Hadley v. Kellogg Sales Co.
| Decision Date | 17 August 2018 |
| Docket Number | Case No. 16-CV-04955-LHK |
| Citation | 324 F.Supp.3d 1084 |
| Parties | Stephen HADLEY, Plaintiff, v. KELLOGG SALES COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of California |
Melanie Rae Persinger, Trevor Matthew Flynn, Jack Fitzgerald, The Law Office of Jack Fitzgerald, PC, San Diego, CA, for Plaintiff.
Kenneth Kiyul Lee, Alexander Michael Smith, Kate Tainsky Spelman, Jenner & Block LLP, Los Angeles, CA, Dean N. Panos, Richard P. Steinken, Jenner & Block LLP, Chicago, IL, for Defendant.
Plaintiff Stephen Hadley ("Plaintiff") brings the instant putative class action against Defendant Kellogg Sales Company ("Kellogg") for allegedly misleading statements on Kellogg's food product packaging. Before the Court are (1) Plaintiff's motion for class certification; and (2) Kellogg's motion to exclude the opinion testimony of Steven P. Gaskin. Having considered the parties' briefing, the relevant law, and the record in this case, the Court GRANTS in part DENIES in part Plaintiff's motion for class certification, and DENIES Kellogg's motion to exclude the opinion testimony of Steven P. Gaskin.
Kellogg is a "multi-billion dollar food company that manufactures, markets, and sells a wide variety of cereals and bars, among other foods." ECF No. 62, Second Amended Complaint ("SAC") ¶ 108. Plaintiff alleges that Kellogg has "positioned itself in the market as a purportedly ‘healthy’ brand of processed food, by using various labeling statements to suggest its foods, especially its cereals and bars, are healthy choices." Id. ¶ 112.
Plaintiff "has been a frequent cereal eater for many years." Id. ¶ 249. Over the past several years, Plaintiff has purchased Kellogg's breakfast cereals and cereal bars. Id. ¶ 250–51. During that time period, Plaintiff allegedly "tried to choose healthy options, and has been willing to pay more for cereals he believes are healthy." Id. ¶ 249.
This case concerns statements on the packaging for breakfast cereals and cereal bars sold by Kellogg that indicate that Kellogg's products are healthy when excess added sugar allegedly causes those products to be unhealthy. Plaintiff alleges that eight of Kellogg's product lines are sold with misleading packaging. See SAC ¶¶ 120–23. Four of those product lines are relevant to the instant order: (1) Kellogg's Raisin Bran; (2) Kellogg's Frosted Mini-Wheats; (3) Kellogg's Smart Start—Original Antioxidants; and (4) Nutri-Grain Soft-Baked Breakfast Bars. See id. ; ECF No. 129 at 1.
In general, Kellogg's products are alleged to contain 9 to 16 grams of total sugar per serving and are 18% to 40% added sugar by calorie. See SAC App. 1. Plaintiff alleges that the consumption of added sugar can have significant health impacts on individuals. Specifically, Plaintiff states that people in the United States consume excess added sugar, that people can become addicted to added sugar, and that excess added sugar consumption has been empirically linked to metabolic syndrome
, type 2 diabetes, cardiovascular disease, liver disease, obesity, inflammation, high cholesterol, hypertension, Alzheimer's disease, and some cancers. SAC ¶¶ 9–107.
Moreover, Plaintiff alleges that the American Heart Association ("AHA") has found that a person is "safe" to consume up to 5% of his or her daily calories in added sugar, which amounts to approximately 25 grams of added sugar on a 2000 calorie diet. Id. ¶ 26. On the other hand, the United States Food and Drug Administration ("FDA") has concluded that the Daily Recommended Value ("DRV") of added sugars is 10% of a person's daily calories, or approximately 50 grams of added sugar. Based on these values, Plaintiff alleges that Kellogg's products are unhealthy because they contain a higher percentage of added sugar (18%–40% of total calories per serving) than the daily "safe" percentage of added sugar recommended by the AHA or the DRV recommended by the FDA.
