Hilsley v. Ocean Spray Cranberries, Inc.

• Decision Date: 30 October 2018
• Docket Number: Case No.: 17cv2335-GPC(MDD)
• Parties: CRYSTAL HILSLEY, on behalf of herself and all others similarly situated, Plaintiff, v. OCEAN SPRAY CRANBERRIES, INC.; ARNOLD WORLDWIDE LLC; and DOES defendants 1 through 5, inclusive, Defendants.
• Court: U.S. District Court — Southern District of California

CRYSTAL HILSLEY, on behalf of herself and all others similarly situated, Plaintiff, v. OCEAN SPRAY CRANBERRIES, INC.; ARNOLD WORLDWIDE LLC;and DOES defendants 1 through 5, inclusive, Defendants.

Case No.: 17cv2335-GPC(MDD)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

October 30, 2018

ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

[Dkt. No. 31.]

Before the Court is Defendants' motion for summary judgment. (Dkt. No. 31.) Plaintiff filed an opposition, and Defendants replied. (Dkt. Nos. 40, 65.) Based on a careful review of the briefs, the supporting documents and the applicable law, the Court DENIES Defendants' motion for summary judgment.

Background

The action was removed to this Court pursuant to the Class Action Fairness Act on November 16, 2017. (Dkt. No. 1.) Plaintiff Crystal Hilsley ("Plaintiff" or "Hilsley") brings a purported consumer class action against Defendants Ocean Spray Cranberries, Inc. and Arnold Worldwide LLC for violations of California consumer protection laws based on misrepresentation of labels on certain Ocean Spray products. (Dkt. No. 1-2, Compl.) Defendant Ocean Spray Cranberries, Inc. ("Ocean Spray") manufactures, distributes, advertises, markets and sells a variety of juices and juice-based beverage products. Defendant Arnold Worldwide LLC ("Arnold") participates in the labeling and advertising of these products for Ocean Spray. (Id. ¶ 6.) According to Hilsley, the labels on Defendants' juice-based beverage products labeled "Cran-Apple" and "Cran-Grape" states "No . . . artificial flavors." (Dkt. No. 23-19, Hilsley Decl. ¶ 5.) The Cran-Apple juice drink includes fumaric acid and malic acid as ingredients. (Dkt. No. 31-2, Fritz Decl. ¶ 9; Dkt. No. 23-4 at 4¹.) The Cran-Grape juice drink contains fumaric acid. (Dkt. No. 23-6, Marron Decl., Ex. 3 at 8-10.)

According to Hilsley, the Cran-Apple juice drink contains an artificial ingredient called d-l malic acid. (Id. ¶ 6.) "Malic acid is an organic compound with the molecular formula C2H605. (Dkt. No. 40-19, Dr. Somogyi Decl. ¶ 19.) Natural malic acid, also known as l-malic acid, is found naturally in many fruits and vegetables. (Id. ¶ 21.) Dl-malic acid is a racemic mixture that does not occur naturally but is produced synthetically by "hydration of fumaric acid or maleic acid." (Id. ¶ 22.) The complaint alleges that Ocean Spray uses a synthetic form of fumaric acid to simulate the flavor of grapes in its Cran-Grape product.² (Dkt. No. 1-2, Compl. ¶ 56.)

According to Plaintiff's expert, Dr. Somogyi, malic acid is added to foods, beverages and candies to give tart and fruity flavors. (Dkt. No. 40-19, Dr. Somogyi Decl. ¶ 25.) Fumaric acid also simulates, resembles or reinforces certain fruit flavors in beverages and can also affect pH. (Id. ¶ 41.) Fumaric acid combined with malic acid improves the flavor profile of the product. (Id. ¶¶ 25, 41.) According to Ocean Spray'sVice President ("VP") of research, development, quality and engineering, Ocean Spray uses malic and fumaric acids to control pH and titratable acid levels in their juice products, and are not used as flavors. (Dkt. No. 31-2, Fritz Decl. ¶ 9.)

