Bell v. Dave
| Decision Date | 11 July 2022 |
| Docket Number | Civil Action 21-11816 (ES) (ESK) |
| Parties | LAD JOSEPH BELL, HERMOINE KING, GABRIELLA BELL, and JILL JONES, individually and on behalf of all others similarly situated, Plaintiffs, v. GEORGE THOMAS DAVE and GT'S LIVING FOODS, LLC, Defendants. |
| Court | U.S. District Court — District of New Jersey |
Not for Publication
Pending before the Court is Defendants George Thomas Dave (“GT Dave”) and GT's Living Foods, LLC's motion to dismiss the class action Complaint of Plaintiffs Lad Joseph Bell, Hermoine King, Gabriella Bell, and Jill Jones for lack of jurisdiction and failure to state a claim under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (D.E. No. 13; see also D.E. No. 13-1 ( )). Having considered the parties' submissions, the Court decides the matter without oral argument. Fed.R.Civ.P. 78(b); L. Civ. R. 78.1(b). For the reasons set forth below, the motion is GRANTED in part and DENIED in part.
GT's Living Foods sells kombucha products throughout the United States. . Kombucha is a fermented beverage created from the mixture of tea and sugar, resulting in “some naturally occurring alcohol due to fermentation.” . The alcohol content in kombucha may increase after the bottle leaves the production facility depending on a number of factors, including time and temperature. (Compl. ¶ 39). The product at issue in this case is Synergy Kombucha. (Id. ¶ 1). After it is bottled in California, Synergy Kombucha is either distributed to retail stores throughout the United States or sold directly to consumers through the company's website. (Id. ¶ 48). Plaintiffs allege that Synergy Kombucha is marketed to consumers as a health product and sold online and in retail stores among non-alcoholic beverages. (Id. ¶¶ 2 & 63). Plaintiffs further allege Synergy Kombucha is commonly sold in retail stores that do not have liquor licenses and is available to any consumer regardless of age, thereby creating the appearance that Synergy Kombucha is not classified as an alcoholic beverage. (Id. ¶¶ 64-65). Notwithstanding, Plaintiffs admit that each bottle of Synergy Kombucha contains a label with the following statement: (Id. ¶ 60). That said, Plaintiffs allege this label is insufficient because Synergy Kombucha's alcohol by volume (“ABV”) is too high. (Id. ¶ 2).
Plaintiffs allege “every bottle of Synergy Kombucha contains greater than 0.5% ABV by the time the product reaches consumers, thereby making Synergy Kombucha an alcoholic beverage subject to” regulations set forth by the United States Department of Treasury's Alcohol and Tobacco Tax and Trade Bureau (“TTB”) and the State of New Jersey's Office of the Attorney General's Division of Alcoholic Beverage Control. (Id. ¶¶ 56 & 66). Plaintiffs base this allegation on laboratory tests allegedly conducted in Kentucky on four bottles of Synergy Kombucha in various flavors. (Id. ¶¶ 88-93). The tests revealed that, after being purchased directly from refrigerated shelves in non-alcoholic sections of various retail stores and transported in refrigerated conditions to the testing facility, the bottles contained alcohol content greater than 0.5% ABV. .[1] Plaintiffs also allege that Blake Ebersole, an expert chemist and scientific consultant in kombucha alcohol testing, obtained similar results based on several samples of “GT's Enlightened Kombucha and Enlightened Synergy” drinks[2] in studies conducted between December 2015 and February 2019.[3] (Compl. ¶¶ 94, 97 & Ex. C ¶¶ 12, 44, 47, 57, 63 & 68).[4] According to Plaintiffs, the true ABV of Synergy Kombucha requires a health warning on the label pursuant to the Alcoholic Beverage Labeling Act of 1998. (Id. ¶ 42 (citing 27 U.S.C. § 215)).
Thus, Plaintiffs allege, Synergy Kombucha is “actually a mislabeled alcoholic beverage that misrepresents and/or fails to disclose [its] true alcoholic content.” (Id. ¶ 2). Plaintiffs allege Defendants knew or should have known that Synergy Kombucha contains greater than 0.5% ABV by the time the products reach consumers based on allegations made and evidence submitted in previous lawsuits, research, and “various forms of media coverage.” (Id. ¶ 57). Plaintiffs allege that by “failing to disclose the true alcoholic nature of the product,” Defendants “engage in the unlawful sale of alcohol to people of all ages, including those under the age of 21 and those who should not consume alcohol for a wide range of personal, religious and/or health reasons.” (Id. ¶ 4). Plaintiffs further allege Synergy Kombucha is an “illicit . . . alcoholic beverage[]” with “no legal market value on any legitimate markets.” (Id. ¶ 124). Accordingly, Plaintiffs allege they “suffered an ascertainable loss when they purchased Synergy Kombucha beverages that they otherwise would not have purchased.” (Id. ¶ 123).
Specifically, Hermoine King alleges she purchased Synergy Kombucha throughout 2019 and 2020 from retail stores in New Jersey and would not have done so had she known its true alcohol content. (Id. ¶¶ 20 & 22). Lad Joseph Bell alleges he purchased Synergy Kombucha from retail stores in New Jersey throughout 2019 and 2020 for himself and for his minor children and would not have done so had he known its true alcohol content. (Id. ¶¶ 24-26). Gabriella Bell alleges she consumed Synergy Kombucha purchased by her father, Mr. Bell, and purchased and consumed Synergy Kombucha on her own while she was a minor throughout 2019 and 2020 and would not have done so had she known its true alcohol content. (Id. ¶¶ 28-31). Finally, Jill Jones alleges she purchased Synergy Kombucha from retail stores in New Jersey throughout 2020 for herself and for her minor daughter and would not have done so had she known its true alcohol content. (Id. ¶¶ 34-36).
On May 26, 2021, Plaintiffs filed the Complaint against Defendants on behalf of themselves and all those similarly situated. (Id. ¶¶ 7 & 105). In their Complaint, they assert the following claims: (i) violations of the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. § 56:8-1 et seq., against both Defendants (Compl. ¶¶ 116-26); (ii) violations of the New Jersey racketeering statute (“NJRICO”), N.J.S.A. § 2C:41-1 et seq., against both Defendants (Compl. ¶¶ 127-38); and (iii) violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., against GT Dave (Compl. ¶¶ 139-45).[5] The Complaint seeks monetary and injunctive relief. (Compl. ¶ 6).
On August 2, 2021, Defendants filed the instant motion to dismiss the Complaint, which was fully briefed in due course. (D.E. No. 13; D.E. No. 18 (“Opp.”); D.E. 22 (“Reply”)).
Standing is a prerequisite to a federal court's subject matter jurisdiction and may be raised at any stage of a case. Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016). “A motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter.” Const. Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014) (quoting Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007)). “Two types of challenges can be made under Rule 12(b)(1)-‘either a facial or a factual attack.'” In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 632 (3d Cir. 2017) (quoting Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016)). In assessing a facial challenge, the Court accepts the factual allegations as true. See In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012). Defendants raise a facial challenge, so the Court accepts Plaintiffs' factual allegations as true.
Similarly, in considering a motion to dismiss under Rule 12(b)(6), a court must accept all factual allegations as true and “constru[e] the alleged facts in favor of the nonmoving party.” Aichele, 757 F.3d at 358. The complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face,” and a claim is facially plausible when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Zuber v. Boscov's, 871 F.3d 255, 258 (3d Cir. 2017) ().
Under Rule 9(b), a plaintiff must plead fraud with particularity-“in order to place the defendants on notice of the precise misconduct with which they are charged and to safeguard defendants against spurious charges of immoral and fraudulent behavior.” Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 791 (3d Cir. 1984), abrogated in part on other grounds by Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007). A plaintiff may meet this requirement by including the “‘date, place or time' of the fraud, or through ‘alternative means of injecting precision and some measure of substantiation into [the] allegations of fraud.'” Lum v. Bank of America, 361 F.3d 217, 224 (3d Cir. 2004), abrogated on other grounds by Twombly, 550 U.S. at 557, as recognized in In re Lipitor Antitrust Litig., 868 F.3d 231, 249 (3d Cir. 2017). A plaintiff must allege “who made a misrepresentation to whom and the general content of the misrepresentation.” Id. If a plaintiff sufficiently pleads “that the requisite factual information is peculiarly within the defendant's knowledge...
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