Colpitts v. Blue Diamond Growers

• Decision Date: 16 March 2021
• Docket Number: 20 Civ. 2487 (JPC)
• Parties: Matthew COLPITTS, individually and on behalf of all others similarly situated, Plaintiff, v. BLUE DIAMOND GROWERS, Defendant.
• Court: U.S. District Court — Southern District of New York

527 F.Supp.3d 562

Matthew COLPITTS, individually and on behalf of all others similarly situated, Plaintiff,

v.BLUE DIAMOND GROWERS, Defendant.

20 Civ. 2487 (JPC)

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

Signed March 16, 2021

Christopher Patalano, Spencer Sheehan, Sheehan & Associates, PC, Great Neck, NY, for Plaintiff.

Colleen M. Gulliver, Rachael C. Kessler, Negin Hadaghian, DLA Piper US LLP, New York, NY, Stefanie Jill Fogel, DLA Piper LLP, Boston, MA, for Defendant.

OPINION AND ORDER

JOHN P. CRONAN, United States District Judge:

Plaintiff Matthew Colpitts brings this putative class action against Defendant Blue Diamond Growers, in connection with Defendant's sale of a specific variety of almonds featuring a smoky taste (the "Product"). Plaintiff alleges that the Product's use of the word "Smokehouse®" and a color scheme evocative of fire on its packaging misleads consumers into thinking that the almonds were prepared by a natural smoking process, when in fact the Product retains its taste from added flavors that imitate a smoky flavor. Asserting federal jurisdiction under the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d)(2), Plaintiff brings claims under New York consumer protection law and common law.

Defendant moves to dismiss the Complaint on numerous grounds. First, Defendant argues that Plaintiff has not pleaded an injury-in-fact sufficient to establish standing under Article III of the United States Constitution for any of his claims. Second, Defendant seeks dismissal of Plaintiff's claims under New York General Business Law ("N.Y. G.B.L.") §§ 349 and 350, arguing that Plaintiff fails to adequately plead a purchase, that he improperly seeks to privately enforce regulations promulgated under the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq. , and that no reasonable consumer would interpret the Product's "Smokehouse®" description and package coloring as meaning that the almonds derive their taste from having been smoked over a fire. Lastly, Defendant argues that Plaintiff has failed to adequately plead his claims of fraud, negligent misrepresentation, breaches of express and implied warranties, and unjust enrichment under common law. See Dkts. 10, 11, 12.

For the reasons below, the Court concludes that Plaintiff has established Article III standing to seek damages. Plaintiff's N.Y. G.B.L. §§ 349 and 350 claims survive dismissal because Plaintiff has sufficiently pleaded viable grounds for relief under those Sections, including by plausibly alleging that reasonable consumers could be misled by the Product's labeling. The Court, however, dismisses Plaintiff's common law claims for failure to state a claim upon which relief may be granted.

I. Background

A. Factual Allegations

For purposes of the present motion to dismiss, the Court accepts as true all factual allegations in the Complaint and draws all reasonable inferences in Plaintiff's favor. See Tsirelman v. Daines , 794 F.3d 310, 313 (2d Cir. 2015). The factual recitation that follows therefore is derived from the Complaint and is assumed true only for the purposes of resolving the instant motion.

Defendant distributes and manufactures smoke-flavored almonds, i.e. , the Product. Dkt. 1 ("Compl." or "Complaint") ¶ 1. The Product is sold in various sizes, and its packaging features the label "Smokehouse®," among other words, as well as red and red-orange coloring, a color scheme that, according to Plaintiff, is suggestive of fire. Id. ¶¶ 2-4. The Complaint includes the following picture of the front of the Product's packaging:

Id. ¶ 3. Plaintiff alleges that through these features—the "Smokehouse®" label and the packaging's color scheme—the Product "makes direct representations" that its smoky flavor is the result of the actual process of smoking. Id. ¶ 4. As alleged, "[s]moking is a method of food preparation (and preservation) where a food is cooked over a fire that contain[s] various kinds of wood chips," with the wood chips "provid[ing] unique and powerful flavors, based on the type of wood used." Id. ¶¶ 5-6. Plaintiff further alleges that it would not be unreasonable for consumers to expect that the almonds were in fact smoked over a fire: " ‘Smoked Almonds’ that get their smoked flavor from being smoked is not an unheard of or rare delicacy that it would make a reasonable consumer ‘double check’ the veracity of the front label claims." Id. ¶ 12. Plaintiff contends that consumers therefore receive the impression that the almonds retain their smoky taste through this process of actual smoking. Id. ¶¶ 8, 14.¹

This representation, according to Plaintiff, is misleading because the Product's smoky taste is in fact derived from added smoke flavor, not the aforementioned process of smoking over a fire with wood chips. Id. ¶¶ 15, 18. To support this contention, the Complaint includes a picture of the ingredients section on the back of the Product's packaging, which lists "NATURAL HICKORY SMOKE FLAVOR" as an ingredient:

Id. ¶ 15.

