A class action suit filed in February 2011 alleged that the maker of Nutella, Ferrero U.S.A., misleads consumers into believing that Nutella is healthy using deceptive advertisements.  See Hohenberg v. Ferrero U.S.A., No. 11-0205 (S.D. Cal. filed Feb. 1, 2011).  Now, the parties have reached a $3 million settlement, which provides relief to members of California and nationwide subclasses.  $2.5 million of the settlement is earmarked for division among claimants, with each claimant entitled to receive $4 per jar of Nutella purchased, up to five jars. 

In Hohenberg, the plaintiff claimed that Ferrero conceals the fact that Nutella is nearly three-quarters saturated fat and that it contains none of the nutritional properties associated with the fruit and other healthy foods pictured in Nutella ads.  In addition to providing monetary relief to customers, Ferrero will also be required to remove misleading health claims from its packaging, website, and advertising.

District Court Judge Christina A. Snyder of the Central District of California has granted certification of two consumer subclasses in an action alleging that L’Oreal failed to warn consumers of the flammability of its Garnier Fructis Sleek & Shine Anti-Frizz Serum.  See Guido v. L’Oreal, USA, No. 2:11-cv-01067 (C.D. Cal. May 7, 2012) (available here).

The ruling is notable in part because the defendants had predicated their opposition to class certification on Dukes v. Wal-Mart, 131 S. Ct. 2541 (2011).  Despite adhering to the “rigorous analysis” mandated by Dukes, Judge Snyder nevertheless found that the plaintiffs had established each of the Rule 23 class certification requirements.  Guido, No. 2:11-cv-01067 at *4, n.4 (citing Ellis v. Costco Wholesale Corp., 657 F.3d 970, 980 (9th Cir. 2011) (citing Dukes, 131 S. Ct. at 2551)).

Although L’Oreal has vowed to challenge the still “tentative” certification ruling, Judge Snyder’s comprehensive order reflects that the parties have already argued the pivotal legal issues.  For instance, Judge Snyder rejected the defendants’ contention that the plaintiffs lacked Article III standing, on grounds that the plaintiffs “would have paid less than [Sleek & Shine’s] retail price or would not have purchased it at all,” had they been forewarned of the product’s flammability.  Guido, No. 2:11-cv-01067 at *8.  As such, the plaintiffs had adequately alleged a cognizable “economic injury.”  Slip op. at 7.

Additionally, the certification ruling adds to the long line of state and federal cases holding that, under California’s Unfair Competition Law, “‘a presumption or at least an inference[] of reliance arises whenever there is a showing that a misrepresentation was material’”  Slip op. at 8-9 (quoting In re Tobacco II Cases, 46 Cal. 4th 298, 326–27 (2009).  Thus, “so long as plaintiffs establish that defendants’ omissions and misrepresentations are ‘material,’ they may bring a UCL claim on behalf of a class without individualized proof of reliance.”  Slip op at 9 (quoting In re Tobacco II, 46 Cal. 4th 326-27).  See also Wolph v. Acer, 272 F.R.D. 477 (N.D. Cal. Mar. 25, 2011) (class-wide reliance presumed from showing that misrepresentation would be material to a reasonable consumer).

In a major victory for consumers, the Sixth Circuit Court of Appeals has upheld the multi-district certification of a class of consumers alleging that their Whirlpool washers accumulate mold and mildew, leaving laundry malodorous and ruined. See Glazer v. Whirlpool Corp., No. 10-4188 (6th Cir. May 3, 2012) (order affirming certification) (available here).

After the district court granted certification, the defendant appealed, arguing that the class representatives could not demonstrate the predominance of common questions of law or fact, chiefly because the lawsuit was comprised of at least 21 different models of washers. However, the Sixth Circuit panel sided with the district court on the commonality issue.

Likewise, the Sixth Circuit rejected the defendant’s contention that the class definition was overly broad because not every class member experienced the same harm (and some class members experienced no harm, and were happy with their washers). The panel found that, so long as the challenged practice is generally applicable to the entire class, class treatment is appropriate.

In a ruling that reversed a Court of Appeal decision granting attorney’s fees to a defendant employer, the California Supreme Court has held that prevailing parties in rest break actions may not recover attorney’s fees. See Kirby v. Immoos Fire Protect., Inc., No. S185827 (Cal. Apr. 30, 2012) (available here).

The decision concerned the interplay between California Labor Code section 226.7, which provides for the payment of an additional hour of pay as compensation for meal and rest break violations, and section 218.5, which provides that “[i]n any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney’s fees and costs to the prevailing party if any party to the action requests attorney’s fees and costs upon the initiation of the action. . . . [¶] This section does not apply to any action for which attorney’s fees are recoverable under Section 1194.”

The Supreme Court unanimously held that neither Section 218.5 nor Section 1194 provide for a prevailing party’s recovery of attorney’s fees in connection with a rest break claim under Section 226.7. See Slip op. at 2. In reaching their holding, the justices reasoned that a 226.7 claim is not an action “brought for the nonpayment of wages” within the meaning of Section 218.5, but is instead “brought for the nonprovision of meal and rest periods”; the payment of “wages” as a penalty for missed breaks is merely incidental, not the impetus for the claim itself. See id. at 11-13. As such, the court found that the defendant could not recover attorney’s fees.

Kirby rejected the defendant’s argument that, under Murphy v. Kenneth Cole, because a violation of Section 226.7 allows a remedy of a “wage,” an action under Section 226.7 is an action for “wages” under Section 218.5. See id.; see also Murphy v. Kenneth Cole Productions, Inc., 40 Cal.4th 1094, 1102 (2007) (holding that Section 226.7 payment is “wage”). The decision took a complex path to distinguishing Murphy and reaching its ultimate conclusion:

As a textual matter, we note that section 218.5 uses the phrase “action brought for” to mean something different from what the phrase means when it is coupled with a particular remedy (e.g., “action brought for damages” or “action brought for injunctive relief”). An “action brought for damages” is an action brought to obtain damages. But an “action brought for nonpayment of wages” is not (absurdly) an action to obtain nonpayment of wages. Instead, it is an action brought on account of nonpayment of wages. The words “nonpayment of wages” in section 218.5 refer to an alleged legal violation, not a desired remedy.

Slip op. at 13.

In rejecting the defendant’s attempt to recover its attorney fees incurred in the course of defeating the plaintiff’s rest break claim, the Kirby decision concluded that “the most plausible inference to be drawn from this history is that the Legislature intended section 226.7 claims to be governed by the default American rule that each side must cover its own attorney’s fees.” Id. at 17. The Kirby opinion was authored by the California Supreme Court’s newest member, Justice Goodwin Liu.