Court Opinion

ID: 4546719
Source: CourtListenerOpinion
Date Created: 2020-07-08 15:00:14.257948+00
Date Added: 2024-06-11T12:49:55.158470
License: Public Domain

19-1921-cv
Berni v. Barilla S.p.A., et al v. Schulman

                                             In the
               United States Court of Appeals
                              for the Second Circuit

                                     AUGUST TERM 2019

                                        No. 19-1921-cv

    ALESSANDRO BERNI, GIUSEPPE SANTOCHIRICO, MASSIMO SIMIOLI,
                       DOMENICO SALVATI,
                        Plaintiffs-Appellees,

                                               v.

           BARILLA S.P.A., BARILLA AMERICA, INC., BARILLA USA,
                            Defendants-Appellees,

                                               v.

                                 ADAM EZRA SCHULMAN,
                                   Objector-Appellant.

               On Appeal from the United States District Court
                    for the Eastern District of New York

                                SUBMITTED: APRIL 2, 2020
                                 DECIDED: JULY 8, 2020
Before: KEARSE, CABRANES, and SACK, Circuit Judges.

      Can a group of past purchasers of a product obtain certification
as a class under Federal Rule of Civil Procedure 23(b)(2)? Put another
way, can a group of past purchasers of a product maintain a class
action for injunctive relief?

      These questions—which have surfaced in many consumer-led
class actions in the district courts of this Circuit—are now before us in
a suit involving boxes of pasta.

      Objector-Appellant Adam Ezra Schulman—a member of a class
of past purchasers of that pasta—argues, among other things, that the
United States District Court for the Eastern District of New York
(Steven L. Tiscione, Magistrate Judge) erred in certifying Plaintiffs-
Appellees as a Rule 23(b)(2) class when the Court approved their
settlement with Defendant-Appellee Barilla America, Inc. (“Barilla”).
Plaintiffs-Appellees and Barilla, seeking to preserve the settlement
they struck, contend otherwise.

      We agree with Schulman and conclude that the District Court
did, in fact, err in certifying Plaintiffs-Appellees as a Rule 23(b)(2) class
because not all class members stand to benefit from injunctive relief,
the kind of relief the settlement primarily provides. Accordingly, we

                                     2
VACATE the District Court’s June 3, 2019 order granting class
settlement approval and REMAND for further proceedings.

                             Ronen Sarraf, Sarraf Gentile LLP, Great
                             Neck, NY; Daniella Quitt, Glancy Prongay
                             & Murray LLP, New York, NY, for Plaintiffs-
                             Appellees.

                             Steven P. Blonder, Much Shelist P.C.,
                             Chicago, IL, for Defendants-Appellees.

                             Adam E. Schulman, Hamilton Lincoln Law
                             Institute Center for Class Action Fairness,
                             Washington, D.C., Counsel in Pro Per.

JOSÉ A. CABRANES, Circuit Judge:

       Can a group of past purchasers of a product obtain certification
as a class under Federal Rule of Civil Procedure 23(b)(2)? 1 Put another
way, can a group of past purchasers of a product maintain a class
action for injunctive relief?

       1 Federal Rule of Civil Procedure 23(b)(2) specifies that a class action may
be maintained if the requirements of Rule 23(a) are satisfied and “the party
opposing the class has acted or refused to act on grounds that apply generally to
the class, so that final injunctive relief or corresponding declaratory relief is
appropriate respecting the class as a whole.”

                                        3
        These questions—which have surfaced in many consumer-led
class actions in the district courts of this Circuit—are now before us in
a suit involving boxes of pasta.

        Objector-Appellant Adam Ezra Schulman—a member of a
group of past purchasers of that pasta—argues, among other things,
that the District Court for the Eastern District of New York (Steven L.
Tiscione, Magistrate Judge) 2 erred in certifying Plaintiffs-Appellees as a
Rule 23(b)(2) class when the Court approved their settlement with
Defendant-Appellee Barilla America, Inc. (“Barilla”). 3 Plaintiffs-
Appellees and Barilla, seeking to preserve the settlement they struck,
contend otherwise.

