Silva v. B&G Foods, Inc.

Background

Sabrina Silva and Nancy Schier brought a proposed class action against B&G Foods, Inc. and B&G Foods North America, Inc. They alleged that Ortega taco shells contained partially hydrogenated oil and about 0.2 grams of trans fat per serving until 2015, even though the packaging stated “0g Trans Fat! per serving.” They asserted claims under California’s Unfair Competition Law and Consumer Legal Remedies Act.

The court had previously denied B&G’s summary-judgment motion, partly granted and partly denied plaintiffs’ motion for judgment on the pleadings, and denied class certification. As a result, only Silva’s and Schier’s individual claims remained active.

Plaintiffs’ motion for partial summary judgment

Summary judgment is a ruling that resolves an issue when the evidence shows no genuine dispute over a material fact. The court granted in part and denied in part plaintiffs’ motion.

The court granted summary judgment on whether B&G’s label violated 21 C.F.R. §§ 101.13 and 101.62. B&G’s own evidence established that the shells contained trans fat and that the label made the “0g Trans Fat! per serving” representation. The court found no genuine dispute of material fact on the violation.

The court did not grant summary judgment on whether B&G was liable under the Unfair Competition Law. California law requires plaintiffs to show causation, including reliance on the alleged misrepresentation, and whether Silva and Schier relied on the label remained disputed. The court also denied B&G’s requests to file another summary-judgment motion concerning standing, injury, or timeliness. The court stated that disputed facts prevented resolving those issues at summary judgment.

As to B&G’s affirmative defenses, the court:

- granted the motion as to accord and satisfaction because B&G withdrew that defense; - granted the motion as to the legally frivolous defense because B&G had not shown that it was a valid affirmative defense; - denied the motion as to the statute-of-limitations defense; - denied the motion as to laches; - denied the motion as to failure to mitigate damages; and - granted in part and denied in part the motion as to unclean hands. The defense could not operate as a complete defense to the Unfair Competition Law claims, but it could still be asserted against plaintiffs’ remedies.

Motion to exclude Dr. Palmatier’s testimony

Plaintiffs also sought to exclude all testimony from Dr. Robert Palmatier, a marketing expert whose survey examined whether the “0g Trans Fat! per serving” statement affected taco-shell demand and price.

The court granted in part and denied in part this motion. It excluded Palmatier’s testimony about whether Silva and Schier were entitled to a full refund or suffered injury. It also concluded that his survey did not address whether consumers understood the label or whether that understanding affected their purchases, so it was not relevant to whether the advertising violated the reasonable-consumer test.

However, the court found that the survey was sufficiently reliable to be admitted if plaintiffs sought to prove reliance through materiality. Materiality asks whether a reasonable person would consider the alleged misrepresentation important when deciding whether to make the purchase. The court also found that Palmatier was qualified to address marketing issues within his expertise. Challenges to the survey’s design and methodology went to the weight of the evidence rather than its admissibility.

Disposition

The court granted in part and denied in part plaintiffs’ motion for partial summary judgment. It granted the motion concerning the federal labeling violation, the legally frivolous and accord-and-satisfaction defenses, and the unclean-hands defense to the extent it was asserted as a complete defense to the Unfair Competition Law claims. It denied the motion otherwise.

The court also granted in part and denied in part plaintiffs’ motion to exclude Palmatier’s testimony. The court ordered plaintiffs to notify B&G within seven days whether they intended to argue reliance based on materiality or only actual reliance. Judge Jon S. Tigar issued the order on July 24, 2023.