In re Conagra Foods Inc.

• Decision Date: 15 November 2012
• Docket Number: Case No. CV 11–05379 MMM (AGRx).
• Citation: 908 F.Supp.2d 1090
• Parties: In re CONAGRA FOODS INC.
• Court: U.S. District Court — Central District of California

908 F.Supp.2d 1090

In re CONAGRA FOODS INC.

Case No. CV 11–05379 MMM (AGRx).

United States District Court, C.D. California.

Nov. 15, 2012.

Christian Keeney, Jeff S. Westerman, Los Angeles, CA, Adam J. Levitt, Edmund S. Aronowitz, Wolf Haldenstein Adler Freeman & Herz LLC, Chicago, IL, Andrei V. Rado, Jessica J. Sleater, Milberg LLP, Kim E. Richman, Michael R. Reese, Michael Robert Reese, Reese Richman LLP, Christopher A. Seeger, Seeger Weiss LLP, Antonio Vozzolo, Christopher Marlborough, Faruqi and Faruqi LLP, Scott A. Bursor, Bursor and Fisher PA, New York, NY, Betsy C. Manifold, Francis M. Gregorek, Patrick H. Moran, Rachele R. Rickert, Wolf Haldenstein Adler Freeman & Herz LLP, San Diego, CA, William Charles Wright, Wright Law Office, West Palm Beach, FL, Jonathan Shub, Scott Alan George, Seeger Weiss LLP, Philadelphia, PA, Julie Diane Miller, Complex Litigation Group LLC, Highland Park, IL, Donald A. Ecklund, James E. Cecchi, Lindsey H. Taylor, Carella, Byrne, Checchi, Olstein, Brody & Agnello, PC, Roseland, NJ, Lawrence Timothy Fisher, Sarah N. Westcot, Bursor and Fisher PA, Walnut Creek, CA, Allan Steyer, Jill M. Manning, Steyer Lowenthal Boodrookas Alvarez and Smith LLP, Julio J. Ramos, Law Offices of Julio J. Ramos, San Francisco, CA, for Plaintiffs.

Robert B. Hawk, Hogan Lovells U.S. LLP, Palo Alto, CA, Benjamin T. Diggs, Douglas M. Schwab, Hogan Lovells U.S. LLP, San Francisco, CA, Robin Wechkin, Hogan Lovells U.S. LLP, Isaquah, WA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

MARGARET M. MORROW, District Judge.

In November and December 2011, the court consolidated several cases filed against defendant ConAgra Foods, Inc. under the above caption.¹ Prior to the consolidation, the court dismissed the complaint in one case, Robert Briseno v. Conagra Foods, Inc., on the basis that Briseno had failed to plead his claims with the particularity required by Rule 9(b) of the Federal Rules of Civil Procedure. The court granted Briseno leave to amend. ² On January 12, 2012, plaintiffs filed a consolidated putative class action complaint.³ ConAgra moved to dismiss the complaint on February 24, 2012.⁴ Plaintiffs oppose the motion.⁵

I. BACKGROUND

Plaintiffs allege that from at least June 27, 2007 through the present, ConAgra deceptively and misleading marketed its Wesson brand cooking oils as “100% Natural,” when in fact Wesson Oils are made from unnatural, genetically-modified organisms (“GMO”).⁶ Specifically, plaintiffs contend that ConAgra's representations are deceptive because “Wesson Oils are made with GMO-plants whose genes have been altered by scientists in a lab for the express purpose of causing those plants to exhibit traits that are not naturally their own.” ⁷ ConAgra allegedly asserts that its products are “100% Natural” not only on the products labels, but in print and television advertising as well.⁸ Plaintiffs are individual consumers of Wesson Oils residing in Nebraska (where ConAgra is headquartered) and 14 other states,⁹ who seek to represent a nationwide class alleging claims under (1) the Magnusson–Moss Warranty Act, 15 U.S.C. § 2301 et seq.; (2) the Nebraska Consumer Protection Act, Neb.Rev.Stat. § 59–1602, et seq.; and (3) the Nebraska Uniform Deceptive Trade Practices Act, Neb.Rev.Stat. § 87–301; and various subclasses based on the laws of the states in which the named plaintiffs reside, i.e., (1) consumer protection state law subclasses; (2) breach of express warranty state law subclasses; (3) breach of implied warranty state law subclasses; and (4) unjust enrichment state law subclasses. ¹⁰

