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

Continue Reading Ninth Circuit Affirms Denial of Class Claims in Pet Food Case

The American Tort Reform Foundation (ATRF) named nine “Judicial Hellholes” in its new annual report intended to shine a light on lawsuit abuse and its effects. See https://www.judicialhellholes.org/reports/2020-2021-executive-summary

ATRF explains that lawsuit abuse harms average, hard-working Americans by clogging our court system with meritless and frivolous cases; dollars spent fighting lawsuits are dollars taken away from important societal goals.

The 2020-2021 list begins with your humble blogger’s hometown at No. 1 (we’d rather win the Super Bowl again):
1. Philadelphia Court of Common Pleas and the Supreme Court of Pennsylvania
2. New York City
3. California
4. South Carolina’s Asbestos Litigation (New in 2020)
5. Louisiana
6. Georgia
7. City of St. Louis
8. Cook, Madison and St. Clair Counties, Illinois
9. Minnesota

The Report also notes that three state legislatures enacted significant, positive civil justice reforms in 2020, including ‘phantom damages’ reform in Iowa, “The Civil Justice Reform Act of 2020” in Louisiana, and consumer protection and punitive damage reforms in Missouri.

Our readers know that vanilla-based litigation remains active.  Yet another proposed class claim fell short in Howard Clark v. Westbrae Natural Inc., No. 3:20-cv-03221 (N.D. Calif. 12/1/20).  Plaintiff  alleged that the use of the word “vanilla” on the label of Westbrae Natural, ’s organic unsweetened vanilla soymilk misrepresents to consumers that the product’s vanilla flavor is derived exclusively from the vanilla bean plant. Plaintiff made various California consumer protection law claims on behalf of a proposed class of California consumers.

Plaintiffs cited a survey of over 400 consumers showed that over 69.5% of the consumers believed the “vanilla” representation on the product meant the product’s vanilla flavor comes exclusively from the vanilla bean. And scientific testing of the product allegedly revealed that the vanilla flavoring of the product did not come exclusively from the vanilla bean but rather comes from a non-vanilla source. Plaintiff alleged that he would not have purchased or paid a premium price for the Product if he had realized that its vanilla flavor does not come exclusively from the vanilla bean.

In assessing the motion to dismiss, the court took judicial notice of the full label.  A court may take judicial notice of documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the plaintiff’s pleading. Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). Courts regularly have taken judicial notice of images that more completely display the packaging in question, on the ground that the packaging of the defendant’s product is publicly available and not subject to reasonable dispute. Prescott v. Nestle USA, Inc., No. 19-CV-07471-BLF, 2020 WL 3035798, at *2 (N.D. Cal. June 4, 2020).

Defendant’s primary argument is that Plaintiff’s UCL, CLRA, and false advertising claims must be dismissed because the FAC fails to allege that a reasonable consumer would be deceived by the “vanilla” label into believing that the product’s vanilla flavor is derived exclusively from the vanilla bean.
To prevail on such claims, a plaintiff must show that members of the public are likely to be deceived. This showing requires more than a mere possibility that the label might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner” Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 507 (2003). Rather, the reasonable consumer standard requires a probability that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.

Here, plaintiff did not allege facts that plausibly support an inference that a reasonable consumer would interpret “vanilla” on the label to mean that the product’s flavor is derived exclusively from the vanilla bean. The word “vanilla” itself does not suggest to the reasonable consumer that the flavor comes exclusively from the vanilla bean. See Pichardo v. Only What You Need, Inc., Case No. 20-cv-0493 (VEC), 2020 WL 6323775, at* 3 (S.D.N.Y. Oct. 27, 2020) (finding that a reasonable consumer would not believe the label “smooth vanilla” itself means that the vanilla flavor is exclusively or even mostly comes from vanilla extract (the vanilla bean). Further, the label did not contain any other words or pictures that suggest the vanilla flavor is derived exclusively from the vanilla bean.

