“Because reliance is not an element of express warranty claims 2 under California law, common questions predominate and class action treatment is appropriate.”
How later courts described this case
- “Because reliance is not an element of express warranty claims 2 under California law, common questions predominate and class action treatment is appropriate.”
- “California’s UCL, FAL and CLRA rely on the same objective test, that is, whether 12 members of the public are likely to be deceived.”
Written by the judges who cited it.
The opinion
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 JONATHAN RUSOFF, et al., Case No. 21-cv-08084-AMO
8 Plaintiffs, ORDER ON PLAINTIFFS’ MOTION
FOR CLASS CERTIFICATION AND
9 v. DEFENDANT’S MOTION TO STRIKE
OPINION OF CRAIG MORRIS
10 THE HAPPY GROUP, INC.,
Re: Dkt. Nos. 61, 72
Defendant.
11
12
13 This putative class action is about eggs, specifically, whether The Happy Group deceived
14 consumers in California and New York about its Happy Eggs products being pasture raised. Now
15 pending before the Court are Plaintiffs’1 motion for class certification, ECF 61, and The Happy
16 Group’s motion to strike the opinion of Craig Morris, ECF 72.2 Having carefully considered the
17 parties’ papers, the relevant legal authority, and the arguments advanced by counsel during the
18 hearing on this matter, the Court GRANTS IN PART AND DENIES IN PART Plaintiffs’
19 motion for class certification and GRANTS The Happy Group’s motion to strike.
20 I. BACKGROUND
21 A. Factual Background
22 The Happy Group manufactures and distributes eggs throughout the United States. ECF
23 41 ¶ 13. The egg products at issue here are sold as “Free Range Pasture Raised on Over 8 Acres”
24 and “Organic Free Range Pasture Raised on Over 8 Acres” (the “Class Products”). ECF 61-2 ¶ 3;
25
26 1 Jonathan Rusoff and Michael Merabi were the two original named plaintiffs. ECF 1. Joseph
Gambino replaced Merabi as a named plaintiff upon the filing of the operative complaint. ECF 40
27 at 2; ECF 41 ¶ 10.
1 ECF 62-2; ECF 62-3. Plaintiffs refer to the statement appearing on the cartons for these products
2 – “Pasture Raised on Over 8 Acres” – as the “Pasture Raised Claim.” ECF 61-2 at 8.
3 Plaintiffs contend that pasture raised “is the gold standard for eggs.” ECF 41 ¶ 23. The
4 hens producing “pasture raised eggs go outside, are exposed to sunlight and fresh air, and forage in
5 fields,” as required by animal welfare standards set by the American Humane Association and
6 Human Farm Animal Care, which Plaintiffs allege are the industry standard. Id. ¶¶ 18, 23. In
7 contrast, “free range hens do not regularly go outside, much less roam and forage for food in open
8 fields. They also consume feed that consists primarily of corn and/or soy.” Id. ¶ 22. “Having
9 exposure to sunlight and fresh air, eating a diet that includes seeds and insects, and being able to
10 engage in natural behaviors, is foundational to the hens’ happiness and wellbeing.” Id. ¶ 27.
11 These hens “produce higher quality eggs as a result.” Id.
12 Though The Happy Group’s egg cartons “prominently bear the term ‘pasture,’ ” Plaintiffs
13 allege that the eggs “are not raised under conditions that comport with the meaning of the term.”
14 Id. ¶ 30. According to Plaintiffs, The Happy Group’s hens “are only afforded average daytime
15 access to an outdoor area of approximately 21.8 square feet per hen . . . well short of the 108.9
16 square feet per hen of outdoor space that must be provided in order to make a pasture raised
17 claim.” Id. ¶ 34. The Happy Group “does not provide its hens with access to live vegetation, nor
18 does it provide year-round outdoor access, in compliance with the pasture raised standard.” Id. It
19 also provides 0.5 acres per 1,000 hens, less than the 2.5 acres per 1,000 hens required under the
20 pasture raised standard.” Id. Still, The Happy Group “systematically use[s] the well-known
21 ‘pasture’ terminology,” and sells its eggs at the premium price the market commands for those that
22 are pasture raised. Id. ¶¶ 29, 30.
23 Based on The Happy Group’s representations on their egg cartons, Plaintiffs formed a
24 reasonable belief that “were buying and eating eggs from hens that were raised according to the
25 highest standards of life and health for hens – i.e., that they were buying and eating pasture raised
26 eggs.” Id. ¶¶ 8-10. This belief was an important part of the decision to purchase The Happy
27 Group’s eggs. Id. ¶¶ 8-10. Plaintiffs “would have not have purchased the eggs” or “would have
1 The Happy Group’s misleading, false, unfair, and deceptive practices, Plaintiffs paid a price
2 premium for eggs that were not pasture raised. Id. ¶¶ 8-10.
3 B. Procedural Background
4 Plaintiffs commenced this proposed class action on October 15, 2021. ECF 1. They filed
5 the operative fourth amended complaint on August 8, 2022, asserting claims for violations of
6 (1) the California Consumer Legal Remedies Act, Cal. Civil Code § 1750, et seq., (the “CLRA”),
7 (2) California’s False Advertising Law, Cal. Bus. & Prof. Code § 17500, et seq., (the “FAL”),
8 (3) the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq., (the “UCL”)
9 (4) New York General Business Law (“GBL”) § 349, (5) New York GBL § 350, (6) breach of
10 express warranty under California Commercial Code § 2313, (7) breach of express warranty under
11 New York U.C.C. § 2-313, (8) breach of implied warranty under California Commercial Code
12 § 2314, 3 and (9) and intentional misrepresentation. Id. ¶¶ 65-69, ¶¶ 70-76, ¶¶ 77-85, ¶¶ 86-96,
13 ¶¶ 97-105, ¶¶ 106-115, ¶¶ 116-122, ¶¶ 123-129.
14 Plaintiffs filed their motion for class certification on April 11, 2023. ECF 61. The Happy
15 Group filed its opposition to the motion on June 9, 2023, with a motion to strike the expert opinion
16 of Craig Morris. ECF 71, 72. Plaintiffs filed a reply in support of their motion for class
17 certification and an opposition to the motion to strike on July 21, 2023. ECF 77, 79. The Happy
18 Group filed its reply in support of the motion to strike on August 11, 2023. ECF 83. Following
19 guidance from the Court, the parties resolved some evidentiary objections and reached agreement
20 on limited additional briefing. ECF 81, 82, 85, 86, 87. Following that further briefing, the Court
21 held a hearing on the pending motions on October 5, 2023. ECF 86, 89.
22 II. DISCUSSION
23 Because Plaintiffs rely on the opinions of their expert, Craig Morris, to meet the class
24 certification requirements, the Court first addresses The Happy Group’s motion to strike those
25
26 3 Plaintiffs do not seek certification of their California breach of implied warranty claim and state
they “can file an amended complaint omitting this claim with the Court’s leave.” ECF 61-1 at 18.
27 The parties shall meet and confer on whether they can reach a stipulation on this issue to avoid
1 opinions before turning to Plaintiffs’ motion for class certification.
2 A. Motion to Strike
3 Federal Rule of Evidence 702 permits “[a] witness who is qualified as an expert by
4 knowledge, skill, experience, training, or education” to “testify in the form of an opinion or
5 otherwise” where:
6 (a) the expert’s scientific, technical, or other specialized knowledge
will help the trier of fact to understand the evidence or to determine
7 a fact in issue;
(b) the testimony is based on sufficient facts or data;
8 (c) the testimony is the product of reliable principles and methods;
and
9 (d) the expert has reliably applied the principles and methods to the
facts of the case.
10
11 Fed. R. Evid. 702.
12 “In evaluating challenged expert testimony in support of class certification, a district court
13 should evaluate admissibility under the standard set forth in Daubert[4].” Grodzitsky v. Am. Honda
14 Motor Co., 957 F.3d 979, 984 (9th Cir. 2020) (internal citations, quotations, and modifications
15 omitted). Under Daubert, expert testimony is admissible if it is both relevant and reliable.
16 Wendell v. GlaxoSmithKline LLC, 858 F.3d 1227, 1232 (9th Cir. 2017). Expert testimony is
17 relevant if it “will assist the trier of fact to understand or determine a fact in issue.” Cooper v.
18 Brown, 510 F.3d 870, 942 (9th Cir. 2007) (citing Daubert, 509 U.S. at 591-92). “The evidence
19 must logically advance a material aspect of the party’s case.” Id. (citation omitted). Expert
20 testimony “is reliable if the knowledge underlying it has a reliable basis in the knowledge and
21 experience of the relevant discipline.” Primiano v. Cook, 598 F.3d 558, 565 (9th Cir. 2010)
22 (footnote omitted).
23 At class certification, “the relevant inquiry is a tailored Daubert analysis which scrutinizes
24 the reliability of the expert testimony in light of the criteria for class certification and the current
25 state of the evidence.” Id. The inquiry, therefore, does not end at admissibility. Sali v. Corona
26 Reg’l Med. Ctr., 909 F.3d 996, 1006 (9th Cir. 2018). “[E]ven if the evidence is admissible, the
27
1 district court must then evaluate its persuasiveness during the class certification analysis.” See
2 Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011).
3 The Happy Group moves to strike the opinion of Plaintiffs’ proposed expert Craig Morris,
4 Ph.D. 5 ECF 72. The core of Dr. Morris’s opinion is that:
5 [T]he free-range and pasture-raised standards promulgated
by the AHA and HFAC are predominantly used and followed in the
6 egg industry. In the absence of federal regulation, they are the
industry standard. Accordingly, prevailing consumer expectation is
7 that an egg producer using the free-range or pasture-raised claim is
adhering to the commonly accepted standards pertaining to such
8 claims, as set by the AHA and/or HFAC. Therefore, if an egg
producer makes a free-range or pasture-raised claim, it should be
9 consistent with at least one of these standards, or if not, prominently
disclose that it is following a different standard or explain the basis
10 for the free-range or pasture-raised claim.
11 This is true even if the average consumer is not familiar with
the details of these standards, because the onus is on the company to
12 comply with prevailing standards. A consumer certainly would not
be expected to know the details or nuances of a particular standard
13 (for example, the beef tenderness standard I referenced above), but if
the standard is not met, it would be false and deceptive for a
14 company to make such a claim. It is no different here. Marketing to
consumers that eggs are pasture raised without a disclosure making
15 clear that the eggs do not comply with industry standards is false
and inherently misleading.
16
17 ECF 62-66 ¶¶ 44-45.
18 The Happy Group argues that Dr. Morris lacks the scientific, technical, or other specialized
19 knowledge required to opine on standards in the egg industry. ECF 72 at 4-7. It also contends
20 that Dr. Morris’s opinions are neither based on sufficient facts or data nor the product of reliable
21 principles or methods. Id. The Court first addresses Dr. Morris’s qualifications before turning to
22
23
5 Although Plaintiffs cite to the Court’s Standing Order, see ECF 79 at 19, Dr. Morris’s reports do
not comply with the requirement that “[a]ll expert reports shall number each paragraph to facilitate
24
any motion practice challenging the specifics of any opinions and shall include a table of
contents[,]” and “shall list each opinion to be proffered and provide an executive opinion of each.”
25
See Standing Order for Civil Cases at 6 (May 10, 2023), amended (Nov. 22, 2023). The motion to
strike also does not comply with the Court’s Standing Order, which requires that such motions
26
“clearly specify the paragraphs or portions of the report that the party seeks to exclude.” See id.
Future non-compliant submissions will be stricken. Moreover, to the extent the parties have
27
buried requests for relief that should have been brought as separately-noticed motions, see ECF 83
1 the reliability of his methodology.
2 1. Qualifications
3 Dr. Morris’s experience in food and agriculture marketing and regulation spans over 30
4 years. See ECF 62-66 ¶¶ 9-18, 43. He obtained a Doctorate in Animal Science in 1995 and has
5 served as an outside expert and consultant in agricultural commodity marketing throughout his
6 career. Id. ¶¶ 9, 10. He has also held various positions in different organizations within the
7 industry, including serving as the Deputy Administrator for the U.S. Department of Agriculture,
8 Agricultural Marketing Service (“AMS”) Livestock, Poultry and Seed Program, Vice President of
9 International Marketing for the National Pork Board, and currently, as the Chief Executive Officer
10 of the Association of Genuine Alaska Pollock Producers. Id. ¶¶ 11-13.
11 During his time at AMS, a significant portion of Dr. Morris’s work included “developing
12 national and international standards for various agricultural commodities.” Id. ¶ 14. Dr. Morris
13 also chaired the U.S. representation and served “as an author of the International Organization for
14 Standardization’s (ISO) first-ever standard for the welfare of food producing animals.” Id. ¶ 15.
15 He led “the U.S. representation to the United Nation’s Economic Commission for Europe’s Meat
16 Standardization Section that developed the United Nation’s first meat, poultry, egg and fish
17 quality standards that defined claims used in the marketing of these products.” Id. ¶ 16.
18 While “experts are not required to have previous experience with the product at
19 issue[,]” see In re Macbook Keyboard Litig., No. 5:18-CV-02813-EJD, 2021 WL 1250378, at *6
20 (N.D. Cal. Apr. 5, 2021), Dr. Morris has done work involving egg products. He has “had
21 oversight responsibility for the commodity marketing boards, including the American Egg Board
22 and its marketing programs related to eggs and egg products.” Id. ¶ 15. In that role, Dr. Morris
23 “was intimately connected to commodity reporting and grading operations, including those for
24 eggs,” giving him experience “in the basis of agency approval of marketing claims associated with
25 shell eggs.” Id. Dr. Morris also gained knowledge and familiarity with “commonly accepted
26 standards and practices regarding egg laying hens” through “interviews and conversations with
27 leading egg experts, including the Pacific Egg and Poultry Association, Egg Quality Program of
1 American Egg Board and United Egg Producers,” which have taken place over the course of his
2 career. Id. ¶ 18.
3 Given Dr. Morris’s extensive qualifications in his field, the Court finds that he possesses
4 “at least the minimal foundation of knowledge, skill, and experience required in order to give
5 expert testimony.” See Hangarter v. Provident Life & Acc. Ins. Co., 373 F.3d 998, 1016 (9th Cir.
6 2004) (internal quotations and citation omitted; modifications in original); Rogers v. Raymark
7 Indus. Inc., 922 F.2d 1426, 1429 (9th Cir. 1991) (“A witness can qualify as an expert through
8 practical experience in a particular field[.]”). The Court rejects The Happy Group’s contention
9 that Dr. Morris lacks the specific expertise needed to opine on eggs standards.6 See In re Silicone
10 Gel Breast Implants Prod. Liab. Litig., 318 F. Supp. 2d 879, 889 (C.D. Cal. 2004) (“A court
11 abuses its discretion when it excludes expert testimony solely on the ground that the witness’s
12 qualifications are not sufficiently specific if the witness is generally qualified. A lack of
13 specialization affects the weight of the expert’s testimony, not its admissibility.”) (citation
14 omitted); see also In re PFA Ins. Mktg. Litig., No. 4:18-CV-03771 YGR, 2021 WL 5994908, at *4
15 (N.D. Cal. Nov. 3, 2021) (rejecting argument that proffered expert with decades of experience in
16 the life insurance industry could not offer expert testimony without specialization in indexed
17 universal life policies or compliance issues); In re Macbook Keyboard Litig., 2021 WL 1250378,
18 at *6 (holding expert did not need specific experience with keyboards given indisputable
19 experience in materials science, mechanical engineering, and failure analysis).
20 2. Reliability
21 In forming his opinions on industry standards and consumer perception, Dr. Morris
22 reviewed the operative complaint and The Happy Group’s answer, documents produced by The
23 Happy Group in discovery, deposition transcripts, and drew upon his extensive experience,
24 including that “in standards development for the purpose of label claims from [his] time at the
25 U.S. Department of Agriculture.” ECF 62-66 ¶¶ 19, 23-31 & nn.8-15; ECF 77-13 ¶ 18. He
26
27
6 During oral argument, The Happy Group confirmed that it makes no challenge to Dr. Morris’s
1 consulted international animal welfare draft standards pertaining to poultry and egg-laying hens
2 that “speak to welfare overall and are those overarching welfare standards most often adhere to or
3 incorporate guidance from commonly-accepted industry standards and practices.” ECF 62-66
4 ¶ 19. He conducted online research, visited grocery stores “in or around [his] neighborhood,” and
5 took pictures of different egg products bearing a pasture raised label. Id. ¶ 34. Dr. Morris’s initial
6 report states:
7 To be clear, this is not intended to be a comprehensive survey of all
egg brands in the market, although I could conduct such a survey or
8 retain someone to do one for me. That said, I believe this presents a
telling snapshot of the market, particularly from the perspective of a
9 typical consumer shopping for eggs at the grocery store.
10 Id. ¶ 35.
11 Dr. Morris testified that there was no methodology for taking pictures of cartons in stores,
12 no scientific basis for the days he chose to visit those stores, and only selected cartons if they
13 made a pasture-raised claim. ECF 74-3 at 13-14. In the context of answering questions about his
14 process for visiting local grocery stores, when asked if he intended “this to be like a scientific
15 process,” Dr. Morris replied, “[a]bsolutely not.” Id. at 9. He explained:
16 It’s what I do as a part of my day job with Genuine Alaska Pollock
Producers. We do a number of very scientifically designed studies
17 that are surveys. This was intended to be a survey for my own
personal purposes, but not a nationally representative sample.
18
19 Id. Dr. Morris added that he did not intend for his work to be representative of California or New
20 York. Id. at 9-10.
21 What suffices for Dr. Morris’s personal purposes does not satisfy Daubert. While “the test
22 of reliability is ‘flexible,’ ” the objective of Daubert’s gatekeeping requirement “[i]t is to make
23 certain that an expert, whether basing testimony upon professional studies or personal experience,
24 employs in the courtroom the same level of intellectual rigor that characterizes the practice of an
25 expert in the relevant field.” Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141, 152 (1999). Dr.
26 Morris’s own deposition testimony shows that is not the case here. When asked what kind of
27 surveys he did for work, Dr. Morris responded:
1 Awareness, perception. . . . A whole host of issues. What it is,
intent to buy over the next 30 days. We do focus groups related to
2 the attributes that are most likely to create evangelists or drive
demand. We have a -- we spend millions of dollars on research that
3 are all designed for different purposes, both domestically and
abroad.
4
5 Id. at 10. When asked, “[i]f you had been asked to run a survey to see what consumers think
6 pasture raised means, are you competent to design and have that survey run,” Dr. Morris
7 responded: “I’m confident that I could identify an agency to help do that work on my behalf. I
8 know what I’m looking for in the survey. I’m not a survey expert.” Id. Dr. Morris confirmed that
9 he did not interview any consumers. Id. at 18. The methodology Dr. Morris used to reach his
10 opinion that on consumer expectations thus does not pass the standards that he would expect of his
11 own survey consultant. The statement in Dr. Morris’s rebuttal declaration that he applied the
12 methodology that “any expert in [his] field would undertake,” ECF 77-13 ¶¶ 15, 18, cannot be
13 squared with the sworn deposition testimony discussed above.7 Dr. Morris’s own testimony is that
14 such a study would be required.
15 Plaintiffs attempt to salvage Dr. Morris’s methodology by (1) arguing that The Happy
16 Group’s expert – Dr. Joy Mench – used the same methods, and (2) pointing to two writings
17 outside of the class period that purportedly confirm his conclusions. ECF 79 at 10-12. Both
18 arguments fail.
19 As to Plaintiffs’ first argument, Defendants dispute that Dr. Mench applied the same
20 methods as Dr. Morris. ECF 83 at 9-10. Whether their methodologies align or not, Dr. Morris’s
21 deposition testimony illustrates that, in his own knowledge and experience, he would expect a
22 more rigorous analysis than what he has conducted. That is enough to grant The Happy Group’s
23 motion. Compare Stiner v. Brookdale Senior Living, Inc., No. 17-CV-03962-HSG, 2023 WL
24 2722294, at *6 (N.D. Cal. Mar. 30, 2023) (rejecting argument that expert opinion should be
25
26
7 Indeed, Plaintiffs offer an entirely separate expert – Dr. J. Michael Dennis – to offer survey
evidence on consumer deception and materiality, ECF 61-88, and in a footnote, Plaintiffs indicate
27
“[i]f the Court believes [Dr. Morris’s consumer expectations] opinion is unnecessary, it could
1 excluded for lack of a reliable scientific process where expert’s opinions were adequately based on
2 || extensive personal knowledge and experience).
3 As to Plaintiffs’ second argument, they rely on a blog post and a letter. ECF 83 at 11-12.
4 || The June 15, 2023 blog post, made by a trade organization called United Egg Producers stated, in
5 part:
6 Egg producers commonly differentiate free-range and pasture-raised
in the layer industry through established non-governmental
7 certifications. Though the two most popular certifications for these
claims do not match precisely, they have provided stability for the
8 industry and ensured that on-label raising claims related to free-
range and pasture production methods meet established standards.
9 These certifications already ensure that free-range and pasture are
neither interchangeable nor misleading in eggs and include
10 vegetation requirements. As the agency continues investigating
these animal-raising claims, third-party certification programs must
11 be part of any claims made.
12 || 77-6 2. The May 2023 letter from another organization — the United Egg Association — to
13 || the U.S. Department of Agriculture’s Food and Safety Inspection Service, the United Egg
14 Association stated, in part:
15 Egg producers commonly differentiate free-range vs. pasture in the
layer industry through established non-governmental certification
16 schemes. Though the two most popular certifications do not match
precisely (see comparison table below), they have provided stability
17 for the industry and ensure that on-label raising claims related to
free range and pasture production methods meet established
Z 18 standards. Importantly, these certifications already ensure that free-
range and pasture are neither interchangeable nor misleading in eggs
19 and do not have vegetation requirements.
