Troy Lambert v. Nutraceutical Corp. , 870 F.3d 1170 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TROY LAMBERT, on Behalf of No. 15-56423
Themselves and All Others Similarly
Situated, D.C. No.
Plaintiff-Appellant, 2:13-cv-05942-
AB-E
v.
NUTRACEUTICAL CORP., OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
André Birotte, Jr., District Judge, Presiding
Argued and Submitted March 9, 2017
Pasadena, California
Filed September 15, 2017
Before: Richard A. Paez, Marsha S. Berzon,
and Morgan Christen, Circuit Judges.
Opinion by Judge Paez
2 LAMBERT V. NUTRACEUTICAL CORP.
SUMMARY*
Fed. R. Civ. P. 23(f) & 23(b)(3) / Class Certification
The panel concluded that plaintiff’s Fed. R. Civ. P. 23(f)
petition for class certification was timely filed with this court;
reversed the district court’s order decertifying the class; and
remanded for further proceedings.
Rule 23(f) governs interlocutory appeals of “order[s]
granting or denying class-action certification,” and requires
that a petition for permission to appeal be filed “within 14
days after the order is entered.” Fed. R. Civ. P. 23(f). The
plaintiff filed his motion for reconsideration twenty days after
the district court decertified the class.
The panel held that the fourteen-day Rule 23(f) deadline
was not jurisdictional. Specifically, the panel that under
Bowles v. Russell, 551 U.S. 205 (2007), and Eberhart v.
United States, 546 U.S. 12 (2005), the Rule 23(f) deadline
was not jurisdictional because it was procedural, did not
remove a court’s authority over subject matters or persons,
and was in the Federal Rules of Civil Procedure, rather than
in a statute.
The panel held that because the Rule 23(f) deadline was
not jurisdictional, equitable exceptions, such as tolling, might
apply. The panel also held that a motion for reconsideration
filed within the Rule 23(f) deadline would toll the deadline.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
LAMBERT V. NUTRACEUTICAL CORP. 3
The panel held that the Rule 23(f) deadline could be tolled
as a result of additional equitable circumstances. The panel
further held that a number of equitable factors supported
tolling the Rule 23(f) deadline. The panel held that because
plaintiff informed the court orally of his intention to seek
reconsideration of the decertification order and the basis for
his intended filing within fourteen days of the decertification
order and otherwise acted diligently, and because the district
court set the deadline for filing a motion for reconsideration
with which plaintiff complied, the Rule 23(f) deadline should
be tolled. The panel noted that other circuits would likely not
toll the Rule 23(f) deadline in this case, and would only allow
tolling when the motion for reconsideration was filed within
the fourteen-day period. The panel concluded that plaintiff’s
Rule 23(f) petition was timely filed in this court.
Turning to the merits of the certification petition, the
panel held that the district court abused its discretion in
decertifying the class on the basis of plaintiff’s inability to
prove restitution damages through the full refund model.
Plaintiff brought his consumer class action under Fed. R. Civ.
P. 23(b)(3), which requires that a plaintiff show a class wide
method for damages calculations as a part of the assessment
of whether common questions predominate over individual
questions. The full refund model measures damages by
presuming a full refund for each customer, on the basis that
the product has no, or only a de minimis, value. The panel
held that because plaintiff’s damages model matched his
theory of liability, and because plaintiff had shown that his
damages model was supportable on evidence that could be
introduced at trial, the class should not have been decertified.
The panel further held that whether plaintiff could prove
damages to a reasonable certainty on the basis of his full
4 LAMBERT V. NUTRACEUTICAL CORP.
refund model was a question of fact that should be decided at
trial on remand.
COUNSEL
Gregory Weston (argued) and David Elliott, The Weston
Firm, San Diego, California; Ronald A. Marron, The Law
Offices of Ronald A. Marron APLC, San Diego, California;
for Plaintiff-Appellant.
Steven N. Feldman (argued) and John C. Hueston, Hueston
Hennigan LLP, Los Angeles, California; Jon F. Monroy,
Monroy Averbuck & Gysler, West Lake Village, California;
for Defendant-Appellee.
OPINION
PAEZ, Circuit Judge:
Federal Rule of Civil Procedure 23(f) allows a litigant to
seek an interlocutory appeal of a district court’s order
granting or denying class certification. This case is about
whether and when the fourteen-day Rule 23(f) deadline may
be tolled. In a matter of first impression for this court, we
hold that the Rule 23(f) deadline is not jurisdictional, thus
equitable exceptions apply. We therefore hold that a motion
for reconsideration filed within the Rule 23(f) deadline will
toll the deadline. Parting ways with some of our sister
circuits, we further hold that additional equitable
circumstances may also warrant tolling. As a result, we hold
that the Rule 23(f) deadline was tolled here, when counsel for
the lead plaintiff, within fourteen days of the district court’s
LAMBERT V. NUTRACEUTICAL CORP. 5
decertification order, informed the court of his intention to
seek reconsideration, explained his reasons for doing so, and
the court set a date for filing the motion with which counsel
complied. As for the merits of the Rule 23(f) petition, we
hold that the district court abused its discretion in decertifying
the class, and therefore reverse and remand.
I.
