MARY BETH MONTERA, individually and on behalf of all others similarly situated, Plaintiff-Appellant / Cross-Appellee, v. PREMIER NUTRITION CORPORATION, FKA Joint Juice, Inc., Defendant-Appellee / Cross-Appellant.
Nos. 22-16375, 22-16622
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
August 6, 2024
D.C. No. 3:16-cv-06980-RS; Argued and Submitted February 14, 2024, San Francisco, California
Sidney R. Thomas, David F. Hamilton, and Morgan Christen, Circuit Judges. Opinion by Judge Christen.
SUMMARY**
Consumer Class Action / Product Labels
The panel affirmed in part, reversed in part, and vacated and remanded in part the district court‘s judgment following a jury trial and award of statutory damages in a consumer class action alleging that Premier Nutrition Corporation engaged in deceptive conduct and false advertising in violation of New York law based on representations made on the packaging of Joint Juice, a dietary supplement drink made by Premier, that touted its ability to relieve joint pain.
Mary Beth Montera sued Premier on behalf of a class of New York consumers for violations of New York
Addressing Premier‘s liability under
The panel rejected Premier‘s contention that the district court‘s evidentiary rulings and Montera‘s counsel‘s inflammatory arguments entitled it to a new trial.
The panel affirmed the district court‘s ruling that statutory damages under
COUNSEL
Leslie E. Hurst (argued), Timothy G. Blood, Thomas J. O‘Reardon II, and Paula R. Brown, Blood Hurst & O‘Reardon LLP, San Diego, California; Todd D. Carpenter, Lynch Carpenter LLP, Del Mar, California; Eugene G. Iredale, Iredale and Yoo APC, San Diego, California; Grace Jun, Law offices of Grace Jun, San Diego, California; for Plaintiff-Appellant.
Aaron D. Van Oort (argued) and Hannah M. Leiendecker, Faegre Drinker Biddle & Reath LLP, Minneapolis, Minnesota; Mark D. Taticchi and Ashlee A. Paxton-Turner, Faegre Drinker Biddle & Reath LLP, Washington, D.C.; Angel A. Garganta, Amit Rana, and Steven E. Swaney, Venable LLP, San Francisco, California; Jessica Grant, Shook Hardy & Bacon LLP, San Francisco, California; Antonia I. Stabile, Benesch Friedlander Coplan & Aronoff LLP, San Francisco, California; for Defendant-Appellee.
OPINION
CHRISTEN, Circuit Judge:
This consumer class action involves New York purchasers of Joint Juice, a dietary supplement drink made by defendant Premier Nutrition. Mary Beth Montera sued Premier on behalf of a class of New York consumers for deceptive conduct and false advertising in violation of New York
Both parties appeal the district court‘s rulings. Premier contends that the district court applied erroneous interpretations of New York law when it certified the class and denied Premier‘s post-trial motion for judgment as a matter of law. In Premier‘s view, Montera did not prove liability, either individually or on a classwide basis. Premier further contends that the district court made numerous errors during the trial and when it calculated statutory damages on a per-violation basis and awarded prejudgment interest. Montera appeals the district court‘s decision to cut statutory damages by over 90%.
We find no errors in the district court‘s class certification rulings, analysis of New York law, trial rulings, or initial calculation of statutory damages. But we conclude that the award of prejudgment interest was error, and that the statutory damages award must be reconsidered in light of our intervening decision in Wakefield v. ViSalus, Inc., 51 F.4th 1109 (9th Cir. 2022). We therefore affirm in part, reverse in part, and vacate and remand in part.
This case began as a putative nationwide consumer class action for the allegedly deceptive advertising of Joint Juice. After the district court declined to certify a nationwide class, plaintiffs filed nine separate cases, each bringing claims under the laws of a different state. The court first certified a class in the California case, Mullins v. Premier Nutrition Corp., No. 13-cv-01271 (N.D. Cal.), then certified the other classes, including the Montera class, in a single order that was entered in each case. The district court ordered the parties to provide “two cases to prioritize for trial, one chosen by the Plaintiffs and one chosen by the Defendant.” Plaintiffs proposed the New York case and Premier proposed the Massachusetts case. The district court chose Montera, the New York case, to go first. After the close of discovery and prior to trial, Premier moved to decertify the New York class. The district court denied the motion.