        We agree with Schulman and conclude that the District Court
did, in fact, err in certifying Plaintiffs-Appellees as a Rule 23(b)(2) class
because not all class members stand to benefit from injunctive relief,
the kind of relief the proposed settlement primarily provides.
Accordingly, we VACATE the District Court’s June 3, 2019 order
granting class settlement approval and REMAND for further
proceedings.

        2This action was assigned to the magistrate judge for all purposes pursuant
to 28 U.S.C. § 636(c)(1), which allows him, upon consent of the parties, to “conduct
any or all proceedings in a jury or nonjury civil matter and order the entry of
judgment in the case.”
        3 As the District Court noted, “Barilla G. e. R. Fratelli S.p.A., Barilla’s Italian
parent company, was dismissed from this action for lack of personal jurisdiction.”
Accordingly, Barilla America, Inc. is “the sole remaining defendant.” Berni v. Barilla
G. e R. Fratelli, S.p.A., 332 F.R.D. 14, 19 n.1 (E.D.N.Y 2019).

                                            4
                            I.     BACKGROUND

      Visit the pasta aisle in any major American supermarket and one
is bound to encounter the “iconic blue box[es]” of Barilla’s pastas. 4 The
pastas come in many familiar varieties—and more recently, in some
less familiar ones. In addition to the standard “enriched macaroni”
noodles that it sells, Barilla has added a set of specialty pastas,
including those that are whole grain, gluten free, and made with
added fiber or protein. 5 It is their attempt to keep up with American
dietary trends, and to appeal to “health conscious” consumers. 6

      Enticed by these offerings, Plaintiffs-Appellees Alessandro
Berni, Domenico Salvati, Massimo Simioli, and Giuseppe Santochirico
(jointly, “Plaintiffs”) each purchased one or another of Barilla’s new
products. But they quickly found themselves disappointed. The
problem: the boxes of the pasta were allegedly underfilled.

      According to Plaintiffs, the newer Barilla pastas were sold in
boxes of the same size as the older, familiar Barilla pastas. But there
was a key difference: someone who bought one of the older products
would get more pasta than someone who bought one of the newer
products—even though the size of the containers in which the pastas

      4   Amended Class Action Complaint ¶ 1.
      5 Id. at ¶ 2.
      6 Id.

                                      5
were sold was exactly the same. 7 According to the four Plaintiffs, any
consumer—reasonably conditioned to believe that all Barilla boxes of
the same size contain the same amount of pasta—would thus be
deceived, just as they were, by the new packaging.

          Expecting more pasta than they got, Plaintiffs brought a lawsuit.
In July 2016, the four purchasers, acting on behalf of themselves and
others similarly situated, initiated a class action against Barilla for
deceptive packaging. Alleging that Barilla intentionally sold its pasta
in misleading boxes which concealed non-functional “slack-fill,” they
made claims under N.Y. Gen. Bus. Law § 349(a)—which prohibits
“[d]eceptive acts or practices in the conduct of any business, trade or
commerce”—and under the common law for unjust enrichment. 8 They
sought, among other things, damages, restitution, and injunctive
relief.

          Nearly two years later, after Barilla filed its motion to dismiss
but before the District Court ruled on it, Plaintiffs and Barilla
converged on a settlement. They agreed that Barilla would pay up to
$450,000 in fees to class counsel and to the four named representatives;
that all class members would release Barilla from future claims; and,
most importantly, that Barilla would include a minimum “fill-line” on
its boxes going forward, to indicate how much pasta was contained
inside, in addition to language about how its pasta is sold by weight
Id. at ¶ 4 (“Barilla markets and sells its specialty pastas in same-sized boxes
          7

as the traditional pastas but with substantially less pasta.”)
          8 Id. at ¶¶ 47-57.

                                           6
and not by volume. 9 The “fill-line” and disclaimer-language
remedies—both forms of injunctive relief—are the only relief to be
provided to the class as a whole as part of the settlement agreement. 10

       Neither party to the agreement challenges any elements of the
settlement here. Instead, this appeal is brought by a lone class member
who objected to the settlement, Objector-Appellant Schulman.11
Schulman objected to the settlement in the District Court on several
grounds, among them that the group of past purchasers of Barilla
pasta could not be certified, as it sought to be, under Rule 23(b)(2)
because a group of past purchasers is not eligible for injunctive relief.

