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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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

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

<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

Zak is an associate in the Litigation Department in Morrison Foerster’s New York office.Zak’s practice focuses on class actions, commercial litigation, white collar defense, government investigations, and antitrust litigation and counseling. He has represented clients before federal and state courts in complex commercial matters, as well as in arbitration tribunals.Zak received his J.D. from New York University School of Law in 2018, where he was inducted into the Order of the Barristers. During law school, Zak also served as the Marden executive editor for the NYU Law Moot Court Board. In 2013, Zak received his B.A. and M.A. in political science from Yale University, receiving honors in his major and the Ellsworth Prize for Best Senior Essay in the Social Sciences.

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Associate

Zak Newman

Mitchell A. Hokanson is an associate in the Litigation Department of Morrison Foerster’s San Diego office.Mitchell’s practice focuses on commercial litigation and consumer class actions. He has extensive experience with civil litigation, including managing day-to-day strategy, propounding and responding to discovery, taking and defending depositions, and engaging in motion practice. He also has experience providing regulatory advice to clients, including pro bono partners and multinational corporations. Mitchell maintains an active pro bono practice.After law school, Mitchell worked as a judicial clerk for Justice Susan M. Carney of the Alaska Supreme Court, where he drafted bench memoranda and opinions on a wide range of state and federal law topics. Prior to joining MoFo, Mitchell worked for another international law firm, where he was a member of the Complex Civil Litigation practice group, in Los Angeles, California.Mitchell received his J.D. from Columbia Law School, where he was honored as a James Kent Scholar and Harlan Fiske Stone Scholar. While in law school he was the senior executive editor of the Columbia Journal of Environmental Law and worked as a judicial intern for Judge Sandra S. Ikuta of the United States Court of Appeals for the Ninth Circuit and Judge George B. Daniels of the United States District Court, Southern District of New York. Prior to that, Mitchell earned his B.A. from Stanford University.

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Mitchell Hokanson

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Client Alert: Jury Returns Verdict in “Manufactured in the USA” False Advertising Case

Everyone Please Stand: Supreme Court to Consider Standing Requirements for Class Actions, With the Potential to Resolve Long-standing Multi-circuit Split.

A New Era of Climate Accountability: State Climate Superfund Laws Gain Momentum

APHIS Reinstates Legacy Biotechnology Regulations: Implications for CRISPR-Edited Plants

