In re McCormick & Co., Inc., Pepper Prods. Mktg. & Sales Practices Litig.

• Decision Date: 10 July 2019
• Docket Number: MDL Docket No. 2665,Misc. No. 15-1825 (ESH)
• Citation: 422 F.Supp.3d 194
• Parties: IN RE: MCCORMICK & COMPANY, INC., PEPPER PRODUCTS MARKETING AND SALES PRACTICES LITIGATION This Document Relates to: All Consumer Cases
• Court: U.S. District Court — District of Columbia

422 F.Supp.3d 194

IN RE: MCCORMICK & COMPANY, INC., PEPPER PRODUCTS MARKETING AND SALES PRACTICES LITIGATION

This Document Relates to: All Consumer Cases

MDL Docket No. 2665

Misc. No. 15-1825 (ESH)

United States District Court, District of Columbia.

Signed July 10, 2019

REDACTED

MEMORANDUM OPINION

ELLEN S. HUVELLE, United States District Judge

TABLE OF CONTENTS

BACKGROUND...207

I. WHAT IS "NONFUNCTIONAL SLACK-FILL"?...207

A. Federal Law...207

B. State Laws...208

C. Slack-Fill Litigation...208

II. THE PRESENT LITIGATION...210

A. Factual Background...210

B. Procedural History of the Multi-District Litigation...215

C. Current Plaintiffs and Remaining Claims...217

III. MOTION FOR CLASS CERTIFICATION...218

A. Proposed Classes...219

1. Consumer Protection Claims...219

a. Multi-State Consumer Protection Class...219

b. Single-State Consumer Protection Classes...220

2. Unjust Enrichment Claims...220

a. Multi-State Unjust Enrichment Classes...220 b. Single-State Unjust Enrichment Classes...221

B. Class Certification Record...221

ANALYSIS...222

I. LEGAL STANDARD FOR CLASS CERTIFICATION...222

II. MULTI-STATE CLASSES...224

A. Multi-State Consumer Protection Class of Twenty Jurisdictions...226

B. Multi-State Unjust Enrichment Classes...230

1. Element of Unjustness...231

2. No Adequate Remedy at Law Requirement...233

III. SINGLE-STATE CLASSES...235

A. Numerosity (Rule 23(a)(1))...235

B. Commonality (Rule 23(a)(2))...236

C. Typicality (Rule 23(a)(3))...237

D. Adequacy (Rule 23(a)(4))...240

E. Ascertainability...241

F. Predominance (Rule 23(b)(3))...243

1. Single-State Consumer Protection Classes...244

a. Deception...244

b. Existence of Nonfunctional Slack-Fill...246

c. Damages...247

d. Extrinsic Evidence of Consumer Perceptions and Behavior...248

e. California Consumer Protection Class...252

f. Illinois Consumer Protection Class...256

g. Florida Consumer Protection Class...260

h. Missouri Consumer Protection Class...262

2. Single-State Unjust Enrichment Classes...264

G. Superiority (Rule 23(b)(3))...267

H. Appointment of Class Counsel (Rule 23(g))...268CONCLUSION...268

This multidistrict consumer litigation against McCormick & Co. and Wal-Mart Stores, Inc., arises from the sales of black pepper in tins and grinders allegedly containing "nonfunctional slack-fill" not visible to purchasers (the "Slack-Filled Pepper Products"). The Slack-Filled Pepper Products were sold between March 2015 and mid-2016. They include both McCormick-branded products and McCormick-filled private-label brands, such as Wal-Mart's Great Value products. Named plaintiffs are purchasers who claim that the sale of these products violated various state consumer protection statutes and unjust enrichment laws.¹

Before the Court is plaintiffs' motion pursuant to Federal Rule of Civil Procedure 23 for class certification and appointment of counsel. (Pls.' Mot. for Class Certification, ECF No. 156 ("Class Cert. Mot.").) With respect to their statutory consumer protection claims, plaintiffs seek certification of a multi-state class covering purchasers in 20 jurisdictions (the "Consumer Protection Multi-State Class") or, in the alternative, four single-state classes covering purchasers in California, Florida, Illinois, and Missouri. With respect to their unjust enrichment claims, plaintiffs seek certification of two multi-state classes, covering purchasers in a total of 29 jurisdictions (the "Unjust Enrichment (Restatement) Multi-State Class" and the "Unjust Enrichment (Appreciation) Multi-State Class") or, in the alternative, seven single-state unjust enrichment classes covering purchasers in California, Connecticut, the District of Columbia, Illinois, Maryland, Missouri, and Pennsylvania. In addition to opposing class certification, defendants have filed a joint motion to exclude the expert report and opinions of Dr. Armando Levy, plaintiffs' damages expert. (Defs.' Joint Mot. to Exclude the Report and Opinions of Dr. Armando Levy, Aug. 28, 2017, ECF No. 164 ("Defs.' Expert Mot.").)

For the reasons stated herein, plaintiffs' motion for class certification is granted in part and denied in part. Defendants' motion to exclude plaintiffs' damages expert is denied.

