Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

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Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

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Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

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Alexandra Preece Barlow

Adam J. Hunt

The Future of Section 230: Protection Against Product Liability Claims?

New Wave of PFAS Legislation Aimed at Consumer Products

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On November 2, 2016, a Florida Federal District Court issued a $29 million judgment against the marketer of Pure Green Coffee extract weight-loss pills in a deceptive advertising suit brought by the Federal Trade Commission. District Court Judge Steven Mayberry of the Middle District of Florida ordered defendant Nicholas Congleton to disgorge $29 million in net revenue for deceptively marketing Pure Green Coffee extract pills with debunked scientific research, fake news sites, and paid testimonials all touting the pills’ weight-loss benefits.Congleton created a business selling Pure Green Coffee extract pills after watching an episode of the “Dr. Oz” television show on the purported benefits of the product. Congleton and his co-defendants created a company, built a website, and spent over $9 million on advertising.  Congleton advertised Pure Green Coffee as providing “[t]remendous weight loss results,” such as “sixteen percent of body-fat in twenty-two weeks” and “twenty pounds in four weeks.”  In fewer than two years, Congleton’s business generated $33.8 million in revenue.The FTC sued Congleton alleging four different false advertising claims, and moved for summary judgment. The Court granted the FTC’s motion for summary judgment on all claims, finding in each one that Congleton failed to raise a disputed fact.False Claims of Health Benefits.  The Court agreed with the FTC’s claim that Pure Green Coffee advertisements made false or unsubstantiated claims regarding the health benefits or efficacy of their Pure Green Coffee extract pills.  Citing the analysis of its nutrition expert that Pure Green Coffee’s claims were “biologically implausible,” the FTC argued that the claims could not be substantiated with competent and reliable scientific evidence, and would therefore likely mislead a reasonable customer.  Because Congleton admitted that Pure Green Coffee’s efficacy claims lacked a scientific basis and he failed to rebut the FTC’s expert, the Court granted summary judgment in favor of the FTC on this claim.False Claims of Scientific Basis.  The Court also granted summary judgment as to FTC’s claim that Congleton’s advertisements created an “overall impression” that Pure Green Coffee’s efficacy was backed by scientific evidence.  The Court agreed with the FTC that Pure Green Coffee’s ads featuring a man wearing a white doctor’s coat and stethoscope holding a pill, along with references to a “study” using terms including “double-blind,” “randomization,” and “proven results” that created the misleading impression that Pure Green Coffee’s benefits could be proven scientifically.Deceptive Testimonials.  The Court granted summary judgment as to FTC’s allegation that Pure Green Coffee’s ads deceptively used “testimonials” by purported “real people” who were, in fact, paid to appear and promote the product.  The Court found the fact that Pure Green Coffee’s testimonialists were compensated was a material fact; the Court also found that a reasonable customer would likely rely on the testimonials, given their prominent placement in Pure Green Coffee’s advertisements.Fake News Site.  The Court agreed with the FTC that Pure Green Coffee’s fake news site, purportedly written by a Women’s Health Journal columnist offering an review of the product’s efficacy, would likely mislead a reasonable consumer.  Congleton admitted that the article was false, and that he had no idea if the article’s author actually existed.Congleton Individually Liable for $29 Million.  The Court found that, because Congleton directly oversaw Pure Green Coffee’s marketing campaign and was aware of the advertisements’ falsehoods and misrepresentations, he was individually liable for the deceptive acts of the corporate enterprise he created.  The Court rejected Congleton’s arguments that the advertisements constituted mere “puffery” and that the FTC was required to show that actual consumers were misled.

