court
"applied improper legal criteria and erroneous legal assumptions in
denying class certification, warranting reversal." He also contends that "[b]ecause
substantial evidence does not support the [t]rial [c]ourt's denial of class
certification, the [o]rder must be reversed." As we shall explain, the trial did not err by
denying Margolin's class certification motion because Margolin did not
demonstrate the existence of an ascertainable or a sufficiently numerous class.
A. Standard of Review
We ordinarily review an order
denying class certification for abuse of discretion. (Brinker
Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1022 (
"only where the trial court has successfully negotiated the proper
'procedural hoops.' " (National
Solar Equipment Owners' Assn. v. Grumman Corp. (1991) 235 Cal.App.3d 1273,
1281; see also Occidental Land, Inc. v.
Superior Court (1976) 18 Cal.3d 355, 361 ["the showing required for
certification of a class is within the trial court's discretion provided that
correct criteria are employed"].)
Thus, an order denying class certification is presumed correct, and it
will not be reversed on appeal if it is supported by substantial evidence
(including reasonable inferences drawn from the evidence) unless it rests on
improper criteria or erroneous legal assumptions. (Brinker,
at p. 1022; Linder v. Thrifty Oil
Co. (2000) 23 Cal.4th 429, 435-436.)
Although we must consider only the reasons stated by the trial court in
its order denying class certification and not others that might support the
order (Linder, at p. 436), we
may not reverse the order "simply because some of the court's reasoning was faulty, so long as
to justify the order" (Kaldenbach v.
Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 844; accord,
18 Cal.App.4th 644, 656 (Caro)
["Any valid pertinent reason stated will be sufficient to uphold the
order."]). Thus, we must affirm an
order denying class certification if any of the trial court's stated reasons is
legally valid and substantial evidence supports the order. (Knapp
v. AT&T Wireless Services, Inc. (2011) 195 Cal.App.4th 932, 939 (
472 (Hamwi) ["So long as that
court applies proper criteria and its action is founded on a rational basis,
its ruling must be upheld."].)
B. Ascertainability and Numerosity Requirements of Class Certification
Among the
reasons the trial court stated for denying Margolin's class certification
motion was the lack of evidence of "the existence of an ascertainable and
sufficiently numerous class." (
We address in turn these two related procedural requirements for class
certification.
1. Ascertainability
We first consider whether Margolin
demonstrated the existence of an ascertainable class. No class can be certified unless there exists
an identifiable group whose members are similarly situated with respect to the
defendant in that they have sustained the same or a similar injury as a result
of the defendant's conduct. (
Cal.App.4th 1094, 1100 (Akkerman);
Cal.App.3d 1552, 1566-1567 (Guidotti).) For a proposed class to be ascertainable,
(1) the class definition must state precise and objective criteria that
allow identification of persons who have claims and will be bound by the
results of the litigation (Marler v.
E.M. Johansing, LLC (2011) 199 Cal.App.4th 1450, 1459 (
(Medrazo); Global Minerals & Metals Corp. v. Superior Court (2003) 113
Cal.App.4th 836, 858 (Global Minerals));
and (2) there must be a way to identify those persons and give them notice
of the litigation without undue expense or time, usually by reference to
official or business records (
195 Cal.App.4th 807, 828 (Archer);
Cal.App.4th 905, 919 (Sevidal)). "Courts have recognized that 'class
certification can be denied for lack of ascertainability when [(1)] the
proposed definition is overbroad and [(2)] the plaintiff offers no means
by which only those class members who have claims can be [separated] from those
who should not be included in the class.' " (
class suffers from the two ascertainability problems discussed in
not shown the trial court erred by denying class certification based on these
problems.
a.
Margolin defined his proposed class
as all persons residing in California who purchased NO Shotgun at any time
during the period from February 23, 2006, through the date of certification of
a class in this action." The basic
problem with this definition is that it does not describe a "cognizable
class" of persons who are "similarly situated" to Margolin in
that they "sustained the same or similar damage" as a result of
Vital's alleged misconduct. (
that there is an identifiable group that was harmed by the
defendant"].) Indeed, several
California appellate cases have held that such "all purchaser"
classes are overbroad and thus not ascertainable.
