On April 29, 2025, the Supreme Court heard argument on an issue that has divided the circuits: “Whether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III injury?â€� The case is, and the court’s decision could have a significant impact on class action litigation across the country. But the justices’ questions at oral argument highlighted a procedural wrinkle that could prevent the court from resolving this hotly contested issue.Ìý

The named plaintiffs in LabCorp are legally blind individuals who allege that they are unable to use the self-service check-in kiosks installed at LabCorp’s patient service centers. Based on these allegations, the plaintiffs assert claims for damages under the Americans with Disabilities Act and California’s Unruh Act.

In May 2022, the district court certified a damages class under Rule 23(b)(3) comprising all legally blind individuals in California who visited a LabCorp patient service center and “were denied full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations due to LabCorp’s failure to make its e-check-in kiosks accessible to legally blind individuals.� In August 2022, following a motion by plaintiffs to modify the class definition to eliminate any “fail safe� language (generally, a class defined in a way that depends on determination on the merits), the district court issued an order redefining the damages class as all legally blind individuals who visited a LabCorp patient service center “but were unable to use the LabCorp Express Self-Service kiosk.�  

LabCorp filed an interlocutory appeal from the district court’s May 2022 order, challenging certification on the ground that the class included members who lacked Article III standing. LabCorp argued that some legally blind individuals who visited a LabCorp patient service center preferred not to use a self-service kiosk. According to LabCorp, those individuals did not suffer any injury but would nonetheless be included in the class. 

The Ninth Circuit affirmed the district court’s order. Citing its decision , the Ninth Circuit explained that “LabCorp’s allegation that some potential class members may not have been injured does not defeat commonality at this time.â€� .

In its briefing in the Supreme Court, LabCorp framed the issue principally in terms of whether Article III of the Constitution forbids certification of a class that includes uninjured members. Alternatively, it argued that individualized issues will necessarily predominate over any common issues when a class contains an appreciable number of uninjured members, making certification improper under Rule 23(b)(3).

But at oral argument, the justices expressed concern about the fact that LabCorp only filed an appeal from the district court’s May 2022 certification order — not its subsequent August 2022 order that redefined the class to remove any “fail safe� language. That procedural quirk creates two potential problems for LabCorp and for the Supreme Court as it attempts to resolve this case. First, as plaintiffs’ counsel emphasized during oral argument, LabCorp’s arguments regarding uninjured class members appear to be directed primarily at the revised class definition in the August 2022 order, not the original class definition in the May 2022 order that was the subject of LabCorp’s appeal. Second, to the extent LabCorp is challenging the May 2022 order, that order has arguably been rendered a nullity by the district court’s subsequent August 2022 order.

A decision on the merits from the Supreme Court would bring much needed clarity to questions about Article III or predominance under Rule 23(b)(3). Following oral argument, it remains to be seen whether the court will actually reach the merits in this particular case. However, given the fact that the petition for a writ of certiorari was granted in LabCorp, the court clearly has expressed an interest in addressing the underlying issues at some point.

We will provide additional updates here once the Supreme Court acts. In the meantime, parties should pay careful attention to the governing law in their respective circuit, while keeping in mind that the law in this area could soon be clarified.

Manufacturers should add “possible class action defense� to the list of considerations when evaluating whether to conduct a voluntary recall of a consumer product, particularly when class action litigation is threatened or imminent. Rather than waiting to address issues reactively, a voluntary recall may help proactively squelch costly class action litigation before it gets off the ground. This is true because a voluntary recall, particularly one with robust remedies for consumers, may moot certain claims or eliminate standing under the “live case or controversy� requirements of Article III.

Consumer product recalls[1] are familiar to manufacturers, retailers, and consumers. Most manufacturers and retailers are likely aware that the U.S. Consumer Product Safety Commission (CPSC) has the authority to compel an involuntary recall.[2] However, the CPSC prefers and generally provides other options for manufacturers, distributors, and retailers, including voluntary recalls (for example, under the Fast-Track Program) that often provide the same types of remedies sought in class action litigation.[3]

To be sure, any consumer product recall can present challenges to manufacturers and retailers that range from cost to reputational damage. That said, if navigated correctly — particularly when the need for a recall is obvious — a voluntary recall can serve to save costs and protect a reputation by removing potentially dangerous products from the market. Voluntarily recalling and remedying potentially problematic products as quickly as possible could minimize or eliminate the potential harm that a defective (or potentially defective) product can cause that would lead to litigation in the first place.

