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).