Kinman v. Kroger Co.

• Decision Date: 27 May 2022
• Docket Number: 21 C 1154
• Citation: 604 F.Supp.3d 720
• Parties: Valerie KINMAN, Plaintiff, v. The KROGER CO., Defendant.
• Court: U.S. District Court — Northern District of Illinois

604 F.Supp.3d 720

Valerie KINMAN, Plaintiff,

v.The KROGER CO., Defendant.

No. 21 C 1154

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

Signed May 27, 2022

Spencer Sheehan, Sheehan & Associates, P.C., Great Neck, NY, Peter S. Lubin, Patrick Doyle Austermuehle, Lubin Austermuehle, P.C., Oakbrook Terrace, IL, for Plaintiff.

Samuel Lanier Felker, Paul Thomas Madden, Pro Hac Vice, Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Nashville, TN, for Defendant.

MEMORANDUM OPINION AND ORDER

JORGE L. ALONSO, United States District Judge

Feeling defrauded after the purchase of sliced cheese she believed had been smoked over hardwood, plaintiff Valerie Kinman ("Kinman") filed against defendant The Kroger Co. ("Kroger") a first amended complaint asserting claims for violation of the Illinois Consumer Fraud and Deceptive Trade Practices Act, breach of express and implied warranties, negligent misrepresentation, common-law fraud and unjust enrichment.¹ Defendant moves to dismiss. For the reasons set forth below, the Court grants in part and denies in part the motion to dismiss.

I. BACKGROUND

The following facts are from plaintiff's complaint, and the Court takes them as true.

On more than one occasion in November and December 2020, plaintiff purchased from defendant one of defendant's private label cheese products. The front of the product was labeled "SMOKED GOUDA" over the words "SLICED CHEESE." (Am. Comptl. ¶ 1). Just below those words were the words, "distinctive, smoky flavor." (Am. Complt. ¶ 1).

Plaintiff alleges that when she purchased the sliced cheese, she "wanted more than a ‘smokey’ taste but a product that was smoked over hardwood." (Am. Complt. ¶ 74). Plaintiff alleges that the front label "does not disclose that all of the Product's smoked flavor is from liquid smoke, prepared by pyrolysis of hardwood sawdust, instead of being smoked over hardwoods." (Am. Complt. ¶ 33). Rather, that information is relegated to the back of the label in the ingredient list, which states, "INGREDIENTS: CULTURED PASTEURIZED MILK, SALT, ENZYMES, SMOKE FLAVOR, COLOR ADDED." (Am. Complt. ¶ 39). Plaintiff alleges that " ‘SMOKE FLAVOR’ is ‘smoke condensed into a liquid form.’ " (Am. Complt. ¶ 40). Plaintiff alleges that gouda is not the sort of luxury good that, priced cheaply, would make a reasonable consumer check the back label for ingredients. According to plaintiff, defendant's label gives consumers "the false impression" that the cheese was "smoked over hardwood, when it was not." (Am. Complt. ¶ 52).

Plaintiff alleges she would not have purchased (or would have paid less for) the product had she known the representations on the label were false and misleading. Finally, plaintiff alleges that she would purchase the product again in the future "when she can do so with the assurance that [the] Product's representations are consistent with its composition." (Am. Complt. ¶ 80).

Based on these allegations, plaintiff asserts multiple claims. Defendant moves to dismiss.

II. STANDARD ON A MOTION TO DISMISS

The Court may dismiss a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure if the plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). Under the notice-pleading requirements of the Federal Rules of Civil Procedure, a complaint must "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ). A complaint need not provide detailed factual allegations, but mere conclusions and a "formulaic recitation of the elements of a cause of action" will not suffice. Twombly , 550 U.S. at 555, 127 S.Ct. 1955. To survive a motion to dismiss, a claim must be plausible. Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Allegations that are as consistent with lawful conduct as they are with unlawful conduct are not sufficient; rather, plaintiffs must include allegations that "nudg[e] their claims across the line from conceivable to plausible." Twombly , 550 U.S. at 570, 127 S.Ct. 1955.

In considering a motion to dismiss, the Court accepts as true the factual allegations in the complaint and draws permissible inferences in favor of the plaintiff. Boucher v. Finance Syst. of Green Bay, Inc. , 880 F.3d 362, 365 (7th Cir. 2018). Conclusory allegations "are not entitled to be assumed true," nor are legal conclusions. Iqbal , 556 U.S. at 680 & 681, 129 S.Ct. 1937 (noting that a "legal conclusion" was "not entitled to the assumption of truth[;]" and rejecting, as conclusory, allegations that " ‘petitioners ‘knew of, condoned, and willfully and maliciously agreed to subject [him]’ to harsh conditions of confinement"). The notice-pleading rule "does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Iqbal , 556 U.S. at 678-679, 129 S.Ct. 1937.

Pursuant to Rule 9(b) of the Federal Rules of Civil Procedure, the "circumstances constituting fraud" must be alleged with particularity. Fed.R.Civ.P. 9(b).

III. DISCUSSION

All of plaintiff's claims are brought under state law, primarily the law of Illinois. As a federal court considering this case under diversity jurisdiction, this Court's job is to predict how the Illinois Supreme Court would decide the issues. Nationwide Agribusiness Ins. Co. v. Dugan , 810 F.3d 446, 450 (7th Cir. 2015) ("As a federal court sitting in diversity jurisdiction, our task is to predict how the Illinois Supreme Court would decide issues presented here."); Allstate Ins. Co. v. Menards, Inc. , 285 F.3d 630, 637 (7th Cir. 2002) ("[W]e adhere today to the general rule, articulated and applied throughout the United States, that, in determining the content of state law, the federal courts must assume the perspective of the highest court in that state and attempt to ascertain the governing substantive law on the point in question."). There being "no federal general common law," this Court, when applying federal cases, will take care to consider which state's law those federal courts are applying. See Erie R. Co. v. Tompkins , 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ("Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state. And whether the law of the state shall be declared by its Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no federal general common law."); Novoselsky v. Brown , 822 F.3d 342, 352 (7th Cir. 2016) ("our responsibility is to apply Illinois law as it currently exists").

A. Plaintiff's claims for breach of warranty

Plaintiff attempts to state claims for breach of express warranty and breach of implied warranty of merchantability, as well as a claim under the Magnusson Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. "Express warranties by the seller are created as follows: (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise." 810 ILCS 5/2-313. "Unless excluded or modified (Section 2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." 810 ILCS 5/2-314(1). To be merchantable, goods "must be ... fit for the ordinary purposes for which such goods are used." 810 ILCS 5/2-314(2)(c).

Defendant argues that plaintiff's warranty claims must be dismissed, because plaintiff has not alleged that she provided notice to defendant before filing suit. The Court agrees. Buyers must provide pre-suit notice of a warranty claim. See 810 ILCS 5/2-607(3)(a) ("the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy"); Connick v. Suzuki Motor Co., Ltd. , 174 Ill.2d 482, 492, 221 Ill.Dec. 389, 675 N.E.2d 584 (Ill. 1996) ("In general, buyers such as the instant plaintiffs must directly notify the seller of the troublesome nature of the transaction or be barred from recovering for a breach of warranty.").

"Direct notice is not required when ... the seller has actual knowledge of the defect of the particular product." Connick , 174 Ill.2d at 492, 221 Ill.Dec. 389, 675 N.E.2d 584. Although plaintiff alleges defendant should have known about the defect due to "complaints by regulators, competitors, and consumers," (Am. Complt. ¶ 103), such generalized knowledge does not suffice. Plaintiff has not alleged she provided notice about the particular cheese she purchased. In Connick , the Illinois Supreme Court explained that "generalized knowledge" of a product line's problems is not enough to establish actual knowledge of a particular plaintiff's problem with a particular product. Connick , 174 Ill.2d at 493, 221 Ill.Dec. 389, 675 N.E.2d 584. There, the Illinois Supreme Court quoted Judge Learned Hand, who had said:

The notice ‘of the breach’ required is not of the facts, which the seller presumably knows quite as well as, if not better than, the buyer, but of buyer's claim that they constitute a breach.

Connick , 174 Ill.2d at 493-94, 221 Ill.Dec. 389, 675 N.E.2d 584 (quoting American Mfg. Co. v. United States Shipping Board Emergency Fleet Corp. , 7 F.2d 565, 566 (2d Cir. 1925) ). The Illinois Supreme Court went on to say:

Thus, even if a manufacturer is aware of problems with a particular product line, the notice requirement of section 2-607 is satisfied only where the manufacturer is somehow apprised of the trouble with the particular product purchased by a particular buyer.

Connick , 174 Ill.2d at 494, 221 Ill.Dec. 389, 675 N.E.2d 584 (emphasis added). The Illinois Supreme Court cited examples of cases where...