The evidence at trial showed that Premier targeted its Joint Juice advertising to people who suffer joint pain as a result of osteoarthritis. The shrink-wrap packaging for Joint Juice sported the Arthritis Foundation logo and name, and made claims such as “Use Daily for Healthy, Flexible Joints” and “A full day‘s supply of glucosamine combined with chondroitin helps keep cartilage lubricated and flexible.” The jury heard that Premier spent just under $40 million between 2009 and 2015 to market and advertise Joint Juice, and netted annual sales of approximately $20 million in both 2020 and 2021.
Both parties offered expert witnesses to testify about scientific studies on the effect of glucosamine and chondroitin on joint health. Montera offered evidence of numerous studies conducted over the past three decades, including three by the National Institutes of Health, that found glucosamine and chondroitin had no effect on joint health. In contrast, industry-funded studies almost uniformly found glucosamine to be effective for joint pain, though some of the sponsoring companies refused to release data for external review. Evidence showed that Premier was aware of the studies concluding that glucosamine and chondroitin have no effect on joint health but continued to sell—and increased its marketing of—Joint Juice to arthritis and joint-pain sufferers. For example, Montera introduced an internal email dated January 2011, in which the brand director for Joint Juice wrote, “there is no scientific evidence for chondroitin at 200 mg.” When Premier considered running its own study, its president wrote a note that was introduced at trial: “if poor—don‘t publish.” For its defense, Premier introduced evidence that some studies found that glucosamine and chondroitin have therapeutic benefits, and that Joint Juice is beneficial because it is hydrating and contains Vitamins C and D.
Both parties’ experts introduced surveys they conducted that sought to determine what messages Joint Juice‘s packaging conveyed to consumers and whether that messaging was material to consumers’ decisions to buy Joint Juice. Montera‘s expert testified that 92.5 percent of respondents to his study “believed that the product packaging was communicating one or more of [the packaging‘s claimed] joint health benefits,” and 56% of respondents said that Joint Juice‘s claimed joint health benefits “were material to their purchase decisions.” Montera also introduced Premier‘s internal customer survey in which 96% of those surveyed said they were managing chronic pain, 75% said they bought Joint Juice because they have joint pain and thought the drink would help them, and 56% said they had been diagnosed with arthritis. In Premier‘s expert‘s
After a nine-day trial, the jury returned a verdict for Montera, finding that Premier “engaged in an act or practice that [was] deceptive or misleading in a material way” and that “Montera and the class suffered injury as a result.” The jury further found that 166,249 units of Joint Juice had been sold in New York during the class period and that the class‘s actual damages (based on average purchase price) were $1,488,078.49.
II. STANDARD OF REVIEW
We review de novo a district court‘s denial of a motion for judgment as a matter of law, and “[a] jury verdict will be upheld if supported by substantial evidence.” Optronic Techs., Inc. v. Ningbo Sunny Elec. Co., 20 F.4th 466, 476 (9th Cir. 2021). “We review a district court‘s formulation of civil jury instructions for an abuse of discretion, but we consider de novo whether the challenged instruction correctly states the law.” Wilkerson v. Wheeler, 772 F.3d 834, 838 (9th Cir. 2014). We review for abuse of discretion a district court‘s class certification orders, evidentiary rulings, and denials of motions for a new trial. Yokoyama v. Midland Nat. Life Ins. Co., 594 F.3d 1087, 1090–91 (9th Cir. 2010); United States v. Daly, 974 F.2d 1215, 1216–17 (9th Cir. 1992); Kode v. Carlson, 596 F.3d 608, 611 (9th Cir. 2010) (per curiam).
