Knowledge Is Not Power for Class Action Plaintiffs
The saying goes, knowledge equals power. For plaintiffs asserting claims for injunctive relief on behalf of putative classes, however, the Mott’s Apple Juice case demonstrates just the opposite.
The Northern District of California’s recent order denying reconsideration of its summary judgment ruling in Rahman v. Mott’s LLP, 2018 WL 4585024 (N.D. Cal. Sept. 25, 2018) holds that a plaintiff cannot “plausibly claim” that he will suffer future harm if he is now “fully aware” of what the allegedly deceptive statement means.
Plaintiff Rahman filed a class action against Mott’s in 2013, alleging that the “No Sugar Added” statement on the Motts Apple Juice label is deceptive in that it caused him to believe that the apple juice had less sugar and was healthier than other apple juices. In 2014, the Court granted in part, and denied in part, Defendant’s Motion for Summary Judgment, holding that Rahman “lacks Article III standing for injunctive relief” because he “cannot plausibly prove that he will, in the future, rely on the ‘No Sugar Added’ statement to his detriment.” On December 3, 2014, the Court denied plaintiff’s motion for class certification. Plaintiff appealed, and the Ninth Circuit affirmed the decision on July 5, 2017.
Citing a change in the law, Plaintiff moved to reconsider the district court’s order holding the plaintiff lacked Article III standing to represent a putative injunctive class.
Following the issuance of the Ninth Circuit’s opinion in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017), the Mott’s Plaintiffs moved for reconsideration.
The plaintiff in Davidson sought to enjoin defendant Kimberly-Clark Corp. from labeling pre-moistened wipes as “flushable.” The Ninth Circuit held that the plaintiff had standing to pursue an injunctive claim—notwithstanding her knowledge that the wipes were improperly labeled in the past—because there was a continuing risk she could be deceived by the product label in the future and suffer an ongoing injury. The court outlined two circumstances where the future injury requirement for standing could be satisfied:
a plaintiff plausibly alleges “that she will be unable to rely on the product’s advertising or labeling in the future, and so will not purchase the product although she would like to;” or
a plaintiff plausibly alleges that she will purchase the product in the future because she “may reasonably, but incorrectly, assume the product was improved.”
The Mott’s court distinguished Davidson. The court explained that in Davidson, the plaintiff faces a plausible risk of future injury because she may purchase the product in the future under the mistaken belief that the product has been corrected and, in fact, is a flushable wipe. By contrast, the Court observed that the plaintiff in Mott’s now knows how to correctly interpret the product statement (i.e. that “No Sugar Added” simply means no sugar added, and nothing more) and thus could not possibly be deceived in connection with a future purchase. Ultimately, this distinction turns on the fact that the advertising in Davidson “was false at the time of the original purchase.”
Is this a trend?
Consumer knowledge of a label statement’s meaning was also case dispositive in a recent consumer class action involving Vita Coco coconut water filed in the Southern District of Florida. Robert N. Scola denied class certification against All Market Inc. (AMI), the parent company of coconut water industry leader Vita Coco. Plaintiffs alleged that the slogan on Vita Coco containers “born in brazil” would deceive consumers into believing that all Vita Coco coconut water came from Brazil, when, in fact, the coconuts are sourced from countries throughout southeast Asia in addition to Brazil. Like the Court in Mott’s, Judge Scola held that the plaintiffs lacked standing because they now know “that not all Vita Coco is manufactured in Brazil” so they “will not be deceived by the ‘born in brazil’ slogan in the future.” As Judge Scola observed, “the plaintiffs ‘cannot manufacture standing by choosing’ not to purchase a product because of allegedly deceptive labeling, when the Plaintiffs actually know the truth underlying that labeling and thus cannot be deceived.”
The Mott’s court’s discussion of Davidson gives further clarity regarding the boundaries of viable Rule 23(b)(2) claims. Defendants facing injunctive relief class claims predicated on label representations unrelated to product performance have a powerful tool in their arsenal: Under Mott’s and All Market Inc., if a plaintiff pleads that they “now know” what a label statement actually means, there can be no threat of future harm warranting court intervention.