LAURA TAYLOR SWAIN, District Judge.
Plaintiff Dominique Green brings this putative class action against SweetWorks Confections, LLC ("Defendant" or "SweetWorks"), claiming that Defendant's packaging and marketing of its Sixlets candy product ("Sixlets") is misleading. Plaintiff's First Amended Class Action Complaint (docket entry no. 23, the "FAC") seeks injunctive relief under New York General Business Law § 349 (Count I), as well as damages for violations of New York General Business Law §§ 349, 350, and 350-a(1) (Counts II and III) and common law fraud (Count IV). Plaintiff contends that the Court has jurisdiction of this action pursuant to the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). Defendant moves, pursuant to Federal Rule of Civil Procedure 12(c), for judgment on the pleadings. (Docket entry no. 31.) The Court has reviewed thoroughly all of the parties' submissions and, for the following reasons, Defendant's motion is granted in part and denied in part.
The following factual summary is drawn from the FAC and is assumed to be true for the purposes of this motion practice.
Defendant SweetWorks is a confectionary company organized under Delaware law with its principal place of business in New York. (FAC ¶ 19.) Defendant manufactures, markets and sells Sixlets, a chocolate candy product "sold across the country both at retail establishments and online." (FAC ¶¶ 1, 3.) On December 29, 2017, Plaintiff, a New York City resident, purchased a 3.5 oz. box of Sixlets for $0.50 at a Kmart store in Manhattan. (FAC ¶ 17.) Sixlets are "mass produced and packaged in a non-transparent box of standardized size and composition, with a standardized quantity of candy in each box." (FAC ¶ 2.) Each Sixlets box also contains slack-fill. (FAC ¶ 3.) Slack-fill is "the difference between the actual capacity of a container and the volume of product contained therein." 21 C.F.R. § 100.100(a).
Plaintiff alleges that Defendant manufactures, markets and sells Sixlets with non-functional slack-fill which "serves no legitimate purpose, and misleads consumers about the quantity of food they are purchasing." (FAC ¶ 4.) Specifically, Plaintiff avers that a 3.5 oz. box of Sixlets with dimensions of 6.625 inches by 3.25 inches by 1 inch (the "Larger Sixlets Box") contains 40% candy and 60% slack-fill. (FAC ¶¶ 1, 28.) By contrast, a 5 oz. box of Hershey's Milk Duds candy measuring 6.125 inches by 2.625 inches by 0.9375 inches encloses 77% candy and 23% slack-fill. (FAC ¶ 33.) Similarly, another version of the Sixlets box (the "Smaller Sixlets Box") fits 3.5 oz. of candy in a box with dimensions of 6.625 inches by 3.25 inches by 0.5 inches, and thus contains 89% candy and 11% slack-fill.
Plaintiff brings this action on behalf of "[a]ll persons or entities in the United States who made retail purchases of [the Larger Sixlets Box] during the applicable limitations period." (FAC ¶ 64.) The FAC alleges that the exact number of class number is "unknown," but that there are likely thousands of members in the proposed class. (FAC ¶ 67.) In aid of her argument that the Court has subject matter jurisdiction of her claims, Plaintiff proffers a press release from SweetWorks which states, among other things, that Sixlets candies are "available at retailers across the U.S." (Lee Decl. Ex. A.) Plaintiff also proffers a product catalog and website printout indicating that Sixlets are available for purchase on the internet and in bulk quantities. (Lee Decl. Exs. C, D.)
Plaintiff alleges that class members were injured by Defendant's packaging of Sixlets because they "paid full price . . . but did not receive a full container." (FAC ¶ 18.) Plaintiff avers that, had she known that the Larger Sixlets Box contained non-functional slackfill, she "would not have bought the [Larger Sixlets Box] at the given price." (FAC ¶ 47.) Thus, Plaintiff argues, she must be refunded in an amount equal to the "proportion of the purchase price equal to the percentage of non-functional slack-fill." (FAC ¶ 62.) Plaintiff also claims that injunctive relief is warranted because she is "at risk of several types of future injury," including an inability to rely on Defendant's representations, an inability to "uninhibitedly take advantage" of Defendants' products, and hesitation to purchase Defendant's products in the future. (FAC ¶ 85.)
