JOAN A. LENARD, District Judge.
Also before the Court is Defendants' Motion Requesting Judicial Notice in Support of their Motion to Dismiss (D.E. 72), filed December 2, 2013, Plaintiffs' Response in Opposition to the Motion for Judicial Notice (D.E. 82), filed December 23, 2013, and Defendants' Reply thereto (D.E. 83), filed January 2, 2014.
Also before the Court are an Agreed Motion to File Documents Under Seal (D.E. 73), filed December 4, 2013; Plaintiff's Unopposed Motion to Request Judicial Notice in Support of their Response in Opposition to Defendants' Motion to Dismiss (D.E. 81), filed December 23, 2013; and an Agreed Motion to File Documents Under Seal (D.E. 88), filed January 10, 2014.
The agreed and unopposed motions (D.E. 73, 81, and 88) are hereby
Defendants manufacture, market, advertise, distribute, and sell various breakfast cereals, cereal bars, energy bars, and other foodstuffs. (SAC, D.E. 58 ¶ 1.) At issue in this case are Defendants' Kashi brand cereal products, snack bars, cookies, crackers,
On May 3, 2012, Plaintiffs Eggnatz and Garcia filed a Complaint in the Southern District of Florida. (See D.E. 1.) On September 14, 2012, Plaintiff Martin filed a Class Action Complaint in the Northern District of California. (See Martin v. The Kellog Company, et al., No. CV 12-04846 CRB (N.D.Cal. Sept. 14, 2012), Compl. (D.E. 1).) On December 7, 2012, The Honorable Charles R. Breyer, United States District Judge for the Northern District of California, ordered Plaintiff Martin's case to be transferred to the Southern District of Florida. (Id. at D.E. 20.) On January 11, 2013, this Court entered an Order consolidating the two cases, and further ordered Plaintiffs to file an amended consolidated complaint. (D.E. 30.) On October 18, 2013, Plaintiffs filed their Amended Consolidated Class Action Complaint ("SAC," D.E. 58), which is the operative pleading for the instant Motion to Dismiss.
The SAC lists the Florida causes of action as (1) violations of Florida's Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. (id. ¶¶ 72-87); (2) Negligent Misrepresentation (id. ¶¶ 88-95); (3) Breach of Implied Warranty of Fitness for Purpose (id. ¶¶ 96-103); (4) Breach of Express Warranty (id. ¶¶ 104-111); (5) Declaratory Judgment (id. ¶¶ 112-117); (6) Money Had and Received (id. ¶¶ 118-130); and lists the California causes of action as violations of (7) California's Business and Professions Code § 17500 et seq. (id. ¶¶ 131-141); (8) California Civil Code § 1750 et seq. (id. ¶¶ 142-151); (9) the "unfair" and "fraudulent" prongs of California Business and Professions Code § 17200 et seq. (id. ¶¶ 152-164); and (10) the "unlawful" prong of California Business and Professions Code § 17200 et seq. (id. ¶¶ 165-174). Plaintiff's seek declaratory and injunctive relief in addition to monetary damages and attorneys' fees and costs. (Id. at 44-45.)
Because the Court may rely upon some of the documents contained within Defendants' Motion Requesting Judicial Notice (D.E. 72), the Court will address that Motion first. Pursuant to Federal Rule of Evidence 201, a "court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R.Evid. 201(b). "The contents of the Federal
Defendants ask the Court to take judicial notice of the following:
(See Motion Requesting Judicial Notice, D.E. 72 at 1-2.)
Plaintiffs argue that the Court should deny the Motion in toto, because (1) "the `facts' that Defendants request to take judicial notice of are subject to reasonable dispute;" and (2) "because, to the extent the Exhibits shed any light at all on the issues at hand, they contradict Defendants' arguments in their Motion." (Response to Defendant's Motion Requesting Judicial Notice, D.E. 82 at 2.) They argue that the purported fact that Defendants are attempting to establish—i.e., "that it would be `objectively unreasonable' for a consumer to believe that an `all natural' label on a food package could indicate that the food within did not contain GMOs and/or the other synthetic ingredients," (id. at 4)—is not appropriate for judicial notice because it cannot be "accurately and readily determined" from the documents. (Id. (quoting Fed.R.Evid. 201(b).)) Finally, with respect to Exhibit 8, they argue that "the 2006 letter to Defendants' hexane-processed soy supplier lacks foundation, is presented out of context and its accuracy is highly disputed by Plaintiffs." (Id.)
In reply, Defendant asserts that the "fact" of which it seeks judicial notice is "that the FDA and the USDA have made certain statements regarding natural food products and bioengineered ingredients, which are relevant to the determination of whether Plaintiffs have stated a claim upon which relief can be granted." (Reply in Support of Motion Requesting Judicial Notice, D.E. 83 at 1-2.)
The Court takes judicial notice of Exhibits 1 through 4—the Federal Register exhibits—pursuant to 44 U.S.C. section 1507. See Randolph v. J.M. Smucker Co., No. 13-80581-CIV, 2014 WL 1018007, at *1-2 (S.D.Fla. Mar. 14, 2014) (taking judicial
However, the Court denies the request to take judicial notice of Exhibits 7 and 8. First, with respect to Exhibit 7, "although described by Defendant as a `transcript', these items are copies of statements purportedly given before Congress," and "are not adjudicative facts." Id. (denying motion to take judicial notice of Exhibit 7 above).
Second, with respect to Exhibit 8, the letter Defendants seek to introduce is from the USDA to one of Defendants' primary suppliers of hexane-processed soy products. (See Letter, D.E. 73-1.) In that letter, the USDA informs the supplier that certain soy protein isolates and soy protein concentrates manufactured with hexane are acceptable as ingredients in meat and poultry products labeled as "natural." (Id.) The letter is marked "CONFIDENTIAL PURSUANT TO PROTECTIVE ORDER, ATTORNEY'S EYES ONLY." (Id.) The Court finds that this letter does not evince an "adjudicative fact" of which the Court can take judicial notice. See Astiana v. Kashi Co., 295 F.R.D. 490, 493 (S.D.Cal.2013) ("Kashi is mistaken in asserting that the USDA letter settles the issue of whether hexane-processed soy ingredients are natural as a matter of federal law.).
Under Federal Rule of Civil Procedure 12(b)(6), a court may dismiss a claim for "failure to state a claim upon which relief can be granted." In reviewing a motion to dismiss, the Court must accept the factual allegations as true and construe them broadly in the light most favorable to the plaintiff. See Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir.2007). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Conclusory statements, assertions or labels will not survive a 12(b)(6) motion to dismiss. Id. "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." Id.; see also Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir.2010) (setting forth the plausibility standard). In recent decisions, the Eleventh Circuit further advised that courts may make reasonable inferences in a plaintiffs favor, but they are not required to draw plaintiffs inference. Sinaltrainal v. Coca-Cola, 578 F.3d 1252, 1260 (11th Cir.2009).
