Jensen v. Natrol, LLC

Background

Jaime Jensen moved to certify a class of all people who purchased Natrol’s biotin supplements. The opinion indicates that Jensen’s proposed damages measure was a full refund of money paid for Natrol’s biotin supplements nationwide. The court also discussed restitution under California’s Unfair Competition Law, which is available for money or property acquired through the alleged unfair competition.

Class definition

The court stated that Jensen appeared to concede that Natrol was not liable to people who used biotin supplements to alleviate biotinidase deficiency or other rare biotin-related genetic disorders. Nevertheless, the proposed class included people with those disorders.

Relying on Ninth Circuit precedent, the court explained that it must be at least possible that every class member suffered an injury caused by the defendant. A class definition must also reasonably match the plaintiff’s theory of liability. A class that includes people who were not misled, were not injured, or could not recover does not fit that theory when those people could be identified and excluded at the outset.

The court said there would presumably be no problem with excluding people with biotinidase deficiencies and requiring class members to confirm in claim forms that they did not have disorders requiring biotin supplements. But that exclusion created a problem with Jensen’s proposed damages model.

Damages model

The court reasoned that if purchasers with biotinidase deficiencies were excluded because they were not entitled to refunds, a model seeking a full refund of all nationwide sales would likely be inadequate. A class-action damages model must measure only damages attributable to the plaintiff’s theory of liability.

Jensen suggested deducting 0.00138 percent from total retail sales, based on the percentage of people with biotinidase deficiencies in the general population. The court rejected that approach as unsupported. It found no basis for assuming that the rate among people who purchased biotin supplements was similar to the rate in the general population, particularly because the evidence suggested that some people with biotinidase deficiencies were told by doctors to use over-the-counter biotin supplements. Jensen had provided no evidence from which the court or a jury could reasonably estimate the percentage of Natrol’s sales to customers with those deficiencies.

The court’s footnote added that, if Jensen continued using an aggregate damages model in a renewed certification motion, she should show that damages could be reasonably calculated even if the class were limited to purchases in multiple states or in California rather than nationwide purchases.

Ruling and next steps

The court denied Jensen’s motion for class certification without prejudice to filing a renewed motion based on a stronger evidentiary record. The court scheduled a case-management conference for February 12, 2020, to set a schedule for resolving a renewed class-certification motion, and required a joint case-management statement seven days before the conference.