20 || ECF 77-5 at 3 (emphasis in original). The referenced table is reproduced below:
71 CertifyingBody | eg Free Range
Certified Humane Farm Animal Care 2.0 sq. ft. / bird 108.0 sq. ft. / bird
American Humane Certified 21.8 sq. ft. / bird 108.8 sq. ft. / bird
23
24 || Jd. Plaintiffs contend that this blog post and letter, combined with certain excerpts from the
25 deposition of The Happy Group’s own expert, Dr. Mench, is dispositive of whether AHA/HFAC
26 standards are the industry standard and that the Court can thus deny the instant motion as moot on
27 || that basis alone. ECF 79 at 12. Even if Plaintiffs’ reading of these materials were correct, the fact
28 || that they may confirm Dr. Morris’s conclusions is separate from the question of whether he
1 arrived at those conclusions in a manner that passes muster under Daubert. See Primiano, 598
2 F.3d at 564 (“[T]he test under Daubert is not the correctness of the expert’s conclusions but the
3 soundness of his methodology.”). Here, Plaintiffs have not shown that Dr. Morris’s opinions are
4 sufficiently reliable. The Court therefore excludes his consumer expectations and industry
5 standards opinions on this basis. Consequently, the Court has not considered those opinions in
6 deciding Plaintiffs’ motion for class certification, to which the Court now turns.
7 B. Motion for Class Certification
8 “Rule 23 of the Federal Rules of Civil Procedure governs class certification.” White v.
9 Symetra Assigned Benefits Serv. Co., 104 F.4th 1182, 1191 (9th Cir. 2024). The rule “mandates
10 that district courts ‘rigorous[ly] analy[ze]’ whether a proposed class meets various requirements.”
11 Black Lives Matter Los Angeles v. City of Los Angeles, 113 F.4th 1249, 1258 (9th Cir. 2024)
12 (quoting Comcast Corp. v. Behrend, 569 U.S. 27, 33 (2013)) (modifications in original). “[A]
13 class action may be maintained if the four prerequisites of Rule 23(a) are met, and the action meets
14 one of the three kinds of actions listed in Rule 23(b).” Van v. LLR, Inc., 61 F.4th 1053, 1062 (9th
15 Cir. 2023). Rule 23(a) requires a showing that:
16 (1) the class is so numerous that joinder of all members is
impracticable;
17 (2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of
18 the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the
19 interests of the class.
20 Fed. R. Civ. P. 23(a). Among the actions listed in Rule 23(b) are those in which “questions of law
21 or fact common to class members predominate over any questions affecting only individual
22 members, and . . . a class action is superior to other available methods for fairly and efficiently
23 adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3); see Lytle v. Nutramax Labs., Inc., ---
24 F.4th ----, ----, 2024 WL 3915361, at *5 (9th Cir. Aug. 23, 2024).
25 The class certification analysis “may entail some overlap with the merits of the plaintiff’s
26 underlying claim,” but “Rule 23 grants courts no license to engage in free-ranging merits inquiries
27 at the certification stage.” Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 568 U.S. 455, 465-66
1 extent – but only to the extent – that they are relevant to determining whether the Rule 23
2 prerequisites for class certification are satisfied.” Id. To that end, “the plaintiffs must
3 ‘affirmatively demonstrate’ by a preponderance of actual evidence that they satisfy all the Rule 23
4 prerequisites.” Black Lives Matter, 113 F.4th at, at 1258 (citing White, 104 F.4th at 1192). They
5 “ ‘must actually prove – not simply plead – that their proposed class satisfies each requirement of
6 Rule 23.’ ” Id. (citing White, 104 F.4th at 1192) (emphasis in original).
7 Plaintiffs seek certification of the following classes pursuant to Rule 23(b)(3):
8 California Class: All natural persons who purchased at least one
carton of The Happy Group, Inc.’s eggs at a retail store in
9 California, at any time from May 1, 2019 to December 31, 2021,
with a carton that stated “Pasture Raised on Over 8 Acres.”
10
New York Class: All natural persons who purchased at least one
11 carton of The Happy Group, Inc.’s eggs at a retail store in New
York, at any time from May 1, 2019 to December 31, 2021, with a
12 carton that stated “Pasture Raised on Over 8 Acres.”
13 ECF 62-1 at 19.
14 The Happy Group argues that class certification should be denied because Plaintiffs cannot
15 meet Rule 23(a)(3)’s typicality requirement, Rule 23(a)(2)’s commonality requirement, or Rule
16 23(b)(3)’s predominance requirement. ECF 70-3 at 18. The Happy Group does not challenge
17 numerosity or adequacy, see id. at 17 n.13, or, as confirmed at the hearing, superiority. Because
18 Plaintiffs must meet all of Rule 23’s requirements, the Court briefly addresses the Rule 23
19 requirements that are not in dispute before turning to those that are contested.
20 1. Numerosity
21 Rule 23(a)(1) requires that the class be so numerous that joinder of all members
22 individually is impracticable. Fed. R. Civ. P. 23(a)(1). “Although there is no exact number, some
23 courts have held that numerosity may be presumed when the class comprises forty or more
24 members.” Vizcarra v. Unilever United States, Inc., 339 F.R.D. 530, 543 (N.D. Cal. 2021)
25 (internal quotations and citation omitted). Here, Plaintiffs offer The Happy Group’s responses to
26 requests for admission, indicating that The Happy Group’s eggs have been sold to over 100
27 consumers in both California and New York. ECF 62-1 at 19; ECF 61-67 at 5-6. Each proposed
1 2. Adequacy
2 Rule 23(a)(4) requires a showing that “the representative parties will fairly and adequately
3 protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “This requires inquiry into whether the
4 plaintiff and its counsel have any conflicts of interest with other class members, and whether the
5 plaintiff and its counsel will prosecute the action vigorously on behalf of the class.” Vizcarra, 339
6 F.R.D. at 550 (citing Staton v. Boeing Co., 327 F.3d 938, 957 (9th Cir. 2003)).
7 Plaintiffs’ declarations state that their interests are aligned with the interests of the class
8 members and that they are aware of no conflicts of interest. ECF 62-1 at 21; ECF 61-85 ¶ 9; ECF
9 61-86 ¶ 9. They have actively participated in the litigation by sitting for deposition and
10 responding to written discovery, and they are committed to fulfilling their obligations as class
11 representatives. ECF 62-1 at 21; ECF 61-85 ¶¶ 9-10; ECF 61-86 ¶¶ 9-10. Plaintiffs’ counsel
12 submit that they are experienced in litigating complex class actions, have dedicated resources to
13 litigating this case on behalf of Plaintiffs and class members, and will continue to do so through
14 trial and appeals. ECF 62-1 at 21; ECF 61-2 ¶¶ 4-20; ECF 61-84 ¶¶ 4-10. Based on the
15 declarations provided, the Court finds that each Plaintiff, and their counsel, satisfy Rule 23(a)(4)’s
16 adequacy requirement.
17 3. Superiority
18 Class certification under Rule 23(b)(3) requires a showing that “a class action is superior to
19 other available methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P.
20 23(b)(3). In deciding whether the superiority requirement is met, courts consider:
21 (A)the class members’ interests in individually controlling
the prosecution or defense of separate actions;
22 (B)the extent and nature of any litigation concerning the
controversy already begun by or against class members;
23 (C)the desirability or undesirability of concentrating the
litigation of the claims in the particular forum; and
24 (D)the likely difficulties in managing a class action.
25 Id. “Where classwide litigation of common issues will reduce litigation costs and promote greater
26 efficiency, a class action may be superior to other methods of litigation.” Valentino v. Carter-
27 Wallace, Inc., 97 F.3d. 1227, 1235 (9th Cir. 1996).
1 adjudication for four reasons. ECF 62-1 at 31. First, each class member’s damages are modest
2 compared to the time and expense of litigating their claims. Id. Second, “it does not appear” that
3 any class member has commenced litigation concerning the subject matter of this litigation. Id.