Defendants begin by asserting broader arguments for dismissal before challenging the individual claims. The Court will discuss the arguments in the order they were presented by Defendants' Motion.
Each count in the SAC alleges that Defendants violated some law by representing their products as "all natural" and containing "nothing artificial," when in fact the products contain GMOs and other allegedly synthetic ingredients. Defendants' Motion argues that Plaintiffs are seeking "to impose new and different labeling standards for products that may have bioengineered ingredients" (Motion at 6), which would conflict with federal policy—specifically, the Food and Drug Administration's (FDA) regulation of natural and bioengineered foods under the Federal Food, Drug, and Cosmetic Act (FDCA), as amended by the Nutrition Labeling and Education Act (NLEA), 21 U.S.C. section 341 et seq. Thus, Defendants argue that Plaintiffs' claims are preempted by federal law and/or policy. (See Motion at 6.) They offer four separate arguments in support: first, they argue that Plaintiffs' GMO-based claims are preempted by FDA policy and regulations (id.); second, they argue that Plaintiffs' GMO-based claims conflict with FDA regulations governing the identification of common ingredients (id. at 7); third, they appear to argue that two cases from other districts support the conclusion that Plaintiffs' challenge to the "all natural" representation on the product packaging is preempted (id. at 8-10); and fourth, they argue that Plaintiffs' "claims against vitamins and hexane-processed soy are preempted" because "the FDA permits `natural' foods to contain synthetic ingredients
"Whether federal statutes or regulations preempt state law is `a question of congressional intent.'" Irving v. Mazda Motor Corp., 136 F.3d 764, 767 (11th Cir.1998) (quoting Perry v. Mercedes Benz of N. Am., Inc., 957 F.2d 1257, 1261 (5th Cir.1992)). "Congress—through federal laws and regulations—may effectively preempt state law in three ways: (1) express preemption; (2) field preemption (regulating the field so extensively that Congress clearly intends the subject area to be controlled only by federal law); and (3) implied (or conflict) preemption." Id. Here, Defendants appear to argue Plaintiffs claims are expressly preempted and impliedly preempted. (See Motion at 6 ("Plaintiffs' GMO-based claims conflict with FDA Policy on GMOs.").)
Defendants argue that "[f]or two decades, the FDA has consistently rejected any requirement that bioengineered foods must be labeled differently because the FDA has determined that there is no material difference from non-bioengineered foods that would require such disclosure." (Motion at 6.) However, this argument is based on a misreading of the SAC: the SAC does not allege that Defendants are required to disclose the presence of GMOs on the packaging of their products, as Defendants assert; rather, the SAC merely alleges that the "all natural" representation currently on the packaging would, and does, mislead reasonable consumers. (Response at 6-7 (citing SAC ¶¶ 7-9, 36-39, 46-53).) Accordingly, to the extent Defendants argument is based on the mistaken premise that the SAC seeks to impose a disclosure requirement on Defendants GMO products, it is rejected. The Court turns to whether Plaintiffs' claims are otherwise preempted.
The NLEA's express preemption provision provides, in relevant part: "[N]o State ... may directly or indirectly establish... any requirement for the labeling of food of the type required by section 343(k) of this title that is not identical to the requirement of such section[.]" 21 U.S.C. § 343-1(a)(3). Section 343(k), in turn, provides that food is misbranded "[i]f it bears or contains any artificial flavoring, artificial coloring, or chemical preservative[.]" This provision does not apply to the SAC, because Plaintiffs do not allege that Kashi's products contain artificial flavoring, coloring, or chemical preservatives, but rather that the GMOs and other allegedly synthetic ingredients precludes the
Alternatively, Defendants appear to argue that Plaintiffs' claims are impliedly preempted because a court order requiring Defendants to remove the "all natural" language from their product packaging would "require this Court to legislate state law requirements for bioengineered foods that conflict with federal policy." (Motion at 6.) This argument fails because the FDA does not have a policy permitting food containing GMOs to be described as "natural," nor has it regulated the term "all natural." Implied preemption occurs "where it is impossible for a private party to comply with both state and federal requirements, see, e.g., Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963), or where state law `stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'" English v. Gen. Elec. Co., 496 U.S. 72, 79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990) (quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941)).
Defendants rely on the informal policy espoused by the FDA in 1991, which provides: "[T]he agency has considered `natural' to mean that nothing artificial or synthetic (including colors regardless of source) is included in, or has been added to, the product that would not normally be expected to be there." Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definition of Terms, 56 Fed.Reg. 60421, 60466 (Nov. 27, 1991). Defendants also cite a 1993 statement from the FDA in which it specifically declined to establish a definition for "natural," and maintained the informal position it espoused in 1991. Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definition of Terms; Definitions of Nutrient Content Claims for the Fat, Fatty Acid, and Cholesterol Content of Food, 58 Fed.Reg. 2302, 2407 (Jan. 6, 1993).
Thus, with respect to Plaintiffs' "all natural" claims, "the FDA has deferred taking regulatory action. Plaintiff's All Natural Claims do not stand as an obstacle to accomplishing Congress's objectives of uniformity and consistency in regulating ... labeling because there are no federal requirements regarding the term `natural' to be given preemptive effect." Hitt, 2009 WL 449190, *5. Nor has Defendant established that Plaintiffs' claims, if successful, make compliance with federal law an impossibility. See Lockwood, 597 F.Supp.2d at 1034.
Furthermore, in Holk v. Snapple Beverage Corp., the Third Circuit Court of Appeals held that this informal FDA policy upon which Defendants rely for preemptive
In sum, the Court concludes that Plaintiffs' GMO-based claims are neither expressly nor impliedly preempted by FDA policy or regulations.
Next, Defendants argue that Plaintiffs' GMO-based claims are preempted "because the FDA has implemented comprehensive labeling regulations for food ingredients that directly undercut Plaintiffs' claim that Kashi must identify its ingredients as bioengineered." (Motion at 7.) Once again, Defendants' argument is premised on a misreading of the SAC. Plaintiffs do not, as Defendants argue, "suggest that Kashi should have identified ingredients as bioengineered." (Id.) Rather, the SAC alleges that the "all natural" representation currently on the packaging would, and does, mislead reasonable consumers. (Response at 6-7 (citing SAC ¶¶ 7-9, 36-39, 46-53).) Accordingly, Defendants' argument with respect to FDA regulations governing identification of common ingredients is misplaced and therefore rejected.
