In re 100% Grated Parmesan Cheese Mktg. & Sales Practices Litig.

• Decision Date: 16 July 2019
• Docket Number: MDL 2705,16 C 5802
• Parties: IN RE: 100% GRATED PARMESAN CHEESE MARKETING AND SALES PRACTICES LITIGATION This Document Relates to All Cases
• Court: U.S. District Court — Northern District of Illinois

393 F.Supp.3d 745

IN RE: 100% GRATED PARMESAN CHEESE MARKETING AND SALES PRACTICES LITIGATION

This Document Relates to All Cases

16 C 5802

MDL 2705

United States District Court, N.D. Illinois, Eastern Division.

Signed July 16, 2019

MEMORANDUM OPINION AND ORDER

Gary Feinerman, United States District Judge

Defendants in this multidistrict litigation are purveyors of grated parmesan cheese products with labels stating "100% Grated Parmesan Cheese" or some variation thereof. After the Judicial Panel on Multidistrict Litigation assigned these suits to the undersigned judge, Doc. 1, Plaintiffs filed five consolidated class action complaints, Docs. 120-123, 143, which alleged that they were misled by the "100% Grated Parmesan Cheese" labels because the products contained non-cheese ingredients such as cellulose. Defendants moved to dismiss the complaints under Civil Rules 12(b)(1) and 12(b)(6). The court denied the Rule 12(b)(1) motions but granted the Rule 12(b)(6) motions without prejudice to repleading. Docs. 215-216 (reported at 275 F. Supp. 3d 910 (N.D. Ill. 2017) ).

Plaintiffs then filed five amended consolidated class action complaints. Doc. 225 (against Kraft Heinz Company); Doc. 226 (against Publix Super Markets, Inc.); Doc. 227 (against Albertsons Companies, Inc., Albertsons LLC, and SuperValu, Inc.); Doc. 228 (against Target Corp. and ICCO-Cheese Company, Inc.); Doc. 229 (against Wal-Mart Stores, Inc. and ICCO-Cheese Company, Inc.). Like the initial complaints, the amended complaints allege that Plaintiffs were misled by the "100% Grated Parmesan Cheese" labels because the products in fact contained cellulose. In addition, the amended complaints except for the one against Publix allege that the products' ingredient lists were misleading because they represented that the cellulose was added to prevent caking, when in fact the cellulose also acted as filler.

Defendants moved to dismiss the amended complaints under Rule 12(b)(6). Docs. 237, 238, 243, 246, 249. Those motions were granted as to the claims based on the "100% Grated Parmesan Cheese" label (the "100% claims") and granted in part and denied in part as to the claims based on the ingredient lists' representation that cellulose was added to prevent caking (the "Anticaking claims"), and Publix and Target/ICCO were dismissed as defendants. Docs. 296-297 (reported at 348 F. Supp. 3d 797 (N.D. Ill. 2018) ). Plaintiffs now move under Rule 15(a)(2) to amend their complaints to allege an Anticaking claim against Publix and to cure the defects in their Anticaking claim against Target/ICCO, Doc. 306; Albertsons/SuperValu moves under Rule 56 for partial summary judgment and under Rule 12(c) for partial judgment on the pleadings, Doc. 309; and Kraft moves under Rule 12(c) for judgment on the pleadings, Doc. 314. Plaintiffs' motion is denied, and Albertsons/SuperValu's and Kraft's respective motions are granted in part and denied in part.

Background

When considering Albertsons/SuperValu's motion for partial summary judgment, the facts are construed as favorably to Plaintiffs, the non-movants, as the record and local Rule 56.1 permit. See Johnson v. Advocate Health & Hosps. Corp. , 892 F.3d 887, 893 (7th Cir. 2018). When considering Albertsons/SuperValu's and Kraft's Rule 12(c) motions, the court assumes the truth of the operative complaints' well-pleaded factual allegations, though not their legal conclusions. See Bishop v. Air Line Pilots Ass'n, Int'l , 900 F.3d 388, 397 (7th Cir. 2018). The court must also consider "documents attached to the complaint[s], documents that are critical to the complaint[s] and referred to in [them], and information that is subject to proper judicial notice," along with additional facts set forth in Plaintiffs' opposition briefs, so long as those additional facts "are consistent with the pleadings." Phillips v. Prudential Ins. Co. of Am. , 714 F.3d 1017, 1019-20 (7th Cir. 2013) (internal quotation marks omitted); see also N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend , 163 F.3d 449, 452 (7th Cir. 1998). The facts are set forth as favorably to Plaintiffs as those materials allow. See Brown v. Dart , 876 F.3d 939, 940 (7th Cir. 2017). The court must assume the truth of the facts relevant to each motion, but does not vouch for them. See Donley v. Stryker Sales Corp. , 906 F.3d 635, 636 (7th Cir. 2018) ; Goldberg v. United States , 881 F.3d 529, 531 (7th Cir. 2018).

A detailed description of Plaintiffs' allegations appears in the court's prior opinions, familiarity with which is assumed. In brief, Defendants Kraft Heinz Company, Albertsons Companies, Inc., Albertsons LLC (the two Albertsons entities will be referred to together as "Albertsons"), SuperValu, Inc., Target Corporation, Wal-Mart Stores, Inc., ICCO-Cheese Company, Inc., and Publix Super Markets, Inc. design, develop, manufacture, sell, test, package, label, distribute, promote, market, and/or advertise grated parmesan cheese products. Doc. 225 at ¶ 19; Doc. 226 at ¶ 10; Doc. 227 at ¶ 16; Doc. 228 at ¶¶ 13-14; Doc. 229 at ¶¶ 15, 29. (Albertsons and SuperValu, close corporate relatives, are named in one complaint. Doc. 227. ICCO manufactures the products for both Target and Wal-Mart, and is named as a defendant in both the Target and Wal-Mart complaints. Docs. 228-229.) At all relevant times, Defendants' products bore labels stating "100% Grated Parmesan Cheese," Doc. 225 at ¶ 21; Doc. 227 at ¶ 18; Doc. 228 at ¶ 18; Doc. 229 at ¶ 18, or some variation thereof, Doc. 225 at ¶ 21; Doc. 226 at ¶ 12; Doc. 227 at ¶ 18; Doc. 228 at ¶ 18; Doc. 229 at ¶ 18.

