Victor v. R.C. Bigelow, Inc., No. 3:2013cv02976 - Document 104 (N.D. Cal. 2016)
Court Description: ORDER GRANTING R.C. BIGELOW, INC.'S MOTION FOR SUMMARY JUDGMENT. Signed by Judge William H. Orrick on 08/29/2016. (jmdS, COURT STAFF) (Filed on 8/29/2016)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ADAM VICTOR, Case No. 13-cv-02976-WHO Plaintiff, 8 v. 9 10 R.C. BIGELOW, INC., Defendant. ORDER GRANTING R.C. BIGELOW, INC.'S MOTION FOR SUMMARY JUDGMENT Re: Dkt. No. 94 United States District Court Northern District of California 11 12 INTRODUCTION 13 Plaintiff Adam Victor alleges that R.C. Bigelow (“Bigelow”) mislabeled its black tea 14 products by including the phrase “delivers healthful antioxidants” on its product labels, originally 15 asserting causes of action under California’s Unfair Competition Law (“UCL”), Consumers Legal 16 Remedies Act (“CLRA”), False Advertising Law (“FAL”), and bringing a claim for restitution 17 based on unjust enrichment and quasi-contract on behalf of a putative class. Third Amended 18 Complaint (“TAC”) ¶ 12, 35-43 (Dkt. No. 78). After extensive motion practice, only his unlawful 19 UCL claim and claim for unjust enrichment remain; I also denied his motion for class certification, 20 concluding that Victor had not presented a plausible damages model nor established standing for 21 injunctive relief. Dkt. No. 85 at 1. 22 Bigelow now moves for summary judgment on the remaining claims. It argues that no 23 material issues of fact exist because Victor (1) cannot show Bigelow’s label statements are false or 24 misleading, (2) has no evidence that a reasonable consumer is likely to be misled by the label 25 statements, (3) has presented only flawed evidence that the label statements are material, (4) has 26 presented no evidence of actual reliance, (5) has presented no evidence of damages, and (6) cannot 27 show a real or immediate threat to support his claims for injunctive relief. Motion for Summary 28 Judgment (“Mot.”) 1, (Dkt. No. 94). I now GRANT Bigelow’s motion for summary judgment: 1 Victor has failed to provide evidence that a reasonable consumer is likely to be misled by 2 Bigelow’s statements; he has not presented evidence in support of a claim for damages; and, he 3 cannot establish standing for injunctive relief.1 4 BACKGROUND 5 In his Third Amended Complaint, Victor argues that the phrase “delivers healthful 6 antioxidants” listed on Bigelow’s black tea products suggests that the tea contains a certain 7 amount of antioxidant nutrients and that because of this specific nutrient content, the tea has a 8 beneficial and healthful effect on humans. TAC ¶ 14. He alleges that the Food and Drug 9 Administration (“FDA”) has not set a recommended daily intake for flavonoids or polyphenols, the kind of antioxidants in black tea, and has not recognized “a substantial consensus of the 11 United States District Court Northern District of California 10 scientific or medical community of any beneficial effects” that these nutrients have on humans. 12 Id. He contends that Bigelow’s black tea products are therefore “unlawfully misbranded as a 13 matter of law and are legally worthless.” Id. 14 Victor purchased three of Bigelow’s black tea products: Earl Grey Tea; English Teatime 15 Tea; and Constant Comment Tea. Id. ¶ 2. He states that at “various times” he read the “delivers 16 healthful antioxidants” claim appearing on the labels of Bigelow’s black tea products and relied on 17 it in his decision to purchase those products. Id. ¶ 17, 65. He asserts that the claim “would be 18 considered by a reasonable consumer” in deciding to purchase the product. Id. ¶ 39. He “did not 19 know, and had no reason to know,” that the products were misbranded and would not have bought 20 the products, or paid a “premium” for them, had he known the truth. Id. ¶ 69. But for the 21 misrepresentation on Bigelow’s labels, he would have “foregone purchasing [Bigelow’s] products 22 and bought other products readily available at a lower price or would not have purchased any 23 product at all.” Id. ¶ 67. Victor contends that Bigelow’s practices deceived him. Id. ¶ 18. In support of Bigelow’s defense that its label statements are not false or misleading to 24 25 consumers, Bigelow presents the declaration and report of its expert, Dr. Blumberg, who opines 26 27 28 1 The analysis in this Order matches the analysis in the Order filed today in Khasin v. R. C. Bigelow, Inc., 12-cv-02204 (WHO) (N.D. Cal., Aug. 29, 2016), concerning Bigelow’s motion for summary judgment on Khasin’s claims regarding Bigelow’s green tea products. 