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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A few years back, the Northern District of California was dubbed the “food court” based on the influx of food misbranding class actions claiming that alleged FDA regulatory infractions constituted violations of California consumer deception statutes.  The first cases in the misbranding pack were appealed to the Ninth Circuit, with plaintiffs challenging district courts’ denials of class certification and grants of summary judgment in favor of defendants, while the matters filed later were stayed pending the Ninth Circuit’s guidance on these class certification and summary judgment issues.  Now, the Ninth Circuit has weighed in on a few of the pending misbranding appeals.  But its decisions thus far raise more questions rather than provide clear answers.  Below, we review the status of key Ninth Circuit misbranding appeals as well as the impact of these decisions on class certification and summary judgment standards going forward.Summary of Status of Food Misbranding Appeals1. Brazil v. Dole (No. 14-17480). On September 30, 2016, in an unpublished decision, the Ninth Circuit reversed the district court’s grant of summary judgment in favor of Dole, but upheld the court’s decision to decertify the class.  See Brazil v. Dole Packaged Foods, LLC, 660 F. App’x 531 (9th Cir. 2016).<ul><li>Class Certification.  The Ninth Circuit confirmed that the court did not err in finding that the plaintiff’s damages model failed to correctly isolate a price premium. The court further confirmed that price premium was the correct measure of damages for claims that a product was misleading.</li><li>Summary Judgment. The court held that plaintiff’s deposition testimony stating that he was misled by Dole’s “all natural fruit” labels—along with letters from the FDA to other companies regarding “natural” label statements and conflicting testimony on the subject—were sufficient to create a material issue of fact to survive summary judgment.  The court, however, rejected the plaintiff’s “illegal product theory”—i.e., that possession of a “misbranded” product was “illegal,” and accordingly found that any alleged misrepresentations or deception did not amount to unlawful conduct under California’s Unfair Competition Law (UCL).</li></ul>2. Briseno v. ConAgra (No. 15-55727). On January 3, 2017, in a published decision, the Ninth Circuit affirmed the district court’s certification of 11 statewide classes and addressed the circuit split regarding standards of ascertainability. Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017).  ConAgra filed a petition for certiorari with the U.S. Supreme Court, which drew amici support on both sides and is now fully briefed and awaiting a decision on whether it will be heard in the 2018 Term.<ul><li>Class Certification. In Briseno, the Ninth Circuit found that there was no ascertainability requirement for class certification, i.e., there is no requirement that a plaintiff demonstrate that there is an administratively feasible means of identifying absent class members.  The court’s conclusion runs contrary to the Third Circuit’s decision in Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013) and its progeny.  The Ninth Circuit stated, however, that it will continue to address ascertainability-related issues, including overbroad class definitions or uninjured class members, through other Rule 23 requirements, such as superiority, commonality, or predominance.  Notably, Briseno did not present a factual situation, such as in Bruton v. Gerber, Jones v. ConAgra, or Kosta v. Del Monte (discussed below), where companies argued that label changes throughout the class period rendered it impossible to identify which consumers were exposed to challenged statements and, accordingly, who was included in the class.</li></ul>3. Bruton v. Gerber (No. 15-15174). As we previously <a href="http://classdismissed.mofo.com/food-misbranding/ninth-circuit-revives-gerber-baby-food-class-action/">reported</a>, on April 19, 2017, in an unpublished memorandum, the Ninth Circuit reversed the district court’s class certification and summary judgment orders.  Bruton v. Gerber Prod. Co., No. 15-15174, 2017 WL 1396221 (9th Cir. Apr. 19, 2017).  After Gerber petitioned for rehearing, challenging the court’s summary judgment decision, the Ninth Circuit issued an updated memorandum on July 17, 2017, in which it modified the summary judgment portion of its order.  Bruton v. Gerber Prod. Co., No. 15-15174, 2017 WL 3016740 (9th Cir. July 17, 2017).<ul><li>April 2017 Order (“Bruton I”).<ul><li>Class Certification.  The court found that the district court’s denial of class certification on grounds that the class was unascertainable contravened the Ninth Circuit’s later decision in Briseno that ascertainability was not a perquisite to certification. Unlike Briseno, however, Bruton involved significant label variations during the class period.  The Ninth Circuit did not address these facts, however.  Instead, it reversed and remanded the case to the district court to determine if class certification was appropriate.<a href="#_ftn1" name="_ftnref1">[1]</a></li><li>Summary Judgment. The court held that the following evidence was sufficient to raise a material issue of fact as to whether Gerber’s labels were deceptive:  (1) the labels themselves, especially when compared to competitor labels that allegedly omitted challenged statements; (2) plaintiff’s deposition testimony that she was deceived; and (3) FDA warning letters to Gerber regarding alleged noncompliance with applicable nutrient content regulations.  The court also found that plaintiff did not need to offer proof of deception to support her unlawful UCL claim, as the particular FDA nutrient content regulations that plaintiff alleged Gerber violated did not require evidence of consumer deception.  In this case, “misbranding” was sufficient.</li></ul></li><li>July 2017 Order (“Bruton II”).