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A federal magistrate judge in New York has recommended that New York and California classes be certified to pursue injunctive and declaratory relief against Coca-Cola and Energy Brands for allegedly deceptive labeling of its “vitaminwater” brand of beverages based on, among other things, the allegedly high sugar content in the beverages and “flavor names that are associated with specific purported health benefits.” The magistrate judge found that plaintiffs had demonstrated injuries sufficient to satisfy standing requirements under the unfair and deceptive practices statutes in both states, and concluded that the proposed classes should be able to proceed in their pursuit of injunctive relief. Notably, however, the magistrate found that plaintiffs had not demonstrated a workable damages formula and rejected plaintiffs’ motion for Rule 23(b)(3) class certification for their monetary damages claims.
The named plaintiffs in Ackerman v. Coca-Cola Co. (E.D.N.Y., No. 09-00395) assert that defendants’ misleading representations as to vitaminwater’s health benefits influenced customers to pay a premium for the drinks. In a previous chapter of this long-running litigation, a district court judge deemed plaintiffs’ claims to be preempted by FDA rulings, to the extent that the allegations rested solely “on the notion that vitaminwater’s high sugar content made its health or implied nutrient content claims misleading[.]” The district court declined to dismiss plaintiffs’ claims in their entirety, however, leaving room for plaintiffs to proceed with broader challenges to the drink brand’s allegedly deceptive labeling and advertising.
After a lengthy consideration of the merits of plaintiffs’ motion for class certification, the magistrate judge concluded that the proposed classes of New York and California consumers satisfied Rule 23’s numerosity, commonality, typicality, adequacy of representation, and ascertainability requirements. Although the magistrate acknowledged that a request for monetary damages constituted an important element of plaintiffs’ claims, he viewed injunctive relief as critical to plaintiffs’ deceptive labeling claims and severed the requested remedies for class certification purposes. The magistrate recommended the proposed classes be permitted to proceed with their pursuit of injunctive relief but not with their monetary claims: “Proof that each class member paid a premium for vitaminwater over another beverage would not be susceptible to generalized proof.”
It remains to be seen whether the district court will adopt the magistrate’s recommendation, but the magistrate’s willingness to certify a Rule 23(b)(2) class based on plaintiffs’ claims that vitaminwater is “just another sugary soft drink” falsely labeled and marketed as healthy gives little comfort to companies defending these types of claims. The recommendation also puts companies on further notice that compliance with federal nutrition labeling laws will not always serve to insulate them from claims of false and deceptive advertising.
This client alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.
Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.
The named plaintiffs in Ackerman v. Coca-Cola Co. (E.D.N.Y., No. 09-00395) assert that defendants’ misleading representations as to vitaminwater’s health benefits influenced customers to pay a premium for the drinks. In a previous chapter of this long-running litigation, a district court judge deemed plaintiffs’ claims to be preempted by FDA rulings, to the extent that the allegations rested solely “on the notion that vitaminwater’s high sugar content made its health or implied nutrient content claims misleading[.]” The district court declined to dismiss plaintiffs’ claims in their entirety, however, leaving room for plaintiffs to proceed with broader challenges to the drink brand’s allegedly deceptive labeling and advertising.
After a lengthy consideration of the merits of plaintiffs’ motion for class certification, the magistrate judge concluded that the proposed classes of New York and California consumers satisfied Rule 23’s numerosity, commonality, typicality, adequacy of representation, and ascertainability requirements. Although the magistrate acknowledged that a request for monetary damages constituted an important element of plaintiffs’ claims, he viewed injunctive relief as critical to plaintiffs’ deceptive labeling claims and severed the requested remedies for class certification purposes. The magistrate recommended the proposed classes be permitted to proceed with their pursuit of injunctive relief but not with their monetary claims: “Proof that each class member paid a premium for vitaminwater over another beverage would not be susceptible to generalized proof.”
It remains to be seen whether the district court will adopt the magistrate’s recommendation, but the magistrate’s willingness to certify a Rule 23(b)(2) class based on plaintiffs’ claims that vitaminwater is “just another sugary soft drink” falsely labeled and marketed as healthy gives little comfort to companies defending these types of claims. The recommendation also puts companies on further notice that compliance with federal nutrition labeling laws will not always serve to insulate them from claims of false and deceptive advertising.
This client alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.
Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.