2 1 that Bigelow’s statements are true and accurate because its tea does contains antioxidants and 2 antioxidants have proven health benefits. Blumberg Decl. ¶ 3, (Dkt. No. 94-4). In his Opposition, 3 Victor offers in rebuttal an article published by the Lipton Institute of Tea that Victor contends 4 directly contradicts Dr. Blumberg’s claims. Oppo. 22. Victor does not present any extrinsic 5 evidence that Bigelow’s claims are likely to mislead consumers. 6 7 LEGAL STANDARD Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 9 56(a). In order to prevail, a party moving for summary judgment must show the absence of a 10 genuine issue of material fact with respect to an essential element of the non-moving party’s 11 United States District Court Northern District of California 8 claim, or to a defense on which the non-moving party will bear the burden of persuasion at trial. 12 See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has made this showing, 13 the burden then shifts to the party opposing summary judgment to identify “specific facts showing 14 there is a genuine issue for trial.” Id. The party opposing summary judgment must then present 15 affirmative evidence from which a jury could return a verdict in that party’s favor. Anderson v. 16 Liberty Lobby, 477 U.S. 242, 257 (1986). 17 On summary judgment, the court draws all reasonable factual inferences in favor of the 18 non-movant. Id. at 255. In deciding a motion for summary judgment, “[c]redibility 19 determinations, the weighing of the evidence, and the drawing of legitimate inferences from the 20 facts are jury functions, not those of a judge.” Id. However, conclusory and speculative testimony 21 does not raise genuine issues of fact and is insufficient to defeat summary judgment. See 22 Thornhill Publ’g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). 23 24 DISCUSSION In order to sustain his mislabeling claims under the UCL, FAL, and CLRA, Victor must 25 establish that (1) Bigelow’s labeling statements violate labeling regulations, (2) he actually relied 26 on the labeling statements in deciding to purchase the products, and (3) he suffered “economic 27 injury.” Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 323 (2011). 28 Further, “UCL, FAL, and CLRA claims grounded in fraud are governed by the ‘reasonable 3 1 consumer test.” Ries v. Arizona Beverages USA LLC, No. 10-01139 RS, 2013 WL 1287416, *3 2 (N.D. Cal. Mar. 28, 2013). Under the reasonable consumer test, a plaintiff must demonstrate “that 3 members of the public are likely to be deceived” by the allegedly false, misleading, or unlawful 4 statements. Williams v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008). Victor has failed to provide evidence sufficient to establish that a reasonable consumer is 5 6 likely to be misled by Bigelow’s statements. In addition, he has not provided evidence that would 7 allow a trier of fact to calculate a damage award in his favor and has not demonstrated any 8 economic injury. And, as discussed in my prior order, he has not established standing for 9 injunctive relief. Dkt. No. 85 at 5. Bigelow is entitled to summary judgment on all of Victor’s claims. 11 United States District Court Northern District of California 10 I. WHETHER THE CLAIMS ARE LIKELY TO DECEIVE 12 Victor’s factual claim is that Bigelow’s black tea products contained the unlawful claim 13 “delivers healthful antioxidants.” TAC ¶ 14. He asserts that this claim does not meet the FDA 14 regulations for food labeling and Bigelow’s black tea products are therefore “misbranded” and 15 illegal as a matter of California and federal law. Id. ¶ 12. He contends that “had he known the 16 truth that the products were misbranded and did not in fact contain recognized and accepted 17 nutritional and healthful value, Plaintiff would not have paid a premium for the products, or would 18 not have bought the products at all.” Id. ¶ 17. 19 Bigelow has presented evidence from its expert, Dr. Blumberg, that its black tea contains 20 antioxidants. Victor has not attempted to rebut this evidence. Blumberg Decl. ¶ 16. It is therefore 21 not in dispute that Bigelow’s black tea contains antioxidants. Victor contends, however, that 22 Blumberg does not provide sufficient evidence to demonstrate that the antioxidants in black tea, 23 which are flavonoids and polyphenols, are “healthy” or have any healthful benefits. Oppo. 21. 24 Victor adds that even if the statements on Bigelow’s labels are true, that is irrelevant because they 25 fail to meet California and federal labeling requirements and are therefore unlawful. Id at 22. 