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Mednick v. Precor Inc.

United States District Court, N.D. Illinois, Eastern Division

March 16, 2017

GARY MEDNICK and STEVEN BAYER, Individually and on Behalf of All Others Similarly Situated, Plaintiffs,
v.
PRECOR, INC., a Delaware Corporation, Defendant.

          MEMORANDUM OPINION AND ORDER

          HARRY D. LEINENWEBER, JUDGE UNITED STATES DISTRICT COURT.

         Plaintiffs Gary Mednick and Steven Bayer's Renewed Motion for Class Certification [ECF No. 149] is granted in part and denied in part. The Court certifies Plaintiffs' proposed class for the purpose of determining liability, but it reserves the issue of damages for individual hearings. The Court appoints Mednick and Bayer as class representatives and the attorneys representing them as class counsel.

         I. LEGAL STANDARD

         Plaintiffs here seek to certify a class under Federal Rule of Civil Procedure 23(b)(3). See, ECF No. 149 at 14. As such, Plaintiffs' proposed class must meet the four requirements of numerosity, commonality, typicality, and adequacy under Rule 23(a), as well as the predominance and superiority requirements under Rule 23(b)(3). Fed.R.Civ.P. 23(a)-(b); Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 133 S.Ct. 1184, 1191 (2013). Plaintiffs bear the burden of showing by a preponderance of the evidence that the putative class satisfies these prerequisites. Bell v. PNC Bank, N.A., 800 F.3d 360, 373 (7th Cir. 2015).

         The Court exercises discretion in deciding whether to certify a class. See, Arreola v. Godinez, 546 F.3d 788, 794 (7th Cir. 2008) (“Recognizing that Rule 23 gives the district courts broad discretion to determine whether certification of a class-action lawsuit is appropriate, this court reviews such decisions deferentially. . . .”) (internal quotation marks omitted). In making its determination, however, the Court may not accept Plaintiffs' allegations at face value. See, Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 675-76 (7th Cir. 2001) (“The proposition that a district judge must accept all of the complaint's allegations when deciding whether to certify a class cannot be found in Rule 23 and has nothing to recommend it.”). Instead, it must probe beyond the pleadings and resolve any legal or factual disputes necessary to ensure that the prerequisites of Rule 23 have been met. See, Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350-51 (2011). In so doing, the Court conducts a “rigorous analysis” that may overlap with the merits of the underlying claims. Id.

         Finally, “when appropriate, ” the Court may maintain a class action “with respect to particular issues.” Fed.R.Civ.P. 23(c)(4). This means that the Court can “carve at the joint” a class action, deciding some issues on a class wide basis and leaving others for individualized determinations. See, id.; In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1302-03 (7th Cir. 1995).

         II. BACKGROUND

         Plaintiffs bring this class action to remedy unfair and deceptive business practices arising from Defendant Precor's marketing and sale of treadmills incorporating “touch sensor heart rate” monitoring technology. The core of Plaintiffs' allegations is that the touch sensor heart rate monitors do not provide accurate heart rate readings. According to Plaintiffs, Precor knows this to be the case. See, ECF No. 127 (Am. Compl.) ¶¶ 16, 22, 27; ECF No. 149 at 1-2. Nonetheless, Precor continues to tout the benefits of the technology and fails to inform consumers of its shortcomings, thus harming members of the putative class. See, Am. Compl. ¶¶ 5-14, 26; ECF No. 149 at 3-4.

         In this Renewed Motion for Class Certification, Plaintiffs have narrowed their proposed class to residents of five states who purchased certain Precor treadmills within the statute of limitation period set by each of the states. In particular, Plaintiffs define the class as:

1All persons who purchased, within the time period outlined below, a Precor Home Treadmill equipped with a touch sensor heart rate monitor from either Precor or a third-party retailer and who are residents of California, Illinois, Missouri, New Jersey, and New York. Excluded from the Class are defendant herein [and certain other persons].

         ECF No. 149 at 14. In the alternative, Plaintiffs ask the Court to certify a class of only Illinois residents. Id. at 15.

         The putative class seeks to recover for violations of the Illinois Consumer Fraud and Deceptive Practices Act (“ICFA”) and the equivalent consumer protection statutes of the other four states. ECF No. 149 at 14. According to Plaintiffs, Precor violates the states' consumer protection laws by marketing touch sensor heart rate monitors that do not work. Plaintiffs bring evidence to bear on both of these factors, attempting to show that (1) Precor markets the heart rate monitors by making representations regarding their performance, and (2) the monitors do not perform as advertised.

         As evidence of Precor's allegedly deceptive advertising, Plaintiffs point to three types of representations. First are the brochures that Precor creates and distributes. The brochures highlight the heart rate monitoring technology incorporated in the treadmills. For example, a brochure crows:

         “Maximize your workout results whether you walk or run with touch and telemetry heart rate monitoring.” ECF No. 149, Ex. 1. Plaintiffs do not allege that Precor distributes the brochures directly to consumers; instead, they say that Precor sends the brochures to third-party retail stores to train the sales staff and to serve as marketing materials at the point of purchase. See, ECF No. 149 at 6; ECF No. 127 ¶ 9.

