Tabler v. Panera LLC et al, No. 5:2019cv01646 - Document 56 (N.D. Cal. 2020)

Court Description: Amended Order Granting Motion to Dismiss With Leave to Amend. Signed by Judge Lucy H. Koh on 06/30/2020. (lhklc4, COURT STAFF) (Filed on 6/30/2020)

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Tabler v. Panera LLC et al Doc. 56 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION United States District Court Northern District of California 11 12 BRIANNA TABLER, 13 Plaintiff, 14 v. 15 PANERA LLC, 16 Case No. 19-CV-01646-LHK AMENDED ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 Re: Dkt. No. 44 Defendant. 17 18 Before the Court is Defendant Panera LLC’s motion to dismiss. ECF No. 44. Having 19 considered the submissions of the parties, the relevant law, and the record in this case, the Court 20 GRANTS Defendant’s motion to dismiss with leave to amend. 21 I. BACKGROUND A. Factual Background 22 23 Plaintiff Brianna Tabler is a citizen of Santa Clara County, California. ECF No. 41 ¶ 65 24 (“FAC” or “First Amended Complaint”). Defendant Panera LLC is a limited liability company 25 that was formed under the laws of New York and maintains headquarters in New York City. Id. 26 27 28 1 This order supersedes ECF No. 53, which was vacated. 1 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND Dockets.Justia.com 1 ¶ 72. Defendant manufactures, markets, and distributes sandwiches, baked goods, and other 2 prepared foods, including the “Whole Grain Bagel” and “Whole Grain Bread” (the “Products”), in 3 retail outlets in California. Id. ¶¶ 4, 5. United States District Court Northern District of California 4 Plaintiff alleges that Defendant falsely and deceptively labels and markets the Products as 5 “100% clean.” Id. ¶¶ 4, 10. According to Plaintiff, on January 13, 2017, Defendant “declared that 6 the entire ‘Panera Bread Menu is Now 100% Clean’” and “promoted the claim that ‘100% of our 7 food is 100% clean’ through its marketing, including a television commercial, billboards, and T- 8 shirts worn by staff at its roughly 2,000 outlets.” Id. ¶ 14. Defendant “has since continued to 9 represent that all of the food it sells in its retail outlets, including the Products, are ‘100% clean,’” 10 and that such representations “are ubiquitous at the point of sale of the Products—on bags, signs, 11 and labels throughout Panera’s physical locations.” Id. ¶¶ 15-16. For example, Plaintiff indicates 12 that “signs and placards” at Defendant’s retail outlets display statements such as “100% of our 13 food is 100% clean” and “All 100% clean.” Id. ¶ 17. Other advertisements simply state that all 14 food sold is “100% clean.” Id. ¶ 18. Plaintiff provides several images of representative 15 advertisements: 16 17 18 19 20 21 22 23 24 25 26 27 28 Id. ¶ 17. Further, Plaintiff asserts that Defendant’s bags and uniforms display statements such as, 2 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 “100% clean food,” encircled by the statement, “No artificial flavors, sweeteners, preservatives / 2 No colors from artificial sources.” Id. ¶ 18. Plaintiff includes representative images of such 3 advertisements: 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 Id. Additionally, Plaintiffs do not explain whether there are other “100% clean” advertisements 17 that differ from the proffered representative samples, and if so, how any those advertisements 18 differ. 19 Nonetheless, according to Plaintiff, Defendant’s differing “representations are intended to, 20 and do, portray to consumers that, at the very least, the ingredients in the Products do not contain 21 residue of non-food items such as synthetic chemicals used during the ingredients’ growing, 22 harvest, or processing.” Id. ¶ 19. 23 Notwithstanding these statements, Plaintiff alleges that the Products contain the residue of 24 glyphosate, a synthetic chemical. Id. ¶¶ 21, 25. Glyphosate is an artificial chemical derived from 25 the amino acid glycine. Id. ¶¶ 23, 25. Glyphosate was invented by the agrochemical and 26 agricultural biotechnology corporation Monsanto, which marketed the biocide under the trade 27 name “Roundup.” Id. ¶ 22. 28 3 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 According to Plaintiff, the fact that the Products contain glyphosate residue renders 2 Defendant’s statements that the Products are “100% clean” misrepresentations. Id. ¶ 30. Indeed, 3 Plaintiff asserts that Defendant’s statements indicate to reasonable consumers that the Products 4 “do not contain residue of non-food items such as synthetic chemicals used during the ingredients’ 5 growing, harvest, or processing.” Id. ¶ 19. Plaintiff claims that Defendant does not disclose that 6 glyphosate residue is present in the Products on Defendant’s website, packaging, signage, or in a 7 biannual “Responsibility Report” that Defendant disseminates to provide information about the 8 Products. Id. ¶¶ 31–38, 51. United States District Court Northern District of California 9 Plaintiff alleges that Defendant is aware that the Products contain glyphosate residue and 10 that Defendant is also aware of the source of the glyphosate residue in the production process. Id. 11 ¶¶ 40, 41. Plaintiff asserts that Defendant purposefully fails to disclose this information in order 12 to charge a premium from consumers, and in order to ensure that consumers do not cease 13 purchasing the Products and switch to one of Defendant’s competitors. Id. ¶¶ 46–48. 14 As previously alleged in Plaintiff’s initial complaint, Plaintiff purchased Defendant’s 15 Whole Grain Bagel, as well as other unspecified Products, at unspecified times during the class 16 period from three different retail outlets located in California. Id. ¶ 66. Plaintiff alleges that in 17 deciding to make these purchases, Plaintiff “saw and believed in-store signage representing that all 18 of the foods sold there were ‘100% clean.’” Id. ¶ 67. 