Hilsley v. Ocean Spray Cranberries, Inc.

Rebecca Kirk Fair[1] and Rene Befurt[2]

Why It Made the List

For the past decade, “natural” claims in the advertising and marketing of food and beverage products have been the subject of many class action lawsuits.[3] Most of these class actions have focused on products containing types of ingredients with which the average consumer is now familiar and considers to be artificial ingredients, like high fructose corn syrup and genetically modified organisms (GMOs). However, a number of newer class actions have involved ingredients for which the line between “natural” and “artificial” is less clear, such as ingredients that occur naturally but have been processed and produced artificially.[4] Here, we consider Crystal Hilsley v. Ocean Spray Cranberries, et al., a fitting representation of this new trend. In Hilsley, the plaintiff alleges that Ocean Spray deceived consumers with labels indicating that some of their products contain no artificial flavors, despite containing artificial versions of malic and/or fumaric acids, which also occur naturally in fruits used in Ocean Spray juices.[5] This difficult delineation between natural and artificial ingredients has been one of the main focal points in Hilsley thus far, as both sides argue over whether the acids should be considered natural or artificial flavors, and, in some instances, if they are to be considered flavors at all.

In the context of this class action, the plaintiff seeks restitutionary damages under the theory that consumers paid more for the at-issue products than they would have if they had known the truth behind the allegedly deceitful marketing claims. Under Comcast v. Behrend, class certification requires that the plaintiff present a damages model that is both consistent with their damages theory and capable of calculating class-wide damages.[6] In order to demonstrate damages by common proof, considerations of how consumers interpret the at-issue claims could therefore impact the damages model. Therefore, here, we consider Hilsley in the context of surveys and damages models.

Discussion

Context

Since the 1970s, regulatory agencies in the United States, including the Federal Trade Commission, Federal Drug Administration, and United States Department of Agriculture, have worked to define a regulatory standard for what qualifies as “natural” as it relates to food.[7] Current federal regulations define natural flavors and natural flavoring as being “derived from a spice, fruit or fruit juice, vegetable or vegetable juice, edible yeast, herb, bark, bud, root, leaf or similar plant material, meat, seafood, poultry, eggs, dairy products, or fermentation products thereof, whose significant function in food is flavoring rather than nutritional.”[8]

These regulatory bodies have themselves been involved in relatively little litigation regarding the enforcement of these guidelines, but there have been many class action lawsuits filed in recent years relating to this topic. Most of these lawsuits allege that “all natural” marketing claims violate consumer protection laws because the corresponding products contain ingredients or flavors that are not “natural,” thereby contradicting reasonable consumer expectations.

Claims in these class actions have generally been concerned with products containing high fructose corn syrup, genetically modified organisms (GMOs), or artificial preservatives, or products processed with chemicals or containing other “artificial” ingredients. Plaintiffs in these types of lawsuits seek damages under the theory that consumers paid more for the product due to alleged false or misleading marketing claims than they would have paid if they had known the whole truth.[9]

The burden of establishing this price premium falls on the expert witness from the fields of economics, marketing, or survey research. Based on the precedent established by Comcast, the price premium model presented during the class certification phase must be able to both calculate class-wide damages by common proof and be consistent with the plaintiff’s damages theory.[10] In the Comcast decision, the Supreme Court also ruled that District Courts “must conduct a ‘rigorous analysis’ to determine whether it is so.”[11]

Class actions seeking damages under this theory of liability have used damages models involving many survey methods, including Contingent Valuation, Choice-Based Conjoint analysis, and Hedonic Regression analysis.[12] Contingent Valuation surveys vary different features of the product that they study and subsequently ask respondents how much they would be willing to pay for the product in an attempt to determine price premiums, i.e., the difference in willingness to pay.[13] Meanwhile, Choice-Based Conjoint analyses involve surveys in which respondents are asked to choose from several products (usually four or five), which are described to respondents in the form of a list of product attributes. Respondents are asked to complete this exercise a number of times (usually around ten). Using two underlying statistical models, the researcher can then use the data to estimate the value of each product attribute for each respondent.[14]

Both Contingent Valuation and Choice-Based Conjoint analyses have been accepted as price premium estimation models by courts in some cases[15] and rejected in others,[16] due to varying applicability and the methodological challenges posed by each of the two methods. As we discuss below, in Hilsley, the court accepted a Contingent Valuation survey proffered by one of the plaintiff’s expert witnesses, first acknowledging that it only addressed consumers’ willingness to pay but ultimately determining that the second expert addressed the supply-side factors in his damages model by relying on standard retail prices based on Ocean Spray sales data from the class period.[17]

Facts of the Case

The defendants, Ocean Spray Cranberries, Inc. and Arnold Worldwide LLC, manufacture, distribute, advertise, market, sell, and/or label a variety of juices and juice-based products. The case concerns the defendant’s representation that some of its products contain “No High Fructose Corn Syrup, Artificial Colors, or Flavors.” The plaintiff, Crystal Hilsley, a California resident, sued in 2017, purporting to represent a class of all persons in California who purchased one of a list of Ocean Spray Products for personal and household use and not for resale, in California from January 1, 2011 until the date class notice is disseminated. The plaintiff asserted that Ocean Spray’s characterizations of its products labeled as containing “No . . . artificial flavors,” such as its Cran-Apple and Cran-Grape juices, is false and misleading because these products contain artificial flavoring ingredients, either dI-malic acid, fumaric acid, or both, which simulate advertised fruit flavors.

Key allegations in the case are that consumers prefer products that contain no artificial flavors, believing them to be of higher quality. Accordingly, it is alleged, consumers will pay more for a product that has this attribute than they would pay for an otherwise indistinguishable product that does not. This allegedly enabled Ocean Spray to sell its products marketed as containing “No . . . artificial flavors” at higher prices in comparison to competing products. Consumers who purchased these products allegedly would not have purchased the beverage, or would have only been willing to pay less for it, if they did not see and believe the defendants’ express claims that it contained “No . . . artificial flavors.”

The plaintiff filed a motion to certify the class and appoint class counsel in August 2018,[18] which was followed closely by the defendants’ motion for summary judgement, filed in September 2018.[19] The court responded by denying the defendants’ motion for summary judgment in October 2018[20] and issuing a partial class certification in November 2018.[21]

Liability & Damages Hypothesis

The theory of liability in Hilsley and other false or misleading advertising cases under which the plaintiffs seek restitutionary damages is that consumers paid more for the at-issue product or products than they would have been willing to had they known the truth of the allegedly deceptive marketing claims. In Hilsley, the plaintiffs sought damages under Rule 23(b)(3), requiring them to present damages models at the class certification phase that were consistent with this theory of liability and capable of calculating damages on a class-wide basis.[22]

In order to calculate class-wide damages, the plaintiff’s expert witness(es) from the fields of economics, marketing, or survey research implement surveys that can isolate and quantify the effect of the attribute or attributes covered by the allegedly false or misleading marketing claims. In the case of Hilsley, the price premium is the amount by which consumers overpaid for the Ocean Spray products containing malic or fumaric acid because they did not know that the products contained the allegedly artificial flavors.

Role of an Expert

Isolating the effect of this product feature on the price of the at-issue products poses a challenge for expert witnesses, who must ensure that their survey follows best practices to accurately determine the price premium. Such considerations include, among others, how questions should be designed and what statistical analyses should be conducted. Many methods have been used and accepted in contexts similar to that of Hilsley. Here, we explore two methodologies that were discussed in Hilsley, Contingent Valuation (CV) and Choice-Based Conjoint (CBC) analysis. In Hilsley, CV and CBC were proposed as methods through which one can determine the value of product features, in particular the “No . . . artificial flavors” claim.

CV surveys are typically used to value public goods, such as the reduction of pollution, which cannot necessarily be sold to consumers and therefore, have value that is not easily quantified.[23] Researchers in favor of CV suggest that CV surveys can provide valuable information in areas where consumer behavior has not previously been recorded or is difficult to measure, can evaluate consumer behavior in relation to new goods or altered existing goods which may not be available in the marketplace, and can offer a measurement of consumer surplus related to those goods.[24],[25]

CV surveys were introduced in the 1940s in the form of public opinion surveys and were initially used in environmental economics in the 1950s and 1960s. For example, it was during this time that the U.S. National Park Service and the U.S. Forest Service needed a calculation of how much people were willing to pay and wanted of its national parks in order to obtain adequate funding from policymakers.[26] The health and transportation industry also adopted CVs in the 1960s through 1980s.[27]

In Hilsley, the plaintiff’s expert, Dr. George Belch, implemented a CV survey to determine the price premium paid by consumers due to the allegedly misleading “No . . . artificial flavors” claim. Dr. Belch offered four versions of his survey to 400 respondents in total, with 100 respondents, all of whom indicated that they had purchased Ocean-Spray Cranberry juice in the past six months, assigned to each of the four versions. Two of the versions presented respondents with images of bottles and package labels for Ocean Spray Cran-Apple juice, and the other two presented images of bottles and package labels for Ocean-Spray Cran-Grape juice. For each of the products, one version of the survey presented labels with the banner “No High Fructose Corn Syrup, Artificial Colors or Flavors,” while the other version presented labels with the banner “Artificially Flavored” in the same location. The surveys first asked respondents to indicate the importance of different aspects of the product labels and then asked them to indicate how much they would be willing to pay for the products. Dr. Belch determined the price premium to be the difference between the average price respondents were willing to pay for the products with the at-issue claim and the average price they were willing to pay for products with the “Artificially Flavored” banner. Dr. Belch thus determined that the price premium paid by consumers due to the “No . . . artificial flavors” claim was 61 cents per bottle, or 19%.[28]

