ROBERT W. GETTLEMAN, District Judge.
A traditional tandoor oven, plaintiff Emily Friend alleges, is cylindrical, insulated with sand, operated over a wood- or charcoal-burning fire, and so small that only one or two pieces of naan—a leavened flatbread popular in South and Central Asian cuisine—can be hand-baked at a time:
At grocery stores across North America and Canada, defendants FGF Brands (USA) Inc., an American corporation, and FGF Brands, Inc., a Canadian corporation, sell packaged naan products, boasting that their naan is "hand-stretched and tandoor oven-baked to honor 2,000 years of tradition":
That statement, plaintiff alleges, is deceptive: defendants do not bake their naan in a traditional tandoor oven, but in a patented, gas-heated commercial oven capable of baking 15,000 pieces of naan an hour:
Plaintiff alleges that there is no substitute for the flavor imparted by baking naan in a traditional tandoor oven, and that defendants misleadingly portray their naan products as a high-quality, hand-stretched, low-volume alternative to other mass-produced flatbreads, while in fact they mass-produce their naan on an endless conveyor belt.
Plaintiff's complaint, filed under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2), on behalf of three putative classes of people who bought defendants' naan, claims that defendants: (1) violated the consumer fraud laws of California, Florida, Illinois, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, and Washington (Counts I and II);
Defendants argue that: plaintiff fails to state a claim under the consumer fraud laws because the allegedly mislabeled naan products could not plausibly deceive a reasonable consumer; plaintiff fails to plead fraud with particularity; plaintiff lacks Article III standing to assert claims as to the naan products that she did not purchase; and this court lacks personal jurisdiction over defendants as to the claims that plaintiff brings on behalf of non-Illinois class members. The court holds that: (1) plaintiff states a claim under the consumer fraud laws; (2) plaintiff has pleaded fraud with particularity; (3) plaintiff's Article III standing as to unpurchased products must be decided at class certification; and (4) defendants may file a new motion to dismiss for lack of personal jurisdiction after the Court of Appeals for the Seventh Circuit decides
Plaintiff states a claim under the consumer fraud laws. As did the parties in
If plaintiff had alleged that the packaging of Campbell's Homestyle Chicken Noodle Soup deceived her into thinking that the soup was home-cooked and home-canned, perhaps common sense or judicially-noticeable facts could justify dismissal: ubiquitous products with long histories are unlikely to deceive. But today's shoppers at Costco, Whole Foods, and Jewel-Osco expect to see tiny jars of artisanal jam made with locally-sourced fruit next to homogenous stacks of Wonder Bread. "Handmade" and "mass-produced" are not binary variables, but points on a continuum. Made-to-order street food occupies one end; Campbell's soup, the other.
All kinds of food products occupying the handmade-to-mass-produced continuum are sold in grocery stores and supermarkets. Even handmade products can come pre-packaged and wrapped in plastic. A reasonable consumer who sees naan pre-packaged and plastic-wrapped could believe that each piece had been baked in small quantities in traditional tandoor ovens—all the more so when that naan supposedly was "hand-stretched and tandoor oven-baked to honor 2,000 years of tradition." And the erroneous belief that defendants bake their naan in traditional tandoor ovens may well be material to reasonable consumers: consumers who turn up their noses at food products that they deem mass-produced could plausibly pay a premium for small-batch, hand-made variants, including, as plaintiff alleges, for traditional tandoor oven-baked naan. To sustain her case at summary judgment or at trial, plaintiff will have to set forth competent evidence that consumers who buy defendants' products reasonably believe that they are buying naan baked in these traditional tandoor ovens. To survive a motion to dismiss, however, it is enough that she has alleged material differences between what she defines as a tandoor oven and the "tunnel oven" that defendants allegedly use—a gas-heated, conveyor belt-running commercial oven capable of baking 15,000 pieces of naan an hour.
