A federal court ruled recently for defendant in a proposed class action about the labeling of an iced tea product. See Ries v. Arizona Beverages USA LLC, No. 10-01139 (N.D. Cal., 3/28/13).

We have posted before about plaintiffs' efforts to manufacture consumer fraud class actions out of any aspect of a product label or marketing. Here, plaintiffs brought a class action challenge defendants’ advertising, marketing, selling, and distribution of AriZona Iced Tea beverages labeled “All Natural,” “100% Natural,” and “Natural” because they allegedly contained high fructose corn syrup (HFCS) and citric acid. Problem turns out, plaintiffs could muster no proof the marketing was false.

The Complaint set forth six California state law claims for relief: under the False Advertising Law (FAL) for (1) misleading and deceptive advertising, and (2) untrue advertising; under the Unfair Competition Law (UCL), for (3) unlawful, (4) unfair, and (5) fraudulent business practices; and (6) under the Consumers Legal Remedies Act (CLRA), for injunctive and declarative relief.

The defendants filed a motion for summary judgment and plaintiffs filed a motion for class certification. The court initially certified the class under Rule 23(b)(2) for purposes of injunctive and declaratory relief only. At the close of discovery, defendants made a renewed motion for summary judgment, reviving their argument that the named plaintiffs could not support their claims, and had failed to meet their evidentiary burden of showing that defendants’ beverage labeling practices were unfair or misleading. Defendants further moved for decertification of the class.

The court noted that factual predicate for each of plaintiffs’ claims was that the beverages were falsely labeled as “all natural” despite allegedly containing HFCS and citric acid. So plaintiffs had to show that HFCS and citric acid are indeed not natural; and also that accordingly they were entitled to restitution. In their opposition to the motion for summary judgment, plaintiffs did not offer any credible evidence that HFCS is artificial and thus rendered the beverage not natural.  But plaintiffs had no credible evidence, relying primarily on the fact the ingredients were allegedly patented.  But they cited no legal authority supporting their contention that if the process to produce an ingredient is patented, that fact, in and of itself, automatically renders it artificial and no natural. This was, the court observed, merely an extension of their rhetoric that HFCS is artificial because it “cannot be grown in a garden or field, it cannot be plucked from a tree, and it cannot be found in the oceans or seas of this planet.”  The deposition testimony they cited, even when read in the light most favorable to plaintiffs, did not satisfy their evidentiary burden. It certainly did not demonstrate that it is probable that a significant portion of the consuming public could be confused by the “all natural” labeling of defendants’ products. Rather than showing that defendants were attempting to engage in unfair competition by capitalizing on any such confusion, the testimony indicated that everything in the beverages is natural, and that defendants even included labels specifying that they contain all natural tea without preservatives, artificial color, and artificial flavor to clarify that to theoretically confused customers.

On the restitution issue, the court noted there must be evidence that supports the amount of restitution necessary to restore to the plaintiff, meaning the difference between what the plaintiff paid and the value of what the plaintiff received.  Plaintiffs had no such evidence to support their prayer for restitution and disgorgement. Plaintiffs offered not a scintilla of evidence from which a finder of fact could determine the amount of restitution or disgorgement to which plaintiffs might be entitled if this case were to proceed to trial. This failure alone provided an independent and sufficient basis to grant defendants summary judgment.  

The court also found that plaintiffs' failures undermined the finding of adequacy of representation under Rule 23(a)(4). The class was therefore decertified. One wonders why it was certified in the first place.

The class was decertified, the motion for summary judgment was granted, and a motion to exclude expert opinion testimony was denied as moot.