Plaintiff’s allegation regarding the results of a  survey of 400 consumers did not push plaintiff’s reasonable consumer allegation over the plausibility line. See Tucker v. Post Consumer Brands, LLC, No. 19-CV-03993-YGR, 2020 WL 1929368, at *5 (N.D. Cal. Apr. 21, 2020) (noting that a consumer survey on its own cannot satisfy reasonable consumer test); Yu v. Dr. Pepper Snapple Group, Inc., No. 18-CV-06664-BLF, 2020 WL 5910071, at *4-5 (N.D. Cal. October 6, 2020) (same). The Court noted that plaintiff did not allege precisely what the survey asked so it was impossible to infer that notwithstanding the commonsense interpretation of “vanilla” as not implying flavored exclusively with vanilla bean, plaintiff had plausibly alleged that it does. At bottom, the vague survey allegation did not make plausible that reasonable consumers understand that “vanilla” soymilk is flavored exclusively with vanilla bean.

Order can be found at clark-1333734-https-ecf-cand-uscourts-gov-doc1-035119992794

 

In a unanimous, published decision, a three-judge panel of the Ninth Circuit affirmed the dismissal of a a putative class action brought by a plaintiff-consumer who alleged claims arising when Diamond Foods allegedly included partially hydrogenated oils as an ingredient in Pop Secret popcorn. See McGee v. S-L Snacks Nat’l, 982 F.3d 700 (9th Cir. Dec. 5, 2020).

In sum, the panel affirmed the district court’s dismissal for lack of constitutional Article III standing as the plaintiff did not plausibly allege that, as a result of her purchase and consumption of Pop Secret, she suffered economic or immediate physical injury, or that she was placed at substantial risk of adverse consequences. Concerning plaintiff’s alleged economic injury, the panel held that plaintiff had not alleged that she was denied the benefit of her bargain, particularly given the labeling disclosure that the product contained artificial trans fat.

The panel also held that plaintiff failed to allege an economic injury based on an overpayment theory.
Plaintiff did not allege that Pop Secret contained a hidden defect, or that Pop Secret was worth objectively less than what she paid for it. Concerning plaintiff’s alleged present physical injury, the panel held that plaintiff had not plausibly alleged that she suffered physical injuries due to her consumption of Pop Secret. Concerning plaintiff’s alleged future physical injury, the panel held that plaintiff had not plausibly alleged that her consumption of Pop Secret substantially increased her risk of disease.

 

Continue Reading Everyone Knows Popcorn is (Trans-) Fattening

Flagging for our readers interested in civil justice reform, the 2020 Federalist Society Civil Justice Update of civil justice issues by my partner Mark Behrens, Esq.

Part I focuses on broad trends. Part II discusses 2020 federal legislation and amendments to federal court rules that take effect today. Part III summarizes liability law changes at the state level in 2020. Part IV highlights key cases in 2020 that addressed the constitutionality of civil justice reforms.

Well researched and worth a read.

Increasing attention has been given to the failure of MDL courts to apply the FRCP, particularly Rule 12(b)(6), to address meritless and inadequately pleaded claims on federal dockets in MDLs. In non-MDL cases, such claims are routinely disposed of by Rule 12(b)(6), but in an MDL, avoiding the clear impact of the rules is deemed a “necessary evil” associated with the size of the MDL.  We would much rather have courts view “necessity” as the mother of invention in this regard to find a way to enforce Rule 1’s admonition that the FRCP should “govern all actions and proceedings,” rather than the misuse of Master pleadings.

A case from a few weeks ago illustrates well that this is not a theoretical concern. Baca v. Johnson & Johnson, No. CV-20-01036-PHX-DJH, 2020 WL 6450294 (D. Ariz. Nov. 2, 2020), is one of myriad similar cases in which plaintiffs allege defects in pelvic repair systems. Before June, 2018, such cases would have been transferred to the Southern District of West Virginia as part of the Multi-District Litigation, In re: Ethicon, Inc. Pelvic Repair System Products Liability Litigation, MDL No. 2327 (“MDL”). But the MDL has since stopped accepting transfers, and so the case got traditional treatment, which meant the Rules were actually applied.

