Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Goldfish crackers deceptive marketing cases consolidated in Colorado court, (Sep 11, 2013)

By Jody Coultas, J.D.

Pepperidge Farm, Inc. was granted transfer of California consumer protection law claims filed by Goldfish Crackers purchasers to the District of Colorado based on the first-to-file rule, the federal district court in Oakland has held (Koehler v. Pepperidge Farm, Inc., September 9, 2013, Rogers, Y.).

The purchaser brought class action claims against Pepperidge Farm for allegedly deceptively marketing its Goldfish Crackers to California purchasers. Pepperidge Farm used a “natural” label in marketing and advertising of the crackers despite the crackers containing ingredients derived from genetically-modified organisms.

Prior to the purchaser filing suit in California, another purchaser filed a class action suit in the District of Colorado against Pepperidge Farm based on the company’s representations that Goldfish were natural.

The first-to-file rule permits a district court to decline jurisdiction over an action to alleviate the burden placed on the federal judiciary by duplicative litigation and to prevent the possibility of conflicting judgments. Courts look at the chronology of the actions, similarity of the parties, and similarity of the issues when deciding whether to apply the first-to-file rule.

The court transferred the action to the District of Colorado based on the first-to-file rule. The Colorado action was filed seven months before the California action. The purchaser argued that because he was the plaintiff in the California action and someone else was the plaintiff in the Colorado action, the court could not find that the parties were similar. This argument was incorrect, however. The first-to-file rule requires only substantial similarity between the parties, not strict identity. It was also not improper to compare classes prior to certification as the purchaser argued. Pepperidge Farm was the sole defendant in both cases, and the classes were similar because both sought to represent a class of California purchasers. Both actions involved similar issues, overlapping claims, products, and class periods.

The resources of the courts would be best served as having discovery managed in one district. The purchaser failed to show how discovery in the cases would differ or any other issues that outweighed the judicial efficiency gained by transferring the case. There was no evidence that the Colorado courts could not adequately address the different issues in the two cases.

The case is No. 13-cv-02644-YGR.

Attorneys: Benjamin Michael Lopatin (The Law Offices of Howard W. Rubinstein, P.A.) for Garett Koehler.William Lewis Stern (Morrison & Foerster LLP) for Pepperidge Farm, Inc.

Companies: Pepperidge Farm, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews