In the world of class action lawsuits, damages calculations and whether or not prejudgment interest accrues can become high-stakes battlegrounds. These issues are highlighted in the recent Ninth Circuit decision in Montera v. Premier Nutrition Corp. FKA Joint Juice, Inc., Nos. 22-16375, 22-16622, slip op. (9th Cir. Aug. 6, 2024). The case had been appealed by both parties from the Northern District of California in one of the few class actions to go to jury trial. (N.D. Cal. Case No. 3:16-cv-06980-RS.) The plaintiff asserted that “Joint Juice” was misleadingly labeled under New York’s General Business Law (“GBL”) §§ 349 and 350 because the product did not work to improve joint function or to remediate joint pain. The jury awarded the class of consumers full refund damages totaling $1,488,078.49 based on 166,249 units of product sold. The plaintiff then sought statutory damages in the amount of $91 million. This figure was derived by adding the $50 statutory penalty for GBL § 349 violations with the $500 statutory penalty for GBL § 350 violations, multiplied by the 166,249 units sold. The plaintiff also sought prejudgment interest totaling $4,583,004.90 – again far dwarfing the amount of actual damages. The District Court ultimately reduced the award of statutory damages on due process grounds to $50 per violation for a total of $8,312,450 plus prejudgment interest, and an appeal to the Ninth Circuit followed.Continue Reading Ninth Circuit Issues Long-Awaited Montera Decision Applying New York General Business Law §§ 349 and 350, Confirming “Per Violation” Damages but Striking Prejudgment Interest
Abby Meyer
Abby Meyer is a partner in the Business Trial Practice Group a member of the firm’s Food & Beverage team.
What Must the Consumer Read on Product Packaging? The Answer is Anything but Black-and-White Following the Ninth Circuit’s Whiteside Decision
The Ninth Circuit’s recent Whiteside decision complicates the question of when information on the back of a product’s packaging can be used to clarify information on the front of the packaging. As a result, the bar for using back of pack information at the motion to dismiss phase seems to once again be raised.Continue Reading What Must the Consumer Read on Product Packaging? The Answer is Anything but Black-and-White Following the Ninth Circuit’s Whiteside Decision
The Ninth Circuit Declares that Ambiguity can be Cured with Back Label
False advertising and labeling consumer class actions filed against consumer packaged goods companies have surged in the last few years, with more than 300 new cases filed each year since 2021. More than a quarter of these have been filed in California federal courts. A key question in many of these cases is what information the reasonable consumer would read and rely on from the product packaging. In June 2023, the Ninth Circuit weighed in on this topic, providing helpful guidance to companies.Continue Reading The Ninth Circuit Declares that Ambiguity can be Cured with Back Label
FDA Boosts Protein Preemption Defense
Recent FDA guidance for determining and declaring the protein grams in a serving has helped muscle a class action out of federal court.
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Are Flavor Cases Fizzling? Two More Courts Grant Motions to Dismiss
Since 2019, a staggering number of “flavor” lawsuits have been filed, with dozens of putative class actions filed in a single month and more than 100 in 2021 alone. While some lawyers appear to have an insatiable appetite for filing these suits, courts appear to find them mostly unpalatable. The complaints allege that packaging on food and beverage items is false and misleading because the challenged products do not contain certain ingredients or because the flavor is achieved by using ingredients other than or in addition to what consumers “expect” to be the source of the flavor. Manufacturers of plant and dairy milks, yogurts, ice creams, creamers, cereals, chips, cakes, cookies and brownies have faced such claims. Vanilla, lime, butter, milk, strawberry, smoked, chocolate and fudge flavors have all been dragged into court. All of this litigation begs the question – will the gluttonous plaintiff’s class action counsel ever be satiated? It seems that, by and large, the federal courts are not swallowing the case theme. Two back-to-back decisions from the Southern District of New York, Boswell v. Bimbo Bakeries USA, Inc. and Kamara v. Pepperidge Farm, Inc., chucked flavor claims on the basis that a reasonable consumer could not be misled by the product labels. In Boswell, the court dismissed plaintiff’s claims that she was misled by the packaging on Entenmann’s “All Butter Loaf Cake.” The district court noted that this was “the latest in a long string of putative class actions brought by the same lawyer” and identified six prior cases that had been dismissed.
Continue Reading Are Flavor Cases Fizzling? Two More Courts Grant Motions to Dismiss
The Scoop on All that Vanilla Flavor Litigation
This article was originally published on Food Navigator on January 13, 2021.
If your company sells any vanilla-flavored food or beverage product, then you are probably aware of the innumerable class action cases that have been filed over the last 18 months attacking these products – 67 cases by our count. Here, we trace the history of this litigation and the outcomes achieved to date.
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It’s Not Pop Secret, Ninth Circuit Affirms that Plaintiff Didn’t Have a Leg to Stand On
The Ninth Circuit’s recent decision in McGee v. S-L Snacks Nat’l,., confirms that nutrition fact panel and ingredient disclosures provide information that can be used to support a motion to dismiss and remain important tools for defeating consumer class actions.
Continue Reading It’s Not Pop Secret, Ninth Circuit Affirms that Plaintiff Didn’t Have a Leg to Stand On
No Reason to Blush
*This post originally appeared as an article in the August 2020 edition of Happi Magazine.
Beauty companies face an uptick in alleged false-labeling class actions. Whether the actions are justified or vexatious, one thing is certain: they are expensive to defend. By keeping the following labeling-related litigation trends in mind when considering and reviewing product labels and marketing, beauty companies can, hopefully, avoid becoming a litigation target.
Continue Reading No Reason to Blush
Avoiding Formation Challenges To Your Arbitration Clause With Consumers
In prior posts (here and here), we raised questions that companies may want to ask when evaluating their arbitration clauses and making changes to them. In this third installment, we look at what companies should be doing to ensure that they can present proof of their arbitration agreements if ever required to do so in court. Your company may have a perfect arbitration clause, but if a customer claims never to have signed the arbitration agreement or not to have seen the website providing notice of the terms and conditions, you will have to present evidence that the customer is wrong.
Continue Reading Avoiding Formation Challenges To Your Arbitration Clause With Consumers
Questions To Ask When Changing Your Arbitration Clause
In a prior post (here), we highlighted some questions that companies may want to ask when evaluating whether their arbitration clauses are enforceable. If changes need to be made to those clauses, then companies should consider how to implement those changes so as to ensure those are enforceable too. The following is what you should be thinking about and asking.
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An Arbitration Clause Health Check
Arbitration clauses with class action waivers remain one of the most effective tools that consumer-facing companies can employ to fend off consumer class action litigation. Yet many companies stumble both in getting their customers to agree to the arbitration clause and in drafting a clause that captures all claims that they might face. As we continue to work, shop, and engage with the world from home, companies should perform a quick “health-check” of their arbitration clause, asking themselves at least the following questions:
Continue Reading An Arbitration Clause Health Check