Colucci et al v. ZonePerfect Nutrition Company

Filing 101

ORDER by Judge Samuel Conti denying 65 Motion to Certify Class; denying 86 Motion for Hearing (sclc1, COURT STAFF) (Filed on 2/13/2014)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 10 For the Northern District of California United States District Court 9 11 12 13 14 15 16 KIMBERLY S. SETHAVANISH, on behalf ) Case No. 12-2907-SC of themselves and all others ) similarly situated, ) ORDER DENYING MOTION FOR ) CLASS CERTIFICATION Plaintiff, ) ) v. ) ) ZONEPERFECT NUTRITION COMPANY, ) ) Defendant. ) ) ) ) 17 18 19 I. INTRODUCTION Plaintiff Kimberly S. Sethavanish ("Plaintiff") brings this 20 putative class action against Defendant ZonePerfect Nutrition 21 Company ("Defendant"), a maker of nutritional snack bars 22 ("nutrition bars"). 23 Defendant's nutrition bars, which bear on their labels the 24 statement "All-Natural Nutrition Bars," are not all-natural and 25 hence misleadingly labeled. 26 Plaintiff's fully-briefed motion for class certification. 27 65 ("Mot."), 73 ("Pl.'s Supp. Br."), 77 (Opp'n), 82 ("Reply"), 85 28 ("Def.'s Sur-Reply"). The thrust of Plaintiff's Complaint is that Now pending before the Court is ECF Nos. Also pending before the Court is Defendant's 1 fully briefed motion for an evidentiary hearing on class 2 certification issues, ECF Nos. 86 ("Evid. Mot."), 88 ("Opp'n to 3 Evid. Mot."). 1 4 argument. 5 motions are DENIED. The motions are suitable for decision without oral Civ. L.R. 7-1(b). For the reasons set forth below, both 6 7 II. Defendant manufactures, distributes, and sells nutrition bars 8 9 BACKGROUND (the "ZonePerfect bars") through walk-in and online retailers. ECF United States District Court For the Northern District of California 10 No. 1 ("Compl.") ¶ 9. There are twenty varieties of ZonePerfect 11 bars, and they are sold and distributed nationwide in grocery 12 stores, health food stores, and other venues. Id. ¶ 10. 13 packaging of all twenty varieties is similar. See id. ¶ 42. 14 front of the packaging is emblazoned with the ZonePerfect logo and 15 the legend "All-Natural Nutrition Bars." The The Id. Plaintiff claims that this "all-natural" representation is 16 17 false and misleading because all varieties of the ZonePerfect bars 18 contain one or more of the following ten allegedly non-natural 19 ingredients: ascorbic acid; calcium pantothenate; calcium 20 phosphates; glycerine; potassium carbonate a/k/a "Cocoa [Processed 21 with Alkali]" or "Cocoa Powder [Processed with Alkali]"; pyridoxine 22 hydrochloride; disodium phosphate; sorbitan monostearate; 23 tocopherols; and xanthan gum. 24 that these ingredients are not natural because federal regulations 25 define them as "synthetic." 26 (list of applicable regulations). Id. ¶¶ 21-30. Plaintiff contends See ECF No. 66 ("Kravec Decl.") Ex. 8 27 28 1 At the Court's request, the parties also submitted supplemental briefing on the issue of standing. ECF Nos. 94, 99. 2 1 Beginning on or around September 14, 2007, Plaintiff purchased 2 the ZonePerfect bars for her then-fiancé James Collucci (the two 3 are now married). 4 active-duty member of the United States Marine Corps. 5 stationed at Camp Pendleton in San Diego County, California and 6 then deployed overseas. 7 Colucci a monthly care package. 8 Plaintiff would include in these care packages "two multi-bar packs 9 of ZonePerfect Nutrition Bars per month, including its Classic Compl. ¶ 8. Id. At the time, Mr. Colluci was an Id. He was During this time, Plaintiff sent Mr. Id. At Mr. Colucci's request, United States District Court For the Northern District of California 10 ZonePerfect 'All-Natural' Nutrition Bars Chocolate Peanut Butter 11 flavor." 12 2007, Ms. Sethavanish would purchase packs of ZonePerfect Chocolate 13 Peanut Butter Bars every four to six weeks from retail stores near 14 her home. Id. Plaintiff alleges that, beginning on September 14, See id. 15 Plaintiff alleges that Mr. Colucci believed and relied upon 16 the "all-natural" representation on the label of the ZonePerfect 17 bars when he asked Plaintiff to purchase them for him. 18 Plaintiff alleges that, based on the "all-natural" representation, 19 she believed that the nutrition bars were made entirely of natural 20 ingredients. 