Gibson v. Eagle Family Foods Grp.

• Docket Number: 1:22-cv-02147-TWP-MKK
• Decision Date: 29 August 2023
• Parties: MELISSA GIBSON individually and on behalf of all others similarly situated, Plaintiff, v. EAGLE FAMILY FOODS GROUP LLC, Defendant.
• Court: U.S. District Court — Southern District of Indiana

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MELISSA GIBSON individually and on behalf of all others similarly situated, Plaintiff, v. EAGLE FAMILY FOODS GROUP LLC, Defendant.

No. 1:22-cv-02147-TWP-MKK

United States District Court, S.D. Indiana, Indianapolis Division

August 29, 2023

Spencer Sheehan

SHEEHAN & ASSOCIATES, P.C.

Amy P Lally

SIDLEY AUSTIN LLP

Elizabeth M. Chiarello

SIDLEY AUSTIN LLP

Thomas Aaron Weber

SIDLEY AUSTIN LLP

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

Hon. Tanya Walton Pratt, Chief Judge

This matter is before the Court on a Motion to Dismiss filed pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) by Defendant Eagle Family Foods Group, LLC ("Eagle") (Filing No. 11). Plaintiff Melissa Gibson ("Gibson" or "Plaintiff") initiated this putative class action, alleging that Eagle misled her and other consumers by marketing "Popcorn Indiana" brand products as being made in Indiana by an Indiana company. Gibson asserts claims for violation of Indiana's and other states' consumer protection statutes, breach of express and implied warranties, violation of the Magnuson-Moss Warranty Act, negligent misrepresentation, fraud, and unjust enrichment. For the following reasons, the Court grants Eagle's Motion to Dismiss.

I. BACKGROUND

The following facts are not necessarily objectively true, but as required when reviewing a motion to dismiss, the Court accepts as true all factual allegations in the complaint and draws all inferences in favor of Gibson as the non-moving party. See Bielanski v. County of Kane, 550 F.3d 632, 633 (7th Cir. 2008).

Eagle manufactures, labels, markets, and sells popcorn products under the brand "Popcorn Indiana" (the "Product") (Filing No. 1 at ¶ 1). Although the Product is made with corn grown in Indiana, it is not made (popped) in Indiana, and Eagle is not an Indiana company. Id. at ¶¶ 24-25. Neither the front nor back of the Product packaging states that the Product is not made in Indiana or by an Indiana company, though Eagle's website states that the Product is manufactured in Illinois. Id. at ¶¶ 26-27. The front label of certain varieties of the Product appear as follows:

(Image Omitted)

Id. at ¶ 18.

The Product is sold for approximately two dollars and ninety-nine cents for a three-ounce bag, excluding tax. Id. at ¶ 35. On one or more occasions between August and October 2022, Gibson purchased the Product at "locations," including a Walmart at 1133 North Emerson Avenue in Greenwood, Indiana. Id. at ¶ 46. Gibson bought the Product because she believed the "Popcorn Indiana" label referred to the place the corn was grown, the place it was popped, and the place the company was from. Id. at ¶¶ 47-48. If Gibson had known the Product was not made in Indiana or by an Indiana company, she would not have purchased the Product or would have paid less for it. Gibson filed this putative class action on behalf of herself and all persons in Indiana, North Dakota, North Carolina, Utah, Idaho, Alaska, West Virginia, and Montana, "who purchased the Product during the statutes of limitations for each cause of action alleged." Id. at ¶ 55.

II. LEGAL STANDARDS

A. Standard for Dismissal under Rule 12(b)(1)

A motion to dismiss under Rule 12(b)(1) challenges the court's subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). The burden of proof is on the plaintiff, the party asserting jurisdiction. United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003), overruled on other grounds by Minn-Chem, Inc. v. Agrium, Inc., 683 F.3d 845 (7th Cir. 2012) (en banc). "The plaintiff has the burden of supporting the jurisdictional allegations of the complaint by competent proof." Int'l Harvester Co. v. Deere & Co., 623 F.2d 1207, 1210 (7th Cir. 1980). "In deciding whether the plaintiff has carried this burden, the court must look to the state of affairs as of the filing of the complaint; a justiciable controversy must have existed at that time." Id.

"When ruling on a motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), the district court must accept as true all well-pleaded factual allegations, and draw reasonable inferences in favor of the plaintiff." Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995) (citation omitted). Further, "[t]he district court may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Id. (citation and quotation marks omitted).