19 20 B. Procedural History On March 29, 2019, Plaintiff filed the instant putative class action complaint against 21 Defendant and two related entities. Id. ¶ 1. The complaint alleges causes of action under: 22 (1) California’s Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1750–1785; (2) 23 California’s False Advertisement Law (“FAL”), Cal. Bus. & Prof. Code § 17500 et seq.; and (3) 24 California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200–17210. Id. 25 ¶¶ 82–112. On May 15, 2019, Plaintiff filed a notice of voluntary dismissal of the two related 26 entities. ECF No. 5. Thus, Defendant is the only remaining defendant in the instant case. Id. 27 On July 10, 2019, Defendant filed a motion to dismiss, or in the alternative, to stay the 28 4 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 instant case or strike portions of Plaintiff’s complaint. ECF No. 21. On October 19, 2019, the 2 Court granted Defendant’s motion to dismiss with leave to amend and denied Defendant’s request 3 to stay and request to strike. ECF No. 35. First, the Court held that Plaintiff’s claims were not 4 expressly preempted by the Federal Food, Drug, and Cosmetic Act (“FDCA”) as amended by the 5 Nutrition Labeling and Education Act (“NLEA”). Id. at 8–11. Second, the Court determined that 6 the application of the primary jurisdiction doctrine was inappropriate and therefore refused to 7 dismiss or stay the case on this basis. Id. at 11–14. 8 United States District Court Northern District of California 9 The Court then proceeded to the merits of Plaintiff’s claims. The Court concluded that Plaintiff lacked Article III standing to pursue injunctive relief because as alleged in the initial 10 complaint, Plaintiff only sought to “change . . . the current Products’ representations, packaging, 11 labels and marketing, or a reformulation of the Products so that the Products no longer contain 12 glyphosate residue.” Id. at 15 (quoting Compl. ¶ 60). However, even if some relief were granted 13 and only the representations, packaging, labels, and marketing were changed, Plaintiff would still 14 refuse to purchase the Products. Id. at 15–16. Additionally, Plaintiffs “allege[d] only the 15 possibility of future injury arising from the fact that Plaintiff may purchase the Products in the 16 future.” Id. at 16 (quotation marks omitted). 17 Furthermore, because the initial complaint sought to bring claims based on other, 18 unspecified “bread products” that Plaintiff did not purchase and were not “substantially similar” to 19 the purchased products, the Court held that Plaintiff lacked standing to bring these claims. Id. at 20 16–19; see id. at 18 (“When a complaint fails to adequately allege how products a plaintiff 21 purchased are in fact substantially similar to products that the plaintiff challenges, the Court must 22 dismiss the complaint to the extent it seeks to bring claims on the basis of unpurchased 23 products.”). 24 Finally, the Court held that Plaintiff failed to state a CLRA, FAL, or UCL claim for 25 purchased products because Plaintiff failed to satisfy Federal Rule of Civil Procedure 9(b)’s 26 heightened pleading standard. Id. at 19–25. Plaintiff failed to specify “which, if any, of the 27 ‘representative’ advertisements described in the complaint Plaintiff actually relied upon before” 28 5 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 purchasing any products. Id. at 21. “Nor d[id] Plaintiff provide any information about when 2 Plaintiff allegedly viewed Defendant’s advertisements, or which ones Plaintiff found to be 3 material in making her purchases.” Id. As a result, the complaint “fail[ed] to give [Defendant] the 4 opportunity to respond to the alleged misconduct.” Id. (quotation marks omitted). Indeed, Plaintiff “d[id] not dispute that the complaint fail[ed] to sufficiently plead reliance 5 6 on specific misstatements to satisfy the requirements of Rule 9(b).” Id. at 22. Rather, Plaintiff 7 argued that she did not need to allege reliance on a specific advertisement pursuant to In re 8 Tobacco II, 46 Cal. 4th 298 (2009). Id. The Court rejected Plaintiff’s argument because 9 numerous courts, including this court, construed the In re Tobacco II exception narrowly. Id. at 10 United States District Court Northern District of California 11 23. As the Court explained, “In re Tobacco II does not stand for the proposition that a 12 consumer who was never exposed to an alleged false or misleading advertising or promotional 13 campaign may bring a claim for relief.” Id. (quotation marks omitted). “Rather, In re Tobacco II 14 stands for the narrower, and more straightforward proposition that, where a plaintiff has been 15 exposed to numerous advertisements over a period of decades, the plaintiff is not required to plead 16 with an unrealistic degree of specificity the particular advertisements and statements that she 17 relied upon.” Id. (quotation marks and internal alterations omitted). Plaintiff “ma[de] no 18 allegation whatsoever concerning the duration or pervasiveness of Defendant’s alleged advertising 19 campaign, which render[ed] In re Tobacco II wholly inapplicable.” Id.; see also id. at 23 (“The 20 unadorned assertion that allegedly fraudulent representations are ‘ubiquitous at the point of sale’ is 21 insufficient to plead an advertising campaign of the necessary ‘longevity and pervasiveness’ 22 required to invoke In re Tobacco II.”). 