Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Class certification denied in Conagra food products misleading labeling action, (Jun 16, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in San Francisco has denied class certification to three proposed classes of consumers of Hunt’s, PAM, and Swiss Miss brand products in their deceptive and misleading labeling claims against a food packaging company. Thus, the plaintiffs’ proposed classes failed to satisfy the prerequisites of Federal Rule of Civil Procedure 23(a) and (b) (Jones v. Conagra Foods, Inc., June 13, 2014, Breyer, C.).

Conagra Foods produces an array of food products under various brand names that are available in supermarkets, restaurants, and food service establishments. Consumers Levi Jones, Christine Sturges, and Edd Ozard filed a putative class action suit against Conagra, alleging that the food packaging company’s website and certain product labels—Hunt’s tomato products, PAM cooking spray, and Swiss Miss hot cocoa—contained deceptive and misleading information. The plaintiffs alleged unfair and fraudulent business practices under California’s Unfair Competition Law (UCL), misleading and deceptive advertising under False Advertising Law (FAL), and violations of the Consumers Legal Remedies Act (CLRA). The plaintiffs moved for class certification of three separate classes for the purchasers of the three brand products.

Rule 23(a). The court found that the classes for three products—Hunts, PAM, and Swiss Miss—were unascertainable because the proposed classes were overbroad and there were no objective and verifiable criteria for determining class members. A party seeking class certification must demonstrate that an identifiable and ascertainable class exists. For low-cost consumer purchases, there was no reliable way to determine who purchased the products and how many products were purchased because consumers were unlikely to have retained receipts during the class period. Moreover, the labels at issue changed during the proposed class period and it was not plausible that the proposed class members would remember their specific purchases.

Rule 23(b)(2). The class representatives lacked standing to seek injunctive relief, according to the court. To establish standing for injunctive relief, a plaintiff must establish a “real and immediate threat of repeated injury.” For each of the three classes, the plaintiffs failed to allege their intent to purchase the products in the future. The class representatives stated that they no longer buy the challenged products and failed to allege that they might buy the products if they were properly labeled.

Rule 23(b)(3). The plaintiffs failed to demonstrate that common questions of law or fact predominate over any questions affecting only individual members for their UCL, FAL, and CLRA claims. In rejecting the plaintiffs’ argument that they did not need to show reliance on the challenged product labels, the court noted that there was a lack of cohesion among class members because consumers were exposed to label statements that varied by container size, variety, and time period and consumer understanding of those representations would not uniform. The plaintiffs also failed to show how the challenged statements were a factor in any reasonable consumer’s purchasing decisions or that the use of the term “all natural” on the product labels was necessarily material to reasonable consumers. Furthermore, the plaintiff did not present a likely method for determining class damages. The plaintiffs’ expert’s use of comparable products in calculating restitution failed to account for the different product lines or multiple varieties within each product line and failed to provide a clearly defined list of variables in his regression analysis.

Finally, the court determined that the plaintiffs did not demonstrate that a class action was superior method for fairly and efficiently adjudicating the controversy. Since the product labels differed over time, consumers would not be able to readily determine whether they were class members, and there was no way to determine what class members paid for the purchases, class treatment was not superior to individual actions, the court concluded.

The case is No. 12-01633 CRB.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Levi Jones. Robert B. Hawk (Hogan Lovells US LLP) for ConAgra Foods, Inc.

Companies: Conagra Foods, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews