Howard v. Hain Celestial Group, Inc.

Background

The plaintiffs alleged that Hain Celestial violated federal food-labeling regulations by placing nutrient content statements on more than a dozen products while marketing them for children under two. They asserted a claim under the unlawful prong of California’s Unfair Competition Law, based on those federal regulations. They also asserted several state-law fraud claims, alleging that parents of children under two were misled into believing the products were healthy for those children.

The plaintiffs sought certification of a class consisting of everyone who purchased the products, rather than only people who bought them for children under two. They also alternatively requested a class for injunctive relief under Federal Rule of Civil Procedure 23(b)(2) and an issues class focused on liability questions under Rule 23(c)(4).

Reasons for denying class certification

The court held that the proposed class was overbroad. Under the plaintiffs’ own theory, people who bought the products for children two or older could not have been misled because the products delivered the label’s promises for those children. The court treated the unlawful-prong claim as substantively similar to the fraud claims and concluded that the plaintiffs had to show reliance on the alleged misleading statements, as well as a basis to infer that the class members similarly relied on them.

The court also held that narrowing the class to purchases made for children under two would not fix the problem. The plaintiffs’ damages model calculated total liability for a product by multiplying an alleged price premium by all purchases during the class period. Because the model could not distinguish purchases for children under two from other purchases, it could not measure damages for the narrower class.

The court denied the request for an injunctive-relief class because the plaintiffs did not have standing, meaning they had not shown a sufficient continuing likelihood of being affected by the alleged conduct to seek an injunction. The court noted that the plaintiffs knew about product disclaimers stating that the products were “for ages 2 and up.” It also noted that two plaintiffs said they would not have purchased the products if they had seen the disclaimers, and that the plaintiffs had not shown or alleged that they still had children under two or planned to have more children.

The court denied the request for an issues class because the plaintiffs had not adequately explained how deciding liability issues separately would materially advance the case as a whole, particularly given the court’s view that individual damages actions were unlikely.

Other rulings and disposition

The court denied class certification without leave to file a renewed class certification motion. It identified additional concerns, including the proposed class’s coverage of more than a dozen products despite limited evidence common to all products, the fact that class members did not all purchase every product, and the possibility that individualized inquiries about what each purchaser saw before buying would overwhelm common issues. The court concluded that the problems were sufficiently serious that giving the plaintiffs another opportunity would be unfair to Hain Celestial.

Each side also asked the court to exclude the other side’s expert evidence under Federal Rule of Evidence 702 and the standard governing unreliable expert testimony. The court denied both requests, finding that none of the evidence was based on unreliable “junk science.” A further case-management conference was scheduled for April 5, 2024, to discuss how the parties wished to proceed.