Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Decertification of class proper, reconsideration denied, (Feb 2, 2015)

By Dan Selcke, J.D.

The federal district court in San Jose, California denied reconsideration of a previous order decertifying a class of almond milk purchasers, alleging the mislabeling of “All Natural” products, since the court had made no errors when granting the decertification motion and the purchasers did not present any new arguments to change its mind (Werdebaugh v. Browers, January 29, 2015, Koh, L).

Background. Blue Diamond Growers produces almond milk products. Werdebaugh, the plaintiff and a former Blue Diamond customer, took issue with what he thought were misleading labels on those products. Specifically, he objected to Blue Diamond labeling their almond milks as “All Natural” and for listing the sweetener used as “Evaporated Cane Juice” instead of sugar. He alleged violations of the California Unfair Competition Law, the California False Advertising Law, and the California Consumers Legal Remedies Act.

Certification and decertification. After Werdebaugh filed an amended complaint, the court certified a class of individuals who had been impacted by Blue Diamond’s misleading labels. However, it later granted Blue Diamond’s motion to decertify the damages class, since it did not meet the predominance requirement of FRCP 23(b)(3). Werdebaugh sought leave to file a motion for reconsideration of the court’s order decertifying the class.

Legal Standard. The court considered whether it had to grant Werdebaugh’s motion for leave to file a motion for reconsideration under the framework set up by Civil Local Rule 7-9(b). Among other things, that rule provided that such a motion should be granted if the plaintiff could show that there had been a manifest failure by the court to consider material facts or dispositive legal arguments which were presented to it. Also, Rule 7-9(c) stated that “[n]o motion for leave to file a motion for reconsideration may repeat any oral or written argument made by the applying party in support of or in opposition to the interlocutory order which the party now seeks to have reconsidered.”

Untimely disclosure. First, Werdebaugh argued that the court committed manifest error by excluding a doctor’s second supplemental expert report as an untimely disclosure under FRCP 26(e). The court disagreed, affirming its original decision. Werdebaugh had submitted the second supplemental expert report, which made alterations to the regression analysis Werdebaugh wanted to use in calculating damages, over a month after the court had closed expert discovery. All of the information in the second supplemental report was available to the doctor at the time of his opening report and his supplemental report, well before the close of expert discovery. This meant that it was an untimely disclosure, and subject to exclusion under FRCP 37(c). Also, because the second supplemental report changed the regression analysis, allowing it in after expert discovery had closed would prejudice Blue Diamond.

Repeat argument. Next, Werdebaugh argued that the court committed manifest error by failing to consider binding Ninth Circuit authority. Specifically, he pointed to Leyva v. Medline Indus., 716 F3d 510, 513-514 (9th Cir. 2013), for the proposition that “damages calculations alone cannot defeat certification.” Unfortunately for Werdebaugh, this argument was a repeat of one he had used to fight Blue Diamond’s original motion to decertify. Under Civil Local Rule 7-9(c), as noted above, it could not again be used as the basis for a motion for leave to file a motion for reconsideration.

Conclusion. Even if the argument had not been previously raised, it would not have helped Werdebaugh’s case. The court had granted Blue Diamond’s motion to decertify not because individual issues of damages predominated, but because Werdebaugh failed to put forth a model that measured the damages attributable to Blue Diamond’s conduct. Leyva reinforced the notion that a need to calculate individual damages did not necessarily require class decertification, but it did not invalidate the fundamental requirement that a plaintiff must show that his or her damages stem from the defendant’s wrongful conduct. Werdebaugh’s damages model did not meet this requirement. The court denied his motion for leave to file a motion for reconsideration.

The case number is: 12-CV-02724

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Chris Werdebaugh. Lawrence M. Cirelli (Hanson Bridgett LLP) for Blue Diamond Growers

Companies: Blue Diamond Growers

Cases: Advertising StateUnfairTradePractices CaliforniaNews