When interpreting New York law, we are bound by the decisions of New York‘s highest court, the Court of Appeals. See In re Kirkland, 915 F.2d 1236, 1238 (9th Cir. 1990). “In the absence of such a decision, a federal court must predict how the highest state court would decide the issue using intermediate appellate court decisions, decisions from other jurisdictions, statutes, treatises, and restatements as guidance.” Id. at 1239.
III. DISCUSSION
On appeal, Premier argues that Montera failed to prove deceptive conduct, injury, and causation under New York law. Premier also argues that the district court abused its discretion in its class certification and trial rulings, and erred in its calculation of statutory damages and prejudgment interest. Montera appeals the district court‘s reduction of the statutory damages award. We affirm the district court on all issues except its award of prejudgment interest. Because we issued an intervening decision concerning Premier‘s substantive due process challenge to the damages award, we also vacate and remand the district court‘s reduction of the award for reconsideration in light of this new authority.
GBL §§ 349 and 350
Montera brought claims under two overlapping New York consumer protection laws.
To succeed on a claim under
For the second element, Premier argues that its conduct was not materially misleading as a matter of law because its claims about Joint Juice‘s efficacy were substantiated. Premier advances no persuasive authority to support this argument. For the third element, Premier argues that Montera‘s injury is not cognizable under New York law and that, even if it is cognizable, Montera cannot show that her injury was caused by the statements on the Joint Juice packaging. We conclude that New York law recognizes Montera‘s injury, and that Montera proved at trial that the class members’ injuries were caused by Premier‘s misrepresentations.
1. Materially misleading conduct
Premier argues that it was entitled to judgment as a matter of law because, in its view, it substantiated its claims about the efficacy of glucosamine and chondroitin and therefore those claims were not deceptive under New York law. Premier fails to support its position that the deceptiveness of its statements was a question of law under the circumstances of this case. It also overlooks that the jury, after considering the studies introduced by both sides, found as a matter of fact that Joint Juice was “valueless for its advertised purpose.”
Claims under
Whether Premier‘s statements were misleading was a question of fact decided by the jury at trial. See Sims v. First Consumers Nat‘l Bank, 758 N.Y.S.2d 284, 286 (App. Div. 2003) (“Whether defendants’ conduct was deceptive or misleading is a question of fact.“); Duran v. Henkel of Am., Inc., 450 F. Supp. 3d 337, 346 (S.D.N.Y. 2020) (“[The deceptiveness] inquiry is generally a question of fact . . . .“). New York law permits a court to decide that a statement is not deceptive as a matter of law in narrow circumstances, not present here, such as when “a plaintiff‘s
The district court instructed the jury that Montera “must prove that the advertisement was likely to mislead a reasonable consumer acting reasonably under the circumstances” and that Montera suffered an injury only if Joint Juice is “valueless for its advertised purpose.”1 The jury considered each party‘s evidence, including their competing scientific studies, and found that Montera established both elements. Thus, contrary to Premier‘s first argument on appeal, judgment as a matter of law in its favor was not required merely because it introduced studies that supported its view of Joint Juice‘s efficacy. The jury considered the evidence offered by both parties and found that Premier‘s statements about Joint Juice‘s efficacy for treating joint pain were materially misleading, which is all the second element of a
Premier cites no authority that supports its contention that “New York law provides that a claim is not misleading as a matter of law when it is substantiated.” Premier argues that the most on-point decision is Parker v. United Industries Corp., 2020 WL 5817012 (S.D.N.Y. Sept. 29, 2020). But Parker is of little help to Premier. In that case, the plaintiff alleged that the defendant‘s bug repellant deceptively claimed it “repels mosquitoes for hours.” Id. at *4. The district court granted summary judgment for the defendant because there was no genuine dispute of fact as to the deceptiveness of the statement. Id. Specifically, the court reasoned that the plaintiff‘s evidence did not establish that the spray was “ineffective for all individuals, even if this Court were to credit [the plaintiff‘s] cited studies and expert‘s analysis and discount those proffered by the Defendant.” Id. The Parker court‘s ruling was specific to the evidence presented; it did not purport to apply a rule of New York law that claims under
fail if both sides introduce reputable scientific studies supporting their respective positions.
