PA Supreme Court Issues Important Strict Liability Decision

Pennsylvania has long been a jurisdiction which followed unique, sometimes archaic, rules regarding strict product liability. The state Supreme Court recently issued a significant ruling on product liability law in the Commonwealth, perhaps not surprisingly forging its own path going forward. See Tincher et al. v. Omega Flex Inc., No.17 MAP 2013 (Pa. 11/19/14). Disclosure: your humble blogger assisted in one of the amicus briefs.

The decision came in a complex 130 page opinion; in sum, the opinion gives both plaintiff and defendants some of what they sought, and neither side of the bar all. The Court offered a lengthy survey of the history of tort law in Pennsylvania, as a foundation for its key holdings:

1. declined to adopt the Third Restatement treatment of product defect, opting to maintain a strict liability doctrine rooted in the now half-century old Second Restatement, with a nod to incremental future changes in the common law model.  There was clearly a process-based component to the reasoning, as the Chief Justice noted: “It is difficult to imagine a modern court simply adopting something so broad-based and legislative in character as an outside organization’s Restatement of the Law, even if it is the product of an esteemed organization.”

2. unanimously (believe it or not) overruled the infamous Azzarello v. Black Brothers Company, 391 A.2d 1020 (Pa. 1978), case and its unfair and unworkable attempts to distinguish between strict liability and negligence.

In the underlying case, the defendant was hit with a $1 million jury verdict in connection with allegation about defective steel tubing. According to the plaintiffs, the product had been affected by a lightning strike, and caused their house to burn down.

The defendant's appeal argued in part for the adoption of the Third Restatement, under which a plaintiff alleging a design defect must show that the manufacturer could and should have adopted a reasonable alternative design. Of course, that makes compete sense. Other tests of defect (such as consumer expectations) are amorphous and often unworkable.  And Pennsylvania's traditional standard is so pro-plaintiff as to make a manufacturer the virtual insurer of its products -- which the Second Restatement rejects. That is why two justices wrote in support of the adoption of the Third Restatement.

But all six justices ruling on the case agreed to reject the Azzarello decision, which in practice had juries ruling on the defectiveness of products without any consideration of their risks and utilities. So, in essence, Pennsylvania juries received no guidance on when the product is “safe for its intended use.”  New jury instructions will replace the Azzarello question which asked whether the product lacked any element necessary to make it safe. New jury instructions should be fashioned to be applicable to a particular case.   A plaintiff pursuing a cause upon a theory of strict liability in tort must prove that the product is in a “defective condition.” The plaintiff may prove defect by showing either that (1) the danger is unknowable and unacceptable to the average or ordinary consumer, or that (2) a reasonable person would conclude that the probability and seriousness of harm caused by the product outweigh the burden or costs of taking precautions.

The trial court may choose its own wording as long as the jury charge properly explains the meaning of defective condition. The court thus referenced a two prong standard that allows liability under either consumer expectation or risk-utility tests for defect.  Neither is perfect, and neither will be universally applicable, so plaintiff's choice of a preferred test can be challenged by defense motion practice. The Court recognized, for example, that the consumer expectation test fails at both ends of the spectrum, on obvious dangers and on complex products with dangers that are vague or outside the ordinary consumer’s contemplation.  The Court left for another day the issues regarding manufacturing and warning claims and the interplay with affirmative defenses, and the intended use doctrine.

The overturned precedent also impacted the evidence that was admissible when,as often happened, plaintiffs dropped their negligence count before trial. Going forward, the admissibility of the evidence — even if it arguably implicates negligence concepts — will be decided by trial judges on an incremental basis. Rejection of Azzarello will also mean that judges will no longer do the preliminary risk-utility calculus for the challenged product. Removing risk-utility balancing from the jury turned out to be problematic, as separating risk-utility from the condition of the product is incompatible with basic principles of strict liability.  Risk-utility thus is properly a jury question.