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Court Issues $29 Million Judgment Against Pure Green Coffee Weight-Loss Pills in FTC Deceptive Advertising Suit

Court Issues $29 Million Judgment Against Pure Green Coffee Weight-Loss Pills in FTC Deceptive Advertising Suit

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On November 2, 2016, a Florida Federal District Court issued a $29 million judgment against the marketer of Pure Green Coffee extract weight-loss pills in a dec

On September 27, 2016, the U.S. Food and Drug Administration (FDA) announced that it has begun a public process to redefine the term “healthy” on food labels.As part of the public process, the FDA is soliciting input from consumers and businesses on their understanding of the term “healthy” and what it should signify when placed on food labels.  Specifically, the FDA wants to know what current dietary recommendations should be reflected in the definition of “healthy” and what consumers expect from foods that are labeled “healthy.”  Along with soliciting written input from the public, the FDA will also hold public forums on the issue and engage with food manufacturers as well.  As the redefinition process continues, food manufacturers can continue to use the “healthy” label for foods that meet the FDA’s current definition.The FDA’s current guidelines recommend that food manufacturers use the “healthy” label to describe foods that: (1) are not low in total fat, but have a fat profile makeup of predominantly mono and polyunsaturated fats; or (2) contain at least ten percent of the Daily Value per reference amount customarily consumed (RACC) of potassium or vitamin D.According to the FDA, the decision to redefine “healthy” was spurred by evolving public health recommendations on nutrition and is part of a broader, ongoing plan to help consumers make informed food choices and to encourage the food industry to develop healthier foods.  Recently, the FDA has issued warnings to food manufacturers regarding their potential misuse of the “healthy” label, which prompted public debate on the meaning of the term.  For example, in April 2015, the FDA notified KIND bar maker KIND, LLC, that certain of its bars labeled “healthy” did not satisfy the current definition of that term.  In May 2016, the FDA reconsidered its position in light of KIND’s argument that its use of the term “healthy” was a reflection of the company’s corporate culture and philosophy, not a nutritional claim.

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To Your Health: FDA Redefining the Term “Healthy” on Food Labels

To Your Health: FDA Redefining the Term “Healthy” on Food Labels

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On September 27, 2016, the U.S. Food and Drug Administration (FDA) announced that it has begun a public process to redefine the term “healthy” on food labels. A

On September 2, 2016, United States District Judge Dean P. Pregerson for the Central District of California granted in part and denied in part a motion to dismiss a class action complaint alleging violations of the UCL and CLRA against defendants that market and sell “Himalania” brand goji berries.  Torrent v. Thierry Ollivier et al., No. 2:15-cv-02511 DDP (JPRx), Dkt. No. 76.  The court held that the plaintiff’s claims for injunctive relief survived to the extent that they were based on the allegation that the product’s packaging created an “impression” that the berries were harvested from the Himalayas.  The court dismissed plaintiff’s claims to the extent that they were based on a reasonable consumer’s knowledge of Chinese geography.Consumer Challenges “Himalania” Goji Berries’ Packaging.  In April 2015, Plaintiff Nicolas Torrent filed a class action lawsuit on behalf of himself and California purchasers in the Central District of California, seeking injunctive relief and damages under California’s UCL and CLRA against the founder, marketer, and seller of “Himalania” brand goji berries.  Torrent alleged that the defendants “falsely creat[ed] the impression in the minds of its consumers that their Himalania brand goji berries are harvested in and transported from the Himalayas mountain range[,]” when “[i]n fact, the berries are harvested in the Ningxia province of China, which is not what the reasonable consumer considers as the Himalayas.”Court Dismisses UCL and CLRA Claims Based on a Reasonable Consumer’s Knowledge.  Torrent’s claims were based in part on the allegation that the goji berries “come from the Ningxia province of China, which is not what a reasonable consumer considers as the Himalayas.”  The defendants argued that members of the public were not likely to be deceived by the packaging because “the reasonable consumer does not know about Ningxia province’s location relative to the Himalayas.”  The court agreed with defendants, finding that “Plaintiff cannot [] plausibly allege that reasonable consumers are well-versed enough in Chinese geography to have any beliefs about Ningxia’s location or whether the Ningxia province qualifies as ‘Himalayan.’”UCL and CLRA Claims Based on “Creating an Impression” Survive.  Torrent’s claims were also based on the allegation that the goji berries’ packaging “created the impression” that the product was harvested from the Himalayan mountains.  Torrent argued that this “impression” was created by the packaging’s portrayal of images of mountains and statements including “The most famous berry in the Himalayas” and “Goji berries originate in the high plateaus of the Himalayan mountains.”  The court held that “[t]hese facts, putting aside any allegations about consumers’ knowledge of Ningxia, themselves could support a claim that Defendants’ packaging would lead a reasonable consumer to believe that Defendants’ berries are harvested in the Himalayas, when in fact the berries are not harvested in the Himalayas.”  The court declined to dismiss the UCL and CLRA claims to the extent they were based on wrongful “impression” allegations.Himalayn Takeaway.  The holding in this case highlights a potentially significant and relatively novel basis for a motion to dismiss:  that the plaintiff cannot plausibly allege that a reasonable consumer would have the requisite knowledge to be deceived.

