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Conrad v. Boiron, Inc.

United States Court of Appeals for the Seventh Circuit

April 4, 2017, Argued; August 24, 2017, Decided

No. 16-3656

Opinion

 [*538]  Wood, Chief Judge. Chad Conrad filed a class action against Boiron for deceptive marketing, but he was left with only his individual claim after the district court refused to certify his proposed class. About a year later Boiron offered Conrad $5,025, more than he could [**2]  hope to win at trial. Conrad does not want to accept the money because it will moot his claim; Boiron wants to force him to take it for the same reason. The district court refused to certify Conrad's proposed class and found his individual claim moot. We conclude, in keeping with our decision in Fulton Dental, LLC v. Bisco, Inc., 860 F.3d 541 (7th Cir. 2017), that the latter decision was in error, because an unaccepted offer cannot moot a case. There are other measures available to address the problem (if it exists here) of "unreasonably and vexatiously" persisting in litigation, see, e.g., 28 U.S.C. § 1927, but the district court has yet to decide whether they should be used. We therefore remand this case to the district court for further proceedings.

Boiron makes homeopathic products, including an over-the-counter remedy called Oscillococcinum ("Oscillo") that retails for between $12 and $20, depending on whether one buys a six, twelve, or thirty-dose package. Bohn v. Boiron, Inc., 2013 U.S. Dist. LEXIS 107928, 2013 WL 3975126, at *1 (N.D. Ill. Aug. 1, 2013). Oscillo is made by mixing one percent Anas Barbariae Hepatis et Cordis Extractum—that is, duck hearts and livers—with 99 percent water, repeating the dilution process 200 times, and then selling the result in pill form. The repeated dilutions render the finished product nothing more than a placebo. [**3]  Boiron's claim that Oscillo has a therapeutic effect on flu symptoms is thus highly doubtful. Aggrieved customers caught on at some point, and in 2011 they filed a class action against the company in the Southern District of California over its deceptive marketing. In October 2012, Boiron and the class agreed to a broad settlement that covered over 200 of the company's products (including Oscillo) purchased between January 1, 2000 and July 27, 2012. Gallucci v. Boiron, Inc., 2012 WL 5359485, 2012 U.S. Dist. LEXIS 157039 (S.D. Cal. Oct. 31, 2012), aff'd sub nom. Gallucci v. Gonzales, 603 F. App'x 533 (9th Cir. 2015). In relevant part, the settlement required Boiron to (1) pay refunds to past buyers, (2) revise its labels to make them accurate, and (3) let future unhappy customers request refunds within 14 days of purchase (the company calls this the "Boiron Promise"). Boiron went one step further; it now informs customers that they have 30 days from purchase to request a refund. See Boiron Promise, BOIRON, http://www.boironusa.com/promise/ (last visited Aug. 22, 2017) ("Boiron Promise Webpage").

Some of the class members were not satisfied with this outcome, and so they opted out of the Gallucci settlement. Attorneys representing the optouts filed new class actions, raising essentially the same claims against Boiron, in California and Illinois. When the district [**4]  courts found the class representatives inadequate, counsel tried to swap in replacements. In the Illinois case, the prospective representative was the current plaintiff, Chad Conrad. (Boiron eventually prevailed in the California case, and so it does not concern us further.) Yet before the Illinois substitution could occur, the then-lead plaintiff accepted Boiron's offer of judgment, prompting the district court to terminate  [*539]  the case. Boiron also offered Conrad $25 (more than he had paid for the Oscillo) plus attorney's fees and costs to settle his claim, but he rejected the offer and filed the complaint that kicked off the current suit on November 4, 2013. Eight months of preliminary proceedings followed, at which point the district court stayed the case pending the Ninth Circuit's resolution of the appeal of the October 2012 settlement. That court ultimately upheld the settlement, and the district court lifted its stay on August 13, 2015.

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869 F.3d 536 *; 2017 U.S. App. LEXIS 16180 **; 98 Fed. R. Serv. 3d (Callaghan) 527

CHAD CONRAD, Plaintiff-Appellant, v. BOIRON, INC., and BOIRON USA, INC., Defendants-Appellees.

Prior History:  [**1] Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 13 C 7903 — William T. Hart, Judge.

Conrad v. Boiron, Inc., 2015 U.S. Dist. LEXIS 152981 (N.D. Ill., Nov. 12, 2015)

CORE TERMS

district court, refund, Promise, moot, settlement, costs, class action, proceedings, class certification, customers, buyers, settlement offer, injunctive, certify, deposit

Civil Procedure, Appeals, Standards of Review, Abuse of Discretion, Special Proceedings, Class Actions, Appellate Review, Certification of Classes, De Novo Review, Preliminary Considerations, Justiciability, Mootness, Prerequisites for Class Action, Adequacy of Representation, Numerosity, Commonality, Typicality, Settlements, Settlement Agreements, Offers of Judgment, Rejection, Governments, Courts, Clerks of Court, Sanctions