 

Seventh Circuit Rejects Another Class Settlement

The Seventh Circuit is one of the appeals courts that tends to examine very closely proposed class action settlements.  In a recent case, the court rejected a proposed settlement, finding the distribution to members of a class challenging dietary supplement labeling didn't justify the attorneys' fee award. See Pearson v. NBTY Inc., No. 14-1198 (7th Cir. 11/19/14).

Judge Posner opined for the panel about several class action settlement issues.  Defendants manufactured vitamins and nutritional supplements, including glucosamine pills, which are dietary supplements designed to help people with joint disorders, such as osteoarthritis. Several class action suits were filed in federal district courts across the country alleging violation of several states’ consumer protection laws by making allegedly false claims for glucosamine’s efficacy.  The district court had jurisdiction of this case under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2).

About eight months after the plaintiffs filed this suit in federal district court in Illinois, class counsel in all the cases negotiated a nationwide settlement and submitted it to that court for approval. Judge Posner noted it is typical in class action cases of this sort—cases in which class counsel want to maximize the settlement and the defendants don’t want to settle except for “global” peace—for the class counsel to negotiate a single nationwide settlement and agree to submit it for approval to just one of the district courts in which the multiple actions had been filed.

Here, the district judge approved the settlement, though with significant modifications. As approved, the settlement required payment of $1.93 million in fees to class counsel, plus an additional $179,676 in attorney expenses (attorneys' fees cover billable time and overhead expenses such as office space); $1.5 million in class notice and administration costs, $1.13 million to the Orthopedic Research and Education Foundation, $865,284 to the 30,245 class members who submitted claims, and $30,000 to the six named plaintiffs ($5,000 apiece) as compensation for their role as the class representatives. There had been a stipulation that defendants wouldn’t challenge any attorney fee requests by class counsel up to the agreed amount. Such a stipulation is sometimes called a “clear-sailing” agreement.

Approval of the proposed settlement involved an assessment of the value of the settlement to the class. The district judge valued the settlement at the maximum potential payment that class members could receive, which came to $20.2 million. That valuation, which played a critical role in the judge’s decision as to how much to award class counsel in attorneys’ fees, comprised $14.2 million for class members (based on the contrary-to-fact assumption that every one of the 4.7 million class members who had received postcard rather than publication notice of the class action would file a $3 claim), $1.5 million for the cost of notice to the class, and the fees to class counsel.  The $20.2 million figure had "barely any connection to the settlement’s value to the class," said Judge Posner.  Notice and fees, which together account for $6 million of the $20.2 million, are costs, not benefits. The attorneys’ fees are of course not paid to the class members; and as stated in Redman v. RadioShack Corp., 768 F.3d 622, 630 (7th Cir. 2014), “administrative costs should not have been included in calculating the division of the spoils between class counsel and class members. Those costs are part of the settlement but not part of the value received from the settlement by the members of the class. The costs therefore shed no light on the fairness of the division of the settlement pie between class counsel and class members.”

The $14.2 million “benefit” to the class members was a fiction too, said the panel, since only 30,245 claims were filed, yielding total compensation for the class members of less than $1 million.  Because the amount of the attorneys’ fees that the judge wanted to award class counsel—$1.93 million—was only 9.6 percent of $20.2 million, he thought the amount reasonable. But Judge Posner explained that was not relevant;  the ratio that is relevant is the ratio of the fee to the fee plus what the class members received. Basing the award of attorneys’ fees on this ratio, which shows how the aggregate value of the settlement is being split between class counsel and the class, gives class counsel an incentive to design the claims process in such a way as will maximize the settlement benefits actually received by the class. Here, said the court, the class received a "meager" $865,284. This means the attorneys’ fees represented not 9.6 percent of the aggregate value but an "outlandish" 69 percent.

