Seegert v. Rexall Sundown, Inc.

Filing 30

ORDER granting 17 Defendant's Motion to Dismiss and 18 Motion to strike. Plaintiff's claims are dismissed without prejudice. Plaintiff may file a second amended complaint within 30 days of this order. Signed by Judge John A. Houston on 12/01/2017. (jpp)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 11 SANDRA SEEGERT, individually and on behalf of all other similarly situated, 14 15 ORDER GRANTING DEFENDANT’S MOTION TO DISMISS (Doc. No. 17) AND MOTION TO STRIKE (Doc. No. 18) Plaintiff, 12 13 Case No.: 17cv1243-JAH (JLB) v. REXALL SUNDOWN, INC., Defendant. 16 17 18 19 20 21 INTRODUCTION 22 Pending before the Court are Defendant Rexall Sundown Incorporated’s 23 (“Defendant”) motion to dismiss and motion to strike Plaintiff Sandra Seegert’s 24 (“Plaintiff”) class action complaint (“Complaint”) pursuant to Rules 12(b)(6) and 12(f) of 25 the Federal Rules of Civil Procedure. Doc. Nos. 17, 18. Defendant also requests the Court 26 to take judicial notice of specific documents. Doc. No. 19. Plaintiff filed oppositions to 27 both motions. Doc. Nos. 24, 25. After a careful review of the pleadings filed by both 28 1 17cv1243-JAH (JLB) 1 parties, and for the reasons set forth below, the Court GRANTS Defendant’s motion to 2 dismiss, motion to strike, and request for judicial notice. 3 FACTUAL BACKGROUND 4 Plaintiff alleges Defendant engaged in false and misleading advertising of four Osteo 5 Bi-Flex dietary supplements. Doc. No. 1. at pg. 2. Plaintiff posits that Defendant falsely 6 claims the products promote joint health. Id. Plaintiff contends that on February 20, 2017, 7 Plaintiff purchased one of Defendant’s products, Osteo Bi-Flex Triple Strength, in reliance 8 on the product’s advertising. Id. at pg. 3. Plaintiff alleges the product did not provide 9 “meaningful joint health benefits” and was falsely, deceptively, and misleadingly 10 advertised. Id. 11 Plaintiff argues that Defendant violated three California statutes: (1) California’s 12 Unfair Competition Law, Cal. Bus. & Prof. Code § 17200; (2) California’s Consumers 13 Legal Remedies Act, Cal. Civ. Code § 1750; and California’s False Advertising Law, Cal. 14 Bus. & Prof. Code § 17500. Doc. No. 1 at pgs. 21-27. Plaintiff presents allegations on 15 behalf of herself and a putative class of similarly situated individuals. Id. Specifically, 16 Plaintiff asserts that Defendant falsely advertises four products: Osteo Bi- Flex One Per 17 Day; Osteo Bi-Flex Triple Strength; Osteo Bi-Flex Triple Strength MSM; and Osteo Bi- 18 Flex Triple Strength with Vitamin D. Id. at pgs. 4-5. Plaintiff argues that none of the four 19 products achieve their intended purpose, to support or benefit joint health. Id. Plaintiff 20 requests restitution, disgorgement, injunctive relief, attorney’s fees, and interest on damage 21 awards. Id. at pg. 28. 22 PROCEDURAL BACKGROUND 23 Plaintiff filed her Complaint on June 19, 2017, on behalf of herself and a putative 24 class. Doc. No. 1. On August 14, 2017, Defendant filed a motion to dismiss Plaintiff’s 25 Complaint. Doc. No. 17. The same day, Defendant filed a motion to strike. Doc. No. 18. 26 Defendant also filed a request for judicial notice. Doc. No. 19. On October 9, 2017, 27 Plaintiff filed a response in opposition to Defendant’s motion to dismiss. Doc. No. 22. On 28 2 17cv1243-JAH (JLB) 1 the same day, Plaintiff filed a response in opposition to Defendant’s motion to strike. Doc. 2 No. 24. 3 4 LEGAL STANDARD I. Federal Rule of Civil Procedure 12(b)(6) 5 A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint. 6 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal is warranted under Rule 7 12(b)(6) where the complaint lacks a cognizable legal theory or fails to allege sufficient 8 facts to support a cognizable legal theory. Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013). 9 “To survive a motion to dismiss, a complaint must contain sufficient factual matter, 10 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 11 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 12 (2007)). A claim is facially plausible when the factual allegations permit “the court to draw 13 the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 14 556 U.S. at 678. In other words, “the non-conclusory ‘factual content,’ and reasonable 15 inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff 16 to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (citing Iqbal, 556 17 U.S. at 678). “Determining whether a complaint states a plausible claim for relief will . . . 18 be a context-specific task that requires the reviewing court to draw on its judicial 19 experience and common sense.” Iqbal, 556 U.S. at 679. 20 In reviewing a motion to dismiss under Rule 12(b)(6), a court must assume the truth 21 of all factual allegations and construe the factual allegations in the light most favorable to 22 the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996). 23 However, legal conclusions need not be taken as true merely because they are “cast in the 24 form of factual allegations.” Ileto v. Glock Inc., 349 F.3d 1191, 1200 (9th Cir. 2003). “Nor 25 does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual 26 enhancement.’” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 557). The court may 27 consider facts alleged in the complaint, documents attached to the complaint, documents 28 relied upon but not attached to the complaint when authenticity is not contested, and 3 17cv1243-JAH (JLB) 1 matters of which the court takes judicial notice. Lee v. City of Los Angeles, 250 F.3d 668, 2 688–89 (9th Cir. 2001). If a court determines that a complaint fails to state a claim, the 3 court should grant leave to amend unless it determines that the pleading could not possibly 4 be cured by the allegation of other facts. Doe v. United States, 58 F.3d 494, 497 (9th Cir. 5 1995). 6 II. Federal Rules of Civil Procedure 8 7 Rule 8 of the Federal Rules of Civil Procedure provides that in order to state a claim 8 for relief in a pleading it must contain “a short and plain statement of the grounds for the 9 court’s jurisdiction” and “a short and plain statement of the claim showing that the pleader 10 is entitled to relief.” Fed.R.Civ.P. 8(a)(1) & (2). “The pleading standard Rule 8 announces 11 does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the 12 defendant-unlawfully-harmed me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 13 550 U.S. at 555). 14 III. Federal Rule of Civil Procedure 9(b) 15 Under Rule 9(b) of the Federal Rules of Civil Procedure, “[i]n alleging fraud or 16 mistake, a party must state with particularity the circumstances constituting fraud or 17 mistake.” Under Ninth Circuit case law, Rule 9(b) imposes two distinct requirements on 18 complaints alleging fraud. First, the basic notice requirements of Rule 9(b) require 19 complaints pleading fraud to “state precisely the time, place, and nature of the misleading 20 statements, misrepresentations, and specific acts of fraud.” Kaplan v. Rose, 49 F.3d 1363, 21 1370 (9th Cir. 1994); see also Vess v. Ciba-Geigy Corp., U.S.A., 317 F.3d 1097, 1106 (9th 22 Cir. 2003) (citation omitted) (stating that a plaintiff must set forth the “who, what, when, 23 where and how” of the alleged misconduct). Second, Rule 9(b) requires that the complaint 24 “set forth an explanation as to why the statement or omission complained of was false or 25 misleading.” Yourish v. California Amplifier, 191 F.3d 983, 993 (9th Cir. 1999) (citation 26 and quotation omitted). 27 // 28 // 4 17cv1243-JAH (JLB) 1 IV. Federal Rule of Civil Procedure 12(f) 2 A party may move to strike from a pleading “an insufficient defense or any 3 redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). “[T]he 4 function of a 12(f) motion to strike is to avoid the expenditure of time and money that 5 must arise from litigating spurious issues by dispensing with those issues prior to trial.” 6 See Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). Motions to 7 strike are generally disfavored, unless “it is clear that the matter to be stricken could have 8 no possible bearing on the subject matter of the litigation.” See LeDuc v. Kentucky 9 Central Life Ins. Co., 814 F. Supp. 820, 830 (N.D. Cal. 1992); Cairns v. Franklin Mint 10 Co., 24 F. Supp. 2d 1013, 1037 (C.D. Cal. 1998); See also Colaprico v. Sun 11 Microsystems, 758 F. Supp. 1335, 1339 (N.D. Cal. 1991). 12 DISCUSSION 13 The Court first addresses whether Plaintiff and the class have standing to assert 14 their claims against Defendant. The Court will then address whether Plaintiff has 15 properly plead her allegations under the heightened standard of Federal Rule of Civil 16 Procedure 9(b). 17 18 I. Motion to Dismiss a. Plaintiff’s Standing 19 Defendant argues Plaintiff lacks standing to assert claims for products she did not 20 purchase and representations she did not rely on. Defendant also contends Plaintiff lacks 21 standing for injunctive relief because Plaintiff faces no imminent or future harm. 22 A federal court’s judicial power is limited to “cases” or “controversies.” U.S. Const., 23 Art. III § 2. A necessary element of Article III’s “case” or “controversy” requirement is 24 that a litigant must have “‘standing’ to challenge the action sought to be adjudicated in the 25 lawsuit.” Valley Forge College v. Americans United for Separation of Church and State, 26 Inc., 454 U.S. 464, 471 (1982); LSO, Ltd. v. Stroh, 205 F.3d 1146, 1152 (9th Cir. 2000). 27 To satisfy the standing requirement, both the UCL and the CLRA require a plaintiff to 28 allege they have suffered economic injury and that the economic injury was caused by the 5 17cv1243-JAH (JLB) 1 unfair business practice or false advertising that is the mainstay of the claim. See Kwikset 2 Corp. v. Superior Court, 51 Cal.4th 310, 321 (2011); Stearns v. Ticketmaster Corp., 655 3 F.3d 1013 (9th Cir. 2011). 4 The “irreducible constitutional minimum” of Article III standing has three elements. 5 LSO, 205 F.3d at 1152 (internal quotations omitted). First, plaintiff must have suffered 6 “an injury in fact — an invasion of a legally protected interest which is (a) concrete and 7 particularized, and (b) actual and imminent, not conjectural or hypothetical.” Lujan v. 8 Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal citations and quotations omitted). 9 Second, plaintiff must show a causal connection between the injury and the conduct 10 complained of; i.e., “the injury has to be fairly . . . trace[able] to the challenged action of 11 the defendant, and not . . . th[e] result [of] the independent action of some third party not 12 before the court.” Id. (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 13 U.S. 26, 41-42 (1976))(alterations in original). Third, it must be “likely,” and not merely 14 “speculative,” that the plaintiff’s injury will be redressed by a favorable decision. Id. at 15 561. If the Court finds plaintiff lacks Article III standing, it must dismiss plaintiff’s claim. 16 Nichols v. Brown, 859 F. Supp. 2d 1118. 1127 (C.D. Cal. 2012). 17 Here, Defendant points out that Plaintiff admits she only relied on an advertisement 18 for one of Defendant’s four products. Doc. No. 17-1 at pgs. 26-27. Defendant argues 19 Plaintiff cannot assert claims for the three other products she did not purchase. Id. 20 Defendant further contends that Plaintiff’s Complaint references advertisements that 21 Plaintiff never read. Id. at pg. 27. For example, Plaintiff challenges three products she 22 never purchased: Osteo Bi-Flex Triple Strength MSM, Osteo Bi-Flex One Per Day, and 23 Osteo Bi-Flex Triple Strength with Vitamin D. Id. at pgs. 26-27. However, Plaintiff never 24 relied on advertisement for these products. Id. 25 Defendant also posits that numerous district courts in the Ninth Circuit now 26 implement a bright line rule where the named plaintiff of a putative class action “cannot 27 expand the scope of his claims to include a product he did not purchase or advertisements 28 relating to a product that he did not rely upon.” Id.; see also Johns v. Bayer Corp., No. 6 17cv1243-JAH (JLB) 1 09CV1935DMSJMA, 2010 WL 476688 (S.D. Cal. Feb. 9, 2010); Granfield v. NVIDIA 2 Corp., No. C 11-05403 JW, 2012 WL 2847575 (N.D. Cal. July 11, 2012); Hairston v. S. 3 Beach Beverage Co., No. CV 12-1429-JFW DTBX, 2012 WL 1893818 (C.D. Cal. May 4 18, 2012). 5 In response, Plaintiff maintains that she has standing. Doc. No. 22 at pgs. 23-30. 