Sharpe et al v. Puritan's Pride, Inc. et al

Filing 229

ORDER RE SUMMARY JUDGMENT. Signed by Judge James Donato on 1/4/2022. (jdlc3, COURT STAFF) (Filed on 1/4/2022)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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PENELOPE MUELLER, et al.,
Plaintiffs,

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Re: Dkt. No. 195
PURITAN'S PRIDE, INC., et al.,
Defendants.

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ORDER RE SUMMARY JUDGMENT

v.

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Case No. 3:16-cv-06717-JD

This order resolves defendant Puritan’s Pride’s motion for summary judgment on
plaintiffs’ remaining claims in this class action. Dkt. No. 195. The salient facts have been

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United States District Court
Northern District of California

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discussed in detail in prior orders. See, e.g., Dkt. No. 112 (motion to dismiss); Dkt. No. 178

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(motion for partial summary judgment); Dkt. No. 228 (class certification). In relevant summary,

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Puritan’s Pride markets and sells vitamins and supplements to consumers through catalogs, email,

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mail and a website. Dkt. No. 226 at 2. Puritan’s Pride sells most of its products under buy-one-

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get-one (BOGO) promotions, which plaintiffs challenge as deceptive. Id. Plaintiffs alleged that

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these promotions were misleading because the price of the offered “free” products were built into

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the price of the purchased non-free product(s).

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The Court has dismissed the claims under New York state law. Dkt. No. 112. The Court

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granted Puritan’s Pride summary judgment baring the recovery of damages under the False

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Advertising Law (FAL) and restitution and denied Puritan’s Pride’s motion for summary

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judgment on actual damages under the California Consumer Legal Remedies Act (CLRA). Dkt.

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No. 178 at 12. The Court certified a class under Federal Rule of Civil Procedure 23(b)(2) for

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injunctive relief in connection with plaintiffs’ CLRA and California Unfair Competition Law

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(UCL) claims. Dkt. No. 228 at 15. Class certification under Rule 23(b)(3) for monetary relief was

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denied. Id.

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The present motion for summary judgment addresses the merits of plaintiffs’ deceptive

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practices claims under the UCL and CLRA. Summary judgment is denied, and the case will be set

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for trial.

DISCUSSION

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I.

LEGAL STANDARDS
Parties “may move for summary judgment, identifying each claim or defense -- or the part

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of each claim or defense -- on which summary judgment is sought. The court shall grant summary

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judgment if the movant[s] sho[w] that there is no genuine dispute as to any material fact and the

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movant[s] [are] entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “The Court may

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dispose of less than the entire case and even just portions of a claim or defense.” CZ Servs., Inc. v.

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Express Scripts Holding Co., No. 3:18-CV-04217-JD, 2020 WL 4368212, at *2 (N.D. Cal. July

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30, 2020) (citing Smith v. Cal. Dep’t of Highway Patrol, 75 F. Supp. 3d 1173, 1179 (N.D. Cal.
2014)). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict

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United States District Court
Northern District of California

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for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

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A fact is material if it could affect the outcome of the suit under the governing law. Id. To

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determine whether a genuine dispute as to any material fact exists, the Court views the evidence in

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the light most favorable to the nonmoving party, and “all justifiable inferences are to be drawn” in

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that party’s favor. Id. at 255. The moving party may initially establish the absence of a genuine

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issue of material fact by “pointing out to the district court that there is an absence of evidence to

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support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). It is

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then the nonmoving party’s burden to go beyond the pleadings and identify specific facts that

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show a genuine issue for trial. Id. at 323-24. “A scintilla of evidence or evidence that is merely

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colorable or not significantly probative does not present a genuine issue of material fact.” Addisu

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v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000).

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II.

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CONSUMER DECEPTION
Puritan’s Pride says summary judgment is warranted because plaintiffs have not adduced

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evidence to establish that reasonable consumers would be deceived by Puritan’s Pride’s BOGO

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promotions, as required by the UCL and CLRA. Dkt. No. 195 at 7. Claims under the UCL and

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CLRA are “governed by the ‘reasonable consumer’ test.” Williams v. Gerber Prods. Co., 552

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F.3d 934, 938 (9th Cir. 2008). Under that standard, plaintiffs must “show that members of the

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public are likely to be deceived.” Id. (quoting Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir.
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1995)); see also In re Tobacco II Cases, 46 Cal. 4th 298, 312 (2009) (“[T]o state a claim under

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either the UCL or the false advertising law, based on false advertising or promotional practices, it

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is necessary only to show that members of the public are likely to be deceived.”).

