RAMOS, District Judge.
This putative class action arises from Plaintiffs' allegations that Boulder Brands, Inc. ("Boulder") and GFA Brands, Inc. ("GFA") (collectively, the "Defendants") deceptively labeled as "fat free" certain milk products that — due to the addition of an omega-3 oil blend — in fact contained one gram of fat per serving. Plaintiffs bring three claims under New York State law: (1) violation of General Business Law ("GBL") § 349; (2) breach of express warranty; and (3) unjust enrichment. Complaint ("Compl."), Doc. 1.
Currently before the Court is Defendants' motion to dismiss the Complaint. Doc. 12. For the reasons set forth below, Defendants' motion is GRANTED in part and DENIED in part.
Unless otherwise noted, the following facts are taken from the allegations in the Complaint, which the Court accepts as true for purposes of this motion. Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir.2010).
Defendants are Delaware corporations with principal places of business and corporate headquarters in New Jersey. Compl. ¶¶ 11-12. Defendant Boulder is a consumer food products company that markets and sells "fat free" milks under
Plaintiffs Philip Koenig and Enrico Luongo are New York residents who allegedly purchased Smart Balance starting in 2009. Mr. Koenig allegedly bought Defendants' "Fat Free Milk and Omega-3s," whereas Mr. Luongo purchased Defendants' "Lactose-Free Fat Free Milk and Omega-3s." Id. ¶¶ 9, 10. Plaintiffs claim to have paid price premiums for both products. Id. ¶¶ 7, 9-10, 81. Plaintiffs seek to represent a class of New York consumers who purchased Smart Balance between 2008 and September 2012 (the "Class Period"), a period that spans from the time Defendants began marketing Smart Balance to the time Defendants changed Smart Balance labels. Id. ¶¶ 1 n. 1, 8, 75.
Plaintiffs primarily base their claims on the content and appearance of the Smart Balance cartons. Compl. ¶¶ 49-59; Product labels, Ex. A-C to Mot. Dismiss, Doc. 15.
Plaintiffs allege that in total, each Smart Balance carton uses the term "fat free" nine times, and that "[t]hese statements were false, and intentionally confusing and misleading" because the products contained one gram of fat per serving. Compl. ¶¶ 57-59. Plaintiffs appear to acknowledge that each carton discloses that the product contains one gram of fat per serving in two places: the front label panel and the nutrition facts panel. Id. ¶¶ 50, 59; Product labels, Ex. A-C to Mot. Dismiss.
The top third of each product's front panel features the yellow Smart Balance
For each of the Smart Balance milks, the nutrition facts panel specifies a serving size of one cup, with a total fat content of one gram per serving, zero grams of saturated fat, and zero grams of trans fat. The total calorie content for one serving is 110 calories, ten of which are from fat. The first three ingredients in each product's ingredient list are: "Grade A Fat Free Milk," "Nonfat Milk Solids," and "Omega-3 Oil Blend (Purified Fish Oil And Sunflower Oil — To Help Maintain Freshness)." The cartons do not include any asterisk or disclaimer modifying the omega-3 oil blend listing on the ingredient list. Product Labels, Ex. A-C to Mot. Dismiss.
Plaintiffs also allege that Defendants "misleadingly marketed" Smart Balance as "fat free" on their website. Compl. ¶¶ 48-50. Plaintiffs represent that Defendants promoted each of the Smart Balance milks on their website as follows:
Compl. ¶ 49.
The Federal Food, Drug, and Cosmetic Act ("FDCA"), passed by Congress in 1938, grants the Food and Drug Administration ("FDA") power to ensure "foods are safe, wholesome, sanitary, and properly labeled." 21 U.S.C. § 393(b)(2)(A); Mot. Dismiss at 5 (citing Ackerman v. Coca-Cola Co., No. 09 Civ. 0395(JG)(RML), 2010 WL 2925955, at *2 (E.D.N.Y. July 21, 2010)).