The Complaint also suggests that certain parts of the label fail to put a consumer on notice that the Product is not actually smoked. The Complaint maintains that the trademark symbol at the end of the word "Smokehouse®" does not cure the misleading nature of the representation, because "[t]here is no reason to expect that because a representation may carry a trademark registration that it should mean the thing described is false or that it is necessarily fanciful." Id. ¶ 10. Plaintiff also alleges that no reasonable consumer would resort to the ingredients list after reading the "Smokehouse®" label to check whether the almonds had smoke flavor additives, id. ¶ 11, and even if one were to, "a reasonable consumer would have no reason to know that the listing of ‘natural hickory smoke flavor’ forecloses the possibility the Product was also subject to smoking," id. ¶ 17.

Plaintiff pleads that, as a result of the Product's allegedly misleading labeling, reasonable consumers will purchase the Product, instead of similar products, at a higher price. Id. ¶ 21. This is because "[c]onsumers prefer foods that have the characteristics they seek due to their natural production process, i.e., actual smoking, as opposed to the ‘taste’ of being smoked through ‘smoke flavor,’ for reasons including nutrition, health and/or the avoidance of additives and highly processed ingredients." Id. ¶ 16. Plaintiff further alleges that, during the relevant statute of limitations period and while in this District, he purchased the Product "for personal consumption and/or use in reliance on the representations the Product's smoked taste being the result of actual smoking as opposed to smoke flavor." Id. ¶ 34. Plaintiff alleges that the Product "is sold at a premium price, approximately no less than $2.79 per 1.5 OZ, excluding tax, compared to other similar products represented in a non-misleading way," id. ¶ 24, and had he and other members of the putative class known that the Product's taste was not the result of any smoked treatment, they would not have bought the Product or would have paid less for it, id. ¶ 22.

B. Procedural Background

Plaintiff filed the Complaint on March 22, 2020, asserting jurisdiction under the CAFA, 28 U.S.C. § 1332(d)(2).² Compl. ¶¶ 25-28. The Complaint pleads claims under N.Y. G.B.L. §§ 349 and 350, as well as common law claims of fraud, negligent misrepresentation, breach of express warranty, breach of implied warranty of merchantability, and unjust enrichment.³ Id. ¶¶ 43-71. Plaintiff pleads that the class will consist of all purchasers of the Product in New York and other states during the applicable statute of limitations period.⁴ Id. ¶ 35.

On September 11, 2020, Defendant moved to dismiss the Complaint. Dkts. 10 ("Notice of Motion"), 11 ("Motion to Dismiss"), 12. Plaintiff filed his brief opposing dismissal on October 2, 2020, Dkt. 14 ("Opposition"), and Defendant filed its reply brief on October 16, 2020, Dkt. 17 ("Reply"). On September 29, 2020, this case was reassigned to the undersigned. The Court held oral argument on Defendant's Motion to Dismiss on February 18, 2021. See Dkt. 38 ("2/18/21 Tr.").

II. Discussion

A. Applicable Legal Standards Under Federal Rule of Civil Procedure 12(b)

When reviewing a motion under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, this Court must accept all factual allegations in the complaint as true and draw inferences from the allegations in the light most favorable to the plaintiff. Tsirelman , 794 F.3d at 313. Because a court resolving a Rule 12(b)(6) motion "may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint," DiFolco v. MSNBC Cable L.L.C. , 622 F.3d 104, 111 (2d Cir. 2010), this Court also considers the Product's label, including the "Smokehouse®" description, the color scheme, and the ingredients list. See Stewart v. Riviana Foods Inc. , No. 16 Civ. 6157 (NSR), 2017 WL 4045952, at *1-2, 10 (S.D.N.Y. Sept. 11, 2017). 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). A claim is facially plausible only "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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While this Court accepts factual allegations as true, that principle does not apply to "legal conclusions" or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Id.

The standard of review for a motion to dismiss pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction is "identical" to the standard for a Rule 12(b)(6) motion for failure to state a claim.⁵ Moore v....