LUCY H. KOH, United States District Judge
Before the Court is Defendant Chobani, Inc.'s ("Defendant" or "Chobani") Motion to Dismiss Plaintiffs' Third Amended Complaint. ECF No. 158. Plaintiffs Katie Kane, Arianna Rosales, and Darla Booth (collectively "Plaintiffs") oppose the motion, ECF No. 160. Defendant has replied. ECF No. 161. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS Defendant's Motion to Dismiss the Third Amended Complaint with prejudice.
Plaintiffs allege that they purchased Defendant's yogurt products. ECF No. 154, ¶ 2 (Third Amended Complaint, hereinafter "TAC"). Specifically, Plaintiffs allege that they purchased the pomegranate, lemon, peach, vanilla, strawberry, and blueberry flavors of Defendant's Chobani Greek Yogurt. TAC ¶ 2. Plaintiffs contend that Defendant's "Chobani Greek Yogurt" and "Chobani Greek Yogurt Champions" (collectively, "Yogurts") are mislabeled. TAC ¶¶ 3-5. Plaintiffs do not allege that they purchased any flavor of Chobani Greek Yogurt Champions.
Evaporated Cane Juice ("ECJ") Allegations — Plaintiffs allege that Defendant's labels refer to the sweetener in Defendant's Yogurts as "evaporated cane juice" ("ECJ"). TAC ¶ 19. Plaintiffs contend that ECJ is essentially just "sugar" or "dried cane syrup." TAC ¶¶ 26-27. Plaintiffs allege that the use of the term ECJ to describe this ingredient is false and misleading and conceals the fact that
All Natural Claims — Plaintiffs also allege that Defendant has falsely stated that its Yogurts contain "[o]nly natural ingredients" and are "all natural." TAC ¶¶ 5, 9. The Court refers to Defendant's representations regarding the Yogurts' natural quality and use of natural ingredients as the "All Natural Representations." Plaintiffs allege that these representations appeared on the labeling for Defendant's Yogurts and on Defendant's website. TAC ¶ 22. Plaintiffs allege that these representations were false and misleading because the Yogurts include artificial colors. TAC ¶ 140. Because "fruit and vegetable juice (for color)" and "turmeric (for color)" are the only unnatural ingredients that Plaintiffs have specifically identified from Defendant's labels, see id. ¶¶ 149, 167, Plaintiffs' claims alleging that the Yogurts included unnatural ingredients are limited to these ingredients. Plaintiffs further allege that the All Natural Representations were "false and misleading" because "the fruit and vegetable juices ... were highly processed unnatural substances far removed from the fruits or vegetables they were supposedly derived from and in fact were more akin to synthetic dyes like coal tar dyes." TAC ¶ 161. The Court refers to Plaintiffs' claims based on the All Natural Representations as the "All Natural Claims."
Plaintiffs allege that they each "read the labels on Defendant's [Yogurts], including the [i]ngredient, `evaporated cane juice' and the `[a]ll [n]atural,' `[a]ll [n]atural [i]ngredients' and/or `[o]nly [n]atural [i]ngredients' claims on the labels, before purchasing them." TAC ¶¶ 187, 189, 191. Plaintiffs allege that they "believed Defendant's [Yogurts] contained only natural sugars from milk and fruit and did not contain added sugars or syrups" and that the Yogurts "contained only natural ingredients." Id. Plaintiffs also allege that, "[h]ad Plaintiff[s] known Defendant's [Yogurts] that [they] purchased contained added sugar or syrup and unnatural and artificial ingredients, [they] would not have purchased" them. Id. Plaintiffs further allege that they "would not have purchased Defendant's [Yogurts] had they known they were not capable of being legally sold or held." TAC ¶ 195.
Plaintiffs allege six causes of action. Plaintiffs' first cause of action is for violation of the unlawful prong of the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., predicated on violations of: (1) the False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500 et seq.; (2) the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq.; and (3) California's Sherman Food, Drug, and Cosmetic Act
Plaintiffs filed their original Complaint in this case on May 14, 2012. ECF No. 1. On August 3, 2012, the parties stipulated that Plaintiffs would file a First Amended Complaint. ECF No. 12. Plaintiffs filed their First Amended Complaint on August 30, 2012. ECF No. 14. On October 2, 2012, the Court granted the parties' stipulation to allow Plaintiffs to file a Second Amended Complaint ("SAC"). ECF No. 34. Plaintiffs filed their SAC on October 10, 2012. ECF No. 35. Plaintiffs filed their Third Amended Complaint ("TAC") on October 10, 2013. ECF No. 154.