California Updates Prop 65 Short-Form Warning Requirements

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We’ve all heard about food fads:  Paleo, artisanal, farm-to-table.  But what about food litigation fads?  Plaintiffs’ lawyers must scour the same grocery aisles, judging from their past “sweet tooth” obsession with “evaporated cane juice” (ECJ).  But—with most courts in this District staying ECJ cases pending the U.S. Food and Drug Administration’s (FDA’s) review of its ECJ draft guidance—the ECJ litigation fad appeared to have faded as abruptly as it began.Not so fast, Plaintiffs’ lawyers will say.  While the majority of courts have maintained stays pending FDA’s final review, recent decisions to the contrary may portend the revival of this forgotten trend.  Will ECJ have another “moment”?We provide further background and discuss the implication of these decisions below.Plaintiffs’ ECJ Allegations. Plaintiffs bringing ECJ claims allege that ECJ is actually sugar, so listing ECJ as an ingredient misleads consumers into believing that these products are healthier than those listing sugar as an ingredient. Plaintiffs assert that FDA has explicitly stated that ECJ is not a common or usual name for sugar, and thus cannot be listed as an ingredient at all.FDA’s Position. Despite these assertions, FDA’s position on ECJ is in flux. Although FDA issued draft guidance in 2009 suggesting that ECJ is not the common or usual name for sugar, as we have previously posted, FDA subsequently issued a notice in 2014 reopening the comment period for its draft guidance, indicating that it would reconsider the issue.ECJ Stays. Following FDA’s notice, courts facing ECJ claims stayed or dismissed the claims pursuant to the primary jurisdiction doctrine, finding that, based on FDA’s authority over product labeling and its expertise in the area, courts should permit FDA to at least finalize its stance on ECJ before passing judgment. At least 18 ECJ claims were dismissed or stayed between 2014 and 2015.After issuing stays, one Northern District court judge who had stayed an ECJ case—Judge Chen—requested an update from FDA on the status of its review. In July 2015, FDA confirmed that it anticipated finalizing its guidance by the close of 2016. At least six Northern District courts continued stays since that update — all over plaintiffs’ objections. One court, however, departed from the trend: in August 2015, Judge Chhabria lifted a stay in an ECJ case.  See Gitson et al. v. Trader Joe’s Company, No. 3:13-cv-01333-VC (N.D. Cal. Aug. 18, 2015), Dkt. No. 123.Updates. Until recently, Judge Chhabria was the lone dissenter in the ECJ debate. But on January 4 and 5, 2016, Judges Henderson and Donato, respectively, also lifted ECJ stays. See Figy v. Lifeway Foods, Inc., No. 3:13-cv-4828-TEH (N.D. Cal. Jan. 4, 2016), Dkt. No. 57; Swearingen v. Pacific Foods of Oregon, Inc., No. 13-cv-04157 (N.D. Cal. Jan. 5, 2015), Dkt. No. 61. While neither decision contains substantial analysis, Judge Donato did note that he considered the issues “in light of the FDA’s continued delay in providing final guidance.” Id. at 1:18. These courts appear to have become impatient with the pace of FDA’s review.Two other courts, however, have continued stays subsequent to these three rulings. See, e.g., Gitson, et al. v. Clover-Stornetta Farms, Inc., Case No. 3:13-cv-01517-EDL (N.D. Cal. Jan. 7, 2016) (extending ECJ stay for an additional 180 days, until August 2016) (Laporte, J.); Swearingen v. Amazon Preservation Partners, Inc., Case No. 13-cv-04402-WHO (N.D. Cal. Jan. 11, 2016) (Orrick, J.) (extending ECJ stay and continuing case management conference until July 2016). The new year has thus brought divergence in Northern District courts’ treatment of ECJ cases.Implications. The future of ECJ claims is unclear: while Judges Orrick and Laporte’s decisions upholding stays suggest that the pendulum has not shifted towards reviving these claims, Judges Chhabria, Henderson, and Donato’s rulings to the contrary may suggest that ECJ stays will not remain in place indefinitely. This means that a slew of dormant ECJ claims could come back to life this year, especially if FDA fails to make headway on its draft guidance.  We may see a revival of the ECJ fad after all.But another trend may nonetheless keep these cases quiet. Many district courts have stayed misbranding cases pending the Ninth Circuit’s decisions in misbranding appeals, including Jones v. ConAgra, Brazil v. Dole, and Kosta v. Del Monte. These appeals concern class certification issues—including ascertainability and the proper measure of damages—that district courts must consider when assessing a plaintiff’s proposed class certification motion. Courts have therefore found it appropriate to wait for the Ninth Circuit’s guidance before deciding these issues. See, e.g., Ham v. Hain Celestial Grp., Inc., 3:14-cv-02044-WHO (N.D. Cal. Dec. 10, 2015), Dkt. No. 59. (staying putative class action pending Ninth Circuit appeals and collecting decisions in accord). ECJ cases are no exception. See Thomas v. Costco Wholesale Corp., No. 12-CV-02908-BLF, 2015 WL 6674696 (N.D. Cal. Nov. 2, 2015) (staying entire action based on Ninth Circuit appeals after staying ECJ claims in November 2014). Thus, even if FDA-based stays are lifted, Ninth Circuit stays may continue to keep ECJ claims at bay.

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Reviving a Forgotten Fad: Three Judges Lift Stays of Evaporated Cane Juice Claims

Reviving a Forgotten Fad: Three Judges Lift Stays of Evaporated Cane Juice Claims

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We’ve all heard about food fads:  Paleo, artisanal, farm-to-table.  But what about food litigation fads?  Plaintiffs’ lawyers must scour the same grocery aisles

