Clark v. The Hershey Company

Background

The plaintiffs alleged that The Hershey Company’s Brookside Dark Chocolate products were mislabeled because their packages stated “No Artificial Flavors,” while the products contained synthetic malic acid. The operative complaint asserted claims under California law, including fraud by omission, negligent misrepresentation, the Consumers Legal Remedies Act, the Unfair Competition Law, the False Advertising Law, and California warranty law. It also asserted claims under New York consumer-protection and warranty laws.

A November 2019 order granted Hershey’s motion for summary judgment and allowed proposed intervenors Suzanne Mirzoyan and Raymond Lee to seek intervention as plaintiffs. They filed the motion at issue in December 2019, and Hershey opposed it.

Analysis

The court explained that intervention after the denial of class certification is generally improper when it would operate as an attempt to restart the case with a new class representative. The court considered this case somewhat different because the earlier ruling was a summary-judgment ruling finding that the named plaintiffs either did not rely on the label or did not suffer an injury from the alleged mislabeling.

The court nevertheless applied the principle that, without standing, a class action cannot continue when no class has been certified. It distinguished constitutional standing—which requires an injury, a connection between the injury and the defendant’s conduct, and the possibility that a court decision would remedy the injury—from the prudential standing issue discussed in the earlier summary-judgment order. The court concluded that Clark’s injury was not caused by reliance on the alleged mislabeling, while Hall and Pirrone did not rely on the alleged mislabeling. The court said these failures meant there was no longer a live case or controversy and that the case must be dismissed.

The court also held that the proposed intervenors had not shown “good cause” under Federal Rule of Civil Procedure 16. The scheduling order set March 28, 2019, as the deadline to add parties or amend the pleadings. Although the proposed intervenors filed their motion about two weeks after the summary-judgment order, the case had been pending for more than a year, fact discovery had closed, and the plaintiffs’ counsel had chosen to seek class certification with plaintiffs the court found deficient. The court therefore found no good cause to modify the scheduling order and add the proposed intervenors.

Disposition

Judge Liam Alsup denied the motion to intervene. The opinion stated that the case must be dismissed because the existing plaintiffs lacked standing, but it also stated that judgment would be entered in a separate order.