Three years ago, AriZona Beverage Co. was hit with a class action lawsuit challenging its marketing and selling of iced tea beverages labeled “All Natural,” “100% Natural,” and “Natural” because they contain high fructose corn syrup (HFCS) and citric acid — which are allegedly artificial and man-made. Class certification was allowed under Rule 23(b)(2) for purposes of injunctive
and declaratory relief. But on March 28, 2013, U.S. District Court Judge Seeborg (N.D. Cal.) granted AriZona’s renewed motion for summary judgment and class decertification.
Earlier in the case, plaintiffs had argued that it would “have experts that will line up and they’ll be able to show, pursuant to FDA regulation, that this is a chemical process, it’s not a biological process.” But in response to the summary judgment motion, they simply asked the Court to “take judicial notice of United States Patent law” and rule that that HFCS is not natural because patents have been issued for the process of producing it. In a significant retort, the Court noted:
[Plaintiffs'] argument is that if HFCS were a naturally occurring substance such as “a new mineral discovered in the earth or a new plant found in the wild” it would not be patentable. …. “United States Patent law” is not a proper subject of judicial notice under Federal Rule of Evidence 201 and the request is denied. Plaintiff’s request is properly characterized as an argument that HFCS is not natural as a matter of law. But plaintiffs have cited no legal authority supporting their contention that if the process to produce an ingredient is patented, that fact, in and of itself, automatically renders it artificial. This is merely an extension of their rhetoric that HFCS is artificial because it “cannot be grown in a garden or field, it cannot be plucked from a tree, and it cannot be found in the oceans or seas of this planet.” …. In the face of a motion for summary judgment, rhetoric is no substitute for evidence.
The Court then turned to the issue of whether the labels may nevertheless be misleading because AriZona admitted it changed its labels to add the language “All Natural Tea,” “No Preservatives,” “No Artificial Color,” and “No Artificial Flavor” because some customers were confused by the terms 100% natural and asked “100% natural what?” Plaintiffs argued that this was an admission that the labels were confusing. The Court rejected that argument, noting that this “admission” simply indicated that “everything in” the beverages is natural, and “that defendants included the additional claims on the labels specifying that they contain all natural tea without preservatives, artificial color, and artificial flavor to clarify that to confused customers.”
Next, the Court also noted that “plaintiffs have no evidence to support their prayer for restitution and disgorgement” and did not “offer not a scintilla of evidence from which a finder of fact could determine the amount of restitution or disgorgement to which plaintiffs might be entitled if this case were to proceed to trial.”
Finally, the Court sternly criticized plaintiffs’ counsel in the context of decertifying the class, noting that they had “been dilatory and has failed to prosecute this action adequately.”
Please see complete ruling here.