For example, in
putative class of all California online purchasers asserting UCL, FAL, CLRA,
and fraud claims against a defendant for allegedly misrepresenting the
purchased items were made in the
States. We held the class was
overbroad and not ascertainable because the evidence showed approximately
80 percent of purchasers was not exposed to the alleged misrepresentations
and therefore had no right to recover against the defendant on the claims
asserted by the named plaintiff and because there were no records from which to
identify the individuals who bought goods that were misrepresented as having
been made in the United States. (
class of all California mouthwash purchasers during a six-month period
asserting UCL and FAL claims against the manufacturer was "overbroad
because it presume[d] there was a classwide injury." The court vacated the order certifying the
class because many, if not most, class members were not exposed to the
advertising and bought the mouthwash for other reasons and therefore were not
entitled to relief. (
supra, 152 Cal.App.4th 1094, the
Court of Appeal considered a putative class of all California patients who
received shock treatment after a certain date from a device manufactured by the
defendant, and who alleged the defendant violated the UCL and FAL by
deceptively minimizing the treatment risks in its advertising. The court held the proposed class was not
ascertainable because there was no way to distinguish patients who decided to
undergo shock treatment based on defendant's advertising, and thus might have a
claim against the defendant, from those who made their decisions based on their
physician's advice or state-mandated consent forms, and thus would not have a
claim. (Id. at pp. 1100-1101.)
The court held the putative class was not ascertainable because the
proposed class definition was "overbroad" and "did not
adequately define those who were entitled to restitution." (Id.
at pp. 1100, 1101.) Finally, in
class asserting antitrust claims based on purchases of scrap or recycled copper
products during a three-year period. We
vacated the order certifying the class because, "in light of the broad
terminology used, the three-year period of time covered, and the technical
nature of the products described and the industry structure in which the
proposed class members and [d]efendants operated," the class definition was
"vague and overbroad." (
Margolin's proposed class suffers
from similar overbreadth problems. The
only objective criteria for inclusion in the proposed class stated in the
definition are California residency and purchase of NO Shotgun on or after
February 23, 2006. As in
there was a classwide injury" from the mere purchase of the product (
beneficial" (Akkerman,
p. 1101). Such presumptions are not
warranted, however, because Margolin submitted no evidence whatever regarding
any other purchaser's experience with NO Shotgun. Nor did he present evidence that
NO Shotgun was adulterated, defective, illegal, or worthless, such that a
presumption of injury might arise from its mere purchase. (Cf. Steroid
Hormone Product Cases (2010) 181 Cal.App.4th 145, 156-157 [damage for CLRA
claim resulted from purchase of product that contained undisclosed substance
that could not lawfully be sold without prescription]; Hicks v. Kaufman & Broad Home Corp. (2001) 89 Cal.App.4th 908,
922 (Hicks) [injury for breach of
warranty claim resulted from purchase of defective product].)
Rather, Margolin alleged Vital
duped him and other putative class members into buying NO Shotgun at
inflated prices by means of statements on its labeling and Web site falsely
touting the superiority of creatine ethyl ester over creatine monohydrate at
building muscle. But, as in
did not show that all, or even most, putative class members read, relied on, or
were even exposed to these statements and therefore would have claims against
Vital. In fact, Vital submitted evidence
in opposition to class certification that suggests many, if not most, putative
class members have no such claims because they likely bought NO Shotgun
for reasons wholly unrelated to the statements about which Margolin complains. For example:
(1) NO Shotgun contains at least 24 active ingredients with
different physiological properties, any one or combination of which might
appeal to a given purchaser; (2) the labeling and Web site materials
submitted by Margolin discuss the physiological effects of many of these
ingredients without giving special prominence to the muscle-building effects of
creatine ethyl ester — in fact, the product name and label emphasize the
physiological effects of nitric oxide (NO) in building muscle;
(3) creatine ethyl ester was removed as an ingredient in 2011; and
(4) Vital received no complaints about the effectiveness of
NO Shotgun except Margolin's.
name="_ftnref4" title="">[4] Thus, as in Global Minerals, the "technical nature" of the product
and market at issue, the lengthy period of time covered, and "the broad
terminology used" make Margolin's proposed class definition
"overbroad." (
In sum, based on Vital's evidence
and the allegations of the operative complaint, the trial court reasonably
could conclude Margolin's proposed class of all
California residents who bought NO Shotgun over the past several years was
"grossly overbroad." (
be denied on overbreadth grounds when the class definition is only slightly
overinclusive [citations], in this case the overbreadth is
significant." (Sevidal, supra, 189
Cal.App.4th at p. 921.) Thus,
because the class definition did not describe "an identifiable group
supra, 152 Cal.App.4th at
p. 1100, italics added), or " 'a set of common characteristics sufficient to allow a
member of [the proposed class] to identify himself or herself
description' "
(Sevidal, at p. 920, italics
added), the court reasonably could conclude, as it did, that Margolin's
proposed class was not ascertainable.
b. Identification of
Putative Class Members
Another problem with the
ascertainability of Margolin's proposed class is that he " 'offer[ed] no means by
which only those class members who have claims can be [separated] from those
who should not be included in the class.' " (
ascertainable class, " 'it
is not possible to give adequate notice to class members or to determine after
the litigation has concluded who is barred from relitigating.' " (Global
Minerals, supra,
due process safeguard, ensuring that notice can be provided 'to putative class
members as to whom the judgment in the action will be res judicata.' " (Sotelo
v. Medianews Group, Inc. (2012) 207 Cal.App.4th 639, 647-648 (
importance of notifying absent class members—who are suddenly before the
court—such notice should not be left to the whim of litigants." (City
of San Jose v. Superior Court (1974) 12 Cal.3d 447, 454.)
