Pelayo v. Nestle United States, Inc.

• Decision Date: 25 October 2013
• Docket Number: Case No. CV 13–5213–JFW (AJWx).
• Citation: 989 F.Supp.2d 973
• Court: U.S. District Court — Central District of California
• Parties: Maritza PELAYO v. NESTLE USA, INC., et al.

989 F.Supp.2d 973

Maritza PELAYO

v.NESTLE USA, INC., et al.

Case No. CV 13–5213–JFW (AJWx).

United States District Court,

C.D. California.

Oct. 25, 2013.

Elaine A. Ryan, Lindsey Gomez–Gray, Patricia N. Syverson, Bonnett Fairbourn Friedman & Balint PC, Phoenix, AZ, Manfred Patrick Muecke, Bonnett Fairbourn Friedman and Balint PC, San Diego, CA, Mila F. Bartos, Robert O. Wilson, Finkelstein Thompson LLP, Washington, DC, Stewart M. Weltman, Stewart Weltman LLC, Chicago, IL, Behram V. Parekh, Kirtland and Packard LLP, El Segundo, CA, for Maritza Pelayo.

Carmine R. Zarlenga, Mayer Brown LLP, Washington, DC, Dale J. Giali, Mayer Brown LLP, Los Angeles, CA, for Nestle USA, Inc., et al.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS FIRST AMENDED COMPLAINT [filed 9/23/13; Docket No. 30]

JOHN F. WALTER, District Judge.

On September 23, 2013, Defendants Nestle USA, Inc. and Nestle Prepared Foods Company Inc. (collectively, “Defendants”) filed a Motion to Dismiss First Amended Complaint (“Motion”). On October 7,2013, Plaintiff Maritza Pelayo (“Plaintiff”) filed her Opposition. On October 14, 2013, Defendants filed a Reply. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7–15, the Court finds that this matter is appropriate for decision without oral argument. The hearing calendared for October 28, 2013 is hereby vacated and the matter taken off calendar. After considering the moving, opposing, and reply papers, and the arguments therein, the Court rules as follows:

I. Factual and Procedural Background¹

On July 18, 2013, Plaintiff, on behalf of herself and others similarly situated, filed this class action lawsuit against Defendants (Docket No. 1), and, on August 19, 2013, she filed a First Amended Complaint (Docket No. 18). The First Amended Complaint focuses on thirteen of Defendants' stuffed pasta products, which can be generally described as nationally manufactured and marketed packaged pasta found in the refrigerated aisle of grocery stores: (1) Buitoni Four Cheese Ravioli; (2) Buitoni Light Four Cheese Ravioli; (3) Buitoni Whole Wheat Four Cheese Ravioli; (4) Buitoni Three Cheese Ravioli; (5) Buitoni Three Cheese Tortellini; (6) Buitoni Whole Wheat Three Cheese Tortellini; (7) Buitoni Spinach Cheese Tortellini; (8) Buitoni Cheese & Roasted Garlic Tortellini; (9) Buitoni Spinach & Ricotta Tortellini; (10) Buitoni Herb Chicken Tortellini; (11) Buitoni Chicken Marsala Ravioli; (12) Buitoni Chicken & Prosciuto Tortellini; and (13) Buitoni Mixed Cheese Tortellini (collectively, “Buitoni Pastas”).² First Amended Complaint, ¶¶ 1, 10–11, and 14–15.

Plaintiff alleges that the product labeling on Buitoni Pastas which uses the term “All Natural” is false, misleading, and reasonablylikely to deceive the public because the Buitoni Pastas contain at least two ingredients that are unnatural, artificial, or synthetic. Specifically, Plaintiff alleges that all but one of the Buitoni Pastas contain both synthetic xanthan gum and soy lecithin, and that all of the Buitoni Pastas contain a synthetic soy lecithin. Id., ¶ 16.

Plaintiff claims that in late June or early July 2013, she saw Defendants' “All Natural” label on the Buitoni Three Cheese Tortellini and Buitoni Spinach Cheese Tortellini at a Vons market in La Verne, California. Id., ¶ 9. Based on the “All Natural” label of the Buitoni Pastas, Plaintiff allegedly believed that the products were “All Natural” and that they did not contain any unnatural, artificial, or synthetic ingredients.³ Plaintiff alleges that in reliance on Defendants' “All Natural” representation, she purchased both Buitoni Three Cheese Tortellini and Buitoni Spinach Cheese Tortellini for $5.00 each. Plaintiff alleges that the Buitoni Pastas were not “All Natural” as represented, and she was injured because she would not have purchased the two Buitoni Pastas if she knew the true facts about them. Id., ¶ 9.

