ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS
I. BACKGROUND
Rebecca Yumul filed this putative class action against defendant Smart Balance, Inc. on February 8, 2010. 1 Yumul’s complaint alleges that she purchased Nucoa margarine, a product manufactured by Smart Balance, repeatedly during the class period, from January 1, 2000 until the present. 2
Yumul alleges that Nucoa contains artificial trans fat, which increases the risk of coronary heart disease by raising the level of “bad” LDL blood cholesterol and lowering the level of “good” HDL blood cholesterol.
3
Yumul also alleges that trans fat
Yumul asserts that any statute of limitations that might otherwise bar the action is tolled because she “did not discovery that SBI’s labeling of Nucoa Real Margarine was false, deceptive, or misleading until late January 2010, when she learned of the causal links between Nucoa Real Margarine and coronary heart disease, type-2 diabetes, and cancer.” 7 The first amended complaint asserts that Yumul is a reasonably diligent consumer. It alleges that she “would not have been and was not able to discover SBI’s deceptive practices and lacked the means to discover those practices because, like nearly all consumers, she is not an expert on nutrition and does typically read or have access to those scholarly journals ... where the scientific evidence on trans fat’s dangers ha[ve] been published.” The complaint also asserts that “SBI’s labeling practices (in particular, falsely representing Nucoa Real Margarine as ‘healthy’ and good for eholesterol) have actively impeded ... Yumul’s ability ... to discover its fraud.” 8
Yumul pleads three causes of action: (1) violation of California’s unfair competition law (“UCL”), California Business & Professions Code §§ 17200 et seq.; (2) violation of California’s false advertising law (“FAL”), California Business & Professions Code §§ 17500 et seq.; and (3) violation of California’s Consumer Legal Remedies Act (“CLRA”), California Civil Code § 1750 et seq.
She seeks (1) an injunction requiring Smart Balance to cease its misleading advertising practices; (2) a mandatory injunction requiring Smart Balance to conduct a corrective advertising campaign; (3) restitution of the amount by which Smart Balance has been unjustly enriched by its false advertising; and (4) a mandatory injunction requiring that Smart Balance destroy all misleading and deceptive materials and products.
II. DISCUSSION
A. Legal Standard Governing Motions To Dismiss Under Rule 12(b)(6)
A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in a complaint. A Rule 12(b)(6) dismissal is proper only where there is either a “lack of a
The court must accept all factual allegations pleaded in the complaint as true, and construe them and draw all reasonable inferences from them in favor of the non-moving party.
Cahill v. Liberty Mutual Insurance Co.,
To survive a motion to dismiss, plaintiffs complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ... A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal,
B. Whether the Court May Consider Documents Submitted with the Motion to Dismiss
In deciding a Rule 12(b)(6) motion, the court generally looks only to the face of the complaint and the documents attached thereto.
Van Buskirk v. Cable News Network, Inc.,
Defendant cites a number of cases in which district courts have considered exemplars of purportedly false advertising in deciding motions to dismiss. In
Haskell v. Time, Inc.,
“Plaintiff does not deny that the exemplars, or virtually identical other mailings, are in his possession, are central to his claim, and are referred to in detail in the complaint. Rather, he argues that the exemplars are not the exact or only mailings on which he bases his claims and that they were handpicked by the defendants to succeed on their motions to dismiss. He suggests that he may have exemplars in which the challenged statements appear in a more misleading context or that such examples may turn up through discovery. But plaintiff does not provide any basis in fact for these conclusory assertions. He certainly had exemplars either identical or very similar to the ones provided by defendants when drafting the complaints. He has been on notice for some time — at least since the first status conference — that defendants intended to make this motion to dismiss based on exemplars. And he has provided no competing examples in which the context of the alleged misrepresentations is different from the exemplars. His hope that discovery will somehow turn up favorable examples is not sufficient to deprive defendants of their opportunity to avoid the burdens of discovery through a motion to dismiss.