Although appellate review of approval of class action settlements is limited, Williams v. Rohm & Haas Pension Plan, 658 F.3d 629, 634 (7th Cir. 2011), it is far from pro forma, because the district judge as “a fiduciary of the class, who is subject therefore to the high duty of care that the law requires of fiduciaries.” Reynolds v. Beneficial National Bank, 288 F.3d 277, 280 (7th Cir. 2002).

Judge Posner also took issue with the claim forms.  As experienced class action lawyers, class counsel in the present case must have known, said the panel, that the notice and claim forms, and the very modest monetary award that the average claimant would receive, were bound to discourage filings. The postcard sent to each of 4.7 million class members informed the recipient that to file a claim he must click on a website or call a toll-free phone number. A long and detailed process was not enticing for a $3 reward.

The panel also rejected the $1.13 million cy pres award in this case. A cy pres award is supposed to be limited to money that can’t feasibly be awarded to the intended beneficiaries, here consisting of the class members. Notice costing $1.5 million reached 4.7 million class members. Granted, doubling the expenditure would not have doubled the number of class members notified. But there could have been more notice, or the claims process could have been simplified to generate more returns.  The Orthopedic Research and Education Foundation was entitled to receive money intended to compensate victims of consumer fraud only if it was infeasible to provide that compensation to the class—which had not been demonstrated.

An economically rational defendant will be indifferent to the allocation of dollars between class members and class counsel. Caring only about his total liability, the defendant will not agree to class benefits so generous that when added to a reasonable attorneys’ fee award for class counsel they will render the total cost of settlement unacceptable to the defendant.  Judges have learned that class action settlements are often quite different from settlements of other types of cases, which indeed are bargained exchanges between the opposing litigants. Class counsel rarely have clients to whom they are responsive. The named plaintiffs in a class action, though supposed to be the representatives of the class, are typically chosen by class counsel; the other class members are not parties and have no control over class counsel. The result is an acute conflict of interest between class counsel, whose pecuniary interest is in their fees, and class members, whose pecuniary interest is in the award to the class. Defendants, said Judge Posner, are interested only in the total costs of the settlement to them, and not in the division of the costs between attorneys’ fees and payment to class members.   See Eubank v. Pella Corp., 753 F.3d 718, 720 (7th Cir. 2014).

The panel concluded that the district judge made significant modifications in the settlement, but not enough. The settlement, a "selfish deal" between class counsel and the defendant, dis-served the class. Only one-fourth of one percent of the class members would receive even modest compensation, and for these "meager benefits," the court said, class counsel should not receive almost $2 million.  

 

 

En Banc Appeals Court Interprets CAFA Mass Action Requirement

The Ninth Circuit has weighed in on an interesting CAFA issue, holding that personal injury claims relating to prescription pain relief drugs belong in federal court when the plaintiffs sought coordination of the claims in state court. See Corber v. Xanodyne Pharm. Inc., et al., 771 F.3d 1218 (9th Cir. en banc, 11/18/14).

The issue was whether removal is proper under the “mass action” provision of the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. § 1332(d)(11)(B)(i), when plaintiffs in several actions moved for coordination in the state trial court pursuant to California Code of Civil Procedure section 404.  It was significant that plaintiffs moved for coordination  “for all purposes” and justified their request in part by asserting a need to avoid inconsistent judgments.  As our readers know, CAFA extends federal removal jurisdiction for certain class actions and for mass actions in which “monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs’ claims involve common questions of law or fact.” 28 U.S.C. § 1332(d)(11)(B)(i).

Here, the petitions asked the California Judicial Council to establish a coordinated proceeding for all California propoxyphene actions under section 404 of the California Code of Civil Procedure. The standards for coordination list that coordination of civil actions sharing a common question of fact or law is appropriate if one judge hearing all of the actions for all purposes in a selected site or sites will promote the ends of justice taking into account whether the common question of fact or law is predominating and significant to the litigation; the convenience of parties, witnesses, and counsel; the relative development of the actions and the work product of counsel; the efficient utilization of judicial facilities and manpower; the calendar of the courts; the disadvantages of duplicative and inconsistent rulings, orders, or judgments; and, the likelihood of settlement of the actions without further litigation should coordination be denied.

