Topic: Recent consumer products case law

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Ninth Circuit says “not so fast” for Hain Celestial dismissal

Last Friday, the Ninth Circuit reversed a holding by the District Court for Southern District of California dismissing “All Natural” false advertising claims against Hain Celestial cosmetics because they were barred by the primary jurisdiction doctrine. The Court stated that dismissal of the claims was the improper result, even if the FDA did have primary jurisdiction to handle the all natural claims. Along the way, the Ninth Circuit also managed to make plaintiff-friendly rulings regarding FDA preemption and unjust enrichment claims.

All Natural Cosmetics?

Hain Celestial markets and sells cosmetics advertised as “All Natural,” “Pure Natural,” or “Pure, Natural & … Continue Reading

Ninth Circuit says manifestation of a defect does not matter at the pleading stage

Last month, the Ninth Circuit held that a district court in the Western District of Washington erred by striking class allegations from a complaint because a product defect did not manifest in the vast majority of products purchased.

District Court Strikes Class Allegations From Complaint

In the case, several named plaintiffs filed a class action complaint alleging that a design defect in the Xbox 360 video game console gouged and scratched game disks, making the disks unplayable. Defendant argued that only 0.4% of Xbox owners reported the defect in the product and that any scratching was caused by consumer error.… Continue Reading

Would-be competitor lacks standing to sue for false advertising

The United States District Court for the District of Maine has held that a competitor who is “thinking” about going into business does not have Article III standing to bring a Lanham Act false advertising suit against an established competitor.

In this case, Maine Springs, a company created to establish water bottling operations in Poland Spring, Maine, argued that Nestlé Waters falsely implied that its Poland Spring brand bottled water actually contained water from the dried-up Poland Spring. Even though Maine Springs had in place the mechanisms to start producing bottled water, because it had not actually attempted to “enter … Continue Reading

Lack of defendant’s consumer records may not mean a class is unascertainable

A California Court of Appeal recently held that a class is not unascertainable simply because individual class members cannot be identified from a defendant’s records so long as there is some objective means for identifying class members.

In Aguirre v. Amscan Holdings, Inc., plaintiff alleged that defendant Party America violated the Song-Beverly Credit Card Act by requesting and recording credit cardholders’ zip codes in conjunction with credit card purchase transactions.

Party America moved for an order striking and dismissing the class allegations from the complaint and denying class certification. It argued the class was not ascertainable because there were … Continue Reading

Appellate ruling signals potential sea change in Prop 65 enforcement for reproductive toxins

A recent decision from the California Court of Appeal, First Appellate District, in Environmental Law Foundation v. Beech-Nut Corporation applied the familiar substantial evidence standard to uphold a trial court judgment in favor of defendants that has enormous implications for Prop 65 enforcement cases.

Beech-Nut Trial Court Holding

Beech-Nut involved claims that users were exposed to lead from fruits and fruit juices manufactured by the defendants. There was no dispute that the products contained trace amounts of lead, although there was a significant dispute over whether some or all of the lead was “naturally occurring,” and thus exempt … Continue Reading

Ninth Circuit says no preemption for Benecol’s “No Trans Fat” label claims

Reversing an order from the Southern District of California, the Ninth Circuit has held that state law false advertising claims based on “No Trans Fat” statements on the butter/margarine substitute Benecol are not preempted by federal law.

Robert Reid filed class claims for violations of California’s Consumer Legal Remedies Act, Unfair Competition Law and False Advertising Law, arguing that representations on the labeling of Benecol – among them “No Trans Fat”, “No Trans Fatty Acids” and “Proven To Reduce Cholesterol” – were misleading to consumers because the product did contain trans fat (albeit a very small amount) and that … Continue Reading

Plaintiffs’ energy zapped in Redline Xtreme lawsuit

A Florida federal judge refused to certify a nationwide class of purchasers of Redline Extreme Energy Drink stating that the class lacked ascertainability (a topic we have previously addressed on this blog).

The plaintiffs claimed in Mirabella v. Vital Pharmaceuticals, Inc., S.D. Florida Case No. 0:12-cv-62086, that Vital Pharmaceuticals Inc. concealed the dangerous side effects of its Redline Xtreme energy drink, and attempted to certify a class composed of all purchasers of the approximately $3 drink since 2008.

The Court noted that ascertainability was a “threshold” requirement, such that the plaintiff must be able to demonstrate that the … Continue Reading

California court creates split of authority for class action damages modeling in the same case

Class certification is a do or die moment for class action plaintiffs. Currently, a hotly contested issue at class certification is whether or not a plaintiff can propose a damages model that is common to the putative class.