The FDCA expressly forbids the misbranding of food in interstate commerce. 21 U.S.C. § 331(a)-(c), (k). Section 343 of the FDCA sets forth circumstances under which food is considered "misbranded." 21 U.S.C. § 343. In general, a food is "misbranded" if "any particular" of its labeling is "false or misleading." 21 U.S.C. § 343(a)(1). Section 343(q), titled "[n]utrition information," addresses the information about nutrients in a food that must be disclosed to the public to ensure that a product is properly branded, such as total calories and serving size, which appear on the "nutrition facts" panel on packaged foods. N.Y. State Restaurant Ass'n, 556 F.3d at 118 (citing 21 U.S.C. § 343(q)(1)).
Section 343(r) governs optional information about nutrition, that is, those claims that a food purveyor may choose to make about the nutrient content of its product. Id. at 118-19; 21 U.S.C. § 343(r). A nutrient content claim is a direct expression about the specific concentration of a nutrient in a food, for example, "low sodium" or "contains 100 calories." See 21 C.F.R. § 101.13(b)(1). If a food producer chooses to include a nutrient content claim on a food label, it must comply with the applicable regulations promulgated by the FDA. 21 U.S.C. § 343(r)(1)(2). Of particular relevance here, the FDA has issued regulations that define the specific requirements that food products, including milk products, must meet in order to support a nutrient content claim of being "fat free":
See 21 C.F.R. § 101.62(b) ("[n]utrient content claims for fat, fatty acid, and cholesterol content of foods") (emphasis added).
Federal regulations also specifically provide a standard for what products may be labeled and sold as milk.
While the regulations provide a standard identity for whole milk, they also permit the dairy industry to produce and market four types of milk with different levels of fat: whole milk, with 8 grams of fat per serving; 2% reduced fat milk, with 5 grams of fat per serving; 1% or "low fat" milk with 3 grams of fat per serving; and skim or nonfat milk, with less than 0.5 grams of fat per serving. 21 C.F.R. § 130.10; Mot. Dismiss at 6-7; Opp. Mot. Dismiss at 6. The parties agree that to qualify as "fat free," milk must contain less than 0.5 grams of fat per serving, and must comply with 21 C.F.R. § 101.62(b), which concerns nutrient content claims for fat. Mot. Dismiss at 6; Opp. Mot. Dismiss at 6.
Consistent with the statute's purpose of promoting uniform national labeling standards, the NLEA includes an express preemption provision that forbids the states from "directly or indirectly establish[ing]... any requirement ... made in the labeling of food that is not identical to" the federal labeling requirements established by certain specifically enumerated sections of the FDCA. 21 U.S.C § 343-1(a). Relevant here, the NLEA preemption provision requires food producers to comply with the FDA's definitions set forth in 21 C.F.R. § 101.13 ("[n]utrient content claims — general principles") and 21 C.F.R. § 101.62 ("[n]utrient content claims for fat, fatty acid, and cholesterol content of foods"). 21 U.S.C § 343-1(a)(5). The NLEA's express preemption provision also applies to section 343(b), which prohibits the sale of a food under another name; section 343(g), which requires that foods comply with their standards of identity, to the extent that the regulations define them; and section 343(i), which requires foods to be labeled using their common or standardized names. 21 U.S.C § 343-1(a)(1)-(3).
The effect of the NLEA's preemption provision is to ensure that the states only enact food labeling requirements that are equivalent to, and consistent with, the federal food labeling requirements for certain products, including milk. State laws that impose affirmatively different labeling requirements from federal law in these areas will be preempted. Contrariwise, state laws that seek to impose labeling requirements identical to those required by federal regulations will not be preempted. See, e.g., In re Pepsico, Inc., 588 F.Supp.2d 527, 532 (S.D.N.Y.2008).
