A federal court granted summary judgment to defendant Snapple in a lawsuit accusing Snapple Beverage Corp. of misleading consumers by labeling drinks as “all natural when the drinks are sweetened with high fructose corn syrup. The decision follows a label lawsuit in California that stated “labels matter.” Together these decisions provide a roadmap for future plaintiffs in developing a label lawsuit.
Plaintiffs sued seeking to represent a nationwide class of consumers who made purchases between 2001 and 2009 in New York of Snapple beverages labeled “all natural” and which contained high fructose corn syrup. They alleged they paid a premium for the company’s drinks as a result of the “all natural” claim. Last year the district court denied the plaintiffs’ motion for class certification, holding the named plaintiffs could not provide a suitable methodology to establish causation on a class-wide basis. Snapple then moved for summary judgment on the two named plaintiffs’ individual claims under New York’s consumer protection laws, as well as claims of unjust enrichment and breach of express warranty.
The district court granted Snapple’s motion finding the plaintiffs were unable to show injury from the “all natural” labeling. The plaintiffs were unable to establish the actual price they paid for Snapple products, the court found they had only a “vague recollections of the locations, dates and prices” (slip opinion pg. 8). The failure to establish an actual price mean there was no basis to calculate the premium paid for “all natural” Snapple. Their breach of warranty claim suffered from a similar problem. Damages for a breach of warranty claim is the benefit of the bargain, which is measured by the difference between the value of the product as warranted and the true value at the time of sale. The plaintiffs only injury was an intangible feeling they had been duped.
Weiner comes on the heels of Kwikset, both outline the anatomy of a label lawsuit. Kwikset was a California Supreme Court decision reported on last week, in which the court held “labels matter.” The court was cautious to delineate injury in fact. It made clear that “personal, individualized loss of money or property in any nontrivial amount, he or she has also alleged or proven injury in fact.” This non-trivial personal loss fits neatly into the decision out of NY in Weiner.
The anatomy of a lawsuit emerging the past week requires plaintiffs to be detailed. Plaintiffs would be well advised to save bottles or labels that make the claim they want to challenge along with receipts. Plaintiffs should also purchase or provide evidence of what another good in the market costs. For example, in the Snapple lawsuit a plaintiff could purchase “all natural” Snapple at say $5 then buy from an equivalent product with no high fructose corn syrup also at $5, and a product that contains HFC but doesn’t make the “all natural” claim say at $3. Then the plaintiff in this example could say my injury is the $2 I overpaid for an “all natural” drink that wasn’t “all natural.”
This formula sounds complicated and it’s unlikely the average plaintiff will follow this much detail. Although there are hoops for plaintiffs to jump through if labels matter then there must be some responsibility in making claims.
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