On September 10, 2012, Plaintiffs filed a Motion for a Preliminary Injunction. ECF No. 16. Plaintiffs withdrew this motion on November 1, 2012. ECF No. 37. Three months later, on February 5, 2013, Plaintiffs filed another Motion for a Preliminary Injunction. ECF No. 44. Plaintiffs sought to: (1) enjoin Defendant "from selling, advertising or distributing Chobani Greek Yogurt Products as currently labeled and formulated," and (2) require Defendant "to remove and recall all Chobani Greek Yogurt products, as currently labeled and formulated, from its distributors and retailers." ECF No. 44-25 at 1. On April 15, 2013, Defendant filed an Opposition. ECF No. 86. On June 14, 2013, Plaintiffs filed a Reply. ECF No. 103. The Court held a hearing on the motion on July 11, 2013. ECF No. 127. The Court issued an Order denying the motion on July 15, 2013. ECF No. 126.
On March 5, 2013, Defendant filed a motion to: (1) Disqualify Plaintiffs' Counsel; (2) Bar Plaintiffs' Counsel from Discussing Issues in this Case with Replacement Counsel; and (3) Bar EAS Consulting Group LLC from Discussing Issues in this Case with Plaintiffs' Counsel or Replacement Counsel. ECF No. 64. On April 15, 2013, Plaintiffs' Counsel filed an Opposition. ECF No. 84. On June 14, 2013, Chobani filed a Reply. ECF No. 110. A hearing was held on the motion on July 25, 2013. ECF No. 143. On July 29, 2013, Plaintiffs filed a Motion to Stay Decision on the Motion to Disqualify and for Leave to Conduct Discovery. ECF No. 133. On July 30, 2013, counsel for Chobani sent an e-mail to the Courtroom Deputy, objecting to the Motion to Stay, and on July 31, 2013, Plaintiffs' Counsel sent a reply by e-mail to the Courtroom Deputy. On August 1, 2013, Plaintiffs' Counsel filed a Notice of Withdrawal of the Motion to Stay. ECF No. 139. Also on August 1, 2013, Plaintiffs filed another Motion to Stay Decision and for Leave to Conduct Discovery. ECF No. 140. On August 2, 2013, the Court issued an Order granting in part and denying in part Chobani's Motion to Disqualify, and denying as
The Court held a hearing on Defendant's Motion to Dismiss the SAC on March 28, 2013. ECF No. 79. On July 12, 2013, this Court issued an Order granting in part and denying in part Defendant's Motion to Dismiss the SAC. ECF No. 125 ("July 12 Order"). Defendant filed a Motion for Leave to file a Motion for Reconsideration of that Order on July 22, 2013. ECF No. 128. Following a Case Management Conference on July 25, 2013, at which the parties addressed Defendant's pending Motion for Leave to file a Motion for Reconsideration and stipulated to allowing Defendant to file a Motion for Reconsideration limited to "(1) the Court's characterization of Plaintiffs' ECJ theory, and (2) whether the doctrine of primary jurisdiction should apply to preclude Plaintiffs' ECJ claims," the Court granted Defendant's Motion for Leave and VACATED the July 12 Order. ECF No. 131, at 1-2. Plaintiffs thereafter filed a Motion for Leave to file their own Motion for Reconsideration, ECF No. 137, which the Court denied on August 14, 2013, ECF No. 144.
Defendant filed its Motion to Reconsider the July 12 Order on Defendant's Motion to Dismiss the SAC on August 21, 2013. ECF No. 146. The Court granted the Motion for Reconsideration and dismissed the SAC on September 19, 2013. ECF No. 153 ("September 19 Order"). However, the Court granted Plaintiffs leave to amend the pleading deficiencies with respect to the Plaintiffs' UCL, FAL, and CLRA claims. September 19 Order, at 20.
Plaintiffs filed their TAC on October 10, 2013. ECF No. 154. Defendant moved to dismiss the TAC on October 28, 2013. ECF No. 158 ("Mot."). Plaintiffs filed an opposition to this motion on November 12, 2013. ECF No. 160 ("Opp'n"). In support of their Opposition, Plaintiffs have filed two Statements of Recent Decision relevant to the pending Motion. ECF No. 164, 165. Defendant filed a Reply on November 19, 2013. ECF No. 161 ("Reply"). In addition, Defendant has filed two Statements of Recent Decision in support of its motion. ECF Nos. 162, 163.
A defendant may move to dismiss an action for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). A motion to dismiss for lack of subject matter jurisdiction will be granted if the Complaint on its face fails to allege facts sufficient to establish subject matter jurisdiction. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n. 2 (9th Cir.2003). In considering a Rule 12(b)(1) motion, the Court "is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction." McCarthy v. United States, 850 F.2d 558, 560 (9th Cir.1988). If the plaintiff lacks standing under Article III of the U.S. Constitution, then the court lacks subject matter jurisdiction, and the case must be dismissed. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 101-02, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). Once a party has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the opposing party bears the burden of establishing the court's jurisdiction, see Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010), by putting forth "the manner and degree of evidence required" by whatever stage of the litigation the case has reached, Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The Supreme Court has held that Rule 8(a) requires a plaintiff to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, a court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir.2008).
However, a court need not accept as true allegations contradicted by judicially noticeable facts, Shwarz v. United States, 234 F.3d 428, 435 (9th Cir.2000), and the "[C]ourt may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into one for summary judgment, Shaw v. Hahn, 56 F.3d 1128, 1129 n. 1 (9th Cir.1995). Nor is the court required to "`assume the truth of legal conclusions merely because they are cast in the form of factual allegations.'" Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir.2011) (per curiam) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981)). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); accord Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Furthermore, "a plaintiff may plead herself out of court" if she "plead[s] facts which establish that [s]he cannot prevail on h[er] ... claim." Weisbuch v. Cnty. of L.A., 119 F.3d 778, 783 n. 1 (9th Cir.1997) (internal quotation marks omitted).
Claims sounding in fraud or mistake are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which requires that a plaintiff alleging fraud "must state with particularity the circumstances constituting fraud." Fed.R.Civ.P. 9(b); see Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir.2009). To satisfy the heightened standard under Rule 9(b), the allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir.1985). Thus, claims sounding in fraud must allege "an account of the `time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.'" Swartz v. KPMG LLP,
If the court concludes that the complaint should be dismissed, it must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend "shall be freely given when justice so requires," bearing in mind "the underlying purpose of Rule 15 ... [is] to facilitate decision on the merits, rather than on the pleadings or technicalities." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000) (en banc) (internal quotation marks and citation omitted). Nonetheless, a district court may deny leave to amend a complaint due to "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment." See Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir.2008).
Defendant seeks to dismiss Plaintiffs' TAC on a number of grounds, including lack of standing; failure to allege facts showing that a "reasonable consumer" is likely to be deceived by the challenged advertising; preemption; primary jurisdiction; and failure to state a claim for purposes of Federal Rules of Civil Procedure 9(b). Mot. at 1-2, 18-24; Reply at 11-15. The Court will not address every one of Defendant's arguments, however, because, as discussed below, the Court finds that Plaintiffs have failed to cure the deficiencies identified in the Court's September 19 Order because the TAC fails to adequately demonstrate that Plaintiffs have standing to pursue their UCL, FAL, and CLRA claims.
A federal court must ask whether a plaintiff has suffered sufficient injury to satisfy the "case or controversy" requirement of Article III of the U.S. Constitution. See Clapper v. Amnesty Int'l USA, ___ U.S. ___, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013) ("`One element of the case-or-controversy requirement' is that plaintiffs `must establish that they have standing to sue.'") (quoting Raines v. Byrd, 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997)). To satisfy Article III standing, a plaintiff must allege: (1) an injury-in-fact that is concrete and particularized, as well as actual or imminent; (2) that the injury is fairly traceable to the challenged action of the defendant; and (3) that the injury is redressable by a favorable ruling. Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 130 S.Ct. 2743, 2752, 177 L.Ed.2d 461 (2010); Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). Article III's standing requirements may be satisfied by allegations that a plaintiff purchased a product he otherwise would not have purchased, or spent more on such product, in reliance on the defendant's misrepresentations. See, e.g., Brazil v. Dole Food Co., 935 F.Supp.2d 947, 962 (N.D.Cal. 2013) (holding that "Brazil suffered a concrete and particularized injury ... [because] he allegedly was deceived, and then
In addition to the requirements imposed by Article III, the UCL, FAL, and CLRA all require Plaintiffs to demonstrate standing. To have standing under the FAL and the CLRA, a plaintiff must allege that she relied on the defendant's alleged misrepresentation and that she suffered economic injury as a result. See, e.g., Cal. Bus. & Prof. Code § 17535 (providing that a plaintiff must have "suffered injury in fact and ha[ve] lost money or property as a result of a violation of this chapter"); Durell v. Sharp Healthcare, 183 Cal.App.4th 1350, 1367, 108 Cal.Rptr.3d 682 (2010) (finding plaintiff's CLRA claim failed because plaintiff failed to allege facts showing that he "relied on any representation by" defendant).
