Antitrust and Unfair Competition Law

Competition: Fall 2014, Vol. 23, No. 2


By Jill M. Manning1

"Organic," "100% Natural," "Pure," "Free-Range," "Pesticide-Free," "Whole Wheat," "Reduced Fat," "0g Trans Fats," "Low Sodium." The formerly routine trip to the grocery store has turned into a maddening, thesaurus-requiring, label-deciphering exercise. Why the sudden explosion of health-related food labels? The consumers’ desire and willingness to pay more for "healthy" products has caught the attention of the food industry. Food manufacturers, in turn, are seeking to take advantage of this trend by advertising their products as "All Natural" and "100% Natural," even when they are not. Consumers are challenging the legality of these types of labels when products contain artificial ingredients, such as genetically modified organisms ("GMOs"). The federal courts of California have become a common venue for these cases, due to California’s expansive consumer protection statutes, with many now referring to the federal court in the Northern District of California as the "Food Court."2

How can a plaintiff successfully prosecute an "all natural" class action? Surviving a motion to dismiss is the first step. Defendants’ primary jurisdiction arguments have lost steam since the FDA expressly declined the invitation of several federal courts to define what the term "natural" means on a food product label. With most cases now proceeding to the class certification phase of litigation, defendants have most often challenged the requirements of ascertainability and predominance of common issues. Although courts have issued opinions both granting and denying class certification in "all natural" cases for a variety of reasons, plaintiffs who can demonstrate that the class is ascertainable and that common issues predominate over those affecting individual ones are most likely to prevail on a class certification motion.


Most defendants move to dismiss a plaintiff’s false labeling claim on the ground that the United States Food and Drug Administration ("FDA") has primary jurisdiction over the claims. Primary jurisdiction is a common-law doctrine that is used to coordinate judicial and administrative decision-making. The doctrine allows courts, at their discretion, to stay or dismiss actions requiring technical expertise in deference to the administrative agency with "special competence" in that area.3

One area not currently regulated by the FDA, however, is the use of the word "natural." This inactivity has allowed plaintiffs to challenge the validity of "natural" labels under their state consumer protection laws. For example, in In re ConAgra Foods, Inc., the plaintiffs allege that ConAgra’s "100% Natural" label on its Wesson Oil products is misleading because the product is made from unnatural genetically modified corn, soybean and canola.4 ConAgra moved to dismiss the case under the doctrine of primary jurisdiction. The court overruled the motion, in part, because the FDA has not regulated what "natural" means or does not mean on food labels.5 The court concluded that absent FDA regulation, the court could adjudicate plaintiffs’ claim because "every day courts decide whether conduct is misleading."6

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Other courts have granted motions to dismiss and referred cases to the FDA for an administrative determination as to "whether and under what circumstances food products containing ingredients produced using bioengineered seed may or may not be labeled ‘Natural’ or ‘All Natural’ or ‘100% Natural.’"7 The FDA responded that it would take no position on the matter, citing its limited resources that must be devoted to food safety issues.8 It also noted that if it were to define "natural," it would do so through a public process, and not in the context of litigation.9

Following the FDA’s response, the previously stayed cases now are proceeding through the court system, and the courts, not the FDA, will determine whether "natural" labels on food products are misleading.


Food manufacturers are vigorously defending cases that survive motions to dismiss at the class certification stage. They most often have challenged the ascertainability and predominance requirements under Rule 23, arguing that it is impossible to identify customers who purchased the products at issue, and that customers purchase products for a whole host of reasons unrelated to any representations made on the product’s label. Courts are just now starting to issue opinions on whether these types of cases are suitable for class certification, with varying results.

On deciding a motion to certify the class, a court considers whether a plaintiff has demonstrated that the requirements of Rule 23 of the Federal Rules of Civil Procedure have been satisfied by a preponderance of the evidence. First, a plaintiff must show that the four requirements of Rule 23(a) — numerosity, commonality, typicality, and adequacy — are met. Second, a plaintiff must establish that one of the bases for certification in Rule 23(b) is met. A plaintiff seeking damages must demonstrate that "questions of law or fact common to class members predominate over any questions affecting only individual class members," and that a class action would be "superior to other available methods for fairly and efficiently adjudicating the controversy."10 A class seeking injunctive relief may be certified when "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole."11

