On November 29, 2018, the Hon. Gonzalo P. Curiel of the Southern District of California granted partial certification to a California class of consumers of Ocean Spray’s juice-based beverages (12 in total), which were purportedly falsely advertised as containing “no artificial flavors” although they contain malic acid and/or fumaric acid.¹ The district court hearing Hilsley v. Ocean Spray Cranberries, Inc. granted the plaintiff’s motion for class certification pursuant to Fed. R. Civ. P. 23(b)(3) on claims under California’s Unfair Competition Law (UCL), False Advertising Law (FAL) and Consumer Legal Remedies Act (CLRA). The district court also granted certification for an injunctive relief class under Fed. R. Civ. P. 23(b)(2). However, the court denied the plaintiff’s motion to certify a class as to the claims that Ocean Spray breached express and implied warranties. 

With respect to the statutory consumer fraud claims, the court concluded that the predominance inquiry was satisfied and that certification was appropriate because plaintiff asserted that all products contain the “no artificial flavors” labels, all class members were exposed to the same or substantially similar misleading labels and a single final injunctive relief would provide relief to each member of the class. Ocean Spray argued that the plaintiff had failed to present evidence that the ingredients in question function as “flavors” in the products. However, the court found that at the certification stage, the plaintiff is not required to go into the merits of the case or prove that the ingredients function as flavors. 

The district court also found predominance as to damages for the UCL, FAL and CLRA claims, providing for restitution to the class, finding that plaintiff’s damages model demonstrated the price premium attributable to defendants’ alleged misrepresentation or deceptive labeling (i.e., that the consumers paid more for the juices than they otherwise would have). Specifically, the plaintiff presented a damages model based on a consumer survey purporting to show that consumers preferred Ocean Spray’s juices without artificial flavoring and that they were willing to pay a premium of 61 cents to obtain such juices; this amount was then applied to Ocean Spray’s actual unit sales during the class period to arrive at a restitution figure. Therefore, the court certified a class under these statutory claims because the damages model not only accounted for consumer class demand, but also for Ocean Spray’s market supply.

With respect to the warranty claims, the district court emphasized that in California, vertical privity—a contractually binding relationship between the plaintiff and defendant—is required for implied warranty claims. Since everyone in the class bought the Ocean Spray products in retail stores and not directly from Ocean Spray, the district court found that there was no predominance for breach of implied warranty due to such individual inquiries.

Further, the court concluded that the plaintiff failed to demonstrate a class-wide method of determining damages for both the express and implied warranty claims. Specifically, the court addressed a consumer survey that asked people how willing they would be to buy Ocean Spray products if they didn’t have the “no artificial flavors” labels. Judge Curiel found this to be “insufficient” to satisfy the prevailing standard in Comcast Corp. v. Behrend “as it fails to take into consideration any ‘corresponding gain by the defendant.’”² The court added: “‘The ultimate price of a product is a combination of market demand and market supply’” (quoting In re NJOY, Inc. Consumer Class Action Litigation). Thus, the court declined to certify both warranty claims.

While the merits of this case—whether the malic acid and fumaric acid function as flavors in these juices—have yet to be decided, for now, the plaintiff can proceed with most of her class claims.

1. Hilsley v. Ocean Spray Cranberries, Inc. (S.D. Cal. Nov. 29, 2018)↩
2. Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1433 (2013) (demanding that plaintiff demonstrate, with evidence, that there is a class-wide method of determining damages that is consistent with her theory of liability)↩