Cimoli v. Alacer Corp.

• Decision Date: 01 July 2021
• Docket Number: Case No. 5:20-cv-07838-BLF
• Citation: 546 F.Supp.3d 897
• Parties: Jeffrey CIMOLI, on behalf of himself and all others similarly situated, Plaintiff, v. ALACER CORP., Defendant.
• Court: U.S. District Court — Northern District of California

546 F.Supp.3d 897

Jeffrey CIMOLI, on behalf of himself and all others similarly situated, Plaintiff,

v.ALACER CORP., Defendant.

Case No. 5:20-cv-07838-BLF

United States District Court, N.D. California, San Jose Division.

Signed July 1, 2021

Benjamin Heikali, Joshua Nassir, Ruhandy Glezakos, Faruqi and Faruqi LLP, Los Angeles, CA, for Plaintiff.

Jessica D. Miller, Pro Hac Vice, Skadden Arps Slate Meagher and Flom LLP, Washington, DC, Emily Anne Reitmeier, Skadden Arps, Palo Alto, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

Re: ECF 17

BETH LABSON FREEMAN, United States District Judge

Plaintiff Jeffrey Cimoli ("Plaintiff") brings this putative consumer class action against Defendant Alacer Corp. ("Defendant"). Plaintiff asserts eight causes of action against Defendant for allegedly misleading labels on two of Defendant's products. Before the Court is Defendant's motion to dismiss Plaintiff's complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). See generally Mot., ECF 17. The Court heard oral argument on Defendant's motion on June 3, 2021. For the reasons stated on the record at the hearing and discussed below, Defendant's motion is GRANTED IN PART WITH LEAVE TO AMEND and DENIED IN PART.

I. BACKGROUND¹

Plaintiff is an individual consumer and a citizen of California, currently residing in San Jose. Compl. ¶ 16, ECF 1. Defendant is a California corporation with its principal place of business in Carlisle, Pennsylvania. Id. ¶ 18. Defendant sells Emergen-C brand products, including several varieties of Emergen-C brand Immune Support Gummies. Id. ¶ 2. Plaintiff's complaint centers on two of these Immune Support Gummies: a Vitamin C

supplement product (the "Vitamin C Gummies") and an Elderberry supplement product (the "Elderberry Gummies") (collectively, the "Products").

The front label of the Vitamin C

Gummies represents that the product contains 750 mg of Vitamin C. Id. ¶ 3. The front label of the Elderberry Gummies represents that the product is "[c]rafted with 50 mg of elderberry juice concentrate." Id. ¶ 3. Defendant sells these products nationwide. Id. ¶ 18.

In or around June 2020, Plaintiff purchased the Vitamin C

Gummies from a Target in San Jose, California. Compl. ¶ 16. When Plaintiff purchased the Vitamin C Gummies, he allegedly relied on the dosage information provided on the Vitamin C Gummies' front label, which reads "750 mg of Vitamin C" and "45 Gummies." Id. ¶ 16. Plaintiff alleges that he believed the Vitamin C Gummies product contained 45 Gummies, each of which contained 750 mg of Vitamin C. Id. Plaintiff further claims he would not have purchased the Vitamin C Gummies or would have paid less for the Vitamin C Gummies had he not been misled by the front label. Id. Though Plaintiff has not purchased the Elderberry Gummies, he claims that the label misleads consumers in the same manner as the label of the Vitamin C Gummies. Id. ¶¶ 23-25. Plaintiff's primary theory of liability is that "[a] reasonable consumer understands [the representations on the front of the Products] to mean that each Gummy will contain 750 mg of Vitamin C or 50 mg of elderberry juice concentrate." Id. ¶ 24.

Plaintiff proposes a nationwide class of consumers who purchased Defendant's Gummies along with a "California Subclass" and a "California Consumer Subclass." Compl. ¶ 39. The Nationwide Class includes "[a]ll persons in the United States who, within the relevant statute of limitations period, purchased any of the Products." Id. The California Subclass includes "[a]ll persons who, within the relevant statute of limitations period, purchased any of the Products in the state of California." Id. The California Consumer Subclass includes those who purchased the Products for "personal, family, or household purposes in the state of California." Id.

