McMorrow et al v. Mondelez International, Inc.

Filing 23

ORDER granting in part and denying in part Defendant's 15 Motion to Dismiss for Failure to State a Claim. Court grants without leave to amend the motion to dismiss Plaintiffs' claims relying on the advertising statements referenced in th is Order. Court grants with leave to amend the motion to dismiss Plaintiffs' claims for breach of express and implied warranties. Court denies the motion to dismiss as to the remaining advertising statements. Plaintiffs may file a Second Amended Complaint that only provides additional factual allegations relating to the breach of express and implied warranty claims by 8/31/2018. If Plaintiffs do not file a Second Amended Complaint, Defendant must answer to the First Amended Complaint by 9/14/2018. Signed by Judge Cynthia Bashant on 8/17/2018. (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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PATRICK MCMORROW, MARCO
OHLIN, and MELODY
DIGREGORIO, individually and on
behalf of themselves and all others
similarly situated,

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ORDER GRANTING IN PART
AND DENYING IN PART
DEFENDANT’S MOTION TO
DISMISS

Plaintiffs,

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Case No. 17-cv-02327-BAS-JLB

v.

[ECF No. 13]

MONDELEZ INTERNATIONAL,
INC.,
Defendant.

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Plaintiffs Patrick McMorrow, Marco Ohlin, and Melody DiGregorio bring this

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putative class action lawsuit against Defendant Mondelez International, Inc. alleging

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that Defendant breached warranties and violated other California and New York

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consumer protection laws related to Defendant’s products. (First Amended

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Complaint (“FAC”), ECF No. 13.) Plaintiffs claim that Defendant’s belVita branded

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breakfast products are designed to appeal to health conscious consumers and that

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such advertising is deceptive and misleading because these products contain “high
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levels of added sugar,” which Plaintiffs argue is unhealthy. Defendant now moves to

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dismiss the FAC. (ECF No. 15.)

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

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without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the reasons

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stated below, the Court GRANTS IN PART and DENIES IN PART Defendant’s

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motion to dismiss. (ECF No. 15.)

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I.

BACKGROUND
A.

Factual and Procedural Background

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Plaintiffs’ claims arise from their purchases of the belVita branded breakfast

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products (the “Products”). (FAC ¶ 3.) The Products include the following in various

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flavors: belVita “Crunchy” Biscuits, belVita “Soft Baked” Biscuits, belVita “Bites,”

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and belVita “Sandwiches.” (FAC ¶ 113, at App’x 1.) Plaintiff Patrick McMorrow

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alleges he began purchasing the Products in 2012 in California. (Id. ¶ 155.) Plaintiff

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Marco Ohlin alleges he began purchasing the Products in the summer 2015 in

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California. (Id. ¶ 158.) Plaintiff Melody DiGregorio alleges she began purchasing the

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Products around 2013 in New York. (Id. ¶ 161.) Plaintiffs claim that the Products

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were specifically marketed to consumers with health and wellness in mind. (Id. ¶ 2.)

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Plaintiffs allege that they believed the advertisements regarding the health and

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wellness qualities of the Products. (Id. ¶¶ 157, 160, 163.) Further, Plaintiffs claim

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Defendant’s labeling statements are deceptive because they are incompatible with

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the alleged health dangers of excessive sugar consumption to which the Products

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contribute. (Id.)

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On June 16, 2017, Plaintiffs initiated this action and filed the FAC on

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September 7, 2017. In the FAC, Plaintiffs assert claims for: (1) breach of implied

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warranty of merchantability; (2) breach of express warranty; (3) violations of the

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California’s Unfair Competition Law, Business & Professions Code §§ 17200, et

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seq., (“UCL”), the California False Advertising Act §§ 17500, et seq. (“FAL”), and
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California’s Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.

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(“CLRA”); and (4) violations of New York’s Unfair and Deceptive Business Acts

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Law (N.Y. Gen. Bus. L. § 349) and False Advertising Law (N.Y. Gen. Bus. L. §

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350).

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The FAC alleges the following material facts:

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1.

