Mains v. Whole Food Market, Inc.

Filing 61

ORDER granting in part and denying in part 54 Motion to Dismiss and Motion to Strike. The court schedules this case for a Case Management Conference for 10:00 a.m. on 11/19/2015. The parties shall file a Joint Case Management Conference Statement on or before 11/12/2015. Signed by Judge Edward J. Davila on 9/30/2015. (ejdlc1S, COURT STAFF) (Filed on 9/30/2015)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6

SAN JOSE DIVISION

7
8

ROBERT PRATT, individually and on
behalf of all others similarly situated,

9

Plaintiff,
v.

10

United States District Court
Northern District of California

11

WHOLE FOOD MARKET CALIFORNIA,
INC., et al.,

12

Case No. 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS’
MOTION TO DISMISS AND MOTION
TO STRIKE
Re: Dkt. No. 54

Defendants.
13

Plaintiff Robert Pratt (“Plaintiff”) bought various food products from Whole Foods1 after

14
reading the product labels. He later found out that those products contained a form of added sugar
15
and were not as natural as he believed them to be. He brings this purported class action asserting
16
17

violations of California’s consumer protection statutes, now based on a Second Amended
Complaint (“SAC”). See Docket Item No. 51. Whole Foods moves to dismiss and strike the SAC

18
under Federal Rules of Civil Procedure 12(b)(6) and 12(f). See Docket Item No. 54. Plaintiff
19
opposes the motion. See Docket Item No. 55.
20
Federal jurisdiction arises pursuant to § 1332. The court found this matter suitable for
21
decision without oral argument pursuant to Civil Local Rule 7-1(b) and vacated the associated
22

hearing. Having carefully considered the parties’ pleadings, the court finds Whole Foods’

23
arguments meritorious on all issues but one. Thus, the Motion to Dismiss and Motion to Strike
24
25
26
27
28

1

In this order, “Whole Foods” refers to all defendants: Whole Foods Market California, Inc.,
WFM-WO, Inc., WFM Private Label, LP, and Mrs. Gooch’s Natural Foods Markets, Inc.
1
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

will be granted in part and denied in part for the reasons explained below.

2

I.

BACKGROUND
Defendant Whole Foods “is the largest retailer of natural and organic foods in the United

3
4

States, Canada and the United Kingdom.” See SAC, at ¶ 7. According to Plaintiff, Whole Foods

5

recognizes its customers’ desire to consume a healthy diet and seeks to profit from it. Id. at ¶ 9. It

6

therefore “actively promotes the naturalness and health benefits of its products” by making certain

7

claims, including touting itself as “America’s healthiest grocery store.” Id. at ¶¶ 9, 10. Whole

8

Foods also makes healthiness claims on the labels of its proprietary brands. Id. at ¶ 16.
In this action, Plaintiff challenges some of the representations Whole Foods made on

9

products he purchased. First, he alleges the use of the phrases “evaporated cane juice” or

11
United States District Court
Northern District of California

10

“evaporated can juice solids”2 in the ingredient list on 365 Everyday Value Organic Chicken

12

broth, 365 Everyday Value Tomato Ketchup, 365 Everyday Value Organic Ketchup and 365

13

Everyday Value Apple Cinnamon Instant Oatmeal is misleading. Id. at ¶¶ 45, 46. Plaintiff

14

believes that, by using ECJ in place of the “proper term” sugar, Whole Foods is misleading

15

consumers by making their products appear healthier, which in turn increases the sales of those

16

products and permits Whole Foods to charge a premium. Id. at ¶ 47. Plaintiff further contends

17

that using ECJ in place of sugar violates the statutory requirement that ingredients on a product

18

label be listed according to their common or usual name. Id. at ¶ 50.
Second, Plaintiff alleges that Whole Foods’ inclusion of the phrase “all natural” or

19
20

“naturale” on the labels for 365 Everyday Value Cola, 365 Everyday Value Ginger Ale, 365

21

Everyday Value Root Beer, Natural Italian Soda in green apple flavor, and Natural Italian Soda in

