UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA. Plaintiffs, Defendants.

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1 Case :-cv-0-h-bgs Document Filed 0// Page of 0 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA SKYE ASTIANA, et al., individually and on behalf of all others similarly situated, vs. KASHI COMPANY, AND RELATED CASE. Plaintiffs, Defendants. CASE NO. :-CV-0-H (BGS) ; -CV-0-H (BGS) ORDER () DENYING PLAINTIFFS MOTION FOR PARTIAL RECONSIDERATION OF CLASS CERTIFICATION; () DENYING DEFENDANT S MOTION FOR MODIFICATION OF CLASS DEFINITION; AND () DENYING DEFENDANT S MOTION TO STAY PROCEEDINGS On August,, Defendant Kashi Company ( Kashi ) filed a motion to stay the proceedings pursuant to Federal Rule of Civil Procedure (f). (Doc. No..) On August 0,, Plaintiffs Skye Astiana, Milan Babic, Timothy Bolick, Joe Chatham, James Colucci, Tamara Diaz, Martha Espinola, Tamar Larsen, Mary Littlehale, and Kimberly S. Sethavanish ( Plaintiffs ) filed their opposition to Kashi s motion to stay. This is the lead case in consolidated cases -CV--H (BGS), -CV--H (BGS), -CV--H (BGS), -CV--H (BGS), -CV--H (BGS), and -CV- -H (BGS). (Doc. Nos.,.) This Order applies to all of the cases, and the related case (-CV-0-H (BGS)). - - cv

2 Case :-cv-0-h-bgs Document Filed 0// Page of 0 (Doc. No..) On September,, Kashi filed its reply. (Doc. No..) For the reasons set forth below, the Court denies Kashi s motion to stay the proceedings. On August,, Plaintiffs filed a motion for patrial reconsideration of the order granting class certification. (Doc. No..) On September,, Kashi filed its opposition to the motion for partial reconsideration. (Doc. No..) On September,, Plaintiffs filed their reply. (Doc. No..) On August,, Kashi filed a motion for modification of class definition. (Doc. No. 0.) On September,, Plaintiffs filed their opposition to the motion for modification of class definition. (Doc. No..) On September,, Kashi filed its reply. (Doc. No..) For the reasons set forth below, the Court denies both Plaintiffs motion for partial reconsideration and Kashi s motion for modification of class definition. Background This is a consumer class action lawsuit brought on behalf of people who have purchased Kashi food products. Plaintiffs claim the products contained deceptive and misleading labeling and advertisements. (Doc. No. ( Complaint ) -.) Plaintiffs allege that Defendant packaged, marketed, distributed, and sold Kashi food products as being Nothing Artificial or All Natural. (Id.) Plaintiffs claim certain ingredients or processes used to manufacture Kashi food products are not natural, but rather are synthetic. (Id.) Plaintiffs identified 0 specific Kashi products containing one or more of the challenged ingredients with labels claiming Nothing Artificial and products with labels claiming All Natural. (Id. -; Doc. No. 0.) Defendant contends that consumers and producers have no uniform definition of natural and, accordingly, the representations are not materially false. (Doc. No. at -.) - - cv

3 Case :-cv-0-h-bgs Document Filed 0// Page of 0 Discussion I. Plaintiffs Motion for Reconsideration of Class Certification and Kashi s Motion for Class Modification On July 0,, the Court issued a carefully reasoned order granting in part and denying in part Plaintiffs motion for class certification. (Doc. No..) The Court certified a class of California purchasers of Kashi products marketed and labeled as containing Nothing Artificial. (Id. at -.) Additionally, the Court certified a class of California purchasers of Kashi products marketed and labeled as All Natural that contained one or more of the following ingredients: pyridoxine hydrochloride, calcium pantothenate, or hexane-processed soy ingredients. (Id. at.) Plaintiffs motion for partial reconsideration of class certification argues that the Court erred by excluding the ingredient potassium bicarbonate from the All Natural class. (Doc. No. - at.) Conversely, Kashi s motion for modification of the All Natural class definition argues that the Court erred by including the ingredients calcium pantothenate and pyridoxine hydrochloride in the All Natural class. (Doc. No. 0 at.) After carefully considering both Plaintiffs and Kashi s arguments for modifying the definition of the All Natural class, the Court declines to modify its previous order. The Court s class certification order was not predicated on a technical parsing of the federal regulations surrounding organic products. Rather, the Court certified the All Natural class for three ingredients that reasonable consumers could plausibly consider to be material misrepresentations by Kashi. (See Doc. No. at.) Accordingly, the Court denies Plaintiffs motion for partial reconsideration and likewise denies Kashi s motion for class modification. II. Kashi s Motion to Stay Proceedings On August,, Kashi submitted a petition under Federal Rule of Civil Procedure (f) seeking the Ninth Circuit s permission to appeal the class certification order of July 0,. (Doc. No. 0.) Kashi s petition argues that the Court erred in - - cv

