Beware of What You Wish for, You Might Get It
As this blog has reported on numerous occasions, plaintiffs have brought claims challenging labeling of food products for mislabeling. The labels challenged include the use of the term “natural”, “0g trans fat” and the infamous claim of misbranding relating to “crunch berries.”
Motions to strike class allegations due to the amalgamation of several misbranding theories across numerous products in a single putative class action have garnered a fair amount of success in the “Food Court” (Northern District of CA). Defendants often argue that a case which involves disparate issues with each requiring individual determination should result in the allegations being struck as a class and/or dismissal of the action in its entirety.
Two recent cases in the Food Court may make defendants pause before asserting these arguments though.
Trazo v. Nestlé USA, Inc. (N.D. Cal., No. 12-0227, 12/4/13) -- Judy Trazo, Jenna Coffey, and Marianna Belli brought a putative class action challenging the labeling on thirteen separate Nestlé products and asserted nine separate theories of liability. The products involved in the action were very different from one another. The products included Juicy Juice, ravioli, and CoffeeMate.
Initially the trial court struck the class allegations, ruling that they were not related enough to be amenable to class certification. Undeterred, the plaintiffs filed an amended complaint and a motion under Federal Rule Civil Procedure 21 to sever the claims into seven putative class actions, each one representing a single product line. Nestlé opposed the motion.
Under Rule 21, a court will consider whether the claims arose out of the same transaction or occurrence, whether the claims present some common questions of law or fact, whether settlement or judicial economy would be facilitated, whether prejudice would be avoided if severance were granted, and whether different witness and documentary proof are required for the separate claims. Determination of a Rule 21b motion is within the sound discretion of the trial court and as long as there is a discreet and separate claim, the district court may exercise its discretion and sever it.
Plaintiffs admitted that the request to sever is unusual. The Court noted that “what plaintiffs seek is nothing less than a shattering into pieces of a case they brought as an integrated whole.” Nestlé concurred that the case involves disparate issues and the Court agreed that the issues belong in different cases. The Court, however, disagreed with Nestlé that striking or dismissing the action would not achieve anything more than what the plaintiffs already propose. The Court went on to reason that assuming that the plaintiffs would pay the relatively modest filing fee for each new case addressing each unique claim, one way or another, Nestlé and the Court would confront the claims.
The Court then addressed the factors relating to common questions of law or fact, judicial economy, potential for prejudice and evidentiary proof required for separate claims and found that though the plaintiffs’ request is unusual he would grant it. The Court acknowledged some of the concerns Nestlé raised and provided specific guidance relating to how the matters would be handled. Although the Nestlé order is believed to be the first time a court has acted on a plaintiff’s motion to sever in a food mislabeling case, it is not the first time that a severance has occurred in the Food Court.
Gustavson v. Wrigley Sales Co. (N.D. Cal. No. 12-01861) -- In September 2013, Judge Lucy H. Koh ordered severance of the case into two: Gustavson v. Wrigley, involving gum and mints, and Gustavson v. Mars, Inc., No. 13-04537, involving claims against the chocolate.
Jones v. C. A. Agra Corp. (N.D. Cal. No. 12-01633) -- A motion for severance is also pending in another food labeling case where the plaintiffs seek to sever their claims along three product lines: PAM cooking spray, Hunts tomato products, and Swiss Miss cocoa.
Although the defendants raised reasonable arguments that putative class actions involving multiple products and multiple claims should not be class actions and therefore dismissed, the Food Court has ignored this FRCP 23 procedural requirement and is permitting the plaintiffs to either sever the matters on their own or severing the case sua sponte.
The law of unintended consequences appears to be at play here. Defendants have raised the issue that unrelated products and claims do not belong in the same lawsuit. The courts have agreed; but rather than dismissing the cases for failure to comply with FRCP 23, the courts have granted plaintiffs relief in the form of severance.
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