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In re Morning Song Bird Food Litigation

United States District Court, S.D. California

March 30, 2017



          JOHN A. HOUSTON United States District Judge


         Plaintiffs Laura Cyphert and Milt Cyphert originally filed an action on June 27, 2012, asserting a class action against Defendants The Scotts Miracle-Gro Company (“SMG”) and The Scotts Company, LLC (“Scotts”). Upon the parties' joint motion, the Court consolidated the matter with several other cases seeking the same relief against the same defendants. Plaintiffs filed a Consolidated Class Action Complaint on October 9, 2012, and an Amended Consolidated Class Action Complaint on January 31, 2013. After the Court granted leave to amend, Plaintiffs filed a Second Amended Consolidated Class Action Complaint on October 9, 2015, asserting claims for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), California Consumer Remedies Act (“CLRA”), California's Unfair Competition Law (“UCL”), California False and Misleading Advertising law (“FAL”), Kentucky Consumer Protection Act (“KCPA”), Minnesota Consumer Fraud Act, Missouri Merchandising Practices Act, breach of implied warranty of merchantability, breach of the common law implied warranty of fitness for consumption by animals, intentional misrepresentation, and negligent misrepresentation against SMG, Scotts and James Hagedorn.

         Plaintiffs now seek an order certifying the class. See Doc. No. 93. Defendants filed an opposition to the motion to certify and Plaintiffs filed a reply. See Doc. Nos. 115, 140. Defendants filed a surreply with leave of Court, and Plaintiffs filed a response to the surreply. See Doc. Nos. 161-2, 174. Defendants also filed a notice of supplemental authority in support of its opposition. See Doc. No. 169. The motion was taken under submission without oral argument. The parties, however, filed numerous documents addressing the issues in the pending motion, including: Plaintiff's request to submit newly discovered evidence in support of their motion, Defendants' response and Plaintiffs' reply (Doc. Nos. 187, 194, 195); Plaintiffs' application for leave to submit new evidence, summary of the evidence[1] and Defendants' response to the summary (Doc. Nos, 210, 237, 247); Plaintiffs' notice of recent authority in support of their motion and Defendants' response (Doc. Nos. 240, 246); Defendants' ex parte motion seeking leave to file recent decisions regarding materials sought by Plaintiffs in their request to submit newly discovered evidence[2] (Doc. No. 248); Defendants' motion to stay the decision on the motion for class certification, Plaintiffs' opposition and Defendants' reply (Doc. Nos. 276, 295, 298); Plaintiffs' request for judicial notice in support of the motion to certify the class, Defendants' response and Plaintiffs' reply (Doc. Nos. 305, 306, 307); Plaintiffs' notice of recent authority and Defendants' response (Doc. Nos. 319, 323).

         Defendant Hagedorn sought and was granted leave to file a response to the motion following this Court's ruling on his motion to dismiss. He filed an opposition to which Plaintiffs filed a reply (Doc. Nos. 317, 318).[3]

         For the reasons discussed in detail below, the Court DENIES Defendants' motion to stay and GRANTS Plaintiffs' motion to certify the class.

         I. Motion to Stay

         Defendants ask the Court to stay its decision on Plaintiffs' motion for class certification pending the outcome of cases pending before the Ninth Circuit and the Supreme Court, namely Brazil v. Dole Packaged Foods, LLC, No. 14-17480 (9th Cir., filed Dec. 18, 2014), Jones v. ConAgra Foods, Inc., No. 14-16327 (9th Cir., filed July 15, 2014), Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146 (U.S., cert. granted June 8, 2015), and Spokeo, Inc. v. Robins, No. 13-1339 (U.S., cert. granted April 27, 2015). Defendants maintain the pending appeals will offer further guidance regarding key issues in the motion for class certification. They further maintain a stay will permit Defendant Hagedorn, who was recently added to this matter as a defendant, to conduct discovery and challenge class allegations himself. Defendants also contend a stay would preserve the Court's resources and prevent the parties from incurring unnecessary costs.

         In opposition, Plaintiffs argue they will be harmed by a stay because discovery has already been stayed pending ruling on the class certification. They further argue Defendants will not be harmed by proceeding because new defendants are routinely added to cases without the proceedings as to the original defendants being stayed. Plaintiffs maintain it will not take Defendant Hagedorn an excessive amount of time to “catch up” because he is not a stranger to the litigation and there is no indication he would have any unique defenses as to certification.