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A. Ascertainability: Courts in the Ninth Circuit Reject the Third Circuit’s Heightened Ascertainability Requirement

Although not an express requirement of Rule 23, courts have required plaintiffs to demonstrate that the class is ascertainable.12 "Ascertainability" has two requirements: (1) the class must be adequately defined; and (2) class members must be ascertainable by reference to objective criteria.13 Courts have concluded that "[t]he class definition must be sufficiently definite so that it is administratively feasible to determine whether a particular person is a class member."14

The Court of Appeals for the Third Circuit issued a controversial decision in Carrera v. Bayer Corp., rejecting class certification solely on the grounds that the class members were not identifiable. 15 In Carrera, the plaintiff brought a class action against Bayer for falsely and deceptively advertising its "One-A-Day WeightSmart" dietary supplement as having "metabolism-enhancing effects."16 Carrera argued that class members could be ascertained through value cards from retailers17 and from affidavits declaring their purchases of the product.18 The district court granted certification, "characterizing the issue of ascertainability as one of manageability, stating ‘speculative problems with case management’ are insufficient to prevent class certification."19 Bayer appealed. The Court of Appeals for the Third Circuit vacated the class certification order, holding that a "defendant has a similar, if not the same, due process right to challenge the proof used to demonstrate class membership as it does to challenge the elements of a plaintiff’s claim."20 The court further held that "[a]scertainability provides due process by requiring that a defendant be able to test the reliability of the evidence submitted to prove class membership." Id. Carrera argued that ascertainability was less important because Bayer’s total liability would be proven at trial, and the amount would not increase or decrease based on the claims submitted by class members.21 The court disagreed, finding that "Bayer too has an interest in ensuring it pays only legitimate claims."22

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Most district courts in the Ninth Circuit have refused to adopt the heightened ascertainability standard set forth in Carerra, finding that doing so would eviscerate consumer class actions. In McCrary v. The Elations Co., LLC,23 the court rejected the defendant’s argument that there was no way to identify the consumers who purchased the products at issue, and that allowing class members to "self-identify" violates its due process rights, finding that:

If Defendant’s argument were correct, ‘there would be no such thing as a consumer class action.’ … Carerra eviscerates low purchase price consumer class actions in the Third Circuit. It appears that pursuant to Carrera in any case where the consumer does not have a verifiable record of its purchase, such as a receipt, and the manufacturer or seller does not keep a record of buyers, Carerra prohibits certification of the class. While this may now be the law of the Third Circuit, it is not currently the law in the Ninth Circuit. [Citations omitted.]24

Similarly, in Forcellati v. Hylands, Inc.,25 the court found that a class of purchasers of children’s cold or flu products within a prescribed time period was ascertainable because defendants had no due process interest in how damages were distributed when total damages was based on the total amount of sales. "Given that facilitating small claims is ‘the policy at the very core of the class action mechanism . we decline to follow Carerra."26 Finally, in Brazil v. Dole Packaged Foods, LLC,27 the court granted certification of a California class of consumers who purchased certain Dole products labeled as "all natural." The court rejected defendant’s argument that the class was not ascertainable because no company records exist to identify purchasers or which product they bought, finding that "[i]n this Circuit, it is enough that the class definition describes a set of common characteristics sufficient to allow a prospective plaintiff to identify himself or herself as having a right to recover based on the description."28

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Consumers challenging health-related labels in the Ninth Circuit can take comfort (for now) in the majority of recent decisions of the district courts rejecting the heightened burden of ascertainability announced by the Court of Appeals for the Third Circuit.29

B. Predominance: Proving Damages with Common Evidence in the Post-Comcast World

One of the key questions affecting whether "all natural" claims may be certified as class actions is the extent to which damages are susceptible to classwide proof. In Comcast, the United States Supreme Court held that class certification was improper because the plaintiff had failed to demonstrate that "damages are capable of measurement on a class-wide basis."30 The Ninth Circuit has held that even after Comcast, the fact that damages calculations would require an individualized inquiry does not defeat class certification.31 Instead, the "plaintiffs must be able to show that their damages stemmed from the defendant’s actions that created the legal liability."32