Plaintiffs asked for coordination of their lawsuits for reasons consistent with these factors, including concerns that there could be potential “duplicate and inconsistent rulings, orders, or judgments,” and that without coordination, “two or more separate courts ... may render different rulings on liability and other issues.” Plaintiffs argued in their petitions and the supporting memoranda that the cases should be coordinated before one judge “hearing all of the actions for all purposes,” to address “the same or substantially similar” causes of action, issues of law, and issues of material fact.

The central CAFA issue in dispute was whether plaintiffs’ petitions for coordination constituted proposals for the cases “to be tried jointly” under CAFA.  The mass action provision allows for federal jurisdiction when the monetary relief claims of 100 or more persons are “proposed to be tried jointly” on the ground that the plaintiffs' claims involve common questions of law or fact, 28 U.S.C. § 1332(d)(11)(B)(i). The district court held that it lacked jurisdiction under CAFA because plaintiffs’ petitions for coordination were not explicit proposals to try the cases jointly, and it thus remanded the cases back to state court.

Congress enacted CAFA in 2005 to “curb perceived abuses of the class action device which, in the view of Congress, had often been used to litigate multi-state or even national class actions in state courts.” Tanoh v. Dow Chem. Co., 561 F.3d 945, 952 (9th Cir.2009). CAFA further extends federal jurisdiction over “mass action” cases when several requirements are met, although only the “proposed to be tried jointly” requirement was at issue here. See 28 U.S.C. § 1332(d)(2), (6), (11)(A).

The case eventually made it to the Ninth Circuit en banc, which noted that while plaintiffs are the masters of their complaints, they are also the masters of their petitions for coordination. Stated another way, when the court assesses whether there has been a proposal for joint trial, the court must hold plaintiffs responsible for what they have said and done. Plaintiffs voluntarily asked for coordination under section 404, and they submitted memoranda in support of their petitions for coordination. The court thus carefully assessed the language of the petitions for coordination to see whether, in language or substance, they had proposed a joint trial.

The en banc court concluded that plaintiffs’ petitions for coordination were in essence proposals for joint trial. First, the petitions said that plaintiffs sought coordination “for all purposes.” “All purposes” must include the purposes of trial. So reading the petitions literally, plaintiffs, who in total number far more than 100, were seeking a joint trial. Second, the specific reasons given for coordination also supported the conclusion that a joint trial was requested. For example, plaintiffs listed potential issues in support of their petitions that would be addressed only through some form of joint trial, such as the danger of inconsistent judgments and conflicting determinations of liability.  A "proposal for a joint trial can be implicit." See also Atwell v. Bos. Scientific Corp., 740 F.3d 1160, 1163 (8th Cir.2013) (holding that proposals for joint trial may be made implicitly).

This issue of when and whether plaintiffs propose that cases be tried jointly for CAFA purposes has now been addressed by several courts. See Atwell v. Bos. Scientific Corp., 740 F.3d 1160 (8th Cir. 2013);  In re Abbott Labs. Inc, 698 F.3d 568 (7th Cir. 2012).  But see Parson v. Johnson & Johnson, 749 F.3d 879 (10th Cir. 2014).

 

New Drug Law in Canada

With a tip of the cap to our old friend, Peter Pliszka, north of border: Earlier this month, the so-called Protecting Canadians from Unsafe Drugs Act (Vanessa's Law) received royal assent and became law in Canada. This new legislation on paper was intended to protect Canadians from the potential risks related to drugs and medical devices by substantially increasing Health Canada's pre- and post-market powers over industry stakeholders, and changing the consequences for violating the Food and Drugs Act and its regulations.

Peter suggests that Vanessa's Law introduces the most significant amendments to the Food and Drugs Act in 50 years, and represents in some ways a new chapter in Canadian drug and medical device regulatory enforcement.