Lambert purchased “Cobra Sexual Energy,” an alleged
aphrodisiac dietary supplement manufactured and marketed
by Nutraceutical, which the Food and Drug Administration
(“FDA”) had not approved. Labels on Cobra Sexual Energy
boasted that it contained performance-enhancing herbs that
would provide users with “animal magnetism” and “potency
wood.” On the basis of these labels, Lambert believed that
the product would enhance his sexual performance and
increase the frequency with which he could engage in sexual
activity. Had he known that the labels’ claims were false, he
would not have purchased the product.
According to Lambert, Cobra Sexual Energy violated the
FDA’s aphrodisiac drug rule because it claimed to increase
sexual desire but had not been through clinical testing, as
required by 21 C.F.R. § 310.528(c); nor had it received FDA
approval, as required by 21 C.F.R. § 310.528(b). The product
also failed to display prominently a disclaimer that it had not
been evaluated by the FDA, in alleged violation of 21 U.S.C.
§ 343(r)(6)(C). Moreover, Lambert alleges that the
supplement contained an ingredient, yohimbe, which is
dangerous for certain persons in certain doses, yet the product
label contained no warning of that risk.
6 LAMBERT V. NUTRACEUTICAL CORP.
Lambert brought a consumer class action for violations of
California’s Unfair Competition Law (“UCL”) (Cal. Bus. &
Prof. Code §17200 et seq.), False Advertising Law (“FAL”)
(Cal. Bus. & Prof. Code § 17500 et seq.), and Consumer
Legal Remedies Act (“CLRA”) (Cal. Civ. Code § 1750 et
seq.). Lambert brought his class action under Federal Rule of
Civil Procedure 23(b)(3), which provides that a class may be
certified if “questions of law or fact common to class
members predominate over any questions affecting only
individual members.”
The district court initially granted class certification on
the basis of the full refund damages model. That model
applies when a product is shown to be worthless, and
damages may be calculated by multiplying the average retail
price by the number of units sold. In granting class
certification, the district court concluded that Lambert put
forth a “tenable theory that monetary relief can be ascertained
on a classwide basis . . . [that] can be readily calculated using
Defendant’s sales numbers and an average retail price.” The
case was subsequently reassigned to a different district judge
because the original judge retired. Discovery proceeded and
closed. Nutraceutical then filed a motion for decertification
of the class, upon which the newly assigned district judge
held a hearing.
On February 20, 2015, the district court granted the
motion to decertify. The district court found that Lambert’s
full refund damages model was “consistent with his theories
of liability.” The court proceeded to find, however, that
Lambert “failed to provide the key evidence necessary to
apply his classwide model for damages,” so common issues
did not predominate. The district court required Lambert to
LAMBERT V. NUTRACEUTICAL CORP. 7
provide the actual average retail price, and Lambert had
provided only the suggested retail price.
During a March 2, 2015 status conference, ten days after
the order decertifying the class, Lambert informed the court
of his intention to file a motion for reconsideration. Counsel
explained that he had a damages model and evidentiary
support for it. The district court instructed Lambert to file the
motion for reconsideration within ten days—i.e., within
twenty days in total from the order decertifying the class.
As directed by the district court, ten days later, on March
12, 2015, Lambert moved for reconsideration and asked for
recertification. In his motion for reconsideration, Lambert
pointed to evidence he had presented in his class certification
motion showing that the suggested retail price could be used
in conjunction with other evidence to establish the full refund
damages model. Lambert also argued for the first time that,
as an alternative, he could prove damages through non-
restitutionary disgorgement.
The district court denied Lambert’s motion for
reconsideration three months later. The court rejected
Lambert’s contention that the average retail price could be
calculated from the suggested retail price. The district court
also rejected Lambert’s non-restitutionary disgorgement
argument, reasoning that he waived it by presenting it for the
first time in his motion for reconsideration. The court
proceeded to hold that even if Lambert had not waived the
non-restitutionary disgorgement argument, it was improper
under California law, as restitution should be measured by
what the plaintiffs lost, not by what the defendants gained; in
other words, the district court held, non-restitutionary
8 LAMBERT V. NUTRACEUTICAL CORP.
disgorgement is not available under California law.1 In
addition to declining to recertify the class, the order set forth
a plan for notifying the class regarding decertification.
Within fourteen days of the order denying his motion for
reconsideration, Lambert filed in this court a Rule 23(f)
petition for permission to appeal the district court’s orders
granting the motion for class decertification and denying the
motion for reconsideration. Upon the filing of that petition,
the district court stayed proceedings pending appeal. A
motions panel of this court conditionally granted Lambert’s
Rule 23(f) petition, instructing the parties “[i]n addition to all
other issues the[y] wish to raise in their briefs in the appeal,
[to] . . . address the timeliness of this petition.”
II.
Because the motions panel only conditionally granted the
petition and referred the issue of timeliness to this panel, we
review de novo its timeliness. See Briggs v. Merck Sharp &
Dohme, 796 F.3d 1038, 1045–46 (9th Cir. 2015) (reviewing
the timeliness of a Rule 23(f) petition after the petition was
conditionally granted by a motions panel).
As to the merits of the petition, we review the district
court’s class decertification ruling for an abuse of discretion.
Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979,
984 (9th Cir. 2015); Yokoyama v. Midland Nat’l Life Ins. Co.,
1
While non-restitutionary damages refer to the defendant’s revenues
regardless of the plaintiff’s relationship to those damages, restitutionary
damages refer to the portion of the defendant’s revenues over which the
plaintiff has some ownership claim. See Korea Supply Co. v. Lockheed
Martin Corp., 63 P.3d 937, 941 (Cal. 2003).
LAMBERT V. NUTRACEUTICAL CORP. 9
594 F.3d 1087, 1090–91 (9th Cir. 2010). “A district court
would necessarily abuse its discretion if it based its ruling on
an erroneous view of the law or a clearly erroneous
assessment of the evidence.” United States v. Hinkson,
585 F.3d 1247, 1259 (9th Cir. 2009) (en banc) (quoting
Cooter & Gell v. Hartmax Corp., 496 U.S. 384, 405 (1990)).
We review findings of fact in the class certification
determination for clear error. Abdullah v. U.S. Sec. Assocs.,
Inc., 731 F.3d 952, 956 (9th Cir. 2013).
III.
Rule 23(f) governs interlocutory appeals of “order[s]
granting or denying class-action certification.” Fed. R. Civ.
P. 23(f). The Rule requires that a petition for permission to
appeal be filed “within 14 days after the order is entered.” Id.Rule 23(f) is silent as to the effect of motions for
reconsideration on this deadline. Here, the district court
decertified the class on February 20, 2015. Lambert’s Rule
23(f) petition, however, was not filed until June 24, 2015,
fourteen days after the court denied his motion for
reconsideration. Under the plain text of Rule 23(f),
Lambert’s petition would be untimely because it was not filed
within fourteen days of the district court’s initial order
decertifying the class. In other words, unless an exception
applies, Lambert’s Rule 23(f) petition would be barred.
To determine whether Lambert’s Rule 23(f) petition is
timely, we must first determine whether Rule 23(f) is
jurisdictional. We conclude that it is non-jurisdictional, and
that equitable remedies softening the deadline are therefore
generally available. Specifically, we hold that a motion for
reconsideration filed within fourteen days of the certification
order tolls the Rule 23(f) deadline. We also hold that the
10 LAMBERT V. NUTRACEUTICAL CORP.
deadline can be tolled as a result of additional equitable
circumstances. In light of the circumstances in this case, we
conclude that the Rule 23(f) deadline was tolled and deem
Lambert’s petition timely.
A.
We turn first to whether the fourteen-day deadline in Rule
23(f) is jurisdictional. Two Supreme Court cases primarily
guide our inquiry. In Eberhart v. United States, the Court
held that a deadline in the Federal Rules of Criminal
Procedure was not jurisdictional because it was a procedural
claim-processing rule, as opposed to a rule that delineated the
classes of cases or persons within a court’s adjudicatory
authority. 546 U.S. 12, 15–16 (2005). Several years later,
the Court held in Bowles v. Russell that deadlines contained
in statutes are jurisdictional, but non-statutory deadlines, such
as those in the Federal Rules of Civil or Criminal Procedure,
may instead be procedural “claims-processing” rules.
551 U.S. 205, 211–14 (2007).
We have not yet had occasion to apply these cases to Rule
23(f). We have, however, concluded that an immigration
regulation requiring a petitioner to file his notice of appeal
with the Board of Immigration Appeals within thirty days of
the immigration judge’s adverse ruling is not jurisdictional
because it is regulatory, rather than statutory. Irigoyen-
Briones v. Holder, 644 F.3d 943, 948–49 (9th Cir. 2011). In
Irigoyen-Briones, we also noted that the regulatory provision
that contained the deadline did not use the word
“jurisdiction,” and that the Supreme Court had narrowly
defined jurisdictional rules as those that remove a court’s
authority to hear a case. Id.LAMBERT V. NUTRACEUTICAL CORP. 11
The Third Circuit has had occasion to consider the
jurisdictional nature of Rule 23(f). In Gutierrez v. Johnson &
Johnson, the Third Circuit held that in light of Bowles, the
Rule 23(f) deadline is not jurisdictional because it is set forth
in a rule promulgated by the Supreme Court, not a statute
enacted by Congress. 523 F.3d 187, 197–98 (3d Cir. 2008).
Other circuits have likewise suggested that the Rule 23(f)
deadline is not jurisdictional. See, e.g., Carpenter v. Boeing
Co., 456 F.3d 1183, 1190 n.1 (10th Cir. 2006) (noting that
although the court had previously held Rule 23(f) to be
jurisdictional, Eberhart “casts doubt” on that notion); Coco
v. Inc. Vill. of Belle Terre, N.Y., 448 F.3d 490, 491–92 (2d
Cir. 2006) (declining to decide whether Rule 23(f) is
jurisdictional, but noting that Eberhart “calls the
jurisdictional nature of Rule 23(f) into question”).
We conclude that under Bowles and Eberhart, the Rule
23(f) deadline is not jurisdictional because it is procedural,
does not remove a court’s authority over subject matters or
persons, and is in the Federal Rules of Civil Procedure, rather
than in a statute.