22

blood orange flavor is misleading because each of these products actually contain artificial

23

ingredients, such as coloring and chemical preservatives. Id. at ¶ 119, 127. Because a reasonable

24

consumer would understand a “natural” label to mean the product does not contains “synthetic,

25
26
27
28

2

The court will refer to both “evaporated cane juice” and “evaporated can juice solids”
collectively as “ECJ.”
2
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

artificial or excessively processed ingredients,” Plaintiff believes the products are misbranded and

2

designed to induce health-conscious consumers into buying the products. Id. at ¶ 132.
Plaintiff, a consumer who “cares about the nutritional content of food and seeks to

3
4

maintain a healthy diet,” does not specify when he purchased each of the challenged products from

5

Whole Foods. Instead, he generally alleges that he bought the “Purchased Products” - which is the

6

conglomeration he uses to refer to all products - since 2008. Id. at ¶ 148. He read the label for the

7

“Purchased Products” before deciding to buy them and relied on the labels’ representations when

8

making his decision. Id. at ¶ 149. For the products with ECJ in their ingredient lists, Plaintiff

9

believed either that they contained only natural sugars and did not contain added sugars or syrups,
that they did not contain added refined sugar, or that ECJ was a healthy ingredient. Id. at ¶ 101.

11
United States District Court
Northern District of California

10

For the products labeled “all natural” and “natural,” Plaintiff believed they were free of artificial

12

colors, preservatives or flavors. Id. at 151. He stopped purchasing Whole Foods’ products once

13

he realized they were falsely labeled. Id. at ¶ 153.
Plaintiff filed the original Complaint on November 2, 2012, and an Amended Complaint

14
15

on May 2, 2013. See Docket Item Nos. 1, 21. On March 31, 2014, the court addressed the

16

Amended Complaint, finding some claims sufficiently pled and dismissing other claims with leave

17

to amend. See Docket Item No. 50. Plaintiff filed the SAC on April 14, 2014. This motion

18

followed.

19

II.

LEGAL STANDARD

20

A.

21

Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient

Motion to Dismiss

22

specificity to “give the defendant fair notice of what the . . . claim is and the grounds upon which

23

it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). A

24

complaint which falls short of the Rule 8(a) standard may be dismissed if it fails to state a claim

25

upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “Dismissal under Rule 12(b)(6) is

26

appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support

27
28

3
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th

2

Cir. 2008). Moreover, the factual allegations “must be enough to raise a right to relief above the

3

speculative level” such that the claim “is plausible on its face.” Twombly, 550 U.S. at 556-57.
Claims that sound in fraud are subject to a heightened pleading standard. Fed. R. Civ.

4
5

Proc. 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances

6

constituting fraud or mistake.”); Swartz v. KPMG LLP, 476 F.3d 756, 765 (9th Cir. 2007) (“Rule

7

9(b) imposes heightened pleading requirements where ‘the object of the conspiracy is

8

fraudulent.’”). The allegations must be “specific enough to give defendants notice of the

9

particular misconduct which is alleged to constitute the fraud charged so that they can defend
against the charge and not just deny that they have done anything wrong.” Semegen v. Weidner,

11
United States District Court
Northern District of California

10

780 F.2d 727, 731 (9th Cir. 1985). This generally requires “an account of the time, place, and

12

specific content of the false representations as well as the identities of the parties to the

13

misrepresentations.” Swartz, 476 F.3d at 764. In other words, fraud or claims asserting fraudulent

14

conduct must generally contain more specific facts than is necessary to support other causes of

15

action.

16

When deciding whether to grant a motion to dismiss, the court generally “may not consider

17

any material beyond the pleadings.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d

18

1542, 1555 n. 19 (9th Cir. 1990). However, the court may consider material submitted as part of

19

the complaint or relied upon in the complaint, and may also consider material subject to judicial

20

notice. See Lee v. City of Los Angeles, 250 F.3d 668, 688-69 (9th Cir. 2001).

