Sinatro et al v. Welch Foods Inc. et al

Filing 45

ORDER RE MOTION TO DISMISS. Signed by Judge James Donato on 5/22/2023. (jdlc3, COURT STAFF) (Filed on 5/22/2023)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MATTHEW SINATRO, et al., Plaintiffs, 8 9 10 United States District Court Northern District of California 11 Case No. 3:22-cv-07028-JD ORDER RE MOTION TO DISMISS v. WELCH FOODS INC., et al., Defendants. 12 13 In this putative consumer class action, plaintiffs Matthew Sinatro and Shane Winkelbauer 14 challenge the “no preservatives” claims that defendants Welch Foods Inc. and Promotion in 15 Motion, Inc. place on the labels of Welch’s Fruit Snacks products. Dkt. No. 30. Plaintiffs say that 16 the products contain two preservatives -- citric and lactic acid -- and that defendants knowingly 17 mislabel their products in order to boost sales. See id. ¶¶ 3-6. The operative first amended 18 complaint (FAC) presents claims against defendants for violations of California’s Unfair 19 Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; the False Advertising Law, Cal. Bus. & 20 Prof. Code § 17500 et seq.; and the Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et 21 seq., as well as claims for fraudulent inducement, negligent misrepresentation, breach of warranty, 22 and unjust enrichment. See Dkt. No. 30 ¶¶ 109-205. Plaintiffs seek damages, injunctive relief, a 23 corrective advertising campaign, and restitution, among other remedies. See id. ¶ 206. 24 Defendants ask to dismiss certain claims in the FAC under Federal Rules of Civil 25 Procedure 12(b)(1) and 12(b)(6). Dkt. No. 33. Specifically, defendants request dismissal of 26 plaintiffs’ claims for injunctive relief, any claims to the extent they are based on online advertising 27 statements that plaintiffs never saw, and the claim for unjust enrichment. See id. The parties’ 28 familiarity with the record is assumed, and the motion is denied. DISCUSSION 1 United States District Court Northern District of California 2 I. PLAINTIFFS’ STANDING FOR INJUNCTIVE RELIEF 3 Defendants challenge whether plaintiffs have Article III standing to seek injunctive relief. 4 See Dkt. No. 33 at 2. As the Ninth Circuit has determined, “a previously deceived consumer may 5 have standing to seek an injunction against false advertising or labeling, even though the consumer 6 now knows or suspects that the advertising was false at the time of the original purchase,” because 7 “[k]nowledge that the advertisement or label was false in the past does not equate to knowledge 8 that it will remain false in the future.” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 969 (9th 9 Cir. 2018); see also Mueller v. Puritan’s Pride, Inc., No. 16-cv-06717-JD, 2021 WL 5494254, at 10 *8 (N.D. Cal. Nov. 23, 2021). Defendants say that plaintiffs lack standing because “neither 11 Plaintiff alleges they would be interested in purchasing the Products if they contained ‘no 12 preservatives,’” Dkt. No. 40 at 3, and that “there is no threat of future injury because Plaintiffs 13 now know the Products contain the purported preservatives and know where to identify those 14 ingredients on the Products’ labels,” id. at 4. 15 The points are not well taken. Plaintiff Sinatro plausibly alleges that (i) he “enjoys fruit 16 snacks as a common household staple and intends to purchase the Products again in the future if 17 he could be sure that the Products’ labeling was truthful,” (ii) “in the future [he] will be unable to 18 determine with confidence based on the labeling and/or other marketing materials, and without 19 specialized knowledge, whether the Products truly contain ‘No Preservatives’ including any 20 beyond citric or lactic acid,” and (iii) he “cannot rely on the No Preservatives or any other Label 21 representations with confidence in the future, and so he will not know if he should buy the Product 22 again as he