Manufacturers and retailers faced with this reality should consider how to frame the remedies they will provide in an effort to shut down potential follow-on litigation from those seeking to take advantage of a ready-made consumer class action.

For example, providing customers belonging to a potential putative class with a robust remedy via a voluntary recall (e.g., fixing or replacing a product) can strip a court of potential avenues of redressability — thus knocking out a key pillar[4] of putative class members’ Article III standing. Similarly, proactively providing a robust remedy to customers that might otherwise belong to a putative class can short-circuit class litigation on mootness grounds.

Three recent decisions illustrate the value of a voluntary recall: one involving a voluntary CPSC recall, and two involving voluntary recalls from the National Highway Traffic Safety Administration (NHTSA).

Last year, a manufacturer of batteries designed for residential energy storage successfully moved to dismiss a class action lawsuit against it on mootness grounds after initiating a voluntary recall in conjunction with the CPSC.[5] The manufacturer in that case announced a pre-suit voluntary recall as part of the CPSC’s Fast Track Recall Program of certain batteries that had potential for overheating, notifying consumers that they would receive replacement products.[6] After announcing the recall, a class action complaint was filed against the manufacturer alleging violations of California’s Consumers Legal Remedies Act and California’s Unfair Competition Law. The manufacturer moved to dismiss, and the court, in granting the manufacturer’s motion, held:

Here, Defendant provided a timely response to Plaintiff and had already initiated its recall program, which is being monitored by CPSC, and will provide replacement products and renewed warranties to consumers. Therefore, Plaintiff’s CLRA and UCL claims should be dismissed because there is no live case or controversy as required under Article III. The Court finds that Defendant’s recall program adequately addresses and remedies the alleged [ ] battery defect and, thus, any alleged injury on which Plaintiff bases [his] claims appears to be moot.[7]

Fiat Chrysler Automobiles (FCA) obtained a similar result in a Georgia-based putative class action in Ward-Richardson, et al. v. FCA US LLC.[8] The putative class brought a suit alleging an electrical defect in a particular Jeep vehicle. After the lawsuit was filed, FCA worked with the NHTSA to voluntarily recall the model of Jeep affected, including the vehicles targeted by the lawsuit as well as vehicles not implicated by the litigation. FCA notified the owners and lessors of the vehicles, acknowledged the existence of a defect, and, in doing so, offered to repair the defect for free or reimburse those who had already paid to repair the defect. The district court later granted FCA’s motion to dismiss the complaint, holding that the recall “provides Plaintiffs with precisely the relief they seek through th[is suit]. Therefore, any additional relief that this Court could award would constitute an impermissible double recovery.�[9]

Finally, earlier this year, a district court in Michigan dismissed a putative class action against Ford Motor Company in similar fashion. In Letson v. Ford Motor Co.,[10] a putative class of plaintiffs alleged defects related to fuel injectors and the alleged resultant fire risk in certain Ford vehicles. Before the suit was filed, Ford initiated a voluntary recall for the affected vehicles, offering free repairs and advising drivers of the affected vehicles on ways to mitigate potential fire risk. Despite the plaintiffs disputing the recall’s adequacy, the district court granted Ford’s motion to dismiss on prudential mootness grounds.[11]

As these examples illustrate, voluntary recalls may offer manufacturers, distributors, and retailers an effective mechanism of mitigating the risk and potentially ending costly class action litigation.

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[1] See Consumer Product Safety Improvement Act (CPSIA), 15 U.S.C. § 2064(b). As an initial matter, the CPSIA requires any manufacturer, importer, distributor, or retailer of a consumer product within the CPSC’s purview to inform the CPSC “immediately� upon the receipt of information that “reasonably supports the conclusion that such product:

(1) Fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard upon which the [CPSC] has relied under section 9;

(2) Fails to comply with any other rule, regulation, standard, or ban under [the CPSIA] or any other Act enforced by the [CPSC];

(3) Contains a defect which could create a substantial product hazard . . .; or

(4) Creates an unreasonable risk of serious injury or death.�

[2] See 16 C.F.R. §§ 1115.23—1115.29.