New York law forbids the misbranding of food "in language largely identical to that found in the FDCA." Ackerman, 2010 WL 2925955, at *4. New York's Agriculture and Marketing law incorporates the FDCA's labeling provisions and, likewise, provides that food shall be deemed misbranded "[i]f its labeling is false or misleading in any particular." Id.; N.Y. Agric. & Mkts. Law § 201 (McKinney). New York law also provides remedies, including private rights of action, for misbranding food under consumer protection
Under certain circumstances, federal regulations permit food producers and other interested parties to request advisory opinions from the FDA concerning how particular food products may be labeled, and in response, the FDA may issue statements of policy or interpretation. 21 C.F.R. § 10.85. The regulations explicitly state that certain statements of policy or interpretation, including statements known as Compliance Policy Guides, constitute advisory opinions. 21 C.F.R. § 10.85(d)(3). The regulations further provide that "[a]n advisory opinion may be used in administrative or court proceedings to illustrate acceptable and unacceptable procedures or standards, but not as a legal requirement." 21 C.F.R. § 10.85(j).
Defendants argue that, in addition to federal statutes and regulations, FDA Compliance Policy Guides pertaining to so-called "combination products" govern how Smart Balance must be labeled. Mot. Dismiss at 7-8. A "combination product" combines two individual food components in a single package. According to Defendants, the name of a "combination product" must (1) include the standardized or common names of both component foods, and (2) join the names of the component foods using the words "and" or "with." Examples of "combination products" include "purified water with added minerals" and "peas and carrots." Id. at 7.
Defendants claim, and Plaintiffs dispute, that applicable federal statutes, regulations and policies allow them to create a combination product that contains, in one package, "a `fat free milk' component having less than 0.5 grams of fat per serving and another component that is not `fat free' provided that the combination product is identified by both names and connected by the word `and' or `with.'" Mot. Dismiss at 8. In support of their position, Defendants rely upon guidance issued by the FDA for peas and carrots (Compliance Policy Guide § 585.600, Peas and Carrots, Labeling of Canned Mixture (CPG 7114.16)), a "final rule" for "Beverages: Bottled Water" involving water with added minerals (60 Fed.Reg. 57076 (Nov. 13, 1995)), and guidance for jellies (Compliance Policy Guide § 550.475, Jellies, Nonstandardized (CPG 7110.14)). Mot. Dismiss at 7-8. These sources do not specifically discuss or address milk products.
While Plaintiffs claim that Defendants violated federal requirements for use of the term "fat free" on food labeling, they do not seek relief under federal law; rather, they argue that, in failing to comply with federal statutes and regulations, Defendants also violated state laws. On behalf of themselves and the putative class, Plaintiffs bring three New York state law causes of action: (1) violation of GBL § 349; (2) breach of warranty; and (3) unjust enrichment. Compl. ¶ 6. Plaintiffs claim that in failing to abide by the FDCA, "Defendants misled Plaintiffs in violation of [GBL] § 349 and in breach of their warranties, resulting in Defendants' unjust enrichment." Id. While Plaintiffs only seek relief under state law, they represent that their claims "mirror the federal requirements." Id. ¶¶ 6, 22.
The gravamen of Plaintiffs' complaint is that the Smart Balance milks are not, in actuality, "fat free" because the presence of the omega-3 oil blend raises their fat content to one gram per serving, which exceeds the amount permitted by federal
Plaintiffs claim that Defendants' misrepresentations with respect to the fat content of Smart Balance caused them to suffer economic loss in the form of the price paid for the products, including price premiums. Id. ¶¶ 78-81.
When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the court must accept as true all of the factual allegations in the complaint, and draw all reasonable inferences in the plaintiff's favor. Famous Horse Inc., 624 F.3d at 108. However, this requirement does not apply to legal conclusions, bare assertions, or conclusory statements. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. 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 ... to state a claim to relief that is plausible on its face.'" Id. (citing Twombly, 550 U.S. at 570, 127 S.Ct. 1955). A claim is facially plausible "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. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). "Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955) (internal quotation marks omitted).
Defendants argue that the Complaint should be dismissed on three grounds: (1) that federal law preempts Plaintiffs' claims; (2) that Plaintiffs fail to sufficiently plead their claims; and (3) that the relevant statutes of limitations bar certain of Plaintiffs' claims. See generally Mot. Dismiss.