Based on the alleged false and misleading labeling of Buitoni Pastas consisting of the “All Natural” term, Plaintiff has alleged the following claims: (1) California Unfair Competition Law (“UCL”) and (2) California Consumer Legal Remedies Act (“CLRA”). See, generally, First Amended Complaint.

II. Legal Standard

A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. “A Rule 12(b)(6) dismissal is proper only where there is either a ‘lack of a cognizable legal theory’ or ‘the absence of sufficient facts alleged under a cognizable legal theory.’ ” Summit Technology, Inc. v. High–Line Medical Instruments Co., Inc., 922 F.Supp. 299, 304 (C.D.Cal.1996) (quoting Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988)). However, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964–65, 167 L.Ed.2d 929 (2007). “[F]actual allegations must be enough to raise a right to relief above the speculative level.” Id. at 1965.

In addition, Rule 9(b) provides: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). The heightened pleading requirements of Rule 9(b) are designed “to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Neubronner v. Milken, 6 F.3d 666, 671 (9th Cir.1993). In order to provide this required notice, “the complaint must specify such facts as the times, dates, places, and benefits received, and other details of the alleged fraudulent activity.” Id. at 672. Further, “a pleader must identify the individual who made the alleged representation and the content of the alleged representation.” Glen Holly Entertainment, Inc. v. Tektronix, Inc., 100 F.Supp.2d 1086, 1094 (C.D.Cal.1999).

In deciding a motion to dismiss, a court must accept as true the allegations of the complaint and must construe those allegations in the light most favorable to the nonmoving party. See, e.g., Wyler Summit Partnership v. Turner Broadcasting System, Inc., 135 F.3d 658, 661 (9th Cir.1998). “However, a court need not accept as true unreasonable inferences, unwarranted deductions of fact, or conclusory legal allegations cast in the form of factual allegations.” Summit Technology, 922 F.Supp. at 304 (citing Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981)cert. denied,454 U.S. 1031, 102 S.Ct. 567, 70 L.Ed.2d 474 (1981)).

“Generally, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n. 19 (9th Cir.1990) (citations omitted). However, a court may consider material which is properly submitted as part of the complaint and matters which may be judicially noticed pursuant to Federal Rule of Evidence 201 without converting the motion to dismiss into a motion for summary judgment. See, e.g., id.;Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994).

Where a motion to dismiss is granted, a district court must decide whether to grant leave to amend. Generally, the Ninth Circuit has a liberal policy favoring amendments and, thus, leave to amend should be freely granted. See, e.g., DeSoto v. Yellow Freight Systems, Inc., 957 F.2d 655, 658 (9th Cir.1992). However, a Court does not need to grant leave to amend in cases where the Court determines that permitting a plaintiff to amend would be an exercise in futility. See, e.g., Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir.1987) (“Denial of leave to amend is not an abuse of discretion where the pleadings before the court demonstrate that further amendment would be futile.”).

III. Discussion

The CLRA and UCL, which are the basis of Plaintiff's first and second claims, are California consumer protection statutes. The UCL makes actionable any “unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof.Code § 17200. The CLRA also prohibits “unfair methods of competition and unfair or deceptive acts or practices.” Cal. Civ.Code § 1770. Claims made under these statutes are governed by the “reasonable consumer” test which focuses on whether “members of the public are likely to be deceived.” Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir.2008) (holding that claims under UCL, CLRA, and FAL “are governed by the ‘reasonable consumer’ test”) ( citing Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir.1995)). The reasonable consumer standard requires a probability “that a significant portion of the general consuming public or of targeted consumers, acting reasonably under the circumstances, could be misled.” Lavie v. Procter & Gamble Co., 105 Cal.App.4th 496, 508, 129 Cal.Rptr.2d 486 (2003); see also Hill v. Roll International Corp., 195 Cal.App.4th 1295, 1300–01, 128 Cal.Rptr.3d 109 (2011) (holding that the “reasonable consumer” is not the “least sophisticated consumer” or an “unwary consumer,” but “[r]ather, California courts consistently have looked to the ordinary consumer within the larger population”) ( citing Lavie, 105 Cal.App.4th at 505–06, 508–10, 129 Cal.Rptr.2d 486).

The question of whether a business practice is deceptive in most cases presents a question of fact not amenable to resolution on a motion to dismiss. See Williams, 552 F.3d at 938. However, in certain instances, the Court can properly make this determination and resolve such claims based on its review of the product packaging. See Brockey v. Moore, 107 Cal.App.4th 86, 100, 131 Cal.Rptr.2d 746 (2003) (“the primary evidence in a false advertising case is the advertising...