B.
Because the Rule 23(f) deadline is not jurisdictional,
equitable exceptions, such as tolling, may apply.2 When
deadlines are not jurisdictional, courts may apply judicial
equitable exceptions to avoid or soften the time limitations.
Bowles, 551 U.S. at 211–14; Gutierrez, 523 F.3d at 197 (“The
2
Equitable exceptions include tolling, the unique circumstances
doctrine, and others. See Gutierrez, 523 F.3d at 197. Because we resolve
this case on the basis of tolling, we need not address the unique
circumstances doctrine.
12 LAMBERT V. NUTRACEUTICAL CORP.
import of this distinction between jurisdictional and non-
jurisdictional rules, according to the Supreme Court, is that
courts cannot create equitable exceptions to jurisdictional
time limits.”).
Equitable exceptions arise from the “traditional power of
the courts to apply the principles . . . of equity jurisprudence.
The classic example is the doctrine of equitable tolling, which
permits a court to pause a statutory time limit when a litigant
has pursued his rights diligently but some extraordinary
circumstance prevents him from bringing a timely action.”
Cal. Pub. Emps. Ret. Sys. v. ANZ Sec., Inc., 137 S. Ct. 2042,
2051 (2017) (citations and internal quotation marks omitted).
“At bottom, the purpose of equitable tolling is to ‘soften the
harsh impact of technical rules which might otherwise
prevent a good faith litigant from having [her] day in court.’”
Rudin v. Myles, 781 F.3d 1043, 1055 (9th Cir. 2015)
(alteration in original) (quoting United States v. Buckles,
647 F.3d 883, 891 (9th Cir. 2011)).
C.
All circuits to consider tolling the Rule 23(f) deadline
have held that the deadline may be tolled when a litigant files
a motion for reconsideration within the fourteen-day
deadline.3 These circuits have reasoned, for example, that
3
See Gutierrez, 523 F.3d at 193 (holding that “for the purpose of
tolling the time within which to file a Rule 23(f) petition, a ‘timely’
motion to reconsider is one that is filed within the [fourteen]-day period
set forth in Rule 23(f)”); Nucor Corp. v. Brown, 760 F.3d 341, 343 (4th
Cir. 2014) (stating that a motion for reconsideration filed within fourteen
days of the order granting or denying class certification can toll a Rule
23(f) deadline); Fleischman v. Albany Med. Ctr., 639 F.3d 28, 31–32 (2d
Cir. 2011) (same with respect to a motion to amend); In re DC Water &
LAMBERT V. NUTRACEUTICAL CORP. 13
“federal courts long have held that a motion for
reconsideration tolls the time for appeal, provided that the
motion is made within the time for appeal.” Blair v. Equifax
Check Servs., Inc., 181 F.3d 832, 837 (7th Cir. 1999). We
agree, and therefore hold, as a baseline matter, that a motion
for reconsideration filed within fourteen days of a
certification decision tolls the Rule 23(f) deadline.
D.
Of course, in this case, that holding does not end the
inquiry. Lambert did not file his motion for reconsideration
until twenty days after the district court decertified the class.
We nonetheless hold that Lambert is entitled to tolling given
the history of this case.
Equitable exceptions such as tolling are meant to allow a
“a good faith litigant” to have “[her] day in court.” Rudin,
781 F.3d at 1055 (alteration in original) (internal quotation
marks omitted). Accordingly, in determining when equitable
circumstances beyond a motion for reconsideration filed
within the fourteen day Rule 23(f) deadline can toll that
deadline, we look to equitable factors such as whether the
litigant “pursued his rights diligently,” and whether external
circumstances, such as a deadline imposed by the district
Sewer Auth., 561 F.3d 494, 496 (D.C. Cir. 2009) (same with respect to a
motion for reconsideration); Jenkins v. BellSouth Corp., 491 F.3d 1288,
1291–92 (11th Cir. 2007) (same); Carpenter, 456 F.3d at 1190–92 (same);
McNamara v. Felderhof, 410 F.3d 277, 281 (5th Cir. 2005) (same); Gary
v. Sheahan, 188 F.3d 891, 892 (7th Cir. 1999) (same); Shin v. Cobb Cty.
Bd. of Educ., 248 F.3d 1061, 1064 n.1 (11th Cir. 2001) (same); Blair v.
Equifax Check Servs., Inc., 181 F.3d 832, 836–37 (7th Cir. 1999) (same).
14 LAMBERT V. NUTRACEUTICAL CORP.
court,4 affected the litigant. Cal. Pub. Emps. Ret. Sys., 137 S.
Ct. at 2050.