Peter notes that the new powers granted to Health Canada include:

• The power to order any person to provide information related to a drug or medical device where Health Canada believes that the product may present a serious risk of injury to human health;
• The power to order a manufacturer to conduct an assessment of a drug or medical device and to provide Health Canada with the results;
• The power to order a manufacturer to conduct additional tests or studies, or monitor experience, in relation to a drug or medical device for the purpose of obtaining additional information about the product's effects on health or safety, and to provide Health Canada with the results;
• The power to order a manufacturer to modify the label of a drug or medical device or to replace its packaging, where Health Canada believes that doing so is necessary to prevent injury to health; and
• The power to order any person who sells a drug or medical device to recall the product where Health Canada believes that a drug presents a serious risk of injury to health.

It appears that new regulations may be coming down the pike as well, on issues such as clinical trials information and product label issues outside of Canada.

Mouthwash Class Action Washed Out

A federal judge earlier this month granted defendant's motion to dismiss a putative class action lawsuit accusing it of using misleading labeling on its market mouthwash.  See Suzanna Bowling v. Johnson & Johnson et al., No. 1:14-cv-03727 (S.D.N.Y., 11/4/14).

The issue here was preemption.  Plaintiff Bowling filed this action on behalf of herself and others similarly situated, alleging that the defendant violated (1) numerous state statutes, as well as (2) the Magnuson-Moss Warranty Act ("MMWA"), when it sold Listerine Total Care ("LTC"), a line of
mouthwashes. Defendant moved to dismiss on the grounds that the state law claims were preempted by the Food Drug and Cosmetics Act ("FDCA"). (Put the MMWA issue aside for today.)

Plaintiffs alleged that purported claims that the mouthwash can help with tooth enamel issues were false. But FDA had trod on this ground in "monographs" that set out labeling regulations for over-the-counter ("OTC") dental hygiene products.  First, in 1980, the FDA published a proposed
monograph ("1980 Monograph"), which found, inter alia, that "[t]he deposition of fluoride in dental enamel has been shown to increase resistance to enamel solubility and therefore dental decay" - or in plain English, flouride is good for preserving enamel. Second, in 1995, the FDA published a final monograph ("1995 Monograph"), which permits manufacturers of OTC drugs containing sodium
fluoride (such as LTC) to market the product as "aid[ing] the prevention of dental .. . decay,"'  along with "other truthful and nonmisleading statements [further] describing [this] use."  In other words, pursuant to the 1995 Monograph, manufacturers of OTC drugs containing sodium fluoride are allowed (1) to represent that such drugs prevent tooth decay and (2) to provide further labeling to explain how decay is prevented.  Furthermore, on multiple occasions, the FDA has sent letters to manufacturers of OTC drugs containing sodium fluoride to clarify the parameters of the Monographs.  In each of these letters, the FDA has objected to certain labeling practices - for example, certain representation that sodium fluoride "fights plaque"- but it has expressed no concern about the label "Restores Enamel."

Defendant moved to dismiss. In the context of OTC drugs, the FDCA expressly preempts state law labeling requirements that are "different from," "addition[ al] to," or "otherwise not identical with" federal labeling requirements. Under this standard, said the court, preemption is certainly appropriate when a state law prohibits labeling that is permitted under federal law. But it is also appropriate when a state law prohibits labeling that is not prohibited under federal law. The standard, in other words, is not only whether a state law actively undermines federal law. It is whether state law diverges from federal law at all.

That means, found the court, that plaintiffs would need to plead facts suggesting that the FDA has
affirmatively prohibited the challenged label language. Otherwise, plaintiffs' state law causes of action would be, in effect, imposing a labeling requirement that is "not identical with" labeling requirements under federal law. "Plaintiffs cannot meet this burden." If the FDA had prohibited the
"Restores Enamel" kind of label, there would obviously have been a regulation saying so. But there was no such regulation. As it stands, observed the court, the FDA has issued a monograph directly on point but declined to indicate either in the monograph itself or in advisory interpretations of the monograph that a phrase like "Restores Enamel" is misleading. If successful, this litigation would thus do exactly what Congress sought to forbid: using state law causes of action to bootstrap labeling requirements that are "not identical with" federal regulation.

