JANIE HAWKINS, individually and on behalf of all others similarly situated v. THE COCA-COLA COMPANY
No. 21-CV-8788 (KMK)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
February 7, 2023
KENNETH M. KARAS, United States District Judge
Shub Law Firm LLC
Haddonfield, NJ
Counsel for Plaintiff
Spencer Sheehan, Esq.
Sheehan & Associates, P.C.
Great Neck, NY
Counsel for Plaintiff
Dakotah Burns, Esq.
Jane Metcalf, Esq.
Steven A. Zalesin, Esq.
Patterson Belknap Webb & Tyler LLP
New York, NY
Counsel for Defendant
OPINION & ORDER
KENNETH M. KARAS, United States District Judge:
Plaintiff Janie Hawkins (“Plaintiff“) brings this putative class action against The Coca-Cola Company (“Defendant“), alleging that the labeling on Defendant‘s Fanta brand “Pina Colada flavored” soda (the “Product“) is deceptive and misleading. (See generally First Am. Compl. (“FAC“) (Dkt. No. 12).) Plaintiff brings claims for damages against Defendant for (1) violation of §§ 349 and 350 of the New
I. Background
A. Factual Background
The following facts are drawn from the FAC and are assumed to be true for the purposes of resolving the instant Motion. See Div. 1181 Amalgamated Transit Union-N.Y. Emps. Pension Fund v. N.Y.C. Dep‘t of Educ., 9 F.4th 91, 94 (2d Cir. 2021) (per curiam).
Defendant is a multinational beverage corporation with its principal place of business in Atlanta, Georgia. (See FAC ¶ 123.) Included in Defendant‘s product lines is Fanta, a brand of flavored soda with various varieties based on “real fruit flavors.” (See id. ¶¶ 124–125, 128.) As relevant to the instant Action, Defendant manufactures a “pina colada flavored” variety of Fanta which Defendant represents on the label as containing “100% Natural Flavors.” (Id. ¶ 1.) This representation sits above pictures of half a coconut, a wedge of pineapple, and “two yellow droplets representing juice from pineapples.” (Id. ¶ 4.)
(See id. ¶¶ 1, 4.)
Plaintiff also cites the digital and print marketing of the Product, which features similar images of pineapples and coconut coupled with the assertion that there are 100% natural flavors in the Product. (Id. ¶¶ 29–30.)
Plaintiff alleges several reasons as to why Defendant includes DL-Malic Acid in the Product. For example, Plaintiff alleges that it is included: (1) “to help make the Product taste tart and fruity, like the pictured fruits taste naturally,” (id. ¶ 65); (2) “to create, enhance, simulate, and/or reinforce the sweet, fruity, and tart taste that consumers associate with the pictured fruits,” (id. ¶ 66); and (3) that it “could function as a flavor enhancer or PH balancer,” (id. ¶ 83). Plaintiff concludes, however, that “because the flavor imparted by malic acid is a core component of the pictured fruits,” malic acid “does not function as a flavor enhancer” but instead “fundamentally alters the original combination of sugar and natural L-Malic Acid . . . so that the flavors of the Product are no longer [] natural[.]” (Id. ¶¶ 86–87.) In addition, Plaintiff alleges that the malic acid “is not a PH balancer because it is not necessary to change or maintain active acidity or basicity in the Product.” (Id. ¶ 89.) Plaintiff also alleges that the “Product lacks appreciable amount[s] of pineapple and coconut ingredients.” (Id. ¶¶ 98–106.)
