Tapia v. The Coca-Cola Company, No. 4:2022cv01362 - Document 39 (N.D. Cal. 2023)
Court Description: ORDER DENYING DEFENDANTS 25 MOTION TO DISMISS. Case Management Statement due by 4/4/2023. Initial Case Management Conference set for 4/11/2023 02:00 PM. The 4/11/2023 proceeding will be held by AT&T Conference Line. The parties are advised that in the event of an audio problem, counsel should be prepared to attend the hearing via Zoom conference at the Courts direction. The court circulates the following conference number to allow the equivalent of a public hearing by telephone.For conference line information, see: https://apps.cand.uscourts.gov/telhrg/ All counsel, members of the public and press please use the following dial-in information below to access the conference line: Dial In: 888-808-6929Access Cod e: 6064255The Court may be in session with proceedings in progress when you connect to the conference line. Therefore, mute your phone if possible and wait for the Court to address you before speaking on the line. For call clarity, parties s hall NOT use speaker phone or earpieces for these calls, and where at all possible, parties shall use landlines. The parties are further advised to ensure that the Court can hear and understand them clearly before speaking at length.PLEAS E NOTE: Persons granted access to court proceedings held by telephone or videoconference are reminded that photographing, recording, and rebroadcasting of court proceedings, including screenshots or other visual copying of a hearing, is absolutely pr ohibited. See General Order 58 at Paragraph III.NOTE REGARDING TELEPHONIC CASE MANAGEMENT CONFERENCES: All attorneys and pro se litigants appearing for a telephonic case management conference are required to dial-in at least 15 minutes before the hearing to check-in with the CRD. Signed by Judge Haywood S. Gilliam, Jr. on 3/23/2023. (ndr, COURT STAFF) (Filed on 3/23/2023)
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Tapia v. The Coca-Cola Company Doc. 39 Case 4:22-cv-01362-HSG Document 39 Filed 03/23/23 Page 1 of 6 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 KYLA TAPIA, Plaintiff, 8 v. 9 ORDER DENYING DEFENDANT’S MOTION TO DISMISS Re: Dkt. No. 25 10 THE COCA-COLA COMPANY, Defendant. 11 United States District Court Northern District of California Case No. 22-cv-01362-HSG Pending before the Court is Defendant The Coca-Cola Company’s motion to dismiss. Dkt. 12 13 No. 25 (“Mot.”). The motion is fully briefed. See Dkt. Nos. 32 (“Oppo.”), 33 (“Reply”). The 14 Court finds this matter appropriate for disposition without oral argument and the matter is deemed 15 submitted. See Civil L.R. 7-1(b). For the reasons detailed below, the Court DENIES the motion. 16 I. 17 BACKGROUND Defendant manufactures, distributes, markets, labels, and sells berry flavored soda under 18 the brand name “Fanta.” See Dkt. No. 23 (“FAC”). Plaintiff Kyla Tapia alleges that the label 19 “100% Natural Flavors” on Defendant’s product is misleading and unlawful. See id. Plaintiff 20 alleges that Defendant flavors the product with DL-malic acid, an artificial type of malic acid, to 21 “create, enhance, simulate, and/or reinforce” the sweet and tart taste of berries. Id. ¶ 62. 22 According to Plaintiff, because malic acid comprises one third of the total acids in raspberries and 23 blueberries, it resembles the “characterizing flavors” of those fruits. Id. ¶¶ 40, 45, 74. Defendant 24 markets the product as containing “100% Natural Flavors” and only lists “malic acid” on the 25 ingredient label, rather than its artificial form, DL-malic acid. Id. ¶ 74. As a result, Plaintiff 26 contends, consumers are misled into believing that the product is flavored with ingredients from 27 natural sources, and induced to purchase a product of lesser value and quality than advertised. Id. 28 ¶ 126. Dockets.Justia.com United States District Court Northern District of California Case 4:22-cv-01362-HSG Document 39 Filed 03/23/23 Page 2 of 6 1 Plaintiff seeks to bring a statewide class action on behalf of herself and “(a)ll citizens of 2 California who purchased the Product for personal or household consumption and/or within the 3 statutory period.” Id. ¶ 153. The FAC alleges the following causes of action: 1) Violation of Cal. 4 Bus. & Prof. Code §§ 17200 et seq. – Unlawful Conduct Prong of the UCL; 2) Violation of Cal. 5 Bus. & Prof. Code §§ 17200 et seq. – Unfair and Fraudulent Conduct Prong of the UCL; 3) 6 Violation of Cal. Bus. & Prof. Code §§ 17500 et seq. [“FAL”] – False and Misleading 7 Advertising; 4) Violations of the Consumer Legal Remedies Act [“CLRA”], Cal. Civ. Code §§ 8 1750 et seq.; 5) Unjust Enrichment. Id. ¶¶ 163-210. Plaintiff seeks declaratory and injunctive 9 relief, damages, restitution, and disgorgement. See id. at 26. Defendant argues that Plaintiff has 10 not plausibly alleged deception and moves to dismiss the complaint in its entirety.1 See generally 11 Mot. 12 II. LEGAL STANDARD 13 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain 14 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 15 defendant may move to dismiss a complaint for failing to state a claim upon which relief can be 16 granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the 17 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 18 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 19 12(b)(6) motion, a plaintiff need only plead “enough facts to state a claim to relief that is plausible 20 on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 21 when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that 22 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 23 Rule 9(b) imposes a heightened pleading standard where fraud is an essential element of a 24 claim. See Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with particularity 25 the circumstances constituting fraud or mistake.”); see also Vess v. Ciba–Geigy Corp. USA, 317 26 27 28 Plaintiff has withdrawn her claims alleging that the blue color of Defendant’s soda leads consumers to expect fruit juice in the product. See Opp. at 4 n.1. The Court thus only will address whether Plaintiff has stated a plausible claim for 1) deception regarding natural flavors, and 2) unjust enrichment. 