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A Berry Mixed Decision: Consumer Class Action Challenging Packaging of “Himalania” Goji Berries Largely Survives Motion to Dismiss

A Berry Mixed Decision:  Consumer Class Action Challenging Packaging of “Himalania” Goji Berries Largely Survives Motion to Dismiss

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On September 2, 2016, United States District Judge Dean P. Pregerson for the Central District of California granted in part and denied in part a motion to dismi

District Court Judge Gonzalo Curiel recently considered and rejected—for the second time—a proposed class action settlement involving false advertising claims against a defendant jeans manufacturer.  Hofmann v. Dutch, LLC, No. 3:14-cv-02418-GPC-JLB (S.D. Cal. Aug. 16, 2016).  The court initially rejected the proposed settlement because of its coupon offer, charitable award unrelated to the issues of the case, and attorneys’ fee provision, which the Court found excessive.  The court rejected the parties’ renewed attempt to secure settlement approval because the problematic provisions remained unchanged and the sole addition – a free denim tote bag – did not adequately address the Court’s concerns.On September 5, 2014, plaintiff Sonia Hofmann sued defendant Dutch, LLC, alleging the denim company manufactured and sold jeans labeled “Made in the USA” that contained foreign-made components (buttons, rivets, zipper assembly, thread, and fabric).  Plaintiff alleged four causes of action under California law:  violations of the Unfair Competition Law (UCL); violations of the Business and Professions Code § 17533.7 (relating to manufacturers’ and retailers’ use of the label “Made in the USA”); violations of the Consumer Legal Remedies Act (CLRA); and negligent representation.Settlement Reached.  After litigating the case for just over a year, the parties agreed to a settlement.  On October 26, 2015, Plaintiff filed an unopposed motion requesting the court’s approval of a settlement agreement including the following terms:<ul><li>an injunction requiring Dutch to change its labels to reflect the country-of-origin of its jeans’ component parts;</li><li>$20 e-gift certificates for participating class members;</li><li>an award of $250,000 over five years to charities that benefit women; and</li><li>attorneys’ fees and costs not to exceed $175,000.</li></ul>Initial Settlement Rejected.  On April 26, 2016, Judge Curiel rejected the proposed settlement.  While the Court had no issue with the injunction, it rejected the $20 gift card offer, charitable award, and attorneys’ fees provisions, finding that the first two provisions did not provide sufficient value to potential class members, and the third suggested collusion between the parties.$20 Gift Card.  The parties argued that a $20 gift card was appropriate restitution for class members in light of the risk that they would receive nothing if the case went to trial.  The Court disagreed, noting that the average price of a pair of Dutch jeans is $205.  Therefore, the $20 offer was merely a coupon or discount requiring class members to spend more money to buy a Dutch product.  