The court certified two classes of people who bought Kashi
food products, though neither as large as plaintiffs wanted. Bringing the usual California claims, they
alleged that Kashi deceptively sold products as having “Nothing Artificial” (10
products) or being “All Natural” (91 products), when in fact certain
ingredients and processes used to make the products were not “natural” but
rather synthetic. Kashi argued, among
other things, that consumers and producers have no uniform definition of
“natural” and, accordingly, the representations were not materially false.
The court certified a “Nothing Artificial” class of
California consumers. Kashi argued that
the class wouldn’t be ascertainable. A
class definition must be definite enough to make determining membership administratively
feasible. The proposed class definition
met that standard: purchasers of Kashi products that included the allegedly
material misrepresentations. “Because
the alleged misrepresentations appeared on the actual packages of the products
purchased, there is no concern that the class includes individuals who were not
exposed to the misrepresentation.” True,
Kashi didn’t have purchase records for individuals, and class members would
likely lack proof of purchase. But there’s
no requirement that the identity of class members must be known at the time of
certification; if that were true, there’d be no such thing as a class
action. Kashi also argued that the class
had to be defined so that anyone within it would have standing, and that the
class definition included members who were unexposed to the alleged
misrepresentations or who bought for other reasons. But California law allows causation/reliance
to be established classwide by materiality, thus creating actual injury for the
class.
Kashi didn’t dispute numerosity, and commonality was also
easy, despite Kashi’s argument that differences in products and consumer
motivations meant that the issues weren’t common. However, commonality only requires some common
issues of fact and law capable of classwide resolution, which was the case
here. “Courts routinely find commonality in false advertising cases that are
materially indistinguishable from this matter.”
The argument that the representative plaintiff could only represent
purchasers of the exact same product, not similar products with the same
alleged misrepresentations, also failed.
“Plaintiffs seek common relief in the form of restitution for their
purchases and injunctions prohibiting the allegedly false advertisement to
continue.”
Kashi also contested typicality, arguing that differences in
the named plaintiffs’ perceptions and knowledge about Kashi products, and their
preferences and reasons for purchase, rendered them atypical. But the focus is on defendants’ conduct and
the plaintiffs’ legal theory, not the injury caused, and the California
statutes also use an objective test for likely deceptiveness, making individual
experience irrelevant. The plaintiffs
alleged reliance and harm (they wouldn’t have bought the products or would have
paid less for them had they known the truth), thus alleging the same type of
damages as the putative class members.
They didn’t need to show that the misrepresentations were the only
cause, or even the predominant or decisive factor, in their purchases;
considering other factors wouldn’t make them atypical. Also, they might buy other products that are
unhealthy or otherwise artificial, but that “says nothing about whether they
purchased Kashi products specifically because they were supposedly healthy and
natural.” (Indeed, such weakness might
make them vulnerable to all-natural type claims, as a way to balance out their
purchases.)
The court also found that the named plaintiff would be an
adequate representative.
Turning next to Rule 23(b)(3), the court addressed
predominance and superiority. Kashi argued that individual issues of reliance
and injury defeated predominance, but the court held that the plaintiffs made a
sufficient showing of materiality to create an inference of reliance, so common
issues predominated, given that relief under California’s consumer protection
law is available without individualized proof of deception, reliance, and
injury, so long as named plaintiffs show injury and causation, which itself is
shown by materiality. Unlike “All
Natural,” “Nothing Artificial” had a clearly ascertainable meaning: no
artificial or synthetic ingredients. The
named plaintiff alleged that she bought Kashi products because of that claim,
and would have paid less or bought something else if she’d known the truth.
There was a sufficient showing for the purpose of class
certification that the challenged ingredients might be considered artificial or
synthetic, and that reliance occurred. The proposed “Nothing Artificial” class
covered Kashi’s “Heart to Heart” product line, including ten products, “alleviating
concerns that individual purchasing factors for a variety of products would
predominate.” Though Kashi challenged
plaintiffs’ evidence of materiality in light of the challenged ingredients,
that was a determination for a factfinder; the representation wasn’t immaterial
as a matter of law. “For the purposes of
class certification, it is sufficient that the alleged material misstatement
and omission was part of a common advertising scheme to which the entire class
was exposed, and is a sufficiently definite representation whose accuracy has
been legitimately called into question.”
There was also predominance for the associated breach of express
warranty/quasi contract claims.
As for individual damages, they typically don’t overcome
predominance of common issues on liability. The named plaintiff claimed the
same type of economic injury and damages as the putative class members. They could seek an amount representing the
difference between expected and received value.
For certification, the plaintiff has to present a likely method for
determining damages, and plaintiffs here claimed they could calculate
restitutionary damages based upon sales, profits and prices data from records generally
maintained by Kashi. “If individual issues as to how much reward each class
member is entitled later predominate, the Court can address such concerns at
that time.”
This was also a claim involving many people and small sums,
a standard indicator that a class action was superior to individual lawsuit.
“All Natural” Class: The court narrowed plaintiffs’ proposed
class. For most of the challenged
ingredients, plaintiffs didn’t adequately show materiality, as necessary to
infer reliance by the class. Kashi argued that consumers and food producers,
not to mention the FDA, lacked any uniform definition of “All Natural” that
affects purchasing decisions. Kashi’s challenged
products contained as little as 0.01% and, at most, 5% by weight the challenged
ingredients, and it presented evidence that many consumers would still view a
product as a “natural food product” despite these amounts (“All Natural”?). Plus, plaintiffs were challenging over 90
different products labeled “All Natural,” with different ingredients and
different advertising campaigns, and which would involve differing consumer decision
processes. Ten of the 13 challenged
ingredients were allowed in “organic” foods, and consumers—including the named
plaintiffs—often equate “natural” with “organic” or hold “organic” to a higher
standard; named plaintiffs also disagreed about the definition of “All Natural”
and about whether the challenged ingredients satisfied their expectations of “All
Natural” products. And Kashi provided a
definition of “natural” on its website, available to putative class members,
that accommodated most of the challenged ingredients.
Thus, plaintiffs failed to show that class members would
view the presence of ingredients permitted in “organic” foods as not “All
Natural,” especially in light of the large number and different types of
products challenged. Without a common inference of materiality, the class
couldn’t be certified. However, there was a sufficient showing of materiality
to certify a class pertaining to hexane-processed soy ingredients, calcium
pantothenate, and pyridoxine hydrochloride. Hexane is a “synthetic organic
chemical manufacturing industry chemical,” and Kashi admitted that
hexane-processed soy ingredients didn’t even satisfy Kashi’s own definition of
“All Natural” according to its website. The other two ingredients were
designated by statute as “synthetic” but, unlike the other challenged
ingredients, weren’t permitted in certified “organic” foods. Thus, there was a
sufficient showing of materiality for this limited class.
The court also declined to certify a nationwide class under
California law, finding this case on all fours with Mazza v. Honda American
Honda Motor Co., 666 F.3d 581 (9th Cir. 2012).
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