<ul><li>Class Certification. The court did not make changes to its class certification ruling, so its reliance on Briseno</li><li>Summary Judgment. On rehearing, the court reversed its prior ruling that the plaintiff had provided sufficient evidence of deception, instead finding that: (1) Gerber’s competitors used the same challenged statements, so the record contravened plaintiffs’ theory that Gerber’s labels were comparatively misleading; (2) plaintiff’s testimony about being misled was “uncorroborated” and “self-serving”; and (3) FDA warning letters to Gerber, “in addition to being informal and nonbinding,” did not indicate that Gerber’s competitors complied with the law, and therefore did not support plaintiff’s theory that Gerber’s labels were misleading in comparison to competitors’ labels.</li></ul></li></ul>Despite reversing course on its deception ruling, the court upheld its prior ruling, however, on the UCL’s unlawful prong, finding that the alleged FDA regulatory violations on which plaintiff’s unlawful claim was predicated do not require a showing of consumer deception.  The court therefore still reversed the district court’s grant of summary judgment on this ground.4. Jones v. ConAgra (No. 14-16327).Jones, one of the first misbranding appeals filed, concerns ascertainability and predominance issues arising from label variations as well as class certification damages.  The Ninth Circuit stayed plaintiffs’ appeal of the district court’s class certification denial, however, pending the Supreme Court’s decision in Microsoft v. Baker as to whether plaintiffs could—as they did in Jones—voluntarily dismiss their claims to immediately appeal the district court’s class certification order.  As we recently <a href="http://classdismissed.mofo.com/consumer-products/supreme-court-slams-the-back-door-around-rule-23f-in-microsoft-v-baker/">reported</a>, the Supreme Court has confirmed that this tactic violates the spirit and process of Rule 23(f) and is therefore an improper vehicle for appeal.  The plaintiffs in Jones recently agreed to voluntarily dismiss their appeal, likely in light of Baker.  The Ninth Circuit accordingly will not review the important class certification raised by the Jones appeal.5. Kosta v. Del Monte (No. 15-16974). The Kosta appeal also concerns ascertainability and commonality issues based on variations in challenged label statements throughout the class period.  Kosta, however, was also appealed based on a Baker voluntary dismissal, and the plaintiffs also recently agreed to voluntarily dismiss the case.Takeaways and Remaining Questions<ul><li>Class Certification Damages. The argument that plaintiffs cannot present a viable damages model that is consistent with the Supreme Court’s requirements in Comcast v. Behrend appears to be the strongest blow to class certification.  The Ninth Circuit has confirmed that price premium is the proper measure of damages in a misbranding claim, as plaintiffs’ “full refund” model overcompensates the class and is inconsistent with plaintiffs’ theory of liability that companies can charge more for a product because of misleading claims.  But plaintiffs have been hard-pressed to provide a damages model (such as regression or conjoint analysis) that isolates the price premium associated with a challenged label statement while controlling for other factors that impact price.  This is a battle of the experts that plaintiffs are thus far losing.  But it is unclear what model would pass muster.</li><li>Ascertainability. With Briseno and Bruton, the Ninth Circuit has essentially rejected ascertainability as a separate requirement to class certification, but has indicated that ascertainability issues—such as overbreadth or uninjured class members—can be addressed through other Rule 23 requirements.  The Ninth Circuit has also dodged the issue of how label changes throughout the class period impact certification, as the remaining appeals that addressed the issue—Jones and Kosta—were dismissedproceed in light of Baker.  Thus, as of now, the issue of whether changes in label statements over the class period can defeat class certification is unresolved.</li><li>Summary Judgment. The Ninth Circuit’s unpublished decisions in Brazil and Bruton II similarly lead to more questions than answers.  Regarding deception, the court in Brazil found that plaintiff raised a material issue of fact based on the plaintiff’s testimony that he was misled, FDA warning letters to other companies, and conflicting testimony on the meaning of “natural.”  But in Bruton II, the court found that the plaintiff’s testimony that she was misled, FDA warning letters to Gerber, and the labels themselves were insufficient to raise a material issue as to deception.  The Ninth Circuit’s position in these two decisions is accordingly inconsistent, and the fault line on what constitutes sufficient or insufficient evidence of deception remains unclear.</li></ul>Similarly, while Brazil confirms that allegations of deception will not give rise to an unlawful claim in the context of alleged “all natural” violations, Bruton finds that alleged violations of FDA nutrient content regulations are sufficient to state an unlawful claim, as such violations do not require a finding of consumer deception.  Whether a plaintiff can state an unlawful claim separate and apart from alleging deception therefore appears to turn on the nature of the alleged regulatory violations at issue.We will continue to provide updates on changes to the Ninth Circuit’s “food court” menu and the impact on class certification and summary judgment issues based on the court’s decisions.<a href="#_ftnref1" name="_ftn1">[1]</a> The Ninth Circuit also reversed the district court’s dismissal of the plaintiff’s unjust enrichment/quasi-contract claim, finding that the California Supreme Court had confirmed that unjust enrichment is a standalone claim under California law after the district court issued its order.