21

In addition, the court must generally accept as true all “well-pleaded factual allegations.”

22

Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). The court must also construe the alleged facts in the

23

light most favorable to the plaintiff. Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1988).

24

However, “courts are not bound to accept as true a legal conclusion couched as a factual

25

allegation.” Id.

26
27
28

4
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

B.

1

Motion to Strike

Under Federal Rule of Civil Procedure 12(f), the Court may strike from any pleading
2

matters that are “redundant, immaterial, impertinent, or scandalous.” Fed. R. Civ. P. 12(f).

3
However, because such motions are disfavored, a motion to strike will generally not be granted
4
unless it is clear the matter to be stricken could not have any possible bearing on the subject matter
5
of the litigation. See RDF Media Ltd. v. Fox Broad. Co., 372 F. Supp. 2d 556, 566 (C.D. Cal.
6
2005); see also LeDuc v. Ky. Cent. Life Ins. Co., 814 F.Supp. 820, 830 (N.D. Cal. 1992). When a
7
8

court considers a motion to strike, it “must view the pleading in a light most favorable to the
pleading party.” In re 2TheMart.com, Inc. Sec Litig., 114 F. Supp. 2d 955, 965 (C.D. Cal. 2000).

9
A motion to strike should be denied if there is any doubt whether the allegations in the pleadings
10
might be relevant in the action. Id.

United States District Court
Northern District of California

11
12
13
14

III.

DISCUSSION
As before, Plaintiff’s case has two “facets.” The first is the “UCL unlawful” part, in which

he alleges that Whole Foods’ misbranded products “cannot be legally sold, possessed, have no
economic value, and are legally worthless.” The second is the “fraudulent” part, in which Plaintiff

15
alleges the product labels are misleading, deceptive, unfair and fraudulent. Plaintiff asserts eight
16
claims in the SAC based on these two theories: three for violation of the Unfair Competition Law
17
18
19
20

(“UCL”), California Business and Professions Code § 17200 et seq., one under each “prong” of
that law; two for violation of the False Advertising Law (“FAL”), California Business and
Professions Code § 17500 et seq., one for “misleading and deceptive” and one for “untrue
“advertising; and one each for violation of the Consumers Legal Remedies Act (“CLRA”),

21
California Civil Code § 1750 et seq.; breach of implied warranty of merchantability; and negligent
22
misrepresentation. Whole Foods moves to dismiss or strike all claims previously dismissed with
23
leave to amend as well as those appearing for the first time in the SAC. These arguments are
24
discussed below.
25
26

A.

The Federal and State Statutory Framework

The court begins with the relevant federal and state statutes. The Food, Drug, and
27
28

5
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq., as amended by the Nutrition Labeling and

2

Education Act of 1990, 21 U.S.C. § 343 et seq., establishes the conditions under which food is

3

considered “misbranded.” Generally, food is misbranded under 21 U.S.C. § 343(a)(1) if “its

4

labeling is false or misleading in any particular.” The California Sherman Food, Drug, and

5

Cosmetic Law, Calfornia Health & Safety Code § 109875 et seq., incorporates into state law the

6

requirements of the FDCA. It forms the basis of Plaintiff’s instant claims under the UCL, CLRA

7

and FAL.
The UCL prohibits business practices that are unlawful, unfair, or fraudulent. The

9

“fraudulent” prong of the UCL “requires a showing [that] members of the public are likely to be

10

deceived.” Wang v. Massey Chevrolet, 97 Cal. App. 4th 856, 871 (2002). The “unlawful” prong

11
United States District Court
Northern District of California

8

“borrows violations of other laws and treats them as independently actionable.” Daugherty v. Am.

12

Honda Motor Co., Inc., 144 Cal. App. 4th 824, 837 (2006). As for the “unfair” prong, “California

13

appellate courts disagree on how to define an ‘unfair’ act or practice in the context of a UCL

14

consumer action.” Morgan v. Wallaby Yogurt Co., Inc., No. 13-CV-00296-WHO, 2014 U.S. Dist.

15

LEXIS 34548, *38, 2014 WL 1017879 (N.D. Cal. March 13, 2014) (citing Davis v. Ford Motor

16

Credit Co., 179 Cal. App. 4th 581, 594 (2009)). Some courts have held that the “unfair” prong

17

requires alleging a practice that “offends an established public policy or . . . is immoral, unethical,

18

oppressive, unscrupulous or substantially injurious to consumers,” and the policy must be

19

“tethered to specific constitutional, statutory or regulatory provision.” Bardin v. Daimlerchrysler

20

Corp., 136 Cal. App. 4th 1255, 1263 (2006) (citations omitted). Other courts have held that the

21

court must apply a balancing test that “weigh[s] the utility of the defendant’s conduct against the

22

gravity of the harm to the alleged victim.” Schnall v. Hertz Corp., 78 Cal. App. 4th 1144, 1167

23

(2000).

24

Like the UCL, the CLRA prohibits “unfair methods of competition and unfair or deceptive

25

acts or practices.” Cal. Civ. Code § 1770. Commercial conduct that is “likely to mislead a

26

reasonable consumer” violates the CLRA. Keegan v. Am. Honda Motor Co., Inc., 838 F. Supp.

27
28

6
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

2d 929, 938 (C.D. Cal. 2012) (quoting Colgan v. Leatherman Tool Group, Inc., 135 Cal. App. 4th

2

663, 680 (2006)).

3

The FAL prohibits “unfair, deceptive, untrue, or misleading advertising.” Cal. Bus. &

4

Prof. Code § 17500. The FAL and the UCL are related such that “‘any violation of the false

5

advertising law . . . necessarily violates’ the UCL.” Kasky v. Nike, Inc., 27 Cal. 4th 939, 950

6

(2002) (quoting Comm. on Children’s Television, Inc. v. Gen. Foods Corp., 35 Cal. 3d 197, 210

7

(1983)).

8

To state a plausible claim under any of these consumer protection statutes, a plaintiff “must

9

allege that Defendant’s representations are likely to deceive a reasonable consumer.” Red v. Kraft
Foods, Inc., No. CV 10-1028-GW(AGRx), 2012 U.S. Dist. LEXIS 164461, at *6, 2012 WL

11
United States District Court
Northern District of California

10

5502754 (C.D. Cal. Oct. 25, 2012) (citing Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th

12

Cir. 2008)). Because such an inquiry is common to all three statutory schemes, courts often

13

analyze them together. See Elias v. Hewlett-Packard Co., 950 F. Supp. 2d 1123, 1132 (N.D. Cal.

14

2013). The court does so here.

15
16
17

B.

The Motion to Dismiss
i.

Strict Liability Theory

As noted, Plaintiff asserts a strict liability theory in SAC, primarily under the unlawful

18

prong of the UCL. See SAC, at ¶ 72 (“In short, Defendants’ injury causing unlawful conduct is

19

the only necessary element needed for UCL liability under the unlawful prong . . . . this claim does

20

not sound in fraud; instead, it alleges strict liability . . . .”). To that end, he implies injury merely

21

from the purchase of misbranded products, which he believes have “no economic value, and are

22

legally worthless.” Id. at ¶ 154. Plaintiff further alleges he “would not have bought the products

23

had he known the truth about them, including the fact that the products were illegal to purchase

24

and possess.” Id. at ¶ 152.

25
26
27
28

The court previously rejected the theory that a defendant’s liability attaches under the UCL
merely because its product label allegedly violates a law. See Pratt v. Whole Foods Mkt. Cal.,
7
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

Inc., No. 5:12-CV-05652-EJD, 2014 U.S. Dist. LEXIS 46409, *27, 2014 WL 1324288 (N.D. Cal.

