Cimoli v. Alacer Corp.Cimoli v. Alacer Corp.
Plaintiff Jeffrey Cimoli (Plaintiff) brings this putative consumer class action against Defendant Alacer Corp. (Defendant). Plaintiff asserts eight causes of action against Defendant for allegedly misleading labels on two of Defendant‘s products. Before the Court is Defendant‘s motion to dismiss Plaintiff‘s complaint pursuant to
I. BACKGROUND1
Plaintiff is an individual consumer and a citizen of California, currently residing in San Jose. Compl. ¶ 16, ECF 1. Defendant is a California corporation with its principal place of business in Carlisle, Pennsylvania. Id. ¶ 18. Defendant sells Emergen-C brand products, including several varieties of Emergen-C brand Immune Support Gummies. Id. ¶ 2. Plaintiff‘s complaint centers on
In or around June 2020, Plaintiff purchased the Vitamin C Gummies from a Target in San Jose, California. Compl. ¶ 16. When Plaintiff purchased the Vitamin C Gummies, he allegedly relied on the dosage information provided on the Vitamin C Gummies’ front label, which reads 750 mg of Vitamin C and 45 Gummies. Id. ¶ 16. Plaintiff alleges that he believed the Vitamin C Gummies product contained 45 Gummies, each of which contained 750 mg of Vitamin C. Id. Plaintiff further claims he would not have purchased the Vitamin C Gummies or would have paid less for the Vitamin C Gummies had he not been misled by the front label. Id. Though Plaintiff has not purchased the Elderberry Gummies, he claims that the label misleads consumers in the same manner as the label of the Vitamin C Gummies. Id. ¶¶ 23-25. Plaintiff‘s primary theory of liability is that [a] reasonable consumer understands [the representations on the front of the Products] to mean that each Gummy will contain 750 mg of Vitamin C or 50 mg of elderberry juice concentrate. Id. ¶ 24.
Plaintiff proposes a nationwide class of consumers who purchased Defendant‘s Gummies along with a California Subclass and a California Consumer Subclass. Compl. ¶ 39. The Nationwide Class includes [a]ll persons in the United States who, within the relevant statute of limitations period, purchased any of the Products. Id. The California Subclass includes [a]ll persons who, within the relevant statute of limitations period, purchased any of the Products in the state of California. Id. The California Consumer Subclass includes those who purchased the Products for personal, family, or household purposes in the state of California. Id.
Plaintiff filed this action on November 5, 2020, asserting eight causes of action: (1) violation of California‘s Unfair Competition Law (UCL),
II. LEGAL STANDARD
A. Rule 12(b)(6)
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering such a motion, the Court accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555).
B. Leave to Amend
In deciding whether to grant leave to amend, the Court must consider the factors set forth by the Supreme Court in Foman v. Davis, 371 U.S. 178 (1962), and discussed at length by the Ninth Circuit in Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2009). A district court
III. DISCUSSION
Defendant moves to dismiss on multiple grounds. First, Defendant argues Plaintiff‘s claims are governed by California law and, therefore, Plaintiff cannot advance a claim for violation of the UTPCPL on behalf of the nationwide class. Mot. at 4-6, 12-14. Second, Defendant argues that Plaintiff‘s FAL, CLRA, UCL, and common law fraud claims should be dismissed for failure to allege an actionable misrepresentation. Id. at 6-10. Third, Defendant argues that Plaintiff‘s breach of express and implied warranty claims must fail because Plaintiff does not allege facts to establish an affirmation of fact or promise that each Products’ dosage is per gummy. Id. at 10-11. Defendant also asserts that Plaintiff‘s implied warranty claims fail because of California‘s privity requirement. Id. at 11. Fourth, Defendant claims Plaintiff lacks standing to pursue injunctive relief under California‘s consumer protection statutes. Id. at 12-14. Finally, Defendant contends the Court should strike purchasers of the Elderberry Gummies from the putative classes for lack of standing. Id. 15-17. The Court addresses each argument in turn.
