Sonia Perez v. The Kroger Co., et al, No. 2:2017cv02448 - Document 52 (C.D. Cal. 2017)
Court Description: ORDER DENYING DEFENDANTS MOTION TO DISMISS 38 by Judge Otis D. Wright, II (lc). Modified on 12/22/2017 .lc).
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Sonia Perez v. The Kroger Co., et al Doc. 52 O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 SONIA PEREZ, individually, and on 12 behalf of a class of similarly situated 13 individuals, Case 2:17-cv-02448-ODW (AGR) Plaintiff, 14 MOTION TO DISMISS [38] v. 15 16 ORDER DENYING DEFENDANT’S THE KROGER CO.; and DOES 1–10, Defendants. 17 18 I. 19 INTRODUCTION 20 Pending before the Court is Defendant The Kroger Co.’s Motion to Dismiss 21 (Mot., ECF No. 38.) Plaintiff Sonia Perez’s Second Amended Class Action Complaint 22 (Second Am. Compl. (“SAC”), ECF No. 35.)1 For the reasons below, the Court 23 DENIES Kroger’s Motion. 24 II. FACTUAL BACKGRUOND 25 This is a consumer product class action. Perez alleges that Kroger’s use of the 26 statement “No Sugar Added” on Kroger 100% Apple Juice, Kroger 100% Natural 27 28 1 After considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-15. Dockets.Justia.com 1 Apple Juice, and Simple Truth Organic 100% Apple Juice (collectively, “Kroger 2 Apple Juice”), does not comply with the applicable Food and Drug Administration 3 (“FDA”) regulations, specifically 21 C.F.R. § 101.60(c)(2). 4 Perez further alleges that Kroger’s failure to comply with FDA regulations violates 5 various California consumer protection statutes—the Unfair Competition Law 6 (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq., the False Advertising Law 7 (“FAL”), Cal. Bus. & Prof. Code §§ 17500 et seq., and the Consumer’s Legal 8 Remedies Act (“CLRA”), Cal. Civ. Code §§ 1750 et seq. (SAC ¶¶ 53, 60, 66–74, 75– 9 88.) (SAC ¶¶ 1–2, 5–7.) 10 Perez alleges that in January 2017, she purchased Kroger 100% Apple Juice 11 after reading and relying on the product’s “No Sugar Added” label, because sugar 12 level is important to her and she believed that Kroger 100% Apple Juice was healthier 13 than other brands of apple juice. (SAC ¶¶ 16–18.) Perez claims that she would not 14 have bought Kroger 100% Apple Juice if she had known that similar products 15 contained the same level of sugar. (SAC ¶ 11.) If Kroger 100% Apple Juice had not 16 included the “No Sugar Added” label, Perez alleges, she would have either not 17 purchased the product or paid less for it. (SAC ¶ 13.) 18 On February 9, 2017, Perez filed a class action complaint in Los Angeles 19 County Superior Court against Kroger. (Compl., ECF No. 1.) On March 29, 2017, 20 Kroger removed the action to this Court pursuant to 28 U.S.C. §§ 1331, 1332(d), and 21 1453(b). (Not. of Removal, ECF No. 1.) On May 6, 2017, Kroger moved to dismiss 22 the complaint (ECF No. 10), and on May 26, 2017, Perez filed her first amended 23 complaint, mooting the motion to dismiss. (First Am. Compl., ECF No. 21.) Kroger 24 moved to dismiss again on June 16, 2017, arguing that Perez failed to state a claim 25 and that the doctrines of preemption, primary jurisdiction, and safe harbor required 26 dismissal. (ECF No. 24.) The Court granted Kroger’s Motion in part, finding that 27 Perez had failed to satisfy the requirements of Federal Rule of Civil Procedure 9(b) by 28 pleading fraud with particularity and dismissed her FAL and CLRA claims and some 2 1 of her UCL claims with leave to amend. (Order 8–10, ECF No. 34.) The Court 2 denied the remainder of Kroger’s Motion, rejecting its arguments that: (1) Perez 3 lacked standing to assert her UCL, FAL, and CLRA claims; (2) under the primary 4 jurisdiction doctrine the Court should dismiss or stay the case pending guidance from 5 the FDA; (3) Perez’s state law claims are preempted by federal law; and (4) Perez’s 6 claims should be dismissed under the safe harbor doctrine. (Id. at 10–15.) 7 Perez timely submitted her Second Amended Complaint (“SAC”) on September 8 8, 2017. Kroger moved to dismiss the SAC on October 6, 2017. (Mot., ECF No. 38.) 9 By the present motion, Kroger moves to dismiss the entire action for failure to state a 10 claim. Kroger has also requested the Court to take judicial notice of a number of 11 documents referenced in Kroger’s Motion and its Reply. (ECF Nos. 39, 45.) Perez 12 opposes Kroger’s Motion and the request for judicial notice related to Kroger’s Reply. 