Stewart v. Kodiak Cakes, LLC
568 F.Supp.3d 1056
S.D. Cal.2021Background
- Plaintiffs (Ty Stewart and 21 others from 11 states) filed a Second Amended Complaint asserting state consumer‑protection and breach of warranty claims against Kodiak Cakes for (1) non‑functional slack‑fill and (2) deceptive labeling/marketing (claims such as “no preservatives,” “free of artificial additives,” “non‑GMO,” “healthy/nourishing”).
- The Court previously granted in part and denied in part Kodiak’s first motion to dismiss, allowed amendment on certain theories (notably non‑GMO and some “healthy” claims), and took judicial notice of product labels.
- Kodiak moved again to dismiss the SAC on multiple grounds including Local Rule noncompliance, claim‑specific standing, implausibility of the non‑GMO theory, and that “nourishing”/“healthy” statements are puffery or otherwise not misleading.
- The Court judicially noticed publicly available product labels and the Non‑GMO Project materials, and took judicial notice of the existence of an unrelated Utah complaint; it declined to rely on matters irrelevant or offered to short‑circuit well‑pleaded claims.
- Ruling: the Court granted in part and denied in part the motion—dismissing with prejudice the non‑GMO theory, the “nourishing” allegations, and one specific whole‑grains “healthy” statement; it denied dismissal as to other “healthy” statements and the remaining claims.
- The Court directed Plaintiffs to file a Third Amended Complaint removing the dismissed theories by November 19, 2021, and cautioned amendments were limited to cleaning the operative pleading.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Compliance with Local Rule 15.1(c) (redline) | Plaintiffs admitted inadvertent omission but cured by attaching redline later; no prejudice to Kodiak. | Strike the entire SAC for failure to attach required redline. | Denied. Court found omission inadvertent, cured, and not prejudicial. |
| Claim‑specific standing / which named plaintiffs support which product claims | Plaintiffs allege they will only represent classes for products/representations they purchased and include a per‑product chart. | Dismiss claims by named plaintiffs who did not purchase products with particular representations. | Denied as premature; adequacy and parsing for class certification stage. |
| “Non‑GMO” theory (plausible meaning) | “Non‑GMO” includes ingredients derived from animals fed GMO feed; consumers expect GMO‑free in broader sense. | “Non‑GMO” should mean not genetically altered; Plaintiffs’ animal‑feed definition is implausible. | Granted dismissal. Court found Plaintiffs’ intended definition implausible for reasonable consumers; non‑GMO theory dismissed. |
| “Nourishing” and “Healthy” marketing (puffery and specificity) | “Nourishing/healthy” statements convey that products are low in fat/sugar/cholesterol and meet DV of nutrients; consumers can be misled. | Statements are vague puffery or contextual (e.g., whole‑grains) and not materially misleading. | Partial grant/partial denial. “Nourishing” statements are nonactionable puffery—dismissed. The “Made with 100% whole grains for a healthy end to your day” statement is not misleading in context—dismissed with prejudice. Other product‑specific “healthy” statements and a Shark Tank consumer‑opinion ad survive. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard governs pleadings)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions and conclusory allegations insufficient)
- United States v. Ritchie, 342 F.3d 903 (documents incorporated by reference and materials court may consider on Rule 12)
- Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (scope of judicial notice and public records)
- Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136 (Rule 12(b)(1) review limited to complaint on facial challenges)
- Hadley v. Kellogg Sales Co., 273 F. Supp. 3d 1052 (nutritive/health claims can be actionable depending on context)
- Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964 (definition of puffery vs. actionable misdescription)
- Pareto v. FDIC, 139 F.3d 696 (conclusory allegations and unwarranted inferences do not defeat a motion to dismiss)