Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—C.D. Cal.: Juice purchaser class decertified, (Mar 26, 2014)

By Jody Coultas, J.D.

The federal district court in Los Angeles decertified a class of juice purchasers that filed California Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA) claims alleging false advertising by Pom Wonderful LLC (In re: Pom Wonderful LLC Marketing and Sales Practices Litigation, March 25, 2014, Pregerson, D.).

A class of consumers alleged that Pom falsely and misleadingly advertised that certain Pom juice products provided various health benefits, and that millions of dollars of scientific research demonstrate these benefits in violations of the FAL and UCL. The court certified a damages class comprised of all persons who purchased a Pom Wonderful 100% juice product between October 2005 and September 2010.

Pom argued that a recent U.S. Supreme Court decision, Comcast Corp. v. Behrend, required that the consumers’ damages models must distinguish accurately between injured and uninjured persons, and calculate the amount of individual damages. Although the court rejected this interpretation of Comcast, the consumers’ damages models were insufficient to satisfy certification.

The consumers’ “Full Refund” damages model assumed that consumers would not have purchased the juices if not for the alleged misrepresentations, and used the full retail price paid as the measure of damages. The UCL and FAL allow for restitution based on the difference between what the plaintiff paid and the value of what the plaintiff received. Restitutive recovery requires evidence of the actual value of what the plaintiff received. The Full Refund model did not account for benefits conferred upon the consumers, and the consumers could not contend that they did not receive any value at all from the juices. Therefore, the court held that the Full Refund damages model could not accurately measure class damages.

The Price Premium model assumed that, absent the alleged misrepresentations, demand for the juices would have been less and the market price would have been lower. Damages were based on a comparison of the price of Pom with other refrigerated juices of the same size. However, fraud on the market is only possible in efficient markets, where the price is determined by openly disseminated information about a business. There was no evidence of a traceable market-wide influence on price, and consumers buy a product for any number of reasons. Even if such a theory could be applied in this case, the consumers failed to show that Pom’s alleged misrepresentations caused any amount of damages. Therefore, damages resulting from the alleged misrepresentations were not amenable to class-wide proof.

The class was not ascertainable, according to the court. Based on the volume of product sold, every adult in the United States was a potential class member. Few consumers were likely to still have receipts from the class period, which closed years before the filing of this action. Also, no bottle, label, or package included any of the alleged misrepresentations.

The case is No. ML 10-02199 DDP (RZx).

Attorneys: Alan M. Mansfield (The Consumer Law Group) for John Alexander. Johnny Traboulsi (Roll Law Group PC) for Pom Wonderful LLC.

Companies: Pom Wonderful LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews