Smedt v. The Hain Celestial Group, Inc., No. 5:2012cv03029 - Document 51 (N.D. Cal. 2013)

Court Description: ORDER granting 29 Motion to Dismiss. If Plaintiff wishes to further amend her complaint, the Court orders that it be pled in compliance with the pleading standards of Rules 8 and 9 and filed within 15 days of the date of this Order. Signed by Judge Edward J. Davila on 8/16/2013. (ejdlc3, COURT STAFF) (Filed on 8/16/2013) Modified on 8/16/2013 (ejdlc1, COURT STAFF).

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Smedt v. The Hain Celestial Group, Inc. Doc. 51 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION United States District Court For the Northern District of California 10 11 12 13 14 15 SUZANNE SMEDT, individually and on behalf ) of all others similarly situated, ) ) Plaintiff, ) ) v. ) ) THE HAIN CELESTIAL GROUP, INC., ) ) Defendant. ) ) Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS [Re: Docket No. 29] 16 Plaintiff Suzanne Smedt (“Plaintiff”) filed this putative class action against Defendant, The 17 Hain Celestial Group, Inc. (“Defendant”). Plaintiff alleges that the labeling on several of 18 Defendant’s food and beverage products as well as websites related to Defendant’s products 19 contain statements amounting to misbranding and deception in violation of California and federal 20 laws and regulations. Presently before the Court is Defendant’s motion to dismiss Plaintiff’s 21 Amended Complaint. See Docket Item No. 29. Having fully reviewed the parties’ papers, the Court 22 will grant Defendant’s motion. 23 24 I. Background 25 Plaintiff, a resident of Los Gatos, California, alleges that since 2008 (the four years relative 26 to the alleged class period) she purchased an indeterminate quantity of the following of 27 Defendant’s products: Coconut Dream Coconut Drink, Terra Stripes & Blues Sea Salt Potato 28 1 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS Dockets.Justia.com 1 Chips, Terra Exotic Vegetable Mediterranean Chips, and Sensible Portions Sea Salt Garden Veggie 2 Straws. Am. Compl. ¶ 118, Docket Item No. 25. The Amended Complaint also contains several 3 statements that assert or imply that Plaintiff has also purchased what she refers to as “Misbranded 4 Food Products.” See, e.g., id. § E (entitled “Plaintiff Purchased Defendant’s Misbranded Food 5 Products”); id. ¶ 31. Plaintiff defines the term “Misbranded Food Products” in the opening of the 6 Amended Complaint in the following way: 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 In order to remedy the harm arising from Defendant’s illegal conduct, which has resulted in unjust profits, Plaintiff brings this action on behalf of a national class, and alternatively, a California sub-class, of consumers who, within the last four years, purchased Defendant’s products: (1) labeled with the ingredient “Evaporated Cane Juice” or “Organic Evaporated Cane Sugar Juice;” (2) labeled “All Natural” and/or “Only Natural” but which contain artificial ingredients, flavorings, added coloring, and/or chemical preservatives; and/or (3) labeled with a “No Trans Fat” or other nutrient content claim but which contain fat, saturated fat, sodium or cholesterol in excess of the disqualifying amounts stated in 21 C.F. R. § 101.13(h); (collectively products in categories 1, 2, and 3 are referred to herein as “Misbranded Food Products”). Am. Compl. at 1–2 (footnote omitted). 15 Plaintiff argues that several statements on the packages and websites of these and other 16 products were false, misleading, or otherwise unlawful. Plaintiff alleges that Defendant did not 17 comply with state and federal regulations when making the following types of representations 18 about its products: (a) nutrient content claims, including “no trans fat” claims; (b) the amounts of 19 (c) nutritional value claims; (d) “all natural,” “only natural,” “enriched,” “healthy,” “excellent 20 source of” claims and the use of these and similar terms; (e) failure to disclose the presence of 21 artificial colors, and artificial flavors; and (f) the confusing use of the terms “Evaporated Cane 22 Juice” and “Organic Evaporated Cane Sugar Juice.” See id. § C (entitled “Defendant’s Food 23 Products Are Misbranded”). 