4 Third, litigating the claims asserted in a single proceeding is desirable because “individual claims
5 could only be brought by consumers unlikely to be able to afford to pursue them or who lack
6 sufficient knowledge of their rights.” Id. Fourth, because the claims at issue rise and fall on
7 common evidence, adjudication on a class basis will reduce litigation costs and promote greater
8 efficiency. Id. Plaintiffs’ arguments are well-taken. In line with other courts that have found
9 superiority satisfied in comparable class cases, this Court finds that Plaintiffs meet that
10 requirement here. See, e.g., Bailey v. Rite Aid Corp., 338 F.R.D. 390, 411 (N.D. Cal. 2021);
11 Prescott v. Reckitt Benckiser LLC, No. 20-cv-02101-BLF, 2022 WL 3018145, at *13 (N.D. Cal.
12 July 29, 2022).
13 4. Typicality
14 Rule 23(a)(3) requires that “the claims or defenses of the representative parties [be] typical
15 of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). “The test for typicality is
16 ‘whether other members have the same or similar injury, whether the action is based on conduct
17 which is not unique to the named plaintiffs, and whether other class members have been injured by
18 the same course of conduct.’ ” Krommenhock v. Post Foods, LLC, 334 F.R.D. 552, 562 n.4 (N.D.
19 Cal. 2020) (quoting Ellis, 657 F.3d at 984). “Typicality refers to the nature of the claim or defense
20 of the class representative, and not to the specific facts from which it arose or the relief sought.”
21 Hanon v. Dataprods. Corp., 976 F.2d 497, 509 (9th Cir. 1992)). “Typicality may be lacking if
22 there is a danger that absent class members will suffer [because] their representative is
23 preoccupied with defenses unique to it.” Vizcarra, 339 F.R.D. at 550 (citation and internal
24 quotations omitted; modification in original).
25 The Happy Group argues that Plaintiffs fail the typicality requirement because they are
26 “vulnerable to ‘unique defenses’ that are likely to ‘become the focus of the litigation.’ ” ECF 70-3
27 at 30 (quoting Hanon, 976 F.2d at 509). In support of this argument, The Happy Group points to
1 testimony indicating that “(1) he has no understanding of the AHA’s or HFAC’s requirements for
2 their pasture raised certifications,” “(2) he believes that cartons that do not have a certified logo
3 are not certified,” and (3) “the Whole Foods standard for pasture raised is fine.” ECF 70-3 at 30.
4 As to Plaintiff Gambino, The Happy Group points to his testimony that (1) egg producers do not
5 all use pasture raised to mean the same thing, (2) he did not see anything on Happy Egg’s cartons
6 that made him think they are AHA-certified, and (3) after seeing a video of Happy Egg’s farms, he
7 would consider eggs from such a farm to be pasture raised. Id. The Happy Group also highlights
8 that Plaintiff Gambino claims he purchased eggs at a Whole Foods in New York, where the
9 company has never sold its eggs. Id.
10 However, The Happy Group does not identify a single specific defense that would be
11 unique to either Plaintiff. See Smith v. Keurig Green Mountain, Inc., No. 18-CV-06690-HSG,
12 2020 WL 5630051, at *3 (N.D. Cal. Sept. 21, 2020) (concluding that assertions that plaintiff had
13 not read recycling label on product, did not know whether local recycling facility could recycle
14 product, and could not claim to have been deceived in any way did not establish unique defenses).
15 Similarly, The Happy Group has not advanced any argument as to how any claimed unique
16 defense would become the focus of this litigation, and its current challenge to typicality does not
17 resemble any of the successful ones cited.
18 In Hanon, a securities case, the district court denied the plaintiff’s motion for class
19 certification. 976 F.2d at 509. On appeal, the Ninth Circuit affirmed. Id. It found typicality
20 lacking because “of [plaintiff’s] extensive experience in prior securities litigation, his relationship
21 with his lawyers, his practice of buying a minimal number shares of stock in various companies,
22 and his uneconomical purchase of only ten shares of stock in” the defendant corporation. Id. at
23 508. That plaintiff’s “unique background and factual situation require[d] him to prepare to meet
24 defenses that are not typical of the defenses which may be raised against other members of the
25 proposed class.” Id. No similar facts exist here.
26 In Benedict v. Hewlett-Packard Company, a misclassification case, the district court found
27 that one of the named plaintiffs did not meet the typicality requirement. 314 F.R.D. 457, 471
1 not think of a reason why he did not sign, and received payment for signing it, but also c[ould] not
2 recall actually signing it.” Id. at 471. Though the defendant had not located the signed waiver
3 agreement, the Court found sufficient evidence to conclude that the plaintiff could become
4 preoccupied with the defenses unique to him. Id. Not so here.
5 In Bowling v. Johnson & Johnson, a mislabeling case, the defendants presented unrebutted
6 evidence that the named plaintiff could not have purchased the product at issue in the manner
7 described in her testimony. No. 17-CV-3982 (AJN), 2019 WL 1760162, at *6 (S.D.N.Y. Apr. 22,
8 2019). The court did “not reach a conclusion . . . that [plaintiff] testified falsely,” but it did find
9 “sufficient justification for the conclusion that she would not be an adequate class representative in
10 light of the substantial credibility issues that threaten[ed] to undermine her claims.” Id. The
11 Happy Group has offered nothing like this.
12 Here, Plaintiffs purchased the same products – bearing the statement “Pasture Raised on
13 Over 8 Acres” on the carton – as the proposed class members, thinking they were buying pasture
14 raised eggs. ECF 61-85 ¶ 4; ECF 61-86 ¶ 4. Plaintiffs assert the same claims on behalf of
15 themselves as they do on behalf of the class members, and they will consider their own interests
16 along with those of the class members. ECF 61-85 ¶¶ 7, 9; ECF 61-86 ¶¶ 7, 9; see also ECF 41.
17 This is sufficient to meet Rule 23(a)(3)’s “permissive standards” for typicality. See Lilly v. Jamba
18 Juice Co., 308 F.R.D. 231, 240 (N.D. Cal. 2014) (finding named plaintiffs’ claims were typical
19 where they “ha[d] a similar injury as the rest of the proposed class, since they purchased products
20 that are the same as, or very similar to, the products challenged by the rest of the proposed class”
21 and “[t]heir claims [we]re not based on any conduct that is unique to them.”). Plaintiffs therefore
22 meet Rule 23(a)(3)’s typicality requirement.
23 5. Commonality
24 Rule 23(a)(3) requires that there be “questions of law or fact common to the class.” Fed.
25 R.Civ. P. 23(a)(2). To satisfy this requirement, the common question must be “capable of class-
26 wide resolution – which means that the determination of its truth or falsity will resolve an issue
27 that is central to the validity of each of the claims in one stroke.” Wal-Mart Stores, Inc. v. Dukes,
1 564 U.S. 338, 350 (2011). “[F]or purposes of Rule 23(a)(2)[,] even a single common question will
2 do.” Id. at 359 (internal quotations and modifications omitted). The Ninth Circuit has explained:
3 The requirements of Rule 23(a)(2) have “been construed
permissively,” and “[a]ll questions of fact and law need not be
4 common to satisfy the rule.” However, it is insufficient to merely
allege any common question, for example, “Were Plaintiffs passed
5 over for promotion?” Instead, they must pose a question that “will
produce a common answer to the crucial question why was I
6 disfavored.”
