ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION FOR JUDGMENT ON THE PLEADINGS AND MOTION TO STRIKE, AND DENYING DEFENDANTS’ MOTION TO STAY DISCOVERY
I. INTRODUCTION
Plаintiff Tony Clancy (“Clancy”), on behalf of himself and a proposed class of similarly situated individuals, has filed a First Amended Complaint (“FAC”) against Defendants Bromley Tea Company, Eastern Tea Corp., London Holding Company, Inc., Bromley Products Corp., and several individuals (collectively “Bromley”). ECF No. 17. Brom-ley has filed a motion for judgment on the pleadings, and a motion to stay discovery. ECF Nos. 50 & 54.
After considering the moving papers, the arguments of the parties at the hearing held on June 20, 2013, and good cause appearing, the Court hereby GRANTS IN PART and DENIES IN PART Bromley’s motion for judgment on the pleadings, and DENIES Bromley’s motion to stay discovery.
II. BACKGROUND
A. Factual Background
For the purposes of these motions, the Court adopts the following factual allegations from the Clancy’s First Amended Complaint.
Bromley produсes, markets and sells several different varieties of tea and makes health claims about its products on its website and product labels. FAC 2-5. Clancy alleges that Bromley’s website contains antioxidant, nutrient content and health claims, and that the products themselves contain additional health claims on the package labels. FAC 4-5.
Clancy alleges that he purchased Brom-ley’s food products, including Pure Green Tea and 100% Organic Pure Black Tea, within the last four years. FAC 115,126. Clancy read the packaging labels, as well as Bromley’s website, before purchasing the Bromley’s products. FAC 116. The packaging labels included nutrient content, and health claims, including the phrase “natural source of antioxidants.” FAC 117. The website makes such claims as “Antioxidants in Greеn and Black Tea is brimming with Antioxidants, the disease-fighting compounds that help your body stave off illness” and “Green Tea Extract May Lower Blood Pres-sure____” FAC 3. Plaintiff relied upon these and other claims in purchasing Defendants’ products. FAC 117.
Clancy, on behalf of himself and a proposed class of similarly situated individuals, filed a complaint against Bromley in June 2012, and a First Amended Complaint (“FAC”) in October of that year. ECF Nos. 1 & 17. In the FAC, Clancy alleges that Bromley made unlawful and deceptive claims on its product labels, violating California’s Sherman Law, Cal. Health & Safety Code §§ 109875, et seq. (“Sherman Law”), which incorporates the requirements of the federal Food, Drug, and Cosmetics Act (“FDCA”).
Defendants have moved for judgment on the pleadings. ECF No. 50. In the motion, Defendants argue that Plaintiff lacks standing as to certain products and representations that he did not see, that Plaintiffs state-law claims are preempted by the FDCA, that Plaintiff failed to plead fraud with particularity under FRCP 9(b), that unjust enrichment is not a legally cognizable cause of action, that Plaintiffs warranty claims fail as a matter of law because the products do not include express warranties, and that claims against the individual defendants should be dismissed since Plaintiff fails to allege that they сommitted any wrongdoing. Pursuant to FRCP 12(f), Defendants also moved to have the Court strike as immaterial Plaintiffs claims regarding: (1) products Plaintiff never bought and statements he never saw; (2) Plaintiffs nationwide class allegations. ECF No. 50.
Defendants have also filed a motion to stay discovery. ECF No. 54.
C. Legal Standards
1. Motion for Judgment on the Pleadings
After the pleadings are closed, any party may move for judgment on the pleadings pursuant to Rule 12(c). The Court must accept all facts in the complaint as true, and view them in the light most favorable to the non-moving party. Fleming v. Pickard,
In this case, Clancy’s preemption, unjust enrichmеnt, warranty, and individual-defendant arguments are assessed under the standards that would govern dismissal for failure to state a claim under Rule 12(b)(6). Clancy’s standing argument goes to the Court’s subject-matter jurisdiction pursuant to Rule 12(b)(1). The Court assesses Bromley’s motion to dismiss Clancy’s fraud claims pursuant to Rule 9(b).
a. Failure to state a claim
For purposes of a Rule 12(b)(6) motion to dismiss, “all allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.” Cahill v. Liberty Mut. Ins. Co.,
b. Standing
The cаse or controversy requirement of Article III requires that, in order for a party to have standing to raise a claim: (1) the party invoking federal jurisdiction must have suffered an actual or threatened injury; (2) the injury must be fairly traceable to the defendant’s challenged conduct and; and (3) the injury must be redressable. Lujan v. Defenders of Wildlife,
c. Pleading Fraud
When a claim contains allegation of fraud, Rule 9(b) requires a party to state “with particularity the circumstances constituting fraud or mistake.” The allegаtions must be specific enough to give the defendant notice of the particular misconduct alleged so that the defendant may defend against the charge. Semegen v. Weidner,
2. Motion to Strike
Pursuant to Rule 12(f), a court “may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” “The function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial ...” Whittlestone, Inc. v. Handi-Craft Co.,
3. Motion to Stay Discovery
Under Rule 26 of the Federal Rules of Civil Procedure, district courts have broad discretion to stay discovery on a showing of “good cause.” Fed.R.Civ.P. 26(c). “[I]f the allegations of the complaint fail to establish the rеquisite elements of the cause of action ... it is sounder practice to determine whether there is any reasonable likelihood that plaintiffs can construct a claim before forcing the parties to undergo the expense of discovery.” Rutman Wine v. E. & J. Gallo Winery,
D. Jurisdiction
Since this is a class action in which: (1) there are over 100 members in the proposed class, (2) members of the proposed class have a different citizenship from Defendants; and (3) the claims of the proposed class members exceed $5,000,000 in the aggregate, this action satisfies 28 U.S.C. § 1332(d). Moreover, the amount in controversy exceeds the sum or value of $75,000, and the dispute is between citizens of different states, satisfying the requirements of diversity jurisdiction. 28 U.S.C. § 1332(a).
Therefore, assuming that Plaintiff has standing (discussed аt III-A, infra) subject-matter jurisdiction is proper over this action.
III. ANALYSIS
A. Standing
Bromley argues that Clancy lacks standing to “assert[] claims regarding products he
1. Products Clancy Did Not Buy
Clancy, the named plaintiff, has alleged that he bought two of the defendant’s tea products. FAC, 115. Defendants do not dispute that this is sufficient for him personally to establish standing to assert a cause of action relating to those purchases. “In a class action, standing is satisfied if at least one named plaintiff meets the requirements.” Bates,
The Supreme Court has noted that “there is tension in [its] prior eases” regarding whether differences among class members “is a matter of Article III standing at all or whether it goes to the propriety of class certification pursuant to Federal Rule of Civil Procedure 23(a).” Gratz v. Bollinger,
Courts in this district have reached different conclusions on similar facts. See Miller v. Ghirardelli Chocolate Co.,
Another group of ease adopts a middle-ground position, in which “the critical inquiry seems to be whether there is sufficient similarity between the products purchased and [those] not purchased.” Astiana v. Dreyer’s Grand Ice Cream, Inc., 11-cv-2910-EMC,
A third group of courts holds that as long as the named plaintiff has individual standing to bring claims regarding the products he or she did actually purchase, the question of whether a proposed class can bring claims related to other products is an issue properly addressed at the class certification stage. See Kosta v. Del Monte Corp., 12-CV-01722-YGR,
Beyond invoking the first two groups of cases and arguing that the facts here are consistent with them, Bromley cites no appellate opinions or even any legal principle that explains why the doctrine of standing should apply here. In identifying the source of the “tension” on this issue, the Gratz court cited Blum v. Yaretsky, 457 U.S. 991,
Another phrase often quoted in support of Defendants’ argument is this one: “ ‘[t]hat a suit may be a class action ... adds nothing to the question of standing, for even named plaintiffs who represent a class ‘must allege and show that they personally have been injured, not that injury has been suffered by other, unidentified members of the class to which they belong and which they purport to represent.’ ” Lewis v. Casey,
The other potential source for Defendants’ view of standing is Justice Stevens’ dissent in Gratz, to which the Court was responding when it acknowledged the tension on this issue. Justice Stevens argued that named plaintiffs who were no longer applying to the University of Michigan lacked standing to seek prospective relief against that school, and therefore could not represent a class of persons who sought such relief. See
To this Court, however, “standing” does not seem to be the proper framework for that question or for this one. Transmogrifying typicality or commonality into an issue of standing would undermine the well-established principles that “[i]n a class action, standing is satisfied if at least one named plaintiff meets the requirements,” Bates,
Deciding at the pleading stage that a plaintiff cannot represent a class who purchased any different products than the plaintiff seems unwarranted, at least on the facts of this ease. A plaintiff has sufficiently “typical” claims to represent a class if his claims “are reasonably co-extensive with those of absent class members; they need not be substantially identical.” Hanlon v. Chrysler Corp.,
Dеfendants’ most well-taken objection is that they would suffer prejudice from having to respond to discovery regarding class allegations that are not specifically defined or directly connected to the named plaintiff’s alleged injury. An expansively written class action complaint can certainly have that effect. But the Court can address that concern with careful case management and the supervision of discovery.
