Bush v. Mondelez International, Inc. et al

Filing 48

ORDER by Judge Richard Seeborg granting 40 Motion to Dismiss Second Amended Complaint. (cl, COURT STAFF) (Filed on 12/16/2016)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

ANTHONY J. BUSH,

Case No. 16-cv-02460-RS

Plaintiff,
8
v.
9
10

United States District Court
Northern District of California

11

MONDELEZ INTERNATIONAL, INC., et
al.,

ORDER GRANTING MOTION TO
DISMISS SECOND AMENDED
COMPLAINT

Defendants.

12
I. INTRODUCTION

13
14

Plaintiff Anthony Bush avers that food manufacturer Mondelez International Inc.

15

(“Mondelez”) under-fills certain travel-size snack products. In his original and first amended

16

complaints, Bush did not dispute that the snack product labels accurately disclose the number of

17

cookies included in each container. Rather, he averred that the containers include empty space at

18

the top, such that the container size misrepresents the volume of included snack. In his second

19

amended complaint (“SAC”), Bush newly alleges that the product labels actually fail accurately to

20

disclose the amount of snack within. The SAC’s new allegations, however, still do not support a

21

plausible claim for consumer deception, and Bush has not adequately pleaded any other violation

22

of California’s Unfair Competition Law. Mondelez’s motion is thus granted.

23

II. BACKGROUND

24

The allegations of the first amended complaint (“FAC”) are described in detail in the

25

October 7, 2016 order dismissing the FAC (“prior order” or “Order”) and, to the extent they are

26

essentially repeated in the SAC, they are not repeated here. This section focuses on the SAC’s

27

new allegations.

28

While Bush previously alleged he purchased six different varieties of travel-size snack

1

products within the last three years, he now alleges only making a one-time purchase of four

2

products: Mini Oreo, Mini Chips Ahoy!, Golden Oreo Mini, and Nutter Butter Bites (“Go-Pak

3

products”). He also newly alleges that Go-Pak products actually contain fewer cookies than listed

4

on the product labels. In addition, he now clarifies that he brings claims under all three prongs of

5

California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200, which prohibits

6
7
8
9
10

“unlawful, unfair or fraudulent business act[s].” He also brings claims for consumer deception
under California’s False Advertising Law, Cal. Bus. & Prof. Code 17500, and Consumer Legal
Remedies Act, Cal. Civ. Code § 1750. Mondelez moves to dismiss the SAC on the grounds that:
(i) Bush’s consumer deception claims are implausible; (iii) his claims under the UCL “unlawful”
prong are inadequately pleaded and preempted; (iii) his claims under the UCL “unfair” prong are
inadequately pleaded; and (iv) all claims are pleaded without requisite particularity.1

11
United States District Court
Northern District of California

III. LEGAL STANDARD
12
13
14
15
16
17
18
19
20
21

A complaint must contain “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a). While “detailed factual allegations” are not
required, a complaint must have sufficient factual allegations to “state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. v. Twombly,
550 U.S. 544, 570 (2007)). A claim is facially plausible “when the pleaded factual content allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Id. This standard asks for “more than a sheer possibility that a defendant acted unlawfully.” Id.
The determination is a context-specific task requiring the court “to draw on its judicial experience
and common sense.” Id. at 679. In alleging fraud, a plaintiff “must state with particularity the
circumstances constituting fraud.” Fed. R. Civ. P. 9(b). “To satisfy Rule 9(b), a pleading must

22
identify the who, what, when, where, and how of the misconduct charged, as well as what is false
23

or misleading about [the purportedly fraudulent] statement, and why it is false.” Cafasso, U.S. ex

24
25
26
27

1

Mondelez also argues that Bush lacks standing to challenge products he did not purchase, but the
SAC seeks relief on behalf of consumers who purchased the same four products that Bush
allegedly purchased. See SAC ¶¶ 1, 70.
ORDER RE MOTION TO DISMISS
CASE NO. 16-cv-02460-RS

28
2

1

rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011) (internal quotations and

2

citations omitted).

3

A motion to dismiss a complaint under Rule 12(b)(6) of the Federal Rules of Civil

4

Procedure tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of

5

Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal under Rule 12(b)(6) may

6

be based either on the “lack of a cognizable legal theory” or on “the absence of sufficient facts

7

alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699

8

(9th Cir. 1990). When evaluating such a motion, the court must accept all material allegations in

9

the complaint as true, even if doubtful, and construe them in the light most favorable to the nonmoving party. Twombly, 550 U.S. at 570. “[C]onclusory allegations of law and unwarranted

11
United States District Court
Northern District of California

10

inferences,” however, “are insufficient to defeat a motion to dismiss for failure to state a claim.”

12

Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996).

13
14
15

IV. DISCUSSION
1. Consumer Deception
The prior order explained in detail the deficiencies of Bush’s consumer deception claim.

16

In short, his claim that reasonable consumers are likely to be deceived by Go-Pak product

17

packaging is implausible because Go-Pak product labels disclose the net weight and number of

18

cookies per container and consumers expect there to be some slack-fill in opaque snack containers.

19

See Ebner v. Fresh, Inc., No. 13-56644, 2016 WL 5389307, at *6 (9th Cir. Sept. 27, 2016)

20

(deception claim based on oversized packaging was implausible where net weight label was

21

affixed to every tube); Hawkins v. UGI Corp., No. 14-08461, 2016 WL2595990 (C.D. Cal. May 4,

22

2016) (“regardless of consumers’ inability to visually observe the level of product remaining in a

23

cylinder . . . Plaintiffs here cannot plausibly allege that Defendants’ admittedly accurate net weight

24

labels [] are fraudulent, deceptive, or misleading”); Fermin v. Pfizer, No. 15-2133, 2016 WL

25

620891 (E.D.N.Y. Oct. 18, 2016) (“as a matter of law, it is not probable or ever possible that

26

Pfizer’s packaging could have misled a reasonable consumer” because “each of the packages in

27

Plaintiffs’ Complaint clearly display the total pill-count on the label”).
ORDER RE MOTION TO DISMISS
CASE NO. 16-cv-02460-RS

28
3

Bush’s new allegations do not alter this conclusion. He attempts to show that Go-Pak

1
2

products “provided less food than the amount actually stated on the [label],” but his averments fall

3

short. For example, he claims that “Golden Oreo Mini containers contain fewer than 32 cookies.”

4

SAC ¶ 36. This is not less than the amount stated on the label. The label lists a serving size of 9

5

cookies and about 3.5 servings per container, so consumers can expect to find approximately 31.5

6

cookies per container. The same is true for Oreo Minis. For Nutter Butter Bites, the labels

7

represent that containers include “about” 35 cookies (with a net weight of 99 grams) and Bush

8

alleges that they contain “fewer than 35 cookies.” Id. ¶ 38. He does not allege the number of

9

cookies actually included or the actual net weight of the included product. Nor does he allege
when, where, and how he weighed or counted the cookies. Id. ¶ 7. For Mini Chips Ahoy!

11
United States District Court
Northern District of California

10

products, the labels represent that the containers include about 49 cookies (with a net weight of 99

12

grams) and Bush alleges that the containers include “fewer than 32 cookies.” SAC ¶ 39. At the

13

hearing, Bush conceded that this allegation is an error and that he intended to allege that Mini

14

Chips Ahoy! products contain “fewer than 49 cookies.” As with Nutter Butter Bites, Bush does

15

not allege the actual number of included Mini Chips Ahoy! cookies, the actual net weight of the

16

included product, or the manner in which he counted or weighed the cookies. He also does not

17

explain why he implicitly acknowledged the accuracy of Go Pak Product labels in his prior

18

complaints and briefing, see, e.g., FAC ¶ 8, or why he failed to assert these new facts in his prior

19

two complaints. At bottom, Bush’s new factual allegations are either entirely immaterial or

20

insufficiently particular under Rule 9(b), which is the applicable pleading standard for claims

21

alleging consumer deception. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir.

22

2009).

23

In his opposition brief, Bush newly argues that the prior order conflicts with FDA guidance

24

on 21 C.F.R. §100.100, the federal regulation prohibiting nonfunctional slack-fill in food products.

25

See Misleading Containers; Nonfunctional Slack-Fill, 58 F.R. 64123, 1993 WL 498605 (Dec. 6,

26

1993). Before finalizing that regulation, he argues, the FDA considered and rejected comments

27

“that stated that net weight statements protect against misleading fill.” Id. at 64128. It found “that
ORDER RE MOTION TO DISMISS
CASE NO. 16-cv-02460-RS

28
4

1

the presence of an accurate net weight statement does not eliminate the misbranding that occurs

2

when a container is made, formed, or filled so as to be misleading.” Id. Bush admits this is a new

3

argument that he could have made earlier in support of his FAC. See Opp. at 9 (“the prior order

4

does not take cognizance of [Bush’s new argument] because it was not provided in Plaintiff’s prior

5

briefing”). This argument could thus be rejected as waived.
In any event, the FDA guidance document is not binding authority for purposes of Bush’s

6
7

consumer deception claims. Those claims are brought under California consumer protection laws.

