Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Bigelow black tea mislabeling claims rejected, (Aug 30, 2016)

By Michael Menzhuber, J.D., LL.M.

An individual’s claims of unjust enrichment and violation of the California Unfair Competition Law (UCL), stemming from R.C. Bigelow, Inc.’s alleged mislabeling of its black tea products, was dismissed by the federal district court in San Francisco. In dismissing the claims, the court determined that: (1) the "reasonable consumer" test was not satisfied; (2) there was inadequate evidence of damages; and (3) the plaintiff lacked standing for injunctive relief (Victor v. R.C. Bigelow, Inc., August 29, 2016, Orrick, W.).

After purchasing three of Bigelow’s black tea products, Adam Victor brought an action against Bigelow that alleged that the products were mislabeled. According to Victor, although the FDA had not set a recommended daily intake for the kind of antioxidants present in black tea and had not recognized a substantial scientific or medical consensus of any beneficial effects that they provided, the product labels included the phrase "delivers healthful antioxidants." After extensive motions, only Victor’s UCL and unjust enrichment claims remained. Bigelow moved for summary judgment on the remaining claims.

UCL. UCL claims grounded in fraud are governed by the "reasonable consumer test." Under this test, a plaintiff must provide evidence sufficient to establish that a reasonable consumer is likely to be misled by the alleged misrepresentations. The court determined that Victor failed to satisfy this test because, after noting the unrebutted expert testimony that the black tea products contain antioxidants, it found that he did not offer any plausible evidence as to why the phrase "delivers healthy antioxidants" was false or likely to mislead a reasonable consumer.

Damages. The court also determined that Victor failed to create a triable issue of fact to support his claims for restitution for either his UCL claim or his claim for unjust enrichment. After noting that Victor erroneously tried to place the evidentiary burden on Bigelow, the court found that he failed to: (1) offer any evidence in support of a claim for restitution or offer an alternative to his full-purchase-price damages theory, which the court had rejected in a prior proceeding; and (2) his request to ask the court to craft an equitable remedy was a concession that he had no evidence to support a claim for damages.

Injunctive relief. The court determined that Victor lacked standing for injunctive relief because he did not plausibly allege an intent to purchase Bigelow products in the future and, therefore, did not establish a likelihood that he would be injured in the future.

Related case. The court reached the same decision in a similar action involving the plaintiff’s allegation that Bigelow mislabeled its green tea products by including the phrases "healthy antioxidants" and "packed powerful antioxidants." As in the present case, the plaintiff failed to: (1) create a material issue of act as to whether reasonable consumers would be likely to be misled by Bigelow’s labels; (2) provide adequate evidence of damages; and (3) establish standing on his claims for injunctive relief (Khasin v. R.C. Bigelow, Inc., August 29, 2016, Orrick, W.).

The cases are Nos. 13-cv-02976-WHO and 12-cv-02204-WHO.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Adam Victor and for Alex Khasin. James Cooper Danaher (Gordon and Rees LLP) for R.C. Bigelow, Inc.

Companies: R.C. Bigelow, Inc.

Cases: StateUnfairTradePractices CaliforniaNews