651 F.Supp.3d 1111
N.D. Cal.2023Background
- Defendant Olly PBC sells melatonin dietary supplements nationwide; plaintiffs (Murphy, Lesh, Jiang) purchased Olly melatonin in CA and NY and allege reliance on the labeled dosage.
- Plaintiffs’ lab testing (eight bottles, mixed expiration dates) allegedly found melatonin levels of 165%–274% of the label claim; plaintiffs contend these overages are unreasonable and exceed FDA "reasonable excess" safe-harbor.
- Plaintiffs bring a putative multi-state class action asserting state consumer-protection claims (California UCL, FAL, CLRA; New York GBL §§349, 350; similar laws of other states), express warranty, and unjust enrichment.
- Olly moved to dismiss the Second Amended Complaint (SAC) on multiple grounds: express and implied preemption, primary jurisdiction, failure to plead deception/reliance/materiality/injury, Rule 9(b), standing, Sonner-based inadequacy of equitable relief, and claims based on unpurchased products.
- The district court denied the motion in all respects except it dismissed claims premised on products the named plaintiffs did not purchase (with leave to amend as to those products).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Express preemption (overages) | Plaintiffs allege Olly’s overages are "unreasonable" and not necessary to meet shelf-life label amounts; claims mirror FDA standards. | Olly says FDA permits overages and state-law claims would impose non-identical requirements and thus are expressly preempted. | Court: no dismissal; plaintiffs pled the FDA-parallel theory that overages exceed what is needed to meet shelf-life claims, so not expressly preempted at pleadings. |
| Preemption — testing method | Plaintiffs relied on independent lab tests (not FDA 12-sample method) but allege FDA-compliant testing will confirm results and discovery can show compliance failures. | Olly argues failure to use FDA-mandated 12-sample protocol means claims are preempted. | Court: decline to dismiss; Durnford dicta and pleading rules allow non-FDA testing at pleading stage without pleading oneself out of court. |
| Primary jurisdiction | Plaintiffs: FDA guidance exists and courts can decide whether labels are misleading; no need to defer. | Olly: technical expertise over melatonin degradation and "reasonable" overages belongs to FDA; court should defer. | Court: primary jurisdiction not invoked — FDA has provided guidance and no current regulatory action makes deferral necessary. |
| California consumer-protection (UCL/FAL/CLRA) — reliance/materiality/injury | Plaintiffs allege they read and relied on dosage, would not have purchased if they knew the true dosing, and suffered economic and subjective harms (safety concerns, worthlessness/price premium). | Olly contends labels comply with federal law, testing is conclusory, and dosage nuance is not material to reasonable consumers. | Court: plaintiffs plausibly allege deception, reliance, materiality, and injury; claims survive. |
| Equitable relief (Sonner adequacy) | Plaintiffs plead alternative remedies and allege legal remedies may be inadequate and restitution is more certain/appropriate. | Olly says Sonner requires pleading inadequacy of legal remedies, so equitable restitution should be dismissed. | Court: equitable relief not dismissed at pleading stage; Sonner rarely applied to dismiss at this early posture. |
| Rule 9(b) fraud particularity | Plaintiffs alleged they read and relied on the label and identified testing and injury; pleadings specify who, what, when re: reliance. | Olly contends plaintiffs failed to plead particulars (what saw, how reliance, economic injury from receiving more melatonin). | Court: Rule 9(b) arguments fail — plaintiffs pleaded reliance, materiality, and injury with sufficient particularity. |
| Standing — unpurchased products, injunctive relief, out-of-state laws | Plaintiffs: claims can cover substantially similar products; they seek injunctive relief based on future inability to rely on labels; seek some other states’ laws in Count 1. | Olly: plaintiffs lack standing for products they didn’t buy, lack imminent injury for injunctive relief, and cannot assert other states’ laws. | Court: plaintiffs lack plausible facts for unpurchased products (dismissed w/ leave to amend). Plaintiffs have standing for injunctive relief. Court denies dismissal as to other states’ laws for now (Olly may renew at class-certification/Rule 23). |
Key Cases Cited
- Durnford v. MusclePharm Corp., 907 F.3d 595 (9th Cir. 2018) (plaintiff need not plead FDA-compliant sampling at pleading stage; preemption is affirmative defense)
- Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020) (plaintiff must show inadequacy of legal remedies before obtaining equitable restitution, but application at pleading stage is limited)
- Perez v. Nidek Co., Ltd., 711 F.3d 1109 (9th Cir. 2013) (preemption/implied-preemption framework in food-labeling context)
- Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012) (limitations on parallel state-law claims premised on federal labeling rules)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a claim plausible on its face)
- Syntek Semiconductor Co. v. Microchip Tech., 307 F.3d 775 (9th Cir. 2002) (primary jurisdiction doctrine factors)
- U.S. v. General Dynamics, 828 F.2d 1356 (9th Cir. 1987) (factors for invoking primary jurisdiction)
- Cohen v. ConAgra Brands, Inc., 16 F.4th 1283 (9th Cir. 2021) (preemption is an affirmative defense; defendant bears burden)
Disposition: Motion to dismiss granted only as to claims based on unpurchased Olly products (with leave to amend); denied in all other respects.