The named plaintiff has standing to assert claims relative to the products he purchased. He does not claim to have standing to assert claims related to other products. What he does claim is that he may be a potential representative of a class of people who havе such standing. He may or may not be able to certify such a class, and he may or may not be an adequate representative. But applying the concept of standing to dismiss proposed class action allegations is a category mistake.
2. Statements Mr. Clancy Did Not See
Defendants also argue that Mr. Clancy cannot sue regarding statements he did not see prior to purchasing their products. Mr. Clancy specifically pleaded that he read statements on Bromley’s website prior to purchasing the tea products. FAC, 87, 91 & 116. This should be sufficient under normal pleading standards to establish Article III standing. To the extent that Defendants argue that he must plead with more specificity which specific representations he saw on the website, this is a Rule 9(b) argument rather than a standing question, and is addressed at III-D, infra.
To the extent that Defendants contend that more is required under the UCL’s statu
In any event, subsequent to Rice, the California Supreme Court has held that the degree of specificity alleged in the FAC is sufficient under the UCL for claims of false advertising. In re Tobacco II Cases,
Whether the Plaintiff can represent class members who have relied on different advertisements then those on which the plaintiff himself relied is, for the reasons explained supra, an issue for the class certification stage.
B. Nationwide Class Allegations
Plaintiff is a California citizen seeking to recover under California’s consumer protection laws, but he seeks to represent a class action on behalf of citizens of other states. Defendants ask the Court to strike Plaintiffs nationwide class allegation, citing Mazza v. American Honda Motor Co., Inc.,
The plaintiffs in Mazza brought a nationwide class action against Honda, alleging violations of California’s consumer protection laws related to Honda’s advertising of its collision mitigation braking system.
Such a detailed choice-of-law analysis is not appropriate at this stage of the litigation. Rather, such a fact-heavy inquiry should occur during the class certification stage, after discovery. See Donohue v. Apple, Inc.,
C. Preemption
Defendants challenge Clancy’s claims as preempted, for two reasons. First, they argue that the FDCA prohibits Plaintiff from invoking the Sherman Law’s private right of action. Second, they argue that Plaintiff is seeking to impose substantive requirements greater than those required under the FDCA and FDA regulations.
1. Preemption of the Sherman Law’s Private Right of Action
Bromley argues that all of Plaintiffs claims are preempted because they are based on alleged regulatory violations of the FDCA. There is no private right of action to enforce the FDCA or regulations promulgated by the FDA, and even though plaintiffs state law claims allege a violation of California’s Sherman Law, Defendants argue he is actually attempting to enforce the FDCA.
