Clay et al v. Cytosport, Inc.

Filing 209

ORDER Granting in Part and Denying in Part 170 Defendant's Motion for Summary Judgment. Signed by Judge M. James Lorenz on 7/31/2018. (lrf)

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UNITED STATES DISTRICT COURT

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FOR THE SOUTHERN DISTRICT OF CALIFORNIA

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CHAYLA CLAY et al.,

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13 v.

Case No: 3:15-cv-00165-L- AGS

Plaintiffs,

ORDER GRANTING IN PART
AND DENYING IN PART
DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT

14 CYTOSPORT, INC.,
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Defendant.

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Pending before the Court in this putative consumer class action is

19 Defendant's motion for partial summary judgment. Plaintiffs filed an opposition,
20 and Defendant replied. This matter is submitted on the briefs pursuant to Civil
21 Local Rule 7.1.d.1. For the reasons which follow, Defendant's motion is granted in
22 part and denied in part.
23 I.

BACKGROUND

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Plaintiffs are consumers who purchased Defendant's protein shake and/or

25 protein powder. They allege that (1) the Nutrition Facts panel and packaging of
26 some of Defendant's ready-to-drink protein shake products overstated the amount
27 of protein content; (2) the Ingredients section on the labels of their Muscle Milk
28 protein powder products included amino acid L-glutamine, it was also listed as an
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1 ingredient of the "Precision Protein Blend" elsewhere on the labels, and an L2 glutamine molecule was also shown in a chart of the amino acids profile for some
3 of the products, implying that L-glutamine was included in its unbonded form,
4 when none was included; and (3) prominently displaying on its Muscle Milk
5 protein powder packaging that the product was "lean" or contained a special blend
6 of "Lean Lipids," when the products contained oils and were no leaner than other
7 protein powders on the market which were not marketed as lean.
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Plaintiffs contend that Defendant's product labeling is false and misleading

9 in violation of the federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301 et seq.,
10 other federal laws, as well as California, Florida and Michigan state consumer
11 protection laws. In the operative first amended complaint (doc. no. 156), they
12 allege causes of action for violation of California False Advertising Law, Cal. Bus.
13 & Prof. Code §§ 17500 et seq. ("FAL"); violation of California Consumer Legal
14 Remedies Act, Cal. Civ. Code §§ 1750 ("CLRA"); violation of California Unfair
15 Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. ("UCL"); violation of
16 Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201 et seq.
17 ("FDUTPA"); violation of Michigan Consumer Protection Act, Mich. Comp. Laws
18 §§ 445.901 et seq. ("MCPA"); breach of express warranty under California, Florida
19 and Michigan state laws; and violation of Magnuson-Moss Warranty Act, 15
20 U.S.C. §§2301 et seq. ("Magnuson-Moss" or "Act") for breach of written warranty.
21 On behalf of themselves and a putative nationwide class with California, Florida
22 and Michigan subclasses, Plaintiffs seek, among other remedies, injunctive relief,
23 damages, restitution and/or disgorgement of Defendant's profits.
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Defendant filed a motion for partial summary judgment, arguing that the

25 FAL, CLRA and UCL claims fail for lack of statutory standing, the MCPA claim
26 fails for lack of reliance, the Michigan and Florida express warranty claims fail for
27 lack of notice, the California express warranty claim fails for lack of reliance, and
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1 the Magnuson-Moss claim fails for lack of a written warranty. Plaintiff opposes
2 these arguments.
3 II.

DISCUSSION

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Under Federal Rule of Civil Procedure 56, "[a] party may move for

5 summary judgment, identifying each claim or defense - or the part of each claim or
6 defense - on which summary judgment is sought." Summary judgment or partial
7 summary judgment is granted "if the movant shows that there is no genuine dispute
8 as to any material fact and the movant is entitled to judgment as a matter of law."
9 Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
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The party seeking summary judgment bears the initial burden of establishing

