Mitchell v. Whole Foods Mkt. Grp., 20 Civ. 8496 (ER)

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtEDGARDO RAMOS, U.S.D.J.
PartiesMANDELL MITCHELL, individually and on behalf of all others similarly situated, Plaintiff, v. WHOLE FOODS MARKET GROUP, INC., Defendant.
Docket Number20 Civ. 8496 (ER)
Decision Date04 March 2022

MANDELL MITCHELL, individually and on behalf of all others similarly situated, Plaintiff,
v.

WHOLE FOODS MARKET GROUP, INC., Defendant.

No. 20 Civ. 8496 (ER)

United States District Court, S.D. New York

March 4, 2022


OPINION & ORDER

EDGARDO RAMOS, U.S.D.J.

Mandell Mitchell brings this putative class action against Whole Foods Market Group, Inc. (“Whole Foods” or “the Company”), alleging that the representations regarding chocolate on the label of the Company's ice cream bars are misleading, because the bars' coating contains vegetable oil. Mitchell seeks injunctive relief and monetary damages for: (1) violations of Sections 349 and 350 of the New York General Business Law (“GBL”), which prohibit deceptive business practices and false advertising; (2) breach of express warranty; (3) breach of the implied warranty of merchantability; (4) violation of the Magnuson Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. (“MMWA”); (5) fraud; and (6) unjust enrichment. Mitchell files this action on behalf of a putative class of similarly situated individuals.

Before the Court is Whole Foods' motion to dismiss the Second Amended Complaint (“SAC”) pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted.[1] For the reasons set forth below, the motion to dismiss is GRANTED.

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I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

A. Factual Background

Whole Foods is a Delaware corporation with a principal place of business in Austin, Texas. ¶¶ 65, 70. It operates over 500 high-end grocery stores, which sell premium and organic groceries. ¶ 71. Whole Foods manufactures and sells the Company's 365 Everyday Value Organic Chocolate & Almond Vanilla Ice Cream Bars (the “Product”). ¶¶ 1, 72.

In 2019 and 2020, Mitchell, a citizen of Bronx County, New York, purchased the Product at Whole Foods stores, including the location at 4 Union Square S, New York, NY 10003. ¶¶ 69, 73.

The Product consists of “chocolate & almond vanilla ice cream bars.” ¶ 1. The representations on the front label state that the Product is “dipped in organic chocolate” and possesses a “decadent chocolate coating.” Id. Photos of the Product's label and its ingredient list, as included in the SAC, are below.

Mitchell alleges that these representations are misleading because the chocolate coating contains ingredients not found in “real chocolate, ” such as pressed palm kernel oil, which is

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identified in the ingredient list on the back label of the Product. ¶¶ 45-51. With respect to the Product's front label, Mitchell alleges that it “creates no ambiguity about the Product's chocolate content, ” through the use of statements such as “chocolate, ” “dipped in organic chocolate, ” and “decadent chocolate coating, ” and that he understood the word, “decadent, ” to refer to the chocolate's richness. ¶¶ 56, 75. With respect to the ingredient list, Mitchell argues that consumers of a premium ice cream bar will not examine the fine print of the ingredient list in order to confirm that the front label is accurate. ¶ 52; see also ¶ 76.

The Product is sold at a “premium price, ” approximately $5.49 for three bars. ¶ 62. Mitchell contends that as a result of the misrepresentations, Whole Foods sold a higher quantity of the Product and at a higher price. ¶ 59. Mitchell further alleges that he, as well as the proposed class members, would not have bought the Product or would have paid less for it if they had known the truth. ¶¶ 60-61, 77-78. Mitchell alleges that he intends to purchase the Product again when he can do so with the assurance that the representations about its ingredients are consistent with its labeling. ¶ 79.