Motion granted, 

Federal Court Decertifies "Natural" Damages Class Action- Naturally

A federal court last week ordered decertification of a damages class action challenging “all natural” fruit labels, due to deficiencies with the the plaintiffs' damages model. See Brazil v. Dole Packaged Foods, LLC,  No. 12-1831 (N.D. Cal., 11/6/14).

Our loyal readers know we have posted on Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), and its potential impact on proposed damages class actions. Here, plaintiff alleged that 10 products, three he purchased and seven that were "similar", had labels that were false and misleading, especially with regard to their use of the term "natural," because all ten products contain ascorbic acid (commonly known as Vitamin C) and citric acid, both allegedly synthetic ingredients.

The court granted in part and denied in part the plaintiff's Motion for Class Certification on May 30, 2014. With respect to the damages class, Brazil's damages expert, Dr. Oral Capps, had advanced three models for measuring the alleged price premium attributable to Dole's use of the "All Natural" label statements. Of those three, the Court originally accepted only the model based on econometric or regression analysis. The Court concluded that the Regression Model, as originally presented to the Court at the time, provided a means of showing damages on a class-wide basis through common proof, thus satisfying the Rule 23(b)(3) requirement that common issues predominate over individual ones.  In reaching this conclusion, the Court rejected Dole's argument that class certification should be denied because Dr. Capps had not yet run his full regressions.

On August 21, 2014, Dole filed a Motion to Decertify.  Readers know that the standard used by the courts in reviewing a motion to decertify is the same as the standard when it considered plaintiffs' certification motions. E.g,, Ries v. Ariz. Beverages USA LLC, 2013 WL 1287416 , at *3 (N.D. Cal. Mar. 28, 2013).  On a motion for decertification, the burden remains on the plaintiffs to demonstrate that the requirements of Rules 23(a) and (b) are met.. Id . (quoting Marlo v. United Parcel Serv., Inc., 639 F.3d 942 , 947 (9th Cir. 2011)); see also Negrete v. Allianz Life Ins. Co. of N. Am., 287 F.R.D. 590 , 598 n.1 (C.D. Cal. 2012).

In its Motion to Decertify, Dole made two chief contentions. First, Dole argued that the damages class certified under Rule 23(b)(3) should be decertified because Dr. Capps' Regression Model was fundamentally flawed, rendering it incapable of measuring only those damages attributable to Dole's alleged misbranding. Second, Dole contends that the damages class, as well as the injunction class certified under Rule 23(b)(2) , should be decertified because neither is ascertainable.  Let's focus on the former. 

To satisfy the Rule 23(b)(3) predominance requirement, plaintiff needed to present a damages model that was consistent with his liability case. Comcast, 133 S. Ct. at 1433. More specifically, the regression model purporting to serve as evidence of damages in this class action must measure only those damages attributable to Dole's alleged conduct. Specifically, the type of damages that Brazil's model sought to prove was restitution, a remedy whose purpose is to restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest. Kor. Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 , 1149 , 131 Cal. Rptr. 2d 29, 63 P.3d 937 (2003). The UCL, FAL, and CLRA - statutes relied on by plaintiff -- authorize California trial courts to grant restitution to private litigants. See Colgan v. Leatherman Tool Grp., Inc., 135 Cal. App. 4th 663 , 694, 38 Cal. Rptr. 3d 36 (2006). The proper measure of restitution in a mislabeling case, said the court, is the amount necessary to compensate the purchaser for the difference between a product as labeled and the product as received. Restitution is then determined by taking the difference between the market price actually paid by consumers and the true market price that reflects the impact of the unlawful, unfair, or fraudulent business practices. See Werdebaugh v. Blue Diamond Growers, 2014 WL 2191901 , at *22 (N.D. Cal. May 23, 2014). Accordingly, Brazil had to present a damages methodology that can accurately determine the price premium attributable to Dole's use of the "All Natural Fruit" label statements.