Next, Defendants argue that Plaintiffs are attempting an "end-run around the NLEA and FDA regulations ... by claiming
First, Defendants rely on In re: Pepsi-Co, Inc., Bottled Water Marketing & Sales Practices Litigation, 588 F.Supp.2d 527 (S.D.N.Y.2008). In that case, the plaintiffs sued the makers of Aquafina water for, inter alia, unfair and deceptive trade practices. Id. at 529. They alleged that the defendant deceptively placed an image of a mountain on bottled water to mislead consumers as to the source of the water, which was actually just purified "tap water." Id. The parties agreed "that although bottled water originating from a community water system generally must be labeled `from a community water system' or `from a municipal source,' the applicable standard of identity explicitly exempts from this source disclosure requirement water meeting the definition of purified drinking water." Id. at 534 (citing 21 C.F.R. § 165.110(a)(3)(ii)).
Id. Thus, finding that the plaintiffs' cause of action would impose a labeling requirement explicitly rejected by the FDA, and affirmatively different from the federal requirements, the court found the claims preempted. Id.
In contrast, here, "[u]nlike the federal standard governing bottled water considered in Pepsico, ... defendants do not have the benefit of an express preemption provision or interpretive guidance by the FDA as to the scope of the regulation's preemptive effect." Chavez v. Blue Sky Natural Beverage Co., 268 F.R.D. 365, 372 (N.D.Cal.2010) (finding no preemption in consumer class action alleging beverage company misrepresented origin of beverage). Here, no "affirmatively different" regulation applies to Plaintiffs' claims; Pepsico is inapposite.
Second, Defendants rely on Hairston v. South Beach Beverage Co., Inc., No. CV 12-1429-JFW (DTBx), 2012 WL 1893818 (N.D.Cal. May 18, 2012). In Hairston, the Plaintiff sued beverage-makers alleging:
Id. Thus, "Hairston did not address whether `all natural' claims, on their own, are preempted," Larsen v. Trader Joe's Co., 917 F.Supp.2d 1019, 1024 (N.D.Cal. 2013) (finding "all natural" claims were not preempted by FDCA or FDA regulations). Rather, "Hairston stands for the limited and unremarkable proposition that a plaintiff cannot avoid preemption of one claim by asserting that it supports another claim.... The pertinent inquiry is whether Plaintiff's ... claim, standing on its own, is preempted." Pardini v. Unilever United States, Inc., 961 F.Supp.2d 1048, 1058 (N.D.Cal.2013). For the reasons discussed in Section III(A)(1) and (2), supra, and Section III(A)(4), infra, Plaintiffs' stand-alone challenge to Defendants' "all natural" labeling are not preempted. Accordingly, Hairston is of no help to Defendants.
In sum, the Court rejects Defendants' argument that Plaintiffs cannot challenge the "all natural" characterization of its products. At this motion to dismiss stage, the Court accepts Plaintiffs' well-pleaded allegations that the "all natural" labeling on Defendants' products is misleading.
Next, Defendants argue that the FDA permits "natural" foods to contain synthetic ingredients and processing aids as long as they are normally expected in the food. (Motion at 10 (citing 58 Fed. Reg. at 2407).) In response, Plaintiffs assert: "Not only is this interpretation of FDA policy incorrect, but even if it were correct it would not apply here. Taking Plaintiffs' allegations in their SAC as true... it is indisputable [that] reasonable consumers do not expect fake vitamins and processing aids to be in foods labeled `All Natural' and/or `containing nothing artificial.'" (Response at 13 (citing SAC ¶¶ 36-45).)
USDA FSIS, Food Standards and Labeling Policy Book, available at www.fsis.usda.gov/OPPDE/larc/Policies/Labeling—Policy—Book—082005.pdf31.
(SAC ¶¶ 36-45.) The Court must take all of these well-pleaded allegations as true
Accordingly, the Court rejects Defendant's argument that Plaintiffs' claims regarding vitamins and hexane-processed soy are preempted.
Defendants argue that even if Plaintiffs' claims are not preempted, the Court should dismiss the SAC based on the "primary jurisdiction doctrine." (Motion at 11.) Specifically, they argue that "the FDA should decide a product labeling issue because it has the requisite expertise and can ensure uniformity in labeling." (Id. at 12.)
Primary jurisdiction "is a doctrine specifically applicable to claims properly cognizable in court that contain some issue within the special competence of an administrative agency." Reiter v. Cooper, 507 U.S. 258, 268, 113 S.Ct. 1213, 122 L.Ed.2d 604 (1993); see also United States v. W. Pac. R.R., 352 U.S. 59, 64, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956) (stating same); Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir.2008) (stating that "the doctrine is a `prudential' one, under which a court determines that an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry, rather than the judicial branch"). "It requires the court to enable a `referral' to the agency, staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling." Reiter, 507 U.S. at 268, 113 S.Ct. 1213. "Referral of the issue to the administrative agency does not deprive the court of jurisdiction; it has discretion either to retain jurisdiction or, if the parties would not be unfairly disadvantaged, to dismiss the case without prejudice." Id. at 268-69, 113 S.Ct. 1213; see also Hansen v. Norfolk & W. Ry., 689 F.2d 707, 714 (7th Cir.1982) (stating that "[d]ismissal of the complaint may be appropriate when all of the relief that is sought in court can be obtained in an administrative forum or in an easily initiated suit subsequent to the administrative proceedings;" however, "[a] stay of the court action pending administrative determinations... is in order when there is reason to believe that a party may be prejudiced by a dismissal" (citing Far E. Conference v. United States, 342 U.S. 570, 576-77, 72 S.Ct. 492, 96 L.Ed. 576 (1952); United States v. Mich. Nat'l Corp., 419 U.S. 1, 5, 95 S.Ct. 10, 42 L.Ed.2d 1 (1974))).
"`[T]he main justifications for the rule of primary jurisdiction are the expertise of the agency deferred to and the need for a uniform interpretation of a statute or regulation.'" Boyes v. Shell Oil Prods. Co., 199 F.3d 1260, 1265 (11th
Here, Defendant argues that all four factors support invoking the primary jurisdiction doctrine in this case. (Motion at 12.)
(Id.)