The Court reasoned that this was an inadequate offer to class members because it would require them to spend additional money on Dutch products, which would result in a net benefit to Dutch.Charitable Award.  The Court also rejected the cy pres provision whereby Dutch would pay $250,000 to various charities that purportedly benefit women, including breast cancer research and juvenile diabetes charities.  The Court noted that charitable awards may be acceptable when they benefit a cause related to the litigation and therefore provide an indirect benefit to class members.  The parties argued that there was a link between class members, who tended to be women, and charities that benefit women.  The Court rejected this argument as too tenuous, finding no link between women-focused charities and a “Made in the USA” class action.Attorneys’ Fees and Costs.  The settlement included a “clear sailing” term, whereby Dutch agreed not to contest any attorneys’ fees or cost awards that did not exceed $175,000.  The Court noted that such provisions create a danger of collusion, because they may encourage plaintiff’s counsel to accept an inadequate settlement on behalf of class members in exchange for an excessive fee award, and therefore require close scrutiny.  The Court rejected the fee award, reasoning that it was too high in light of the fact that class members received no value from the settlement apart from the $20 discount.Second Settlement Fails.  On June 23, 2016, the parties submitted a second settlement agreement to Judge Curiel.  The terms of the agreement remained the same, with one addition: class members were entitled to a denim tote bag valued at $128.  Judge Curiel rejected this settlement in short order, sharply noting that none of the problematic terms in the initial agreement had been remedied.  The Court reiterated its concerns regarding the coupon provision, charitable award, and fee provision, and was unpersuaded by Dutch’s tote bag offer.  As before, the Court denied approval, but permitted an additional 60 days for the parties to submit an improved settlement.Takeaway.  Hofmann offers yet another reminder that courts today strictly scrutinize class action settlements to ensure that they provide real value to settlement class members, do not appear collusive, provide sufficient notice, and treat all members of the class fairly.  See, e.g., Cotter v. Lyft, No. 13-cv-04065-VC, 2016 U.S. Dist. LEXIS 50579 (N.D. Cal. Apr. 7, 2016) (denying settlement agreement that short-changed members of the class by offering less than half the reimbursement to which they were entitled); Deatrick v. Securitas Sec. Servs., No. 13-cv-050160-JST U.S. Dist. LEXIS 22597 (N.D. Cal. Feb. 24, 2016) (settlement failed to provide clear notice procedures to class members); Thomas v. MagnaChip Semiconductor, Inc., No. 14-cv-01160-JST (N.D. Cal. Apr. 7, 2016) (settlement denied in part for distributing class funds to a charitable recipient without a sufficient nexus to the interests of the class members).  Parties submitting a settlement agreement for court approval need to carefully evaluate whether the proposed terms are consistent with current case law in their jurisdiction.

