[00:00:00] Speaker 01: from you. [00:00:01] Speaker 01: Thank you your honor. [00:00:02] Speaker 01: Nick DePalma for the appellant the happy group which we call happy egg. [00:00:07] Speaker 01: Your honor in a consumer deception case to certify a class the district court has to ask is deception a question of law or fact common to the class and then two does it predominate and here the district court correctly decided [00:00:25] Speaker 01: Deception is not common to the class. [00:00:28] Speaker 01: Individualized issues predominate. [00:00:31] Speaker 01: And the reason the district court erred is because the district court did then not say, what is the core element? [00:00:38] Speaker 01: Essentially, your honor's decision in white v. Symmetra. [00:00:42] Speaker 01: What's the core critical element? [00:00:44] Speaker 01: What's the core theory? [00:00:46] Speaker 01: And we're submitting in a deception case because every one of the California and New York causes of action require consumer deception. [00:00:54] Speaker 01: That is the core element. [00:00:56] Speaker 01: And when the court found that individualized issues predominated on that element, the district court was required as a matter of law to deny the motion. [00:01:06] Speaker 04: How much does this turn on expert Morris and his opinion on [00:01:12] Speaker 04: the egg standards and the consumer expectations about what people understand when they're buying eggs and see a particular statement on a package of eggs. [00:01:24] Speaker 01: I think it turns almost entirely on that, at least in the context of the record below, Your Honor. [00:01:29] Speaker 01: I think, you know, in false advertising cases, consumer deception cases, you typically have two types of possible statements. [00:01:37] Speaker 01: You have literally false statements, where someone says something, it's healthy, but, oh, it turns out you have more than the FDA allowance of sugar for the day, so it's not healthy. [00:01:47] Speaker 01: That's a literally false statement. [00:01:49] Speaker 01: Then you have the more nuanced one, which is where all the action is in these cases. [00:01:53] Speaker 01: And that's where someone says it's impliedly false, right? [00:01:57] Speaker 01: Here, the carton says, free range, pasture raised on over eight acres. [00:02:02] Speaker 01: That's literally true. [00:02:04] Speaker 01: These are not caged hens. [00:02:06] Speaker 01: They're not locked in the hen house. [00:02:08] Speaker 01: They're on a farm or multiple farms nestled in the foothills of the Ozark Mountains with more than eight acres per farm. [00:02:15] Speaker 01: Every morning, the door opens. [00:02:16] Speaker 04: More than eight acres per hen? [00:02:18] Speaker 01: Per farm. [00:02:19] Speaker 01: Per farm. [00:02:19] Speaker 01: It's 21.8 square feet of space per hen. [00:02:22] Speaker 01: But it's more than eight acres per farm. [00:02:25] Speaker 01: And every morning, unless it's dangerous weather conditions or incredibly low temperatures, the doors open and the hens forage. [00:02:32] Speaker 01: And the plaintiff's theory here, and this is why Morris is so important, the plaintiff's theory is, well, yes, that's literally true. [00:02:39] Speaker 01: Fine, right? [00:02:41] Speaker 01: Your free range, your pasture raise. [00:02:43] Speaker 01: But you don't comply with the nongovernmental organization standard of the American Humane Association. [00:02:51] Speaker 01: And what that would do if we get into the weeds is that would say, well, every couple of months, you got to rotate those eight acres to another eight acres. [00:02:59] Speaker 01: OK, we don't do that. [00:03:01] Speaker 01: And the important thing for the literal falsity perspective is we don't say we do that. [00:03:07] Speaker 01: Happy Egg just truthfully says free range. [00:03:09] Speaker 03: Yes. [00:03:10] Speaker 03: I do have a question. [00:03:11] Speaker 03: I just want to make sure I understand procedurally where we're at at the district court. [00:03:18] Speaker 03: Because I looked at the district court scheduling order [00:03:21] Speaker 03: And it's my understanding that the expert discovery closes 90 days after class certification. [00:03:30] Speaker 03: Was that the case? [00:03:34] Speaker 01: I guess I would say yes and no. [00:03:35] Speaker 01: I think everything got stayed after the court's decision for purposes of this interlocutory appeal. [00:03:41] Speaker 01: So nothing has happened after that. [00:03:44] Speaker 03: So here's the second part of my question. [00:03:47] Speaker 03: So couldn't plaintiff remedy Dr. Morris's opinion or find another expert to address the merits of their contention? [00:03:56] Speaker 01: No, Judge Mendoza. [00:03:57] Speaker 01: And here's why. [00:03:58] Speaker 01: And I would talk about your decision in Sally. [00:04:02] Speaker 01: I'm probably