Federal Court in California Certifies Nutella Class
I like Nutella. I like peanut butter better, and that's usually what's on my toast in the morning. But sometimes I like to switch it up with Nutella.
I don't know the precise amount of sugar or oil that it contains. But I know where to look for such information: right on the label, in the box marked "Nutrition Facts."
I have voiced my opinion in previous posts about the bogus nature of lawsuits where lawyers have invented class action "misrepresentation" claims out of Nutella's claim that the tasty spread can be part of a healthy breakfast. No one can be deceived into thinking that Nutella has suddenly become wheat germ. A simple look at the Nutrition Facts on the label tells anyone who is curious what they want to know.
And so it was with great disappointment that I read the decision certifying a class of California purchasers of Nutella. See In re Ferrero Litigation, Case No. 11-CV-205 H(CAB), Slip op. (S.D. Cal. Nov. 15, 2011) (Law 360 subscription required). Plaintiffs' consolidated complaint asserted claims under California's Unfair Competition Law, its False Advertising Act, Consumer Legal Remedies Act, and for breach of express and implied warranties. It claims that "Ferrero misleadingly promotes its Nutella spread as healthy and beneficial to children when it in fact contains dangerous levels of fat and sugar." Slip op. at 2.
The opinion gives great lip service to the Supreme Court's decision in Wal-Mart v. Dukes, quoting it often on rigorous analysis and commonality. And yet it ultimately certifies a class in which most of the class members likely were not deceived and would have bought Nutella even if they had read the label and thus knew the facts that plaintiffs claim were concealed. The district court reasoned:
To the extent that Defendant interprets the decision in Wal-Mart as requiring plaintiffs to prove common class-wide injury at the class certification stage, the Court disagrees. Rather, Plaintiffs must show that the claims of the class "depend on a common contention . . . of such a nature that it is capable of classwide resolution--which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Wal-Mart Stores, Inc., 131 S. Ct. at 2551. In this case, the claims made on behalf of the proposed class are based on a common advertising campaign, and include common questions such as whether Ferrero's advertising campaign misrepresented that Nutella is healthier or more nutritious than it actually is, or makes a more significant contribution to a balanced breakfast than it actually does, including for children. Thus, Rule 23(a)(2)'s commonality requirement is satisfied.
Slip op. at 6.
One of the fundamental questions that remains unaddressed in the district court's opinion is the obvious overbreadth of the class definition. The class is defined as a classic "all purchasers" class: "all persons who . . . bought one or more Nutella products in the United States for their own household use rather than resale or distribution." Slip op. at 2. This, of course, sweeps into the class everyone, even those who used and enjoyed the product and would purchase it again and again. Like me. Or like plaintiff Hohenberg, who testified at her deposition that she "does not regret buying Nutella and continued using the spread after she learned about its sugar content." Slip op. at 8-9.
Of course, where a class includes a large number of people who have no damages and have not been injured, the class definition is imprecise and overbroad. Courts routinely deny class certification in such circumstances. See, e.g., State ex rel. The Coca-Cola Company v. Nixon, 249 S.W.3d 855 (Mo. 2008) (class of all purchasers of fountain Diet Coke was overbroad because many did not care that the product contains saccharin and would drink it anyway). But the court in the Nutella litigation did not even consider the issue. Nor did it consider how class members would provide objective proof at the outset of the litigation that they are class members. Ascertainability, too, is a problem for this class.
The bright side, to the extent that there is one, is that the district court clearly recognized that the consumer protection laws of the 50 states are far too different for a nationwide class to pass muster under the predominance requirement, and California could not properly impose its consumer protection statutes on transactions that occurred outside its borders involving nonresidents. Slip op. at 10-11. Thus, the court certified a California-only class. And it limited the class period to the start of the defendant's advertising campaign in August 2009, rather than the January 2000 start-date the plaintiffs had requested.
Still, that means that the maker of Nutella must endure merits discovery and a classwide trial over the claims of many Californians who have not experienced an injury or suffered any damages. Here's hoping they have the fortitude to stick it out and put the "class" to its proofs.
