JOHN J. O'SULLIVAN, United States Magistrate Judge.
THIS MATTER comes before the Court on the Defendant's Motion to Dismiss and Memorandum of Law in Support (DE # 54, 4/25/14).
Anheuser-Busch Companies, LLC (hereinafter "defendant" or "AB") is the brewer of Beck's beer (hereinafter "Beck's" or "Beck's Beer").
The plaintiffs are consumers of Beck's residing in Florida, New York and California who purchased Beck's "in reliance on representations contained on [the] packaging and Beck's history of being an imported beer from Germany." Amended Complaint (DE # 50 at ¶¶ 22, 24, 26, 3/31/14). The plaintiffs allege that the defendant made misrepresentations about Beck's that caused confusion among consumers. Id. at ¶ 15. According to the plaintiffs, "[c]onsumers believed they [we]re purchasing German beer, imported from Germany, brewed using German requirements and with German ingredients, when in fact, they [we]re purchasing beer brewed in St. Louis, Missouri . . . with ingredients from the United States." Id. The plaintiffs maintain that "[b]ased on [the d]efendant's misrepresentations and deceptive conduct, [they] purchased beer that had less value than what [they] had paid, and [they] ha[ve] accordingly suffered legally cognizable damages proximately caused by the [d]efendant's misconduct." Id. at ¶¶ 22, 24, 26.
On March 31, 2014, the plaintiffs filed their Amended Complaint asserting causes of action for: unjust enrichment (Count I), violation of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. ("FDUTPA") (Count II), violation of the New York General Business Law § 349 (Count III), violation of the California Unfair Competition Law Business and Professions Code § 17200, et seq. ("UCL") (Count IV) and violation of the California Consumer Legal Remedies Act Civil Code § 1750, et seq. ("CLRA") (Count V). See Amended Complaint (DE # 50 at ¶ 10, 3/31/14).
On June 6, 2014, the defendant filed a notice of supplemental authority. See Defendant's Notice of Supplemental Authority in Support of Its Motion to Dismiss (DE # 66, 6/6/14). The defendant filed a second notice of supplemental authority on July 28, 2014. See Defendant's Notice of Supplemental Authority in Support of Its Motion to Dismiss (DE # 75, 7/28/14).
In a prior Order, the Court granted the defendant's request to take judicial notice of the Certificates of Label Approval from the Alcohol and Tobacco Tax and Trade Bureau ("TTB") dated December 14, 2009 and December 14, 2011, "the bottom of the current [carton]
On August 1, 2014, the Court held a hearing on the instant motion. At the defendant's request, the Court allowed the defendant to bring demonstratives to the hearing for the Court's consideration. See Defendant's Unopposed Motion for Permission to Bring Demonstratives to the August 1, 2014 Hearing (DE # 74, 7/28/14); Order Granting Defendant's Motion for Permission to Bring Demonstratives to the August 1, 2014 Hearing (DE # 76, 7/29/14). The defendant presented the Court with sample twelve ounce bottles and cans of Beck's, the cartons for six-pack and twelve-pack bottles and the carton for twelve-pack cans. Following the hearing, the Court issued an Order permitting the parties to file supplemental briefs on the issue of standing to seek injunctive relief. See Order (DE # 78, 8/1/14).
On August 6, 2014, the defendant filed its supplemental brief. See Defendant's Supplemental Brief in Support of Its Motion to Dismiss (DE # 81, 8/6/14). The plaintiffs filed their supplemental brief on August 11, 2014. See Plaintiff's Supplemental Brief in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 83, 8/11/14). On September 2, 2014, the defendant filed its third notice of supplemental authority. See Defendant's Notice of Supplemental Authority in Support of Its Motion to Dismiss (DE # 86, 9/2/14). This matter is ripe for adjudication.
The defendant seeks to dismiss the Amended Complaint (DE # 50, 3/31/14) for failure to state a claim upon which relief can be granted. See Defendant's Motion to Dismiss and Memorandum of Law in Support (DE # 54 at 1-36, 4/25/14). "A
The defendant also argues that Rule 9(b)'s heightened pleading requirement applies to the plaintiffs' FDUTPA, UCL and CLRA claims and that the plaintiffs have not met this pleading requirement in their Amended Complaint (DE # 50, 3/31/14). See Defendant's Motion to Dismiss and Memorandum of Law in Support (DE # 54 at 16, 4/25/14). Rule 9(b) states that: "In alleging fraud or mistake, a party 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." Fed.R.Civ.P. 9(b). There is some disagreement in the case law concerning the applicability of Rule 9(b) to state law consumer protection claims. This Court has recognized, for instance, that "although most courts have found that Rule 9(b) applies to claims brought under states' consumer fraud statutes, other courts have found that Rule 9(b) is not applicable to those claims." In re Horizon Organic Milk Plus DHA Omega-3 Mktg. & Sales Practice Litig., 955 F.Supp.2d 1311, 1323 n. 8 (S.D.Fla.2013); see also, e.g., Galstaldi v. Sunvest Cmty. USA, LLC, 637 F.Supp.2d 1045, 1058 (S.D.Fla.2009) (stating that "[t]he requirements of Rule 9(b) do not apply to claims under the FDUTPA" because "FDUTPA was enacted to provide remedies for conduct outside the reach of traditional common law torts such as fraud, and therefore, the plaintiff need not prove the elements of fraud to sustain an action under the statute.") (citation and internal quotation marks omitted). The undersigned does not need to decide whether Rule 9(b) applies to the plaintiffs' Florida and California consumer protection claims because the allegations in the Amended Complaint (DE # 50, 3/31/14) are sufficiently detailed to meet the requirements of Rule 9(b).
In considering a motion to dismiss brought under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court's analysis is generally limited to the four corners of the complaint and the attached exhibits. See Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir.2000). The Court must also accept the non-moving party's well-pled facts as true and construe the complaint in the light most favorable to that party. See Caravello v. Am. Airlines, Inc., 315 F.Supp.2d 1346, 1348 (S.D.Fla. 2004) (citing United States v. Pemco Aeroplex, Inc., 195 F.3d 1234, 1236 (11th Cir. 1999) (en banc)). To survive a motion to dismiss, the complaint must contain factual allegations which are "enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 664, 129 S.Ct. 1937. The issue to be decided is not whether the claimant will ultimately prevail, but "whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds by Davis v. Scherer, 468 U.S. 183, 190, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984).
The defendant also challenges the plaintiffs' standing to seek injunctive relief pursuant
The defendant moves to dismiss all five causes of action in the Amended Complaint for failure to state a claim and the plaintiffs' request for injunctive relief contained within Counts II through IV for lack of standing. See Defendant's Motion to Dismiss and Memorandum of Law in Support (DE # 54, 4/25/14). The Court will address the defendant's arguments in turn.
The plaintiffs assert state law claims under FDUTPA, the New York General Business Law § 349, the UCL and the CLRA (collectively, "state law consumer protection claims"). The defendant maintains that the plaintiffs have failed to state causes of action under each of these statutes because: (1) no reasonable consumer could be deceived by the defendant's representations, (2) the safe harbor provisions of these statutes insulate the defendant from liability and (3) no cognizable harm has been pled.
The defendant argues that the plaintiffs have failed to state a claim as to each of the relevant state law consumer protection statutes because the plaintiffs have not pled any actual misrepresentation or any representations likely to deceive a reasonable consumer. The defendant maintains that the plaintiffs' state law consumer protection claims must fail because they are based on the plaintiffs' own unreasonable assumptions about the labeling and packaging, rather than what the labeling and packaging actually state. According to the defendant, the plaintiffs: (1) fail to identify any misrepresentation that Beck's is imported or brewed in Germany and (2) depend entirely on their failure to read the actual representations regarding production location that are contained on Beck's labeling and packaging.
The Amended Complaint alleges that:
Amended Complaint (DE # 50 at ¶ 1, 3/31/14) (emphasis added). The defendant notes that none of the above quoted statements make any representations concerning the location where Beck's is brewed.
The defendant argues that any mistaken belief that Beck's is brewed in Germany is contradicted by the statement "Product of USA, Brauerei Beck & Co., St. Louis, MO." (hereinafter "`Product of USA' disclaimer") on the label
With respect to the "Product of USA" disclaimer, the plaintiffs argue that it is in a font that is too small and difficult to read, its illegibility is further exacerbated by the fact that it is in metallic white print on a metallic silver background and it is blocked by the carton. The defendant maintains that the "Product of USA" disclaimer complies with the TTB's font size requirements under 27 C.F.R. § 7.28(b) and the Court need only look to the label itself to reject the plaintiffs' illegibility claim.
At the August 1, 2014 hearing, the defendant submitted demonstrative samples of twelve ounce bottles and cans of Beck's for the Court's inspection. At the defendant's invitation, the Court examined these demonstratives. The undersigned finds
More importantly, the "Product of USA" disclaimer is blocked by the carton. A consumer would have to either open the cartons of twelve-pack bottles and twelve-pack cans or lift the bottle from the six-pack carton in order to see the "Product of USA" disclaimer. A reasonable consumer is not required to open a carton or remove a product from its outer packaging in order to ascertain whether representations made on the face of the packaging are misleading. See Williams v. Gerber Prods. Co., 552 F.3d 934, 939 (9th Cir.2008) (reversing motion to dismiss on multiple claims including claims under the UCL and CLRA and "disagree[ing] with the district court that reasonable consumers should be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box.").
The Court further finds that the statement "BRAUEREI BECK & CO., BECK'S © BEER, ST. LOUIS, MO" may not be sufficiently descriptive to alert a reasonable consumer as to the location where Beck's is brewed. Although this statement contains the words "St. Louis, Mo[.]," there is nothing in the statement which discloses where Beck's is brewed. Even assuming, arguendo, that the statement "BRAUEREI BECK & CO., BECK'S © BEER, ST. LOUIS, MO" is sufficiently descriptive as to the location of the brewery, it is printed underneath the carton. A reasonable consumer may not necessarily look at the underside of the carton in deciding whether to purchase a product. See Gerber, 552 F.3d at 939, supra.
In sum, the undersigned finds that the "Product of USA" disclaimer on the label and the statement "BRAUEREI BECK & CO., BECK'S © BEER, ST. LOUIS, MO" underneath the carton do not warrant the dismissal of the plaintiffs' state law consumer protection claims.
Next, the defendant argues that the statement "Brewed under the German Purity Law of 1516" is true because:
German Purity Law has nothing to do with place of production or source of ingredients. This law simply concerns the type of ingredients used to brew beer (water, hops, barley, and yeast). (See Am. Compl. ¶ 8). And there is no dispute that Beck's has always been, and continues to be, brewed with these basic ingredients.
Motion to Dismiss (DE # 54 at 20, 4/25/14) (emphasis added).
The Amended Complaint alleges that:
Defendant went one step further to bolster the German identity of Beck's [B]eer by prominently adding the claim "Brewed Under the German Purity Law of 1516." This claim is false. The German
Amended Complaint (DE # 50 at ¶ 12, 3/31/14). At this juncture in the proceedings, the undersigned must accept as true all well pled allegations in the Amended Complaint (DE # 50, 3/31/14). As such, the undersigned will not rule on the veracity of this statement on a motion to dismiss.
Moreover, even if the "Brewed Under the German Purity Law of 1516" statement is true, a reasonable consumer may not know what compliance with the German Purity Law means. Thus, a reasonable consumer could find the reference to the German Purity Law misleading, particularly when that statement is viewed in conjunction with: (1) other statements on the carton, (2) allegations of the defendant's overall marketing campaign and its efforts to maintain Beck's brand identity as a German beer and (3) Beck's German heritage including its 139-year history of being brewed in Germany. See Amended Complaint (DE # 50 at ¶ 6, 10, 11, 14, 3/31/14). Accordingly, the undersigned cannot agree with the defendant that the statement "Brewed under the German Purity Law of 1516" is true or that it cannot serve as the basis for claims under the applicable consumer protection statutes.
