IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION. Case No. 12-CV-1983-GHK (MEWx)

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1 Case :-cv-0-ghk-mrw Document Filed 0// Page of Page ID #:0 0 JEFFREY MARGULIES, Bar No. 00 STEPHANIE STROUP, Bar No. 0 MATTHEW M. GURVITZ, Bar No. FULBRIGHT & JAWORSKI L.L.P. South Flower Street Forty-First Floor Los Angeles, California 00 Telephone: () -0 Facsimile: () - jeff.margulies@nortonrosefulbright.com stephanie.stroup@nortonrosefulbright.com matthew.gurvitz@nortonrosefulbright.com Attorneys for Defendants STANDARD HOMEOPATHIC COMPANY, HYLANDS, INC. and STANDARD HOMEOPATHIC LABORATORIES, INC. IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA ENZO FORCELLATI and LISA ROEMMICH on behalf of themselves and all others similarly situated, v. Plaintiffs, HYLAND S, INC.; STANDARD HOMEOPATHIC LABORATORIES, INC.; and STANDARD HOMEOPATHIC COMPANY, Defendants. WESTERN DIVISION Case No. -CV--GHK (MEWx) DEFENDANTS FURTHER SUPPLEMENTAL BRIEF IN OPPOSITION TO MOTION FOR CLASS CERTIFICATION Courtroom: 0 Judge: Hon. George H. King.

2 Case :-cv-0-ghk-mrw Document Filed 0// Page of Page ID #:0 0 Plaintiffs propose a two-pronged method of ascertaining class members in this action: ) claims forms from consumers; and ) use of information gathered from customer loyalty programs to identify individuals that purchased products. Plaintiffs make no showing as to what percentage of the potential class could be accurately identified using these methods; the entire proposal is based on guess work about what might be used to identify class members. Nor does their proposal address the problem of differentiating satisfied from unsatisfied customers. As was the case in Carrera v. Bayer Corporation, F.d 00 (d Cir. ), Plaintiffs have failed to show how these proposed methods are sufficient to ascertain class members in this action, and the proposal will cause more problems with management of the class than it will solve. I. Plaintiffs Cannot Reliably Identify Class Members Through Retailer Records Plaintiffs do not establish that data obtained from customer loyalty programs will accurately identify even a small percentage of class members. Of the 0 retailers and wholesale distributors identified as distributors of Defendants cold and flu products, Plaintiffs have pinpointed only six as having customer loyalty programs that might yield records to identify some purchasers of these products. Absent from even this short list is Wal-Mart Stores, one of the largest retailers of Defendants products. Suppl. Fisher Decl. Exh. B. Aside from the fact that Plaintiffs are requesting this information from less than % of Defendants retailers, they also provide no specifics concerning how the data could be used to accurately identify class members. Plaintiffs have not demonstrated, for example: () the Because some retailers purchase products from wholesalers (e.g., Amerisource Bergen, Cardinal Health, McKesson) rather than Defendants, the total number of retailers who sell the Products is greater than 0. Defendants do not know the identity of every retailer who sells its products. See e.g., Suppl. Fisher Decl. Exh. C (Hyland s website acknowledging that its database of retailers may be incomplete.) Although Plaintiffs indicate they obtained records from Duane Reade, see Dkt. No. at, fn., Plaintiffs have not stated what information was actually captured by these customer loyalty records.. - -

3 Case :-cv-0-ghk-mrw Document Filed 0// Page of Page ID #:0 0 percentage of loyalty card holders at each retailer who provide contact information to the retailer; () what percentage of contact information consumers initially furnished to retailers to obtain loyalty cards is accurate and up-to-date and, therefore, capable of being used to contact them; and () that the loyalty card used to purchase one of the products actually belongs to the purchaser it could belong to a friend or family member, the customer next in line, or even the cashier who scans a loyalty card to allow a consumer to obtain a discount when a card has been forgotten. Moreover, no customer is required to be a member of customer loyalty programs to purchase items from a given retailer. Plaintiffs simply speculate that some unknown percentage of customers might be ascertained from rewards programs, but this speculation is unaccompanied by proof and, therefore, should not be considered by the Court. II. Plaintiffs Fail to Describe How They Will Reliably Identify Class Members Through Affidavits The primary way Plaintiffs propose to identify absent class members relies on claim forms, accompanied by either a receipt or a sworn affidavit attesting to a product purchase. See Dkt. No. at -0. Plaintiffs contend this method will be reliable because claims forms can be subjected to screening procedures to eliminate fraud (Id. at ) and Plaintiffs purported expert describes various methods by which claim forms can be analyzed for fraudulent submission. Decl. of Chuck Clabots, 0-. This proposal also misses the mark. To show a class is ascertainable, Plaintiffs must do more than offer a plan for identifying absent class members - they must also prove that their plan will work in a reliable and administratively feasible way. Carrera F.d at 0. This is especially critical where the named plaintiff s deposition testimony suggests that individuals will have difficulty accurately recalling their purchases. Id. at 0. Plaintiffs provide no estimate of the number of class members they expect to have receipts. Both of the class representatives testified that they did not keep receipts for their purchase of the products. Forcellati Depo. at :-; Roemmich. - -