21 the ZonePerfect bars than she would have had to pay for other 22 nutrition bars that were not all natural, and that, had she known 23 the truth, she would have purchased another brand of nutrition bar 24 that was truly all natural or, lacking that, other non-natural 25 nutrition bars that were less expensive. Id. ¶ 8. Id. ¶ 7. Plaintiff alleges that she paid more for Id. 26 Plaintiff asserts claims for (1) common law fraud; (2)-(4) 27 unlawful, unfair, and fraudulent business practices in violation of 28 the California Unfair Competition Law ("UCL"), Cal. Bus & Prof. 3 1 Code § 17200, et seq.; (5) false advertising in violation of the 2 California False Advertising Law ("FAL"), id. § 17500, et seq.; (6) 3 violation of the California Consumers Legal Remedies Act ("CLRA"), 4 Cal. Civ. Code § 1750, et seq.; and (7) restitution based on quasi 5 contract. 2 6 class of all persons who purchased ZonePerfect bars in the United 7 States on or after September 14, 2007. 8 purchases of ZonePerfect bars that were labeled "All-Natural," but 9 which contain one or more of the allegedly non-natural ingredients United States District Court For the Northern District of California 10 Plaintiff now moves this Court to certify a nationwide The class is limited to listed above. 11 12 III. LEGAL STANDARD "The class action is an exception to the usual rule that 13 14 litigation is conducted by and on behalf of the individual named 15 parties only." 16 2550 (2011) (internal quotations and citations omitted). 17 to justify a departure from that rule, a class representative must 18 be part of the class and possess the same interest and suffer the 19 same injury as the class members." 20 citations omitted). "In order Id. (internal quotations and Under Rule 23(a), four prerequisites must be satisfied for 21 22 Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, class certification: 23 (1) the class is so numerous that joinder of all members is impracticable; 24 (2) there are questions of law or fact common to the class; 25 26 (3) the claims or defenses of the representative parties 27 28 2 Plaintiff's claim for violation of the Magnuson-Moss Warranty Act was previously dismissed with prejudice. ECF No. 38. 4 are typical of the claims or defenses of the class; and 1 (4) the representative parties will fairly and adequately protect the interests of the class. 2 3 4 Fed. R. Civ. P. 23(a). A plaintiff also must satisfy one or more of the separate 5 6 prerequisites set forth in Rule 23(b). Plaintiff moves for 7 certification under Rule 23(b)(3), which requires that common 8 questions of law or fact predominate and the class action is 9 superior to other available methods of adjudication. United States District Court For the Northern District of California 10 "Rule 23 does not set forth a mere pleading standard. A party 11 seeking class certification must affirmatively demonstrate his 12 compliance with the Rule -- that is, he must be prepared to prove 13 that there are in fact sufficiently numerous parties, common 14 questions of law or fact, etc." 15 (emphasis deleted). 16 considerations that are enmeshed in the factual and legal issues 17 comprising the plaintiff's cause of action." 18 quotations and citations omitted). 19 about that consequence: The necessity of touching aspects of the 20 merits in order to resolve preliminary matters, e.g., jurisdiction 21 and venue, is a familiar feature of litigation." Dukes, 131 S. Ct. at 2551 Analysis of these factors "generally involves Id. at 2552 (internal "Nor is there anything unusual Id. 22 23 24 IV. DISCUSSION Defendant argues that the Court need not address the 25 requirements of Rule 23 because (1) Plaintiff has failed to 26 establish that she has standing, and (2) Plaintiff has failed to 27 establish that the proposed class is ascertainable. 28 finds that Plaintiff has satisfied the standing requirements, at 5 The Court 1 least for class certification purposes. However, the Court also 2 finds that Plaintiff has failed to establish ascertainability. 3 Accordingly, her motion for class certification is DENIED. 3 4 A. Standing 5 Article III of the United States Constitution provides that cases and controversies. 8 this language requires a plaintiff to establish: (1) "injury in 9 fact," (2) "a causal connection between the injury and the conduct 10 United States District Court the judicial power of the United States extends only to proper 7 For the Northern District of California 6 complained of," and (3) that it is likely "that the injury will be 11 redressed by a favorable decision." 12 Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotations 13 omitted). 14 injury in fact, is absent here. 15 certification, Plaintiffs must demonstrate, not merely allege, that 16 they have suffered an injury-in-fact to establish Article III 17 standing to bring the claims asserted on behalf of the Main Class." 