A. UTPCPL Claim and Nationwide Class
Plaintiff brings Count VIII against Defendant for a violation of Pennsylvania‘s Unfair Trade Practices and Consumer Protection Law,
Defendant argues that California law governs under choice-of-law rules and that Plaintiff is consequently prohibited from bringing claims under the UTPCPL on behalf of the nationwide class. Mot. at 4-6, 15. Plaintiff responds that the nationwide class and UTPCPL claim should survive dismissal because the UTPCPL may be applied to consumers outside of Pennsylvania if the transaction involved a Pennsylvania defendant. Opp. at 4, 16. Plaintiff further contends that the Court should apply California law to his claims brought on behalf of the California classes and Pennsylvania law to the claim brought on behalf of the nationwide class. Id. at 4. Accordingly, Plaintiff argues that no choice-of-law analysis is required because the Court should apply the law of both states. Id.
As an initial matter, the Court finds that the UTPCL may apply extraterritorially. In Danganan v. Guardian Protection Services, 645 Pa. 181, 186 (2018), the Pennsylvania Supreme Court, on certification from the Third Circuit, considered whether a non-resident may bring a [UTPCPL] claim against a Pennsylvania business premised on an out-of-state transaction. Id. at 183. Danganan involved a plaintiff who purchased home security equipment for his home in Washington, D.C. from the defendant, a company headquartered in Pennsylvania. Id. The contract signed by the parties included a choice-of-law provision applying Pennsylvania law to the agreement. Id. The state supreme court found that the plain language definitions of person and trade and commerce evidence no geographic limitation or residency requirement relative to the [UTPCPL]‘s application. Id. at 193. Therefore, the court found that a non-resident may bring a UTPCPL claim against a business headquartered in Pennsylvania even if the transaction itself took place out-of-state. Id. at 193-94. The court cautioned, however, that the reach of the UTPCPL is still limited by jurisdictional principles and choice-of-law rules. Id. at 194-95.
Like the parties in Danganan, Plaintiff, a California resident, has brought a UTPCPL claim against Defendant, a Pennsylvania-based corporation, for a transaction that took place outside of
B. The Reasonable Consumer Test and Fraud-Based Claims
Plaintiff brings four fraud-based claims: (1) violation of the UCL, Compl. ¶¶ 50-63, (2) violation of CLRA, id. ¶¶ 64-79, (3) violation of the FAL, id. ¶¶ 80-87, and (4) common law fraud, id. ¶¶ 111-118. The parties agree that these claims are governed by the reasonable consumer test. See Williams v. Gerber Prod. Co., 552 F.3d 934, 938 (9th Cir. 2008) (applying the reasonable consumer test to FAL, CLRA and UCL claims). The reasonable consumer test requires Plaintiff show that members of the public are likely to be deceived by Defendant‘s conduct. Id. at 938 (quoting Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir.1995)).
Defendant argues that Plaintiff‘s UCL, CLRA, FAL, and common law fraud claims should be dismissed because the misrepresentations alleged are not likely to deceive a reasonable consumer. Mot. at 6-8. To support this contention, Defendant points to the Products’ back label, which clarifies
The Court agrees with Plaintiff. In Walters v. Vitamin Shoppe Industries, 701 F. App‘x 667, 670 (9th Cir. 2017) (Walters II), the Ninth Circuit held that a plaintiff did not have a duty to validate claims on the front of a product‘s label by cross-checking them against information contained in small print on the back. Id.; see also Williams, 552 F.3d at 939-40 (We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception. Instead, reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging.). The plaintiff alleged that products sold by the defendant carried misleading labels because they displayed dosage information per serving rather than per unit. Walters v. Vitamin Shoppe Indus., Inc., No. 3:14-CV-01173-PK, 2015 WL 3916972, at *2 (D. Or. June 25, 2015) (Walters I). One such product was Calcium 1000 mg Caramel Chews, which required individuals to consume a two-chew serving to receive the full 1000 mg of calcium toted on the product‘s front panel. Id. In Walters I, the district court dismissed plaintiff‘s fraud claim because the product included clarifying information in the supplemental facts section located in small print on the products’ back panel. Id. at *8. The Ninth Circuit reversed, explaining that [c]onsumers review the small print on a product‘s label to learn additional details about a product, not to correct potentially misleading representations found on the front. Walters II, 701 F. App‘x at 670 (citing Williams, 552 F.3d at 939-40).
As in Walters, the representations on the front panel of the Products include a specific dosage representation without any indication as to whether the dosage is per serving or per unit. Compl. ¶ 16. Defendant argues that a reasonable consumer could not be misled by the representation because
Defendant cites to various other cases to support their position, but none is as persuasive as Walters II. For example, Defendant points to Skylor v. Nordic Naturals, Inc., No. CGC-17- 562382, 2018 Cal. Super. LEXIS 2414, at *3-5 (Mar. 8, 2016), as an example of where a court dismiss[ed] a case with nearly identical allegations to this one. Mot. at 7. While the Court agrees that Skylor involved allegations nearly identical to those before the Court now, the California Superior Court primarily supported its decision with Goldman v. Bayer AG, No. 17-CV-0647-PJH, 2017 WL 3168525 (N.D. Cal. July 26, 2017)—which was later vacated and remanded. Goldman v. Bayer AG, 742 F. App‘x 325 (9th Cir. 2018). And the allegations before the Ninth Circuit in Ebner v. Fresh, Inc. are dissimilar to those before the Court. 838 F.3d 958, 962 (9th Cir. 2016) (holding that the weight label on a tube of lip balm does not contradict other representations or inferences on [the defendant‘s] packaging.). Neither of these cases carries the day for Defendant in light of Walters II, where the Ninth Circuit characterized representations nearly identical to those at issue here as potentially misleading. 701 F. App‘x at 670; see also Williams, 552 F.3d at 939 (rejecting the
C. Unjust Enrichment
Defendant also moves to dismiss Plaintiff‘s unjust enrichment claim, arguing that it rises and falls alongside Plaintiff‘s underlying fraud-based claims. Mot. at 12. The Court agrees, and the parties do not argue otherwise. Opp. at 16; Reply at 2, n.1; Punian v. Gillette Co., No. 14-CV-05028-LHK, 2016 WL 1029607 at *18 (N.D. Cal. Mar. 15, 2016) (to succeed in a claim for unjust enrichment, Plaintiff must allege receipt of a benefit and unjust retention of the benefit at the expense of another. (internal marks omitted)); Hovsepian v. Apple, Inc., No. 08-5788 JF (PVT), 2009 WL 5069144, at *5 (N.D. Cal. Dec. 17, 2009) (a claim for unjust enrichment cannot stand alone as an independent claim for relief.). Because the Court has denied Defendant‘s motion as to Plaintiff‘s CLRA, FAL, UCL and common law fraud claims, the Court necessarily DENIES Defendant‘s motion to dismiss Plaintiff‘s unjust enrichment claim.
D. Express and Implied Warranty Claims
Plaintiff‘s breach of express warranty claim is predicated on
(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.
(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.
Defendant argues that Plaintiff‘s express warranty claim fails because Plaintiff has not pled sufficient facts to show that Defendant breached an affirmation of fact or promise. Mot. at 10. Plaintiff responds that the representations on the front label of the Products are false affirmations of fact. Opp. at 13. The Court finds that the dosage representations on the front of the Products are not an affirmation that the dose listed is per gummy rather than per serving.
In Broomfield v. Craft Brew Alliance, Inc., No. 17-CV-01027-BLF, 2017 WL 3838453 (N.D. Cal. Sept. 1, 2017), the plaintiff claimed that representations on the labels of beers brewed and bottled by defendant misled consumers to believe the beer was brewed in Hawaii. Id. at *1. The representations at issue included an image of a map of Hawaii marking the location of the defendant‘s brewery and an invitation to visit defendant‘s brewery while in Hawaii. Id. While the defendant‘s owned a brewery in Hawaii that produced all its draft beer sold in Hawaii, the defendant‘s beer bottled and sold outside of Hawaii was brewed in the continental United States. Id. This Court held that while these representations could mislead a reasonable consumer, the representations did not breach an express warranty because they [did] not amount to an unequivocal statement or promise to the consumer that Kona beer is brewed exclusively in Hawaii. Id. at *10. The Court further explained that the fact that each representation is a truthful statement makes it difficult for Plaintiffs to prevail on an express warranty claim in this case. Id.
