JOHN A. MENDEZ, District Judge.
Plaintiffs Martin E. Grossman and Richard David Classick, Jr. ("Plaintiffs") bring this putative class action against Schell & Kampeter, Inc. d/b/a Diamond Pet Foods and Diamond Pet Foods Inc. (collectively "Diamond" or "Defendants") for damages sustained from the purchase of dog food allegedly containing undisclosed levels of heavy metals, BPA, pesticides, and/or acrylamides. Second Amended Compl. ("SAC"), ECF No. 9. Defendants move to dismiss. Mot., ECF No. 13.
For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Defendants' motion.
The following facts are taken as true for purposes of this motion. Plaintiff Martin E. Grossman ("Mr. Grossman") has two Golden Retrievers, named Lilly and Clara. SAC ¶ 18. Mr. Grossman, a citizen of Pennsylvania, bought Taste of the Wild® Grain Free Pacific Stream Canine Formula Smoked Salmon Dry Dog Food for Lilly and Clara from Chewy.com and Pennsylvania-based Braxton's Dog Works between 2012 and 2015. Id.
Plaintiff Richard David Classick, Jr. ("Mr. Classick") has a Blue Nose American Pitbull named Otis. SAC ¶ 20. Mr. Classick, a citizen of California, bought Taste of the Wild® Grain Free High Prairie Canine Formula Roasted Bison and Roasted Venison Dry Dog Food for Otis from Amazon.com between 2017 and 2018. Id.
Defendant Schell & Kampeter, Inc., d/b/a Diamond Pet Foods ("Diamond") is incorporated and headquartered in Missouri, and manufactures, markets, and sells dog food under the brand name Taste of the Wild® throughout the United States. SAC ¶¶ 22, 25. Diamond produces dog food at four facilities, including at facilities in Lathrop, California and Ripon, California. Id. ¶ 24. (Plaintiffs also named "Diamond Pet Foods Inc.," as a defendant, which they allege is a wholly owned subsidiary of Schell & Kampeter. See SAC. According to Diamond, Diamond Pet Foods Inc. does not exist. Mot. at 2.)
Diamond markets the Taste of the Wild® brand as being "premium" dog food made of "the highest quality ingredients and products" for "nutrition-conscious pet owners." SAC ¶ 29. Diamond explains its products are akin to what "nature intended" the animal to eat in the wild and formulated "based on your pet's ancestral diet." Id. ¶ 33. Similarly, the packaging of the Taste of the Wild® products displays images of wild animals in natural settings. Id. ¶ 34. Additionally, the packaging describes the ingredients of the products as "processed under strict human-grade standards to ensure purity," providing "optimal health and vitality," supporting "optimal cellular health" and "overall good health," and helpful in maintaining "the sleek condition of good health." Id. ¶ 35.
Diamond's packaging and advertising do not disclose that the products contain any level of heavy metals (including arsenic, lead, mercury, and cadmium), bisphenol A ("BPA"), pesticides, or acrylamide. SAC ¶ 39. Diamond's marketing also emphasizes the company's high standards and the rigorous testing of its products to ensure quality, safety, and purity. Id. ¶¶ 40-44. According to Plaintiffs, this marketing, advertising, and packaging is deceptive because, per tests conducted on the products, the three Taste of the Wild® products purchased by Plaintiffs contained undisclosed levels of heavy metals, pesticides, acrylamide, and/or BPA. Id. ¶¶ 45-50, 52-56. The presence of these contaminants carries health risks to pets and would be material to an owner's purchasing decision. Id. ¶¶ 68-79. Plaintiffs contend that Diamond knew or should have known of the presence of these alleged contaminations because of its stringent quality controls, knowledge of the production process, and from notice by the Clean Label Project. Id. ¶¶ 51, 102. Plaintiffs further claim that Diamond's wrongful marketing allowed it to capitalize on, and profit from, consumers who paid the purchase price or a premium for the products that were not as advertised. Id. ¶ 91.
Plaintiffs saw "the nutritional claims and labels on the packaging" and on the websites from which they purchased the products and relied on these claims and labels in deciding to purchase the products. Id. ¶¶ 18-21. Plaintiffs were unaware the food contained any level of the alleged contaminants, and had they known Plaintiffs would not have purchased the products or paid the price premium for the Products. Id. Plaintiffs do not allege any physical injuries.