2

Mar. 31, 2014) (“Plaintiff cannot circumvent the reliance requirement by simply pointing to a

3

regulation or code provision that was violated by the alleged label misrepresentation, summarily

4

claiming that the product is illegal to sell and therefore negating the need to plead reliance.”). It

5

rejects it again here. At this point, it appears settled that a plaintiff must plead actual reliance

6

under each prong of the UCL, including the unlawful prong. The California Supreme Court first

7

established this concept with regard to UCL fraud theories in In re Tobacco II Cases, 46 Cal. 4th

8

298, 325-26 (2009). The court then explicitly extended it in Kwikset Corporation v. Superior

9

Court, 51 Cal. 4th 310, 327 n. 9 (2011), to cases under the unlawful prong based on a defendant’s

10

alleged misrepresentations and deception. Although decided before Kwikset, the California Court

11
United States District Court
Northern District of California

1

of Appeal concisely distilled the issue in Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 1363

12

(2010), by observing that “[a] consumer’s burden of pleading causation in a UCL action should

13

hinge on the nature of the alleged wrongdoing rather than the specific prong of the UCL the

14

consumer invokes.” Accord Hale v. Sharp Healthcare, 183 Cal. App. 4th 1373, 1385 (2010).

15

Notably, Plaintiff is also arguing against a developing body of cases to have squarely

16

disagreed with his position. Courts that have addressed some form of a strict liability argument in

17

the context of allegedly misbranded food products have required the plaintiff to plead actual

18

reliance under the UCL’s unlawful prong. See, e.g., Kane v. Chobani, Inc., No. 12-cv-02425-

19

LHK, 2013 U.S. Dist. LEXIS 134385, at *33-34, 2013 WL 5289253 (N.D. Cal. Sept. 19, 2013)

20

(Koh, J.) (“Plaintiffs’ ‘illegal product’ theory would eviscerate the enhanced standing

21

requirements imposed by Proposition 64 and the California Supreme Court’s decision in

22

Kwikset.); Brazil v. Dole Food Co., Inc., No. 12-cv-01831-LHK, 2013 U.S. Dist. LEXIS 136921,

23

at *29-31, 2013 WL 5312418 (N.D. Cal. Sept. 23, 2013) (Koh, J.); Swearingen v. Amazon Pres.

24

Partners, Inc., No. 13-cv-04402-WHO, 2014 U.S. Dist. LEXIS 36830, at *5-6, 2014 WL 1100944

25

(N.D. Cal. Mar. 18. 2014) (Orrick, J.); Victor v. R.C. Bigelow, Inc., No. 13-cv-02976-WHO, 2014

26

U.S. Dist. LEXIS 34550, at *21, 2014 WL 1028881 (N.D. Cal. Mar. 24, 2014) (Orrick, J.)

27
28

8
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

(“Because Victor’s claims sound in fraud, he must plead actual reliance for all his causes of action,

2

including his ‘unlawful’ claim.”); Swearingen v. Pac. Foods of Oregon, Inc., No. 13-cv-04157-JD,

3

2014 U.S. Dist. LEXIS 105730, at *6, 2014 WL 3767052 (N.D. Cal. July 31, 2014) (Donato, J.)

4

(“As in other very similar cases, plaintiffs here try to escape the reliance requirement by

5

characterizing their claims as strict liability labeling violations. The Court finds that this argument

6

is unavailing . . . .).

7

Without a doubt, Plaintiff’s theory under the unlawful prong sounds in misrepresentation

8

and deception. Indeed, it is based on the FDCA, a statutory scheme that prohibits fraudulent and

9

misleading statements on food labels. See 21 U.S.C. § 343(a)(1). Therefore, he must plead actual
reliance to have standing under the UCL. Kane, 2013 U.S. Dist. LEXIS 134385, at *19. Any

11
United States District Court
Northern District of California

10

theory which supposes otherwise must be dismissed.
Attempting to cast aside the requirement of pleading reliance, Plaintiff reformulates his

12
13

allegations into a hybrid “duty to disclose/illegal product” theory based mainly on two paragraphs

14

from his 236-paragraph SAC. He alleges that Whole Foods “had a duty to disclose the illegality

15

of their misbranded products because (a) they had exclusive knowledge of material facts not

