Antitrust Law Daily Wrap Up, ADVERTISING—NDCal: Class Challenging “All Natural” Beverage Decertified , (Apr 2, 2013)

By Jody Coultas, J.D.

A class of purchasers challenging the advertising of beverages as “All Natural” was decertified by the federal district court in San Francisco based on the failure to meet the adequacy of representation requirement (Ries v. Arizona Beverages USA LLC, March 28, 2013, Seeborg, R.). The court also held that the purchasers lacked sufficient evidence to support their claims.

Beverage purchasers filed consumer protection law claims against Arizona Beverages USA LLC based on allegedly false and misleading advertising for its AriZona Iced Tea beverages labeled “All Natural.” The purchasers argued that the beverages were not natural because they contained HFCS and citric acid, two ingredients that were artificial and man-made.

Class counsel failed to adequately prosecute the action, according to the court. Counsel failed to identify an expert, despite having more than six months to do so, and waited five months after the deadline for doing so to file a motion requesting that expert discovery be extended. Counsel also failed to address damages at all in their opposition to the motion for summary judgment. The court held that the lack of diligence and failures by counsel required decertification. The adequacy of representation requirement for certification was not met.

The purchasers failed to present evidence that the labels were false or that a significant portion of the consuming public would be confused by them. The consumer protection claims were governed by the “reasonable consumer” test and required the purchasers to show that members of the public were likely to be deceived by the labeling and advertising. The purchasers failed to present any evidence that HFCS is artificial or legal support for their argument that it must be artificial because patents were issued for the process of producing it. The court declined to take judicial notice of United States Patent law, as it was not a proper subject for judicial notice. There also was no evidence of consumer confusion about the labels.

The case is No. 10-01139 RS.

Attorneys: George Richard Baker (Baker Law PC) for Lauren Ries. Andrew James King (Sedgwick LLP) for Arizona Beverages USA LLC.

Companies: Arizona Beverages USA LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews