YVONNE GONZALEZ ROGERS, District Judge.
Pending before the Court is defendant Lamb Weston Holdings, Inc.'s motion to dismiss plaintiff's second amended complaint. (Dkt. No. 39 ("MTD"); see also Dkt. No. 38 ("SAC").)
Plaintiff is a California citizen who resides in San Francisco, California. (SAC ¶ 9.) Defendant is a Delaware corporation with its principal place of business located in Eagle, Idaho. (Id. ¶ 10.) Plaintiff brings this class action alleging that defendant "unlawfully and unfairly packag[ed] its ALEXIA brand SWEET POTATO fries WITH SEA SALT product [the `Alexia product'] in opaque containers that contain more than 50% empty space." (Id. ¶ 1.)
Plaintiff contends that she purchased the Alexia product "several times during 2017 and 2018 in Daly City," only to be "surprised when she opened the product that the container had
Plaintiff filed her initial complaint on August 2, 2018. (Dkt. No. 1.) After defendant moved to dismiss and strike the complaint with prejudice pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(f), plaintiff filed a first amended complaint. (Dkt. Nos. 8, 16 ("FAC").) Accordingly, the Court denied the motion to dismiss as moot. (Dkt. No. 17.) Defendant subsequently moved to dismiss the FAC, which the Court granted in part and denied in part, giving plaintiff leave to amend its claims under the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq., the "unlawful" and "unfair" prongs of the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq., and the False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500 et seq. (Dkt. Nos. 19, 34.)
On January 15, 2019, plaintiff filed the operative SAC. Therein, plaintiff seeks to represent the following class of California consumers: All California residents who made retail purchases of Defendant's ALEXIA brand SWEET POTATO fries product during the applicable limitations period up to and including final judgment in this action. (SAC ¶ 34.) The SAC is virtually identical to plaintiff's FAC, with the exception of: (i) six additional paragraphs concerning each statutory slack fill safe harbor provision under California Business and Professions Code section 12606.2(c)(1)-(6), (see SAC ¶¶ 15-20); and (ii) allegations regarding consumers' handling practices as to frozen foods, (see id. ¶¶ 22-23). Plaintiff asserts the same three claims for relief as in his FAC, namely violations of the CLRA, UCL, and FAL. Defendant moves to dismiss each.
Under Federal Rule of Civil Procedure 12(b)(6), an action may be dismissed for "failure to state a claim upon which relief can be granted." Dismissal is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Furthermore, the court must construe these well-pleaded factual allegations in the light most favorable to the plaintiff. NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). The complaint must allege "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). It must contain factual allegations sufficient to "state a claim to relief that is plausible on its face." Id. at 570. "In sum, for a complaint to survive a motion to dismiss, the non-conclusory `factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).
Claims alleging fraud must also meet the heightened pleading standard of Rule 9(b). Fed. R. Civ. P. 9(b). Rule 9(b) requires "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, 476 F.3d 756, 764 (9th Cir. 2007) (internal quotation marks omitted). To comply with the Rule 9(b) pleading standard, allegations of fraud "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." Id. (quoting Bly-Magee v. Cal., 236 F.3d 1014, 1019 (9th Cir. 2001)). That is, plaintiff must specifically set forth what is false or misleading about a statement and why it is false. Cardenas v. NBTY, Inc., 870 F.Supp.2d 984, 990 (E.D. Cal. 2012) (citing Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)).
Plaintiff's SAC is based on two theories of liability. First, consumer deception, namely plaintiff alleges that the Alexia product packages are misleading because consumers expect more sweet potato fries than are actually included. Second, slack fill, namely plaintiff alleges that the Alexia product packaging is unlawful because it violates the California Fair Packaging and Labeling Act's ("CFPLA") regulation against nonfunctional slack fill, specifically Business & Professions Code section 12606.2. More specifically, plaintiff explained that both her CLRA claim and the unfair prong of her UCL claim are predicated on both theories of liability; her FAL claim and the fraudulent prong of her UCL claim are based on the consumer deception theory only; and the unlawful prong of her UCL claim is based on the nonfunctional slack fill theory only. (See Dkt. Nos. 47, 48.) The Court addresses each theory of liability in turn.
Plaintiff's claims under the CLRA, UCL, and FAL are governed by California law. The Ninth Circuit has explained:
Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008).
Under the reasonable consumer standard, a plaintiff must "show that `members of the public are likely to be deceived.'" Freeman, 68 F.3d at 289 (quoting Bank of the West v. Superior Court, 2 Cal.4th 1254, 1267 (1992)). "`Likely to deceive' implies more than a mere possibility that the advertisement might conceivably be misunderstood by [a] few consumers viewing it in an unreasonable manner." Lavie, 105 Cal. App. 4th at 508. Rather, the reasonable consumer standard requires a probability that a "significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled." Id.
