Naiman v. Alle Processing Corp.
| Decision Date | 23 November 2020 |
| Docket Number | No. CV20-0963-PHX-DGC,CV20-0963-PHX-DGC |
| Parties | Sidney Naiman, Plaintiff, v. Alle Processing Corporation, a New York corporation, Defendant. |
| Court | U.S. District Court — District of Arizona |
While shopping at Costco, Plaintiff Sidney Naiman purchased a frozen pre-packaged meat dinner made by Defendant Alle Processing Corporation. The front of the package clearly stated, in bold type: "NET WT 40oz (2.5LB)." Doc. 11 ¶ 28; Doc. 15 at 6. The nutritional label on the back of the package contained information for a 10-ounce serving, but stated, incorrectly, that there was "1 servings [sic] per container." Doc. 11 ¶ 28, Doc. 15 at 5. Plaintiff claims that he bought the product in reliance on this back-side statement, assuming he was getting 10-ounces of food despite the 40-ounce label on the front and the package's 2.5-pound weight. Plaintiff does not explain exactly when he discovered that the package contained more than 10 ounces, but it was before he opened or ate it. Plaintiff includes in his amended complaint photographs of the front and back of the package in its original wrapping. Doc. 11 ¶ 28. Thus, unless Plaintiff is in the practice of photographing all his food, it is apparent he discovered the product's true size before he opened it, and that he photographed it in preparation for this lawsuit. Rather than eating one 10-ounce serving from the package, or eating four 10-ounce servings over time, or returning the unopened product to Costco for a full refund, Plaintiff filed this nationwide class action lawsuit seeking more than $5 million from Defendant. He claims Defendant breached express warranties in every State, was unjustly enriched in eight States by selling 40 ounces of food for a price Plaintiff thought was reasonable for 10 ounces, and defrauded consumers in Arizona. The words of Judge Silverman apply here: "Talk about chutzpah."1 United States v. Ramirez-Cortez, 213 F.3d 1149, 1159 (9th Cir. 2000) (Silverman, J., dissenting). The Court will dismiss the claims for breach of warranty, unjust enrichment, and injunctive relief, strike the class allegations from the remaining consumer fraud claim, and schedule a case management conference.
I. Background.
Plaintiff alleges that he "fell victim" to Defendant's "deceptive conduct" when he purchased its Beef Stuffed Cabbage Mon Cuisine meal on April 14, 2020. Doc. 11 ¶¶ 9, 23. But if Defendant intended to deceive Plaintiff and other consumers into believing the package contained only 10 ounces of food, it was not very astute. Directly below the photograph on the front of the package was the bolded statement: "NET WT 40oz (2.5LB)." Doc. 11. ¶ 28 (emphasis in original).2 Plaintiff alleges, nonetheless, that Defendant "deceived" him and caused him to buy the product "in part" by stating, in non-bold print on the back of the package, that it contained one 10-ounce serving. Id. ¶¶ 26, 30. He claims he would not have purchased the meal had he known he was getting four times as much food as he thought he was buying. Id. ¶ 27.
Perhaps recognizing the implausibility of his alleged scheme - "deceiving" people by persuading them they are getting less than they are paying for - Plaintiff tries to cast this as a case about hazardous nutritional misrepresentations. He alleges that there were actually 1,040 calories in the package, not the 260 shown on the label, but this is not an accurate portrayal of the package's nutritional information. Under the heading "Nutrition Facts," the back panel says: "Serving size 10 oz. (283g)." Doc. 11 ¶ 28, Doc. 15 at 5 (). The label then identifies the nutritional amounts "per serving" - that is, for a 10-ounce serving - as 260 calories, 50 mg of cholesterol, and 380 mg of sodium. Id. (emphasis added). Plaintiff does not claim that these nutritional facts are inaccurate for a 10-ounce serving, nor that the food was unfit for consumption, adulterated, or inedible in some other way.
Thus, if Plaintiff examines nutritional labels as closely as he claims, he saw the serving size for which the nutritional values were accurately identified. He was not misled as to the calories in a 10-ounce serving. And he clearly discovered the true amount of the food before he opened the product and ate it, as shown by his own photographs. He did not force down 2.5 pounds of food thinking it was only 10 ounces, only to discover to his dismay that he had eaten 1,040 calories. Thus, even reading the amended complaint with all inferences drawn in Plaintiff's favor, the gravamen of his claim concerns the amount of food in the package, not its nutritional value. This case does not raise the specter of danger to public health from nutritional misrepresentations.