The court in Hilsley v. Ocean Spray Cranberries, Inc. also discussed another methodology, choice-based conjoint (CBC) analysis. Conjoint surveys ask respondents to indicate their preferences for products within a display of several products, each of which is described by a list of product features. In simulating purchase decisions, conjoint surveys implicitly ask respondents to weigh the value of different product attributes and make trade-offs between them. The preference data collected from respondents can then be used to model the value they assign to each of the product features. CBC is therefore valuable in that it allows researchers to determine the importance of different product features, which consumers may not be able to accurately convey themselves if explicitly asked to.[29],[30]

Conjoint analyses were originally developed in non-marketing fields in the 1960s, before being applied to marketing problems in the 1970s, allowing researchers to begin to estimate consumer preferences and the relative importance of product features. With the technological advancements of the coming decades, conjoint surveys were implemented as computer surveys. Computers have also improved CBC analysis in its efficiency and reliability, enabling researchers to conduct simulations and design surveys that effectively tease out respondents’ preferences.[31]

The methodological considerations for survey methods like CV and CBC are important to consider in cases like Hilsley, where class certification motions are evaluated largely based on the damages models presented by the plaintiff’s expert witnesses. Under the precedent established by Comcast, the damages model must be consistent with the plaintiff’s theory of liability and able to calculate class-wide damages,[32] and in order to do so, the surveys used in these models must comply with survey best practices.

In Hilsley, both CV and CBC were discussed as potential methodologies that could be used to determine the price premium paid by consumers as a result of the at-issue claim. Dr. Belch argued that CV was most appropriate in this case because “[c]onjoint analysis is an appropriate survey based method when the information sought includes the effects of multiple independent variables on product price, perceived value or willingness to buy a product or service. In this litigation, however, where the information sought is the effect of a single independent variable (the allegedly deceptive labeling), contingent valuation provides a more direct and useful survey methodology.”[33]

However, the defendants argued that CV was an inappropriate method to have used in Hilsley, claiming that “conjoint analysis is applied to actual, separate attributes of the same product to arrive at the value of that attribute. But Plaintiff rejected this approach, claiming that ‘Dr. Blech’s [sic] survey was based on the contingent valuation methodology.’ [ . . . ] Contingent valuation is an entirely different methodology, that measures a ‘hypothetical scenario.’ [ . . . ] In other words, instead of comparing real world attributes of the actual Ocean Spray products, Dr. Belch made up an imaginary ‘hypothetical’ product with the label element ‘artificially flavored,’ a product that does not exist in real stores.”[34]

Decision

In November 2018, the court issued an order partially granting and partially denying the plaintiff’s motion for class certification, filed in August 2018. The court granted class certification with respect to the causes of action under the Unfair Competition Law (UCL), False Advertising Law (FAL), and the California Consumers Legal Remedies Act (CLRA). The court denied class certification with respect to the breach of express and implied warranty. The court also granted the plaintiff’s motion for class certification under injunctive relief.[35]

A plaintiff seeking class certification must demonstrate that their case satisfies the requirements of Rule 23. Under the precedent established by Comcast, the court must conduct a “rigorous analysis” of the plaintiff’s claims,[36] but the merits of the plaintiff’s claims are “‘considered to the extent that – but only to the extent – that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied.’”[37]

The court first determined that the plaintiff’s case met the requirements of Rule 23(a) – numerosity, commonality, typicality, adequacy of representation, and ascertainability. The court then moved on to consider Rule 23(b)(3), which requires the plaintiff to demonstrate that “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy” and that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” The court found that the predominance requirement was satisfied with respect to the UCL, FAL, and CLRA causes of action and with respect to breach of express warranty. The court ruled that the predominance requirement was not met by the plaintiff’s breach of implied warranty claims.[38] Under California law, a breach of implied warranty claim requires that a plaintiff be in vertical privity with the defendant. Other courts have ruled that the exception to this rule for marketing claims made on labels or in advertisements applies to breach of express warranty claims, but not to implied warranty claims.[39] Thus, the court ruled that.

The court then determined whether Rule 23(b)(3) predominance requirement was met by the damages models proffered by the plaintiff’s expert witnesses. The plaintiff called on two expert witnesses, Dr. George Belch and Dr. Alan Goedde. Dr. Belch and Dr. Goedde both presented models through which they determined the price premium paid by consumers based on the allegedly false or misleading “No . . . artificial flavors” claims. Dr. Goedde also presented a model with which class-wide damages could be calculated using the price premium calculated in his and Dr. Belch’s models.