Defendants' products are comprised largely of cured, dried hard Italian cheeses, Doc. 225 at ¶ 26; Doc. 226 at ¶ 15; Doc. 227 at ¶ 22; Doc. 228 at ¶ 21; Doc. 229 at ¶ 22, but also include a small but nontrivial percentage of cellulose, an organic polymer with no nutritional value that is "often used as a filler." Doc. 225 at ¶¶ 23-24 (Kraft, 3.8%); Doc. 226 at ¶ 13 (Publix, "a significant portion"); Doc. 227 at ¶¶ 19-20 (Albertsons/SuperValu, 8.8%); Doc. 228 at ¶ 19 (Target/ICCO, no percentage specified); Doc. 229 at ¶¶ 19-20 (Wal-Mart/ICCO, 7.8%). Each product's ingredient list, located on the rear label, lists cellulose and asserts that the cellulose is used to prevent "caking." Doc. 225 at ¶ 4; Doc. 227 at ¶ 4; Doc. 228 at ¶ 4; Doc. 229 at ¶ 4. However, grated parmesan "usually available in the marketplace" is cured and dried in such a way that there is "little problem of clumping or agglomeration," so there in fact is little need to ensure that grated parmesan does not clump or "cake." Doc. 225 at ¶ 26; Doc. 227 at ¶ 22; Doc. 228 at ¶ 21; Doc. 229 at ¶ 22. According to the U.S. Food and Drug Administration ("FDA"), dried cheese products should be, at most, 2% cellulose. Grated Cheeses; Amendment of the Standard of Identity, 51 Fed. Reg. 30,210, 30,210 (Aug. 25, 1986). After commissioning an independent laboratory to test several cured, dried cheese products, Bloomberg reported that many such products contained significantly more than 2% cellulose and specified the percentage of cellulose found in the Albertsons/SuperValu, Wal-Mart/ICCO, and Kraft products. See Lydia Mulvaney, The Parmesan Cheese You Sprinkle on Your Penne Could Be Wood , Bloomberg (Feb. 16, 2016, 4:00 AM), https://www.bloomberg.com/news/articles/2016-02-16/the-parmesan-cheese-you-sprinkle-on-your-penne-could-be-wood.

Plaintiffs are consumers who purchased Defendants' products at grocery stores in Alabama (Kraft, Albertsons/SuperValu, Wal-Mart/ICCO), California (Kraft, Target/ICCO, Wal-Mart/ICCO), Connecticut (Kraft), Florida (Kraft, Publix, Target/ICCO, Wal-Mart/ICCO), Illinois (Kraft, Albertsons/SuperValu, Target/ICCO), Michigan (Kraft), Minnesota (Kraft, Wal-Mart/ICCO), Missouri (Target/ICCO), New Jersey (Wal-Mart/ICCO), and New York (Kraft, Wal-Mart/ICCO). Doc. 225 at ¶¶ 9-17; Doc. 226 at ¶¶ 8-9; Doc. 227 at ¶¶ 9-11; Doc. 228 at ¶¶ 9-12; Doc. 229 at ¶¶ 9-14. Plaintiffs purchased the products believing that they contained only cheese. Doc. 225 at ¶¶ 9-17; Doc. 226 at ¶¶ 8-9; Doc. 227 at ¶¶ 9-11; Doc. 228 at ¶¶ 9-12; Doc. 229 at ¶¶ 9-14. In addition, in every amended complaint except the one against Publix, Plaintiffs allege that the products' ingredient lists stated that cellulose was added "to prevent caking," Doc. 225 at ¶ 46; Doc. 227 at ¶ 39; Doc. 228 at ¶ 40; Doc. 229 at ¶ 4, but that the amount of cellulose exceeded what was necessary to prevent caking, Doc. 225 at ¶ 27; Doc. 227 at ¶ 23; Doc. 228 at ¶ 22; Doc. 229 at ¶ 23, and therefore that the cellulose must also serve the undisclosed purpose of acting as filler, Doc. 225 at ¶ 4; Doc. 227 at ¶ 4; Doc. 228 at ¶ 2; Doc. 229 at ¶ 4.

Discussion

I. Standing

As noted, Plaintiffs' 100% claims have been dismissed, leaving only their Anticaking claims. Kraft argues that Plaintiffs cannot bring those claims in federal court because their allegations do not satisfy the causation requirement of Article III standing. Doc. 316 at 19-21. As the court explained in its more recent opinion in this case—and as reiterated below— Plaintiffs by necessary implication allege in the operative complaints that they did not see the Anticaking representation on the products' ingredient labels before purchase. 348 F. Supp. 3d at 810. Kraft reasons that because Plaintiffs never saw the Anticaking representation, they cannot have sustained an injury that is "fairly traceable to" that statement and thus do not have standing. Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016).

Kraft's argument fails for the reasons given in the court's first opinion in this case. 275 F. Supp. 3d at 918-19. As the court explained, under In re Aqua Dots Products Liability Litigation , 654 F.3d 748, 750-51 (7th Cir. 2011), a plaintiff has standing to bring a consumer protection claim if the allegedly deceptive practice caused her to pay more for the product than she otherwise would have paid. That test is satisfied...