Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Cosmetic consumers obtain class certification for allegedly false “organic” claims, (Nov 19, 2014)

By Greg Hammond, J.D.

Two classes have been certified in false advertising litigation, alleging that cosmetics manufacturer, The Hain Celestial Group, Inc., violated California’s organic products and unfair competition laws by advertising certain cosmetic products as “organic,” when they were not. The federal district court in San Francisco granted the consumers’ motion for class certification, certifying one class for Avalon Organics product purchasers and one class for Jason product purchasers (Brown v. The Hain Celestial Group, Inc., November 14, 2014, Beeler, L.).

Background. Hain manufactures and distributes cosmetic products under the Jason and Avalon Organics brands, such as deodorants, soaps, sunscreen, lotions, and hair products. Plaintiff Rosminah Brown purchased a Jason facial wash, allegedly believing that the product was either completely or mostly made of certified organic ingredients, due to the phrase “Pure, Natural & Organic” that appeared on the front of the product’s label. Similarly, plaintiff Eric Lohela purchased multiple Avalon Organics products after viewing the Avalon lavender Lotion packaging, displaying the word “Organics” on the front label, along with a pledge that the product was “Pro-Organic.”

The two consumers filed a putative class action, alleging that Hain violated the California Organic Products Act of 2003, Unfair Competition Law, and the Consumers Legal Remedies Act. They also moved to certify two separate classes: (1) all persons who purchased a personal care product in California sold under the Jason brand name between May 12, 2007 and June 30, 2011 other than those Jason brand personal care products that are USDA certified as organic; and (2) all persons who purchased a personal care product in California sold under the Avalon Organics brand name between May 12, 2007 and the present other than those Avalon Organics brand personal care products that are USDA certified as organic.

Class definitions. Hain made two arguments in opposition to class certification: (1) the proposed definitions differed materially from those in the first amended complaint and potentially included non-actionable products; and (2) the class was not ascertainable because consumers can only self-identify and are not likely to have receipts.

The court rejected both of these arguments, noting first that “[i]t is an unremarkable feature of class actions that class definitions are refined to reflect the developing realities of a given suit,” and that the class definitions did not change in any substantial or troubling way. Rather, it found that the narrowing of the definitions—by cutting off the Jason class after January 31, 2011 and by excluding products that are USDA-certified—resolved issues regarding: (1) new Jason labels that did not contain the allegedly false tagline; and (2) over-inclusiveness for both the Avalon and Jason classes.

Second, the court stated its belief that consumers could accurately recall whether they bought an Avalon Organics or Jason product that stated “pure, natural, and organic,” during the class period. Further, it determined that self-identification was allowable in this case because the restitution damages that were sought focused on Hain’s conduct, not on the harm allegedly suffered by individual class members.

Rule 23(a), 23(b)(3) requirements. In deciding to certify both of the proposed classes, the court determined that the plaintiffs met the Rule 23(a) prerequisites and 23(b)(3) predominance and superiority requirements. First, there was no dispute that the proposed classes were so numerous that joinder would be impracticable. Several common questions of law and fact existed, such as: (1) whether the use of the word “organic” on Hain’s labels constituted selling, labeling, or representing products as organic or made with organic ingredients and (2) whether the Hain products that contained the allegedly false “organic” representation contained at least 70 percent organic content.

The court also found that the consumers’ claims were typical of the class’ claims, because Hain’s purported conduct was not unique to any single plaintiff, and all plaintiffs could claim injury from the same course of conduct. Class counsel and the named plaintiffs were also deemed adequate to represent the class members.

Finally, the court concluded that common issues predominated over questions affecting individual members, and the class action was superior to “a galaxy of individual suits.” Specifically, it found that several central common questions drive the case regarding the “organic” representations and the actual organic content of the products, and the plaintiffs plausibly demonstrated that damages can be calculated on a class-wide basis.

The case number is C 11-03082 LB.

Attorneys: Lisa Margaret Burger (Lexington Law Group) for Rosminah Brown. Claudia Maria Vetesi (Morrison & Foerster LLP) for The Hain Celestial Group, Inc.

Companies: The Hain Celestial Group, Inc.

Cases: Advertising CaliforniaNews