In one of the many food labeling cases flooding the dockets of California federal courts, U.S. District Court Judge Edward J. Davila denied certification of two proposed classes of consumers that included potential class members who had purchased products other than the ones purchased by the named plaintiff.  See Major v. Ocean Spray Cranberries, Inc., No. 5:12-cv-3067 (June 10, 2013).  Judge Davila held that the proposed classes were overbroad and that class definition was inappropriate for certification due to lack of typicality under Rule 23 of the Federal Rules of Civil Procedure. 

Plaintiffs challenging food and beverage labels have been aggressively asserting claims and alleging putative classes that include products the plaintiffs have not purchased.  In response, food and beverage manufacturers have challenged at the pleadings stage plaintiffs’ standing to assert claims on behalf of putative class members for products the named plaintiff had not purchased.  These challenges have been met with mixed results. 

This decision is significant in that it severely restricted the scope of potential classes to include only those products purchased by the named plaintiff or plaintiffs.  The decision, however, is not binding on other federal trial courts and the law in this area remains unsettled.          

Factual Background

Plaintiff Noelle Major claimed to have purchased five Ocean Spray products:  (1) Blueberry Juice Cocktail; (2) 100% Juice Cranberry & Pomegranate; (3) Diet Sparkling Pomegranate Blueberry; (4) Light Cranberry; and (5) Ruby Cherry.  Plaintiff alleged that these and other Ocean Spray products contained packaging and labeling that were unlawful, false or misleading.  Specifically, Plaintiff claimed that Ocean Spray made improper:  “no sugar  added” claims; no artificial colors, flavors, or preservatives claims; “healthy” claims; and antioxidant claims.

Plaintiff asserted claims typical of claims made in food labeling lawsuits in California:  (1) violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq.; (2) violation of the California False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500 et. seq.; (3) violation of the California Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750 et seq.; (4) restitution based on unjust enrichment or quasi-contract; (5) breach of warranty in violation of the California Song-Beverly Act, Cal. Civ. Code § 1790 et seq.; and (6) breach of warranty in violation of the Magnuson-Moss Act, 15 U.S.C. § 2301. 

The Court considered two different proposed classes – the class alleged in Plaintiff’s pleading and the class Plaintiff sought to be certified.  In Plaintiff’s pleading, she alleged a class of persons based on the purported misrepresentations.  For example, Plaintiff alleged a class that included all persons who purchased products during the class period that were represented to contain no artificial colors, flavors, or preservatives but which contained artificial flavors, colors, or preservatives.  Plaintiff, however, then sought certification of a class of persons who purchased products from four juice product lines from which Plaintiff purchased products not just the particular flavors within the product lines that were purchased by Plaintiff.  Thus, the class Plaintiff sought to certify included many different flavors of products than the ones purchased by Plaintiff. 

The Court held that both classes failed due to lack of typicality.  The principle reason cited for that finding was that both proposed classes included products not purchased by Plaintiff.  The Court stated:  “In the context of cases involving several products at issue…district courts have held that the typicality requirement has not been met where the ‘named plaintiff … purchased a different product than that purchased by unnamed plaintiffs.”  Accordingly, “[t]he primary reason behind the Court’s determination that the typicality requirement has not been met is that Plaintiff’s proposed classes are so broad and indefinite that they encompass products that she herself did not purchase.”  The Court noted that Plaintiff purchased just five products. 

The Court noted that Plaintiff failed to link any of the unpurchased flavors to any alleged misbranding issue in the case.  Plaintiff also apparently failed to show that the labels and nutrition claims on different flavors were not unique to differently-flavored products.  As an example, the Court noted that Plaintiff’s claim as to blueberry-flavored sparkling juice was specific to blueberry-related representations.  As a result, it was unclear how those representations could be linked to differently-flavored sparkling juice.   

Implications

While the Ocean Spray decision represents a favorable outcome for the food and beverage industry, businesses should operate with caution as these areas of law are constantly evolving and it is unclear the extent to which other trial and appellate courts will reach the same result.  It is important for food and beverage manufacturers, distributers and retailers to keep abreast of the steadily evolving law in these areas.   

 

On Monday June 3, the United States Supreme Court issued a ruling on the case of Sears, Roebuck & Co. v. Butler, sending the issue of class certification back to the Seventh Circuit Court of Appeals in light of the Court’s recent ruling in Comcast Corp v. Behrend.  The Supreme Court granted Sears, Roebuck & Co.’s (“Sears”) petition for review, vacated the appellate court judgment, and remanded the case to the Seventh Circuit.  The Court’s action closely resembles that taken in another washing machine case, Whirlpool Corp v. Glazer, which the Court remanded to the Sixth Circuit on April 1, 2013.

District Court Ruling

The class action at issue involves alleged defects in Kenmore-brand Sears washing machines which were purchased between 2001 and 2004.  See Seventh Circuit Slip Op. at 1.  The machines allegedly suffered from two defects: a defect causing mold, and another causing the machine to stop at inopportune times.  Id.  With respect to the mold claim, Plaintiffs alleged that the low volume of water used in the machine, and the low temperature of the water as compared with a top loading machine, lead to the accumulation of mold.  However, the manufacturer had made some modifications to the Kenmore models, resulting in different defects in different machines, and thus, the individuals who made up the class of plaintiffs each suffered from different damages.  Id. at 2.  The district court found this was insufficient to show predominance, and denied the class certification motion for the class complaining of mold defects.  Id.  However, the court did grant certification of the class complaining of sudden stoppage.  Id.

The Seventh Circuit Court of Appeals’ Ruling

Following the district court’s ruling, Larry Butler (“Butler”), the Plaintiff, appealed to the Seventh Circuit, which accepted the case to “clarify the concept of ‘predominance’ in class action litigation.”  Id.  The court found that the basic question in the litigation, whether the machines were defective in permitting mold to accumulate was “common to the entire mold class, although the answer may vary with differences in design.”  Id. at 2.  The court found that the parties were likely to agree on a schedule of damages based on the cost of fixing or replacing the machines.  Furthermore, the court found that the class action procedure would prove a far more efficient method for litigating the case than multiple individual lawsuits.  Id.  As such, the court found that the machine stoppage was a proper question for certification, as the problem was common to users, and only the damages for each individual user differed, so litigating the claims together would prove far more efficient.  Id.  Therefore, the court reversed the district court’s denial of class certification on the mold claim, and affirmed the court’s certification on the stoppage claim.  Id at 4.

The Supreme Court’s Certification and Implications

The Supreme Court granted Sears’ petition for review and remanded the case to the Seventh Circuit.  Sears argued that the Seventh Circuit had failed to clarify the concept of predominance, and instead, created a standard flatly at odds with Supreme Court precedence.  Butler, on behalf of the class, argued that the Kenmore washers were sufficiently uniform for class certification, and that review was inappropriate from a procedural perspective, since the district court had yet to certify the mold claim.  Sears, however, argued that the case had not been remanded to the district court, however, because the Seventh Circuit opinion never included such an order.

The Supreme Court ultimately granted Sears’ petition for review, vacated the Seventh Circuit’s opinion and remanded the case for further review.  In doing so, the Supreme Court implicitly chided the Seventh Circuit for failing to follow the “rigorous analysis” of the predicate factors necessary to obtain class certification, something which the Seventh Circuit will need to undertake upon remand.  Similarly, the Supreme Court’s ruling in Comcast found that a plaintiff needed to propose a method to calculate class-wide damages, which will inevitably lead to additional scrutiny in this case, due to the broad range of damages allegedly suffered by the individuals within the class.