Tsan v. Seventh Generation, Inc.
| Decision Date | 03 November 2015 |
| Docket Number | Case No. 15-cv-00205-JST |
| Court | U.S. District Court — Northern District of California |
| Parties | MAGGIE TSAN, et al., Plaintiffs, v. SEVENTH GENERATION, INC., Defendant. |
Before the Court is Defendant Seventh Generation, Inc.'s Motion to Strike, Motion to Dismiss Plaintiffs' Complaint, and Request for Judicial Notice. ECF Nos. 36, 37, 38. For the reasons stated below, the Court grants in part and denies in part Defendant's Request for Judicial Notice, grants in part and denies in part Defendant's Motion to Dismiss, and denies Defendant's Motion to Strike.
For the purposes of deciding these motions, the Court accepts as true the following factual allegations from Plaintiffs' Complaint. ECF No. 1.
Defendant Seventh Generation, Inc. ("Seventh Generation") manufactures, markets, and sells cleaning supplies, paper products, and personal care products that are labeled "natural." Id. ¶ 4-5. Seventh Generation also markets its products as "natural" on its website. Id. ¶ 30-31.
Plaintiffs Maggie Tsan and Erica Wildstein purchased the products because they "believed they were natural products." Id. ¶ 13-14. Plaintiffs would not have purchased the products if they had known they were not natural. Id. ¶¶ 13-14, 50. During the class period, Plaintiffs purchased such items as Seventh Generation's Natural 2X Concentrated Liquid Laundry Detergent and Seventh Generation's Natural Dish Liquid. Id. ¶ 13-14. These, and 21 other Seventh Generation products, contain the word "natural" on the label. Id. ¶¶ 19, Ex. 1-23. Although "natural" is on the label of the products, the products contain non-natural ingredients such as benzisothiazolinone, methylisothiazolinone, laureth-6, sodium lauryl sulfate, lauramine oxide, sodium citrate, glycerin, and sodium hydroxide. Id. ¶ 33. A reasonable consumer would not consider products with such ingredients to be "natural." Id. ¶ 43.
Plaintiffs allege that Defendant labeled the products as "natural" to persuade consumers that the products only contained natural ingredients and that Defendant "profited enormously from its false and misleading marketing." Id. ¶¶ 45, 50.
Plaintiffs commenced this action by filing a complaint on January 14, 2015. ECF No. 1. Defendant filed a Motion to Transfer Venue on February 27, 2015, ECF No. 18, and the motion was denied on June 17, 2015. ECF No. 33. Defendant filed its Motion to Strike, Motion to Dismiss Plaintiffs' Complaint, and Request for Judicial Notice on July 6, 2015. ECF. Nos. 36, 37, 38. Plaintiffs assert the following claims for relief: (1) violation of the Magnuson-Moss Warranty Act; (2) violation of the Consumers Legal Remedies Act, California Civil Code § 1750, et seq.; (3) deceptive advertising, pursuant to California Business & Professions Code § 17500, et seq.; (4) unfair business practices, pursuant to California Business and Professions Code § 17200 et seq.; (5) deceptive advertising, pursuant to Florida Statute § 501.201, et seq.; (6) breach of express warranty. ECF No. 1.
Plaintiffs assert, and Defendant does not deny, that Plaintiffs are citizens of the States of California and Florida and Defendant is a citizen of the State of Vermont. Id. ¶ 1. The Court has subject-matter jurisdiction over this action pursuant to the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d), because there are 100 or more Class Members, at least one Class Member is a citizen of a state diverse from Defendant's citizenship, and the matter in controversy exceeds $5,000,000 exclusive of interest and costs.
Although a court's review on a motion to dismiss is usually limited to the allegations in the pleadings, there are two exceptions to this general rule. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). First, a court may consider documents on which a complaint "necessarily relies" even if those documents are not physically attached to the pleading document itself. Id. (citation omitted). This is known as the "incorporation by reference" doctrine, which allows courts "to take into account documents 'whose contents are alleged in a complaint and whose authenticity no party questions.'" Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (quoting In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir.1999)). Second, under Federal Rule of Evidence 201, courts may take into account matters of public record, as long as they are not subject to reasonable dispute. Lee, 250 F.3d at 689.