A ruling to the contrary would permit a plaintiff in a case such as this, involving allegedly misleading statements, to deprive the defendant of the opportunity to make a motion to dismiss based onthe context of the particular statements on the bare claim that there may be more damaging contexts. This would be inconsistent with case law that permits the court to decide as a matter of law whether allegedly misleading statements amount to mere ‘puffery’ or are factual claims on which a reasonable consumer could rely.” Id. at 1397-98. 9
Defendant submits the declaration of an executive at a Smart Balance subsidiary, GFA Brands, Inc (“GFA”), which attaches three labels for Nucoa that were in use during the class period. The declaration also attaches “all advertising for Nucoa Real Margarine circulated from January 1, 2000 to January 1, 2004 that could be located at this time.” 10 The core problem with defendant’s submission is that the authenticity of the labels is in dispute. In her opposition, plaintiff asserts that she has “had no chance to assess the authenticity of the newly proffered labels and advertisements thus far [and] should have a reasonable opportunity to assess their authenticity before the Court accepts them as fact.” 11
The
Haskell
court emphasized that the plaintiff there had notice at an early status conference of defendant’s intent to present exemplars and move to dismiss on that basis. In this case, there is no record that Yumul had notice of Smart Balance’s intent to use exemplars until the present motion was filed on June 21, 2010. By that time, defendant had requested and the court had granted a stay of all discovery. Although the court lifted the stay with respect to discovery concerning the labels on June 28, 2010, it is not reasonable to conclude that plaintiff had adequate time to complete discovery regarding the labels before July 6, 2010, the day on which her opposition to the motion to dismiss was due. Smart Balance seeks to take advantage of the rule articulated in Haskell— which is dependent on plaintiffs notice of defendant’s intent to rely on exemplars and ability to investigate and discover the documents defendant intends to proffer to the court — while simultaneously asking the court to enter orders that prevent plaintiff from conducting discovery regarding these documents. It is unclear whether
Haskell
The court therefore declines to consider the Dray declaration and the documents attached thereto. As a result, defendant’s arguments that plaintiff cannot prove there was fraudulent advertising prior to 2009 because in earlier years its labels did not include the word “healthy,” and that plaintiff cannot establish reasonable reliance after late 2009 because she purchased margarine both when the label did and did not include the word “healthy” fail because they rely on facts not alleged in the complaint and not contained in any document that can be judicially noticed or that is properly considered under the incorporation by reference doctrine.
C. Whether Plaintiffs Complaint Should Be Dismissed Because It Is Based on Conduct Outside the Applicable Limitations Period
Yumul alleges a class period commencing January 1, 2000 and continuing to the present. CLRA and FAL claims are subject to a three-year statute of limitations, while UCL claims are subject to a four-year statute of limitations. Cal. Crv. Code § 1783 (establishing a three-year limitations period for CLRA actions); Cal. Bus. & Prop. Code § 17208 (setting a four-year statute of limitations for actions under the UCL); Cal. C.C.P. § 338(a) (providing a default three-year statute of limitations for actions created by statute);
County of Fresno v. Lehman,
“In a federal diversity action based on alleged violations of state law, the state statute of limitations controls.”
Adams v. I-Flow Corp.,
No. CV09-09550 R(SSx),
“Ms. Yumul did not discovery that SBI’s labeling of Nucoa Real Margarine was false, deceptive, or misleading until late January 2010, when she learned of the causal links between Nucoa Real Margarine and coronary heart disease, type-2 diabetes, and cancer.
Ms. Yumul is a reasonably diligent consumer who exercised reasonable diligence in her purchases, use, and consumption of Nucoa Real Margarine. Nevertheless, she would not have been and was not able to discover SBI’s deceptive practices and lacked the means to discover those practices because, like nearly all consumers, she is not an expert on nutrition and does typically read or have access to those scholarly journals ... where the scientific evidence on trans fat’s dangers ha[ve] been published. Furthermore, SBI’s labeling practices (in particular, falsely representing Nucoa Real Margarine as ‘healthy’ and good for cholesterol) have actively impeded [her] ability ... to discover its fraud.” 12
Smart Balance argues that this allegation is factually insufficient to support tolling of the statute of limitations. It asserts that Yumul must allege sufficient facts to invoke either the delayed discovery or fraudulent concealment rules.
“In order to invoke [the delayed discovery exception] to the statute of limitations, the plaintiff must specifically plead facts which show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.”
In re Conseco Insurance Co. Annuity Marketing & Sales Practices Litigation,
No. C-05-04726 RMW,
Yumul alleges that in late January 2010 she learned of a causal link between Nucoa and coronary heart disease, type-2 diabetes, and cancer. She asserts that the connection between the ingredients in Nucoa and these purported negative health effects is not known to the general public, that she did not have access to scholarly publications that detailed scientific information suggesting such a link, and that the statements on the Smart Balance packaging did not put her on notice that she should make inquiry.
