State consumer-protection statutes frequently authorize claims for class-wide injunctive relief; notably, California courts have fashioned a similar remedy allowing for injunctions on behalf of the “general public.” Plaintiffs bringing class actions alleging that a company’s advertising is deceptive or misleading frequently tack on to their damages claims a request to enjoin the disputed marketing—sometimes to halt allegedly false advertising and sometimes to require the company to disclose some allegedly concealed fact about its product or service. These types of injunction claims are especially common in cases against food and beverage companies. But it is difficult to square these injunction claims with Article III standing requirements, and companies defending against class actions in federal court should be aware of the potential for seeking dismissal of requests for injunctive relief on standing grounds.Continue Reading The importance of scrutinizing standing to seek injunctive relief in defending or settling false-advertising suits
The U.S. District Court for the Central District of California recently issued an interesting decision (pdf) denying class certification in 15 consolidated consumer class actions against the maker of 5-hour ENERGY drinks.
Continue Reading Court refuses to certify 5-hour Energy false-advertising class action for lack of common proof
What’s the difference between claiming that a food product is improperly certified as organic and claiming that the producer was properly certified but the product isn’t really organic? A unanimous California Supreme Court held in Quesada v. Herb Thyme Farms, Inc. (pdf) that state courts and juries should figure out the answer. That ruling opens the door to state-law actions that challenge food producers’ compliance with the federal organic food product certification and labeling scheme, so long as the claims don’t take issue with the original certification decision. The decision revived a consumer class action alleging that a food…
Continue Reading California Supreme Court Holds That Federal Organic Food Labeling Regime Does Not Preempt Claims of “Intentional” Mislabeling
The California Supreme Court has a reputation for hostility to arbitration, especially in the consumers and employment context. Much of the arbitration docket of the United States Supreme Court over the past 30 years has involved reversals of California Supreme Court decisions refusing to enforce arbitration agreements, most recently (and perhaps most notably) in AT&T Mobility v. Concepcion (in which the authors were counsel). Even when seemingly compelled to enforce an arbitration provision in the face of recent U.S. Supreme Court authority, the California court has often found a way to carve out some exception to arbitration in the particular case or to offer suggestions to plaintiffs seeking to avoid arbitration in a future case. A prime example is the 2014 decision in Iskanian v. CLS Transportation, which exempted from arbitration all wage-and-hour civil-penalty claims under the Private Attorney General Act.
The decision in Sanchez v. Valencia Holding Co. (pdf) represents a welcome break from this pattern, upholding an arbitration agreement against an array of unconscionability challenges without finding it necessary to sever even a single clause to render the agreement enforceable. Although every point decided in Sanchez is consistent with recent U.S. Supreme Court authority applying the Federal Arbitration Act, however, the opinion’s emphasis on the specific factual setting may seed further efforts to evade arbitration agreements . As so often is the case, the devil is often in the details.Continue Reading Man Bites Dog: California Supreme Court unanimously rejects unconscionability challenge to consumer arbitration provision
Plaintiffs’ lawyers love to challenge products labeled as “natural,” with hundreds of false advertising class actions filed in just the last few years. Recently, in Astiana v. Hain Celestial (pdf), the Ninth Circuit reversed the dismissal of one such class action, and in doing so, addressed some key recurring arguments made at the pleading stage in litigation over “natural” labeling.
The Hain Celestial Group makes moisturizing lotion, deodorant, shampoo, conditioner, and other cosmetics products. Hain labels these products “All Natural,” “Pure Natural,” or “Pure, Natural & Organic.” A number of named plaintiffs, including Skye Astiana, filed a putative nationwide class…
Continue Reading Ninth Circuit Upholds FDA’s Primary Jurisdiction Over “Natural” Labeling On Cosmetics But Orders Stay Rather Than Dismissal
As readers of this blog are well aware, manufacturers and retailers have faced a tidal wave of consumer class actions alleging false advertising in recent years. In these cases, the plaintiffs bemoan how they were deceived by the labels or advertising of all kinds of products – from yogurt to waffles to dog food to shampoo. But no matter how implausible these claims may be, judges often allow them to survive motions to dismiss (often multiple times), which inevitably ratchets up the pressure to settle. For companies that stick it out and take discovery of the named plaintiff, however, there…
Continue Reading Food Court Grants Summary Judgment In Class Action Targeting “No Sugar Added” Label
After the oral argument in POM Wonderful LLC v. Coca-Cola Co. (pdf), No. 12-761, the Supreme Court appeared all but certain to allow competitors to sue for false advertising under the Lanham Act over labels of FDA-regulated food products. Food manufactures have been waiting to see just how broad the ruling would be and whether it would affect the onslaught of consumer class actions challenging food and beverage labels. The wait is over, and the POM v. Coke decision, while effecting a dramatic change in competitor actions, should have little impact on consumer class actions.
As described by the Supreme…
Continue Reading POM v. Coke Does Not Alter The Landscape for Food False Advertising Class Actions
The plaintiffs’ bar continues to file consumer class actions challenging food and beverage labels en masse, especially in the Northern District of California—also known as the “Food Court.” One particular line of cases—at least 52 class actions, at last count—targets companies selling products containing evaporated cane juice. The battle over evaporated cane juice has become the latest front in the war over whether federal courts should apply the primary-jurisdiction doctrine and dismiss or stay food class actions while awaiting guidance from the federal Food and Drug Administration.
In these cases, plaintiffs allege that the term “evaporated cane…
Continue Reading Primary Jurisdiction is Gaining Some Weight in the Food Court
Can you have a class action if you can’t figure out who’s in the proposed class? According to many in the plaintiffs’ bar, the answer is “yes.” But as we have discussed in prior blog posts, there is an emerging consensus to the contrary. Most courts agree that plaintiffs in consumer class actions have the burden of proving that members of the putative class can be identified (i.e., that the class is ascertainable). And most of those courts have held that it is not sufficient for plaintiffs to rely upon affidavits by would-be class members who…
Continue Reading More Thoughts On Ascertainability And Why It Matters In Deciding Whether To Certify A Class Action
We previously wrote about the Third Circuit’s decision in Carrera v. Bayer Corp., which reversed a district court’s class-certification order because there was no reliable way to ascertain class membership—indeed, no way to identify who was a member of the class aside from a class member’s own say-so. Last week, the full Third Circuit denied (pdf) the plaintiff’s request to rehear the case en banc over the dissent of four judges. The clear message of Carrera is that when plaintiffs file class actions that have no hope of compensating class members for alleged wrongs because the class members can’t be found, courts should refuse to let these actions proceed.
As we discuss below, the denial of rehearing is significant in itself, given the concerted efforts by Carrera and his amici to draw attention to the case. But what might be most significant about this latest set of opinions is what even the dissenting judges did not say.Continue Reading Third Circuit Rejects Effort At End Run Around The Ascertainability Requirement