Aguilar v. Smart Balance, Inc. et al

Filing 87

ORDER denying Defendants' 82 Motion to Dismiss for Failure to State a Claim. Signed by Judge Cynthia Bashant on 4/16/2015. (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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ORDER DENYING
DEFENDANTS’ MOTION TO
DISMISS

Plaintiff,

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Case No. 3:12-cv-01862 BAS (BGS)

ELIZABETH MITCHELL, On
Behalf of Herself and All Others
Similarly Situated,

[ECF 82]

v.
BOULDER BRANDS, INC.
(formerly known as SMART
BALANCE, INC.), and GFA
BRANDS, INC.,
Defendants.

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Presently before the Court is Defendants Boulder Brands, Inc. and GFA

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Brands, Inc.’s motion to dismiss the Second Amended Complaint (“SAC”). ECF

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82. Plaintiff Elizabeth Mitchell opposed and Defendant replied. ECFs 83, 84. The

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Court finds this motion suitable for determination on the papers submitted and

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without oral argument. See Civ. L.R. 7.1(d.1). For the following reasons,

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Defendant’s motion is DENIED. ECF 82.

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I.

BACKGROUND

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Defendants manufacture and sell three butter products that are fortified with

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plant sterols, which help the body prevent absorption of cholesterol. Pl.’s Opp’n 2;

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SAC ¶ 2, ECF 76. All three products state “HELPS BLOCK CHOLESTEROL” in

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large lettering, and “100mg of plant sterols” and “in the butter” in smaller lettering.

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SAC ¶¶ 1, 18–19. Plaintiff purchased one of the products, claiming the preceding

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statements led her to believe the product would block a “meaningful” amount of

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cholesterol in the butter. Id. at ¶ 12. Plaintiff claims the amount of plant sterols in

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the products is not enough to generate a “clinically meaningful cholesterol

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blocking effect.” Pl.’s Opp’n 3.
II.

DISCUSSION

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On September 2, 2014, Judge Barry Moskowitz granted Plaintiff’s motion

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for leave to file the SAC, holding that permitting the proposed SAC would not be

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futile. Order 7, ECF 74. “[A] proposed amendment is futile only if no set of facts

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can be proved under the amendment . . . that would constitute a valid and sufficient

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claim or defense.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988).

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Thus, the test of futility is identical to the one applied when considering challenges

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under Rule 12(b)(6) for failure to state a claim upon which relief may be granted.

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Baker v. Pac. Far E. Lines, Inc., 451 F. Supp. 84, 89 (N.D. Cal. 1978); see Saul v.

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United States, 928 F.2d 829, 843 (9th Cir. 1991) (“A district court does not err in

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denying leave to amend . . . where the amended complaint would be subject to

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dismissal.” (citation omitted)). Because Judge Moskowitz already determined that

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the SAC validly states a claim, the Court treats Defendants’ Rule 12(b)(6) motion

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to dismiss as a motion for reconsideration.

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Reconsideration may be sought by filing a motion under either Federal Rule

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of Civil Procedure 59(e) (motion to alter or amend a judgment) or Federal Rule of

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Civil Procedure 60(b) (motion for relief from judgment). See Hinton v. Pac. Enter.,

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5 F.3d 391, 395 (9th Cir. 1993). District courts have the inherent authority to
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3:12-cv-01862 BAS (BGS)

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entertain motions for reconsideration of interlocutory orders. Amarel v. Connell,

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102 F.3d 1494, 1515 (9th Cir. 1996) (“[I]nterlocutory orders . . . are subject to

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modification by the district judge at any time prior to final judgment.”); see also

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Fed. R. Civ. P. 54(b); Balla v. Idaho State Bd. of Corr., 869 F.2d 461, 465 (9th Cir.

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1989). To determine the merits of a request to reconsider an interlocutory order,

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the court applies the standard required under a Rule 59(e) reconsideration motion.

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See Hydranautics v. FilmTec Corp., 306 F. Supp. 2d 958, 968 (S.D. Cal. 2003)

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(Whelan, J.).

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“Although Rule 59(e) permits a district court to reconsider and amend a

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previous order, the rule offers an extraordinary remedy, to be used sparingly in the

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interests of finality and conservation of judicial resources.” Kona Enters., Inc. v.

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Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000) (internal quotation marks

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omitted). “Indeed, a motion for reconsideration should not be granted, absent

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highly unusual circumstances, unless the district court is presented with newly

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discovered evidence, committed clear error, or if there is an intervening change in

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the controlling law.” Id. (quoting 389 Orange St. Partners v. Arnold, 179 F.3d

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656, 665 (9th Cir. 1999)) (internal quotation marks omitted). Further, a motion for

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reconsideration may not be used to raise arguments or present evidence for the first

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time when they could reasonably have been raised earlier in the litigation. Id. It

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does not give parties a “second bite at the apple.” See id. Finally, “after thoughts”

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or “shifting of ground” do not constitute an appropriate basis for reconsideration.

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Ausmus v. Lexington Ins. Co., No. 08-CV-2342-L, 2009 WL 2058549, at *2 (S.D.

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Cal. July 15, 2009).

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Defendants do not present newly discovered evidence or contend that there

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was an intervening change in the law. Defendants argue that Judge Moskowitz

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improperly relied on facts outside the four corners of the complaint and its

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attachments to determine the amendments would not be futile. Defs.’ Reply 3.

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They also argue the Court committed clear error by “disregarding” Cullen v.
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Netflix, 880 F. Supp. 2d 1017 (N.D. Cal. 2012). Id. at 5.

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Judge Moskowitz found the products’ labels could plausibly be read as

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implying a “clinically meaningful cholesterol blocking benefit[,]” and that this

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implied representation is “specific, measurable, and falsifiable.” Order 5–7. In

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finding the representation measurable, Judge Moskowitz relied on an expert report.

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Id. The expert report stated that a minimum of 800mg of plant sterols, a far greater

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amount than the 100mg present in one serving of the products, is required to

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“meaningfully” block cholesterol. Id. Defendants argue Judge Moskowitz erred

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because the report was not attached to the SAC. Defs.’ Reply 3. However, Plaintiff

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incorporated the material contents of the expert report in paragraphs 22–26 of the

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SAC. Defendant’s argument is thus without merit.

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In Cullen, the plaintiffs challenged Netflix officials’ public statements that

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implied Netflix would “meaningfully” increase its closed-captioning of video

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content. Cullen, 880 F. Supp. 2d at 1020–21. There, the court found the officials’

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statements were made on a “vague and subjective” issue, and granted the motion to

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dismiss. Id. at 1027, 29. In contrast, the amount of plant sterols needed to

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“meaningfully” block cholesterol is a medical question capable of measurement.

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See SAC ¶ 22. Cullen is therefore distinguishable.

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The balance of Defendants’ brief merely restates their arguments against the

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motion for leave to amend without meeting any threshold requirement for Rule

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59(e) reconsideration. Therefore the Court will not address the merits of those

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arguments. Accordingly, Defendants’ motion to dismiss the Second Amended

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Complaint is DENIED. ECF 82.

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IT IS SO ORDERED.
DATED: April 16, 2015

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