On January 5, 2016, in Torrent v. Yakult U.S.A., Inc., U.S. District Court Judge Cormac J. Carney denied the plaintiff’s motion to certify a class of Yakult yogurt consumers who were allegedly misled by Yakult’s packaging and advertising claims.  The Court found that the sole named plaintiff lacked Article III standing to seek injunctive relief on behalf of the putative class because he failed to allege or offer evidence of a sufficient likelihood of future harm.  This decision is notable for its refusal to carve out an exception to Article III requirements in favor of state consumer protection laws.The named plaintiff, Nicolas Torrent, alleged that Yakult violated California’s Unfair Competition Law (UCL) by deceptively claiming that its probiotic beverages containing the Lactobacillus casei Shirota microorganism help balance the digestive system and maintain overall health.  The plaintiff sought to certify a class of all persons or entities who purchased Yakult while in the state of California since January 2011, and sought only declaratory and injunctive relief on behalf of himself and the putative class.  The plaintiff claimed that he purchased Yakult products multiple times, and “but for” Yakult’s misrepresentations about the health benefits of its products, he would not have done so.  He did not allege that he intended to buy Yakult in the future, and he did not seek restitution or money damages.The Court first considered the threshold question of whether the plaintiff had standing to bring a UCL claim for injunctive relief under Article III of the Constitution.  Judge Carney noted that Article III requires that a plaintiff seeking injunctive relief present evidence that there is a “sufficient likelihood” that he or she “will be wronged in a similar way in the future.”  Past exposure to illegal conduct does not, by itself, show a present case or controversy if there are no continuing, present adverse effects.The Court acknowledged the split within the Ninth Circuit regarding whether the Article III standing requirement for injunctive relief applies in the consumer protection context, noting that some courts have held that a plaintiff in an UCL false advertising case retains standing to pursue injunctive relief so long as the defendant continues to deceptively market and sell the products at issue.  However, the Court rejected this approach, finding “more persuasive the courts that have insisted that it is improper to carve out an exception to Article III’s standing requirements to further the purpose of California consumer protection laws.”  The Court agreed with those cases, concluding that “Article III’s standing requirements take precedence over enforcement of state consumer protection laws,” and “[b]ecause Torrent has not even alleged that he intends to buy Yakult in the future, let alone submitted evidence to that effect,” he had no standing to pursue injunctive relief.Plaintiff’s lack of standing to pursue injunctive relief doomed his class certification motion:“Owing to his lack of standing to pursue injunctive relief,” the plaintiff “failed to provide sound rationale for class certification under either [Rule 23] (b)(1)(A) or (b)(2).”

Stand Down! Court Rejects Yakult Yogurt False Advertising Class for Lack of Standing

On January 5, 2016, in Torrent v. Yakult U.S.A., Inc., U.S. District Court Judge Cormac J. Carney denied the plaintiff’s motion to certify a class of Yakult yog

Stand Down!  Court Rejects Yakult Yogurt False Advertising Class for Lack of Standing

Last week, the California Supreme Court issued a long awaited ruling on organic labeling in Quesada v. Herb Thyme Farms, Inc., No. S216305, 2015 WL 7770635 (Cal. Dec. 3, 2015). At issue in Quesada was whether consumers may bring state law fraud and misrepresentation claims to challenge herb products allegedly mislabeled as “certified organic.” The defendant, Herb Thyme Farms Inc., argued that plaintiff’s claims were preempted by the federal Organic Foods Production Act of 1990 (OFPA).

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

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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 mat

Claudia Vetesi

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

California Supreme Court Opens the Door to Organic Mislabeling Claims

Last week, the California Supreme Court issued a long awaited ruling on organic labeling in Quesada v. Herb Thyme Farms, Inc., No. S216305, 2015 WL 7770635 (Cal

California Supreme Court Opens the Door to Organic Mislabeling Claims

On December 2, 2015, Judge Vince Chhabria of the Northern District of California dismissed with prejudice claims that grocery retailer Trader Joe’s violated California’s Unfair Competition Law (UCL) by using the term “soymilk” to describe certain food products that did not have cow’s milk. The plaintiffs alleged that Trader Joe’s’ use of the word “soymilk” to describe products that contain soymilk, but not cow’s milk, violated the federal Food, Drug and Cosmetics Act. Specifically, the plaintiffs claimed that Trader Joe’s’ use of the word “soymilk” misled plaintiffs into believing that the products (1) actually had cow’s milk, or (2) had a similar nutritional content to cow’s milk. Judge Chhabria held that the plaintiffs failed to state a claim that Trader Joe’s’ use of the term “soymilk” violated the federal act under either of the two theories alleged.First, the plaintiffs failed to state a plausible claim that Trader Joe’s’ use of the term “soymilk” is false or misleading under the “reasonable consumer” standard. Judge Chhabria held that a reasonable consumer would not be misled into thinking that soymilk comes from a cow, as soymilk is widely known as an alternative to cow’s milk. Also, a reasonable consumer would not think that the word “soymilk” implies that the product has a similar nutritional content to cow’s milk, because it would be implausible to assume that two distinct products contain the same nutritional content. Second, the court rejected the notion that Trader Joe’s had represented the “soymilk” products as cow’s milk products, which have a “standard of identity” under FDA regulations. Judge Chhabria found “no conceivable justification” for the assertion that a product labeled “soymilk” could be considered to be representing itself as cow’s milk.Judge Chhabria also denied in part and granted in part Trader Joe’s’ motion to dismiss claims based on undisclosed additives in products that the plaintiffs did not purchase, ruling that only the plaintiffs’ claims regarding additives in purchased products would go forward.

Trader Joe’s Wins Dismissal of Soymilk Products Mislabeling Claims

On December 2, 2015, Judge Vince Chhabria of the Northern District of California dismissed with prejudice claims that grocery retailer Trader Joe’s violated Cal

Trader Joe’s Wins Dismissal of Soymilk Products Mislabeling Claims

In Gyorke-Takatri v. Nestle USA, Inc., the United States District Court for the Northern District of California held that parties in a class action seeking to remove an action to federal court must provide sufficient admissible evidence supporting the jurisdictional basis for removal. No. 15-cv-03702-YGR.<a href="#_ftn1" name="_ftnref1">[1]</a>  Judge Yvonne Gonzalez Rogers remanded to California state court an action involving Gerber Products Co.’s Graduates Puffs as a result of insufficient admissible evidence.Gerber removed the action to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d).  CAFA requires an amount in controversy of at least $5 million.  Gerber argued that the sales amount of Graduates Puffs in California exceeded $5 million during the alleged period and should satisfy the statutory amount.  Gerber attempted to prove this monetary amount through the affidavit of one of its employees who had reviewed sales data provided by a third party researcher tracking the sales of the product.  Gerber provided documents summarizing the third party sales data but failed to provide any documentation in regards to potential hearsay issues.Judge Gonzales Rogers ruled that the evidence was inadmissible multiple hearsay and not subject to any exception. The affidavit constituted inadmissible multiple hearsay because it was a document presenting information from a third party resource. Geber did not submit a declaration from anyone who had knowledge regarding how the data was collected or maintained. Nor did Gerber make any offer of how it intended to cure the defects.  As a result, Gerber could not prove it satisfied CAFA’s amount in controversy requirement by a preponderance of the evidence, and the action was remanded from federal court. <a href="#_ftnref1" name="_ftn1">[1]</a> Gerber’s product, Gerber Graduates Puffs, contains labels depicting vegetables and fruits.  Plaintiffs represent a class of California consumers who allege that these images misled consumers into thinking the products were healthier than they actually are.

Sales Data Alone Insufficient to Support CAFA Jurisdiction in Gerber’s Graduates Puffs Labeling Case

In Gyorke-Takatri v. Nestle USA, Inc., the United States District Court for the Northern District of California held that parties in a class action seeking to r

Sales Data Alone Insufficient to Support CAFA Jurisdiction in Gerber’s Graduates Puffs Labeling Case

On November 10, the federal Food and Drug Administration (FDA) announced that it is seeking public comments on use of the term “natural” on food labeling. FDA, “Natural” on Food Labeling (Nov. 10, 2015). The agency explained that its actions were prompted by the “changing landscape of food ingredients and production, and in direct response to consumers who have requested that the FDA explore the use of the term ‘natural.’” The announcement came as a surprise since FDA had previously declined requests from consumers, the food industry, and federal judges to define the term.

In re Lumber Liquidators Chinese Laminate Litigation

Maxus Energy Corporation

In re Hydroxycut Personal Injury and Class Action Litigation

Los Angeles World Airport (LAWA)

Environmental Law Foundation v. Beech-Nut Nutrition Corp., et al

Fitbit Force Recall 

People of the State of California v. The Coca-Cola Company

Seagate Technology LLC

Clif Bar, Inc.

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Drawing on his considerable experience in environmental health, William (Bill) focuses his practice on environmental and consumer protection law, with an emphasis on climate-related goals and claims, hazardous substances, mass torts, and consumer product safety.

William Tarantino

Drawing on his considerable experience in environmental health, William (Bill) focuses his practice on environmental and consumer protection law, with an emphasis on hazardous substances, mass torts, and consumer product safety.