Plaintiff asserts three claims: (1) breach of express warranty under A.R.S. § 47-2313, Arizona's Uniform Commercial Code ("U.C.C."); (2) unjust enrichment; and (3) violation of the Arizona Consumer Fraud Act ("ACFA"). Doc. 11 ¶¶ 37-59. Plaintiff sues on behalf of himself and three classes who purchased the product from the beginning of the relevant statute-of-limitations period through the date of class notice: (1) for breach of express warranty, a class consisting of all persons in the United States who purchased the product; (2) for unjust enrichment, a subclass consisting of all persons who purchased the product in Arizona, Delaware, Louisiana, Massachusetts, Minnesota, Montana, NorthDakota, and Texas; and (3) for the ACFA claim, a subclass of all persons who purchased the product in Arizona. Id. ¶ 31. Plaintiff seeks a declaratory judgment, actual and punitive damages, an injunction requiring Defendant to stop selling mislabeled products, and attorney's fees and costs. Id. at 17. He says the claims of the class members, when aggregated, exceed $5 million. Id. at 13.
Plaintiff has had two opportunities to plead his claims. After meeting and conferring with Defendant about issues to be raised in the motion to dismiss, Plaintiff filed an amended complaint in August 2020. Doc. 11.
Defendant moves for dismissal of the amended complaint under Rule 12(b)(6) for failure to state a claim and under Rule 12(b)(1) for lack of subject matter jurisdiction based on lack of standing. Doc. 12 at 10-11. In the alternative, Defendant moves to strike Plaintiff's class allegations under Rule 12(f). Id. at 11.
A successful 12(b)(6) motion must show either that the complaint lacks a cognizable legal theory or fails to allege facts sufficient to support its theory. Godecke v. Kinetic Concepts, Inc., 937 F.3d 1201, 1208 (9th Cir. 2019) (citing Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)). A complaint that sets forth a cognizable legal theory will survive a motion to dismiss as long as it contains "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
The Supreme Court has instructed, however, that "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Of particular relevance in a purported nationwide class action such as this, "something beyond the mere possibility of [relief] must be alleged, lest a plaintiff with a largely groundless claim be allowed to take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value." Id. at 557-58(quotation marks and citation omitted). "So, when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should be exposed at the point of minimum expenditure of time and money by the parties and the court." Id. at 558 (quotations marks and citations omitted).
Defendant argues that Plaintiff's breach of express warranty claim fails for lack of privity because he purchased the product from Costco, not Defendant. Doc. 12 at 12-13. Plaintiff responds that several courts have recognized an exception to the privity requirement for lawsuits involving foodstuffs. Doc. 14 at 4-6. The Court agrees with Defendant.
Plaintiff's claim is based on Arizona's U.C.C. Doc. 11, ¶ 42. The Arizona Supreme Court has made clear that a lack of privity between a purchaser and manufacturer precludes recovery based on express warranty under the U.C.C. Flory v. Silvercrest Industries, Inc., 633 P.2d 383, 389 (Ariz. 1981). Other cases reflect this rule. For example, in a case concerning alleged misrepresentations on cartons of milk, a Florida federal court applied Arizona law and held that privity is required under Arizona's U.C.C. for an express warranty claim. In re Horizon Organic Milk Plus DHA Omega-3 Mktg. & Sales Practice Litig., 955 F. Supp. 2d 1311, 1339 (S.D. Fla. 2013). The Arizona Supreme Court has also recognized this rule in other cases. See Rocky Mountain Fire & Cas. Co. v. Biddulph Oldsmobile, 640 P.2d 851, 856 (Ariz. 1982) ( ).
Plaintiff correctly notes that some courts have recognized an exception to the privity requirement for cases involving foodstuffs and public health. Doc. 14 at 4-6 (citing cases); see, e.g., Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) (). But most of Plaintiff's cases involve implied warranties about the fitness of products for human consumption. As one Arizona court has...
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