With respect to a false advertising case, the "primary evidence" is the "advertising itself." Brockey v. Moore, 107 Cal.App.4th 86, 100 (2003). The Ninth Circuit has recognized that the question of whether advertising materials are deceptive to a reasonable consumer "will usually be a question of fact not appropriate for decision" at the pleading stage. Williams, 552 F.3d at 938. However, actions may be dismissed under the reasonable consumer test when "the advertisement itself [makes] it impossible for the plaintiff to prove that a reasonable consumer was likely to be deceived." Id. at 939; see also Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir 2016) (affirming dismissal of deceptive advertising claims where the plaintiff's "claim that the reasonable consumer would be deceived" was "not plausible"); Martinez-Leander v. Wellnx Life Scis., Inc., No. CV 16-08220 SJO (Ex), 2017 WL 2616918, at *8 (C.D. Cal. Mar. 6, 2017) (dismissing deceptive advertising claims based on nonfunctional slack fill where "no reasonable consumer could have been misled" by product packaging).
Plaintiff alleges that Alexia product packages are misleading because consumers expect more fries than are actually included. (SAC ¶ 30.) Defendant argues that the product's packaging would not deceive a reasonable consumer in light of the unit counts, net weight, and serving size stated on the package. (MTD at 6-9.) The Court agrees that plaintiff's claim that the reasonable consumer would be deceived as to the amount of fries in an Alexia product package is not plausible.
In Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016), which plaintiff attempts to distinguish, the Ninth Circuit affirmed the dismissal of deceptive advertising claims on the ground that the plaintiff failed to state a plausible claim for consumer deception. There, the plaintiff alleged that the defendant deceived consumers about the amount of product in its lip balm. She claimed the tube was deceptive because it contained a weighted metallic bottom (which made the box feel heavier), was wrapped in oversized packaging, and used a mechanism that allows only 75% of the product to advance up the tube. Id. at 962. The Ninth Circuit concluded that the plaintiff had not, and could not, allege facts to state a plausible claim of consumer deception.
Plaintiff focuses on Williams to discount the importance of the serving size and unit disclosures because they appear on the side of the Alexia product's packaging.
Here, it is undisputed that the Alexia product packaging discloses the product's net weight, the number of fries per serving, and the approximate number of servings per container. The Alexia product's weight label and serving size statement do not contradict other representations or inferences from defendant's packaging. "[T]here are no other words, pictures, or diagrams adorning the packaging, as there were in Williams, from which any inference could be drawn or on which any reasonable belief could be based about how much . . . product" is included. Id. (emphases in original). "In the absence of any statement or other depiction anywhere on the package about [the quantity of fries], . . . it is not plausible that a `significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled' into thinking" the container would be "filled to the brim with [p]roduct." Ebner, 838 F.3 at 966 (quoting Lavie, 129 Cal. Rptr. 2d at 495); Escobar v. Just Born Inc., 17-cv-08126-BRO (PJW), 2017 WL 5125740, at *10 (C.D. Cal. June 12, 2017).
In accordance with Ebner, many district courts have found that where the package itself discloses the actual unit counts, a "reasonable consumer" could not be misled. See, e.g., Martinez-Leander, 2017 WL 2616918, at *8 (where plaintiff alleged that defendants' herbal supplements were deceptively packaged in slack-filled containers, court rejected theory because "Defendants ha[d] listed the exact number of pills each bottle contain[ed] on the labels of both the external box and the pill container"); Bush I, 2016 WL 5886886, at *3 (where plaintiff alleged that he was deceived as to the amount of snack in the packaging of travel-size snack products, court rejected theory because it was "undisputed that the Go-Pak product labels disclose[d] the net weight of included product, as well as the number of cookies or crackers per container"); Fermin v. Pfizer Inc., 215 F.Supp.3d 209, 211-12 (E.D.N.Y. 2016) (where purchasers of Advil alleged that they were tricked into purchasing the medicine due to the size of Advil's packaging, the court, applying California law, determined "as a matter of law, . . . it is not probable or even possible that Pfizer's packaging could have misled a reasonable consumer" because "each of the packages in Plaintiffs' Complaint clearly display[s] the total pill-count on the label").