Defendant, one of the world’s largest snack companies, introduced the

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Products in 2012. (FAC ¶ 112.) The Products retail for $3.00 to $5.00 per box. (Id. ¶

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155.)

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2.

Defendant created a “multiplatform marketing campaign” for the

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Products aimed at “targeting consumers interested in health and nutrition.” (FAC ¶

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117.) The labels make various statements, such as “Nutritious Sustained Energy,”

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“We worked closely with nutritionists to design belVita Breakfast Biscuits,”

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“wholesome grains,” and “part of a balanced breakfast.” (Id. ¶ 128, at App’x 1.)

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These statements are false, misleading, and reasonably likely to deceive the public

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because the Products contain excessive sugar. (Id. ¶ 164-68.)

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3.

The Products contain “high levels of added sugar” because the added

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sugar amounts to sixteen to twenty-four percent of the Products’ total calories. (FAC

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¶ 124.) Thus, the regular consumption of the Products “is likely to contribute to

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excess added sugar consumption” and, thereby, increase the “risk for and contraction

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of chronic diseases.” (Id.) These diseases include, but are not limited to,

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cardiovascular disease, type 2 diabetes, obesity, liver disease, chronic kidney disease,

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and Alzheimer’s. (Id. ¶¶ 44-45, 48, 67, 72, 74,104.)

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4.

Plaintiffs were “exposed to, read, and relied upon” Defendant’s

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statements on the labels that were intended to appeal to “consumers . . . ‘interested in

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health and nutrition.’” (FAC ¶ 154.) Plaintiffs would not have purchased the Products

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if they knew the labeling claims were false and that the Products “were not as

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healthful as represented but actually harm health.” (Id. ¶ 169.)

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Plaintiffs challenge many of Defendant’s advertising and labeling statements

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found on the Products. Because these various statements include similar marketing

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language with similar allegedly misleading effects, the Court has categorized the

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statements into three groups for the purpose of this analysis.

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The first category encompasses Defendant’s “fiber” claims. These claims

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relate to whole grains and “slow-release carbs” and imply the presence of fiber. These

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claims include the following phrases: “a nutritious, convenient breakfast choice that

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contains slow-release carbs from wholesome grains to help fuel your body for 4

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hours” and “Baked with hearty whole grains, belVita Soft Baked Breakfast biscuits

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are delicious, nutritious, and give you satisfying morning energy to start your day off

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right.” (See FAC at App’x 1.)

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The second category includes Defendant’s “nutritious” claims. All of the

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statements that include the terms “nutritious,” “nutritionists,” or “wholesome”

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(without a reference to whole grains) make up this category. These phrases include:

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“Nutritious Steady Energy,” “Nutritious Sustained Energy,” “Nutritious Steady

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Energy All Morning,” “4 Hours of Nutritious Steady Energy,” “Nutritious Morning

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Energy,” “a nutritious, convenient breakfast choice,” “nutritious, convenient on-the-

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go breakfast choice,” “nutritious,” “We worked closely with nutritionists to design a

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new kind of breakfast biscuit with energy for the morning. Energy that is nutritious

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and sustained,” and “We all need energy to start the morning. We also need a

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delicious, wholesome breakfast.” (See FAC at App’x 1.)

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The third category includes Defendant’s general advertising statements. This

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category includes the following phrases: “Power up People,” “Enjoy belVita

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Breakfast Biscuits as part of a balanced breakfast with a serving of low-fat dairy and

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fruit,” “specifically baked to release energy regularly and continuously to fuel your

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body throughout the morning,” and “satisfying morning energy to start your day off

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right.” (See FAC at App’x 1.)

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Plaintiffs seek to represent a multi-state class consisting of all consumers who

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purchased the Products in California and New York. (FAC ¶ 183.) Plaintiffs seek

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monetary and injunctive relief. (Id. ¶ 259.)

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II.

LEGAL STANDARD

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A pleading that states a claim for relief must contain “a short and plain

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statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.

