Consumer Lawsuit About Hain’s “Natural” Claims Revived by 9th Cir.

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The Ninth Circuit revived a consumer class action that had been dismissed without leave to amend by Judge Manuel Real of the Central District of California. See Balser, et al. v. The Hain Celestial Group Inc., No. 14-55074 (9th Cir. Feb. 22, 2016) (slip op. available here). Plaintiffs Balser and Kresha claimed that Hain misled them into paying a premium price for Alba Botanica products labeled “Natural” and “100% Vegetarian” when they allegedly contained synthetic/non-natural substances and were not made entirely with plant-derived products.

The district court had previously dismissed the plaintiffs’ claims, finding that they had not alleged what they thought the “natural” representation meant, nor had they sufficiently pled how they relied on and were harmed by the representation. Judge Real stated, “[r]ead as a whole, no reasonable consumer would be misled by the label ‘natural.’” See Order Granting Defendant’s Motion to Dismiss, Balser, et al. v. The Hain Celestial Group Inc., No. CV 13-05604-R (C.D. Cal. Dec. 18, 2013). In a brief 5-page opinion, the panel found that the plaintiffs’ allegations are “sufficient . . . to [plausibly] allege a reasonable consumer’s understanding of ‘natural’ as used on Hain’s packaging, and so are adequate under California law.” Slip op. at 2. Additionally, the opinion stated that the consumers’ allegation of reliance—that they relied on the “natural” labeling when they purchased the products, and allegation of economic injury—that they paid more than they otherwise would have because of the misrepresentation, were also sufficiently pled. Id. at 2-3. Applying Williams v. Gerber Prods. Co., 552 F.3d 934 (9th Cir. 2008), the court stated, “[w]hether a business practice is deceptive, misleading, or unfair is ordinarily a question of fact to be decided by a jury.” Williams at 938-39. Williams also involved claims of deceptive labeling on Gerber Fruit Juice Snacks packaging (including a “natural” claim) and the Ninth Circuit had reversed dismissal; similarly, in the present case, statements that the products were “natural” and “100% vegetarian” plausibly could be interpreted as a claim that the products contained no synthetic chemicals, a claim alleged to be false.

Finally, the plaintiffs argued that the district court abused its discretion in denying them pre-certification discovery; the Ninth Circuit agreed, finding the plaintiffs had been improperly denied the chance to conduct discovery, partly due to Central District’s Local Rule 23-3 that requires that the motion for class certification be filed within 90 days of a complaint. The district court had deferred the plaintiffs’ discovery requests beyond the 90-day mark, “thereby implicitly denying the motion by rendering it moot.” Slip op. at 5. Citing Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011), the appeals court noted the schedule, “when considered alongside federal rules regarding status conferences and the timing of discovery, is quite unrealistic in light of recent case law regarding the need to establish a sufficient factual record at the class certification stage.” Id. at 3-4 (emphasis added).

The panel reversed and remanded the district court’s ruling and required the lower court to consider whether precertification discovery is necessary.

Authored by: 
Mao Shiokura, Associate