Given the jury‘s factual finding that Joint Juice‘s packaging was materially misleading and Premier‘s failure to support its interpretation of New York law, we conclude that the district court correctly rejected Premier‘s argument that Joint Juice‘s packaging was not misleading as a matter of law.
As an alternative to its argument that it was entitled to judgment as a matter of law, Premier argues that it is entitled to a new trial because the district court declined to instruct the jury on a regulatory safe harbor that provides a defense to
After the close of evidence, the district court declined to instruct the jury on Premier‘s safe harbor defense because Premier did not dispute that it failed to comply with the regulation‘s 30-day notice requirement. Premier began including the challenged statements on Joint Juice‘s packaging in 2009 but did not send the required notification to the FDA until 2012. Premier offered no evidence that the FDA excused its failure to comply with the regulatory deadline and offers no support for its assertion that the 2012 notice cured its earlier lack of compliance. Because Premier concedes that it did not comply with the plain text of the regulation, the district court did not err by declining to instruct the jury on the safe harbor provision.2
2. Injury
damages accordingly. The jury‘s special verdict form shows that the jury found the class was injured by purchasing Joint Juice, and it awarded damages equal to the total amount spent on Joint Juice during the class period based on average purchase price. Despite the suggestion by Montera‘s counsel, the jury declined to reduce the damages amount on account of Joint Juice having any residual value apart from its advertised purpose.
Premier contends that only two types of injuries are cognizable under
We reject Premier‘s strained reading of New York law, and find no error in the district court‘s denial of Premier‘s motion for judgment as a matter of law on the ground that Montera did not state a cognizable injury. We also find no error in the district court‘s injury instructions.
Premier relies on Small v. Lorillard Tobacco Co., 720 N.E.2d 892 (N.Y. 1999), which involved five proposed class action suits against tobacco companies. In that case, the plaintiffs alleged that the companies “deceived them about the addictive properties of cigarettes and fraudulently induced them to purchase and continue to smoke cigarettes.” Id. at 894. Critically, the plaintiffs did not argue that they were injured by becoming addicted to nicotine. Id. at 898. Instead, the only injury the plaintiffs claimed was “that defendants’ deception prevented them from making free and informed choices as consumers.” Id. The New York Court of Appeals held that the plaintiffs had not stated a cognizable injury under
Premier latches onto the Court of Appeals’ comment that the plaintiffs’ “theory contains no manifestation of either pecuniary or ‘actual’ harm; plaintiffs do not allege that the cost of cigarettes was affected by the alleged misrepresentation, nor do they seek recovery for injury to their health as a result of their ensuing addiction.” Id. From this, Premier argues that the Small court limited cognizable injuries under
In contrast, Montera alleges that the Joint Juice class members did not get what they paid for because they purchased a product that was advertised to improve joint health but in reality did not. See DeRiso v. Synergy USA, 773 N.Y.S.2d 563, 563 (App. Div. 2004) (explaining that the plaintiff failed to allege a
Premier‘s argument that New York law recognizes only two types of injuries is further undermined by the Second Circuit‘s decision in Orlander v. Staples, Inc., 802 F.3d 289 (2d Cir. 2015). The plaintiff in Orlander had purchased a Staples computer protection plan that promised two years of repair services. Id. at 293. In reality, the repair services were not available until the manufacturer‘s one-year warranty had
lapsed. Id. at 294. The Second Circuit held that the plaintiff sufficiently alleged an injury under
Finally, we consider that Premier‘s narrow view of injury under New York law would frustrate what the New York Court of Appeals has explained is the broad applicability of these statutes.