The defendant also argues that the statement "German Quality" is mere puffery and is therefore not actionable under the applicable state law consumer protection statutes. "Specific, quantifiable `statements of fact' that refer to a product's absolute characteristics may constitute false advertising, while general, subjective, unverifiable claims are `mere puffery' that cannot." Edmundson v. Procter & Gamble Co., 537 Fed.Appx. 708, 709 (9th Cir.2013) (citing Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1053 (9th Cir.2008)). In Gerber, the defendant argued that its claim that a product was "nutritious" was puffery and therefore not actionable. 552 F.3d at 939 n. 3. In reversing the lower court's order granting the defendant's motion to dismiss, the Ninth Circuit stated that while that statement "were it standing on its own, could arguably constitute puffery," it nonetheless found that "[t]his statement certainly contribute[d] ... to the deceptive context of the packaging as a whole" and "[g]iven the context of this statement, [it] decline[d] to give [the defendant] the benefit of the doubt by dismissing the statement as puffery." Id.
Similarly here, the Court will not evaluate the statement "German Quality" in a vacuum. It must be considered in conjunction with: (1) other statements on cartons of Beck's, (2) allegations of the defendant's overall marketing campaign and its efforts to maintain Beck's brand identity as a German beer and (3) Beck's German heritage including its 139-year history of being brewed in Germany. See Amended Complaint (DE # 50 at ¶ 6, 10, 11, 14, 3/31/14). When viewed in this context, the Court cannot agree with the defendant that the statement "German Quality" is mere puffery.
Based on the allegations in the Amended Complaint and because the "Product of USA" disclaimer is blocked by the carton, the Court finds that the allegations in the Amended Complaint (DE # 50, 3/31/14) are sufficient to conclude that a reasonable consumer may be misled to believe that Beck's is an imported beer brewed in Germany.
The defendant also argues that the Court should dismiss the plaintiffs'
N.Y. Gen. Bus. Law § 349(d). The California statutes do not expressly provide for a safe harbor provision. However, under California law, "[t]he safe harbor defense [to claims brought under the UCL or CLRA] states that `if the legislature has permitted certain conduct or considered a situation and concluded that no action should lie, courts may not override that determination.'" In re Horizon Organic Milk Plus DHA Omega-3 Mktg. & Sales Practice Litig., 955 F.Supp.2d 1311, 1345 (S.D.Fla.2013) (hereinafter "In re Horizon Organic Milk") (quoting Bronson v. Johnson & Johnson, Inc., No. C 12-04184 CRB, 2013 WL 1629191 at *7 (N.D.Cal. Apr. 16, 2013)) (alterations in original). For the reasons stated below, the safe harbor protections of these statutes do not preclude the plaintiffs' claims.
The Amended Complaint contains a single reference to the TTB:
Amended Complaint (DE # 50 at ¶ 13, 3/31/14).
The defendant bears the burden of establishing the applicability of the safe harbor provisions. See Fla. v. Tenet Healthcare Corp., 420 F.Supp.2d 1288, 1310 (S.D.Fla.2005) (placing the burden on the defendant on a FDUTPA claim to show "that a specific federal or state law affirmatively authorized it to engage in the
The instant case is distinguishable from In re: Anheuser-Busch Beer Labeling, Mktg. and Sales Practices Litig., No. 1:13-md-02448-DCN, Dkt. No. 25, Memorandum Opinion and Order (N.D. Oh. June 2, 2014) "(In re A-B Labeling"), cited in the Defendant's Notice of Supplemental Authority in Support of Its Motion to Dismiss (DE # 66, 6/6/14), and Kuenzig v. Hormel Foods Corp., 505 Fed.Appx. 937, 939 (11th Cir.2013) (per curiam) for the reasons discussed below.
In In re A-B Labeling, the plaintiffs alleged that the label on the beer they purchased over-stated the actual percentage of alcohol per volume contained in the product. See Memorandum Opinion and Order (DE # 66-1 at 6-7, 6/6/14). The relevant federal regulation read, in part: "For malt beverages containing 0.5 percent or more alcohol by volume,
Id. at 32. Thus, because the relevant federal regulation allowed for this 0.3 percent variance on actual alcohol content, the district court dismissed the plaintiffs' claims with prejudice.
In Kuenzig v. Hormel Foods Corp., 505 Fed.Appx. 937, 938, 939 (11th Cir.2013) (per curiam), the Eleventh Circuit affirmed the district court's dismissal of the plaintiff's "putative class-action complaint alleging that [the defendant] misled consumers into believing its lunch meat products contained fewer fat-calories than they actually did." The Eleventh Circuit ruled, in pertinent part, that "[the plaintiff]'s state law labeling claims were preempted by federal law" and "[a]lternatively, [the plaintiff]'s state law labeling claims were properly dismissed for failure to state a claim." The Eleventh Circuit stated that it "affirm[ed] the dismissal of [the plaintiff]'s claims ... for the reasons stated in the district court's thorough and well reasoned orders." Id. at 939. The district court ruled that: (1) the plaintiff's state
In both In re A-B Labeling and Kuenzig, the alleged misrepresentations relied on by the plaintiffs were contained on the labels that were approved by a federal bureau or agency. The plaintiffs' claims in the instant case are not based on the labels approved by the TTB, but rather on the representations contained on the cartons of Beck's and the defendant's other representations and omissions. See Amended Complaint (DE # 50 at ¶¶ 22-27, 3/31/14). For example, the Amended Complaint alleges that the "[defendant]'s misleading packaging and labeling is buttressed by an overall marketing campaign, online and in ads, that misleads the consuming public that Beck's is imported from Germany." Id. at ¶ 14. It further alleges that "[a]s a result of [the d]efendant's false, deceptive, and misleading packaging, labeling and omissions, consumers such as [the p]laintiffs are deceived when they purchase Beck's Beer in violation of state laws governing unfair and deceptive trade practices." Id. at ¶ 20. Thus, unlike In re A-B Labeling and Kuenzig, the misrepresentations and omissions alleged in the instant case are not based on a label approved by the TTB or any federal agency.