Finally, Plaintiff alleges that federal and state regulations “prohibit false and deceptive identification of the source of a food or beverage‘s characterizing flavors.” (Id. ¶ 72.) Here, Plaintiff alleges that the Product‘s “primary or characterizing flavor” is Pina colada, “which is understood by consumers to mean pineapple and coconut.” (Id. ¶ 73 (quotation marks omitted).) The Product states in the lower left corner: “Pina Colada Flavored Soda With Other Natural Flavors[,]” which Plaintiff alleges
In at least October 2021, Plaintiff purchased the product “on one or more occasions” at various stores, including at ShopRite, 250 Route #59, Tallman NY 10901, for a “premium price” of “no less than $2.29 for 20 oz, excluding tax and sales.” (Id. ¶¶ 112, 131, 134.) Plaintiff alleges that she “purchased the Product because the packaging claimed it contained ‘100% Natural Flavors’ and that the only natural flavors were responsible for the Pina Colada and pineapple and coconut taste.” (Id. ¶ 94.) In purchasing the Product, Plaintiff alleges she “believed and expected the Product contained only natural flavoring[] and contained more of the referenced fruit ingredients,” relying on the “words, terms coloring, descriptions layout, packaging, tags, and/or images on the Product, on the labeling,” and on statements made in Defendant‘s digital, print, and social media marketing. (Id. ¶¶ 132–33.) Without this, Plaintiff alleges that she “would not have purchased the Product if she knew the representations and omissions were false and misleading or would have paid less for it.” (Id. ¶ 135.)
B. Procedural History
Plaintiff filed her initial Complaint on October 28, 2021. (See Compl. (Dkt. No. 1).) On March 22, 2022, Defendant filed a pre-motion letter in anticipation of filing a motion to dismiss the original Complaint, (see Dkt. No. 10), but on April 8, 2022, Plaintiff filed the FAC, (see FAC). On April 22, 2022, Defendant filed another pre-motion letter in anticipation of filing a motion to dismiss the FAC. (See Dkt. No. 15.) Following Plaintiff‘s response to Defendant‘s pre-motion letter, (see Dkt. No. 16), the Court held a pre-motion conference on May 17, 2022, (see Dkt. (minute entry for May 17, 2022)). Pursuant to the briefing schedule adopted at the conference, Defendant filed the instant Motion on June 17, 2022. (See Not. of Mot.; Def.‘s Mem. of Law in Supp. of Mot. To Dismiss (“Def.‘s Mem.“) (Dkt. No. 23).) Plaintiff filed her Opposition on July 15, 2022, (see Pl.‘s Mem. of Law in Opp‘n to Mot. To Dismiss (“Pl.‘s Mem.“) (Dkt. No. 24)), and Defendant filed its Reply on July 29, 2022, (see Def.‘s Reply Mem. of Law in Supp. of Mot. To Dismiss (“Def.‘s Reply Mem.“) (Dkt. No. 25)).
II. Discussion
A. Standard of Review
Defendant moves to dismiss the FAC pursuant to
“[W]hen ruling on a defendant‘s motion to dismiss, a judge must accept as true all of the factual allegation contained in the complaint,” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam), and “draw all reasonable inferences in the plaintiff‘s favor,” Div. 1181, 9 F.4th at 95 (citation omitted). Additionally, “when ruling on a Rule 12(b)(6) motion to dismiss,” district courts are directed to confine their consideration to “the complaint in its entirety, . . . documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Bellin v. Zucker, 6 F.4th 463, 473 (2d Cir. 2021) (quotation marks omitted); see also Dashnau v. Unilever Mfg. (US), Inc., 529 F. Supp. 3d 235, 240 (S.D.N.Y. 2021) (same).
Finally, fraud claims—including common law fraud claims—are subject to the heightened pleading standard set forth in
B. Analysis
Defendant argues that (1) Plaintiff fails to state a plausible claim under the GBL because Plaintiff alleges “conclusory and contradictory allegations” to “suggest that Fanta‘s label would mislead a reasonable consumer, (see Def.‘s Mem. 4–9); (2) Plaintiff has failed to state a claim for breach of express warranty because Plaintiff failed to provide Defendant with pre-suit notice, (see id. at 9); and (3) Plaintiff has failed to plead fraud with particularity, as required
1. New York General Business Law § 349 and 350 Claims
”
a. Consumer-Oriented Conduct & Injury
Defendant appears to concede—or at least, does not contest for purposes of its Motion—that Defendant‘s conduct was consumer-orientated. (See generally Def.‘s Mem.) “A defendant engages in ‘consumer-oriented’ activity if [the company‘s] actions cause any ‘consumer injury or harm to the public interest.‘” New York v. Feldman, 210 F. Supp. 2d 294, 301 (S.D.N.Y. 2002) (quoting Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 256, 264 (2d Cir. 1995)). This requirement is liberally construed, id., and “may be satisfied by showing that the conduct at issue ‘potentially affect[s] similarly situated consumers,‘” Wilson v. Nw. Mut. Ins. Co., 625 F.3d 54, 64 (2d Cir. 2010) (alteration in original) (quoting Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741, 745 (N.Y. 1995)). Here, Plaintiff alleges that Defendant “manufactures, packages, labels, markets[,] and sells” the Product “to consumers from third parties, which includes grocery stores, dollar stores, warehouse club stores, drug stores, convenience stores, big box stores, and/or online[.]” (See FAC ¶¶ 1, 119.) These allegations are sufficient to satisfy the first element of Plaintiff‘s GBL claim. See Karlin v. IVF Am., Inc., 712 N.E.2d 662, 665 (N.Y. 1999) (observing that GBL §§ 349 and 350 “apply to virtually all economic activity, and their application has been correspondingly broad” (footnote omitted) (collecting cases)); Sheth v. N.Y. Life Ins. Co., 709 N.Y.S.2d 74, 75 (App. Div. 2000) (noting that the “consumer-oriented” requirement may be satisfied “by a showing that the practice has a broader impact on the consumer at large“) (citation omitted).