Right out of the box, plaintiff had trouble with the methodology, which originally compared data on identical Dole products: the product before the label statement was introduced, and the same product after its label included the alleged misrepresentation.  But as it turned out, discovery revealed that the labels for nine of the ten products in the certified class did not actually change during the class period. So Dr. Capps had to change his methodology as a result, going to a type of regression methodology known as "hedonic price analysis" or "hedonic regression."  

Then, Dole identified six flaws with the new method [the "Model"]: (1) the Court approved a "sales" regression but Dr. Capps performed a "price" regression; (2) the Model confused "brand" and "label"; (3) the Model improperly used retail-level data; (4) the Model did not control for other variables; (5) the Model had data errors; and (6) the Model failed under Comcast. The Court relied on the latter three arguments to find that Dr. Capps' Model did not sufficiently isolate the price impact of Dole's use of the "All Natural Fruit" labeling statements, and therefore failed under Comcast to adequately tie damages to Dole's supposed misconduct.

Plaintiffs had represented that the Model could control for all other factors that may affect the price of Dole's fruit cups, such as Dole's advertising expenditures, the prices of competing and complementary products, the disposable income of consumers, and population.  But the court agreed with Dole, for example, that Brazil failed to show how the Model controlled for other variables affecting price. With respect to advertising, Dr. Capps admitted that he did not control for this variable -- i.e., whether any price premium on the challenged products was due to Dole's "All Natural Fruit" labeling claim rather than to its advertising expenditures. Moreover, many of Dr. Capps' assumptions about the competing products upon which his model relies were either wrong or untested. For example, it was not shown that Del Monte, Dole's chief competitor, actually made the "All Natural" labeling claim on its products. This methodology cannot survive Comcast, said the court. The whole stated objective of Dr. Capps' model was to isolate the price premium supposedly attributable to Dole's "All Natural Fruit" label claim. So if the model was unsure whether the non-Dole products actually made an "All Natural" labeling claim, then how could a 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."   

The Model also overlooked differences in how the products are packaged. Consumers might be willing to pay a premium for fruit products packaged in a certain way. Many of the challenged products, such as the "Pineapple Tidbits," come in "four packs," or four, 4-oz. cups packaged together. But Dr. Capps' model treated a "four pack" as equal to a 16-oz can. There is no control for packaging convenience in the model, even though consumers might well pay a premium for the convenience of four individual fruit cups.

Thus, plaintiff had not met his burden to show that the model he proposed was capable of controlling for all other factors and isolating the price premium, if any, attributable to Dole's "All Natural Fruit" label only. As such, Comcast required the court to find that the Rule 23(b)(3) predominance requirement had not been satisfied.

Damages class decertified.

 (Court rejects ascertainability challenges to injunctive relief class. More on that another day.)

 

SHB on List of Top Firms Again

We are pleased  that U.S. News & World Report and Best Lawyers have again named Shook, Hardy & Bacon to their annual list of Best Law Firms.

Shook received 11 national rankings, including a Tier 1 listing for Mass Tort Litigation/Class Actions - Defendants. In addition, six of Shook's offices received 20 Tier 1 metropolitan rankings across 13 fields, including Commercial Litigation, Litigation - Intellectual Property, and Product Liability Litigation - Defendants. Overall, nine of Shook's offices received 42 metropolitan rankings in the three-tiered list.

We are especially pleases that your humble blogger's office in Philadelphia was ranked in Tier 1 for Mass Tort Litigation / Class Actions - Defendants, and Tier 2 for Product Liability Litigation - Defendants.

The complete rankings appear in U.S. News & World Report's Best Law Firms report.

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