Like in Broomfield, the representations on the Products do not amount to an unequivocal statement or promise that the dosage is per gummy and are otherwise truthful statements. Plaintiff‘s assertion that the dosage representations are affirmations of fact that the Products contain a specific dosage of Vitamin C or Elderberry per gummy is conclusory and inaccurate. Opp. at 13 (citing Compl. ¶¶ 3-4, 16, 90-91, 94); see Iqbal, 556 U.S. at 678 (the tenet that a court must accept a complaint‘s allegations as true is inapplicable to threadbare recitals of a cause
Defendant also moves to dismiss Plaintiff‘s implied warranty claim, arguing that it rises and falls with Plaintiff‘s express warranty claim. Mot. 10-11. The Court agrees. Because the Court has found that Plaintiff has not pled an affirmation of fact or promise that the dosage representations are per gummy, Plaintiff‘s implied warranty claim fails.2 Accordingly, the Court DISMISSES WITH LEAVE TO AMEND Plaintiff‘s breach of express and implied warranty claims. Although it is not clear that any amendment could cure these deficiencies, the Court will allow Plaintiff the opportunity to amend.
E. Plaintiff‘s Standing to Pursue Injunctive Relief
Plaintiff seeks injunctive relief in connection with his UCL and CLRA claims. Compl. ¶ 63, 77. Defendant challenges whether Plaintiff has Article III standing to seek injunctive relief in
The Court agrees. In general, [p]ast exposure to harmful or illegal conduct does not necessarily confer standing to seek injunctive relief if the plaintiff does not continue to suffer adverse effects. Mayfield v. United States, 599 F.3d 964, 970 (9th Cir. 2010). Article III requires plaintiffs show a real or immediate threat . . . that [they] will again be wronged in a similar way to obtain injunctive relief. Id. (quoting Lyons, 465 U.S. at 111). Plaintiff argues he has standing because he is (1) unable to rely on the defendant‘s representations in the future; [and] (2) may purchase the mislabeled product (as is) in the future. Opp. at 17 (citing Broomfield v. Craft Brew All., Inc., No. 17-CV-01027-BLF, 2017 WL 5665654, at *4 (N.D. Cal. Nov. 27, 2017)).
He also argues that the Ninth Circuit has rejected the argument Defendant forwards here, namely that prior knowledge of false advertising prohibits standing. Opp. at 17 (citing Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 969-70 (9th Cir. 2017)).
Plaintiff‘s reliance on the Ninth Circuit‘s holding in Davidson is inapt here. The Ninth Circuit in Davidson affirmed that a previously deceived consumer may have standing to seek injunctive relief in certain circumstances. 889 F.3d at 969 (emphasis added). The plaintiff in Davidson purchased flushable wipes manufactured by the defendant, but later learned the wipes were not in fact flushable. Id. at 961-962. The court in Davidson ultimately held that the plaintiff had Article III standing to seek injunctive relief because the plaintiff had no way of determining whether the representation flushable [was] in fact true without first purchasing the wipes and therefore a threatened injury was still certainly impending. Id. at 972 (citing Clapper v. Amnesty Int‘l USA, 568 U.S. 398, 410 (2013)). This conclusion was motivated by the court‘s determination that the plaintiff face[d] the similar injury of being unable to rely on [defendant‘s] representations of its product in deciding whether or not she should purchase the product in the future. Id. at 971-72 (citing Lyons, 461 U.S. at 111).
