Walcoff v. InnoFoods U.S., Inc.
| Decision Date | 04 May 2023 |
| Docket Number | 22-cv-1485-MMA (AHG) |
| Parties | CAROL WALCOFF, on behalf of herself and all others similarly situated, Plaintiff, v. INNOFOODS USA, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of California |
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS [DOC. NO. 11]
In this putative class action, Plaintiff Carol Walcoff (“Plaintiff”) alleges that Defendants Costco Wholesale Corporation and Inno Foods, Inc.[1] (“Defendants”) misleadingly label and market certain snack products as “keto” and “keto-friendly,” when, in fact, they are high in carbohydrates and added sugars-ingredients which could easily thwart someone adhering to a ketogenic diet. Doc. No. 9 (First Amended Complaint, the “FAC”) ¶¶ 1, 7. On December 12, 2022, Defendants filed a motion to dismiss Plaintiffs' FAC in its entirety pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Doc. No. 11. Plaintiff filed an opposition, Doc. No. 12, to which Defendants replied, Doc No. 13. The Court found the matter suitable for determination on the papers and without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and Civil Local Rule 7.1.d.1. See Doc. No. 14. For the reasons set forth below the Court GRANTS Defendants' motion to dismiss.
Plaintiff began purchasing Defendant Inno Foods, Inc.'s (“Inno”) Keto Coconut Cluster and Dark Chocolate Keto Nuggets snacks (the “Products”) in August 2018 from Defendant Costco Wholesale Corporation at several of its locations, including in Carlsbad, California. FAC ¶¶ 1, 28, 76. After consulting her doctor, who advised Plaintiff to “drastically reduce her carbohydrate intake,” Plaintiff began following a ketogenic diet, which “involves heavily ‘restricting the number of carbohydrates and sugar you consume.'” Id. ¶¶ 20-21 (internal citation omitted). Plaintiff alleges Inno's “labeling, advertising, and marketing campaign is false and misleading” because it touts its Products as “keto” and “keto friendly” even though they contain high net carbs and added high-carb sugars, which are not conducive to a keto diet. Id. ¶¶ 7-8. The front of the Products' packaging contains labels which state that they contain “4 g[rams] net carbs” and “3 g[rams] of sugar” per serving.[3] Id. ¶ 62. Over the last two years, Plaintiff bought over $300 worth of Defendants' Products because she believed they were “keto,” meaning “no-sugar added and low carb[].” Id. ¶¶ 8, 31-32. If the Products did not contain the phrases “keto,” “keto friendly,” “no funny stuff,” “pure,” and “It's in the chocolate!” on the labels, Plaintiff would not have paid the same price and would not have been willing to purchase the Products. Id. Although Plaintiff alleges she would not buy Defendants' Products again if they contain “added simple carbs (sugars)” or high amounts of carbohydrates, she would be willing to purchase them in the future if they were “actually keto friendly.” Id. ¶¶ 8, 34.
Based on the foregoing, Plaintiff initiated this action on behalf of herself and all other persons similarly situated for: (1) Violation of California's Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. (Count I); (2) Violation of California's False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500 et seq. (Count II);
(3) Violation of California's Consumer Legal Remedies Act (“CLRA”), Cal. Bus. & Prof. Code § 1750 et seq. (Count III); (4) Unjust Enrichment (Count IV); (5) Breach of Express Warranty (Count V); (6) Violations of the Consumer Fraud Laws of various other states[4](Count VI); and (7) Negligent Misrepresentation (Count VII). See generally FAC.
A party may challenge the court's subject-matter jurisdiction through a motion filed pursuant to Federal Rule of Civil Procedure 12(b)(1). See Fed.R.Civ.P. 12(b)(1); see also White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). Because “[f]ederal courts are courts of limited jurisdiction,” “[i]t is to be presumed that a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Consequently, “the burden of establishing the contrary rests upon the party asserting jurisdiction.” Id.
“Rule 12(b)(1) jurisdictional attacks can be either facial or factual.” White, 227 F.2d at 1242. “A ‘facial' attack accepts the truth of the plaintiff's allegations but asserts that they ‘are insufficient on their face to invoke federal jurisdiction.'” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (quoting Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004)). “The district court resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6): Accepting the plaintiff's allegations as true and drawing all reasonable inferences in the plaintiff's favor, the court determines whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction.” Id. (citing Pride v. Correa, 719 F.3d 1130, 1133 (9th Cir. 2013)).
“A ‘factual' attack, by contrast, contests the truth of the plaintiff's factual allegations, usually by introducing evidence outside the pleadings.” Id. (citing Safe Air for Everyone, 373 F.3d at 1039; Thornhill Publ'g Co. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979)). “When the defendant raises a factual attack, the plaintiff must support her jurisdictional allegations with ‘competent proof[]'” and “prov[e] by a preponderance of the evidence that each of the requirements for subject-matter jurisdiction has been met.” Id. (citing Hertz Corp. v. Friend, 559 U.S. 77, 96-97 (2010); Harris v. Rand, 682 F.3d 846, 851 (9th Cir. 2012)). Generally, “if the existence of jurisdiction turns on disputed factual issues, the district court may resolve those factual disputes itself.” Id. at 1121-22 (citing Safe Air for Everyone, 373 F.3d at 1039-40; Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983); Thornhill Publ'g, 594 F.2d at 733).
“Because standing . . . pertain[s] to a federal court's subject-matter jurisdiction under Article III, [it is] properly raised in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(1).” White, 227 F.3d at 1242 (citing Bland v. Fessler, 88 F.3d 729, 732 n.4 (9th Cir. 1996)).
“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted ‘tests the legal sufficiency of a claim.'” Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). “A district court's dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is proper if there is a ‘lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.'” Id. at 1242 (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)).
“Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a ‘short and plain statement of the claim showing that the pleader is entitled to relief.'” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (quoting Fed.R.Civ.P. 8(a)(2)). “[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “[a] pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Id. at 679 () (quoting Fed.R.Civ.P. 8(a)(2)).
Additionally, allegations of fraud or mistake require the pleading party to “state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). The context surrounding the fraud must “be ‘specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not just deny that they have done anything wrong.'” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (quoting Bly-Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)). Kearns, 567 F.3d at 1124 (internal quotation marks omitted) (first quoting Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003); and then quoting In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994), superseded by statute on other grounds).
“If a complaint is dismissed for failure to state a claim, leave to amend should be granted ‘unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'” DeSoto v. Yellow Freight Sys Inc., 957 F.2d 655, 658 (9th Cir. 1992) ). “A district court does not...
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