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

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The Ninth Circuit’s Food Court Menu: A Status Update

The Ninth Circuit’s Food Court Menu: A Status Update

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A few years back, the Northern District of California was dubbed the “food court” based on the influx of food misbranding class actions claiming that alleged FD

*This is an update to a previous post on the Class Dismissed blog, seen <a href="http://classdismissed.mofo.com/consumer-products/the-revival-of-ecj-lawsuits-sweet-tooth-for-plaintiffs-or-toothless-claims/" target="_blank" rel="noopener noreferrer">here</a>.On June 8, 2017, Judge Carney dismissed Plaintiff’s class action Complaint because she failed to provide specifics about her own Sports Beans purchase.  The court held that the Complaint was implausible because it only provides a cursory and formulaic recitation that Ms. Gomez purchased the Product relying on Jelly Belly’s representations regarding the ingredients of the Product, and that but for those representations, she would not have purchased or paid as much for the Product.  See Gomez v. Jelly Belly Candy Company et al., No. EDCV 17-00575-CJC(FFMx) (C.D. Cal. June 8, 2017) (Dkt. No. 17) (order granting motion to dismiss with leave to amend).  The Judge noted that “[a]bsent from the complaint are any factual allegations concerning the circumstances of Gomez’s purchase of the product, how she intended to use the product, whether she in fact expected a sugar-free product, whether she thought ‘evaporated cane juice’ was juice as opposed to sugar, and whether she consumed the product.”  Id.Judge Carney also struck Ms. Gomez’s prayer for injunctive relief, finding that it is impossible for her to be deceived in the future by Jelly Belly’s use of the term ECJ, because she now knows that it really means “sugar.”  Judge Carney accordingly joins the list of district court judges who have refused to allow plaintiffs to pursue claims for injunctive relief given their awareness of the misrepresentations alleged in their complaints.The court granted leave to amend and Ms. Gomez filed an Amended Complaint on June 22, 2017.  The Amended Complaint provides more details regarding the circumstances surrounding Ms. Gomez’s purchase and consumption of the Sports Beans; it is unclear whether these allegations will survive another motion to dismiss should Jelly Belly renew its challenge.

