Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Class certification granted in olive oil country-of-origin deceptive labeling claim, (Jul 18, 2016)

By Edward L. Puzzo, J.D.

A class consisting of California purchasers of Filippo Berio brand olive oil misled by "Imported from Italy" labeling on the product during 2010-2015 has been certified by the federal district court in Oakland, California (Kumar v. Salov North America Corporation, July 15, 2016, Rogers, Y.).

Rohini Kumar brought a putative class action against defendant Salov North America Corporation in connection with the Filippo Berio brand olive oil it distributed. Kumar alleged that labeling indicating that the product was "Imported from Italy" was deceptive and misleading because the oil was in fact actually produced in Tunisia, Greece, and Spain, then shipped to Italy, mixed with a small amount of Italian olive oil, bottled, and sold to consumers. Kumar alleged that this conduct violated California's Unfair Competition Law (UCL), Consumers Legal Remedies Act (CLRA), and False Advertising Law (FAL).

Kumar sought certification of a class consisting of all California purchasers of Filippo Berio brand olive oil of any grade, including extra virgin, pure or extra light, between May 23, 2010 and August 31, 2015. Salov opposed certification of the class.

Adequacy and typicality. Salov first argued that Kumar failed the adequacy and typicality requirements of Federal Rule of Civil Procedure 23(a) and was not deceived by the "Imported from Italy" because, when she read the "best by" date on the rear label of the olive oil bottle, she would have seen the disclaimer disclosing the national origin of the oil. However, Kumar denied seeing the disclaimer and her testimony could not be disregarded, the court stated. Salov further challenged Kumar's adequacy as class representative because she was a personal friend with one of the class counsel and she had a felony conviction for driving under the influence. The court ruled that none of these factors made Kumar an inadequate or atypical class representative.

Common questions of law and fact. The UCL, CLRA and FAL prohibit not only statements that are literally false, but also prohibit statements, while true, are likely to deceive a reasonable consumer, the court explained. It is well settled that where numerous consumers are exposed to the same dubious practice by the same seller, proof of the prevalence of the practice as to one consumer would provide proof as to all. Kumar also intended to prove that the labeling violated Food and Drug Administration (FDA) regulations, which would support a UCL claim under the "unlawful" prong. The court found that these factors established that there were common questions of law and fact sufficient to meet the requirements of Fed. R. Civ. P. 23(a).

Ascertainability. If the additional requirement is imposed that members of the class be readily ascertainable (an open question in the Ninth Circuit), then Salov argued that ascertainability was lacking because membership in the class would require each member to prove the purchase of Berio olive oil and recall whether they were deceived by the "Imported from Italy" statement on the bottle. The court found that the claim involved identical statements on all products for the relevant time period, with no "memory test" for flavor, size, or time period necessary to determine whether the purchased product had the challenged label. The court ruled that the class was sufficiently ascertainable based on the period of time the challenged labeling was used and the types of Berio olive oil covered.

Beyond the threshold requirements for class certification, Fed. R. Civ. P. 23(b)(3) requires a plaintiff to establish "that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy."

Materiality. Salov argued that Kumar must show how the misleading statements were material in causing injury, and further show how materiality could be established on a classwide basis. The court stated that questions of materiality and reliance must be determined on a "reasonable consumer" standard, and this did not require individualized evidence for each class member. Misrepresentations as to product origins have been held to be material misrepresentations without the necessity of proof of materiality to each individual consumer. Evidence that a label misleads a consumer as to a product's origins and its associated value establish materiality, the court stated. Here, Salov's own market research showed that Italian origin was important to consumers' olive oil purchasing decisions. Thus, the materiality of the representations could be determined on a classwide basis, the court ruled.

Reliance. Salov questioned consumer reliance on the challenged labeling, asserting that a promotional "neck collar" tags sometimes used on the olive oil bottles would have obscured the challenged labeling. But the court did not find this persuasive.

Damages. Salov also claimed that damages could not be determined on a classwide basis because Kumar was asserting a "fraud on the market' theory. The court found that Kumar was actually using a "diminution in value" theory, which was a sufficient model for calculating damages on a classwide basis.

The court concluded that, based on the above findings, the plaintiff had established the prerequisites for certification of the class and granted plaintiff's motion for certification.

The case is No. 4:14-cv-02411-YGR.

Attorneys: Seth Adam Safier (Gutride Safier LLP) for Rohini Kumar. Sean Ashley Commons (Sidley Austin LLP) for Salov North America Corporation.

Companies: Salov North America Corporation

Cases: Advertising StateUnfairTradePractices CaliforniaNews