Under the Supremacy Clause of the Constitution, state laws are invalid if they "interfere with, or are contrary to the laws of Congress, made in pursuance of the constitution." Gibbons v. Ogden, 22 U.S. 1, 211, 9 Wheat. 1, 6 L.Ed. 23 (1824). Federal law can preempt state law if Congress expresses its intent to preempt the law through explicit statutory language ("express preemption") or, in the absence
As articulated by the Supreme Court, "[t]he purpose of Congress is the ultimate touchstone in every pre-emption case." Wyeth v. Levine, 555 U.S. 555, 565, 129 S.Ct. 1187, 1194-95, 173 L.Ed.2d 51 (2009) (internal citations and quotation marks omitted); see also N.Y. SMSA Ltd. P'ship v. Town of Clarkstown, 612 F.3d 97, 104 (2d Cir.2010) (citation omitted). When Congress has considered the issue of preemption and explicitly enacts legislation that includes a pre-emption clause, the implication is that matters outside of the preemption clause's reach are not preempted. Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 517, 112 S.Ct. 2608, 2618, 120 L.Ed.2d 407 (1992). Such is the case here. As noted by the Second Circuit, "[h]elpfully, the NLEA is clear on preemption, stating that it shall not be construed to preempt any other provision of State law, unless such provision is expressly preempted under [21 U.S.C. § 343-1(a)] of the [FDCA]." N.Y. State Restaurant Ass'n v. N.Y. City Bd. of Health, 556 F.3d 114, 123 (2d Cir.2009) (citation omitted) (emphasis in original).
The express preemption provision of the NLEA does not preempt state law claims that impose requirements "identical to" federal food labeling requirements. 21 U.S.C § 343-1(a). Rather, the NLEA's preemption clause bars the states from imposing affirmatively different requirements that are not equivalent to, or fully consistent with, the labeling and packaging provisions of the FDCA specifically identified in the preemption clause. 21 U.S.C § 343-1(a); see also In re Pepsico, Inc., 588 F.Supp.2d at 532. In addition, "state law causes of action are not preempted where they merely provide a damages remedy for claims premised on a violation of federal law that does not itself provide a private right of action." In re Pepsico, Inc., 588 F.Supp.2d at 532; Ackerman, 2010 WL 2925955, at *6 (citing Bates v. Dow Agrosciences LLC, 544 U.S. 431, 432, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005)).
Thus, the question before the Court is whether Plaintiffs' claims impose requirements for food labeling identical to, or different from, those of federal law. As a threshold matter, the parties dispute which federal requirements apply to their food labels because they disagree regarding how Smart Balance should be classified. Plaintiffs note that 21 C.F.R. § 101.62(b) addresses the precise situation at hand here: the addition of an ingredient that is a fat — the omega-3 oil blend — to a "fat free" food. Opp. Mot. Dismiss at 11-12. Thus, Plaintiffs maintain that their claims are not preempted because they seek to impose requirements identical to those of federal law for fat content claims.
In accordance with that regulation, Plaintiffs assert that in order to label its product "fat free," defendants were required to state that the addition of the omega-3 oil added only a "trivial" amount of fat. Because Defendants could not accurately so state, the product could not be labeled "fat free." Plaintiffs contend that 21 C.F.R. § 101.62(b) does not exempt "combination products" and "no authority... permits [Defendants] to add fat back into fat free milk to the point where the resulting product contains more than 0.5 grams of fat per serving and yet still call
In opposition, Defendants argue that Smart Balance must be classified as a "combination product," and not just milk, because it contains fat from omega-3 oil, a non-milk source. Defendants emphasize that "the omega-3 oil blend is not an `added ingredient' that is a fat" because federal milk regulations governing the standard of identity for milk, as well as the Filled Milk Act, prohibit the addition of non-dairy fats to milk; therefore, they argue, Smart Balance must be viewed as a multicomponent food consisting of omega-3 oil and fat free milk. Reply Supp. Mot. Dismiss at 4-5 (emphasis in original). Defendants also argue that, because the federal standards of identity define milk based upon the amount of milk solids relative to milkfat, they cannot label Smart Balance "low fat" because "low fat" milk must contain more than 0.5 grams of milkfat. Mot. Dismiss at 13-14.
