In re Horizon Organic Milk Plus Dha Omega-3 Mktg. & Sales Practice Litig.

• Decision Date: 24 July 2013
• Docket Number: Case No. 12–md–02324.
• Citation: 955 F.Supp.2d 1311
• Parties: In re HORIZON ORGANIC MILK PLUS DHA OMEGA–3 MARKETING AND SALES PRACTICE LITIGATION.
• Court: U.S. District Court — Southern District of Florida

955 F.Supp.2d 1311

In re HORIZON ORGANIC MILK PLUS DHA OMEGA–3 MARKETING AND SALES PRACTICE LITIGATION.

Case No. 12–md–02324.

United States District Court, S.D. Florida.

July 24, 2013.

Mitchell L. Burgess, Burgess & Lamb, PC, Ralph K. Phalen, The Law Offices of Ralph K. Phalen, PC, Kansas City, MO, Lance August Harke, Harke Clasby & Bushman LLP, Miami Shores, FL, for Plaintiff.

Angela C. Agrusa, Randall J. Sunshine, Liner, Grode, Stein, Yankelevitz, Sunshine, et al., Los Angeles, CA, David Storrs Wood, Akerman Senterfitt, Orlando, FL, Lawrence Dean Silverman, Sandra Jessica Millor, Akerman Senterfitt, Miami, FL, Margaret Diane Mathews, Akerman Senterfitt, Tampa, FL, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS PLAINTIFFS' AMENDED COMPLAINTS, OR IN THE ALTERNATIVE, STRIKE CLASS ALLEGATIONS (D.E. 68), DENYING AS MOOT PLAINTIFFS' REQUEST FOR JUDICIAL NOTICE (D.E. 84), AND DENYING AS MOOT DEFENDANT'S REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF REPLY BRIEF (D.E. 86)

JOAN A. LENARD, District Judge.

THIS CAUSE is before the Court on Defendant's Motion to Dismiss Plaintiffs' Amended Complaints Pursuant to F.R.C.P. 12, or, in the Alternative, Strike Class Allegations (“Motion,” D.E. 68), filed on August 16, 2012. Plaintiffs filed their Opposition to Defendant's Motion (“Response,” D.E. 83) on September 18, 2012, and Defendant filed its Reply in Support of its Motion (“Reply,” D.E. 85) on September 28, 2012. Also before the Court is Plaintiffs' Request for Judicial Notice (D.E. 84), filed on September 18, 2012. No response was filed. Also before the Court is Defendant's Request for Judicial Notice in Support of Reply Brief (D.E. 86), filed on September 28, 2012. No response was filed. Having considered the Motion, Response, Reply, Requests for Judicial Notice, and the record, the Court finds as follows.

I. Background¹

Defendant WhiteWave Foods Company (“WhiteWave” or “WFC”) is a wholly-owned subsidiary of Dean Foods Company that manufactures, distributes, markets, and sells nationwide five milk products fortified with algae-based DHA Omega–3 (“DHA”) under the brand names of “Horizon Organic” and “Silk.” ² The DHA-fortified milk is packaged in cartons with labels that state “DHA Omega–3 Supports Brain Health.”

Plaintiffs are consumers from six states (Arizona, Arkansas, California, Florida, Illinois, and Missouri) who purchased the DHA-fortified milk. Plaintiffs filed seven class actions, which have been consolidated and transferred to this Court in this multidistrict litigation (“MDL”),³ all claiming that Defendant violated state laws by falsely representing on the milk cartons and in advertising that “DHA Omega–3 Supports Brain Health.” Plaintiffs argue that Defendant's representation that the DHA in its products “supports brain health” is false and that the competent, scientific evidence shows that Defendant's claim that DHA supports brain health is false. Plaintiffs further assert that they suffered an economic injury because they all paid a premium price for the DHA-fortified milk products based on Defendant's false representation that DHA supports brain health.

