Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—NDAla: Orange Juice Purchaser Did Not Have Standing to Challenge Allegedly Misleading Orange Juice Labeling, (Jan 11, 2013)

By Tobias J. Gillett, J.D., LLM.

An orange juice purchaser’s breach of express warranty and breach of contract claims against orange juice manufacturer Citrus World over allegedly deceptive labeling on Citrus World’s products failed because the purchaser did not allege an injury sufficient to confer standing, the federal district court in Birmingham, Alabama has ruled (Veal v. Citrus World, Inc., January 8, 2013, Johnson, I.).

The purchaser had alleged, on behalf of a proposed class of such purchasers, that Citrus World, the manufacturer of Florida’s Natural Orange Juice, adds compounds to its juice after pasteurization to alter its flavor, purportedly because the pasteurization process results in an unappealing flavor. The purchaser claimed that the lack of labeling regarding these additional compounds “deceived” consumers into buying Florida’s Natural Orange Juice, particularly since labels also bore the terms “fresh,” “100%,” and “pure,”.

The purchaser asserted that he would not have paid the higher price for Florida’s Natural Orange Juice had he “known the truth about the defendant’s orange juice products,” and alleged claims for breach of express warranty and breach of contract under Alabama law.

The court dismissed the claims, finding that the purchaser had failed to allege a “concrete and particularized” injury sufficient to confer standing. The court explained that “[t]o have standing, a plaintiff must establish (1) that he has suffered an actual or threatened injury, (2) that the injury is fairly traceable to the challenged conduct of the defendant, and (3) that the injury is likely to be redressed by a favorable ruling.”

The court observed that purchaser had not alleged any harm from purchase or consumption of the orange juice, or that he had stopped purchasing pasteurized orange juice in favor of unpasteurized fresh-squeezed juice, relying instead on a comparison between the price of Florida’s Natural Orange Juice and an orange juice concentrate. The court noted that the purchaser did not allege what the higher price charged was, when or where he bought the product, or what the value of orange juice would have been had it been “as warranted.” The court found that his allegations did “no more than raise abstract questions amounting to generalized grievances,” insufficient to confer standing. The court also noted that many courts had declined to confer standing based on similar “benefit of the bargain” theories.

The court rejected the claim for injunctive relief because the purchaser had not alleged that he how would suffer a future injury. The court explained that to seek injunctive relief a plaintiff “must be able to demonstrate more than mere injury from past wrongs.” Since he had not alleged how he would suffer a future injury, or even how he had suffered a past injury, he also could not satisfy the prong of the standing analysis requiring that the injury would be “redressed by a favorable ruling,” in the court’s view.

Although the court dismissed the purchaser’s claim based on lack of standing, the court also reviewed some of the FDA regulations relating to orange juice products, noting that the regulations provided that the “pulp and orange oil may be adjusted,” that “pasteurized orange juice is treated with heat, and that “optional concentrated orange juice ingredients” and sweeteners could be added. Moreover, the regulations required not-from-concentrate orange juice manufacturers to label their products as “100 percent juice,” and permitted the use of the word “pure.” The court cited decisions concluding that challenges to similar labeling were preempted by federal law.

The court also denied the purchaser’s motion for leave to amend his complaint, concluding that no amendment could cure the deficiency that nothing in Florida’s Natural Orange Juice’s labeling “would in any way deceive a reasonable consumer into believing that the orange juice in question is anything but pasteurized orange juice.” The court also rejected the motion on the ground of bad faith, noting that the plaintiff’s counsel had tried to bring a class action complaint against Citrus World three times before “based on the same inherently flawed theory of liability” after not being included as class counsel in multi-district litigation against orange juice manufacturers.

The case is no. 2:12-CV-801-IPJ.

Andrew S. Herring (Davis & Norris LLP) for John Albert Veal, Jr. Daniel Howard Coultoff (Latham Shuker Eden & Beaudine LLP) for Citrus World, Inc.

Cases: ConsumerProtection AlabamaNews