United States District Court, N.D. California, San Jose Division
June 16, 2014
CHAD BRAZIL, an individual, on his own behalf and on behalf of all others similarly situated, Plaintiff,
DOLE PACKAGED FOODS, LLC, Defendant.
ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO FILE MOTION FOR RECONSIDERATION
LUCY H. KOH, District Judge.
On May 30, 2014, this Court issued an order granting in part and denying in part Plaintiff Chad Brazil's ("Brazil") motion for class certification. ("Class Cert. Order") ECF No. 142. Defendant Dole Packaged Foods, LLC ("Dole") now moves for leave to file a motion for reconsideration of the Court's class certification order under Civil Local Rule 7-9. ("Mot.") ECF No. 145 at vi. In the alternative, Dole requests either that the Court undertake a " Daubert " review of the methodology of Brazil's damages expert, Dr. Oral Capps, or that the Court certify its class certification order for interlocutory review under 28 U.S.C. § 1292(b). Id. For the reasons discussed below, Dole's Motion for Leave to File is DENIED. Dole's requests for a Daubert review and certification under Section 1292(b) are also DENIED.
A. Motion for Reconsideration
Pursuant to Civil Local Rule 7-9(a), "[b]efore the entry of a judgment adjudicating all of the claims and the rights and liabilities of all the parties in a case, any party may make a motion before a Judge requesting that the Judge grant the party leave to file a motion for reconsideration of any interlocutory order.... No party may notice a motion for reconsideration without first obtaining leave of Court to file the motion." Civil Local Rule 7-9(b) provides three grounds for reconsideration of an interlocutory order:
(1) That at the time of the motion for leave, a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or
(2) The emergence of new material facts or a change of law occurring after the time of such order; or
(3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order.
Rule 7-9(c) further requires that "[n]o motion for leave to file a motion for reconsideration may repeat any oral or written argument made by the applying party in support of or in opposition to the interlocutory order which the party now seeks to have reconsidered."
Dole contends that reconsideration is warranted for two reasons. First, Dole asserts that the California Supreme Court's recent decision in Duran v. U.S. Bank National Ass'n, ___ Cal.4th ___, No. S200923, 2014 WL 2219042 (May 29, 2014), changed the legal standard for certifying a class in cases alleging violations of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq. Mot. at 1. Second, Dole asserts that the Court's decision to certify a Rule 23(b)(3) damages class rests on incorrect factual assumptions about the damages model proposed by Dr. Capps. Id. at 1-2. The Court addresses each contention in turn.
Dole argues that Duran, a decision issued one day before this Court's class certification order, is a "paradigm-shifting decision" that fundamentally alters the class certification standards that govern this case. Mot. at 1. The Court disagrees. As an initial matter, to the extent Duran discusses the procedural requirements-such as the necessity of developing a manageable trial plan, see Duran, 2014 WL 2219042 at *15-16-governing class actions proceeding in California state court, the Court notes that class action procedure in federal court is governed by Federal Rule of Civil Procedure 23. See, e.g., In re First Alliance Mortg. Co., 471 F.3d 977, 992 (9th Cir. 2006). More importantly, most, if not all, of the discussion in Duran has no relevance to this case. The class action at issue in Duran was a wage and hour suit in which the plaintiffs challenged their classification as exempt employees under the California Labor Code's "outside salesperson" exemption. See Duran, 2014 WL 2219042 at *1. Although the plaintiffs' claim was technically brought under the UCL, see id. at *3, the California Supreme Court's opinion focuses entirely on the substantive labor law underlying the alleged UCL violation. Indeed, Duran mentions the UCL only twice: once, in discussing the procedural history of the case, see id. at *3, and again in a footnote, see id. at *22 n.35. As should go without saying, the substantive law governing California's outside salesperson exemption is very different from the substantive law governing Brazil's UCL misrepresentation claims in this case. For this reason alone, the Court questions whether Duran has any bearing at all on the substantive legal questions in this case.
In any event, to the extent Duran has any relevance to the instant litigation, this Court's class certification order is consistent with Duran. Dole emphasizes that Duran prohibits class certification where a defendant has no liability toward a significant portion of the class. See Mot. at 7-8. True enough. Nevertheless, the class certified in this case avoids that pitfall. Dole asserts that its liability for allegedly misleading consumers based on "All Natural" statements appearing on Dole's product labels hinges on whether individual class members relied on and were misled by these label statements, see id. at 10-11, but this is simply not the case. Instead, liability in a UCL misrepresentation case turns on whether the defendant's misrepresentations are misleading to reasonable consumers, see, e.g., Cel-Tech, 20 Cal.4th at 180, and the California Supreme Court has held that "relief under the UCL is available without individualized proof of deception, reliance and injury, " In re Tobacco II Cases, 46 Cal.4th 298, 320 (2009). Because Dole's liability toward the class does not require proof that individual class members relied on the allegedly unlawful and misleading "All Natural" statements, there is no risk that the class certified here sweeps in numerous individuals who have no claim against Dole. The Court therefore concludes that Duran does not represent a material change or difference in law that warrants reconsideration of the Court's class certification order.