William F. Tarantino

FDA Requests Public Comments on “Natural” Food Labeling

On November 10, the federal Food and Drug Administration (FDA) announced that it is seeking public comments on use of the term “natural” on food labeling. FDA, 

FDA Requests Public Comments on “Natural” Food Labeling

An Illinois federal judge recently certified a class of consumers who allege that Sturm Foods and its parent company Treehouse Foods Inc. marketed their Grove Square Coffee pods for use in Keurig Inc. brewers—and designed them to mimic Keurig’s “K-Cups” that yield fresh coffee—but hid the fact that they were 95% instant coffee by using the terms “soluble and microground” on the package labels.  Suchanek et al. v. Sturm Foods Inc. et al., No. 3:11-cv-00565.  This class includes consumers who bought Grove Square Coffee products in Alabama, California, Illinois, New Jersey, New York, North and South Carolina, and Tennessee.This decision comes after the previously assigned district court judge (Judge G. Patrick Murphy (Ret.)) sided with Strum on class certification and summary judgment and dismissed the suit.  Judge Murphy held that the plaintiffs failed to show that every class member has been harmed by Sturm’s alleged mislabeling or deception.  He noted that the plaintiffs may have been motivated to buy Grove Square Coffee because of its price point, the desire to try new things, or a host of other factors.  On appeal, the Seventh Circuit disagreed, finding that factual disputes about the packaging called for a trial rather than summary judgment.  In addition, the Seventh Circuit held that the class certification commonality requirement was satisfied because the question of whether the packaging was likely to mislead a reasonable consumer applied to every class member.On remand, the case was re-assigned to Judge Nancy J. Rosenstengel who granted the plaintiffs’ motion for class certification.  Judge Rosenstengel found that commonality and typicality were met because plaintiffs claimed that they would not have purchased Grove Square Coffee pods, or paid as much as they did, but for the misleading packaging.  She also ruled that the plaintiffs presented a viable damages model based on a full-refund theory.  Specifically, Judge Rosenstengel noted that there was “plenty of evidence in the record suggesting that consumers would not have purchased GSC but for its deceptive labeling that created and/or failed to correct the misimpression that GSC was premium, ground coffee.”Moreover, even though Sturm had modified the language on the labels during the class period to say “instant and microground,” Judge Rosenstengel found that the class properly included consumers who purchased after the label change because the plaintiffs provided evidence showing that consumers continued to complain about being misled after the change took place.

Consumers Win Class Certification in Sturm Foods’ Grove Square Coffee Pod Suit

An Illinois federal judge recently certified a class of consumers who allege that Sturm Foods and its parent company Treehouse Foods Inc. marketed their Grove S

Consumers Win Class Certification in Sturm Foods’ Grove Square Coffee Pod Suit

On November 2, 2015, Judge Alsup of the Northern District of California dismissed a consumer class action against food manufacturer Plum Organics for failure to state a claim. In Workman et al. v. Plum Inc., D/B/A Plum Organics, Case No. C 15-02568, the putative class alleged that Plum Organics’ Mighty 4® puree pouches and fruit bars were deceptive because their labels showed pictures of pumpkin, pomegranate, and other ingredients that were not the products’ most prominent ingredients. The plaintiffs argued that this allegedly deceptive advertising was a violation of the California Consumer Legal Remedies Action, Section 1750, and the California Business and Professions Code, Section 17200. Plum Organics moved to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6), lack of standing, and failure to plead with particularity as required by Fed. R. Civ. P. 9.Judge Alsup applied a “reasonable consumer test” to hold that the plaintiffs’ allegations did not amount to a plausible claim, as required by Ashcroft v. Iqbal, 556 U.S. 662 (2009). The operative question was whether members of the public are likely to be deceived by the product at issue. He found that a reasonable consumer would not be deceived by the labels at issue. For one, there was no misrepresentation: the food items pictured on the label were ingredients in the products. Moreover:<blockquote>In contrast to plaintiff’s assertions, a reasonable consumer would simply not view pictures on the packaging of a puree pouch or box of fruit bars and assume that the size of the items pictured directly correlated with their predominance in the blend. One can hardly walk down the aisles of a supermarket without viewing large pictures depicting vegetable or fruit flavors, when the products themselves are largely made up of a different base ingredient. Every reasonable shopper knows that the devil is in the details. Moreover, any potential ambiguity could be resolved by the back panel of the products, which listed all ingredients in order of predominance, as required by the FDA.</blockquote>The take-aways from this holding may be critical to food-labeling matters: (1) deception claims are still subject to dismissal on the pleadings and (2) the “reasonable consumer test” assumes that a reasonable shopper would not rely on pictures on the front of product packaging without reading the ingredient list. The latter finding may be especially useful in disposing of food‑labeling litigation at the outset. Indeed, Judge Alsup granted a complete dismissal, without leave to amend, since “the labels at issue are not deceptive and the labels themselves cannot be changed by a new complaint.”Read more about the “reasonable consumer test” on our September 14th post on <a href="http://www.privatesurgeongeneral.com/2012/09/14/are-reasonable-consumers-free-to-ignore-ingredient-lists/">Williams v. Gerber Products Co</a>.