Defendant also appears to concede or not contest for the purposes of its
Here, Plaintiff alleges that she “purchased the Product because the packaging claimed it contained ‘100% Natural Flavors’ and that only natural flavors were responsible for the Pina Colada and pineapple and coconut taste.” (FAC ¶ 94.) Plaintiff also alleges that she “would not have purchased the Product if she knew the representations and omissions were false and misleading or would have paid less for it.” (Id. ¶ 135.) At this early stage of the case, these allegations suffice to allege a price premium theory of injury. See Fishon v. Peloton Interactive, Inc., No. 19-CV-11711, 2020 WL 6564755, at *10–11 (S.D.N.Y. Nov. 9, 2020) (allegations that the plaintiffs “would not have purchased the [product], or would not have purchased it on the same terms, [had] they kn[o]w[n] the truth,” were sufficient to survive dismissal, because “[n]o more is necessary at this stage“); Duran, 450 F. Supp. 3d at 351 (finding that the plaintiff adequately pled a price premium theory of injury where he alleged that he and other customers “paid full price for the [p]roduct but received something inferior to what [the defendant] had promised, and that, had [the plaintiff] known that the [p]roduct [was inferior], he would not have purchased the [p]roduct, or would have only paid significantly less for it” (citations omitted)); Kacocha v. Nestle Purina Petcare Co., No. 15-CV-5489, 2016 WL 4367991, at *14 (S.D.N.Y. Aug. 12, 2016) (allegation that the plaintiff “would not have paid the premium price he paid” for the product had he “known the truth” was sufficient to state injury based on price premium theory (citation and quotation marks omitted)); Singleton v. Fifth Generation, Inc., No. 15-CV-474, 2016 WL 406295, at *10 (N.D.N.Y. Jan. 12, 2016)
b. Materially Misleading Conduct
Defendant instead largely focuses on the second element of Plaintiff‘s GBL claims, arguing that Plaintiff cannot state a cognizable claim for violations of
To survive a motion to dismiss, plaintiffs “must do more than plausibly allege that a label might conceivably be misunderstood by some few consumers.” Twohig, 519 F. Supp. 3d at 160 (quotation marks omitted) (quoting Sarr v. BEF Foods, Inc., No. 18-CV-6409, 2020 WL 729883, at *3 (E.D.N.Y. Feb. 13, 2020)). “Instead, plaintiffs must ‘plausibly allege that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.‘” Id. (quoting Sarr, 2020 WL 729883, at *3); see also Weinstein v. eBay, Inc., 819 F. Supp. 2d 219, 228 (S.D.N.Y. 2001) (stating “the applicable legal standard is whether a reasonable consumer, not the least sophisticated consumer, would be misled by [a defendant‘s] actions“). “While it is possible for a court to decide this inquiry as a matter of law, this inquiry is generally a question of fact not suited for resolution at the motion to dismiss stage.” Duran, 450 F. Supp. 3d at 346 (citation omitted) (collecting cases). “Notably, whether an interpretation is unreasonable as a matter of law is generally reached at [the motion to dismiss] stage only where, for instance, a plaintiff‘s claims as to the impressions that a reasonable consumer might draw are ‘patently implausible’ or unrealistic.” Eidelman v. Sun Prods. Corp., No. 16-CV-3914, 2017 WL 4277187, at *4 (S.D.N.Y. Sept. 25, 2017) (quoting Stoltz v. Fage Dairy Processing Indus., S.A., No. 14-CV-3826, 2015 WL 5579872, at *20 (E.D.N.Y. Sept. 22, 2015)); see also In re Frito-Lay N. Am. Inc. All Nat. Litig., No. 12-MD-2413, 2013 WL 4647512, at *16 (E.D.N.Y. Aug. 29, 2013) (explaining that claims which “border on fantasy” require “dismissal as a matter of law“).