not pronouncing that right. [00:04:04] Speaker 01: But in Sally, there was this concept of an evidentiary defect in looking at time records. [00:04:09] Speaker 01: And I think this court said, well, that's very formulaic, and this defect could be cured, right? [00:04:16] Speaker 01: So the class can be certified. [00:04:18] Speaker 01: But post-Sally, in this court's decision in Grodzinski and other decisions, this court is affirming the exclusion of experts at the class certification stage under Daubert and Rule 702. [00:04:31] Speaker 01: And to answer Judge Bress's question, which dovetails with, yes, yes. [00:04:36] Speaker 03: Hold on. [00:04:36] Speaker 03: Can you cite what case you're citing to indicate that that would be foreclosed, given the scheduling order that indicates it's [00:04:46] Speaker 03: It closes in 90 days after. [00:04:48] Speaker 03: I just want to make sure I understand your argument and your authority. [00:05:01] Speaker 01: No, yes. [00:05:02] Speaker 01: The case that I was citing was the Grodzicki case, 957 F3rd, 979 Ninth Circuit, 2020, where the court affirmed the exclusion of an expert of class certification. [00:05:14] Speaker 01: holding that under Daubert, the district court must ensure that all admitted expert testimony is both relevant and reliable. [00:05:21] Speaker 01: And I would say the plaintiffs brought the motion for class cert. [00:05:25] Speaker 01: That means that they have to prove that common questions predominate on, under white visa metra, the critical or core issue in the case. [00:05:35] Speaker 01: And if the plaintiffs can't prove that, [00:05:38] Speaker 01: And we're not talking about a formulaic issue with whether they can review time records, whether that's hearsay. [00:05:44] Speaker 01: We're talking about they can't prove the core element of deception. [00:05:47] Speaker 03: And there's no indication they can. [00:05:50] Speaker 03: The reason I was asking is that I saw that Little versus Neutromex in 2024. [00:05:58] Speaker 03: Uh, where we held that, uh, there, that contrary to Neutromax's contention, there is no requirement that the evidence relied upon by plaintiff to support class certification be presented in an admissible form at the stage certification, uh, at the, at the class certification stage. [00:06:18] Speaker 03: Um, and then they cited Sally, uh, at 909-10-1004. [00:06:25] Speaker 03: So I guess that's where I'm, I'm. [00:06:27] Speaker 03: I might have to look at Grzezinski because I don't, is it, what year was that? [00:06:34] Speaker 01: Grzezinski is 2020. [00:06:35] Speaker 01: Okay. [00:06:35] Speaker 01: There's also Olean v. Bumblebee Foods, 31F4651, pin site 665. [00:06:45] Speaker 01: That's 9th Circuit 2022 on Bonk. [00:06:49] Speaker 01: And that says in carrying the burden of proving facts necessary for certifying a class under Rule 23B3, [00:06:55] Speaker 01: Plaintiffs may use any admissible evidence. [00:06:59] Speaker 01: And I guess just to round this off, Judge Mendoza, in summary judgment under Rule 56, you submit an affidavit. [00:07:06] Speaker 01: That affiant, that declarant might not be able to lay the foundation for everything in that affidavit. [00:07:13] Speaker 01: But a district court can still say the facts in there are admissible. [00:07:18] Speaker 01: What we have with Dr. Morris and why Dr. Morris is different is because Dr. Morris has nothing that would be admissible. [00:07:26] Speaker 01: What Dr. Morris actually said is he's a former USDA official. [00:07:31] Speaker 01: He is currently the head of a pollock association, a whitefish association in Seattle. [00:07:36] Speaker 01: He went to a few grocery stores in Seattle years after the class period. [00:07:41] Speaker 01: He looked at some of the egg cartons, then he googled AHA and some other things on the internet, and then he said, I think, this is the definition of Ipsy Dixit, I think consumers would think that the industry standard is AHA. [00:07:57] Speaker 01: And that's why, and the district court actually was quite fair to Dr. Morris because one of the things he said when I deposed him was he said, look, let me stop you there. [00:08:06] Speaker 01: I'm not qualified as an expert in egg standards. [00:08:09] Speaker 01: And the district court said, no, we're not dealing with his qualifications. [00:08:14] Speaker 01: What the district court's saying is what he did isn't sufficient. [00:08:18] Speaker 01: And unlike Sally or cases that rely on Sally, it's not a technical defect that could be cured. [00:08:26] Speaker 01: He'd have to do something entirely different than what he did. [00:08:29] Speaker 01: And what the results of that are, we have no idea. [00:08:32] Speaker 01: And one useful foil here is they had a damages expert as well, but that damages expert didn't actually do the analysis. [00:08:41] Speaker 01: They just said