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UPDATE: The Revival of ECJ Lawsuits*

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*This is an update to a previous post on the Class Dismissed blog, seen here. On June 8, 2017, Judge Carney dismissed Plaintiff’s class action Complaint because

UPDATE: The Revival of ECJ Lawsuits*

Introduction.  On May 22, 2017, plaintiff Jessica Gomez filed an opposition on behalf of a putative class of consumers urging a federal district court judge not to dismiss her lawsuit against Jelly Belly Co. (“Jelly Belly”) for allegedly misleading consumers by listing “evaporated cane juice” (ECJ) instead of “sugar” in the ingredient list of its “Sports Beans” candy.  The Gomez matter suggests that ECJ claims, previously dormant pending FDA’s issuance of final ECJ guidance, are now being filed and litigated since FDA issued its final guidance in May 2016. It remains to be seen, however, whether courts will dismiss these claims at the pleadings or summary judgment stage.Background on  FDA’s ECJ Guidance.  In 2009, FDA issued draft guidance stating that the term ECJ is false and misleading under Section 403(a)(1) of the FDCA because ECJ “does not accurately describe the basic nature of the food and its characterizing properties (i.e., that the ingredients are sugars or syrups, as required by 21 CFR 102.5.).”  In other words, FDA suggested that ECJ could mislead consumers into believing that a product did not include sugar.  Instead of finalizing its Draft Guidance, FDA reopened the comment period on March 4, 2014.  In the meantime, ­­several lawsuits in the Northern and Central Districts of California were stayed pending FDA’s issuance of its Final Guidance.  (See e.g., <a href="http://classdismissed.mofo.com/fda/judge-seeks-answers-from-fda-on-ecj-draft-guidance/">The (Not So) Sweet Sound of FDA’s Silence:  Judge Seeks Answers From FDA on ECJ Draft Guidance.</a>)  On May 25, 2016, FDA issued its <a href="https://www.fda.gov/Food/NewsEvents/ConstituentUpdates/ucm502680.htm">2016 ECJ Final Guidance</a> (“2016 Final Guidance”), upholding its previous finding that the use of ECJ is false and misleading and further stating that “sweeteners derived from sugar cane should not be listed in the ingredient declaration by names such as ‘evaporated cane juice,’ which suggest that the ingredients are made from or contain fruit or vegetable ‘juice’ as defined in 21 CFR 120.1.”  After FDA issued the 2016 Final Guidance, stays were lifted in multiple cases, and new complaints have been filed alleging that the use of ECJ, instead of sugar, on an ingredient list violates the FDCA and California’s corresponding Sherman Act.The Gomez case.  One of these new ECJ lawsuits was filed by Ms. Gomez in February 2017 against Jelly Belly in San Bernadino Superior Court.  Plaintiff alleged that she, and others similarly situated, were misled by Sports Beans’ ingredient list because it lists ECJ rather than sugar.  Plaintiff further alleges that she was harmed because she would not have purchased the Sports Beans, or paid as much for them, had she known that they contained sugar.  She brings claims for violations of California’s CLRA, FAL, UCL, and for negligent misrepresentation under common law.  The lawsuit was removed in March to the Central District of California and assigned to Judge Carney.Jelly Belly’s Defense:  FDA’s Guidance is Not Binding Law.  