Cowen v. Lenny & Larry's, Inc.
1:17-cv-01530
N.D. Ill.Oct 12, 2017Background
- Plaintiffs (Cowen, Ibarrola, Adames) bought various flavors of Lenny & Larry’s “Complete Cookie” and allege its labels overstate protein and understate calories/carbs/fats/sugars and percent daily value of protein.
- Claims: consumer-protection violations (multi-state and state-specific), breach of express and implied warranty, negligent and intentional misrepresentation, and unjust enrichment; asserted on behalf of a national class and several subclasses (including multi-state class of CA, IL, MO, NJ, NY).
- Defendant moved to dismiss for lack of Article III standing (for varieties plaintiffs did not buy), to strike national/multi-state class allegations under Rule 23 and choice-of-law/manageability concerns, and for failure to plead fraud with particularity under Rule 9(b).
- Court applied Article III standing principles (Spokeo) and Illinois choice-of-law (most significant relationship test) to assess class claims at the pleading stage where conflicts are clear.
- Court held plaintiffs lack standing to sue for cookie varieties they did not purchase; struck national and multi-state class claims as unmanageable due to material conflicts among state laws; but denied dismissal under Rule 9(b), finding pleading adequacy sufficient to notify defendant of the alleged fraud.
- Result: Count I (multi-state consumer fraud count) dismissed; national and multi-state class claims stricken; Counts II–VIII survive only as to Illinois, Michigan, and Pennsylvania classes; plaintiffs ordered to file a second amended complaint confined to those classes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for varieties not purchased | Plaintiffs can represent purchasers of substantially similar varieties; standing question premature until class certification | Plaintiffs lack Article III standing for products they did not personally purchase; cannot "piggy-back" on others' injuries | Dismissed claims for varieties not purchased; plaintiffs lack standing to sue for those products |
| Multi-state & national class viability | Conflicts-of-law/manageability are class-cert issues to address later; nationwide class may be appropriate | Illinois choice-of-law yields many material conflicts across states (statutes of limitations, notice, remedies), making class treatment unmanageable and failing Rule 23 | Struck national and multi-state class allegations; only state classes for IL, MI, PA may proceed |
| Rule 9(b) particularity | Complaint adequately alleges who, what, when, where, how and outlines the alleged scheme; defendant has exclusive access to finer details | Complaint insufficiently specific (only one label provided; sizes and exact purchase dates not pled) | Denied dismissal on Rule 9(b) grounds; pleading meets baseline particularity and is not hyper-technically deficient |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. 2016) (Article III standing requires concrete injury fairly traceable to defendant and redressable)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (complaint must state a plausible claim to survive Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleadings must include factual matter permitting inference of liability)
- Payton v. County of Kane, 308 F.3d 673 (7th Cir. 2002) (named plaintiffs cannot acquire standing by relying on injuries of unnamed class members)
- Mirfasihi v. Fleet Mortg. Corp., 450 F.3d 745 (7th Cir. 2006) (choice-of-law issues in nationwide class actions can be complex and are relevant to manageability)
- DiLeo v. Ernst & Young, 901 F.2d 624 (7th Cir. 1990) (Rule 9(b) requires pleading the who, what, when, where, and how)
- Jepson, Inc. v. Makita Corp., 34 F.3d 1321 (7th Cir. 1994) (Rule 9(b) specificity relaxed when details are within defendant's exclusive knowledge)
- Ingersoll v. Klein, 262 N.E.2d 593 (Ill. 1970) (Illinois uses the most significant relationship test for choice-of-law)