what they would do. [00:08:43] Speaker 01: And we challenged that. [00:08:44] Speaker 01: The district court said, no, that's sufficient, because I'm confident they could do that. [00:08:48] Speaker 01: But the district court said, when I look at Morris, he's not giving me anything. [00:08:53] Speaker 01: He's not giving me something that says he could do that, let alone that that would provide the connective tissue that someone needs for deception. [00:09:02] Speaker 01: And to answer, to go back to Judge Bress's question, when you have a consumer deception case and it's not literal falsity, and you're in implied falsity, you have to provide connective tissue. [00:09:16] Speaker 01: You have to prove, and here the plaintiff's theory was, [00:09:19] Speaker 01: The industry standard is AHA. [00:09:21] Speaker 01: Therefore, the happy egg truthful statement, pasture raised in over eight acres, is misleading because it implies to consumers it follows the industry standard, which is AHA. [00:09:33] Speaker 01: And then you say, well, what evidence do you have of that, that that's common, right? [00:09:36] Speaker 01: Why is this different than the Thurgood case by Judge Posner out of the Seventh Circuit, where they had one plaintiff say, hey, I think stainless steel in a washing machine means no rust ever. [00:09:48] Speaker 01: And Judge Posner was like, but does every member of the 500,000 strong class believe that? [00:09:53] Speaker 01: Does anyone believe that? [00:09:56] Speaker 01: And that's the same question we ask here. [00:09:57] Speaker 01: Does anyone believe that when they read Happy Eggs Cardin, that means it's compliant with the AHA standard? [00:10:05] Speaker 01: And no survey was submitted to show that. [00:10:08] Speaker 01: No industry expert was submitted to show that. [00:10:11] Speaker 01: And that's why, after a pretty fulsome analysis of the record, the district court said, common questions do not predominate. [00:10:19] Speaker 01: And under White v. Symmetra, the next step should have been, now that I've reached that decision on the core element of deception, I am now going to deny the motion for class cert. [00:10:32] Speaker 01: That's what ought to have happened, and that's why we filed this interlocutory appeal. [00:10:36] Speaker 01: And I could talk more about each of these, because here, the named plaintiffs, Plaintiff Rousseff, he worked at Whole Foods. [00:10:45] Speaker 01: The Whole Foods standard for pasture raised is lower than the Happy Egg standard. [00:10:50] Speaker 01: It just means access to green space. [00:10:52] Speaker 01: It doesn't mean they get eight plus acres. [00:10:55] Speaker 01: We far exceed that. [00:10:56] Speaker 01: And I asked him, if you don't see a certification, [00:11:00] Speaker 01: Do you think it's certified? [00:11:02] Speaker 01: And he said, no, I know what certifications are. [00:11:04] Speaker 01: Well, we don't claim to be certified pasture raised by the AHA. [00:11:08] Speaker 01: So again, this is a truthful claim that's not literally false. [00:11:11] Speaker 01: Plaintiff Gambino from New York, I actually showed him a video, an aerial footage of our farm. [00:11:16] Speaker 01: And I said, hey, if something from this farm is pasture raised, do you agree? [00:11:22] Speaker 01: Is that fair? [00:11:22] Speaker 01: And he's like, yeah, if it's from that farm, I have no problems. [00:11:25] Speaker 01: I'm not deceived. [00:11:26] Speaker 01: So you have the named plaintiffs not providing any common evidence of deception. [00:11:32] Speaker 01: And that's where you get into Morris. [00:11:33] Speaker 01: What do you do when the plaintiffs don't say it, right? [00:11:36] Speaker 01: You say, Morris, can you say there's an industry standard and that consumers believe the industry standard applies? [00:11:43] Speaker 01: Because this is not true. [00:11:45] Speaker 01: But even if most of the eggs in the market were certified by AHA, they're not. [00:11:50] Speaker 01: That doesn't mean that someone who buys an egg that's not certified by AHA thinks it is certified. [00:11:56] Speaker 01: That's the connective tissue that was wholly missing from the plaintiff's deception theory. [00:12:01] Speaker 01: And that's why the court got that part right. [00:12:05] Speaker 01: The problem is the court did not then do the white v-symmetra analysis and say, what is the critical element? [00:12:12] Speaker 01: What is the core theory? [00:12:14] Speaker 01: Knowing that deception is the critical element and the core theory, can I find that common questions of law and fact predominate over individual ones? [00:12:23] Speaker 01: And the answer was no. [00:12:25] Speaker 01: But the district court did not do that analysis. [00:12:27] Speaker 01: So what we're asking is that this court reverse and enter an order denying the motion for class cert. [00:12:34] Speaker 