         Plaintiffs further maintain a stay will not forward the orderly course of justice because the four cases pending before the Supreme Court are unlikely to alter the Court's analysis of certification in this case. Specifically, they maintain Jones, which Defendants contend will provide guidance on ascertainability and damage models, will not effect the pending motion because Plaintiffs have gone beyond the existing ascertainability requirements. Additionally, they maintain the factual differences in Jones demonstrate any ruling is unlikely to alter the Court's analysis. With regard to Brazil, Plaintiffs contend the damages model issue in the case is inapplicable to this action because it involves the difference between a product marketed as “all natural” and the product sold, whereas, here, Plaintiffs are seeking full refunds of every bag of bird food they purchased. Plaintiffs further contend Tyson/Spokeo, involve questions of standing where numerous class members suffered no injury as compared to this case where Plaintiffs have limited the class to only those who purchased the tainted wild bird food, and therefore suffered an injury.

         In reply, Defendants argue Plaintiffs provide a misleading characterization of the stay on discovery. They maintain both parties have been addressing ongoing discovery needs. Defendants also contend the stay will allow this Court to have the benefit of the Ninth Circuit's and Supreme Court's guidance on controlling issues of law before ruling on the class certification. They argue the class certification motion implicates Jones, Brazil, and Tyson/Spokeo. Specifically, they argue the Ninth Circuit is poised to articulate the Circuit's standard for ascertainability in Jones. Defendants contend Plaintiffs oversimplify the facts of this case and they overstate their ability to identify consumers through retailer records to meet the ascertainability requirement. Additionally, they contend Jones will likely provide guidance on Plaintiffs' “full refund” model of class damages. Defendants further argue the Ninth Circuit's decision in Brazil will provide guidance on damages issues in Plaintiffs' motion for class certification because Plaintiffs will be forced to engage in the difference-in-value calculations at issue in Brazil. They also argue the Supreme Court's decision in Tyson/Spokeo bears on the issues in this case because the proposed class contains uninjured class members in that their injury turns on whether each consumer perceived a benefit of his or her bargain.

         A court has the inherent power to stay proceedings in order “to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. North Am. Co., 299 U.S. 248, 254 (1936). A stay may be granted pending the outcome of other legal proceedings related to the case in the interests of judicial economy. Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863- 64 (9th Cir.1979). The district court's determination of whether a stay is appropriate, “must weigh competing interests and maintain an even balance.” Landis, 299 U.S. at 254-55.

         These competing interests include:

the possible damage which may result from the granting of a stay, the hardship or inequity which a party may suffer in being required to go forward, and the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay.

CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing Landis, 299 U.S. at 254-55).

         While the cases pending before the Ninth Circuit and Supreme Court may lend some guidance to this Court in issuing a decision on the motion to certify the class, the Court finds a significant stay of the motion would serve to prejudice Plaintiff in light of the length of time the case and motion have been pending, and the fact that certain discovery is stayed pending the ruling on the motion to certify. Furthermore, this Court delayed ruling on the motion to permit Defendant Hagedorn to file a separate opposition to a motion to certify the class. The Court also notes it retains discretion to revisit class certification throughout the legal proceedings and may rescind, modify, or amend the class certification in light of subsequent developments. See Fed.R.Civ.P. 23(c)(1)(C); General Telephone Co. Of Southwest v. Falcon, 457 U.S. 147, 160 (1982).

         Accordingly, the motion to stay is DENIED.

         II. Motion to Certify the Class

         A. Plaintiff's Requests to Submit Evidence

         1. Application to Submit Newly Discovered Evidence

         Plaintiff filed a request seeking to submit newly discovered evidence in support of their motion, in which they request leave to file under seal documents that contradict Defendants' representations in their opposition and surreply. They maintain the documents are critical evidence because it confirms that there were significant questions about the safety of Defendants' product at issue in this matter.

