In Brazil v. Dole, No. 14-17480 (9th Cir. Sept. 30, 2016), the United States Court of Appeals for the Ninth Circuit affirmed in part and reversed in part three different orders issued by the U.S. District Court for the Northern District of California. In doing so, the Ninth Circuit (1) confirmed that in order to state a false advertising claim under the unlawful prong of California’s Unfair Competition law, a plaintiff must allege that he relied on the purportedly misleading statements, (2) clarified what types of evidence were sufficient to create an issue of material fact sufficient to defeat summary judgment based on the reasonable consumer standard, and (3) confirmed that, in order to certify a damages class under Rule 23(b)(3), a plaintiff must present a damages model that provides a method of calculating damages using proof common to the class.
Continue Reading Ninth Circuit Confirms Brazil v. Dole Decertification Due to Faulty Damages Model
U.S. Supreme Court Holds California Court of Appeal’s Interpretation of Arbitration Clause Preempted by FAA
In DirecTV v. Imburgia, No. 14-462, 2015 U.S. LEXIS 7999 (December 14, 2015) the United States Supreme Court reversed a California Court of Appeal decision interpreting, and invalidating, an arbitration clause containing a class arbitration waiver, holding that the Court of Appeal’s interpretation was preempted by the Federal Arbitration Act (the “FAA”). The Court then ordered the Court of Appeal to enforce the arbitration agreement at issue. The Court’s opinion, which was decided 6-3 with two dissenting opinions, reinforces earlier Supreme Court precedent holding that state courts cannot avoid the preemptive effect of the FAA by applying facially neutral state contract principles in a way that disfavors arbitration.
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California Court of Appeal Lowers the Bar on Ascertainability Requirement in Consumer Class Actions
In Aguirre v. Amscan Holdings, Inc., Case No. 073059, 2015 Cal. App. LEXIS 214 (Cal. Ct. App. Feb. 11, 2015), a California Court of Appeal reversed the denial of certification of a putative class alleging violation of Civil Code Section 1747.08 of California’s Song Beverly Credit Card Act. The trial court had denied certification because the plaintiff did not show the ability to identify, locate, and notify class members. The court of appeal rejected that standard, and found that the class was, in fact, ascertainable because (1) the class definition contained a set of “common characteristics” that would allow class members to self-identify themselves, and (2) because the plaintiff had suggested an objective method for identifying class members. This decision clarifies the standard for ascertainability in California state court class actions.
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Dole Defeats “All Natural Claims” for Sweet Victory
On December 8, 2014, U.S. District Court Judge Lucy Koh of the U.S. District Court for the Northern District of California granted defendant Dole’s motion for summary judgment of the plaintiff’s false labeling claims in Brazil v. Dole Packaged Foods, LLC. The court granted summary judgment on the ground that the plaintiff had failed to present sufficient evidence that the challenged “All Natural Fruit” label was likely to mislead reasonable consumers. As one of few summary judgment opinions in “All Natural” cases, this opinion provides valuable insight into issues that arise on the merits of such claims.
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Faulty Damages Model Leads to Partial Decertification
On November 6, 2014, U.S. District Court Judge Lucy Koh of the U.S. District Court for the Northern District of California granted in part defendant Dole’s motion for decertification in Brazil v. Dole Packaged Foods, LLC. In May of 2014, the court had granted certification of classes under both Federal Rule of Civil Procedure 23(b)(2) and Rule 23(b)(3). In its November 6 opinion, the court decertified the 23(b)(3) damages class because the plaintiff’s damages model failed to satisfy Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), and left certification of the 23(b)(2) injunction class intact. The court’s analysis of the plaintiff’s damages model provides guidance on the weaknesses and pitfalls of using a hedonic regression model to measure damages.
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Courts Still Searching for Sweet Spot in “Evaporated Cane Juice” Cases: Confusion Over Applicability of Primary Jurisdiction to ECJ Claims Continues
May 2014 was an active month for evaporated cane juice (“ECJ”) litigation in the U.S. District Court for the Northern District of California. Six courts issued opinions that involved the application of the primary jurisdiction doctrine to ECJ claims. The primary jurisdiction doctrine allows courts to stay or dismiss a complaint without prejudice, pending the resolution of an issue within the special competence of an administrative agency. Many defendants have moved to dismiss ECJ claims based on this doctrine.
Continue Reading Courts Still Searching for Sweet Spot in “Evaporated Cane Juice” Cases: Confusion Over Applicability of Primary Jurisdiction to ECJ Claims Continues
Sweet(ener) Confusion: Court Divide Over Role of Primary Jurisdiction Doctrine in “Evaporated Cane Juice” Cases Grows
In Swearingen v. Santa Cruz Natural, Inc., No. C 13-04291 (N.D. Cal. April 2, 2014), Judge Illston of the U.S. District Court for the Northern District of California granted defendant’s motion to dismiss based on the primary jurisdiction doctrine. The court held that the determination of the issue of whether the use of the term “evaporated cane juice” violates Food and Drug Administration (“FDA”) regulations is best left to the FDA, and that deference to the FDA is appropriate as the FDA is engaged in active rulemaking on the issue. Judge Illston’s decision demonstrates a growing divide on the application of primary jurisdiction in the “evaporated cane juice” arena.
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Court Issues Sweet Ruling for Plaintiffs in Mislabeling Action – Ignorance That “Evaporated Cane Juice” Is An Added Sugar Not “Implausible”
In Morgan v. Wallaby Yogurt Co., Inc., the U.S. District Court for the Northern District of California denied defendant’s motion to dismiss a class action complaint alleging violations of the UCL, FAL, and CLRA for mislabeling yogurt products, but struck plaintiffs’ prayer for injunctive relief. The Court held that plaintiffs had standing to bring the UCL, FAL, and CLRA claims, as well as standing to prosecute claims for products the plaintiff did not purchase. Morgan provides companies with an insight into the standing threshold for class actions challenging food product labels.
Continue Reading Court Issues Sweet Ruling for Plaintiffs in Mislabeling Action – Ignorance That “Evaporated Cane Juice” Is An Added Sugar Not “Implausible”
Suits Brought by State AGs Alone Not “Mass Actions”: SCOTUS Sides With 4th, 7th, and 9th Circuits in Clarifying CAFA’s Mass Action Requirements
In Mississippi ex rel. Hood v. AU Optronics Corp., No. 12-1036, 2014 U.S. LEXIS 645 (Jan. 14, 2014) the Supreme Court of the United States addressed the circuit split that arose after the 5th Circuit Court of Appeal’s holding in Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008) that a suit brought by the Louisiana Attorney General qualified as a “mass action” under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(11)(B)(i). The Fourth Circuit, Seventh Circuit, and Ninth Circuit all reached the opposite conclusion. The Supreme Court, resolving the split in favor of the Fourth, Seventh, and Ninth Circuits, held that the mass action provision can only be invoked to remove a case where the case is brought by 100 or more named plaintiffs. Lawsuits brought by state attorneys general in which the state is the only named plaintiff do not qualify as “mass actions.”
Continue Reading Suits Brought by State AGs Alone Not “Mass Actions”: SCOTUS Sides With 4th, 7th, and 9th Circuits in Clarifying CAFA’s Mass Action Requirements