The pleading standards demand more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” See Twombly, 550 U.S. at 555. A complaint must “state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. And if a complaint alleges fraud, then it “must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). To satisfy the particularity requirement, a complaint must include an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.
Like so many of the cases parked or warehoused in the MDL, this case failed to meet those standards. the Complaint did not identify a specific manufacturing defect, either by failing to manufacture the product as designed, or by failing to manufacture the particular product in a similar way as other identical units. As the Court said, Plaintiff’s summary allegations that the product failed to perform as designed and intended, without explanation as to how those defects are tied to the manufacturing process, do not demonstrate that it had a manufacturing defect.
On warnings, the Complaint did say that plaintiff would not have relied on the product if she had known the “true facts” about the risks. But because of the learned intermediary doctrine, a defendant’s duty to warn ends once it provides an adequate warning to the healthcare provider. The focus of this failure to warn claim is on what Defendants told the health-care provider and whether inadequacies in those warnings caused Plaintiff’s injuries. On this point, the Complaint was silent. It did not name the treating physicians who received the allegedly inadequate warning, nor state that these physicians would have acted differently had they received a different warning.
The design claim failed to allege the causation element. The allegations simply failed to show how the Product caused this Plaintiff’s specific injury. And on fraud, nothing in the Complaint detailed the specific content of the allegedly relevant misrepresentation documents, when they were made, nor the identities of the key parties, such as Plaintiff’s physicians, who received the alleged misrepresentations. It was evident that the Complaint failed to allege fraud with particularity.
The contrast between that lucid analysis and the treatment of similar claims inside an MDL is stark. Perhaps reform is needed.

Many of our colleagues have remarked that a favorite pastime during the upcoming holidays is to watch their favorite holiday movies.  That may be more important this year. One that many mention is “Elf”, starring Will Ferrell as a human, raised as an elf at the North Pole, who decides to travel to New York City to locate his real father, played by James Caan (yes Sonny).   The  movie features Buddy (Ferrell) in a series of fish out of water scenes in New York, including one in which he bursts into a greasy spoon eatery with hearty congratulations after seeing it sporting the puffery sign “World’s Best Cup of Coffee.”

That came to mind when seeing a New York federal recently rejected a proposed class action accusing Starbucks of deceptively calling its drinks the “best coffee for you” while allegedly using harsh chemicals to kill roaches at some of its shops. Order. Specifically (and the court accepted allegations as true on a motion to dismiss), employees allegedly would deploy the Hot Shot No-Pest 2 Strip. The No-Pest Strip is a time-release device that emits a powerful pesticide, 2,2-dichlorovinyl dimethyl phosphate (often abbreviated “DDVP”), into the air. Plaintiffs claim the CDC warns that sufficient exposure to DDVP can cause symptoms as serious as coma and death.

Not surprisingly, though, none of the customers complained that they got sick. Instead, the customers alleged that this ran afoul of New York consumer protection laws that prohibit false advertising and deceptive business practices. See New York Gen. Bus. Law §§ 349–350.

First issue, the customers did not allege any statements likely to mislead reasonable consumers.
Nearly all of the language the customers objected to consists of obvious “puffery”— subjective
claims about products, which cannot be proven either true or false.” Time Warner Cable, Inc. v.
DIRECTV, Inc., 497 F.3d 144, 159 (2d Cir. 2007). Only one statement cited in the amended complaint came close– that Starbucks’ baked goods contain “no artificial dyes or flavors.” But the alleged bug killer is not an artificial dye or flavor. No reasonable consumer would understand that statement to convey any information about the company’s use or non-use of pesticides in its stores.

So plaintiffs next trotted out the synergy theory- that the whole of Starbucks’ brand messaging is more
than the sum of its parts. That theory is rarely recognized, and even then in the context of innuendo that conveys a clear statement about the quality or safety of the defendant’s product.  The customers here did not allege that Starbucks’s advertisements communicated—even indirectly—any specific details about its products. A claim that a seller’s wares are “premium” or “the best” cannot support such a cause of action for deceptive practices, whether made in a single advertisement or a hundred, said the Court.