16

known or reasonably accessible to the Plaintiff; and (b) [Whole Foods] actively concealed such

17

material facts from the Plaintiff.” See SAC, at ¶ 73. In other words, he seeks to replace alleged

18

affirmative misrepresentations on the labels and instead claims reliance on what was not said; that

19

the products were illegal to sell or possess. But apart from the convolutions that render this

20

theory, as the Brazil court put it, “counterintuitive” and as pled here almost unintelligible,3 the

21

misdirection is unhelpful. This theory constitutes nothing more than “attempting to impose a

22

requirement not identical to those imposed by federal law,” and on that basis is expressly

23

preempted by the FDCA. Brazil, 2013 U.S. Dist. LEXIS 136921, at *36. His citation to this

24

court’s decision in Khasin v. Hershey Co., No. 5:12-CV-01862 EJD, 2012 U.S. Dist. LEXIS

25
26
27
28

3

“Plaintiff further relied upon the Defendants’ implicit representation based on Defendant’s
material omission of material facts that these products were legal to sell or possess.” See SAC, at
¶ 73.
9
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

161300, 2012 WL 5471153 (N.D. Cal. No. 9, 2012), is misplaced since neither standing under the

2

UCL nor preemption of an “illegality disclosure” duty are discussed there.

3

Since Plaintiff cannot rely on a theory of strict liability as a matter of law, any such claim

4

will be dismissed without leave to amend. See Miller v. Rykoff-Sexton, 845 F.2d 209, 214 (9th

5

Cir. 1988) (“A motion for leave to amend may be denied if it appears to be futile or legally

6

insufficient.”).

7
8
9

ii.

Plausibility

The court now examines whether Plaintiff has pled plausible claims based on the use of
ECJ on the accused product labels. The court previously dismissed these claims based on the
reasoning employed in two similar cases, Kane and Avoy v. Turtle Mountain, LLC, No. 13-CV-

11
United States District Court
Northern District of California

10

0236-LHK, 2014 U.S. Dist. LEXIS 19241, 2014 WL 587173 (N.D. Cal. Feb. 14, 2014). Whole

12

Foods argues the allegations are still deficient under those cases. The court agrees.

13

As already suggested, “[t]o establish standing under the UCL, FAL, and CLRA a person

14

must have ‘suffered injury in fact and ha[ve] lost money or property as a result.’” Salazar v.

15

Honest Tea, Inc., 74 F. Supp. 3d 1304, 1315 (E.D. Cal. 2014) (citing Cal. Bus. & Prof. Code §§

16

17204, 17535; Cal. Civ. Code § 1780). Again, the plaintiff’s reliance is a key inquiry. See Victor,

17

2014 U.S. Dist. LEXIS 34550, at *15-16. Reliance on alleged misrepresentations must have been

18

reasonable. See Red, 2012 U.S. Dist. LEXIS 164461, at *6; see also Williams, 552 F.3d at 938

19

(“Under the reasonable consumer standard, Appellants must show that members of the public are

20

likely to be deceived.” (internal quotations omitted)). Whether a product label is deceptive so as

21

to mislead a reasonable consumer is normally a question of fact incapable of resolution on a

22

motion to dismiss. Williams, 552 F.3d at 938-39. However, in certain “rare” cases, lack of

23

deception can be found as a matter of law. See id., at 939; see also, e.g., Williamson v. Apple,

24

Inc., No. 5:11-cv-00377 EJD, 2012 U.S. Dist. LEXIS 125368, at *17-18, 2012 WL 3835104 (N.D.

25

Cal. Sept. 2, 2012) (finding implausible as a matter of law plaintiff's theory that disregarded the

26

“well-known fact of life that glass can break under impact.”).

27
28

10
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

Plaintiff puts forth three somewhat irreconcilable reliance theories in the SAC. First, he

2

alleges he was unaware that ECJ was a sweetener and therefore did not know that the chicken

3

broth, ketchup and instant oatmeal contained any added sugar. Second, Plaintiff contends he

4

believed ECJ was actually a healthy ingredient because the “j” stands for juice. Third, Plaintiff

5

states he knew ECJ was a sweetener but thought it was some type of healthy unrefined sugar.

