Hadley v. Kellogg Sales Co.
| Decision Date | 21 March 2017 |
| Docket Number | Case No. 16–CV–04955–LHK |
| Citation | 243 F.Supp.3d 1074 |
| Parties | Stephen HADLEY, Plaintiff, v. KELLOGG SALES COMPANY, Defendant. |
| Court | U.S. District Court — Northern District of California |
Melanie Rae Persinger, The Weston Firm, Trevor Matthew Flynn, Jack Fitzgerald, Law Office of Jack Fitzgerald, PC, San Diego, CA, for Plaintiff.
Kenneth Kiyul Lee, Alexander Michael Smith, Kate Tainsky Spelman, Jenner & Block LLP, Los Angeles, CA, Dean N. Panos, Jenner and Block LLP, Chicago, IL, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
Plaintiff Stephen Hadley ("Plaintiff") brings the instant suit against Defendant Kellogg Sales Company ("Defendant") for allegedly misleading statements on Defendant's food product packaging. Before the Court is Defendant's Motion to Dismiss. ECF No. 44 ("Mot."). Having considered the parties' briefing, the relevant law, and the record in this case, the Court GRANTS Defendant's Motion to Dismiss.
Defendant is a "multi-billion dollar food company that manufactures, markets, and sells a wide variety of cereals and bars, among other foods." ECF No. 27, First Amended Complaint ("FAC") ¶ 109. Defendant is allegedly "the world's leading producer of cereal." Id. Defendant allegedly has "positioned itself in the market as a purportedly ‘healthy’ brand of processed food, by using various labeling statements to suggest its foods, especially its cereals and bars, are healthy choices." Id. ¶ 113.
Plaintiff "has been a frequent cereal eater for many years." Id. ¶ 366. Over the past several years, Plaintiff has purchased Defendant's breakfast cereals and cereal bars. Id. ¶ 367–68. During that time period, Plaintiff allegedly "tried to choose healthy options, and has been willing to pay more for cereals he believes are healthy." Id. at 366.
This case concerns statements on the packaging for breakfast cereals and cereal bars sold by Defendant that allegedly indicate that Defendant's products are healthy when "excess sugar" allegedly causes those products to be unhealthy. Plaintiff alleges that twelve of Defendant's product lines are sold with misleading packaging. See FAC ¶¶ 122–23. Those product lines are (1) Kellogg's Raisin Bran, (2) Kellogg's Krave, (3) Kellogg's Frosted Mini-Wheats, (4) Kellogg's Smart Start—Original Antioxidants, (5) Kellogg's Crunchy Nut, (6) Nutri-Grain Cereal Bars, (7) Nutri-grain Soft-Baked Breakfast Bars, (8) Nutri-Grain Oat & Harvest Bars, (9) Nutri-Grain Harvest Hearty Breakfast Bars, (10) Nutri-Grain Fruit Crunch Granola Bars, (11) Nutri-Grain Crunch Crunchy Breakfast Bars, and (12) Nutri-Grain Fruit & Nut Chewy Breakfast Bars. Id. Some of these product lines have multiple variants such that there are 53 products total that Plaintiff alleges are being sold with packaging that is misleading. Id.
In general, Defendant's products are alleged to contain 10 to 19 grams of total sugar per serving and are 20 to 40% sugar by calorie. Id. However, the FAC indicates that there is a difference between "total sugar," which is composed of all sugar in a product, including those provided by fruit, and "added sugar," which is composed of sugar that does not naturally occur in the ingredients of the product. Id.
The FAC alleges that the consumption of added sugar (as opposed to total sugar) can have significant health impacts on individuals. Specifically, the FAC alleges that people in the United States consume excess added sugar, that people can become addicted to added sugar, and that excess added sugar consumption is linked to metabolic syndrome, type 2 diabetes, cardiovascular disease, liver disease, obesity, inflammation, high cholesterol, hypertension, Alzheimer's disease, and some cancers. FAC ¶¶ 9–108. This link allegedly has been shown in multiple studies where the subjects of the study consumed 35 to 75 grams of added sugar (the amount of sugar in 1 to 2 cans of soda) per day. Id.
Moreover, the FAC alleges that the American Heart Association ("AHA") has found that a person is "safe" to consume up to 5% of his or her daily calories in added sugar, which amounts to approximately 25 grams of added sugar on a 2000 calorie diet. Id. ¶ 25. On the other hand, the United States Food and Drug Administration ("FDA") has concluded that the Daily Recommended Value ("DRV") of added sugars is 10% of a person's daily calories, or approximately 50 grams of added sugar. Based on these values, Plaintiff alleges that Defendant's products have a higher percentage of total sugar per serving (20–40% of total calories per serving) than the daily "safe" percentage of added sugar recommended by the AHA or the DRV recommended by the FDA. Id. The FAC does not explain why the per-serving total sugar percentage in the products should be compared to the recommended daily added sugar consumption percentage suggested by the AHA and the FDA.
Plaintiff alleges that the packaging for Defendant's products contains multiple statements touting the health and wellness benefits of consuming Defendant's products. For example, the packaging for Defendant's products contains statements like "Heart Healthy," "Great taste that does your heart good," "Start with a healthy spoonful," "Invest in your health invest in yourself," "nutritious," "Good source of whole grains," and "good source of fiber." FAC ¶¶ 127–219.
As an example, Plaintiff alleges that Raisin Bran contains the following "health and wellness" claims:
Id. ¶ 128. In contrast, other products such as Defendant's Nutri-Grain Fruit Crunch Granola Bars and Nutri-Grain Crunch Crunchy Breakfast Bars contain only a single challenged statement: "MADE WITH Real Fruit." Id. ¶ 280.
On August 29, 2016, Plaintiff filed a complaint. ECF No. 1. On October 31, 2016, Defendant filed a motion to dismiss. ECF No. 22. In lieu of filing a response, on November 14, 2016, Plaintiff filed a First Amended Complaint. ECF No. 27 ("FAC"). The FAC alleged five causes of action including (1) violation of the California False Advertising Law ("FAL"), (2) violation of the California Consumers Legal Remedies Act ("CLRA"), (3) violation of the California Unfair Competition Law ("UCL") under the fraudulent, unfair, and unlawful prongs, (4) breach of express warranty, and (5) breach of the implied warranty of merchantability. Id.
On December 8, 2016, Defendant filed the instant motion to dismiss the FAC. ECF No. 44 ("Mot."). On January 5, 2017, Plaintiff filed an opposition, ECF No. 49 ("Opp'n"), and on January 19, 2017, Defendant filed a reply, ECF No. 50 ("Reply").
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The United States Supreme Court has held that Rule 8(a) requires a plaintiff to 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 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, a 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).
However, a court need not accept as true allegations contradicted by judicially noticeable facts, Shwarz v. United States , 234 F.3d 428, 435 (9th Cir. 2000), and the "court may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into one for summary judgment, Shaw v. Hahn , 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). Nor is a court required to " ‘assume the truth of legal conclusions merely because they are cast in the form of factual allegations.’ " Fayer v. Vaughn , 649 F.3d 1061, 1064 (...
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