Montera v. Premier Nutrition Corp.
| Docket Number | Case No. 16-cv-06980-RS |
| Decision Date | 12 August 2022 |
| Citation | 621 F.Supp.3d 1012 |
| Parties | Mary Beth MONTERA, Plaintiff, v. PREMIER NUTRITION CORPORATION, Defendant. |
| Court | U.S. District Court — Northern District of California |
Eugene G. Iredale, Grace Jun, Iredale and Yoo, APC, San Diego, CA, Leslie E. Hurst, Thomas Joseph O'Reardon, II, Timothy G. Blood, Blood Hurst & O'Reardon LLP, San Diego, CA, for Plaintiff.
Angel A. Garganta, Amit Rana, Antonia Isabella Stabile, Christopher John Clements Waldon, Steven Edward Swaney, Venable LLP, San Francisco, CA, Jessica L. Grant, Morrison & Foerster LLP, San Francisco, CA, for Defendant.
ORDER DENYING DEFENDANT'S MOTION FOR JUDGMENT AS A MATTER OF LAW, DENYING DEFENDANT'S MOTION TO DECERTIFY, AND GRANTING PLAINTIFF'S MOTION FOR ENTRY OF FINAL JUDGMENT
Plaintiff Mary Beth Montera brought this lawsuit on behalf of New York consumers who had purchased Joint Juice, a beverage containing glucosamine and chondroitin that is sold by Defendant Premier Nutrition Corporation ("Premier Nutrition"). The case proceeded to trial, where upon the jury found Defendant liable for violations of New York General Business Law ("GBL") sections 349 and 350. Following the close of Plaintiff's case, Defendant moved for judgment as a matter of law, which the Court took under submission pending the jury's verdict. After the close of all evidence, the jury determined that Plaintiff and the Class suffered actual damages in the amount of $1,488,078.49, representing full refunds of the money they paid for Joint Juice. Plaintiff now brings a motion for entry of judgment, asking the Court to impose statutory damages in the amount of $50 per unit sold for violations of GBL § 349 and $500 per unit sold for violations of GBL § 350, as well as prejudgment interest. Premier Nutrition argues that if statutory damages are available, the Court should only award statutory damages in the amount of $50 per person. Premier Nutrition also argues that under New York law, prejudgment interest does not apply to statutory damages.
A reduction of statutory damages is permitted under Supreme Court and Ninth Circuit law, and is warranted in this case because the calculated amount of statutory damages, $91,436,950, is "so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable." St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 66-67, 40 S.Ct. 71, 64 L.Ed. 139 (1919). The New York legislature has specifically raised concerns about the aggregation of statutory damages in a class context, and disallows such recovery in New York state courts. The statutory damages in this case veer away from serving a compensatory purpose and towards a punitive purpose. A reduction of statutory damages to $8,312,450 is therefore appropriate. Contrary to Defendant's arguments, however, prejudgment interest applies to statutory damages, and is applied as class members' claims accrued, for a total of $4,583,004.90 in prejudgment interest.
Next, Defendant's motion to decertify the class action is denied. Other than Defendant's argument concerning superiority, the arguments raised in the motion are repetitive of arguments Defendant made—and the Court rejected—less than four months ago in Defendant's prior motion to decertify. As for the superiority argument, despite the possibility of recoveries in the thousands of dollars for class members, the class action remains a superior device for resolving claims in this case. Further, Defendant's concerns are mitigated by the reduction of statutory damages described above. Finally, Defendant's motion for judgment as a matter of law is denied.
This case is one of numerous certified class actions pending before this Court alleging false advertising and other claims arising from Premier Nutrition's promotion of Joint Juice, a line of joint health dietary supplements. Each class action concerns a set of plaintiffs in a different state; this action focuses on consumers in New York. In November 2021, the Court set this case for trial on May 23, 2022, the first of these related cases to proceed to trial.
