As the food "misbranding" litigation continues to fill courts' dockets, Judge Lucy H. Koh recently put an end to the two-year battle against Dole's packaged fruit labeling in the Northern District of California. Dole (represented by a team of MoFo litigators led by William Stern) was first successful in decertifying the Rule 23(b)(3) "damages" class, and then won its motion for summary judgment. The case is called Brazil v. Dole Packaged Foods, LLC, No. 12-cv-01831-LHK (N.D. Cal.).
Plaintiff sued Dole in 2012, claiming the label statement "All Natural Fruit" was false and misleading because Dole's products contained citric acid and ascorbic acid. In May 2014, Judge Koh granted certification of a Rule 23(b)(3) "damages" class of California consumers, as well as a Rule 23(b)(2) "injunctive relief" class of nationwide consumers. The case was scheduled for trial in January 2015.
On November 6, 2014, however, the Court granted Dole's motion to decertify the damages class, finding that plaintiff's expert could not calculate the price premium attributable to the statement "All Natural Fruit" through his regression damages model. The model failed Comcast Corp. v. Behrend's requirement that it be consistent with the plaintiff's theory of liability. In this case, that meant that plaintiff's model "must measure only those damages attributable to [Dole's conduct]." The court found that the model failed to control other variables affecting price (such as advertising and prices of competing products), and plaintiff's expert failed to corroborate many of the assumptions he made about non-Dole products' labels. For example:
"if the model is unsure whether the non-Dole products actually made an "All Natural" labeling claim, then how can the Court know whether the price premium the model generates is based on Dole's labeling claim rather than on some other factor? Put simply, it cannot."
Then, on December 8, 2014, the court granted Dole's summary judgment motion, finding that plaintiff had no evidence that a reasonable consumer would be misled by the label. The court found that plaintiff needed some form of extrinsic evidence of deception; the named plaintiff's testimony was not enough. The court also adopted Dole's interpretation of the FDA's "natural" policy, requiring the standard to be based on what is "reasonably to be expected" to be found in food products. Again, plaintiff had no evidence. The court concluded:
"Where, as here, a plaintiff offers one isolated example of deception—i.e., [plaintiff's]—summary judgment must be granted."
The December 8 ruling is notable because it is the first "merits" ruling in the country to decide what the FDA's "natural" policy means. "Natural" class actions have been a favorite of the plaintiffs' bar over the past few years, likely because the FDA declined to define the term, instead offering an ambiguous informal "policy." Judge Koh has made clear that there are no "natural" or "unnatural" ingredients—it depends on what is "reasonably to be expected" to be found in the food product.
Both rulings in Brazil present significant hurdles for plaintiffs in the many other pending "misbranding" class actions. Plaintiffs must present a damages model that can isolate a price premium attributable to the challenged label claim, and they must provide the court with extrinsic evidence that reasonable consumers would be deceived. Neither is a simple task. While these cases are easy to file, and often easy to get past a motion to dismiss, they are turning out to be quite difficult to prove. If other judges follow Judge Koh, plaintiffs' attorneys may soon start looking for a new class action trend.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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