In a proposed settlement of a consumer class action regarding false advertising claims against Jamba Juice’s smoothie kits, the plaintiffs avoided the process of identifying class members by not seeking monetary damages for the class. See Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement, Lilly, et al. v. Jamba Juice Company, et al., No. 13-cv-02998 JST (N.D. Cal.) (available here). The plaintiffs’ initial complaint, filed in June 2013 in the U.S. District Court for the Northern District of California, alleged defendants Jamba Juice and Inventure Foods, Inc. misled buyers by marketing a line of at-home frozen smoothie kits as “all natural.” The smoothie kits were available in various flavors and contained ascorbic acid, xanthan gum, and other unnatural-sounding ingredients. The complaint brought causes of action under California law, including the Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750 et seq., False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq., Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq., and for breach of warranty pursuant to Cal. Comm. Code § 2313, on behalf of a class of California consumers who purchased the smoothie kit products.
The defendants had previously sought to defeat the case on ascertainability grounds at the certification stage, arguing in their opposition that it would be too difficult to identify and locate buyers of such a low-priced grocery item. In a September order granting in part and denying in part the plaintiffs’ motion for class certification, Judge Jon Tigar rejected the defendants’ ascertainability arguments and certified the class solely for purposes of determining liability, rejecting the Carrera approach from the Third Circuit. See Order Granting in Part and Denying in Part Motion for Class Certification, Lilly, et al. v. Jamba Juice Company, et al., No. 13-cv-02998 JST (N.D. Cal. Sept. 18, 2014) (citing Carrera v. Bayer Corp., 727 F.3d 300, 308 (3d Cir. 2013), where class certification was denied, even though the criteria for class membership was objective, because plaintiffs were unable to show at the certification stage that they will be able to identify absent class members) (slip op. available here). The court stated, “Few people retain receipts for low-priced goods . . . . Yet it is precisely in circumstances like these, where the injury to any individual consumer is small, but the cumulative injury to consumers as a group is substantial, that the class action mechanism provides one of its most important social benefits.” Slip op. at 7. However, the court stopped short of certifying the class for the purpose of damages.
In a motion for preliminary approval filed on December 1, 2014, the parties agreed, for purposes of settlement only, to certify a nationwide injunctive relief-only class, which would require Jamba Juice to cease labeling and marketing its smoothie kits as “all natural” so long as the challenged products contain the challenged ingredients, and to compensate the named plaintiffs with up to $5,000 each in incentive awards. See Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement, at 3-5. The defendants have agreed to pay a total of $425,000 for attorney’s fees and costs, subject to court approval. Id. at 5. Because class members would not be awarded any monetary damages nor would they release any monetary claims, no notices or opt-out rights to potential members would need to be sent out. Id. at 8-10. Developments in this proposed settlement will be closely watched by plaintiffs’ and defense counsel alike.