Red v. Gen. Mills, Inc., Case No. 2:15-cv-02232-ODW(JPR)

• Decision Date: 29 December 2015
• Docket Number: Case No. 2:15-cv-02232-ODW(JPR)
• Court: U.S. District Court — Central District of California
• Parties: JENNIFER RED, on behalf of herself and all others similarly situated, Plaintiff, v. GENERAL MILLS, INC.; GENERAL MILLS SALES, INC., Defendants.

JENNIFER RED, on behalf of herself and all others similarly situated, Plaintiff, v. GENERAL MILLS, INC.; GENERAL MILLS SALES, INC., Defendants.

Case No. 2:15-cv-02232-ODW(JPR)

United States District Court Central District of California

December 29, 2015

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND TO STAY [22]

I. INTRODUCTION

Plaintiff Jennifer Red brings this putative class action lawsuit against Defendants General Mills, Inc. and General Mills Sales, Inc. for using partially hydrogenated oils (PHOs) in their food products. Defendants move to dismiss the First Amended Complaint for failure to state a claim or, in the alternative, to stay the action under the primary jurisdiction doctrine. For the reasons discussed below, the Court GRANTS Defendants' Motion to Dismiss with leave to amend, and STAYS the action pending the Food and Drug Administration's determination of the food additive status of PHOs. (ECF No. 22.)

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II. FACTUAL BACKGROUND

Defendants General Mills, Inc. and General Mills Sales, Inc. manufacture and distribute a variety of instant mashed potato products. (First Am. Compl. ¶ 3.) Some of these products contain partially hydrogenated oils (PHOs), which is "the main source of trans fat in the American diet." (Id. ¶¶ 4, 10.) Plaintiff alleges that PHOs cause immediate inflammation of internal organs upon consumption, and that such trans-fats increase the risk of coronary heart disease, type-2 diabetes, other cardiovascular diseases, and cancer. (Id. ¶¶ 16, 18, 38, 41, 46, 77.) Plaintiff also alleges that there is a "scientific consensus" that there is "no safe level" of artificial trans-fat consumption, and that trans-fats "provide no known benefit to human health." (Id. ¶¶ 15-16.) Moreover, there are "safe, low-cost, and commercially acceptable alternatives to artificial trans-fat, including those used in competing brands and even in a variety of instant mashed potatoes manufactured by [Defendants]." (Id. ¶ 5.)

Plaintiff purchased and consumed Defendants' PHO-containing mashed potato products "more than 20 times over the past four years." (Id. ¶ 61.) The First Amended Complaint is silent as to whether the product label listed PHO as an ingredient, but Plaintiff contends that it is at any rate unreasonable to expect her to inspect the ingredients of the foods that she purchases. (Id. ¶¶ 78-79.) Plaintiff alleges both economic and physical injuries as a result of purchasing and consuming the mashed potato products. (Id. ¶¶ 77; Opp'n at 3-12.)

On June 17, 2015, the FDA issued a declaratory order ruling that PHOs were no longer generally recognized as safe ("GRAS"). Final Determination Regarding Partially Hydrogenated Oils, 80 Fed. Reg. 34650-01, 34650 (June 17, 2015). However, the FDA permitted food products containing PHOs to be sold until June 18, 2018, and encouraged food manufacturers to submit food additive petitions by that date so that the FDA could determine whether it is nevertheless "possible to establish, by regulation, safe conditions of use of PHOs." Id. at 34657.

On March 25, 2015, Plaintiff filed this putative class action lawsuit against Defendants. (ECF No. 1.) On April 20, 2015, Plaintiff filed a First Amended Complaint, which asserts the following claims: (1) violation of the "unfair" prong and "unlawful" prong of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 (UCL); (2) public nuisance; and (3) breach of implied warranty of merchantability. (ECF No. 19.) On May 4, 2015, Defendants moved to dismiss the First Amended Complaint. (ECF No. 22.) Plaintiff timely opposed, and Defendants timely replied. (ECF Nos. 26, 27.) The parties also submitted supplemental briefing on the primary jurisdiction doctrine. (ECF Nos. 29, 33, 34.) On July 20, 2015, after hearing oral argument from the parties, the Court took the matter under submission. (ECF No. 36.)

III. LEGAL STANDARD

A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable legal theory or insufficient facts pleaded to support an otherwise cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To survive a dismissal motion, a complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)—a short and plain statement of the claim. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual "allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). That is, the complaint must "contain 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).

The determination whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. A court is generally limited to the pleadings and must construe all "factual allegations set forth in the complaint . . . as true and . . . in the light most favorable" to the plaintiff. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). But a court need not blindly accept conclusory allegations,unwarranted deductions of fact, and unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).

As a general rule, a court should freely give leave to amend a complaint that has been dismissed, even if not requested by the plaintiff. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc). However, a court may deny leave to amend when it "determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986).

IV. DISCUSSION

Defendants raise numerous challenges to both Plaintiff's standing to bring these claims and the sufficiency of Plaintiff's allegations. While the Court rejects the challenge to Plaintiff's Article III standing, the Court nonetheless concludes that Plaintiff's claims should be dismissed. First, Plaintiff has not suffered an economic injury, and thus cannot bring claims under the UCL. Second, Plaintiff cannot state a claim for public nuisance because she has not suffered a "special injury." Third, Plaintiff cannot state a claim for breach of implied warranty of merchantability because the products were fit for their ordinary use. However, because there is a reasonable possibility that some of these deficiencies could be cured by amendment, the Court will give Plaintiff an opportunity to amend.¹

Finally, the Court concludes that health effects of using PHOs as a food ingredient is a complex issue that should be initially determined by the FDA, and thus stays the matter under the primary jurisdiction doctrine.

A. Documents Outside the Complaint

Defendants request that the Court take judicial notice of the fact that Plaintiff has filed at least three other lawsuits alleging physical and economic harm associatedwith the purchase and consumption of food containing PHOs. (Def.'s Req. for Judicial Notice (RJN) at 1-2, ECF No. 23.) Defendants also request that the Court consider the label on the mashed potato products at issue under the incorporation by reference doctrine. (Id. at 3-4.) Plaintiff does not oppose Defendants' requests. The Court concludes that it is appropriate to consider the other lawsuits filed by Plaintiff, but not the contents of the product label.

1. Plaintiff's Other Lawsuits

"The court may judicially notice a fact that is not subject to reasonable dispute because it can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b)(2). The court may take judicial notice of the existence of a complaint and the fact that certain allegations were made therein, but not of the truth of any facts asserted in the complaint. See Peel v. BrooksAmerica Mortg. Corp., 788 F. Supp. 2d 1149, 1158 (C.D. Cal. 2011).

Here, the Court takes judicial notice of the following facts: (1) Plaintiff Jennifer Red was the named plaintiff in three other putative class action complaints filed between October 28, 2009, and February 11, 2010, in California (Def.'s RJN, Ex. 1-3); (2) in those lawsuits, Plaintiff made detailed allegations regarding the physical harm associated with the purchase and consumption of foods containing PHOs (id.); (3) Plaintiff asserted, among other things, false advertising claims relating to various misrepresentations on the product's ingredient label relating to the trans-fat content of the product and the health effects of consuming the product (id.); and (4) each complaint contains numerous pictures of the product's food and nutrition labels (id.). In fact, each complaint in the three prior lawsuits is substantially similar to the First Amended Complaint in this action, with the exception that Plaintiff does not pursue any false advertising claims against Defendants here. (See id. Ex. 5.)

2. Food Label

The food label, however, presents a different story. Under the incorporation by reference doctrine, the court may consider evidence on which the complaint"necessarily relies" if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the document. United States v. Corinthian Colls., 655 F.3d 984, 999 (9th Cir. 2011).

Here, Plaintiff's claims do not "necessarily rely" on the contents of the labeling or even refer to the labeling—to the contrary, Plaintiff's theory is that she did not have time to read the label before purchasing the products. Moreover, the cases cited by Defendants that do consider a product's label all involve false advertising claims in which the content of the label was the primary issue. As a result, the Court cannot consider the product label under the incorporation by reference doctrine.

B. Article III Standing

Defendants contend that Plaintiff's alleged...