False Advertising Suit Regarding Plum Organics Mighty 4 Puree Pouches Dismissed

On November 2, 2015, Judge Alsup of the Northern District of California dismissed a consumer class action against food manufacturer Plum Organics for failure to

False Advertising Suit Regarding Plum Organics Mighty 4 Puree Pouches Dismissed

The flurry of food mislabeling class actions filed in California federal courts has recently come to a halt under the U.S. Supreme Court’s holding in Comcast v. Beherend. Comcast requires that putative class action plaintiffs present a damages model tied to their theory of liability. District courts in food mislabeling cases have limited plaintiffs’ recovery to price premium: the difference between the product as labeled and the product as received. But plaintiffs have yet to present a damages model that controls for factors other than misbranding that impact price. As a result, courts have denied certification of a damages class.Mislabeling plaintiffs are now searching for a new theory that would allow them to bypass price premium. Nonrestitutionary disgorgement based on a claim of unjust enrichment has become the theory de jure. These plaintiffs allege that proof of price premium is unnecessary for this claim, and courts can award whatever remedy they deem is warranted.Courts aren’t buying it. For example, in a series of three mislabeling actions against Nestlé decided in early July, Trazo v. Nestlé USA, Inc., Coffey v. Nestlé USA, Inc., Belli v. Nestlé USA, Inc., Magistrate Judge Paul S. Grewal permitted plaintiffs to pursue unjust enrichment, but precluded them from seeking nonrestitutionary disgorgement under that theory, holding that “nonrestitutionary disgorgement is not the appropriate remedy for an unjust enrichment/quasi-contract claim based on alleged mislabeling of a consumer product.” As the court explained:The nonrestitutionary disgorgement remedy which Trazo seeks would require Nestlé “to surrender . . . all profits earned as a result of [the alleged] unfair business practice regardless of whether those profits represent money taken directly from persons who were victims of the unfair practice.” Yet, Trazo’s amended complaint specifically sought restitution, “a remedy whose purpose is ‘to restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.’” “The proper measure of restitution in a mislabeling case is the amount necessary to compensate the purchaser for the difference between a product as labeled and the product as received,” not the full purchase price or all profits. “There is no reason to go beyond the price premium, and doing so would result in a windfall to plaintiff.”Trazo, No. 5:12-CV-02272-PSG (citations omitted).Judge Orrick reached the same conclusion in Khasin v. R.C. Bigelow, Case No. 12-cv-02204-WHO. In Khasin, Judge Orrick rejected the plaintiff’s demand for discovery on the defendant’s profits and costs to support a claim for unjust enrichment. Unjust enrichment, Judge Orrick held, does not entitle the plaintiff to a nonrestitutionary disgorgement remedy. As the court explained, “[t]he law is clear in this District that ‘[t]he proper measure of restitution in a mislabeling case is the amount necessary to compensate the purchaser for the difference between a product as labeled and the product as received, not the full purchase price or all profits.’”Relying on Judge Grewal’s orders in the Nestlé mislabeling cases, Judge Orrick held that, because the plaintiff was not entitled to nonrestitutionary disgorgement of profits, he was not entitled to discovery on this issue.Judges Grewal and Orrick’s decisions confirm what many mislabeling courts have already held: the proper measure of damages in a mislabeling class action is limited to price premium. This is true regardless of the claim or theory of recovery. Plaintiffs’ attempt to bypass the careful calculations required to prove price premium under Comcast have thus far failed to gain traction.