Preemption is fundamentally a matter of Congressional intent, but in analyzing the issue courts must begin “with the assumption that the historic police powers of the States [are] not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” Wyeth v. Levine,
When Congress passed the FDCA and its subsequent amendments creating national uniform nutrition labeling, it expressly preempted state law that was inconsistent with its requirements. 21 U.S.C. § 343-l(a). However, it did not attempt to completely preempt state laws regarding the marketing of food products. To the contrary, Congress specifically anticipated states enacting their own identical laws. See In re Farm Raised Salmon Cases,
At its core, defendant’s motion asks whether the FDCA preempts a California citizen from bringing suit to enforce the state’s food labeling requirements, which are identical to the federal requirements. Courts in this district “have repeatedly refused to find preemption” where “a requirement imposed by state law effectively parallels or mirrors the relevant sections of the [FDCA].” Wilson v. Frito-Lay North America, Inc., 12-1586 SC,
The Ninth Circuit’s decision in Pom Wonderful LLC v. Coca-Cola Co.,
Defendants’ reliance on the Ninth Circuit recent decision in Perez,
Here, there is no similar problem. Plaintiff is suing for violations of the Sherman Law, not attempting to impose requirements greater than those imposed by the FDCA. The Sherman Law is limited to the requirements of the FDCA. However, it exists independently of that law, and violating its requirements would be a valid state cause of action even if the FDA ceased to exist. The sole basis of Perez’s claim was the FDA status of the device, and so his claim depended entirely on the existence of the FDA. But here, Clancy’s claim does not depend on the FDA, except in the sense that the Sherman Law mirrors the requirements of the FDCA. This court does not read Perez as having quietly reversed the well-established principle of cooperative federalism, recognized in numerous cases discussed supra, that states may enact laws whose substantive content mirrors that of a federal statute.
The final case cited by Defendants’ counsel at oral argument, Buckman Co. v. Plaintiffs’ Legal Comm.,
More importantly, the Ninth Circuit, sitting en banc, recently reviewed Medtronic and Buckman, among other preemption eases, and unanimously concluded that the MDA amendments to the FDCA neither imрliedly nor expressly preempt plaintiffs from bringing a failure-to-warn claim against a medical device manufacturer, because they brought a “state-law claim that is independent of the FDA’s pre-market approval process that was at issue in Buckman,” and because “[t] he claim rests on a state-law duty that parallels a federal-law duty under the MDA.” Stengel,
2. Substantive Requirements Differing from the FDCA
Plaintiffs state law claims under the Sherman Law are, for the reasons stated supra, only preempted if they impose regulations that differ from those imposed by the FDA. Under 21 C.F.R. § 101.54(g), a nutrient content claim regarding the level of antioxidants in a food may be used on a food label only if certain conditions are met. For example, the label must list the specific nutrient subject to the claim in the claim itself, and may оnly do so if a Reference Daily Intake (RDI) has been established for the nutrient. The Defendants argue that the terms “contain” and “source of,” which are used on their products’ labels, are not defined by federal regulation as characterizing the level of a nutrient. Defendants’ Memorandum (“Mem.”), ECF No. 50, at 11:11-14. Therefore, Defendants would only be violating the FDCA’s nutrient claim labeling requirements, adopted by the Sherman Law, if California law exceeded the FDA’s regulations.
Defendants are correct that the terms “contain” and “source of’ are not officially defined by FDA regulations as making a nutrient content claim. However, the FDA is not silent with regard to these terms. In a warning letter to Jonathan Sprouts, Inc., the FDA explained that claims using the word “source” were nutrient сontent claims. FAC 58. By using the term “source,” the company had “characterize[d] the level of nutrients of a type required to be in nutrition labeling.” Id. Since the FDA had not defined the term “source” by regulation, it could not be used in nutrient content claims. Id.
Based on the allegations in the FAC, which the Court must accept as true, the Court cannot conclude that Plaintiff has failed to assert a legitimate nutrient content claim under California law, which is identical to what the FDA classifies as a nutrient content claim. Therefore, it would be inappropriate to dismiss the claim as preempted.
D. Failure to Plead Fraud with Particularity
Defendant argues that the Plaintiff fails to meet the standard of Rule 9(b) of the Federal Rules of Civil Procedure, which requires a heightened level of particularity in support of сlaims of fraud. Plaintiff does not dispute that his FAL, CLRA and several of his UCL claims are grounded in fraud. To satisfy Rule 9(b), “[a]verments of fraud must be accompanied by the ‘the who, what, when, where, and how’ of the misconduct charged.” Kearns v. Ford Motor Co.,
Defendant’s argument relies, in part, on Sateriale v. R.J. Reynolds Tobacco Co.,
The FAC states that the “who” is Bromley Tea Company and other defendants; the “what” is nine discrete types of unlawful and deceptive claims by Defendants on the labeling and packaging of its products, including Pure Green Tea and 100% Organic Pure Black Tea, as well as on its website; the “when” is since 2008 and throughout the class period; the “where” is Bromley's package labels and website. The FAC alleges that Defendant’s product labels and website were in violation of the Sherman Law, and that Plaintiff reasonably relied on those statements to purchase products he would not have purchased absent these allegedly deceptive statements, satisfying the requirement to demonstrate “how” the statements were mislеading.