Margolin has never explained how,
as a practical matter, he would identify the California residents who bought
NO Shotgun during the proposed class period so that they could be given
the constitutionally required notice of the action. As we stated earlier, for a class to be
ascertainable the members must be readily identifiable without undue expense or
time, usually by reference to official or business records. (Archer,
supra, 195 Cal.App.4th at
p. 828; Sevidal,
p. 919.) For the vast majority of
NO Shotgun purchases, however, Vital has no records that would identify
the ultimate purchaser, because it sold more than 99 percent of its units
to independent distributors and retailers.
There is nothing in the record indicating the distributors or retailers
have such records either. Thus, it
appears there is no administratively feasible way that all the purchasers
Margolin seeks to represent can be readily identified and given notice of the
action. (Cf. Sotelo, supra, 207
Cal.App.4th at p. 649 [proposed class whose members had "no recorded
relationship with respondents" was not ascertainable];
putative class of online purchasers were not readily identifiable when
defendant did not maintain or have access to records identifying purchasers].)
Even if all the ultimate purchasers
could be identified, Margolin would still have to identify the subset that has
claims against Vital because, as we explained earlier, only purchasers who
might have been induced to buy NO Shotgun at an inflated price by Vital's
allegedly false statements about the effects of creatine ethyl ester on muscle
cells would properly be members of Margolin's proposed class. Given (1) Vital's evidence that
NO Shotgun has many active ingredients with different physiological
effects, any one or combination of which might appeal to a particular
purchaser; (2) the removal of creatine ethyl ester as an ingredient of
NO Shotgun during the proposed class period; and (3) the lack of any
reliable and objective means to distinguish those, like Margolin, who bought
NO Shotgun for its creatine-related effects from those who bought the
product for wholly unrelated reasons, the trial court reasonably could conclude
that there was no practical method by which " 'those class members who have claims can be
[separated] from those who should not be included in the class.' " (Sevidal,
supra, 189 Cal.App.4th at
p. 921.)
title="">[6] In other words, the court reasonably could
conclude Margolin's proposed class was not ascertainable because putative class
members could not " 'be
identified without unreasonable expense
or time and given notice of the litigation.' " (
c.
Margolin argues the trial court's
ruling that his proposed class is not ascertainable is not supported by
substantial evidence and rests on improper criteria and erroneous legal
assumptions. We shall address his
various arguments in turn.
Margolin contends substantial
evidence does not support the trial court's ruling because his class definition
allows NO Shotgun purchasers to identify themselves as class members, and
he is not required to identify individual class members. A named plaintiff need not identify the
unnamed members of the putative class at the pleading or class certification
stage to demonstrate the existence of an ascertainable class (Daar v. Yellow
Cab Co. (1967) 67 Cal.2d 695, 706 (Daar);
Medrazo, supra, 166 Cal.App.4th at p. 101), and a proposed class
definition sufficient to allow persons to identify themselves as class members
may satisfy the ascertainability requirement (see, e.g., Marler, supra, 199
Cal.App.4th at pp. 1460-1461; Medrazo,
at p. 101). But, Margolin's
proposed class definition does not allow such self-identification. As we have explained, the definition is
overbroad because it does not distinguish NO Shotgun purchasers who have
claims against Vital (i.e., those who were dissatisfied and might have been
induced to buy NO Shotgun by the labeling and marketing statements
Margolin alleges to be false) from those who do not have claims (e.g., those
who were not exposed to the allegedly false statements, bought NO Shotgun
for unrelated reasons, or were satisfied with the product). Without objective characteristics, common transactional
facts, or some other means of making this distinction, and thereby allowing
identification and notification of putative class members, Margolin's proposed
class definition does not describe an ascertainable class. (Sotelo,
supra, 207 Cal.App.4th at
pp. 648-650; Sevidal,
pp. 920-921.)