Grossman filed the Complaint on August 28, 2018, alleging class claims and jurisdiction under CAFA. Compl., ECF No. 1. The First Amended Complaint was filed on September 5, 2018, adding Classick as a plaintiff. First Amended Compl., ECF No. 4. On October 18, 2018, Plaintiffs filed the operative Second Amended Complaint, bringing six causes of action against Diamond: (1) negligent misrepresentation; (2) violations of the California Consumer Legal Remedies Act ("CLRA"); (3) violations of the California False Advertising Law ("FAL"); (4) violations of the California Unfair Competition Law ("UCL"); (5) breach of express warranty; and (6) breach of implied warranty. Second Amended Compl., ECF No. 9. Plaintiffs bring the complaint on behalf of a putative class consisting of "All persons who are citizens of the United States who, from May 1, 2013 to the present, purchased the Contaminated Dog Foods for household or business use, and not for resale." SAC ¶ 107.
Defendants move to dismiss the Second Amended Complaint in its entirety. Mot., ECF Nos. 13, 18 and 19. Plaintiffs oppose the motion. Opp'n, ECF Nos. 14, 21 and 22.
Diamond moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), arguing this Court lacks personal jurisdiction over Diamond with respect to Mr. Grossman's claims. Mot. at 6-7. Diamond does not argue a lack of personal jurisdiction with respect to Mr. Classick's claims. Id. at 7.
A court may assert general (or "all-purpose") jurisdiction over a defendant in a forum where the defendant is "fairly regarded as at home."
Here, Diamond is incorporated and headquartered in Missouri. SAC ¶¶ 22-23. Diamond is therefore not "at home" in California. And while Plaintiffs allege that Diamond operates two of its four manufacturing plants in California (id. at ¶ 24), those operations are not substantial enough to make Diamond "fairly regarded as at home" in California. Thus, this Court does not have general jurisdiction over Diamond.
In the absence of general jurisdiction, a nonresident may only be subject to suit in the forum state if specific jurisdiction exists. For a court to exercise specific jurisdiction over a defendant, "the suit must arise out of or relate to the defendant's contacts with the forum."
Mr. Grossman has failed to carry his burden. Plaintiffs' opposition brief states that "(1) [Diamond] purposefully availed itself of this forum, (2) the claims arise out of [Diamond's] forum-related activities, and (3) the exercise of jurisdiction is reasonable." Opp'n at 4. But this conclusory recitation of the Ninth Circuit's specific jurisdiction standard is insufficient. Mr. Grossman fails to make the required prima facie showing that his claims "arise[] out of or relate to [Diamond's' forum-related activities."
Therefore, this Court cannot exercise specific personal jurisdiction over Diamond with respect to Mr. Grossman's claims.
Given the existence of personal jurisdiction over Diamond for Mr. Classick's claims, Plaintiffs' request this Court exercise pendent personal jurisdiction over Diamond with respect to Mr. Grossman's claims and thereby adjudicate the claims together to avoid piecemeal litigation. Mot. at 5. "[A] court may assert pendent personal jurisdiction over a defendant with respect to a claim for which there is no independent basis of personal jurisdiction so long as it arises out of a common nucleus of operative facts with a claim in the same suit over which the court does have personal jurisdiction."
This Court declines to exercise pendent personal jurisdiction over Diamond with respect to Mr. Grossman's claims.
Diamond argues that any claims by purchasers based outside of California should be dismissed under
However, because this Court dismissed Mr. Grossman's claims against Diamond for lack of personal jurisdiction, and because Mr. Classick is a California resident, this Court need not formally rule on the suitability of nationwide class claims.
Diamond argues Plaintiffs' fraud and consumer-protection claims (under the CLRA, FAL, UCL, and the common-law claim for negligent misrepresentation) are not pleaded with particularity as required by Rule 9(b). Mot. at 7-10 (citing
"Averments of fraud must be accompanied by `the who, what, when, where, and how' of the misconduct charged."
Diamond further argues the alleged misstatements upon which Plaintiffs supposedly relied are mere puffery, which cannot support Plaintiffs causes of action. Mot. at 9 (citing
Nevertheless, Plaintiffs only allege they relied upon the nutritional claims and labels they saw on the packaging and on Amazon.com and Chewy.com (the "websites of purchase"). SAC ¶¶ 18, 20, 26, 34-36, 39. There are no allegations that Plaintiffs relied on any statements beyond those, including those on Diamond's website or in other advertising or marketing materials. SAC ¶¶ 29-33, 37, 40-44. Misstatements upon which Plaintiffs could not or did not rely cannot support a claim sounding in fraud.
