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U.S. Supreme Court Denies Certiorari to 7th Circuit Consumer Protection Case

Recently, the U.S. Supreme Court (the "Court") refused to hear a landmark Seventh Circuit case, a decision that will shake-up eligibility rules regarding class action lawsuits. The Court denied certiorari despite the fact that the Seventh Circuit's decision deepened a circuit split as it challenged the "heightened ascertainability" requirement adopted by the Third Circuit.

The case at hand revolves around a dietary supplement called Instaflex Joint Support ("Instaflex"), marketed and directly sold to consumers through the Internet and television by Direct Digital, LLC ("Digital" or the "Company"). According to the Complaint, Digital fraudulently represented that Instaflex was "scientifically formulated" and "clinically tested" to "relieve [joint] discomfort," "increase mobility," and "support cartilage repair," when, in reality, clinical studies indicated no benefits to joint health. Basically, Digital was "selling a sugar pill through high-tech razzle-dazzle." Plaintiff brought the putative class action complaint pursuant to consumer fraud statutes in several states.

In its opposition to class certification, Digital argued that the court should follow the heightened standard set forth by the Third Circuit in Carrera v. Bayer Corp., 727 F.3d 300. Under the Carrera standard, plaintiffs must show there is a "reliable and administratively feasible" way to individually identify each member who may fall within the class definition - a heightened standard that has previously led courts to deny class certification in numerous consumer class action cases. Citing Carrera, Digital claimed Plaintiff failed to present a method to identify class members who purchased Instaflex. In fact, Digital noted that Plaintiff himself failed to provide any evidence that he purchased Instaflex. However, in affirming the district court's decision to certify the class, the Seventh Circuit refused to follow the Carrera standard in favor of a "weak" version, where the ascertainability requirement was satisfied as long as the class was clearly defined with objective criteria. In its decision, the Seventh Circuit explained that it must balance "countervailing interests to decide whether a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." According to the Seventh Circuit, the heightened standard upsets this balance and disproportionately disadvantages class actions that seek "to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights."

The legal team at SFMS has significant experience litigating class action matters. If you have any questions regarding this subject or this posting, please contact Alec Berin ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

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