In sum, the safe harbor provisions of the relevant state law consumer protection statutes are not triggered by the allegations in the Amended Complaint (DE # 50, 3/31/14) and the plaintiffs' state law consumer protection claims will not be dismissed on this ground.
The defendant also argues that the plaintiffs' state law consumer protection claims should be dismissed because the plaintiffs have failed to plead any facts establishing that they were harmed by the defendant. The defendant notes that it does not sell Beck's directly to consumers, that the retailer sets the prices for beer and that the Amended Complaint does not plead specific prices for imported beer. The defendant further states that the plaintiffs received exactly what they paid for: Beck's Beer.
Here, the Amended Complaint alleges that:
Amended Complaint (DE # 50 at ¶¶ 18, 21, 3/31/14) (emphasis added). The plaintiffs further allege that they were "willing to pay a premium for Beck's Beer because of [the defendant's] representations and omissions, and would not have purchased, would not have paid as much for the products, or would have purchased alternative products in absence of these representations and omissions." Amended Complaint (DE # 50 at ¶¶ 23, 25, 27, 3/31/14).
This premium price theory of damages has been recognized by multiple courts interpreting the state law consumer protection statutes at issue in the instant case. In Lynch v. Tropicana Prods., Inc., No. 2:11-cv-07382 (DMC)(JAD), 2013 WL 2645050, at *8 (D.N.J. June 12, 2013), the district court denied the defendant's motion to dismiss class action claims, including a claim under N.Y. Gen. Bus. Law § 349, stating that "Courts in New York have ... recognized that the payment of a heightened price in reliance on a misrepresentation may satisfy the injury requirement" and that the plaintiffs in that case had "satisfied the injury and ascertainable loss requirements of ... New York" law. Id. In Lynch, the plaintiffs alleged that: "they did not receive the product for which they bargained as a result of [the defendant]'s misrepresentations" and "[the defendant] extract[ed] a premium price for the product in question, based on the fact that the product [wa]s represented as fresh-squeezed." Id.
Similarly, under Florida law, a plaintiff who alleges that he or she has paid a premium price for a product as a result of a defendant's misrepresentation has pled damages under FDUTPA. In Smith v. Wm. Wrigley Jr. Co., 663 F.Supp.2d 1336, 1339-40 (S.D.Fla.2009), this Court denied a motion to dismiss a FDUTPA claim finding that the plaintiff had sufficiently pled a loss that was proximately caused by the defendant's deceptive, misleading and unfair trade practices where the complaint alleged that the plaintiff "was exposed to and saw [the defendant]'s advertising claims and purchased [the product] in reliance on those claims" and further alleged that "as a result of the misleading messages ... [the defendant] ha[d] been able to charge a price premium for [the product]." See also In re Horizon Organic Milk, 955 F.Supp.2d at 1333 (finding that the plaintiffs on a motion to dismiss had sufficiently pled causation and damages under FDUTPA where they "alleg[ed] that they relied on [the defendant]'s representations when buying the DHA-fortified milk products, that they would not have purchased the products but for [the defendant]'s misrepresentations, and that they were damaged in the amount of the difference between the premium price paid for the DHA-fortified milk products and the price they would have paid for other milk products"). In another case, the Eleventh Circuit stated in passing that "should the class [plaintiffs] prevail
Courts interpreting California's consumer protection statutes have also recognized an injury-in-fact where a consumer purchases a product based on the defendant's misrepresentations. See Khasin v. Hershey Co., No. 5:12-CV-01862 EJD, 2012 WL 5471153, at *7 (N.D.Cal. Nov. 9, 2012) (on a motion to dismiss finding that the plaintiff had satisfied the UCL's statutory injury-in-fact requirement where the plaintiff "alleged that he would not have purchased the products but for the [d]efendants' allegedly misleading conduct" and also alleged that "he did not receive the full value for his purchases because he did not obtain the products as advertised and described by the labeling."); Rojas v. Gen. Mills, Inc., No. 12-cv-05099-WHO, 2014 WL 1248017, at *8 (N.D.Cal. Mar. 26, 2014) (denying motion to dismiss and finding that the plaintiff had shown an injury-in-fact on state law claims including claims under the CLRA and UCL where the plaintiff "allege[d] that he spent money purchasing products that he would not have purchased were it not for [the defendant]'s purported mislabeling" and that "he read [the defendant]'s misstatements on its product labels and relied on them in making his purchases."); In re Horizon Organic Milk, 955 F.Supp.2d at 1331 (on motion to dismiss stating that "[a]llegations that a plaintiff paid a premium for a product that the plaintiff would not have paid but for the maker's misrepresentation are sufficient to allege economic injury and standing under the CLRA and UCL.").
The defendant cites to Prohias v. Pfizer, Inc., 485 F.Supp.2d 1329, 1336 (S.D.Fla. 2007) in support of its argument that the plaintiffs have failed to identify an actual harm caused by the defendant. In Prohias, the district court granted a cholesterol drug manufacturer's motion to dismiss because the plaintiffs in that case had failed to plead damages. Id. at 1336, 1339. Prohias is readily distinguishable from the instant case because the plaintiffs in Prohias continued to purchase the cholesterol reducing drug at issue even after they learned of the drug's alleged limitations. Id. at 1335-36. The district court reasoned that:
Id. at 1336. Therefore, the plaintiffs in Prohias received what they paid for, a cholesterol reducing drug. Here, there are no allegations in the Amended Complaint that the plaintiffs continued to purchase Beck's after they learned it was no longer brewed in Germany. To the contrary, the plaintiffs allege that they "would not have purchased [Beck's], would not have paid as much for the products, or would have purchased alternative products in absence of [the defendant's] representations and omissions." Amended Complaint (DE # 50 at ¶¶ 23, 25, 27, 3/31/14).