[3] See, e.g., Consumer Product Safety Commission, Learn About the Fast-Track Program, (last visited June 4, 2024).

[4] TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992) (“[I]f the plaintiff does not claim to have suffered an injury that the defendant caused and the court can remedy, there is no case or controversy for the federal court to resolve.�)(citation omitted) (cleaned up).

[5] Charlton v. LG Energy Sol. Mich., Inc., No. 321CV02142RBMJLB, 2023 WL 1420726 (S.D. Cal. Jan. 31, 2023).

[6] Id. at *5.

[7] Id. (internal record citation and marks omitted).

[8] Ward-Richardson, et al. v. FCA US LLC, 2:21-cv-235, 2023 WL 5767481 (N.D. Ga. Sept. 6, 2023).

[9] Id. at *5.

[10] Letson v. Ford Motor Co., Case No. 23-10420, 2024 WL 845844 (E.D. Mich. Feb. 28, 2024).

[11] Id. at *4 (“Because plaintiffs only hypothesize that the recall leads to safety and environmental issues and do not otherwise show an actual or imminent, post-recall injury, plaintiffs’ claims are prudentially moot.�)

When settling consumer product class actions, many parties agree to resolve their claims using what is known as a “claims-made� settlement model. When a claims-made settlement is reached, class members must submit a “claim� to receive a portion of the monetary settlement. A claims-made process is justified in many circumstances, including, for example: when the identity of the class members or contact information for them is not readily available; when the amount a consumer may have paid for a particular product is not known to the defendant; or where there are other issues unique to each individual class member that might impact their portion of the recovery. Depending on the nature of the agreement, a class member may make a claim by, for example, submitting a receipt showing purchase of the at-issue product, filling out an online form, or, in some cases, merely by clicking a few buttons.

In principle, and oftentimes in practice, claims-made settlements are an effective and efficient way to resolve class claims. However, over the past few years, evidence suggests that claims-made settlements — particularly those administered digitally — have become saturated with fraudulent claims. For example, in a case settled recently in Wisconsin, while counsel for plaintiffs and defendants were aware that the class could not have included more than roughly 18,000 individuals, more than 780,000 claims were submitted in the settlement. Fortunately, in that case, there were measures in the settlement agreement to ferret out obvious instances of abuse, but the situation demonstrates the vast number of fraudulent claims that may be submitted in a claims-made settlement.

This is not an isolated example. In March 2024, a claims-made settlement resolving a consumer product suit against the manufacturer of an eyelash serum generated 6,526,866 claims by the end of the claims period. Just under 200,000 of these claims were deemed to be valid by the settlement administrator, meaning that an astounding 97% of claims made were fraudulent or otherwise invalid.

While it is difficult to pinpoint the exact cause of the seemingly dramatic increase in fraudulent claims, it is safe to assume that online publicity and internet virality play a nonnegligible role. Over the past few years, several claims-made settlements have gone viral on Twitter, TikTok, and other social media platforms, and countless websites have popped up that are dedicated to gathering and publicizing claims-made settlements. While this online publicity provides greater notice and easy access to potential valid claimants, it also increases the likelihood of catching the attention of fraudsters seeking to make a quick buck.

What’s more, there is evidence that some are making use of Artificial Intelligence (AI) and online bots to file claim after claim when news of a new settlement hits the internet. For example, a claims-made settlement approved in California federal court saw nearly 5,500 claims originating from the same IP address, with nearly 1,000 claims submitted from the address of one single-family home. See Opperman v. Kong Techs, Inc., No. 3:13-cv-00453-JST (N.D. Cal. Nov. 30, 2017) (Dkt. 911 at p. 4).

The rise of fraud in the claims-made settlement context has adverse effects on defendants and class members alike. When the parties agree to a limited settlement fund, fraudulent claimants dwindle the available pool, leaving fewer funds available for real claimants. Conversely, when the parties agree that the defendant will compensate all claimants that submit claims, defendants risk significant overpayment to fraudulent claimants.

