Consumer class action litigation—often accusing the defendant company of deceiving its customers—strikes at the heart of a company’s reputation, goodwill, and brand—all of which are often built over the course of many years or decades. As such, these cases pose not only the threat of immense litigation and liability costs, but also irreparable, and potentially fatal, future damage to the company’s brand. By way of recent example, for the past several years, a putative class of plaintiffs from several states took aim at Tropicana’s Pure Premium (“TPP”) orange juice, claiming that the company deceived and misrepresented the public concerning its popular orange juice.
In what is good news for Tropicana, and potentially other consumer product companies who may find themselves facing similar false advertising and consumer fraud claims, the United States District Court for the District of New Jersey denied Plaintiffs’ motion for class certification in a case focused on Tropicana’s purported mislabeling and misbranding of its TPP orange juice. In this putative class action involving potentially several million consumers, Plaintiffs alleged that Defendant: (i) added ingredients—specifically natural flavoring—to TPP in violation of the Food and Drug Administration’s standard of identity for pasteurized orange juice; (ii) failed to disclose all ingredients; and (iii) falsely marketed TPP as “pure, natural and fresh from the grove.” Plaintiffs asserted unjust enrichment, express warranty, and consumer fraud claims and sought to certify a class of purchasers from California, New York, New Jersey, and Wisconsin, as well as subclasses from each of these states. In addition to monetary relief, Plaintiffs sought injunctive relief under Rule 23(b)(2).
In its decision, the Court first analyzed the four requirements under Rule 23(a) and held that such requirements—numerosity, commonality, typicality, and adequacy—were satisfied. The Court next turned to Rule 23(b)(3), which requires the Plaintiffs to satisfy the predominance and superiority requirements. Here, the Court held that Plaintiffs’ unjust enrichment, express warranty, and New Jersey Consumer Fraud Act (“CFA”) claims all required individualized proof and, therefore, individual issues predominate.
With respect to unjust enrichment, the Court noted that it was a quasi-contractual claim that is cognizable only if a party does not receive the benefit of the bargain for which they paid. The Court then held that “Plaintiff cannot credibly show that common questions predominate their unjust enrichment claims over individual questions because the benefit of the bargain for which the named Plaintiffs and putative class members purchased TPP requires an individualized showing of proof.”
After reviewing the respective state laws governing an express warranty claim, and noting subtle distinctions in the laws, the Court held that individualized proof was necessary under each state’s law to establish either reliance under New York law or the “basis of the bargain” element under New Jersey and California law.
The Court next analyzed the New Jersey Consumer Fraud Act claim and likewise held that class certification was not warranted as “Plaintiffs’ theory would erroneously eliminate the required causal nexus of each individual class member’s loss—i.e., premium price paid—to Defendant’s pasteurization statement.” The Court refused to adopt Plaintiffs’ “presumption of causation” standard, which follows recent precedent in both the District Court and the Supreme Court of New Jersey.
Significantly, the Court went on to hold that the Plaintiffs had failed to demonstrate that their proposed class of “Members Only clubs” and “Loyalty Card Stores” was ascertainable under the Third Circuit standard. Here, the Court found that the Plaintiffs could not show that the putative class members could “be identified by employing ‘a reliable and administratively feasible mechanism.’”
Finally, the Court held that Plaintiffs lacked standing to pursue injunctive relief under Rule 23(b)(2) because the law required threat of a future injury to impose injunctive relief and “none of the named Plaintiffs expressed with any certainty that they intend to purchase TPP in the future.”
The Court’s decision is important for four reasons. First, the decision amplifies the rigorous analysis with which the Court will conduct in the class certification context. Second, the case provides a roadmap for defendants to analyze how individual issues of why a consumer makes point of sale purchases predominate. Third, the Court provided additional support and precedent rejecting the “presumption” of causation standard under the CFA. And, fourth, the Court provided a well-reasoned analysis concerning why the ascertainability requirement—the ability to identify the members of a class—is so critical to whether a class action is the best method to adjudicate claims before the Court.