6 Plaintiff argues that while she only purchased one of Defendant’s four products, 7 Defendant’s business practice is consistent across all four products. Id. at pg. 26. Plaintiff 8 contends all four products are advertised in a similar fashion and contain the same main 9 ingredient, glucosamine hydrochloride. Id. Plaintiff also argues that she has standing to 10 seek injunctive relief because fraud impacts the market wholly. Id. at pg. 24. Plaintiff 11 contends she is filing suit on behalf of the class of people impacted by Defendant’s actions. 12 Id. at pg. 26. 13 The Court finds Plaintiff lacks standing to assert a claim in the instant matter. While 14 the standard for reviewing standing at the pleading stage is lenient, the Court reiterates that 15 a plaintiff cannot rely solely on conclusory allegations of injury or ask the court to draw 16 unwarranted inferences in order to find standing. See Schmeir v. U.S. Ct. of Appeals for 17 the Ninth Cir., 279 F.3d 817, 820 (9th Cir. 2001). Plaintiff fails to demonstrate how 18 Defendant’s advertisement of its product, Osteo Bi-Flex Triple Strength, is false or 19 misleading. Plaintiff fails to specifically mention any of the challenged labels in her 20 Complaint. Doc. No. 17-1 at pg. 8. Defendant’s products do not purport to treat 21 osteoarthritis or any other joint-related disease. Id. at pg. 6. Plaintiff also fails to show 22 that her cited scientific studies are relevant or that the active ingredients in Defendant’s 23 products do not deliver promised results. Id. at pgs. 18-23. As to Defendant’s three other 24 products, Plaintiff fails to show how she was injured by products she did not come across 25 or purchase. Plaintiff also fails to demonstrate that she faces “imminent harm” pursuant to 26 the requirements necessary for injunctive relief. 27 // 28 // 7 17cv1243-JAH (JLB) 1 2 b. Rule 9(b) Standard Defendant also argues that Plaintiff’s claims fail because Plaintiff has not plead her 3 claims with the specificity required under Rule 9(b). Doc. No. 17-1 at pgs. 23-25. 4 Claims grounded in fraud must set forth allegations “specific enough to give defendants 5 notice of the particular misconduct . . . so that they can defend against the charge and not 6 just deny that they have done anything wrong.” See Vess v. Ciba-Geigy Corp. USA, 317 7 F.3d 1097, 1103–04, 1108 (9th Cir. 2003) (applying Rule 9(b) when the allegations in the 8 complaint described fraudulent conduct); In re Sony Gaming Networks & Customer Data 9 Sec. Breach Litig., 903 F. Supp. 2d 942, 967, n. 20 (S.D. Cal. 2012) (“Rule 9(b)’s 10 heightened pleading standards apply equally to claims for violation of the UCL . . . that 11 are grounded in fraud”). As noted above, under Rule 9(b) of the Federal Rules of Civil 12 Procedure, “[i]n alleging fraud or mistake, a party must state with particularity the 13 circumstances constituting fraud or mistake.” This requires allegations of fraud to 14 include the “who, what, when, where, and how” of the circumstances giving rise to the 15 claim. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997) (citation omitted). 16 Defendant argues that Plaintiff’s Complaint pleads generally vague and conclusory 17 allegations, which fail to identify the “who, what, when, where and how” of Defendant’s 18 misconduct. Doc. No. 17-1 at pgs. 23-24. Defendant argues that Plaintiff fails to allege 19 how Defendant’s advertisement was false or misleading. Id. at pg. 24. Defendant posits 20 that Plaintiff fails to state if she used Defendant’s product; followed the product’s 21 instructions; why she took the product; what she expected from the product; and whether 22 the product was effective. Id. 23 In response, Plaintiff maintains that the Complaint meets the standards of Rule 9(b). 24 Doc. No. 22 at pg. 22. Plaintiff contends she properly alleged deficiencies in the product 25 she purchased; when and where she made this purchase; how Defendant’s false advertising 26 deceived her; and why Defendant’s representations are untrue. Id. 27 The Court finds Plaintiff fails to sufficiently allege the “who, what, where, how and 28 why” of Defendant’s misconduct. The pleadings do not allege with specificity how 8 17cv1243-JAH (JLB) 1 Defendant misrepresented its product. In addition, the pleadings do not provide specific 2 examples demonstrating Defendant has misrepresented its product. 