         Second, Plaintiffs allege that Precor's website makes representations regarding the benefits of the heart rate monitors that are similar to those found in the brochures. Precor protests that Plaintiffs did not encounter either the brochures or its website prior to their purchase.

         Third, Plaintiffs draw attention to the treadmill machines themselves. On the treadmills are graphics indicating that the heart rate monitoring technology is present. These graphics include the word SmartRate, a trademarked term for the visual display that shows a user's heart rate, and a picture of a heart. Plaintiffs assert that these graphics make “representations regarding [Precor's] heart rate features on the machines.” ECF No. 149 at 7; ECF No. 127 ¶¶ 11-12. Unlike the case with the brochures or the website, Plaintiffs presumably did see these graphics, along with other packaging features of the treadmills, since they tried out the heart rate monitors on the machines before making their purchase.

         As evidence that the touch sensor heart rate monitors do not work, Plaintiffs bring two sources of data that speak to their performance. Both were submitted and considered in the Court's earlier opinions. The Court here covers them again in some detail for the sake of completeness.

         The first is an independent investigation by Precor's expert, Michael Garrett (“Garrett”). See, ECF No. 158 Ex. 1 (Garrett's Suppl. Rep.). Garrett performed testing on 22 prescreened individuals of different ages, heights, weights and cardio-physiologies. These subjects had their heart rates measured by the touch sensors while exercising on two different treadmills. Garrett then compared the heart rate readings from the touch sensor to readings from a chest strap electrocardiogram (“ECG”) worn by the subjects.

         As Precor explains, there are three different heart rate monitoring systems embedded in the treadmills that Plaintiffs have defined to be part of the class products. See, ECF No. 158, Ex. 6 (Brown's Decl.) ¶¶ 4-8, Table 3. The systems are known as the Alatech, Polar, and Salutron, and each uses a different algorithm for converting the signals that it receives from the user into a heart rate reading. See, Id. ¶ 7. Garrett's testing covers two out of the three systems: the Alatech and Polar.

         Test results for both treadmills show that when the subjects ran at speeds below 4 mph, (virtually) all subjects received readings from the touch sensors that were consistent with those from the chest straps. See, Garrett's Suppl. Rep., at 50 Fig. 24 & 51 Fig. 31. Beginning at 4 mph, however, the readings from the touch sensors and chest straps started to diverge. For example, at ¶ 4 mph jog, six out of 21 subjects who used the Alatech-based treadmill had heart rate readings from the touch sensor that diverged by 10% or more from their chest strap's readings. Id. at 50 Fig. 24.

         The results worsened still at 6 mph. At this speed, the majority of subjects, some 60%, experienced a difference of more than 10% between the two readings. See, Garrett's Suppl. Rep. at 50 Fig. 24 & 51 Fig. 31. Thus, assuming that the chest strap's readings are accurate, the touch sensor's measurements were inaccurate for a majority of subjects when they got up to speeds of 6 mph.

         Although Garrett made some adjustments to the presentation of the results in his latest report, the overall picture remains the same. Even with the exclusion of several subjects on the grounds that their hand heart rate amplitudes fell below a certain threshold, still more than 40% of the subjects had inaccurate measurements when they reached running speeds of 6 mph. See, Id. at 51 Fig. 29, 52 Fig. 32. Of the subjects who were not excluded, more had inaccurate than accurate heart rate measurements.

         The second source of data that speaks to the performance of the heart rate monitor is a study by Lee and Mendoza. See, ECF No. 158, Ex. 11 (Lee & Mendoza). The authors of the study used a similar, but not identical, procedure to that employed by Garrett to test the reliability of the Salutron heart rate monitoring system, the one system that was not covered by Garrett's testing. Like Garrett, Lee and Mendoza had prescreened individuals using a Precor treadmill and compared their heart rates as measured by the treadmill's touch sensor against those measured by a chest strap. The heart rate readings came from 25 subjects who did 3-minute periods each of standing, 2 mph walking, 3.5 mph walking, 4.5 mph jogging, and 6 mph running. During the exercises, a lab technician prompted the subjects to obtain their heart rate via the touch sensor at 60-second intervals.

         Lee and Mendoza concluded from their investigation that the Salutron touch sensor heart rate monitors “provide valid estimates of heart rate . . . during treadmill exercise.” Lee & Mendoza at 52. This conclusion holds even at the highest tested speed of 6 mph. The authors found that although the discrepancies between the treadmill's and chest strap's readings widened at this speed, the two measurements remained highly correlated. See, Id. at 53-54.

         Lee and Mendoza made two notes of caution to their results. First, they acknowledged that “during the jogging and running conditions, the percent of measurements successfully obtained from the sensors tended to decrease . . . with increasing exercise intensity.” Lee & Mendoza at 54. That is, while the researchers were able to capture about 116 heart rate readings from the touch sensor when the subjects were walking at 2 mph, they were able to obtain only 75 readings when the subjects were running at 6 mph. Compare, Id. Fig. 2, with Fig. 5; see also, Fig. 6. Second, Lee and Mendoza warned that because “all of the participants in our study were young, healthy adults, ” they could not say “if the sensors would provide the same degree of validity in other populations.” Id. at 54.