BACKGROUND

I. WHAT IS "NONFUNCTIONAL SLACK-FILL"?

A. Federal Law

Although plaintiffs' legal claims arise under state law, they rely on the federal definition and prohibition of "nonfunctional slack-fill." "Slack-fill" is defined as "the difference between the actual capacity of a container and the volume of product contained therein." 21 C.F.R. § 100.100(a). "Nonfunctional slack-fill" is defined as "the empty space in a package that is filled to less than its capacity for reasons other than:"

(1) Protection of the contents of the package;

(2) The requirements of the machines used for enclosing the contents in such package;

(3) Unavoidable product settling during shipping and handling;

(4) The need for the package to perform a specific function (e.g., where packaging plays a role in the preparation or consumption of a food), where such function is inherent to the nature of the food and is clearly communicated to consumers;

(5) The fact that the product consists of a food packaged in a reusable container where the container is part of the presentation of the food and has value which is both significant in proportion to the value of the product and independent of its function to hold the food, e.g., a gift product consisting of a food or foods combined with a container that is intended for further use after the food is consumed; or durable commemorative or promotional packages; or

(6) Inability to increase level of fill or to further reduce the size of the package (e.g., where some minimum package size is necessary to accommodate required food labeling (excluding any vignettes or other nonmandatory designs or label information), discourage pilfering, facilitate handling, or accommodate tamper-resistant devices).

21 C.F.R. § 100.100(a) (emphasis added); see also Misleading Containers; Nonfunctional Slack-Fill , 58 Fed. Reg. 64123-01, 64126 (Dec. 6, 1993) ("[T]he exceptions in § 100.100(a) provide only for that amount of slack-fill that is necessary to accomplish a specific function."). Federal law deems "non-functional slack-fill" in "[a] container that does not allow the consumer to fully view its contents" "to be filled as to be misleading," 21 C.F.R. § 100.100(a), which is a violation of the federal law prohibiting the "misbranding" of foods. See 21 U.S.C. § 343(d) ("[a] food shall be deemed to be misbranded–... [i]f its container is so made, formed, or filled as to be misleading.").²

B. State Laws

Although only a few of the states at issue in this litigation have laws or regulations that expressly prohibit or limit nonfunctional slack-fill,³ the remaining states either incorporate or mirror the definition of "misbranding" in 21 U.S.C. § 343(d),⁴ or define "misbranding" to include misleading or deceptive packaging.⁵ In addition, a number of states have consumer protection statutes that define unfair or deceptive acts or practices to include "[r]epresenting that goods ... have ... quantities that they do not have." Cal. Civ. Code § 1770(a)(5).⁶

C. Slack-Fill Litigation

While there is no private right of action to enforce the federal regulations on nonfunctional slack-fill, consumers in recent years have filed numerous lawsuits seeking to hold manufacturers liable under state law for the sale of products allegedly containing nonfunctional slack-fill. For example, cases have been brought alleging nonfunctional slack-fill in the packaging of candy in cardboard boxes,⁷ chips,⁸ cereal,⁹ pretzels,¹⁰ pasta,¹¹ risotto mix,¹² canned tuna,¹³ gum,¹⁴ protein powder,¹⁵ ice cream,¹⁶ cake mix,¹⁷ dried fruit,¹⁸ and a variety of other food¹⁹ and non-food products.²⁰ The present litigation is the first challenge to allegedly nonfunctional slack-fill in spice tins and grinders.

Despite the volume of slack-fill litigation, all of which has been filed as putative class actions, very few have reached the stage of class certification. Many cases have been dismissed for failing to plausibly allege nonfunctional slack-fill or failing to plausibly allege that reasonable consumers would have been misled by the packaging even if there was nonfunctional slack-fill.²¹

Slack-fill claims have also been dismissed on other grounds,²² remanded to state court,²³ stayed,²⁴ or resolved on summary judgment,²⁵ or plaintiffs have decided not to pursue them.²⁶ In several cases, plaintiffs have voluntarily dismissed their claims (presumably due to a settlement), frequently with the plaintiff's individual claims dismissed with prejudice, while the class claims are dismissed without prejudice.²⁷ Courts have reached the question of class certification in only six cases - one granted certification,²⁸ two granted certification of a settlement class,²⁹ and three denied certification.³⁰

II. THE PRESENT LITIGATION

A. Factual Background

Black pepper is the most widely traded spice in the international market, both in terms of quantity and value, and McCormick is the largest manufacturer and leading seller of black pepper products in the United States. (See Second Am. Cons. Class Action Compl. ¶ 3, ECF No. 128 ("2d Am. Compl."); Declaration of Elizabeth Fegan ¶¶ 10, 12, ECF No. 188-1 ("Fegan Decl."); Expert Report of Dr. Armando Levy ¶¶ 19, 20, ECF No. 188-3 ("Levy Rep.").) It buys black pepper from all over the world and transports it to its processing plants in the United States. (2d Am. Compl. ¶ 28; Levy Rep. ¶ 19 (citing McCormick 2014 Annual Report).) McCormick's processing plants produce both McCormick-branded pepper products and private-label pepper products for major retail chains, including Wal-Mart's Great Value brand. (2d Am. Compl. ¶¶ 3, 46; McCormick's Am. Answer to 2d Am. Compl. ¶ 3, ECF No. 151; Wal-Mart's Am. Answer to 2d Am. Compl. ¶¶ 3, 46, ECF No. 155; Levy Rep. ¶ 20.) In 2015, McCormick-branded pepper products represented 47% of the U.S. black pepper market, while the private-label pepper...