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8(a)(2). The complaint must plead sufficient factual allegations to “state a claim to

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relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

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(internal quotation marks and citations omitted). “A claim has facial plausibility when

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the plaintiff pleads factual content that allows the court to draw the reasonable

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inference that the defendant is liable for the misconduct alleged.” Id.

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Federal Rule of Civil Procedure 9(b) states that when alleging fraud, a party

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must “state with particularity the circumstances constituting fraud or mistake.” Rule

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9(b) requires the allegations to state the “who, what, when, where, and how of the

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misconduct charged.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir.

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2009). A party alleging fraud must “set forth more than the neutral facts necessary to

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identify the transaction.” In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.

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1994) (emphasis in original), superseded by statute on other grounds.When a party

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does not comply with these requirements, a court must dismiss for failure to state a

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claim. Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981, 1008 (9th Cir. 2009).

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A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests

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the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6);

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Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must “accept factual

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allegations in the complaint as true and construe the pleadings in favor of the

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nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025,

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1031 (9th Cir. 2008). To avoid a Rule 12(b)(6) dismissal, a complaint need not

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contain detailed factual allegations; rather, it must plead “enough facts to state a
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claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,

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570 (2007). “However, conclusory allegations and unwarranted inferences are

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insufficient to defeat a motion to dismiss.” Oklevueha Native Am. Church of Haw.,

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Inc. v. Holder, 676 F.3d 829, 834 (9th Cir. 2012). “A Rule 12(b)(6) dismissal may

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be based on either a ‘lack of a cognizable legal theory’ or ‘the absence of sufficient

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facts alleged under a cognizable legal theory.’” Johnson v. Riverside Healthcare Sys.,

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LP, 534 F.3d 1116, 1121 (9th Cir. 2008) (quoting Balistreri v. Pacifica Police

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Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).).

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III.

REQUEST FOR JUDICIAL NOTICE

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Federal Rule of Evidence 201 allows a court to take judicial notice of certain

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evidence and facts that are not subject to reasonable dispute if they are (1) “generally

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known within the trial court’s territorial jurisdiction” or (2) “can be accurately and

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readily determined from sources whose accuracy cannot reasonably be questioned.”

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Fed. R. Evid. 201(b). For example, a court may take judicial notice of “matters of

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public record.” Id.; Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir.

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1986). But a court may not take judicial notice of a fact that is “subject to reasonable

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dispute.” Fed. R. Evid. 201(b). Therefore, while the court may take notice of the

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existence of documents in some cases, it does not necessarily take notice of the facts

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within those documents. See Rezentes v. Sears, Roebuck & Co., 729 F. Supp. 2d

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1197, 1206 (D. Haw. 2010).

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Defendant submits multiple requests for judicial notice. The Court will take

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judicial notice of the Federal Drug Administration’s regulations because the Court

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must judicially notice federal regulations and the contents of the Federal Register.

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See 44 U.S.C. § 1507; see also Bayview Hunters Point Cmty. Advocates v. Metro.

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Transp. Comm’n, 366 F.3d 692, 702 n. 5 (9th Cir. 2004); Adams v. United States,

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No. 03-0049-E-BLW, 2009 WL 2590205, at *2 (D. Idaho Aug. 16, 2009). The Court

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finds that incorporating the nutrition fact label (Exhibit A) and the other reports
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(Exhibits C and E) into the FAC by reference is more appropriate here than taking

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judicial notice of the documents. See Fed. R. Civ. P. 10(c); United States v. Ritchie,

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342 F.3d 903, 908 (9th Cir. 2003) (“[A document] may be incorporated by reference

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. . . if the plaintiff refers extensively to the document or if the document forms the

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basis of the plaintiff’s claim”); Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994),

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overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119

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(9th Cir. 2002) (“We hold that documents whose contents are alleged in a complaint

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and whose authenticity no party questions, but which are not physically attached to

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the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss.”).

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Because Plaintiffs reference the nutrition label (see ECF No. 13-1 at 9) and use the

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reports (see ECF No. 13 at 6 n.10, 39 n.90) to support the basis of their arguments in

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the FAC, and because neither party contests the authenticity of these documents, the

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Court will incorporate the requested documents into the FAC by reference. Lastly,

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the Court denies as moot Defendant’s request regarding the press release in Exhibit

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D as the Court does not rely on it for the purposes of this Order.

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IV.

DISCUSSION

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A.

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In a footnote, Defendant argues that Plaintiffs lack standing to pursue all of

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their claims because Plaintiffs did not individually purchase all of the Products at

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issue. (Mot. at 5 n.3.)

Standing to Bring Suit for Non-Purchased Products

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A plaintiff has standing for claims relating to products that he or she did not

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purchase if the “products are the same kind, . . . comprised of largely the same

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ingredients, and . . . bear[] the same alleged mislabeling.” See Hunter v. Nature’s

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Way Prods., LLC, No. 16-cv-532-WQH-BLM, 2016 WL 4262188, at *14 (S.D. Cal.

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Aug. 12, 2016) (quoting Wilson v. Frito-Lay N. Am., 961 F. Supp. 2d 1134, 1140–41

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(N.D. Cal. 2013)). In other words, a plaintiff has standing when the products and

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alleged misrepresentations are substantially similar. See id.; see also Vasic v.
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Patenthealth, L.L.C., 171 F. Supp. 3d 1034, 1044 (S.D. Cal. 2016) (finding that

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products that share the same primary active ingredients are substantially similar for

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purposes of standing to assert claims); cf. Dysthe v. Basic Research LLC, No. 09-

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8013 AG (SSx), 2011 WL 5868307, at *4–5 (C.D. Cal. June 13, 2011) (finding

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plaintiffs lacked standing for claims involving products with “significant

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differences” from the products they purchased).

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Here, Plaintiffs allege that each of the Products contain excessive added sugar

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and include the same or similar false and misleading advertising statements. (FAC ¶

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2-4, 193-258, at App’x 1.) Because the Products and alleged misrepresentations are

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sufficiently similar, the Court finds that Plaintiffs have standing to assert claims for

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the various Products.

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Accordingly, the Court DENIES Defendant’s request to dismiss Plaintiff’s
claims relating to the Products they did not directly purchase.

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B.

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Defendant seeks to dismiss all of Plaintiffs’ claims because they are expressly

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preempted by federal law. Defendant argues the claims are preempted because

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federal law does not treat added sugar as a “disqualifying” nutrient for nutrient

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content or health claims.

Preemption Under Federal Law

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i.

Background of Regulatory Scheme and Legal Standards

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“Federal preemption occurs when: (1) Congress enacts a statute that explicitly

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pre-empts state law; (2) state law actually conflicts with federal law; or (3) federal

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law occupies a legislative field to such an extent that it is reasonable to conclude that

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Congress left no room for state regulation in that field.” Chae v. SLM Corp., 593 F.3d

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936, 941 (9th Cir. 2010) (internal quotations omitted). “Express preemption exists

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when a statute explicitly addresses preemption.” See Reid v. Johnson & Johnson, 780

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F.3d 952, 959 (9th Cir. 2015).
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Relevant to this case is the regulatory scheme relating to food branding and

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labeling. The Federal Food, Drug, and Cosmetic Act (“FDCA”) was enacted in 1983

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and prohibits the misbranding of food. See 21 U.S.C. §§ 301 et seq. The Food and

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Drug Administration (“FDA”) enforces the FDCA and develops regulations

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governing the labeling of food products. See Lockwood v. Conagra Foods, Inc., 597

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F. Supp. 2d 1028, 1030 (N.D. Cal. 2009). Congress amended the FDCA in 1990

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through the passage of the Nutritional Labeling and Education Act (‘‘NLEA’’).

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Nutritional Labeling and Education Act of 1990, Pub. L. No. 101-535, 104 Stat. 2353

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(1990); see also H.R. Rep. No. 101-538 (1990), reprinted in 1990 U.S.C.C.A.N.

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3336, 3337. The purpose of the NLEA was to ‘‘clarify and to strengthen [FDA’s]

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authority to require nutrition labeling on foods, and to establish the circumstances

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under which claims may be made about the nutrients in foods.’’ Nat’l Council for

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Improved Health v. Shalala, 122 F.3d 878, 880 (10th Cir. 1997) (quoting H.R. Rep.