Accordingly, both class counsel and defense counsel should remain vigilant when drafting and reviewing claims-made settlement agreements and should take extra care to ensure that such agreements proactively protect against fraudulent claims. Counsel might consider requiring class members to submit proof of purchase or, at the very least, to execute a declaration attesting to such purchase under penalty of perjury to increase the legitimacy of incoming claims. Courts, too, should remain alert to the potential for fraud when approving claims-made settlements and should consider more rigorous claims requirements to guard against further abuse.

Among recent trends in consumer product false advertising class actions has been the rise in cases alleging false advertising for products touting ingredients as “all natural� or “100% natural.� These lawsuits often point to any product label-language that could somehow be construed by consumers as referring to the product as “natural,� even when that is not what was intended by the manufacturer and would belie a reasonable reading of the product packaging. Recent decisions from the Second and Ninth Circuit Courts of Appeals reflect a growing recognition that reasonable consumers would not be misled by a label that could be construed as referencing that a product is “natural,� particularly when those statements are ambiguous and other portions of the product packaging clearly disclose the purportedly non-natural ingredients. These cases provide a much-needed common sense approach to adjudicating false advertising class actions challenging label marketing claims related to the naturalness of a product.

We have previously written about the Ninth Circuit’s decision in McGinity v. Procter & Gamble Co., 69 F.4th 1093 (9th Cir. 2023), where the court held that a consumer product manufacturer could rely on an ingredients list panel located on the back of the challenged product packaging to determine whether an ambiguous phrase on the front label was misleading or deceptive. Â鶹´«Ã½ has also previously analyzed district court decisions in the Ninth Circuit applying McGinity.Ìý

Just last week, in Bustamante et al. v. KIND, LLC, 2024 WL 1917155 (2d Cir. May 2, 2024), the Second Circuit affirmed summary judgment for the defendant food manufacturer in a false advertising class case challenging “all natural� marketing claims. Bustamante provides a good illustration of how difficult it can be to appropriately define the label term “All Natural� as used on product packaging. In particular, the plaintiffs in Bustamante alleged that they were misled by the phrase “all natural� on the labeling of snack bar products and brought state law consumer protection statutory claims on behalf three classes comprised of California, New York, and Florida consumers who purchased the product.

After the district court certified three damages classes under Rule 23(b)(3) of the Federal Rules of Civil Procedure, defendant moved for summary judgment, arguing that plaintiffs had failed to carry their burden to present admissible evidence establishing how the challenged “All Natural� statement would mislead reasonable consumers acting reasonably. In opposition, plaintiffs pointed to several pieces of evidence to support their allegations that a reasonable consumer would interpret the phrase “All Natural� to mean that the products do not contain synthetic or artificial ingredients, including: (i) two expert reports; (ii) the named plaintiffs’ testimony; (iii) defendant’s internal documents; and (iv) the dictionary definition of the word “natural.� The district court granted defendant’s motion for summary judgment because it found that plaintiffs had failed to meet their burden in establishing a reasonable consumer’s understanding of the phrase “All Natural� to prove deception, an essential element of their claims. Plaintiffs appealed.

In affirming, the Second Circuit found that plaintiffs’ consumer perception expert evidence, which sought to establish that reasonable consumers view products with an “All Naturalâ€� descriptor as being free of artificial and synthetic ingredients, was correctly excluded because the survey on which it relied was biased and leading. Likewise, the appellate court held that the district court correctly excluded plaintiffs’ expert chemist evidence, which challenged the term “All Naturalâ€� based on the composition of the products’ ingredients, because plaintiffs’ expert neither analyzed the actual ingredients in the products nor considered how the actual product ingredients were sourced or manufactured. The court also determined that plaintiffs’ expert evidence failed to present a cohesive definition of what a reasonable consumer would expect from products labeled “All Natural.â€�     

In addition, the Second Circuit found that the testimony of the named plaintiffs failed to demonstrate a common objective understanding of the term “All Natural� that reflected the views held by “a reasonable consumer.� Instead, the court noted that plaintiffs’ own testimony established how divergent consumers’ expectations can be as to the meaning of the phrase “All Natural.� Notably, several plaintiffs testified that consumers could have different understandings about the implications of the term “All Natural,� that these understandings could change over time, and that not everyone would agree with their understanding of that term.