The cases
Margolin relies on to support his argument that his proposed class is
ascertainable are not on point because in those cases any overbreadth of the
class definition was insignificant and the putative class members could be identified
readily based on common documented transactions with the defendants that gave
rise to the claims sought to be litigated on a classwide basis. For example, in Vasquez v. Superior Court (1971) 4 Cal.3d 800, 810-811 (
each signed an installment contract for the purchase of meat and a freezer;
they were subjected to a uniform script of misrepresentations by defendants;
and their names and addresses could be ascertained from the defendants' books. In Daar,
the defendant allegedly "fixed" its taxi meters to overcharge a
proposed class of all taxi service coupon book purchasers whose names and
addresses could be ascertained from the defendant's books and records. (Daar,
supra, 67 Cal.2d at
pp. 700-701.) In
park residents who were induced to convert the park into a condominium
development by the park owner's allegedly false promises could easily be
identified from the park owner's business records and from other documents. (Marler,
supra, 199 Cal.App.4th at
pp. 1455, 1460-1461.) In
169 Cal.App.4th 1524, 1532, the proposed class of drivers allegedly
undercompensated for on-call time had already been identified by the defendant
through computerized employment records and included "virtually all"
drivers. In Medrazo, the potential class members who bought motorcycles without
legally required price labels could be identified from the defendant's sales
records and given notice because the "vast majority" of motorcycles
the defendant sold did not have the required labels; and after notice was given
to all purchasers, those with claims could use the proposed class definition to
identify themselves. (
class of homeowners in specified developments constructed and marketed by the
defendant in which all the concrete foundation slabs were allegedly defective
could be determined from public records and the defendant's business
records. (Id. at pp. 912, 916.)
Here, by
contrast, the only transaction the
putative class members have in common is the purchase of NO Shotgun,
which, we have explained, does not by itself give rise to the various claims Margolin
seeks to assert against Vital on their behalf.
As we also explained, Margolin's proposed class definition is
"grossly overbroad." (
as here, "the proposed class contains an unknown number of members who
have no recorded relationship with [Vital], a serious notice issue
results. The theoretical ability to
self-identify as a member of the class is useless if one never receives notice
of the action." (
Margolin "present[ed] serious issues for provision of notice, the interest
that the ascertainability requirement is designed to meet," we
"discern no abuse of discretion in the trial court's finding that the
proposed class is not ascertainable."
(Id. at p. 650.)
Next, Margolin argues the order
denying class certification must be reversed because in ruling the proposed
class was not ascertainable the trial court applied "improper
criteria" and "erroneous legal assumptions." (Richmond
v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470 (Richmond); accord, Brinker,
supra, 53 Cal.4th at
p. 1022.) Specifically, he contends
the court erred by "failing to focus on the class definition to determine
ascertainability, and requiring extrinsic evidence regarding individual absent
class members." Margolin's various
arguments regarding extrinsic evidence about absent class members arise from
the court's statement that certification was not warranted "based on the
total lack of evidence as to the
character of the other class members."
(Italics added.) According to
Margolin, this statement indicates the court erroneously assumed he had to
produce declarations from absent class members or other
"character." At different
points in his briefing, he interprets "character" to mean absent
class members' " 'emotional,
intellectual, and moral qualities' "; their "state of mind" or "subjective
beliefs"; and their reliance on and injury caused by Vital's allegedly
false advertising. Independently
reviewing Margolin's arguments that improper criteria were used and erroneous
legal assumptions were made (see, e.g., Jaimez
v. Daiohs USA, Inc. (2010) 181 Cal.App.4th 1286, 1297), we conclude, for
reasons explained below, that they lack merit.
Margolin cites nothing to support
his assertion the trial court failed to focus on the class definition he
proposed. In denying class
certification, the court was not required to provide a statement of facts and
conclusions of law, or otherwise set out its reasoning in detail. (Knapp,
supra, 195 Cal.App.4th at
p. 939; Osborne v. Subaru of
America, Inc. (1988) 198 Cal.App.3d 646, 652, fn. 1.) In the absence of a contrary indication in
the record, we presume the trial court properly followed the applicable
law. (Evid. Code, § 664;
899, 913.) As we explained in
part II.B.1.a.‑b., ante,
under the law governing ascertainability, the proposed class definition is a
key factor courts consider, and the definition does not satisfy the
ascertainability requirement where, as here, it contains no precise or
objective criteria that can be used to identify the persons who have claims
against the defendant, will be bound by the results of the litigation, and must
be given notice. Since nothing in the
record indicates the trial court did not apply these legal principles when it
determined Margolin's proposed class was not ascertainable, we must presume it
did so.