Two post-Comcast decisions show that plaintiffs can meet this burden, and that courts will certify consumer class actions alleging false and deceptive labeling under Rule 23(b)(3). In Astiana v. Kashi Co., the court certified a consumer class action on behalf of persons who purchased Kashi food products labeled as "Nothing Artificial" or "All Natural."33 The court rejected defendants’ argument that difficulties in determining the damages owed to class members defeated predominance, finding that the "’amount of damages is invariably an individual question and does not defeat class treatment.’"34 The court concluded that the plaintiffs did, in fact, articulate a damages theory connected to plaintiffs’ harm that complied with Comcast: "Plaintiffs allege point-of-purchase loss and seek restitution in the form of a refund of all of part of the purchase price" and that they can calculate damages from the defendants’ records.35

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Similarly, in Werdebaugh v. Blue Diamond Growers, the court certified a class of California consumers who purchased Blue Diamond products labeled as "All Natural" when they contain synthetic ingredients.36 The plaintiffs proposed a damages model that would determine the defendants’ monetary gains from the sales of its products with misleading labels, by examining sales of the product before and after the defendant placed the misleading label on the product.37 "The real question before this court is whether the plaintiffs have established a workable multiple regression equation, not whether plaintiffs’ model actually works."38 The court concluded that the proposed damages model "provides a means of showing damages on a classwide basis by common proof" and thus concluded that plaintiffs satisfied Rule 23(b)(3)’s predominance requirement.39


Food manufacturers know that labels containing terms such as "All Natural" influence consumer purchasing decisions. As the California Supreme Court has found:

Simply stated: labels matter. The marketing industry is based on the premise that labels matter—that consumers will choose one product over another similar product based on its label and various tangible and intangible qualities they may come to associate with a particular source.40

Consumers, believing that they are getting a healthier, more natural product than one without a natural label, pay a premium for these products. Now that consumers are challenging the legality of these labels, food manufacturers are seeking to avoid liability by invoking the doctrine of primary jurisdiction, and opposing class certification based on their own lack of record-keeping, dubious due process arguments and questionable interpretations of the Comcast decision. With courts publishing conflicting decisions on ascertainability, and carefully scrutinizing plaintiffs’ damages model, Plaintiffs are advised to proceed with caution. Successful litigation of these claims is the best way to keep companies honest and discourage mislabeling of food products.41

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1. Jill M. Manning is Of Counsel to Steyer Lowenthal Boodrookas Alvarez & Smith, LLP. She specializes in recovering damages for consumers in class action litigation, with a focus on antitrust and consumer fraud cases. Recoveries from the cases she has been involved in total well over a billion dollars. She can be reached at

2. Nicole E. Negowetti, "Defining Natural Foods: The Search for a Natural Law," 26 Regent U. L. Rev. 329, 333 (2014).

3. Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008).

4. CV 11-05379, WL 4259467, *1 (C.D. Cal. Aug. 12, 2013).

5. Id. at *2.

6. Id.; see also Parker v. J.M. Smucker Co., 13-cv-0690, 2013 WL 4516156, *6 (N.D. Cal. Aug. 23, 2013) (motion to dismiss denied because plaintiff provided a "simple" argument, namely that a reasonable consumer would assume products labeled as "all natural" would not contain bioengineered ingredients).

7. See Cox v. Gruma Corp., No. 12-CV-6502 YGR, 2013 WL 3828800, at *2 (N.D. Cal. July 11, 2013) (granting a six-month stay); Van Atta v. Gen. Mills, 12-cv-02815, Docket No. 51, at 7 (D. Colo. July 17, 2013) (applying Cox and recommending a stay); Barnes v. Campbell Soup Co., 12-cv-05185-JSW, Docket No. 55, at 15-16 (N.D. Cal. July 25, 2012) (granting a stay and referring to the FDA the issue of labeling of a food product containing GMOs as "100% Natural").

8. Leslie Kux, Letter re Referrals to the United States Food and Drug Administration, at 2 (Jan. 7, 2014), Docket No. 70, Cox v. Gruma Corp., No. 12-CV-6502 (N.D. Cal.).

9. Id.

10. Fed. R. Civ. P. 23(b)(3); Local Joint Exec. Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1163 (9th Cir. 2001).

11. Fed. R. Civ. P. 23(b)(2).

12. See, e.g., Astiana v. Ben & Jerry’s Homemade, Inc., No. 10-4387, 2014 WL 60097, at *1 (N.D. Cal. Jan. 7, 2014) ("apart from the explicit requirements of Rule 23, the party seeking class certification must also demonstrate that an identifiable and ascertainable class exists.")