24 The Amended Complaint also states that Plaintiff read the labels on Defendant’s 25 Misbranded Food Products as well as Defendant’s website containing information about the 26 Misbranded Food Products. Id. ¶ 119. Plaintiff avers that she relied on the statements located on 27 the labeling and the websites when making her decision to purchase the products: 28 2 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 Plaintiff reasonably relied on Defendant’s package labeling and website claims including (1) the “No Trans Fat” nutrient content claims and the nutrient content claims that the products were “enriched” with, contained “more” or were “good” or “excellent” sources of vitamins or minerals; (2) the “All Natural” and/or “Only Natural” label claims and (3) the ingredients list referencing “evaporated cane juice” and “organic evaporated cane sugar juice” and based and justified the decision to purchase Defendant’s products in substantial part on Defendant’s package labeling and website claims. Id. ¶ 120. She also asserts that she did not know, nor could she reasonably have known, that Defendant’s products were mislabeled, and that she would not have purchased these products “absent the unlawful claims.” Id. ¶¶ 120–23 On October 1, 2012, Plaintiff filed the Amended Class Action Complaint (otherwise referred to herein as the “Amended Complaint”) on behalf of herself and a putative class she defines as follows: All persons in the United States, and alternatively in a sub-class of consumers in California who, within the last four years, purchased Defendant’s products: (1) labeled with the ingredient “Evaporated Cane Juice” or “Organic Evaporated Cane Sugar Juice;” (2) labeled “All Natural” and/or “Only Natural” but which contain artificial ingredients, flavorings, added coloring, and/or chemical preservatives; and/or (3) labeled with a “No Trans Fat” or other nutrient content claim but which contain fat, saturated fat, sodium or cholesterol in excess of the disqualifying amounts stated in 21 C.F. R. § 101.13(h) (the “Class”). 17 Id. ¶ 127 (footnotes omitted). In the Amended Complaint, Plaintiff brings forth the following 18 causes of action: violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. 19 Code § 17200 et seq. (counts 1–3); violation of the False Advertising Law (“FAL”), Cal. Bus. & 20 Prof. Code §§ 17500 et seq. (counts 4–5); violation of the Consumers Legal Remedies Act 21 (“CLRA”), Cal. Civ. Code § 1750 et seq. (count 6); restitution based on unjust enrichment or 22 quasi-contract (count 7); and breach of warranty in violation of the Song–Beverly Consumer 23 Warranty Act, Cal. Civ. Code § 1790 et seq. (count 8) and the Magnuson–Moss Warranty Act, 15 24 U.S.C. § 2301 et seq. (count 9). 25 California’s Sherman Food, Drug, and Cosmetic Laws adopt the federal labeling 26 requirements as the food labeling requirements of the state of California. See Cal. Health & Safety 27 Code § 110100 (“All food labeling regulations and any amendments to those regulations adopted 28 3 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 pursuant to the federal act, in effect on January 1, 1993, or adopted on or after that date shall be the 2 food regulations of this state.”). The state laws also point to the adoption of specific federal 3 provisions as the parallel state labeling requirements. See, e.g., id. § 110665 (“Any food is 4 misbranded if its labeling does not conform with the requirements for nutrition labeling as set forth 5 in Section 403(q) (21 U.S.C. § 343(q)) of the federal act and the regulations adopted pursuant 6 thereto. Any food exempted from those requirements under the federal act shall also be exempt 7 under this section.”). As such, Plaintiff argues that violations of the federal laws and regulations— 8 namely the Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq. as amended by the 9 Nutrition Labeling and Education Act (“NLEA”)—would amount to violations of the identical United States District Court For the Northern District of California 10 California state requirements. 11 12 II. Legal Standard 13 Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient 14 specificity to “give the defendant fair notice of what the ... claim is and the grounds upon which it 15 rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). A 16 complaint which falls short of the Rule 8(a) standard may be dismissed if it fails to state a claim 17 upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “Dismissal under Rule 12(b)(6) is 18 appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a 19 cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 20 2008). Moreover, the factual allegations “must be enough to raise a right to relief above the 21 speculative level” such that the claim “is plausible on its face.” Twombly, 550 U.S. at 556–57. 22 When deciding whether to grant a motion to dismiss, the court generally “may not consider 23 any material beyond the pleadings.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 24 1542, 1555 n.19 (9th Cir. 1990). The court must accept as true all “well-pleaded factual 25 allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The court must also construe the alleged 26 facts in the light most favorable to the plaintiff. Love v. United States, 915 F.2d 1242, 1245 (9th 27 Cir. 1998). “[M]aterial which is properly submitted as part of the complaint may be considered.” 