11 the absence of a genuine dispute as to any material fact. Celotex, 477 U.S. at 323.
12 The moving party can satisfy this burden in two ways: (1) by presenting evidence
13 that negates an essential element of the nonmoving party’s case; or (2) by
14 demonstrating that the nonmoving party failed to make a showing sufficient to
15 establish an element essential to that party’s case on which that party will bear the
16 burden of proof at trial. Id. at 322–23.
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If the moving party fails to discharge its initial burden, summary judgment

18 must be denied and the court need not consider the nonmoving party’s evidence.
19 Adickes v. S.H. Kress & Co., 398 U.S. 144, 159–60 (1970). If the moving party
20 meets the initial burden, the nonmoving party cannot defeat summary judgment
21 merely by demonstrating “that there is some metaphysical doubt as to the material
22 facts.” Matsushita Elect. Indus. Co., Ltd. v Zenith Radio Corp., 475 U.S. 574, 586
23 (1986). Rather, the nonmoving party must “go beyond the pleadings” and by “the
24 depositions, answers to interrogatories, and admissions on file,” designate “specific
25 facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324
26 (quoting Fed. R. Civ. P. 56(e)).
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A.

False Advertising, Unfair Competition and CLRA Claims

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Defendant moves for summary adjudication of the first through fifth causes

3 of action for FAL, CLRA and UCL violations1 for lack of statutory standing. Only
4 a "person who has suffered injury in fact and has lost money or property as a result
5 of" a FAL or UCL violation may bring an action for violation. Cal. Bus. & Prof.
6 Code §§ 17204 (UCL), 17535 (FAL). For purposes of these statutes, the phrase
7 "as a result of" means "caused by" and "requires a showing of a causal connection
8 or reliance on the alleged misrepresentation," as "reliance is the causal mechanism
9 of fraud." Kwikset Corp. v. Super. Ct., 51 Cal.4th 310, 326 (2011) (internal
10 quotation marks and citations omitted).
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CLRA, which contains the same language, is interpreted in a similar way.

12 Kwikset, 51 Cal.4th at 326. An action for a CLRA violation can be brought only
13 by a "consumer who suffers any damage as a result of the use or employment by
14 any person of a method, act, or practice declared to be unlawful" under the CLRA.
15 Cal. Civ. Code § 1780. To meet this requirement, "not only must a consumer be
16 exposed to an unlawful practice, but some kind of damage must result." Meyer v.
17 Spring Spectrum L.P., 45 Cal.4th 634, 641 (2009). In this context, the damage
18 requirement is broadly construed to include "such transaction costs" as "expending
19 time and money threatening [the defendant] with a lawsuit . . . to avoid the
20 consequences of a deceptive practice," even if such transaction costs are not
21 cognizable as "actual damages." Id. at 642-43. With respect to reliance, insofar as
22 the statutory claim is based on a fraudulent representation, a plaintiff
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must demonstrate actual reliance on the allegedly deceptive or
misleading statements, in accordance with well-settled principles
regarding the element of reliance in ordinary fraud actions.
Consequently, a plaintiff must show that the misrepresentation was an
immediate cause of the injury-producing conduct. However, a
plaintiff is not required to allege that the challenged

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Plaintiff alleges UCL violations in the third, fourth and fifth causes of
28 action.

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misrepresentations were the sole or even the decisive cause of the
injury-producing conduct.

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3 Kwikset, 51 Cal.4th at 326-27 (internal quotation marks, brackets, ellipses,
4 citations and footnote omitted).
Defendant argues that it is entitled to summary adjudication on these claims 2

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6 because none of the named Plaintiffs relied on the alleged misrepresentations in
7 their respective decisions to purchase Defendant's products. Deposition testimony
8 does not unequivocally support Defendant's position.
Logan Reichert purchased Defendant's protein powder products. (See

