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Private Surgeon General Class Action Defender

“All Natural” False Advertising Class Certified in Arizona Iced Tea Case

Posted in Class Certification, False Advertising Claims

A federal judge in the Northern District of California has certified a California class of Arizona Iced Tea purchasers.  What is striking is that the court only certified a class for declaratory and injunctive relief and denied plaintiffs’ bid to certify a class seeking monetary restitution based on the purchase price.  Ries, et al. v. Arizona Beverages USA LLC, et al., No. 3:10-cv-001139-DS, 2012 U.S. Dist. LEXIS 169853 (N.D. Cal. Nov. 27, 2012).

The case involves claims under California’s unfair competition and false advertising laws, challenging the defendants’ representation that Arizona Iced Tea is “all natural” given that the beverage contains high fructose corn syrup (“HFCS”) and citric acid.  Forty-eight different beverages are named in the complaint.

After largely denying defendants’ simultaneous motion for summary judgment, the court turned to plaintiffs’ motion for class certification.  Plaintiffs sought certification of a class consisting of all California purchasers of an Arizona brand beverage from March 2006 to the present “which contained [HFCS] or citric acid [and] which were marked, advertised, or labeled as being ‘All Natural,’ or ‘100% Natural.’”  Notably, plaintiffs only sought certification under Federal Rule of Civil Procedure 23(b)(2), thereby avoiding a host of battles over whether the putative class could satisfy Rule 23(b)(3)’s predominance requirement.  Issues such as whether plaintiffs could show on a class-wide basis that members of the putative class saw, much less relied on, the “all natural” labeling thus did not have to be resolved.

Plaintiffs perhaps thought they could have their cake and eat it too by nonetheless seeking restitution on behalf of the class.  The court dashed any such hope.  Citing the Supreme Court’s decision in Dukes, the court noted that Rule 23(b)(2) “does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.”  Id. at *52.  Further, it was clear that plaintiffs’ pursuit of monetary relief was not secondary or incidental to the injunctive relief sought:

“Although plaintiffs describe their pursuit of monetary relief as secondary to their desire for corrective advertising and cessation of the allegedly deceptive labeling practices when arguing for class certification, based on the entire record in this case it is clear the monetary relief predominates.”

Id. at *54.  The court accordingly granted class certification for the purposes of declaratory and injunctive relief and denied certification “to the extent plaintiffs seek monetary damages, including restitution, refund, reimbursement and disgorgement.”  Id. at *55.  Thus, though plaintiffs managed to certify a class, they failed in their attempt to bypass the requirements of 23(b)(3), and still seek restitution.