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August 14, 2020 Practice Points

Second Circuit Holds Past Purchasers Are Not Eligible for Class Certification Under Rule 23(b)(2)

The court holds that district court erred in certifying past purchasers as a Rule 23(b)(2) settlement class because class members would not benefit from injunctive relief.

By D. Scott Carlton and Neeckaun Irani

The Second Circuit’s decision in Berni v. Barilla S.p.A., 964 F.3d 141 (2d Cir. 2020) highlights that approval of a 23(b)(2) injunctive relief class requires first meeting the standing requirements for injunctive relief: including that class members are likely to be harmed again absent an injunction. Analogously to the proverb “fool me once, shame on you, fool me twice, shame on me,” the court held past purchasers of an allegedly deceptive product are not eligible for class certification under Rule 23(b)(2) because repurchase is either unlikely or would be done with sufficient knowledge of what the product entailed.

Barilla is a multinational food company and the world’s largest producer of pasta. Plaintiffs alleged Barilla intentionally sold its pasta in misleading boxes that concealed non-functional “slack-fill.” Slack-fill claims involve the use of excessive amounts of empty space or oversized containers to mislead consumers into believing the actual volume of a container reflects the volume of the product inside. Plaintiffs brought claims under New York’s business code and under the common law for unjust enrichment. The plaintiffs defined the class broadly, in relevant part, as all consumers “who purchased one or more of the Products.”

The district court certified the class and approved a deal in which Barilla agreed to place a minimum “fill-line” on the packaging and to include language disclaiming that pasta is sold by weight and not by volume. A class member objected to the settlement arguing that the class improperly included past purchasers who are ineligible for injunctive relief and thus could not be certified under Rule 23(b)(2).

The court vacated the district court’s order granting approval of a settlement class because past purchasers of an allegedly deceptive product lacked standing to pursue injunctive relief. The Second Circuit agreed that the class is not certifiable because there is no likelihood of future harm and thus no standing seek an injunction. Either past purchasers would not purchase again or would do so knowing what the product entailed.

Specifically, the court reasoned that “there is no reason to believe that all, or even most, of the class members—having suffered the harm alleged—will choose to buy it in the future.” Even if they do decide to repurchase, purchasers would “not again be under the illusion that the boxes of the newer pastas are filled in the same way as the boxes of the older pastas” and “[i]nstead, next time they buy one of the newer pastas, they will be doing so with exactly the level of information that they claim they were owed from the beginning.” The court further noted that past purchasers generally involve purely past harm, which is commonly redressable instead through the award of damages.

The outcome in Berni demonstrates that defendants who are attempting to settle with plaintiffs for injunctive relief in lieu of monetary awards should pay special attention to the unique standing requirements for injunctive relief.

D. Scott Carlton is of counsel with Paul Hastings in Los Angeles, California. Neeckaun Irani is an associate with Weil, Gotshal & Manges LLP in Silicon Valley, California.

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