In re Ferrero Litigation, 278 F.R.D. 552 (S.D. Cal. 2011)
Plaintiffs moved for class certification of their California
consumer protection claims against Ferrero based on alleged misrepresentations
that Nutella was part of a healthy breakfast for children, and the court
granted the motion. Plaintiffs alleged
that they bought Nutella for their childred in reliance on ads suggesting that
Nutella was nutritious, a healthy choice, etc. and showing children being fed
the product. In fact, Nutella has high
levels of sugar and fat, which help make it so yummy.
Numerosity was easy: 10.1% of American households purchased
Nutella in 2010; net sales from 2007-2010 were over $213 million. Typicality was also easy. Commonality requires shared injury—a common
contention capable of classwide resolution, though divergent factual predicates
or remedies are allowable. Ferrero argued that plaintiffs failed under Wal-Mart, but the court disagreed. The claims were based on a common ad
campaign, and included common questions such as whether the ads misrepresented
that Nutella was healthier, more nutritious, or a greater contributor to a
healthy breakfast than it actually was.
Adequacy was also satisfied: there were no conflicts between class
representatives, counsel, and the class.
Rule 23(b)(3) requires more: predominance and superiority. Plaintiffs identified several predominating
common questions: what message was communicated, misleadingness, materiality,
deceptive omissions, and proper calculation of damages/scope of injunctive
relief. Ferrero naturally disagreed: for
example, one named plaintiff didn’t regret her purchase and continued using the
spread after she learned its sugar content, and another testified that her
children loved Nutella and were upset when she took it away (that fact seems
pretty irrelevant). More generally,
Ferrero argued that the case involved class members’ individual expectations,
dietary preferences, nutritional knowledge, and imperfect market
substitutes. The court concluded that
all the class members’ claims shared a common contention: that Ferrero made a
material misrepresentation of Nutella’s nutritional benefits stemming from a
common advertising campaign. Superiority
was easy: individual claims wouldn’t be economically feasible.
Ferrero argued that it would violate due process to apply
California law nationwide. Ferrero is a
Delaware corporation with NJ headquarters, and its only California employees
are field reps responsible for sales to retailers, not to consumers. Only 15 of its 166 field employees are in
California, and sales are about 12.5% of national sales, proportional to
population.
California presumes against extraterritorial application of
its law, and plaintiffs didn’t show a California nexus to the non-California
class members. Thus, the court would
only certify a California class.
As for the class period, plaintiffs wanted to start it in
2000. But the challenged ad campaign
began in August 2009, and shortly thereafter Ferrero began using a label
claiming that Nutella is part of a “balanced breakfast.” Also, the statute of limitations is 4 years
(UCL) or 3 (CLRA/UCL). The court found
that the class period should start as of August 2009.
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