False Advertising Claims Against Arizona Beverage Dismissed in Part in California; Class Cert. Denied in New Jersey

A federal court in California has granted in part the motion to dismiss filed by Arizona Beverages USA LLC, in a putative class action alleging the violation of consumer fraud and false advertising laws due to company representations that its products are “Natural,” “All Natural” and “100% Natural.” Ries v. Arizona Beverages USA LLC, No. 10-01139 (N.D. Cal., decided August 25, 2011). The plaintiffs contend that the products are not natural in that they contain high-fructose corn syrup and an artificially produced citric acid. At issue in the defendants’ motion was whether the plaintiffs had adequately pleaded the claims in their first amended complaint under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).

According to the court, the complaint adequately pleaded fraud in connection
with the plaintiffs’ allegations arising out of the product labels. The court
concluded, “These allegations are not inherently implausible and are sufficient
for purposes of Rule 9(b).” The first amended complaint also included
claims relating to Internet advertising and “other promotional” materials, but
because the plaintiffs failed to identify any specific ads or materials, the court
found these claims insufficient. Dismissing them, the court again gave the
plaintiffs leave to amend.

Meanwhile, a federal court in New Jersey has, on reconsideration of its order
denying a motion for class certification in similar litigation against Arizona
Beverage, again found the plaintiff an inadequate representative of the class.
Coyle v. Hornell Brewing Co., No. 08-2797 (D.N.J., decided August
30, 2011). The court concluded that the named representative was inadequate
because of credibility problems associated with the date she allegedly
purchased the products at issue. In this regard, the court stated, “Without
doubt, determining whether this Plaintiff made her purchase of Defendants’
product on the date she repeatedly claimed, after she had retained a lawyer
to file suit, would become a major focus and quite probably a show-stopper
for this class.”