Plaintiff primarily alleges that Defendant‘s representation that the Product contains “100% natural flavors” is misleading because the Product in reality contains an artificial form of Malic Acid, namely DL-Malic Acid. (See FAC ¶¶ 1–5; 28–36.) In addition, Plaintiff alleges that Defendant‘s representations as to the Product are misleading because they violate federal and state regulations dictating the “source of a food or beverage‘s characterizing flavors.” (See id. ¶¶ 72–97.) Defendant argues that Plaintiff cannot state a viable claim under the GBL “merely by alleging that some of Fanta‘s ingredients are ‘artificial‘” but rather must “plausibly allege that Fanta contains an artificial ingredient that functions as a flavor in the beverage.” (Def.‘s Mem. 4-8 (emphasis omitted).) Additionally, Defendant argues that Plaintiff‘s claims “are contradicted by her own allegations that malic acid in Fanta functions as a flavor enhancer.” (Id. at 8-9.) For the reasons stated below, the Court agrees that Plaintiff has failed to allege that a reasonable consumer would be misled by the representations on the Product.
The Vanilla Cases by and large stand for an analogous proposition that “the word vanilla, by itself, indicates a flavor, and the labels in question made no representation as to any particular ingredient(s) that were contained in the product or were the source of that flavor in the product.” Budhani, 527 F. Supp. 3d at 677 (quotation marks omitted). In coming to this conclusion, these courts distinguished Second Circuit precedent that found that a reasonable consumer could be misled into believing that a particular ingredient (rather than specific flavors) exists inside of a product. See Mantikas v. Kellogg Co., 910 F.3d 633, 637 (2d Cir. 2018) (finding that a
As expected, each product within the Vanilla Cases spans the gamut of alleged representations to consumers, all of which are not as explicit as the representation in the instant Action. See, e.g., Wynn, 2021 WL 168541 at *1–2 (vanilla almond milk product that contains no “qualifying terms” such as “vanilla-flavored,” “contains artificial flavors,” or “with other flavors“); Pichardo, 2020 WL 6323775, at *1 (non-dairy vanilla protein beverage with a vanilla flower vignette and the words “Smooth Vanilla“). However, the Court has identified at least one case within the Vanilla Cases whose representations are strikingly similar to the representations in the Product here. In Steele v. Wegmans Food Markets, Inc., 472 F. Supp. 3d 47 (S.D.N.Y. 2020), the plaintiff sued a grocery store chain over alleged representations in their vanilla ice cream product. Id. at 48. The ice cream container named the ice cream flavor as “vanilla” in large letters across the front and the top of the container. Id. at 49. This is coupled with two relevant disclosures on the front and top of the container: (1) underneath the grocery store logo, the product states that it contains “no artificial colors, flavors, or preservatives“; and (2) underneath the ice cream flavor, the product states that it is “made with milk, cream, and natural vanilla flavor.” Id. (emphasis added). These disclosures, taken together, are effectively the same as the disclosure at issue here: the product is made with “natural vanilla flavor” and contains “no artificial . . . flavors,” which is a claim that the ice cream has 100% natural flavors.
Faced with this representation, the court in Steele questioned the plaintiff‘s allegations that a reasonable consumer could be materially misled for two reasons. See id. at 50–51. First, the court questioned the bare claim of a misrepresentation on the vanilla ice cream container, noting that “[t]hose who prefer natural ingredients will note that it has natural vanilla flavor[] and no artificial flavors.” Id. at 50. In addition, those consumers “interested in the actual ingredients can read the list, which mentions neither vanilla beans nor extracts, but they will not learn the components, amounts or proportions of the Natural Flavor.” Id. Comparing the facts of Steele to the “ingredient” line of cases in Mantikas, the court concluded that “the . . . container does not mention vanilla beans or bean extract, and even if vanilla or bean extract is not the predominant factor, if the sources of the flavor are natural, not artificial, it is hard to see where there is deception.” Id. The court, emphasizing the conundrum, asked: “What is misrepresented? The ice cream is vanilla flavored. The sources of the flavor are natural, not artificial.” Id.
