Milan v. Clif Bar & Company

Background

Ralph Milan and Elizabeth Arnold asked the court to certify four classes in a consumer case against Clif Bar & Company under California and New York law. The plaintiffs challenged the statement “Nutrition for Sustained Energy” on Original Clif Bars and three statements on Clif Kid ZBars: “Nourishing Kids in Motion,” “No High-Fructose Corn Syrup,” and the product’s “family story.” They alleged that these statements were affirmative misrepresentations or omissions because the products had high added-sugar content or posed health risks when consumed outside their intended use.

The California claims included claims under the California Unfair Competition Law, False Advertising Law, Consumer Legal Remedies Act, and California warranty law. The New York claims involved unfair and deceptive business practices and false advertising under New York General Business Law §§ 349 and 350. The plaintiffs said they were not pursuing classwide warranty claims under New York law.

Class Definitions and Rule 23 Analysis

The proposed classes covered: (1) California purchasers of Original Clif Bars bearing “Nutrition for Sustained Energy” between April 19, 2014, and the date class members were notified of certification; (2) New York purchasers of those bars during the same period beginning April 19, 2015; (3) California purchasers of Clif Kid ZBars, other than 24-, 36-, or 42-bar packages, during the period beginning April 19, 2014; and (4) New York purchasers of those products during the period beginning April 19, 2015.

The plaintiffs proceeded under Federal Rule of Civil Procedure 23(a) and Rule 23(b)(3). Rule 23(a) requires numerosity, common questions, typical claims, and adequate class representatives. Rule 23(b)(3) requires common questions to predominate over individual ones and a class action to be superior to other methods of resolving the dispute.

The court found numerosity satisfied because millions of units were sold to each proposed class, and Clif Bar did not contest that requirement. It also found typicality and adequacy satisfied. Clif Bar argued that the named plaintiffs had not shown they personally faced disease from consuming too much added sugar. The court rejected that argument because the plaintiffs alleged consumer deception and economic injury, not personal physical injury. Their theory was that they would not have bought the products had they known the challenged labeling claims were false or misleading.

The court found commonality and predominance satisfied because the same packaging statements were made to class members and the products were made with the same ingredients during the class period. The central liability question for each class was whether the challenged statements were likely to mislead an objectively reasonable consumer. The court also found that consumer surveys and Clif Bar’s internal documents could provide common evidence on falsity, deception, and materiality.

The court rejected Clif Bar’s arguments that individual consumer reliance, personal diets, health conditions, activity levels, or exposure to different advertising defeated certification. The class definitions limited membership to consumers who bought products bearing the relevant statements. The court also concluded that a class action was superior because the products cost no more than a few dollars per bar, making individual lawsuits economically impractical.

Expert Evidence and Damages Model

Clif Bar moved under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc. to exclude expert Steven P. Gaskin’s testimony. Gaskin proposed using conjoint analysis—a survey-based economic method—to estimate the price premium attributable to the challenged statements and omissions. His proposed model would use survey data, actual market prices during the class period, and actual quantities sold during that period.

The court denied Clif Bar’s motion to exclude Gaskin’s opinions. It concluded that the proposed method addressed the principal concern identified in earlier decisions: whether the analysis accounted for supply-side factors by using actual prices and quantities. The court treated Clif Bar’s objections to the survey’s packaging and presentation as matters for cross-examination rather than grounds for excluding the expert entirely.

The court also found that the proposed damages model was adequate under Comcast Corp. v. Behrend because it was designed to measure damages attributable to the plaintiffs’ theory of liability. The court said a possible future due-process problem with a large statutory-damages award under New York law did not defeat certification because that issue was only potential at this stage.

Remaining Daubert Motions and Disposition

Clif Bar filed a motion concerning expert Colin B. Weir. The plaintiffs filed motions concerning experts Dr. Itamar Simonson and Dr. William S. Choi. The court did not rely on opinions or materials from those witnesses in deciding class certification, so it deferred those motions for future resolution as warranted by later developments.

The court certified all four classes, appointed Ralph Milan and Elizabeth Arnold as class representatives, and appointed the Law Office of Jack Fitzgerald, PC, and the Law Office of Paul K. Joseph, PC, as class counsel. The plaintiffs were ordered to submit a proposed notice-distribution plan by October 29, 2021. The court also set a status conference and referred the parties for a settlement conference.