A motion for judgment on the pleadings is "evaluated using the same standard as a motion to dismiss under Rule 12(b)(6)."
A Rule 12(c) motion "based upon lack of subject-matter jurisdiction is treated as a Rule 12(b)(1) motion."
CAFA grants the federal courts original jurisdiction of any class action involving "(1) 100 or more class members, (2) an aggregate amount in controversy of at least $5,000,000, exclusive of interest and costs, and (3) minimal diversity, i.e., where at least one plaintiff and one defendant are citizens of different states."
Next, Defendants contend that, even if Plaintiff has satisfied her burden to demonstrate subject matter jurisdiction, one of three exceptions to CAFA jurisdiction "logically must apply." Under the "local controversy" exception, a district court must decline jurisdiction if "(1) more than two-thirds of the putative class members are citizens of the state in which the action was originally filed; (2) there is at least one defendant from whom `significant relief' is sought by the class members, whose alleged conduct forms a `significant basis' for the asserted claims, and who is a citizen of the state in which the action was originally filed; (3) the principal injuries suffered by the class were incurred in the state in which the action was originally filed; and (4) no other class action asserting the same or similar factual allegations has been filed against any of the defendants within the past three years."
Defendant proffers no argument or evidence in support of its assertion that "at least one of the exceptions to CAFA jurisdiction logically must apply," relying primarily on its contention that Plaintiff has failed to establish minimal diversity. In light of the dearth of evidentiary support for Defendant's argument, the Court finds that Defendant has not met its burden of demonstrating that an exception to CAFA jurisdiction applies. Accordingly, the Court finds that it has jurisdiction of this action pursuant to 28 U.S.C. § 1332(d) and denies Defendant's motion for judgment on the pleadings to the extent that it seeks dismissal of this action for lack of subject matter jurisdiction under CAFA.
Defendant next argues that Plaintiff lacks standing to seek injunctive relief under New York General Business Law § 349 and that the Court therefore lacks jurisdiction of her claims insofar as she seeks injunctive relief. To demonstrate standing for injunctive relief, a plaintiff must, among other things, establish that she faces a "real or immediate threat" of injury.
Here, Plaintiff alleges that she is "at risk of several types of future injury," including an inability to rely on Defendant's representations, an inability to "uninhibitedly take advantage" of Defendants' products, and hesitation to purchase Defendant's products in the future. (FAC ¶ 85.) As other courts have observed in the context of substantially similar allegations, these injuries do not "rise to the level of harms already recognized" as actionable injuries under section 349.
Plaintiff argues that, if there is ever to be a proper party to bring suit for injunctive relief, the "usual application of the standing rule must be adjusted" to accommodate consumers who learn about false or misleading packaging. Plaintiff's argument is unavailing because it essentially seeks to allow Plaintiff to assert standing on behalf of individuals who are not yet aware of the allegedly misleading packaging, even though Plaintiff herself does not meet the constitutional requirements for third-party standing.
To assert a claim under section 349 of New York's General Business Law, "a plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) [the] plaintiff suffered injury as a result of the allegedly deceptive act or practice."
Plaintiff alleges that the slack-fill in the Sixlets box is misleading because it is "non-functional" within the meaning of regulations promulgated by the federal Food and Drug Administration ("FDA"). FDA regulations, which have been incorporated into New York State law,
Similarly, New York law provides that "[f]ood shall be deemed to be misbranded . . . [i]f its container is so made, formed, colored or filled as to be misleading." N.Y. Agric. & Markets Law § 201(4). Although New York's General Business Law does not contain safe harbors for functional slack-fill, it does make it "a complete defense that the act or practice is . . . subject to and complies with the rules and regulations of, and the statutes administered by, . . . any official department, division, commission or agency of the United States as such rules, regulations or statutes are interpreted by . . . federal courts." N.Y. Gen. Bus. Law § 349(d). Thus, "if slack-fill passes muster under federal law, there is no state-law violation."
In promulgating its slack-fill regulations, the FDA recognized that "there is significant variability in the amount of slack-fill in packages, both between and within commodity classes and even within a single-product line. Factors that influence slack-fill include the physical characteristics of the product, the capabilities of the filling machine, and the way in which the product is handled."