Here, the Product matches the findings in Steele. As alleged by Plaintiff, for those consumers who “are increasingly concerned about the ingredients added to what they eat and drink,” (see FAC ¶¶ 6–27), consumers will read the front of the bottle stating that the soft drink contains 100% natural flavors, (see id. ¶ 1). For those consumers interested in the ingredients, they will turn to the back side of the bottle that lists “natural flavors.” (Id. ¶¶ 32–36.) There is no evidence of the
Again in a similar fashion as Steele, Plaintiff appears to concede that there are likely some natural flavors within the product, namely pineapple and coconut. (FAC ¶¶ 73–76.) However, Plaintiff alleges that “the ingredient list does not disclose that [] malic acid is an artificial flavoring ingredient which provides flavoring to the Product.” (Id. ¶ 34.) Plaintiff makes this conclusory claim several times throughout the complaint but provides a single specific allegation to bolster her argument: alleging that “[l]aboratory analysis concluded this Product contains artificial, DL-Malic Acid instead of natural, L-Malic Acid.” (Id. ¶ 70; see also id. ¶ 69 (“Since there are natural and artificial types of malic acid, laboratory analysis is required to identify which type was used in the Product.“).) Again, both Steele and the rest of the Vanilla Cases provide this Court with guidance to interpret Plaintiff‘s allegation.
In Steele, the plaintiff similarly cited an “alleged experts’ test” in the form of “mass spectrometry analysis” of four chemical compounds present in vanilla beans. Steele, 472 F. Supp. 3d at 50–51. Even with specific allegations in the complaint based on this analysis, the court concluded that “[t]he test may just confirm that the vanilla flavor derives solely from vanilla extract” and that the results are “left to speculation.” Id. at 51. Several other Vanilla Cases came to the same conclusion: “[a]bsent any factually substantiated allegations that the [vanilla compounds] in [the defendant‘s] product are not derived from natural sources,” courts have found that plaintiffs “have failed to allege the presence of artificial flavors, and their claim that the ingredient list makes a materially misleading omission thus fails.” Wynn, 2021 WL 168541, at *6; see also Barreto, 518 F. Supp. 3d at 803 (finding “the analysis on which the [c]omplaint heavily relies does not state or otherwise plausibly support the conclusion that the [vanilla compound] comes from artificial rather than natural sources); Santiful, 2022 WL 268955, at *4 (noting that the “[m]ost devastating” challenge to the plaintiffs’ claim was that “[the] flavors can be either artificial or natural depending on how they are derived[,]” and finding that the complaint lacked “factually substantiated allegations that [the] flavors [were] in fact not derived from natural sources“).