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10 Transcript of the Testimony of Logan Reichert ("Reichert Depo.") at 41.)3
11 Defendant argues that he did not rely on any of the disputed statements on
12 Defendant's product labels. (See doc. no. 170-1 at 7-8 & 14.) Plaintiffs dispute
13 this only with respect to the statements regarding L-glutamine. (Doc. no. 185 at
14 35.) Reichert testified that he started using Defendant's products as a wrestler in
15 high school. He knew that amino acids were important "for your body and your
16 muscles," and was reassured when he saw that the protein powder included them.
17 (Id. at 32, 61-64.) Although Reichert testified that he did not know individual
18 amino acids by their names, and did not look for L-glutamine content when he first
19 purchased Defendant's protein powder (see id. at 63-64), Defendant's argument that
20 this testimony establishes Reichert's admission of no reliance is not based on a fair
21 reading. The testimony lends itself to Plaintiffs' and Defendant's proffered
22 interpretations. On summary judgment, the court must draw all inferences from
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Reichert and Ehrlich are not making any claims under the CLRA. (See doc.
no. 156 at 26 (claim asserted solely on behalf of the putative California sub-class).)
25 Except for the deposition transcripts, all page references in citations to docketed
documents are to the page numbers assigned by the ECF system.
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Excerpts from the Reichert Depo. were filed as doc. no. 170-6 at 95-115 and
27 doc. no. 185-11. Throughout this Order, page references to deposition testimony
are to the page numbers in the transcript.
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1 the underlying facts in the light most favorable to the nonmoving party. See
2 Matsushita, 475 U.S. at 587. “Credibility determinations, the weighing of
3 evidence, and the drawing of legitimate inferences from the facts are jury
4 functions, not those of a judge, [when] he is ruling on a motion for summary
5 judgment.” Anderson, 477 U.S. at 255. Reichert's testimony lends itself to the
6 inference that he looked for L-glutamine on the label at some point, and continued
7 to purchase the protein powder because he was reassured that it had it.
Erica Ehrlichman purchased Defendant's protein powder and shakes. (See

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9 Deposition of Erica Ehrlichman ("Ehrlichman Depo.") at 9, 25.)4 Defendant
10 contends that she did not rely on the "lean" representations on the labels.
11 Ehrlichman testified that she did not rely on the phrase "Lean Lipids" or the word
12 "lean." (Id. at 116-17, 119, 128.) However, she also testified that she saw the
13 phrase "lean muscle protein powder" on the package, and thought this was
14 desirable because she wanted "lean muscles" and thought that the product "ha[d] a
15 lower fat content because you can't get lean muscles if you're eating something
16 fattening." (Id. at 112-13.) Ehrlichman's testimony therefore does not preclude
17 reliance on the word "lean" as used in the phrase "lean muscle protein powder."
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Chayla Clay purchased Defendant's protein powder and shakes. (Deposition

19 of Chayla Clay ("Clay Depo.") at 16-23.)5 Defendant contends that she did not
20 rely on the statements regarding protein and L-glutamine. Plaintiff opposes only
21 with respect to her reliance on statements about protein. (Doc. no. 185 at 33.)
22 Defendant bases its position on Clay's testimony that when she first bought the
23 products as a teenager, she did not read the label. (See id. at 127, 130.) Defendant
24 does not establish that the only relevant reliance is for the initial purchase of the
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Excerpts from the Ehrlichman Depo. were filed as doc. no. 170-6 at 116-54
26 and doc. no. 185-9.

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Excerpts from the Clay Depo. were filed as doc. no. 170-6 at 155-88, and
doc. no. 185-10.
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1 product. Clay testified that she purchased Defendant's products over a period of
2 some 15 years (see id. at 15-16, 23-24, 40-42, 156), and that she used them
3 because she thought they were high in protein (id. at 130, 160). Her testimony is
4 sufficient for a reasonable jury to conclude that Clay relied on the protein content
5 at least for some of her purchases.
Christopher Roman used Defendant's protein powder and sometimes shakes.

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7 (Deposition of Christopher Roman ("Roman Depo.") at 66, 70-77, 134-37.)6
8 Defendant claims that Roman did not rely on the protein content representations on
9 the shakes. Roman was a professional mixed martial arts fighter, who was on a
10 strict high protein intake diet when he was training. (Id. at 37-38, 40, 43-45; see
11 also doc. no. 185-5 (exhibits).) He used primarily Defendant's protein powder and
12 drank shakes only rarely when he did not have access to another protein product.
13 (Id. at 134-37.) Defendant focuses on his testimony that he was usually in a hurry
14 when he purchased a shake, did not look at the label carefully, and not until after
15 he had already made the purchase. (Id.) However, Roman also testified that
16 whenever he changed his protein product, he had a habit of carefully scrutinizing
17 supplement labels for the nutrients he was looking for, including protein, and that
18 he did the same with Defendant's protein powders. (Id. at 62-64.) When he
19 purchased shakes, he did check the label for protein content before drinking the
20 shake. (Id. at 134-37.) He chose Muscle Milk shakes because he was already
21 familiar with the brand and assumed that the powder and shake products were
22 similar. (Id. at 134-37.) Based on the foregoing, the testimony is sufficient to raise
23 a genuine issue of material fact regarding reliance on the protein amount statement
24 on Defendant's protein shake products.
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Excerpts from the Roman Depo. were filed as doc. no. 170-6 at 189-221,
doc. no. 185-8, and doc. no. 185-5 (exhibits).
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Based on the foregoing, Defendant is entitled to summary adjudication with

2 respect to some of the claims asserted by Clay and Reichert. Clay lacks standing
3 to assert FAL, CLRA and UCL claims with respect to Defendant's representations
4 regarding L-glutamine in protein powder products, and Reichert lacks standing to
5 assert FAL and UCL claims with respect to Defendant's statements about protein
6 content of its shakes and "lean" statements about protein powders.
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B.

Michigan Consumer Protection Claim

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Defendant seeks summary adjudication of the seventh cause of action for

9 MCPA violation. The sole argument in this regard is that Ehrlichman did not rely
10 on the "lean" statements on Defendant's protein powders. As discussed above,
11 Ehrlichman's testimony allows for a reasonable inference that she relied on the
12 word "lean" as used in the phrase "lean muscle protein powder." Nevertheless,
13 Plaintiffs' state in their reply that the only claim they seek to litigate is the claim
14 arising under M.C.L. § 445.903(1)(c). (Doc. no. 185 at 42.) Defendant is not
15 contesting this claim to the extent it is based solely on subsection (c). (Doc. no.
16 191 at 14 n.3.) Accordingly, Defendant's motion is granted with respect to any
17 claim Plaintiffs asserted pursuant to M.C.L. § 445.903(1)(a). (e), (s) and (cc). (See
18 doc. no. 156 at 36.)
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C.

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Defendant next maintains it is entitled to summary adjudication of the eighth

Breach of Express Warranty

21 cause of action for breach of state law express warranty because Ehrlichman and
22 Reichert failed to give pre-suit notice of breach as required by Michigan and
23 Florida law, respectively. They also contend that summary adjudication is
24 appropriate under California law to the extent Plaintiffs did not rely on Defendant's
25 product labels.
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Plaintiffs do not dispute that Michigan and Florida law require pre-suit

27 notice of breach. (See doc. no. 185 at 41.) It is also undisputed that Plaintiffs sent
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1 Defendant a demand letter on January 23, 2015. (See doc. no. 191 at 16; see also
2 doc. no. 184-1 (Decl. of Amy L. Marino); doc. no. 185-4 (Exh. B to Decl. of Amy
3 L. Marino).) The letter attached the complaint, which included all pertinent
4 claims, and was filed the same day. (Doc. no. 185-4.)
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Section 440.2607(3)(a) of Michigan's Compiled Laws requires reasonable