Once again, Defendants' argument misses the mark. Plaintiffs' claims rest on the determination of whether Defendants' "all natural" and "nothing artificial" representations on their products' labeling are misleading and whether customers purchased Defendants' products in reliance upon these representations. "`[T]his is not a technical area in which the FDA has greater technical expertise than the courts—[as] every day courts decide whether conduct is misleading.'" Rikos v. Procter & Gamble Co., 782 F.Supp.2d 522, 530 (S.D.Ohio 2011) (declining to apply the primary jurisdiction doctrine where the plaintiff's claims rested on a determination of whether a company's advertisements of a food supplement "are likely to deceive a reasonable consumer" under California's consumer fraud statutes) (quoting Lockwood, 597 F.Supp.2d at 1035 (declining to apply the primary jurisdiction doctrine in false advertising case concerning definition and deceptive use of the term "natural")) (citing Chacanaca v. Quaker Oats Co., 752 F.Supp.2d 1111, 1124 (N.D.Cal.2010) (stating that the plaintiffs advanced a "relatively straightforward claim: they assert that defendant has violated FDA regulations and marketed a product that could mislead a reasonable consumer," which "is a question courts are well-equipped to handle")); see also In re Horizon Organic Milk Plus
Nor has the FDA promulgated a comprehensive regulatory scheme regarding assertions of "all natural" or "nothing artificial" on food labeling. See Lockwood, 597 F.Supp.2d at 1035; see also In re Frito-Lay, 2013 WL 4647512, at *7. "[V]arious parties have repeatedly asked the FDA to adopt formal rulemaking to define the word natural and the FDA has declined to do so because it is not a priority and the FDA has limited resources." Id. Courts have further noted that "[a]lthough the FDA has addressed the use of the term `natural' in depicting food and beverage products, its policy with respect to the use of the term `natural' is unrestrictive. The FDA follows a policy of not taking enforcement action charging that a product labeled as `natural' is misbranded, as long as the product has no `added color, synthetic substances, and flavors.'" Wright v. Gen. Mills, Inc., Civil No. 08cv1532L(NLS), 2009 WL 3247148, at *3 (S.D.Cal. Sept. 30, 2009) (quoting 58 Fed.Reg. 2407). "Based on the FDA's consistent determination that the term `natural' does not need specific definition, state law claims based upon the use of the term `natural' is not an issue of first impression, does not require technical expertise within the special competence of the FDA, and is not a particularly complicated issue outside the ability of the Court to consider and decide." Id.
In sum, "`[t]his case is far less about science than it is about whether a label is misleading,' and the reasonable-consumer inquiry upon which some of the claims in this case depends is one to which courts are eminently well suited, even well versed.'" In re Frito-Lay, 2013 WL 4647512, at *8. Accordingly, the Court denies Defendants' motion to dismiss pursuant to the primary jurisdiction doctrine. See id.; see also Krzykwa v. Campbell Soup Co., 946 F.Supp.2d 1370, 1375 (S.D.Fla.2013) (declining to dismiss under primary jurisdiction doctrine where plaintiffs alleged that defendant's use of GMOs in their "all natural" products misled consumers); Janney v. Mills, 944 F.Supp.2d 806, 811-815 (N.D.Cal.2013) (declining to dismiss under the primary jurisdiction doctrine where plaintiffs alleged that foods containing high fructose corn syrup were not "all natural" and providing a detailed analysis of the FDA's position on "natural" food labeling"); Jones v. ConAgra Foods, Inc., 912 F.Supp.2d 889, 898-99 (N.D.Cal. 2012) ("100% Natural"); Briseno v. ConAgra Foods, Inc., Case No. CV 11-05379 MMM (AGRx), 2011 U.S. Dist. LEXIS 154750, at *28-29 (C.D.Cal. Nov. 23, 2011) (same).
Next, Defendants assert that Plaintiffs have failed to allege sufficient factual content to show that it is more than "conceivable" that Defendants' products actually contain bioengineered or artificial ingredients. (Motion at 13 (citing Ashcroft v. Iqbal, 556 U.S. 662, 683, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).) They argue that Plaintiffs "fail to provide a single factual allegation that [Defendants'] products ... actually contain such ingredients," and that although Kashi has "publicly stated that it is possible that some of its products may contain GMO ingredients due to commingling of ingredients in storage and shipment, it has never stated that its products actually contain GMOs. ..." (Id.) Plaintiffs respond by arguing that they
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." This pleading standard does not require "detailed factual allegations," but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "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." Id.
Under Rule 9, a party alleging fraud or mistake "must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." The particularity requirement of Rule 9(b) is satisfied if the complaint alleges "facts as to time, place, and substance of the defendant's alleged fraud, specifically the details of the defendants' allegedly fraudulent acts, when they occurred, and who engaged in them." Hopper v. Solvay Pharm., Inc., 588 F.3d 1318, 1324 (11th Cir.2009) (citation and internal quotation marks omitted); see also Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir.2001) (noting the pleading standards are satisfied if alleging precisely what statements were made in what documents, when, where and by whom, the content, the manner in which they misled the plaintiff, and what the defendants obtained as a consequence of the fraud).
Plaintiffs have sufficiently pled their claims. The SAC alleges (1) which Plaintiffs purchased (2) which specific food items that were manufactured, marketed, advertised, distributed, and sold by Defendants, (3) where the Plaintiffs purchased them and (4) when. For example, Paragraph 21 provides:
Plaintiff Garcia has purchased Go Lean Crunch®, and the snack bars Kashi Go Lean® Crunchy! All Natural Protein and Fiber Bars (chocolate peanut butter), and Kashi Go Lean® Roll! All Natural Protein and Fiber Bars (chocolate peanut butter) during the Class period, from a Publix Supermarket located at 2270 SW 27th Avenue, Miami, Florida 33145 as well as the Whole Foods located at 10th and Alton in Miami Beach, Florida, 33139.
(See also ¶¶ 22-23.) It further alleges that Plaintiffs were induced to buy the products by their "All Natural" labeling, which they "interpreted to mean that the Products do not contain any GMOs and/or artificial and synthetic ingredients." (Id. ¶ 27.) "If Plaintiffs had known the Products contained GMOs and/or other synthetic and artificial ingredients and thus were not all-natural, they would not have purchased them." (Id. ¶ 24.) Thus, they allege the labeling is "deceptive and misleading." (Id. ¶ 26.)
The SAC further provides an extensive list of Defendants' products that are labeled as "All Natural" (SAC ¶ 33) and a separate list of the products that are labeled as "Nothing Artificial" (id. ¶ 34). Under each product, the SAC lists the "GMO Ingredients" and the "Artificial/Synthetic Ingredients" that each product allegedly contains. To take just two
Paragraph 34(a) alleges that Kashi® Heart to Heart® Honey Oat Waffles are labeled as "Nothing Artificial" but contain:
The SAC does not allege that these products may contain these genetically-modified and synthetic ingredients, it alleges that they do contain them. (See id. ¶¶ 33-34.) The SAC further alleges that the labeling on Defendants' products would, and did, mislead a reasonable consumer. (See, e.g., id. ¶¶ 44, 82, 92.) Finally, the SAC alleges that Defendants charged an artificially high price for these products to encourage the perception that its Products "were superior to other, comparable products because the Kashi Products were `all natural' whereas the others were not." (Id. ¶ 30.) "Plaintiffs paid this price premium for the Products because they believed the Products were GMO-free and did not contain artificial and synthetic ingredients (in other words, they believed they are `All Natural' and contained `Nothing Artificial')."