Defendants further argue, based upon their interpretation of FDA Compliance Policy Guides for "combination products" such as water with added minerals, that federal law does not require the entirety of a "combination product" to have less than 0.5 grams of fat per serving in order for the product to use the words "fat free" in its name. Rather, each individual component of a "combination product" need only satisfy the applicable labeling requirements for that component. Reply Supp. Mot. Dismiss at 1. Thus, Defendants argue, Smart Balance complied with all relevant FDA requirements because (1) the "fat free milk" component complied with the requirements for "fat free milk," and (2) the names of the Smart Balance milks "clearly disclosed the presence of the omega-3 oil blend," in compliance with sections 343(g) and (i) of the FDCA. Mot. Dismiss at 10. Thus, Defendants claim that Plaintiffs' causes of action are expressly preempted because they require something more or different than the federal requirements applicable to "combination products." Id. at 9.
The Court concludes that Plaintiffs' claims are not preempted irrespective of which regulations apply to the products at issue. As an initial matter, Plaintiffs' claims explicitly track the requirements imposed by federal law for fat content claims. Plaintiffs merely seek damages from Defendants under state law for their alleged failure to comply with the labeling requirements of 21 C.F.R. § 101.62(b). Compl. ¶¶ 4, 37-41; Ackerman, 2010 WL 2925955, at *6. Nothing in the language of the FDCA, NLEA, or related regulations expressly preempts state law claims for deceptive practices, breach of express warranty, or unjust enrichment premised upon an alleged failure to follow federal food labeling requirements. Particularly because the NLEA's preemption provision allows state law claims that impose requirements identical to federal food labeling law, the Court finds that Plaintiffs' claims are not preempted. See, e.g., Ackerman, 2010 WL 2925955, at *6; Smajlaj v. Campbell Soup Co., 782 F.Supp.2d 84, 93 (D.N.J.2011).
In addition, with respect to Plaintiffs' breach of express warranty claims, the Supreme Court has held that breach of warranty claims do not impose an additional "requirement" under state law, because the duty to honor a promise voluntarily undertaken cannot "fairly be said to be `imposed under state law,' but rather is best understood as undertaken by the manufacturer itself." Ackerman, 2010 WL 2925955, at *24 (citing Bates, 544 U.S. at 444-45, 125 S.Ct. 1788; Cipollone, 505 U.S. at 526, 112 S.Ct. 2608). While it is also true, as Defendants note, that a breach of warranty claim based on language mandated by federal regulations would be
Defendants' authority in support of their preemption arguments do not compel a different conclusion for several reasons. First, Defendants' "combination products" theory of preemption is untenable to the extent that it is based on FDA Compliance Policy Guides (see Mot. Dismiss at 10-11, 12 n. 3), which constitute advisory opinions. 21 C.F.R. § 10.85. An advisory opinion "may be used in administrative or court proceedings to illustrate acceptable and unacceptable procedures or standards, but not as a legal requirement." Professionals & Patients for Customized Care v. Shalala, 56 F.3d 592, 596 (5th Cir.1995) (citing 21 C.F.R. § 10.85(j)). As it is non-binding guidance, the FDA's Compliance Policy Guide "is not entitled to preemptive effect." In re Frito-Lay North Amer., Inc. All Natural Litig., No. 12 MD 2413(RRM)(RLM), 2013 WL 4647512, at *10 (E.D.N.Y.2013) (citing, e.g., Holk v. Snapple Beverage Corp., 575 F.3d 329, 342 (3d Cir.2009)); see also Porrazzo v. Bumble Bee Foods, LLC, 822 F.Supp.2d 406, 411-13 (S.D.N.Y.2011) (finding that certain documents issued by the FDA, including a Compliance Policy Guide regarding methyl mercury content in seafood, did not create a "pervasive federal regulatory scheme" concerning the allowable methyl mercury content in tuna sufficient to preempt state law).