28 4 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 Twombly, 550 U.S. at 555. But “courts are not bound to accept as true a legal conclusion couched 2 as a factual allegation.” Id. 3 Fraud-based claims are subject to heightened pleading requirements under Federal Rule of 4 Civil Procedure 9(b). In that regard, a plaintiff alleging fraud “must state with particularity the 5 circumstances constituting fraud.” Fed. R. Civ. P. 9(b). The allegations must be “specific enough to 6 give defendants notice of the particular misconduct which is alleged to constitute the fraud charged 7 so that they can defend against the charge and not just deny that they have done anything wrong.” 8 Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). To that end, the allegations must contain 9 “an account of the time, place, and specific content of the false representations as well as the United States District Court For the Northern District of California 10 identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th 11 Cir. 2007). Averments of fraud must be accompanied by the “who, what, when, where, and how” 12 of the misconduct charged. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) 13 (citation omitted). Additionally, “the plaintiff must plead facts explaining why the statement was 14 false when it was made.” Smith v. Allstate Ins. Co., 160 F. Supp. 2d 1150, 1152 (S.D. Cal. 2001) 15 (citation omitted); see also In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1549 (9th Cir. 1994) (en 16 banc) (superseded by statute on other grounds). 17 18 III. Discussion 19 A. Warranty Claims 20 Defendant moves to dismiss Plaintiff’s breach of warranty claims brought under the Song- 21 Beverly Consumer Warranty Act (“SBCWA”), Cal. Civ. Code § 1790 et seq. (count 8), and the 22 Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2301 et seq. (count 9). 23 The SBCWA provides a private right of action for buyers of consumer goods for express or 24 implied warranty violations. Cal. Civ. Code § 1794. The SBCWA defines “consumer goods” as 25 “any new product or part thereof that is used, bought, or leased for use primarily for personal, 26 family, or household purposes, except for … consumables,” id. § 1791(a) (emphasis added), and 27 defines “consumables” as “any product that is intended for consumption by individuals, or use by 28 5 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 individuals for purposes of personal care or in the performance of services ordinarily rendered 2 within the household, and that usually is consumed or expended in the course of consumption or 3 use.” Id. § 1791(d). The Court finds that the products at issue here—apparent food products—fall 4 under this definition of “consumables.” 5 Plaintiff does not dispute that the products at issue here are consumables under the SBCWA 6 and would thus be excepted from section 1794. See Am. Compl. ¶ 202 (“Defendant’s food 7 products are ‘consumables’ as defined by Cal. Civ. Code § 1791(d).”) Rather, Plaintiff appears to 8 argue that the product labels constitute express warranties and that the products in question fall 9 under the provisions of sections 1793.35, which provides for the enforcement of express warranties United States District Court For the Northern District of California 10 on consumables. Pl.’s Opp’n to Def.’s Mot. to Dismiss 24–25. The Court rejects this argument 11 because food labels, like the ones at issue here, do not constitute express warranties against a 12 product defect. See Astiana v. Dreyer’s Grand Ice Cream, Inc., No. C-11-2910 EMC, C-11-3164 13 EMC, 2012 WL 2990766, at *3 (N.D. Cal. July 20, 2012); Jones v. ConAgra Foods, Inc., -- F. 14 Supp. 2d --, No. C 12-01633 CRB, 2012 WL 6569393, at *12–13 (N.D. Cal. Dec. 17, 2012). 15 Labels on product packaging and websites are “product descriptions rather than promises that [a 16 food product] is defect-free, or guarantees of specific performance levels.” Hairston v. S. Beach 17 Beverage Co., No. CV 12-1429-JFW, 2012 WL 1893818, at *6 (C.D. Cal. May 18, 2012) (internal 18 quotation marks omitted). Accordingly, the Court finds that Plaintiff fails to state a claim for a 19 violation of the SBCWA. 20 The MMWA creates a civil cause of action for consumers to enforce the terms of written 21 warranties. 15 U.S.C. § 2310(d). Similar to Plaintiff’s argument for the applicability of the 22 SBCWA, she contends that the labeling on the products at issue constitutes an express warranty. 