In 2013, the U.S. Supreme Court held in Comcast v. Behrend that at the class certification stage, plaintiffs must present a damages model that is consistent with their liability case, and that courts “must conduct a rigorous analysis to determine whether that is so.”

Following Comcast, class action defendants have seized every opportunity to attack plaintiff’s damages models to avoid class … Continue Reading

Making online terms and conditions stick

Because the interaction between online retailers and their customers is limited, online retailers have little choice but to present terms and conditions of sale on their websites. These online terms and conditions present concepts important to online retailers, including arbitration and choice of law provisions. The way in which online retailers present these terms and conditions to customers, and the way in which the customers manifest assent, is crucial to determining whether these terms and conditions are enforceable. Here are some key considerations in presenting online terms and conditions that may help to avoid court when you’re expected to be … Continue Reading

Ski resorts and outdoor industries may face increasing liability

When a business’s consumers are skiers and snowboarders, knowing the potential liability for negligence is critical. Ski resort operators often encounter claims of unsafe terrain and failure to warn. Equipment manufacturers and sellers often run into product liability and personal injury claims regarding faulty bindings, skis, or other equipment.

Outdoor Sports Liability Protections

Early personal injury cases brought by skiers in the 1970s spurred a slew of protective measures for ski resorts and equipment manufacturers. To help boost the burgeoning industry, several states passed laws that limit negligence claims brought by injured skiers. But as outdoor sports become more common, … Continue Reading

UPDATE: California AG appeals foie gras ruling

In the wake of the federal court’s decision enjoining California’s foie gras ban, many restaurant owners rejoiced, making the delicacy immediately available. But restaurant owners may not want to throw out their creative menu techniques just yet.

Following the court’s decision, the California Attorney General has filed a notice of appeal. The ball is in the Ninth Circuit’s court to issue a briefing schedule, and the notice is a straightforward document providing no insight into the basis for the AG’s appeal, leaving us all guessing when this matter might be addressed, and on what grounds. We will post further … Continue Reading

UPDATE: No Appeal In Jeans “Made In USA” Claim

We previously posted about the case Paz v. AG Adriano Goldschmied, in which the Southern District of California denied a motion to dismiss a complaint alleging violations of California’s “Made in the USA” standard. In denying the motion, the court held that California’s stricter standard (i.e., all components of a product, even a screw, must be made “entirely or substantially” in the United States) was not preempted by more lenient standards set forth by the Federal Trade Commission Act and the Textile Fiber Products Identification Act.

Attempting to counter the ruling, defendants filed a request for interlocutory … Continue Reading

Class certified in EZ Seed case in New York and California

Consumer Products: Class certified in EZ Seed caseEarly this week, Judge Vincent Briccetti in the Southern District of New York certified classes of consumers in New York and California who purchased the product Scotts Turf Builder EZ Seed. In re Scotts EZ Seed Litigation.

The lawsuit alleges violations of the UCL, FAL, CLRA and New York’s General Business Law based on sales of the product 

Plaintiffs allege that the EZ Seed is falsely advertised because:“EZ Seed,” a grass seed product combined with a fertilizer. Among other things, Scotts advertises EZ Seed as growing grass “50% thicker with half the water,” as compared to “ordinary seed.”  … Continue Reading

California AG fowls out on foie gras ban

Restaurants across California may no longer need to find creative ways to put foie gras on their menus, as a California federal court has ruled that federal law preempts California’s ban on the sale of the delicacy and enjoined the California Attorney General from enforcing the law.

The ban

In 2004, California enacted SB 1520, which banned the use of gavage (force-feeding) to produce foie gras in the state, and also banned the sale within the state of foie gras produced through gavage. However, the Legislature delayed enforcement of the ban until 2012.

The initial SB 1520 challenge

Shortly … Continue Reading

Ninth Circuit finally poised to decide ascertainability split

At long last, the Ninth Circuit has heard the cries of confused class action litigants and will be weighing in on whether self-identification of class members (without the benefit of a receipt or other indicia of purchase) is enough to pass the implicit ascertainability requirement of Rule 23.

As we have often commented on this blog, the split in treatment of purchasers of small-ticket items (the issue most notably addressed by the Third Circuit in Carrera) by district courts has resulted in disparate ascertainability rulings, and there is no certainty how courts (even within the same circuit) will come … Continue Reading

No plaintiff, no problem: Apple court allows action to proceed after plaintiff disqualified

Last week a N.D. California judge refused to dismiss a long-running class action suit against Apple Inc., despite disqualifying the last remaining named plaintiff. The parties rested Friday in the multi-million dollar antitrust trial accusing Apple of holding a digital-music monopoly, without a lead plaintiff to represent the class.