       But the District Court rejected Schulman’s arguments. In a Final
Approval Order from June 3, 2019, it certified the class of past
purchasers of Barilla pasta under Rule 23(b)(2) and approved the
settlement struck by Plaintiffs and Barilla—so that fill-line-drawing

       9   See generally Class Action Settlement Agreement, App. 35-61.
       10  The class is defined as “[a]ll consumers in the United States and all U.S.
territories (including, but not limited to, the Commonwealth of Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and
the other territories and possessions of the United States), who purchased one or
more of the Products from July 28, 2010 until the date of the preliminary approval
of the settlement of this litigation. Excluded from the Class are persons who timely
and properly exclude themselves from the Class as provided in the Settlement
Agreement.” See id at ¶ 6.1.
       11 Schulman is a serial class action objector (or, often, attorney for such
objectors) who works as an attorney for the Center for Class Action Fairness at the
Hamilton Lincoln Law Institute. The Center for Class Action Fairness has
“sponsored” many such objections, including before this Court. Schulman states
that he brings this objection “through his employer.” Obj. Br. 14.

                                          7
and disclaimer-printing could commence, and new boxes of pasta
could make their way to supermarket shelves. 12

      Schulman challenges the District Court’s determination here,
putting forward many of the same arguments: that the Rule 23(b)(2)
certification was incorrect; that the class had not been adequately
represented in the settlement negotiations; and that, even if the class
were certifiable, the settlement unfairly rewarded class counsel at the
expense of class members. Because we find that Schulman is correct
on his first point—that the class is not certifiable—we need not reach
the other arguments at this time.

                                  II.     DISCUSSION

   A. Jurisdiction

      The District Court had jurisdiction over this class action under
the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d). This Court
has appellate jurisdiction under 28 U.S.C. § 1291 over the Final
Approval Order of June 3, 2019.

   B. Standing

      A brief note on Schulman’s standing is necessary before
proceeding to the merits of his claim. Plaintiffs contend, at the outset,
that Schulman lacks standing to bring this appeal because, by his own

      12   See Berni, 332 F.R.D. at 37.

                                           8
admission, he was not deceived by Barilla’s packaging. 13 Therefore,
“even if Mr. Schulman is arguably a class member”—because he
purchased Barilla pasta during the relevant time period to so qualify—
“the injunctive relief provided by the settlement will admittedly not
impact him.” 14 According to Plaintiffs, since Schulman “was not
harmed in any way by Barilla’s conduct, could not allege such harm
and thus could not release any claims alleging such harm, he lacks
standing to object to the settlement or appeal its approval.” 15

       The District Court concluded otherwise. As it noted, under
Federal Rule of Civil Procedure 23(e)(5), “[a]ny class member may
object to the [settlement] proposal if it requires court approval” as the
settlement proposal does here. 16 Since Schulman is a class member—
he “purchased one or more of [Barilla’s] Products from July 28, 2010
until June 12, 2018” according to a declaration he produced for the
District Court—he automatically has standing to object. 17

       We agree with the District Court’s determination. “As a member
of the . . . class” an objector, like Schulman, necessarily “has an interest
in the settlement that creates a ‘case or controversy’ sufficient to satisfy

       13 “The existence of standing is a question of law that we review de novo.”
Shain v. Ellison, 356 F.3d 211, 214 (2d Cir. 2004).
       14   Pl. Brief at 24.
       15 Id. at 20.
       16   Berni, 322 F.R.D. at 21 (internal quotation marks omitted).
       17 Id. at 22 (internal quotation marks omitted).

                                            9
the      constitutional          requirements         of       injury,   causation,   and
redressability.” 18 Once he established that he was a member of the
class, he needed to do no more in order to proceed with his objection.
For the same reason, he need do no more now to proceed with his
appeal before this Court.