Turning to the UCL, the UCL prohibits business practices that are unlawful, unfair, or fraudulent. As this Court discussed in its September 19 Order, courts have held that, to establish standing under the UCL's fraud prong, a plaintiff must demonstrate that she actually relied upon the allegedly fraudulent misrepresentation. See September 19 Order, at 10; In re Tobacco II Cases, 46 Cal.4th 298, 326, 93 Cal.Rptr.3d 559, 207 P.3d 20 (2009). Courts have also extended this actual reliance requirement to claims under the UCL's unlawful prong to the extent "the predicate unlawful conduct is based on misrepresentations." Durell, 183 Cal.App.4th at 1363, 108 Cal.Rptr.3d 682. Moreover, in Kwikset Corp. v. Superior Court, the California Supreme Court suggested that the actual reliance requirement applies whenever the underlying misconduct in a UCL action is fraudulent conduct. See 51 Cal.4th 310, 326, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011) (holding that plaintiff was required to demonstrate actual reliance to establish standing to pursue claims under the UCL's unlawful prong because his claims were "based on a fraud theory involving false advertising and misrepresentations to consumers" (internal quotation marks omitted)). Thus, as stated in this Court's September 19 Order, the actual reliance requirement also applies to claims under the UCL's unfair prong to the extent such claims are based on fraudulent conduct. See September 19 Order, at 11; see also In re Actimmune Mktg. Litig., No. 08-2376, 2010 WL 3463491, at *8 (N.D.Cal. Sept. 1, 2010) aff'd, 464 Fed.Appx. 651 (9th Cir.2011) (holding "that a plaintiff must plead `actual reliance,' even if their [sic] claim arises under the unlawful or unfair prongs, so long as the pleadings assert a cause of action grounded in misrepresentation or deception.").
In their Opposition, Plaintiffs ask the Court to reconsider its position that Plaintiffs must demonstrate reliance in order to bring their UCL claim under the UCL's
The Court addresses each of Plaintiffs' contentions in turn, and rejects the Plaintiffs' request for reconsideration for the following reasons. First, Plaintiffs themselves concede in their opposition that the California Supreme Court, in Kwikset, held that where a UCL claim brought under the "unlawful prong" is premised on "misrepresentation and deception, reliance [is] a[] [required] element." Opp'n at 11 n.4. Second, the Court declines to change its position in light of the continued impact of Proposition 64 and Kwikset since the Court's September 19 ruling. See, e.g., Wilson v. Frito-Lay N. Am., Inc., No. 12-1586, 961 F.Supp.2d 1134, 1144-46, 2013 WL 5777920, at *7-8 (N.D.Cal. Oct. 24, 2013) (citing Kwikset and similarly rejecting Plaintiffs' argument that a mislabeling claim can be brought under the UCL's unlawfulness prong absent allegations of reliance); Bruton v. Gerber Prods. Co., No. 12-02412, 2014 WL 172111, at *6 (N.D.Cal. Jan. 15, 2014) (holding that there is a reliance requirement for claims brought under the UCL's unlawful prong to the extent "the predicate unlawful conduct is based on misrepresentations.") (citation omitted); Figy v. Amy's Kitchen, No. 13-3816, 2013 WL 6169503, at *3-4 (N.D.Cal. Nov. 25, 2013) (same). As this Court explained in its September 19 Order, "the voters enacted Proposition 64 in 2004 as a means of `confin[ing] standing to those actually injured by a defendant's business practices and [] curtail[ing] the prior practice of filing suits on behalf of clients who have not used the defendant's product or service, viewed the defendant's advertising, or had any other business dealing with the defendant.'" September 19 Order, at 16-17 (quoting Kwikset, 51 Cal.4th at 321). Third, Plaintiffs' citations to Morgan, Swearingen, Gitson, and Trazo do not persuade the Court to change course because these cases do not discuss the impact of Proposition 64 and Kwikset on the standing requirements under the UCL, and thus do not address clear California Supreme Court authority on this point. Notably, in In re Tobacco II Cases, the California Supreme Court cited People v. Cooper, 27 Cal.4th 38, 45, 115 Cal.Rptr.2d 219, 37 P.3d 403 (2002) for the proposition that "[t]o determine the meaning of a statute, we seek to discern the sense of its language, in full context, in light of its purpose," and thereafter concluded that an actual reliance requirement exists under the UCL "in light of [the] intention [behind the enactment of Proposition 64] to limit [private enforcement] actions." 46 Cal.4th at 326.