01: And may I reserve the rest of my time? [00:12:35] Speaker 01: Yes. [00:12:36] Speaker 01: Thank you. [00:12:48] Speaker 02: Good morning, Your Honors, and may it please the court. [00:12:50] Speaker 02: Aubrey Wands, appearing for plaintiff's appellees. [00:12:53] Speaker 02: Just to start with the factual question to Judge Mendoza's question, expert discovery was not closed. [00:13:00] Speaker 02: So we fully had the opportunity to clear up any issues with Dr. Morris's testimony if need be. [00:13:07] Speaker 02: Again, we disagree with the proposition that Dr. Morris needed to conduct a survey in this case, and I'm happy to explain why. [00:13:15] Speaker 02: But if that was necessary, expert discovery wasn't closed, and there was time for him to do that work. [00:13:21] Speaker 04: Well, I guess it depends. [00:13:23] Speaker 04: I mean the, it's one thing to kind of make little adjustments to an expert report, but I mean the class. [00:13:31] Speaker 04: motion was filed, there was evidence attached to it. [00:13:35] Speaker 04: So, I mean, we usually expect that to be kind of ready to go with the motion. [00:13:41] Speaker 04: And if there's some cleanup later, that's one thing. [00:13:43] Speaker 04: But we're talking about, based on the district court's decision, some pretty substantial changes to what Morris has done, it would appear. [00:13:50] Speaker 02: Well, let me try to answer that here again. [00:13:52] Speaker 02: We do not believe that Dr. Morris needed to do any survey evidence, right? [00:13:55] Speaker 02: Because our method of proving deception was a two-pronged approach. [00:13:59] Speaker 02: Dr. Morris was proffered. [00:14:01] Speaker 02: to offer the opinion on the existence of an industry standard. [00:14:04] Speaker 02: We had another expert, Dr. J. Michael Dennis, who is our consumer perception expert, who did conduct a survey showing that the reasonable consumer believed that these eggs were pasture-raised eggs. [00:14:17] Speaker 02: So fundamentally, the existence of an industry standard does not depend on consumer perception or survey evidence. [00:14:24] Speaker 02: But the district court still struck his testimony on that basis. [00:14:28] Speaker 02: Again, our position that that was an error of law [00:14:31] Speaker 02: But Dr. Morris did, it's not like Dr. Morris didn't do anything in that regard, Your Honor. [00:14:35] Speaker 02: Dr. Morris did conduct what he called an informal survey, which is really just a snapshot of the market. [00:14:41] Speaker 02: He did online research. [00:14:43] Speaker 02: He went to stores. [00:14:44] Speaker 02: He considered other evidence in the record from Happy Egg and the industry that followed these hen welfare standards, but he looked at what was going on in the stores, and all of that corroborated what he already understood to be the case, which is every retailer, every major, except Whole Foods, [00:15:00] Speaker 02: And the rest of the industry essentially follows the standard. [00:15:02] Speaker 02: So he did do a survey. [00:15:04] Speaker 02: And to the extent that district court believed that survey did not comport with scientific standards, in other words, we acknowledge that it was never intended to be a formal survey, just to be clear. [00:15:14] Speaker 02: But it did not cover the states of California and New York. [00:15:18] Speaker 02: It wasn't statistically significant. [00:15:20] Speaker 02: But Dr. Morris did do an informal survey. [00:15:23] Speaker 02: And there was time for him to conduct that survey if he needed to do that. [00:15:28] Speaker 02: But I think it's also worth pointing out, Your Honor, to that point, is that the results of that survey wouldn't really have made a difference. [00:15:37] Speaker 02: The record evidence is uncontested that every major retailer other than Whole Foods followed these standards. [00:15:43] Speaker 02: Happy Egg's own industry standards expert testified that it wouldn't matter if 100% of the retailers followed the hand welfare standards. [00:15:51] Speaker 02: It would be the position that the UEP takes. [00:15:55] Speaker 02: The bottom line is that it wouldn't have mattered if Dr. Morris's survey proved 100% of the retailers followed the standard, even according to HAPI. [00:16:03] Speaker 02: But again, if the district court still believed that that was necessary, there was time for Dr. Morris to do that. [00:16:11] Speaker 02: And Your Honor, you asked my colleague at the beginning, to what extent does this case, the predominance issue, turn on the sufficiency of Dr. Morris's testimony? [00:16:21] Speaker 02: And I asked my colleague to say that it fully turns on that issue. [00:16:25] Speaker 02: And we agree with that, Your Honor. [00:16:27] Speaker 02: The district court's predominance finding was predicated entirely on striking Dr. Morris's expert