6 notice of breach of warranty. Gorman v. Am. Honda Motor Co., 839 N.W.2d 223,
7 229 (Mich. App. 2013); Am. Bumper & Mfg Co. v. TransTech. Corp., 652 N.W.2d
8 252, 255 (Mich. App. 2002). Two of the purposes of notice requirement are "to
9 prevent surprise and . . . to allow the seller the fair opportunity to investigate and
10 prepare for litigation." Am. Bumper, 652 N.W.2d at 256. If the notice does not
11 serve the purposes for the notice requirement, it is not reasonable and the buyer has
12 not complied. Id. Commencing a lawsuit is not reasonable notice. See Gorman,
13 839 N.W.2d at 230, 231. Here, Plaintiffs simultaneously sent the letter to
14 Defendant and filed this action. (Doc. no. 185-4.) Although Plaintiffs did more
15 than just serve the complaint, notice was not sufficient to comply with Michigan
16 state law requirements. A plaintiff who does not comply, is "barred from any
17 remedy." Mich. Comp. Laws § 440.2607(3)(a); Gorman, 839 N.W.2d at 232; Am.
18 Bumper, 652 N.W.2d at 256. To the extent Defendant moves for summary
19 adjudication of the claim for breach of express warranty under Michigan law, the
20 motion is granted.
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Florida's notice statute is the same as Michigan's. Fla. Stat. § 672.607(3)(a);

22 cf. Mich. Comp. Laws § 440.2607(3)(a). Like Michigan, Florida courts evaluate
23 compliance with the notice requirement in light of the underlying reasons. See
24 General Matters, Inc. v. Paramount Canning Co., 382 So.2d 1262, 1264 (Ct. App.
25 Fla. 1980). "There are several important reasons for the notice requirement[.]" Id.
26 For example, it "enables the seller to make adjustments or replacements or to
27 suggest opportunities for cure to the end of minimizing the buyer's loss and
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1 reducing the seller's liability to the buyer." Id. (internal quotation marks omitted).
2 A notice sent at the same time as the lawsuit is filed does not provide sufficient
3 time to accomplish these purposes. Accordingly, Plaintiffs' notice did not comply
4 with Florida law. To the extent Defendant moves for summary adjudication of the
5 claim for breach of express warranty under Florida law, the motion is granted.
6

With respect to Plaintiffs' express warranty claim under California law,

7 Defendant argues that it is entitled to summary adjudication because there is no
8 privity of contact between Plaintiffs and Defendants, and Plaintiffs did not rely on
9 the representations on Defendants' product labels. Plaintiffs dispute that privity or
10 reliance is required.7
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California law requires neither privity nor reliance to prevail on a claim for

12 breach of express warranty. "Privity is not required for an action based upon an
13 express warranty." Jud. Council of Cal. Civ. Jury Instr. ("CACI") no. 1230, cmt
14 (2017) (quoting Hauter v. Zogarts, 14 Cal.3d 104, 114 n.8 (1975)). Furthermore,
15 "[w]hereas plaintiffs in the past have had to prove their reliance upon specific
16 promises made by the seller . . ., the Uniform Commercial Code requires no such
17 proof." CACI no. 1230, cmt (quoting Hauter, 14 Cal.3d at 115); see also Cal.
18 Comm. Code § 2313(1) & Cal. Code Cmt. 2 (reliance no longer required). To the
19 extent Defendant seeks summary adjudication of the express warranty claim under
20 California law, the motion is denied.
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D.

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Defendant contends it is entitled to summary adjudication of Plaintiffs' ninth

Magnuson-Moss Claim

23 cause of action for breach of written warranty under the Magnuson-Moss Warranty
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The entirety of Plaintiffs' argument in this regard is included in an
25 incomplete choice-of-law chart filed as Exhibit UU to the Declaration of Trenton
R. Kashima. (See doc. no. 185 at 42-43.) The chart consists of five (page one is
26 missing) single-spaced pages of legal argument. (Doc. no. 157-72.) This is a
blatant run around the page limits, which already were extended pursuant to
27 Plaintiffs' request. (See doc. no. 148 (Order Granting Plaintiffs' Ex parte
Application for Over Length Brief).) Failure to comply with orders of the Court is
28 grounds for sanctions. Civ. Loc. Rule 83.1.

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1 Act because the representations on product labeling are not written warranties for
2 purposes of the Act. The Act defines the term "written warranty" in pertinent part
3 as follows:
any written affirmation of fact or written promise made in connection
with the sale of a consumer product by a supplier to a buyer which
relates to the nature of the material or workmanship and affirms or
promises that such material or workmanship is defect free or will meet
a specified level of performance over a specified period of time . . ..