26 Victor’s position lacks merit. It is not, as Victor asserts, Bigelow’s “burden to establish 27 the truth of the statements at issue if Defendant wishes to rely upon the truth of the statement as a 28 basis for summary judgment.” Id. Under the reasonable consumer test, Victor is required to 4 1 provide evidence that Bigelow’s statements are likely to deceive consumers. Williams, 552 F.3d 2 938. A party may succeed on a motion for summary judgment by showing that “the nonmoving 3 party does not have enough evidence of an essential element of its claim or defense to carry its 4 ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 5 F.3d 1099, 1106 (9th Cir. 2000). Bigelow does not need to prove that its statements are true or 6 that its statements are not misleading. It can succeed on summary judgment by showing that 7 Victor has failed to provide sufficient evidence that the statements are likely to mislead. 8 9 It is also incorrect that the truth or falsity of Bigelow’s statements is irrelevant if they are unlawful as a matter of California and federal law. Oppo. 22. Even if I assume that the labels are unlawful, whether the statements are true remains relevant as it is probative of whether they are 11 United States District Court Northern District of California 10 likely to deceive a reasonable consumer. Ries, 2013 WL 1287416, *7 (N.D. Cal. Mar. 28, 2013) 12 (no material issue of fact regarding whether the term “natural” was misleading where plaintiffs 13 presented no evidence that the label was false or likely to confuse consumers). If Bigelow’s label 14 statements are true, it is not likely that they would deceive a reasonable consumer. Id. 15 While Bigelow does not have the burden of proving its statements are accurate, it has 16 presented evidence that its label statements are true and, therefore, unlikely to mislead or deceive 17 reasonable consumers. Blumberg Decl. ¶ 16. While Victor attacks the accuracy of Blumberg’s 18 report and research, he does not provide any actual evidence to rebut Blumberg’s declaration. 19 Oppo. 21. 20 The Lipton Institute of Tea article Victor includes in his Opposition is not admissible 21 evidence. Dkt. No. 95-5. As Bigelow argues in its Reply, this non peer-reviewed article, 22 purportedly written by Dr. Jane Rycroft, whom Victor has not designated as an expert, is hearsay, 23 has not been sworn to or made under oath, and has not been properly authenticated. Reply 9, 24 (Dkt. No. 100). This article fails to meet the standards for admissibility under Federal Rules of 25 Evidence 602 or 703 and must be excluded under Rule 403. Fed. R. Evid. 602, 703, 403. 26 (Notably, even if the article is considered on the merits, it does little to help Victor’s claim. While 27 the article notes that “dietary antioxidants reducing free radicals damage in humans has not been 28 found,” it also notes that “tea flavonoids have strong antioxidant properties” and that “tea 5 1 2 consumption in linked with various health benefits.” Dkt. No. 95-5 at 4-5.). Victor provided no affirmative evidence that Bigelow’s statements are in fact false or 3 inaccurate; he only attempted to undermine the credibility of Bigelow’s expert. This is 4 insufficient to create a material issue of fact. See National Union Fire Ins. Co. of Pittsburgh, Pa. 5 v. Argonaut Ins. Co., 701 F.2d 95, 96-97 (9th Cir. 1983) (“[N]either a desire to cross-examine an 6 affiant nor an unspecified hope of undermining his or her credibility suffices to avert summary 7 judgment” where the non-moving party has “offered no evidence.”). 8 9 Similarly, Victor has presented insufficient evidence that Bigelow’s label statements are likely to deceive a reasonable consumer. Victor’s deposition testimony and the declaration of Dr. Edward Scarbrough do not support Victor’s claims that the statements are misleading to 11 United States District Court Northern District of California 10 consumers and fail to create a material issue of fact. 12 Victor testified that the claim “delivers healthful antioxidants” did not lead him to believe 13 the product contained a certain level or kind of antioxidant. Id. Victor Depo 54:11-18 (Dkt. No. 14 95-2). He further testified that he had no particular knowledge about FDA regulations and did not 15 form a belief about whether the Bigelow claim met FDA regulations. Id. at 54:7-10. As Victor 16 testified, his understanding of the claim “delivers healthy antioxidants” was that “I was getting a 17 healthy dose of antioxidants.” Id. at 71:4-6. When asked “if the product does contain 18 antioxidants, did you believe that you got the benefit of that?” he responded “I believe so, yeah.” 19 Id. at 71:7-10 Victor’s testimony suggests that he was not misled--he does not dispute that 20 Bigelow’s black tea contains antioxidants, as he believed. 21 Further, regardless of whether Victor’s testimony suggests that he was misled, individual 22 testimony is insufficient to establish that a reasonable consumer is likely to be misled, as required 23 under the reasonable consumer test. Haskell v. Time, Inc., 965 F. Supp. 1398, 1407 (N.D. Cal. 24 1997) (“[A]necdotal evidence alone is insufficient to prove that the public is likely to be misled.”). 