L.S. v. Happy Hippo, LLC
2:24-cv-02849
| E.D. Cal. | Jul 17, 2025Background
- Plaintiff L.S. filed a class action against Happy Hippo LLC in the Eastern District of California, alleging false advertising and related claims regarding kratom-containing products.
- Plaintiff asserts that kratom, an unregulated, opioid-like substance, is addictive and causes withdrawal symptoms, which was not disclosed on defendant’s product packaging.
- Plaintiff claims that defendant knew or should have known about kratom’s addictive properties, based on interactions with overseas growers and user reports.
- Plaintiff seeks to represent California and nationwide classes of purchasers, alleging violations of California’s UCL, FAL, and CLRA, as well as common law claims for breach of implied warranty, unjust enrichment, and fraud by omission.
- Defendant moved to dismiss several claims and plaintiff moved to proceed under a pseudonym, citing the sensitive nature of drug addiction.
- The court granted plaintiff’s motion to proceed pseudonymously, granted in part and denied in part the motion to dismiss, and granted leave to amend as to breach of implied warranty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proceeding under pseudonym | Drug addiction issue is highly sensitive, would cause stigma | No opposition | Granted |
| FAL/CLRA/UCL claims based on omission | Defendant had duty to disclose kratom’s addictive nature | FAL does not allow pure omission claims; no duty to disclose | Pure omissions allowed; duty to disclose adequately pled |
| Duty to disclose & exclusive knowledge | Kratom is a safety hazard; defendant had superior knowledge | No unreasonable hazard; info publicly available, no exclusive knowledge | Plaintiff plausibly pleaded both elements |
| Reliance | Would not have purchased if warned | No specific reliance pled | Allegations sufficient to show reliance on omission |
| Breach of implied warranty | (No opposition) | No privity, plaintiff bought through third party | Dismissed with leave to amend |
| Unjust enrichment | Retaining profits from deceptive sales is unjust | Not a standalone cause of action | Sufficient to state quasi-contract claim |
| Fraud by omission | Same facts support fraud by omission | Fails for same reasons as consumer claims | Sufficiently stated fraud by omission claim |
Key Cases Cited
- Does I thru XXIII v. Advanced Textile Corp., 214 F.3d 1058 (9th Cir. 2000) (standard for allowing parties to proceed under pseudonym)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard)
- Hodsdon v. Mars, Inc., 891 F.3d 857 (9th Cir. 2018) (consumer law omissions and duty to disclose)
- Williams v. Yamaha Motor Co., 851 F.3d 1015 (9th Cir. 2017) (unreasonable safety hazard standard)
- Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) (privity required for implied warranty)
- In re Tobacco II Cases, 46 Cal. 4th 298 (Cal. 2009) (reliance requirement in consumer class actions)
- Daniel v. Ford Motor Co., 806 F.3d 1217 (9th Cir. 2015) (reliance on omission standard)