Victor v. R.C. Bigelow, Inc.

Filing 68

ORDER REGARDING DISPUTE OVER DISCOVERY OF PROFITS by Hon. William H. Orrick re 65 Discovery Letter Brief. Victor's request is DENIED. (jmdS, COURT STAFF) (Filed on 8/12/2015)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

ADAM VICTOR,

Case No. 13-cv-02976-WHO

Plaintiff,
8
v.

ORDER REGARDING DISPUTE OVER
DISCOVERY OF PROFITS

9
10

R.C. BIGELOW, INC.,
Defendant.

Re: Dkt. No. 65

United States District Court
Northern District of California

11
12
13

Plaintiff Adam Victor alleges that defendant R.C. Bigelow Inc. made false health claims by

14

promoting the presence of antioxidants in its tea products and claiming associated health benefits.

15

The parties have filed a joint letter disputing Victor’s entitlement to discovery of Bigelow’s profits

16

and costs. Dkt. No. 65. Victor argues that “[a]s long as a theory of recovery of unjust enrichment

17

is present in the case, Plaintiff is allowed to seek some percentage of Defendant’s net profits as a

18

remedy for himself and the class.” Id. at 3. Bigelow counters that its profits and costs are

19

irrelevant because the proper measure of restitution in a food labeling case is the price premium

20

attributable to the challenged label (the difference between the product as labeled and the product

21

as received), not its profits. Bigelow is correct.

22

The law is clear in this District that “[t]he proper measure of restitution in a mislabeling

23

case is the amount necessary to compensate the purchaser for the difference between a product as

24

labeled and the product as received, not the full purchase price or all profits.” Trazo v. Nestle

25

USA, Inc., 12-cv-02272-PSG, 2015 WL 4196973, at *3 (N.D. Cal. July 10, 2015) (citations

26

omitted); see also Ivie v. Kraft Foods Global, Inc., 12-cv-02554-RMW, 2015 WL 183910, at *2

27

(N.D. Cal. Jan. 14, 2015) (“plaintiffs may only recover restitutionary damages, which would be

28

the price premium attributable to the offending labels, and no more”); Brazil v. Dole Packaged

1

Foods, LLC, 12-cv-01831-LHK, 2014 WL 5794873, at *5 (N.D. Cal. Nov. 6, 2014) (“The proper

2

measure of restitution in a mislabeling case is the amount necessary to compensate the purchaser

3

for the difference between a product as labeled and the product as received.”). As Judge Grewal

4

of this District observed in rejecting the same argument made by Victor’s counsel in a different

5

food labeling case:

6
7
8
9
10

[Victor] cites a number of cases to support his argument that he can
pursue nonrestitutionary disgorgement under a quasi-contract
theory. But none of those cases address that remedy in the context of
a product mislabeling claim. The nonrestitutionary disgorgement
remedy which [Victor] seeks would require [Bigelow] “to surrender
... all profits earned as a result of [the alleged] unfair business
practice regardless of whether those profits represent money taken
directly from persons who were victims of the unfair practice.”
Trazo, 2015 WL 4196973, at *3 (citing Kor. Supply Co. v. Lockheed Martin Corp., 29 Cal.4th

11
United States District Court
Northern District of California

1134, 1145 (2003)). Victor is not entitled to do so.
12

Victor’s request is DENIED. Bigelow states that its gross sales and the retail pricing of the

13
products at issue have already been produced or are already available to Victor. Dkt. No. 96 at 5.
14
Victor does not dispute this or explain why that information is not sufficient to present a damages
15
theory based on the difference between the products as labeled and the products as received.
16
17
IT IS SO ORDERED.
18
Dated: August 12, 2015
19
20
21

______________________________________
WILLIAM H. ORRICK
United States District Judge

22
23
24
25
26
27
28
2