Riva v. Pepsico, Inc.

• Decision Date: 04 March 2015
• Docket Number: No. C–14–2020 EMC,Lead Member Case C–14–0478 EMC,C–14–2020 EMC
• Parties: Paul Riva, et al., Plaintiffs, v. Pepsico, Inc., Defendant.
• Court: U.S. District Court — Northern District of California

82 F.Supp.3d 1045

Paul Riva, et al., Plaintiffs

v.Pepsico, Inc., Defendant.

No. C–14–2020 EMC

Lead Member Case C–14–0478 EMC

United States District Court, N.D. California.

Signed March 4, 2015

Roy Arie Katriel, The Katriel Law Firm, La Jolla, CA, Amanda Marie Friedman, Ralph B. Kalfayan, Krause Kalfayan Benink and Slavens LLP, San Diego, CA, for Plaintiffs.

Christopher Chorba, Lauren Margaret Blas, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, Trenton Herbert Norris, Sarah Esmaili, Arnold & Porter LLP, San Francisco, CA, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

(Docket No. 52)

EDWARD M. CHEN, United States District Judge

Pending before the Court is Defendant Pepsico, Inc.'s (“Pepsi's”) Motion to Dismiss the Amended Complaint of Plaintiffs Riva and Ardagna (collectively “Riva Plaintiffs”). Docket No. 52 (“Motion”). The operative complaint is the First Amended Complaint. Docket No. 51.

I. FACTUAL & PROCEDURAL BACKGROUND

Nine putative class actions were filed against Pepsi. In general, each action originally alleged that certain Pepsi products contain a carcinogen, 4–methylimidazole (“4–MeI”), at levels that were unhealthy, because, among other things, they exceeded the levels which triggered warning labels under California Proposition 65.

Following a contested application, the Court appointed the attorneys for Plaintiffs Hall and Ree as interim lead counsel for consolidated class actions. Sciortino ECF, Docket No. 65. Interim lead counsel subsequently elected not to allege any personal injury or medical monitoring claims in their consolidated amended complaint. The Court severed the Riva case from the consolidated actions to allow Plaintiffs Riva and Ardagna an opportunity to plead a personal injury claim seeking medical monitoring in their own amended complaint independent of the consolidated complaint. Sciortino ECF, Docket No. 75.

According to a study cited in the First Amended Complaint (“FAC”), 4–MeI is “used in the manufacture of pharmaceuticals, photographic chemicals, dyes and pigments, cleaning and agricultural chemicals, and rubber.” Docket No. 53–2 at 7.¹ Four–MeI has “been identified as a by-product of fermentation in foods and has been detected in mainstream and sidestream tobacco smoke.” Id. The 4–MeI compound is generated during the caramelization process of caramel colors, a color additive used in a wide range of foods and beverages, including beer and some soft drinks, because of its color, flavor, and other properties. Docket No. 53–3; see also FAC ¶ 9.

Plaintiffs Riva and Ardagna allege that Pepsi's Diet Pepsi and Pepsi One beverages contained 4–MeI at levels that caused them to experience an “increased risk of cancer

,” specifically bronchioloalveolar cancer. FAC ¶ 1. To support the claim of the increased risk of bronchioloalveolar cancer, the Riva Plaintiffs cite to a report by the National Toxicology Program that found that high levels of exposure to 4–MeI resulted in increased incidences of alveolar/bronchial neoplasms in mice. Id. ¶ 11.

According to the FAC, the compound 4–MeI appears on the list of known carcinogens that require disclosure at certain levels under Proposition 65. FAC ¶ 1. Proposition 65 calls for disclosure of the presence of 4–MeI at levels above 29 micrograms per day. Id. ¶ 15. Testing by Consumer Reports in December of 2013 revealed that Diet Pepsi sold in California contained an average of 30.5 micrograms of 4–MeI per can. Id. ¶ 16. Pepsi One sold in California contained an average of 43.5 micrograms of 4–MeI per can. Id. ¶ 18. A toxicologist at the Consumer Reports Food Safety & Sustainability Center has opined that there is no “safe level” of 4–MeI, and that the threshold should be “more like 3 micrograms/day.” Id. ¶ 15.

