Lugones v. Pete & Gerry's Organic, LLC

• Decision Date: 21 February 2020
• Docket Number: 19 Civ. 2097 (KPF)
• Citation: 440 F.Supp.3d 226
• Parties: Michelle LUGONES; Tricia Rizzi; Marcus Siezing; Claudia Vassallo; Denise Alvarado; Minoee Modi; Isabelle Gray; Karine Sewell; Anne Flournoy ; and Sonja Romano, Plaintiffs, v. PETE AND GERRY'S ORGANIC, LLC and Nellie's Free Range Eggs, Defendants.
• Court: U.S. District Court — Southern District of New York

440 F.Supp.3d 226

Michelle LUGONES; Tricia Rizzi; Marcus Siezing; Claudia Vassallo; Denise Alvarado; Minoee Modi; Isabelle Gray; Karine Sewell; Anne Flournoy ; and Sonja Romano, Plaintiffs,

v.PETE AND GERRY'S ORGANIC, LLC and Nellie's Free Range Eggs, Defendants.

19 Civ. 2097 (KPF)

United States District Court, S.D. New York.

Signed February 21, 2020

Asher Smith, Peta Foundation, Washington, DC, Jeanne-Marie Bates Christensen, Wigdor LLP, New York, NY, for Plaintiffs.

Nathan Reed Fennessy, Preti, Flaherty, Beliveau & Pachios, PLLP, Concord, NH, Peter T. Shapiro, Lewis Brisbois Bisgaard & Smith LLP, New York, NY, for Defendants.

OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge:

Plaintiffs bring this action, on behalf of themselves and as proposed representatives of a putative class of similarly situated individuals, against Defendant Pete and Gerry's Organic, LLC.¹ Plaintiffs allege that they purchased Defendant's eggs, branded as Nellie's Free Range Eggs, based on Defendant's advertisements indicating that Defendant's hens are loved and are given ample access to open, green spaces in which they can peck, perch, and play. However, Plaintiffs allege that this advertising is a lie, and conceals the facts that (i) Defendant's hens are kept in tightly constricted spaces, with no real access to the outdoors, and (ii) the hens are subject to numerous husbandry practices that Plaintiffs oppose, such as beak-cutting and culling. Plaintiffs bring a wide variety of state-law statutory claims relating to false and deceptive advertising, as well as claims for fraud, fraudulent misrepresentation, and breach of express warranty, and request damages and injunctive relief. Defendant moves, pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6), both to dismiss the claims brought by the non-New York plaintiffs and putative class members for lack of personal jurisdiction and to dismiss the complaint as a whole for failure to state a claim for relief. For the reasons set forth in the remainder of this Opinion, Defendant's motion to dismiss for lack of personal jurisdiction is granted in part and denied in part, and Defendant's motion to dismiss for failure to state a claim is granted in part and denied in part.

BACKGROUND²

A. Factual Background

Plaintiffs are residents of New York, California, Massachusetts, Georgia, Maryland, and North Carolina. (SAC ¶¶ 16-24). Defendant is a limited liability company formed and headquartered in New Hampshire. (Id. at ¶ 25). Plaintiffs purchased Defendant's Nellie's Free Range Eggs in their respective states. (Id. at ¶¶ 16-24). In making their respective decisions to purchase the eggs, Plaintiffs relied on a combination of slogans, descriptions, and images on the Nellie's Free Range Eggs containers. (Id. ). The slogans included such statements as: "WE LOVE OUR HENS, YOU'LL LOVE OUR EGGS"; "WE LOVE OUR HENS"; "BETTER LIVES FOR HENS MEAN BETTER EGGS FOR YOU!"; and "OUTDOOR FORAGE."

(Id. ). The container also claimed that "[m]ost hens don't have it as good as Nellie's," because Nellie's hens "can peck, perch, and play on plenty of green grass." (Id. ). Finally, the containers all included imagery highlighting young children playing with hens in an open field. (Id. at ¶ 46). Based on these slogans, statements, and images, Plaintiffs believed that Nellie's Free Range Eggs were "sourced from small farms providing all chickens with space to move around both indoors and outdoors, as well as freedom from chick culling, beak-cutting, calcium

depletion[,] and sale to commercial slaughterhouses and live markets." (Id. at ¶ 16). Defendant's website, it is alleged, only reinforced these beliefs. (Id. ).

Plaintiffs allege that Defendant's hens face a far different and grimmer reality than Defendant's advertising indicates. (SAC ¶¶ 7-8). In contrast to Defendant's idyllic images of happy hens in green pastures, Defendant's hens are instead crammed "into sheds up to 20,000 at a time ... prevent[ing] them from extending their wings, foraging or making their way to the outdoor space [Defendant] advertises so prominently." (Id. at ¶ 7). In addition, Defendant mutilates its hens' beaks. (Id. at ¶ 8). And once Defendant's hens have laid so many eggs that they are depleted of the calcium

"needed to lay eggs strong enough to make it to market," Defendant "sells them to slaughterhouses and live markets that kill them." (Id. ). Plaintiffs allege that if they had known the truth about Defendant's practices, they would not have paid premium prices for Defendant's eggs. (Id. at ¶¶ 16-24). Moreover, Plaintiffs "would only consider purchasing Nellie's eggs in the future if Defendant[ ] were to treat chickens in a manner consistent with [its] advertising." (Id. at ¶¶ 16-24).