8

Courts, not the FDA, determine whether a product is misleading under those laws. In Ebner, the

9

Ninth Circuit decided that a manufacturer’s alleged oversized packaging for a lip balm product
was not deceptive under the reasonable consumer test and, thus, did not violate the same consumer

11
United States District Court
Northern District of California

10

protection laws at issue here. There, the district court granted the defendant’s motion to dismiss,

12

noting that “Plaintiff points to no cases in which such packaging, when paired with an accurate net

13

quantity label, . . . constituted deceptive marketing practices.” No. 13-00477, 2013 WL 9760035,

14

at *7 (C.D. Cal. Sept. 11, 2013). The Ninth Circuit affirmed. 2016 WL 5389307, at *6.2 Though

15

Ebner involved a cosmetic product and 21 C.F.R. §100.100 governs food products, nothing in the

16

decision suggests that the Ninth Circuit’s application of the reasonable consumer test under state

17

consumer protection laws would have been different in the context of food, or that the court was

18

influenced by, or even considered, the existence of any FDA regulations (or the lack thereof).
2. Unlawful Packaging

19

In the SAC, Bush again asserts a claim under the “unlawful” prong of the UCL. He avers

20
21

his claim is based on violations of California’s Sherman Food, Drug, and Cosmetic Act

22
23
24
25
26
27

2

The prior order distinguished Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008),
which “stands for the proposition that, if the defendant commits an act of deception, the presence
of fine print revealing the truth is insufficient to dispel that deception.” Ebner, 2016 WL 5389307
at *5. It found that here, like in Ebner and unlike in Williams, there is no deceptive act to be
dispelled. Order at 6. Bush argues for the first time in his opposition brief that the size of the
packing itself is a deceptive act. Yet, in Ebner, the plaintiff similarly alleged that oversized
packaging was deceptive and the Ninth Circuit nevertheless found “the weight label does not
contradict other representations or inferences on [defendant’s] packaging.” Id. at *6.
ORDER RE MOTION TO DISMISS
CASE NO. 16-cv-02460-RS

28
5

1

(“Sherman Law”), Cal. Health & Safety Code § 109875 et seq., and cites the provisions of the

2

Sherman Law that incorporate by reference the nutrition labeling requirements of the federal Food,

3

Drug, and Cosmetics Act (“FDCA”), 21 U.S.C. § 343(q). See SAC ¶ 88 (citing Cal. Health &

4

Safety Code § 110665). Bush does not, however, aver with specificity any particular FDCA

5

requirement which he claims Mondelez violated. His claim is thus inadequately pleaded.3
To the extent Bush intended to allege a violation of the Sherman Law based on 21 C.F.R.

6
7
8
9
10

§ 100.100, his allegations continue to be insufficient. That regulation provides that a food is
misbranded if it contains “nonfunctional slack-fill,” which is defined as “empty space in a package
that is filled to less than its capacity” for reasons other than: (1) protection of contents; (2) the
requirements of the machines used for enclosing the package; (3) unavoidable product settling; (4)
the need for the package to perform a specific function; (5) the fact that the product consists of a

11
United States District Court
Northern District of California

food packaged in a reusable container where the container is part of the presentation and has
12
value; or (6) inability to increase level of fill or to further reduce the size of the package. 21
13
14
15
16

C.F.R. § 100.100(a)(1)-(6). Bush alleges that Go-Pak slack-fill serves none of these
functionalities. SAC ¶¶ 12-32. Yet, his allegations continue to be entirely conclusory; he has not
amended them in any meaningful way. See Order at 7 (citing Victor v. R.C. Bigelow, Inc., No. 1302976, 2014 WL 1028881, at *16 (N.D. Cal. Mar. 14, 2014)); see also Bautista v. Cytosport Inc.,

17

15-CV-9081-CS (S.D.N.Y. Dec. 13, 2016) (“a plaintiff must possess some factual basis before

18

bringing a [nonfunctional slack fill claim]”). Moreover, some of his allegations are illogical and

19

implausible. For example, Bush alleges that “any slack-fill present in the Products’ container is

20

not a result of the cookies settling during shipping and handling,” SAC ¶ 21, but the “settling” of

21

contents “is a normal, unavoidable process for many types of food (e.g., cereal and potato chips).”

