Prescott v. Nestle USA, Inc
- Beth Freeman
- 5:19-cv-07471
- U.S. District Court · Northern District of California
- 8
In Prescott v. Nestle, Judge Freeman stayed the case pending an appeal and terminated Nestlé’s dismissal motion without prejudice.
The plaintiffs and Nestle USA, Inc. were affected: the case was stayed and administratively closed, and Nestlé’s motion to dismiss was terminated without prejudice to renewal.
What happened
Prescott and Cheslow sued Nestlé in a proposed class action, alleging that it deceptively marketed baking chips as containing white chocolate when they did not. Nestlé moved to dismiss their second amended complaint, while the plaintiffs asked the court to pause the case until an appeal in a closely related case was decided.
The court granted the stay through November 22, 2021, or until the related appeal was resolved, whichever came first. It terminated Nestlé’s motion to dismiss without prejudice to renewal after the stay, canceled the scheduled hearing, and administratively closed the case. The plaintiffs could ask to extend the stay and could request that the case be reopened when appropriate.
Judge Beth Labson Freeman concluded that the appeal could clarify issues central to the case, reduce unnecessary litigation costs, and promote efficient use of judicial resources. The order did not decide whether the plaintiffs’ consumer-protection claims were valid.
The detailed version
- Prescott v. Nestle USA, Inc · No. 5:19-cv-07471
- Beth Freeman
- Nov. 25, 2020
Background
Steven Prescott and Linda Cheslow brought a proposed class action against Nestle USA, Inc. They alleged that Nestlé violated California’s Unfair Competition Law, Consumers Legal Remedies Act, and False Advertising Law by marketing its “Nestlé’s Toll House’s Premier White Morsels” as containing white chocolate even though, according to the complaint, the product contained no white chocolate.
The court had previously dismissed the first amended complaint with leave to amend. The plaintiffs then filed a second amended complaint, adding allegations that 95% of surveyed consumers believed the product contained white chocolate. Nestlé moved to dismiss the second amended complaint, relying heavily on rulings in a related case involving similar allegations about white baking chips. The plaintiffs moved to stay this case while an appeal in that related case was pending.
Legal standard
The court explained that district courts have discretionary authority to stay, or temporarily pause, proceedings to manage their dockets efficiently. In deciding whether to grant a stay, the court weighed possible harm to Nestlé, hardship to the plaintiffs if the case continued, and whether a stay would promote the orderly administration of justice. The party requesting the stay had the burden of showing that it was needed.
Court’s analysis
The court found no concrete prejudice to Nestlé from a stay. Although the case would be delayed, the related appeal could resolve or clarify issues central to the pending motion to dismiss, including the significance of the consumer survey and the product’s back-panel ingredient list.
The court also found that the plaintiffs would face hardship if the case proceeded. Nestlé’s motion to dismiss relied extensively on the related case, and continuing the litigation could require the plaintiffs to spend resources on issues that the appeal might clarify.
Finally, the court concluded that a stay would promote judicial economy because the related appeal involved nearly identical issues. The court limited the stay to one year to address Nestlé’s concern about an indefinite delay.
Order
The court granted the plaintiffs’ motion for a stay through November 22, 2021, or until resolution of the related appeal, whichever occurred first. If the appeal was not resolved by that date, the plaintiffs could seek an extension, and the parties were required to submit a joint status report by November 22, 2021.
The court terminated without prejudice Nestlé’s pending motion to dismiss, allowing it to be renewed if appropriate after the stay was lifted. The court vacated the December 17, 2020 hearing and directed the clerk to administratively close the case. The court stated that administrative closure was an internal procedure that did not affect the parties’ substantive rights and that the parties could request reopening when appropriate. The order did not decide the merits of the consumer-protection claims or the motion to dismiss.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.