A federal judge on Tuesday denied class certification in a consumer fraud suit over the “All Natural” claim by the makers of Arizona iced tea because the plaintiff hired her lawyers seven months before purchasing the product.
However, District Judge Jerome Simandle allowed for the possibility that the lawyers, at the firms of Wilentz, Goldman & Spitzer and Michael Halbfish, both in Woodbridge, could qualify as class counsel if they find a suitable client.
At issue in Coyle v. Hornell Brewing Co., 08-cv-2797, is a company’s marketing of the drinks as “100% Natural,” despite use of high fructose corn syrup, which allegedly misled buyers.
On a motion for reconsideration, Simandle stood by his May 26 denial of class certification on the ground that Lauren Coyle — who stated in her complaint, in interrogatory answers and at deposition that she bought the tea on March 30, 2008, seven months after retaining counsel — did not qualify as a class plaintiff.
In that earlier ruling, he found as an independent ground for denying certification that Coyle’s lawyers were “too careless about key facts to effectively represent the interests of a class of potentially tens of thousands of absent class members,” even under “the most charitable interpretation.”
On reconsideration, Simandle said that although the lawyers made a serious or possibly even a material error by pursuing the claim based on a purchase that took place after Coyle had hired them, or by continually misstating the purchase date, that error “does not overbalance the efforts taken by Plaintiff’s counsel to investigate claims in this action, counsel’s experience in litigating class actions, counsel’s knowledge of the applicable law, and the resources Plaintiff’s counsel has demonstrated they are willing to commit to representing the putative class.”
He said he was assuming that the inconsistent date was a mistake rather than that Coyle’s lawyers had her buy the iced tea so they could file the suit.
After the defendants got the retainer agreement through discovery and pointed out the date problem, Coyle filed a declaration stating she had no recollection of buying Arizona iced tea after Aug. 9, 2007, when she signed the retainer, in which Halbfish agreed to represent her in an anticipated class action over the marketing of the iced tea.
Her April 7, 2010, declaration says she bought Arizona iced tea beverages from 2002 to 2007, and did so in March 2007 but stopped buying the drinks in the summer of 2007 once she realized they contained high fructose corn syrup, known as HFCS. She claims she mixed up the years.
In opposing certification, the defendants argued the declaration should be disregarded as a “sham affidavit.”
Simandle held he did not have to decide whether Coyle was lying because even if she was merely mistaken, she could not show she would be an adequate class representative.
Beyond the credibility issues raised by her assertion of the March 30, 2008, date on multiple occasions, the date problem made her claim subject to unique defenses and risked the possibility that the class claim could fail because she would not be able to prove she made a qualifying purchase or suffered an ascertainable loss.
That would be unfair to class members who might have valid claims, Simandle added.
He noted that the declaration did not explain “how such a serious and central mistake could have inadvertently been included in the Complaints and discovery materials in this case” and appeared to be “an effort to paper over the problem.”
Coyle had placed herself in a predicament that set her apart from the class she sought to represent, Simandle said.
“Without doubt, determining whether this Plaintiff made her purchase of Defendants’ product on the date she repeatedly claimed, after she had retained a lawyer to file suit, would become a major focus and quite probably a show-stopper for this class.”
“We’re pleased with the judge’s changing his position and we’re pleased we will have the opportunity to proceed,” says Halbfish about Simandle’s changed decision about the adequacy of class counsel.
He says Coyle was confused about the date and he thought her testimony that she had bought the iced tea at other times would address the issue.
Daniel Lapinski of Wilentz says he has mixed emotions about the decision, given the findings on Coyle.
Philip Tortoreti, also of Wilentz, and defense lawyers Robert Donovan and Ryan Mulvaney of McElroy Deutsch Mulvaney & Carpenter in Newark, did not return calls.
Although Coyle is still knocked out as a class plaintiff, her lawyers could add a new plaintiff as class representative and try again for certification.
Halbfish says no decision has been made whether to do so.
Lapinski and Tortoreti already have another plaintiff. They are co-counsel with Lite DePalma & Greenberg of Newark in a similar action against the same defendants, Arizona Beverage Co. and related entities.
Robinson v. Hornell Brewing Co., 11-cv-2183, filed on April 13 on behalf of plaintiff Steven Robinson, is before District Judge Mary Cooper in Trenton.
A motion to strike or dismiss the class allegations was filed Aug. 2 and has not been decided.
Lapinski and Tortoreti also brought similar litigation over claims that Snapple iced tea was “all natural” even though it contained HFCS.
In Holk v. Snapple Beverage Corp., 07-cv-3018, Cooper held the claim was pre-empted by federal food labeling laws, but the Third U.S. Circuit Court of Appeals reversed on Aug. 12, 2009. The case was dismissed with prejudice on Nov. 23, 2010, based on the parties’ stipulation.
Lapinski says he cannot recall whether the Holk dismissal was in connection with a settlement, but says a similar claim he brought against Snapple in California settled on confidential terms.
HFCS is a sugar substitute created from an enzymatic process in which the glucose in corn starch is converted to fructose and mixed with pure corn syrup.
Cheaper than sugar because of corn subsidies and sugar tariffs and widely used in soft drinks, cookies, salad dressing and other products, HFCS has been blamed for a rise in obesity. Snapple replaced it with sugar in 2009, but it is still used in Arizona drinks.