Plaintiff has stated the alleged fraud's circumstances with particularity. Fed. R. Civ. P. 9(b). She identifies: the content of the allegedly deceptive statements ("hand-stretched and tandoor oven-baked to honor 2,000 years of tradition"); the media in which those statements were made (the packaging of Stonefire Original Naan and Stonefire Original Mini Naan); the entities that made them (the defendant companies); the place she encountered them (at Mariano's and Jewel-Osco stores throughout Illinois); when they were made (from 2005 until today); and why they were made (as part of an advertising campaign to mislead consumers into paying a price premium). Plaintiff need not plead the dates when she saw the statements or the addresses of the stores in which those statements were made: Rule 9(b) demands that she "conduct a precomplaint investigation in sufficient depth to assure that the charge of fraud is responsible and supported, rather than defamatory and extortionate."
Plaintiff seeks to represent classes that include all people who purchased any of seven different naan products, alleging that each product represents that defendants' naan is "hand-stretched and tandoor oven-baked to honor 2,000 years of tradition." Plaintiff does not allege, however, that she purchased five of those seven products: Stonefire Roasted Garlic Naan, Stonefire Whole Grain Naan, Stonefire Organic Original Naan, Stonefire Ancient Grain Mini Naan, or Stonefire Naan Dippers. Defendants argue that plaintiff lacks standing under Article III of the Constitution to assert claims as to the five products she did not purchase.
Because plaintiff alleges that her injuries were caused by the same allegedly deceptive representations "that caused the injuries to all other members of the proposed class," whether plaintiff has Article III standing as to the products she did not purchase must be decided at class certification.
Relying on
Plaintiff fails to state a claim under the Deceptive Trade Practices Act. Although defendants' alleged deception may give plaintiff Article III standing to seek an injunction,
Plaintiff states a claim for fraudulent concealment. Although defendants were neither her fiduciary, nor so "clearly dominant" because of their "superior knowledge" that they exercised "overwhelming influence" over her,
Plaintiff states a claim for unjust enrichment. Consumers who prefer hand-made, artisanal food products could plausibly pay a premium for naan baked in traditional tandoor ovens—ovens so small that only one or two pieces of naan can be hand-baked at a time. If, as plaintiff alleges, defendants deceived her into paying a premium for artisanal qualities that they did not give her, defendants were unjustly enriched. Unjust enrichment may or may not be an independent cause of action under Illinois law,
The motion to dismiss for failure to state a claim, lack of Article III standing, and lack of personal jurisdiction (Doc. 16) by defendants FGF Brands, Inc. (an American corporation) and FGF Brands, Inc. (a Canadian corporation) is granted in part and denied and part:
1. Defendants' motion to dismiss for failure to state a claim is denied except as to the Illinois Uniform Deceptive Trade Practices Act claim (Count III), which is dismissed.
2. Defendants' motion to dismiss for lack of Article III standing as to the products that plaintiff did not purchase is denied without prejudice. Defendants may file a new motion when plaintiff moves to certify the classes. The new motion must contain only those arguments fairly presented in section I.D of defendants' memorandum supporting their motion to dismiss.
3. Defendants' motion to dismiss for lack of personal jurisdiction over non-Illinois putative class members is denied without prejudice. After the Court of Appeals for the Seventh Circuit decides
Defendants are directed to answer all counts of the complaint except Count III on or before July 8, 2019. The parties are directed to file a joint status report using this court's form on or before July 15, 2019. This matter is set for a report on status on July 23, 2019 at 9:00 a.m.
This case has been assigned to the calendar of Judge Robert W. Gettleman. To assist the court in acquiring the requisite knowledge of the case, it is hereby ordered:
1. Counsel and any unrepresented party should obtain a copy of Judge Gettleman's Revised Standing Order Regarding Motion Practice, Briefs and Protective Orders in Civil Cases, which is available in chambers or on the court website (
2. Counsel are to confer, prepare and file a brief, joint
3. The principal trial attorney for each party, or an attorney with sufficient familiarity with and responsibility for the case, shall appear at that time prepared to discuss all aspects of the case.