The requirement that the named plaintiff must be an adequate class representative is not often the basis for denying class certification. But a recent decision from the Northern District of Illinois in a false-advertising class action illustrates the importance of taking discovery on facts that are relevant to the adequacy standard.
In Lipton v. Chattem, Inc., the district court denied class certification in a case alleging that purchasers of a weight-loss product, Dexatrim, had been deceived because the label did not disclose that its ingredients included hexavalent chromium, which allegedly can cause serious health problems. The court held that the named plaintiff, Tracy Lipton, was not an adequate class representative because her deposition testimony made her subject to a potential defense not applicable to the class as a whole: she admitted that she had not heard of hexavalent chromium at the time of her purchase and that, even if the label had listed hexavalent chromium as an ingredient, she would have bought Dexatrim anyway. These admissions, the court explained, posed a “serious problem” for Lipton’s claims because a jury could easily find that she had not proved materiality and causation (elements of the fraud and statutory consumer-protection claims), reliance (an element of the fraud claim), or a connection between the alleged detriment to her and the alleged benefit to the defendant (a requirement for the unjust-enrichment claim). Those obstacles to proving a claim presumably would not exist for putative class members who knew what hexavalent chromium was or who would not have bought Dexatrim if it had been listed as an ingredient. The court stressed that it did not need to find that a jury would find against Lipton; it held that Rule 23(a)(4)’s adequacy requirement is not satisfied if a jury might find against the plaintiff on grounds not applicable to the class as a whole—the defense need only be “arguable” to defeat class certification on adequacy grounds. The court went on to note that the same potential defenses meant that common issues did not predominate over individual issues and that a class action was not superior to other methods of adjudicating the controversy. In particular, Lipton had not offered “any practicable way” for the court to efficiently resolve key liability issues “without conducting hundreds or thousands of mini-trials”—the same point the Seventh Circuit made with respect to individual damages issues in the Espenscheid case we recently discussed.
Lipton demonstrates why it is essential to question proposed class representatives carefully in depositions; the facts elicited may well reveal that they are subject to individualized defenses that may not apply to some members of the putative class. And sometimes the allegations of the complaint alone will indicate the same thing. In that instance, a defendant can use one of our favorite devices for defeating class certification without discovery—a motion to strike the class allegations. Finally, Lipton and Espenscheid both highlight that defendants faced with potential individualized issues in the case should emphasize the practical difficulties of resolving those issues in a single proceeding; if even one issue cannot be decided without hundreds of mini-trials for each class member, the case should not be certified in the first place.