Brod v. Sioux Honey Ass'n

• Decision Date: 27 February 2013
• Docket Number: No. C–12–1322 EMC.,C–12–1322 EMC.
• Citation: 927 F.Supp.2d 811
• Parties: Gregory BROD, on behalf of himself and all others similarly situated, Plaintiff, v. SIOUX HONEY ASSOCIATION, COOPERATIVE, Defendant.
• Court: U.S. District Court — Eastern District of California

927 F.Supp.2d 811

Gregory BROD, on behalf of himself and all others similarly situated, Plaintiff,

v.SIOUX HONEY ASSOCIATION, COOPERATIVE, Defendant.

No. C–12–1322 EMC.

United States District Court,

N.D. California.

Feb. 27, 2013.

Jon Michael Herskowitz, Miami, FL, Laurence D. King, Linda M. Fong, Kaplan Fox & Kilsheimer LLP, San Francisco, CA, Robert Ian Lax, Lax LLP, New York, NY, for Plaintiff.

David Ian Dalby, Hinshaw & Culbertson LLP, San Francisco, CA, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (Docket No. 56)

EDWARD M. CHEN, District Judge.

I. INTRODUCTION

Plaintiff Gregory Brod (“Brod”) has filed a class action lawsuit against Defendant Sioux Honey Association Cooperative (“Sioux Honey”) alleging that it violated state law by marketing its “Sue Bee Clover Honey” in California simply as “Honey,” without disclosing the fact that it did not contain pollen. Plaintiff contends that the California Food and Agricultural Code requires “honey products marketed in California that have had their natural pollen unnecessarily removed” to be “sold with a notation which discloses this fact.” Second Amended Class Action Complaint (“SAC”) (Docket No. 55) ¶ 5. Brod advances causes of action under California's Consumers Legal Remedies Act and Unfair Competition Law, as well as for breach of express and implied warranty. Sioux Honey has filed a motion to dismiss Brod's complaint arguing that Plaintiff and members of his purported class lack standing to sue based on the facts alleged in the complaint, that the claims asserted by Plaintiff are preempted by federal food and drug laws, that Plaintiff's causes of action fail to state a claim under Fed.R.Civ.P. 12(b)(6), and that Plaintiff's claims are barred by the Commerce Clause of the U.S. Constitution. See Def.'s Mot. to Dismiss (Docket No. 56). Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS Defendant's motion for the reasons discussed herein.

II. FACTUAL & PROCEDURAL BACKGROUND

Plaintiff Gregory Brod bought a bottle of Sue Bee Clover Honey (“Sue Bee Honey”) at a store in San Rafael, California some time before January 12, 2012. Brod Decl. ¶ 3 (Docket No. 1). Prior to purchasing the bottle, Brod read the “Clover Honey” label and the “U.S. Grade A Fancy White Pure Honey” representation printed on the front of the bottle. SAC ¶ 8. At some point after his purchase, Brod learned that all the pollen had been filtered out of the bottle of Sue Bee Honey during the manufacturing process. See SAC ¶¶ 6, 21–22. He alleges that Sioux Honey's act of filtering all naturally-occurring pollen out of Sue Bee Honey renders it incapable of meeting certain California Food and Agricultural Code standards for products sold as “honey,” making it unlawful to sell the product in the state “without disclosures that it is filtered or pollen-free.” SAC ¶ 15 (citing Cal. Food & Agric. Code § 29413(e)); see also SAC ¶ 5, 14. Had Plaintiff known that Sioux Honey's Sue Bee Honey did not comply with California standards, he alleges that he and similarly situated consumers “would not have purchased the Sue Bee Honey.” SAC ¶¶ 8, 25.

On January 19, 2012, Brod filed a class action lawsuit against Sioux Honey in the Superior Court for the State of California in Marin County. Not. of Removal ¶ 1 (Docket No. 1). Sioux Honey, a citizen of the State of Iowa, thereafter removed the suit to federal district court pursuant to 28 U.S.C. § 1332 on the basis of diversity jurisdiction. Not. of Removal ¶¶ 3–5. Brod filed a First Amended Class Action Complaint on April 23, 2012, see Docket No. 19, and a Motion to Relate this case to another one called Ross v. Sioux Honey Association, C–12–1645, see Docket No. 20, which this Court subsequently granted, see Docket No. 23. Sioux Honey then filed a motion to dismiss the amended complaint, which this Court granted with leave to amend by an order dated September 11, 2012. See Motion to Dismiss (Docket No. 25); Order (Docket No. 52). Brod filed his Second Amended Complaint on October 11, 2012. Brod's SAC advances the following four causes of action:

