Clark v. Blue Diamond Growers
| Docket Number | 22-cv-1591 |
| Decision Date | 05 July 2023 |
| Parties | MARGO CLARK, individually and on behalf of all others similarly situated Plaintiff, v. BLUE DIAMOND GROWERS, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Plaintiff Margo Clark filed this lawsuit alleging that Defendant Blue Diamond Grower's “Smokehouse Almonds” product misleads consumers into believing that its almonds are flavored through a smokehouse process instead of through added liquid smoke flavoring. Defendant moves to dismiss Clark's claims based on a lack of standing and for failure to state a claim. For the reasons that follow, the Court grants in part and denies in part Defendant's motion [16].
The Court takes the following facts from the complaint, which are accepted as true for motion to dismiss purposes. See Lax v. Mayorkas, 20 F. 4th 1178, 1181 (7th Cir. 2021). Defendant is a California cooperative of almond growers that sells almond-based products, including a line of almonds made in a variety of flavors. One such flavor is “Smokehouse Almonds,” which is intended to have a smokey flavor. This product is sold in various sizes and its packaging features the label “Smokehouse®”, among other words, as well as red and orange coloring. A copy of the packaging (as it appears in the complaint) is reproduced below:
(Image Omitted)
(Compl ¶ 1, ECF No. 1.)
Clark alleges that she bought this product at a CVS store located in Chicago, Illinois on one or more occasions between March 15, 2022 and March 21, 2022. She contends that, despite being labeled “Smokehouse®”, the almonds in this product are not flavored by smoking the almonds in an actual smokehouse. Rather, the almonds attain their smokey flavor through a liquid flavoring. (Compl. ¶¶ 41-42, ECF No. 1.)
Clark claims that by labeling the product in this manner, Blue Diamond misled consumers into believing they were purchasing a product flavored in a smokehouse rather than through added liquid smoke flavoring. She further alleges that Blue Diamond sold more of this product at higher prices (i.e., a premium) than it would have in the absence of the smokehouse labeling. Clark, therefore, brings claims for violation of (1) the Illinois Consumer Fraud and Deceptive Practices Act (“ICFA”), 815 ILCS 505/1; (2) breach of express warranty; (3) negligent misrepresentation; (4) fraud; and (5) unjust enrichment. In addition, she originally brought claims for breach of implied warranty of merchantability/fitness for a particular purpose and under the Magnuson Moss Warranty Act, 15 U.S.C. §§ 2301, but has withdrawn those claims. (Pl. Resp. 9 n.1, ECF No. 27.) Clark also seeks to represent a class of consumers from 12 states, including Illinois, and injunctive relief against Blue Diamond.
To survive a motion to dismiss under Rule 12(b)(6), a complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows 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). This standard “is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'” Id. (quoting Twombly, 550 U.S. at 557 (internal quotation marks omitted)).
When considering a motion to dismiss, courts “accept the allegations in the complaint as true, and . . . draw all reasonable inferences in favor of the plaintiff.” Crescent Plaza Hotel Owner, L.P. v. Zurich Am. Ins. Co., 20 F.4th 303, 307 (7th Cir. 2021) (citation omitted). But “allegations in the form of legal conclusions are insufficient” to survive a motion to dismiss, as are “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Defender Sec. Co. v. First Mercury Ins. Co., 803 F.3d 327, 334 (7th Cir. 2015) (citations and internal quotation marks omitted).
Defendant argues that the Court should dismiss Clark's claims because she lacks standing to pursue them and, alternatively because she fails to plead causes of action with respect to each theory of relief. Because Defendant's standing argument presents a threshold issue, the Court addresses it first.
Blue Diamond begins by arguing that Clark lacks Article III standing to pursue her claims because she has not alleged an injury and has not traced any alleged injury to its conduct. In order to establish Article III standing, a plaintiff must show the following: she has suffered an injury-in-fact that is both (a) concrete and particularized and (b) actual and imminent, not conjectural or hypothetical; the injury is fairly traceable to the defendant's challenged action; and it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 18081 (2000) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992)). A “concrete” injury must be “de facto”; that is, it must actually exist. Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 154849 (2016). Furthermore, a plaintiff must allege facts supporting standing for each form of relief sought. Davis v. Fed. Elec. Comm'n, 554 U.S. 724, 734 (2008).
Here, Clark plausibly alleges facts showing standing to pursue damages but not injunctive relief. The Supreme Court states that an economic injury may support standing. See Sierra Club v. Morton, 405 U.S. 727, 733 (1972) (“[P]alpable economic injuries have long been recognized as sufficient to lay the basis for standing.”). “Under the benefit-of-the-bargain theory, the economic injury is calculated as the difference in value between what was bargained for and what was received.” 15 James Wm. Moore et al., Moore's Federal Practice § 101.40[5][c] (3d ed. 2019).
Clark's allegation of an economic injury is sufficient to support standing. She alleges that she didn't get what she paid for-namely, that she did not get almonds flavored in an actual smokehouse-which suffices to demonstrate an injury. See Sierra Club, 405 U.S. at 733; see also Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 132 (2014); In re Aqua Dots Products Liability Litigation, 654 F.3d 748, 751 (7th Cir. 2011).
Blue Diamond argues that no price premium exists because it sells all its flavored almonds for the same price and points to the decision in Colpitts v. Blue Diamond, Case No. 20-cv-2487, 2023 WL 2752161 (S.D.N.Y March 31, 2022), as well as affidavits from various company executives. But that particular Colpitts decision is unhelpful here. First, that order was issued at the summary judgment stage. Id. at *2. And second, Colpitts held that the plaintiff could not marshal enough evidence to prove an injury, one of the essential elements under New York's consumer protection statute. Id. at *4-5. To be sure, Clark may run into the same problem that the Colpitts plaintiff did, but that is a matter for summary judgment, not a motion to dismiss.
Moreover, the Court declines to consider Blue Diamond's affidavits-which seek to introduce evidence and facts beyond the complaint's four corners. See Neita v. City of Chicago, Case No. 19-cv-595, 2019 WL 5682838, at *2 (N.D. Ill. Nov. 1, 2019) (citing Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993) ().
Clark fails, however, to demonstrate standing to pursue injunctive relief. “Past exposure to illegal conduct does not in itself [provide standing to seek] injunctive relief. .if unaccompanied by any continuing, present adverse effects,” O'Shea v. Littleton, 414 U.S. 488, 495-96 (1974), or by “a sufficient likelihood that [plaintiff] will again be wronged in a similar way,” City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983). Indeed, most courts to address similar issues agree that consumer plaintiffs cannot pursue injunctive relief if they are already aware of the alleged deceptive practice. See In re Herbal Supplements Mktg. & Sales Practices Litig., No. 15-cv-5070, 2017 WL 2215025, at *7 (N.D. Ill. May 19, 2017) (); Mednick v. Precor, Inc., Case No. 14-cv-3624, 2016 WL 5390955, at *9 (N.D. Ill. Sept. 27, 2016); Bohn v. Boiron, Case No. 11-cv-2704, 2013 WL 3975126, at *4 (N.D. Ill. Aug. 1, 2016).
This Court follows In re Herbal Supplements and Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732 (7th Cir. 2014), which reason that a plaintiff who only alleges a past harm caused by a deceptive sales practice faces no “real and immediate threat” such that she will be deceived by the same practice after the deception is revealed, and therefore is not entitled to pursue injunctive relief. See also Ulrich v. Probalance Inc., No. 16-cv10488, 2017 WL 3581183, at *7 (N.D. Ill. Aug. 18, 2017) (citing Lyons, 461 U.S. at 102). But Clark does not allege that she continues to...
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