Plaintiff asserts that the packaging for Kellogg's products displays multiple statements touting the health and wellness benefits of consuming Kellogg's products that are misleading (the "challenged statements" or "challenged health statements"). Specifically, Plaintiff challenges Kellogg's use of statements that contain the terms "healthy," "nutritious," or "wholesome." SAC ¶ 186–89. Plaintiff alleges that these statements assert that Kellogg's products are healthy when they are in fact not healthy because of the presence of added sugar. Id. ¶ 189. Further, Plaintiff alleges that a number of statements, such as "lightly sweetened," imply that Kellogg's products are lower in sugar, when they actually are composed of 18% to 40% added sugar. Id. ¶¶ 215–19.
Some of the products at issue allegedly display multiple challenged health statements. For example, Plaintiff states that the packaging for Raisin Bran displays "HEART HEALTHY," "Start with a healthy Spoonful," and "Invest in your health invest in yourself." Id. ¶ 128. On the other hand, other products only have a single challenged statement. For example, on the packaging for Nutri-Grain Soft-Baked Breakfast Bars, Plaintiff only challenges the statement "wholesome goodness." See ECF No. 130 Exhs. 19–22.
On August 29, 2016, Plaintiff filed a complaint. ECF No. 1. On October 31, 2016, Kellogg filed a motion to dismiss. ECF No. 22. In lieu of filing a response, on November 14, 2016, Plaintiff filed a First Amended Complaint ("FAC"). ECF No. 27.
On December 8, 2016, Kellogg filed a motion to dismiss the FAC. ECF No. 44. On January 5, 2017, Plaintiff filed an opposition, ECF No. 49, and on January 19, 2017, Kellogg filed a reply. ECF No. 50. On March 21, 2017, the Court granted Kellogg's motion to dismiss Plaintiff's FAC. ECF No. 56.
On April 5, 2017, Plaintiff filed a second amended complaint ("SAC"). See SAC. Plaintiff's SAC alleges five causes of action, including (1) violation of the California False Advertising Law ("FAL"); (2) violation of the California Consumers Legal Remedies Act ("CLRA"); (3) violation of the California Unfair Competition Law ("UCL") under the fraudulent, unfair, and unlawful prongs; (4) breach of express warranty; and (5) breach of the implied warranty of merchantability. Id.
On April 19, 2017, Kellogg filed a motion to dismiss Plaintiff's SAC. ECF No. 62. On May 3, 2017, Plaintiff filed an opposition, ECF No. 65, and on May 10, 2017, Kellogg filed a reply. ECF No. 66. On August 10, 2017, the Court granted in part and denied in part Kellogg's motion to dismiss Plaintiff's SAC. ECF No. 76.
On April 30, 2018, Plaintiff filed a motion for class certification. ECF No. 129 ("Mot."). Plaintiff seeks to certify the following class, which is composed of four subclasses, under Federal Rule of Civil Procedure 23(b)(3) :
Kellogg filed an opposition to Plaintiff's motion for class certification on June 11, 2018, ECF No. 159 ("Opp."), and Plaintiff filed a reply on July 2, 2018. ECF No. 194 ("Reply").
Kellogg also filed a motion based on Daubert v. Merrell Dow Pharmaceuticals, Inc. , 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), to exclude the opinion testimony of one of Plaintiff's damages experts, Steven P. Gaskin, on June 11, 2018. ECF No. 167 ("Gaskin Daubert Mot."). Plaintiff filed an opposition to Kellogg's Daubert motion on June 25, 2018, ECF No. 181, and Kellogg filed a reply on July 2, 2018. ECF No. 188.
Class actions are governed by Rule 23 of the Federal Rules of Civil Procedure. Rule 23 does not set forth a mere pleading standard. To obtain class certification, plaintiffs bear the burden of showing that they have met each of the four requirements of Rule 23(a) and at least one subsection of Rule 23(b). Zinser v. Accufix Research Inst., Inc. , 253 F.3d 1180, 1186, amended by 273 F.3d 1266 (9th Cir. 2001). "A party seeking class certification must affirmatively demonstrate ... compliance with the Rule[.]" Wal-Mart Stores, Inc. v. Dukes , 564 U.S. 338, 350, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011).
Rule 23(a) provides that a district court may certify a class only if: "(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class." Fed. R. Civ. P. 23(a). That is, the class must satisfy the requirements of numerosity, commonality, typicality, and adequacy of representation to maintain a class action. Mazza v. Am. Honda Motor...
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