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No. 101-538, at 7). The NLEA made several significant changes to the FDCA. See

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Ackerman v. Coca-Cola Co., No. CV-09-0395(JG)(RML), 2010 WL 2925955, at *3

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(E.D.N.Y. 2010). “It expanded the coverage of nutrition labeling requirements; it

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changed the form and substance of ingredient labeling on packages; it imposed

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limitations on health claims; [and] it standardized the definitions of all nutrient

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content claims.” Id.; see Lilly v. ConAgra Foods, Inc., 743 F.3d 662, 664 (9th Cir.

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2014).

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The NLEA also included an express preemption provision for claims

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appearing on food labels. See Ackerman, 2010 WL 2925955, at *3 (citing to 21

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U.S.C. § 343-1(a)(5), or section 403A). This express preemption provision includes

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the type of claims—which could also be described as statements—in 21 U.S.C. §

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343(r)(1). “Section 343(r)(1) of the NLEA describes claims in the labeling of

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food that expressly or by implication, characterize the level of any nutrient or

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characterize the relationship of any nutrient to a disease or health related condition.”

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Id. (cleaned up) (quoting 21 U.S.C. § 343(r)(1)). Therefore, pursuant to the
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preemption provision for food labeling, the FDA regulates three types of claims

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relevant in this case: express nutrient content claims,1 implied nutrient content

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claims, and health claims. See Chacanaca v. Quaker Oats, Co., 752 F. Supp. 2d 1111,

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1117 (N.D. Cal. 2010) (citing 21 U.S.C.A. § 343(q), (r) and 21 C.F.R. §§ 101.13,

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101.14).

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An express nutrient claim is a statement about the level or range of the nutrient

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in the food product, like “low sodium” or “contains 100 calories.” See 21 C.F.R. §

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101.13(b)(1). Food product labels may include an express nutrient claim provided

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that it “does not in any way implicitly characterize the level of the nutrient in the

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food and it is not false or misleading in any respect (e.g., ‘100 calories’ or ‘5 grams

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of fat’), in which case no disclaimer is required.” 21 C.F.R. § 101.13(i)(3).

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An implied nutrient content claim “[d]escribes the food or an ingredient

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therein in a manner that suggests that a nutrient is absent or present in a certain

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amount (e.g., ‘high in oat bran’).” 21 C.F.R. § 101.13(b)(2)(i)-(ii); Ackerman, 2010

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WL 2925955, at *3 (providing the example “as much fiber as an apple”). An implied

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nutrient content claim might also make “a ‘general nutritional claim,’ (a subcategory

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of an implied nutrient claim) consisting of an express or implied claim that the

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nutrient content of a food may help consumers maintain healthy dietary practices.”

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Ackerman, 2010 WL 2925955, at *3 (emphasis added).

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The “general rule is that ‘nutrient content claims’ are not permitted on food

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labels, subject to certain exceptions.” Krommenhock v. Post Foods, LLC, 255 F.

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Supp. 3d 938, 952-3 (N.D. Cal. 2017) (citing Reid v. Johnson & Johnson, 780 F.3d

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952, 959-60 (9th Cir. 2015). “Among the nutrient content claims authorized by the

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FDA are ‘statements about the amount or percentage of a nutrient that are consistent

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Both 21 U.S.C. § 343(r)(1)(A) and (B) refer to nutrients as the types of
nutrients required by section 343(q), which provides regulations for nutritional
labeling panels. These nutrients include: calories, total fat, saturated fat, cholesterol,
sodium, total carbohydrates, complex carbohydrates, sugars, dietary fiber, total
protein, and any vitamins and minerals. 21 U.S.C. § 343(q)(1)(C), (D), (E), (2).
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with the labeling regulations (e.g. less than 3 g. of fat per serving) . . . or statements

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that do not characterize the level of nutrient and are not false and misleading.’” Id.

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A health claim is “any claim . . . that expressly or by implication . . .