The case began with three plaintiffs suing Apple nearly ten years ago, but two of them withdrew, and presiding judge, Yvonne Gonzalez Rogers, disqualified the third in the midst of trial. All were disqualified because they had not purchased a product at issue in the case, a covered model iPod, … Continue Reading

Class claims certified for Hain Celestial Organic Cosmetics

Last week, Magistrate Judge Beeler in the Northern District of California certified a class of purchasers of cosmetics marketed as “organic” by The Hain Celestial Group, Inc.

In so doing, Judge Beeler weighed in on several hot spot issues for class certification, including ascertainability, consumer reliance and class-wide damages models. Her determinations seem generally in keeping with the plaintiff-happy class action climate in California, as courts recently seem reticent to deny class certification.

Background

On June 22, 2011, plaintiffs Rosminah Brown and Eric Lohela filed a lawsuit alleging that several different Avalon Organics and Jason cosmetic products (manufactured and marketed … Continue Reading

One plaintiff not enough to prove advertising likely to deceive reasonable consumers

It seems that lately, all it takes to bring a false advertising class action regarding “all natural” or “no sugar added” representations on product packaging is the say-so of one consumer who claims the representations are misleading (even though they might not be technically “false”).

Indeed, at the motion to dismiss stage, courts tend to be quite consumer friendly, many times finding that bare allegations of deception are enough to move the case into discovery.

While this may be frustrating for many defendants who believe they have done nothing wrong, there is light at the end of the tunnel. Despite … Continue Reading

Certification of damages class denied in “All Natural Fruit” false labeling suit

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 … Continue Reading

Jamba Juice class deemed ascertainable; Skinnygirl class is not

Federal courts continue their divide on ascertainability requirements for small-ticket items in the wake of Carrera v. Bayer.

Just recently, district courts in California and Illinois (neither of which are bound by Carrera), took opposite stances in applying the 3rd Circuit decision, leaving litigants to wonder when or if the Supreme Court is going to weigh in on the decision.

Until clarification from a higher authority comes, a decision on class certification based on ascertainability can vary wildly, depending on where the case is and, frankly, the personal proclivities of the judge assigned to the case.

Lilly v.

Continue Reading

UPDATE: Recent jeans case confirms harsher “Made In USA” standards exist in California

A California federal district court judge recently provided some clarity on the apparent disparity between California’s “Made in the USA” law and the standard set forth by the Federal Trade Commission.

The Southern District Court of California’s recent decision in Paz v. AG Adriano Goldschmied confirms that California’s “Made in the USA” standard sets forth more stringent requirements than the FTC standard.

In Paz the plaintiff filed a class action complaint against AG Adriano Goldschmied and retailer Nordstrom, alleging that AG falsely labeled its jeans “Made in USA.” The plaintiff alleged that AG’s jeans actually contained fabric, thread, buttons, rivets, … Continue Reading

No more rubber stamps: courts critical of class action settlements

A number of recent cases show courts taking a more active role in approving class action settlements, more closely scrutinizing settlements meant to benefit class members.

Just last month in Redman v. RadioShack Corporation the Seventh Circuit rejected a class action settlement providing for dissemination of $10 coupons to class members and $1 million in attorneys’ fees to class counsel.

Although there were an estimated 16 million RadioShack customers in the class, notice of the proposed settlement was sent to less than 5 million. Of those receiving notice, only 83,000 submitted claims for the coupon—about one half of one percent … Continue Reading

Courts disagree whether attacks on expert damage models defeat class certification in the wake of Comcast

Federal courts continue to be split on whether the Supreme Court’s 2013 ruling in Comcast Corp. v. Behrend  requires plaintiffs seeking class certification to present viable, common methodologies to prove class-wide injury and damages. Two recent federal decisions highlight these competing views of Comcast. Uncertainty over the standards for the use of expert damages testimony to establish predominance of common issues is likely to remain until the Supreme Court further clarifies Comcast and what it means for class actions.

Denial of Class Certification in In re Optical Disk Drive 

On Oct. 3, 2014, Northern District of California Judge Richard … Continue Reading

Red Bull settlement problems show consequences of certifying unascertainable classes

Since the Third Circuit’s opinion in Carrera v. Bayer Corp., courts have been battling with the approach to consumer classes for small-ticket items because consumers often do not retain receipts or proofs of purchase (think consumer products like OTC drugs, food items, beverages, etc.). The challenge is that without receipts or proofs of purchase, a court cannot definitively ascertain the class. Although courts have been all over the map when it comes to certifying classes based on ascertainability (particularly the Ninth Circuit), the recent settlement in a class action over Red Bull products provides a good example of the … Continue Reading

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