### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 16

‐ 3656

C HAD C ONRAD

, Plaintiff

‐ Appellant

,

v.

B OIRON

, I NC

., and B OIRON USA, I NC

., Defendants

‐ Appellees

.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 13 C 7903

— William T. Hart

, Judge

.

____________________

A RGUED A PRIL 4, 2017

— D ECIDED A UGUST 24, 2017

____________________

Before W OOD

, Chief Judge

, and K ANNE and R OVNER

, Circuit

Judges

.

W OOD

, 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 cer

‐ tify his proposed class. About a year later Boiron offered Con

‐

rad $5,025, more than he could 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.2 No. 16

‐ 3656

The district court refused to certify Conrad’s proposed class

and found his individual claim moot. We conclude, in keep

‐ ing with our decision in Fulton Dental, LLC v. Bisco, Inc.

,

860 F.3d 541 (7th Cir. 2017), that the latter decision was in er

‐

ror, 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 litiga

‐

tion, 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.

I

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 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. 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 (S.D. Cal. Oct. 31, 2012), aff’d sub nom.

Gallucci v. Gonzales

, 603 F. App’x 533 (9th Cir. 2015). InNo. 16

‐ 3656 3

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, B OIRON

, 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 opt

‐ outs filed new class actions,

raising essentially the same claims against Boiron, in

California and Illinois. When the district 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 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, 2015.4 No. 16

‐ 3656

Two weeks later, Boiron filed a motion to dismiss, which

for the most part the district court granted. The court found

that Conrad was an inadequate class representative because

his suit would provide little benefit beyond Boiron’s existing

refund guarantee; it also found that Conrad lacked standing

to pursue injunctive relief (a ban on marketing Oscillo as a flu

remedy) under the Illinois Consumer Fraud Act since Conrad

himself would not be duped by Boiron’s misleading claims

again. We denied Conrad’s request to appeal the denial of

class certification in February 2016, leaving him with only his

individual damages claim. After still more proceedings, the

district judge granted Boiron’s motion under Federal Rule of

Civil Procedure 67 to deposit $5,025 with the court—above

the maximum Conrad could recover—in order to moot his

claim. Boiron deposited the funds, and the district court dis

‐

missed the case as moot on September 20, 2016. This appeal

followed.

II

Conrad’s main arguments are straightforward: he attacks

both the court’s refusal to certify the class and its rejection of

his individual claim based on Boiron’s use of Rule 67 to try to

moot the case. We review the denial of class certification for

abuse of discretion, and we consider the mootness ruling de

novo

. Messner v. Northshore Univ. HealthSystem

, 669 F.3d 802,

811 (7th Cir. 2012); Stevens v. Hous. Auth. of S. Bend, Ind.

,

663 F.3d 300, 306 (7th Cir. 2011).

A

We begin with Conrad’s effort to represent what remains

of the class of Oscillo purchasers after the Gallucci settlement.No. 16

‐ 3656 5

Federal Rule of Civil Procedure 23(a) conditions class certifi

‐

cation on “four requirements—numerosity, commonality,

typicality, and adequate representation.” Wal

‐ Mart Stores, Inc.

v. Dukes

, 564 U.S. 338, 349 (2011). This case turns on adequacy,

for an aspiring lead plaintiff such as Conrad is entitled to rep

‐

resent a class only if he “will fairly and adequately protect the

interests of the class.” F ED

. R. C IV

. P. 23(a)(4). In order to be an

adequate representative, the named plaintiff must “be part of

the class and possess the same interest and suffer the same

injury as the class members.” Amchem Prod., Inc. v. Windsor

,

521 U.S. 591, 625–26 (1997) (internal quotation marks and ci

‐

tation omitted). In addition, the court must be satisfied that

the plaintiff will keep the interests of the entire class at the

forefront. Conrad’s case brings to mind our comment in In re

Aqua Dots Products Liability Litigation

, 654 F.3d 748, 752

(7th Cir. 2011) (“ Aqua Dots ”), that “[a] representative who

proposes that high transaction costs (notice and attorneys’

fees) be incurred at the class members’ expense to obtain a re

‐

fund that already is on offer is not adequately protecting the

class members’ interests.”

In Aqua Dots

, the manufacturer of the eponymous toys re

‐

called them because they were potentially toxic. The recall no

‐

tice told buyers that they could exchange the Aqua Dots for a

non

‐ defective replacement or a different, comparably priced

toy. Notably, it did not mention any refunds, though they

were provided upon request. A group of buyers challenged

the recall program through a class action, alleging that the re

‐

lief the company offered was inadequate. The district court

refused to certify the class, and we affirmed because the pu

‐

tative class representative failed to satisfy Rule 23(a)(4)’s ade

‐

quacy requirement.6 No. 16

‐ 3656

Aqua Dots demonstrates that there is more to adequacy

than simple membership in a group. As we said in Eubank v.

Pella Corp.