There is also nothing in the record
to support Margolin's contention the trial court improperly placed on him a
burden to produce evidence of absent class members' "character." What the trial court meant by this reference
to "character" is not entirely clear from the sentence of the order
in which it appears. We therefore must
adopt a reasonable interpretation (Civ. Code, § 3542) by considering the
entire order (Lazar v. Superior Court (1940)
16 Cal.2d 617, 622) and the evidence and arguments presented in connection with
the class certification motion (Knapp,
supra, 195 Cal.App.4th at
p. 939). Further, if possible we
must adopt an interpretation that upholds the order rather than invalidates
it. (Civ. Code, § 3541;
317, 319.) As we shall explain, when
these rules of interpretation are applied, it becomes clear that by referring
to the lack of evidence of the "character" of absent class members,
the trial court meant the lack of evidence about their experiences with
NO Shotgun, not, as Margolin suggests, evidence about their emotional,
intellectual, or moral qualities.
In connection with the motion for
class certification, neither the trial court nor the parties ever mentioned
anything about the emotional, moral, intellectual, or other personal traits of
absent class members, which, of course, are entirely irrelevant to class
certification. Rather, in his motion for
class certification, Margolin argued, among other things, that certification
was appropriate because putative class members could identify themselves as
purchasers of NO Shotgun, and the members were similarly situated because
Vital induced them to buy the product at inflated prices by means of the same
misrepresentations regarding the superiority of creatine ethyl ester over
creatine monohydrate at building muscle.
In support of the motion, Margolin submitted a declaration in which he
described his own reasons for buying NO Shotgun and his own disappointing
experience with the product, but he submitted no evidence regarding anyone
else's purchase of or experience with the product. In opposition to Margolin's class
certification motion, Vital argued, among other things, that class certification
was not warranted because there was no reliable way to identify the putative
class members, and because the members were not similarly situated in that
issues concerning the reasons why they bought NO Shotgun, what they paid
for it, and what their results of using it were, varied and would require
individualized proof. Vital submitted
evidence that it had no records regarding more than 99 percent of retail
purchasers; that NO Shotgun has many active ingredients with various
physiological effects, any one or combination of which might appeal to a
particular consumer; that creatine ethyl ester was removed as an ingredient
during the proposed class period; and that Margolin's lawsuit was the only
complaint it had ever received about the effectiveness of NO Shotgun. Based on this record, the trial court found
"insufficient evidence as to the ascertainable nature of the class, the
community of interest, typicality, numerosity, and the ability of [Margolin] to
adequately represent the class.
as to the character of the other class members." (Italics added.)
When the italicized sentence quoted
above is construed reasonably and in the context of the whole order and the
record before the trial court on the class certification motion, it is obvious
the court was not referring to the " 'combination of emotional, intellectual, and
moral qualities' "
of absent class members, as Margolin implausibly suggests. Rather, the court was referring to the
absence of evidence to establish the existence of an objectively identifiable
group of purchasers of NO Shotgun situated similarly to Margolin in terms
of the reasons they bought the product and their experiences using it.
"character" to denote a "combination of qualities or features
that distinguishes . . . [the] group . . . from
another." (American Heritage Dict.
(2d college ed. 1982) p. 259, col. 2.) Indeed, a class is ascertainable only when
its members have such a "character," i.e., when they constitute an
identifiable group of "similarly situated persons" who "have
sustained the same or similar damage" (Guidotti,
supra, 214 Cal.App.3d at
pp. 1566, 1567) and can be described by " 'a set of common characteristics sufficient to
allow a member of that group to identify himself or herself as having a right
to recover based on the description' " (Sevidal,
To determine whether Margolin's
proposed class had the type of "character" required for an
ascertainable class, the trial court properly considered such "subjective
beliefs" as how reliance, causation, and injury would be proven as to
absent class members. "[F]or an
ascertainable class, the right of each individual to recover may not be based
on a separate set of facts applicable only to him." (Vasquez,
supra, 4 Cal.3d at p. 809.) Hence, a court ruling on class certification
must "consider whether the theory of recovery advanced by the proponents
of certification is, as an analytical matter, likely to prove amenable to class
treatment." (Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319,
327 (Sav-On).) Here, Margolin's theory of recovery, asserted
in claims for breach of warranty and violations of the UCL, FAL, and CLRA, was
essentially that Vital induced him and the other putative class members to buy
NO Shotgun at inflated prices by means of false advertising statements
regarding the effects of creatine ethyl ester on muscle cells. CLRA and warranty claims based on false
advertising require proof of reliance, causation, and injury. (Tucker
v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th 201, 221-222 (
[warranty].) Although the UCL and FAL
require such proof from class representatives but not absent class members (
require, at a minimum, that the class be exposed to the allegedly false
advertising at issue" (Davis-Miller
v. Automobile Club of Southern California (2011) 201 Cal.App.4th 106,
124-125 (Davis-Miller)). Hence, information about the reasons why
absent class members bought NO Shotgun, the labeling or marketing
statements they read or relied on, and their satisfaction or dissatisfaction
with the product — what Margolin calls absent class members' "state
of mind" and "subjective beliefs" — was relevant to the
related determinations of whether the claims alleged were "likely to prove
amenable to class treatment" (Sav-On,
at p. 327) and, ultimately, whether the class was "ascertainable"
(Vasquez, at p. 809).