We conclude that Montera advanced a cognizable injury under
3. Causation
Premier next argues that, even if Montera‘s injury is cognizable, it was entitled to judgment as a matter of law because Montera did not show that the class members’ injuries were caused by the statements on Joint Juice‘s packaging. In Premier‘s view, Montera‘s theory of injury—that the class members would not have purchased Joint Juice absent Premier‘s misrepresentations—required her to prove
at trial that Premier‘s “deceptive statement[s] caused each purchase.” Premier further argues that because causation in this case is “an individual issue,” common issues did not predominate and the district court should have granted Premier‘s pre- and post-trial motions to decertify the class. See
We reject Premier‘s causation argument because it is inconsistent with New York law. Premier acknowledges that its argument would require Montera to prove that each class member relied on the challenged statements to make their purchase decisions. The Court of Appeals has unequivocally held that reliance is not required to show causation under
“there is a difference between reliance and causation” and holding plaintiffs need not “allege that they would not otherwise have entered into the transaction“). As the Eleventh Circuit recently explained in affirming certification of a class action under New York law, ”
The jury‘s findings satisfied New York‘s causation requirement. The district court correctly instructed the jury to consider whether Premier‘s conduct was
Our rejection of Premier‘s causation argument is consistent with our caselaw analyzing consumer claims under other states’ consumer protection laws. For example, in Yokoyama, the district court declined to certify a class because it determined that Hawai‘i‘s “consumer protection laws require individualized reliance showings.” 594 F.3d at 1093. Reversing the district court, we explained that Hawai‘i “uses an objective test to effectuate its remedial consumer protection statute” and therefore whether a consumer relied on the defendant‘s misrepresentation required the jury “to determine only whether [the defendant‘s] omissions were likely to deceive a reasonable person.” Id. Both Hawai‘i and New York use an objective consumer test, but New York does not require reliance, making this case more straightforward than Yokoyama.
Having rejected Premier‘s view of New York‘s causation requirement, we easily dispose of Premier‘s remaining arguments that class certification was improper and that there was insufficient evidence for the jury to find causation. At trial, Montera presented evidence that Premier advertised Joint Juice to treat joint pain despite numerous studies concluding that glucosamine and chondroitin have no effect on joint health, and the majority of customers surveyed—56% in Montera‘s survey and 75% in Premier‘s internal survey—purchased Joint Juice because they thought it would help their joint pain. The district court did not abuse its discretion by concluding that this evidence satisfied
Premier contends that the district court‘s evidentiary rulings and Montera‘s counsel‘s inflammatory arguments entitle it to a new trial. We disagree.
1. Evidentiary rulings
Premier argues that the district court violated
a. Advertising evidence
The advertising evidence Montera offered included a list of Google AdWords that Premier purchased to market Joint Juice, many of which related to arthritis, and a television commercial featuring a celebrity recommending Joint Juice to help joint stiffness.
Premier first argues that this evidence was irrelevant under
At a minimum, the extra-label evidence was relevant to Premier‘s safe harbor defense because it tended to show that the packaging statements were meant to convey a disease claim, not a structure/function claim. We may consider evidence aside from a product‘s label to determine whether the label makes a structure/function claim or implicitly makes a disease claim. See Kroessler v. CVS Health Corp., 977 F.3d 803, 815 (9th Cir. 2020) (quoting 65 Fed. Reg. 1000, 1006 (Jan. 6, 2000) (codified at
Next, Premier argues that admission of the AdWords and television commercial violated
b. Size of parent companies
Premier argues that evidence Montera elicited about Post Holdings and BellRing Brands, Premier‘s parent companies, was irrelevant and unfairly prejudicial. The district court ruled before trial that mention of Post was relevant when discussing documents that referred to the company, but precluded mention of any parent company‘s financial condition because Montera was not seeking punitive damages, making the parent companies’ finances irrelevant.