22
23
24
25
26
27

3

Mondelez also argues that Bush’s claims are preempted by the FDCA. Federal law prohibits
state food labeling requirements that are not identical to federal requirements, but the FDCA and
Sherman law contain identical prohibitions on false or misleading labeling. See Cal. Health &
Safety Code § 110100(a). Because Bush’s claim is inadequately pleaded, it is difficult to assess
whether Bush seeks to impose a slack-fill requirement separate and apart from 21 C.F.R.
§ 100.100. Assuming his claim is based merely on a violation of that regulation, his claim is not
preempted. See, e.g., Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111, 1119 (N.D. Cal.
2010) (“plaintiffs’ claims need not fail on preemption grounds if the requirements they seek to
impose are . . . identical to those imposed by the FDCA”).
ORDER RE MOTION TO DISMISS
CASE NO. 16-cv-02460-RS

28
6

1

58 Fed. Reg. 2957-01, 2961, 1993 WL 1564 (Jan. 6, 1993). In the SAC, Bush adds no factual

2

allegation about how Go-Pak packaging is unlawful aside from conclusory statements that do not

3

suffice for either Rule 8’s “plausibility” standard or Rule 9’s “particularity” standard for pleading.4
3. “Unfair” Conduct

4
5

Bush now asserts that Mondelez violated the UCL’s “unfair” prong. The proper definition

6

of “unfair” conduct against consumers “is currently in flux” among California courts. In re Adobe

7
8
9
10

United States District Court
Northern District of California

11

Systems, Inc. Privacy Litigation, 66 F. Supp. 3d 1197, 1224 (N.D. Cal. 2014). Some courts apply
a balancing approach, which requires courts to “weigh the utility of the defendant’s conduct
against the gravity of the harm to the alleged victim.” Davis v. HSBC Bank Nevada, N.A., 691
F.3d 1152, 1169 (9th Cir. 2012). Others have held that “unfairness must be tethered to some
legislatively declared policy or proof of some actual or threatened impact on competition.” Lozano
v. AT&T Wireless Servs., Inc., 504 F.3d 718, 735 (9th Cir. 2007).5 Bush’s claim fails under both

12
tests. First, his claim fails under the balancing test because, as discussed above, he alleges no
13
plausible claim of consumer deception. Second, his claim fails under the public policy test
14
15
16
17
18

because, as discussed above, Bush fails adequately to plead any specific statutory violation. He
also does not otherwise connect Mondelez’s conduct with a violation of a legislatively declared
policy. Moreover, to the extent he intended to tether his claim to the policy of protecting against
consumer deception, his claim fails for the same reasons it fails the balancing test. In sum, his
allegations do not comply with Rule 8 or 9.

19
20
21
22
23
24
25
26
27

4

Rule 9(b)’s particularity requirement applies to each of the three prongs of the UCL where, as
here, the claims are based on a “unified course of fraudulent conduct.” Kearns, 567 F.3d at 1126–
27. Bush’s “unlawful” and “unfair” claims appear to relate to 21 C.F.R. 100.100, which protects
consumers against “misbranding,” specifically “misleading containers.” Other courts in this
district have “rejected the notion that ‘misbranding’ under the ‘unlawful’ prong of the UCL
excuses a plaintiff’s obligation to plead fraud with particularity.” Romero v. Flowers Bakeries,
LLC, 2015 WL 2125004 (N.D. Cal. May 6, 2015) (citing cases).
5

There is a third test, which borrows from section 5 of the Federal Trade Commission Act, finding
“unfair” business practices where (1) the consumer injury is substantial, (2) any countervailing
benefits to consumers or competition do not outweigh the injury, and (3) the consumers could not
reasonably avoid the injury. See Camacho v. Auto. Club of S. Cal., 142 Cal.App.4th 1394, 1403,
48 Cal.Rptr.3d 770 (2006). This test does not apply in consumer cases, and therefore is
inapplicable here. Lozano, 504 F.3d at 736 (“Though the California Supreme Court did reference
FTC’s section 5 as a source of ‘guidance,’ that discussion clearly revolves around anti-competitive
conduct, rather than anti-consumer conduct.” (internal alteration omitted)).
ORDER RE MOTION TO DISMISS
CASE NO. 16-cv-02460-RS

28
7

V. CONCLUSION

1
2

For the foregoing reasons, Mondelez’s motion is granted and Bush’s claims are dismissed

3

without leave to amend. Given that Bush failed to cure the previously identified pleading

4

deficiencies on his third attempt to state a claim, leave to amend appears futile and thus is not

5

granted.

6
7

IT IS SO ORDERED.

8
9
10

United States District Court
Northern District of California

11

Dated: December 16, 2016
______________________________________
RICHARD SEEBORG
United States District Judge

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
ORDER RE MOTION TO DISMISS
CASE NO. 16-cv-02460-RS

28
8