Here, Plaintiff plainly makes bare, unsubstantiated allegations about the possibility that the Product contains artificial DL-Malic acid, without any additional factual support from product testing. Liberally construed, the operative Complaint alleges that the Product contains DL-Malic acid rather than natural L-Malic acid. (FAC ¶¶ 28–71.) However, instead of including factual allegations to support their claim, Plaintiff repeatedly deems it so with conclusory statements that Defendant “includes DL-Malic [a]cid to help make the Product taste tart and fruity[,]” “to create, enhance, simulate, and or/reinforce the sweet, fruity, and tart taste that consumers associate with the pictured fruits.” (Id. ¶¶ 65–67.) And in an effort to substantiate the claim, Plaintiff again determines—
Plaintiff appears to allege, in the alternative, that Defendant‘s labeling violates FDA‘s regulations governing how flavorings in food are labeled. Specifically, Plaintiff alleges that federal and state regulations “prohibit false and deceptive identification of the source of a food or beverage‘s characterizing flavors[,]” and that the Product is false and misleading because it is “required to be accompanied by the word(s) ‘artificial’ or ‘artificially flavored[.]‘” (FAC ¶¶ 72, 75–77.) Under
Accordingly, because the Court concludes that the Product‘s labeling would not mislead a reasonable consumer, Plaintiff‘s claims under the GBL are dismissed.3
2. Breach of Express Warranty
“An express warranty is an 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.” Barreto, 518 F. Supp. 3d at 806 (quotation marks omitted). To adequately state a claim for breach of an express warranty under New York law, plaintiffs must plead “(1) the existence of a material statement amounting to a warranty, (2) the buyer‘s reliance on this warranty as a basis for the contract with the immediate seller, (3) breach of the warranty, and (4) injury to the buyer caused by this breach.” Wynn, 2021 WL 168541, at *7 (quoting Goldemberg v. Johnson & Johnson Consumer Cos., Inc., 8 F. Supp. 3d 467, 482 (S.D.N.Y. 2014)). In addition, New York law requires that the buyer, “within a reasonable time after he discovers or should have discovered any breach[,] notify the seller of breach or be barred from any remedy.” Tomasino v. Estee Lauder Cos., 44 F. Supp. 3d 251, 260 (E.D.N.Y. 2014) (quoting
Plaintiff has failed to adequately allege that he provided Defendant with any manner of pre-suit notice, only vaguely alleging that “Plaintiff provided or will provide notice to [D]efendant, its agents, representatives, retailers, and their employees” and that “Defendant received notice and should have been aware of these misrepresentations due to complaints by third-parties, including regulators, competitors, and consumers, to its main offices, and by consumers through online forums.” (FAC ¶¶ 168–70.) These allegations are insufficient to plead pre-suit notice and avoid dismissal. See Colpitts v. Blue Diamond Growers, 527 F. Supp. 3d 562, 590 (S.D.N.Y. 2021) (finding allegation that “[the] [d]efendant received notice and should have been aware of these misrepresentations due to numerous
Plaintiff‘s arguments that pre-suit notice is not required or, in the alternative, that Plaintiff‘s original Complaint constitutes notice are unavailing. (See Pl.‘s Mem. 6.) While Plaintiff is correct that there is a “line of New York cases suggesting that the notice requirement does not apply to retail sales,” Neri v. R.J. Reynolds Tobacco Co., No. 98-CV-371, 2000 WL 33911224, at *19 (N.D.N.Y. Sept. 28, 2000) (citing Fischer v. Mead Johnson Labs., 341 N.Y.S.3d 257, 259 (App. Div. 1973)), numerous courts in the Second Circuit have explained that “th[is] exception appears to be exclusively applied where the party alleges physical, in addition to economic, injury,” Colella v. Atkins Nutritionals, Inc., 348 F. Supp. 3d 120, 143–44 (2018) (collecting cases); see also Colpitts, 527 F. Supp. 3d at 589 (explaining that “[b]ecause [the] [p]laintiff only alleges economic injury in the form of a price premium paid for the [p]roduct, this exception—to the extent it exists at all—is inapplicable,” and dismissing breach of express warranty claim for failure to allege pre-suit notice). And, while Plaintiff is correct that there is limited authority for the proposition that a plaintiff‘s pleadings could constitute pre-suit notice under certain circumstances, (see Pl.‘s Mem. 6), the Court is persuaded by Judge Failla‘s reasoning in Lugones v. Pete & Gerry‘s Organic, LLC, 440 F. Supp. 3d 226 (S.D.N.Y. 2020), in which she explained that the case from which this limited authority stems (and on which Plaintiff relies)—Panda Capital Corp. v. Kopo Int‘l, Inc., 662 N.Y.S.2d 584 (App. Div. 1997)—does not stand “for a broad rule that a filed complaint qualifies as sufficient and timely notice.” Lugones, 440 F. Supp. 3d at 244–45.
Accordingly, Plaintiff‘s claim for breach of express warranty is dismissed.