Jelly Belly filed a motion to dismiss on April 21, 2017, arguing that Ms. Gomez failed to allege facts sufficient to show that the label was misleading to consumers or that it was material to their decision to purchase the Sports Beans.  In moving to dismiss Plaintiff’s claims, Jelly Belly contends that FDA’s Final Guidance is not binding law.  Indeed, FDA explicitly states that its “guidance documents, including this guidance, do not establish legally enforceable responsibilities,” but instead “describe [FDA’s] current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited.”Plaintiff’s Reliance on FDA’s Guidance.  In response, Ms. Gomez does not dispute that FDA’s 2016 Final Guidance is not binding law.  Instead, she contends that it does not matter, because “the law was settled long ago by the relevant statutes and regulations.”  The FDA’s 2016 Final Guidance simply clarified FDA’s position that the use of ECJ instead of sugar is false and misleading under 21 U.S.C. §343(a)(1) and its accompanying regulations.<a href="#_ftn1" name="_ftnref1">[1]</a>  Therefore, Plaintiff argues that Jelly Belly’s use of the term ECJ instead of sugar on Sports Beans’ label violates these regulations and §343(a)(1).  FDA’s 2016 Final Guidance was simply underscoring the alleged violation.Takeaway.  We have <a href="http://classdismissed.mofo.com/?s=ECJ+Guidance">written</a> about courts issuing stays on ECJ claims pending FDA’s issuance of the 2016 Final Guidance.  Now that the guidance is finalized, these claims have been revived and, as indicated by Gomez, are still being filed.  Yet it remains to be seen whether ECJ claims can survive motions to dismiss and/or motions for summary judgment.  Indeed, none of the 17 cases filed in the Northern District of California have advanced beyond the pleadings.  In fact, Judge Chen recently dismissed in its entirety the ECJ claim in Swearingen v. Healthy Beverage, LLC because the label of the product at issue included a link to the product’s website, which “specifically states that ‘cane juice is natural sugar.’”<a href="#_ftn2" name="_ftnref2">[2]</a>  Similarly in Gomez, Jelly Belly argues that ECJ is listed right below the product’s sugar content on the Nutrition Facts Panel, so purchasers of the Sports Beans who read the label would know that it contains sugar.Although Judge Chen’s holding does not address Ms. Gomez’s argument regarding the FDA’s 2016 Final Guidance, it does suggest that plaintiffs who raise ECJ claims may be required to show that there is no other way for them to know that the product at issue contains sugar.We will provide updates with relevant developments.<a href="#_ftnref1" name="_ftn1">[1]</a> These regulations include the following: (1) 21 C.F.R. § 184.1854 (FDA’s definition of “Sucrose” as “a substance obtained by crystallization from sugar cane or sugar beet juice that has been extracted by pressing or diffusion, then clarified or evaporated”), (2) 21 C.F.R. 104(b)(20) (the common name for “sucrose” is “sugar”), (3) 21 C.F.R. 101.4(a)(1) (ingredients must be referred to by their common or usual name on food labels), (4) 21 C.F.R. 102.5(d) (the common or usual name of an ingredient is the name established by common usage or regulation), and (5) 21 C.F.R. 102(a) (the common or usual name of an ingredient must accurately describe the basic nature of the food or its characterizing properties).<a href="#_ftnref2" name="_ftn2">[2]</a> Swearingen v. Healthy Beverage, LLC, et al.,  No. 13-cv-04385-EMC (N.D. Cal. May 2, 2017) (Dkt. No. 92) (order granting motion to dismiss).

