January 21, 2015

Federal Courts Still Answering the Consumer Class Action Call

Seller Beware: Consumer Product Insights for Industry

As lawsuits alleging misleading food and beverage labeling continue to be filed, plaintiffs' efforts to certify class actions can run aground when the purported class members viewed different labels or advertisements for the products, or due to other individualized factors about their purchase or consumption of the products. But two recent trial court decisions show these defects can be difficult to litigate on motions to dismiss, and may need to await class certification to be challenged.

A California federal court denied a motion to dismiss a proposed class action against Honest Tea, Inc. Plaintiff alleged the company improperly marketed its honey green tea as a source of antioxidants. Although Honest Tea had used two different labels, plaintiff purchased only one of them. Despite that, the court found sufficient similarity between the two labels to support plaintiff's standing to challenge claims made on both labels. The court pushed off any decision on differences between the labels to the class certification stage.

In a similar ruling last week, another California Federal court denied an olive oil importer's motion to dismiss a consumer class action alleging that the labels on Bertolli and Carapelli brand olive oils mislead consumers as to the quality ("extra virgin") and origin ("Imported From Italy") of the olive oils. The Court found that these claims were sufficient to prevent early dismissal of three proposed consumer classes, despite acknowledging that some of those classes included consumers of products that plaintiff did not himself purchase. The Court reasoned that some jurisdictions have allowed class actions where there was sufficient similarity between the different products at issue, and thus deferred the matter to the class certification stage.

As these recent examples demonstrate, tightening restrictions on class certification may not pave the way for early dismissal, but will continue to be fought out at the class certification stage.

© Arnold & Porter Kaye Scholer LLP 2015 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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