Plaintiff points to Escobar to argue otherwise. There, the plaintiff alleged that the defendant's advertising was misleading because the reasonable consumer would not understand when purchasing Mike and Ike and Hot Tamales candy that the amount of candy purchased was significantly less than the visible size of the packaging. Id. at *8. Unlike the instant case, Escobar did not involve the disclosure of actual unit counts. The court held:
Id. at *9. However, the court critically noted: "This case is distinguishable from Bush, where the product's packaging indicated the number of cookies the package contained, giving the consumer a reasonable expectation of the product's contents beyond just the weight." Id. (emphasis in original). The only other cited in-circuit district court case does support plaintiff's theory despite the disclosure of the number of pretzels contained in each package. See Cordes v. Boulder Brands USA, Inc., No. CV 18-6534 PSG (JCx), 2018 WL 6714323 (C.D. Cal. Oct. 17, 2018).
Plaintiff attempts to expand the consumer deception theory by arguing as a general matter that the size of defendant's packaging itself is "inherently deceptive," and therefore the labeling statements cannot insulate defendant from liability. (Opp. at 7 (emphasis in original) (internal quotation marks omitted).) Plaintiff fails to persuade. She continues to rely heavily on Hobby Industry Association of America, Inc. v. Younger, 101 Cal.App.3d 358 (1980) in support thereof. However, Hobby, is inapposite in the context of plaintiff's consumer deception theory.
Finally, plaintiff attempts to save her claims through new allegations regarding consumers' handling practices as to frozen foods. These are similarly unavailing. Specifically, the SAC alleges that "[i]t is common sense that consumers including [p]laintiff expend the least amount of time possible to touch and otherwise handle frozen food items, which is uncomfortable to the average adult, and that they seek to minimize their handling of frozen food items including [d]efendant's Product at a grocery store to the bare minimum in order to minimize their discomfort." (SAC ¶ 23.)
In light of the foregoing, plaintiff fails to state a plausible claim of consumer deception based on the Alexia product's packaging. Plaintiff's CLRA, UCL (fraudulent and unfair prongs), and FAL claims are thus
With respect to slack fill, plaintiff does not bring a separate, free-standing claim for violation of Business & Professions Code section 12606.2. Rather, plaintiff alleges violations of that section as predicates of her UCL unfair and unlawful prong claims and her CLRA claim. Section 12606.2 states:
Cal. Bus. & Prof. Code § 12606.2(c)(1)-(6). Plaintiff alleges that defendant intentionally packages its products in opaque containers comprised of more than 50% non-functional slack fill to mislead consumers. (SAC ¶¶ 1, 3, 25, 63, 65.) Defendant opposes, arguing that the Alexia product packaging falls within the permitted category for slack fill for "[p]rotection of the contents of the package." (Defendant's Reply ISO MTD ("Reply") at 10, Dkt. No. 42 (quoting Cal. Bus. & Prof. Code § 12606.2(c)(1)).)
The Court disagrees. According to plaintiff, "[m]ore than 50% of the interior of the [Alexia product's] containers is comprised of empty space, or non-functional slack-fill," and "[t]here is no practical reason for the non-functional slack-fill used to package the [p]roduct." (SAC ¶¶ 25, 31.) Plaintiff proceeds to elaborate with particularity:
(Id. ¶ 15.) In response, defendant argues the merits, contending that "any reasonable consumer would understand that sweet potato fries are long and skinny (frozen or not) and could therefore be broken without any extra space in the bag." (MTD at 13.) While defendant may ultimately be correct, determining whether a reasonable consumer would understand that sweet potato fries are "long and skinny" and thus susceptible to breakage absent extra room in the packaging is a question of fact not contained within the four corners of plaintiff's SAC.
Accordingly, defendant's motion to dismiss plaintiff's remaining claims on the basis that she has not sufficiently alleged the presence of nonfunctional slack fill in the Alexia product packaging is
The Court, having found a basis for plaintiff's UCL claim under the unfair and unlawful prongs, addresses defendant's additional arguments regarding these specific prongs.
The "unfair" prong of the UCL creates a cause of action for a business practice that is unfair even if not proscribed by some other law. Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 1143 (2003). "The UCL does not define the term `unfair.' . . . [And] the proper definition of `unfair' conduct against consumers is `currently in flux' among the California courts." Davis v. HSBC Bank. Nev., N.A., 691 F.3d 1152, 1169 (9th Cir. 2012) (citing Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718, 735 (9th Cir. 2007)). Some courts apply a balancing approach, which requires courts to "weigh the utility of the defendant's conduct against the gravity of the harm to the alleged victim." Davis, 691 F.3d at 1169 (internal quotation marks omitted). Others have held that "unfairness must be tethered to some legislatively declared policy or proof of some actual or threatened impact on competition." Lozano, 504 F.3d at 745 (internal quotation marks omitted).