Alternatively, the plaintiffs in Prohias argued a "price inflation" theory of damages. Id. at 1336. The district court determined that such damages were "purely speculative" because:
Id. at 1337. This is not the theory of damages alleged by the plaintiffs in the instant case.
The courts have recognized an injury to a consumer who pays a premium price for a product based on misrepresentations made about that product. See discussion, supra. In light of the allegations in the Amended Complaint (DE # 50, 3/31/14) that the plaintiffs paid a premium price for Beck's based on the mistaken belief that it was an imported beer brewed in Germany, the Court finds that the plaintiffs have pled an actual harm resulting from the defendant's alleged misrepresentations concerning Beck's.
The defendant asserts that California law does not recognize an independent cause of action for unjust enrichment. The undersigned disagrees. Recently, in Imber-Gluck v. Google, Inc., No. 5:14-CV-01070-RMW, 2014 WL 3600506, at *7-8 (N.D.Cal. July 21, 2014), a California district court rejected a defendant's argument that a claim for unjust enrichment should be dismissed because "the Ninth Circuit has held that unjust enrichment does not describe a theory of recovery under California law" and that it is "a principle underlying various legal doctrines and remedies." Id. at *7 (internal quotations omitted) (quoting In re Sony PS3 "Other OS" Litigation, 551 Fed.Appx. 916, 923 (9th Cir.2014)). The district court noted that the defendant was relying on an unpublished decision and the Ninth Circuit's most recent published decision, Berger v. Home Depot USA, Inc., 741 F.3d 1061, 1070 (9th Cir.2014), recognized unjust enrichment as an independent claim. The district court further noted that:
[The defendant]'s suggestion that the court follow an unpublished, non-precedential report is similarly unpersuasive. Even permitting that Berger did not expressly hold that California law recognizes an unjust enrichment cause of action, the factually analogous In re Apple In-App Purchase Litigation allowed the plaintiffs to proceed with an unjust enrichment claim at the
Id. at *8 (emphasis added). For this reason, the district court denied the defendant's motion to dismiss the unjust enrichment claim.
Similarly here, the undersigned is unpersuaded that the plaintiffs' unjust enrichment claim in the instant case should be dismissed on the ground that California does not recognize a separate cause of action for unjust enrichment. The undersigned acknowledges that there is case law supporting both parties' positions and finds the reasoning in Imber-Gluck persuasive in concluding that California law does recognize a separate cause of action for unjust enrichment. See also Khasin, 2012 WL 5471153, at *9 (rejecting defendant's argument that the plaintiff's unjust enrichment claim must be dismissed because California does not recognize this cause of action and noting that "[u]njust enrichment has been recognized as an allegation akin to `quasi-contract': a restitution claim brought forth so as to avoid unjustly conferring a benefit upon a defendant in the absence of a valid and enforceable contract.").
The defendant further argues that the Court should dismiss the plaintiffs' unjust enrichment claims because: (1) they are duplicative of the state law consumer protection claims and (2) the plaintiffs have not shown that they lack a remedy at law in light of the plaintiffs' state law consumer protection claims. The undersigned acknowledges that there is some case law supporting the defendant's argument. However, in In re Horizon Organic Milk, 955 F.Supp.2d at 1337, this Court rejected the argument that the plaintiffs could not maintain a cause of action for unjust enrichment under Florida law because an adequate remedy at law existed. This Court recognized that "[v]arious courts disagree as to whether the existence of an adequate legal remedy precludes the plaintiff from pleading a cause of action for unjust enrichment." Id. at 1337 (citations omitted).
The Court in In re Horizon Organic Milk relied on an unpublished Eleventh Circuit opinion which stated: "It is generally true that equitable remedies are not available under Florida law when adequate legal remedies exist. However, that rule does not apply to unjust enrichment claims." In re Horizon Organic Milk, 955 F.Supp.2d at 1337 (quoting State Farm Mut. Auto. Ins. Co. v. Physicians Injury Care Ctr., Inc., 427 Fed.Appx. 714, 722 (11th Cir.2011) (per curiam) (internal citation omitted), rev'd in part on other grounds. State Farm Mut. Auto. Ins. Co. v. Williams, 563 Fed.Appx. 665 (11th Cir. 2014) (per curiam)).
Finally, the defendant argues that the plaintiffs' unjust enrichment claim fails because they received the benefit of the bargain: the plaintiffs received a product in exchange for their money. In the instant case, the Amended Complaint alleges that the "[p]laintiff and class members paid money for a product that is not what it claims to be or what they bargained for. They paid a premium for Beck's Beer when they could have instead bought other, less expensive, domestic beer...." Amended Complaint (DE # 50 at ¶¶ 18, 21. 3/31/14) (emphasis added). The Amended Complaint alleges that the plaintiffs were "willing to pay a premium for Beck's
The undersigned finds that Prohias v. Pfizer, Inc., 490 F.Supp.2d 1228 (S.D.Fla. 2007), cited by the defendant for the proposition that the plaintiffs' unjust enrichment claims should be dismissed because they have not shown that they lack a legal remedy for the complained-of conduct and because they received a product in return for their money, is factually distinguishable from the instant case. In finding that certain plaintiffs failed to state a claim for unjust enrichment, this Court in Prohias noted that: "Both men purchased a cholesterol reducing drug, and both men obtained cholesterol reduction as a result. Therefore, in a general sense, they obtained the benefit of their bargain. Unjust enrichment cannot exist where payment has been made for the benefit conferred." Id. at 1236.