   C. Standard of Review

         “Certification of a class is reviewed for abuse of discretion, i.e.,
whether the decision (i) rests on a legal error or clearly erroneous
factual finding, or (ii) falls outside the range of permissible
decisions.” 19 In certain contexts, this review for abuse of discretion is
more stringent than usual. Specifically, “[w]hen a district court, as
here, certifies for class action settlement only, the moment of
certification requires ‘heightene[d] attention’ to the justifications for
binding the class members.” 20 This is so despite our otherwise “strong
judicial policy in favor of settlements, particularly in the class action
context.” 21

         18   Devlin v. Scardeletti, 536 U.S. 1, 6-7 (2002).
         19 In re Payment Card Interchange Fee and Merchant Discount Antitrust
Litigation, 827 F.3d 223, 231 (2d Cir. 2016); see also In re City of New York, 607 F.3d
923, 943 n.21 (2d Cir. 2010) (explaining that “abuse of discretion” is a non-pejorative
“term of art”).
         20Ortiz v. Fibreboard Corp., 527 U.S. 815, 848-49 (1999) (quoting Anchem
Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997)) (internal citations omitted).
         21   In re Painewebber Limited Partnerships Litigation, 147 F.3d 132, 138 (2d Cir.
1998).

                                                10
   D. Rule 23(b)(2) Certification

         “Before approving a class settlement agreement, a district court
must first determine whether the requirements for class certification
in Rule 23(a) and (b) have been satisfied.” 22 Because the Plaintiffs here
sought to have their class certified under Rule 23(b)(2), and because
Schulman contends that the District Court failed to properly
determine that the requirements of Rule 23(b)(2) were satisfied, we
need only review whether the District Court “abused its discretion” in
stating that those requirements were, in fact, met.

         According to the Federal Rules of Civil Procedure, a class may
be certified under Rule 23(b)(2) in a single circumstance: when “the
party opposing the class has acted or refused to act on grounds that
apply generally to the class, so that final injunctive relief or
corresponding declaratory relief is appropriate respecting the class as
a whole.” As such, the Supreme Court has counseled that “Rule
23(b)(2) applies only when a single injunction or declaratory judgment
would provide relief to each member of the class.” 23 Put another way,
a class may not be certified under Rule 23(b)(2) if any class member’s
injury is not remediable by the injunctive or declaratory relief sought.

         Since the relief sought here is equitable in nature (i.e.,
injunctive)—taking the form of a “fill-line” and disclaimer language

         22   In re American Intern. Group, Inc. Securities Litig., 689 F.3d 229, 238 (2d Cir.
2012).
         23   Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360 (2011) (emphasis added).

                                               11
on the pasta boxes—we must determine if that relief is proper for each
and every member of the group of past purchasers of Barilla pasta.
Only if the injunctive relief is proper on such an individualized basis
is the group as a whole then eligible for class certification under Rule
23(b)(2).

        Our analysis starts with the familiar principle that injunctive
relief is only proper when a plaintiff, lacking an adequate remedy at
law, is likely to suffer from injury at the hands of the defendant if the
court does not act in equity. 24 The prospective-orientation of the
analysis is critical: to maintain an action for injunctive relief, a plaintiff
“cannot rely on past injury . . . but must show a likelihood that he . . .
will be injured in the future.” 25 Moreover, such a threat of future injury
must be “actual and imminent, not conjectural or hypothetical.” 26 If
the injury occurred in the past—or if some future injury is merely
conjectural or hypothetical—then plaintiffs will lack the kind of injury
necessary to sustain a case or controversy, and necessary to establish
standing, under Article III. 27

         Petereit v. S.B. Thomas, Inc., 63 F.3d 1169, 1185 (2d Cir. 1995) (“[I]njunctive
        24

relief where an adequate remedy at law exists is inappropriate.”).
        25   Deshawn E. by Charlotte E. v. Safir, 156 F.3d 340, 344 (2d Cir. 1998).

         Summers v. Earth Island Institute, 555 U.S. 488, 493 (2009); see also City of Los
        26

Angeles v. Lyons, 461 U.S. 95, 111 (1983).
        27 See O’Shea v. Littleton, 414 U.S. 488, 495-96 (1974) (holding that “[p]ast
exposure to illegal conduct does not in itself show a present case or controversy
regarding injunctive relief . . . if unaccompanied by any continuing, present adverse
effects”); Nicosia v. Amazon.com, Inc., 834 F.3d 220, 239 (2d Cir. 2016) (“Although

                                             12
       Has an actual and imminent threat of future injury been shown
by all members of the class here? Put another way, are each of the pasta
purchasers likely to be harmed by Barilla in the imminent future
absent injunctive relief?