25 A plaintiff must “demonstrate by extrinsic evidence, such as consumer survey evidence, that the 26 challenged statements tend to mislead consumers.” Id. Victor presented no extrinsic evidence in 27 support of his conclusory statement that Bigelow’s claims are likely to mislead consumers. 28 Victor’s reliance on Scarbrough’s declaration similarly fails as Scarbrough offers no 6 1 opinion on whether Bigelow’s label statements are likely to mislead reasonable consumers. 2 Scarbrough Decl. (Dkt. No. 95-4). Scarbrough’s only discussion regarding whether the Bigelow 3 claims are misleading is indirect and wholly conclusory. Id. at 5-6. He implies that Bigelow’s 4 antioxidant claims were misleading because they could not meet the lowest minimum threshold 5 for a nutrient content claim, which he asserts is the “lowest level that a nutrient can be present in a 6 food before it becomes deceptive and misleading to highlight its presence in a nutrient content 7 claim.” He seems to say that because Bigelow’s claims did not meet FDA requirements, they are 8 misleading as a matter of law. Id. Scarbrough’s conclusory statements, which only tangentially 9 address Victor’s specific claim, cannot create a material issue of fact. See Thornhill Publ’g Co., 10 Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). Victor has not offered any plausible evidence to explain why the phrase “delivers healthy United States District Court Northern District of California 11 12 antioxidants” is false or likely to mislead a reasonable consumer. As he has presented no plausible 13 evidence, he cannot show that “it is probable that a significant portion of the consumer public or of 14 targeted consumers, acting reasonably under the circumstances, could be misled.” Lavie v. 15 Proctor & Gamble Co., 105 Cal. App. 4th 496, 508 (2003). Because he bears the burden of 16 proving this element and has failed to provide any evidence on this point, he has failed to create a 17 material issue of fact as to whether reasonable consumers are likely to be misled by Bigelow’s 18 labels. Bigelow is entitled to summary judgment on Victor’s only remaining UCL claim. 19 II. 20 WHETHER VICTOR HAS PROVIDED ADEQUATE EVIDENCE OF DAMAGES In addition, Bigelow argues that summary judgment is appropriate because Victor has 21 failed to create a triable issue of fact to support his claims for restitution. Mot. 16. “The False 22 Advertising Law, the Unfair Competition Law, and the CLRA authorize a trial court to grant 23 restitution to private litigants asserting claims under those statutes.” Colgan v. Leatherman Tool 24 Grp., 135 Cal. App. 4th 663, 694 (2006). “There must be evidence that supports the amount of 25 restitution necessary to restore to the plaintiff ‘any money . . . which may have been acquired by 26 means of such unfair competition.’ ” In re Google AdWords Litig., 2012 WL 28068 at *15 (N.D. 27 Cal. Jan. 5, 2012). 28 As I stated in my prior orders, “the proper measure of restitution in a mislabeling case is 7 1 the amount necessary to compensate the purchaser for the difference between a product as labeled 2 and the product received, not the full purchase price or all profits.” Dkt. No. 68 at 1; see also 3 Brazil v. Dole Packaged Food, LLC, No. 12-cv-01831-LHK, 2014 WL 5794873, at *5 (N.D. Cal. 4 Nov. 6, 2014) (finding that “[t]he proper measure of restitution in a mislabeling case is the amount 5 necessary to compensate the purchaser for the difference between a product as labeled and the 6 product as received”) (internal citations and quotation marks omitted). 7 At class certification, Victor failed to present a plausible methodology for calculating 8 restitution or damages, instead alleging that “the product as received has a value of $0” and 9 therefore that “the measure of the restitution is the average retail purchase price minus $0.” Dkt. 10 United States District Court Northern District of California 11 No. 73 at 16-17. Now, in his Opposition to Bigelow’s motion, Victor fails to offer any evidence in support 12 of a claim for restitution or to offer an alternative to his full-purchase-price damages theory. 13 Instead, in support of his claim for unjust enrichment, Victor argues that “it is the Defendant who 14 must bear the burden of demonstrating a downward deviation, or suffer maximum disgorgement.” 15 Oppo. 18. In support of this claim, he cites Sheldon v. Metro-Goldwyn Pictures Corp., a 1939 16 case on the attribution of profits from copyright infringement in which the Second Circuit 17 discussed a defendant’s burden to separate comingled funds during a copyright infringement 18 accounting. 