The court first considered Dr. Belch’s CV survey, which he used to determine the price premium paid by consumers as a result of the at-issue marketing claims, finding it to be 61 cents per bottle, or 19%.[40] The defendants criticized various aspects of Dr. Belch’s survey design, such as the stimuli presented in the survey. For example, the defendants criticized the edited versions of the Ocean Spray products displayed in the survey, “which feature[] the expression ‘Artificially Flavored’ on the principal display panel, in letters larger than anything but the brand and product names. Dr. Belch cites no regulation to suggest that such a message would be required to be presented in such shockingly large font on the principal display panel of any product. Nor does he identify any real-world proxies for such messages. Moreover, the giant ‘Artificially Flavored’ message is several font sizes larger than Ocean Spray’s actual ‘no artificial flavors’ message, another misleading trick that doubtless had the effect, if not the actual intent, of skewing the results of Dr. Belch’s ‘survey’ in a direction that could only favor plaintiff.”[41] The court dismissed the defendants’ critiques of Dr. Belch’s survey methodology, ruling that “on class certification, such challenges do not address whether Plaintiff’s damages models comport with Comcast.”[42]

Instead, the court evaluated whether the methodology “is sufficiently linked to the theory of damages and is capable of identifying damages on a class-wide basis.”[43] In this regard, the defendants argued that Dr. Belch’s survey did not address supply-side factors and was therefore not admissible under Comcast. Whereas demand-side considerations address how consumers would react to a change in a product feature, supply-side considerations address how suppliers would react to such a change. For example, changes to a product might affect how the product is marketed, the price at which producers are willing and able to sell the product, and the features of other products on the market. In this line of critique, the defendants noted that Dr. Belch’s report did not demonstrate whether products similar to the edited versions of Ocean Spray products that he presents in his survey exist in the market, or whether suppliers would be willing to offer the products at the prices that his survey produces. However, the court ruled that while Dr. Belch’s survey only addressed consumers’ willingness to pay (a method that has been rejected by other courts[44]), supply-side factors are addressed through Dr. Goedde’s damages model, which applied the 19% price premium to a standard $3.25 retail price for the at-issue products.[45]

Next, the court evaluated Dr. Goedde’s method for determining the price premium attributable to the “No . . . artificial flavors” claims. Dr. Goedde conducted a survey of published juice prices from retailers in Southern California between August 1-3, 2018 and categorized the juices as being naturally flavored or artificially flavored based on the ingredients listed on the product labels. Dr. Goedde’s survey found that artificially flavored juices in 59 to 64 ounce packaging had an average price of $2.30, while naturally flavored juices had an average price of $2.96 for the same units. He then concluded that the price premium paid by consumers due to the at-issue claim was $0.66, or 29%.[46]

The court rejected Dr. Goedde’s methodology for determining the price premium. In this regard, the defendants criticized Dr. Goedde’s methodology, arguing that his model incorporated products, retailer settings, and juice percentages that were not comparable to Ocean Spray products during an irrelevant time period. Referencing similar models that have been rejected by other courts,[47] the court determined that Dr. Goedde’s price premium model did not satisfy Comcast requirements because it did not connect to the plaintiff’s theory of damages and failed to demonstrate how the price premium was caused by the “No . . . artificial flavors” claim.[48]

After accepting Dr. Belch’s price premium and rejecting Dr. Goedde’s, the court determined, based on Dr. Goedde’s supplemental declaration,[49] that using Dr. Belch’s price premium and Ocean Spray sales data from the class period, Dr. Goedde would be able to calculate class-wide damages consistent with the plaintiff’s damages theory.[50] However, the court ruled that this damages model did not address the breach of express warranty claim and thus did not satisfy the predominance requirement with respect to this cause of action. Based on these conclusions, the court ruled that the plaintiff’s case also satisfied the superiority requirement of Rule 23(b)(3) and certified the class with respect to the UCL, FAL, and CLRA causes of action.

The plaintiff also sought class certification for injunctive relief under Rule 23(b)(2). Citing a recent decision from the Ninth Circuit, the court held that “a previously deceived consumer may have standing to seek an injunction against false advertising or labeling, even though the consumer now knows or suspects that the advertising was false at the time of the original purchase, because the consumer may suffer ‘an actual and imminent, not conjectural or hypothetical’ threat of future harm.”[51] The plaintiff stated that she would like to purchase Ocean Spray products in the future if the allegedly artificial flavors are removed but now does not know if she can trust the labeling of Ocean Spray products. The court ruled that the plaintiff had grounds to seek injunctive relief and certified the class under Rule 23(b)(2).[52]

In late March 2019, the plaintiff filed a motion for partial summary judgment, restating their positions and arguing that the defendants’ affirmative defenses were insufficient. As of April 3rd, 2019, the case has not been decided, and the parties have not reached a settlement.