Premier challenges the district court‘s decisions overruling its objections to three instances during trial in which Montera‘s counsel elicited testimony about the parent corporations. None of these instances referred to the parent companies’ financial condition. On one occasion, Montera asked a question about Joint Juice‘s corporate structure that elicited an answer about Post, as allowed by the district court‘s pre-trial ruling, and counsel then moved to another topic.7 Next, Montera asked Premier‘s president about her roles at Premier and the parent companies, whether BellRing was traded on the New York Stock Exchange, and whether it was “a big company.” When Premier objected, the district court told Montera to move on and denied Premier‘s request to remind the jury that BellRing and Post were not defendants. Finally, Montera asked a few questions about a children‘s cereal that Post manufactures after a testifying expert mentioned it in his report. These brief references were not unfairly prejudicial or likely to cause the jury to decide the case based on their views or impressions of large companies. The district court did not abuse its discretion in these evidentiary decisions.
c. California tax letter
Premier also argues that the district court erred by overruling its objection to a letter its tax advisor sent to the California Department of Resources Recovery and Recycling in 2010. The letter argued that Joint Juice should not be subject to a five-cent bottle deposit tax because it did not qualify as a “beverage” under California law, but rather was a “medical supplement” and “over-the-counter medication.” Premier argues that the letter was irrelevant, unfairly prejudicial, and confusing to the jury.
In Premier‘s view, the letter was irrelevant because no New York consumer saw it, so it could not have affected any purchases. This argument fails because extra-label evidence of the message intended by Joint Juice‘s packaging was relevant to Montera‘s defense against Premier‘s regulatory
With respect to
2. Counsel‘s arguments
Premier argues that the district court erred by denying Premier a new trial based on Montera‘s opening statement and closing argument, which Premier considered inflammatory. “To receive a new trial because of attorney misconduct,” Premier must show that Montera‘s misconduct “substantially interfered” with Premier‘s interests. SEC v. Jasper, 678 F.3d 1116, 1129 (9th Cir. 2012) (quoting Cal. Sansome Co. v. U.S. Gypsum, 55 F.3d 1402, 1405 (9th Cir. 1995)). Because “the district court is ‘in a superior position to gauge the prejudicial impact of counsel‘s conduct during the trial,’ we will not overrule a district court‘s [assessment of] the impact of counsel‘s alleged misconduct unless we have ‘a definite and firm conviction that the court committed a clear error of judgment.‘” Hemmings v. Tidyman‘s Inc., 285 F.3d 1174, 1192 (9th Cir. 2002) (quoting Anheuser-Busch Inc. v. Natural Beverage Distribs., 69 F.3d 337, 346 (9th Cir. 1995)). Premier fails to show that Montera‘s arguments were improper, let alone that misconduct “permeate[d] [the] entire proceeding” such that reversal is warranted. Jasper, 678 F.3d at 1129 (quoting Kehr v. Smith Barney, Harris Upham & Co., 736 F.2d 1283, 1286 (9th Cir. 1984)).
Premier first argues that Montera inappropriately suggested to the jury that Premier was “prey[ing] on the vulnerable.” This argument fails because counsel “is allowed to argue reasonable inferences based on the evidence,” United States v. Sayetsitty, 107 F.3d 1405, 1409 (9th Cir. 1997), and counsel‘s argument that “Joint Juice set out to target people who suffer from arthritis” was consistent with the evidence of Premier‘s marketing strategy. Similarly, counsel‘s argument that Premier used “paid hacks and certified [q]uacks in the articles that they publish” was not untethered from the record; it was consistent with evidence about Premier relying on industry-backed studies, evidence that some of the sponsoring companies refused to release the underlying data for external review, and the note written by Premier‘s president not to publish the study Premier contemplated if it yielded unfavorable results.
Premier next argues that Montera “primed the jury‘s sense of community protectiveness by referring ... to the defendant‘s size.” Premier takes issue with Montera‘s counsel‘s comment during
Finally, Premier argues that counsel “repeatedly emphasized the supposed moral blameworthiness of Premier‘s conduct” and portrayed “everyone on Premier‘s side” as “liars and thieves.” Montera responds that whether Premier‘s statements were false was relevant to its claim that Joint Juice‘s packaging was deceptive. We agree. “Using some degree of emotionally charged language during closing argument in a civil case is a well-accepted tactic in American courtrooms.” Settlegoode v. Portland Pub. Sch., 371 F.3d 503, 518 (9th Cir. 2004). We have recognized that lawyers are “entitled to argue that the jury should disbelieve the opposing party‘s witnesses for any number of reasons.” Id. at 520. The district court did not abuse its discretion when it ruled that “Plaintiff‘s counsel stayed within the reasonable bounds of argument and did not improperly inflame the jury.”
