Sihler v. Global e-Trading, LLC
8:23-cv-01450
M.D. Fla.Aug 13, 2024Background
- Plaintiffs Sihler and Bavencoff filed a putative nationwide class action against Chargebacks911 (Global E-Trading, LLC), Gary Cardone, and Monica Eaton, alleging involvement in perpetuating a fraudulent Keto diet pill scheme (the “Keto Racket”).
- The alleged scheme involved false online advertisements offering 'free' Keto diet pills, with consumers’ payment information charged for the free bottles as well as the ones they intended to purchase.
- Chargebacks911 allegedly helped the Keto Racket evade detection by credit card companies and banks, including disputing chargebacks, creating new merchant identification numbers (MIDs), and orchestrating sham transactions.
- Plaintiffs assert two RICO claims: direct RICO violation (18 U.S.C. § 1962(c)) and RICO conspiracy (18 U.S.C. § 1962(d)).
- Plaintiffs sought certification of a nationwide class of consumers who were overcharged for shipments of three or five bottles of specific Keto products and did not receive refunds; Defendants opposed class certification on multiple grounds.
- The court reviewed the motion for class certification under Rule 23, including numerosity, commonality, typicality, adequacy, predominance, and superiority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ascertainability of Class | Objective criteria and fulfillment spreadsheets make class ascertainable. | Spreadsheet lacks reliable data, especially for refunds. | Class is ascertainable; spreadsheet sufficient and objective. |
| Rule 23(a) Prerequisites | Numerosity, commonality, typicality, adequacy all met via common scheme. | Named plaintiffs are atypical/inadequate due to testimony and knowledge. | All requirements met; differences do not preclude representation. |
| Rule 23(b) Predominance | Common issues of scheme and injury predominate over individualized questions. | Individualized issues of standing, causation, reliance predominate. | Common issues predominate; RICO allows joint liability; no reliance. |
| Rule 23(b) Superiority | Class action is superior due to small damages and inefficiency of individuals. | Individualized issues undermine superiority of class action mechanism. | Class action is superior and most efficient way to resolve claims. |
Key Cases Cited
- Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009) (class certification requirements for standing and Rule 23 prerequisites)
- Williams v. Mohawk Indus., Inc., 465 F.3d 1277 (11th Cir. 2006) (elements and proof of a federal civil RICO violation)
- Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283 (11th Cir. 2010) (establishing RICO conspiracy and proof approaches)
- Wal–Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (standard for commonality in class actions)
- Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546 (11th Cir. 1986) (numerosity threshold for class actions)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008) (no reliance required in RICO claims for classwide proof)
- Neder v. United States, 527 U.S. 1 (1999) (reliance not required for mail/wire fraud statutes)
- Sacred Heart Health Sys., Inc. v. Humana Military Healthcare Servs., Inc., 601 F.3d 1159 (11th Cir. 2010) (superiority requirement in class certification)