Jones v. Conagra Foods, Inc.

• Decision Date: 17 December 2012
• Docket Number: No. C 12–01633 CRB.,C 12–01633 CRB.
• Parties: Levi JONES, et al., Plaintiffs, v. CONAGRA FOODS, INC., Defendant.
• Court: U.S. District Court — Eastern District of California

912 F.Supp.2d 889

Levi JONES, et al., Plaintiffs,

v.CONAGRA FOODS, INC., Defendant.

No. C 12–01633 CRB.

United States District Court,

N.D. California.

Dec. 17, 2012.

Ben F. Pierce Gore, Pratt & Associates, San Jose, CA, Charles F. Barrett, Charles Barrett, P.C., Nashville, TN, Dewitt Marshall Lovelace, Sr., Lovelace Law Firm, P.A., Miramar Beach, FL, Brian K. Herrington, David Malcolm McMullan, Jr., John W. (Don) Barrett, Katherine B. Riley, Don Barrett, P.A., Lexington, MS, Ananda N. Chaudhuri, Frank Karam, Keith M. Fleischman, The Fleischman Law Firm, New York, NY, J. Price Coleman, Coleman Law Firm, Richard Barrett, Law Offices of Richard R. Barrett, PLLC, David Shelton, Oxford, MS, Carol Nelkin, Jay P. Nelkin, Stuart M. Nelkin, Nelkin & Nelkin, P.C., Houston, TX, for Plaintiffs.

Benjamin Todd Diggs, Douglas Mayer Schwab, Hogan Lovells U.S. LLP, San Francisco, CA, Robin Eve Wechkin, Hogan

Lovells U.S. LLP, Issaquah, WA, Robert B. Hawk, Stacy R. Hovan, Hogan Lovells U.S. LLP, Palo Alto, CA, for Defendant.

ORDER GRANTING IN PART MOTION TO DISMISS

CHARLES R. BREYER, District Judge.

Before the Court is Defendant's Motion to Dismiss Amended Complaint (“MTD”) (dkt. 32), which alleges that several of Defendant's products contained deceptive and misleading labels, violating numerous California and federal laws. As discussed below, the Court GRANTS in part, and DENIES in part, Defendant's motion.

I. BACKGROUND

Plaintiffs Levi Jones, Christine Sturges, and Edd Ozard, on behalf of themselves and others similarly situated, filed this class action suit against Defendant ConAgra Foods, Inc. on April 2, 2012, (dkt. 1), and subsequently filed an Amended Complaint (“AC”) on July 2, 2012, (dkt. 27). Plaintiffs allege that Defendant's website and numerous products of Defendant's, including PAM cooking spray, Hunt's canned tomato products, and Swiss Miss cocoa, contain deceptive and misleading labeling information. Id.

Specifically, Defendant's allegedly deceptive and misleading practices include (1) labeling food products as 100% natural, when they contain petrochemicals; (2) labeling food products as 100% natural, when they contain chemical preservatives, synthetic chemicals, added artificial color and other artificial ingredients; (3) labeling food products as “organic” or “certified organic,” when they contain disqualifying ingredients; (4) failing to use the common or usual name of ingredients or failing to list the ingredients in the correct order; (5) falsely representing food products to be “free of artificial ingredients and preservatives;” (6) making unlawful nutrient content claims; (7) making unlawful antioxidant claims; (8) falsely representing foods to be fresh or have a “fresh taste;” and (9) making unlawful health claims. Id. ¶ 3.

Plaintiffs assert that they “care about the nutritional content of food and seek to maintain a healthy diet.” Id. ¶ 225. Plaintiffs allege that, throughout the class period, they and other class members purchased Defendant's misbranded products, reasonably relying on the health and content claims on Defendant's package labeling and website. Id. ¶ 226. Had they known that Defendant's products were mislabeled, Plaintiffs assert that they would not have purchased the products. Id. ¶¶ 97, 120, 127, 143, 164. Further, because of Defendant's misleading and deceptive practices, Plaintiffs allege that they were harmed when they paid an “unwarranted premium” for Defendant's mislabeled products. See, e.g., id. ¶¶ 100, 121, 144, 196, 208.

Based on the above alleged practices, Plaintiffs assert causes of action based on (1) California's Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200, et seq.; (2) California's False Advertising Laws (“FAL”), Cal. Bus. & Prof.Code § 17500, et seq.; (3) Consumer Legal Remedies Act (“CLRA”), Cal. Civ.Code § 1750, et seq.; (4) restitution based on unjust enrichment/quasi-contract; (5) Song–Beverly Act, Cal. Civ.Code § 1790, et seq.; and (6) Magnuson–Moss Act, 15 U.S.C. § 2301, et seq.See generally, AC. Defendant filed this Motion to Dismiss Amended Complaint on August 17, 2012, seeking to dismiss all of the claims in the AC.