3 demonstrate that the cited scientific studies are relevant to Defendant’s products. Doc. No. 4 17-1 at pgs. 18-20. Plaintiff also fails to show that Defendant’s products do not achieve 5 the intended purpose. Id. at pgs. 18-23. Thus, the Court finds that Plaintiff’s Complaint 6 does not demonstrate Plaintiff has plead with particularity sufficient to meet the 9(b) 7 heightened standard. 8 II. Plaintiff fails to Motion to Strike 9 Defendant moves to strike Plaintiff’s class definition and allegations relating to 10 standing as factually insufficient.1 Defendant argues that Plaintiff’s class includes putative 11 class members that have already settled their claims against Defendant and thus lack 12 standing. Doc. No. 18-1 at pgs. 9-12. 13 Specifically, Defendant argues that Plaintiff’s class definition includes members that 14 have not been injured and do not have standing to sue. Doc. No. 18-1 at pg. 10. Defendant 15 contends that Plaintiff’s class definition includes individuals that have already settled their 16 case in Pearson v. NBTY Inc., No. 11-cv-7972 (N.D. Ill.). Id. Defendant posits that these 17 individuals from the Pearson settlement lack standing to sue. Id. at pgs. 11-12. 18 In response, Plaintiff states she does not oppose modifying the class definition to 19 exclude all transactions covered by the Pearson settlement. Doc. No. 24 at pg. 2. Plaintiff 20 suggests her class definition can change, including to “[a]ll persons who purchased in the 21 state of California any of the following products between January 19, 2016, and the date 22 of notice of this class action…” Id.2 23 24 25 26 27 28 Because the Court has already addressed Plaintiff’s standing relating to allegations involving products she did not purchase, the Court will solely address Defendant’s motion to strike Plaintiff’s class definition. 2 The Court will not accept Plaintiff’s intention to modify the class definition by way of her response. Any modification should be undertaken in an amended complaint. 1 9 17cv1243-JAH (JLB) 1 For the reasons stated in Section I (a) above, Plaintiff cannot assert claims for 2 products she did not purchase regardless of whether members of the putative class 3 participated in the Pearson settlement. Id. 4 Here, Plaintiff fails to prove that all members of her class definition have been 5 injured and/or have standing pursuant to Article III. Members of the class must have the 6 same interest and suffer the same injury as other class members. Fed. R. Civ. P. 23. Thus, 7 the Court GRANTS Defendant’s motion to strike the class definition pursuant to FRCP 8 Rule 12(f). 9 III. Request for Judicial Notice 10 Defendant filed a request for judicial notice. Doc. No. 19. This Court may take 11 judicial notice of an adjudicative fact “not subject to reasonable dispute because it can 12 be…accurately and readily determined from sources whose accuracy cannot be reasonably 13 questioned.” See Fed. R. Evid. 201; Grason Elec. Co. v. Sacramento Mun. Util. Dist., 571 14 F. Supp. 1504, 1521 (E.D. Cal. 1983). 15 Defendant seeks judicial notice of product labelling and various documents. The 16 documents Defendant submits for judicial notice include packaging and labeling for four 17 Osteo products (Exhibits 1-4) and documents from Pearson (Exhibits 5-14). Doc. No. 19. 18 Because the request of judicial notice is capable of accurate and ready determination from 19 sources whose accuracy cannot be reasonably questioned and the parties do not dispute the 20 authenticity of the document, Defendant’s request for judicial notice is GRANTED. 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 10 17cv1243-JAH (JLB) 1 2 CONCLUSION AND ORDER 3 Based on the foregoing reasons, IT IS HERBEY ORDERED THAT Defendant’s 4 motion to dismiss Plaintiff’s Complaint (Doc. No. 17) is GRANTED, and Plaintiff’s 5 claims are DISMISSED WITHOUT PREJUDICE. Accordingly, Defendant’s motion to 6 strike (Doc. No. 18) is GRANTED as well. To the extent that Plaintiff is able to cure the 7 noted deficiencies, Plaintiff may file a second amended complaint within 30 days of this 8 order. 9 10 DATED: December 1, 2017 11 12 13 _________________________________ JOHN A. HOUSTON United States District Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 17cv1243-JAH (JLB)

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