Impact

Hilsley is part of a larger trend of class actions in which plaintiffs allege that food and beverage companies deceive consumers through false or misleading claims that their products are “all natural” or contain no artificial flavors or ingredients.[53] Like in Hilsley, these class actions have largely focused on processed or artificially manufactured versions of naturally occurring ingredients, like malic acid, fumaric acid, xantham gum, and citric acid, with synthetic versions of malic acid being a particularly popular target. Hilsley represents a noteworthy case in this larger trend because of the partial class certification granted in November 2018, reflecting plaintiffs’ increased success with cases of this kind, most of which survive dismissal motions filed by defendants.[54]

Continued success in the class certification stage and in later stages of these types of class actions is largely dependent upon the damages models proffered by expert witnesses. As in Hilsley, the class certification phase mainly involves an evaluation of a proposed damages model under the predominance requirement of Rule 23(b)(3). Because the expert must demonstrate that their damages model is consistent with the plaintiff’s damages theory and capable of calculating class-wide damages,[55] it is important that the expert present the model in sufficient detail and take into consideration the relevant theory, best practices, and the context of the specific case.

Expert witnesses are also often called by defendants to challenge the damages models put forth by the plaintiffs’ experts. Expert witnesses can and should add a valuable perspective, as it is their role to offer methodologies that are academically grounded. Their opinions can significantly impact the outcome of class certification motions[56] or the degree to which the court relies on an opposing expert.[57] Of course, neither party is required to seek expert opinions, as exemplified in Hilsley, where the defendants chose instead to submit opposition reports in which they offered their own critiques of the plaintiff’s experts’ damages models.[58] The defendants argued that the survey conducted by the plaintiff’s expert failed to ask appropriate questions, follow survey best practices, and address supply-side factors, rendering the survey unreliable.[59] In the class certification order, the court ruled against the critiques raised by the defendants in their opposition reports.[60]

While one can only speculate how the introduction of an expert by defendants would have influenced the court, it is worth considering relying on an expert when presenting specific arguments such as the aforementioned critique pertaining to a lack of supply-side factors. Supply-side considerations have been presented in courts on various occasions and can influence the standing of a class significantly.[61] For example, some courts have found that damages models that only measure consumers’ willingness to pay do not adequately address supply-side factors and therefore do not provide a reliable price premium for damages calculations.[62] However, other courts, such as that in Hilsley, have found that these types of damages models satisfy Comcast and address supply-side factors if they incorporate prices and quantities based on actual sales data.[63] Still others have approved models measuring demand-side willingness to pay when used in conjunction with hedonic regression pricing models that use actual sales and pricing data.[64] This supply-side argument has been an important part of the evaluation of damages models in recent class actions, and, in Hilsley, proved to be the court’s main consideration in determining whether the plaintiff’s damages model satisfied Comcast. Plaintiffs’ experts’ arguments about how their models reconcile the difference between consumers’ willingness to pay and actual market prices and, more broadly, calculate class-wide damages (and conversely, defendants’ experts’ challenges) can be determining factors in courts’ class certification decisions. Thus, both sides could benefit from carefully selecting experts and supplementing their arguments with expert opinions in all phases of class action lawsuits.

 

 

[1]    Rebecca Kirk Fair is a Managing Principal at Analysis Group in Boston.

[2]    Rene Befurt is a Vice President at Analysis Group in Boston.

[3]    “Plaintiff offers the Webster’s Dictionary definition of ‘natural,’ meaning ‘produced or existing in nature’ and ‘not artificial or manufactured.’ First Amended Complaint, ¶ 18. However, even Plaintiff admits that this definition clearly does not apply to the Buitoni Pastas because they are a product manufactured in mass (see, e.g., First Amended Complaint, ¶¶ 1, 10-11, and 14-15), and the reasonable consumer is aware that Buitoni Pastas are not ‘springing fully-formed from Ravioli trees and Tortellini bushes.’” Order Granting Defendants’ Motion to Dismiss First Amended Complaint, Maritza Pelayo v. Nestle USA, Inc., et al., United States District Court Central District of California, No. CV 13-5213-JFW (AJWx), October 25, 2013, pp. 4-5; See, e.g., Skye Astiana v. Ben & Jerry’s Homemade, Inc., United States District Court for the Northern District of California, No. C 10-4387 PJH, January 7, 2014; Kelly v. Cape Cod Potato Chip Co., United States District Court for the Western District of Missouri, Western Division, No. 14-00119-CV-W-DW, January 27, 2015; Brazil v. Dole Packaged Foods, LLC, United States Court of Appeals for the Ninth Circuit, No. 14-17480, September 30, 2016; In RE: General Mills Glyphosate Litigation, United States District Court for the District of Minnesota, No. 16-2869 (MJD/BRT), July 12, 2017; In re: ConAgra Foods, Inc., United States District Court Central District of California, 90 F.Supp.3d 919, February 23, 2015; Claudia Morales, et al. v. Kraft Foods Group, Inc., et al., United States District Court Central District of California, No. LA CV14-04387 JAK (PJWx), June 9, 2017.