23 As a result, the Court granted Defendant’s motion to dismiss but permitted Plaintiff leave 24 to amend. Id. at 24. The Court instructed Plaintiff that “to the extent that Plaintiff does not plead 25 the existence of an advertising campaign of the necessary ‘extent and pervasiveness’ to satisfy the 26 In re Tobacco II exception,” Plaintiff must “set forth in chart form the misstatements that Plaintiff 27 challenges on a numbered, statement-by-statement basis: (1) the challenged statement, (2) the 28 6 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND United States District Court Northern District of California 1 location and timing of the statement; (3) the Product(s) covered by the statement; (4) the date on 2 which Plaintiff witnessed the statement; and (5) the Product(s) Plaintiff purchased on the basis of 3 the statement.” Id. at 25. Moreover, the Court notified that any “failure to cure deficiencies 4 identified herein or in Defendant’s motion to dismiss will result in dismissal of the deficient 5 claims with prejudice.” Id. 6 On November 27, 2019, Plaintiff filed the First Amended Complaint. ECF No.41 7 (“FAC”). The FAC alleges the same three causes of action under the CLRA, FAL, and UCL. Id. 8 ¶¶ 87–117. As before, the FAC includes a number of representative advertisements but never 9 specifies which particular advertisements Plaintiff saw and relied upon “in-store” when purchasing 10 Panera products. FAC ¶ 67. Indeed, the FAC fails to comply with the Court’s instruction 11 requiring “Plaintiff to set forth in chart form the misstatements that Plaintiff challenges.” ECF No. 12 35 at 25. Furthermore, the FAC also fails to explain when Plaintiff viewed any advertisements 13 and instead only mentions that Plaintiff viewed some advertisements at unspecified times 14 “[d]uring the class period” when purchasing Panera products at three different retail outlets 15 located in California. FAC ¶¶ 66, 67. On December 11, 2019, Defendant filed a motion to dismiss Plaintiff’s FAC. ECF No. 44 16 17 (“Mot.”). On December 26, 2019, Plaintiff filed an opposition to Defendant’s motion to dismiss. 18 ECF No. 45 (“Opp.”). On January 2, 2019, Defendant filed a reply. ECF No. 46 (“Reply”). 19 II. LEGAL STANDARD 20 A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6) 21 Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include “a 22 short and plain statement of the claim showing that the pleader is entitled to relief.” A complaint 23 that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 24 12(b)(6). The United States Supreme Court has held that Rule 8(a) requires a plaintiff to plead 25 “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. 26 Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads 27 factual content that allows the court to draw the reasonable inference that the defendant is liable 28 7 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility 2 standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a 3 defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling 4 on a Rule 12(b)(6) motion, the Court “accept[s] factual allegations in the complaint as true and 5 construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. 6 Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). United States District Court Northern District of California 7 The Court, however, need not “assume the truth of legal conclusions merely because they 8 are cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) 9 (per curiam) (internal quotation marks omitted). Mere “conclusory allegations of law and 10 unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 11 F.3d 1179, 1183 (9th Cir. 2004). 12 13 B. Motion to Dismiss Under Federal Rule of Civil Procedure 9(b) Claims sounding in fraud are subject to the heightened pleading requirements of Federal 14 Rule of Civil Procedure 9(b). Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001). 15 Under the federal rules, a plaintiff alleging fraud “must state with particularity the circumstances 16 constituting fraud.” Fed. R. Civ. P. 9(b). To satisfy this standard, the allegations must be 17 “specific enough to give defendants notice of the particular misconduct which is alleged to 18 constitute the fraud charged so that they can defend against the charge and not just deny that they 19 have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Thus, 20 claims sounding in fraud must allege “an account of the time, place, and specific content of the 21 false representations as well as the identities of the parties to the misrepresentations.” Swartz v. 22 KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007). In other words, “[a]verments of fraud must be 23 accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” Vess v. 24 Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). The plaintiff must 25 also plead facts explaining why the statement was false when it was made. See In re GlenFed, 26 Inc. Sec. Litig., 42 F.3d 1541, 1549 (9th Cir. 1994) (en banc), superseded by statute on other 27 grounds as stated in Marksman Partners, L.P. v. Chantal Pharm. Corp., 927 F. Supp. 1297 (C.D. 28 8 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 Cal. 1996). 2 “When an entire complaint . . . is grounded in fraud and its allegations fail to satisfy the 3 heightened pleading requirements of Rule 9(b), a district court may dismiss the complaint . . . .” 4 Vess, 317 F.3d at 1107. A motion to dismiss a complaint “under Rule 9(b) for failure to plead 5 with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6) for 6 failure to state a claim.” Id. 7 C. Leave to Amend United States District Court Northern District of California 8 If the Court determines that a complaint should be dismissed, the Court must then decide 9 whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave 10 to amend “shall be freely given when justice so requires,” bearing in mind “the underlying purpose 11 of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” 12 Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation 13 marks omitted). When dismissing a complaint for failure to state a claim, “a district court should 14 grant leave to amend even if no request to amend the pleading was made, unless it determines that 15 the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal 16 quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing 17 amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the 18 moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522, 532 19 (9th Cir. 2008). At the same time, a court is justified in denying leave to amend when a plaintiff 20 “repeated[ly] fail[s] to cure deficiencies by amendments previously allowed.” See Carvalho v. 21 Equifax Info. Servs., LLC, 629 F.3d 876, 892 (9th Cir. 2010). Indeed, a “district court’s discretion 22 to deny leave to amend is particularly broad where plaintiff has previously amended the 23 complaint.” Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th Cir. 24 2011) (quotation marks omitted). 25 III. 26 27 28 DISCUSSION In the motion to dismiss, Defendant contends that dismissal of Plaintiff’s FAC is again warranted because (1) the complaint does not adequately plead reliance with sufficient specificity 9 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 to meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b); and (2) no 2 reasonable consumer would understand Defendant’s alleged statements to mean that the Products 3 are free of glyphosate residue. Mot. at 7–18. Additionally, Defendant asserts that Plaintiff is not 4 entitled to injunctive relief because she fails to allege future harm and that any claims predicated 5 on products that Plaintiff did not purchase should be dismissed because Plaintiff fails to allege 6 substantial similarity between the products. Mot. at 18-21. 7 The Court concludes that the FAC again fails to adequately plead reliance on specific 8 misstatements and that the FAC does not sufficiently plead that the In re Tobacco II exception 9 applies. Accordingly, the Court need not reach Defendant’s other arguments and dismisses 10 Plaintiff’s FAC, but with leave to amend. United States District Court Northern District of California 11 A. Plaintiff does not adequately allege reliance on specific statements. As before, Defendant argues that Plaintiff “still does not plead which, if any, of the 12 13 advertisements Plaintiff actually saw or relied upon in deciding to purchase the [Whole Grain] 14 Bagel.” Mot. at 8. As a result, Defendant claims that Plaintiff has not met Federal Rule of Civil 15 Procedure 9(b)’s pleading standard. Id. Plaintiff contends that it has met Rule 9(b)’s heightened 16 pleading standard. In the alternative, Plaintiff argues if the FAC has not adequately pleaded 17 reliance on a specific misrepresentation, the FAC has nonetheless satisfied an exception under 18 California law established by In re Tobacco II Cases, 46 Cal. 4th 298 (2009), which permits 19 Plaintiff to plead her claims without alleging reliance on any specific representations. Opp. at 3– 20 11. 21 As the Court previously concluded, Plaintiff fails to allege reliance on Defendant’s 22 representations with the specificity required by Federal Rule of Civil Procedure 9(b). Further, as 23 before, the In re Tobacco II exception that Plaintiff invokes is narrow and unavailable under the 24 facts alleged. The Court first addresses Plaintiff’s failure to plead reliance with sufficient 25 specificity to satisfy the standard set by Rule 9(b) before turning to the unavailability of the In re 26 Tobacco II exception to this standard. 27 28 1. Plaintiff fails to meet the heightened pleading standard of Federal Rules of Civil 10 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 2 3 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Procedure 9(b). Federal Rule of Civil Procedure 9(b)’s heightened pleading requirement applies to Plaintiff’s CLRA, FAL, and UCL claims because all three of these claims are based on Defendant’s allegedly fraudulent course of conduct: Defendant’s alleged misrepresentations that the Products are “100% clean.” See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (“[W]e have specifically ruled that Rule 9(b)’s heightened pleading standards apply to claims for violations of the CLRA and UCL.”); Brazil v. Dole Food Co., Inc., 935 F. Supp. 2d 947, 963 (N.D. Cal. 2013) (applying Rule 9(b)’s heightened pleading standard to FAL claims for misleading, deceptive, and untrue advertising); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (stating that when a plaintiff “allege[s] a unified course of fraudulent conduct and rel[ies] entirely on that course of conduct as the basis of a claim . . . the claim is said to be ‘grounded in fraud’ . . . and the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b)”). When CLRA, FAL, and UCL claims are premised on misleading advertising or labeling, Rule 9(b) requires the plaintiff to allege “the particular circumstances surrounding [the] representations” at issue. Kearns, 567 F.3d at 1126. This rule applies regardless of whether the statements at issue are misleading because they are affirmative misrepresentations or because they contain material omissions. See, e.g., Williamson v. Reinalt-Thomas Corp., 2012 WL 1438812, at *13 (N.D. Cal. Apr. 25, 2012) (citing Kearns, 567 F.3d at 1127, for the proposition that “a claim based on a nondisclosure or omission is a claim for misrepresentation in a cause of action for fraud, and it must be pleaded with particularity under Rule 9(b)”). To satisfy this standard, the allegations must be “specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Semegen, 780 F.2d at 731. Thus, claims sounding in fraud must allege “an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.” Swartz, 476 F.3d at 764. In other words, “[a]verments of fraud must be 11 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 accompanied by ‘the who, what, when, where, and how’ of the misconduct charged.” Vess, 317 2 F.3d at 1106 (citation omitted). The plaintiff must also plead facts explaining why the statement 3 was false when it was made. See In re GlenFed, 42 F.3d at 1549. Put differently, “Rule 9(b) 4 requires that the plaintiff(s) identify specific advertisements and promotional materials” and 5 “allege when the plaintiff(s) were exposed to the materials.” Janney v. Mills, 944 F. Supp. 2d 806, 6 818 (N.D. Cal. 2013)). United States District Court Northern District of California 7 Plaintiff’s initial complaint, like the FAC, gave a number of representative advertisements. 8 Nonetheless, in its previous order granting Defendant’s motion to dismiss with leave to amend, the 9 Court dismissed Plaintiff’s CLRA, FAL, and UCL claims because Plaintiff failed to specify 10 “which, if any, of the ‘representative’ advertisements described in the complaint Plaintiff actually 11 relied upon before” purchasing any products. ECF No. 35 at 21. “Nor d[id] Plaintiff provide any 12 information about when Plaintiff allegedly viewed Defendant’s advertisements, or which ones 13 Plaintiff found to be material in making her purchases.” Id. As a result, the complaint “fail[ed] to 14 give [Defendant] the opportunity to respond to the alleged misconduct.” Id. (quotation marks 15 omitted). 16 The same is true of the FAC. The FAC alleges that at unspecified times during the class 17 period starting in 2015, Plaintiff “purchased Panera products, including Whole Grain Bagels,” 18 multiple times from three of Defendant’s retail outlets. FAC ¶ 66. Plaintiff also alleges that in 19 deciding to make these purchases, Plaintiff “saw and believed the in-store signage representing 20 that all of the foods sold there were ‘100% clean.’” Id. 21 This is not enough to satisfy Rule 9(b). First, as before, the FAC is still unclear as to 22 which specific advertisements Plaintiff actually saw and relied upon in deciding to purchase the 23 Whole Grain Bagel. The Court specifically granted Plaintiff leave to amend to more specifically 24 allege which particular statement she saw, believed, and relied upon in making her purchasing 25 decision. Id. at 25. The Court, however, cautioned Plaintiff that “failure to cure” the complaint’s 26 pleading deficiencies “will result in dismissal of the deficient claims with prejudice.” Id. at 26. 27 28 With this additional opportunity, Plaintiff merely alleges that she saw one of Defendant’s 12 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 “100% clean” advertisements. Id. This is problematic because the FAC includes a number of 2 representative “100% clean” advertisements with different language. One of those advertisements 3 simply states “All 100% Clean.” Id. ¶ 17. Another states “100% of our food is 100% clean.” Id. 4 To be sure, these statements appear substantially similar. Nonetheless, Plaintiff’s two other 5 representative samples contain different language. Those two advertisements, which account for 6 half of Plaintiff’s representative samples, appear to state that Defendants’ products are “100% 7 Clean Food: No artificial flavors, sweeteners, preservatives / No colors from artificial sources.” 8 Id. ¶¶ 17–18. Moreover, Plaintiff never alleges whether there are other “100% clean” 9 advertisements that Plaintiff may have seen, believed, and relied upon, and if so, whether those 10 United States District Court Northern District of California 11 advertisements differ from the other ones alleged in the FAC. Plaintiff must plead which specific advertisements she saw, believed, and relied upon in 12 order for the Court to assess how a “reasonable consumer” would view the different 13 advertisements. Thus, Plaintiff’s lack of specificity “fails to give [Defendant] the opportunity to 14 respond to the alleged misconduct.” Kearns, 567 F.3d at 1126; see also Janney, 944 F. Supp. 2d 15 at 818 (“Rule 9(b) requires that the plaintiff(s) identify specific advertisements and promotional 16 materials” and “allege when the plaintiff(s) were exposed to the materials . . . .”); Swartz, 476 F.3d 17 at 764 (holding that claims sounding in fraud must allege “an account of the time, place, and 18 specific content of the false representations as well as the identities of the parties to the 19 misrepresentations”). 20 Additionally, Plaintiff’s failure to specify when she viewed Defendant’s advertisements 21 compounds the uncertainty. As was the case in the initial complaint, the FAC simply alleges that 22 “[d]uring the class period”—that is, beginning as far back as 2015—Plaintiff “saw and believed 23 the in-store signage representing that all of the foods sold there were ‘100% clean.’” FAC ¶¶ 66, 24 67. This is problematic because as the FAC itself alleges, Defendant’s “100% clean” advertising 25 campaign only began on January 13, 2017. Id. ¶¶ 14, 17. Thus, Plaintiff could not have relied on 26 any of Defendant’s “100% clean” advertisements in 2015 or 2016 before Defendant began its 27 “100% clean” advertising campaign on January 13, 2017. Therefore, because Plaintiff does not 28 13 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND United States District Court Northern District of California 1 explain which precise statement she relied upon in making her purchasing decisions or when 2 Plaintiff allegedly saw the relevant advertisements, Plaintiff has not given Defendant sufficient 3 notice to enable Defendant to mount a defense. Thus, the FAC “fails to give [Defendant] the 4 opportunity to respond to the alleged misconduct.” Kearns, 567 F.3d at 1126; see also Janney v. 5 Mills, 944 F. Supp. 2d 806, 818 (N.D. Cal. 2013) (“Rule 9(b) requires that the plaintiff(s) identify 6 specific advertisements and promotional materials” and “allege when the plaintiff(s) were exposed 7 to the materials . . . .”). 8 In summary, Plaintiff’s pleading raises the same deficiencies that the Court previously 9 identified in its prior order. ECF No. 35 at 20–22. As explained above, Plaintiff again merely 10 identifies a range of representative advertisements that Plaintiff alleges to be misleading, but 11 Plaintiff provides no indication of which statements, if any, Plaintiff herself relied upon before 12 purchasing the unspecified Products. See In re Arris Cable Modem Consumer Litig., 2018 WL 13 288085, at *9 (N.D. Cal. Jan. 4, 2018) (dismissing complaint under Rule 9(b) because the 14 complaint identified “a range of statements” that were allegedly misleading, but plaintiffs did not 15 specify “which statements any of them saw or relied on in deciding to buy” products from the 16 defendant); Ahern v. Apple, 411 F. Supp. 3d 541, 564 (N.D. Cal. 2019) (dismissing fraudulent 17 concealment and UCL claim because “Plaintiffs have not specified which statements any of them 18 saw or relied on in deciding to buy the Apple computers” (quoting In re Arris, 2018 WL 288085, 19 at *9) (internal alterations omitted)). Additionally, Plaintiff also fails to specify when she viewed 20 and relied on the advertisements in making her purchasing decisions. See Pirozzi v. Apple Inc., 21 913 F. Supp. 2d 840, 850 (N.D. Cal. 2012) (dismissing complaint under Rule 9(b) because 22 “[n]owhere in the [complaint] does Plaintiff specify when she was exposed to the statements or 23 which ones she found material to her decisions to purchase an Apple Device or App.”). These 24 failures undermine Defendant’s ability to “defend against the charge.” Semegen v. Weidner, 780 25 F.2d 727, 731 (9th Cir. 1985). 26 27 28 As a result, as before, the Court concludes that Plaintiff fails to meet the heightened pleading standard of Rule 9(b). The Court proceeds to consider whether the In re Tobacco II 14 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 2 2. Plaintiff does not satisfy the In re Tobacco II exception. 3 In the alternative, Plaintiff contends that the FAC “make[s] . . . allegations as to invoke the 4 rule of In re Tobacco II.” Opp. at 7 (“In re Tobacco II is not necessary to the survival of the 5 [FAC] . . . . [but] [n]evertheless, the [FAC] does make such allegations as to invoke the Rule of In 6 re Tobacco II.”). The Court disagrees. In re Tobacco II does not apply to the instant case under 7 the facts alleged in the FAC. 8 United States District Court Northern District of California exception nevertheless saves Plaintiff’s complaint from dismissal. In In re Tobacco II, the California Supreme Court held that in narrow circumstances, a 9 plaintiff may state a UCL claim for a fraudulent advertising campaign without alleging reliance on 10 any specific misrepresentations. 46 Cal. 4th at 327. In re Tobacco II concerned a putative class of 11 plaintiffs that brought a UCL claim against defendants for alleged misrepresentations concerning 12 the safety of cigarettes. Id. at 327–28. In evaluating this claim, the California Supreme Court 13 explained that when “a plaintiff alleges exposure to a long-term advertising campaign, the plaintiff 14 is not required to plead with an unrealistic degree of specificity that the plaintiff relied on 15 particular advertisements or statements.” Id. Accordingly, the California Supreme Court held that 16 a plaintiff may “plead and prove actual reliance” without pointing to “specific misrepresentations” 17 where the alleged misrepresentations “were part of an extensive and long-term advertising 18 campaign.” Id. at 328. 19 When In re Tobacco II applies, Rule 9(b) may not be read to require a plaintiff to plead 20 reliance on specific advertisements. Haskins v. Symantec Corp., 2013 WL 6234610, at *5 (N.D. 21 Cal. Dec. 2, 2013). However, the scope of In re Tobacco II is narrow. As explained by the 22 California Court of Appeal in Pfizer Inc. v. Superior Court, In re Tobacco II “does not stand for 23 the proposition that a consumer who was never exposed to an alleged false or misleading 24 advertising or promotional campaign” may bring a claim for relief. 182 Cal. App. 4th 622, 632 25 (2010). “Rather, In re Tobacco II stands for the narrower, and more straightforward proposition 26 that, where a plaintiff has been exposed to numerous advertisements over a period of decades, the 27 plaintiff is not required to ‘plead with an unrealistic degree of specificity [the] particular 28 15 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 advertisements and statements’ that she relied upon.” Kane v. Chobani, Inc., 2013 WL 5289253, 2 at *9 (N.D. Cal. Sept. 19, 2013) (quoting In re Tobacco II, 46 Cal. 4th at 328) (emphasis added); 3 see also In re Arris, 2018 WL 288085, at *9 (noting that “the Tobacco II exception [is] narrow 4 and applie[s] [to] long-term advertising campaigns”). 5 6 campaigns. 46 Cal. 4th at 327. As stated above, the FAC does not distinguish between the two 7 sets of advertisements. As a result, the Court cannot conduct a full In re Tobacco II exception 8 analysis. 9 United States District Court Northern District of California As a threshold matter, the In re Tobacco II exception applies to fraudulent advertising For example, Plaintiff alleges that Defendant’s advertising campaign began on January 13, 10 2017, and that Plaintiff made purchases “[d]uring the class period,” which began in 2015. FAC 11 ¶¶ 14, 66–67. However, Plaintiff does not specify which set of advertisements began on January 12 13, 2017. Moreover, even if the advertisements upon which Plaintiff relied began on January 13, 13 2017, the In re Tobacco II exception cannot apply to Plaintiff’s 2015 or 2016 purchases that 14 predate the advertising campaign. At most, the duration of the advertising campaign was 15 approximately two years—from January 13, 2017 to March 29, 2019, when Plaintiff filed the 16 instant suit. Advertising campaigns of this duration are typically, though not always, insufficient 17 to invoke the In re Tobacco II exception. See, e.g., Azimpour v. Sears, Roebuck& Co., 2017 WL 18 1496255, at *4 (S.D. Cal. Apr. 26, 2017) (holding In re Tobacco II exception did not apply to a 19 two-year advertising campaign); Bronson v. Johnson & Johnson, Inc., 2013 WL 1629191, at *3 20 (N.D. Cal. Apr. 16, 2013) (“At best, Defendants’ marketing campaign began in 2012, which is 21 substantially less than the ‘long-term’ campaign at issue in Tobacco II that lasted at least seven 22 years.”); PETA v. Whole Foods Mkt. Cal., 2016 WL 362229 (N.D. Cal. Jan. 29, 2016) (concluding 23 that an advertising campaign with “signs, placards, and napkins over a four year period” did not 24 satisfy In re Tobacco II). 25 Equally important is the pervasiveness and extent of any advertising campaign. Again, 26 because Plaintiff does not identify upon which advertisements Plaintiff relied, the Court cannot 27 assess the pervasiveness or extent of such advertising and thus cannot find that the In re Tobacco 28 16 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 II exception applies. As with the original complaint, the FAC merely alleges that Defendant’s 2 “representations are ubiquitous at the point of sale of the Products—on bags, signs, and labels 3 throughout [Defendant’s] physical locations.” FAC ¶¶ 15, 16; Opp. at 9. This is generally 4 insufficient. See, e.g., Delacruz v. Cytosport, Inc., 2012 WL 1215243, at *8 (N.D. Cal. Apr. 11, 5 2012) (dismissing complaint for failure to sufficiently plead reliance when plaintiff failed to allege 6 the existence of “advertising campaign [that] approached the longevity and pervasiveness of the 7 marketing at issue in Tobacco II”). 8 United States District Court Northern District of California 9 Plaintiff’s only response to this conclusion is to ask the Court to adopt United States District Judge Jon S. Tigar’s In re Tobacco II standard in Opperman v. Path, Inc., 84 F. Supp. 3d 10 962 (N.D. Cal. 2015), which Plaintiff argues is a more permissive standard. Opp. at 8–9. In 11 Opperman, Judge Tigar identified six factors relevant to the In re Tobacco II inquiry: 12 13 14 15 16 17 18 19 20 21 22 First, a plaintiff must allege that she actually saw or heard the defendant's advertising campaign. Second, the advertising campaign must be sufficiently lengthy in duration, and widespread in dissemination, that it would be unrealistic to require the plaintiff to plead each misrepresentation she saw and relied upon. Third, the plaintiff must describe in the complaint, and preferably attach to it, a representative sample of the advertisements at issue so as to adequately notify the defendant of the precise nature of the misrepresentation claim—what, in particular, defendant is alleged to have said, and how it was misleading. Fourth, the plaintiff must allege, and the court must evaluate, the degree to which the alleged misrepresentations contained within the advertising campaign are similar to each other. Fifth, each plaintiff must plead with particularity, and separately, when and how they were exposed to the advertising campaign, so as to ensure the advertisements were representations consumers were likely to have viewed, rather than representations that were isolated or more narrowly disseminated. And finally, sixth, the court must be able to determine when a plaintiff made his or her purchase or otherwise relied on defendant's advertising campaign, so as to determine which portion of that campaign is relevant. Id. at 976–77. However, even under this six-factor standard, Plaintiffs cannot invoke the In re Tobacco II 23 exception. First, Opperman is distinguishable from the instant case. In Opperman, Judge Tigar 24 found that Plaintiffs had adequately pleaded that In re Tobacco II’s exception applied because 25 almost all of the six factors weighed in the plaintiff’s favor. 84 F. Supp. 3d at 983. Notably, the 26 court concluded that the second factor—the advertising campaign’s duration and pervasiveness— 27 weighed in favor of invoking the In re Tobacco II exception because it was five-years long and 28 17 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 very extensive. Specifically, “Plaintiffs identif[ed] dozens of specific examples of what they 2 believe[d] represent[ed] the advertising campaign, and those examples span[ned] eighteen pages 3 of the [complaint] (not including the numerous examples attached to the complaint . . . .).” Id. at 4 979. United States District Court Northern District of California 5 As explained above, Plaintiff’s failure to identify the specific advertisements upon which 6 she relied renders impossible an assessment of whether the advertising campaign was extensive or 7 pervasive. Thus, Plaintiff has failed to allege an advertising campaign as extensive or pervasive as 8 the advertising campaign in Opperman. Moreover, the length of Defendant’s alleged advertising 9 campaign was, at best, less than half of the five-year campaign in Opperman. Furthermore, unlike 10 in Opperman, the balancing of the six factors does not weigh in favor of Plaintiff. For example, in 11 the instant case, the fifth factor (when plaintiff was exposed to the advertising campaign) also 12 weighs against invoking the In re Tobacco II exception. As explained above, the FAC only 13 alleges that Plaintiff was exposed to the advertising campaign at some point “[d]uring the class 14 period,” which began in 2015—two years before the advertising campaign. FAC ¶¶ 66–67. As a 15 result, this case is clearly distinguishable from Opperman. 16 Indeed, this case is more analogous to Haskins v. Symantec Corporation, 2014 WL 17 2450996 (N.D. Cal. June 2, 2014), another case where Judge Tigar applied the same six-factor 18 standard as in Opperman. Specifically, in Haskins, the court concluded that even though “some of 19 the most basic factors, such as the first and the third, weigh in Plaintiff’s favor[,] . . . . the other 20 factors weigh strongly against applying the [In re] Tobacco II exception.” Id. Specifically, the 21 Haskins court emphasized the importance of the second factor—the duration and pervasiveness of 22 the advertising campaign—and concluded that plaintiff’s two-year advertising campaign “[fell] 23 well short of the ‘decades-long’ campaign in [In re] Tobacco II, which made it ‘unreasonable’ to 24 demand that the plaintiff identify a specific representation she actually viewed.” Id. As a result, 25 the Haskins court found that “the scope of the advertising campaign at issue in this case. . . . does 26 not fall within the ambit of the [In re] Tobacco II exception.” Id. 27 28 The same is true in the instant case. Like in Haskins, Plaintiff alleges she saw some 18 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 unspecified advertisement and described a representative sample of possible advertisements. 2 However, also as in Haskins, Plaintiff’s two-year advertising campaign “falls well short of the 3 ‘decades-long’ campaign in [In re] Tobacco II, which made it ‘unreasonable’ to demand that the 4 plaintiff identify a specific representation she actually viewed.” Id. Additionally, and just as 5 importantly, Plaintiff failed to allege facts that would permit the Court to accurately assess the 6 extent and pervasiveness of any alleged advertising campaign. United States District Court Northern District of California 7 Accordingly, the instant case is more analogous to Haskins than to Opperman such that 8 even under Plaintiff’s preferred standard, the In re Tobacco II exception does not apply. 9 Therefore, because the Court concludes that Plaintiff has failed to satisfy the heightened pleading 10 standard of Rule 9(b) and does not qualify for the exception contemplated by In re Tobacco II, the 11 Court GRANTS Defendant’s motion to dismiss the FAC in its entirety. In its prior order, the Court explained that “failure to cure deficiencies identified herein or 12 13 in Defendant’s motion to dismiss will result in dismissal of the deficient claims with prejudice.” 14 ECF No. 35 at 25. Typically, when a plaintiff already had an opportunity to amend the complaint 15 but failed to address the issues that the Court previously identified in granting a motion to dismiss, 16 dismissal with prejudice is warranted and appropriate. 17 However, the instant case is a unique one. The Court grants Plaintiff leave to amend one 18 final time because, as explained previously, Plaintiff’s claims may be able to proceed depending 19 on which specific advertisements she allegedly saw, believed, and relied upon. 2 As a result, 20 amendment would not necessarily be futile. Therefore, the Court GRANTS Plaintiff leave to 21 amend one final time. 22 IV. CONCLUSION For the foregoing reasons, the Court GRANTS Defendant’s motion to dismiss with leave 23 24 25 26 27 28 2 Additionally, Plaintiff claims that she purchased products throughout the class period beginning in 2015. FAC ¶¶ 66–67. However, Plaintiff also alleges that Defendants’ “100% clean” advertising campaign only began on January 13, 2017. Id. ¶¶ 14, 17. As such, Plaintiff must amend the complaint to harmonize these allegations, as Plaintiff could not have relied on the advertisements before the start of the advertising campaign. 19 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND 1 to amend. Plaintiff shall file any amended complaint within 30 days of this Order. In the amended 2 complaint, to the extent that Plaintiff does not plead the existence of an advertising campaign of the 3 necessary “extent and pervasiveness” to satisfy the In re Tobacco II exception, Plaintiff shall set forth 4 in chart form the misstatements that Plaintiff challenges on a numbered, statement-by-statement basis: 5 (1) the challenged statement; (2) the location and timing of the statement; (3) the Product(s) covered 6 by the statement; (4) the date on which Plaintiff witnessed the statement; and (5) the Product(s) 7 Plaintiff purchased on the basis of the statement. 8 United States District Court Northern District of California 9 Failure to file an amended complaint within 30 days of this Order or failure to cure deficiencies identified herein or in Defendant’s motion to dismiss will result in dismissal of the 10 deficient claims with prejudice. As before, Plaintiff may not add new cause s of action or new parties 11 without a stipulation or leave of the Court. 12 IT IS SO ORDERED. 13 Dated: June 30, 2020 14 15 ______________________________________ LUCY H. KOH United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 20 Case No. 19-CV-01646-LHK ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

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