To conceive how the SAC could possibly be pled with any more particularity strains the imagination. The Court therefore concludes that the SAC pleads sufficient factual content to allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 663, 129 S.Ct. 1937. The Court further finds that the SAC alleges precisely what statements were made in what documents, when, where and by whom, the content, the manner in which they misled the plaintiff, and what the defendants obtained as a consequence of the fraud. See Ziemba, 256 F.3d at 1202. Accordingly, the SAC is sufficiently pled under Rules 8 and 9(b) of the Federal Rules of Civil Procedure. See In re ConAgra Foods Inc., 908 F.Supp.2d 1090, 1099-1101 (C.D.Cal.2012).
Next, Defendants allege that Plaintiffs' claims under Florida's Deceptive `and Unfair Trade Practices Act (FDUTPA), California's Unfair Competition Law (UCL), California's False Advertising Law (FAL), and California's Consumers Legal Remedies Act (CLRA) must be dismissed because Plaintiffs fail to articulate why a reasonable consumer would be misled. (Motion at 14.) Plaintiff contends that Defendants' arguments are premature at the motion to dismiss stage where the pleadings control. (Response at 19 (citing Wright v. Emory, 41 So.3d 290, 292-93 (Fla.Dist.Ct.App.2010) ("Whether [Defendants'] representations constitute `deceptive and unfair' conduct is an issue of fact to be resolved by the judge at the conclusion of the trial.")).)
"`A consumer claim for damages under FDUTPA has three elements: (1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.'" City First Mortg. Corp. v. Barton, 988 So.2d 82, 86 (Fla.Dist.Ct.App.2008) (quoting Rollins,
Similarly, the UCL prohibits any "unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof.Code § 17200. The FAL prohibits any "unfair, deceptive, untrue, or misleading advertising." Cal. Bus. & Prof.Code § 17500. The CLRA prohibits "unfair methods of competition and unfair or deceptive acts or practices." Cal. Civ.Code § 1770. The claims under these California statutes are governed by the "reasonable consumer" test. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir.2008) (citations omitted). "Under the reasonable consumer standard, [Plaintiffs] must show that members of the public are likely to be deceived." Id. (citations and internal quotation marks omitted).
Defendants first argue that Plaintiffs have not shown how Defendants have violated the FDA's policy, which permits foods to be labeled "natural" when "nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected in the food." (Motion at 18 (citing 58 Fed.Reg. 2407 (Jan. 6, 1993)).) In fact, they contend that reasonable consumers "would expect and want vitamins and low-fat soybeans in their food." (Id.) However, the SAC alleges that reasonable consumers do not expect that foods labeled "all natural" will contain synthetic and/or artificial ingredients. (SAC ¶¶ 27, 30, 40, 44.) "At the motion to dismiss stage, all well-pleaded facts are accepted as true, and the reasonable inferences therefrom are construed in the light most favorable to the plaintiff." Garfield v. NDC Health Corp., 466 F.3d 1255, 1261 (11th Cir.2006) (citation and internal quotation marks omitted). Thus, the Court rejects Defendants' claim that reasonable consumers would expect and want synthetic and/or artificial ingredients in food labeled "all natural."
Second, Defendants argue that notwithstanding their compliance with the FDA policy, Plaintiffs "claims fail because they have not offered a plausible definition of `natural' for packaged foods that by definition undergo some processing and human intervention to be created." (Id.) They cite Pelayo v. Nestle USA, Inc. where the complaint alleged that the "All Natural" labeling of pasta was misleading because the products contained unnatural, artificial, or synthetic ingredients. 989 F.Supp.2d 973, 975-76 (C.D.Cal.2013). The Court relied on a report by the Federal Trade Commission in which it purportedly "declined to adopt a definition of `natural' because `natural may be used in numerous contexts and may convey different meanings depending on that context.'" Id. at 979. The Court dismissed the Complaint because the plaintiff "failed to allege either a plausible objective definition of the term `All Natural' or her subjective definition of the term `All Natural' that is shared by the reasonable consumer." Id, at 979-80.
To begin with, no subsequent case has adopted Pelayo's position, and two cases
2014 WL 2212216, at *3 (emphasis added). For the same reasons, this Court rejects Pelayo and Defendants' reliance thereon. Plaintiffs' claims are not deficient for failure to offer an alternative definition of "all natural." See id.
Third, Defendants argue that Plaintiffs' GMO-based claims fail because the FDA has found that there is no material difference between food produced through bioengineering and those produced naturally. (Id. at 19 (citing the FDA's "Guidance for Industry Voluntary Labeling Indicating Whether Foods Have or Have Not Been Developed Using Bioengineering, Draft Guidance" (D.E. 72-5)).) However, as Plaintiffs point out, Defendants' argument attempts "to make the leap from a purported FDA finding [that] there is no material difference between GMO and traditionally bred food to the conclusion that no reasonable consumer would understand the statement "All Natural" to mean the Products were made from non-GMO ingredients." (Response at 21.) The SAC sufficiently alleges that a reasonable consumer would expect a product labeled "all natural" to be free of GMOs. (See SAC ¶¶ 27, 30, 36-45.) And, at this stage of the proceedings, the Court must accept that allegation as true. See Garfield, 466 F.3d at 1261.
Finally, Defendants argue that Plaintiffs are attempting to conflate "natural" with "organic," and contend that consumers who do not want foods containing GMOs can avoid them because the "federal government
In sum, the SAC sufficiently alleges that the "All Natural" labeling of Defendants' Products could mislead a reasonable consumer to his or her detriment. See Williams, 552 F.3d at 939 (reversing the dismissal of UCL and false advertising claims, finding that "the statement that Fruit Juice Snacks was made with `fruit juice and other all natural ingredients' could easily be interpreted by consumers as a claim that all the ingredients in the product were natural, which appears to be false."); accord Rojas v. Gen. Mills, Inc., No. C 12-5099 WHO, 2014 WL 1248017, at *7-8 (N.D.Cal. Mar. 26, 2014) ("100% Natural" and "All Natural" representations on Nature Valley granola bars could mislead a reasonable consumer where the products contained GMOs); Parker v. J.M. Smucker Co., No. C 13-690 S.C. 2013 WL 4516156, at *6 (N.D.Cal. Aug. 23, 2013) (plaintiffs allegations that a reasonable consumer would believe that a product labeled as "all natural" contained no bioengineered or chemically altered ingredients "cannot be resolved as a matter of law"); Vicuna v. Alexia Foods, Inc., No. C 11-6119 PJH, 2012 WL 1497507, at *2 (N.D.Cal. Apr. 27, 2012) (same); Ben & Jerry's, Nos. C 10-4387 PJH, C 10-4937 PJH, 2011 WL 2111796, at *5-6 (N.D.Cal. May 26, 2011) (same). Accordingly, the Court denies Defendants Motion to Dismiss Claims I, VII, VIII, IX, and X for failure to state claims.
