A rare class action trial that resulted in a jury verdict against a defendant may set a precedent for the amount of statutory damages that can be recovered under New York’s General Business Law (GBL) when a class action proceeds to trial.  After a jury found that Joint Juice deceptively labeled its beverages and awarded actual damages to the class, the plaintiffs moved for $140 million in statutory damages.

Last week in Montera v. Premier Nutrition Corp., Case No. 3:16-cv-6980 (N.D. Cal.), a jury awarded $1.49 million in actual damages to the class based on approximately 165,000 units sold during the relevant time period, or about $9 per beverage.  Joint Juice’s beverages, which contain glucosamine and chondroitin, promised to improve joint health and relieve pain.  The plaintiffs claimed that the beverages were deceptively labeled because none of their ingredients in fact provided the promised benefits.  The jury unanimously sided with the plaintiffs.

Two days after the verdict, the plaintiffs moved for entry of final judgment and an award of about $140 million in statutory damages, including prejudgment interest.  The plaintiffs brought claims under GBL §§ 349 and 350, which generally prohibit false or deceptive advertising.  Plaintiffs can recover actual damages under the statute.  Alternatively, plaintiffs can recover statutory damages under the GBL—$50 for violations of § 349, and $500 for violations of § 350.  Those statutory damages generally do not require a finding of willful misconduct.  The plaintiffs arrived at the $140 million figure by multiplying the number of units sold (166,249) by $550, and adding interest.

Before the trial, Judge Seeborg stated in an order on a motion in limine that “it is clear that statutory damages will be higher” in the case, but nevertheless required plaintiffs to prove actual damages at trial.  See ECF No. 215.  One reason he did so, he explained, was that “[a] determination on actual damages may also be necessary to assess the constitutionality of an award of statutory damages.”  Id.  He noted that some cases suggest that a significant difference between actual and statutory damages raises due process concerns.  Id.  In their motion for entry of final judgment, plaintiffs attempt to head off an argument that their requested award is unconstitutional.  They contend that the GBL’s statutory damages provisions are designed to deter wrongdoing and compensate consumers for intangible harms, which are valid legislative purposes.

Given the stark difference between the actual damages per unit ($9) and requested statutory damages ($550), whether the plaintiffs are successful could have significant ramifications for GBL cases, including the amounts plaintiffs demand to settle cases.  The defendant’s response to the motion is due later this month, and the court is scheduled to hold a hearing on the motion in July.

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Photo of Dillon Grimm Dillon Grimm

Dillon Grimm is an associate in the firm’s Washington, DC office, where his practice focuses on complex commercial litigation and class actions.

Dillon has experience in matters involving a range of issues, including consumer protection, breach of contract, and fraud, among others. He…

Dillon Grimm is an associate in the firm’s Washington, DC office, where his practice focuses on complex commercial litigation and class actions.

Dillon has experience in matters involving a range of issues, including consumer protection, breach of contract, and fraud, among others. He has represented clients in the financial services, technology, and sports industries. He also maintains a robust pro bono practice focusing on criminal justice.

Dillon was a judicial law clerk for the Hon. Rebecca Beach Smith, U.S. District Court for the Eastern District of Virginia and the Hon. Jane R. Roth, U.S. Court of Appeals for the Third Circuit, before rejoining the firm in 2021.

Photo of Andrew Soukup Andrew Soukup

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which…

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which were defeated through dispositive pre-trial motions.
Andrew is co-chair of the firm’s Class Action Litigation practice group.

Andrew has helped his clients achieve successful outcomes at all stages of litigation, including through trial and appeal. He has helped his clients prevail in litigation against putative class representatives, government agencies, and commercial entities. Representative victories include:

  • Delivered wins in multiple nationwide class actions on behalf of large financial companies related to fees, disclosures, and other banking practices, including the successful defense of numerous lenders accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recent recognition as a “Class Action Group Of The Year.”
  • Successfully defending several of the nation’s leading financial institutions in a wide variety of litigation and arbitration proceedings involving alleged violations of RICO, FCRA, TILA, TCPA, FCBA, ECOA, EFTA, FACTA, and state consumer protection and unfair and deceptive acts or practices statutes, as well as claims involving breach of contract, fraud, unjust enrichment, and other torts.
  • Successfully defended several of the nation’s leading companies and brands from claims that they deceptively marketed their products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
  • Obtained favorable outcomes for numerous clients in commercial disputes raising contract, fraud, and other business tort claims.

Because many of Andrew’s clients are subject to extensive federal regulation and oversight, Andrew has significant experience successfully invoking federal preemption to defeat litigation.

Andrew also advises clients on their arbitration agreements. He has successfully helped numerous clients avoid multi-district class-action litigation by successfully enforcing the institutions’ arbitration agreements.

Clients praise Andrew for his personal attention to their matters, his responsiveness, and his creative strategies. Based on his “big wins in his class action practice,” Law360 named Mr. Soukup a “Class Action Rising Star.

Prior to practicing law, Andrew worked as a journalist.