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The Ninth Circuit Splits the Baby in California Consumer Class Action Brazil v. Dole

New-Update-IconBy Kate T. Spelman

As we recently reported, on September 12 the Ninth Circuit heard oral argument in two appeals with potentially wide-ranging implications for California consumer class actions.  Less than three weeks later, on September 30, the Ninth Circuit issued its decision in one of those appeals, Brazil v. Dole.  In Brazil, the plaintiffs challenged the “all natural fruit” labels on Dole fruit products under California’s consumer protection statutes.  The district court dismissed the plaintiffs’ unjust enrichment claim and their illegal product theory at the pleading stage, then later decertified the class based on the plaintiffs’ failure to present a viable class-wide damages model.  The district court then granted summary judgment to Dole after finding that the plaintiffs had failed to present sufficient evidence of a likelihood of consumer deception.  The plaintiff appealed. 

In an unpublished decision, the Ninth Circuit affirmed the district court’s decertification of the class, but reversed the district court’s decision granting summary judgment to Dole.  With respect to decertification, the Ninth Circuit found that the district court had correctly limited the plaintiffs’ potential damages to the “price premium” associated with the challenged label (i.e., the difference between what the plaintiff paid and the value received) because the plaintiffs had failed to establish that the products were valueless.  The Ninth Circuit then held that the district court had correctly decertified the class because the plaintiffs had failed to submit evidence that the price premium could be calculated with proof common to the class.  With respect to summary judgment, the Ninth Circuit found that the district court had erred in granting summary judgment to Dole because the following evidence introduced by the plaintiffs was sufficient to create a question of fact regarding the likelihood of consumer deception: (1) the challenged label; (2) the plaintiffs’ testimony; (3) Dole’s consumer survey; and (4) the FDA’s informal policy on “natural,” including recent FDA warning letters regarding “100% natural” products containing synthetic citric acid.  The Ninth Circuit also affirmed the district court’s dismissal of the plaintiffs’ “illegal products” theory, reversed the district court’s dismissal of the plaintiffs’ individual unjust enrichment claim in light of the Ninth Circuit’s decision in Astiana v. Hain Celestial, and found that the district court had not abused its discretion in refusing to dismiss or stay the case on primary jurisdiction grounds.

This decision is sure to generate significant analysis in the California district courts as they continue to define the parameters of the state’s consumer protection statutes.