The Revival of ECJ Lawsuits: Sweet Tooth For Plaintiffs, or Toothless Claims?

Introduction.  On May 22, 2017, plaintiff Jessica Gomez filed an opposition on behalf of a putative class of consumers urging a federal district court judge not

The Revival of ECJ Lawsuits:  Sweet Tooth For Plaintiffs, or Toothless Claims?

Bruton v. Gerber, No. 15-15174.  The district court had dismissed Plaintiff’s unjust enrichment claim, denied class certification for lack of an “ascertainable class,” and granted summary judgment to Gerber because Plaintiff lacked evidence of deception.  The Ninth Circuit reversed the rulings and remanded the case.Background of the Case.  Plaintiff alleged that the labels on certain Gerber baby food products included claims about nutrient and sugar content that violated FDA’s regulations as incorporated into California law.  Plaintiff sued over 69 different Gerber products, with 66 labeled both with and without challenged labels during the class period.  Plaintiff brought claims under California’s consumer protection laws, as well as for unjust enrichment/quasi-contract.Unjust Enrichment/Quasi-Contract.  The Ninth Circuit first found that the district court erred in dismissing Plaintiff’s unjust enrichment/quasi-contract claim at the motion to dismiss stage.  While acknowledging that it was uncertain whether unjust enrichment was a standalone cause of action under California law at the time of the district court’s order, it held that the California Supreme Court had since clarified that an independent claim for unjust enrichment could proceed.  As such, it reversed the dismissal and remanded for the district court’s consideration of whether there are other grounds on which Plaintiff has failed to state a claim for unjust enrichment.Class Certification.  The Court of Appeals next addressed class certification.  It held that the district court erred in holding that the class could not be certified because it was not “ascertainable.”  It clarified that, again, the district court’s ruling contravened a later Ninth Circuit decision:  Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017).  In Briseno, the Ninth Circuit used different terminology for what the district court called “ascertainability” and held that there was no separate “administrative feasibility” requirement for class certification.  Because the district court’s decision ran contrary to Briseno, the Court reversed and remanded for further consideration regarding whether class certification is appropriate.Summary Judgment.  Finally, the Ninth Circuit reversed the lower court’s ruling on summary judgment.  First, it held that the district court erred in holding that there was no genuine dispute of material fact on Plaintiff’s claims that Gerber’s labels were deceptive under California consumer deception laws.Second, the Court confirmed that Plaintiff presented a viable theory of deception:  the combination of (a) claims on Gerber’s products in violation of FDA regulations and (b) the lack of such claims on competitors’ products made Gerber’s labels likely to mislead the public into thinking that Gerber’s products were of a higher quality than competitor products.Third, the Court held that Plaintiff had submitted sufficient evidence to create a genuine issue of material fact:  (a) Gerber’s and competitors’ labels, (b) Plaintiff’s deposition testimony that she was misled, and (c) two FDA warning letters on the claims.  The key evidence, the Court confirmed, is the labels:  “[a] reasonable jury observing Gerber’s labels and comparing them to those of its competitors could rationally conclude that Gerber’s labels were likely to deceive members of the public.”Finally, the Court held that the district court erred in granted summary judgment to Gerber on Plaintiff’s “unlawful” prong under the UCL.  It found that Plaintiff’s allegations that Gerber “misbranded” its products were sufficient to defeat summary judgment and that the “reasonable consumer test” did not apply to Plaintiffs’ unlawful claims.Takeaways.  Although an unpublished decision, Bruton v. Gerber answers some open questions in the consumer class action litigation field while leaving others unanswered.As for ascertainability, Bruton solidifies the Ninth Circuit’s position that there is no “administrative feasibility” requirement for class certification, but it does not address whether a class is ascertainable where consumers cannot reliably determine whether they are eligible to join the class due to label variations on products during the class period.  This issue has also been briefed in the Jones v. ConAgra appeal, which is pending the U.S. Supreme Court’s decision in Baker v. Microsoft.  (Read our prior blog post on Baker <a href="http://classdismissed.mofo.com/class-certification/class-dismissed-but-not-quite-supreme-court-to-review-appealability-of-class-certification-denials-when-plaintiffs-voluntarily-dismiss-case/">here</a>.)  It remains to be seen whether the Ninth Circuit will address this aspect of “ascertainability” as part of its ruling in the Jones case.As for deception, Bruton arguably lowers the bar for evidence that a plaintiff must submit to get past summary judgment.  Labels, the Court suggests, are enough.  It remains to be seen whether this decision holds and how Bruton will impact consumer class action litigation.

