Court: District Court, S.D. New York; January 9, 2017; Federal District Court
Plaintiffs Tracy Albert, Dimitrios Malaxianis, and Tatyana Oshkina filed a consumer class action against Blue Diamond Growers, alleging misrepresentation regarding the Almond Breeze almond milk products. They claim that Blue Diamond falsely represented these products as heart healthy and containing a significant almond content, when they actually contain only two percent almonds. The specific misrepresentations included misleading imagery and statements on packaging and social media regarding the number of almonds and health certifications.
The plaintiffs, who purchased Almond Breeze products between January 2012 and June 2015, assert causes of action for violation of New York General Business Law Section 349, California Business and Professions Code Section 17200, and unjust enrichment. They seek various forms of relief including restitution, compensatory and punitive damages, attorneys' fees, and any additional relief the Court deems appropriate.
Blue Diamond has requested a stay of the current action pending approval of a Settlement Agreement reached in a related case (Townsend v. Blue Diamond Growers) that encompasses all labeling claims against them. This Settlement Agreement includes a class of individuals who purchased Blue Diamond products with specific labeling claims from May 28, 2009, to the date of the Preliminary Approval Order, addressing issues such as misleading "natural" labeling and endorsements from the American Heart Association. The Court granted Blue Diamond's motion to stay the action.
On November 17, 2016, the Townsend plaintiffs sought preliminary approval for a settlement agreement, which was granted shortly thereafter. Following this, Blue Diamond filed a motion to stay the action on November 21, 2016, but due to a filing error, it refiled on December 8, 2016. Blue Diamond's motion argues that the settlement in the Townsend action covers the claims in this case, requests a stay pending final approval of the Settlement Agreement, asserts potential prejudice from not granting a stay, and claims that a stay would conserve judicial resources and serve the public interest. In contrast, the plaintiffs argue that this case is the first filed and uniquely addresses false misrepresentations about almond content, alleging that Blue Diamond is attempting to avoid federal court review and that the preliminary approval order is inadequate.
In its reply, Blue Diamond maintains that the nationwide class settlement resolves all claims related to its Almond Breeze products, denies any intention to evade review, and refutes the plaintiffs' objections to the preliminary order as grounds for denying the stay. The legal standard for granting a stay, as established by the Supreme Court, involves judicial discretion, recognizing that stays can disrupt the normal judicial process. Courts typically grant stays when a nationwide settlement may affect ongoing claims. Five factors are considered in deciding whether to grant a stay, including the interests of the plaintiffs, defendants, courts, non-parties, and the public.
The plaintiffs' complaint centers on alleged misrepresentations by Blue Diamond about almond content and claims of heart health, arguing that their claims are distinct from those covered by the Settlement Agreement.
The Settlement Agreement includes a wide range of claims beyond those specifically raised by the Plaintiffs, such as issues related to Blue Diamond's 'all natural' labeling and endorsements, while also covering the Plaintiffs’ claims about almond content. The Second Circuit permits class action releases to encompass claims not presented, provided they stem from the same factual basis. The Townsend action shares identical factual grounds concerning alleged false advertising related to Blue Diamond’s products, which are also incorporated in this case. The Settlement Agreement defines the settlement class as individuals who purchased specific Blue Diamond products during a set timeframe without full disclosure of almond content. A stay of this case is deemed beneficial for judicial economy as it avoids unnecessary resource expenditure while a potential nationwide settlement is considered. Such a stay is not expected to prejudice the Plaintiffs, who can resume their claims if the Settlement Agreement is not approved. Consequently, Blue Diamond’s motion to stay the action pending settlement approval is granted. The factual background for this decision is primarily based on the amended complaints referenced.
