Branca v. Bai Brands, LLC

• Decision Date: 07 March 2019
• Docket Number: Case No.: 3:18-cv-00757-BEN-KSC
• Court: U.S. District Court — Southern District of California
• Parties: KEVIN BRANCA, on behalf of himself and all others similarly situated, Plaintiff, v. BAI BRANDS, LLC, a New Jersey Limited Liability Company; DR PEPPER SNAPPLE GROUP, INC., a Delaware Corporation; LARRY YOUNG, an individual; BEN WEISS, an individual; JUSTIN TIMBERLAKE, an individual, Defendants.

KEVIN BRANCA,on behalf of himself and all others similarly situated, Plaintiff, v. BAI BRANDS, LLC, a New Jersey Limited Liability Company;DR PEPPER SNAPPLE GROUP, INC., a Delaware Corporation;LARRY YOUNG, an individual; BEN WEISS, an individual;JUSTIN TIMBERLAKE, an individual, Defendants.

Case No.: 3:18-cv-00757-BEN-KSC

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

March 7, 2019

ORDER:

(1) GRANTING IN PART AND DENYING IN PART DEFENDANTS DR. PEPPER SNAPPLE GROUP, INC. AND BAI BRANDS, LLC'S MOTION TO DISMISS FIRST AMENDED COMPLAINT;

(2) GRANTING DEFENDANTS JUSTIN TIMBERLAKE, BEN WEISS, AND LARRY YOUNG'S MOTION TO DISMISS FIRST AMENDED COMPLAINT; and(3) DENYING DEFENDANTS' MOTION FOR SANCTIONS

[Doc. Nos. 18, 19, and 24.]

Before the Court are two Motions to Dismiss and a Motion for Sanctions filed by Defendants Bai Brands, LLC, ("BAI"), a New Jersey Limited Liability Company, Dr. Pepper Snapple Group, Inc., ("DPSG"), a Delaware Corporation, Larry Young ("Young"), an individual, Ben Weiss ("Weiss"), an individual, and Justin Timberlake ("Timberlake"), an individual (collectively, the "Defendants"). (Doc. Nos. 18, 19, 24.) Plaintiff Kevin Branca ("Branca" or "Plaintiff") filed timely oppositions (Doc. Nos. 22, 23, 31) to which Defendants replied (Doc. Nos. 26, 27, 34). The Court finds the motions suitable for disposition without oral argument. For the reasons discussed below, the Court GRANTS in part and DENIES in part the Motions to Dismiss and DENIES the Motion for Sanctions.

I. BACKGROUND

Defendants manufacture, distribute, advertise, market, and sell beverage products labeled "Bai Antioxidant Infusion Brasilia Blueberry," "Bai Antioxidant Infusion Ipanema Pomegranate," "Bai Antioxidant Infusion Malawi Mango," "Bai Bubbles Sparkling Antioxidant Infusion Bolivia Black Cherry," and "Bai Bubbles Sparkling Antioxidant Infusion Jamaica Blood Orange." (Doc. No. 19-1 at 2.) The ingredient list on Defendants' Products provides "they contain only natural ingredients and are flavored only with natural ingredients when the Products, in fact, contain undisclosed artificial flavors in violation of state and federal law." (Doc. No. 22 at 1.) Specifically, "Defendants add a synthetic industrial chemical called d-1 malic acid, in the form of a racemic mixture of d- and 1-isomers, to flavor the Products and make them taste like fresh fruit." Id. Malic acid has two forms: 1-malic acid, which occurs naturally and is found in several fruits and vegetables, and d-1 malic acid, which is chemically manufactured from benzene or butane. (See Id.)

According to Branca, d-1 malic acid poses potential safety risks since it has "not been extensively studied for its health effects in human beings." (See Doc. Nos. 3 and 22.) Branca claims that the d-1 malic acid in Defendants' Products is used to give them their tangy, fresh fruit flavor. Id. Defendants do not contest that the Products contain malic acid. (See Doc. No. 18-1.) Rather, Defendants argue the malic acid in their Products is natural d-1 malic acid which is used as a pH control agent, not as a flavor. Id.Branca, on behalf of himself and a purported class of similarly situated individuals, filed this action against Defendants concerning their failure to disclose an artificial flavoring ingredient in their Bai Beverage Products (the "Products").

This is important because Defendants' Products are labeled as containing "NO artificial flavors" and as being "naturally flavored." But because of the d-1 malic acid, Branca claims Defendants' Product "labels violate California and federal statute and state common law in multiple regards" including California's Sherman Law, Cal. Health & Saf. Code § 109875 et seq., and various other FDA regulations. (Doc. No. 3 ¶¶ 28-53.) And since Defendants' Products were not labeled as containing artificial flavors, Branca alleges he paid a premium for Products he was misled into believing were naturally flavored.