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8 15 U.S.C. § 2301(6)(A).
Plaintiffs concede that a product description alone is insufficient to

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10 constitute a warranty. (Doc. no. 185 at 40.) The parties disagree whether the
11 product labels include a promise that the product is "defect free or will meet a
12 specified level of performance over a specified period of time," as required by the
13 Act. Neither side cites any binding case law in support of its respective
14 arguments.8
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Plaintiffs argue that the protein and L-glutamine statements on the product

16 labels are more than product descriptions. With respect to the protein
17 representations on the protein shake products, they point to the prominently and
18 repeatedly displayed representations regarding protein content. (See, e.g., doc. no.
19 157 Exh. S at 1 (non-electronically filed); see also id. App'x C.) With respect to
20 the L-glutamine content of their powdered products, they point to the list of
21 ingredients included in the "protein blend" (id. App'x B at 2) , and a detailed chart
22 under the heading "TYPICAL AMINO ACID PROFILE per 2 scoops 70g (32g
23 Protein)" which shows pictures of amino acid molecules, including "L-glutamine
24 and Precursors" and lists the quantity. (See, e.g., id. Exh. K a 6 (non-electronically
25 filed) (all caps in orig.); see also id. App'x B.) Plaintiffs argue that these
26
“A decision of a federal district court judge is not binding precedent in either
a different judicial district, the same judicial district, or even upon the same judge
28 in a different case.” Camreta v. Green, 563 U.S. 692 n.7 (2011).
27

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1 ingredient and quantity representations, together with "multiple statements of
2 efficacy and scientific validity made elsewhere on the package, and the expiration
3 date, . . . promise a specific level of performance over a specific time period."
4 (Doc. no. 185 at 40).
5

To constitute a written warranty under the Act, the statement must include a

6 "written affirmation of fact or a written promise of a specified level of performance
7 [which] must relate to a specified period of time. A product information disclosure
8 without a specified time period to which the disclosure relates is therefore not a
9 written warranty." 16 C.F.R. § 700.3(a) (emphasis added). Although Plaintiffs
10 allude to an expiration date, none of the evidence they cite discloses an expiration
11 date. (See doc. no. 157 Exhs. K & S (non-electronically filed) & App'x B & C.)
12 Furthermore, Plaintiffs cite no binding legal authority for the proposition that an
13 expiration date is sufficient for purposes of a written warranty under the Act.
14

Because Plaintiffs did not carry their burden in opposing Defendant's

15 summary judgment motion, the motion is granted with respect to the ninth cause of
16 action for breach of written warranty under the Act.
17 III.

CONCLUSION

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Defendant's motion for partial summary judgment is granted in part and

19 denied in part as follows:
20

1.

Defendant is entitled to summary adjudication with respect to some of

21 the claims asserted by Plaintiffs Clay and Reichert. Clay lacks standing to assert
22 claims under California False Advertising Law ("FAL"), California Consumer
23 Legal Remedies Act ("CLRA"), and California Unfair Competition Law ("UCL")
24 with respect to Defendant's representations regarding L-glutamine in protein
25 powder products. Reichert lacks standing to assert FAL and UCL claims with
26 respect to Defendant's statements about protein content of its shakes, and "lean"
27 / / / / /
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1 statements about protein powders. All other claims asserted for FAL, CLRA and
2 UCL violations survive Defendant's motion.
3

2.

Defendant's motion is granted with respect to any claim Plaintiffs

4 assert for violation of Michigan Consumer Protection Act, Mich. Comp. L. §
5 445.903(1)(a), (e), (s) and (cc). Plaintiffs' claim for violation of Michigan Comp.
6 L. § 445.903(1)(c) survives Defendant's motion.
7

3.

Defendant's motion for summary adjudication of the express warranty

8 claim alleged under Michigan and Florida state law is granted. The motion is
9 denied with respect to the express warranty claim under California law.
10

4.

Defendant's motion for summary adjudication of the claim for breach

11 of written warranty under the Magnuson-Moss Warranty Act, is granted.
12

IT IS SO ORDERED.

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14 Dated: July 31, 2018
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