The plaintiffs seek injunctive relief with respect to each of their state law consumer protection claims. The defendant argues that the plaintiffs' claims for injunctive relief should be dismissed for lack of standing. See Defendant's Motion to Dismiss and Memorandum of Law in Support (DE # 54 at 36, 4/25/14).
Attacks on this Court's subject matter jurisdiction may be either facial or factual. "Facial attacks to subject matter jurisdiction require the court merely to look and see if the plaintiff's complaint has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion." Houston v. Marod Supermarkets, Inc., 733 F.3d 1323, 1335-36 (11th Cir.2013) (citation omitted). On the other hand, "in a factual challenge to subject matter jurisdiction, a district court can consider extrinsic evidence such as deposition testimony and affidavits and is free to weigh the facts and is not constrained to view them in the light most favorable to the plaintiff." Id. at 1336 (citation and quotation marks omitted). In the instant motion, the defendant does not specify whether it is making a facial or factual attack on jurisdiction. Because the defendant's standing arguments relate to the allegations in the Amended Complaint and do not rely on matters outside this pleading, the undersigned will construe the defendant's Motion to Dismiss (DE # 54, 4/25/14) as a facial attack on subject matter jurisdiction. See BP Chems. Ltd. v. Jiangsu Sopo Corp., 285 F.3d 677, 679 (8th Cir.2002) ("constru[ing motion to dismiss] as a facial, not factual, challenge because [the movant] limited its attack to the allegations
To establish standing under Article III, a plaintiff must demonstrate three things. First, the plaintiff must show that he or she has suffered an "injury-in-fact." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Second, the plaintiff must demonstrate a causal connection between the asserted injury-in-fact and the challenged action of the defendant. Id. Third, the plaintiff must show that "the injury will be redressed by a favorable decision." Id. at 561, 112 S.Ct. 2130 (citations and internal quotations omitted). These requirements are the "`irreducible minimum' required by the Constitution" for a plaintiff to proceed in federal court. Northeastern Fla. Chapter, Assoc. Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656, 664, 113 S.Ct. 2297, 124 L.Ed.2d 586 (1993). The party invoking federal jurisdiction has the burden of proving these elements. Lujan, 504 U.S. at 561, 112 S.Ct. 2130.
Additionally, "[b]ecause injunctions regulate future conduct, a party has standing to seek injunctive relief only if the party alleges ... a real and immediate—as opposed to a merely conjectural or hypothetical—threat of future injury." Wooden v. Board of Regents of Univ. Sys. of Ga., 247 F.3d 1262, 1284 (11th Cir.2001) (emphasis in original). "A determination that a plaintiff has standing to seek damages does not ensure that the plaintiff can also seek injunctive ... relief." Clark v. City of Lakewood, 259 F.3d 996, 1006 (9th Cir. 2001) (citing Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167, 180, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000)). "[A] plaintiff seeking injunctive relief `must show a sufficient likelihood that he will be affected by the allegedly unlawful conduct in the future.'" Houston, 733 F.3d at 1328-29 (quoting Wooden, 247 F.3d at 1284).
As a threshold matter, the Court finds that the plaintiffs have met the first three requirements of Article III standing. The Amended Complaint alleges that the plaintiffs have paid a premium price for what they believed was imported beer when in fact it was domestic beer. Amended Complaint (DE # 50 at ¶¶ 18, 21, 3/31/14). Therefore, the plaintiffs have pled an injury-in-fact. See also, discussion on "Identification of an Actual Harm," supra. The plaintiffs have also pled a causal connection between their injury and the defendant's conduct. The Amended Complaint alleges the plaintiffs were "willing to pay a premium for Beck's Beer
In the instant case, the defendant argues that there is no threat of future injury to the plaintiffs from the defendant's purportedly wrongful conduct because the plaintiffs allege that they stopped buying Beck's after learning that Beck's was brewed in the United States. See Defendant's Motion to Dismiss and Memorandum of Law in Support (DE # 54 at 36, 4/25/14) (citing Amended Complaint (DE # 50 at ¶¶ 22, 24, 26)). In response to the defendant's standing argument, the plaintiffs point out that the Amended Complaint does not expressly state that the plaintiffs have stopped buying Beck's. See Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 27, 5/19/14). The plaintiffs further state that:
Id. at 27 (italics in original; footnote omitted). In a footnote, the plaintiffs state:
Id. at n. 18.
The undersigned will only consider allegations made in the most recent Amended Complaint (DE # 50, 3/31/14). The Amended Complaint does not allege that the plaintiffs will purchase Beck's again in the future if appropriately labeled and there are no express allegations either that the plaintiffs have stopped purchasing Beck's or that they have continued to purchase Beck's despite the alleged misrepresentations. The Amended Complaint does allege that the plaintiffs were "willing to pay a premium for Beck's Beer because of [the defendant's] representations and omissions, and
The plaintiffs reason that "[i]f Article III standing were construed as [the defendant advocates, it would preclude any claim in federal court under consumer protection laws to enjoin false advertising or labeling, because a plaintiff would never have standing." Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 27, 5/19/14). In support of this argument, the plaintiffs cite to two Americans with Disabilities Act ("ADA"): Parr v. L & L Drive-Inn Rest., 96 F.Supp.2d 1065, 1080-81 (D.Haw.2000) and Fortyune v. Am. Multi-Cinema, Inc., No. CV01-05551, 2002 WL 32985838, 2002 U.S. Dist. LEXIS 27960 (C.D.Cal. Oct. 22, 2002). See Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 28, 5/19/14).
In Parr, the district court stated that it was "reluctant to embrace a rule of standing that would allow an alleged wrongdoer to evade the court's jurisdiction so long as he does not injure the same person twice." Parr, 96 F.Supp.2d at 1080 (citations and internal quotation marks omitted). However, it also found that the "[p]laintiff ha[d] established a likelihood of future injury based on his reasonable desire to patronize [a particular fast food restaurant] in the future." Id. Among the circumstances considered by the Parr court were: the fact that this particular restaurant location was "within a reasonable distance from [the p]laintiff's residence and along a familiar bus route" and the similarity of the food and service provided at this chain of restaurants which the plaintiff had patronized in the past. Id. at 1079-1080.