2 1 Case 4:22-cv-01362-HSG Document 39 Filed 03/23/23 Page 3 of 6 1 F.3d 1097, 1107 (9th Cir. 2003). A plaintiff must identify “the who, what, when, where, and how” 2 of the alleged conduct, so as to provide defendants with sufficient information to defend against 3 the charge. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997). However, “[m]alice, intent, 4 knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 5 Rule 9(b). In reviewing the plausibility of a complaint, courts “accept factual allegations in the United States District Court Northern District of California 6 7 complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 8 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nevertheless, 9 courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of 10 fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 11 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)). And even 12 where facts are accepted as true, “a plaintiff may plead [him]self out of court” if he “plead[s] facts 13 which establish that he cannot prevail on his ... claim.” Weisbuch v. Cty. of Los Angeles, 119 F.3d 14 778, 783 n.1 (9th Cir. 1997) (quotation omitted). Even if the court concludes that a 12(b)(6) motion should be granted, the “court should 15 16 grant leave to amend even if no request to amend the pleading was made, unless it determines that 17 the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 18 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (quotation omitted). 19 III. DISCUSSION 20 A. UCL, FAL, CLRA Claims 21 Plaintiff’s claims are based on the theory that the “100% Natural Flavors” label is unlawful 22 under California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer 23 Legal Remedies Act (CLRA) because the product in fact contains DL-malic acid, an artificial 24 flavor. See generally FAC. The UCL prohibits any “unlawful, unfair, or fraudulent business act 25 or practice.” Cal. Bus. & Prof. Code § 17200. The FAL prohibits any untrue or 26 misleading advertising. See Cal. Bus. and Prof. Code § 17500. The CLRA prohibits “unfair 27 methods of competition and unfair or deceptive acts or practices.” Cal. Civ. Code § 1770. 28 Despite their differences, UCL, FAL, and CLRA claims are all evaluated under the 3 Case 4:22-cv-01362-HSG Document 39 Filed 03/23/23 Page 4 of 6 1 “reasonable consumer” standard. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2 2008). Under this standard, Plaintiff must show that “members of the public are likely to be 3 deceived.” Id. (quotation omitted). “‘Likely to deceive’ implies more than a mere possibility that 4 the advertisement might conceivably be misunderstood by some few consumers viewing it in an 5 unreasonable manner.” Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508 (Cal. Ct. App. 6 2003) (quotation omitted). Rather, the test is whether “it is probable that a significant portion of 7 the general consuming public or of targeted consumers, acting reasonably in the circumstances, 8 could be misled.” Id. “California courts ... have recognized that whether a business practice is 9 deceptive will usually be a question of fact.” Williams, 552 F.3d at 938. It is thus a “rare situation” 10 United States District Court Northern District of California 11 when “granting a motion to dismiss [a UCL, CLRA, or FAL claim] is appropriate.” Id. at 939. Plaintiffs contend that because the soda contains DL-malic acid, an artificial flavor, 12 Defendant’s label “100% Natural Flavors” is misleading. FAC ¶ 73, 74. Further, in Plaintiff’s 13 view, by only listing “malic acid” in the ingredients list, Defendant conceals that the product 14 actually contains the artificial form, DL-malic acid. Id. ¶ 89. Defendant does not appear to 15 dispute the claim that product contains artificial DL-malic acid but maintains that there is no 16 deception. Mot. at 5. According to Defendant, there is nothing “objectively misleading” about the 17 label because DL-malic acid is only an artificial ingredient, not an artificial flavor. Id. 18 Defendant contends that Plaintiff has not plausibly alleged that DL-malic acid “functions 19 as a flavor” in the product because Plaintiff “offers only conclusory allegations, not facts” to 20 support her claims and contradicts herself by conceding that malic acid can function as a “flavor 21 enhancer” or “pH balancer.” Mot. at 3, 6. Defendant also contends that Plaintiff contradicts her 22 own claim that DL-malic-acid functions as a flavor because she alleges that it is “used to enhance 23 the taste of the fruits pictured on the Product.” Mot. at 8 (quoting FAC ¶ 94) (emphasis omitted). 