Third Time’s the Charm? Court Rejects Parties’ Second Settlement Agreement for Failure to Provide Sufficient Value to Class Members

District Court Judge Gonzalo Curiel recently considered and rejected—for the second time—a proposed class action settlement involving false advertising claims a

Third Time’s the Charm?  Court Rejects Parties’ Second Settlement Agreement for Failure to Provide Sufficient Value to Class Members

On July 29, 2016, President Obama signed into law the federal genetically engineered (GE) food labeling bill (S. 764). The bill passed the U.S. House of Representatives on July 14, 2016, 306-117, with broad bipartisan support. The Senate had previously passed the final bill, 63-30, on July 7. The bill will create a nationwide labeling standard for foods containing GE ingredients, and puts an end to the patchwork of state legislation that has developed over the past few years, including the nation’s first GE food labeling law in Vermont that was supposed to go into effect in July.

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy mat

Claudia Vetesi

President Signs Federal GMO Food Labeling Bill

On July 29, 2016, President Obama signed into law the federal genetically engineered (GE) food labeling bill (S. 764). The bill passed the U.S. House of Represe

President Signs Federal GMO Food Labeling Bill

A judge in the Eastern District of California recently dismissed a class action filed against LogMeIn based on the company’s decision to terminate its free app, which allowed users to access a remote desktop computer via a virtual private network. Handy v. LogMeIn, Inc., Case No. 1:14-cv-01355-JLT (E.D. Cal. Jan. 27, 2016). The court held that Plaintiff failed to show that LogMeIn misrepresented the discontinuance of the free app or that it misled users into believing that the free app and paid subscription were “companion products” such that discontinuation of the app made the other products less valuable.LogMeIn’s Products. LogMeIn offered a free app, as well as a second product, Ignition, which allowed users access to the app using a table or smartphone for a one-time fee of $29.99. In 2014, LogMeIn notified users of the free app and Ignition that it would no longer offer the free product and was planning to migrate all users to a paid subscription service, which offered a few extra amenities. Plaintiff—a user of the free app and purchaser of Ignition—brought suit under California’s Unfair Competition Law (UCL) and False Advertising Law (FAL), alleging that the company failed to properly notify users that it would discontinue its products and that, had he known LogMeIn would do so, he would not have purchased Ignition.LogMeIn filed a motion to dismiss Plaintiff’s claims and a motion for summary judgment. Since the court considered evidence outside the pleadings, it applied summary judgment standards and ruled in favor of LogMeIn.Failure to Identify Any Affirmative Misrepresentation. The court found that Plaintiff claimed the following: (1) LogMeIn led consumers to believe that the free app was being discontinued and that users had to pay for an annual subscription if they wanted to use the services provided by the app; and (2) LogMeIn led users to believe that the free app and the paid subscription were “companion services” and failed to inform users that the discontinuation of the free app would make the subscription app less valuable. The court rejected both theories.First, the court held that LogMeIn did not misrepresent its intention to discontinue its free app and the Ignition product. LogMeIn explained its migration plan and offered consumers a six-month free subscription to the new subscription-based service. It further explained that, regardless of whether users accepted the complementary subscription, they could continue to use Ignition until it was discontinued. This is exactly what Plaintiff did: he continued to use the Ignition product throughout 2014 and 2015. Because Plaintiff was not “tricked” by LogMeIn’s statement and did not buy the new subscription-based product because of any alleged misrepresentation, he could not base a claim on this statement. The court noted:<ul style="list-style-type: none;"><li>While he may be outraged by what he feels occurred to others, the Court is not clear why he believed that this outrage makes him aggrieved such that he can vindicate this grievance in this litigation.</li></ul>Second, the court held that Plaintiff failed to show that the free app and Ignition were “companion services” such that Ignition was less valuable without the free app. It noted that Plaintiff used the free app for more than a year before buying Ignition and then used Ignition for more than a year after the free app had been discontinued. The products, therefore, were not dependent on one another.Takeaway. Fraud-based claims under the UCL and FAL are subject to heightened pleading requirements. Plaintiffs must allege reliance on specific statements and injury in fact as a result. Courts are increasingly dismissing claims that fail to allege such individualized reliance and injury.

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LogMeIn Class Action Dismissed: Termination of Free App Not False Advertising

Digital Single Market Update: Technology Standardization in the EU

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A judge in the Eastern District of California recently dismissed a class action filed against LogMeIn based on the company’s decision to terminate its free app,

LogMeIn Class Action Dismissed: Termination of Free App Not False Advertising

Four years after California’s genetically engineered (GE) food labeling initiative was defeated, but just days before Vermont’s GE law is to go into effect, the U.S. Senate is poised to impose such labeling nationwide. The proposed legislation is the result of a compromise of interests between Senate Agriculture Chairman Pat Roberts, R-Kansas, and ranking Democrat Debbie Stabenow of Michigan, and will need 60 votes to pass the Senate.