Further, Plaintiffs' citation to Berger v. Home Depot USA, Inc., No. 11-55592, 741 F.3d 1061, 2014 WL 350082, at *4 (9th Cir. Feb. 3, 2014), is unavailing. ECF No. 165. Citing to In re Tobacco II's background
Finally, Plaintiffs' citations to Medrazo v. Honda of North Hollywood, 205 Cal.App.4th 1, 140 Cal.Rptr.3d 20 (2012), and Steroid Hormone Product Cases, 181 Cal.App.4th 145, 104 Cal.Rptr.3d 329 (2010), are similarly unavailing. Opp'n at 9-11. Steroid Hormone was decided prior to the California Supreme Court's decision in Kwikset and the alleged unlawful conduct in that case was not based on a statute prohibiting specific types of misrepresentations. Steroid Hormone, 181 Cal. App.4th at 150 n.4, 104 Cal.Rptr.3d 329 (alleging unlawful conduct based on a law prohibiting the sale of a schedule III controlled substance without a prescription). Medrazo contains no discussion of Kwikset's statement that the actual reliance requirement applies to claims under the unlawful prong of the UCL where the alleged unlawful conduct is based on a statute that prohibits specific types of misrepresentations.
Accordingly, the Court declines to change its prior holding that Proposition 64, as interpreted by Kwikset, requires actual reliance when a claim brought under the UCL's "unlawful prong" is grounded in fraud, as in the instant case.
In the Court's September 19 Order addressing Plaintiffs' SAC, the Court concluded that because Plaintiffs had failed to adequately plead the reliance element of their "ECJ" and "All Natural" Claims, Plaintiffs had failed to demonstrate that they had standing to bring those claims. See September 19 Order, at 14, 18. However, the Court gave Plaintiffs leave to amend to cure the pleading deficiencies identified in the Order.
As in their Second Amended Complaint, Plaintiffs continue to allege that Defendant's use of the term "evaporated cane juice" is misleading because it conceals the fact that the ingredient is essentially white sugar or dried cane syrup. See, e.g., TAC ¶¶ 29, 55, 60, 86. Plaintiffs also continue to assert they did not know ECJ was sugar, see TAC ¶¶ 188, 190, 192, and they instead believed the sugars present in the products "were naturally occurring sugars that were found naturally in the ingredients used by Chobani such as fruit (fructose) and milk (lactose)." TAC ¶ 85.
In their TAC, Plaintiffs also now emphasize that they would not have purchased Defendant's products had they known that the products contained sugar that was "added as an ingredient into Defendant's yogurt during [the products'] processing or preparation." Id. (emphasis in original); id. ¶ 188 ("Had [Plaintiff] known `evaporated cane juice' was the same thing as added sugar or syrup, Plaintiff would not have purchased Defendant's yogurt product."). Unlike the SAC, the TAC alleges that while Plaintiffs "did not know what evaporated cane juice was at the time [they] purchased Defendant's yogurt product, because of the fact [the labels] used the term `juice,' it sounded like something healthy." TAC ¶¶ 188, 190, 192.
Plaintiffs' TAC alleges essentially two theories of reliance with respect to Plaintiffs' ECJ claims: (1) Plaintiffs had no idea that ECJ was a sweetener, see TAC ¶¶ 188, 190, 192; and (2) Plaintiffs had no idea that ECJ was a sweetener but believed it was "some type of ingredient that was healthier than sugar," see id. ¶ 193. The Court agrees with Defendant that neither theory, as alleged in the TAC, cures the deficiencies identified in this Court's September 19 Order.