[4]    Negowetti, Nicole E., “A National ‘Natural’ Standard for Food Labeling,” Maine Law Review, Vol. 65, 2013, pp. 581-612, pp. 596-598.

[5]    Class Action Complaint, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., Superior Court of the State of California in and for the County of San Diego, No. 37-2017-0003-4889-CU-BT-CTL, September 15, 2017, pp. 5-9.

[6]    Opinion of the Court, Comcast Corporation, et al. v. Caroline Behrend, et al., Supreme Court of the United States, No. 11-864, March 27, 2013, p. 7.

[7]    Negowetti, Nicole E., “A National ‘Natural’ Standard for Food Labeling,” Maine Law Review, Vol. 65, 2013, pp. 581-612, pp. 584-594.

[8]    Electronic Code of Federal Regulations §101.22, accessed February 20, 2019.

[9]    Negowetti, Nicole E., “A National ‘Natural’ Standard for Food Labeling,” Maine Law Review, Vol. 65, 2013, pp. 581-612, pp. 596-599.

[10]  Opinion of the Court, Comcast Corporation, et al. v. Caroline Behrend, et al., Supreme Court of the United States, No. 11-864, March 27, 2013, p. 7.

[11]  Ibid, p. 8.

[12]  “[N]umerous courts, including this one, have accepted both CBC [Choice-Based Conjoint] and CVM [Contingent Valuation Method] as reliable methodologies for calculating price premiums on a classwide basis in consumer class actions.” Proceedings: (In Chambers) Plaintiff’s Motion for Class Certification, Scott Miller v. Fuhu Inc., et al., United States District Court Central District of California, No. 2:14-cv-06119-CAS-AS, December 1, 2015, p. 36; See, e.g., Order Granting in Part and Denying in Part Plaintiffs’ Amended Motion for Class Certification, In re: ConAgra Foods, Inc., United States District Court Central District of California, 90 F.Supp.3d 919, February 23, 2015, 948.

[13]  Carson, Richard T. and W. Michael Hanemann, “Contingent Valuation,” Handbook of Environmental Economics, Vol. 2, 2005, pp. 821-936, p. 825.

[14]  Sawtooth Software, Inc. “The CBC System for Choice-Based Conjoint Analysis,” Sawtooth Software: Technical Paper Series, Version 9, August 2017, pp. 5-14.

[15]  See, e.g., Order Granting Plaintiffs’ Motion for Reconsideration, Denying Defendant’s Motion for Summary Judgment, Granting Plaintiffs’ Motion for Class Certification, and Denying Plaintiffs’ and Defendant’s Daubert Motions, Martin Schneider, et al. v. Chipotle Mexican Grill, Inc., United States District Court Northern District of California, No. 16-cv-02200-HSG, September 29, 2018, p. 26; Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification, Denying Defendant’s Motion to Exclude Opinion Testimony of Steven P. Gaskin, Stephen Hadley v. Kellogg Sales Company, United States District Court Northern District of California San Jose Division, No. 16-CV-04955-LHK, August 17, 2018, p. 34.

[16]  See, e.g., Order Denying Plaintiffs’ Motion for Class Certification, In re: NJoy, Inc. Consumer Class Action Litigation, United States District Court Central District of California, No. CV 14-00428 MMM (JEMx), August 14, 2015, p. 90.

[17]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 25.

[18]  Plaintiff Crystal Hilsley’s Notice of Motion and Motion for Class Certification and to Appoint Class Counsel, Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, No. 3:17-CV-2335-GPC-MDD, August 16, 2018.

[19]  Motion for Summary Judgment, Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, No. 3:17-CV-2335-GPC-MDD, September 7, 2018.

[20]  Order Denying Defendants’ Motion for Summary Judgment, Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, No. 17cv2335-GPC(MDD), October 30, 2018.

[21]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83.

[22]  Opinion of the Court, Comcast Corporation, et al. v. Caroline Behrend, et al., Supreme Court of the United States, No. 11-864, March 27, 2013, p. 7.