Next, Defendant argues that Plaintiffs' negligent misrepresentation claim (Claim II)-which alleges, in part, that "[t]hrough advertising not related to the label, Defendants have failed to disclose that the Products contain [GMOs] and other artificial and synthetic ingredients," (SAC ¶ 90)—must be dismissed because the SAC fails to identify the advertising at issue. (Motion at 19.) Plaintiffs argue that they have sufficiently alleged that they "reasonably relied on Defendants' all natural' and `nothing artificial' representations as well as Defendants' strategic branding on its labels and websites." (Response at 23 (quoting SAC ¶ 29).)
"To state a cause of action for negligent misrepresentation in Florida, a plaintiff must allege: `(1) the defendant made a misrepresentation of material fact that he believed to be true but which was in fact false; (2) the defendant was negligent in making the statement because he should have known the representation was false; (3) the defendant intended to induce the plaintiff to rely ... on the misrepresentation; and (4) injury resulted to the plaintiff acting in justifiable reliance upon the misrepresentation.'" McGee v. JP Morgan Chase Bank, NA, 520 Fed.Appx. 829, 831 (11th Cir.2013) (quoting Simon c. Celebration Co., 883 So.2d 826, 832 (Fla. Dist.Ct.App.2004)).
"The Eleventh Circuit has ... noted that because actions for negligent misrepresentation in Florida sound in fraud rather than negligence, the pleading requirements contained in Federal Rule of Civil Procedure 9(b) apply to such actions." Recreational Design & Constr., Inc. v.
The Court finds that Plaintiffs have stated a claim for negligent misrepresentation with respect to the "all natural" and "nothing artificial" representations on the product labeling. With respect to the first two prongs, construing the inferences drawn from the SAC's factual allegations in the light most favorable to Plaintiffs, the Court finds that Claim II alleges that Defendants' made a negligent misrepresentation of material fact they should have known was false. (See, e.g., SAC ¶ 89 ("Defendants have negligently represented that the Products have nothing artificial and are all `ALL NATURAL,' when in fact, they are not because it contains GMOs."); id. ¶ 28 ("Defendants' statement that the Products had nothing artificial and were `All Natural,' was important to Plaintiffs in deciding to purchase and consume the Products because they would not have purchased and consumed the Products had they not been advertised and labeled as `All Natural'. ...").)
With respect to the third prong, the SAC sufficiently alleges that Defendants intended to induce the Plaintiffs to rely on the misrepresentation. (See id. ¶ 91 ("Defendants knew or should have known that these omissions would materially affect Plaintiffs' and Class Members' decisions to purchase the Products."); id. ¶ 82 ("Defendants have deceived reasonable consumers, like Plaintiff and the Class, into believing its Products were something they were not—`All Natural.'").)
With respect to the fourth prong, the SAC sufficiently alleges that injury resulted to the Plaintiffs acting in justifiable reliance upon the misrepresentation. (See id. ¶ 92 ("Plaintiffs and other reasonable consumers, including the Class members, reasonably relied on Defendants' representations set forth herein, and, in reliance thereon, purchased the Products."); id. ¶ 94 ("Plaintiffs would not have been willing to pay for Defendants' Products if they knew that they contained genetically modified organisms and/or other artificial and synthetic ingredients, such as pyridoxine hydrochloride, alpha-tocopherol acetate, hexane-processed soy ingredients and calcium pantothenate."); id. ¶ 95 ("As a direct and proximate result of these misrepresentations, Plaintiffs and Members of the Class were induced to purchase and consume Defendants' Products, and have suffered damages to be determined at trial in that, among other things, they have been deprived of the benefit of their bargain in that they bought Products that were not what they were represented to be, and they have spent money on Products that had less value than was reflected in the premium purchase price they paid for the Products.").) Thus, even assuming that Defendants are correct in that the SAC
Next, Defendants argue that Plaintiffs' claims for Breach of Implied Warranty of Fitness for Purpose (Claim III) and Breach of Express Warranty (Claim IV) fail because there is no privity. (Motion at 20.) Specifically, they argue that Plaintiffs allege that they bought the products from Publix, Whole Foods, and Trader Joe's supermarkets, and argue that Florida law requires privity of contract with the defendant in order to recover on express and implied warranty claims. (Id. (citing T.W.M. v. Am. Med. Sys., Inc., 886 F.Supp. 842, 844 (N.D.Fla.1995); Weiss v. Johansen, 898 So.2d 1009, 1011 (Fla.Dist. Ct.App.2005)).) Defendants further argue that the express warranty claim must be dismissed because Plaintiffs failed to allege that Defendants made statements amounting to "an affirmation of fact or promise." (Id. (citing Fla. Stat. 672.313; Carter Hawley Hale Stores, Inc. v. Conley, 372 So.2d 965, 969 (Fla.Dist.Ct.App.1979)).)
"Florida law requires privity of contract to sustain a breach of implied warranty claim." David v. Am. Suzuki Motor Corp., 629 F.Supp.2d 1309, 1321 (S.D.Fla.2009) (containing a comprehensive discussion of the evolution of the privity requirement in implied warranty claims under Florida law); see also Kramer v. Piper Aircraft Corp., 520 So.2d 37, 39 (1988) (noting that an action for breach of implied warranty exists "where privity of contract is shown.") Because the SAC does not allege privity of contract between Plaintiffs and Defendants, Claim III must be dismissed. See Bailey v. Monaco Coach Corp., 168 Fed.Appx. 893, 895 (11th Cir.2006) (affirming district court's dismissal of implied warranty claim because plaintiff lacked privity with defendant manufacturer); Mesa v. BMW of N. Am., LLC, 904 So.2d 450, 458 (Fla.Dist.Ct.App. 2005) ("Under Florida law, a plaintiff cannot recover economic losses for breach of implied warranty in the absence of privity.") (citations omitted).
Whether privity is required in a claim for breach of express warranty under Florida law is not as clear cut. See Smith v. Wm. Wrigley Jr. Co., 663 F.Supp.2d 1336, 1341-1343 (S.D.Fla.2009) (characterizing the privity requirement in Florida warranty claims as "a moving target"). Although there is case law supporting Defendants' position that privity is required for express warranty claims, see T.W.M., 886 F.Supp. at 844, several cases involving the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. ("MMWA") have not required privity for express warranty claims to advance past the motion to dismiss stage. See, e.g., Rentas v. DaimlerChrysler Corp., 936 So.2d 747, 751 (Fla. Dist.Ct.App.2006). Furthermore, in David v. American Suzuki Motor Corp., which involved express and implied warranty claims under both Florida law and the MMWA, Judge Gold dismissed the implied warranty claims for lack of privity but made no mention of privity in discussing the express warranty claims which survived the motion to dismiss. 629 F.Supp.2d at 1323-24, 1328.