In this regard, the Court finds persuasive the district court's decision in Stewart v. Smart Balance, Inc., which involved one of the same products at issue here,
Defendants argue that Judge Linares's decision is flawed because express preemption does not require a single regulation governing the product at issue. Mot. Dismiss at 14-16. Defendants claim that, because the FDA cannot be expected to opine with respect to every variety of food,
Moreover, the products addressed in the guidance cited by Defendants — bottled water, peas and carrots, and jellies — do not involve the combination of an ingredient that is a fat with a "fat free" food, a combination that the federal regulations specifically address elsewhere, at 21 C.F.R. § 101.62(b). While the Court acknowledges that the concept of adding minerals to purified water parallels the idea of adding omega-3 oils to fat free milk, that guidance does not opine on the FDA regulations concerning fat content claims. Accordingly, Defendants' comparison between Smart Balance and bottled water with added minerals is unpersuasive. Thus, as in Stewart, the Court finds that the FDA policy and guidelines pertaining to multicomponent foods provide no basis on which to preempt Plaintiffs' claims.
Finally, Defendants argue that naming Smart Balance "low fat milk," instead of using the nomenclature for a combination food (fat free milk and or with omega-3 oil), would violate the standard identity of milk and the Filled Milk Act of 1923, which prohibits producers from selling, in interstate commerce, any milk to which any fat or oil, other than milk fat, has been added.
Accordingly, the Court DENIES Defendants' motion to dismiss on preemption grounds.
With respect to Defendants' contention that Plaintiffs have failed to sufficiently plead their claims, the Court GRANTS in part, and DENIES in part, Defendants' motion.
To state a claim for a violation of GBL § 349, a plaintiff must allege that the defendant engaged in (1) a consumer-oriented business practice or act that was (2) materially misleading and (3) the plaintiff suffered an injury thereby. See, e.g., City of New York v. Smokes-Spirits.Com, Inc., 12 N.Y.3d 616, 621, 883 N.Y.S.2d 772, 911 N.E.2d 834, 838 (2009); Stutman v. Chemical Bank, 95 N.Y.2d 24, 29, 709 N.Y.S.2d 892, 731 N.E.2d 608 (2000). Claims brought under GBL § 349 are not subject to the heightened pleading requirements set forth in Rule 9(b). Quinn v. Walgreen Co., 958 F.Supp.2d 533, 542-44 (S.D.N.Y. 2013) (citing Pelman ex rel. Pelman v. McDonald's Corp., 396 F.3d 508, 511 (2d Cir.2005)).
Defendants contend that Smart Balance "conspicuously and unambiguously" stated, on the front panels, that the products contained one gram of fat from the omega-3 oil blend. Mot. Dismiss at 1. Defendants argue that Plaintiffs have failed to state a claim because Defendants fully disclosed the total fat content on their packaging, and therefore did not materially mislead consumers. Mot. Dismiss at 17-20; Reply Supp. Mot Dismiss at 7-8.
New York courts employ an objective test to assess whether an allegedly deceptive practice is "likely to mislead a reasonable consumer acting reasonably under the circumstances." Wilner v. Allstate Ins. Co., 71 A.D.3d 155, 165, 893 N.Y.S.2d 208, 216 (2010) (citations omitted); Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 126 (2d Cir.2007) (applying state law). "Such a test ... may be determined as a matter of law or fact (as individual cases require)." Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 26, 623 N.Y.S.2d 529, 647 N.E.2d 741 (1995).