18 Evans v. Linden Research, Inc., C 11-01078 DMR, 2012 WL 5877579, at 19 *6 (N.D. Cal. Nov. 20, 2012). The doctrine of standing which flows from Lujan v. Defenders of Defendant contends that the first element of standing, "On a motion for class At the pleading stage, "[a] consumer who relies on a product 20 21 label and challenges a misrepresentation contained therein can 22 [satisfy the economic injury] requirement . . . by alleging . . . 23 that he or she would not have bought the product but for the 24 misrepresentation." 25 330 (Cal. 2011). 26 present evidence supporting such allegations. 27 3 28 Kwikset Corp. v. Sup. Ct., 51 Cal. 4th 310, At class certification, the plaintiff must See Evans, 2012 WL Defendant also argues that typicality, adequacy, and predominance are lacking. The Court need not reach these issues since it finds that the proposed class is not ascertainable. 6 1 5877579, at *6. Plaintiffs may establish economic injury even if 2 the product in question is not "defective, overpriced, or of 3 inferior quality." 4 Kwikset, the California Supreme Court found that the plaintiffs had 5 established an economic injury where they had purchased locksets 6 based on the allegedly false representation that the products were 7 made in the United States. 8 had not received the benefit of the bargain: Kwikset, 51 Cal. 4th at 331. For example, in The court explained that the plaintiffs 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 Plaintiffs selected Kwikset's locksets to purchase in part because they were "Made in U.S.A."; they would not have purchased them otherwise; and, it may be inferred, they value what they actually received less than either the money they parted with or working locksets that actually were made in the United States. They bargained for locksets that were made in the United States; they got ones that were not. The same points may be made generally with regard to consumers who purchase products in reliance on misrepresentations. The observant Jew who purchases food represented to be, but not in fact, kosher; the Muslim who purchases food represented to be, but not in fact, halal; the parent who purchases food for his or her child represented to be, but not in fact, organic, has in each instance not received the benefit of his or her bargain. 18 19 Id. at 332. 20 Likewise, Plaintiff asserts that she would not have purchased 21 ZonePerfect bars but for the "all natural" claim on the packaging. 22 Plaintiff pleads that "had [she] known the truth that [Defendant]'s 23 Nutrition Bars were not all natural, she would not have purchased 24 [Defendant]'s Nutrition Bars, but would have purchased another 25 brand of nutrition bar that was truly all natural or, if one was 26 not available, would have purchased other non-natural nutrition 27 bars that were less expensive." 28 testified that Mr. Colucci requested that she send him ZonePerfect Compl. ¶ 8. 7 Plaintiff also 1 bars because he wanted to eat an all-natural product while he was 2 deployed. 3 considered purchasing something other than the ZonePerfect bars, 4 Plaintiff responded: "I went to the all natural section -- or the 5 nutrition bar section, looked for ones that had "all natural," and 6 just included them in the packages [to Mr. Colucci]." 7 The Court finds this sufficient to establish injury. When asked whether she Id. at 34. Defendant argues that Plaintiff did not suffer injury because 8 9 ECF No. 96 Ex. A at 24. the alleged misrepresentations actually saved her money. Opp'n at United States District Court For the Northern District of California 10 9. 11 purchases Pure Protein bars, products Plaintiff does not believe to 12 be all natural. 13 actually more expensive than ZonePerfect bars. 14 what Plaintiff now purchases for her household, she has testified 15 that she was interested in purchasing all-natural nutrition bars 16 for Mr. Colucci while he was deployed. 17 not prove that she paid a premium for ZonePerfect bars in order to 18 establish standing. 19 would not have purchased the product but for Defendant's alleged 20 misrepresentation. 21 natural, and she allegedly received one that was not. 22 Defendant points out that Plaintiff has testified that she now Id. Defendant contends that Pure Protein bars are But regardless of Moreover, Plaintiff need It is enough that she has asserted that she She bargained for a nutrition bar that was all Defendant also urges the Court to reject Plaintiff's claim 23 that she and Mr. Colucci valued all-natural products. 