Howard v. Hain Celestial Group, Inc.

Background

The plaintiffs brought a claim under the California Unfair Competition Law’s unlawful-practices provision. They alleged that Hain Celestial put nutrient content statements on baby food even though an FDA regulation prohibits such statements on products intended for children younger than two. The regulation is incorporated into California law.

The court had previously denied the plaintiffs’ motion for class certification with prejudice. The proposed class included everyone who purchased the products, including people who purchased them for children age two or older. The plaintiffs then sought leave to file a motion asking the court to reconsider two parts of that order: the court’s discussion of reliance and misleadingness, and its refusal to allow a renewed motion for class certification.

Reliance and the proposed class

The court clarified that its earlier order did not hold that the plaintiffs had to prove deception or objective misleadingness as an element of their unlawful-practices claim. A representation can be lawful in the sense of not being misleading but still violate an FDA labeling rule. Consumers may rely on such a representation when buying a product.

The court held, however, that plaintiffs bringing an unlawful-practices claim based on food mislabeling must show reliance on the aspects of the label that allegedly made it unlawful. In a class action, named plaintiffs must establish their own reliance, while plaintiffs need not prove actual, individualized reliance for every absent class member. They must still show that it is fair to infer that the class members relied on the alleged mislabeling.

The court concluded that the proposed class was overbroad because it included purchasers who bought the products for children age two or older. Those purchasers could not have relied on nutrient statements or the absence of a disclaimer concerning products intended for children under two, because they did not buy the products on the assumption that they were intended for a child under two. The court said that limiting the class to under-two purchasers would still have made certification inappropriate for other reasons.

The court distinguished cases holding that deception is not required to state an unlawful-practices claim. Those decisions involved motions to dismiss, not class-certification motions addressing whether class-wide reliance could fairly be inferred. The court also distinguished a California case involving an illegal product, explaining that this case involved alleged illegality based on how food was labeled.

Effect of a later Ninth Circuit decision

The plaintiffs relied on Davidson v. Sprout Foods, Inc., which involved similar baby-food labeling allegations. The Ninth Circuit held that the unlawful-practices claim in that case was not preempted, while affirming dismissal of a fraud claim. The court said Davidson supported the proposition that deception is not an element of the unlawful-practices claim, but did not address whether the proposed class here could establish a fair inference of class-wide reliance.

Renewed class-certification motion

The court treated permission to file a renewed class-certification motion as a matter of discretion. It stated that courts sometimes allow renewed motions, but concluded that the plaintiffs had overreached so substantially and created so many issues that allowing them to start over would unfairly impose additional expense on Hain Celestial.

Disposition

The court denied the plaintiffs’ motion for leave to file a motion for reconsideration. The order’s discussion left standing the earlier denial of class certification with prejudice and the denial of leave to file a renewed class-certification motion.