(1) That Defendant's marketing and sale of Sue Bee Honey in California simply as “honey” violated the California Consumers Legal Remedies Act (CLRA), Cal. Civ.Code §§ 1750, et seq., because the product did not include “disclosures that it is filtered or pollen free as required by the California Food & Agriculture Code's proscription against false or misleading labeling of honey.” SAC ¶ 41;

(2) That Defendant's marketing and sale of Sue Bee Honey in California simply as “honey” violated California's Unfair Competition Law (UCL), Cal. Bus. and Prof. Code §§ 17200, et. seq., because Sioux Honey's failure to adequately disclose the product's lack of pollen both violates provisions of the California Food & Agriculture Code, and is likely to deceive California consumers. SAC ¶¶ 45–53;

(3) That Defendant's marketing and sale of Sue Bee Honey in California simply as “honey” breached Sioux Honey's express warranty that the product “was of normal quality and standards for such goods in this locale,” and “was of a characteristic grade which complied with all applicable laws, and which had not been economically adulterated.” SAC ¶¶ 54–60; and

(4) That Defendant's marketing and sale of Sue Bee Honey in California simply as “honey” breached California's implied warranty of merchantability, codified at Cal. Comm. Code § 2314, because the product “does not comply with the ordinary standards for such goods” and was thus “not fit for its ordinary purpose and intended consumption as ‘honey,’ ” and because it is marketed and sold “in contravention of the explicit statutory standards for honey in the State of California” and is thus “not merchantable in the State of California.” SAC ¶¶ 63, 68.

Plaintiff seeks on behalf of himself and all other persons who purchased Sue Bee Honey in California after January 1, 2010, both “a permanent injunction or other appropriate equitable relief” prohibiting Sioux Honey from “marketing its Sue Bee Honey to consumers in the State of California,” and “actual and statutory damages, restitution and punitive damages,” as well as “reasonable costs and attorneys' fees.” SAC at 12–13.

Sioux Honey filed the now pending motion to dismiss on October 25, 2012. Def.'s Mot. to Dismiss (Docket No. 56). Sioux Honey argues, among other things, that Plaintiff and similarly situated members of the purported class lack standing to sue under Article III of the U.S. Constitution because they have not incurred an “injury-in-fact,” that federal food and drug laws preempt Plaintiff's argument that California law mandates disclosure of the removal of pollen from honey, that Plaintiff's four causes of action fail to state a claim under Fed. R. Civ. P. 12(b)(6), and that Plaintiff's claims are otherwise barred by the Commerce Clause of the U.S. Constitution. In his opposition brief, Brod concedes that his third cause of action for breach of an express warranty fails to state a claim. See Pl.'s Opp. Br. (Docket No. 62) at 2 n. 1 (“Plaintiff does not contest Sioux's motion with regard to the SAC's claim for Breach of Express Warranty”). Brod opposes the balance of Defendant's legal arguments.

III. DISCUSSION

A. Constitutional Standing

Sioux Honey's Motion to Dismiss asks this Court to dismiss Brod's class action complaint under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction. In its motion, Sioux Honey argues that Brod and other similarly situated class members do not have “the required injury-in-fact” to assert standing for their claims “under Article III of the United States Constitution.” Def.'s Mot. to Dismiss at 3.

Under Rule 12(b)(1), a court may dismiss a complaint for lack of subject matter jurisdiction if the plaintiff cannot satisfy the standing requirements set by Article III of the U.S. Constitution. Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1121–22 (9th Cir.2010). “Because standing ... [pertains] to federal courts' subject matter jurisdiction, [it is] properly raised in a Rule 12(b)(1) motion to dismiss.” Chandler, 598 F.3d at 1121–22. “A jurisdictional challenge under Rule 12(b)(1) may be made either on the face of the pleadings or by presenting extrinsic evidence.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir.2003). Here, Sioux Honey asserts only a facial challenge; therefore, the Court must accept all allegations of fact in the complaint as true. See Warren, 328 F.3d at 1139 (“Where jurisdiction is intertwined with the merits, we must assume the truth of the allegations in a complaint unless controverted by undisputed facts in the record.”) (citing Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.1987)) (internal quotation marks omitted).

1. Legal Standard

“Article III of the Constitution limits the ‘judicial power’ of the United States to the resolution of ‘cases' and ‘controversies.’ ” Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 471, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982).

To satisfy the “case” or “controversy” requirement of Article III, which is the “irreducible constitutional minimum” of standing, a plaintiff must, generally speaking, demonstrate that he has suffered “injury in fact,” that the injury is “fairly traceable” to the actions of the defendant, and that the injury will likely be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 471–72, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982).

Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997). Although evidence is to be viewed and inferences are to be drawn in Plaintiff's favor (as the nonmoving party), Plaintiff has the burden of proving that he has...