Figy v. Frito-Lay N. Am., Inc.
| Decision Date | 12 August 2014 |
| Docket Number | Case No. 13-3988 SC |
| Court | U.S. District Court — Northern District of California |
| Parties | ROBERT FIGY and MARY SWEARINGEN, individually and on behalf of all others similarly situated, Plaintiffs, v. FRITO-LAY NORTH AMERICA, INC., Defendant. |
Now before the Court is Defendant Frito-Lay North America, Inc.'s ("Defendant") motion to dismiss Plaintiffs Robert Figy and Mary Swearingen's ("Plaintiffs") first amended complaint. ECF Nos. 17 ("FAC"), 25 ("MTD"). The motion is fully briefed, ECF Nos. 31 ("Opp'n"),1 34 ("Reply"), and suitable for decision without oral argument. Civ. L.R. 7-1(b). For the reasons explained below, theCourt GRANTS in part and DENIES in part Defendant's motion.
Defendant, a Texas corporation, makes snack food products. Plaintiffs are two California consumers who purchased three of Defendant's pretzel products between August 27, 2009 and the present (the "Class Period"). FAC Intro. ¶ 4.2 Specifically, Plaintiffs allege that they purchased "Frito-Lay's Rold Gold Sticks Pretzels," "Frito-Lay's Rold Gold Thins Pretzels," "Frito-Lay's Rold Gold Low Fat Tiny Twists Pretzels," (collectively, the "Purchased Products"), and were misled by portions of their labels. Id. ¶¶ 5-6. Plaintiffs, on behalf of themselves and a putative class, filed this action against Defendant, alleging that the Purchased Products contain deceptive and misleading labeling information, in violation of state and federal law. Id. ¶¶ 1-6; FAC ¶¶ 1-15. Plaintiffs also bring claims on behalf of a putative nationwide class of people who purchased two other products from Defendant that Plaintiffs did not buy.3
Plaintiffs allege that Defendant's marketing of the Products is misleading because the Products are labelled "Made with All Natural Ingredients" despite containing "artificial, synthetic andunnatural ingredients 'niacin, reduced iron, thiamin mononitrate, riboflavin, folic acid and ammonium bicarbonate.'" FAC ¶¶ 6, 27, 37, 52, 53, 57. Further, Plaintiffs contend that the labelling of some of the products as "LOW FAT" or "FAT FREE" is false and misleading because, despite containing greater than 480 milligrams of sodium per reference amount, the Products do not bear an additional label directing consumers to see the nutritional information for sodium content as required by 21 C.F.R. Section 101.13(h)(1). FAC ¶¶ 22-32. Together, Plaintiffs argue that these representations convey the impression that the Defendant's "products [are] healthier than a product that does not contain [the] unlawful nutrient content claim[s]." FAC ¶ 42. Further, Plaintiffs state that the absence of further labelling on the "LOW FAT" and "FAT FREE" products renders them "misbranded" as a matter of federal and California law, and therefore unsalable and "legally worthless." Id. ¶ 45.
Plaintiffs state that they care about buying healthy foods and read the label statements on the Purchased Products prior to buying them. FAC ¶ 80, 82. Because of their interest in purchasing healthy foods, Plaintiffs contend that they relied on the label statements and drew from them "the net impression that the Purchased Products they bought made only positive contributions to a diet, and did not contain any nutrients at levels that raised the risk of diet-related disease or health-related conditions." FAC ¶ 83. Plaintiffs claim they would not have bought the Products had they been properly labelled. Id.
In the FAC, Plaintiffs assert six causes of action against Defendant: (1-3) violations of the "unlawful," "unfair," and"fraudulent" prongs of California's Unfair Competition Law's ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq.; (4-5) violations of the "misleading and deceptive" and "untrue" prongs of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code § 17500, et seq.; and (6) violations of California's Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750, et seq. Plaintiffs seek monetary, equitable, and injunctive relief both individually and on behalf of a putative nationwide class of consumers.
Defendant now moves to dismiss the FAC.
Colwell v. Dep't of Health & Human Servs., 558 F.3d 1112, 1121 (9th Cir. 2009) (quoting St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989)).
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). However, Id. (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The court's review is generally "limited to the complaint, materials incorporated into the complaint by reference, and matters of which the court may take judicial notice." Metzler Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1061 (9th Cir. 2008) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)).
When a motion to dismiss is granted, a district court must decide whether to grant leave to amend. Generally, the NinthCircuit has a liberal policy favoring amendments and, thus, leave to amend should be freely granted. See, e.g., DeSoto v. Yellow Freight System, Inc., 957 F.2d 655, 658 (9th Cir. 1992). However, a court does not need to grant leave to amend in cases where the court determines that permitting a plaintiff to amend would be an exercise in futility. See, e.g., Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987) ().
Claims sounding in fraud are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b), which requires that a plaintiff alleging fraud "must state with particularity the circumstances constituting fraud." See Kearns v. Ford Motor Co., 567 F. 3d 1120, 1124 (9th Cir. 2009). "To satisfy Rule 9(b), a pleading must identify the who, what, when, where, and how of the misconduct charged, as well as what is false or misleading about [the purportedly fraudulent] statement, and why it is false." United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (citations omitted) (internal quotation marks omitted).
Defendant argues that Plaintiffs' FAC should be dismissed for five reasons: (1) Plaintiffs lack standing as to products they do not claim to have purchased, (2) Plaintiffs lack standing to seek injunctive relief as to statements that are no longer present on Defendant's labeling and were discontinued prior to this suit being filed, (3) Plaintiffs improperly seek to apply California consumerlaw to purchases made outside California against a non-California company, (4) Plaintiffs have not sufficiently pleaded reliance and injury with respect to their 'misbranding' claims, and (5), more generally, Plaintiffs have not adequately pleaded deception and reasonable reliance on Frito-Lay's labels.
The Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. Section 301 et seq., as amended by the Nutrition Labeling and Education Act of 1990 ("NLEA"), 21 U.S.C. § 343(r), et seq., is the operative statute in this matter.
The many subsections of 21 U.S.C. § 343 establish the conditions under which food is considered "misbranded." Generally, food is misbranded under 21 U.S.C. § 343(a)(1) if "its labeling is false or misleading in any particular." Section 343(r) discusses "nutrition levels and health-related claims" about food products made anywhere on their labels. It governs all voluntary statements about nutrition content or health information that a manufacturer includes on the food label or packaging. The Food and Drug Administration ("FDA") has classified these nutrient claims as "express" (e.g., "100 calories"), "implied" (e.g., "high in oat bran"), and "health claims," which "characteriz[e] the relationship of any substance to a disease or health-related condition." 21 C.F.R. §§ 101.13, 101.14; see also Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111, 1116-17 (N.D. Cal. 2010) (). If a food item contains a requisite level of certain...
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