Additionally, in Smith—a case highly analogous to the case at bar—Judge Cohn concluded that the plaintiff's claim for breach of express warranty survived the defendant's motion to dismiss, despite the absence of privity. 663 F Supp.2d at 1343.
The Court need not resolve the issue of whether privity is ever required for express warranty claims under Florida law. Rather, the Court finds that, given the particular facts of this case, the analysis here is relatively straightforward. First, this case is not similar to T.W.M. or [Intergraph Corp. v.] Stearman [555 So.2d 1282 (Fla.Dist.Ct.App.1990)]. In each of those cases, whether it be a doctor installing an implant or a computer salesman, it could be assumed that the end-purchaser might expect the seller or "middle man" to have relevant knowledge, or even expertise, regarding the manufacturer's product. Here, it defies common sense to argue that purchasers of Eclipse gum presumed that the cashier at the local convenience store is familiar with the scientific properties of MBE. Second, it is significant that the express warranty the manufacturer allegedly breached is contained on the packaging of Eclipse gum. Compl. ¶ 14. Moreover, the Complaint alleges that Plaintiff relied on the warranty when purchasing the gum. Id. ¶ 8. Accordingly, the Court finds that Plaintiff states a valid claim for breach of express warranty.
Id. This Court is persuaded by Judge Cohn's analysis in Smith and, for the same reasons, concludes that Plaintiffs claim for breach of express warranty survives despite the absence of privity.
With respect to Defendants' alternative argument, under Florida law, "[a]ny affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise." Fla. Stat. 672.313(1)(a). Construing the SACs allegations in the light most favorable to Plaintiffs, and drawing all reasonable inferences therefrom, the Court finds that the SAC sufficiently states a claim for breach of express warranty under the statutory definition. See Vicuna v. Alexia Foods, Inc., No. C 11-6119 PJH, 2012 WL 1497507, at *2 (N.D.Cal. Apr. 27, 2012) (holding that the plaintiffs adequately stated express warranty claim regarding "all natural" characterization of potato containing allegedly synthetic ingredient under California's parallel "affirmation of fact or promise" standard).
Claim V seeks a declaratory judgment "requiring Defendants to cease using genetically modified organisms in its All Natural products and/or stopping Defendants from representing its products are All Natural when they are not." (SAC ¶ 115.) The Court finds that Claim V is a claim for injunctive relief, not a declaratory judgment.
A declaratory judgment is "[a] binding adjudication that establishes the rights and other legal relations of the parties without providing for or ordering enforcement."
In a general sense, every order of a court which commands or forbids is an injunction; but in its accepted legal sense, an injunction is a judicial process or mandate operating in personam by which, upon certain established principles of equity, a party is required to do or refrain from doing a particular thing. An injunction has also been defined as a writ framed according to the circumstances of the case, commanding an act which the court regards as essential to justice, or restraining an act which it esteems contrary to equity and good conscience; as a remedial writ which courts issue for the purpose of enforcing their equity jurisdiction; and as a writ issuing by the order and under the seal of a court of equity.
1 Howard C. Joyce, A Treatise on the Law Relating to Injunctions § 1, at 2-3 (1909), as quoted in Black's Law Dictionary at 904.
Claim V does not request a binding adjudication regarding the parties' rights and legal relations, but rather requests an order commanding Defendants "to cease using genetically modified organisms in its All Natural products and/or stopping Defendants from representing its products are All Natural. ..." (SAC ¶ 115.) Such a request is, by definition, one for injunctive relief. However, "to obtain a permanent injunction, a party must show: (1) that he has prevailed in establishing the violation of the right asserted in his complaint; (2) there is no adequate remedy at law for the violation of this right; and (3) irreparable harm will result if the court does not order injunctive relief." Alabama v. U.S. Army Corps of Eng'rs, 424 F.3d 1117, 1128 (11th Cir. 2005). The Court finds that: (1) a permanent injunction is premature in that Plaintiffs have not prevailed in establishing the violation of the right asserted in the SAC; and (2) an adequate remedy at law exists. An injunction is therefore inappropriate, and Claim V is therefore dismissed.
Next, Defendants argue that Plaintiffs' claim for Money Had and Received must be dismissed because "Plaintiffs do not— and cannot—allege that the money they paid for Kashi products was intended to be used for the benefit of the Plaintiffs, as that money was undisputedly provided to Publix, Whole Foods, and Trader Joe's in exchange for Kashi cereal and snack bars." (Motion at 21.) They further argue that the claim may only be pursued to the extent that there is privity between the plaintiff and defendant, which is absent here. (Id.) Plaintiffs argue that the claim survives because the SAC properly alleges that they paid a price premium in exchange for Defendants' products and had they known that the products were not all natural they would not have been deprived of their money. (Response at 25.) They further allege that "Defendants' privity argument fails because the money Plaintiffs paid to retailers in exchange for the Products, in fact, provides significant monetary benefits to Defendants." (Id.)
"Florida law recognizes the general rule that `an action for money had and received ... can be maintained where money is paid under a mistake of fact or where money has been obtained through
Claim VI of the SAC alleges that "Defendants have represented on its label that its Products are `All Natural' when in fact, they are not, because they contain GMOs, a fact that Defendants fail to disclose. . . ." (SAC ¶ 120.) It further alleges that Defendants received, accepted, and retained money from the Plaintiffs through the purchase price obtained from sales of the Products to Plaintiffs. (Id. ¶¶ 122-23.) It further alleges that "Defendants have profited from their unlawful, unfair, misleading, and deceptive practices and advertising at the expense of Plaintiffs and Class Members, under circumstances in which it would be unjust for Defendants to be permitted to retain the benefit." (Id. ¶ 124.) The Court finds that Plaintiffs have sufficiently pled the elements of a money had and received cause of action.
With respect to Defendants' argument that the claim fails for lack of privity, the Supreme Court of Florida has stated:
First State Bank of Fort Meade v. Singletary, 124 Fla. 770, 169 So. 407, 408 (1936) (emphasis added); see also Anchor Sav. Bank v. Berlin, 445 So.2d 675, 676 (Fla. Dist.Ct.App.1984); Ferguson v. Cotler, 382 So.2d 1315, 1316 (Fla.Dist.Ct.App.1980). Accordingly, the Court rejects Defendants'
The SAC alleges that Plaintiffs purchased eight of the eighty-one products listed in the SAC. (See SAC ¶¶ 21-23.) Defendants argue that Plaintiffs lack standing to pursue any claims involving Kashi products they did not purchase. (Motion at 21.) Plaintiffs argue that "[a] named plaintiff has standing to assert claims for products he did not purchase when those products are sufficiently similar and part of the same product line." (Response at 25 (citing Colucci v. ZonePerfect Nutrition Co., No. 12-2907-SC, 2012 WL 6737800 (N.D.Cal. Dec. 28, 2012); Miller v. Ghirardelli Chocolate Co., 912 F.Supp.2d 861, 869 (N.D.Cal.2012)).) Plaintiffs contend that the non-purchased products are sufficiently similar to confer standing. (Id. at 25-26.) In reply, Defendants cite to Toback v. GNC Holdings, Inc., a case from this District in which the Court held that the class representative did not have standing to "raise claims relating to those other products which he did not purchase." No. 13-80526-CIV, 2013 WL 5206103, at *5 (S.D.Fla. Sept. 13, 2013).