, 753 F.3d 718, 719 (7th Cir. 2014), the “named [class]

plaintiffs are the representatives of the class—fiduciaries of its

members

... .” It is thus both necessary and proper for the dis

‐

trict court to consider whether the potential named repre

‐

sentative will act in the best interests of the unnamed mem

‐

bers of the class. That was precisely our point in Aqua Dots

. There, the product in question cost from $17 to $30. In re Aqua

Dots Prod. Liab. Litig

., 270 F.R.D. 377, 379 (N.D. Ill. 2010). Given

the low price point, we were concerned that transaction costs

might swallow all of any potential recovery. The same point

applies here. Oscillo retails for between $12 and $20. Most Os

‐

cillo buyers are protected not only by the Gallucci settlement,

but also by the refund process Boiron now offers on its web

‐

site (which is not limited to those who participated in the set

‐ tlement).

There is another important similarity between our case

and Aqua Dots —both proposed classes are relatively small.

The class Conrad envisions is limited to relatively recent pur

‐

chasers who have not taken advantage of the Boiron Promise.

The combination of low

‐ value claims and small class size is

likely to make this another case in which “high transaction

costs (notice and attorneys’ fees)” will leave class members

with a negligible award. Aqua Dots

, 654 F.3d at 752. Indeed, it

is hard to see how the proposed class action benefits anyone

but the attorneys who filed it, especially since this suit (to say

nothing of its failed predecessor) has been rumbling on for

years. Class actions driven by attorneys’ fees are notoriously

troublesome.No. 16

‐ 3656 7

Conrad responds that the Aqua Dots recall was more gen

‐

erous than the “Boiron Promise,” and so there is more poten

‐

tial in the class

‐ wide treatment he proposes. We agree with

him that the Boiron Promise is poorly publicized and hard to

use when compared to the Aqua Dots recall. Boiron does not

mention the refund on Oscillo’s packaging nor does it display

information about the refund prominently on its website. To

the contrary, finding any information at all takes some dig

‐ ging. See Boiron Promise Webpage. And, astonishingly,

Boiron requires that refunds be sent by “snail mail” rather

than digitally. Color us unimpressed with this transparent at

‐

tempt to put off dissatisfied customers. Boiron is happy to

take Oscillo buyers’ money online, and so we see no reason

why it cannot handle refunds the same way. See Oscillo,

B OIRON

, https://shop.boironusa.com/medicine/oscillococ

‐

cinum/ (last visited Aug. 22, 2017) (allowing online purchase

of Oscillo). More broadly, as digital commerce becomes ever

‐

more embedded into American society, Boiron’s pretense that

recalls and refunds (but not purchases) require resort to phys

‐

ical mail is hard to take seriously.

Nonetheless, taken as a whole, the Boiron Promise is com

‐ parable to the process we accepted in Aqua Dots

. Boiron’s re

‐

fund publicity, lackluster though it is, looks better when we

consider that the Aqua Dots recall did not even mention a re

‐

fund. There, customers had to decide on their own to ask for

one. The contrast between the two default positions is im

‐ portant—the typical Boiron Promise user receives a refund;

the typical Aqua Dots buyer got a replacement product or a

comparable toy. Compare Aqua Dots

, 654 F.3d at 750 with

Boiron Promise Webpage. All of this is to say that the reme

‐8 No. 16

‐ 3656

dies already in place for disappointed Boiron customers un

‐

dermine Conrad’s ability to show that he can bring any signif

‐

icant extra value to the absentee class members.

Conrad argues that, as a factual matter, discovery would

reveal that the Boiron Promise is empty, and that aggrieved

purchasers are not obtaining any relief. But there was enough

information in the record to permit the district court to spot

the similarities with Aqua Dots and to conclude that this case

is not suitable for class treatment. It is hard to see how more

discovery would change things. In one incarnation or another,

this case has dragged on since 2013; it is a de facto continuation

of the preceding 2011 suit, which was itself an outgrowth of

the underlying California class action. The evidence is out

there for all to see, and Conrad has given us no reason to think

that there are any smoking guns left to uncover. His own ac

‐

tions reinforce this conclusion: he took no steps to pursue dis

‐

covery between his 2013 motion for class certification and his

last

‐ ditch effort to avoid dismissal in 2016. We conclude,

therefore, that the district court was well within its rights to

refuse to certify Conrad’s proposed class. In so ruling, we

stress that we place no significance on Boiron’s later effort to

render Conrad’s individual case moot by buying him off with

a Rule 67 deposit into the court’s registry. The denial of class

certification stands on its own.

B

That leaves Conrad’s individual case, which does turn on

the effect of Boiron’s payment of $5,025 into the court’s

registry, pursuant to Federal Rule of Civil Procedure 67. In

Fulton Dental

, we addressed the question whether a

defendant’s act of depositing with the court an amount that (if

accepted) would fully satisfy a plaintiff’s claim, rendered theNo. 16

‐ 3656 9

plaintiff’s case moot. After a review of the Supreme Court’s

decision in Campbell

‐ Ewald Co. v. Gomez

, 136 S. Ct. 663 (2016),

as well as a careful look at the mechanics of Rule 67, we

concluded that the answer was no. 860 F.3d at 545–46. See also

Chapman v. First Index, Inc.

, 796 F.3d 783, 786–87 (7th Cir. 2015).