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The question of consumer deception is a factual one, see Williams, 552 F.3d at 938-39, and

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the record has enough disputed evidence for a trial. The evidence includes, among other items: (1)

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the declarations and depositions of the named plaintiffs, which establish that they were misled by

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the BOGO promotions, see Dkt. No. 186-12; Dkt. No. 186-13; Dkt. No. 186-14; Dkt. No. 186-18;

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Dkt. No. 186-19; Dkt. No. 186-20; Dkt. No. 186-21; (2) Puritan’s Pride’s internal marketing

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research, which shows that consumers responded favorably to the BOGO promotions and returned
to Puritan’s Pride’s website because of the promotions, see Dkt. No. 218-2; Dkt. No. 218-6; Dkt.

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United States District Court
Northern District of California

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No. 218-7; and (3) work by Brian Bergmark, an expert retained by plaintiffs who analyzed sales

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data from Puritan’s Pride to opine that almost all of Puritan’s Pride’s sales were BOGO purchases.

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Dkt. No. 186-11. This evidence, along with similar records, is subject to a genuine issue of

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material fact that forestalls summary judgment.

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Plaintiffs additionally rely on the expert report of Dr. Larry Compeau, Dkt. No. 218-5, as

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evidence of whether a reasonable consumer would be deceived by Puritan’s Pride’s BOGO

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promotions. Dkt. No. 226 at 10-12. Puritan’s Pride previously requested to strike portions of Dr.

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Compeau’s report. See Dkt. No. 196. The Court denied the request without prejudice and

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indicated that the objections to Dr. Compeau’s report would be revisited as warranted. See Dkt.

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No. 228 at 15. The Court again declines to consider the request to strike portions of Dr.

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Compeau’s report and relies solely on the unchallenged portions of the report.

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The portions of the report that Puritan’s Pride does not seek to strike buttress the showing

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of triable issues of fact. For example, Dr. Compeau opines that the advertised BOGO prices “are

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always deceptive” and “likely to enhance consumers perceptions of value and likelihood of

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purchases.” Dkt. No. 218-5 at ¶ 30. Dr. Compeau also says that “the use of external reference

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prices increase consumers’ perceptions of the value of the deal and decrease consumers’ intentions

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to search for a lower price.” Id. at ¶ 28. Dr. Compeau concludes that because Puritan’s Pride does

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not make a substantial number of sales at its reference prices, the reference prices in the BOGO

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offers lack veracity. Id. at ¶ 34. These opinions add fuel to the trial fire.

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III.

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UCL UNLAWFUL PRONG
Puritan’s Pride also seeks summary judgment on the grounds that there is no predicate

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unlawful conduct to sustain a claim under the UCL’s “unlawful” prong. Dkt. No. 195 at 12-13.

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The UCL defines unfair competition as “any unlawful, unfair, or fraudulent business act or

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practice.” Cal. Bus. & Prof. Code § 17200. The UCL’s unlawful prong “borrows violations of

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other laws and treats them as unlawful practices that the unfair competition law makes

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independently actionable.” Beaver v. Tarsadia Hotels, 816 F.3d 1170, 1177 (9th Cir. 2016)

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(quoting Cel-Tech Commc’n, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180 (Cal. 1999)).

United States District Court
Northern District of California

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Puritan’s Pride says that, because the Court concluded that the FAL does not apply to this

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case, the only remaining predicate for the UCL claim is the FTC Guide, which is not a law within

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the meaning of the statute. Dkt. No. 195 at 12-13. The Court need not decide that question

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because plaintiffs have ample grounds to maintain the UCL claim on the basis of violations of the

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CLRA. Puritan’s Pride tries to sidestep this result by saying it should win the CLRA claim, but

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that is part of the disputed issues of fact that need to be tried.
CONCLUSION

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Summary judgment is denied across the board. A status conference has been scheduled for

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January 27, 2022, at 10:00 a.m. The joint status conference statement should include the parties’

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agreement on dates for the pretrial conference and trial.

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IT IS SO ORDERED.
Dated: January 4, 2022

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JAMES DONATO
United States District Judge

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