13 (ECF Nos. 43, 47.) 14 III. LEGAL STANDARD 15 A complaint must “contain sufficient factual matter, accepted as true, to state a 16 claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 17 (2009). The determination whether a complaint satisfies the plausibility standard is a 18 “context-specific task that requires the reviewing court to draw on its judicial 19 experience and common sense.” Id. at 679. A court is generally limited to the 20 pleadings and must construe all “factual allegations set forth in the complaint . . . as 21 true and . . . in the light most favorable” to the plaintiff. Lee v. City of Los Angeles, 22 250 F.3d 668, 688 (9th Cir. 2001). But a court need not blindly accept conclusory 23 allegations, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. 24 Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The court must dismiss a 25 complaint that does not assert a cognizable legal theory or fails to plead sufficient 26 facts to support an otherwise cognizable legal theory. Fed. R. Civ. P. 12(b)(6); 27 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 28 In addition, where, as here, the plaintiff’s claim sounds in fraud, the complaint 3 1 must comply with Federal Rule of Civil Procedure 9(b)’s heightened pleading 2 standard. Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 3 2008); Bly-Magee v. Cal., 236 F.3d 1014, 1018 (9th Cir. 2001). Rule 9(b) requires the 4 party alleging fraud to “state with particularity the circumstances constituting fraud,” 5 Fed. R. Civ. P. 9(b), including “the who, what, when, where, and how of the 6 misconduct charged.” Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993, 998 (9th 7 Cir. 2010) (internal quotation marks omitted); Vess v. Ciba-Geigy Corp. USA, 317 8 F.3d 1097, 1106 (9th Cir. 2003). “In addition, the plaintiff must set forth what is false 9 or misleading about a statement, and why it is false.” Ebeid, 616 F.3d at 998 10 (citations, brackets, and internal quotation marks omitted). The purpose of Rule 9(b) 11 is: 16 to give defendants adequate notice to allow them to defend against the charge and to deter the filing of complaints as a pretext for the discovery of unknown wrongs, to protect professionals from the harm that comes from being subject to fraud charges, and to prohibit plaintiffs from unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis. 17 In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir. 1996) (citations, brackets, 18 and internal quotation marks omitted). 12 13 14 15 IV. 19 DISCUSSION 20 Kroger argues that Perez’s SAC must be dismissed because: (1) Perez has not 21 stated a claim as to how a reasonable consumer could be deceived by the “No Sugar 22 Added” label; (2) Perez lacks standing because she has not suffered an economic 23 injury; and (3) Perez’s CLRA claim fails because the “No Sugar Added” label is true. 24 (Mot.) The Court will address each argument in turn. 25 A. Requests for Judicial Notice 26 While a district court generally may not consider any material beyond the 27 pleadings in ruling on a Rule 12(b)(6) motion, a court may consider any documents 28 referenced in the complaint, and may take judicial notice of matters in the public 4 1 record, without converting a motion to dismiss into one for summary judgment. See 2 Lee, 250 F.3d at 688–89. 3 4 Kroger requests the Court to take judicial notice of the following exhibits (ECF No. 39): 5 Exhibit A: The product label for Martinelli’s 100% Pure Apple Juice. 6 Available at https://www.martinellis.com/products/apple-juice-50oz/; 7 Exhibit B: The nutrition fact panel for Martinelli’s 100% Pure Apple 8 Juice. 9 Available at https://www.martinellis.com/nutrition/apple-juice- 50oz/.; 10 Exhibit C: A printout of the product page for Martinelli’s 100% Pure 11 Apple Juice for Ralphs at 3410 West 3rd Street, Los Angeles, CA. 12 Available 13 juice/0004124400152; 14 at https://www.ralphs.com/p/martinelli-s-apple- Exhibit D: The product label and nutrition fact panel for Langers 100% 15 Apple 16 http://www.langers.com/products/langers/3liter.html; 17 Juice. Available at Exhibit E: A printout of the product page for Langers Apple Juice for 18 Ralphs at 3410 West 3rd Street, Los Angeles, CA. Available at 19 https://www.ralphs.com/p/langers-100-apple-juice/0004175500106; and 20 Exhibit F: A printout of the product page for Kroger 100% Apple Juice 21 for Ralphs at 3410 West 3rd Street, Los Angeles, CA. Available at 22 https://www.ralphs.com/p/kroger-100-apple-juice/0001111082114 23 The Court finds Kroger’s Exhibits A through F appropriate for judicial notice. 24 The SAC already contains an image of the front label for Kroger Apple Juice, but 25 omits the nutrition labeling on the side of the packaging, which Kroger submits as 26 Exhibit B. (SAC 2–4.) Additionally, the SAC references and describes the labels of 27 Martinelli’s Apple Juice and Langers Apple Juice. (Id. ¶ 16.) “A district court ruling 28 on a motion to dismiss may consider documents whose contents are alleged in a 5 1 complaint and whose authenticity no party questions, but which are not physically 2 attached to the [plaintiff’s] pleading.” Parrino v. FHP, Inc., 146 F.3d 699, 705 (9th 3 Cir. 1998) (internal quotation marks omitted). 4 motions to dismiss product-labeling claims routinely take judicial notice of images of 5 the products packaging.” Kanfer v. Pharmacare US, Inc., 142 F. Supp. 3d 1091, 6 1098–1099 (S.D. Cal. 2015). Accordingly, the Court GRANTS Kroger’s request for judicial notice as to 7 8 Moreover, “[c]ourts addressing Exhibits A through F. (ECF No. 39.) 9 Kroger also asks the Court to take judicial notice of a letter from the FDA to an 10 unrelated third party filed in the state court action, Perez v. Naked Juice Co. of 11 Glendora, Inc., et al., No BC64926. (ECF No. 45.) The letter purports to establish 12 that the FDA provided guidance contradicting Perez’s deception claim. (See Reply 2, 13 ECF No. 44.) Kroger seeks to use it for exactly that purpose—to argue that Perez’s 14 deception claim is barred by recent FDA guidance. (Id.) Perez objects to Kroger’s 15 request for judicial notice. (ECF No. 47.) 16 Although a court may take judicial notice of the existence and content of files in 17 another court, it cannot take judicial notice of the truth of the facts recited therein. 18 Lee, 250 F.3d at 688–90. Because Kroger asks the Court to take judicial notice of the 19 facts contained within the FDA letter, which the Court cannot do, the Court DENIES 20 Kroger’s request for judicial notice as to that document. (ECF No. 45.) 21 B. Reasonable Consumer Standard 22 Kroger argues that Perez has not sufficiently alleged how she was misled or 23 how a reasonable consumer is likely to be deceived by Kroger’s “No Sugar Added” 24 claim, which is an accurate statement. 25 premised on Kroger’s alleged violation of an FDA labeling regulation, 21 C.F.R. § 26 101.60(c)(2). That regulation provides: The terms “no added sugar,” “without added sugar,” or “no sugar added” may be used only if: 27 (Mot. 3.) 28 6 Perez’s causes of action are 1 (i) 2 3 4 (ii) 5 6 (iii) 7 8 9 10 11 12 13 14 (iv) (v) No amount of sugars, as defined in § 101.9(c)(6)(ii), or any other ingredient that contains sugars that functionally substitute for added sugars is added during processing or packaging; and The product does not contain an ingredient containing added sugars such as jam, jelly, or concentrated fruit juice; and The sugars content has not been increased above the amount present in the ingredients by some means such as the use of enzymes, except where the intended functional effect of the process is not to increase the sugars content of a food, and a functionally insignificant increase in sugars results; and The food that it resembles and for which it substitutes normally contains added sugars; and The product bears a statement that the food is not “low calorie” or “calorie reduced” (unless the food meets the requirements for a “low” or “reduced calorie” food) and that directs consumers’ attention to the nutrition panel for further information on sugar and calorie content. 15 Perez alleges that Kroger Apple Juice does not comply with § 101.60(c)(2)(iv) 16 because it does not resemble and substitute for foods that normally contain added 17 sugar. (SAC ¶ 47.) According to Perez, the food that Kroger Apple Juice “resembles 18 and for which it substitutes” is other brands of 100% apple juice from concentrate, 19 which does not normally contain added sugars. (Id. ¶¶ 50–51.) Perez further alleges 20 that the presence of the “No Sugar Added” label on Kroger 100% Apple Juice, and the 21 absence of such a label on competitors’ products misled her into thinking that Kroger 22 100% Apple Juice was healthier. (Id. ¶¶ 17–18.) 