151 F. Supp. 3d 412
S.D.N.Y.2015Background
- Two consolidated consumer class actions challenged labeling of almond milk sold as Almond Breeze (Blue Diamond) and Silk (WhiteWave), alleging misleading claims about being "heart healthy" and containing substantial amounts of almonds when products allegedly contain ~2% almonds.
- Plaintiffs (named New York and California consumers) brought claims under New York GBL § 349 and California UCL, seeking injunctive relief, restitution/disgorgement, damages, and other relief; unjust enrichment claims were withdrawn.
- Defendants moved to dismiss arguing lack of subject-matter jurisdiction (no standing for injunctive relief), failure to state claims under Rule 12(b)(6), and that UCL damages are barred.
- Court held that plaintiffs failed to allege a likelihood of future injury (no allegation they will purchase the products again) and therefore lack standing to seek injunctive relief for themselves or the putative classes; injunctive claims were dismissed for lack of jurisdiction.
- The court denied dismissal of the GBL § 349 and UCL claims on the pleadings, concluding plaintiffs sufficiently alleged materially misleading statements and injury under those statutes; the UCL damages issue was left undecided at this stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for injunctive relief | Plaintiffs contend misleading labeling justifies injunctive relief to stop ongoing deception | Defendants argue plaintiffs lack Article III standing because they allege only past purchases and no likelihood of future injury | Held: Dismissed for lack of subject-matter jurisdiction; plaintiffs did not allege future injury and thus cannot seek injunctive relief for themselves or class |
| Sufficiency of GBL § 349 and UCL claims | Plaintiffs allege misleading packaging, marketing and website statements likely to deceive reasonable consumers | Defendants argue statements are not materially misleading and plaintiffs failed to plead injury/reliance (UCL) | Held: Claims under GBL § 349 and UCL survive Rule 12(b)(6); pleadings sufficient to proceed |
| UCL damages remedy | Plaintiffs seek compensatory/punitive damages under the UCL | Defendants assert UCL only permits restitution and injunctive relief, not damages | Held: Court declined to resolve at motion-to-dismiss stage; issue left for later resolution |
| Effect of prior consumer-standing cases | Plaintiffs rely on Eastern District decisions allowing standing despite ceased purchases | Defendants rely on Supreme Court and Second Circuit precedent requiring future injury for injunctive standing | Held: Court follows binding Supreme Court/Second Circuit precedent (requires likelihood of future injury) and declines to follow contrary EDNY decisions |
Key Cases Cited
- City of Los Angeles v. Lyons, 461 U.S. 95 (Sup. Ct.) (plaintiff seeking injunctive relief must show likelihood of future injury)
- Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26 (Sup. Ct.) (named plaintiffs in class actions must personally allege injury for standing)
- Ashcroft v. Iqbal, 556 U.S. 662 (Sup. Ct.) (complaint must plead facts sufficient to state plausible claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (Sup. Ct.) (plausibility pleading standard)
- Shain v. Ellison, 356 F.3d 211 (2d Cir.) (plaintiff must show likelihood of future injury to obtain injunctive relief)
- Deshawn E. v. Safir, 156 F.3d 340 (2d Cir.) (standing requires injury traceable to defendant and redressable by court)
- Makarova v. United States, 201 F.3d 110 (2d Cir.) (plaintiff bears burden to show subject-matter jurisdiction)
- Shipping Financial Services Corp. v. Drakos, 140 F.3d 129 (2d Cir.) (jurisdictional showing must be affirmative)
- Rhulen Agency, Inc. v. Alabama Insurance Guaranty Association, 896 F.2d 674 (2d Cir.) (consider Rule 12(b)(1) jurisdictional challenges before other defenses)