We also look, as a factor, to whether a litigant took some
other action similar to filing a motion for reconsideration
within the fourteen-day deadline, such as a letter or verbal
representation conveying an intent to seek reconsideration
and providing the basis for such action. We are not alone in
considering this as a factor. In McNamara v. Felderhof, the
Fifth Circuit considered whether tolling of Rule 23(f)’s
deadline was available when a litigant stated in a court filing
that he would seek reconsideration of certification within
fourteen days, but did not file a formal motion for
reconsideration within that time. 410 F.3d 277, 279–80 (5th
Cir. 2005). The Fifth Circuit concluded that a “Trial and
Case Management Plan” (“the Plan”) could toll the Rule 23(f)
filing deadline. Id. The Plan specifically sought “revisitation
and modification” of the class certification ruling. Id. at 280(internal quotation marks omitted). The Fifth Circuit
reasoned that the Plan should be considered a motion for
4
Petitions for certiorari in the Supreme Court provide a useful
analogy. The advisory committee notes to Rule 23(f) provide that “[t]he
court of appeals is given unfettered discretion whether to permit the
appeal, akin to the discretion exercised by the Supreme Court in acting on
a petition for certiorari.” Fed. R. Civ. P. 23(f) advisory committee’s note
to 1998 amendment. In discussing the timeliness of a Rule 23(f) petition,
the Eleventh Circuit cited the advisory committee’s certiorari analogy.
Jenkins, 491 F.3d at 1290; cf. Blair, 181 F.3d at 833–34 (looking to
petitions for certiorari to determine substantive standards for Rule 23(f)).
Petitions for certiorari must be filed within ninety days, but may be filed
later when a timely petition for rehearing is granted or when the court of
appeals entertains an untimely petition for rehearing. Sup. Ct. R. 13(1),
(3). By analogy, much like the courts of appeals’ authority to affect the
Supreme Court’s certiorari petition deadline, district courts have authority
to affect the Rule 23(f) deadline.
LAMBERT V. NUTRACEUTICAL CORP. 15
reconsideration for tolling purposes because it “called into
question the correctness of the district court’s [certification]
order.” Id. The Fifth Circuit also reached this conclusion
because it “d[id] not read Rule 23(f) as so limiting in
nature.”5 Id. The Seventh Circuit has stated, similarly, that
it does not “matter[] what caption the litigant places on the
motion to reconsider.” Gary v. Sheahan, 188 F.3d 891, 893
(7th Cir. 1999). Accordingly, an important factor in the
tolling analysis is whether the litigant provided, within the
Rule 23(f) deadline, notice of the intent to seek
reconsideration.
Here, a number of equitable factors support tolling the
Rule 23(f) deadline. Lambert clearly conveyed his intention
to file a motion for reconsideration seeking recertification on
the tenth day after entry of the order decertifying the class.
At a status conference, Lambert specifically informed the
court of his intention to seek recertification and briefly
explained his reasons for doing so. The district court then
instructed Lambert to file his motion within ten days, which
allotted him twenty days in total from the decertification
order. The district court imposed the deadline after an
exchange with Lambert’s counsel as to whether it was
reasonable. Lambert complied, and filed his motion for
reconsideration within the period set by the district court.
Lambert also filed the Rule 23(f) petition within fourteen
days after the district court denied the motion for
reconsideration. We hold that because Lambert informed the
court orally of his intention to seek reconsideration of the
decertification order and the basis for his intended filing
within fourteen days of the decertification order and
5
McNamara ultimately dismissed the petition as untimely because the
Plan was not filed within the Rule 23(f) deadline.
16 LAMBERT V. NUTRACEUTICAL CORP.
otherwise acted diligently, and because the district court set
the deadline for filing a motion for reconsideration with
which Lambert complied, the Rule 23(f) deadline should be
tolled.
We recognize that other circuits would likely not toll the
Rule 23(f) deadline in Lambert’s case. To the extent other
circuits limit Rule 23(f) tolling only to the circumstance
where a motion for reconsideration is filed within fourteen
days of the certification order, we part ways with them.
Other circuits have, for example, held that a motion for
reconsideration filed more than fourteen days after a
certification order will not toll the deadline even when the
district court set or influenced that deadline. In a case in
which a district court extended the time to file a motion for
reconsideration well beyond the Rule 23(f) deadline, the
Third Circuit held that even if a motion for reconsideration is
timely for the district court’s purposes, it is untimely if it is
filed outside of Rule 23(f)’s fourteen-day period. Gutierrez,
523 F.3d at 193 n.5 (“[A] motion to reconsider that is filed
more than [fourteen] days after an order granting or denying
class certification will not toll the time to file a 23(f) petition,
even if the motion is ‘timely’ as defined by the district court’s
rules or its scheduling order.”); see also Jenkins v. BellSouth
Corp., 491 F.3d 1288, 1289 (11th Cir. 2007) (providing that
a district court cannot manipulate the timeliness of a Rule
23(f) petition by vacating and reentering the order denying
class certification to make it timely); Delta Airlines v. Butler,
383 F.3d 1143, 1145 (10th Cir. 2004) (holding that even if a
district court extended the time to file a Rule 23(f) petition,
this could not toll the fourteen-day period because the district
court lacked such authority). Similarly, the Third Circuit held
that an informal letter to the district court conveying an intent
to seek reconsideration of a certification decision filed within
LAMBERT V. NUTRACEUTICAL CORP. 17
fourteen days would not toll the time to file a Rule 23(f)
petition, because it did not specifically request certification
nor provide reasons why the certification order was wrong.
Gutierrez, 523 F.3d at 194–95.
The reasons offered by other circuits for strictly limiting
the availability of Rule 23(f) tolling, by only allowing for
tolling when a motion for reconsideration is filed within the
fourteen-day period, are not persuasive.
