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July 17, 2015 Practice Points

Eleventh Circuit Rules in Karhu v. Vital Pharmaceuticals

Self-identification, the majority found, suffers from two intertwined problems.

By E. Colin Thompson

On June 9, 2015, in Karhu v. Vital Pharmaceuticals, Inc., Case No. 14-11648, the Eleventh Circuit issued an unpublished opinion in accord with Third Circuit’s decision in Carrera v. Bayer Corp., 727 F. 3d 300, 310 (3d Cir. 2013), in regard to what plaintiffs must demonstrate to satisfy the implicit ascertainability requirement necessary to certify a class.

In Karhu, the plaintiff-appellant appealed a decision of the District Court for the Southern District of Florida refusing to certify classes of purchasers of a weight loss supplement called VPX Meltdown Fat Incinerator (Meltdown), which was marketed by defendant-appellee Vital Pharmaceuticals, Inc. Karhu alleged that he and the members of the putative classes purchased Meltdown in reliance on Vital’s advertising that Meltdown aids in fat loss, which Karhu alleged it does not. The district court held that Karhu failed to demonstrate the ascertainability requirement was satisfied. The Eleventh Circuit panel unanimously concluded the district court was correct in this holding.

The Karhu majority held that a plaintiff cannot establish that class members are ascertainable “simply by asserting that class members can be identified using the defendant’s records” or simply “by proposing that class members self-identify (such as through affidavits) . . . .” Instead, proponents of class certification must “establish that the [defendant’s] records are in fact useful for identification purposes, and that identification will be administratively feasible,” or that “self-identification is administratively feasible and not otherwise problematic.” Karhu’s proposal to identify class members using Vital’s sales data, the court concluded, “was incomplete, insofar as Karhu did not explain how the data would aid class-member identification.”

Self-identification, the majority found, suffers from two intertwined problems:

On the one hand, allowing class members to self-identify without affording defendants the opportunity to challenge class membership ‘provide[s] inadequate procedural protection to . . . [d]efendants’ and ‘implicate[s their] due process rights.’ . . . On the other hand, protecting defendants’ due process rights by allowing them to challenge each claimant’s class membership is administratively infeasible, because it requires a ‘series of mini-trials just to evaluate the threshold issue of which [persons] are class members.’

Because Karhu did not propose a method of self-identification, the majority held, he had not established how the potential problems with such a method would be avoided in this case.

Although the three-judge panel unanimously concluded that Karhu failed to demonstrate that the ascertainability requirement was satisfied in the case before it, Judge Martin wrote a concurring opinion to address what she saw as problems with a more general holding announced by some courts that “a prospective class of consumers of a small-dollar product is not ascertainable if the only way they can be identified is through self-identification.” She stated that “[w]hen timely presented, I would hold that affidavits are a sufficient means of identification for purchasers of a cheap, unique product like Meltdown” and advocated for a two-factor test to determine whether, in a particular case, affidavits from putative class members could be used. Those factors are: “(1) the value of each class member’s claim, and (2) the likelihood that potential class members could accurately identify themselves.” Courts applying the first factor, Judge Martin explained, certify “classes of purchasers of low-value items, such as supplements or bottled beverages, based solely on consumer self-identification,” but “have been more reluctant to certify classes when the per-class-member claim is large.” Courts applying the second factor have reasoned that where a product at issue is similar to other products on the market, “consumers may find it hard to know whether they purchased” the product that is the subject of the action, or one of the similar products.

Although the unpublished opinion is not binding precedent, it may be cited as persuasive authority and will likely make it more difficult in district courts within the Eleventh Circuit for putative class representatives to obtain certification of classes to pursue claims regarding small-dollar products, for which sellers do not maintain records of the end purchasers and for which purchasers are unlikely to maintain proofs of purchase. The majority and concurring opinions, however, provide examples of methods to identify class members, including self-identification, that may satisfy the ascertainability requirement. 

E. Colin Thompson is a shareholder with Smolker Bartlett Loeb Hinds & Sheppard in Tampa, Florida.

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