Thus, Defendants' motion to dismiss Plaintiffs' fraud and consumer-protection claims is denied with respect to alleged affirmative misstatements appearing on the products' packaging or websites of purchase, and is granted with respect to any other alleged misstatements.
Omissions may be the basis of fraud-based claims, but "to be actionable the omission must be contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose."
Plaintiffs argue that Diamond had a duty to disclose the presence of the contaminants in its products because it had exclusive knowledge of material facts (the presence of contaminants in its products) not known to the Plaintiffs, either given its stringent quality controls and assurances or by being put on notice by the Clean Label Project. SAC ¶¶ 51, 102. Plaintiffs adequately allege, and Diamond does not seem to refute, that the presence of the alleged contaminants in the products would be material. And while the allegation that Diamond was put on notice by the Clean Label Project is too vague because it does not explain what the Clean Label Project is or why its existence is sufficient to put Diamond on notice, the other allegations in the SAC—including Diamond's knowledge of its production and stringent standards—are nonetheless pleaded with reasonable particularity and can sustain an omission-based claim.
Defendants' motion to dismiss Plaintiffs' fraud and consumer-protection claims with respect to alleged omissions is therefore denied.
Diamond also contends Plaintiffs' claim for negligent misrepresentation, at least to the extent based on omissions, is barred by the economic loss rule. Mot. at 11, fn. 3. "The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise."
Here, Plaintiffs do not allege any property damage or any actual physical injury to themselves or their pets, and instead allege they were "injured when [they] paid the purchase price and/or a price premium for the Contaminated Dog Foods that did not deliver what Defendants promised." SAC ¶¶ 19, 21. However, Plaintiffs negligent misrepresentation claim sounds far more in fraud than breach of contract or negligence.
To state a claim for breach of express warranty under California law, a plaintiff "must allege the exact terms of the warranty, plaintiff's reasonable reliance thereon, and a breach of that warranty which proximately causes plaintiff injury."
Thus, Defendants' motion to dismiss Plaintiffs' express warranty claim is denied with respect to any affirmation of fact, promise, or description of the goods appearing on the products' packaging or websites of purchase, and is granted with respect to any other alleged representations.
To bring a claim for breach of implied warranty, a plaintiff "must stand in vertical contractual privity with the defendant."
Here, Plaintiffs bought the products from retailers, not directly from Diamond. SAC ¶¶ 18, 20. The exceptions to the privity rule for cases involving food for human consumption and for reliance on labels or advertising materials for alleged violations of express warranties do not apply here.
This Court finds that Plaintiffs cannot sustain a breach of implied warranty claim because they lack vertical privity with Diamond. Because any attempt to amend is futile, Plaintiffs' sixth cause of action for breach of implied warranty is dismissed with prejudice.
Diamond argues that if any of Plaintiffs' claims for monetary damages survive, Plaintiffs claims for equitable relief, which they seek under the CLRA, FAL, UCL, and as a general demand in the prayer for relief, must be dismissed. Mot. at 13 (citing
Additionally, to state a claim for injunctive relief, a plaintiff must allege "she will be unable to rely on the product's advertising or labeling in the future, and so will not purchase the product although she would like to."
Accordingly, Plaintiffs' claims for equitable relief are dismissed without prejudice. Nevertheless, this Court grants Plaintiffs leave to amend the complaint to cure these pleading defects. Fed. R. Civ. P. 15(a) ("[T]he court should freely give leave [to amend] when justice so requires.").
For the reasons set forth above, this Court GRANTS IN PART and DENIES IN PART Defendants' Motion to Dismiss (ECF No. 13) as follows:
1. GRANTED as to this Court's lack of personal jurisdiction over Mr. Grossman's claim, which are dismissed with prejudice;
2. DENIED as to Plaintiffs' First, Second, Third, Fourth, and Fifth Causes of Action with respect to alleged omissions or affirmative misstatements appearing on the products' packaging or websites of purchase;
3. GRANTED as to Plaintiffs' First, Second, Third, Fourth, and Fifth Causes of Action with respect to alleged affirmative misstatements other than those appearing on the products' packaging or websites of purchase;
4. GRANTED as to Plaintiffs Sixth Cause of Action for breach of implied warranty, which is dismissed with prejudice; and
5. GRANTED as to Plaintiffs claims for equitable remedies, which are dismissed without prejudice.
If Plaintiff elects to amend his complaint with respect to the equitable remedy claims, Plaintiffs shall file a Third Amended Complaint within twenty days of this Order. Defendants' responsive pleading is due twenty days thereafter.