testimony. [00:16:34] Speaker 02: Therefore, this court has jurisdiction over that. [00:16:37] Speaker 02: And if it reverses the Dabbert ruling, then it would resolve the rule 23B3 issue as well. [00:16:43] Speaker 02: Again, Dr. Morris's primary opinion was that the HEN welfare standards for pasture-raised eggs, and those are the standards set by the AHA and the HFAC, are the industry standards. [00:16:55] Speaker 02: This is not controversial. [00:16:57] Speaker 02: Experts routinely apply it on the meanings of industry terms across industries. [00:17:02] Speaker 04: What is the common proof, though, that any consumer would understand this to be the case? [00:17:08] Speaker 02: Our method of proof was twofold. [00:17:11] Speaker 02: First, establishing the existence of industry standard. [00:17:13] Speaker 02: And that was the purpose of Dr. Moore's testimony. [00:17:16] Speaker 02: And second, the proof was from Dr. Dennis. [00:17:19] Speaker 02: He conducted a survey, which the defendants didn't challenge. [00:17:24] Speaker 02: And he's an expert in conducting consumer perception surveys. [00:17:28] Speaker 02: The results of that survey showed that the vast majority of consumers believe that these eggs are pasture-raised eggs. [00:17:37] Speaker 04: So therefore, the reasonable... Did the survey shed any light on this key issue of the industry standard and whether consumers understand that to be a reference to some kind of industry standard? [00:17:49] Speaker 02: No, it didn't, Your Honor. [00:17:50] Speaker 02: We don't believe that was necessary because of Dr. Morris's component, which is first established in the existence of an entry standard. [00:17:57] Speaker 02: So I don't think the reasonable consumer, Your Honor, is expected to know, all right, well, these pasture raised eggs are certified by the AHA or the HVAC. [00:18:08] Speaker 02: I mean, there's examples of there could be a standard of identity for a food product. [00:18:14] Speaker 02: Set by the government. [00:18:15] Speaker 02: I don't think the reasonable consumers is expected to know the details of that I guess I don't I'm not understanding your your Point you just made because if you're saying that dr. Morris is supposed to present the industry standard Dr.. Morris's test one is excluded Right well our absolute our main argument your honor is that dr. Morris's expert testimony should not have been excluded excluded in the district court committed an abuse of discretion by excluding his testimony [00:18:44] Speaker 02: based solely on the fact that he did not conduct a survey, and that that survey did not comport with scientific standards governing survey research. [00:18:53] Speaker 04: Well, this was kind of why I asked your friend on the other side how much of this is really riding on Dr. Morris. [00:18:59] Speaker 04: And if I were to think, let's just say hypothetically, I were to think that the district court did not abuse its discretion in striking Dr. Morris, how then do you prevail here? [00:19:11] Speaker 02: Yes, Your Honor. [00:19:12] Speaker 02: I think two points on that, Your Honor. [00:19:13] Speaker 02: First, we did submit other evidence in support of an industry standard in addition to Dr. Morris's testimony. [00:19:20] Speaker 02: So HAPIIG itself and the rest of the industry considered the HEN welfare standards to be the industry standard. [00:19:28] Speaker 02: So we submit that that is common evidence from which a jury could conclude that those are the industry standard. [00:19:35] Speaker 02: We also submitted evidence from the UEP that took the position that the HEN welfare standards [00:19:41] Speaker 02: are the industry standard. [00:19:42] Speaker 02: And Happy Egg's own industry standards expert testified that the position taken by the UEP would represent the industry standard. [00:19:51] Speaker 02: So even putting aside the admissibility of Dr. Morris' opinion, we think those two other categories of common evidence could be used to prove the existence of an industry standard. [00:20:02] Speaker 00: Let me ask you, you said that Dennis' testimony was that [00:20:10] Speaker 00: people understood pastor raised to mean pastor raised? [00:20:17] Speaker 00: That is, what exactly did he connect what his consumers meant? [00:20:23] Speaker 00: Because I thought Happy Eggs agrees that people think pastor raised means pastor raised. [00:20:31] Speaker 02: Well, so the cartons, Your Honor, the challenge statement that's printed on the cartons is free range pasture raised on over eight acres. [00:20:41] Speaker 02: So I think from our perspective, what we needed to prove was, do consumers believe, based on that challenge claim, that these acres are pasture raised? [00:20:50] Speaker 02: And so I find it a little happy. [00:20:52] Speaker 04: But just to put a pause there, doesn't it depend on what we mean by