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characterizes the relationship of any substance to a disease or health-related

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condition.” 21 C.F.R. § 101.14(a)(1). An express health claim are those “references,

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written statements (e.g., a brand name including a term such as ‘heart’), symbols

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(e.g., a heart symbol), or vignettes” that expressly characterize the relationship. Id.

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An implied health claim are “those statements, symbols, vignettes, or other forms of

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communication that suggest, within the context in which they are presented, that a

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relationship exists between the presence or level of a substance in the food and a

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disease or health-related condition.” Id.

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Statements that do not involve the above health or nutrient content claims (or

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nutritional labeling information under section 343(q)) are not preempted by the FDA.

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See id. at 1118 (discussing 21 U.S.C.A. § 343(q) and (r)); see also 21 C.F.R. § 101.65

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(“Certain label statements about the nature of a product are not nutrient content

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claims unless such statements are made in a context that would make them an implied

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[nutrient content claim] under § 101.13(b)(2).”). As the FDA explained:

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When a term such as “Wholesome” or “Nutritious” is used
in a context that does not render it an implied claim (e.g.,
“Nutritious foods, prepared fresh daily” or “Made with
wholesome ingredients”), it is not subject to the claims
requirements. On the other hand, FDA may consider the
term to be used in a nutritional context if it appears in
association with an explicit or implicit claim or statement
about a nutrient. In statements such as “Nutritious, contains
3 grams of fiber,” “Best choice, contains 200 mg sodium,”
or “Good for you, contains 5 grams of fat,” the terms are
implied nutrient content claims and the foods bearing the
claims must meet the requirements for a claim defined by
FDA for the nutrient that is the subject of the claim.

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FDA, Guidance for Industry: A Labeling Guide for Restaurants and Other Retail

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Establishments Selling Away-From-Home Foods, 2008 WL 2155726, at *10 (April

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2008) [“FDA Labeling Guide”].
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ii.

FDA Regulations Regarding Sugar

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Claims that a product is “healthy” or “nutritious” will also be preempted if the

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claim refers to a “disqualifying nutrient”—either positively or negatively—because

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these nutrients have already been deemed by the FDA to be inherently unhealthy at

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certain levels and are currently regulated. See, e.g., 21 C.F.R. § 101.14(a)(4)

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(“Disqualifying nutrient levels means the levels of total fat, saturated fat, cholesterol,

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or sodium in a food above which the food will be disqualified from making a health

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claim.”). For example, the FDA prohibits implied nutrient content claims where the

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product contains a “disqualifying nutrient” that exceeds an amount established by

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regulations. 21 C.F.R. §§ 101.65(d)(2)(i), (ii) (limiting the use of “healthy” and

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related terms for implied nutrient content claims to foods that meet certain

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“conditions for fat, saturated fat, cholesterol, and other nutrients”); see also

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Chacanaca, 752 F. Supp. 2d at 1122.

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The FDA has identified total fat, saturated fat, cholesterol, and sodium as

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disqualifying nutrients. See 21 C.F.R. §§ 101.13(h)(1), 101.14(a)(4). Sugar is not one

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of these disqualifying nutrients. Krommenhock, 255 F. Supp. 3d at 956.

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In early 2012, the FDA began its rule-making process to evaluate and amend

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the nutrition labeling regulations for conventional food products. Krommenhock, 255

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F. Supp. 3d at 944. In May 2016, the FDA issued a final rule which, among other

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things, established a recommended daily sugar intake value. 81 Fed. Reg. 33742

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(May 27, 2016). The final rule became effective on July 26, 2016. Id.

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The final rule establishes a Daily Recommended Value (“DRV”) of ten

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percent of total calories from added sugar, despite the American Heart Association’s

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(“AHA”) recommendation that the maximum amount be five percent. 81 Fed. Reg.

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33742 at 33849. Responding to the AHA’s recommendation, the FDA stated ‘‘[w]e

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disagree that the DRV for added sugars should be lower than 10 percent of calories

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or that there is adequate evidence at this time to set a DRV for added sugars of less

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than 5 percent calories,’’ and noted that the ten percent figure ‘‘is more realistic
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considering current consumption of added sugars in the United States.” Id. at 33845.

