Health Law Daily Wrap Up, LABELING (FOOD, DRUGS & MEDICAL DEVICES)—S.D. Calif.: Common questions and factors found to predominate in granting class certification over biscuits, (Mar 11, 2021)

By Jeffrey H. Brochin, J.D.

Both parties’ expert witness testimony admitted for class certification purposes, even though different rulings may prevail at trial.

A federal district court in California has granted class certification to California and New York consumers who purchased breakfast biscuits that were allegedly mislabeled with the term "nutritious" notwithstanding the fact that the biscuits contained high quantities of sugar. Although the court previously denied, without prejudice, the consumers’ first motion for class certification, the renewed motion properly satisfied the predominance requirement of Rule 23(b)(3) by showing that the class-wide damages model matched the recognized theory of liability and no other individual issues predominated over the common ones (McMorrow v. Mondelez International, Inc., March 8, 2021, Bashant, C.).

Claim of misleading labeling. Mondelez International, Inc. (MDLZ or manufacturer) produces four varieties of belVita breakfast biscuits all of which bear the packaging claims of: "Nutritious Sustained Energy," "Nutritious Steady Energy All Morning," "4 Hours of Nutritious Steady Energy" and other similar claims as to being nutritious. The consumers alleged that the biscuits in fact contain high added sugar content that increases the risk of serious diseases including Congestive Heart Disease, stroke, and other morbidity, and they filed a putative class action lawsuit alleging violations of California’s Unfair Competition Law (UCL), False Advertising Law (FAL), Consumer Legal Remedies Act (CLRA), New York’s General Business Law (GBL), and the Uniform Commercial Code. The parties filed cross-Daubert motions to exclude expert witnesses, all of which were denied at the present stage, and, the court granted class certification for belVita consumers in California and New York.

Class-wide damages required. The court noted that the instant lawsuit advanced a classic mislabeling case theory. A previous Order by the court found that the plaintiffs had satisfied several Rule 23(b)(3) elements including: numerosity, commonality, typicality, adequacy, and superiority. However, their earlier proposed price premium damages model was deemed deficient. Under the Rule, a plaintiff seeking to certify a class must show that damages are capable of measurement of a class-wide basis in a manner consistent with the liability of the case. Their renewed motion proffered expert testimony to satisfy that requirement.

Satisfying Rule 23(b)(3). The court restated the standard that in determining the propriety of a class action, the question is not whether the plaintiffs have stated a cause of action or will prevail on the merits, but rather, whether the requirements of Rule 23 have been met. The Rule does not set forth a pleading standard, rather, a party seeking class certification must affirmatively demonstrate compliance with the Rule—that is, he or she must be prepared to prove that there are in fact sufficiently numerous parties, and common questions of law or fact, etcetera.

The predominance analysis focuses on the legal or factual questions that qualify each class member’s case as a genuine controversy to determine whether proposed classes are sufficiently cohesive to warrant adjudication by representation.

Challenges to plaintiffs’ experts. MDLZ moved to exclude the testimony of two expert’s, Weir and Dennis, proffered by the plaintiffs. They argued that Weir’s opinion that the litigation called for a "Price Premium" damages calculation was both irrelevant and unreliable. According to DLZ, Weir presented no evidence that a consumer’s preference for the term "nutritious" would translate into higher market prices for belVita biscuits, and, they cited their own expert’s opinion that Price Premium cannot be estimated without considering supply-side and competitive factors.

MDLZ also criticized the methodology of an expert who was similarly called upon to calculate the class-wide damages caused by MDLZ’s alleged mislabeling. Conversely, the consumers brought Daubert motions to exclude the testimony of MDLZ’s own expert witnesses. However, in denying both parties’ Daubert motions, the court ruled that the consumers were not required to prove that the challenged health statements were the sole or even the predominant or decisive factor influencing class members’ decisions to buy the subject products, and that the plaintiffs only needed to make an objective showing of a probability that a significant portion of the relevant consumers acting reasonably could be misled by the challenged statements.

The court found that because deception and materiality under the FAL, CLRA, and UCL were objective questions, they were ideal for class certification, and, that the consumers offered evidence that reasonable consumers can understand "nutritious" to mean food that is conducive to health. For the foregoing reasons, the court granted class certification for belVita consumers in California and New York.

The case is No. 17-cv-2327-BAS-JLB.

Attorneys: Jack Fitzgerald (The Law Office of Jack Fitzgerald, PC) for Patrick McMorrow. Dean Nicholas Panos (Jenner & Block, LLP) for Mondelez International, Inc.

Companies: Mondelez International, Inc.

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