In Toback, a single plaintiff brought a single FDUTPA claim against GNC challenging representations GNC made about its entire "TriFlex" line of products, even though the plaintiff had only purchased one product from the Tri Flex line (the Tri Flex Vitapak). Id. at *1. GNC argued Plaintiff lacked standing to challenge the non-purchased items. Id. at *4. The court noted that some courts have dismissed similar claims for lack of standing to challenge the non-purchased products, see id. (citing Pearson v. Target Corp., No. 11-7972, 2012 WL 7761986 (N.D.Ill. Nov. 9, 2012)), while other courts hold that whether a class representative has standing to challenge non-purchased products is a question more appropriate for the class certification stage, id. (citing Cardenas v. NBTY, Inc., 870 F.Supp.2d 984, 991-92 (E.D.Cal.2012)), while still other courts have permitted plaintiffs to maintain consumer class actions involving products they did not purchase, id. (citing In re Frito-Lay N. Am., Inc., No. 12-2413, 2013 WL 4647512 (E.D.N.Y. Aug. 29, 2013)). However, the Court in Toback stated that
Id. The court concluded:
Id. at *5.
The Court acknowledges that "there is authority going both ways" on this issue. Astiana v. Dreyer's Grand Ice Cream, Inc., Nos. C-11-2910 EMC, C-11-3164 EMC, 2012 WL 2990766, at *11 (N.D.Cal. July 20, 2012), and other courts in other circuits permit class representatives to challenge non-purchased products that are "sufficiently similar" to the purchased products.
Although the Court finds persuasive arguments supporting both positions, it appears that Toback is the only case from the Eleventh Circuit to directly address the issue. Relying on the Eleventh Circuit's opinion in Prado-Steiman, 221 F.3d at 1279-80, Toback held that a named plaintiff in a consumer class action lacks standing to challenge a non-purchased product because there is no injury-in-fact as to that product, even if he purchased a substantially similar product. 2013 WL 5206103, at *4-5. This interpretation is consistent with other pronouncements from the Eleventh Circuit. See Wooden v. Bd. of Regents of Univ. Sys. of Ga., 247 F.3d 1262, 1288 (11th Cir.2001) ("[J]ust as a plaintiff cannot pursue an individual claim unless he proves standing, a plaintiff cannot represent a class unless he has standing to raise the claims of the class he seeks to represent."); Griffin v. Dugger, 823 F.2d 1476, 1483 (11th Cir.1987) ("[The] individual injury requirement is not met by alleging `that injury has been suffered by other, unidentified members of the class to which [the plaintiff] belong[s] and which [he] purport[s] to represent.' Warth v. Seldin, 422 U.S. 490, 502, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) . . . Moreover, it is not enough that a named plaintiff can establish a case or controversy between himself and the defendant by virtue of having standing as to just one of many claims he wishes to assert. Rather, each claim must be analyzed separately, and a claim cannot be asserted on behalf of a class unless at least one named plaintiff has suffered the injury that gives rise to that claim."). Toback's holding is also consistent with U.S. Supreme Court precedent:
Blum v. Yaretsky, 457 U.S. 991, 999, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982) (second emphasis added)
(See SAC ¶¶ 21-23.)
Finally, Defendants argue that Defendant The Kellogg Company ("Kellogg") must be dismissed from this action because the SAC insufficiently alleges that Kashi is the "mere instrumentality" or "alter ego" of Kellogg. (Motion at 22.) Plaintiff agrees that a parent corporation cannot be held liable for the actions of its subsidiary unless the subsidiary is deemed to be a mere instrumentality of the parent, but argues that this issue presents a factual question not suitable for resolution at the motion to dismiss stage. (Response at 27-28.)
In Florida, "[a] parent corporation will not be held liable for the actions of its subsidiary unless the subsidiary is deemed to be a mere instrumentality of the parent." Federated Title Insurers, Inc. v. Ward, 538 So.2d 890, 891 (Fla.Dist. Ct.App.1989) (citation omitted).
Id. (citations omitted). Or, as the Eleventh Circuit has stated: "Florida law allows a party to pierce the corporate veil and hold a parent corporation liable for its subsidiary's actions if it can demonstrate first, `that the subsidiary was a `mere instrumentality' of the parent,' and second, `that the parent engaged in `improper conduct' through its organization or use of the subsidiary.'" SEB S.A. v. Sunbeam Corp., 148 Fed.Appx. 774, 800 (11th Cir. 2005) (quoting Johnson Enters. of Jacksonville, Inc. v. FPL Grp., Inc., 162 F.3d 1290, 1320 (11th Cir.1998)).
Similarly, "[u]nder California law, a parent corporation may be held liable for the acts of its subsidiary only if that subsidiary is either the alter ego or the agent of the parent." Salkin v. United Servs. Auto. Ass'n, 767 F.Supp.2d 1062, 1065 (C.D.Cal.2011) (citations omitted).
Id. (quoting Sonora Diamond Corp. v. Super. Ct., 83 Cal.App.4th 523, 99 Cal.Rptr.2d 824 (2000)).
The Court concludes that the SAC must be dismissed as to Kellogg because it simply does not allege a "mere instrumentality" or "alter ego" theory of liability. See Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330, 1351 (11th Cir.2011) (affirming district court's rejection of agency theory of liability for failure to plead it in the amended complaint); see also Pegasus Imaging Corp. v. Northrop Grumman Corp., No. 08:07-CV-1937-T-27EAJ, 2008 WL 5099691, at *2-3 (M.D.Fla. Nov. 25, 2008) (dismissing claim against parent company for failure to plead sufficient facts establishing liability for subsidiary). In fact, the SAC does not even mention Kellogg beyond noting that Kashi is a "subsidiary" of Kellogg, and alleging that Kellogg "promoted and marketed the Products at issue." (SAC ¶¶ 19-20.) This falls far short of establishing that Kashi is a "mere instrumentality" or "alter ego" of Kellogg, as is required to survive Defendants' Motion. Accordingly, the Court dismisses the SAC as to Defendant The Kellogg Company.
Accordingly, it is