A recent case arising out of the Northern District of California provides a notable contrast between class actions in the United States and those in Canada when it comes to the burden of proof for representative plaintiffs.

Background

In Khasin v. The Hershey Co., Case No. 5:12-CV-01862-EJD, the Hershey Company (“Hersey”) was granted partial summary judgment in a putative class action. The plaintiff had alleged that Hershey’s representations concerning some of its products were unlawful and misleading, so as to amount to disbranding and deception. More specifically, the plaintiff alleged certain representations concerning antioxidants, nutrients, sugar and portion serving size on Hershey's advertisements, packaging and online website. The plaintiff alleged that he had relied on the Hershey website when he purchased its products.

Hershey sought summary judgment on the plaintiff’s misrepresentation claims, arguing that the plaintiff did not actually rely on such representations. The plaintiff argued that he need not prove actual reliance under California’s Unfair Competition Law, but also that summary judgment cannot be decided before ruling on class certification.

The court noted that because Hershey was seeking summary judgment, it was choosing to waive the potential protection afforded by an early resolution on class certification. The court found that no prejudice would result to class members or to the plaintiff from a pre-certification summary judgment; putative class members would remain able to sue Hershey.

The court granted partial summary judgment in favour of Hershey, as the plaintiff testified he had not even viewed Hershey’s website and off-label advertising and that he did not rely on a majority of Hershey’s labels. The plaintiff further testified that he did not purchase any of Hershey’s products as a result of relying on deceptive advertising, except for those representations regarding antioxidants.

Contrast With Canada

This case provides an interesting contrast to class actions in Canada, specifically the standard of the burden of proof for class representatives in Canada. While the Northern District of California focused on whether the plaintiff had actually seen the majority of the alleged misrepresentations and had, in fact, relied on such misrepresentations, Canadian courts are less concerned with the connection between the plaintiff representative and the defendant’s alleged wrongdoing. Canadian courts take a more relaxed approach than those courts south of the border when assessing whether a plaintiff representative has satisfied the burden of proof.  Often times, the plaintiff representative has not even been directly wronged by the acts as alleged against the defendant(s).

Currently, given that regulators and consumers scrutinize the accuracy of product labelling more than ever, and given that courts seem to be less concerned with whether a plaintiff representative has, in fact, been wronged by such acts, there appears to be no shortage of consumers willing to take food, beverage and care product manufacturers to task over product labels. Accordingly, Canadian manufacturers ought to be mindful to implement strategies that can mitigate risk against such claims. Some tips for best practices include the following:

  • Know the law in terms of labelling requirements, and what regulations and guidelines apply to your product;
  • Use marketing research and surveys to establish how the average consumer might interpret your label; and
  • Keep on top of current research, studies and any recent litigation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.