6

None of these theories are well-pled or plausible under the “reasonable consumer” test. As

7

a threshold matter, the court need not accept as true the allegations that Plaintiff, on the one hand,

8

did not know what ECJ was, and on the other, knew it was some type of sugar. Plaintiff alleges he

9

progressively “did not realize” that ECJ was “1) sugar or a syrup; 2) a form of added sugar; 3) a
refined sugar or 4) not a juice.” See SAC, at ¶ 101. But in reality, it makes no sense that Plaintiff,

11
United States District Court
Northern District of California

10

a self-styled “health conscious consumer who wished to avoid ‘added sugars’” (Id. at ¶ 76), would

12

have purchased any of the accused products because he was unaware that ECJ is a refined sugar,

13

as opposed to some other type of sugar. That allegation assumes Plaintiff knew ECJ was a form of

14

sugar, and directly contradicts the representations that precede it as well as his overall statement of

15

the case. Added unrefined sugar is added sugar, no matter how Plaintiff tries to spin it.

16

The court also rejects the theory based on Plaintiff’s lack of knowledge that ECJ was a

17

sweetener. As the Kane court reasoned, Plaintiff must allege what he believed ECJ to be if not a

18

sweetener for that theory to be plausible. Without that allegation, Plaintiff cannot reasonably state

19

that he relied on the ECJ statement. And though he does not explicitly allege it, it simply cannot

20

be that Plaintiff thought ECJ referred to bamboo cane, sorghum cane, corn or cane berries as used

21

on labels for chicken broth, ketchup, and instant oatmeal. See Levitt v. Yelp! Inc., 765 F.3d 1123,

22

1135 (9th Cir. 2014) (“In all cases, evaluating a complaint’s plausibility is a ‘context-specific’

23

endeavor that requires courts to ‘draw on . . . judicial experience and common sense.’”). Such an

24

allegation suspends reality too thin.

25
26
27
28

Similarly, it is implausible that Plaintiff believed ECJ was something healthy merely
because it contains the word “juice” in its name. Again, his own pleading demonstrates why this
11
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

is so. An sugar conscious consumer like Plaintiff would not have been misled by the inclusion of

2

the word “juice” on the label because it is a word used to describe another popular and widely-

3

recognized form of added sugar, namely “fruit juice concentrate.” The SAC reiterates that point in

4

several areas. Plaintiff cannot purport to be looking for sugar in ingredient lists but at the same

5

time feign ignorance of common phrases that refer to sugar. Thus, in this context, “juice” does not

6

impart a misrepresentation of healthiness to the reasonable consumer.

7

Plaintiff’s arguments made in an effort to save his ECJ claims are unpersuasive. Although
he is correct that actual reliance must be shown for standing under Article III of the Constitution,

9

that reliance must nonetheless have been reasonable, as explained in Williams, and sufficiently

10

pled under Rule 8. Similarly, the court cannot presume reliance when the underlying theories of

11
United States District Court
Northern District of California

8

liability are implausible, as they are here.

12

In sum, Plaintiff’s ECJ claims have not been cured in the SAC. They will also be

13

dismissed without leave to amend since allowing for further amendment at this point would be

14

futile. See Miller, 845 F.2d at 214.

15
16

iii.

The New Claims

Plaintiff originally asserted claims under the UCL, FAL, CLRA, and for unjust enrichment

17

based on the inclusion of ECJ and “natural” on Whole Foods’ product labels. In ruling on the

18

ensuing motion to dismiss, the court found Plaintiff’s “natural” claims sufficiently pled but

19

dismissed with leave to amend all ECJ claims along with the claim for unjust enrichment. Whole

20

Foods argues that Plaintiff’s new claims for breach of the implied warranty of merchantability and

21

negligent misrepresentation exceed the scope of the court’s leave. Whole Foods is correct.

