Updating our previous post, another federal district court has interpreted Comcast Corp. v. Behrend to require plaintiffs to demonstrate a viable “means of showing damages on a classwide basis through common proof,” and denied certification of a damages class based on a challenge to the validity of the regression model offered by the plaintiff’s expert. At least in California courts, the recent trend appears to be strict adherence to the “viable class-wide damages methodology,” which could be good news for consumer class action defendants.
In Brazil v. Dole Packaged Foods, plaintiff alleged that Dole packaged fruit products were falsely labeled as “All Natural Fruit,” in violation of various California consumer protection statutes. Plaintiff moved for certification of a damages class seeking restitution of the “price premium” attributable to the mislabeling—i.e., the difference between what Dole charged and what it would have charged for products without the “All Natural Fruit” label statement.
Plaintiff proposed to establish the “price premium” through the use of a regression model to isolate the impact of the “All Natural Fruit” label statement by comparing Dole’s prices to those of comparable products and then “controlling for the other factors that may affect” product prices. Specifically, the model used as its explanatory variables “package size, seasonality, year, brand, and the presence or absence of” an “All Natural Fruit” labeling claim.
Keeping in line with other recent opinions out of the Northern District that have strictly adhered to Comcast, Northern District of California Judge Lucy Koh denied certification based on various flaws in plaintiff’s regression model.
Among others, Judge Koh found that plaintiff’s expert failed to corroborate his assumption that comparable products did not make “All Natural” labeling claims, a fatal flaw since any price difference that might exist between comparable products that both made “All Natural” labeling claims could not possibly be attributed to Dole’s claim.
Judge Koh also found plaintiff’s model failed to control for other key variables, such as:
- advertising
- differences in product packaging or
- the presence of multiple labeling claims on some Dole products (e.g., claiming “No Sugar Added” along with “All Natural Fruit”).
Judge Koh held that, under Comcast, a plaintiff seeking class certification must present a damages model that measures “only those damages attributable to” Dole’s allegedly false label statement.
Further, she interpreted Comcast to require plaintiff not only to “say” that a proposed regression model controls for the relevant factors; rather, plaintiff must “show that the model he proposes is capable of controlling for all other factors and isolating the price premium attributable to Dole’s ‘All Natural Fruit’ label only.”
Having found that plaintiff failed to meet this burden, Judge Koh held that the expert’s proposed “methodology cannot survive Comcast,” and, thus, denied certification of the proposed damages class.