First, the fourteen-day deadline is for filing a Rule 23(f)
petition, not for filing a motion for reconsideration in federal
court. Thus, the fourteen-day limitation on tolling has no
basis in Rule 23 or any other Rule, but instead is a judicial
construct. Litigants have no reason to know that their
deadline for filing a motion for reconsideration is effectively
fourteen days, rather than whatever the district judge has
ordered.
Second, those circuits that have strictly construed the
Rule 23(f) fourteen-day deadline have reasoned that Rule
23(f) petitions slow down litigation, are disruptive, and inject
uncertainty into class action litigation.6 For example, the
6
In defining the substantive standards of Rule 23(f), we adopted
much of the reasoning discussed by other circuits with respect to timing:
First, the rule provides a mechanism through which
appellate courts, in the interests of fairness, can restore
equilibrium when a doubtful class certification ruling
would virtually compel a party to abandon a potentially
meritorious claim or defense before trial. And second,
the rule furnishes an avenue . . . [to] take earlier-than-
usual cognizance of important, unsettled legal
questions, thus contributing to both the orderly progress
18 LAMBERT V. NUTRACEUTICAL CORP.
District of Columbia Circuit explained that “[c]ourts
generally disfavor interlocutory appeals because they disrupt
ongoing trial court proceedings and squander resources.” In
re DC Water & Sewer Auth., 561 F.3d 494, 497 (D.C. Cir.
2009); see also Shin v. Cobb Cty. Bd. of Educ., 248 F.3d
1061, 1064 (11th Cir. 2001) (describing Rule 23(f) petitions
as “an avenue of last resort” and “inherently disruptive, time-
consuming, and expensive”). The Third Circuit in Gutierrez
explained that, as a result, the Rule 23(f) deadline is
purposely short, to “ensure that interlocutory appeals of class
certification decisions are heard and decided in a timely
manner, so as not to disrupt the proceedings at the district
court level.” 523 F.3d at 199 (citing Fed. R. Civ. P. 23(f)
advisory committee’s note to 1998 amendment). The
Eleventh Circuit has expressed concern that appellate court
review generally takes more time than disposition by a trial
court. Shin, 248 F.3d at 1064. Moreover, the Seventh Circuit
explained that because class certification can have major
consequences for litigation strategies and resources, and for
the possibility of settlement, allowing for only one short
window of review “permit[s] the parties to proceed in
confidence about the scope and stakes of the case.” Sheahan,
188 F.3d at 893.
The premise that Rule 23(f) petitions are disruptive and
slow is not universally true and we decline to adopt any hard
and fast rule on the basis of such an idea. First, Rule 23(f)
of complex litigation and the orderly development of
law. . . . Interlocutory appeals are generally disfavored
because they are disruptive, time-consuming, and
expensive.
Chamberlan v. Ford Motor Co., 402 F.3d 952, 957–59 (9th Cir. 2005)
(per curiam) (citations and internal quotation marks omitted).
LAMBERT V. NUTRACEUTICAL CORP. 19
petitions do not actually slow down litigation. Rule 23(f)
petitions do not automatically stay district court
proceedings—only the district court can grant a stay, as it did
in this case, and it has discretion whether or not to do so. See
Blair, 181 F.3d at 835 (suggesting that such stays will be
infrequent). Likewise, district courts are bound to experience
delay when they are confronted with motions for
reconsideration, irrespective of any Rule 23(f) petition. The
district court in this case, for example, kept Lambert’s motion
for reconsideration under submission for more than three
months; and statistical studies by the Federal Judicial Center
show that median ranges for decisions on class certification
motions range from seven to fifteen months. See Thomas E.
Willging et al., Fed. Judicial Ctr., Empirical Study of Class
Actions in Four Federal District Courts: Final Report to the
Advisory Committee on Civil Rules 27 (1996),
http://www.uscourts.gov/sites/default/files/rule23_1.pdf. The
Third and Eleventh Circuits’ suggestions that district courts
“ordinarily” rule on motions for reconsideration more quickly
than appellate courts, and are “expect[ed]” to do so, are vague
and lack persuasive force in light of the evidence to the
contrary. See Gutierrez, 523 F.3d at 199; Shin, 248 F.3d at
1064. We recognize that Rule 23(f) petitions may lengthen
litigation. But so do motions for reconsideration of a class
action decertification decision when no 23(f) petition is filed,
which every circuit to consider the question has treated as
valid grounds for equitable tolling.
Third, Rule 23(f) petitions do not uniquely disrupt or
inject uncertainty into the litigation. Rule 23(c)(1)(C) allows
modifying or amending an order granting or denying class
certification up to the time of final judgment, at the discretion
20 LAMBERT V. NUTRACEUTICAL CORP.
of the district court. Fed. R. Civ. P. 23(c)(1)(C)7; see In re
DC Water & Sewer Auth., 561 F.3d at 497 (noting that district
courts may reconsider and modify class certification
throughout the case); Shin, 248 F.3d at 1064 (explaining that
district courts have the ability, “and perhaps even a duty,” to
reconsider certification as the case progresses). If the district
court may change its class certification decision at any time,
interlocutory review should not affect the parties’ level of
certainty as to the finality of that decision, nor should it be
unusually or particularly disruptive. See Michael G.