Margolin nevertheless insists he
did not have to provide any information about other class members' experiences
with NO Shotgun because "this is a deceptive labeling case ideally
suited for class certification." He
argues "subjective issues" of materiality, reliance, causation, and
injury as they pertain to absent class members are, as a matter of law,
"completely irrelevant to the class certification analysis." According to Margolin, such issues may be
presumed as to all other California residents who bought NO Shotgun during
the proposed class period because Vital made identical labeling
misrepresentations to them. We disagree.
An essential factual premise
underlying Margolin's argument for a classwide presumption of reliance,
causation, and injury is missing because there is no evidence Vital made the
same alleged misrepresentations to all putative class members. Margolin submitted no evidence regarding any
other purchaser's experience buying or using NO Shotgun, and the record
contains no information about what product labeling or Web site marketing
statements any other purchaser actually read or relied on. Further, the alleged misrepresentations
underlying Margolin's claims relate specifically to the muscle-building effects
of creatine ethyl ester,
name="_ftnref9" title="">[9]
but that ingredient was removed from NO Shotgun during the proposed class
period and is no longer listed in Vital's labeling or marketing materials. No presumption of reliance, causation, or
injury can be made as to putative class members who bought NO Shotgun
after these changes were made. (See
reliance without evidence alleged misrepresentations were uniformly made to all
members of proposed class]; Fairbanks v.
Farmers New World Life Ins. Co. (2011) 197 Cal.App.4th 544, 562 (
will be upheld when determination whether alleged misrepresentations were
actually made to each putative class member requires individual proof];
members were injured and entitled to restitution under UCL or FAL when they
were never exposed to allegedly deceptive advertising].)
An essential legal premise
underlying Margolin's argument for a classwide presumption of reliance,
causation, and injury is also missing because he presented no evidence that the
labeling statements upon which he allegedly relied were material to all other
purchasers of NO Shotgun. A
presumption, or at least an inference, of detrimental reliance on a
misrepresentation arises when there is a showing the misrepresentation was
"material," i.e., a reasonable person would consider its existence or
nonexistence important in determining his course of conduct in the transaction
in question. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 327 (
of fact requiring individualized proof (ibid.),
the Legislature may determine that certain types of representations are
material (see, e.g., Kwikset
Cal.4th 310, 329 (Kwikset) ["The
Legislature has recognized the materiality of [a 'Made in U.S.A.' label] by
specifically outlawing deceptive and fraudulent 'Made in America' representations."]). Or, more commonly, a misrepresentation may be
deemed material when the record shows that but for the misrepresentation, the
putative class members would not have acted to their detriment (
Cal.App.4th 1282, 1294 (Massachusetts
Mutual)).
Unlike the cases on which Margolin
relies, no presumption of materiality, reliance, causation, or injury is
warranted here. Margolin has not shown,
for example, that Vital made a false labeling statement regarding a matter
legislatively determined to be material (Kwikset,
supra, 51 Cal.4th at p. 333);
conducted "a decades-long campaign of deceptive advertising"
regarding the serious health risks of its product (Tobacco II, supra,
46 Cal.4th at p. 306); failed to disclose its product contained an
ingredient making purchase without a prescription illegal (Steroid Hormone Product Cases, supra,
181 Cal.App.4th at p. 157); or failed to disclose the product contained a
known defect that substantially diminished its represented usefulness (
and all other putative class members into buying NO Shotgun by falsely
stating creatine ethyl ester is more effective than creatine monohydrate at
building muscle. Such assertions were
not material to putative class members who bought NO Shotgun after
creatine ethyl ester was removed as an ingredient and associated label and Web
site references were deleted, because they were never exposed to the
assertions. (See id. at pp. 179, 184 [presumption of materiality requires
exposure to alleged misrepresentation].)
Nor were Vital's statements about creatine ethyl ester material to putative
class members who bought NO Shotgun because they desired one or more of
the many other ingredients or physiological effects to which the statements
were irrelevant. (Cf.
materiality when insurance policy had several features that might have induced
purchase and to which alleged misrepresentations were irrelevant];
Cal.App.4th 116, 133-134 [same when drug was prescribed based on
patient-specific factors to which alleged misrepresentations were
irrelevant].) Further, the statements
were not material to putative class members "who never saw
[NO Shotgun] advertisements or representations of any kind before deciding
to purchase" the product, such as those who purchased it "primarily
based on word of mouth or because they saw [it] in a store or at a friend's or
family member's home." (
Cal.App.4th 966, 979.) Where, as here,
"the issue of materiality or reliance is a matter that would vary from
consumer to consumer, the issue is not subject to common proof, and the action
is properly not certified as a class action." (In re
Vioxx Class Cases, at p. 129.)
