Kelly v. Kasim International Corporation

Background

Kevin Kelly brought a proposed class action alleging that Beliv LLC violated New York General Business Law §§ 349 and 350 by falsely or misleadingly labeling its Nectar Petit fruit nectar. The label said “No Preservatives,” stated that the product was made “with VITAMIN C,” listed citric acid as an acidulant and vitamin C as ascorbic acid, and stated that the product contained 90% of the daily value of vitamin C. Kelly alleged that citric acid and ascorbic acid functioned as preservatives and that he and proposed class members would not have purchased the product, or would not have paid as much for it, had they known that.

Kelly initially named Kasim International Corporation as the defendant, later informed the court that this was erroneous, and obtained permission to substitute Beliv. In an earlier order, the court dismissed several claims but allowed the New York General Business Law claims to proceed. Kelly later withdrew his Massachusetts claims and his express-warranty claim. The only claims remaining for decision were under New York General Business Law §§ 349 and 350.

Motion to Strike the Meyers Declaration

Beliv moved to strike the declaration of Marc A. Meyers as untimely under Federal Rule of Civil Procedure 37(c). The court’s scheduling order set August 11, 2023, as the deadline for expert discovery and disclosures. Kelly disclosed Meyers on October 11, 2023, about two months late and after Beliv had moved for summary judgment.

The court rejected Kelly’s argument that the declaration was justified as a rebuttal to a declaration by Clayton Santos. The court found that Santos was a fact witness, not an expert witness, and that Kelly had not shown a justification for the late disclosure. Applying four factors concerning late evidence—including the reason for the delay, the importance of the testimony, prejudice to Beliv, and whether a continuance was possible—the court found that each factor favored exclusion. It therefore granted Beliv’s motion to strike the Meyers Declaration.

Summary Judgment

Summary judgment is a decision without a trial when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law. For claims under New York General Business Law §§ 349 and 350, a plaintiff must show consumer-oriented conduct that was materially misleading and caused the plaintiff actual injury.

The court held that Kelly failed to produce evidence of actual injury. One possible method of proving injury was showing that he paid a price premium because of the alleged mislabeling. Kelly’s expert, Dr. Andrea Lynn Matthews, proposed using economic analyses to measure such a premium, but she had not performed those analyses and had not concluded that the product actually commanded a premium. Kelly offered no other evidence comparing the product’s price with comparable products. The court also noted that Kelly testified that the product was cheaper than comparable products and that he paid less, not more, for it.

Kelly also argued that he was injured because he relied on the label and would not have bought the product if it had been labeled differently. The court held that this theory still required evidence that he received less value than he expected. Beliv offered evidence that the product’s pasteurization process meant it did not need preservatives, that citric acid was used as an acidulant, and that ascorbic acid was used as a nutrient. Kelly offered no contrary evidence at summary judgment, and his deposition testimony indicated that he did not consider the listed ingredients to be preservatives. The court therefore concluded that Kelly received the product he understood he would receive and had not shown injury.

Because injury was a required element of Kelly’s remaining claims, the court held that no reasonable jury could find for him and granted Beliv’s motion for summary judgment. The court did not decide whether the label was likely to mislead a reasonable consumer.

Other Motions and Disposition

The court denied Kelly’s motion for class certification as moot because summary judgment was granted on his only remaining claims. It also denied as moot Beliv’s motion to strike the declaration of Dr. Matthews. The conclusion states that Beliv’s motions for summary judgment and to strike the Meyers Declaration were granted, while Kelly’s class-certification motion and Beliv’s motion to strike the Matthews Declaration were denied as moot. The clerk was directed to close the four motions.