3. Fraud Claim
“Under New York law, stating a claim for fraud requires alleging (1) a material misrepresentation or omission of fact, (2) made with knowledge of its falsity, (3) with an intent to defraud, and (4) reasonable reliance on the part of the plaintiff, (5) that causes damage to the plaintiff.” Wynn, 2021 WL 168541, at *7 (citing Schlaifer Nance & Co. v. Estate of Warhol, 119 F.3d 91, 98 (2d Cir. 1997)). And, as explained above, to adequately plead fraud, plaintiffs must also meet the particularity requirement in
Defendant argues that Plaintiff‘s fraud claim falters because Plaintiff has failed to plead any elements of the fraud with requisite particularity, including a puzzling allegation regarding Defendant‘s recordkeeping leading to “knowledge” under New York law. (See Def.‘s Mem. 10.) While the Court agrees that Plaintiff‘s vague allegation that “the records Defendant is required to maintain . . . provided it with actual and constructive knowledge,” (FAC ¶ 176), in all likelihood does not pass muster under Rule 12(b)(6), or certainly under Rule 9(b), the Court need not even address this question because the FAC includes even fewer allegations as to scienter. While Plaintiff is correct that a fraud claim can plead scienter “generally,” courts have been clear that “the plaintiff must still allege facts that give rise to a strong inference of fraudulent intent.” Colpitts, 527 F. Supp. 3d. at 585 (emphasis added) (quoting Hesse v. Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 472 (S.D.N.Y. 2020)). “A plaintiff may demonstrate this inference by (1) alleging facts to show that defendants had both motive and opportunity to commit fraud, or (2) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness.” Id. (citations and quotation marks omitted). Liberally construed, the sum total of Plaintiff‘s allegations as to scienter are that Defendant “sold more of the Product and at higher prices than it would have in the absence of this misconduct, resulting in additional profits“, (FAC ¶ 110), and that “Defendant‘s fraudulent intent is evinced by its knowledge that the Product was not consistent with its representations,” (id. ¶ 178). However, it is well-settled that a company‘s general profit motive is insufficient to plead scienter. See, e.g., Duran, 450 F. Supp. 3d at 354 (“[S]imply alleging a defendant‘s self-interested desire to increase sales does not give rise to an inference of fraudulent intent.“). And courts frequently find that allegations such as that “[a] defendant‘s fraudulent intent is evinced by its failure to accurately identify the [p]roduct on the front label, when it knew its statements to be not true nor accurate” to be “conclusory” and “fall short of the Rule 9(b) standard.” Colpitts, 527 F. Supp. 3d at 585 (quotation marks omitted) (collecting cases).
Accordingly, Plaintiff‘s fraud claim is dismissed.
III. Conclusion
For the foregoing reasons, Defendant‘s Motion is granted. Plaintiff has requested that should the Court grant Defendant‘s motion, this Court grant Plaintiff leave to file a Second Amended Complaint. (See Pl.‘s Mem. 7.) Leave to amend a complaint should be freely given “when justice so requires.”
Here, Plaintiff has already amended her complaint once after being prompted by a pre-motion letter from Defendant stating all of the grounds on which it would move to dismiss. (See Dkt. No. 10.) “Generally, a plaintiff‘s failure to fix deficiencies in the previous pleading, after being provided notice of them, is alone sufficient ground to deny leave to amend.” Turnipseed, 2022 WL 657413, at *8 (collecting cases); see also Nat‘l Credit Union Admin. Bd. v. U.S. Bank Nat‘l Ass‘n, 898 F.3d 243, 257–58 (2d Cir. 2018) (“When a plaintiff was aware of the deficiencies in his complaint when he first amended, he clearly has no right to a second amendment even if the proposed second amended complaint in fact cures the defects of the first. Simply put, a busy district court need not allow itself to be imposed upon by the presentation of theories seriatim.“) (alteration, footnote, and quotation marks omitted).
Moreover, Plaintiff has failed to otherwise suggest that she is “in possession of facts that would cure the deficiencies that Defendants highlighted in the instant motion and that the Court highlighted in this [O]pinion.” Turnipseed, 2022 WL 657413, at *8 (collecting cases); see also TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d Cir. 2014) (plaintiff need not be given leave to amend if plaintiff fails to specify how amendment would cure the pleading deficiencies in the complaint).
As such, the Court dismisses Plaintiff‘s Amended Complaint with prejudice. The Clerk of the Court is directed to terminate the pending motion, (see Dkt. No. 22), enter judgment for Defendant, and to close the case.
SO ORDERED.
Dated: February 7, 2023
White Plains, New York
KENNETH M. KARAS
United States District Judge