106 F.2d 45, 48-51 (2nd Cir. 1939). That case does not come close to addressing the 19 issues here. Victor insists that Bigelow, as the wrongful actor, has the burden of proving it is not 20 liable for the full purchase price of its products. Oppo. 19. He ignores foundational legal 21 principles and the standard I have repeated multiple times in this case to insist that despite having 22 proved no wrongdoing, and having offered no evidence in support of damages, he is entitled to 23 monetary compensation. Id. He cannot survive summary judgment when he has provided no 24 evidence in support of a theory of damages. 25 Victor then asks me to use my discretion to craft an equitable remedy “in an amount that 26 would both deprive Defendant of its ill-gotten profits and compensate Plaintiff and the class for 27 their losses.” Id. at 20. In asking me to create an equitable remedy out of thin air, Victor concedes 28 that he has no evidence to offer to support a claim for damages. His contention that he is not able 8 1 to meet his evidentiary burden because “the Court has denied Plaintiff the right to conduct 2 discovery on this issue” falls flat as Bigelow has already produced its sales data to him. Id.; see 3 also Dkt. No. 68 at 2. (Bigelow’s “gross sales and the retail pricing of the products at issue have 4 already been produced” and “Victor does not dispute this or explain why that information is not 5 sufficient to present a damages theory based on the difference between the products as labeled and 6 the products as received.”). He does not explain why further discovery would be fruitful. The facts here parallel those underlying the Hon. Richard Seeborg’s decision in Ries v. 7 8 Arizona Beverages USA LLC, in which plaintiffs in a mislabeling case similarly failed to provide 9 any evidence in support of a claim for restitution. No. 10-01139 RS, 2013 WL 1287416, *8 (N.D. Cal. Mar. 28, 2013). “They offer not a scintilla of evidence from which a finder of fact could 11 United States District Court Northern District of California 10 determine the amount of restitution or disgorgement to which plaintiffs might be entitled if this 12 case were to proceed to trial. This failure alone provides an independent and sufficient basis to 13 grant defendants summary judgment.” Id. Like the plaintiff in Ries, Victor has provided no 14 evidence in support of his claims for restitution. His attempt to shift the evidentiary burden to 15 defendant and to me fails. Bigelow is entitled to summary judgment on Victor’s UCL claim on 16 the basis that Victor has provided no evidence to support a showing of restitution damages. Similarly, Victor’s failure to provide any evidence of damages is fatal to his claim for 17 18 unjust enrichment. See Krouch v. Wal-Mart Stores, Inc., No. 12-cv-02217-YGR, 2014 WL 19 5463333 (N.D. Cal. Oct. 28, 2014) (A cause for “unjust enrichment also requires a finding that the 20 claimant suffered a loss.”). Victor cannot survive summary judgment where he has provided no 21 evidence that he suffered any harm. Bigelow is also entitled to summary judgment on Victor’s 22 claim for unjust enrichment. 23 III. 24 WHETHER VICTOR LACKS STANDING FOR INJUNCTIVE RELIEF Finally, as discussed in my prior order denying class certification, Victor has not 25 established individual standing on his claims for injunctive relief. Dkt. No. 85 at 10. As I 26 previously found, “Victor has not plausibly alleged an intent to purchase Bigelow products in the 27 future” and therefore cannot establish that there is a “sufficient likelihood” that he will be injured 28 in the future as required to establish Article III standing. Id. at 9. Further, he cannot establish that 9 1 he is likely to suffer the same injury in the future because “[p]laintiffs like Victor, who were 2 previously misled by deceptive food labels and now claim to be better informed, lack standing for 3 injunctive relief because there is no danger that they will be misled in the future.” Id. at 10. As 4 Victor does not have standing on his claims for injunctive relief, Bigelow is entitled to summary 5 judgment on these claims. CONCLUSION 6 7 I GRANT Bigelow’s motion for summary judgment on all claims because Victor has failed 8 (1) to present any evidence in support of his claim that a reasonable consumer is likely to be 9 misled by Bigelow’s statements, (2) to present any evidence in support of a claim for proper damages, and (3) to demonstrate standing for injunctive relief. Judgment shall be entered 11 United States District Court Northern District of California 10 accordingly. 12 13 14 15 IT IS SO ORDERED. Dated: August 29, 2016 ______________________________________ WILLIAM H. ORRICK United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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