Our reasoning in Fulton Dental

, following that of the Supreme

Court in Campbell

‐ Ewald

, was based on the law of contract. As

the Court put it, “an unaccepted settlement offer or offer of

judgment does not moot a plaintiff’s case.” 136 S. Ct. at 672.

We explained in Fulton Dental why a Rule 67 offer for this

purpose is equivalent to the Rule 68 offer that was involved in

Campbell

‐ Ewald

. The court cannot accept an instrument made

payable to a third party into its registry; checks are normally

drawn to the clerk of the court and release is by order of the

court. This fact prompted our statement in Fulton Dental that

the process of depositing funds with the court and later

withdrawing them in favor of a party is not a mechanical one.

860 F.3d at 545.

Boiron would like us to hold that at some point, a plain

‐

tiff’s stubborn refusal to accept a generous settlement offer

should be taken as the legal equivalent of acceptance. But we

are aware of no such doctrine, and we are loathe to adopt such

an ill

‐ defined rule. The Supreme Court has never endorsed

anything like this. To the contrary, it has recognized “the

deep

‐ rooted historic tradition that everyone should have his

own day in court.” Taylor v. Sturgell

, 553 U.S. 880, 892–93

(2008) (internal quotation marks omitted). That does not

mean that every person will use that day in court in a way that

is economically rational, and some will invoke the aid of the

courts for impermissible purposes. But so

‐ called negative

‐

value cases are sometimes rational, if the party hopes to es

‐

tablish an important principle through the case. That said,10 No. 16

‐ 3656

there is no guarantee that litigation will not be abused. Cf.

Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc.

,

508 U.S. 49 (1993) (setting out the contours of the “sham” liti

‐ gation doctrine for antitrust purposes).

The law has developed doctrines, such as the common

‐

law tort of wrongful civil proceedings (related to the mali

‐

cious prosecution tort that arises from criminal proceedings),

to address abusive litigation. And free

‐ standing claims are not

the only option. Federal courts have an array of tools to ad

‐

dress these problems. Prominent among them is 28 U.S.C.

§ 1927, which authorizes the court to sanction against “[a]ny

attorney

... who so multiplies the proceedings in any case un

‐ reasonably and vexatiously

... .” Rule 11 of the Federal Rules

of Civil Procedure also serves as a constraint on a lawyer’s

ability to file a case that is not appropriately founded. If a case

is based on diversity of citizenship, whether under the con

‐

ventional rules of 28 U.S.C. § 1332(a) or (as here) the Class Ac

‐

tion Fairness Act, 28 U.S.C. § 1332(d), if the plaintiff prevails

but is awarded less than $75,000, “the district court may deny

costs to the plaintiff and, in addition, may impose costs on the

plaintiff.” 28 U.S.C. § 1332(b). If the defendant, rather than us

‐ ing the Rule 67 process that Boiron tried, uses the rule best

suited for pre

‐ trial offers of settlement—Rule 68—and that of

‐

fer is not accepted, then “[i]f the judgment that the offeree fi

‐ nally obtains is not more favorable than the unaccepted offer,

the offeree must pay the costs incurred after the offer was

made.” F ED

. R. C IV

. P. 68(d). Finally, the courts have inherent

power to punish abuses of process. Chambers v. NASCO, Inc.

,

501 U.S. 32 (1991). We are not saying, at this juncture, that any

of these measures is appropriate for Conrad’s case. The point

is only that tools exist for the person who abuses the litigationNo. 16

‐ 3656 11

process, but the tools do not include deemed acceptance of a

proposed offer of settlement.

Before concluding, we should say a word about the district

court’s conclusion that Conrad does not have standing to re

‐

quest injunctive relief under the Illinois Consumer Fraud Act

(ICFA). See Summers v. Earth Island Inst.

, 555 U.S. 488, 493

(2009) (plaintiff “bears the burden of showing that he has

standing for each type of relief sought”). The court reasoned

that Conrad, as an individual, knows about Boiron’s refund

program and that he is fully aware of the fact that Oscillo is

nothing but sugar water. No injunction could therefore re

‐

dress any potential injury for him, and that lack of redressa

‐ bility defeats standing. See Spokeo, Inc. v. Robins

, 136 S. Ct.

1540, 1547 (2016). We agree with that ruling. This is not a case

like Laurens v. Volvo Cars of N. Am., LLC

, No. 16

‐ 3829 (7th Cir.

Aug. 22, 2017), where class treatment was still a possibility

and the record did not unequivocally foreclose the possibility

of injunctive relief for the putative named plaintiff. In the pre

‐

sent case, there will be no class, given our affirmance of the

district court’s decision denying certification. If Conrad has a

claim at all, it is an individual one for money only.

III

The district court did not abuse its discretion in denying

class certification, and it correctly rejected Conrad’s individ

‐

ual claim for injunctive relief. It erred, however, insofar as it

concluded that the passage of time meant that Conrad no

longer had the legal right to reject Boiron’s offer of settlement.

We therefore A FFIRM in part and R EMAND for further proceed

‐ ings consistent with this opinion. Each party will bear its own

costs on appeal.