Bohr v. Tillamook Cnty. Creamery Ass'n
| Decision Date | 10 August 2022 |
| Docket Number | A175575 |
| Citation | 321 Or.App. 213,516 P.3d 284 |
| Parties | Sonja BOHR, Tamara Barnes, Karen Foglesong, and Mary Wood, on behalf of themselves and all others similarly situated, Plaintiffs-Respondents, v. TILLAMOOK COUNTY CREAMERY ASSOCIATION, an Oregon cooperative corporation, Defendant-Appellant. Sonja Bohr, Tamara Barnes, Karen Foglesong, and Mary Wood, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. Tillamook County Creamery Association, an Oregon cooperative corporation, Defendant-Respondent. |
| Court | Oregon Court of Appeals |
321 Or.App. 213
516 P.3d 284
Sonja BOHR, Tamara Barnes, Karen Foglesong, and Mary Wood, on behalf of themselves and all others similarly situated, Plaintiffs-Respondents,
v.
TILLAMOOK COUNTY CREAMERY ASSOCIATION, an Oregon cooperative corporation, Defendant-Appellant.
Sonja Bohr, Tamara Barnes, Karen Foglesong, and Mary Wood, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants,
v.
Tillamook County Creamery Association, an Oregon cooperative corporation, Defendant-Respondent.
A175575
Court of Appeals of Oregon.
Argued and submitted April 27, 2022
August 10, 2022
Amanda Howell, Texas, argued the cause for Sonja Bohr, Tamara Barnes, Karen Foglesong, and Mary Wood. Also on the briefs were David F. Sugerman, Nadia H. Dahab, and Sugerman Law Office, Tim Quenelle and Tim Quenelle PC, Kelsey Eberly, California, and Animal Legal Defense Fund.
Michael J. Sandmire, Portland, argued the cause for Tillamook County Creamery Association. Also on the opening and answering briefs were Alexandra M. Shulman, Daniel L. Lis, and Buchalter Ater Wynne. Also on the reply brief were Alexandra M. Shulman and Buchalter Ater Wynne.
Before Tookey, Presiding Judge, and Lagesen, Chief Judge, and DeVore, Senior Judge.
TOOKEY, P. J.
Plaintiffs brought this putative class action under Oregon's Unlawful Trade Practices Act (UTPA) against defendant, Tillamook County Creamery Association (Tillamook), on behalf of themselves and on behalf of all "persons in Oregon who purchased Tillamook dairy products in Oregon" during the one-year period preceding the date that their complaint was filed. Plaintiffs’ complaint asserts that Tillamook engaged in practices prohibited by the UTPA. More specifically, plaintiffs’ complaint asserts that "Tillamook has engaged in a deceptive marketing campaign to convince consumers that the dairy cows who provide milk for its products graze on pastures in Tillamook County" and deceptively represented to consumers that Tillamook's "products are sourced from small family farms whose traditional farming practices are better for the environment, the local community, and of course the cows than are the industrial dairy facilities that Tillamook derides as ‘Big Food.’ " Plaintiffs’ complaint included both a "price-inflation" theory of causation, as well as an "inducement" theory of causation, and what plaintiffs characterize as "prohibited transaction" claims.
Tillamook moved to dismiss the complaint for the reason, among others, that the named plaintiffs and the putative class members had not pleaded reliance. Tillamook argued, among other points, that plaintiffs could not avoid pleading reliance by alleging "a non-cognizable ‘price-inflation’ theory" or by characterizing their UTPA claims against Tillamook as "prohibited transaction" claims. The trial court granted Tillamook's motion to dismiss in part and denied it in part. In the trial court's view, although the complaint adequately pleaded reliance with regard to the named plaintiffs, it did not do so with regard to the putative class. That putative class, as the trial court observed, included individuals who purchased Tillamook products "without ever having observed any Tillamook marketing." The trial court directed that the class be limited to consumers who had purchased Tillamook products in reliance on Tillamook's marketing representations described in plaintiffs’ complaint. The trial court further dismissed plaintiffs’ claims—both those of the named plaintiffs and those of
the putative class—that were "based on a price inflation or fraud on the market theory," and plaintiffs’ claims that were based on a "prohibited transaction" theory.
In its order granting in part and denying in part Tillamook's motion to dismiss, the trial court certified seven controlling questions of law for interlocutory review by this court pursuant to ORS 19.225 (five from plaintiffs and two from Tillamook).1 The parties then separately applied for leave to appeal the trial court's order. We granted both plaintiffs’ and Tillamook's applications for interlocutory appeal.
As explained below, plaintiffs’ first two assignments of error correspond to four of the controlling questions certified by the trial court. In plaintiffs’ first assignment of error, plaintiffs assert that the trial court "erred in granting Tillamook's motion to dismiss on the ground that plaintiffs and members of the putative class were required to plead and prove that they observed and relied upon defendant's representations." In plaintiffs’ second assignment of error, plaintiffs assert the trial court "erred in granting Tillamook's motion to dismiss on the ground that plaintiffs and members of the putative class were required to plead and prove that they relied
upon defendant's representations with respect to their prohibited transaction claims." For the reasons described below, we reject plaintiffs first two assignments of error, affirm the trial court's rulings on Tillamook's motion to dismiss as to those issues, and we remand for further proceedings consistent with this opinion.
Further, as explained below, our resolution of plaintiffs’ first two assignments of error functionally resolve the claims of the putative class. Having resolved the claims
of the putative class, mindful that interlocutory appeals in class actions under ORS 19.225 should be reserved for "exceptional cases," Pearson v. Philip Morris, Inc. , 208 Or App 501, 514, 145 P.3d 298 (2006) ( Pearson I ), and that our review under ORS 19.225 is discretionary, we decline to address the remaining questions certified for interlocutory appeal. As we will explain, resolution of the remaining issues presented in this interlocutory appeal would apply to only the named plaintiffs, and there are prudential reasons not to reach them.
I. BACKGROUND
"We review the grant of a motion to dismiss for failure to state a claim under ORCP 21 A(8) for legal error."2 Rivas v. Board of Parole , 277 Or App 76, 78, 369 P.3d 1239 (2016), rev. den. , 360 Or. 752, 388 P.3d 722 (2017). In doing so, we accept as true the allegations in plaintiffs’ second amended complaint—the operative complaint in this case—as well as any reasonable inferences that may be drawn, viewing them in the light most favorable to the nonmoving party. Id. We state the facts in accordance with that standard.
A. Tillamook and Its Marketing
Tillamook is an Oregon cooperative corporation that does business in Oregon and across the United States. In 2017, Tillamook's revenue attributable to its dairy products was $800 million. According to plaintiffs, Tillamook has engaged in a deceptive marketing campaign: Per plaintiffs’ complaint, "Tillamook's marketing deceptively claims its dairy products are (1) sourced (exclusively) from dairy farms located in Tillamook County, (2) made using production practices that closely resemble small-scale traditional farming, and (3) from cows allowed to graze on pasture and treated better than those on factory farms." According to plaintiffs, those deceptive claims are made through Tillamook's "website, in print and television advertisements, and across social media platforms."3
According to plaintiffs’ complaint, in reality, contrary to Tillamook's marketing representations, Tillamook "sources upwards of two thirds of the milk for its products from the largest and most industrialized dairy factory farm in the country—a Concentrated Animal Farming Operation (‘CAFO’) with over 70,000 total cows and 32,000 dairy cows confined in a single location." The CAFO is not located in Tillamook County but, instead, in eastern Oregon. Plaintiffs allege that the CAFO consists of a "complex of cement-floored production facilities and barren dirt feedlots, where cows are continuously confined, milked by robotic carousels, and afflicted with painful udder infections," and is "a far cry from the rolling green hills of the Tillamook County family farms shown throughout Tillamook's marketing campaign."
B. Consumer Behavior
Plaintiffs’ complaint also contains allegations concerning consumer behavior. According to the complaint, consumers "increasingly seek out and are willing to pay more for products that they perceive as being ecofriendly, such as ‘free range,’ ‘cage free,’ ‘organic,’ ‘sustainable,’ ‘local,’ ‘grass fed’ and
other terms that lead reasonable consumers to conclude they are supporting local and ethical businesses." Consumers do so because they "believe such sellers are better for the environment, more humane." Consumers also "seek out products made by small-scale farmers in order to support non-industrialized farming, to eschew products that contribute to corporate control of the food system, and support products that are environmentally sustainable."
According to plaintiffs’ complaint, Tillamook has falsely projected "such ethical sourcing as its company ethos, deliberately crafting its marketing messages to attract these consumers, who believe they are getting such responsibly sourced products when they buy Tillamook cheese and ice cream." The complaint also alleges that Tillamook's marketing "is highly effective at convincing consumers that its dairy products are sourced from smaller, pasture-based dairies in
Tillamook County that prioritize animal welfare and environmental stewardship more than large, industrial dairies do."
C. The Named Plaintiffs
Plaintiffs’ complaint was filed by four named plaintiffs. Each of the four named plaintiffs alleges that, "having seen the Tillamook representations," each plaintiff thought that "she was purchasing a product that aligned with her values" and that, had each named plaintiff known the truth about Tillamook's products, "she would have bought other dairy products instead of Tillamook's, or would not have paid as much as she did for the Tillamook products." The complaint further alleged that each of the named plaintiffs "regularly...
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