Northern District of California Judge William Orrick recently denied class certification in two food misbranding class actions challenging antioxidant claims for Bigelow green and black teas. Khasin v. R.C Bigelow Inc., Case No. 12-cv-02204-WHO (N.D. Cal. March 29, 2016) (green tea) and Victor v. R.C Bigelow Inc., Case No. 13-cv-02976-WHO (N.D. Cal. March 29, 2016) (black tea). Consistent with many courts in this District, Judge Orrick rejected plaintiffs' damages model and found that they failed to establish an entitlement to injunctive relief.
No Viable Damages Model. Plaintiffs offered three damages models to certify a Rule 23(b)(3) class: (1) restitution; (2) statutory damages1; and (3) a nominal alternative. The court rejected all three models. The court first found that plaintiffs' restitution calculation was not viable because, rather than relying on the Ninth Circuit's accepted "price premium" method, plaintiffs sought a full refund. Judge Orrick noted that the "full refund" model has been repeatedly rejected, and that he had previously rejected it in the actions. Judge Orrick declined to change his position.
The court then found that plaintiff in Khasin had not established an entitlement to statutory damages under the CLRA.2 The court noted that, while the statutory language sets a minimum damages award, Khasin had not proven any actual damages, thus fatally undermining his statutory damages claim.
Finally, the court noted that plaintiffs failed to cite a single case establishing that nominal damages were available under their asserted causes of action.
No Standing for Injunctive Relief. Next, the court addressed plaintiffs' attempt to certify a Rule 23(b)(2) injunctive class. The court noted that plaintiffs needed to establish a threat of particularized harm before prospective injunctive relief could be granted. Both plaintiffs failed to do so.
The court rejected plaintiffs' bare assertion that they would consider purchasing Bigelow's green or black tea products again in the future if they were assured that allegedly misleading verbiage was removed from product labels. Judge Orrick found this assertion too speculative and hypothetical to support standing for injunctive relief.
Judge Orrick then stated that even if plaintiffs did intend to purchase Bigelow tea in the future, plaintiffs failed to establish a likelihood that they would again suffer the same alleged harm based on those purchases. While plaintiffs may have been misled by deceptive labeling in the past, because they are now better informed, they cannot be "duped" again, and accordingly cannot establish standing for injunctive relief.
Takeaway. Judge Orrick's decisions demonstrate that misbranding plaintiffs face an uphill battle in presenting a viable damages model and are likely to be rejected if they present a model other than "price premium." In addition, courts within the Northern District are taking an increasingly narrow view of standing to seek injunctive relief under Article III and the UCL. Thus, it may not be enough for a plaintiff to allege that he or she plans to buy a product again. Courts now question whether a plaintiff can ever be duped by a product once he or she knows the "truth" about the labels.
Footnotes
1 Only Khasin offered a statutory damages model under the CLRA.
2 Relief under the CLRA is limited to only those plaintiffs who actually suffered damages.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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