The Court first addresses Plaintiffs' theory that Plaintiffs had no idea that ECJ was a sweetener. The Court rejected this theory as implausible in its September 19 Order, holding:
September 19 Order, at 13 (emphases in original). The Court begins its analysis by first noting that like in the SAC, Plaintiffs' allegations in the TAC continue to suggest that Plaintiffs understood that dried cane syrup was a form of sugar because Plaintiffs repeatedly refer to sugar and dried cane syrup interchangeably throughout the TAC. See, e.g., TAC ¶ 26 ("[T]he ingredient section fails to list `sugar' or `dried can syrup' as an added ingredient"); id. ¶ 27 ("Chobani fails to disclose the fact that that [sic] `evaporated can juice' is, in its ordinary and commonly understood terms, `sugar,' and/or `dried cane syrup'"); id. ¶ 75 (stating that "dried cane syrup" is an "alternative term" for sugar); id. ¶ 138 (describing ECJ as "a false and misleading name for another food or ingredient that has a common or usual name, namely sugar or dried cane syrup"); id. ¶ 139 ("ECJ is different sweetener from sugar or dried cane syrup"); id. ¶ 193 ("ECJ is really sugar or dried cane syrup"). Moreover, Plaintiffs Kane and Booth submitted declarations in support of their preliminary injunction motion stating that they would not have bought Defendant's products if they had known the products contained "dried cane syrup," which indicates that both Plaintiffs understood dried cane syrup was equivalent to sugar. See ECF Nos. 109-1, 112.
However, the TAC, like the SAC, continues to fail to explain how Plaintiffs could have realized that dried cane syrup was a form of sugar, but nevertheless believed that evaporated cane juice was not. The TAC fails to do so despite the fact that the September 19 Order explicitly put Plaintiffs on notice of this deficiency in the SAC. In other words, Plaintiffs still fail to explain what they believed evaporated cane juice to be, if not a form of sugar. Instead, Plaintiffs simply add the new allegation that they were "looking for `added sugar'" and that "Plaintiffs scanned the ingredient lists of the Chobani products for forms of added sugar and failed to recognize the term `evaporated cane juice' as a form of added sugar." TAC ¶ 112; see also Opp'n at 2-3. While Plaintiffs now cite to public health guidelines that describe the harmful properties of "added sugars," see TAC ¶¶ 87-109, these allegations do not answer the question of what Plaintiffs believed evaporated cane juice was when they purchased Defendant's products.
The Court notes that while Plaintiffs, in their TAC, allege that there are other less common forms of cane apart from sugar cane, including bamboo cane and sorghum cane, TAC ¶ 128;
Furthermore, the TAC repeatedly acknowledges that "fruit juice concentrate" is a well-known added sugar. See TAC ¶¶ 90, 94, 96, 98, 109. This not only undermines Plaintiffs' purported reliance on the word "juice" in "evaporated cane juice" as denoting something "healthy," but also renders implausible Plaintiffs' belief that Defendant's yogurt products contained no "added sugars," given that Plaintiffs allege that they read the ingredient "fruit and vegetable juice concentrate" on the Defendant's product labels. See TAC ¶¶ 187-193 (alleging that Plaintiffs read Defendant's product labels); see, e.g., ECF Nos. 154-2; 154-7 (displaying how Defendant's product labels included the term "fruit and vegetable juice concentrate").
Accordingly, without further factual allegations in support of Plaintiff's theory, the Court rejects Plaintiffs' reliance theory — that Plaintiffs didn't know ECJ was a sweetener and instead believed the sugars present in the products were only "naturally occurring sugars" and not "added sugars" — as implausible for the same reasons stated in this Court's September 19 Order. September 19 Order, at 13-14.