24 of her motion for class certification, Plaintiff has submitted a 25 declaration stating she did not purchase any nutrition bar that was 26 not labeled as "All Natural" during the class period. 27 Defendant argues that this declaration is a sham. 28 out that Plaintiff has alleged that she was willing to purchase 8 In support ECF No. 95. Defendant points 1 non-natural nutrition bars, so long as they were less expensive 2 than all-natural alternatives. 3 out that, at her deposition, Plaintiff testified that she 4 previously purchased a number of other nutrition bars, including 5 Power Bars and Luna Bars, but she does not recall whether these 6 products are all natural. 7 Plaintiff also testified she has always been willing to eat foods 8 with artificial and synthetic ingredients. 9 Compl. ¶ 8. Defendant also points ECF No. 78-5 at 69-70, 122, 126-27. Id. at 181. The Court agrees that there is some tension between United States District Court For the Northern District of California 10 Plaintiff's declaration, her pleadings, and her deposition 11 testimony. 12 is unclear when Plaintiff purchased the other nutrition bars 13 referenced by Defendant, as well as whether Plaintiff purchased 14 these products for Mr. Colucci while he was deployed. 15 the fact that Plaintiff sometimes purchases non-natural products 16 does not preclude the possibility that she also values all-natural 17 products. 18 to assess the credibility of Plaintiff's statements regarding her 19 preference for all-natural foods. 20 make such a determination on a motion for class certification. 21 For these reasons, the Court finds that Plaintiff has set 22 forth sufficient evidence to establish standing for the purposes of 23 class certification. However, those statements are not irreconcilable. It Moreover, In any event, Defendant is essentially asking the Court It would be inappropriate to 24 B. Ascertainability 25 "As a threshold matter, and apart from the explicit 26 requirements of Rule 23(a), the party seeking class certification 27 must demonstrate that an identifiable and ascertainable class 28 exists." Wolph v. Acer Am. Corp., 272 F.R.D. 477, 482 (N.D. Cal. 9 1 2011). 2 presently ascertainable." 3 F.R.D. 311, 319 (C.D. Cal. 1998) (internal quotations omitted). 4 "While the identity of the class members need not be known at the 5 time of certification, class membership must be clearly 6 ascertainable. 7 so that it is administratively feasible to determine whether a 8 particular person is a class member." 9 (internal citations omitted). United States District Court For the Northern District of California 10 "A class definition should be precise, objective, and O'Connor v. Boeing N. Am., Inc., 184 The class definition must be sufficiently definite Wolph, 272 F.R.D. at 482 Defendant argues that Plaintiff has failed to define an 11 objectively ascertainable class. 12 that it overwhelmingly sells to retailers, not directly to 13 consumers, and that there are no records identifying any but a 14 small fraction of consumers who have purchased ZonePerfect bars in 15 the last several years. 16 would be infeasible to determine whether a putative class member 17 actually purchased Defendant's products and in what quantity. 18 Plaintiff responds that a class need not be so ascertainable that 19 every potential member can be identified at class certification. 20 Reply at 2. 21 sufficient since it allows identification of class members through 22 objective criteria. 23 Opp'n at 10. Id. at 11. Defendant contends Thus, Defendant reasons, it Id. Plaintiff further argues that its class definition is Id. The Third Circuit addressed a similar dispute in Carrera v. 24 Bayer Corp., 727 F.3d 300 (3d Cir. 2013), a putative class action 25 brought on behalf of the purchasers of the defendant's diet 26 supplement. 27 because there was insufficient evidence to show that retailer 28 records could be used to identify class members. The court found that the class was not ascertainable 10 Id. at 308-09. 1 The court also rejected the plaintiff's contention that class 2 membership could be determined based on affidavits by putative 3 class members, reasoning this process deprived the defendant of the 4 opportunity to challenge class membership. 5 Additionally, the court held that fraudulent or inaccurate claims 6 could dilute the recovery of absent class members, and, as a 7 result, absent class members could argue that they were not bound 8 by a judgment because the named plaintiff did not adequately 9 represent them. United States District Court Id. at 310. Courts in this circuit are split on the issue. 