2. Damages Model
Dole next asserts that reconsideration is warranted because the Court's class certification order relied on "incorrect facts" in concluding that Dr. Capps's regression-based damages model ("Regression Model") is capable of showing damages on a classwide basis in a manner consistent with Brazil's liability case, as required by Rule 23(b)(3) and Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1433 (2013). See Mot. at 3-6. Dole principally contends that Dr. Capps's Regression Model will work only if the allegedly unlawful product labels changed during the class period-so that the Model can compare sales and prices for products that bore the offending label statements with prices and sales for products that did not-but that the labels did not change for nine out of the ten products at issue in this case. See id. at 3-5.
Even assuming that most of Dole's labels did not change during the class period, the precise implications of this fact for Dr. Capps's Regression Model remain unclear. Dr. Capps has offered somewhat contradictory testimony (all in the context of other food misbranding cases pending in this district) as to whether or not his Regression Model can estimate damages even in the absence of labels that changed over the course of the class period. Although Dr. Capps at one point appeared to concede that the absence of label variation would doom his regression analysis, he later testified that statistical techniques could be used to make up for the lack of variation. Compare Reply Declaration of Dr. Oral Capps in Support of Plaintiff Nancy Lanovaz's Motion for Class Certification, Lanovaz v. Twinings N. Am., Inc., No. 12-2646 (N.D. Cal. Mar. 14, 2014), ECF No. 114-6 ¶ 20 ("[I]t is not possible in this case to invoke a regression analysis approach because of the lack of any variation in sales or units sold attributed to the antioxidant claims."), and Lanovaz v. Twinings N. Am., Inc., No. 12-2646, 2014 WL 1652338, at *6-7 (N.D. Cal. Apr. 24, 2014) (noting that Dr. Capps abandoned regression analysis as a method for proving damages), with Deposition of Dr. Oral Capps in Kosta v. Del Monte Foods, Inc., ECF No. 145-3 at 123:18-22 ("I can construct a variable called a dummy variable that corresponds to the presence or absence of a label. And that variable used as an explanatory variable will be key in drawing out as what is suggested here the incremental differences in either sales or volume sold."). The Court concludes that although Dole raises potentially legitimate concerns about Brazil's ability to prove damages, a motion for reconsideration is not the appropriate procedural mechanism for addressing these concerns. Dr. Capps has yet to serve his expert report in this case, see ECF No. 146 at 1, and as a result, Dole's concerns about the details of the Regression Model-as well as any arguments Brazil might offer to counter these concerns-are necessarily somewhat speculative. If it turns out that Dr. Capps's Regression Model cannot adequately assess damages on a classwide basis, then Dole will have a basis to move for decertification. At this point, however, the Court cannot say that the "new" facts Dole presents regarding label variation are sufficiently material to warrant reconsideration under the standards of Civil Local Rule 7-9(b).
As an alternative to reconsideration, Dole requests that the Court conduct a Daubert review of Dr. Capps's Regression Model. Mot. at 16. A Rule 7-9 motion is not the appropriate vehicle by which to request such a review, particularly considering that Dole failed to raise this issue in its original opposition to class certification. Dole's evidentiary objections to Dr. Capps's damages methodology may be raised in a decertification, summary judgment, or Daubert motion after the close of expert discovery.
C. Interlocutory Appeal
Finally, Dole requests that this Court certify its class certification order for interlocutory appeal under 28 U.S.C. § 1292(b). Mot. at 16-17. This is unwarranted and unnecessary. Dole is already free to petition the Ninth Circuit directly for leave to appeal the Court's class certification order. See Fed.R.Civ.P. 23(f) ("A court of appeals may permit an appeal from an order granting or denying class-action certification under this rule if a petition for permission to appeal is filed with the circuit clerk within 14 days after the order is entered.").
For the foregoing reasons, Dole's Motion for Leave to File Motion for Reconsideration is DENIED. Dole's requests for a Daubert review and for an order certifying this Court's class certification order for interlocutory review are also DENIED.
IT IS SO ORDERED.