A recurring issue in pretrial litigation was the availability of statutory damages for a violation of GBL §§ 349 and 350, and how statutory damages would be imposed if the jury found for Plaintiff and the class. The first arose in the context of a Daubert motion concerning the expert testimony of Colin Weir, Plaintiff's damages expert. Defendant moved to exclude Weir's testimony, arguing that his calculations of statutory damages were irrelevant. Defendant argued that the calculations were irrelevant because Weir's calculations were done on a per unit basis, and Defendant argued that New York law only permitted statutory damages on a per person basis. While recognizing the diverging views of courts across the country on this question, the Court concluded that statutory damages were available on a per unit basis, reasoning as follows:
A violation of sections 349 and 350 occurs when a consumer views the label and purchases the product. This means a plaintiff may experience multiple violations of the statutes. Indeed, Premier marketed its product to encourage consumers to drink the product regularly and to make multiple purchases. Consumers were repeatedly exposed to the label, and repeatedly made the choice to buy the product. A reading of sections 349 and 350 that recognizes a plaintiff experiences a violation each time the product is purchased is consistent with the text and intent of the statute. Thus, GBL §§ 349(h) and 350-e allow statutory damages on a per unit basis.
Order on Motions to Exclude Expert Testimony and Motion to Decertify Class, Dkt. No. 180, p.14.
Much of Defendant's argument at the Daubert stage for why statutory damages should only be allowed on a per person basis concerned the constitutionality of a high award of statutory damages. This argument, however, was predicated on the expected divergence between the amount of actual damages and the statutory damages prescribed under New York law. The arguments, thus, concerned the constitutionality of an award of per unit statutory damages in this case, rather than arguing that an award of statutory damages on a per unit basis would be unconstitutional in every instance.1 As the Ninth Circuit has noted, it is "not appropriate to evaluate the excessiveness of the award" during pretrial litigation before the award of damages is actually imposed, as doing so "is unduly speculative." Bateman v. Am. Multi-Cinema, Inc., 623 F.3d 708, 723 (9th Cir. 2010). The parties were instructed that Premier Nutrition's arguments concerning constitutionality of statutory damages in this case would be considered if and when a verdict was delivered for Plaintiff. See Order on Motions in Limine, Dkt. No. 215, p.5 n.1.
Next, the parties disputed whether Plaintiff had to present evidence of actual damages, since Plaintiff argued statutory damages would be imposed automatically if liability were found. The relevant statutes allow a plaintiff to recover the greater of actual damages or statutory damages. See N.Y. Gen. Bus. Law § 349(h) ("[A]ny person who has been injured by reason of any violation of this section may bring . . . an action to recover his actual damages or fifty dollars, whichever is greater[.]"; id. at § 350-e(3) (). The statutes require a determination of whether actual damages or statutory damages is higher, and thus Plaintiff was instructed "to prove actual damages at trial." Order on Motions in Limine, Dkt. No. 215, p.4. A determination of actual damages was also necessary to evaluate fully Defendant's constitutional arguments about an award of statutory damages.
The parties further disagreed as to whether the imposition of statutory damages was a question that needed to be put to the jury. As GBL §§ 349 and 350 impose a specific amount of statutory damages, rather than allowing the jury to choose an amount of statutory damages within a range, the imposition of statutory damages is a question of law for the court, rather than a factual question that needed to be put to the jury. The jury was therefore instructed to determine the actual damages if they found Defendant liable. The jury was also asked to determine the number of units sold in New York during the Class Period such that statutory damages could be calculated.
After a nine-day trial, the jury reached a verdict two and half hours after the case was submitted to them for deliberation. The jury determined both that Premier Nutrition engaged in deceptive acts and practices in violation of GBL §349 and engaged in deceptive or misleading advertising in violation of GBL § 350. The jury further determined that Premier Nutrition had sold 166,249 units of Joint Juice in New York during the Class Period and that Plaintiff and the Class should be awarded $1,488,078.49 in actual damages.
"If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue," the Court may "grant a motion for judgment as a matter of law against the party on a claim or defense[.]" Fed. R. Civ. Pro. 50(a). Defendants moves for judgment as a matter of law as to both the section 349 and section 350 claims. The jury's verdict, however, is supported by ample evidence as to each element of both of the claims. A reasonable jury would therefore have a legally sufficient evidentiary basis to find for the Plaintiff, and the motion is therefore denied.
As courts across the country have noted, the imposition of statutory damages aggregated across the members of a class action may, in...
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