4 Case :-cv-0-ghk-mrw Document Filed 0// Page of Page ID #:0 0 Depo. at :-:. Plaintiffs also offer no proof that self-serving affidavits describing the particulars of past purchases can reliably identify class members. Individuals forget details about long-ago transactions; indeed, not even class representative Lisa Roemmich remembers the date she purchased the product (Dep. Tr. at -), where she purchased the product (id. at -), or how much she paid for the Product. Id. at. In similar situations, other courts have rejected the use of affidavits for ascertaining the class. See e.g., In re Bisphenol-A (BPA) Prod. Liab. Litig., (W.D. F.R.D., 0 (W.D. Mo. ), explaining com[ing] forward and identifying himself or herself [as a class member] does not prove a person is in the class. A plaintiff in a typical case is not allowed to establish an element of a defendant's liability merely by completing an affidavit swearing the element is satisfied, and this should be no different for a class action. See U.S.C.A. (b) (stating procedural rules shall not abridge, enlarge or modify any substantive right ). Plaintiffs' proposed class extends back nearly a decade, and Defendants would be entitled to cross-examine each and every alleged class member regarding his or her memory. See also In re Phenylpropanolamine (PPA) Prods. Liab. Litig., F.R.D., (W.D. Wa. 0) (concluding affidavits could not be used to ascertain a class where the named plaintiffs had difficulty remembering the products they bought that contained PPA); Weiner v. Snapple Beverage Corp., 0 WL at * & n. (S.D.N.Y. Aug., 0) (where none of the named plaintiffs could recall the quantity of Snapple beverages they purchased or the price they paid, putative class members would also be unlikely to remember every purchase during the class period; hence, soliciting declarations from absent class members would invite them to speculate or worse ); In re Teflon Prods. Liab. Litig., F.R.D., - (D. Iowa 0) (rejecting argument that class members need not be able to prove membership at the class certification stage because it necessarily depends upon the availability of better evidence to establish membership at a later stage. No such additional evidence will be produced. ) (c.f., Chipotle v. Hernandez, WL 0, at * (C.D. Cal. Dec., ) (rejecting idea that class members would be able to remember with certainty, the date, location and. - -

5 Case :-cv-0-ghk-mrw Document Filed 0// Page of Page ID #:0 0 type of burrito purchased more than five years ago.) Rather than specifically describe how they will use affidavits to identify class members, Plaintiffs rely on the Declaration of Chuck Clabots, an undisclosed expert, to identify ways in which the affidavits could be screened for fraudulent claims. See Decl. of Chuck Clabots, 0-. As a threshold matter, Plaintiffs never informed Defendants that they intended to rely on the testimony of Mr. Clabots, in derogation of the Court s order in the scheduling conference. And, even if it were considered, the Clabots Declaration does not constitute proof that screening affidavits for fraud makes them acceptably reliable for ascertaining class members. For one, the screening methods Mr. Clabots suggests are based on his experience using affidavits in class settlements, in which the parties agreed to accept affidavits as proof of unnamed plaintiffs claims. Although Mr. Clabots contends he is confident that the parties, along with a claims administration firm, can employ claims processes, services and technologies to accurately and effectively verify claims made by class members, id. at 0, his assurance does not satisfy Rule. Weiner, 0 WL at * n. (claim administrator s assurance that notification would be feasible if a class were to be certified does not establish that certification requirements have been met); see also Comcast Corp. v. Behrend, S.Ct., () (rejecting contention that Rule is satisfied by an assurance that the plaintiffs can produce a model capable of The Court s April, Scheduling Order [Dkt. No. 0] required Plaintiffs to disclose any expert they intended to rely on for their class certification motion at least seven days before filing the motion. Plaintiffs did not disclose Chuck Clabots as an expert until filing their supplemental ascertainability brief, and therefore, the Court should not consider his declaration. For the same reason, the Court should disregard the list of Non-Contested (Settlement Classes) in Exh. A to the Supplemental Fisher Decl. (purporting to identify cases where claim forms were used to identify absent class members). These cases involve settlement classes where the defendant chose not to litigate certain issues (including individual claims for relief), and do not bear on ascertainability in a class certification analysis.. - -

6 Case :-cv-0-ghk-mrw Document Filed 0// Page of Page ID #:0 0 measuring damages). Plaintiffs do not demonstrate how Mr. Clabots suggestions for screening out fraudulent claims by e.g., requiring class members to identify the specific product and location of purchase, are likely to succeed. One method Plaintiffs propose for providing notice and claim forms to class members is to make these documents available at retailers who sell the products. Dkt. No. at. An individual intent on submitting a fraudulent claim would almost certainly list the retailer where he obtained the claim form as the site of purchase. Alternatively, an individual can easily identify product retailers on Hyland s website. See Supp. Fisher Decl. Exh. C. On the other hand, just because an individual lists a store that does not sell the product on a claim form does not mean the claim is invalid; an individual may forget where a product was purchased. Plaintiffs also identify methods to detect fraudulent claims, such as fraud analysis algorithms to detect, isolate and remediate fraudulent activity, (Clabots Decl. at 0) but fail to explain how, or how well, these would work. In sum, Mr. Clabots provides no data, and suggests no way to measure the reliability of any proposed screening method. As the Third Circuit observed in considering a similar proposal, even if a model screens out a significant number of claims, say %, there is probably no way to know if the true number of fraudulent or inaccurate claims was actually % or 0%. Carrera at. At bottom, evaluating claims based on the criteria set forth by Mr. Clabots actually invites a host of mini-trials about the validity of claims, rendering the proposed class inherently unmanageable. Because Plaintiffs have wholly failed to carry their burden to present a workable plan for reliably identifying class members, certification must be denied.. - -

7 Case :-cv-0-ghk-mrw Document Filed 0// Page of Page ID #:0 0 Dated: February, JEFFREY MARGULIES STEPHANIE STROUP MATTHEW GURVITZ FULBRIGHT & JAWORSKI L.L.P. /S/ Stephanie Stroup STEPHANIE STROUP Attorneys for Defendants STANDARD HOMEOPATHIC COMPANY, STANDARD HOMEOPATHIC LABORATORIES, INC. and HYLANDS, INC.. - -