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Ninth Circuit Revives Gerber Baby Food Class Action

Ninth Circuit Revives Gerber Baby Food Class Action

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Bruton v. Gerber, No. 15-15174.  The district court had dismissed Plaintiff’s unjust enrichment claim, denied class certification for lack of an “ascertainable 

The Big Picture:  On Tuesday, Judge Koh granted Kellogg’s Motion to Dismiss in its entirety in Hadley v. Kellogg Sales Company, No. 5:16-cv-04955-LHK (N.D. Cal.).  Hadley is one of three cases<a href="#_ftn1" name="_ftnref1">[1]</a> against well-known cereal makers pending in the Northern District of California.  All three actions challenge various factually true “health” representations on the cereal packaging as misleading due to the amount of “added sugars” in the products.  FDA requires the total amount of sugars to be included on the Nutrition Facts Panel but does not yet require the amount of “added sugars” be broken out of the sugar category.<a href="#_ftn2" name="_ftnref2">[2]</a>While Judge Koh granted the motion in its entirety, she did not address several key arguments (e.g. preemption) and gave plaintiff leave to amend on several causes of action.  Thus, before we can play the funeral march for these “added sugars” cases, we need to see how one more round of pleadings shakes out and whether Judges Orrick and White follow Judge Koh’s lead.Key Holdings:<ul><li>“Added Sugars”—Plaintiff’s claims as to the amount of “added sugars” were dismissed with leave to amend for failing to satisfy 9(b).  Plaintiff did not plausibly allege that the various health claims were misleading because he failed to allege the amount of added sugar versus the total amount of sugar in each product and whether the amount of added sugar exceeded plaintiff’s own alleged “healthy” threshold.</li><li>Trans Fats—Plaintiff’s label challenges based on the fact that some products contained trans fats were dismissed with prejudice.  It was simply not plausible that the inclusion of trans fats made the factually true (and seemly unrelated) phrase “MADE WITH Real Fruit” misleading.</li><li>Miscellaneous Violations of FDA Regulations<a href="#_ftn3" name="_ftnref3">[3]</a>—Plaintiff’s claims based on alleged violations of FDA regulations were dismissed because plaintiff failed to plausibly plead that consumers would have been misled by the violations.  While the court generally granted leave to amend on these claims, a few were dismissed with prejudice based on futility or waiver.</li><li>Warranty Claims—Plaintiff’s express and implied warranty claims were dismissed with leave to amend because plaintiff provided a litany of statements but did not match them to the respective products.</li><li>Injunctive relief—The court found that while a willingness to consider repurchasing the product was likely sufficient to establish standing, here plaintiff’s willingness to repurchase was dependent on the products being “appropriately” priced.  Since any injunctive relief would not affect the price of the product, plaintiff lacked standing to seek such relief.</li></ul><a href="#_ftnref1" name="_ftn1">[1]</a> The other two cases are Krommenhock v. Post Foods, LLC, No. 3:16-cv-04958 (N.D. Cal. Filed Aug. 29, 2016); Truxel v. Gen. Mills Sales, Inc., No. 4:16-cv-04957 (N.D. Cal. Filed Aug. 29, 2016).<a href="#_ftnref2" name="_ftn2">[2]</a> On May 27, 2016, FDA issued a final rule on how “added sugars” should be listed on the Nutrition Facts Panel (“NFP Final Rule”).   Food Labeling: Revision of the Nutrition and Supplement Facts Panel, 81 Fed. Reg. 33,741 (May 27, 2016).  The NFP Final Rule revises the Nutrition Facts label by, among other things, “requiring the declaration of the gram amount of ‘added sugars’ in a serving of a product, establishing a Daily Reference Value (DRV), and requiring the percent Daily Value (DV) declaration for added sugars.”  Id. at 33,744.  The NFP Rule, which went into effect on July 26, 2016, does not require manufacturer compliance with the new labeling requirements until July 26, 2018.<a href="#_ftnref3" name="_ftn3">[3]</a> 21 C.F.R. §§ 101.13(e) (prohibition on the use of “free” or “low” unless product contains an altered amount of nutrient), (f) (type size of nutrient content claim), (i) (misleading nutrient content claim), 101.14(d) (limits on intervening material between health claims and required disclosures), 101.60 (calorie content claims), and 1.21 (material omissions)

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Judge Koh Issues First Blow to “Added Sugars” Plaintiffs

Judge Koh Issues First Blow to “Added Sugars” Plaintiffs

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The Big Picture:  On Tuesday, Judge Koh granted Kellogg’s Motion to Dismiss in its entirety in Hadley v. Kellogg Sales Company, No. 5:16-cv-04955-LHK (N.D. Cal.