Unlike the plaintiff in Davidson, Plaintiff has not (and cannot) reasonably claim that he has no way of determining whether Defendant‘s representations are true. The complaint explicitly notes that a customer must consume three [g]ummies to receive 750 mg of Vitamin or 50 mg of elderberry juice concentrate. Compl. ¶ 25. Plaintiff is aware that the dosage representations on the front of the Products refer to a serving size of gummies. And several district courts relying on Davidson have found a plaintiff lacks standing where the plaintiff could easily discover whether a previous misrepresentation had been cured without first buying the product at issue. Cordes v. Boulder Brands USA, Inc., No. CV 18-6534 PSG (JCX), 2018 WL 6714323, at *4 (C.D. Cal. Oct. 17, 2018) (finding plaintiff lacked standing for injunctive relief because now that [p]laintiff is on notice about potential underfilling, he could easily determine the number of pretzels in each package before making a future purchase by simply reading the back panel. . . .); Shanks v. Jarrow Formulas, Inc., No. LACV1809437PAAFMX, 2019 WL 7905745, at *5 (C.D. Cal. Dec. 27, 2019) (finding plaintiff lacked standing because in the future [plaintiff can] simply look at the label on Defendant‘s coconut oil . . . and put it back.); Matic v. United States Nutrition, Inc., No. CV189592PSGAFMX, 2019 WL 3084335, at *8 (C.D. Cal. Mar. 27, 2019) (finding plaintiff lacked standing because he knows precisely where to find clarifying information on a product label).
Because Plaintiff knows that he can determine the Products’ dosages by consulting the back labels, Plaintiff cannot plausibly allege that he faces a real or immediate threat of similar, future harm. Accordingly, Defendant‘s motion to dismiss Plaintiff‘s request for injunctive relief is GRANTED.
F. Plaintiff‘s Standing to Assert Claims on Behalf of California Purchasers of the Elderberry Gummies
As this Court has previously recognized, a plaintiff has Article III standing for an unpurchased product only when there is substantial similarity between the purchased and unpurchased products at issue. Romero v. Flowers Bakeries, LLC, No. 14-cv-05189-BLF, 2015 WL 2125004, *10 (N.D. Cal. May 6, 2015); Leonhart v. Nature‘s Path Foods, Inc., No. 13-cv-00492-BLF, 2014 WL 6657809, at *3 (N.D. Cal. Nov. 21, 2014).
The Ninth Circuit has cautioned courts to be careful not to employ too narrow or too technical an approach when determining what constitutes the same type of relief or the same kind of injury. Armstrong v. Davis, 275 F.3d 849, 867 (9th Cir.2001). In Armstrong, the Ninth Circuit considered a class action brought by prisoners and parolees suffering from six categories of disability: mobility impairments, hearing disabilities, visual disabilities, learning disabilities, mental retardation, and renal impairments. Id. at 854. Over a challenge by Defendant California Board of Prison Terms, the court held that disabled plaintiffs had standing to bring claims on behalf of a proposed class even where class members’ disabilities and experienced harms were not identical. Id. at 867. The court explained: the named plaintiffs all established the same injury: that the Board propounded a policy and engaged in a practice that denied them their rights under the ADA, and harmed them by preventing them from attending, communicating at, or comprehending parole and parole revocation hearings. Id. Accordingly, the Ninth Circuit held that the plaintiffs had standing on behalf of the class because the named plaintiffs and each of the class members suffered from the same injurious conduct; each incurred the same injury; and each [was] seeking the same relief. Id.
Although the Ninth Circuit has not directly addressed substantial similarity for purposes of consumer fraud-based class actions, district courts, driven by Armstrong, have taken a broad
Defendant points to differences between the two Products, such as the amount of active ingredients, dosage, and packaging colors, to support its argument that the Vitamin C Gummies and
Accordingly, the Court finds that Plaintiff has standing to bring claims on behalf of purchasers of the Elderberry Gummies because such consumers may be deceived in the same manner, and thus face the same injury, as Plaintiff was when he purchased Vitamin C Gummies. Defendant‘s motion to strike the claims related to the Elderberry Gummies is DENIED.
IV. ORDER
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Defendant‘s motion WITH LEAVE TO AMEND. Plaintiff SHALL file an amended complaint no later than August 2, 2021. No new claims or parties may be added without leave of Court.
IT IS SO ORDERED.
Dated: July 1, 2021
BETH LABSON FREEMAN
United States District Judge