Seventh Generation requests that the Court take judicial notice of: (1) 7 C.F.R. § 3202.1; (2) 7 C.F.R. § 205.100; (3) the Natural Products Association ("NPA") Standard and Certification for Personal Care Products (available online), for the fact of its existence and not the truth of what it asserts; (4) the NPA Standard and Certification for Home Care Products (available online), for the fact of its existence and not the truth of what it asserts; and (5) the Declaration of Timothy John Fowler authenticating and attaching Exhibits 1-23, which are copies of Seventh Generation's product image files that include the front and back labels corresponding to the exhibits in the complaint. ECF No. 38 at 2.
Plaintiffs do not oppose the first four of Defendant's requests. The Court finds 7 C.F.R. § 3202.1 and § 205.100 appropriate for judicial notice as documents in the public record whose accuracy cannot reasonably be questioned. See Fed. R. Evid. 201. The Court also finds both NPA Standards and Certifications appropriate for judicial notice because Plaintiffs referred to the NPA for guidance as to what a reasonable consumer may consider "natural," ECF No. 1 ¶ 9, and because the fact that they exist is not subject to reasonable dispute. See McMahon v. Take-Two Interactive Software, Inc., No. EDCV 13-02032-VAP (SPx), 2014 WL 324008, at *2 (C.D. Cal. Jan. 29, 2014) (). Accordingly, the Court grants Defendant's request for judicial notice as to 7 C.F.R. § 3202.1, 7 C.F.R. § 205.100, the NPA Standard and Certification for Personal Care Products, and the NPA Standard and Certification for Home Care Products.
Plaintiffs oppose Seventh Generation's request for judicial notice of Timothy John Fowler's declaration and the accompanying image files of front and back labels. ECF No. 45 at 1. They question the accuracy of the labels, arguing it is unclear if the Defendant's exhibits represent every label produced by Defendant and contend that there is no indication of the time periods the labels were used. Id. at 2. Additionally, Plaintiffs point out that the images Defendant submitted contain the term "proof" and a space for an individual to approve the proof, but that it is unclear whether the proofs were ever approved for use in the marketplace. Id. at 3. Finally, they contend that that "the date for the back labels does not correspond to the date on the front labels." Id. Defendant responds that the images are appropriate for judicial notice under the incorporation by reference doctrine and that they were sufficiently authenticated by the declaration of Seventh Generation Senior Vice President Timothy John Fowler. ECF No. 50 at 2-4.
The Ninth Circuit has "recognized consistently that the district court may, but is not required to incorporate documents by reference." Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1159 (9th Cir. 2012). The incorporation by reference doctrine Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998). It is true, as Seventh Generation points out, that other courts have sometimes incorporated by reference the backs of food package labels on judicial notice. See,e.g., Brazil v. Dole Food Co., 935 F. Supp. 2d 947, 962 n.4 (N.D. Cal. 2013) (); Bruton v. Gerber Products Co., 961 F. Supp. 2d 1062, 1074 n.1 (N.D. Cal. 2013) (); Gustavson v. Wrigley Sales Co., 961 F.Supp. 2d 1100, 1113 n.1 (N.D. Cal. 2013) (). However, a necessary part of the incorporation by reference doctrine is that "no party questions" the "authenticity" of the labels at hand. Knievel, 393 F.3d at 1076; see also Davis, 691 F.3d at1159-60.
Here, Plaintiffs strongly dispute the authenticity of the labels. ECF No. 45 at 2-3. Although there is a declaration accompanying the images, the Court nevertheless finds there is sufficient justification for Plaintiffs to dispute their authenticity. The images of the backs of the labels are proofs, contain dates that do not correspond to the front labels offered by Plaintiffs, and have approval boxes that are not checked. The Court therefore denies without prejudice Defendant's request for judicial notice of the declaration of Timothy John Fowler and the accompanying images.
Seventh Generation moves to dismiss Plaintiffs' complaint on several grounds: (1) Plaintiffs fail to allege a plausible theory of deception; (2) Plaintiffs' Magnuson-Moss Warranty Act ("MMWA") claim fails; (3) Plaintiffs fail to state their claims with specificity; and (4) Plaintiffs' express warranty claim fails as a matter of law. ECF No. 37 at i. The Court considers these arguments in turn.
A complaint must contain "a short and plain statement of the...
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