II. Motion and Response⁴

Defendant moves to dismiss the six amended complaints,⁵ arguing that they all fail to state a cognizable claim for relief and fail to meet pleading standards under Rule 9 of the Federal Rules of Civil Procedure for allegedly deceptive conduct. Defendant argues that the amended complaints should all be dismissed for the following six reasons: (1) “private plaintiffs have no standing to bring claims seeking scientific substantiation for a company's labeling or advertising representations,” because only federal agencies like the U.S. Food and Drug Administration (“FDA”) or the Federal Trade Commission (“FTC”) “are authorized to demand substantiation of advertising claims;” (2) “the ‘primary jurisdiction doctrine’ ... mandates dismissal of these actions in deference to governmental agencies vested with authority over the issues presented;” (3) “inasmuch as FDA and the FTC have already determined that there is enough scientific support for WhiteWave's brain health representation, the claims are not misleading as a matter of law, and are barred by the ‘safe harbor’ provisions of the consumer protection statutes at issue—which preclude claims based on labels or advertising permitted by FDA or the FTC;” (4) “there is no conceivable way that reasonable consumers could be misled by the conservative claim that DHA Omega–3 ‘supports' brain health” because “WhiteWave makes no quantified or specific assertions about the benefits of its product, nor does it state that the product is ‘assured’ to improve brain function or ‘clinically proven to increase IQ;’ ” (5) because “Plaintiffs will be unable to certify classes based on disparate and individualized misrepresentation allegations,” all class allegations should be dismissed; and (6) “Plaintiffs lack standing because they cannot show any injury—that is, they cannot show loss of money or property.” (Motion 2–3.)

In their Response, Plaintiffs first argue that “WhiteWave's DHA-fortified milk products do not support brain health in children or adults” and that because there are “clinical cause-and-effect studies that have found no causative link between DHA algal oil supplementation in milk and brain health,” Plaintiffs “have brought claims against WhiteWave for violations of state consumer protection laws, unjust enrichment and breach of warranty.” (Response 1–2.) Plaintiffs additionally argue that because the FDA and the FTC's letters regarding WhiteWave's brain health representations “are not a result of an adjudicative enforcement action, they do not provide WhiteWave with a safe harbor from which to escape liability for its violations of law.” ( Id. at 2.) Plaintiffs further argue that Defendant has “mischaracteriz[ed] the complaints as raising failure to substantiate scientific claims,” when Plaintiffs are actually asserting that Defendant has made false statements regarding DHA and brain health on its products. ( Id.) Plaintiffs assert that at this stage in the litigation, their claims of falsity in their complaints, as well as their claims of economic injury, must be taken as true. ( Id. at 2–3.) Finally, Plaintiffs argue that Defendant's motion to strike the class allegations from the complaints is premature, and “even if the Court were to accept ‘the facts' as WhiteWave imagines them to be, several courts including this court, have found similar facts insufficient to defeat certification.” ( Id. at 3.)

III. Legal Standards

The Federal Rules of Civil Procedure generally require a plaintiff to set forth in its complaint a “short and plain statement of his claim showing that the pleader is entitled to relief” in order to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Fed.R.Civ.P. 8(a)(2)). However, in claims involving fraud, “a party must state with particularity the circumstances constituting fraud.” Fed.R.Civ.P. 9(b). “Rule 9(b) is satisfied if the complaint sets forth (1) precisely what statements were made in what documents or oral representations or what omissions were made, and (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, and (3) the content of such statements and the manner in which they misled the plaintiff, and (4) what the defendants obtained as a consequence of the fraud.” Ziemba v. Cascade Intern., Inc., 256 F.3d 1194, 1202 (11th Cir.2001).

In evaluating a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, courts adopt a “two-pronged approach” whereby they first (1) eliminate any allegations in the complaint that are merely legal conclusions and then (2) where there are well-pleaded factual allegations, “assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir.2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)). “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.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

IV. DiscussionA. Plaintiffs' Claims for Relief Under State Law⁶

This MDL is comprised of seven class actions, filed by plaintiffs from six different states (Arizona, Arkansas, California, Florida, Illinois, and Missouri). Each case sets forth only state law claims, and each case was filed in federal court under diversity of citizenship jurisdiction pursuant to 28 U.S.C. § 1332(d)(2). In general, “[f]ederal courts adjudicating state law claims apply the substantive law of the state where they render decisions.” Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1059 (11th Cir.2007) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). However, in the MDL setting, “[w]hen considering questions of state law, ... the transferee court must apply the state law that would have applied to the individual cases had they not been transferred for consolidation.” In re Temporomandibular Joint (TMJ) Implants Prods. Liab. Litig., 97 F.3d 1050, 1055 (8th Cir.1996) (citing In re Air Crash Disaster Near Chi., Ill., 644 F.2d 594, 610 (7th Cir.1981)); see also Menowitz v. Brown, 991 F.2d 36, 40 (2d Cir.1993) (stating that “under the rule of Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), a transferee court applies the substantive state law, including choice-of-law rules, of the jurisdiction in which the action was filed”); In re Bldg. Materials Corp. of Am. Asphalt Roofing Shingle Prods....