491 F.Supp.3d 740
S.D. Cal.2020Background
- Plaintiff Glenn Liou purchased Organifi Green Juice after viewing Organifi’s website and alleges he relied on statements that the product’s efficacy was established by “numerous clinical trials” posted on ClinicalTrials.gov and supported by a prestigious medical university.
- FAC identifies ~20 “Benefit Statements” about health effects and separate “Clinical Trial Statements” claiming numerous supporting trials; plaintiff asserts the cited links/searches do not show such trials.
- Suit filed as a putative consumer class action in state court; defendants removed to federal court and moved to dismiss.
- Defendants argued dismissal under Rule 12(b)(6) and Rule 9(b) (fraud pleading), lack-of-substantiation, FDCA/DSHEA preemption, primary jurisdiction, and failure to state warranty and quasi-contract claims.
- Court found plaintiff’s allegations satisfy Rule 9(b); dismissed implied warranty of merchantability, dismissed CLRA/UCL claims premised solely on Benefit Statements, denied dismissal of express warranty, implied fitness, CLRA/UCL insofar as based on Clinical Trial Statements, unjust enrichment/common counts; denied primary jurisdiction and preemption challenges at this stage.
- Court also held plaintiff lacks present standing for injunctive relief; dismissal of certain claims was without prejudice and leave to amend was granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of Rule 9(b) | Alleged misrepresentations about trials and benefits, not a pure fraud claim | Claims plead a unified course of fraudulent conduct; Rule 9(b) applies | 9(b) applies but plaintiff met its particularity requirements (who/what/when/where/how) |
| Breach of implied warranty of merchantability | Product failed to perform as advertised by virtue of lacking claimed efficacy | Alleged injuries arise from marketing, not product defect; merchantability claim fails | Merchantability claim dismissed (no allegation product lacked basic juice functionality) |
| Breach of implied warranty of fitness & express warranty | Bought for particular purpose (health benefits supported by trials); Clinical Trial Statements were basis of bargain | Warranty claims are speculative/lack specificity or are mere lack-of-substantiation | Implied fitness and express warranty claims survive at pleading stage (warranties pled with sufficient particularity) |
| CLRA/UCL — lack of substantiation vs provable falsity | Clinical Trial Statements are provably false (no such trials); Benefit Statements tied to those trials | Claims are only lack-of-substantiation (not actionable by private plaintiff) | CLRA/UCL claims based on Clinical Trial Statements survive; claims based solely on Benefit Statements dismissed as lack-of-substantiation (without prejudice) |
| CLRA/UCL — primary jurisdiction / preemption | Claims challenge deceptive labeling independently actionable in court | FDA expertise required; DSHEA/FDCA preempt state law claims | Primary jurisdiction not invoked at pleading stage; preemption denied at this stage |
| Unjust enrichment / money had and received / assumpsit | Purchase conferred benefit unjustly because statements were false | Such common counts are not properly alleged or are duplicative | Common-count quasi-contract/unjust enrichment claims survive |
| Standing for injunctive relief | Previously deceived consumer may seek injunction to prevent future deception | Plaintiff now knows/suspects falsity; no plausible future injury alleged | Injunctive-relief request dismissed for lack of standing (no plausible future harm alleged) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for plausibility)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state plausible claim)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (Rule 9(b) applies where complaint alleges unified course of fraudulent conduct)
- Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017) (Rule 9(b) particularity for consumer fraud; details of deceptive statements)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (UCL/FAL/CLRA claims grounded in fraud must satisfy Rule 9(b))
- Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009) (implied warranty of merchantability standard)
- Lilly v. ConAgra Foods, Inc., 743 F.3d 662 (9th Cir. 2014) (NLEA/FDCA preemption framework for food labeling)
- Davel Commc’ns, Inc. v. Qwest Corp., 460 F.3d 1075 (9th Cir. 2006) (primary jurisdiction doctrine elements)
- County of Santa Clara v. Astra United States, 588 F.3d 1237 (9th Cir. 2009) (standard for invoking primary jurisdiction on pleading stage)
- Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753 (9th Cir. 2015) (quasi-contract/common-count principles in consumer labeling cases)