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Hadley v. Kellogg Sales Co.

Citation: 324 F. Supp. 3d 1084Docket: Case No. 16-CV-04955-LHK

Court: District Court, N.D. California; August 17, 2018; Federal District Court

Narrative Opinion Summary

In this case, a consumer, acting as the plaintiff, initiates a putative class action against a major food manufacturer, alleging that the company engaged in deceptive marketing practices by labeling its breakfast cereals and bars as 'healthy' despite high sugar content. The legal action centers on claims under California's False Advertising Law (FAL), Consumers Legal Remedies Act (CLRA), and Unfair Competition Law (UCL), as well as breach of express and implied warranties. The procedural history includes various motions and complaints, with the plaintiff ultimately seeking class certification under Rule 23(b)(3) of the Federal Rules of Civil Procedure. The court partially grants class certification for specific subclasses, focusing on products with misleading labeling. It finds that common questions of law or fact predominate over individual inquiries, satisfying the Rule 23(b)(3) predominance requirement. The court also denies the defendant's motion to exclude the plaintiff's expert testimony, affirming the reliability of the conjoint analysis proposed to measure class-wide damages. The ruling emphasizes the use of an objective 'reasonable consumer' standard for assessing the misleading nature of health claims, sidelining individual health impacts in favor of collective economic injuries. Ultimately, the court certifies a class for certain claims, appointing the plaintiff as the class representative and his counsel as class counsel, while denying certification for claims related to certain product lines where individual inquiries were deemed necessary.

Legal Issues Addressed

Admissibility of Expert Testimony under Daubert

Application: The court allows expert testimony from Steven P. Gaskin, finding his methodology reliable and relevant for class certification purposes under Rule 23.

Reasoning: The court denies Kellogg's motion to exclude Gaskin's expert testimony related to his proposed conjoint analysis.

Class Action Certification under Rule 23(b)(3)

Application: The court partially grants class certification for certain subclasses, finding that common questions of law or fact predominate over individual inquiries.

Reasoning: The Court partially grants and denies the class certification while denying Kellogg's motion to exclude Gaskin's testimony.

Express Warranty Claims under California Law

Application: Reliance is not required for express warranty claims in California, supporting the predominance of common questions for class certification.

Reasoning: Under California law, reliance is not necessary for express warranty claims, suggesting common questions predominate and class action treatment is warranted.

Objective 'Reasonable Consumer' Standard under FAL, CLRA, and UCL

Application: The court applies an objective standard to determine whether product labeling is misleading, focusing on the likelihood of deception to a reasonable consumer.

Reasoning: Under the FAL, CLRA, and the 'fraudulent' prong of the UCL, the determination of whether statements on product packaging are false or misleading is assessed using an objective 'reasonable consumer' standard.

Predominance Requirement under Rule 23(b)(3)

Application: Common issues must predominate over individual ones for class certification, even if individual damages calculations are necessary.

Reasoning: The predominance standard under Rule 23(b)(3) is stricter, requiring that common questions of law or fact dominate over individual issues.