As predicates for her claim under the UCL's "unfair" prong, plaintiff alleges that defendant's conduct fails the balancing test because the conduct was "immoral, unethical, oppressive, and unscrupulous" and caused harm that "outweigh[ed] any alleged benefits" of the conduct. (SAC ¶ 66.) Plaintiff further alleges that defendant's conduct fails the tethering test because the conduct violated public policy as embodied in California Business & Professions Code sections 12606.2(b) and (c). (Id.)
Defendant counters that plaintiff's claim under the balancing test fails for two reasons. First, plaintiff's allegations fail to allege plausibly any consumer deception, foreclosing any "harm to the alleged victim." (MTD at 10 (internal quotation marks omitted).) Second, plaintiff does not attempt to allege that her purported injury is outweighed by the "utility" of the empty space, namely to protect the sweet potato fries from damage. (Id. at 11 (internal quotation marks omitted).) As to the tethering test, defendant argues that the alleged conduct is not tethered to a "legislatively declared policy," but rather plaintiff's "lone allegation" is "wholly conclusory." (Id. (internal quotation marks omitted).)
While the Court agrees that plaintiff fails to allege any consumer deception, (see supra Section III.A.1.b), plaintiff sufficiently alleges that the Alexia product's slack fill is nonfunctional, (see id. Section III.A.2). Moreover, contrary to defendant's contention, plaintiff does allege that defendant's conduct is outweighed by the utility of the empty space. (See SAC ¶ 66.) In addition, while the Court agrees with defendant that plaintiff fails to allege any facts connecting defendant's conduct to a "legislatively declared policy," because plaintiff's allegations satisfy the balancing test, defendant's motion to dismiss plaintiff's UCL unfair prong claim on these additional proffered grounds is
The "unlawful" prong of the UCL prohibits "anything that can properly be called a business practice and that at the same time is forbidden by law." Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163 (1999) (internal quotation marks omitted). By proscribing "any unlawful" business practice, Cal. Bus. & Prof. Code § 17200, the UCL permits injured consumers to "borrow" violations of other laws and treat them as unfair competition that is independently actionable. Cel-Tech, 20 Cal. 4th at 180. Here, plaintiff's claim under the unlawful prong is premised exclusively on sections 12606.2(b) and (c) of the Business and Professions Code. (SAC ¶ 65.)
In light of the Court's conclusion that plaintiff has established that the Alexia product's packaging contains nonfunctional slack fill, (see supra Section III.A.2), the Court finds that plaintiff's unlawful prong of the UCL claim, predicated on violations of section 12606.2, states a plausible claim for relief. Accordingly, defendant's motion to dismiss the same on the ground that there is no predicate violation is
In light of the foregoing, defendant's motion to dismiss plaintiff's SAC is
Defendant shall file an answer within
This Order terminates Docket Number 39.
Separately, While plaintiff argues that the size of the packaging itself is a deceptive act, the plaintiff in Ebner similarly alleged that oversized packaging was deceptive, and the Ninth Circuit nevertheless found "the weight label does not contradict other representations or inferences on [defendant's] packaging." Ebner, 838 F.3d at 966.
Separately, plaintiff contends her allegation that "the average consumer spends a mere 13 seconds making an in-store purchasing decision," is "significant" and cites to three Missouri district court cases which considered this statistic in denying the motions to dismiss before those courts. Opp. at 6 (citing Hawkins, 309 F. Supp. 3d at 704; White, 2017 WL 3130333, at *1, *4; and Bratton, 2017 WL 2126864, at *1, *4, *6); see also SAC ¶ 1. However, as defendant notes, each of these cases was brought under Missouri's Merchandising Practices Act ("MMPA"), which the Missouri Supreme Court has characterized as "paternalistic legislation designed to protect those that could not otherwise protect themselves." Hawkins, 309 F. Supp. 3d at 701 (quoting High Life Sales Co. v. Brown-Forman, Corp., 823 S.W.2d 493, 498 (Mo. 1992)); see also White, 2017 WL 3130333, at *2; Bratton, 2017 WL 2126864, at *3. "The Missouri Supreme Court has explained that an `unfair practice' under the MMPA covers every unfair practice imaginable and every unfairness, to whatever degree." Hawkins, 309 F. Supp. 3d at 702. And, unlike California's consumer protection statutes at issue here, under the MMPA, "[a] plaintiff need not even allege or prove reliance on an unlawful practice to state a claim under the act." Id. Accepting plaintiff's argument regarding the significance of her 13-seconds allegation would effectively allow any plaintiff to avoid dismissal of similar claims by merely inserting that statistic into his or her complaint.
Moreover, the Court disagrees with plaintiff's suggestion that defendant intentionally omitted the portion of the front label of the Alexia product packaging containing the statement "KEEP FROZEN." Opp. at 22 n. 9.