B. Procedural Background

Plaintiffs initiated this action and filed their original Complaint on March 6, 2019. (Dkt. #1). Plaintiffs then amended their Complaint and added additional parties on May 7, 2019, prior to Defendant responding. (Dkt. #10). On May 20, 2019, Defendant requested a conference to discuss its anticipated motion to dismiss (Dkt. #18), to which Plaintiffs responded on May 30, 2019 (Dkt. #22). The parties appeared before the Court for a pre-motion conference on June 27, 2019, at which the Court set both a date by which Plaintiffs could again amend their complaint and a briefing schedule for Defendant's motion to dismiss. (Minute Entry of June 27, 2019).

Plaintiffs filed their SAC on July 29, 2019. (Dkt. #29). The SAC alleged violations of New York General Business Law ("GBL") Sections 349 and 350 ; California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 to 17210 ; California's False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 to 17509 ; Maryland's Unfair or Deceptive Trade Practices Law, Md. Code Ann., Com. Law § 13-301 ; North Carolina's Unfair & Deceptive Trade Practices Law, N.C. Gen. Stat. § 75-1.1 ; Massachusetts's Consumer Protection Act, Mass. Gen. Laws Ann. Ch. 93A, §§ 1 to 11 ; and Georgia's Fair Business Practices Act, Ga. Code Ann. §§ 10-1-390 to 10-1-408. (SAC ¶¶ 128-88). The SAC also alleged common-law claims for fraud, fraudulent representation, and breach of express warranty, without specifying any particular state statutes. (Id. at ¶¶ 189-208).

Defendant filed its motion to dismiss, with an accompanying memorandum of law, on September 16, 2019. (Dkt. #30, 31). Plaintiffs responded with an opposing memorandum and supporting declaration on October 25, 2019. (Dkt. #32, 33). Defendant filed its reply brief on November 8, 2019. (Dkt. #34).

DISCUSSION

A. The Court Grants in Part Defendant's Motion to Dismiss for Lack of Personal Jurisdiction

1. Motions to Dismiss Under Rule 12(b)(2)

"A court facing challenges as to both its jurisdiction over a party and the sufficiency of any claims raised must first address the jurisdictional question." Cohen v. Facebook, Inc. , 252 F. Supp. 3d 140, 148 (E.D.N.Y. 2017) (citing Arrowsmith v. United Press Int'l , 320 F.2d 219, 221 (2d Cir. 1963) ). Therefore, the Court will first address Defendant's motion to dismiss the claims of the named Plaintiffs and putative class members residing outside New York for lack of personal jurisdiction.

"On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant." Metro. Life Ins. Co. v. Robertson-Ceco Corp. , 84 F.3d 560, 566 (2d Cir. 1996). To survive a motion to dismiss, a plaintiff need only provide "legally sufficient allegations of jurisdiction." Id. A plaintiff makes such a showing through "an averment of facts that, if credited by the ultimate trier of fact, would suffice to establish jurisdiction over the defendant." Id. at 567 (quoting Ball v. Metallurgie Hoboken-Overpelt, S.A. , 902 F.2d 194, 197 (2d Cir. 1990) ). Plaintiff's jurisdictional allegations "are construed in the light most favorable to the plaintiff and doubts are resolved in the plaintiff's favor[.]" Elsevier, Inc. v. Grossman , 77 F. Supp. 3d 331, 341 (S.D.N.Y. 2015) (quoting A.I. Trade Fin., Inc. v. Petra Bank , 989 F.2d 76, 79-80 (2d Cir. 1993) ). Where a court does not hold an evidentiary hearing on the jurisdictional question, it may, nevertheless, consider matters outside the pleadings. Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A. , 722 F.3d 81, 86 (2d Cir. 2013).

There are three requirements that must be met in order for a court to exercise personal jurisdiction: "First, the plaintiff's service of process upon the defendant must have been procedurally proper. Second, there must be a statutory basis for personal jurisdiction that renders such service of process effective.... Third, the exercise of personal jurisdiction must comport with constitutional due process principles." Waldman v. Palestine Liberation Org. , 835 F.3d 317, 327 (2d Cir. 2016) (quoting Licci ex rel. Licci v. Lebanese Canadian Bank, SAL , 673 F.3d 50, 59-60 (2d Cir. 2012) ). In order to assure that the last prong has been satisfied, a court must determine both "whether a defendant has sufficient minimum contacts with the forum to justify the court's exercise of personal jurisdiction over the defendant and whether the assertion of personal jurisdiction over the defendant comports with traditional notions of fair play and substantial justice under the circumstances of the particular case." Johnson v. UBS AG , 791 Fed.Appx. 240, 242 (2d Cir. 2019) (internal quotation marks omitted) (citing Waldman , 835 F.3d at 331 ).

"In analyzing the minimum contacts requirement, courts have distinguished between two bases for personal jurisdiction: specific jurisdiction and general jurisdiction." Johnson , 791 Fed.Appx. at 242. There are three conditions that must be met for the exercise of specific jurisdiction: (i) "the defendant must have purposefully availed itself of the privileges of conducting activities within the forum State or have purposefully directed its conduct into the forum State," ...