7 Ellis, 657 F.3d at 981 (quoting Dukes, 564 U.S. at 350).
8 Plaintiffs argue that they meet the commonality requirement of Rule 23(a)(2). ECF 62-1 at
9 20. They contend that “all the Class Products’ cartons have, by definition, borne the same Pasture
10 Raised claim.” Id. They claim “[t]his common exposure to a product’s packaging suffices to
11 show commonality.” Id. In its opposition, The Happy Group does not expressly dispute that there
12 are questions of law or fact common to the class, opting instead to address it “jointly under
13 predominance” because the two are interrelated. ECF 70-3 at 12. The Court will therefore
14 address commonality in conjunction with predominance below.
15 6. Predominance
16 Plaintiffs seek class certification under Rule 23(b)(3), see ECF 62-1 at 21, which requires
17 “that the questions of law or fact common to class members predominate over any questions
18 affecting only individual members . . . .” See Fed. R. Civ. P. 23(b)(3). “An individual question is
19 one where ‘members of a proposed class will need to present evidence that varies from member to
20 member,’ while a common question is one where ‘the same evidence will suffice for each member
21 to make a prima facie showing [or] the issue is susceptible to generalized, class-wide proof.’ ”
22 Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 453 (2016) (citation omitted). “The
23 predominance inquiry asks whether the common, aggregation-enabling, issues in the case are more
24 prevalent or important than the non-common, aggregation-defeating, individual issues.” Id.
25 (internal quotations and citations omitted). “When one or more of the central issues in the action
26 are common to the class and can be said to predominate, the action may be considered proper
27 under Rule 23(b)(3) even though other important matters will have to be tried separately, such as
1 quotations and citations omitted). “Considering whether ‘questions of law or fact common to
2 class members predominate’ begins, of course, with the elements of the underlying cause of
3 action.” Erica P. John Fund, Inc., v. Halliburton Co., 563 U.S. 804, 809 (2011).
4 Here, Plaintiffs assert claims under the CLRA, FAL, UCL, and Sections 349 and 350 of
5 the New York GBL, for breach of express warranty under New York and California law, and
6 intentional misrepresentation.8 See Id. ¶¶ 65-69, ¶¶ 70-76, ¶¶ 77-85, ¶¶ 86-96, ¶¶ 97-105, ¶¶ 106-
7 115, ¶¶ 123-129.
8 The claims under the CLRA, FAL, UCL, and GBL are governed by the same objective test
9 – the reasonable consumer test – which requires the plaintiff to show that members of the public
10 are likely to be deceived. See Tait v. BSH Home Appliances Corp., 289 F.R.D. 466, 480 (C.D.
11 Cal. 2012) (“California’s UCL, FAL and CLRA rely on the same objective test, that is, whether
12 members of the public are likely to be deceived.”) (internal quotations and citations omitted);
13 Zaragoza v. Apple Inc., No. 18-CV-06139-PJH, 2019 WL 1171161, at *3 (N.D. Cal. Mar. 13,
14 2019) (“A ‘reasonable consumer’ test also applies to the N.Y. G.B.L. claims.”).
15 a. Deception
16 Seeking to establish that consumer deception is a common issue that predominates,
17 Plaintiffs point to Dr. Morris’s opinion that “reasonable consumers are deceived by the Pasture
18 Raised claim because it is objectively false under industry standards,” an opinion they claim is
19 validated by Dr. J. Michael Dennis’s consumer perception survey. ECF 62-1 at 26. Dr. Dennis
20 has designed and conducted “surveys about the opinions, perceptions, attitudes, preferences, and
21 values of consumers, voters, members of associations and citizens” for over 25 years. Id. ¶ 6. In
22 this case, he designed and conducted a “consumer perception survey to determine whether a
23 reasonable consumer was misled by the Defendant’s labeling of the Products based on the
24
25 8 Plaintiffs do not meaningfully address their New York claims for breach of express warranty
claim and intentional misrepresentation. Because Plaintiffs bear the burden on class certification
26 and have failed to proffer any developed argument with respect to these claims, the motion for
class certification is DENIED as to the New York express warranty claim and the New York
27
intentional misrepresentation claim.
1 Challenged Representation.[9]” Id. ¶ 21.
2 After implementing a screening protocol to select a representative sample of consumers,
3 Dr. Dennis surveyed adults in California and New York “who reported purchasing a Happy Egg
4 product in the past 12 months or otherwise indicated that they would consider purchasing a Happy
5 Egg product in the next 12 months for personal use.” Id. ¶¶ 29, 30. Respondents were put into
6 one of two groups. Id. ¶ 57. Respondents who were shown a product without the Challenged
7 Representation comprised the Control Group. Id. Respondents who were shown an identical
8 product with the Challenged Representation comprised the Test Group. Id. The survey results
9 showed that “88.8% of respondents shown the packaging with the Challenged Representation
10 understood the product packaging to be communicating “the[y] are pasture-raised eggs,”
11 compared to 11.5% of respondents in the Control Group who perceived the eggs to be pasture
12 raised. Id. ¶ 73 (internal modifications omitted). According to Dr. Dennis, “[b]y adding the
13 Challenged Representation to the product packaging, the net increase in consumers’ perceptions
14 was 77.4 percentage points (a factor of 7.7) such that a substantial majority of respondents
15 perceived the Products to be “pasture-raised eggs.” Id. Based on these results, Dr. Dennis opines
16 “that a reasonable consumer perceived the Challenged Representation to convey that the Products
17 are pasture raised eggs.” Id. ¶ 24.
18 Relying on the opinions of its own survey expert, Hal Poret, The Happy Group argues that
19 Dr. Dennis’s survey fails to demonstrate deception on a classwide basis for two reasons. ECF 70-
20 3 at 21. First, the survey says nothing about how a reasonable consumer might perceive “pasture
21 raised” or whether the term is used consistent with AHA or HFAC standards Plaintiffs claims are
22 the industry standard. Id. Second, Dr. Dennis disregarded basic principles of survey design in
23 three ways. Id. He did not ask any open-ended questions, such as asking each respondent what
24 pasture raised means to them. Id. He asked leading questions, i.e., showing respondents the claim
25 and prompting the answer. Id. He also did not include an appropriate control. Id.
26 The Happy Group offers the competing opinion of Mr. Poret to show that there is no
27
1 classwide deception. ECF 70-3 at 26. Based on the results of his own consumer perception
2 survey, Mr. Poret opines that: “The term ‘pasture raised’ on the Happy Egg packaging does not
3 cause consumers to believe that the product meets the alleged standard for ‘pasture raised’ . . . or
4 that the product is certified by AHA or HFAC to meet its standard for ‘pasture raised.’ ” ECF 74-
5 7 at 6. Mr. Poret also opines that “the large majority (roughly 85%) of consumers do not
6 understand ‘pasture raised’ to be a higher standard than ‘free range.’ ” Id. at 7.
7 The Court is not persuaded by Mr. Poret’s opinion because it does not align with Plaintiffs’
8 theory of liability. In their reply brief, Plaintiffs provided clarity on that:
9 Plaintiffs’ theory of liability is that pasture raised eggs have an
objective definition under the Hen Welfare Standards (i.e., the
10 industry standards), and accordingly, the Pasture Raised claim
deceived consumers.[10] Therefore, the salient analysis is whether
11 the Hen Welfare Standards are the industry standard, and whether
the reasonable consumer believes the Class Products are pasture
12 raised eggs.