that? [00:20:56] Speaker 04: Because it may be factually untrue. [00:20:59] Speaker 04: The hens may be raised [00:21:01] Speaker 04: in a dark tunnel. [00:21:03] Speaker 04: So that's not pasture raised. [00:21:04] Speaker 04: But they may be raised on something that looks a lot like a pasture. [00:21:07] Speaker 04: And then we're asking ourselves, is that really what we mean by pasture raised? [00:21:12] Speaker 04: Or does it mean something more technical in this industry? [00:21:15] Speaker 04: I took your position to be the latter. [00:21:18] Speaker 00: But the dentist doesn't go to that point. [00:21:21] Speaker 00: Morris does. [00:21:23] Speaker 02: Morris goes to the point of the existence of the industry standard. [00:21:25] Speaker 02: And I do believe if you find, whether through Dr. Morris's testimony or the other independent evidence that I was just talking about, [00:21:32] Speaker 02: that there is an industry standard, then it's not incumbent on Dennis to conduct a survey. [00:21:38] Speaker 00: No, I was just trying to get to the point, though, of what does Dennis actually prove, because I thought Happy Eggs would agree that the statement on their cartons does mean that it's pasture raised. [00:21:51] Speaker 02: I wish that was the case. [00:21:53] Speaker 02: I don't think Happy Egg is conceding that the [00:21:55] Speaker 02: that consumers believe these eggs are pasture-raised. [00:21:58] Speaker 02: I think they absolutely are arguing that consumers think they're free-range eggs. [00:22:02] Speaker 02: That's why Happy Egg put both statements on the carton. [00:22:07] Speaker 02: So it's not, they call it a reading test, but Dr. Dennis didn't do a reading test. [00:22:12] Speaker 02: He asked, there is the free-range claim and the pasture-raised statement on the cartons. [00:22:17] Speaker 02: And so I don't think it's obvious that a consumer necessarily believes that these eggs are pasture-raised. [00:22:23] Speaker 02: That's where Dr. Dennis' survey came in. [00:22:25] Speaker 02: to prove that. [00:22:26] Speaker 02: I mean, I think, again, just to be clear, I think maybe it's helpful to look at this court's decision in the Becerra versus Dr. Pepper case, where there was this tension between a consumer survey testing how consumers understand the meaning of diet with respect to a diet soda. [00:22:43] Speaker 02: And this court held that, well, that doesn't just carry the day. [00:22:46] Speaker 02: That consumer understanding is inconsistent with how an industry defines the term. [00:22:51] Speaker 02: So I think you have this situation where there is an industry standard [00:22:55] Speaker 02: that we need to prove, and that's what we try to do through Dr. Morris and this other evidence. [00:23:00] Speaker 02: And once we've established that, then I don't think it's a matter of proving that consumers believe its pasture is under the industry standard, if that, I hope that made sense. [00:23:14] Speaker 03: So, counsel, if you, if you, if we disagree with you that Dr. Morris, that it was incorrect [00:23:23] Speaker 03: In other words, if we affirm the judge excluding Dr. Morris, then you agree that you would lose? [00:23:31] Speaker 02: No, I'm sorry. [00:23:33] Speaker 02: We don't agree with that. [00:23:34] Speaker 02: We think that is the most efficient and straightforward way to resolve this appeal. [00:23:38] Speaker 02: But I think we could still win if you found that the other common evidence that we submitted could be used to prove the existence of an industry standard. [00:23:50] Speaker 04: But the way the district court did this was a little bit different because the district court basically said, well, there's not common evidence of deception, but there is common evidence of materiality and damages. [00:24:00] Speaker 04: Do you think you can win on that theory, that we just put common deception off to the side totally? [00:24:07] Speaker 04: And can this be sustained based on the latter two pieces of this? [00:24:11] Speaker 02: Your Honor, let me try to explain. [00:24:13] Speaker 02: I think there's a little bit of nuance to that argument. [00:24:15] Speaker 02: I think from our perspective, the district court had discretion. [00:24:19] Speaker 02: to certify that class, even assuming that the deception was not a common question that predominated. [00:24:26] Speaker 02: So we think the district court had the discretion under rule 23 to do that. [00:24:30] Speaker 02: However, and I think that's primarily because classification rulings are tentative and they're procedural. [00:24:37] Speaker 02: So after the district court issued that ruling, there would, as a matter of proof, a lot could have developed. [00:24:43] Speaker 02: We could have submitted Dr. Morris's opinion in admissible form. [00:24:47] Speaker 02: We have this other common evidence that I just discussed that we would