13. In re TFT-LCD (Flat Panel) Antitrust Litig., 267 F.R.D. 291, 299 (N.D. Cal. 2010).

14. Wolph v. Acer Am. Corp., 272 F.R.D. 477, 482 (N.D. Cal. 2011).

15. 727 F.3d 300 (3rd Cir. 2013). The Court of Appeals for the Third Circuit denied the petition for a rehearing en banc, with four judges dissenting and arguing for a lower burden of ascertainability.

16. Id. at 303.

17. Plaintiff cited the Federal Trade Commission’s ("FTC’s") settlement with CVS regarding the sale of a supplement that made false health claims. The FTC stated in a press release regarding the settlement that "[p]urchasers will be identified through the CVS ExtraCare card program and sales on" Id. at 308.

18. Id. at 308-09.

19. Id. at 304-05, citing Carrera v. Bayer Corp., Civ. A. No. 08-4716, 2011 WL 5878376, at *4 (D.N.J. Nov. 22, 2011) (quoting Klay v. Humana, Inc., 382 F.3d 1241, 1272-73 (11th Cir. 2004)).

20. 727 F.3d at 307.

21. Id. at 309-10.

22. Id. at 310.

23. 2014 WL 1779243 (C.D. Cal. Jan. 13, 2014).

24. Id. at *7-8; see also Werdebaugh v. Blue Diamond Growers, 12-CV-2724, 2014 WL 2191901, at *10 (N.D. Cal. May 23, 2014); Lanovaz v. Twinnings N. Am., Inc., 2014 WL 1652338, *3 (N.D. Cal. Apr. 24, 2014) ("[i]f class actions could be defeated because membership was difficult to ascertain at the class certification stage, ‘there would be no such thing as a consumer class action.’" [Citations omitted]).

25. 2014 WL 1410264 (C.D. Cal. Apr. 4, 2014).

26. Id. at *5 (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 617 (1997).

27. 12-CV-01831, 2014 WL 2466559 (N.D. Cal. May 30, 2014).

28. Id. at *6 (citations omitted); see also Guido v. L’Oreal, USA, Inc., No. 11-1067, 2013 WL 3353857, at *18 (C.D. Cal. July 1, 2013) (finding the class ascertainable where "the requirement for membership in the class [was] whether a consumer purchased a product after a particular date.")

29. Two other district courts in the Ninth Circuit considering the issue of ascertainability in similar cases, however, reached a different result. See, e.g., In re POM Wonderful LLC, No. 10-2199, 2014 WL 1225184, at *6 (C.D. Cal. Mar. 25, 2014) (finding the class unascertainable because "[f]ew, if any, consumers are likely to have retained receipts during the class period" and "there is no way to reliably determine who purchased Defendant’s products or when they did so"); Jones v. ConAgra Foods., Inc., C 12-01633, 2014 WL 2702726, at *17-24 (N.D. Cal. Jun. 13, 2014) (finding the class unascertainable, but noting that "a lack of ascertainability alone will generally not scuttle class certification.")

30. Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).

31. Ley v a v. Medline Industries, 716 F.3d 510, 513-14 (9th Cir. 2013).

32. Id. at 514.

33. 291 F.R.D. 493, 510 (S.D. Cal. 2013).

34. Id. at 506 (citations omitted).

35. Id. Other courts have rejected the "price premium" and "full refund" models, finding them inconsistent with plaintiffs’ theories of liability. See In re POM Wonderful LLC Mktg. and Sales Practices Litig., ML-10-02199, 2014 WL 1225184, at *2-3 (C.D. Cal. Mar. 25, 2014) ("[b]ecause the Full Refund model makes no attempt to account for benefits conferred upon Plaintiffs, it cannot accurately measure classwide damages"); Jones, supra, 2014 WL 2702726, at *37-43 (denying class certification based on plaintiffs’ failure to provide an adequate damages model).

36. 12-CV-2724, 2014 WL 2191901, at *27 (N.D. Cal. May 23, 2014).

37. Id. at *24.

38. Id. at *25 (citations omitted).

39. Id. at *26.

40. Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 328 (2011).

41. Several companies have removed "all natural" claims from the labels of their products following litigation. See, e.g.,;"Some Companies Ditch ‘Natural’ Label,"

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