15
Defendant attacks the sufficiency of this pleading in four brief
Defendant asserts,
inter alia,
that allegations of delayed discovery are subject to the particularity requirement of Rule 9(b) of the Federal Rules of Civil Procedure. The court’s order on the first motion to dismiss held only that Rule 9(b) applies to the pleading of fraudulent concealment. Given that the rule concerns no allegations of “fraud or mistake,” and given that neither fraud nor mistake is required to prove delayed discovery, the court concludes that Rule 9(b) does not apply. Indeed, the court has found no decision applying Rule 9(b) to the pleading of delayed discovery. Rather, in a thoughtful and lengthy opinion, Judge Oliver Wanger of the Eastern District of California considered whether a heightened pleading standard applied to allegations of delayed discovery and concluded that it did not.
Bonds v. Nicoletti Oil, Inc.,
No. CV-F-07-1600 OWW/DLB,
Plaintiffs complaint contains a “short and plain statement” that she is a
A plaintiff seeking to take advantage of the delayed discovery rule must plead “the time and
manner
of discovery.”
E-Fab,
III. CONCLUSION
For the reasons stated, the court grants defendant’s motion to dismiss without prejudice insofar as it seeks to dismiss claims that predate the limitations period. Plaintiff is directed to file no later than fourteen days after the date of this order an amended complaint that alleges the manner in which plaintiff discovered the facts underlying her claims. Defendant’s motion to dismiss is otherwise denied.
Notes
.Complaint for Violations of Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act ("Complaint”), Docket No. 1 (Feb. 8, 2010).
.First Amended Complaint for Violations of Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act (“FAC”), Docket No. 20 (June 4, 2010), ¶ 3.
.Id.., ¶¶ 4 — 5.
.Id., ¶¶ 6-7. See also id., ¶ 61 ("SBI's Nucoa Real Margraine contains substantial and dangerous levels of artificial trans fat, which increases LDL cholesterol and decreases HDL cholesterol levels. SBI capitalizes on a common misperception of the relative importance of dietary cholesterol to fool consumers who are concerned about heart health, leading them to purchas[e] a produce that increases their LDL serum cholesterol, lowers their HSL serum cholesterol, and raises their risk for heart disease, diabetes, and cancer”). Much of the complaint recites scientific research establishing that trans fat causes adverse physical health effects. (Id., ¶¶ 16-57.)
. Id., ¶ 8. See also id., ¶ 62 ("Nucoa Real Margarine is anything but 'healthy.' To the contrary, Nucoa Real Margarine is extremely high in trans fat, which causes heart disease, cancer, and type-2 diabetes, and therefore harms rather than benefits human health”).
. Id., ¶ 62.
. Id., ¶ 79.
. Id., ¶ 80.
.Defendant also cites
In re Century 21-RE/ MAX Real Estate Advertising Claims Litigation,
. Declaration of Peter Dray and Attached Exhibits in Support of Motion to Dismiss ("Dray Decl.”), Docket No. 21 (June 21, 2010).
. Opp. at 4 (footnote omitted).
. FAC, ¶¶ 79-80.
. FAC, ¶¶ 69-70.
. The title of the tolling section in the FAC is "Additional Tolling Allegations (Delayed Discovery of FAL and CLRA Claims).” Moreover, plaintiffs opposition brief addresses only delayed discovery.
.In its reply, defendant references paragraphs in the complaint that in turn reference the report of an advisory committee of the
. Judge Wanger relied on the Supreme Court's decision in
Swierkiewicz
v.
Sorema, N.A.,
. Defendant’s argument regarding the publicity surrounding the health risks of trans fat incorporates facts outside the pleading. While defendant correctly notes that the first amended complaint references trans fat bans in New York and elsewhere (FAC, ¶ 52), it does not suggest that there were “well publicized report[s]” of the bans (Reply at 7). Consequently, the fact that such reports may have been published constitutes a fact outside the pleadings that cannot be considered in deciding this motion. Similarly, although the first amended complaint references a 2008 law banning trans fat, it notes that the law did not take effect until January 1, 2010 (FAC, ¶ 51). Additionally, defendant's assertion in reply that the ban was publicized (Reply at 7) constitutes a fact outside the record. “The question when a plaintiff actually discovered or reasonably should have discovered the facts for purposes of the delayed discovery rule is a question of fact unless the evidence can support only one reasonable conclusion.”
Ovando v. County of Los Angeles,
The court notes, moreover, that defendant's contention was recently rejected in
Unruh-Haxton v. Regents of University of California,