B. Standard for Dismissal under Rule 12(b)(6)

Similarly, Rule 12(b)(6) allows a defendant to move to dismiss a complaint that has failed to "state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). When deciding a motion to dismiss under Rule 12(b)(6), the court accepts as true all factual allegations in the complaint and draws all inferences in favor of the plaintiff. Bielanski, 550 F.3d at 633. However, courts "are not obliged to accept as true legal conclusions or unsupported conclusions of fact." Hickey v. O'Bannon, 287 F.3d 656, 658 (7th Cir. 2002).

The complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). In Bell Atlantic Corp. v. Twombly, the United States Supreme Court explained that the complaint must allege facts that are "enough to raise a right to relief above the speculative level." 550 U.S. 544, 555 (2007). Although "detailed factual allegations" are not required, mere "labels," "conclusions," or "formulaic recitation[s] of the elements of a cause of action" are insufficient. Id.; see also Bissessur v. Ind. Univ. Bd. of Trs., 581 F.3d 599, 603 (7th Cir. 2009) ("[I]t is not enough to give a threadbare recitation of the elements of a claim without factual support."). The allegations must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Twombly, 550 U.S. at 555. Stated differently, the complaint must include "enough facts to state a claim to relief that is plausible on its face." Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009) (citation and quotation marks omitted). To be facially plausible, the complaint must 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 (2009) (citing Twombly, 550 U.S. at 556).

III. DISCUSSION

Gibson asserts six claims: Count I: violation of the Indiana Deceptive Consumer Sales Act, Ind. Code §§ 24-5-0.5-0.1-12 ("IDCSA"); Count II: violation of other "State Consumer Fraud Acts"; Count III: breach of express and implied warranties and violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-12 ("MMWA"); Count IV: negligent misrepresentation; Count V: fraud; and Count VI: unjust enrichment. On behalf of herself and others, she seeks compensatory and injunctive relief.

Eagle argues the Complaint should be dismissed because Gibson lacks standing to seek injunctive relief and to assert claims under other states' statutes; she fails to adequately plead her fraud claims (Count I, II, and V); her warranty and MMWA claims fail for several reasons; her unjust enrichment claim is barred by Indiana's economic loss doctrine; and her negligent misrepresentation claim is barred by the existence of an adequate remedy at law. Eagle also argues that all of Gibson's claims must be dismissed because the Product label is not misleading.

A. Lack of Standing

Eagle argues that Gibson lacks standing to seek injunctive relief or to sue under other states' consumer protection statutes (Filing No. 12 at 14). Because standing is a jurisdictional issue, the Court addresses this argument first.

1. Injunctive Relief

Eagle contends Gibson may not seek injunctive relief because she faces no future risk of deception. Specifically, Gibson now "knows the geographic origin of Popcorn Indiana products, [so] she cannot plausibly claim that she faces any future risk of being misled on the geographic origin of the products" (Filing No. 12 at 14). The Court agrees.

"It goes without saying that those who seek to invoke the jurisdiction of the federal courts must satisfy the threshold requirement imposed by Article III of the Constitution by alleging an actual case or controversy." City of Los Angeles v. Lyons, 461 U.S. 95, 101 (1983). "Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects." O'Shea v. Littleton, 414 U.S. at 495-96 (1974). "Without a 'showing of any real or immediate threat that the plaintiff will be wronged again,' [a plaintiff] lack[s] standing to request, and the district court lack[s] jurisdiction to award, . . . [a] permanent injunction." Lopez-Aguilar v. Marion Cnty. Sheriff's Dep't, 924 F.3d 375, 396 (7th Cir. 2019) (citation omitted) (quoting Lyons, 461 U.S. at 111).

The Northern District of Illinois, which frequently adjudicates consumer fraud actions, has repeatedly held that a consumer who learns of an alleged deception is not likely to suffer any future similar harm, so the consumer cannot obtain injunctive relief. See, e.g., Calderon v Procter & Gamble Co., __ F.Supp.3d __, No. 22-cv-3326, 2023 WL 3627797, at *6 (N.D. Ill. May 24, 2023); Geske v. PNY Techs., Inc., 503 F.Supp.3d 687, 701 (N.D. Ill. 2020); Benson v. Fannie May Confections Brands, Inc., No. 17 C 3519, 2018 WL 1087639, at *5 (N.D. Ill. Feb. 28, 2018); see also Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 741 (7th Cir. 2014) (stating in dicta that once a consumer becomes aware of deceptive "sales practices, he is not likely to be harmed by the practices in the...