Before addressing Plaintiffs' second theory that Plaintiffs had no idea that ECJ was a sweetener but believed it was "some type of ingredient that was healthier than sugar," TAC ¶ 193, the Court notes that it appears that the TAC makes various statements, like the SAC did, see SAC ¶¶ 62-64, concerning the allegedly healthful properties of unprocessed sugar cane by implying that unlike ECJ and other refined sugars, natural sugar cane is "healthy and nutritious, containing vitamins, minerals, enzymes, fibers, and phytonutrients ..." TAC ¶ 129. Relying on these similar allegations present in the SAC, the July 12 Order had concluded that even though Plaintiffs failed to adequately plead reliance based on a theory that they were unaware that Defendant's yogurts contained any sweeteners beyond "natural sugars from milk and fruit," Plaintiffs had nevertheless adequately pleaded reliance by alleging that the term ECJ plausibly suggested to Plaintiffs that ECJ was a form of sugar that is healthier than refined sugars and syrups. July Order at 11-12 (citing SAC ¶¶ 62-64). However, Plaintiffs expressly disavowed this theory at the July 25, 2013 Hearing on Defendant's Motion to Disqualify Plaintiffs' counsel and expert, see ECF No. 143, at 14:3-9, and stipulated to allowing Defendant to file a Motion for Reconsideration of the Court's July 12 Order, see id. at 40:9-41:1. Because Plaintiffs' Opposition to the Motion for Reconsideration similarly disavowed this theory, see ECF No. 147 at 4 ("Plaintiffs do not claim that Plaintiffs believed ECJ was a healthier form of sugar ...."), the Court concluded in the September 19 Order that the SAC failed to plead reliance based on a theory that Defendant's ECJ
However, instead of claiming that ECJ was a "healthier form of sugar," Plaintiffs assert that they believed ECJ was "some type of ingredient that was healthier than sugar ..." TAC ¶ 193. Plaintiffs did not specifically allege this theory in the SAC but alleged it for the first time in Plaintiffs' opposition to Defendant's Motion to Dismiss the SAC. Plaintiffs also assert this theory in the TAC. The Court rejected this theory in the September 19 Order because, in addition to not having been specifically alleged in the SAC, Plaintiffs' theory was essentially "just a restatement" that Plaintiffs believed Defendant's yogurts contained only "natural sugars from milk and fruit" because they did not know ECJ was a sweetener — a theory that the Court had already rejected as implausible. See September 19 Order, at 13. The September 19 Order specifically stated:
Id. at 14. In the TAC, Plaintiffs do not provide any further allegations in support of this theory that ECJ was "some type of ingredient that was healthier than sugar" other than to add the new allegation that "because of the fact [the yogurt labels] used the term `juice', it sounded like something healthy." TAC ¶¶ 188, 190, 192. However, the TAC undermines Plaintiffs' allegation. The TAC repeatedly acknowledges that "fruit juice concentrate" is a well-known added sugar. See TAC ¶¶ 90, 94, 96, 98, 109. Moreover, the TAC cites various lists published by the National Institute of Health and the American Heart Association which identify "fruit juice concentrate" as an added sugar to watch out for. See, e.g., TAC ¶¶ 96, 98 (emphasis added).
The Court is unpersuaded by Plaintiffs' new allegation, as Plaintiffs' vague reformulation of this general theory of reliance still fails to meet the heightened pleading requirement under Rule 9(b), wherein a plaintiff must allege "the who, what, when, where, and how" of the misconduct charged. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997) (internal quotation marks omitted). Again, the Court concludes that Plaintiffs' theory is essentially just a restatement that Plaintiffs believed Defendant's yogurts contained only "natural sugars from milk and fruit" because they did not know ECJ was a sweetener — a theory that the Court again rejects as implausible above.
In sum, the Court finds that the TAC's allegations concerning Plaintiffs' reliance on Defendant's ECJ statements are still
Consistent with their SAC, Plaintiffs allege that Defendant's "All Natural" misrepresentations were deceptive because Defendant's products were artificially colored using fruit or vegetable juice concentrate. TAC ¶¶ 140, 149, 156 (describing
Plaintiffs now contend that they have cured this pleading deficiency with respect to their "All Natural Claims" by "clarifying that it was not just the presence of fruit or vegetable juice for color that made the `only natural ingredients' or `all natural' representations unlawful and deceptive, it was also the fact that the coloring agents themselves were not natural products." Opp'n at 6. Specifically, the TAC adds the following new allegation:
