A federal judge in New York certified classes of New York, California, and Florida consumers this week in an “all-natural” product mislabeling class action case, finding all three states’ consumer protection laws contain important, similar elements.
On March 24th, 2021, Senior District Judge William H. Pauley, III of the United States District Court in the Southern District of New York certified classes of consumers in these three states seeking damages against Kind LLC (“Kind”) for its alleged mislabeling of 39 varieties of snack bars as being “All Natural” and containing no GMOs, when they allegedly contained non-natural and/or genetically modified ingredients. The case, captioned In re: KIND LLC “HEALTHY AND ALL NATURAL” LITIGATION, Case No. 15md2645, will now proceed on behalf of classes of persons who purchased Kind’s products in New York since April 17, 2009 and by persons who purchased Kind’s products in California and Florida since April 17, 2011. A copy of the Court’s opinion certifying the classes can be read here.
While other food labeling class actions have been certified in the past (including in cases prosecuted by this Firm), Judge Pauley’s Kind opinion is notable for a number of reasons.
First, the Court found that despite nuances among California, New York and Florida consumer protection laws, they all contain the same three elements: (1) a deceptive act, (2) materiality, and (3) injury. Given that all 39 varieties of Kind’s products contained the same basic alleged material misrepresentations, and Kind charged a premium for the products, the Court found it appropriate to certify classes under all three states’ laws even if the products’ labels varied in other ways.
Second, the Court found that disagreements by the parties’ experts on whether the alleged misrepresentations were material did not preclude class certification. Rather, whether the labels are materially misleading was an issue that would be decided for the entire class. Moreover, the Court found that product-specific labeling beyond the allegedly false All Natural and Non-GMO claims did not require proof as to individual understandings, but could be judged on an objective standard using generalized proof making class certification more appropriate than other mislabeling actions.
Third, the Court found that a class need not be defined as persons who have receipts to prove they purchased the snack bars at issue, for a class to be certified. While noting that other courts have found receipts to be necessary to find that a class is sufficiently ascertainable, Judge Pauley held that “[i]mposing a receipt requirement would severely constrict consumer class actions where most consumers do not keep receipts because the purchase price is low and part of a minerun retail transaction,” and that requiring class members to have receipts would allow Kind and every other manufacturer and distributor or consumer goods to escape liability for their misconduct.
Fourth, the Court held that plaintiffs need not prove a price premium at the class certification stage, nor determine damages for a class to be certified. Rather, it was sufficient for the plaintiffs’ expert to identify the type of analysis he could do to calculate damages; identify the data he would use for the analysis; and show that the data is available. It was irrelevant that the plaintiffs’ expert was not in possession of the data he would use, so long as it was available and could be used as part of a damage model designed to determine the value of the All Natural and Non-GMO claims to consumers.
FDPK’s consumer protection lawyers have significant experience in making sure manufacturers making untruthful or misleading claims on food are held accountable. Please contact us at info@fdpklaw.com if you are interested in learning more or if you recently purchased a food product that you believe may be labeled with deceptive or untruthful claims.
Posted by R. Samuel Stein.