Beasley v. Lucky Stores, Inc.

• Decision Date: 16 September 2019
• Docket Number: Case No. 18-cv-07144-MMC
• Citation: 400 F.Supp.3d 942
• Court: U.S. District Court — Northern District of California
• Parties: Mark BEASLEY, Plaintiff, v. LUCKY STORES, INC., et al., Defendants.

400 F.Supp.3d 942

Mark BEASLEY, Plaintiff,

v.LUCKY STORES, INC., et al., Defendants.

Case No. 18-cv-07144-MMC

United States District Court, N.D. California.

Signed September 16, 2019

Andrew Christopher Hamilton, The Weston Firm, Gregory Weston, San Diego, CA, for Plaintiff.

Dale Joseph Giali, Keri Elizabeth Borders, Rebecca Bari Johns, Mayer Brown LLP, Los Angeles, CA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT; AFFORDING PLAINTIFF LEAVE TO AMEND; GRANTING DEFENDANT NESTLÉ USA'S MOTION TO STRIKE; CONTINUING CASE MANAGEMENT CONFERENCE

Re: Dkt. Nos. 36, 38

MAXINE M. CHESNEY, United States District Judge

Before the Court are two motions, both filed May 23, 2019: (1) a Motion to Dismiss Plaintiff's First Amended Complaint, filed jointly by all defendants to the instant action, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ; and (2) a Motion to Strike Portions of the First Amended Complaint, filed by defendant Nestlé USA, Inc. ("Nestlé" or "Nestlé USA"), pursuant to Rule 12(f) of the Federal Rules of Civil Procedure. Plaintiff Mark Beasley ("Beasley") has filed opposition to each said motion, to which defendants have replied. Having read and considered the papers filed in support of and in opposition to the motions, as well as the parties' respective objections filed in connection therewith, the Court rules as follows.¹

BACKGROUND

The instant case is a putative class action lawsuit brought by Beasley, a California citizen, as a purchaser and consumer of Coffee-mate, a line of coffee-creamer products.

Beasley alleges Nestlé "manufactures, markets, and sells" Coffee-mate. (See First Am. Compl. ("FAC"), filed Dec. 19, 2018, ¶ 3.) He also alleges that four retailers, namely, defendants Lucky Stores, Inc. ("Lucky"), Save Mart Super Markets ("Save Mart"), Save Mart Companies, Inc. ("SMCI"), and The Kroger Company ("Kroger"), "sold Coffee-mate at their grocery stores throughout California" (see id. ¶ 4) and that, during the class period, he purchased Coffee-mate from grocery stores owned by said retailers (the "retailers" or "retailer defendants").

According to Beasley, Coffee-mate, during the class period, contained partially hydrogenated oil ("PHO"), which is an "[a]rtificial" form of trans fat (see id. ¶ 20) and an "unsafe food additive" (see id. ¶ 3). In addition, Beasley alleges that, for portions of the class period, Coffee-mate's labels bore "unauthorized nutrient content claims" (see id. ¶ 79), namely, "0g Trans Fat" and/or "IT'S GOOD TO KNOW: 0g TRANS FAT/SERV ..." (the " ‘0g Trans Fat’ statements" or " ‘0g Trans Fat’ claim(s)") (see id. ¶ 76; see also id. ¶¶ 8, 79), and that "[t]his language was part of an intentional, long-term campaign to deceptively market Coffee-mate as healthful and free of trans fat" (see id. ¶ 77).

Based on the above allegations, Beasley, on October 29, 2018, filed his initial complaint in the Superior Court of California, in and for the County of San Francisco.

On November 26, 2018, defendants removed the case to federal court.²

On December 19, 2018, Beasley filed the FAC, in which he asserts six Causes of Action, brought both individually and on behalf of the following two putative classes: (1) a "Class," defined as "[a]ll citizens of California who purchased in California, on or after January 1, 2010, Coffee-mate products containing [PHO]" (see FAC ¶ 149); and (2) a "0g Trans Fat Claim Subclass," defined as "[a]ll citizens of California who purchased in California, on or after January 1, 2010, Coffee-mate containing the nutrient content claim ‘0g Trans Fat’ and containing [PHO]" (see id. ).

The first two Causes of Action, brought on behalf of Beasley and the "Class," challenge defendants' manufacturing and distribution of Coffee-mate on the basis that it contains PHO (collectively, the "use claims").³ Said causes of action are predicated on, respectively, the "unfair" and "unlawful" prongs (see id. at 27:16 & 28:1) of California's "Unfair Competition Law" ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq., and "Breach of Implied Warranty of Merchantability" (see id. at 29:18).

The last four Causes of Action, brought on behalf of Beasley and the "Subclass," challenge defendants' manufacturing and distribution of Coffee-mate on the basis of the "0g Trans Fat" statements (collectively, the "labeling claims").⁴ Said causes of action are predicated on, respectively, the "unlawful," "fraudulent," and "unfair" prongs (see id. at 30:12, 32:18, & 33:3) of the UCL, violation of California's "False Advertising Law" ("FAL"), Cal. Bus. & Prof. Code §§ 17500 et seq. (see id. at 33:23), "Breach of Express Warranty" (see id. at 34:6), and California's "Consumer Legal Remedies Act" ("CLRA"), Cal. Civ. Code §§ 1750 et seq. (see id. at 34:20).

By the instant motion to dismiss, defendants seek an order dismissing the above-titled action. By the instant motion to strike, Nestlé seeks an order striking paragraphs of the FAC alleging it has a "pattern and practice" of misconduct toward consumers. (See Def. Nestlé's Mot. to Strike ("Nestlé Mot.") at 2:21; see also FAC ¶ 82.)

DISCUSSION

As noted, defendants bring two separate motions. The Court will begin with defendants' joint motion to dismiss, then turn to Nestlé's motion to strike.

A. Motion to Dismiss

Defendants challenge Beasley's claims on a number of grounds, some of which apply to a subset of such claims and/or defendants. In particular, defendants contend the use claims are both preempted and fail on their merits, that all of the labeling claims are barred by statutes of limitations and equitable principles, and that some of the labeling claims fail for lack of a showing of reliance. In addition, defendants contend the FAC, as a whole, fails to meet the heightened pleading requirements for fraud and that, as to the retailers, Beasley has failed to allege any actionable wrongdoing.

Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure "can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). Rule 8(a)(2), however, "requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’ " See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Fed. R. Civ. P. 8(a)(2) ). Consequently, "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations." See id. Nonetheless, "a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." See id. (internal quotation, citation, and alteration omitted).

In analyzing a motion to dismiss, a district court must accept as true all material allegations in the complaint and construe them in the light most favorable to the nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). "To survive a motion to dismiss, a complaint must contain sufficient factual material, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). "Factual allegations must be enough to raise a right to relief above the speculative level[.]" Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Courts "are not bound to accept as true a legal conclusion couched as a factual allegation." See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (internal quotation and citation omitted).

Given that defendants challenge the FAC on numerous grounds, and that the parties' objections pertain not only to such grounds but to the motion to dismiss more generally, the Court begins by addressing the objections.

1. Parties' Objections

As noted, both parties have filed objections in connection with the instant motion. In that regard, Beasley objects to defendants' reply brief on multiple grounds, namely, that defendants: (1) have "evaded their page limit" of 15 pages, by including "nearly five pages" of footnotes (see Pl.'s Objs. to Defs.' Reply, filed Jun. 17, 2019, at 1:3–4); (2) "make new arguments on reply" (see id. at 1:12), with respect to preemption and tolling; and (3) "misstate" a decision cited therein (see id. at 2:10). Defendants, in turn, object to Beasley's objection, and ask that it be stricken, on the basis that it "makes numerous legal arguments" and, consequently, is "an improper sur-reply." (See Defs.' Obj. to Pl.'s Obj., filed Jun. 18, 2019, at 1:4–5.)

Under the applicable local rule, "[u]nless the Court expressly orders otherwise pursuant to a party's request ..., the reply brief or memorandum may not exceed 15 pages of text." See Civ. L. R. 7-4(b). "Text ... must be double-spaced with no more than 28 lines per page, except for" specified elements, including "footnotes." See id. 3-4(c)(2). In addition, "[o]nce a reply is filed," absent an applicable exception, "no additional memoranda, papers or letters may be filed without prior Court approval." See id. 7-3(d) (setting forth, as exceptions, "new evidence ... submitted in the reply" and "a relevant judicial opinion published after the date the opposition or reply was filed").

At the outset, the Court notes that Beasley's response to the reply is, although titled "Objections," more properly characterized as a sur-reply, as it primarily consists of substantive legal arguments, and, as defendants point out, Beasley neither sought nor obtained permission to file a sur-reply. Further, as such sur-reply includes no objection to newly submitted evidence or any notice of newly decided legal authority, neither exception to Civil Local Rule 7-3(d) applies. Nevertheless, the Court declines to strike said submission, particularly when, as discussed below, defendants' own filing is not...