[23]  Carson, Richard T. and W. Michael Hanemann, “Contingent Valuation,” Handbook of Environmental Economics, Vol. 2, 2005, pp. 821-936, p. 827-833.

[24]  Ibid, p. 835.

[25]  However, critics of the method argue CV surveys can report arbitrary willingness to pay in some instances. For instance, researchers in 1994 found that the willingness to pay for the clean-up of one lake was roughly equal to respondents’ willingness to pay for the clean-up of five lakes, including the one originally asked about. Hausman, Jerry, “Contingent Valuation: From Dubious to Hopeless,” Journal of Economic Perspectives, Vol. 26, No. 4, Fall 2012, pp. 43-56, p. 47.

[26]  Carson, Richard T. and W. Michael Hanemann, “Contingent Valuation,” Handbook of Environmental Economics, Vol. 2, 2005, pp. 821-936, p. 829.

[27]  Ibid, pp. 829-833.

[28]  Expert Report of Dr. George E. Belch, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 3:17-CV-2335-GPC-MDD, August 16, 2018, Dkt. 23-20, p. 24,.

[29]  Sawtooth Software, Inc. “The CBC System for Choice-Based Conjoint Analysis,” Sawtooth Software: Technical Paper Series, Version 9, August 2017, pp. 5-14.

[30]  Although CBC can reliably estimate the value respondents place on certain product attributes, the survey should limit the number of features and choice screens included in the survey, so that respondents do not become fatigued and inaccurately indicate their preferences. Due to the assumptions in the underlying statistical model, conjoint surveys should be designed with the utmost care as well as allow respondents to evaluate the trade-offs between features without potential biases arising from the questionnaire design. Sawtooth Software, Inc. “The CBC System for Choice-Based Conjoint Analysis,” Sawtooth Software: Technical Paper Series, Version 9, August 2017, pp. 14-16.

[31]  “Chapter 4: A Short History of Conjoint Analysis,” Orne, B. Getting Started with Conjoint Analysis: Strategies for Product Design and Pricing Research, Second Addition, pp. 29-37.

[32]  Opinion of the Court, Comcast Corporation, et al. v. Caroline Behrend, et al., Supreme Court of the United States, No. 11-864, March 27, 2013, p. 7.

[33]  Supplemental Declaration of Dr. George E. Belch, Case No. 3:17-CV-2335-GPC-MDD, October 26, 2018, Dkt. No. 75-1, p. 4.

[34]  Supplemental Brief in Support of Defendants’ Opposition to Plaintiff Crystal Hilsley’s Motion for Class Certification, Case No. 3:17-CV-2335-GPC-MDD, November 2, 2018, Dkt. No. 79, p. 6.

[35]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 37.

[36]  Opinion of the Court, Comcast Corporation, et al. v. Caroline Behrend, et al., Supreme Court of the United States, No. 11-864, March 27, 2013, p. 8.

[37]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 6, citing Opinion of the Court, Amgen Inc., et al. v. Connecticut Retirement Plans and Trust Funds, Supreme Court of the United States, No. 11-1085, February 27, 2013, p. 9.

[38]  Ibid, p. 6-22.

[39]  Ibid, p. 21, citing Opinion, Burr v. Sherwin Williams Co., Supreme Court of California, 42 Cal.2d 682, April 16, 1954.

[40]  See Expert Report of Dr. George E. Belch, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 3:17-CV-2335-GPC-MDD, August 16, 2018, Dkt. 23-20.

[41]  Defendant’s Opposition to Plaintiff Crystal Hilsley’s Motion for Class Certification, Crystal Hilsley v. Ocean Spray Cranberries, et al., Case No. 3:17-CV-2335-GPC-MDD, September 7, 2018, Dkt. No. 30, p. 21.

[42]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 25.

[43]  Ibid, p. 26.

[44]  See, e.g., Order Denying Plaintiffs’ Motion for Class Certification, In Re: NJOY, Inc. Consumer Class Action Litigation, United States District Court Central District of California, No. CV 14-00428 MMM (JEMx), August 14, 2015, p. 87.

[45]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 29-30.

[46]  See Expert Report of Alan G. Goedde, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 3:17-CV-2335-GPC-MDD, August 9, 2018, Dkt. No. 23-21.

[47]  See, e.g., Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification, Chris Werdebaugh v. Blue Diamond Growers, United States District Court Northern District of California San Jose Division, No. 12-CV-2724-LHK, May 23, 2014, p. 40.

[48]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 32.

[49]  See Supplemental Expert Report of Dr. Alan G. Goedde, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 3:17-CV-2335-GPC-MDD, October 25, 2018, Dkt. No. 75-4.

[50]  Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, Crystal Hilsley v. Ocean Spray Cranberries, Inc., et al., United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 27.