have submitted a summary judgment. [00:24:53] Speaker 02: and would try to admit at trial. [00:24:54] Speaker 04: But I guess I'm having trouble with the, you know, we would submit Dr. Morris's opinion in admissible form because it would mean basically completely redoing what he did. [00:25:04] Speaker 04: That the district court was not, by the district court's lights, I mean the district court was not satisfied with the methods that he undertook. [00:25:10] Speaker 04: And so whether he could undertake some different methods or not, I don't think that's just like a kind of minor tweak to what he's doing. [00:25:17] Speaker 04: It's a complete overhaul of his work. [00:25:19] Speaker 04: And whether the district court would have permitted that, I don't know. [00:25:22] Speaker 02: Well, I don't know that either, Your Honor. [00:25:24] Speaker 02: I mean, I'll just try to push back on that a little bit. [00:25:26] Speaker 02: I mean, I think that the district court misunderstood the purpose of Dr. Morris's testimony, which was to establish the existence of an industry standard, which does not depend on consumer perception. [00:25:39] Speaker 02: And I'll refer back to the Dr. Pepper case. [00:25:42] Speaker 02: And it believed that Dr. Morris should have conducted a survey based on some testimony where he said, I've done consumer perception surveys. [00:25:51] Speaker 02: in his current role at Alaska Pollock. [00:25:52] Speaker 02: But he was fundamentally trying to test something entirely different in that case. [00:25:56] Speaker 02: So I think the district court made a mistake there. [00:26:00] Speaker 02: But the point I was trying to make, Your Honor, is simply that if, again, we don't think a survey was needed at all. [00:26:06] Speaker 02: But if one was needed, Dr. Morris did start that process. [00:26:11] Speaker 02: He didn't need to do it. [00:26:12] Speaker 02: It's sort of the cherry on top. [00:26:14] Speaker 02: He had already established what he needed to from a factual basis to form his opinion. [00:26:19] Speaker 03: But he could do something. [00:26:21] Speaker 03: I guess I went back and I was looking at the district court order and at ER 8, the court actually said, the court rejects Happy Group's contention that Dr. Morris lacks the specific expertise needed to opine on egg standards. [00:26:42] Speaker 03: But what it did do, it went on to exclude his opinion based on consumer perception. [00:26:48] Speaker 03: So that's a fine distinction. [00:26:50] Speaker 03: I think that's the point that you're trying to make, correct? [00:26:52] Speaker 02: Yeah, sure. [00:26:53] Speaker 02: Thank you. [00:26:53] Speaker 02: I think that's exactly the point I'm trying to make. [00:26:55] Speaker 02: I think under Hangarter, under Rule 702, I think Dr. Morris's qualifications are a primary component of assessing his reliability. [00:27:04] Speaker 02: But to your point, Dr. Morris was not put forward [00:27:07] Speaker 02: as a consumer perception expert. [00:27:08] Speaker 02: He was not before to offer an opinion on consumer perception. [00:27:12] Speaker 04: What is the evidence on consumer perception, then? [00:27:17] Speaker 04: It's Dr. Dennis' testimony, Your Honor. [00:27:20] Speaker 04: Does he actually get into the issue that we're talking about, which is the consumer perception of what this phrasing means as it relates to an industry standard? [00:27:29] Speaker 02: No, he doesn't, but that's where [00:27:31] Speaker 02: First, we established from Dr. Morroth the existence of an industry standard. [00:27:36] Speaker 02: So let me try to give, maybe this example may be helpful. [00:27:40] Speaker 02: There are grades for eggs, like grade AA, that's set by, I believe, the USDA AMS department. [00:27:49] Speaker 02: If you were to ask a consumer, do you believe these are, let's say hypothetically that those eggs don't meet that standard. [00:27:56] Speaker 02: Well, I think the test from the reasonable consumer standard would be to ask consumers, do you believe these are AA eggs, grade AA eggs? [00:28:03] Speaker 02: It wouldn't be, do you believe these are USDA AMS set grade AA eggs? [00:28:08] Speaker 02: So I think if we establish as a predicate that the hand welfare standards are the industry standard, [00:28:16] Speaker 02: All we need to do is prove that consumers actually believe that these are pasture-raised eggs. [00:28:20] Speaker 02: So we don't believe that Dr. Dennis needed to stay in his survey, ask consumers, do you believe these are AHA HVAC pasture-raised eggs? [00:28:30] Speaker 02: I think that's antithetical to the reasonable consumer standard. [00:28:33] Speaker 02: But again, expert discovery hadn't closed. [00:28:37] Speaker 02: And if the district court believed that Dr. Dennis needed to conduct a different survey, [00:28:44] Speaker 02: He could have done that too. [00:28:45] Speaker 