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Class Certification Granted In Canada Dry Ginger Ale False Advertising Suit

U.S. Magistrate Judge Nathanael M. Cousins of the Northern District of California granted class certification to consumers in a case against Dr Pepper Snapple Group Inc. ("Dr Pepper") on June 26, 2018. Consumers successfully proved a sufficient number of people relied on the claim that Dr Pepper's Canada Dry ginger ale ("Canada Dry") is "made from real ginger," which Dr Pepper's own internal marketing research confirmed.

The lawsuit, originally filed in 2016, alleges Canada Dry's labelling is misleading, as lab tests revealed the ginger ale contained "no detectable amount of any ginger compounds." Dr Pepper's own test results corroborated this finding, showing an amount of ginger indiscernible to humans.

Another Dr Pepper study found that 25 percent of purchasers chose the Canada Dry brand of ginger ale because they believed it was "made with real ginger." Commenting on the evidence, Judge Cousins asserted, "[c]learly, if a quarter of Canada Dry consumers were listing the ginger claim as a top five reason why they bought the product, the claim is material. Dr Pepper cannot walk back evidence contained in its own documents."

Judge Cousins also rejected Dr Pepper's argument that plaintiffs lacked a common definition of "real ginger," noting that "such material alleged misrepresentations were made here to the entire class, because no Canada Dry purchaser was not exposed to the alleged misrepresentation. Therefore, the standard requires only that the court find there is a probability that reasonable consumers could be misled, not that they all believed 'Made From Real Ginger' means the same thing."

An expert for the plaintiffs conducted surveys and found that 78.5 percent of purchasers of Canada Dry believed it contained real ginger root. The "made from real ginger" claim lead customers to pay a four percent price premium. Applying the figure to a class of all Canada Dry purchasers in California since December 2012, plaintiffs' expert calculated damages of approximately $10.8 million.

Dr Pepper attempted to throw out the survey results, alleging they relied upon bias and flawed methodology. While Judge Cousins agreed that some of survey's methodology was "problematic," he deemed the expert opinions admissible, noting that "to the extent that plaintiffs' expert evidence is imperfect, these imperfections go to the weight of the evidence, not the admissibility."

The legal team at Shepherd, Finkelman, Miller & Shah, LLP ("SFMS") has significant experience litigating consumer fraud and class action matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

SFMS is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Sources

Archer, Rick. "Consumers Win Cert. In Canada Dry Ginger Ale Labeling Row." Law 360. Last modified on June 27, 2018.

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