[51]  Ibid, p. 35, citing Opinion, Jennifer Davidson v. Kimberly-Clark Corporation, et al., United States Court of Appeals for the Ninth Circuit, No. 15-16173, October 20, 2017, p. 19.

[52]  Ibid, p. 36-37.

[53]  See, e.g., Class Action Complaint, Adenike Graham and Kimberly McNulty v. National Beverage Corporation, United States District Court for the Southern District of New York, No. 19-cv-873, January 29, 2019, Dkt. No. 1, p. 14.

[54]  Taylor, Trent, Ben Abel, Frank Talbott, and Eric Fleming, “5 Food Labeling Litigation Trends To Watch in 2019,” Law360, https://www.law360.com/articles/1115125/5-food-labeling-litigation-trends-to-watch-in-2019, accessed on February 26, 2019.

[55]  Opinion of the Court, Comcast Corporation, et al. v. Caroline Behrend, et al., Supreme Court of the United States, No. 11-864, March 27, 2013, p. 7.

[56]  See, e.g., Opinion Memorandum and Order, Richard Cotromano et al. v. United Technology Corporation and Palm Beach Aggregates, LLC, United States District Court Southern District of Florida, No. 13-80928-Civ-Marra, May 2, 2018, Dkt. No. 438.

[57]  “The Ninth Circuit has clarified that some challenges to Experts’ testimony and reports affect the weight, rather than the admissibility, of the expert’s opinion: ‘Disputes as to the strength of an expert’s credentials, faults in his use of a particular methodology, or lack of textual authority for his opinion, go to the weight, not the admissibility, of his testimony.’” Opinion, Townsend v. Monster Bev. Corp., United States District Court for the Central District of California, No. ED CV 12-2188-VAP, March 20, 2018, p. 4.

[58]  Defendant’s Opposition to Plaintiff Crystal Hilsley’s Motion for Class Certification, Crystal Hilsley v. Ocean Spray Cranberries, et al., United States District Court Southern District of California, Case No. 3:17-CV-2335-GPC-MDD, September 7, 2018, Dkt. No. 30; Supplemental Brief in Support of Defendants’ Opposition to Plaintiff Crystal Hilsley’s Motion for Class Certification, United States District Court Southern District of California, Case No. 3:17-CV-2335-GPC-MDD, November 2, 2018, Dkt. No. 79.

[59]  Defendant’s Opposition to Plaintiff Crystal Hilsley’s Motion for Class Certification, Crystal Hilsley v. Ocean Spray Cranberries, et al., Case No. 3:17-CV-2335-GPC-MDD, September 7, 2018, Dkt. No. 30, pp. 17-22. Supplemental Brief in Support of Defendants’ Opposition to Plaintiff Crystal Hilsley’s Motion for Class Certification, Case No. 3:17-CV-2335-GPC-MDD, November 2, 2018, Dkt. No. 79, pp. 5-7.

[60]  The court ruled that “typically, ‘[c]hallenges to survey methodology go to the weight given the survey, not its admissibility.’” Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, United States District Court Southern District of California, Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 25, citing Order, Wendt v. Host International, Inc., United States Court of Appeals for the Ninth Circuit, 125 F.3d 806, September 22, 1997, at 814. The court also determined that “[b]ecause Plaintiff’s expert relied on the actual unit sales of Ocean Spray products during the class period and a standard $3.25 retail price to reflect actual prices, Defendants’ argument that Plaintiff’s demand-side model fails to account for real world market conditions and is based on hypotheticals is without merit.” Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification and Appointing Class Counsel, United States District Court Southern District of California Case No. 17cv2335-GPC(MDD), November 29, 2018, Dkt. No. 83, p. 30.

[61]  See, e.g., Order, Oula Zakaria v. Gerber Products Co., United States District Court Central District of California, No. LA CV15-00200 JAK, Dkt. No. 297, August 9, 2017.

[62]  See, e.g., Order Denying Plaintiffs’ Motion for Class Certification, In Re: NJOY, Inc. Consumer Class Action Litigation, United States District Court Central District of California, No. CV 14-00428 MMM (JEMx), August 14, 2015, p. 87.

[63]  See, e.g., Order Granting in Part and Denying in Part Plaintiff’s Motion for Class Certification; Denying Defendant’s Motion to Exclude Opinion Testimony of Steven P. Gaskin, Steven Hadley v. Kellogg Sales Company, United States District Court Northern District of California San Jose Division, No. 16-CV-04955-LHK, August 17, 2018, p. 27.

[64]  See, e.g., Order Granting in Part and Denying in Part Plaintiffs’ Amended Motion for Class Certification, In re: ConAgra Foods, Inc., United States District Court Central District of California, 90 F.Supp.3d 919, February 23, 2015, at 948.