Plaintiff filed this action on November 5, 2020, asserting eight causes of action: (1) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq. , (on behalf of the California Class); (2) violation of California's Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq. , (on behalf of the California Consumer Subclass); (3) violation of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500 et seq. , (on behalf of the California Class); (4) breach of express warranty, Cal. Com. Code § 2313, (on behalf of the California Class); (5) breach of implied warranty, Cal. Com. Code § 2314, (on behalf of the California Class); (6) unjust enrichment/quasi-contract (on behalf of the California Class); (7) common law fraud (on behalf of the California Class); and (8) violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. §§ 201-1, et seq. , (on behalf of the Nationwide Class). See generally Compl.

II. LEGAL STANDARD

A. Rule 12(b)(6)

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). When considering such a motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party."

Manzarek v. St. Paul Fire & Marine Ins. Co. , 519 F.3d 1025, 1031 (9th Cir. 2008). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

B. Leave to Amend

In deciding whether to grant leave to amend, the Court must consider the factors set forth by the Supreme Court in Foman v. Davis , 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962), and discussed at length by the Ninth Circuit in Eminence Capital, LLC v. Aspeon, Inc. , 316 F.3d 1048 (9th Cir. 2003). A district court ordinarily must grant leave to amend unless one or more of the Foman factors is present: (1) undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by amendment, (4) undue prejudice to the opposing party, and (5) futility of amendment. Eminence Capital , 316 F.3d at 1052. When considering these factors, "prejudice to the opposing party ... carries the greatest weight." Id. However, a strong showing with respect to one of the other factors may warrant denial of leave to amend. Id.

III. DISCUSSION

Defendant moves to dismiss on multiple grounds. First, Defendant argues Plaintiff's claims are governed by California law and, therefore, Plaintiff cannot advance a claim for violation of the UTPCPL on behalf of the nationwide class. Mot. at 4-6, 12-14. Second, Defendant argues that Plaintiff's FAL, CLRA, UCL, and common law fraud claims should be dismissed for failure to allege an actionable misrepresentation. Id. at 6-10. Third, Defendant argues that Plaintiff's breach of express and implied warranty claims must fail because Plaintiff does not allege facts to establish an affirmation of fact or promise that each Products' dosage is per gummy. Id. at 10-11. Defendant also asserts that Plaintiff's implied warranty claims fail because of California's privity requirement. Id. at 11. Fourth, Defendant claims Plaintiff lacks standing to pursue injunctive relief under California's consumer protection statutes. Id. at 12-14. Finally, Defendant contends the Court should strike purchasers of the Elderberry Gummies from the putative classes for lack of standing. Id. 15-17. The Court addresses each argument in turn.

A. UTPCPL Claim and Nationwide Class

Plaintiff brings Count VIII against Defendant for a violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-2. The UTPCPL declares unlawful "unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce ...." 73 P.S. § 201-3. For example, 73 PS § 201-2(4)(v) prohibits "[r]epresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have ...."

Defendant argues that California law governs under choice-of-law rules and that Plaintiff is consequently prohibited from bringing claims under the UTPCPL on behalf of the nationwide class. Mot. at 4-6, 15. Plaintiff responds that the nationwide class and UTPCPL claim should survive dismissal because the UTPCPL may be applied to consumers outside of Pennsylvania if the transaction involved a Pennsylvania defendant. Opp. at 4, 16. Plaintiff further contends that the Court should apply California law to his claims brought on behalf of the California classes and Pennsylvania law to the claim brought on behalf of the nationwide class. Id. at 4. Accordingly, Plaintiff argues that no choice-of-law analysis is required because the Court should apply the law of both states. Id.

As an initial matter, the Court finds that the UTPCPL may apply extraterritorially. In Danganan v. Guardian Protection Services , the Pennsylvania Supreme Court, on certification from the Third Circuit, considered whether "a non-resident may bring a [UTPCPL] claim against a Pennsylvania business premised on an out-of-state transaction." 645 Pa. 181, 186, 179 A.3d 9 (2018). Danganan involved a plaintiff who purchased home security equipment for his home in Washington, D.C. from the defendant, a company headquartered in Pennsylvania. Id. at 183, 179 A.3d 9. The contract signed by the parties included a choice-of-law provision applying Pennsylvania law to the agreement. Id. The state supreme court found that "the plain language definitions of ‘person’ and ‘trade’ and ‘commerce’ evidence no geographic limitation or residency requirement relative to the [UTPCPL]’s application." Id. at 193, 179 A.3d 9. Therefore, the court found that a non-resident may bring a...