Defendants contend that "Branca simply assumes - with no basis - that the malic acid in the Products is not natural malic acid (1-malic acid), but rather d-1-malic acid. (Doc. No. 18-1 at 1.) Moreover, he "misapprehends federal labeling regulations with respect to malic acid" because "federal labeling law does not consider malic acid to be a flavor, the presence of malic acid as an ingredient has no bearing on label statements regarding flavors, whether natural or artificial." Id.

Based on these and other facts, Branca filed this case on behalf of himself and all others similarly situated, asserting nine separate claims.¹ Defendants now move to dismiss the First Amended Complaint ("FAC") and for sanctions.

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II. DISCUSSION

A. Defendants' BIA and DPSG's Motion to Dismiss

Defendants argue that (1) Branca fails to state an actionable claim against any defendant; (2) Branca lacks standing to pursue injunctive relief; (3) putative class members not residing in California should be dismissed for lack of personal jurisdiction; and (4) some of Branca's claims are barred by the applicable statutes of limitations. (See Doc. No. 18-1.)

1. Fails to State an Actionable Claim Against Any Defendant.

Under Federal Rule of Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts that "allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). There must be "more than a sheer possibility that a defendant has acted unlawfully." Id. While courts do not require "heightened fact pleading of specifics," a plaintiff must allege facts sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555, 570.

In deciding whether the plaintiff has stated a claim upon which relief can be granted, the court accepts the plaintiff's allegations as true and draws all reasonable inferences in favor of the plaintiff. See Usher v. City of L.A., 828 F.2d 556, 561 (9th Cir. 1987). However, the court is not required to accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).

If the court dismisses a complaint, it "should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). In making this determination, the court should consider factors such as "thepresence or absence of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party and futility of the proposed amendment." See Moore v. Kayport Package Express, 885 F.2d 531, 538 (9th Cir. 1989).

(a)Offers Only Conjecture that the Products Contain d-1-Malic Acid

Defendants argue Branca has failed to plead an actionable claim in the FAC demonstrating Defendants' Products contain d-1-malic acid.² (Doc. No. 18-1 at 3.) Additionally, his submission of a FAC containing an unsubstantiated "assumption" about the malic acid in Defendants' Products is mere conjecture, violating plaintiff counsel's ethical obligation to establish the evidentiary basis of any claim prior to filing any complaint. Fed. R. Civ. P. 11(b)(3). (Doc. No. 18-1 at 11.)

The liberal pleading standard applied by federal courts comports with Rule 8(e), which states "Pleadings must be construed so as to do justice." Fed. R. Civ. P. 8(e); C.F. Sagan v. Apple Computer, Inc., 874 F. Supp. 1072, 1077 (C.D. Cal. 1994) ("Parties are expected to use discovery, not the pleadings, to learn the specifics of the claims being asserted."); Davison v. Santa Barbara High School Dist., 48 F. Supp. 2d 1225, 1228 (C.D. Cal. 1998) ("If the moving party could obtain the missing detail through discovery, the motion should be denied.").

Here, Branca avers the FAC clearly alleges the Defendants use an "artificial petrochemical, d-1-malic acid in their Products, but pretend otherwise, conflating the natural and the artificial flavorings" in order to deceive consumers. (Doc. No. 22 at 13.) Specifically, the FAC narrates "what, how, and why" the Defendants use artificial malic acid by discussing "with particularity" how artificial malic acid is created, is used in beverage products like Bai, and why Defendants use 'd-1-malic acid'" in place of naturalmalic acid. Allred v. Kellogg, 2018 WL 1158885 at *2. Finally, due to the current procedural posture of the case, Branca contends the allegations in the FAC must be accepted as true. See Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005).

This Court finds that Branca has sufficiently described his claims to avoid dismissal. While Branca's assumption as to the type of malic acid contained in Defendants' Products ultimately may be incorrect, at the pleading stage, this Court "does not operate as a fact-finder," but, instead, must "presume all facts plead as true." Thus, the Court finds Branca has sufficiently pled the products contain d-1-malic acid.

Therefore, the Court DENIES Defendants' Motion to Dismiss as to this claim.

(b)Fails to State that the Products Should be Labeled "Artificially Flavored"

Defendants argue that even if Plaintiffs can establish that its Products contained artificial d-1-malic acid, it would have no effect on the Product labels because federal regulations prohibit malic acid (whatever form) from being listed as an "artificial flavor." (Doc. No. 18-1 at 5.) Thus, labeling Defendants' Products as containing an "artificial flavor," is expressly prohibited by federal regulations. Id....