23 False advertising claims under the FAL, the CLRA, and the fraudulent and 24 unfair prongs of the UCL are governed by the reasonable consumer standard. 25 Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008); Kasky v. Nike, Inc., 26 27 Cal. 4th 939, 951 (2002); Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 27 504 (2003). Under the reasonable consumer standard, a plaintiff must show that 28 members of the public are likely to be deceived by the defendant’s representations. 7 1 Williams, 552 F.3d at 938 (“The California Supreme Court has recognized that these 2 laws prohibit not only advertising which is false, but also advertising which[,] 3 although true, is either actually misleading or which has a capacity, likelihood or 4 tendency to deceive or confuse the public.” (internal quotation marks omitted)). A 5 likelihood of deception means that “it is probable that a significant portion of the 6 general consuming public or of targeted consumers, acting reasonably in the 7 circumstances, could be misled.” Lavie, 105 Cal. App. 4th at 508. 8 Kroger points to this Court’s Order on the previous motion to dismiss, in which 9 it found that the First Amended Complaint lacked sufficient detail to establish how 10 exactly the presence of the “No Sugar Added” claim misled her, or would mislead a 11 reasonable consumer, into purchasing the apple juice. In that Order, the Court found 12 that Perez had failed to satisfy the heightened pleading standard in 9(b), because she 13 did not name which competitors’ products did not portray the “No Sugar Added” 14 label. (Order 9.) 15 In her SAC, Perez corrects the deficiencies outlined in the Court’s previous 16 Order. Perez now alleges that she observed two different apple juice containers, 17 Martinelli’s and Langers, which did not include a “No Sugar Added” label. (SAC 18 ¶ 17.) Therefore, and for the reasons discussed in the Court’s previous Order,2 Perez 19 has sufficiently stated a claim for violations of the UCL, FAL, and CLRA. 20 C. Standing 21 Kroger next argues that Perez has not suffered an economic injury as a result of 22 Kroger’s conduct, and thus does not have statutory standing. (Mot. 6.) Most of 23 Kroger’s argument on this issue centers on assertions the Court previously rejected. 24 (See Order 10–11.) The only new argument from Kroger on this point is that the 25 competing apple juices Perez saw without the “No Sugar Added” label—Martinelli’s 26 27 28 2 The Court incorporates, by reference, its Order on Kroger’s previous Motion to Dismiss. (ECF No. 34.) 8 1 and Langers—were actually more expensive than Kroger’s 100% Apple Juice. (Mot. 2 8.) Thus, her decision not to buy them did not result in economic injury. 3 A plaintiff, however, can satisfy the economic injury requirement by alleging 4 that “he or she would not have bought the product but for the misrepresentation.” 5 Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310, 329 (2011). This is what Perez has done. 6 Perez alleges that if Kroger Apple Juice’s label had not included the “No Sugar 7 Added” claim, she would not have purchased it, or would have paid less for it. (SAC 8 ¶ 20.) This satisfies the standards set out in Kwikset, despite Kroger’s argument 9 regarding the competing juices. Hinojos, 718 F.3d 1098, 1107 (9th Cir. 2013) (“[W]e 10 hold that when a consumer purchases merchandise on the basis of false [] information, 11 and when the consumer alleges that he would not have made the purchase but for the 12 misrepresentation, he has standing to sue under the UCL and FAL because he has 13 suffered an economic injury.”). Accordingly, Perez has standing to assert her claims. 14 D. Perez’s CLRA Claim 15 Kroger argues that the Court should dismiss Perez’s CLRA claim because she 16 admits that the “No Sugar Added” label on Kroger Apple Juice is “literally true.” 17 (Mot. 9.) The Court already addressed and rejected that very argument in its previous 18 Order and declines to address it again here. (See Order 9.) V. 19 CONCLUSION 20 Accordingly, the Court DENIES Kroger’s Motion to Dismiss. (ECF No. 38.) 21 IT IS SO ORDERED. 22 December 22, 2017 23 24 25 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 26 27 28 9
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