22

The two new claims, appearing for the first time in the SAC, are subject to dismissal

23

because they were pled without an appropriate stipulation or leave of court. The court did not

24

permit Plaintiff to include any new claims in the prior dismissal order, and Federal Rule of Civil

25

Procedure 15 prohibited him from doing so on his own volition. Under Rule 15(a)(1), a party

26

“may amend its pleading once as a matter of course” within 21 days after that pleading is served,

27
28

12
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

or 21 days after service of a responsive pleading or motion under Rule 12. “In all other cases, a

2

party may amend its pleading only with the opposing party’s written consent or the court’s leave.”

3

Fed. R. Civ. P. 15(a)(2).

4

Here, Whole Foods filed a motion to dismiss the Amended Complaint on July 15, 2013,

5

and Plaintiff’s ability to amend as a matter of course expired 21 days later pursuant to Rule

6

15(a)(1)(B). Amending the complaint to add two new claims in April, 2014, was in contravention

7

of Rule 15. Contrary to Plaintiff’s characterization, the court’s instruction on leave to amend was

8

not broad; it was specific as to scope and it did not include permission to assert new claims in a

9

subsequent pleading. Moreover, such permission should not be presumed from an order granting
a motion to dismiss with leave to amend, given the carefully-crafted language of Rule 15(a)(2)

11
United States District Court
Northern District of California

10

precludes “in all other cases” voluntary amendments after expiration of the permissive Rule

12

15(a)(1) window. Indeed, pleadings would never be settled and cases would never progress if a

13

plaintiff could independently add brand new claims each time a motion to dismiss was granted.

14

Because Plaintiff did not comply with Rule 15 before asserting them, the claims for breach

15

of the implied warranty of merchantability and negligent misrepresentation must be dismissed

16

without leave to amend.

17

C.

18

Whole Foods moves to strike several portions of the SAC. That particular motion is moot

The Motion to Strike

19

as to the claims for breach of the implied warranty of merchantability and negligent

20

misrepresentation as those two claims will be dismissed. It is also moot as to any allegations

21

which imply liability on an “illegal to possess” theory since those claims will be dismissed based

22

on the discussion above.

23

As to the other requests, Plaintiff essentially admits that the reference to “Substantially

24

Similar Products” in paragraph 156 of the SAC was an error, and the court will strike the reference

25

on that ground. Plaintiff also concedes he has abandoned claims based on carbon dioxide and

26

black carrot juice, which allegations will also be stricken. Footnote 3 will be stricken as

27
28

13
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE

1

impertinent since it appears to apply a strict liability theory to Plaintiff’s “natural” claims.

2

However, the allegation that Plaintiff relied on “the representation that products were free

3

from artificial colors, flavors or preservatives” in paragraph 160 will not be stricken since it does

4

appear related to Plaintiff’s “natural” claims, and cannot be determined immaterial and

5

impertinent at this time.

6

IV.

7
8

ORDER
Based on the foregoing, Defendant’s Motion to Dismiss and Motion to Strike (Docket Item

No. 54) is GRANTED IN PART and DENIED IN PART.
The Motion to Dismiss is GRANTED as to (1) all claims based on a theory of strict

10

liability, (2) all ECJ claims, and (3) the claims for implied warranty of merchantability and

11
United States District Court
Northern District of California

9

negligent misrepresentation. All such claims are DISMISSED WITHOUT LEAVE TO AMEND.

12

The Motion to Strike is GRANTED IN PART and DENIED IN PART, consistent with the

13

discussion above.

14

The court schedules this case for a Case Management Conference for 10:00 a.m. on

15

November 19, 2015. The parties shall file a Joint Case Management Conference Statement on or

16

before November 12, 2015.

17
18
19
20
21

IT IS SO ORDERED.
Dated: September 30, 2015
______________________________________
EDWARD J. DAVILA
United States District Judge

22
23
24
25
26
27
28

14
Case No.: 5:12-cv-05652-EJD
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS AND MOTION TO STRIKE