Cross-posted at Forbes.com’s WLF contributor page
A decision last month in one of the many class action lawsuits targeting food makers epitomizes much of what is wrong about America’s civil justice system generally, and the latest food labeling suits in particular.
Two AriZona iced tea purchasers, on behalf of all similarly situated Californians, filed suit in The Food Court (aka The Northern District of California) under three California statutes. They argue that AriZona’s use of “natural” on some product labels is deceptive because the tea contains high fructose corn syrup and citric acid. On November 27, Judge Richard Seeborg granted in part and denied in part AriZona’s summary judgment motion, and also issued a modified certification of the suit as a class action.
Plaintiff Lauren Ries claims she purchased an “All Natural Green Tea” at a gas station in 2006 because (among other reasons) she was thirsty and wanted something healthier than a soda. She couldn’t recall the price and doesn’t have a receipt. Plaintiff Serena Algozer says she bought various AriZona teas over several years but doesn’t recall the prices, doesn’t remember what label statements she relied on, and, doesn’t have receipts.
Judge Seeborg ruled that Ms. Ries’s claims under two of the California laws were barred by their statutes of limitation. However, her claims under the third law, and all of Ms. Algozer’s claims, were allowed to proceed. Under the court’s interpretation of the proof needed for plaintiffs to survive a summary judgment motion, it did not matter that Ries and Algozer:
- had no proof of their purchases;
- had no evidence that they paid more for a “natural” iced tea than a comparable (“unnatural”?) product; and
- can’t be sure that they relied on the “natural” statement when buying the tea.
The court then turned to plaintiffs’ motion to certify a class under Federal Rule of Civil Procedure 23(b)(2). Over defendants’ objections to the proposed class definition, Judge Seeborg ruled that it was immaterial that many if not most “class members” would not be able to prove they had purchased a “natural” AriZona product. He also decided it did not matter if some class members couldn’t satisfy constitutional standing requirements.
Judge Seeborg further ruled that the facts and law at issue among the class members need only have “minimal commonality” to meet the requirements of Rule 23(a)(2). Had the plaintiffs sought certification under 23(b)(3), the commonality hurdle would have been much higher, as the applicable test is whether “questions of law or fact common to the class members predominate over any questions affecting only individual members.” Under 23(a)(2), the court explained, it was immaterial that different class members may have purchased AriZona products for different reasons, or may have been exposed to different labels.
The decision by the plaintiffs’ lawyers to seek 23(b)(2) certification, and thus avoid the stricter “predominance” test for commonality under 23(b)(3), however, proved to be a double-edged sword. Judge Seeborg noted that in addition to seeking injunctive relief (i.e., an end to the use of “natural” on packaging), the plaintiffs wanted restitution for their wayward iced tea purchases. Monetary damages are not available to class members in a Rule 23(b)(2) class, so Judge Seeborg declined to certify a class for restitution.
Ries v. AriZona Beverages USA offers an unambiguous example of how absurdly easy it is to bring class action suits. The two lead plaintiffs aren’t sure exactly when or why they bought an AriZona beverage, can’t recall for what the label said (though it definitely said “natural”), don’t have receipts, and don’t remember how much they paid. No problem—they can still sue on behalf of thousands of other consumers who may or may not have bought an AriZona tea thinking it was natural. All of those factors would work against you in a rational civil justice system; but under our system, they earn you class certification and possibly a ticket to expensive, drawn-out litigation. More likely, they earn you a settlement.
Also, consider this: some “absent” class members might actually want restitution for their mistaken AriZona purchase. But that won’t be available, since only injunctive relief is available after Judge Seeborg’s ruling. This situation likely doesn’t bother the lawyers, who will get their attorneys’ fees, or Ms. Ries or Ms. Algozer, who will receive incentive awards for bringing the case.
Finally, we’d be remiss if we didn’t point out that Ries reflects the importance of picking the right forum. Last year, the Federal District Court for the District of New Jersey dismissed a nearly identical class action against AriZona filed by some of the same lawyers involved in Ries. No matter, one imagines the lawyers must have thought at the time, we have this other pending case in the Northern District of California, so our hopes are very much alive.