The Second Circuit also determined that defendant’s internal documents, which discussed defendant’s understanding of what “All Natural� means, did not reveal a reasonable consumer’s understanding of that term. The court similarly was unpersuaded by an ordinary dictionary definition of the word “natural� — “existing in or caused by nature; not made or caused by humankind� — as sufficient for plaintiffs to meet their burden of establishing what a reasonable consumer acting reasonably expects from a product labeled “All Natural� in the context of applying it to a mass-produced snack bar wrapped in plastic.

Moreover, in an earlier district court decision issued out of the Second Circuit in the case of de Lacour et al v. Colgate-Palmolive Co., 16-CV-8364 (KMW), 2024 WL 36820, at *6 (S.D.N.Y. January 3, 2024)[1], a review of governmental guidance on the term “naturalâ€� further confirmed that “there are many interpretations of the word ‘natural’â€� because the governmental agencies weighing in on the term’s meaning have not reached an agreement on a definition. For instance, the court noted that the U.S. Food & Drug Administration (FDA) solicited public comments regarding use of the term “naturalâ€� on food product packaging in 2015 but never promulgated a definition after receiving over 7,000 comments reflecting varying and wide-ranging understandings of the term. Because there is no objective governmental understanding of the term “natural,â€� the district court found that plaintiffs in that case could not meet their burden to establish a “reasonable consumer’s understanding of ‘natural.’â€�   

Calls for federal regulators to provide clarity on the meaning and appropriate interpretation of the term “natural� have gone unanswered, and because of this ambiguity, it has been left to the courts to assess whether naturalness-based product marketing claims are deceptive. As the above cases demonstrate, a key issue in these cases is whether “naturalness� claims are ambiguous when viewed in context, such that courts can consider statements made on other parts of the product packaging in evaluating the plaintiff’s allegations of deceptiveness. This point is particularly important in evaluating whether a claim can be successfully challenged at the motion to dismiss stage, where factual allegations must be construed in plaintiff’s favor. These recent appellate decisions from the Ninth and Second Circuits take a more thoughtful and critical approach to adjudicating allegations of false or misleading “natural� labeling.

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[1] The plaintiffs in de Lacour argued they were misled by the inclusion of the term “naturalâ€� on toothpaste and deodorant products and sought to certify a class of California, New York, and Florida consumers. 

The Ninth Circuit Court of Appeals recently issued three noteworthy decisions holding that courts may consider information on the back or side of consumer product labels to clarify any ambiguous language on the front labels in considering whether consumer protection claims are plausibly alleged at the pleading stage: McGinity v. The Procter & Gamble Co., 69 F.4^th 1093 (9th Cir. 2023);¹ Steinberg v. Icelandic Provisions, Inc., No. 22-15287 (9th Cir. 2023); and Robles v. GOJO Indus., Inc., No. 22-55627 (9th Cir. 2023) (“Robles fails to state a claim because she does not plausibly allege that the front label is literally false or that the front label, as clarified by the back label, is false or misleadingâ€�). In each of the foregoing cases, the Ninth Circuit affirmed the district court’s dismissal of consumer protection claims for failure to state a claim. Specifically, plaintiffs failed to state a plausible claim that a reasonable consumer would be misled by information on the front of the product label in light of clarifying information contained on the back product label.

District courts within the Ninth Circuit have taken note. Just this month, three California district courts entered orders granting motions to dismiss consumer protection claims based on consideration of information on the entirety of the products’ labels.