The Court agrees with Defendant that this sole allegation is insufficient to plead reliance with the particularity required by Rule 8(a) and Rule 9(b). Mot. at 8 n.7. For one thing, Plaintiffs' statement that the turmeric and fruit and vegetable juice concentrate used for color in Defendant's products is more akin to "coal tar dyes" than the "fruits and vegetables they were supposedly derived from," TAC ¶ 161, is merely conclusory. Essentially, Plaintiffs, in the TAC, now allege, for the first time after having filed three previous complaints and after participating in multiple hearings before this Court, including a preliminary injunction hearing, a hearing on Defendant's motion to dismiss the SAC, a hearing on Defendant's motion to disqualify Plaintiffs' counsel and expert, and a case management conference in which the parties addressed Defendant's Motion for Leave to File a Motion for Reconsideration of the Court's July 12 Order, that the fruit and vegetable juice concentrate ingredient is not natural due to some undisclosed aspect of that ingredient's processing. While Plaintiffs contend in other parts of the TAC that "natural ingredients are ingredients that occur naturally in nature and are not synthetic or highly processed," see TAC ¶ 164, Plaintiffs do not provide any other factual allegations nor provide any basis to support their claim that the color additives which Defendant uses in its yogurts are in fact "highly processed unnatural substances." Plaintiffs also provide no basis whatsoever to support their allegation that fruit and vegetable juice is somehow unnatural, nor explain with any specificity what they contend is "unnatural" about these particular ingredients. Plaintiffs simply restate in other parts of the TAC that "there was no disclosure that any of these ingredients were artificial or unnatural or synthetic." TAC ¶ 167. Furthermore, Plaintiffs fail to explain how or why Defendant's juices were in fact "far
Simply put, Plaintiffs do not allege how they thought these juices were processed, nor provide any explanation as to how Defendant "highly processed" the juices in such a way as to render them "unnatural," or how the processing fell short of Defendant's labeling representations. For these reasons, the Court concludes that Plaintiffs' allegations fail under Rule 9(b)'s heightened pleading standard, whereby a plaintiff must set forth precisely "what is false or misleading about a statement, and why it is false," see In re Glenfed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.1994) (en banc), superseded by statute on other grounds, (emphasis added), and must allege "the who, what, when, where, and how" of the misconduct charged. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997) (internal quotation marks omitted). See also Pelayo v. Nestle USA Inc., No. 13-5213, 2013 WL 5764644, at *5 (C.D.Cal. Oct. 25, 2013) (dismissing plaintiffs' claim that defendant's "all natural" representations were misleading because defendant's ingredients were allegedly "unnatural," where plaintiff failed to plausibly allege that the ingredients were in fact unnatural). A reasonable consumer could plausibly believe that "turmeric" and "fruit and vegetable juice" are, in fact, "natural ingredients," and Plaintiffs have failed to allege facts that persuade the Court to conclude it was plausible that Plaintiffs believed otherwise. Because Plaintiffs have failed to sufficiently plead reliance with respect to their "All Natural" claims against Defendant's products, Plaintiffs have failed to demonstrate standing to bring their claims. This is because Plaintiffs must allege that they relied on Defendant's alleged misrepresentations in order to demonstrate standing under the FAL, CLRA, and the UCL. Accordingly, the Court GRANTS Defendant's motion to dismiss the Plaintiffs' "All Natural Claims" because of Plaintiffs' lack of standing. As the Court found with respect to Plaintiffs' ECJ claims, the Court dismisses Plaintiffs' "All Natural Claims" without leave to amend not only because the September 19 Order held that Plaintiffs' failure to cure the deficiencies in the SAC would result in a dismissal with prejudice, see September 19 Order, at 20, but also because amendment appears to be futile. Leadsinger, 512 F.3d at 532. Again, as set forth above, Plaintiffs have already had the opportunity to file a total of four complaints in this case and have had multiple hearings to present their theories and claims, including a preliminary injunction hearing, a hearing on Defendant's motion to dismiss the SAC, a hearing on Defendant's motion to disqualify Plaintiffs' counsel and Plaintiffs' expert, and a case management conference in which the parties addressed Defendant's Motion for Leave to File a Motion for Reconsideration of the Court's July 12 Order. The Court concludes that if Plaintiffs had a legitimate basis to claim that Defendant's juices were "unnatural," Plaintiffs would already have articulated such a plausible theory in a meaningful way in one of their first four complaints or at one of the Court's various hearings. The Court thus dismisses Plaintiffs' "All Natural Claims" with prejudice due to futility of amendment, and also because Defendant should not be required to respond to a continually moving target. See Franczak v. Suntrust Mortg., Inc., Case No. 5:12-cv-01453 EJD, 2013 WL 4764327, at *4, 2013 U.S. Dist. LEXIS 126977, *11-12 (N.D.Cal. Sept. 5, 2013) (denying leave to amend third amended complaint and dismissing case with prejudice because allowing further amendments after Plaintiff has already amended his pleading twice would unduly prejudice defendant who had
For the foregoing reasons, the Court GRANTS Defendant's Motion to Dismiss Plaintiffs' UCL, FAL, and CLRA claims with prejudice. The Clerk shall close the case file.
