Let’s start the New Year off right.  It’s not often we find ourselves agreeing with the Ninth Circuit, especially in the class action realm.  But the Ninth Circuit recently upheld the denial of class certification to a group of dog owners alleging a pet food maker misled buyers about the alleged presence of heavy metals in its food products. See Reitman v. Champion Petfoods USA, Inc., 830 F. App’x 880 (9th Cir. 2020).

Twelve named plaintiffs purported to represent 12 state-specific classes. They alleged that defendant misrepresented the quality and content of the dog food in its label.  In earlier proceedings, the proposed class was narrowed to California residents who purchased the dog food since 2014. The plaintiffs alleged that defendants failed disclose that the dog foods contain levels of arsenic, mercury, lead, cadmium and/or BPA, which are known to pose health risks to humans and animals, including dogs. Plaintiffs also alleged defendants were knowingly, recklessly, and/or negligently selling certain of the contaminated foods containing pentobarbital.  This allegedly rendered false any statement that the ingredients are biologically appropriate. Finally, defendants also allegedly misled consumers by marketing that their dog food is made from fresh and regional ingredients and is never outsourced. Plaintiffs asserted state-law claims on behalf of the class: (1) violations of California’s Consumer Legal Remedies Act (“CLRA”),  (2) violations of California False Advertising Law (“FAL”),  (3) violations of the Unfair Competition Law (“UCL”), (4) breach of express warranty; (5) breach of implied warranty of merchantability; (6) fraudulent misrepresentation; (7) fraud by omission; (8) negligent misrepresentation; and (9) unjust enrichment.

The district court found that common questions of law or fact did not predominate, finding that plaintiffs were not entitled to a presumption of reliance because plaintiffs cannot show that members of the class were exposed to the same misrepresentations. Even if there was a common general “message” on the products, numerous issues requiring individualized attention would predominate over any common questions. Even the specific phrases at issue required context that differs from bag to bag. Reitman v. Champion Petfoods USA, Inc., No. CV181736DOCJPRX, 2019 WL 7169792, at *1–2 (C.D. Cal. Oct. 30, 2019).

Moreover, the variations went to the very heart of plaintiffs’ claims: Whether a reasonable person would be deceived by the message. That question will necessarily require an individualized inquiry into the specific formula at issue i each brand extension because each formula is unique and has different representations on the packaging that give context to the overall message. Here, the misrepresentations at issue were subject to variations depending on the formula purchased by the proposed class member; every package differed and the changes would require the court to determine what combinations of labels were visible before determining whether that combination is deceiving to a reasonable consumer. The district court recognized that every package also differs in providing additional statements that give context to the overall theme such that an individualized determination must be made bag by bag to determine whether a reasonable customer would be deceived. Therefore, plaintiffs did not meet Rules 23(b)(3)’s predominance requirements as to their UCL, FAL, and CLRA claims.
The Ninth Circuit

affirmed the conclusion that individualized inquiries requiring bag-to-bag determinations predominate over common questions, and this applies whether the misrepresentations are based on affirmative statements on, or omissions from, the packaging. The district court also properly found that plaintiffs’ damages model failed to satisfy the standard set out in Comcast Corp. v. Behrend, 569 U.S. 27 (2013). The “price premium” model failed to measure the price difference attributable to misleading statements on, or omissions from, the packaging. In other words, the proposed model measured only the differing customer expectations based on various corrective statements in the abstract and failed to measure the difference between what the plaintiff paid and the value of what the plaintiff received.
Finally, the district court applied the correct standard in denying the request to create a liability-only class or issue classes under Rule 23 (c)(4) — the last refuge of the failed class plaintiff.  Numerous individualized issues affecting determinations of liability made Rule 23(c)(4) certification inefficient. It would not materially advance the disposition of the litigation as a whole.  The district court did not abuse its discretion when it denied certification. and Happy New Year!