“Food” Courts Confirm That Price Premium Is the Proper Measure of Damages in Misbranding Cases

The flurry of food mislabeling class actions filed in California federal courts has recently come to a halt under the U.S. Supreme Court’s holding in Comcast v.

“Food” Courts Confirm That Price Premium Is the Proper Measure of Damages in Misbranding Cases

A recent decision from the Southern District of California demonstrates the uphill battle consumer lawsuits face when challenging “handmade” or “handcrafted” labels on alcoholic beverages.  On July 27, 2015, in Nowrouzi et al. v. Maker’s Mark Distillery Inc., Case No. 3:14-cv-02885, U.S. District Judge John A. Houston granted Maker’s Mark’s motion to dismiss plaintiffs’ four causes of action challenging the “handmade” label on its whisky:  (1) false advertising; (2) unfair competition; (3) negligent misrepresentation; and (4) intentional misrepresentation.Plaintiffs’ claims were premised on the argument that Maker’s Mark’s “handmade” label was deceptive because the company’s whisky-making process “involves little to no human supervision, assistance, or involvement” and because its website demonstrates that the company uses a “mechanized and/or automated production process.”  In dismissing plaintiffs’ claims, the court relied on two recent decisions addressing similar claims:  the “handmade” label on Maker’s Mark’s bourbon (Salters v. Beam Suntory, Inc., No. 14-cv-659, 2015 WL 2124939 (N.D. Fla. May 1, 2015); and the “handmade” label on Tito’s Vodka (Hofman v. Fifth Generation, Inc., Case No. 14-cv-2569 JM (JLB), Dkt. No. 15 (S.D. Cal. March 18, 2015).UCL and FAL ClaimsMaker’s Mark made two main arguments for dismissal of the UCL and FAL claims.  First, it argued that the Tobacco Tax and Trade Bureau’s (TTB) review and pre-approval process for distilled spirit labels ensures compliance with applicable laws and regulations, thus bringing the company’s label within the safe harbor doctrine.  Judge Houston, however, disagreed, and followed a recent decision in a similar case, Hofman v. Fifth Generation, Inc., Case No. 14-cv-2569 JM (JLB), Dkt. No. 15 (S.D. Cal. March 18, 2015).  In Hofman, the court ruled that the safe harbor decision did not cover TTB’s decision in investigating and approving the defendant’s “handmade” label because it was an informal agency decision that was not as stringent as the USDA or FDA processes.Second, Maker’s Mark argued that plaintiffs failed to plausibly allege the requisite likelihood of deception.  Specifically, Maker’s Mark argued that the “handmade” claim could not mislead a reasonable consumer because it was not a specific or measurable claim and that plaintiffs’ proffered interpretation of “handmade” failed the Ninth Circuit’s common sense approach.  Maker’s Mark noted that its label describes the actual production process and invites consumers to visit the website for more information, where consumers can view a video about the production process.  The court agreed, finding that: “‘handmade’ cannot reasonably be interpreted as meaning literally by hand nor that a reasonable consumer would understand the term to mean no equipment or automated process was used to manufacture the whisky.”Negligent and Intentional Misrepresentation ClaimsPlaintiffs abandoned their negligent misrepresentation claim.  As for the intentional misrepresentation claim, Maker’s Mark moved to dismiss this claim on the grounds that a reasonable consumer would not find the challenged statements misleading and that plaintiffs failed to allege facts supporting a finding that the company had the requisite intent to deceive.In dismissing these claims, the court was persuaded by the reasoning in Salters, where the court concluded that no reasonable person could understand the term “handmade” to mean “literally by hand” and that “substantial equipment was not used.”  The Salters court also noted that if the statement was “some ill-defined effort to glom onto a trend toward products like craft beer,” it merely constituted puffery that could not support an intentional misrepresentation claim.Judge Houston agreed with Maker’s Mark that it was not premature to decide whether a reasonable consumer would have been deceived, and concluded that the intent issue was not dependent on consumers visiting the website because “plaintiffs cannot plausibly contend defendant intends to deceive consumers about the nature of its processes when its label clearly describes the process and points consumers to its website.”  Finding that this claim could not possibly be cured by pleading additional facts, Judge Houston dismissed the claim with prejudice.

A Handmade Dismissal for Maker’s Mark

A recent decision from the Southern District of California demonstrates the uphill battle consumer lawsuits face when challenging “handmade” or “handcrafted” la