In sum, Margolin has not shown the
trial court's ascertainability ruling is unsupported by substantial evidence,
or rests on improper criteria or erroneous legal assumptions. We thus must uphold that ruling. (Brinker,
supra, 53 Cal.4th at p. 1022.)
2.
We next consider whether Margolin
demonstrated the existence of a sufficiently numerous class to warrant
certification. The numerosity element
requires the action involve a question that is of common interest to "many
persons," or the parties be so "numerous" that "it is
impracticable to bring them all before the court." (Code Civ. Proc., § 382; see
505, 509.) "[T]here is no set
number required as a matter of law for the maintenance of a class
action." (Hebbard v. Colgrove (1972) 28 Cal.App.3d 1017, 1030.) Classes of 10, 28 and 42 members have been
held quantitatively sufficient (see Rose
v. City of Hayward (1981) 126 Cal.App.3d 926, 934), but a class of six
members has been held too small (Kennedy
v. Domerque (1955) 137 Cal.App.2d Supp. 849, 850). It is the burden of the party seeking to
certify a class to prove the "approximate size of her class." (Bauman
v. Islay Investments (1975) 45 Cal.App.3d 797, 801 (Bauman).) Margolin did not
satisfy this burden.
In his class certification motion,
Margolin argued the trial court had to accept the allegation of his second
amended complaint that the class contained at least 100 members and therefore
satisfied the numerosity requirement. He
also contended numerosity could be inferred from information on Vital's Web
site about the nature of its retail merchandising business. In his appellate briefing, Margolin similarly
argues numerosity may be inferred from information in the record about the
nature and scope of Vital's business, as well as from the jurisdictional
allegations of his second amended complaint that Vital transacts
"significant business in California" and "a high
percentage" of its customers resides in California. Margolin also contends Vital conceded
numerosity at the hearing on the class certification motion by admitting the
class contained tens of thousands of people.
None of these arguments has merit.
Margolin
cannot rely on the allegations of his second amended complaint to satisfy his
burden to establish numerosity. Although
a trial court must accept class action allegations as true when a defendant
demurs to them (Daar,
plaintiff moves to certify a class, he has the "burden to establish that
of the litigation in that format are present" (Hamwi, supra, 72
Cal.App.3d at p. 471, italics added). A
plaintiff seeking class certification must present substantial evidence
establishing each of the procedural requirements of certification. (Morgan,
supra, 210 Cal.App.4th at p. 1354; Quacchia v. DaimlerChrysler Corp. (2004) 122 Cal.App.4th 1442, 1447
(Quacchia).) "But pleadings are allegations, not
evidence, and do not suffice to satisfy a party's evidentiary
burden." (Soderstedt v. CBIZ Southern California, LLC (2011) 197 Cal.App.4th
133, 154 (Soderstedt).) Thus, Margolin cannot sustain his burden to
demonstrate numerosity simply by pointing to his pleadings.
Margolin
also may not rely on inferences he draws from information about the nature and
scope of Vital's business to establish the existence of a class sufficiently
numerous to warrant certification. In
support of his argument that he adequately established numerosity, Margolin
cites a page printed from Vital's Web site that identifies 10 members of its "Specialty
Sales Team" and an interrogatory response by Vital that NO Shotgun is
sold by eight different retail entities in California. Although it may be reasonable to infer from
this limited information that numerous California residents purchased NO Shotgun
during the proposed class period, the information does not support an inference
that those purchasers have claims against Vital. As we have explained, Margolin submitted no
evidence that any other purchasers were situated similarly to him in that they
were duped into buying NO Shotgun at an inflated price by Vital's
allegedly false statements concerning the efficacy of creatine ethyl ester at
building muscle, and therefore might have the claims Margolin wants to assert
on their behalf.
The record actually supports the
opposite conclusion, i.e., that the putative class members Margolin seeks to
represent do not have claims against Vital.
As we discussed earlier, the product labels and Web site marketing
materials concerning NO Shotgun and the declarations Vital introduced
describing the product's many ingredients and their physiological effects
support an inference that most putative class members bought NO Shotgun
for reasons unrelated to the efficacy of creatine ethyl ester at building
muscle. The fact that Vital received no
complaints about NO Shotgun from anyone but Margolin supports an inference
that purchasers were satisfied with the product and have no claims against
Vital. Since these inferences are
reasonable and support the trial court's ruling on numerosity, we may not
disregard them in favor of the contrary inferences Margolin urges us to
draw. (See Massachusetts Mutual, supra,
certification order turns on inferences to be drawn from facts, reviewing court
may not substitute its inferences for those of trial court].)