24 In response, Plaintiff argues that the complaint clearly alleges the use of DL-malic acid as 25 a flavor in the product, given that malic acid “is most responsible for” the “unique tart taste” of 26 blueberries and raspberries. Opp. at 6. Plaintiff also argues that that her allegation that the malic 27 acid is “used to enhance the taste of the fruits” does not contradict her allegation that it is a flavor 28 because “an ingredient which enhances taste is by definition one that reinforces it, which is 4 Case 4:22-cv-01362-HSG Document 39 Filed 03/23/23 Page 5 of 6 1 sufficient to qualify as a flavor.” Id. at 8 (quotations omitted and cleaned up). Plaintiff further 2 contends that her claims and Defendant’s “alternative explanations” for DL-malic-acid’s function 3 are both plausible, which means that the FAC should not be dismissed. Id. at 8. While this is hardly the most overwhelming case the Court has seen, it finds that Plaintiff United States District Court Northern District of California 4 5 has sufficiently stated her deception claims so as to avoid dismissal. Whether a reasonable 6 consumer would be deceived by the label “100% Natural Flavors” turns on the question of 7 whether malic acid functions as a flavor or flavor enhancer. See Branca v. Bai, 2019 WL 1082562 8 at *9 (S.D. Cal. 2019) (explaining that “[i]f it is determined that the Defendants should have 9 disclosed the ‘artificial flavor,’ then a reasonable consumer would likely be deceived by the 10 Product’s packaging [label], which clearly states ‘No artificial flavors.’ (alteration in original) 11 (citations omitted)). The Court recognizes that the FDA distinguishes between an artificial flavor, 12 which imparts flavor not derived from a natural source, and a flavor enhancer, which supplements, 13 enhances, or modifies the original taste, without imparting a taste of its own. Compare 21 C.F.R. 14 § 101.22(a)(1) with § 170.3(o)(11). However, the Court finds that whether malic acid functions as 15 a flavor or a flavor enhancer in the soda at issue is a factual dispute not appropriate for resolution 16 at the motion to dismiss stage. See Branca, 2019 WL 1082562, at * 5 (denying motion to dismiss 17 because the court could not “make a factual determination at this time as to whether malic acid is 18 an artificial flavor”).2 At this stage, the Court cannot say as a matter of law that the product label was not 19 20 misleading or deceptive, or that a reasonable consumer would not be deceived by the product 21 label. See Williams, 552 F.3d at 939. The Court thus finds that Plaintiff has sufficiently pled 22 deception and DENIES the Motion to Dismiss as to these claims. 23 24 25 26 27 28 2 Defendant acknowledges that several district courts have found that the flavor versus flavor enhancer dispute is inappropriate to resolve at the motion to dismiss stage. Mot. at 6. Defendant just argues that those courts “misapplied” the pleading standard, reasoning that Plaintiff’s “legal conclusions” lack substantial factual allegations to survive a motion to dismiss. Id. at 7. However, though they are sparse, Plaintiff has alleged facts: malic acid comprises a large percentage of the total acids in berries and provides flavor by giving the product its unique tart taste. See FAC ¶¶ 45, 62, 74, 83. Even if it is possible that Plaintiff’s allegations may later be proved false, at the pleading stage, the Court must presume them to be true. See Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005). 5 Case 4:22-cv-01362-HSG Document 39 Filed 03/23/23 Page 6 of 6 1 B. Unjust Enrichment 2 Defendant argues that Plaintiff’s unjust enrichment claim is derivative of her other claims 3 and should likewise be dismissed. Mot. at 10 (citation omitted). Defendant’s argument relies 4 solely on the dismissal of Plaintiff’s deception claims and fails to articulate any other reason for 5 dismissal. As with Plaintiff’s deception claims, the Court finds that unjust enrichment is 6 sufficiently pled. Therefore, the Court DENIES the motion to dismiss the Plaintiff’s unjust 7 enrichment claim. 8 IV. 9 10 United States District Court Northern District of California 11 CONCLUSION Accordingly, the Court DENIES the motion to dismiss in its entirety. The Court further SETS a telephonic case management conference on April 11, 2023, at 2:00 p.m. All counsel shall use the following dial-in information to access the call: 12 Dial-In: 888-808-6929; 13 Passcode: 6064255 14 All attorneys and pro se litigants appearing for a telephonic case management conference 15 are required to dial in at least 15 minutes before the hearing to check in with the courtroom 16 deputy. For call clarity, parties shall NOT use speaker phone or earpieces for these calls, and 17 where at all possible, parties shall use landlines. The Court further DIRECTS the parties to meet 18 and confer and submit a joint case management statement by April 4, 2023. The parties should be 19 prepared to discuss how to move this case forward efficiently. Given the nature of the parties’ 20 contentions, the Court is specifically interested in discussing whether an early motion for 21 summary judgment, focused on whether the malic acid in fact functions as a flavor or flavor 22 enhancer in the product at issue, would be appropriate. 23 24 25 26 IT IS SO ORDERED. Dated: 3/23/2023 ______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge 27 28 6
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