Nationwide GE Labeling Leaps Forward

Four years after California’s genetically engineered (GE) food labeling initiative was defeated, but just days before Vermont’s GE law is to go into effect, the

Nationwide GE Labeling Leaps Forward

On April 22, 2016, in Alaei v. Kraft Heinz Food Co. (“Heinz”), No. 3:15-cv-02961, Southern District of California Judge Michael M. Anello granted defendant Heinz’s motion to dismiss without prejudice plaintiff Suzanne Alaei’s “Made in the U.S.A.” false advertising claims.  The court held that plaintiff failed to plead facts with the particularity required for fraud-based claims under Federal Rule of Civil Procedure 9(b), and lacked standing regarding products she did not purchase.Background.  Plaintiff’s First Amended Complaint, filed on January 19, 2016, alleged that defendant’s “Made in the U.S.A.” advertisements violated California’s Unfair Competition Law (UCL) and the Consumer Legal Remedies Act (CLRA). Plaintiff alleged that she purchased a bottle of defendant’s Heinz 57 sauce that included the claim “MFD. In U.S.A.” on the product label, but that the sauce was made, or contained ingredients made, outside the United States. Plaintiff claimed that had she known this, she would not have purchased Heinz’s product.The “Who, What, When, Where, and How.”  The court began its analysis by noting that, under Rule 9(b), a fraud allegation must include the “who, what, when, where, and how” of the circumstances giving rise to a claim.  While plaintiff alleged the basic factual premise underlying her claims — that Heinz falsely labeled its products as “Made in the U.S.A.” even though certain ingredients used in its products were manufactured outside the United States — she offered little detail beyond this. Her complaint did not allege that the bottle of Heinz 57 sauce plaintiff purchased was manufactured outside the United States or contained any ingredients that originated outside of the United States. And, while plaintiff challenged the origin of certain ingredients, her complaint contained no allegations regarding where any of Heinz’s products or their ingredients were actually manufactured.No Standing For Products Not Purchased. Although plaintiff alleged that she purchased a single bottle of Heinz 57 sauce, she sought to represent a class of all Californians who purchased any Heinz product advertised as “Made in the U.S.A.,” but which was foreign-made or contained foreign-made ingredients. The court held that plaintiff lacked standing to make claims as to products she never purchased and whose advertising she did not see unless those products and alleged misrepresentations were “substantially similar” to those she bought.  Because plaintiff failed even to identify other offending products in her complaint, the court could not assess the similarity of such products to the product plaintiff purchased. The court held that plaintiff lacked standing to sue as to products she did not purchase and dismissed her class claims as to those products under Rule 12(b)(1).Takeaway. Alaei joins the list of California federal district court cases we have highlighted that reject plaintiffs’ false advertising or misbranding claims at the pleading stage for failure to meet Rule 9(b)’s particularity requirement. See, e.g., Davidson v. Kimberly-Clark Corp., No. C 14-1783 PJH (N.D. Cal. Dec. 19, 2014) (see our Kimberly-Clark post); Figy v. Frito-Lay N. Am., Inc., No. 13-3988-SC (N.D. Cal. Aug. 12, 2014) (see our Frito-Lay post). Alaei also supports the majority trend in the Ninth Circuit holding that plaintiffs lacks standing to challenge products they did not purchase unless they at least demonstrate substantial similarity to purchased products. See, e.g., Gallagher v. Chipotle Mexican Grill Inc., No. 15-cv-03952-HSG (N.D. Cal. Feb. 5, 2016); Maxwell v. Unilever United States Inc., No. 12-cv-01736-EJD (N.D. Cal. Aug. 28, 2014); Bruton v. Gerber Prods. Co., No. 12-cv-02412-LHK (N.D. Cal. Sept. 6, 2013) (see our Gerber post). These decisions are a win for companies fighting vague, conclusory allegations of false advertising that challenge a host of products.