       We conclude that such future harm is not likely, and that, as a
result, the injunctive relief sought would not provide a remedy for all
members of the class. 28 At a general level, we note that past purchasers
of a consumer product who claim to be deceived by that product’s
packaging—like the purchasers of Barilla pasta here—have, at most,
alleged a past harm. Such a past harm is of the kind that is commonly
redressable at law through the award of damages, which, it should be
noted, is what Plaintiffs primarily sought in their complaint.

       For several reasons, past purchasers of a product, like the Barilla
purchasers, are not likely to encounter future harm of the kind that
makes injunctive relief appropriate. In the first place, past purchasers
are not bound to purchase a product again—meaning that once they

past injuries may provide a basis to seek money damages, they do not confer
standing to seek injunctive relief unless the plaintiff can demonstrate that she is
likely to be harmed again in the future in a similar way.”).
       28  We have stated that the relief to each class member in a Rule 23(b)(2)
action need not “be identical, only . . . beneficial.” Sykes v. Mel. S. Harris and
Associates LLC, 780 F.3d 70, 97 (2d Cir. 2015). That means that different class
members can benefit differently from an injunction—but no matter what, they must
stand to benefit (it cannot be the case that some members receive no benefit while
others receive some). Here, we conclude that at least some, and maybe all, members
of the class would receive no benefit from the relief provided, since the prospective
injunctive relief would not redress their past harms.

                                         13
become aware they have been deceived, that will often be the last time
they will buy that item. Past purchasers do not have the sort of
perpetual relationship with the producer of a consumer good that is
typical of plaintiffs and defendants in Rule 23(b)(2) class actions. 29 No
matter how ubiquitous Barilla pasta may be, 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.

       But even if they do purchase it again, there is no reason to
believe that all, or even most, of the class members will incur a harm
anew. Supposing that they have been deceived by the product’s
packaging once, they will 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. Instead, 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. A “fill-line” or some disclaimer
language will not materially improve their position as knowledgeable
consumers.

       We are aware that some district courts in this Circuit have been
hesitant to find that past purchasers cannot obtain injunctive relief,
and so cannot constitute a Rule 23(b)(2) class. 30 Perhaps most

       29  Wal-Mart, 564 U.S. at 361 (noting that civil rights cases, in which the
parties presumably have an ongoing relationship, are the “prime examples of what
(b)(2) is meant to capture” (internal quotation marks omitted)).
       30See e.g., In re Amla Litigation, 282 F. Supp. 3d 751, 769 (S.D.N.Y. 2017);
Ackerman v. Coca-Cola Co., No. 09-cv-395 (DLI/RML), 2013 WL 7044866, at *17
(E.D.N.Y. July 18, 2013).

                                        14
famously, Judge Jack B. Weinstein has stated that to prohibit injunctive
relief to past purchasers would be to foist them into an unwelcome
dilemma, what the District Court here calls a “Catch-22.” 31 Said Judge
Weinstein: “The only way a consumer could enjoin deceptive conduct
would be if he were made aware of the situation by suffering injury.
But once the consumer learned of the deception, he would voluntarily
abstain from buying and therefore could no longer seek an
injunction.” 32

       Concerned about this “Catch-22,” several district courts have
attempted to carve out an exception to the strictures of our law on
injunctions, so that past purchasers can maintain class actions for such
relief. Indeed, that is precisely what the District Court did here. It
admitted that “the class [of Barilla purchasers] is technically defined
by the past rather than the future activity of its members”—making it
ordinarily ineligible for injunctive relief. 33 It even quoted a popular
treatise on class actions which notes that “[t]he requisite imminent
threat of future injury [is not] present based on a representation by
plaintiff of intent to purchase another item of the product in the
coming months.” 34 Nevertheless, it found that because “future
purchasers [of Barilla pasta] would still be buying an allegedly
deceptive product, even if they know of the manner in which it is

       31   Berni, 322 F.R.D. at 25-26.
       32   Belfiore v. Procter & Gamble Co., 311 F.R.D. 29, 67 (E.D.N.Y. 2015).
       33   Berni, 332 F.R.D. at 26.
       34 Id. (quoting 1 McLaughlin on Class Actions § 5:15 (15th ed. 2018)).