Here, a reasonable consumer viewing the Smart Balance packaging may very well conclude that it includes one gram of fat per serving. See Product Labels, Ex. A-C to Mot. Dismiss. As in Verzani v. Costco, where the court found that the product's name — "shrimp tray with cocktail sauce" — alerted consumers to the fact that the shrimp tray included something more than just shrimp, here, Defendants' milk products include both "Fat Free Milk" and "Omega-3s" in their names, alerting consumers to the existence of non-milk components. Verzani v. Costco Wholesale Corp., No. 09 Civ.
Defendants also argue that Plaintiffs insufficiently allege injury and causation. Mot. Dismiss at 17; Reply Supp. Mot. Dismiss at 8 n. 8. A plaintiff adequately alleges injury under GBL § 349 by claiming that he paid a premium for a product based on the allegedly misleading representations. See, e.g., Stutman, 95 N.Y.2d at 30, 709 N.Y.S.2d 892, 731 N.E.2d 608; Ackerman, 2010 WL 2925955, at *23. Here, Plaintiffs claim that, but for Defendants' "unfair and deceptive practices," they — and the putative class — would not have purchased, or paid a price premium for, Smart Balance. Compl. ¶¶ 7, 81. Indeed, Plaintiffs claim that they paid price premiums specifically "based on Defendants' misrepresentations," and allege that they deserve damages in the amount of either the purchase prices, or the price premiums, that they paid for Smart Balance. Id. ¶ 81. Accordingly, the Court finds that Plaintiffs have adequately alleged injury under GBL § 349, and thus also DENIES Defendants' motion to dismiss for that reason. Ackerman, 2010 WL 2925955, at *23; Ebin v. Kangadis Food Inc., No. 13 Civ. 2311(JSR), 2013 WL 6504547 (S.D.N.Y. Dec. 11, 2013) (deeming allegations sufficient to state a claim under GBL § 349 where "[t]he deception is the false and misleading label, and the injury is the purchase price."); Rodriguez v. It's Just Lunch, Int'l, No. 07 Civ. 9227(SHS)(KNF), 2010 WL 685009, at *9 (S.D.N.Y. Feb. 23, 2010) ("[C]onsumers who buy a product
With respect to Defendants' argument that the Court should, at a minimum, limit Plaintiffs' claimed damages to the alleged price premium that they paid, the Court will address the issue of the measure of damages a later juncture, if necessary. Mot. Dismiss at 8 n. 8.
The U.C.C. provides that "[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." N.Y.U.C.C. § 2-313(1)(a) (McKinney 2012). To state a claim for breach of express warranty, a plaintiff must allege that "there was an affirmation of fact or promise by the seller, the natural tendency of which was to induce the buyer to purchase and that the warranty was relied upon to the plaintiff's detriment." DiBartolo v. Abbott Labs., 914 F.Supp.2d 601, 625 (S.D.N.Y.2012) (citations omitted).
To the extent that Defendants argue that Plaintiffs fail to state a claim because they never warranted that Smart Balance contained less than 0.5 grams of total fat per serving, and disclosed the fact of one gram of fat per serving in multiple places on the product packaging, the Court finds that the cases cited by Defendants are distinguishable.
However, the Court notes that under New York law, privity is an essential element of a cause of action for breach of express warranty, unless the plaintiff claims to have been personally injured. DiBartolo, 914 F.Supp.2d at 624-25 (citing N.Y.U.C.C. § 2-318). In Ebin v. Kangadis Food Inc., a similar case wherein the plaintiffs alleged that an oil manufacturer breached an express warranty that its product was "100% Pure Olive Oil," Judge Rakoff held that the plaintiffs' failure to adequately plead privity was fatal to their express warranty claim:
2013 WL 6504547, at *6 (internal citations and quotation marks omitted). Here, as in Ebin, Plaintiffs have pleaded solely economic injury, and therefore privity is required to assert a breach of warranty claim. Id. (citing DiBartolo, 914 F.Supp.2d at 624-25); see also N.Y.U.C.C. § 2-318. However, Plaintiffs merely allege that they purchased Defendants' products "in the state of New York," but do not specify where, or from whom. Compl. ¶¶ 9, 10.