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

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.

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

In American Beverage Association v. City and County of San Francisco, No. 3:15-cv-03415-EMC, decided on May 17, 2016, Northern District Judge Edward Chen denied a preliminary injunction against enforcement of a San Francisco ordinance that requires a warning label on every advertisement for a sugar-sweetened beverage (SSB).  The ordinance requires that the warning be enclosed in a rectangular border, constitute at least 20 percent of the area of the printed advertisement, and read:  “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.”  Plaintiffs’—three state and national trade organizations—brought suit, alleging that the ordinance violated their First Amendment rights.Plaintiffs brought suit soon after the ordinance was enacted in 2015 and immediately moved for a preliminary injunction.  The court denied plaintiffs’ motion, finding that plaintiffs were not likely to succeed on the merits, were not likely to suffer irreparable harm, and that the balance of hardships did not favor plaintiffs.  The court did grant an injunction pending appeal.Facial Challenge Based on Non-commercial SpeechJudge Chen first rejected plaintiffs’ argument that the ordinance covered both commercial and noncommercial speech and was therefore subject to strict scrutiny.  The court found that, even accepting plaintiffs’ arguments that they engaged in some noncommercial speech that would be impacted by the ordinance, they had failed to establish that the ordinance would infringe a substantial amount of protected speech, as required for a facial challenge.Facial Challenge Based on Commercial SpeechThe court next turned to the more prevalent commercial speech that would be impacted by the ordinance, and applied the standard set forth in Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985), which is essentially a rational-basis test.  Under the Zauderer test, there is no First Amendment violation so long as the disclosure requirement is reasonably related to the state’s interest, and the content of the compelled disclosure is factual.Judge Chen found that the compelled disclosures under this ordinance were factual and accurate.  The court found that there was sufficient evidence that SSBs contribute to tooth decay, obesity, and diabetes, that the defendant City had a legitimate interest in protecting public health and safety relating to these issues, and that the ordinance was reasonably related to that interest.No Chilling Effect on SpeechThe court also rejected plaintiffs’ argument that the ordinance would have a chilling effect on their speech.  Plaintiffs argued that the size of the warning would change the primary message of any advertising they engaged in, which would lead to no advertising at all, and that they could not practically engage in any counter-speech, given the size of the warning.  The court noted that both arguments were essentially based on the size of the required warning, and rejected both arguments.  Judge Chen further expressed skepticism over plaintiffs’ claim that they would not engage in any advertising at all if the ordinance went into effect.  As the court noted, tobacco companies continued to advertise, even with similar compelled warning labels, and the idea that beverage companies would not do the same, strained credulity.No Irreparable HarmThe court next turned to the irreparable-harm inquiry, and again rejected plaintiffs’ arguments.  Judge Chen first noted that, to the extent the irreparable harm was a violation of plaintiffs’ First Amendment rights, the fact that plaintiffs had failed to show a likelihood of success on the merits disposed of the issue.  The court also found unconvincing plaintiffs’ arguments based on harm to goodwill and reputation.Balance of HardshipsFinally, the court noted that plaintiffs had failed to show that the balance of hardships tipped sharply in their favor.  Judge Chen pointed to the City’s interest in advancing public health, along with evidence that there was a serious obesity-related health problem facing City residents, attributable at least in part to consumption of SSBs.

Warning Labels Suit Not Suitable for Preliminary Injunction

In American Beverage Association v. City and County of San Francisco, No. 3:15-cv-03415-EMC, decided on May 17, 2016, Northern District Judge Edward Chen denied

Warning Labels Suit Not Suitable for Preliminary Injunction

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