Plaintiffs' complaint contains allegations concerning different plaintiffs' history of purchasing Wesson Oil. While there is some variation among plaintiffs, the complaint generally asserts that each plaintiff saw that Wesson Oils were marketed as “100% Natural,” purchased the product because of the representation, and would not have purchased it but for the representation. ¹¹ Each plaintiff was purportedly damaged by paying for a product that was 100% natural, and receiving a product “that was genetically engineered in a laboratory, and had its genetic code artificially altered to exhibit not natural qualities.” ¹²

II. DISCUSSION

A. Legal Standard Governing Motions To Dismiss Under Rule 12(b)(6)

A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in the complaint. A Rule 12(b)(6) dismissal is proper only where there is either a “lack of a cognizable legal theory,” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988). The court must accept all factual allegations pleaded in the complaint as true, and construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir.1996); Mier v. Owens, 57 F.3d 747, 750 (9th Cir.1995).

The court need not, however, accept as true unreasonable inferences or legal conclusions cast in the form of factual allegations. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 553–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do”). Thus, a plaintiff's complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ... 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, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009); see also Twombly, 550 U.S. at 545, 127 S.Ct. 1955 (“Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)” (citations omitted)); Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir.2009) (“[F]or a complaint to survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief,” citing Iqbal and Twombly ). The manner in which the court should assess the adequacy and plausibility of a plaintiff's allegations is described in Telesaurus VPC, LLC v. Power, 623 F.3d 998 (9th Cir.2010). There, the court stated:

“For purposes of our review, we begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. We disregard threadbare recitals of the elements of a cause of action, supported by mere conclusory statements. After eliminating such unsupported legal conclusions, we identify well-pleaded factual allegations, which we assume to be true, and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 1003 (citations and quotation marks omitted).

B. Legal Standard Governing Rule 9(b) Pleading Requirements

Rule 9(b) requires that, “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” Fed.R.Civ.Proc. 9(b); see also 5A Charles A. Wright & Arthur W. Miller, Federal Practice And Procedure § 1297 (2006) (“[Rule 9(b) ] is a special pleading requirement [that is] contrary to the general approach of the ‘short and plain,’ simplified pleading adopted by the federal rules ...”). “To avoid dismissal for inadequacy under Rule 9(b),” a “complaint [must] ‘state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation.’ ” Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir.2004) (quoting Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1393 (9th Cir.1988), and Schreiber Distrib. Co. v. Serv–Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986)); see also In re GlenFed Securities Litigation, 42 F.3d 1541, 1548 (9th Cir.1994) (en banc). Conclusory allegations are insufficient, and the facts constituting the fraud must be alleged with specificity. See Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 540 (9th Cir.1989) (“A pleading is sufficient under Rule 9(b) if it identifies the circumstances constituting fraud so that a defendant can prepare an adequate answer to the allegations. While statements of the time, place and nature of the alleged fraudulent activities are sufficient, mere conclusory allegations of fraud are insufficient” (citation omitted)); see also Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997) (to satisfy Rule 9(b), “the complaint [must] identif[y] the circumstances of the alleged fraud so that defendants can prepare an adequate answer” (internal quotation marks omitted)).

“It is well-settled that the Federal Rules of Civil Procedure apply in federal court, ‘irrespective of the source of the subject matter jurisdiction, and irrespective of whether the substantive law at issue is state or federal.’ ” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir.2009) (quoting Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir.2003)). Consequently, Rule 9(b) appliers to plaintiffs' state law misrepresentation claims, as well as their federal claim. Plaintiffs do not dispute that Rule 9(b), rather than the more lenient requirements of Rule 8, govern their claims.¹³

C. Whether the Complaint Satisfies the Particularity Requirement of Rule 9(b)

ConAgra argues that the consolidated complaint fails to meet the particularity requirement of Rule 9(b). It notes that only two of the 21 plaintiffs allege the location at which they purchased Wesson Oil.¹⁴ Only a handful of plaintiffs provide a...