intends and wishes to do.” Dkt. No. 30 ¶ 22; see also id. ¶ 23 (plaintiff Winkelbauer’s 23 identical allegations). Plainly speaking, plaintiffs are interested in the truth of the “no 24 preservatives” claim on the packaging because they would buy the fruit snacks if they were sure 25 that the snacks contained no preservatives. While Sinatro and Winkelbauer now understand the 26 claim to be false, they have plausibly alleged that they will be unable to rely on the representations 27 on the fruit snacks going forward, including any claims regarding the presence of preservatives, 28 2 1 without an injunction. This is enough for plaintiffs to proceed with their claims for injunctive 2 relief. See Milan v. Clif Bar & Co., 489 F. Supp. 3d 1004, 1007 (N.D. Cal. 2020). 3 II. Defendants contend that plaintiffs “lack standing to assert claims based upon various 4 United States District Court Northern District of California ONLINE MARKETING AND ADVERTISING 5 website and marketing representations they identify, but which they do not allege to have seen or 6 relied upon in marketing their purchases.” Dkt. No. 33 at 6. The FAC refers to defendants’ 7 marketing of the fruit snacks on the Welch’s Fruit Snacks website and Twitter account, but neither 8 Sinatro nor Winkelbauer allege that they saw or relied upon any representations made online. See 9 Dkt. No. 30 ¶¶ 22-23, 61-65. According to plaintiffs, these allegations are relevant to the 10 materiality of the “no preservatives” misrepresentation to a reasonable consumer, as well as 11 defendants’ knowledge and intent. See Dkt. No. 34 at 7. The allegations will be considered for 12 those purposes, to the extent that they inform plaintiffs’ label-based claims. Dismissal of any claims is not warranted at this juncture. Notwithstanding some ambiguity 13 14 in the FAC, see, e.g., Dkt. No. 30 ¶ 166, plaintiffs have not suggested in opposing defendants’ 15 motion that they are bringing independent claims premised on defendants’ online marketing or 16 advertising. The Court will revisit this issue as warranted by developments in the case. 17 III. 18 UNJUST ENRICHMENT Lastly, defendants seek dismissal of the unjust enrichment claim. They say that the claim 19 must be dismissed because plaintiffs also assert a claim for breach of express warranty, and 20 “[u]nder California law, there cannot be a claim based on quasi-contract where there exists 21 between the parties a valid express contract covering the same subject matter.” Dkt. No. 33 at 7 22 (internal quotations and citation omitted). The point is not well taken. “Rule 8(d) expressly 23 permits [plaintiffs] to allege alternative and/or inconsistent theories of liability at the pleadings 24 stage.” Qayumi v. Talent Net, Inc., No. 21-cv-00323-JD, 2023 WL 218961, at *2 (N.D. Cal. Jan. 25 17, 2023) (citing Fed. R. Civ. P. 8(d)(2), (3)); see also Deno v. State Farm Gen. Ins. Co., No. 22- 26 cv-00513-JD, 2022 WL 4112358, at *3 (N.D. Cal. Sept. 9, 2022). In this case, the FAC asserts the 27 unjust enrichment claim “in the alternative,” in the event “there are no enforceable contractual 28 obligations between the Parties.” Dkt. No. 30 ¶ 201. 3 1 Defendants also ask to dismiss the unjust enrichment claim on the ground that “California 2 does not recognize unjust enrichment as an independent cause of action.” Dkt. No. 33 at 8. But 3 the “status of unjust enrichment as an independent cause of action under California law is not 4 clear.” Lundy v. Facebook Inc., No. 18-cv-06793-JD, 2021 WL 4503071, at *2 (N.D. Cal. Sept. 5 30, 2021) (citing ESG Cap. Partners, LP v. Stratos, 828 F.3d 1023, 1038 (9th Cir. 2016)). The 6 Court declines to dismiss the claim at this stage of the case. 7 8 IT IS SO ORDERED. Dated: May 22, 2023 9 10 JAMES DONATO United States District Judge United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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