C. Damages
Finally, we turn to the parties’ competing challenges to the district court‘s calculation of damages and prejudgment interest. New York law provides that statutory damages are not an available remedy in class actions unless the New York Legislature expressly authorizes them. See
Lacking guidance from New York courts, the district court canvassed federal caselaw and concluded that “§§ 349(h) and 350-e allow statutory damages on a per unit basis,” where each unit of Joint Juice sold represented a statutory violation.9 The jury found that 166,249 units of Joint Juice were sold in New York during the class period. After the verdict, Montera sought statutory damages of $91,436,950, which represented the combined statutory damage amount of $550 per unit. Premier argues that the district court erred because
We know of no New York caselaw that resolves this question and federal courts have applied these statutes inconsistently. In some cases, the courts awarded damages without specifying how damages were calculated. In others, the distinction between awarding damages on a per-person or per-violation basis was not at issue because the cases involved single violations.10
The New York Court of Appeals has instructed that “[w]hen interpreting a statute, our primary consideration is to discern and give effect to the Legislature‘s intention. The text of a statute is the clearest indicator of such legislative intent and
The history and purpose of
The Legislature‘s use of the phrase “by reason of any violation” in the text of
We conclude that awarding statutory damages for each violation, particularly when the violation relates to a low-cost product, advances the Legislature‘s deterrent purpose and is consistent with the plainest reading of the statutory text. We therefore affirm the district court‘s ruling that statutory damages under
2. Substantive due process challenge to aggregate damages
Premier argued to the district court that a $91 million statutory damages award was substantively unreasonable and violated its due process rights. The district court agreed that the total award was excessive, and it awarded the class $50 per violation, rather than $550 per violation. The district court noted there was little guidance addressing when or how a court should reduce statutory damages on due process grounds, other than the Supreme Court‘s century-old opinion in St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63 (1919). The district court instead looked to the Supreme Court‘s State Farm factors for assessing the substantive reasonableness of punitive damages awards. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 418 (2003).
Two months after the district court entered final judgment, we published Wakefield v. ViSalus, Inc., 51 F.4th 1109 (9th Cir. 2022). Wakefield concerned a company that placed over 1.8 million robocalls in violation of the Telephone Consumer Protection Act (TCPA). Id. at 1116. Based on the TCPA‘s fixed statutory penalty of $500 “for each [] violation,”
3. Prejudgment interest
Premier challenges the district court‘s award of prejudgment interest on the statutory damages award.
New York courts have cautioned that “the sole function of [
Montera overlooks the New York Court of Appeals’ description of
We conclude that the award of prejudgment interest was error. The statutory damages award in this case was not compensatory because it exceeded the jury‘s actual damages award of $1,488,078.49, which the jury based on the number of units sold during the class period and the average price class members paid per unit of Joint Juice. As such, any award of prejudgment interest in addition to an award of statutory damages would constitute a windfall.14
We affirm the district court‘s orders denying Premier‘s motion for class decertification, judgment as a matter of law, and for a new trial. We also affirm the district court‘s evidentiary and trial rulings and initial calculation of statutory damages. We vacate the damages award and remand with direction to reassess Premier‘s substantive due process challenge to the award of statutory damages in light of the factors identified in Wakefield. On remand, the district court shall not award prejudgment interest on statutory damages.15
AFFIRMED IN PART, REVERSED IN PART, AND VACATED AND REMANDED IN PART.
Notes
The filing fees in small claims court in New York are lower, ranging from $10 to $20. See