C.S. Lewis once wrote that “[t]ea should be taken in solitude.” A California federal court agrees, ruling Tuesday that a consumer’s false labeling claims against tea manufacturer R.C. Bigelow could not proceed as a class action due to the lack of an acceptable classwide damages model as well as standing.
The consumer’s complaint targeted two antioxidant claims on Bigelow’s green tea product labels: “Healthy Antioxidants” and “Mother Nature gave us a wonderful gift when she packed powerful antioxidants into green tea.” Plaintiff alleged that these were unlawful and unapproved health claims under California law because Bigelow’s green tea products “fail[ed] to meet the minimum” nutritional and antioxidant requirements to make such claims. According to plaintiff, he based his purchase decision “in substantial part” on these claims.
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Plaintiff moved to certify a statewide class of all persons in California who purchased a variety of Bigelow’s green tea products, which Bigelow opposed. The court denied the motion, concluding that plaintiff had failed to show that damages were capable of being measured on a classwide basis.
At the certification stage, a plaintiff is required to submit a damages model that measures “only those damages attributable to” the defendant’s allegedly misleading conduct. “If the model does not even attempt to do that, it cannot possibly establish that damages are susceptible of measurement across the entire class,” said the court.
Plaintiff presented three alternative models, but the court concluded that “none ha[d] merit.” The first model – the “restitution calculation” – measured classwide damages as the entire average retail price for each green tea product sold during the class period. This model was based on plaintiff’s contention that “the product [was] legally worthless” and, therefore, had zero value. The court disagreed: “The ‘full refund’ method of calculating restitution has been repeatedly rejected in this district.” Plaintiff’s restitution theory was particularly implausible because it assumed that consumers “gain no benefit in the form of enjoyment, nutrition, caffeine intake, or hydration from consuming the teas.” Indeed, plaintiff himself admitted that he enjoyed the taste of Bigelow’s tea and preferred it over another brand, so the product could not have been worthless.
Plaintiff’s second and third models sought statutory damages under the California Consumer Legal Remedies Act (CLRA) and/or nominal damages, respectively. While the CLRA provides that “actual damages” in a class action shall be no less than $1,000, that award is not automatic. Instead, as the term “actual damages” connotes, a plaintiff must prove the element of causation, i.e., that the defendant’s alleged deception actually caused him or her damage. Relying on its earlier rejection of the restitution calculation, the court held that plaintiff had “failed to provide a viable theory for calculating damages under the CLRA that would be tied to his theory of liability.” Plaintiff’s nominal damages theory was similarly dismissed, as plaintiff failed to cite “a single case demonstrating that nominal damages” were available.
Plaintiff also sought to certify a class to enjoin Bigelow from continuing to allegedly mislabel its products, but the court denied this request because plaintiff had not shown an intent to purchase Bigelow products in the future. Consumers like the plaintiff who have been “previously misled by deceptive food labels and now claim to be better informed” lack standing for injunctive relief “because there is no danger that they will be misled in the future.”
This case is the latest in a welcomed trend in California courts putting plaintiffs to their burden of proving that damages can be calculated on a classwide basis at the certification stage and not accepting shortcuts.