A federal court rejected a proposed class of New York consumers challenging the “all natural” labeling of four Crisco oils that allegedly contained genetically modified ingredients. See Ault v. J.M. Smucker Co., No.13-03409 (S.D.N.Y., 8/6/15).
On May 21, 2013, Plaintiff Adrianna Ault filed a complaint alleging that Defendant violated N.Y. Gen. Bus. Law ("GBL") §§ 349 and 350, and breached an express warranty by labeling certain Crisco cooking oils as "All Natural." Plaintiffs proposed class included: consumers who purchased one or more of the following products in New York: Crisco Pure Vegetable Oil and/or Crisco Pure Com Oil between February 15,2 009 and June 1, 2014; and/or Crisco Pure Canola Oil and/or Crisco Natural Blend Oil between June 1, 2010 and June 1, 2014.
According to Plaintiff, the "All Natural" label was deceptive for two reasons. First, Defendant allegedly purchased from third parties the crude soy, canola, and corn oils from which it manufactures its cooking oils. Some of such crude oils were allegedly derived from GMO crops, and Defendant allegedly did not differentiate between GMO and non-GMO crops when purchasing crude oils. Second, Plaintiff argued that the "All Natural" label was misleading because the Natural Label Oils were "heavily processed" using chemicals: after Defendant purchases source oils from its suppliers, it allegedly refined the oils using a multi-step process, Plaintiff argued that, as a result, the Natural Label Oils are chemically altered and highly processed, and cannot be considered "natural."
Plaintiffs moved for class certification. Defendant responded that class certification is improper because the term "natural" is not susceptible to a uniform meaning. The Food and Drug Administration has declined to adopt a definition of "natural," Consumers define "natural" in diverse ways. Defendant pointed to a survey conducted by its expert, which determined that 55% of respondents could not define or did not even know what "All Natural" cooking oil meant.
Defendant argued that class certification must also fail because consumers bought the Natural Label Oils for many reasons unrelated to whether the products were "natural." According to the Survey, respondents' most common considerations in deciding whether to purchase cooking oil were price and brand awareness. Only 1.6% of respondents indicated that whether an oil was "natural" factored into their purchasing decision. Under the New York General Business Law, the plaintiff must demonstrate that she "sustained injury as a result" of defendant's action, and the plaintiff must show that she suffered a loss "because of' the defendant's "deceptive act." Rodriguez v. It 's Just Lunch, Int 'l, 300 F.R.D. 125, 147 (S.D.N.Y. 2014). Defendant argued this element highlighted individual issues among the class members.
The court noted that class action law recognizes an "implied requirement of ascertainability." In re Initial Pub. Offering Sec. Litig., 471 F.3d 24, 30 (2d Cir. 2006). A class is ascertainable if it is "readily identifiable, such that the court can determine who is in the class and, thus, bound by the ruling." Charrons v. Pinnacle Group NY LLC, 269 F.R.D. 221, 229 (S.D.N.Y.2010). The class must be "defined by objective criteria that are administratively feasible," and identifying class members should not "require a mini-hearing on the merits of each case." Id.
Here, it was undisputed that many potential class members will not have retained records of their cooking oil purchases. Plaintiffs argued that some class members could be identified by retailer records. But, the court concluded, this fell well short of establishing ascertainability. While the criteria may be objective, Plaintiff had not shown that it was "administratively feasible." See Charrons, 269 F.R.D. at 229. The mere assertion that "records exist to identify many class members" does not suffice. Defendant sold to retailers and distributors, not to consumers, and therefore has no records regarding the ultimate purchasers of the Natural Label Oils. Plaintiffs' information did not relate exclusively to New York retailers, and there was no evidence concerning what percentage of sales this data represents, nor whether such data would identify more than a small percentage of class members.
As many plaintiffs do, the argument was made that self-identification was also a feasible method for determining class membership; however, there was no proof of how such self-identification would be authenticated. Most courts reject such an approach, especially when there were a variety of related products only some of which fall within the class definition. Often, putative class members are unlikely to remember accurately every purchase during the class period, and soliciting declarations from putative class members regarding their history of purchases would invite them to speculate, or worse. Here, defendant was selling nine different brands of cooking oil, only four of which ever bore the challenged label. Permitting potential class members to self-identify would require them to specifically recall each variety of Crisco cooking oil they purchased during the class period. Adding to the confusion, the "All Natural" label appeared on the four brands at different times, and the proposed class period was defined differently for the Vegetable and Corn Oils than the Canola and Natural Blend Oils. Based on the class definition, therefore, an individual who purchased Crisco Corn Oil in 2009 would be a member of the class, but one who purchased Canola Oil that same year would not. "Who could possibly recall that level of detail six years (or more) later?" Indeed, the named Plaintiff herself could not recall the number of bottles of Crisco cooking oil she had purchased during the class period.
The court turned next to commonality and predominance. Commonality requires plaintiffs' claims to "depend upon a common contention" that is "capable of class-wide resolution-which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). The determining factor is not whether common questions exist, but rather "the capacity of a class-wide proceeding to generate common answers apt to drive the resolution of the litigation." !d. The predominance requirement "is a more demanding criterion than the commonality inquiry under Rule 23(a)." Moore v. PaineWebber, Inc. , 306 F.3d 1247, 1252 (2d Cir. 2002). Class-wide issues predominate if "resolution of some of the legal or factual questions ... can be achieved through generalized proof," and are "more substantial than the issues subject only to individualized proof." Id. Although individualized damages determinations alone traditionally did not preclude certification under Rule 23(b )(3), the fact that "damages may have to be ascertained on an individual basis" is a factor that courts "must consider in deciding whether issues susceptible to generalized proof outweigh individual issues." Roach v. T.L. Cannon Corp., 778 F.3d 401, 408-09 (2d Cir. 2015). A plaintiffs damages model "must be consistent with its liability case," and must "measure only those damages attributable to that theory." Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1433 (2013).
Here, plaintiff asserts that the injury to Plaintiff and class members was subject to common proof' because the inclusion of the "All Natural" label had the effect of increasing the price of the cooking oils for everyone. Yet, Plaintiff offered no evidence that a price premium actually existed for cooking oils labeled "All Natural," nor had she proposed a reliable method for determining the existence or amount of any such price premium. This plaintiffs proposed a survey to identify the allege price premium. But such a methodology is not "consistent with [Plaintiffs] liability case," see Comcast Corp., 133 S. Ct. at 1433, because it made no attempt to calculate the amount that consumers actually overpaid due to the "All Natural" label. Rather than analyzing actual pricing and sale data for the Natural Label Oils, plaintiffs' expert merely proposed to ask some unspecified subsection of Crisco customers what they would pay for a hypothetical Crisco product. Moreover, this analysis further compounded the problems with the ascertainability of the class, by designating potential class members- many of whom may be unidentifiable--as the very individuals who will determine the amount of damages to which they are entitled.
Accordingly, Plaintiffs motion for class certification under Rule 23(b)(3) was denied.