In Fortyune, the court quoted Parr stating that: "[i]f this Court rules otherwise, like defendants would always be able to avoid enforcement of the ADA. This court is reluctant to embrace a rule of standing that would allow an alleged wrongdoer to evade the court's jurisdiction so long as he does not injure the same person twice." Fortyune, 2002 WL 32985838, at *7, 2002 U.S. Dist. LEXIS 27960, at *21 (quoting Parr, 96 F.Supp.2d at 1080) (alteration in original; internal quotation marks omitted). Nonetheless, "[the p]laintiff's intent to return to [the d]efendant's [movie] theater [wa]s undisputed" in that case. Id. at *20. *7, 2002 U.S. Dist. LEXIS 27960, at *20. Moreover, the Fortyune court specifically found that the plaintiff had established a likelihood of future injury because "[the p]laintiff and his wife frequent[ed] the [movie theater in question] and the lack of accommodation continue[d] to exist." Id.
Thus, despite the broad language employed in Parr and Fortyune, the plaintiffs in both cases exhibited an intent to return to the defendants' facilities in the future. Because they would continue to encounter the same architectural barriers or lack of accommodations in the future, both courts concluded that the plaintiffs had standing to seek injunctive relief. There is nothing in Parr or in Fortyune which would suggest adopting a lower standard for Article III standing in order to allow a plaintiff to seek injunctive relief. Unlike Parr and Fortyune, there are no allegations in the Amended Complaint that the plaintiffs
Moreover, the plaintiffs' argument that a plaintiff bringing a consumer protection law claim to enjoin false advertising or labeling "would never have standing," Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 27, 5/19/14), rings hollow particularly when the plaintiffs themselves have cited to Richardson v. L'Oreal, 991 F.Supp.2d 181, 187 (D.D.C. 2013). In Richardson, the district court dealt with the issue of Article III standing to seek injunctive relief in the context of a challenge to a motion for conditional class certification for the purposes of settlement and for final approval of the class settlement. The plaintiffs in Richardson "alleg[ed] that defendant L'Oreal falsely and deceptively labeled [certain] ... products as available only in salons when the products c[ould] be purchased in non-salon retail establishments including Target, Kmart, and Walgreens" and "that the salon-only label implie[d] a superior quality product and buil[t] a cachet that allow[ed] L'Oreal to demand a premium price." Id. at 188. The issue in Richardson was whether the plaintiffs had established a likelihood of particularized future injury. Id. at 191. After carefully reviewing the case law and noting that "courts have differed on the showing plaintiffs must make to have standing" to seek injunctive relief, the district court ultimately concluded that the named plaintiffs in Richardson had standing to seek injunctive relief because "repeat past purchases, brand loyalty, allegations of ongoing purchases, and an injury unconnected to the performance of the product combine[d] to show that future injury [wa]s likely." Id. at 191, 195.
In their response brief, the plaintiffs also cite to Mason v. Nature's Innovation, Inc., No. 12cv3019 BTM (DHB), 2013 WL 1969957 (S.D.Cal. May 13, 2013). See Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 28, 5/19/14). In Mason, the district court specifically stated that:
Mason, 2013 WL 1969957, at *4 (emphasis added). Thus, notwithstanding the plaintiffs' claim that "[i]f Article III standing were construed as [the d]efendant advocates, it would preclude any claim in federal court under consumer protection laws to enjoin false advertising or labeling, because a plaintiff would never have standing," Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 27, 5/19/14), there are instances where a consumer protection law plaintiff would have standing to seek injunctive relief in federal court.
The plaintiffs maintain that they have standing to seek injunctive relief because the defendant continues to engage in the complained of conduct. Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 28, 5/19/14). The plaintiffs rely on three cases to support this argument: Ries v. Ariz. Beverages USA, 287 F.R.D. 523, 533 (N.D.Cal.2012), Koehler v. Litehouse, Inc., 2012 WL 6217635 (N.D.Cal. Dec. 13, 2012) and Richardson v. L'Oreal USA, 991 F.Supp.2d 181, 191-92 (D.D.C.2013).
The plaintiffs further argue that "courts have recognized the distinction between the cases that [the d]efendant cites, where the product does not work and therefore there is less likelihood of a future purchase, and the instant case, where the complaint concerning the product is easily cured by an accurate label." Plaintiffs' Response in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 62 at 28, 5/19/14) (footnote omitted). Even accepting the plaintiffs' reading of the case law as accurate, the fact remains that the Amended Complaint is devoid of any allegations that the plaintiffs would purchase Beck's in the future. Without any allegations that the plaintiffs would purchase Beck's again, it is unclear how they can establish a likelihood of a future injury.
Following the August 1, 2014 hearing, the Court allowed the parties to file supplemental briefs on standing. See Defendant's Supplemental Brief in Support of Its Motion to Dismiss (DE # 81, 8/6/14); Plaintiff's Supplemental Brief in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 83, 8/11/14). In their supplemental brief, the plaintiffs state the following:
The Amended Complaint alleges that, as a result of AB's misleading labeling and packaging, the Plaintiffs purchased beer that they believed was brewed in and imported from Germany at prices higher than those of domestic beer. (Am. Compl. ¶ 1; see also id. ¶¶ 15, 18, 20, 21.) Plaintiffs further allege that they purchased Beck's [B]eer in reliance on the representations about Beck's German origin, have since learned that Beck's is no longer imported, and would not have purchased it had they known the representations were false. (Id. ¶¶ 22, 24, 26). The Amended Complaint also alleges that AB was only able to charge a price premium for Beck's through its misrepresentation, (id. ¶¶ 8, 11, 17, 18, 21),
Plaintiff's Supplemental Brief in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 83 at 2, 8/11/14) (original emphasis omitted; bold emphasis added; footnotes omitted). The bold emphasis denotes allegations which are not in the Amended Complaint (DE # 50, 3/31/14) as indicated by the plaintiffs citations to sources outside the Amended Complaint: the original complaint, the plaintiffs' economist expert report and the plaintiffs' deposition transcripts.