The Court finds that, because Plaintiffs have failed to allege that they were in privity with Defendants, their claim for breach of warranty under New York law is DISMISSED, without prejudice. Ebin, 2013 WL 6504547, at *6.
To state a claim for unjust enrichment under New York law, a plaintiff must allege that "(1) the defendant was enriched, (2) at the expense of the plaintiff, and (3) ... it would be inequitable to permit the defendant to retain that which is claimed by the plaintiff." Baron v. Pfizer, Inc., 42 A.D.3d 627, 629, 840 N.Y.S.2d 445, 448 (2007) (citing Clifford R. Gray, Inc. v. LeChase Constr. Servs., LLC, 31 A.D.3d 983, 988, 819 N.Y.S.2d 182 (2006)). Yet, an unjust enrichment claim cannot survive "where it simply duplicates, or replaces, a conventional contract or tort claim." Corsello v. Verizon New York, Inc., 18 N.Y.3d 777, 790-91, 944 N.Y.S.2d 732, 967 N.E.2d 1177, 1185, rearg. denied, 19 N.Y.3d 937, 950 N.Y.S.2d 91, 973 N.E.2d 187 (2012); Ebin, 2013 WL 6504547, at *7.
Here, Plaintiffs claim that they purchased Smart Balance because of Defendants' purported misrepresentations, and Defendants allegedly retained the revenue
Finally, Defendants argue that Plaintiffs' claims should be dismissed to the extent that relevant statutes of limitations bar them. Mot. Dismiss at 23. Defendants allege, and Plaintiffs do not contest, that the relevant statutes of limitations bar Plaintiffs from bringing a GBL § 349 claim for purchases made prior to February 21, 2010 and a breach of express warranty claim based on purchases made prior to February 21, 2009. Reply Supp. Mot. Dismiss at 10 n. 9. Accordingly, the Court GRANTS Defendants' motion in that respect and DISMISSES, with prejudice, Plaintiffs' claims to the extent that they include a GBL § 349 claim for purchases made prior to February 21, 2010 and a breach of express warranty claim based on purchases made prior to February 21, 2009. See N.Y. C.P.L.R. 214 (McKinney) (three-year statute of limitations applies to claims brought under GBL § 349); Woods v. Maytag Co., No. 10 Civ. 0559(ADS)(WDW), 2010 WL 4314313 (E.D.N.Y. Nov. 2, 2010) (per N.Y.U.C.C. 2-725, four-year statute of limitations applies to claims for breach of warranty).
Given that the Court has dismissed Plaintiffs' unjust enrichment claim, the Court need not address whether it may be time-barred.
For the reasons set forth above, Defendants' motion to dismiss the Complaint is GRANTED in part and DENIED in part. The Clerk of the Court is respectfully directed to terminate the motion, Dec. 12.
The parties are to appear for a status conference on February 20, 2014 at 9:30 a.m.
It is SO ORDERED.
Beverages: Bottled Water, 60 Fed.Reg. 57076-01, 57104 (Nov. 13, 1995).
Grinnell is of limited help to resolving the instant motion for several reasons. First, Grinnell was decided at the summary judgment phase and does not address pleading requirements for a breach of warranty claim under New York law. Second, unlike this case, none of the parties in Grinnell alleged that the damage to the crops resulted from statements made on the herbicides' labeling. Here, the issue before the Court here is whether Plaintiffs have sufficiently alleged the existence of an express warranty based on the words "fat free" on the Smart Balance labels, even though Defendants also disclosed the one gram of fat per serving on their product packaging. Grinnell does not offer a parallel analogy.
In DiBartolo, the second case cited by Defendants, the breach of express warranty allegations failed because the plaintiff did not specify which words allegedly created the warranty, and claimed that a product ad created a misleading effect in the aggregate. 914 F.Supp.2d at 625-26 (cited in Mot. Dismiss at 22; Reply Supp. Mot. Dismiss at 9). Here, the alleged basis of the warranty is the particular phrase "fat free." Compl. ¶ 84.
