A federal court in California has decertified a damages class in litigation alleging that Dole Packaged Foods, LLC misleads consumers by labeling 10 of its fruit products as “All Natural Fruit” because they contain allegedly synthetic ingredients ascorbic acid and citric acid. Brazil v. Dole Packaged Foods, LLC, No. 12-1831 (U.S. Dist. Ct., N.D. Cal., San Jose Div., order entered November 6, 2014). The court found flaws in the regression model that the plaintiff’s expert (Oral Capps) used to determine the price premium attributable to the company’s use of the “All Natural Fruit” label statements, finding that the model “does not sufficiently isolate the price impact” of the labeling statement.
The court disagreed with Dole that the expert performed a “price” regression rather than a “sales” regression and thus “measured the wrong thing.” According to the court, while the initially proposed analysis differed from the one actually carried out, given that the expert had initially proposed a model based on changes in labels on Dole products—which did not occur—it appropriately responded to the court’s damages methodology request as long as it isolated the price impact traceable to the labeling claim. The court further rejected Dole’s argument that the model confused “brand” and “label” and that it improperly used retail data. The court agreed, however, that the regression model did not control for a number of variables affecting price, including advertising and the prices of competing products. As to the latter, the court faulted the expert for failing to actually determine whether comparable products bore the “All Natural” label and improperly made certain assumptions in this regard. According to the court, “This methodology cannot survive Comcast.” The court was also concerned that the model failed to “account for the possibility that some products might make multiple labeling claims,” such as “All Natural Fruit” and “No Sugar Added,” and that it overlooked “differences in how the products are packaged.” In the court’s view, the desirability of a single 16-oz. can differs significantly from a “four pack,” i.e., four 4-oz. cups packaged together. Thus the court found that the Rule 23(b)(3) predominance requirement was not satisfied.
Its conclusion was “only bolstered by other troubling aspects of Dr. Capps’ model.” He apparently offered a contradictory opinion about the efficacy of regression modeling where, as here, a label statement on a product has not changed during the class period in Lanovaz v. Twinings North America, Inc. As the court queried, “How is it that regression analysis was ‘not possible’ in Lanovaz, but remains eminently so here?” The court found his explanation unsatisfactory.
The court rejected Dole’s request to decertify the injunctive relief class for lack of ascertainability, stating, “Here, [the plaintiff] has adequately defined the class based on an objective criterion: purchase of the identified Dole fruit products within the class period.” It distinguished the case from others that involved many more products with a variety of labeling claims. The Rule 23(b) (2) class certified includes “all persons in the United States who, from January 1, 2009, until the date of notice, purchased a Dole fruit product bearing the front panel label statement ‘All Natural Fruit’ but which contained citric acid and ascorbic acid.”