McLellan, If at First You Don’t Succeed: The Varying
Standards Applicable to Renewed Motions for Class
Certification, 30 A.B.A. ANTITRUST 89, 92 (Summer 2016)
(suggesting that Rule 23(f) and Rule 23(c)(1)(C) are strategic
alternatives available to class action litigants).
If anything, Rule 23(f) appellate review may increase the
level of certainty for litigants. Once an appellate court speaks
to class certification issues in a Rule 23(f) appeal, the district
court can no longer reconsider those issues under Rule
23(c)(1)(C), or at least its authority to do so will be narrowed
by the court of appeals’ ruling, thus enhancing certainty for
the parties and the district court. See McLellan, supra, at 92
(explaining that a Rule 23(f) decision constrains the district
court’s ability to alter or amend certification under Rule
23(c)(1)(C)) (citing Gene & Gene, L.L.C. v. BioPay, L.L.C.,
624 F.3d 698, 703 (5th Cir. 2010)).
In sum, we hold that (1) Rule 23(f)’s deadline is not
jurisdictional, (2) equitable exceptions therefore apply, such
7
Federal Rule of Civil Procedure 23(c)(1)(C) provides: “An order that
grants or denies class certification may be altered or amended before final
judgment.”
LAMBERT V. NUTRACEUTICAL CORP. 21
that (3) motions for reconsideration filed within fourteen days
toll that deadline. We also hold that (4) equitable
circumstances beyond a formal motion to reconsider filed
within fourteen days can toll the Rule 23(f) deadline. As
discussed above, equitable circumstances tolled the Rule
23(f) fourteen-day deadline so that Lambert’s 23(f) petition
was timely filed in this court.8
IV.
As Lambert’s petition was timely, we turn to the merits,
and conclude that the district court abused its discretion in
decertifying the class on the basis of Lambert’s inability to
prove restitution damages through the full refund model.
Lambert brought his consumer class action under Federal
Rule of Civil Procedure 23(b)(3). “Under Rule 23(b)(3), the
court must find that ‘questions of law or fact common to class
members predominate over any questions affecting only
individual members.’” Pulaski, 802 F.3d at 985. A Rule
23(b)(3) plaintiff must show a class wide method for damages
8
The parties also debate whether an order granting a motion for
reconsideration provides a new fourteen-day window to file a Rule 23(f)
petition, because such an order is “an order granting or denying class
certification.” This would be another issue of first impression for this
court. Other circuits to consider the issue have held that petitioners
receive an additional fourteen days to file a Rule 23(f) petition if a motion
for reconsideration is granted and changes the status quo of class
certification, regardless of when the motion is filed. See Nucor Corp.,
760 F.3d at 343; Fleischman, 639 F.3d at 31; In re DC Water & Sewer
Auth., 561 F.3d at 496; Gutierrez, 523 F.3d at 194; Jenkins, 491 F.3d at1291–92; Carpenter, 456 F.3d at 1191–92; McNamara, 410 F.3d at 281.
We need not decide this question, as we hold that Lambert’s petition was
timely under a tolling theory, and, in any case, the district court denied
Lambert’s motion.
22 LAMBERT V. NUTRACEUTICAL CORP.
calculations as a part of the assessment of whether common
questions predominate over individual questions. Leyva v.
Medline Indus. Inc., 716 F.3d 510, 514 (9th Cir. 2013). The
party seeking to maintain class certification bears the burden
of demonstrating that the Rule 23 requirements are satisfied,
even on a motion to decertify. Marlo v. United Parcel Serv.,
Inc., 639 F.3d 942, 947 (9th Cir. 2011); United Steel Workers
v. ConocoPhillips Co., 593 F.3d 802, 807 (9th Cir. 2010).
We have repeatedly emphasized that uncertain damages
calculations should not defeat certification. In Yokoyama, we
held that “damage calculations alone cannot defeat
certification.” 594 F.3d at 1094. After our decision in
Yokoyama, the Supreme Court held in Comcast that a Rule
23(b)(3) plaintiff must show that “damages are capable of
measurement on a classwide basis.” Comcast Corp. v.
Behrend, 133 S.Ct. 1426, 1433 (2013). We have since
reconciled our holding that uncertain damages cannot destroy
class certification with Comcast’s holding that plaintiffs must
show that their damages are capable of classwide
measurement. In Leyva, we reaffirmed that uncertain
damages calculations alone cannot defeat class certification
because Comcast stood only for the proposition that
“plaintiffs must be able to show that their damages stemmed
from the defendant’s actions that created the legal liability.”
Leyva, 716 F.3d at 513–14.