II. LEGAL STANDARD

A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199–1200 (9th Cir.2003). Dismissal is proper where a cause of action fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The Rule calls for sufficient factual matter to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). On a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir.1998). A complaint should not be dismissed without leave to amend unless it is clear that the claims could not be saved by amendment. Swartz v. KPMG LLP, 476 F.3d 756, 760 (9th Cir.2007).

Under Rule 9(b), the “circumstances constituting fraud” or any other claim that “sounds in fraud” must be stated “with particularity.” Fed.R.Civ.P. 9(b); Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1103–04 (9th Cir.2003). To comply with Rule 9(b), a plaintiff must plead with particularity the time and place of the fraud, the statements made and by whom, an explanation of why or how such statements were false or misleading, and the role of each defendant in the alleged fraud. KEMA, Inc. v. Koperwhats, No. C–09–1587 MMC, 2010 WL 3464737, at *3 (N.D.Cal. Sept. 1, 2010). In short, the complaint must include the “who, what, when, where, and how.” Cooper v. Pickett, 137 F.3d 616, 627 (1997) (internal quotations omitted).

III. DISCUSSION

Defendant moves to dismiss the AC on the grounds that (A) Plaintiffs' claims are preempted by federal law; (B) the FDA has primary jurisdiction over certain claims; (C) Plaintiffs fail to state a claim upon which relief may be granted and have not established standing; (D) Plaintiffs fail to plead with particularity in accordance with Rule 9(b); and (E) Plaintiffs' warranty and unjust enrichment claims fail as a matter of law. See generally, MTD. This Order will address each argument in turn.

A. Preemption

Defendant asserts that Plaintiffs' claims are preempted by (1) the Organic Foods Product Act (“OFPA”); (2) the Nutrition Labeling and Education Act (“NLEA”); and (3) the Federal Food, Drug, and Cosmetic Act (“FDCA”).

1. OFPA preemption

Defendant asserts that Plaintiffs' organic labeling claims are preempted by the OFPA. MTD at 4–5. Relying on In re Aurora Dairy Corp. Organic Milk Marketing and Sales Practices Litigation, 621 F.3d 781, 796 (8th Cir.2010), Defendant asserts that the Eighth Circuit affirmed a district court's dismissal of certain organic claims because “ ‘claims that [manufacturers and retailers] sold [a product] as organic when in fact it was not organic are preempted because they conflict with the OFPA.’ ” MTD at 4 (quoting In re Aurora, 621 F.3d at 781).

Defendant takes this quote out of context. In In re Aurora, the Eighth Circuit upheld dismissal of claims involving the organic certification of a dairy farm. 621 F.3d at 796 (“Claims Attacking Aurora's Certification are Preempted”). The Eighth Circuit held that “Congress did not expressly preempt state tort claims, consumer protection statutes, or common law claims” involving the OFPA. Id. at 792 (emphasis added). Judge Beeler recently agreed, analyzing In re Aurora at length and holding that “OFPA expressly preempts state certification requirements but does not expressly bar state law claims that do not conflict with OFPA's provisions ... so long as the compositional requirements at issue do not conflict with those set forth in OFPA.” Brown v. Hain Celestial Grp., Inc., No. C 11–03082 LB, 2012 WL 3138013, at *9 (N.D.Cal. Aug. 1, 2012)motion to certify appeal granted,No. C 11–03082 LB, 2012 WL 4364588 (N.D.Cal. Sept. 24, 2012).

Defendant correctly notes that the Brown decision involved the labeling of cosmetics, not food, but incorrectly argues that this meaningfully distinguishes Brown. See Reply (dkt. 77) at 2. Judge Beeler clearly concluded that the “OFPA covers cosmetics” before she analyzed preemption. Brown, 2012 WL 3138013, at *8. Thus, Brown's preemption analysis applies generally to products governed by the OFPA, and not only to cosmetics.

Here, the claims at issue do not involve organic certification of Defendant's products; rather, the claims are exactly the type of state claims the courts in In re Aurora and Brown concluded are not expressly preempted. Accordingly, Plaintiffs' organic claims are not preempted to the extent that the state claims do not conflict with the OFPA.

a. Conflict preemption

Although Plaintiffs' claims are not expressly preempted by the OFTA, their state law claims still must not conflict with the OFPA. Pursuant to OFPA, the USDA created the National Organic Program (“NOP”) to establish the national standards for organic products. See65 Fed. Reg. 80,548–10 (Dec. 21, 2000) (codified as 7 C.F.R. § 205). These regulations govern the use of the term “organic” in labeling and marketing agricultural products, 7 C.F.R. § 205.300, require “that agricultural products labeled as organic be certified as meeting the requirements of the regulations by an agent accredited by the USDA, and forbid[ ] the labeling as organic of products that have not been certified as such,” Brown, 2012 WL 3138013, at *3 (citing 7 U.S.C. §§ 6514(a), 6515, 6519).

California has enacted laws for organic labeling that incorporate the NOP regulations. Section 110820 of the California Health and Safety Code provides,

[N]o product shall be sold as organic pursuant to this article unless it is produced according to regulations promulgated by the...