                                            15
deceptive[,]” they are in a position to seek injunctive relief. 35 In doing
so, it created an exception to the Federal Rules of Civil Procedure to let
a Rule 23(b)(2) class action move forward even when injunctive relief
is not proper for every class member.

       But such an equitable exception to Rule 23(b)(2) simply does not
exist, and courts cannot create one to achieve a policy objective, no
matter how commendable that objective. That is because, as many
other district courts in our Circuit have already noted, courts cannot
permit injunctive relief through class settlement when plaintiffs would
otherwise lack standing to seek such relief under Article III.36 Where

       35 Id.
       36  See, e.g., Davis v. Hain Celestial Group, Inc., 297 F. Supp. 3d 327, 338
(E.D.N.Y. 2018) (noting that “[b]ecause a plaintiff in a false advertisement case has
necessarily become aware of the alleged misrepresentations, there is no danger that
they will again be deceived by them” and so they have no standing to seek
injunctive relief (internal quotation marks omitted)); Langan v. Johnson & Johnson
Consumer Companies, Inc., 3:13-cv-1471 (JAM), 2017 WL 985640 at *11 (D. Conn. Mar.
13, 2017) (noting that “[r]egardless of the salutary purpose of consumer protection
statutes” and potential injunctive relief under them, “they cannot alter the bedrock
requirements for federal constitutional standing”), vacated on other grounds, 897 F.3d
88 (2d Cir. 2018); Singleton v. Fifth Generation, Inc., No. 5:15-cv-474 (BKS/TWD), 2017
WL 5001444 at *16 (N.D.N.Y. Sept. 27, 2017) (rejecting plaintiff’s request that the
court “carve out a public policy exception to the standing requirement, in the
interest of protecting [ ] consumers”); In re Avon Anti-Aging Skincare Creams and
Products Marketing and Sales Practices Litigation, No. 13-cv-150 (JPO), 2015 WL
5730022, at *8 (S.D.N.Y. Sept. 30, 2015) (noting that no “public policy exception”
permits Rule 23(b)(2) class certification when plaintiffs are “unlikely to buy the
class products again”); Vaccariello v. XM Satellite Radio, Inc., 295 F.R.D. 62, 68
(S.D.N.Y. 2013) (noting that because “[p]laintiff has demonstrated he is now keenly
aware” of the alleged deceptive behavior of defendant, “he is very unlikely to
suffer” some future harm worthy of an injunction). District courts outside of this

                                          16
there is no likelihood of future harm, there is no standing to seek an
injunction, and so no possibility of being certified as a Rule 23(b)(2)
class. As such, the district courts in many cases—involving past
purchasers of such varied products as skin creams, vodka, and satellite
radio subscriptions—have come to the conclusion that past purchasers
cannot be certified as a class under Rule 23(b)(2).

       We come to the same conclusion in this case. Since injunctive
relief is not proper for the group of past purchasers of Barilla pasta—
because not every member of that group stands to benefit from the
“fill-line” and disclaimer language included in the settlement
proposal—that group cannot be certified as a Rule 23(b)(2) class.

                               III. CONCLUSION

       To summarize: We hold that past purchasers of a product—like
the purchasers of Barilla pasta in this case—are not eligible for class
certification under Rule 23(b)(2) of the Federal Rules of Civil
Procedure. For the foregoing reasons, we VACATE the District
Court’s order granting approval of the settlement and REMAND for
further proceedings consistent with this opinion.

Circuit have also concluded that a Rule 23(b)(2) class cannot be certified when
injunctive relief is sought by past purchasers. See, e.g., Algarin v. Maybelline, LLC,
300 F.R.D. 444, 458 (S.D. Cal. 2014) (noting that once consumers are “aware of the
realities of [a] product[ ]” they “will not benefit from [ ] injunctive relief[,] as they
cannot demonstrate a probability of injury; if they know the ‘truth’ they cannot be
further deceived”).

                                           17