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From Health Law Daily, October 17, 2014

Consumer’s second bite at the apple more successful in Mott’s litigation

By Patricia K. Ruiz, JD

The Northern District of California granted in part and denied in part a motion for summary judgment by Mott’s LLP in the second lawsuit by a consumer alleging that he relied on the statement “No Sugar Added” on Mott’s Original 100 % Apple Juice product. The court determined that, despite arguments by the consumer that he would continue to buy the product but in smaller quantities, there was no risk of harm in the future necessitating injunctive relief, as he was no longer at risk of being deceived by the labeling. Furthermore, the court held that the consumer failed to allege that the reasonable consumer would be misled by the labeling. (Rahman v Mott’s LLP, October 14, 2014, Illston, S).

Background. Mohammed Rahman alleged that he purchased increasing amounts of Mott’s Original 100 % Apple Juice after reading and relying on the “No Sugar Added” labeling, having observed that competitor’s 100 % apple juice products did not contain such a label. He alleged that he would not have purchased as much of the product if it did not contain the “No Sugar Added” label. Rahman alleged violations of California’s Sherman Law, Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA). He also alleged negligent misrepresentation and breach of quasi-contract. Mott’s moved to dismiss on the grounds that (1) Rahman did not suffer damages as a result of purchasing and consuming the apple juice; (2) Rahman lacked Article III standing to seek injunctive relief; (3) Rahman did not rely on the “No Sugar Added” label when he chose to purchase the product; and (4) Rahman failed to introduce evidence showing that the reasonable consumer would be misled by the labeling.

Damages. Mott’s argued that summary judgment was proper, as Rahman failed to articulate a theory of damages and because Rahman in his testimony “disclaimed any desire to receive monetary relief in this lawsuit.” Monetary damages are a requirement to establishing statutory standing under the UCL, FAL, and CLRA. However, the California Supreme Court previously said that “[t]here are innumerable ways in which economic injury from unfair competition may be shown.” Because Rahman provided an estimate of how much he spent on the apple juice, as well as incremental increases in the amount he was spending, allegedly attributable to the “No Sugar Added” labeling, the court held that Rahman had sufficiently established damages.

Standing. Mott’s argued that Rahman lacked Article III standing to seek injunctive relief. To have standing to obtain such relief, a plaintiff must allege that a “real or immediate threat” exists that he will be wronged again. Despite Rahman’s claims that he would continue to purchase the apple juice, the court held that because Rahman can no longer be deceived by the “No Sugar Added” labeling, he does not have standing to seek injunctive relief. “Merely being exposed to an allegedly unlawful label is not a cognizable harm. . . . Similarly, merely feeling that one cannot trust defendant’s future representations is not sufficient harm to confer standing for injunctive relief,” the court said.

Reliance. Motts argued that summary judgment should be granted, as Rahman failed to show actual reliance on the “No Sugar Added” label. Rahman testified that he did not rely on the “No Sugar Added” labeling to tell how many calories or how much sugar was in the beverage and that he continued to purchase the product even when the statement was not included on the label. He also testified that the label caused him to purchase more of the product than he would have otherwise. Thus, the court found that there was a triable issue of fact and that summary judgment was not warranted.

The reasonable consumer. Mott’s argued that Rahman failed to introduce evidence that a reasonable consumer would be misled by the “No Sugar Added” label. Rahman only used his own experience—plus the testimony of an expert regarding a survey that had the potential to show that consumers were misled, but had not been conducted. The court held that this was not sufficient and granted summary judgment as to the CLRA, FAL, the unfair and fraud prongs of the UCL, and negligent misrepresentation.

The court previously dismissed Rahman’s claims regarding the sugar content labeling of Mott’s Original 100% Apple Juice in a class action lawsuit (see No Added Sugar” labeling claims dismissed, January 31, 2014).

The case number is CV 13-3482 SI.

Attorneys: Jordan L. Lurie (Capstone Law APC) for Mohammed Rahman. Kevin Marshall Sadler (Baker Botts LLP) for Mott's LLP.

Companies: Mott's LLP

MainStory: TopStory CaseDecisions MisbrandingNews AdvertisingNews FoodNews FoodStandardsNews LabelingNews CaliforniaNews

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