Plaintiff alleges that "almost all" of the slack-fill in the Larger Sixlets Box is non-functional because other candies are packaged in boxes containing less slack-fill. (FAC ¶ 29.) Specifically, Plaintiff avers that a 3.5 oz. box of Sixlets comprising of 40% candy and 60% slack-fill must contain some non-functional slack-fill because (1) more candy is enclosed in a 5 oz. container of Milk Duds, which contains 77% candy and 23% slack-fill, and (2) the same quantity of Sixlets candies can fit into the Smaller Sixlets Box, which contains 89% candy and 11% slack-fill. (
Plaintiff's comparison of the Larger Sixlets Box with the Smaller Sixlets Box is similarly insufficient to support a plausible inference of non-functional slack-fill. Although the nature and quantity of candy are the same, the FAC acknowledges that the larger box includes an inner cellophane bag for the candy and contains no allegations specific to the Larger Sixlets Box from which the Court can infer that the slack-fill contained in the Larger Sixlets Box is greater than what is necessary to accomplish one of the functions enumerated by FDA regulations. For example, the FAC contains no facts to support a plausible inference that the size of a Larger Sixlets Box is greater than necessary to protect its contents, that the box's dimensions are not required to accommodate filling equipment, or that the box's size is not the result of a need to accommodate any settling in the shipping and handling process. That 3.5 oz. of Sixlets candy can fit inside the Smaller Sixlets box alone is not enough to support a plausible inference that "almost all" of the slack-fill in the Sixlets box is non-functional, particularly in light of FDA guidance acknowledging the "significant variability" in the amount of slack-fill required "even within a single-product line." 58 Fed. Reg. at 64135. Moreover, photographs of the cellophane packaged product proffered by Plaintiff and Defendant do not demonstrate that the cellophanebagged candy could fit inside the Smaller Sixlets Box.
Even if, however, a comparison to the Smaller Sixlets Box could be sufficient to establish, at the pleading stage, that the Larger Sixlets Box contains non-functional slack-fill, Plaintiff's section 349, 350 and 350-a claims must still be dismissed because she has failed to allege plausibly that the Sixlets box is materially misleading, as required under New York law.
New York courts have adopted an objective definition of "misleading" and thus, "sections 349 and 350 require more than a determination as to whether the slack-fill, standing alone, constitutes a misrepresentation. Rather, sections 349 and 350 require an additional finding that a reasonable consumer in like circumstances would consider the misrepresentation
Relying primarily on FDA commentary and cases interpreting non-New York law, Plaintiff argues that net weight and count disclosures do not preclude an action under sections 349 and 350 where a product is packaged with non-functional slack-fill. The authorities cited by Plaintiff, however, do not address the requirement, specific to New York law, that a package be misleading to a "reasonable customer acting reasonably under the circumstances,"
Plaintiff also argues that the disclosures on the Larger Sixlets Box are insufficient to correct the "misleading visual impression" created by non-functional slack-fill because reasonable consumers ultimately care about product volume, not quantity. Plaintiff's argument appears to be inconsistent with the allegations in the FAC, which state that Plaintiff was deceived as to the quantity of Sixlets contained in the box. (
Because the FAC does not allege plausibly that the slack-fill contained in the Sixlets box is non-functional, or that the Larger Sixlets Box is materially misleading to a reasonable consumer under the circumstances, Counts II and III of the FAC are dismissed for failure to state a claim upon which relief can be granted.
To state a claim for common law fraud under New York law, a plaintiff must allege "(1) a material misrepresentation or omission of fact; (2) which the defendant knew to be false; (3) which the defendant made with the intent to defraud; (4) upon which the plaintiff reasonably relied; and (5) which caused injury to the plaintiff."
For the foregoing reasons, Defendant's motion for judgment on the pleadings is denied to the extent that it seeks dismissal of all of Plaintiff's claims for lack of subject matter jurisdiction under CAFA and is granted to the extent that it seeks dismissal of Plaintiff's injunctive relief claim for lack of standing and Plaintiff's remaining causes of action for failure to state a claim. The First Amended Class Action Complaint is dismissed, and the Clerk of Court is directed to enter judgment accordingly and to close this case. This Memorandum Opinion and Order resolves docket entry no. 31.
SO ORDERED.