In their supplement, the plaintiffs further maintain that "Courts find standing to seek injunctive relief under consumer protection laws where the defendant continues the allegedly deceptive labeling or advertising and the plaintiff may purchase the product in the future." Plaintiff's Supplemental Brief in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 83 at 3, 8/11/14) (emphasis in original). The permissive word "may" seems at odds with Supreme Court precedent which requires a real and immediate threat of future injury. See City of Los Angeles v. Lyons, 461 U.S. 95, 101-02, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) (holding that the threat must be "real and immediate" as opposed to "conjectural or hypothetical"). In any event, the Amended Complaint (DE # 50) does not even allege that the plaintiffs "may" purchase Beck's in the future. It is simply silent on the plaintiffs' future purchasing intentions with respect to the defendant's products.
The requirements of Article III standing do not change merely because a plaintiff is asserting claims under a state law consumer protection statute. As the court in Mason noted, "[i]f an ADA plaintiff must demonstrate likely injury in the future, consumer plaintiffs [seeking injunctive relief under the CLRA, the UCL, and the California False Advertising Law] must as well. There is no likelihood of injury in the future if a plaintiff has no interest in purchasing the product at issue again because it does not work or does not perform as advertised." Mason, 2013 WL 1969957, at *2. The undersigned recognizes that there is a line of cases, i.e., Henderson, 2011 WL 1362188 and Koehler, 2012 WL 6217635, which cite to public policy grounds for finding that Article III standing to seek injunctive relief has been met even where a plaintiff does not intend to purchase the same product again in the future. For the reasons discussed in footnote 15, supra, the undersigned is unpersuaded by this line of cases.
In their supplement, the plaintiffs also cite to Galstaldi v. Sunvest Cmty. USA, LLC, 637 F.Supp.2d 1045, 1058 (S.D.Fla. 2009) to support their argument that they have pled Article III standing to seek injunctive relief. See Plaintiff's Supplemental Brief in Opposition to Defendant's Motion to Dismiss Amended Complaint (DE # 83 at 4, 8/11/14). However, the plaintiff in Galstaldi sought only declaratory relief and thus the issue of whether the plaintiff was required to allege a future harm was not before this Court in Galstaldi.
For the reasons stated above, the plaintiffs lack standing to seek injunctive relief. The Amended Complaint fails to allege facts showing that the plaintiffs will likely face a real or immediate threat of future injury. The Amended Complaint contains only allegations of past injury. Injury in the past, however, does not support a finding of an Article III case or controversy when injunctive relief is sought. Shotz, 256 F.3d at 1082. Absent allegations that each plaintiff will likely suffer a real and immediate threat of future injury, the plaintiffs have no standing to seek injunctive relief. Accordingly, the plaintiffs' claims for injunctive relief are
In accordance with the foregoing, the Defendant's Motion to Dismiss and Memorandum of Law in Support (DE # 54, 4/25/14) is
Id. at 1099. The instant case is distinguishable from Porsche because the plaintiffs allege that the defendant engaged in misrepresentations and deceptive conduct leading them to believe that Beck's was still imported from Germany. See Amended Complaint (DE # 50 at ¶¶ 23, 25, 27, 3/31/14). Thus, the Court will not dismiss the plaintiffs' FDUTPA claim on this ground.
Amended Complaint (DE # 50 at ¶¶ 79-80, 3/31/14).
The undersigned finds Henderson, and by extension Koehler, unpersuasive on several grounds. At the outset, the intent of a state legislature cannot trump the constitutional requirements of Article III standing. The undersigned also rejects the premise in Henderson that "[i]f the Court were to construe Article III standing for FAL and UCL claims as narrowly as the [the d]efendant advocates, federal courts would be precluded from enjoining false advertising under California consumer protection laws because a plaintiff who had been injured would always be deemed to avoid the cause of the injury thereafter . . . and would never have Article III standing." Henderson, 2011 WL 1362188, at *7. As illustrated by Richardson and as discussed in Mason, there are instances where a consumer protection law plaintiff would have standing to seek injunctive relief. See, e.g., Mason, 2013 WL 1969957, at *4 (stating that "it is an exaggeration to claim that injunctive relief would never be available in false advertising cases. There are cases where a consumer would still be interested in purchasing the product if it were labeled properly"); see also Jou v. Kimberly-Clark Corp., No. 3:13-cv-03075, 2013 WL 6491158, at *4 (N.D.Cal. Dec. 10, 2013) (on motion to dismiss "reject[ing the p]laintiffs' contention that it [wa]s unnecessary for them to maintain any interest in purchasing the products in the future" and noting that "[p]lacing this requirement on [the p]laintiffs d[id] not thwart the objective of California consumer protection laws since it [wa]s not impossible that a consumer would be interested in purchasing the products at issue if they were labeled correctly."). To the extent Henderson, 2011 WL 1362188 at *6-7, relies on the broad language of Fortyune, the undersigned has already explained why the Fortyune decision does not lessen the requirements of Article III standing to seek injunctive relief. Finally, the undersigned rejects the premise in Henderson that because there was no evidence that the defendant "ha[d] removed its allegedly misleading advertising from its products," the plaintiffs "as representatives of a class, should be entitled to pursue injunctive relief on behalf of all consumers in order to protect consumers from [the d]efendant's alleged false advertising." Henderson, 2011 WL 1362188 at *8. This statement is at odds with Ninth Circuit precedent which recognizes that "[i]n a class action, standing is satisfied if at least one