Mr. Riva contends that he “drank Pepsi One 2 to 3 times each and every week” (id. ¶ 3), and Ms. Ardagna alleges that she “consumed 3 to 4 cans of Diet Pepsi per day, or nearly 30 cans of Diet Pepsi per week” (id. ¶ 4). The Riva Plaintiffs seek to represent a class of California consumers who purchased Diet Pepsi or Pepsi One during the four-year period from February 13, 2010 to the filing of the original complaint. Id. ¶ 32.

The Riva Plaintiffs assert three claims: negligence, strict liability based on defective design, and strict liability based on failure to warn. Id. ¶¶ 41–59. The Riva Plaintiffs seek medical monitoring as a remedy for all three claims; specifically, they seek an order requiring Pepsi to establish a “fund from which those individual class members can seek monetary recovery for the costs of actual or anticipated medical monitoring expenses incurred by them.” Id. at 19.² The Riva Plaintiffs in particular allege that outcomes in bronchioloalveolar cancer

show a clinically significant benefit from early evaluation, detection, and diagnosis. Id. ¶ 45.

The Riva Plaintiffs do not seek to certify a class for the entire action, nor do they seek certification of the damages portion of their case. Instead, the Riva Plaintiffs contemplate a two-step process. First, they seek to certify certain liability issues and issues pertaining to remedies, such as whether medical monitoring is warranted, and what monitoring is “medically and legally justified,” under Federal Rule of Civil Procedure 23(c)(4). Id. ¶ 1. Second, following resolution of those discrete class issues, the Riva Plaintiffs envision that class members would “individually litigate their damages” from the fund created through the class process. Id. at ¶ 2. According to the Riva Plaintiffs, litigation of damages at that point would include proof that those individuals ingested Pepsi One or Diet Pepsi “at or above the threshold quantities” that justify medical monitoring. Id.

Pepsi has moved to dismiss the Riva Plaintiffs' FAC, arguing that the Riva Plaintiffs lack standing or otherwise have failed to allege actual harm, have failed to allege sufficient factual support for the cancer

screenings they seek, and have not adequately pled their class allegations, including ascertainabilty of the class, commonality and predominance, and superiority of class adjudication. For the reasons discussed herein and on the record at the hearing, the Court GRANTS Pepsi's Motion. Because the currently-pled facts cannot plausibly state a claim and the Riva Plaintiffs have failed to identify any realistic plan to cure the deficiencies in the FAC, the Court grants Pepsi's Motion with prejudice.

II. DISCUSSION

A. Legal Standard

A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief” in order to provide “fair notice of what the claim is and the grounds upon which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss under Rule 12(b)(6), a complaint need not contain “detailed factual allegations,” but it 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). In other words, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”Id.

For purposes of ruling on a Rule 12(b)(6) motion to dismiss, a court accepts all factual allegations as true and construes the pleadings in the light most favorable to the nonmoving party. Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir.2005). While a court assumes the allegations in the complaint are true (even if “doubtful in fact”), the factual allegations must “be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. “Asking for plausible grounds does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence” of wrongdoing. Id. at 545, 127 S.Ct. 1955. Requiring such factual content to be pled serves the “practical purpose of preventing a plaintiff with a largely groundless claim from taking 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 546, 127 S.Ct. 1955 (quotations omitted).

In its motion to dismiss, Pepsi questions not only the factual sufficiency of the FAC, but also whether the Riva Plaintiffs have constitutional standing. “[L]ack of Article III standing requires dismissal for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir.2011). Under Rule 12(b)(1) a court is not as limited as under Rule 12(b)(6) in determining constitutional standing; “it is within the trial court's power to allow or to require the plaintiff to supply, by amendment to the complaint or by affidavits, further particularized allegations of fact deemed supportive of plaintiff's standing.” Maya, 658 F.3d at 1067.

B. Standing

The Riva Plaintiffs bear the burden of establishing the core components of constitutional standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The “irreducible constitutional minimum of standing” requires establishing three elements. Id. at 560–61, 112 S.Ct. 2130 ; Cent. Delta Water Agency v. United States, 306 F.3d 938, 946–47 (9th Cir.2002). First, standing requires an “injury in fact,” that is, an invasion of a legally protected interest. Id. Such injury must be “concrete and particularized” as well as “actual or imminent,” i.e., “not conjectural or hypothetical.” Id. There must be a “credible threat of harm sufficient to constitute actual injury.” Cent. Delta Water Agency, 306 F.3d at 950. Second, standing requires a “causal connection between the injury and the conduct complained of—the injury has to be fairly traceable to the challenged action of the defendant.” Id. Third, it must be “likely as...