         Defendant oppose the request. They argue the evidence is not newly discovered because Plaintiffs have known for over a year before seeking leave that the government believed there was some harm from Defendants' product and made those contentions in the criminal proceedings in the United States District Court for the Southern District of Ohio. They further argue Plaintiffs' unauthorized use of the inadvertently produced materials is prohibited by federal law. Defendants contend Plaintiffs sought authorization from the Ohio court to release the presentence materials that were inadvertently produced by Defendants and the request was still pending at the time Plaintiff filed the current application. They argue Plaintiff should not be rewarded for circumventing the Ohio court and its rules. Even if Plaintiff is permitted to produce the materials, Defendants contend, they do not support class certification.

         Defendants also notified this Court of the decisions rendered by the Honorable Ruben B. Brooks and the District Court of Ohio rejecting Plaintiff's arguments regarding the presentence materials and denying Plaintiff's requests.

         Judge Brooks denied Plaintiffs' request to use presentence materials from the Ohio court in this litigation and to compel Defendants to produce other sentencing submissions related to the presentence materials. Judge Brooks determined the Ohio court is in a better position to interpret and apply its rules which principles of comity and sound judicial administration dictate should apply. See Doc. No. 217. Judge Brooks, later, denied Plaintiffs' motion for reconsideration upon finding Plaintiffs did not offer any new law or facts justifying consideration. See Doc. No. 243.

         The Ohio District Court also denied Plaintiffs' request for authorization to disclose the presentence report and related documents.[4] The court found Plaintiffs did not meet their burden to demonstrate the disclosure was necessary to meet the ends of justice and the information is not available through other means, and policy considerations support nondisclosure of the requested documents.

         In their response, Plaintiffs maintain the decisions are not dispositive of the instant request, because the Ohio court did not include whether this Court has the authority to consider, under seal, portions of the sentencing letters Defendants produced in discovery.

         This Court finds the documents Plaintiffs seek to submit under seal are not newly discovered and finds the rationale of the district court and the Sixth Circuit Court of Appeals persuasive. The Court further finds the documents are not relevant to the pending motion. As discussed further below, the Court finds the dispute over the toxicity levels of the bird food at issue in this matter requires this Court address the merits of the claims further than the limited inquiry necessary to make a decision on the motion to certify the class. Accordingly, Plaintiff's application is DENIED.

         2. Request for Judicial Notice

         Plaintiffs seek judicial notice of a statement contained in the Sixth Circuit's decision affirming the Ohio District Court's denial of Plaintiffs request for authorization to use presentence documents. Defendants oppose the request.

         Because the Court finds the subject fact or statement irrelevant to its decision on the pending motion, the request for judicial notice is DENIED as moot.

         B. Legal Standard

         Whether to grant class certification is within the discretion of the court. Montgomery v. Rumsfeld, 572 F.2d 250, 255 (9th Cir. 1978). A cause of action may proceed as a class action if a plaintiff meets the threshold requirements of Rule 23(a) of the Federal Rules of Civil Procedure: numerosity, commonality, typicality, and adequacy of representation. Fed.R.Civ.P. 23(a). In addition, a party seeking class certification must meet one of the three criteria listed in Rule 23(b).

         Courts should certify a class only if they are “satisfied, after a rigorous analysis, ” that Rule 23 prerequisites have been met. Falcon, 457 U.S. at 161. “Frequently that ‘rigorous analysis' will entail some overlap with the merits of the plaintiff's underlying claim, ” which “cannot be helped.” Wal-Mart Inc. v. Dukes, 564 U.S. 338, 351 (2011). However, examination of the merits is limited to determining whether certification is proper and “not to determine whether class members could actually prevail on the merits of their claims. Ellis v. Costco Wholesale Corp., 657 F.3d 970, 983 n. 8 (9th Cir. 2011) (citation omitted).

         C. Discussion

         Plaintiffs requests the Court certify the following class for their RICO claim:

All persons who purchased, and have not yet received a full refund for, a Scotts Miracle-Gro wild bird food product containing Storcide II, Actellic 5E, or their active ingredients, chlorpyrifos-methyl or pirimiphos-methyl, respectively (“MSBF”).

         They further ask the Court to certify three subclasses for claims in California, for counts 3 through 5; in Missouri for count 10; and Minnesota, for count 9.

         1. Rule 23(a)

         Plaintiffs argues class certification is warranted and maintain the requirements of Rule 23(a) are met. Defendants argue the proposed class is not ascertainable, and Plaintiffs cannot meet the commonality and typicality requirements of Rule 23(a).

         a. ...

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