B. Procedural History

Mitchell filed the instant complaint on October 12, 2020. Doc. 1. On March 4, 2021, Whole Foods requested a pre-motion conference to discuss its anticipated motion to dismiss the complaint under Rule 12(b) on the following grounds, among others: (1) Mitchell's claims are preempted; (2) the Product's labeling is not plausibly deceptive under Sections 349 and 350 of the GBL because the Product contains chocolate, and the mere presence of other ingredients in addition to chocolate does not render the label false or misleading; (3) he lacks standing to seek injunctive relief; (4) the complaint fails to state a claim for fraud because he has not alleged facts that give rise to a strong inference of fraudulent intent; (5) his claim for express warranty fails

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because he did not provide notice of the alleged breach; (6) his implied warranty of merchantability and MMWA claims fail because he does not allege that the Product was not merchantable; and (7) his unjust enrichment claim fails as duplicative of his other claims. Doc. 9. On March 9, Mitchell responded to Whole Foods' letter, noting that he intended to file an amended complaint. Doc. 11. Mitchell filed the First Amended Complaint (“FAC”) on May 6. Doc. 14. On May 27, Whole Foods again requested leave to move to dismiss the FAC under Rule 12(b) on the same grounds. Doc. 15. A pre-motion conference was held before the Court on July 13. The Court directed Mitchell to file the SAC, and granted Whole Foods leave to move to dismiss the SAC. Mitchell filed the SAC on July 20. Doc. 20. Whole Foods moves to dismiss the SAC under Rules 9(b) and 12(b)(6).

II. LEGAL STANDARD

Under Rule 12(b)(6), a complaint may be dismissed for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). When ruling on a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiffs favor. Koch v. Christie's Int 'l, PLC, 699 F.3d 141, 145 (2d Cir. 2012). However, the Court is not required to credit “mere conclusory statements” or “threadbare recitals of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). Federal Rule of Civil Procedure 8 “marks a notable and generous

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departure from the hypertechnical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at 678-79. If the plaintiff has not “nudged [the] claims across the line from conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550 U.S. at 570.

III. DISCUSSION

A. New York General Business Law Claims

Section 349 of the GBL prohibits “[d]eceptive acts or practices in the conduct of any business, trade or commerce . . . .” Section 350 of the GBL prohibits “[f]alse advertising in the conduct of any business, trade or commerce . . . .” While the standard for recovery under Section 350 is specific to false advertising, it is otherwise identical to Section 349. Cosgrove v. Oregon Chai, Inc., 520 F.Supp.3d 562, 575 (S.D.N.Y. 2021). T o state a claim under either Section 349 or Section 350, “a plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice.” Orlander v. Staples, Inc., 802 F.3d 289, 300 (2d Cir. 2015) (quoting Koch v. Acker, Merrall & Condit Co., 944 N.Y.S.2d 452, 452 (2012)). While plaintiffs are not required to meet the heightened pleading requirements of Rule 9(b) for their claims, Cosgrove, 520 F.Supp.3d at 575-76, “plaintiffs must do more than plausibly allege that a ‘label might conceivably be misunderstood by some few consumers.'” Twohig v. Shop-Rite Supermarkets, Inc., 519 F.Supp.3d 154, 160 (S.D.N.Y. 2021) (quoting Sarr v. BEF Foods, Inc., No. 18 Civ. 6409 (ARR) (RLM), 2020 WL 729883, at *3 (E.D.N.Y. Feb. 13, 2020) (internal quotation marks omitted)). Plaintiffs must “plausibly allege that a significant portion of the

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general consuming public or of targeted customers, acting reasonably in the circumstances, could be misled.” Id. (quoting Sarr, 2020 WL 729883, at *3 (internal quotation marks omitted)).

“The primary evidence in a consumer-fraud case arising out of allegedly false advertising is, of course, the advertising itself.” Fink v. Time Warner Cable, 714 F.3d 739, 742 (2d Cir. 2013). In order to determine whether a reasonable consumer would have been misled by an advertisement, “context is crucial.” Id. “For example, under certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception.” Id. “Although the question of whether a business practice or advertisement is misleading to a reasonable consumer is generally a question of fact, it is ‘well settled that a court may determine as a matter of law that an allegedly deceptive [practice or advertisement] would not have misled a reasonable consumer.'” Wynn v. Topco Assocs., LLC, No. 19 Civ. 11104 (RA), 2021 WL 168541, at *2 (S.D.N.Y. Jan. 19, 2021) (internal citation omitted) (quoting Fink, 714 F.3d at 741).

i. Violations of Federal Regulations

As Whole Foods argues, the Food, Drug, and Cosmetic Act (the “FDCA”), pursuant to which the United States Food and Drug Administration (the “FDA”) issues regulations, does not create a private right of action. See PDK Labs Inc. v. Friedlander, 103 F.3d 1105, 1113 (2d Cir. 1997). While Mitchell contends that he is not pursuing a private action for violations of the FDCA, the parties dispute whether his claims are wholly predicated on purported violations of federal labeling...

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