         Precor contests Plaintiffs' evidence purporting to show that the heart rate monitors on its treadmills do not work. The company does not argue that its touch sensor technology works for all users on all treadmills. Instead, it contends that the inaccuracies were driven by differences in “individualized physiologic factors . . . such as age, body mass and weight, medical conditions and medications.” ECF No. 158 at 15-16.

         Moreover, Precor presses the fact that its treadmills come with disclaimers about the heart rate monitors' performance.For example, Plaintiff Bayer's owner's manual contains the following warning: “Touch heart rate performance may vary based on a user's physiology, age, and other factors. You may experience an erratic readout if your hands are dry, dirty or oily or if the skin on your hands is especially thick.” ECF No. 158 at 7. Precor also relies on information available on its website, which to the question “Why is my touch heart rate reading erratic or nonexistent?” answers, in part, “Some people have stronger pulse in their hands compared to others. Your results may vary.” Id. The website also advises users to “gently grasp the sensors” and maintain “warm and moist” hands to improve the performance of the touch sensor. Id.

         Plaintiffs counter that these disclaimers are not provided at the point of sale. They also point to the numerous complaints that Precor has received on its touch sensor technology. See, ECF No. 149 at 3 & Ex. 2. Given the independent testing showing that the heart rate monitors' performance deteriorates as users get up to higher speeds, Plaintiffs now emphasize the inability of the technology to measure the heart rate as the users “run, ” a term used to denote a moving speed of at least 4 mph and certainly a 6 mph pace.

         Finally, Plaintiffs resubmit a damages report that was included with their first Motion for Class Certification. See, ECF No. 149, Ex. 10. Plaintiffs' damages expert, Jonathan Schwartz (“Schwartz”), argued that class members should be compensated “for the diminished value of the cardiovascular exercise equipment given that the class members paid for a feature of value, the touch sensor, which is alleged to not have any actual value.” Id. ¶ 12. Putting a number on this diminished value required Schwartz to estimate the price that Precor treadmills would have sold for without “the inclusion of the touch sensor, ” and he proposed two methodologies for doing so.

         On the strength of this evidence, Plaintiffs ask the Court to certify the class. The Court grants the Motion in part.

         III. ANALYSIS

         Before reaching the merits of the Class Certification Motion, the Court first addresses an evidentiary issue. Precor has moved to strike an exhibit relied upon by Plaintiffs in their Motion. The exhibit is a document produced by Precor during discovery but otherwise contains no authenticating information, including the identity of the author. See, ECF No. 149, Ex. 2. The document suggests that Precor had received complaints about its heart rate technology, where the top complaints were “HR erratic, HR not working at all, . . ., [and] HR giving false readings.” Id. The document also says that “sales relies heavily on selling HR as part of the ‘Precor Experience'.” Id. The unidentified writer concludes that “we need to look at our options to determine the best route for getting costs down and improving the product, ” but that “as of now, no action has been taken.” Id. Plaintiffs use the document to make the case that Precor was aware of the problems with its touch sensor technology but nonetheless chose to market and sell the product.

         Precor argues that the document should be excluded because it violates Rules 401, 402, 403, and 901 of the Federal Rules of Evidence. The Seventh Circuit has not spoken on the issue of whether the Rules apply at the class certification stage. See, Quality Mgmt. & Consulting Servs. v. SAR Orland Food Inc., No. 11 C 06791, 2013 U.S. Dist. LEXIS 155727, at *9 (N.D.Ill. Oct. 30, 2013) (“The federal courts of appeals have not directly addressed whether evidence used in a class-certification motion must be admissible under the Federal Rules of Evidence.”). Courts in this district have leaned both ways. Compare, e.g., In re Yasmin & Yaz Mktg., No. 3:09-cv-20001-DRH-PMF, 2012 U.S. Dist. LEXIS 33183, at *24 (S.D. Ill. Mar. 13, 2012) (crediting the position that “the Federal Rules of Evidence apply at the class certification stage”), with Fond du Lac Bumper Exch., Inc. v. Jui Li Enter. Co., No. 09-cv-0852, 2016 U.S. Dist. LEXIS 82434, at *9 (E.D. Wis. June 24, 2016) (“Defendants cite no authority in support of their claim that evidence submitted in support of class certification must first be found admissible under the Federal Rules of Evidence. . . . Class certification must be considered at an early practicable time . . . making objections based on admissibility and authenticity premature.”) (internal quotation and alteration marks omitted).

         The Court need not take a position on this open issue. The outcome of the Motion at hand remains the same whether or not the Court considers the document. The Court exercises its discretion to take account of the exhibit but puts limited weight on it. See, Quality Mgmt., 2013 U.S. Dist. LEXIS 155727, at *9 (noting that regardless of whether the Rules are applied stringently “district courts exercise broad discretion when ruling on a class-certification motion”). The Court chooses to do so because, as Plaintiffs admit, the document speaks to the state of events in 2008, “way before [Precor] sold any treadmill at issue in this case.” ...


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