13 ECF 78-1 at 9.11 As phrased, Plaintiffs’ theory depends on the existence of an industry standard.
14 As a result, even if Dr. Dennis’s survey was properly designed to measure deception, it lacks the
15 needed component from Dr. Morris, whose opinion as to industry standards has been stricken.
16 Plaintiffs’ argument that survey evidence is not required to show deception does not help
17 them here. Their “theory of liability is that pasture raised eggs have an objective definition under
18 the Hen Welfare Standards (i.e., the industry standards), and accordingly, the Pasture Raised claim
19 deceived consumers.” ECF 78-1 at 9. Plaintiffs’ framing of their theory of liability distinguishes
20 this case from those on which Plaintiffs rely. For example, in Hadley v. Kellogg Sales Company,
21 “the falsity or deceptiveness of the challenged health statements on the products at issue w[ere to]
22 be determined based solely on whether the health statements are likely to deceive or mislead a
23 hypothetical reasonable consumer in light of the amount of added sugar that Kellogg put[] into
24
10 In their opening brief, however, Plaintiffs stated: “The salient question is whether consumers
25
reasonably believed, based on the Pasture Raised claim, that the Class Products were pasture
raised eggs. Because there is no protection for literal falseness, Plaintiffs need only prove the
26
falsity of the Pasture Raised claim.” ECF 62-1 at 24.
27
11 Plaintiffs reiterated that clarification at the hearing, stating that the Court would have to accept
1 those product[s].” The plaintiffs’ theory in that case did not, as here, turn on whether the
2 statements were likely to deceive or mislead based on a purported industry standard. See id.
3 Similarly, in Mullins v. Premier Nutrition Corporation, no industry standard was at issue. No. 13-
4 CV-01271-RS, 2016 WL 1535057, at *5 (N.D. Cal. Apr. 15, 2016). There, the defendant
5 expressly advertised its produced as “a way to improve joint health.” Id. The court found that
6 resolving the question of whether an ordinary consumer would reasonably believe this statement
7 was capable of common proof in the form of reviewing advertisements, labels, and then asking the
8 jury how they understood the message. Id. It rejected the argument that consumer survey
9 evidence was necessary to satisfy predominance as to consumer understanding. Id. Unlike in
10 these cases, Plaintiffs here tether their theory of liability to an industry standard. Because that
11 industry standard anchors their theory of deception, the failure to provide survey evidence
12 measuring deception by reference to that industry standard precludes a finding of predominance.
13 See Jones v. ConAgra Foods, Inc., No. C 12-01633 CRB, 2014 WL 2702726, at *15 (N.D. Cal.
14 June 13, 2014) (finding that individualized issues predominated where the word “natural” had no
15 fixed meaning and expert’s opinion did not amount to more than ipse dixit).
16 b. Materiality
17 “For purposes of class certification, the UCL, FAL, and CLRA are materially
18 indistinguishable.” Forcellati v. Hyland’s, Inc., No. CV 12-1983-GHK MRWX, 2014 WL
19 1410264, at *9 (C.D. Cal. Apr. 9, 2014). “The objective test for materiality and thus reliance
20 ‘renders claims under the UCL, FAL, and CLRA ideal for class certification because they will not
21 require the court to investigate class members’ individual interaction with the product.’ ” In re
22 Scotts EZ Seed Litig., 304 F.R.D. 397, 410 (S.D.N.Y. 2015) (quoting Tait, 289 F.R.D. at 480).
23 Sections 349 and 350 of the New York GBL do not “require proof that a consumer actually relied
24 on the misrepresentation.” Hasemann v. Gerber Products Co., 331 F.R.D. 239, 257 (E.D.N.Y.
25 2019) (citations and footnote omitted). California warranty claims likewise require no such
26 showing.12 See Weinstat v. Dentsply Int’l, Inc., 180 Cal. App. 4th 1213, 1227 (2010); In re Scotts
27
1 EZ Seed Litig., 304 F.R.D. at 411 (“Because reliance is not an element of express warranty claims
2 under California law, common questions predominate and class action treatment is appropriate.”).
3 For common law fraud, reliance may be presumed if the defendant’s misrepresentations or
4 omissions were material. See Vasquez v. Superior Court, 4 Cal. 3d 800, 814 (1971). “A
5 misrepresentation is judged to be ‘material’ if a reasonable [person] would attach importance to its
6 existence or nonexistence in determining his choice of action in the transaction in question.”
7 Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 332 (2011) (internal quotations and citations
8 omitted).
9 Here, the record is sufficiently developed with ample common evidence of materiality.
10 For example,
11 ECF 62-54 at 3. The Happy
12 Group’s former CEO also testified that pasture raised eggs are generally more expensive that free
13 range or cage free eggs. ECF 62-5 at 55.
14 In addition to the internal documents and deposition testimony, Plaintiffs offer an
15 additional survey from Dr. Dennis. ECF 62-1 at 28. Focusing his second survey on materiality
16 instead of consumer perception, Dr. Dennis used the “referendum question format” to “measure
17 any materiality attributable to the Challenged Representation.” ECF 61-88 at 26. According to
18 Dr. Dennis, this format “measures consumers’ preference to purchase either the Products
19 (i) without the Challenged Representation or (ii) with the Challenged Representation.” Id. Dr.
20 Dennis describes his findings as follows:
21 When shown two identical products, one with the Challenged
Representation and the other without it, respondents were 8.1 times
22 more likely to state a purchase preference for the Products with the
Challenged Representation than without it – i.e., by a margin of
23 86.9% to 10.7%, consumers prefer to purchase the Products with the
Challenged Representation.
24
25 Id. at 29.
26 The Happy Group argues that Plaintiffs cannot rely on Dr. Dennis’s survey because it
27
1 focuses on “preference,” which is not materiality. ECF 70-3 at 27. That criticism is not well-
2 taken in light of the numerous decisions accepting Dr. Dennis’s preference-focused surveys. See,
3 e.g., Vizcarra v. Unilever United States, Inc., No. 4:20-CV-02777 YGR, 2023 WL 2364736, at
4 *13 (N.D. Cal. Feb. 24, 2023) (accepting Dr. Dennis’s revised materiality survey, which tested the
5 effect of the defendant’s representations about vanilla flavor derived exclusively from the vanilla
6 plant); Fitzhenry-Russell, 326 F.R.D. at 612 (rejecting challenges to referendum battery seeking to
7 prove the materiality of the claim “Made From Real Ginger”).
8 Based on the internal documents Plaintiffs cite, the deposition testimony discussed above,
9 and Dr. Dennis’s findings, the Court finds that materiality is a common question that
10 predominates. Vizcarra, 2023 WL 2364736, at *18 (predominance requirement satisfied with
11 respect to claims under UCL, FAL, and CLRA where plaintiffs provided common proof of
12 materiality).
13 c. Damages
14 To satisfy Rule 23(b)(3)’s predominance requirement, Plaintiffs must present a damages
15 model that is “consistent with [their] liability case.” Comcast, 569 U.S. at 35 (internal quotations
16 omitted). Plaintiffs’ “model purporting to serve as evidence of damages in this class action must
17 measure only those damages attributable to [The Happy Group’s conduct].” Id. At this stage,
18 however, “[c]alculations need not be exact.” Id. (citation omitted).