The Court also found that further amendment would be futile because none of the statements in Starbucks’s advertising convey or imply any information related to the use of pesticides in its stores. The Court therefore dismissed the amended complaint with prejudice.

 

Vanilla in common parlance denotes, well, common.  And indeed, vanilla is one of the most common ingredients in food, whether as a primary flavor or a component of another flavor. But for centuries it was rare, a delicacy for the rich.  And even after new fertilization methods greatly expanded output, demand exceeded supply.  So, as far back as the 1800’s, chemists worked to expand supply of the flavor. Vanillin, the main flavor component of vanilla beans, eventually was made from pine bark, clove oil, rice bran, and lignin. Rhône-Poulenc, now Solvay, {a wonderful client, just FYI} commercialized a pure petrochemical route in the 1970s. Today, because of sheer impossibility, very few commercial products have vanilla taste that derives entirely from vanilla extract.

More recently, vanilla-related claims in ads and packaging have spawned litigation.  The latest: a federal judge dismissed claims that a protein drink maker’s products somehow mislead consumers into thinking they were flavored only with vanilla extract. Pichardo et al. v. Only What You Need Inc., No. 1:20-cv-00493 (S.D.N.Y. Oct. 29, 2020).

Plaintiffs alleged that the labeling on defendant’s vanilla flavored protein drink violated New York General Business Law §§ 349-50, because the vanilla flavor is not derived exclusively from the vanilla plant. Defendant moved to dismiss the First Amended Complaint under Rule 12(b)(6), arguing that plaintiffs have not adequately pled material misrepresentation.

The label on defendant’s product has a vanilla flower vignette and the words “Smooth Vanilla.” Plaintiffs allege that they purchased the product because they believed the vanilla taste came exclusively from the vanilla plant. Plaintiffs relied on a consumer survey they commissioned and which allegedly  demonstrated that, based on what appears on the product label, over 70% of respondents believed the flavor in such a product came “only from vanilla beans.” Plaintiffs concede that the product  contains some vanilla from the vanilla plant, but complain it also has source material other than vanilla.

Even with all that, plaintiffs had not alleged facts from which the court could infer that the label in question is materially misleading. The drink, labeled “Smooth Vanilla,” is a vanilla-flavored drink that
tastes like vanilla and is flavored, in part, with vanilla extract. The label on defendant’s protein drink does not state that it is “made only with vanilla extract” or even contain the words “vanilla extract.” There is no basis, therefore, to conclude that a reasonable consumer would be misled by the label to believe that all (or even most) of the vanilla taste comes from vanilla extract.

Be careful how you read polls. (too soon?) Even construing the survey in the light most favorable to plaintiffs, it did not plausibly support the claim. Plaintiffs contended that the consumer survey demonstrates that over 70% of the respondents believed the flavor in defendant’s product came “only from vanilla beans.”  The language used in the survey itself, however, shows that over 70% of the respondents believed the vanilla taste came from vanilla plants; 70% did NOT say that they believed the vanilla taste came only from vanilla plants. More significant, however, over 95% of the consumers expected the product to have a vanilla taste. And in fact, the product has a vanilla taste and contains some vanilla from vanilla extract.

The court distinguished a number of food label cases because a vanilla product that exclusively uses vanilla extract for vanilla flavor is not healthier — or materially different in any other way — than a vanilla product that uses vanillin from some other natural source. In contrast, stating that a protein drink is vanilla flavored when it is, even without clarifying the source of the vanilla, does not mislead because reasonable consumers would expect a vanilla taste, and that is exactly what they get.

Also, given plaintiffs’ acknowledgement that the vast majority of vanilla flavored commercial products do not derive their flavor entirely from vanilla extract, it is not plausible to allege that a reasonable consumer would understand that the vanilla flavoring in a beverage is derived entirely from  vanilla extract. So it was difficult to comprehend what is misleading when the “Smooth Vanilla” tastes like vanilla. Nor does the use of the term vanilla imply that there are no other flavoring ingredients. See Sarr v. BEF Foods, Inc., No. 18-CV-6409, 2020 WL 729883, at *4 (E.D.N.Y. Feb. 14, 2020).