4 Case :-cv-0-h-bgs Document Filed 0// Page of 0 accepting Plaintiffs representations that they could prove damages on a price premium theory. (Doc. No. at.) Instead, Kashi argues that the Supreme Court s decision in Comcast v. Behrend, S. Ct. (), is directly applicable to this case. (Doc. No. at.) Citing Comcast, Kashi contends that Plaintiffs have not translated the legal theory of their false advertising claims into a damages analysis that satisfies the predominance requirement of Rule (b)(). (Id.) A. Legal Standard for Motion to Stay Federal Rule of Civil Procedure (f) states that an appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders. [T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. Landis v. North Am. Co., U.S., (); Leyva v. Certified Grocers of California, Ltd, F.d, - (th Cir. ). The exertion of this power calls for the exercise of the district court s sound discretion. CMAX, Inc. v. Hall, 00 F.d, (th Cir. ). The proponent of a stay bears the burden of establishing its need. Clinton v. Jones, U.S., 0 (). In order to prevail on the motion to stay, Kashi must show that () its Rule (f) petition raises a serious legal question; () it would be irreparably injured in the absence of a stay; () issuance of a stay would not substantially harm Plaintiffs; and () a stay will serve the public interest. Leiva-Perez v. Holder, 0 F.d, (th Cir. ); Gray v. Golden Gate Nat'l Rec. Area, No. C 0-00 EDL, U.S. Dist. LEXIS, at * (N.D. Cal. Dec., ). The four factors are to be evaluated on a flexible continuum, but the serious legal question and the irreparable injury to petitioner prongs are the most critical. Id. at ; Li v. A Perfect Day Franchise, Inc., Case No.: :0-CV-0-LHK, U.S. Dist. LEXIS 0, at *- (N.D. Cal. June, ). - - cv

5 Case :-cv-0-h-bgs Document Filed 0// Page of 0 B. Analysis i. The Seriousness of Kashi s Legal Question Kashi claims that its Rule (f) petition presents a serious legal question as to whether the Supreme Court s decision in Comcast applies to false advertising suits like this one. (Doc. No. at.) Although courts routinely use different formulations to describe the first prong of the test for a stay, the Ninth Circuit has held that the idea is that in order to justify a stay, a petitioner must show... that she has a substantial case for relief on the merits. Leiva-Perez, 0 F.d at -. The party petitioning for a stay need not demonstrate it is more likely than not to win on the merits. Id. at. Nevertheless, more than a mere possibility of relief is required. Id. at (quoting Nken v. Holder, S. Ct., (0)). Kashi claims that district courts are divided on the proper scope of the Comcast decision, and thus that the Ninth Circuit will step in to resolve this unsettled area of law via Kashi s Rule (f) petition. (Doc. No. at.) It is true that the Ninth Circuit has not directly addressed whether Comcast applies to this particular subspecies of consumer class actions. However, the Ninth Circuit has reaffirmed post-comcast that the presence of individualized damages does not defeat class certification under Rule (b)(). Levya v. Medline Indust. Inc., F.d 0, (th Cir. ) (distinguishing Comcast because damages could be calculated based on defendant s records). The Court relied upon this sound legal principle in fashioning its July 0, order, and Kashi has not demonstrated why the Ninth Circuit is likely to consider upending the well-established rule in this case. Consequently, the Court holds that Kashi has not to put forth a serious legal question justifying a stay. ii. The Irreparable Injury to Kashi Kashi asserts that it will suffer irreparable injury if the Court declines to stay the proceedings. (Doc. No. at.) The irreparable harm that Kashi claims it would suffer is entirely in the form of litigation costs. (Id. at.) Courts evaluate whether litigation expenses constitute irreparable harm based on the specific circumstances of - - cv

6 Case :-cv-0-h-bgs Document Filed 0// Page of 0 each case. Brown v. Wal-Mart Stores, Inc., :0-CV-0-EJD, WL 00, at * (N.D. Cal. Nov., ). Several courts have held that in a Rule (f), run of the mill litigation costs do not amount to irreparable injury See, e.g., Castaneda v. United States, Case No. CV 0-0 DDP (Jcx), 0 U.S. Dist. LEXIS 0, at * (C.D. Cal. May, 0); Bradberry v. T-Mobile USA, Inc., No. C 0- CW, 0 U.S. Dist. LEXIS 0, at *- (N.D. Cal. 0). While Kashi would be obligated to respond to Plaintiffs discovery requests absent a stay, there is no evidence that these requests are unusual or particularly onerous. Smith v. Ceva Logistics U.S., Inc., CV 0- CAS (RCx), U.S. Dist. LEXIS, at * (C.D. Cal. Sept., ). Ultimately, Kashi should have been aware that it could continue to incur litigation costs even after it filed its appeal. Fed. R. Civ. P. (f) ( An appeal does not stay proceedings in the district court unless the district judge or court of appeals so orders. ) The Court concludes that Kashi has not shown it would suffer irreparable injury absent a stay. iii. The Substantial Harm to Plaintiffs Plaintiffs assert that they would be harmed if the Court stayed the proceedings. (Doc. No. at.) Plaintiffs contend that the delay itself, as well as the possible loss of evidence that could result if the action were stayed, constitute substantial harm. See Bradberry, 0 U.S. Dist. LEXIS 0, at *. Kashi asserts that Plaintiffs would not be harmed because Rule (f) appeals are expected to be resolved quickly. See Gray, WL, at *. The Court finds that this factor does not weigh strongly either for or against issuing a stay of the proceedings. iv. The Public Interest Plaintiffs assert that a delay of proceedings will allow harm to the putative class members to continue because Kashi continues to market the relevant products as All Natural or Nothing Artificial. (Doc. No. at -.) Kashi asserts that a stay is in the public interest by avoiding the potential for duplicative litigation. (Doc. No. at.) Upon careful consideration, the Court concludes that this factor does not weigh - - cv

7 Case :-cv-0-h-bgs Document Filed 0// Page of 0 towards issuing a stay. Conclusion Exercising its discretion and considering the competing interests, the Court denies Kashi s motion to stay the proceedings. Furthermore, the Court denies Plaintiffs motion for partial reconsideration and denies Kashi s motion for class modification. IT IS SO ORDERED. DATED: September, MARILYN L. HUFF, District Judge UNITED STATES DISTRICT COURT - - cv