These allegations are sufficient to satisfy Plaintiffs obligations under Rule 9(b). See Astiana v. Ben & Jerry’s Homemade, Inc., C 10-4387 PJH,
E. Unjust Enrichment Claims
Defendants also seek to dismiss Plaintiffs seventh cause of action, restitution based on unjust enrichmenVquasi contract. Bromley argues that unjust enrichment in not an independent cause of action, but rather is “a general principle underlying various legal theories and remedies that are synonymous with restitution.” Mem., at 14:21. Plaintiffs assert that their claim is allowed under California law, which treats the allegation of unjust enrichment as a claim for restitution based on “quasi contract.”
Defendants are correct that in California “[t]here is no cause of action for unjust enrichment. Rаther, unjust enrichment is a basis for obtaining restitution based on quasi-contract or imposition of a constructive trust.” Myers-Armstrong v. Actavis Totowa, LLC,
F. Breach of Warranty Claims
Defendants move to dismiss Plaintiffs warranty claims, which Plaintiffs raised under California’s Song-Beverly Consumer Warranty Act and the Federal Magnuson-Moss Warranty Act. Plaintiff presents no argument in opposition to the Defendants’ motion. Rather, Plaintiff concedes that every court to hear similar claims has dismissed them and states that he is preserving the issue for any potential appeal. Plaintiffs Opposition Brief (“Opp.”), ECF No. 58, at 2, n. 2.
Plaintiffs Song-Beverly Act claim is expressly barred since Plaintiff acknowledges that the products at issues are “consumables.” See Cal Civ.Code § 1794(a), (d); see also FAC, at 201. The Court also agrees with the many courts who have determined that representations like the ones challenged here are descriptions of the product rather
G. Motion to Dismiss Individual Defendants and London Holding Company
Defendants also move to dismiss all claims against the individual defendants, as well as the London Holding Company, Inc. In light of the parties’ recent stipulation to dismiss those claims without prejudice, ECF No. 67, this request for relief is moot.
IV. Motion to Stay Discovery
Defendants filed a motion pursuant to Rule 26(c) of the Federal Rules of Civil Procedure for an order staying discovery “until the pending motion for judgment on the pleadings is resolved and Plaintiffs’ First Amended Complaint is held to have stated a legally sufficient claim against Defendants.” ECF No. 54, at 1:9-12. The Court has resolved the Defendants’ motion for judgment on the pleadings, and has determined that Plaintiff has stated a legally sufficient claim. The request for relief is therefore moot.
V. CONCLUSION
For the foregoing reasons the Court hereby GRANTS IN PART and DENIES IN PART Defendant Bromley’s motion for judgment on the pleadings and motion to strike. Clancy’s unjust enrichment, restitution, Song-Beverly and Magnuson-Moss claims (causes of action seven through eight) are DISMISSED WITH PREJUDICE, since those claims are barred as a matter of law. Plaintiffs claims against individual defendants and against London Holding Company have been DISMISSED WITHOUT PREJUDICE pursuant to the parties’ stipulation. The remaining claims are not dismissed.
The Court also hereby DENIES AS MOOT Defendant’s motion to stay discovery.
IT IS SO ORDERED.
Notes
. The FDCA gives food labeling authority to the FDA. The Nutrition Labeling and Education Act of 1990 ("NLEA”), 21 U.S.C. § 343-1, amended the FDCA, setting forth “uniform national standards for the nutritional claims the required nutrient information displayed on food labels.” Any reference to the FDCA in this order includes the NLEA amendments.
. This phrase features prominently in Chin v. General Mills, Inc., Case No. 12-2150 (MJD/TNL),