Twinings Tea Class Action Lawsuit Certified over Antioxidant Claims

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Twinings North America Inc. will face a class action lawsuit over claims that its tea blend advertisements contained false statements about the health benefits of antioxidants, according to an April 24 ruling certifying a class of consumers bringing the lawsuit. The California federal judge, however, ruled the class cannot seek monetary damages; instead, the class may only seek injunctive or declaratory relief.

U.S. District Judge Ronald M. Whyte said in his order that the plaintiff, Nancy Lanovaz, was unsuccessful in offering a damages model to calculate how much she and other class members —  including all California consumers who bought any of the allegedly mislabeled 51 green, black and white teas sold by Twinings over a four-year period — were injured by the alleged deception Twinings is charged with.

In 2012, Lanovaz brought the Twinings tea class action lawsuit in federal court, claiming that the tea company violated California’s Unfair Competition Law (“UCL”), California’s False Advertising Law (“FAL”), and the Consumers Legal Remedies Act (“CLRA”). She sought monetary and injunctive relief for herself and on behalf of a purported class of tea purchasers.

According to the order, “At the heart of Lanovaz’s claim is a label describing Twinings’ tea as a ‘Natural Source of Antioxidants,’ which currently appears on the 51 varieties of Twinings’ tea at issue in this lawsuit. Twinings’ green teas also include a longer text description on the label, which states in relevant part, ‘[a] natural source of protective antioxidants . . . Twinings’ Green Teas provide a great tasting and healthy tea drinking experience.’ Twinings’ website also contained statements about antioxidants.”

At the crux of the Twinings tea class action lawsuit was the alleged violation of U.S. Food and Drug Administration (“FDA”) labeling regulations; she purported that the label statements were illegal under California law. According to the order, “[a]lthough no one disputes that Twinings’ tea contains flavonoids, a type of antioxidant, the FDA does not allow nutrient content claims about flavonoids because the FDA has not established a recommended daily intake for flavonoids… Lanovaz argues that Twinings’ labels and website are deceptive, misleading, and unlawful even if they are technically true.”

The Twinings class action lawsuit says the FDA has, several times, warned food companies these claims are unlawful for tea and other food products, and quotes an FDA warning letter sent to Twinings’ competitor Unilever PLC, which owns Lipton Tea brands, claiming Lipton’s products were misbranded because they did not support their claims of antioxidant content with a listing of nutrients subject to those claims. The FDA warning letter sparked a similar false advertising class action lawsuit against Unilever over its Liption tea products.

The problem, then, was in calculating the damages actually suffered by Lanovaz and the class. According to the order, “[t]he proper measure of restitution in a mislabeling case is the amount necessary to compensate the purchaser for the difference between a product as labeled and the product as received.” Lanovaz found a damages expert to support her claim for damages in the class action lawsuit, but Judge Whyte found his damages models insufficient. The expert, Dr. Oral Capps, offered three ways of calculating damages.

Capps’ first option was to offer a full refund of the purchase price of the tea, but Judge Whyte rejected this because the consumers received some benefit from drinking the tea.

The second idea was the “‘benefit of the bargain’ rule or price premium model.  Under this approach, Dr. Capps would compare the price of Twinings tea to the price of ‘comparable’ products that do not have the antioxidant label,” according to the order. However, wrote Judge Whyte, “Dr. Capps has no way of linking the price difference, if any, to the antioxidant label or controlling for other reasons why ‘comparable’ products may have different prices.” This option was also rejected.

The third was more technical, “an ‘econometric or regression analysis.’ This method would allow Dr. Capps to ‘estimate[e] the portion of sales gleaned by Twinings as a result of the false and misleading use of the term ‘Natural Source of Antioxidants’ on its tea products.’ This method might arrive at a legally relevant damages analysis, because it ‘can be translated into the percentage of sales attributed specifically to the claims made by the Defendant,'” wrote Whyte. Capps himself, however, rejected the regression analysis: “…the antioxidant claims have been on the labels over the entire class period. Hence, it is not possible in this case to invoke a regression analysis approach because of the lack of any variable in sales or units sold attributed to the antioxidant claims.”

Therefore, Judge Whyte wrote, “class certification is granted under Rule 23(b)(2) for the purposes of declaratory and injunctive relief and denied to the extent plaintiffs seek monetary damages, including restitution, refund, reimbursement and disgorgement.”

Plaintiff Nancy Lanovaz is represented by Pierce Gore of Pratt & Associates, J. Price Coleman of Coleman Law Firm and Brian Herrington of Barrett Law Group,

The Twinings Tea Class Action Lawsuit is Nancy Lanovaz, et al. v. Twinings North America Inc., Case No. 5:12-cv-02646, in U.S. District Court for the Northern District of California.

UPDATE: On Mar. 17, 2016, in a motion for summary judgment, Twinings argued that the plaintiffs failed to show evidence that a “reasonable consumer” was likely to be deceived by the statement “natural source of antioxidants.”

UPDATE 2: On May 9, 2016, Twinings filedanother motion to dismissthe claims.UPDATE 3: On Sept. 6, 2016,Twinings won a bid for dismissal in a consumer fraud class action lawsuit claiming the company falsely represented the health benefits of more than 50 different blends of its teas.