Next, Margolin asserts Vital did
not dispute numerosity and actually conceded the issue at the hearing on the
motion for class certification. In
support of this assertion, he cites a portion of the argument of Vital's
counsel responding to his own counsel's assertion that members of the proposed
class are entitled to a refund of the full purchase price of
NO Shotgun. After arguing that
Margolin had not been injured, Vital's counsel continued: "Even though [Margolin is] not entitled
to a penny, put a blanket recovery on everybody else to disgorge the entirety
of whatever was paid for the product for tens
of thousands of people. It's not
within the realm of plausibility that that can be a proper remedy." (Italics added.) This was simply an argument that a full
refund of the purchase price to tens of thousands of purchasers who had not
been injured was not an appropriate remedy.
It was not a concession that there exists a class of purchasers numbering
in the tens of thousands with claims against Vital of the type Margolin seeks
to assert on their behalf.
Even if Vital had conceded there
were tens of thousands of members in the proposed class, that concession would
not suffice. "[T]he defendant's
agreement not to contest numerosity 'is not enough to establish the numerosity
requirement. There must be some evidence
supporting such.' " (Soderstedt,
supra, 197 Cal.App.4th at
p. 155; see also Quacchia,
must present substantial evidence of all procedural requirements of
certification]; Bauman,
[party seeking class certification must prove approximate size of proposed
class].) Here, no such evidence was
submitted.
In sum,
"[o]ther than [his] own claim [Margolin] made no showing of the existence
of any actual controversy with [Vital], nor did [he] offer proof that anyone
except [him]self and [his] counsel desired to prosecute the lawsuit or stood to
profit from it." (
class." (Department of Fish & Game v. Superior Court (2011) 197
Cal.App.4th 1323, 1363.) The trial court
therefore did not abuse its discretion in ruling that Margolin failed to meet
his burden to demonstrate the numerosity required for class certification.
C. Other Class Action
Requirements
The parties
also disagree over whether Margolin satisfied his burden to demonstrate the
community of interest requirements of class certification: predominance of common questions of law or
fact, typicality, and adequacy of representation. We need not, and do not, resolve this
dispute. "We will affirm an order
denying class certification if any of the trial court's stated reasons was
valid and sufficient to justify the order, and it is supported by substantial
evidence." (Knapp, supra, 195
Cal.App.4th at p. 939; see also Caro,
supra, 18 Cal.App.4th at p. 656
["Any valid pertinent reason stated will be sufficient to uphold the
order."].) Our conclusion the trial
court did not abuse its discretion by denying Margolin's class certification
motion for his failure to "demonstrate the existence of an ascertainable
and sufficiently numerous class" (Brinker,
supra, 53 Cal.4th at p. 1021) is
therefore sufficient to uphold the order.
DISPOSITION
The order denying class certification is affirmed.
IRION, J.
WE CONCUR:
McCONNELL, P. J.
O'ROURKE,
J.
name="_ftn1" title="">[1] "There is no freestanding cause of action for
'restitution' in California." (
Cal.App.4th 648, 661.) Rather,
restitution is a remedy that may be awarded to prevent unjust enrichment when
the defendant has obtained some benefit from the plaintiff through fraud,
duress, conversion or similar misconduct.
(McBride v. Boughton (2004)
123 Cal.App.4th 379, 387-388.)
Restitution is authorized by the UCL and FAL. (Bus. & Prof. Code, §§ 17203,
17535; Cortez v. Purolator Air Filtration
Products Co. (2000) 23 Cal.4th 163, 177, fn. 10.) Because Margolin sought "common law
restitution" on the basis of the same conduct that allegedly violated the
UCL and FAL, we consider his demand for restitution as part of those claims,
not as a separate claim.
name="_ftn2" title="">[2] Among the active ingredients in NO Shotgun are
arginine and citrulline, amino acids that are precursors to nitric oxide
(chemically, NO). Nitric oxide is a
circulating compound that improves blood flow to skeletal muscle. According to the NO Shotgun label
attached to the operative complaint:
"NO-induced vasodilation results in killer pumps in the
gym. . . . The pump is so
pronounced in the muscle . . . that it is painful due to NO's opening
of the veins, arteries and capillaries like floodgates. This condition brought on by NO (nitric
oxide) overfills the muscle with nutrient dense blood to produce a NASTY
PUMP! . . . The
physiologic response to NO causes extra trauma to occur when the blood-engorged
muscle is subjected to INTENSE weight training." It is from these purported effects of nitric
oxide that NO Shotgun derives its name.