02: And I think we did specifically ask the district court for the opportunity to do that if it had concerns. [00:28:50] Speaker 02: And I do think that's within the district court's discretion to allow that. [00:28:55] Speaker 04: Let me see if other colleagues have questions for you since we let you go a little over. [00:28:59] Speaker 04: I want to thank you very much for your presentation. [00:29:02] Speaker 04: We'll hear a brief rebuttal. [00:29:03] Speaker 04: Thank you, Your Honor. [00:29:07] Speaker 01: Thank you, Your Honor. [00:29:08] Speaker 01: So if I may pick up where I left off. [00:29:12] Speaker 01: One clarification on the expert discovery, and we pointed this out on page seven of our reply brief. [00:29:21] Speaker 01: Fact discovery closed on April 11th, 2023, and certification-related expert reports were also due April 11th, 2023. [00:29:29] Speaker 01: So there was not more time to do new expert reports. [00:29:34] Speaker 01: Turning to Morris, and in connection with that record site, after the court said, look, [00:29:42] Speaker 01: The gentleman is qualified. [00:29:44] Speaker 01: The court then looked at reliability. [00:29:46] Speaker 01: And on page eight of the court's opinion, the court specifically noted, he conducted online research, looked at grocery stores in or around his neighborhood, and took pictures of different egg products bearing a pasture-raised label. [00:29:59] Speaker 01: And then he said, this is not intended to be a comprehensive survey. [00:30:03] Speaker 01: And then he testified there was no methodology for taking pictures of cartons. [00:30:07] Speaker 01: no scientific basis for the days he chose to visit stores, and he only selected cartons if they said pasture raised. [00:30:14] Speaker 01: And the court didn't even get into, this is in Seattle, it's not in California, it's not in New York, and he did it in real time. [00:30:21] Speaker 01: He made no effort to even see what was on the shelves during the class period, which was May 2019 to December 2021. [00:30:26] Speaker 01: And I asked him, was this supposed to be scientific? [00:30:30] Speaker 01: And he said, absolutely not, absolutely not. [00:30:34] Speaker 01: And then what the court said was, [00:30:36] Speaker 01: Look, what he's doing for his personal purposes does not satisfy Daubert. [00:30:41] Speaker 01: And the court went on that he actually failed to do what he would do as a professional. [00:30:48] Speaker 01: And that's why the court said, look, he is disqualifying himself. [00:30:52] Speaker 01: He's saying, I can commission surveys, but I chose not to do that here because this was just for my own personal purposes. [00:30:59] Speaker 01: Just because I'm a Pollock guy, I needed to get familiar with eggs. [00:31:04] Speaker 01: And that's the very definition of Ipsy Dixit. [00:31:06] Speaker 01: And there's no suggestion whatsoever that even given more time, he could provide that connective tissue. [00:31:13] Speaker 01: What about Dennis? [00:31:14] Speaker 01: So Dennis was my third point. [00:31:16] Speaker 01: Thank you, Judge Press. [00:31:17] Speaker 01: So Dennis, and I think that you were asking these questions, one can run a survey and say, here's the carton. [00:31:24] Speaker 01: What does that mean? [00:31:25] Speaker 01: And then one could do a control and remove the word pasture and say, what does this mean? [00:31:29] Speaker 01: And then you could ask targeted, close-ended questions. [00:31:32] Speaker 01: Does this data imply something about certification by the AHA? [00:31:37] Speaker 01: Does this data imply something about the industry standard? [00:31:40] Speaker 01: What do you think pasture raised means? [00:31:43] Speaker 01: What do you think free range means? [00:31:45] Speaker 01: One could ask those questions. [00:31:47] Speaker 01: Dennis did not ask those questions. [00:31:49] Speaker 01: Dennis just removed the word pasture raised over eight acres from the control, and then he said, [00:31:55] Speaker 01: Select which ones are pasture raised. [00:31:57] Speaker 01: And tellingly, when consumers saw pasture raised, they said pasture raised. [00:32:01] Speaker 01: It doesn't tell us anything about what consumers believe. [00:32:04] Speaker 01: So there was a conscious decision not to ask that. [00:32:07] Speaker 01: And I would say we cite in our brief, we had our own survey expert, to the extent that the court's curious about it, who actually did ask those questions. [00:32:15] Speaker 01: And the answer was absolutely zero consumers believe that this is an industry standard or that our eggs were certified. [00:32:23] Speaker 04: Okay, thank you very much. [00:32:24] Speaker 04: I want to thank both counsel for the very helpful briefing and argument. [00:32:28] Speaker 04: This case was well presented. [00:32:29] Speaker 04: This case is submitted.