Plaintiff purchased four Ocean Spray juice drinks: 1) Ocean Spray Cran-Apple; 2) Ocean Spray Cran-Grape; 3) Ocean Spray 100% Apple Juice; and 4) Ocean Spray Cranberry Juice Cocktail. (Dkt. No. 23-19, Hilsley Decl. ¶ 4.) Plaintiff concedes that Ocean Spray Cranberry Juice Cocktail does not contain malic acid or fumaric acid and she is no longer asserting claims as to the Cranberry Juice Cocktail. (Dkt. No. 40-20, P's Response to Ds' SSUF, Nos. 3, 4.) While Plaintiff agrees that the Ocean Spray 100% Apple Juice does not contain fumaric acid, she disputes Defendants' claim that Ocean Spray 100% Apple Juice does not contain malic acid and refers to Ocean Spray's own website where malic acid is an ingredient in the 100% Apple Juice product for the 15.2-ounce bottles. (Id., Nos. 1, 2; Dkt. No. 40-12, Marron Decl., Ex. 10.) According to the labels, the 60-ounce 100% Apple Juice does not contain malic acid while the 15.2-ounce 100% Apple Juice contains malic acid. (Compare Dkt. No. 23-6, Marron Decl., Ex. 3 at 14 with Dkt. No. 40-12, Marron Decl., Ex. 10.) Defendants argue that since Plaintiff purchased the 64-ounce³ 100% Apple Juice product which does not contain malic acid, her reference to the single-serve bottle is not relevant in this case. The Court disagrees. Neither party has explained the difference in the ingredient labels of the 15.2-ounce and 60-ounce bottle of the same exact product. Accordingly, the Court concludes that this is a disputed issue of fact.

When Plaintiff purchased Defendants' juice products, she read and relied on the products' labels including "No artificial flavors or preservatives" and the fact that the labels failed to state that they contained artificial flavorings. (Dkt. No. 23-19, HilsleyDecl. ¶ 5.) Plaintiff would not have purchased the juice products had she known they contained artificial ingredients. (Id. ¶ 7.)

The complaint alleges that Defendants' product labels stating the products contain "No Artificial Flavors" are false and misleading because their juice products contain artificial flavor ingredients of dl-malic acid and fumaric acid. (Dkt. No. 1-2, Compl. ¶ 10.) The complaint also claims that the products' ingredient list violates federal and state law because it incorrectly identifies malic acid as a generic "malic acid" instead of using the correct, specific, non-generic chemical name. (Id. ¶ 27.) Plaintiff alleges six causes of action for violation of the Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq; violation of the unlawful prong of the Unfair Competition Law ("UCL"), Cal. Bus. & Professions Code section 17200 et seq.; violation of the unfair prong of the UCL; violation of California's False Advertising Law, breach of express warranty and breach of implied warranty. (Id. ¶¶ 115-187.)

Discussion

A. Legal Standard on Summary Judgment

Federal Rule of Civil Procedure 56 empowers the Court to enter summary judgment on factually unsupported claims or defenses, and thereby "secure the just, speedy and inexpensive determination of every action." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327 (1986). Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A fact is material when it affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The moving party bears the initial burden of demonstrating the absence of any genuine issues of material fact. Celotex Corp., 477 U.S. at 323. The moving party can satisfy this burden by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element of his or her claim on which that party will bear theburden of proof at trial. Id. at 322-23. If the moving party fails to bear the initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970). Once the moving party has satisfied this burden, the nonmoving party cannot rest on the mere allegations or denials of his pleading, but must "go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file' designate 'specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324. If the non-moving party fails to make a sufficient showing of an element of its case, the moving party is entitled to judgment as a matter of law. Id. at 325. "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). In making this determination, the court must "view[] the evidence in the light most favorable to the nonmoving party." Fontana v. Haskin, 262 F.3d 871, 876 (9th Cir. 2001). The Court does not engage in credibility determinations, weighing of evidence, or drawing of legitimate inferences from the facts; these functions are for the trier of fact. Anderson, 477 U.S. at 255.

B. Whether Malic and/or Fumaric Acids Function as Flavors

Defendants move for summary judgment on all six causes of action arguing that malic and fumaric acids do not function as flavors in their juice products but instead are acidulants used to control the pH and titratable acid levels in their juices. Because each cause of action is dependent on the determination that malic and fumaric acids function as flavors in Defendants' products, they argue that summary judgment should be granted on all causes of action. Plaintiff responds arguing there are genuine issues of material fact that malic and fumaric acids act as flavors in Defendants' products.

21 C.F.R. § 101.22(a)(1) provides,

The term artificial flavor or artificial flavoring means any substance, the function of which is to impart flavor, which is not derived from a spice, fruit or fruit juice, vegetable or vegetable juice, edible yeast, herb, bark, bud, root, leaf or similar plant material, meat, fish, poultry, eggs, dairy products, orfermentation products thereof. Artificial flavor includes the substances listed in §§ 172.515(b) and 182.60 of this chapter except where these are derived from natural sources.

21 C.F.R. § 101.22(a)(1). Artificial flavor is also described as any flavor "which simulates, resembles or reinforces the characterizing flavor." 21 C.F.R. § 101.22(i)(2).

Defendants first argue that malic and fumaric acids are not artificial flavors because they are not listed by the FDA as an artificial flavor as provided under 21 C.F.R. §§ 172.515(b) and 182.60. Plaintiff disagrees.

Malic and fumaric...