On October 19, 2023, the Northern District of California entered an order granting Defendant Christian Dior Perfumes, LLC’s (“Diorâ€�) motion to dismiss claims alleging that Dior deceptively labels and advertises the SPF benefits of certain cosmetic products. Slaten v. Christian Dior Perfumes, LLC, No. 23-CV-00409-JSC, Dkt. 69 (N.D. Cal.) Plaintiff alleged that Dior’s Forever Foundation product, a cosmetic that also contains sunscreen, has deceptive labeling that suggests that the “24Hâ€� representation on the front label provides 24 hours of cosmetic coverage and sunscreen protection. In reviewing the product’s front label and discussing its layout, the court held that the front label is ambiguous as to whether the “24Hâ€� representation applies to the foundation alone or also to the product’s sun protection benefits. Citing McGinity, the court rejected arguments that a consumer needs only consider the front product label in presenting false advertising claims and concluded that it must also consider whether information on the product’s back label, including, in this case, the drug facts panel mandated by the FDA, cures the front label’s ambiguity. The court held that it did. After referencing the product’s back label sunscreen instruction to reapply “at least every 2 hours,â€� the court concluded that “no reasonable consumer would believe that the ‘24H’ representation applies to the sun protection benefitsâ€� of the Dior product.

That same day, another judge in the Northern District of California entered an order granting Del Monte Foods, Inc.’s (“Del Monteâ€�) motion to dismiss claims alleging that the “new look for fruit naturalsâ€� statement on the front label of Del Monte’s fruit cup products misleads consumers to believe that the products contained only natural ingredients. Bryan v. Del Monte Foods, Inc., No. 23-cv-865-MMC, Dkt. 43 (N.D. Cal.)² The court held that the challenged statement was ambiguous, similar to the “Nature Fusionâ€� representation at-issue in McGinity, because it does not make any affirmative promise about what proportion of the ingredients are natural. The court found that such ambiguity can be resolved by reference to the back label, which clearly discloses the inclusion of multiple synthetic ingredients. Accordingly, the plaintiff “has not plausibly alleged that the Products’ front label, as clarified by the back label, would mislead a reasonable consumer into thinking that the Products contain no synthetic ingredients.â€�

On October 20, 2023, the Central District of California entered an order granting CVS Pharmacy, Inc.’s (“CVSâ€�) motion for reconsideration of an order denying CVS’s motion to dismiss. Mier v. CVS Pharmacy, Inc., No. 20-cv-1979 (C.D. Cal.) In Mier, plaintiffs alleged that CVS’s hand sanitizer product misleads consumers by representing on the front label that it “Kills 99.99% of Germs,*â€� when evidence shows that many types of germs are not killed by alcohol-based hand sanitizers. The asterisk refers consumers to language on the back label: “*Effective at eliminating 99.99% of many common harmful germs and bacteria in as little as 15 seconds.â€� The court denied CVS’s motion to dismiss holding that it was a question of fact “[w]hether th[e] qualification on the back label clears up a consumer’s potential confusion that the Product kills 99.9% of germs.â€� CVS asked the court to reconsider its ruling and dismiss plaintiffs’ claims in light of the Ninth Circuit’s opinions in McGinity and Robles. The court was persuaded. Although the court did not consider Robles to be precedential, the court found it to be useful guidance for how the Circuit has applied its holding in McGinity in addressing a nearly identical hand sanitizer label. Specifically, “[r]ather than contradict the front label, the back label explains to the consumer what population of germs the 99.99% claim applies to[.]â€� Accordingly, the court held that the plaintiffs did not meet their burden to state a claim that a reasonable consumer would be misled by the product’s labeling. 

The recent Ninth Circuit precedent and district court cases have meaningful implications for retailers and manufacturers’ class action litigation strategies in defending claims alleging that a consumer product’s label is false or misleading. The courts’ clarification and application of the reasonable consumer standard provides helpful guidance in considering whether to seek dismissal at the pleading stage when a product label is not literally false or may be ambiguous. Based on these recent decisions, courts are rejecting the plaintiffs’ argument that Ninth Circuit “precedent� requires courts to only consider the front label in assessing whether a plaintiff’s consumer protection claims are plausibly alleged. Instead, they are applying the reasonable consumer standard at the pleading stage in a reasonable way; by considering the entirety of a consumer product’s labeling in evaluating whether plaintiff’s false advertising claims are plausible.

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¹ The McGinity decision is further summarized here.

² The authors of this article are counsel of record for Del Monte in the Bryan matter.