10 For the Northern District of California Id. at 309. Xavier v. 11 Philip Morris USA Inc., 787 F. Supp. 2d 1075 (N.D. Cal. 2011) 12 (Alsup J.), echoes the Third Circuit's decision in Carrera. 13 Xavier, the plaintiff moved to certify a class of asymptomatic 14 smokers and recent quitters who were more than fifty years old and 15 had at least a twenty-pack-year smoking history. 4 16 The Court denied the motion, holding that the class members could 17 not be ascertained in a reliable manner. 18 Specifically, "[t]here [was] no reliable way in which smokers 19 themselves could document their long-term smoking histories." 20 Like the Third Circuit, the Court declined to rely on affidavits to 21 determine class membership, reasoning that the procedure could 22 invite fraudulent or inaccurate claims and undermine the finality 23 of any judgment with respect to absent class members. 24 91. In Id. at 1078. Id. at 1089. Id. Id. at 1090- The Court reached a different result in Ries v. Arizona 25 26 Beverages USA LLC, 287 F.R.D. 523 (N.D. Cal. 2012) (Seeborg J.), a 27 4 28 The plaintiff defined "pack-year" as "the product of the number of cigarette packs smoked per day and the number years the smoking habit has continued." Xavier, 787 F. Supp. 2d at 1078. 11 1 consumer class action suit challenging the defendant's 2 representation that its ice tea products were "All Natural." 3 defendant argued that administration of the class would require 4 fact-intensive mini-trials because class members were unlikely to 5 have retained receipts or other proof that they purchased the 6 defendant's products. 7 argument, reasoning that if such concerns could defeat class 8 certification, "there would be no such thing as a consumer class 9 action." Id. Id. at 535. The The Court rejected this The Court also held that there is "no requirement United States District Court For the Northern District of California 10 that 'the identity of class members . . . be known at the time of 11 certification.'" 12 to Ries, the District Court for the Southern District of California 13 reached the same conclusion in Astiana v. Kashi Co., 291 F.R.D. 14 493, 500 (S.D. Cal. 2013), another consumer class action 15 challenging a defendant's "all natural" representations. Id. (quoting Wolph, 272 F.R.D. at 482). Citing The Court finds the reasoning of Carrera and Xavier more 16 17 persuasive than that of Ries and Astiana. While the former line of 18 cases may restrict the types of consumer classes that can be 19 certified, they do not bar certification in consumer class actions 20 altogether. 5 21 records may make it economically and administratively feasible to 22 determine who is in (and who is out) of a putative class. 23 Moreover, even though there is no requirement that a named 24 plaintiff identify all class members at the time of certification, For example, in some cases, retailer or banking 25 26 27 28 5 Moreover, there are other means of curbing the kind of false and misleading labeling alleged here. The FDA could promulgate regulations concerning the use of the term "all natural." Alternatively, under the UCL, the California attorney general or a city attorney could file an action in the name of the people of California. Cal. Bus. & Prof. Code § 17204. 12 1 that does not mean that a named plaintiff need not present some 2 method of identifying absent class members to prevail on a motion 3 for class certification. In the instant action, Plaintiff has yet to present any method 4 5 for determining class membership, let alone an administratively 6 feasible method. 7 who purchased ZonePerfect bars during the proposed class period, or 8 how many ZonePerfect bars each of these putative class members 9 purchased. It is unclear how Plaintiff intends to determine It is also unclear how Plaintiff intends to weed out United States District Court For the Northern District of California 10 inaccurate or fraudulent claims. Without more, the Court cannot 11 find that the proposed class is ascertainable. 12 13 V. CONCLUSION For the foregoing reasons, Plaintiff Kimberly Sethavanish's 14 15 motion for class certification is DENIED without prejudice. 16 Plaintiff may move for class certification again if she can devise 17 a method for determining class membership in a manner consistent 18 with the guidance set forth above. 19 evidentiary hearing on class certification issues is DENIED as 20 moot. Defendant's motion for an 21 22 IT IS SO ORDERED. 23 24 25 February 13, 2014 UNITED STATES DISTRICT JUDGE 26 27 28 13

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