Campbell v. Freshbev LLC

• Decision Date: 02 July 2018
• Docket Number: 1:16–cv–7119(FB)(ST)
• Citation: 322 F.Supp.3d 330
• Parties: Gerard CAMPBELL, individually on behalf of himself and all others similarly situated, Plaintiff, v. FRESHBEV LLC, and Whole Foods Market Group, Inc., Defendants.
• Court: U.S. District Court — Eastern District of New York

322 F.Supp.3d 330

Gerard CAMPBELL, individually on behalf of himself and all others similarly situated, Plaintiff,

v.FRESHBEV LLC, and Whole Foods Market Group, Inc., Defendants.

1:16–cv–7119(FB)(ST)

United States District Court, E.D. New York.

Signed July 2, 2018

Filed July 3, 2018

For the Plaintiff, JOSHUA LEVIN–EPSTEIN, Levin–Epstein & Associates, P.C., 1 Penn Plaza, Suite 2527, New York, NY 10119, SPENCER SHEEHAN, Sheehan & Associates, P.C., 891 Northern Blvd., Suite 201, Great Neck, NY 11021

For the Defendants, DAVID E. SELLINGER, Greenberg Traurig, 200 Park Avenue, New York, New York 10166, TIMOTHY E. DI DOMENICO, Greenberg Traurig, 445 Hamilton Avenue, 9th Floor, White Plains, NY 10601

MEMORANDUM AND ORDER

FREDERIC BLOCK, Senior United States District Judge

Plaintiff Gerard Campbell brings this class action based on diversity jurisdiction under the Class Action Fairness Act¹ pursuant to New York General Business Law ("GBL") §§ 349 and 350 and common law fraud, alleging defendants Freshbev LLC ("Freshbev") and Whole Foods Market Group, Inc. ("Whole Foods") sell several juice products with misleading labels. Defendants move to dismiss Campbell's Third Amended Complaint ("TAC") under Federal Rules of Civil Procedure 12(b)(1), (2) and (6), alleging lack of subject matter and personal jurisdiction and failure to state a claim upon which relief can be granted. Defendants' motion is granted in part and denied in part.

I

Plaintiff allegedly bought several juices manufactured and sold by Freshbev at a store operated by Whole Foods,² including bottles of Ripe Craft Juice 12.2 Northeast Blend Cranberry Apple ("Cranberry Apple juice"), Ripe Craft Juice 12 Cranberry Unsweetened ("Cranberry juice") and Fresh Juice Pineapple ("Pineapple juice") for $4.99, $3.50 and $7.99, respectively.³ Plaintiff claims these prices represented a premium based on several purported misrepresentations: (1) that the juices were unpasteurized; (2) that the juices were cold-pressed; (3) that the juices were fresh; and (4) that the Cranberry Apple juice had more cranberry juice than apple juice.

The labels are as follows:⁴

II

A. Out–of–State Class Members

Defendants argue that this Court lacks personal jurisdiction over plaintiff's proposed out-of-state class members following the holding in Bristol–Myers Squibb Co. v. Sup. Ct. of Cal. , ––– U.S. ––––, 137 S.Ct. 1773, 1781–82, 198 L.Ed.2d 395 (2017). In Bristol–Myers s, the Supreme Court held that under the Fourteenth Amendment, state courts lacked personal jurisdiction for claims by out-of-state plaintiffs against an out-of-state defendant that had no connection to the forum state. 137 S.Ct. at 1781–82. However, the Court explicitly left open whether the same logic would extend to federal courts under the Fifth Amendment. Id. at 1783–84. Furthermore, as Justice Sotomayor's dissent points out, the Court also left open whether its holding applied to nationwide class actions. Id. at 1789 n.4 (dissenting).

Some district courts have declined to extend the logic of Bristol–Myers . See Sloan v. General Motors LLC , 287 F.Supp.3d 840, 858–59 (N.D. Cal. 2018) (holding Bristol–Myers does not preclude federal jurisdiction over out-of-state claims); Casso's Wellness Store & Gym, L.L.C. v. Spectrum Lab. Prods., Inc. , 2018 WL 1377608, at *5 (E.D. La. Mar. 18, 2018) (holding Bristol–Myers does not preclude personal jurisdiction over nationwide class actions); Molock v. Whole Foods Market, Inc. , 297 F.Supp.3d 114, 124–27 (D.C. Cir. 2018) (holding Bristol–Myers precluded federal jurisdiction over out-of-state mass tort claims but not nationwide class actions).