Uncertainty regarding class members’ damages does not
prevent certification of a class as long as a valid method has
been proposed for calculating those damages. Id. at 514; see
also Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc.,
738 F.3d 960, 970 (9th Cir. 2013) (explaining that the law
“requires only that damages be capable of measurement based
upon reliable factors without undue speculation”). “[T]he
LAMBERT V. NUTRACEUTICAL CORP. 23
fact that the amount of damage may not be susceptible of
exact proof or may be uncertain, contingent or difficult of
ascertainment does not bar recovery.” Pulaski, 802 F.3d at
989 (quoting Marsu, B.V. v. Walt Disney Co., 185 F.3d 932,
939 (9th Cir.1999)); see also Just Film, Inc. v. Buono,
847 F.3d 1108, 1121 (9th Cir. 2017) (reaffirming that so long
as the proposed damages model is attributable to the
plaintiff’s legal theory of the harm, and damages can be
determined without excessive difficulty, decertification is not
warranted).
Class wide damages calculations under the UCL, FAL,
and CLRA are particularly forgiving. California law
“requires only that some reasonable basis of computation of
damages be used, and the damages may be computed even if
the result reached is an approximation.” Pulaski, 802 F.3d at
989 (quoting Marsu, 185 F.3d at 938–39) (referring to the
UCL and FAL); see also Wiener v. Dannon Co., 255 F.R.D.
658, 670 (C.D. Cal. 2009) (providing that courts also have
“‘very broad’ discretion to determine” damages under the
CLRA); Colgan v. Leatherman Tool Grp., Inc., 38 Cal. Rptr.
3d 36, 61 (Cal. Ct. App. 2006) (explaining that damages
under the UCL and FAL “must be of a measurable amount to
restore to the plaintiff what has been acquired by violations
of the statutes, and that measurable amount must be supported
by evidence”). Under California law, because restitution
“damages may be computed even if the result reached is an
approximation,” GHK Assocs. v. Mayer Grp., Inc., 274 Cal.
Rptr. 168, 179 (Cal. Ct. App. 1990), uncertain damages
should not prevent class certification, B.W.I. Custom Kitchen
v. Owens-Illinois, Inc., 235 Cal.Rptr. 228, 237 (Cal. Ct. App.
1987) (“[W]e know of no case where [factual determinations
of damages] ha[ve] prevented a court from aiding the class to
obtain its just restitution.”).
24 LAMBERT V. NUTRACEUTICAL CORP.
Lambert proposed measuring class wide damages under
the full refund model. The full refund model measures
damages by presuming a full refund for each customer, on the
basis that the product has no or only a de minimis value. FTC
v. Figgie Int’l, Inc., 994 F.2d 595, 606 (9th Cir. 1993)
(“Customers who purchased rhinestones sold as diamonds
should have the opportunity to get all of their money back.”).
Here, Lambert presented evidence that the product at issue
was valueless and therefore amenable to full refund
treatment. We agree with the district court that the full
refund model is consistent with Lambert’s theory of liability.
Accordingly, Lambert was required only to show that the full
price amount of retail sales of the product could be
approximated over the relevant time period, even if that
figure or the data supporting it—in this case the average retail
price multiplied by the number of units sold—was uncertain.9
Leyva, 716 F.3d at 514.
Although Lambert did not present evidence of the actual
average retail price, he did present evidence of both unit sales
and the suggested retail price over the relevant time period.10
There may well be additional evidence that Lambert could
present at trial to support an average retail price. For
9
This is not to say that every case proceeding under a full refund
theory must produce figures for the average price and unit sales of a
product. As Lambert argued in his motion for class certification, point-of-
sale data approximating the total retail expenditure would also be an
appropriate method of calculating restitution on a worthless item. So, too,
would evidence of the defendant’s wholesale revenue, if reasonably
capable of being weighed or adjusted by the trier of fact to account for
possible difference between wholesale and retail values.
10
Notably, the suggested retail price was cited as one of the original
grounds for certifying the class.
LAMBERT V. NUTRACEUTICAL CORP. 25
example, the record contains evidence that Lambert paid
$16–$18 per 30-count bottle of the product and that
Nutraceutical, through its website, sold 30-count bottles for
$14.39 during this time frame. The suggested retail price in
conjunction with Lambert’s other evidence suggests that a
trier of fact could calculate or sufficiently approximate the
average retail price for the product.
We recognize that a suggested retail price does not
“automatically configure an average,” but such a precise
average is unnecessary for class certification. At this stage,
the question is only whether Lambert has presented a
workable method. We conclude that he has.
Accordingly, because Lambert’s damages model matched
his theory of liability, and because Lambert had shown that
his damages model was supportable on evidence that could be
introduced at trial, the class should not have been decertified.
The district court abused its discretion in holding otherwise,
contrary to our law. See Hinkson, 585 F.3d at 1261–62
(holding that legal error is an abuse of discretion); see also
Pulaski, 802 F.3d at 989; Leyva, 716 F.3d at 513–14;
Yokoyama, 594 F.3d at 1094. Whether Lambert could prove
damages to a reasonable certainty on the basis of his full
refund model is a question of fact that should be decided at
trial.11
11
Because we hold that Lambert showed damages sufficient to avoid
decertification under the full refund model, we need not reach the question
of whether he waived his non-restitutionary disgorgement argument, or
whether that arguments fails on the merits.
26 LAMBERT V. NUTRACEUTICAL CORP.
V.
For the foregoing reasons, we conclude that Lambert’s
Rule 23(f) petition was timely, reverse the district court’s
order decertifying the class, and remand for further
proceedings consistent with this opinion.
REVERSED AND REMANDED.