California District Court Finds Plaintiff’s Proposed Damages Models Insufficient Under Comcast; Denies Certification Under Rule 23(b)(3) But Certifies 23(b)(2) Class

The U.S. District Court for the Northern District of California certified a Rule 23(b)(2) class for injunctive and declaratory relief but denied plaintiff’s motion for class certification under Rule 23(b)(3) because plaintiff failed to present a sufficient damages model as required by Comcast v. Behrend, 133 S. Ct. 1426, 1430 (2013).  Plaintiff’s putative class action complaint alleged that product labels on 51 varieties of Twinings tea, and statements contained on the Twinings website, violated California’s Unfair Competition Law, California’s False Advertising Law, and the Consumer Legal Remedies Act.  Twinings’ product labels and website describe the tea as a “Natural Source of Antoxidants” and contain other statements about the antioxidant contents of Twinings’ products.  According to plaintiff, these statements were prohibited by FDA and California labeling regulations because the FDA has yet to recommend a daily dose for flavonoids, a type of antioxidant.  Therefore, plaintiff claimed that even if these statements were true, Twinings’ labels and website were still misleading, deceptive, and illegal.

After finding that the requirements of Rule 23(a) were met, the court first held that class certification under Rule 23(b)(2) was appropriate.  However, citing Wal-Mart and relying heavily on Ries v. Arizona Beverages USA LLC, another California food mislabeling class action, the court found that the class could seek only declaratory and injunctive relief because the monetary relief sought was not incidental to the requested injunctive relief.

Next, the court held that plaintiff failed to satisfy the class certification requirements for a Rule 23(b)(3) class under Comcast because plaintiff’s three proposed models for measuring damages were all insufficient.  First, the court found that plaintiff’s proposal that Twinings refund the purchase price of tea was not a proper measure of damages in a mislabeling case.  Second, the court rejected plaintiff’s “benefit of the bargain method,” which compared the price of the product at issue to comparable products without the misleading label.  In rejecting this model, the court held that this method simply calculated the price difference and, therefore, did not “comport with Comcast’s requirement that class-wide damages be tied to a legal theory.”  Finally, the court found that plaintiff’s “econometric or regression analysis,” which would have determined the portion of Twinings’ sales attributable to the misleading labels, might be a sufficient method for measuring damages.  However, after plaintiff’s expert abandoned the regression analysis, the court found that, “plaintiffs [did] not present any damages model capable of estimating the price premium attributable to Twinings’ antioxidant labels.”  Accordingly, the court denied the plaintiff’s motion for class certification under Rule 23(b)(3).

Lanovaz v. Twinings N. Am., Inc., No. 12-02646, slip op. (N.D. Cal. Apr. 24, 2014).

 

Topics:  Class Action, Class Certification, Comcast v. Behrend, Consumers Legal Remedies Act, False Advertising, FDA, Rule 23(b)(2), Rule 23(b)(3), Unfair Competition

Published In: Civil Procedure Updates, Civil Remedies Updates, Communications & Media Updates, Consumer Protection Updates, Products Liability Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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