The Devil’s in the Details: Court Dismisses “Made in the U.S.A.” Fraud Claims against Heinz Because Plaintiff Failed to Allege Specific Facts and Lacked Standing to Sue for Products She Did Not Purchase

On April 22, 2016, in Alaei v. Kraft Heinz Food Co. (“Heinz”), No. 3:15-cv-02961, Southern District of California Judge Michael M. Anello granted defendant Hein

The Devil’s in the Details: Court Dismisses “Made in the U.S.A.” Fraud Claims against Heinz Because Plaintiff Failed to Allege Specific Facts and Lacked Standing to Sue for Products She Did Not Purchase

On May 5, 2016, the Ninth Circuit affirmed a district court’s decision to dismiss, without leave to amend, a class action complaint alleging a violation of the Washington Consumer Protection Act against Costco for the deceptive labeling of its “VitaRain Tropical Mango Vitamin Enhanced Water Beverage” product, holding the plaintiff failed to demonstrate plausibility or causation.  Maple, et al. v. Costco Wholesale Corp., et al., Nos. 13-36089, 14-35038, 14-35059, 2016 WL 2621345.District Court Dismisses Claim that “VitaRain” Is Misleading.  In 2012, Harold Maple filed a class action lawsuit in the Eastern District of Washington against Costco and its bottler, Niagara Bottling, LLC, alleging a violation of the Washington Consumer Protection Act.  The complaint alleged that the name and labeling of Costco’s “VitaRain Tropical Mango Vitamin ‎Enhanced Water Beverage” misleads consumers into thinking the beverage contains only vitamins and natural water.  After two amendments, the district court dismissed the complaint without leave to amend, but without prejudice, because it “ha[d] not considered the merits of th[e] case.”Ninth Circuit Affirms Dismissal, but with Prejudice.  The plaintiff appealed the district court’s dismissal without leave to amend, and defendants cross-appealed challenging the decision to dismiss “without prejudice.”  In an unpublished opinion, the Ninth Circuit affirmed the district court’s holding that the complaint failed to state a claim, vacated the dismissal “without prejudice,” and remanded with instructions to re-enter the judgment “with prejudice.”“VitaRain” Is Not Misleading.  The Ninth Circuit concluded that the name “VitaRain” is not likely to mislead a reasonable consumer as a matter of law.  The court distinguished Ackerman v. Coca-Cola Co., No. CV-09-0395, 2010 WL 2925955 (E.D.N.Y. July 21, 2010) (unpublished) because the beverage at issue (Vitaminwater) contained the full names of two ingredients and the label contained misleading statements.  “Here, the term ‘Vita’ could mean many things, rain could not be an actual ingredient, and the label contains no misleading statements.”  Maple, 2016 WL 2621345, at *1.Plaintiff Cannot Establish Causation.  To the extent the plaintiff’s claim was based on certain ingredients labeled as “natural,” the Ninth Circuit held that such allegations failed because the plaintiff did not allege that he read those parts of the label.  He therefore could not have been deceived by any “natural” statements.  The court rejected plaintiff’s request to amend the complaint to allege a subclass of individuals who did read the label because plaintiff’s individual claims failed.  “The potential existence of other classes of which Plaintiff is not a member,” the court concluded, “is irrelevant.”  Id.“VitaRain” Takeaway.  Although it may be a challenge to obtain outright dismissal of “deception” claims on plausibility grounds, it is certainly not impossible.  Maple, along with the Ninth Circuit’s similar decision in <a href="http://classdismissed.mofo.com/consumer-products/implausibility-wins-the-day-ninth-circuit-affirms-dismissal-of-deception-claims-against-sugar-lip-balm/">Ebner v. Fresh</a>, demonstrates the limits of courts’ tolerance of “misbranding” claims when a label is not facially deceptive or false, and when there is no other indication that a consumer would be deceived.  Maple also demonstrates that a plaintiff cannot establish causation if he or she fails to allege having read challenged labeling statements.

A Tall Drink of Water: Ninth Circuit Affirms Dismissal of Costco VitaRain Class Action on Plausibility and Causation Grounds

On May 5, 2016, the Ninth Circuit affirmed a district court’s decision to dismiss, without leave to amend, a class action complaint alleging a violation of the 

A Tall Drink of Water: Ninth Circuit Affirms Dismissal of Costco VitaRain Class Action on Plausibility and Causation Grounds

A California federal court recently denied a motion to certify a class of Kohl’s customers allegedly misled by false advertising, finding that plaintiff Wendy Chowning’s claim was a copycat of an earlier-filed case, Russell, et al. v. Kohl’s Department Stores, Inc., 5:15-cv-01143 (C.D. Cal., filed June 11, 2015). Chowning v. Kohl’s Department Stores, Inc., Case No. 2:15-cv-08673 (C.D. Cal. April 1, 2016). Judge R. Gary Klausner of the Central District of California, presiding over both actions, initially ruled that the cases were not duplicative because the Chowning plaintiff sought injunctive relief and restitution, while the Russell class was certified for injunctive relief only.  However, after Kohl’s defeated the Chowning plaintiff’s restitution claims at summary judgment, the Court ruled that Chowning no longer differed from Russell, and dismissed the suit.Same Claims, Different Suits.  The Chowning and Russell plaintiffs presented nearly identical claims, only weeks apart. On June 11, 2015, the Russell plaintiffs filed their putative class action, alleging that Kohl’s comparative-pricing sales tags were a form of false advertising under California’s False Advertising Law (FAL) and Unfair Competition Law (UCL). The Russell plaintiffs claimed that Kohl’s exclusive-brand items displayed two price tags, (1) a “sale” price tag, and (2) a significantly higher “original” price tag, but that the items were never actually sold at the higher “original” price advertised. Instead, plaintiffs alleged, Kohl’s simultaneously displayed both tags to deceive plaintiffs and putative class members into thinking that the “original” price was the true price of the item, and induce them to purchase products at the purported “sale” price.The next month, on July 21, 2015, Wendy Chowning filed suit in the same court, alleging the same claims against Kohl’s under the FAL, UCL, and Consumer Legal Remedies Act (CLRA), and also seeking monetary restitution and injunctive relief.Chowning Initially Survives by Seeking Monetary Restitution.  Given the substantial overlap between the two cases, and Russell’s status as the first-filed case, Judge Klausner issued an order in the Chowning action to show cause why it should not be dismissed as duplicative. He declined to the dismiss the action, however, finding that Chowning’s relief sought—restitution in addition to injunctive relief—was sufficient to distinguish the case from Russell.Though the Russell plaintiffs initially had also sought restitution, Judge Klausner certified their class only as to injunctive relief, ruling that plaintiffs failed to meet their burden to present a viable damages model. Russell, et al. v. Kohl’s Department Stores, Inc., 5:15-cv-01143 (C.D. Cal., Dec. 4, 2015).Court Rejects Chowning’s Restitution Claims, Denies Class Certification, and Dismisses the Case.  Chowning’s distinguishing factor soon disappeared, however, when on March 15, 2016, Judge Klausner granted Kohl’s motion for partial summary judgment on the issue of restitution, finding that plaintiff’s proposed damages models did not provide a viable measure of restitution. According to the Court, even if Kohl’s did misrepresent the “original” price of an item, Kohl’s is not required to pay restitution as long as the retail value of the item is higher than the price charged. Chowning, et al. v. Kohl’s Department Stores, Inc., 2016 WL 1072129, at *12 (C.D. Cal. Mar. 15, 2016).In light of this ruling, Judge Klausner found that Chowning was no longer meaningfully different from Russell. Thus, on April 1, 2016, Judge Klausner denied the Chowning plaintiff’s motion for class certification, finding that “the same facts, legal arguments, evidence, and remedies are implicated in both [cases].” The putative Chowning class would therefore be adequately represented as members of the injunctive relief class certified in the Russell action. The court dismissed the case.Takeaway.Chowning is helpful to defendants fighting copycat actions on identical or similar issues. It demonstrates that, where both the underlying facts and requested remedies in two cases are the same, the first-filed case will win the day.

Been There, Done That: Kohl’s Wins Dismissal of Copycat False Advertising Class Action

A California federal court recently denied a motion to certify a class of Kohl’s customers allegedly misled by false advertising, finding that plaintiff Wendy C

Been There, Done That: Kohl’s Wins Dismissal of Copycat False Advertising Class Action