Strange Bedfellows – How a Recent Security Fraud Opinion May Impact Consumer Fraud Class Actions

The U.S. Supreme Court’s recent decision in Liu v. SEC, No. 18-1501 (June 22, 2020), limiting the SEC’s ability to obtain monetary equitable relief in securities fraud litigation, may seem an odd topic for this blog.  But Liu is worth some attention because it may foreshadow an impact on calculation and distribution of monetary awards in consumer fraud class actions.  The decision may influence the calculation of disgorgement or restitutionary remedies, and it may signal another hurdle for the controversial judge-made distribution mechanism, cy pres.
Continue reading

“Vanilla” Ice Cream Deceptive Labeling Case Melts on Motion to Dismiss

A federal court in New York recently granted a motion to dismiss claims that ice cream labeled “vanilla” misleads consumers into believing the product’s flavor comes exclusively from vanilla beans or extract, when in fact other natural flavors contribute to the vanilla taste. The decision may be a harbinger of what is to come in similar cases challenging the label description of vanilla and other flavors in products ranging from ice cream to soy milk to energy drinks. The decision also shows that alleged regulatory violations and product testing do not necessarily support a plausible claim of consumer deception.

Continue reading

New Jersey Supreme Court Pumps the Brakes on Use of Aggregate Proof of Damages in Kia Class Action

In Little v. Kia Motors America, Inc., docket no. A-24-18, the New Jersey Supreme Court recently set out the examination New Jersey courts must undertake before admitting aggregate proof of damages, rather than individualized proof, in a class action. Siding with defendant Kia in a vehicle defect suit, the Court ruled that admission of aggregate proof of damages at trial was inappropriate because an unknown number of class members would have received a windfall, and the formula used to estimate such damages was unreliable. This case reviews the key principles courts and litigants should consider when choosing between individualized or aggregate proof of damages in a class action.

Continue reading

Ninth Circuit’s Ingredients List Rule Keeps Nestlé in Hot Water with Denial of Nestlé’s Statute of Limitations-Based Summary Judgment Motion

The Northern District of California recently applied the Ninth Circuit’s ingredients list rule in a putative class action decision. The Court refused to grant Nestlé USA Inc.’s summary judgment motion based on the statute of limitations in a suit involving allegations that Nestlé misleads consumers about the trans-fat content of their Coffee Mate creamer products. The Court held that a triable issue of fact remained because it was not clear when the consumer first learned about the alleged deception.

Continue reading

Ninth Circuit Confirms That Winning Early Summary Judgment May Be the Ultimate Preemptive Tactic for Beating Class Certification

The Ninth Circuit has confirmed that a lack of summary judgment evidence linking a product to concrete injury may properly halt a would-be class action in its tracks if a defendant preemptively moves for summary judgment before plaintiffs have the chance to move for class certification.

As we explored in an earlier post, the plaintiffs in Browning et al. v. Unilever United States Inc. represented a would-be class alleging that defendant Unilever failed to disclose that its St. Ives facial scrubs caused “micro-tears” of the skin. In early 2019, the United States District Court for the Central District of California granted summary judgment in favor of Unilever. The court held that the plaintiffs failed to establish the alleged micro-tears constituted a safety hazard, and found that causation was lacking because the plaintiffs presented no evidence that St. Ives — and not some “other products or lifestyle” choices — caused the complained-of skin conditions.

Continue reading

California Consumers Can’t Escape Federal Jury Trial by Abandoning Available Damages Claims

The Ninth Circuit affirmed dismissal of a consumer fraud class action pursuing restitution under California’s Unfair Competition Law (UCL) because the plaintiff failed to show she lacked an adequate legal remedy. Sonner v. Premier Nutrition, No. 18-15890 (9th Cir. June 18, 2020). In doing so, the Ninth Circuit resolved a split in the California federal courts regarding whether plaintiffs may pursue solely equitable relief under the UCL, Consumer Legal Remedies Act (CLRA), or False Advertising Law (FAL) when legal damages under the CLRA are available in the same amount for the same alleged harm. This decision has important implications for consumer class actions in California federal courts.

Continue reading