19 Here, Plaintiffs seek to recover the “price premium” paid by consumers who purchased the
20 Class Products bearing the Pasture Raised claim. This measure of damages is appropriate in cases
21 asserting false advertising claims. See In re Vioxx Class Cases, 180 Cal. App. 4th 116, 131 (2009)
22 (“The difference between what the plaintiff paid and the value of what the plaintiff received is a
23 proper measure of restitution in UCL cases.”) (citation omitted); Brazil v. Dole Packaged Foods,
24 LLC, No. 12-CV-01831-LHK, 2014 WL 5794873, at *5 (N.D. Cal. Nov. 6, 2014) (price premium
25 was appropriate measure of recovery for product mislabeling claims asserted under the UCL,
26 FAL, and CLRA); Hasemann, 331 F.R.D. at 275 (price premium was an appropriate measure of
27 damages under New York’s General Business Law §§ 349 and 350).
1 In support of their price premium theory of damages, Plaintiffs rely on their proposed
2 expert, Colin Weir. ECF 62-1 at 29. Weir offers two methodologies to calculate price premium
3 damages.13 ECF 62-67 ¶ 16. First, Weir describes a conjoint analysis as “a representative survey
4 technique that permits an economist to analyze the value of various product attributes” and “can
5 be used to determine market valuation/attribute information for a given product or attribute.” Id.
6 ¶ 18. He explains that “[i]n a typical conjoint analysis, survey panelists are confronted with
7 various choices of product attributes, prices, and other alternatives, and asked either to rank their
8 preferences, or to choose the most preferred attribute or combination thereof.” Id. ¶ 20.
9 According to Weir, “[t]hrough conjoint analysis, by systematically varying the attributes of the
10 product and observing how respondents react to the resulting product profiles, one can statistically
11 measure information about the individual attributes.” Id. ¶ 21. Then, “[s]tatistical methods
12 (including regression analysis) are . . . applied to the survey responses to calculate attribute value.”
13 Id. ¶ 22. Weir states that “as a survey tool,” conjoint analysis “does not rely on an existing data
14 set for its analysis because it relies on data generated through the survey process. Common
15 conjoint analysis software permits the administration of a representative sample survey, and the
16 analysis of the results therefrom.” Id. ¶ 32. As a result, “[n]o individualized analyses, or Class-
17 Member-specific inquiry will be required.” Id. ¶ 33.
18 In his declaration, Weir outlines a proposed conjoint survey design in which a sample of
19 respondents will answer screening questions, receive a series of instructions about assumptions
20 and attributes, then complete “choice-based conjoint choice tasks.” Id. ¶¶ 41-56. Weir asserts that
21 he can use software to analyze the survey results and run a market simulation to measure the price
22 premium on a classwide basis. Id. ¶¶ 57-74.
23 Second, Weir proposes hedonic regression as a methodology to calculate price premium
24 damages. Id. ¶ 90. He explains that “[h]edonic regression is an application of standard regression
25 techniques that measure the value of various product attributes. Hedonic regression is based on
26
27
13 Weir defines price premium damages as “the portion of the market price of the Products solely
1 the concept that each product attribute has a different and measurable impact on aggregate
2 consumer utility.” Id. ¶ 91.
3 The Happy Group attacks Weir’s proposed methodologies on three grounds. ECF 70-3 at
4 28. First, The Happy Group argues that Weir “does not propose to test the price premium
5 associated with being certified.” ECF 70-3 at 28. Second, it contends that Weir’s hedonic
6 regression model cannot, as he claims, control for “any given claim.” Id. Specifically, Weir did
7 not review the data sets his model relies on, which Weir admitted do not include any information
8 on “Pasture Raised on Over 8 Acres” or “Pasture Raised.”14 Id. The Happy Group argues that
9 this makes Weir’s proposed hedonic regression model “impossible because he cannot test that
10 claim as a variable.” Id. Third, The Happy Group faults Weir for ignoring supply side factors. Id.
11 As to the first argument, Plaintiffs seek to recoup the price premium The Happy Group
12 received by selling the Class Products as “pasture raised” when they allegedly were not. Plaintiffs
13 explain that Weir’s model seeks to quantify that price premium under their theory of liability on a
14 classwide basis. See ECF 78-2 at 19-20; ECF 62-67 ¶ 118 (defining price premium damages as
15 “the difference between the market value (purchase price) of the Products (with the Claim[15]) and
16 the market value of the Products (without the Claim), at the time and point of sale” and explaining
17 that calculating that price premium can be done on a classwide basis). The Court agrees that
18 Weir’s damages model is thus adequately tailored to Plaintiffs’ theory of liability, and as such, it
19 satisfies Comcast. See Prescott, 2022 WL 3018145, at *11 (finding price premium damages
20 model “firmly tethered” to the plaintiffs’ theory of liability where they sought they sought “to
21 recover the price premium they paid for the color renew/revive feature promised on the Woolite
22 labels.”).
23 The Happy Group’s remaining criticisms of Weir’s methodology are proper subjects for a
24 later stage. See Lytle, 2024 WL 3915361, at *14 (stating that, on remand, the defendant “must be
25
26
14 The Happy Group claims that the data also “does not distinguish between the words ‘Pasture
Raised’ on the carton versus a certification by AHA or HFAC.” ECF 70-3 at 28.
27
1 given the opportunity in advance of trial to test the sufficiency and reliability of [the expert’s] . . .
2 model once it has been fully executed, including through a motion for summary judgment and/or a
3 renewed Daubert motion.”). At class certification, “Plaintiffs need only show that such damages
4 can be determined without excessive difficulty and attributed to their theory of liability, and [they]
5 have proposed as much here.” See Just Film, Inc. v. Buono, 847 F.3d 1108, 1121 (9th Cir. 2017).
6 “A plaintiff is not required to actually execute a proposed conjoint analysis to show that damages
7 are capable of determination on a class-wide basis with common proof.” Bailey, 338 F.R.D. at
8 408 n.14 (citation omitted); see also Lytle, 2024 WL 3915361, at *12 (“Plaintiffs may rely on an
9 unexecuted damages model to demonstrate that damages are susceptible to common proof.”).
10 Thus, The Happy Group’s contention that “Plaintiffs fail[ed] to carry their burden because Weir
11 did not execute any models to show a price premium” and that “the only market evidence is that
12 Happy Egg [sic] sells for less than AHA or HFAC certified pasture raised producers” are not
13 persuasive at this stage. See Lytle, 2024 WL 3915361, at *13 (stating that “conjoint analysis is a
14 well-accepted technique that is frequently used to establish damages in CLRA actions”). In line
15 with these authorities, the Court also rejects The Happy Group’s additional argument that
16 Plaintiffs must establish that a price premium exists for their GBL claim, even if they do not prove
17 the exact amount. Having considered all of the above, the Court finds that Plaintiffs have put forth
18 a theory of damages that aligns with their theory of liability.
19 III. CONCLUSION
20 For the reasons set forth above, the Court GRANTS IN PART AND DENIES IN PART
21 Plaintiffs’ motion for class certification and GRANTS Defendant’s motion to strike. To the
22 extent any party seeks to maintain any portion of this order under seal, the parties shall meet and
23 confer and submit joint proposed redactions, by way of an administrative motion to seal in
24 compliance with Civil Local Rule 79-5, by no later than October 11, 2024. In the interim, this
25 order will remain provisionally under seal in its entirety. If no proposed redactions are received
26 by 11:59 p.m. on October 11, 2024, the Court will unseal this order in full.
27 ///
1 The Court sets a case management conference for December 12, 2024 at 10:00 a.m. The
2 || parties shall file a further case management conference statement, compliant with Civil Local Rule
3 16-10(d), by no later than noon on December 5, 2024.
4 IT IS SO ORDERED.
5 Dated: September 27, 2024
coh Mac
7
8 ARACELI MARTINEZ-OLGUIN
United States District Judge
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