By David E. Sellinger and Aaron Van Nostrand, Greenberg Traurig LLP
In a closely watched appeal, the US Court of Appeals for the Ninth Circuit has squarely weighed in on the “ascertainability” of class members in a class-action lawsuit. The three-judge panel further widened a rift among federal courts of appeal on the issue, holding that plaintiffs need not demonstrate an administratively feasible way to identify class members at the class-certification stage.
In an August, 2016 WLF Legal Backgrounder, we predicted that a trio of class actions then-pending in the Ninth Circuit could prompt the US Supreme Court to resolve the circuit split on the ascertainability issue. Although that issue was briefed in all three cases, it was not decided in Brazil v. Dole Packaged Foods, LLC (No. 14-17480), and a hold placed on Jones v. ConAgra Foods, Inc. (No. 14-16327) pending a Supreme Court decision in Microsoft v. Baker is still in effect. The Ninth Circuit did address ascertainability in the third case discussed in that Legal Backgrounder—Briseno v. ConAgra Foods, Inc. The January 3 decision presents a view sharply in contrast with that of certain other circuits, most notably the Third Circuit. Continue reading
Partially hydrogenated oil
In 2016, class-action lawsuits alleging that a processed food product or its labeling violated state consumer-protection laws continued to clog the federal courts, especially in California. The number of new food-related consumer class actions filed last year nearly equaled the number filed in 2015, according to a report in Food Navigator USA. It’s unclear whether these trends will hold in 2017, but there is one set of blatantly frivolous claims that should disappear this year: those that seek judicial regulation of products that contain partially hydrogenated oil (PHO), the main source of trans fat. A December 13, 2016 Southern District of California decision should frustrate such claims in the short term, and a forthcoming US Court of Appeals for the Ninth Circuit decision in a pending case may (and should) end them permanently. Continue reading
A September 7 WLF Legal Pulse commentary, Court Pours Cold Water on Unreasonable Serving-Size Class Action vs. Starbucks, discussed the US District Court for the Central District of California’s dismissal of a fraud suit alleging that Starbucks duped iced-drink consumers into purchasing a 12-ounce iced coffee/tea which, because it included ice, contained somewhat less than 12 ounces of liquid. The post noted that copycat suits were pending in federal courts in Illinois and New York. On October 14, Judge Thomas M. Durkin of the Northern District of Illinois granted Starbucks’s motion to dismiss the seven-count suit of disenchanted customer Steven Galanis. (Galanis v. Starbucks Corp.)
What Mr. Galanis, and Mr. Forouzesh before him in Forouzesh v. Starbucks Corp., in essence argue is that when purchasing a “tall” iced coffee, for which there is a 12-ounce cup, they expect to get 12 ounces of coffee plus ice. Upon receiving their drink, they, and the thousands of consumers whom they claim to represent, realize they were deceived, and that the deception made them pay more than what the product was worth. The Illinois consumer fraud law under which Galanis sued requires that the defendant’s action would mislead a reasonable consumer. Just as in Forouzesh, that requirement proved to be Mr. Galanis’s downfall.
“Galanis’s claims ask the Court to interpret Starbucks’s menus in an unreasonable fashion,” Judge Durkin explained. Referencing a screen capture of iced coffee on Starbucks’s online menu reproduced in the opinion, Judge Durkin noted that the company lists the serving size separately from the product’s contents, which specifically include “Ice” and “Brewed Coffee.” The description of the drink also references that it is coffee served “over ice.” The court added that as a matter of law, a reasonable consumer understands that “‘fluid ounces’ is a measurement of a drink’s volume, not a description of a drink’s contents.”
In the dog days of summer 2016, the US Department of Agriculture (USDA) ordered local government authorities to ban advertising for a select group of “disfavored” food and beverage products. The agency’s brazen action establishes a deeply troubling precedent in government’s efforts to usurp our freedom to choose what we eat and drink. Over the last several years, Washington Legal Foundation has closely tracked and strategically opposed actions such as USDA’s ban through our “Eating Away Our Freedoms” project. We launched that project five years ago this month on October 20, 2011.
The EatingAwayOurFreedoms.org website is organized by the four major tactics that activists use to denigrate certain foods and beverages and to stigmatize consumers’ choice of those products: regulation, litigation, taxation, and public-relations demonization. For several years, the “regulation” page contained far fewer references to news articles and other analyses than the other three. But as government’s appetite for food-related mandates and restrictions has grown, the number of “regulation” entries has ballooned. USDA’s ad ban is perhaps the most pernicious regulation EatingAwayOurFreedoms.org has ever encountered. Continue reading
On September 30, just two weeks after hearing oral argument in the case (which we previewed here), the Ninth Circuit released an unpublished opinion in Brazil v. Dole Packaged Foods, partially reversing the district court. The opinion correctly upheld the district court’s dismissal of one of Brazil’s “outlandish theor[ies]” and its decertification of the class. Unfortunately, the Ninth Circuit relied on nonbinding FDA guidance and warning letters to evaluate what would mislead a reasonable consumer, reversing the district court’s dismissal of his other claims. Although not officially precedential, the opinion is worth reviewing because it has the potential to guide lower courts and gives insight into the Ninth Circuit’s future food-labeling decisions. Continue reading
Featured Expert Contributor — Civil Justice/Class Actions
Frank Cruz-Alvarez, a Partner in the Miami, FL office of Shook, Hardy & Bacon L.L.P. with Ravika Rameshwar, an Associate with the firm.
On August 23. 2016, the US District Court for the Eastern District of New York dismissed a class-action suit that alleged the makers of Similac® Advance® Organic Infant Formulas fraudulently misrepresented the products as “organic,” holding that the state claims are preempted by federal law—specifically, the Organic Foods Production Act of 1990. Marentette et. al. v. Abbott Laboratories, Inc., 2016 WL 4444787 (E.D.N.Y Aug. 23, 2016). The court stated that Congress designed the OFPA to create a national standard for organic labeling that would be “disrupted, if not thwarted,” by inconsistent state and federal court decisions. Marentette, 2016 WL 4444787, at *8. Continue reading