In any event, plaintiff has not yet brought a motion to certify a nationwide class. Until he does so, the issue is not squarely before the Court. Given the unsettled nature of the law following Bristol–Myers , the Court will defer on this question until the plaintiff brings a motion for class certification, if he chooses to do so.⁵

B. Standing for Injunctive Relief

Defendants argue plaintiff lacks standing for injunctive relief because he now knows the truth about the juice and therefore cannot be fooled again. For plaintiff to have Article III standing, he "must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). Plaintiffs have standing to pursue injunctive or declaratory relief only where they are able "to establish a 'real or immediate threat' of injury." Nicosia v. Amazon.com, Inc. , 834 F.3d 220, 239 (2d Cir. 2016) (quoting City of Los Angeles v. Lyons , 461 U.S. 95, 111–12, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) ). Past injuries are insufficient "unless the plaintiff can demonstrate that she is likely to be harmed again in the future in a similar way." Id. While the alleged harm must be "certainly impending," Whitmore v. Arkansas , 495 U.S. 149, 158, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990), "it is not the materialization of the feared risk itself that must be 'certainly impending,' " Baur v. Veneman , 352 F.3d 625, 641 (2d Cir. 2003) (quoting Lujan v. Defs. of Wildlife , 504 U.S. 555, 564, n.2, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). Rather, "only the exposure must be imminent...." Id.

"The Second Circuit has not directly addressed whether plaintiffs alleging claims of false or misleading advertising have standing to seek injunctive relief where the action the plaintiffs seek to enjoin is still ongoing." Sitt v. Nature's Bounty, Inc. , 2016 WL 5372794, at *6 (E.D.N.Y. Sept. 26, 2016). Some district courts have reasoned that plaintiffs lack standing for injunctive relief in these cases because they have "necessarily become aware of the alleged misrepresentations, [and] 'there is no danger that they will again be deceived by them.' " Davis v. Hain Celestial Group, Inc. , 297 F.Supp.3d 327, 338 (E.D.N.Y. 2018) (Ross, J.) (quoting Elkind v. Revlon Consumer Prods. Corp. , 2015 WL 2344134, at *3 (E.D.N.Y. May 14, 2015) ). Others have found plaintiffs have standing in such cases because "[t]o hold otherwise would 'effectively bar any consumer who avoids the offending product from seeking injunctive relief.' " Ackerman v. Coca–Cola Co. , 2013 WL 7044866, at *15 n.23 (E.D.N.Y. July 18, 2013) (quoting Koehler v. Litehouse, Inc. , 2012 WL 6217635, at *6 (N.D. Cal. Dec. 13, 2012) ).

However, the Ninth Circuit recently held plaintiffs do have standing so long as they plead a future desire to buy the product. In Davidson v. Kimberly–Clark Corp. , 889 F.3d 956 (9th Cir. 2018), the Ninth Circuit held that a consumer who purchased a wrongfully labeled product had standing for injunctive relief because that consumer faced an ongoing injury: the inability to rely on the truth of the inaccurate label. 889 F.3d at 969–70. This injury is actual and imminent, not conjectural or hypothetical, because as long as the mislabeled product is sold, the consumer is "unable to rely on the product's advertising or labeling in the future, and so will not purchase the product although she would like to." Id. at 970.

The Court finds Davidson persuasive. The parties provide no Second Circuit cases on point,⁶ and the Court's research reveals only one, Kommer v. Bayer Consumer Health, a division of Bayer AG , 710 F. App'x 43 (2d Cir. 2018), a nonprecedential summary order. Notwithstanding that it was not of precedential value, in Kommer , the court found the plaintiff had no standing for injunctive relief because he claimed he would never purchase defendant's product again. 710 Fed.App'x at 44. Therefore, the plaintiff did not allege the future injury deemed sufficient in Davidson .

However, plaintiff has not pleaded such an injury. He alleges only that he has purchased the product in the past and, even in his TAC, does not plead that he intends or desires to purchase FreshBev's juices in the future.⁷ Therefore, plaintiff has not pleaded future injury, and his injunctive relief claims are dismissed.

C. Defendants' 12(b)(6) Motions

1. GBL 349 and 350

Plaintiff challenges four claims on the labels of defendants' juices: that the juices are (1) unpasteurized; (2) cold-pressed; (3) fresh; and, (4) for the Cranberry Apple juice, that the name "Cranberry Apple" implies that there is more cranberry juice than apple in the blend. Defendants argue that federal law preempts plaintiff's claims and that the statements on the labels are accurate.

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint that "fail[s] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To survive, the complaint must plead "enough facts to state a claim to relief that is plausible on its face," Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and "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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

In the case of deceptive advertising claims under GBL §§ 349 and 350, a plaintiff must show that "defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice." Orlander v. Staples, Inc. , 802 F.3d 289, 300 (2d Cir. 2015).⁸ Here, plaintiff challenges consumer-directed advertising and alleges that he suffered injury: He bought the products relying on the false advertising, and they did not live up to expectations.

Defendants challenge the second element, arguing that their label claims are not "materially misleading." This element is "objective," meaning "the alleged act must be 'likely to mislead a reasonable consumer acting reasonably under the circumstances.' " Cohen v. JP Morgan Chase & Co. , 498 F.3d 111, 126 (2d Cir. 2007) (quoting Oswego Laborers' Local 214 Pension...