23 Having found to the contrary under the guidance of Astiana and ConAgra Foods, the Court rejects 24 this argument and finds that Plaintiff fails to state a claim for a violation of the MMWA. 25 26 Accordingly, the Court dismisses Plaintiff’s claims based on violations of the SBCWA and the MMWA (counts 8 and 9). 27 28 6 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 B. Sufficiency of the Pleadings 2 The Court now turns to whether the remaining claims are sufficient to withstand Defendant’s motion in light of the pleading standards set forth in the Federal Rules of Civil 4 Procedure. The Court first notes that the heightened Rule 9 pleading standard applies to claims of 5 false or deceptive advertising brought pursuant to the UCL, FAL, or CLRA. Kearns v. Ford Motor 6 Co., 567 F.3d 1120, 1125 (9th Cir. 2009); see also Herrington v. Johnson & Johnson Consumer 7 Cos., Inc., No. C 09–1597 CW, 2010 WL 3448531, at *7 (N.D. Cal. Sept. 1, 2010) (subjecting 8 UCL, FAL, and CLRA claims which “sound in fraud” to the heightened Rule 9 pleading 9 standards). Because the remaining claims involve allegations of fraudulent conduct, deception, or 10 United States District Court For the Northern District of California 3 misrepresentation, the Rule 9 pleading standard applies. See ConAgra Foods, 2012 WL 6569393, 11 at *10 (applying the heightened Rule 9 pleading standard to the complaint in a similar suit); accord 12 Colucci v. ZonePerfect Nutrition Co., No. 12–2907–SC, 2012 WL 6737800, at *8–9 (N.D. Cal. 13 Dec. 28, 2012). As such, Plaintiff must aver with particularity the specific circumstances 14 surrounding the alleged mislabeling, which give rise to her claims. She must state with clarity the 15 “who, what, when, where, and how” of the fraudulent conduct, Vess, 317 F.3d at 1106, and provide 16 an unambiguous account of the “time, place, and specific content of the false representations,” 17 Swartz, 476 F.3d at 764. 18 Applying the Rule 9 pleading standard, the Court finds that the Amended Complaint does 19 not provide a clear and particular account of the allegedly fraudulent, deceptive, misrepresentative, 20 or otherwise unlawful statements, and therefore cannot sustain an action for these claims. The 21 Amended Complaint fails to unambiguously specify the particular products that have violated 22 particular labeling requirements, the allegedly unlawful representations that were on the products, 23 and the particular statements Plaintiff allegedly relied on when making her purchases. The 24 Amended Complaint contains the same deficiencies as did the pleadings in similar food product 25 labeling lawsuits that were recently dismissed by this Court. See Maxwell v. Unilever U.S., Inc., 26 No. 5:12-CV-01736-EJD, 2013 WL 1435232 (N.D. Cal. Apr. 9, 2013) (dismissing the fraud- 27 related mislabeling claims for failure to meet the Rule 9 specificity and particularity standards); 28 7 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS 1 Thomas v. Costco Wholesale Corp., No. 5:12-CV-02908-EJD, 2013 WL 1435292 (N.D. Cal. 2 Apr. 9, 2013) (same). Like in those cases, here, Defendant—as well as the Court—would have to 3 draw its own inferences about the products at issue and alleged mislabeling based on the equivocal 4 assertions contained in the Amended Complaint. Drawing such inferences about the particular 5 misconduct that is alleged to constitute fraud, deception, or misrepresentation is something the 6 heightened Rule 9 pleading standard seeks to avoid. See Semegen, 780 F.2d at 731. 7 As such, the Court finds that Plaintiff’s claims have not been sufficiently pled so as to meet 8 the heightened Rule 9 pleading standard. The Court will accordingly dismiss the remaining seven 9 claims. United States District Court For the Northern District of California 10 11 IV. 12 Conclusion and Order For the foregoing reasons Defendant’s Motion to Dismiss is GRANTED. Plaintiff’s breach 13 of warranty claims predicated on violations of the SBCWA (count 8) and the MMWA (count 9) are 14 DISMISSED WITH PREJUDICE. The remaining of Plaintiff’s claims (counts 1–7) are 15 DISMISSED WITHOUT PREJUDICE. 16 If Plaintiff wishes to further amend her complaint, the Court orders that it be pled in 17 compliance with the pleading standards of Rules 8 and 9 and filed within 15 days of the date of this 18 Order. 19 Because the Amended Complaint is presently dismissed in its entirety, the Court declines to 20 set a case management schedule at this time. However, the Court will address scheduling issues as 21 raised by the parties should it become necessary. 22 23 IT IS SO ORDERED. 24 Dated: August 16, 2013 25 26 _________________________________ EDWARD J. DAVILA United States District Judge 27 28 8 Case No.: 5:12-CV-03029 EJD ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

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