Finally, plaintiffs had not adequately pled facts from which the court could plausibly infer that a reasonable consumer would find the amount of vanilla flavor that comes from vanilla extract (as
opposed to other sources of vanillin) is material. E.g., Boshnack v. Widow Jane Distilleries LLC, No. 19-CV8812, 2020 WL 3000358, at *3 (S.D.N.Y. June 4, 2020)(precise source of the water was immaterial because a reasonable consumer would not rely on this fact when deciding whether to purchase the product).  Plaintiffs had not explained why the amount of vanilla taste coming from vanilla extract was supposedly material. Plaintiffs allege in a conclusory way that they would not have purchased the product or paid as much if they had known the “true facts,” but they did not explain why that is reasonable consumer behavior.

Dismissed with prejudice, as further amendment would be futile.

In the class action context, the named plaintiffs as class representatives must allege and show that they personally have been injured, not just that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.  If the named plaintiff cannot establish Article III standing, she may not seek relief on behalf of herself or any other class member, and it will lead to dismissal of the action for lack of subject matter jurisdiction. As the 11th Circuit recently noted, see Muransky v. Godiva Chocolatier, Inc., — F.3d —- , No. 16-16486 & 16-16783, 2020 WL 6305084 (11th Cir. October 28, 2020), the question whether pleading merely that a statutory requirement was violated is enough to establish standing, even when the plaintiff suffered no injury from the alleged violation, was a question that had bedeviled litigants, scholars, and lower courts.  At least, up until Spokeo Inc. v. Robins, 136 S. Ct. 1540, 194 L.Ed.2d 635 (2016), in which the Court explained that a party does not have standing to sue when it pleads only the bare violation of a statute.

FYI, defendant Godiva began as a family business nearly 100 years ago in Brussels, and yes, was named after the legend of Lady Godiva and the associated values of boldness, generosity, and a pioneering spirit.  Like StarWars, this legend started over a tax protest.  Anyway, in 1968, Godiva was appointed official chocolatier to the Royal Court of Belgium. Great stuff.

Article III standing consists of three elements:  an injury in fact, that is fairly traceable to the challenged conduct of the defendant, and that is likely to be redressed by a favorable judicial decision.  These elements are an indispensable part of the plaintiff’s case.

In Muransky, plaintiff had pleaded the case as a pure statutory violation of the the Fair and Accurate Credit ‎Transactions Act (“FACTA”). He alleged that Godiva chocolate stores had printed too many credit card digits on hundreds of thousands of receipts over the course of several years, and pointed out that those extra numbers were prohibited under a federal law apparently aimed at preventing identity theft. His complaint disclaimed any recovery for actual damages. Continue Reading Court of Appeals Decides Important Standing Issue

“Bellwether” cases are an important case management tool in many MDL proceedings, which typically include numerous individual claims. A bellwether is the sheep that leads the flock, and in an MDL, these lead “test” cases may shed important light on how a jury will react to the parties’ themes, how credible and persuasive their experts are, and how the court views key legal issues.  This information can at times be as, if not more, important as the amount of the actual verdict.  But to shed meaningful light, the bellwether trials must produce a sufficient number of outcomes to provide relevant guidance, given the variety of fact patterns in a typical MDL.  Outcomes in this context might include motions practice, but often does really mean verdicts.

Recently, the judge overseeing the device MDL, In re Cook Filter MDL (amended bellwether), No. 1:14-ml-02570 (MDL S.D. Ind.)(Third Amended CMO #27, 10/26/2020), has had to confront two issues affecting the litigation’s bellwether case management plan.  The first three bellwether cases ended before trial, and now the pandemic is impacting how a new bellwether trial might proceed.  Accordingly, he issued an order amending the bellwether case process, in essence asking the parties to provide additional information for the selection of viable and appropriate bellwethers. Continue Reading MDL Revises “Bellwether” Trial Process