Class action defense practitioners routinely face uphill battles on the issue of individualized defenses for class members. However, these arguments should not be overlooked as tools to defeat class certification. Lipton v. Chattem, Inc., No. 11 C 2952, 2013 WL 489147 (N.D. Il. Feb. 8, 2013), a recent case out of the Northern District of Illinois, provides a great example of how this argument can be used to successfully attack the adequacy of the class representative, and even perhaps predominating common issues of reliance and causation, during class certification.
In Lipton, the plaintiff brought a putative class action against Chattem, Inc., the maker of weight loss product, Dexatrim Max (“Dexatrim”). The named plaintiff, Tracey Lipton, claimed Chattem sold her a product that was contaminated with a toxic substance. The lawsuit alleged claims under the Illinois Consumer Fraud and Deceptive Practices Act (“ICFA”), and for intentional misrepresentation, breach of implied warranty of merchantability, and unjust enrichment. The defendant moved to dismiss for lack of standing and failure to state a claim. The court dismissed the implied warranty claim but denied the remainder of the motion.
Lipton filed her motion seeking to certify a class of Illinois residents who had purchased the Dexatrim product since 2006. The court denied class certification finding Lipton to be an inadequate class representative under Federal Rule of Civil Procedure 23(a) because she was subject to an individualized defense. At her deposition she testified that she would have bought Dexatrim even if the toxic ingredient, hexavalent chromium, had been listed on the packaging, because she did not know the ingredient was toxic at the time of the purchase. The court noted “[t]his poses a severe problem for Lipton, as the ICFA claim requires proof of materiality, causation, and reliance.” The court reasoned that there was a substantial risk that Lipton would not be able to overcome her deposition testimony which would have sunk the absent class members’ claims even though they might have prevailed had someone else been the class representative.
Even if Lipton had been found to be an adequate representative, the court would have denied class certification on the basis that the suit did not qualify for treatment as a Rule 23(b)(2) injunctive class action. The court reasoned that because Chattem stopped using the toxic ingredient in its Dexatrim product, there was no reasonable expectation that the harm would be repeated. The court also rejected class certification under Rule 23(b)(3) because the suit failed to satisfy the predominance requirement. That is, in order to prevail on the ICFA, intentional misrepresentation or unjust enrichments claims, “each class member would have to prove that they were deceived by Chattem’s labeling of Dexatrim and that they suffered damages as a result.” The court concluded that where liability determinations are individual and fact-intensive, predominance is not satisfied.