Court Limits Class Certification Grant in “All Natural” Litigation
A federal court in California has certified a nationwide class of consumers as
to the injunctive relief requested in litigation against Dole Packaged Foods
regarding its labeling claims that certain fruit products are “All Natural”
despite the presence of ascorbic acid and citric acid, but limited the damages
class to California consumers and the number of products at issue. Brazil v.
Dole Packaged Foods, LLC, No. 12-1831 (U.S. Dist. Ct., N.D. Cal., San Jose Div.,
order entered may 30, 2014). Dismissed with prejudice were Dole products
and label statements in the second amended complaint for which the named
plaintiff did not move for class certification. An earlier ruling narrowing the
claims is discussed in Issue 498 of this Update.
Among other matters, the court disagreed with Dole’s argument that the class
could not be ascertained because company records identifying purchasers
or the products they purchased do not exist and further disagreed that the
“All Natural” labels are not susceptible to common proof. The court found
supporting cases distinguishable because the plaintiff challenges just “10
products labeled ‘All Natural Fruit’ based only on their inclusion of ascorbic
acid and citric acid.” Accordingly, whether the statement is material, in the
court’s view, “is a question common to the class.”
The court agreed with Dole, however, that California law could not be applied
on a class-wide basis as to the damages claims; thus the nationwide class
failed the predominance requirement of Federal Rule of Civil Procedure
23(b)(3). In this regard, the court found that the “place of the wrong” is the
geographic location where the misrepresentations were communicated
to the consumer—“in other words, in each of the 50 states.” The court also
addressed whether the plaintiff had presented a sufficient damages model
consistent with its liability case. While the court found the full-refund and
price-premium models inconsistent with the liability case, it ruled that the
“economic or regression analysis” proffered by the plaintiff’s expert would
trace damages to “Dole’s alleged liability by accounting for several factors
other than the alleged misbranding that might influence changes in price or
sales.”
Dole had also argued that the court should deny class certification because
the expert had not yet run his regressions, but the court noted that the
company had not produced the discovery necessary for the analysis before
class certification was briefed. In this regard, the court stated, “Dole cannot
use damages discovery as both a sword and a shield. In its [Discovery Dispute
Joint Report] #1, Dole claims that it need not produce discovery relevant to
damages before class certification because the discovery is not relevant to
class certification. Yet, Dole opposed class certification on the basis that Dr.
Capps has not performed his regression analysis. According to [the named
plaintiff], Dr. Capps cannot perform his regression analysis without the
discovery Dole refused to produce.”
Issue 525