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The FDA also declined to convey that the DRV of ten percent “is a maximum amount

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rather than a recommended amount,’’ noting that ‘‘such language would not be

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appropriate because we do not require this information for other nutrients with

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DRVs.’’ Id. at 33829.

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Based on the FDA’s express decision to not recognize sugar as a disqualifying

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nutrient, various district courts have now adopted the finding that “any claim under

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state law solely premised on the notion that [a product’s] high sugar content made its

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health or implied nutrient content claims misleading is preempted.” Ackerman, 2010

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WL 2925955, at *8; Krommenhock, 255 F. Supp. 3d at 956; see Hadley v. Kellogg

11

Sales Co., 273 F. Supp. 3d 1052, 1077–78 (N.D. Cal. 2017) (rejecting “Plaintiff's

12

theory that health claims or implied nutrient content claims are misleading because

13

of a certain amount of added sugar in a product” because to hold otherwise “would

14

essentially ‘ascribe disqualifying status’ to added sugar”). This Court agrees, and

15

likewise adopts this finding.

16
17

iii.

Preemption Analysis

18

Both parties agree that sugar is not a disqualifying nutrient, and the FDA has

19

rejected treating it as such. Therefore, to the extent Plaintiffs’ claims rely on the

20

argument that Defendant’s nutrient content or health claims are misleading because

21

of the Products’ added sugar content, these claims are preempted by the FDA’s

22

express decision to not set a disqualifying level for sugar.

23

Because Plaintiffs premise their claims on the theory that the Products’ added

24

sugar content makes the Products unhealthy, the Court must now determine which

25

of Defendant’s statements qualify as express nutrient content, implied nutrient

26

content, or health claims. If Defendant’s statements are any of these type of claims,

27

then Plaintiffs’ claims relating to these statements are preempted. Conversely, if the

28

challenged statements are general, unregulated health and wellness claims—i.e. not
– 13 –

17cv2327

1

one of the three types of claims relevant to the preemption analysis here—Plaintiffs

2

may proceed with their claims based on these statements. See Krommenhock, 255 F.

3

Supp. 3d at 954 (finding some of the plaintiffs’ claims were not preempted, reasoning

4

that the plaintiffs were alleging that the defendant could not make “voluntary health

5

and wellness statements” that were “misleading in light of the added sugar content”

6

and that “[t]he FDA did not consider those issues and arguments in its rulemaking”);

7

Hadley, 273 F. Supp. 3d at 1084–85, 1097 (analyzing non-regulated statements for

8

state law claims, including statements involving the term “healthy,” when a plaintiff

9

alleged that the quantity of added sugar in the defendant’s products made the

10

defendant’s products unhealthy).

11

It is clear that Defendant’s advertising statements do not make any express

12

nutrient claims because the statements do not include any explicit language as to the

13

amount or content of a nutrient. See 21 C.F.R. § 101.13(b)(1) (providing examples

14

of “low sodium” or “contains 100 calories”). Furthermore, the advertising statements

15

do not appear to implicate a health claim. A statement is a health claim only if it

16

relates to a health related condition. General claims of health and wellness are not

17

health claims. See 21 C.F.R. § 101.14(a)(1) (stating that a health claims is “any claim

18

. . . that expressly or by implication . . . characterizes the relationship of any substance

19

to a disease or health-related condition”). None of the statements at issue relate to a

20

health-related condition.

21

Looking closely at the regulations for an implied nutrient content claim, such

22

a claim must either suggest (1) a nutrient is absent or present in a food “in a certain

23

amount (e.g. ‘high in oat bran’)” or (2) a food helps “maintain[] healthy dietary

24

practices” and is made along with “an explicit claim or statement about the nutrient

25

(e.g. ‘healthy, contains 3 grams (g) of fat’).” 21 C.F.R. § 101.13(b)(2)(i), (ii). The

26

FDA also issued guidance expanding on this regulation. See FDA Labeling Guide at

27

*10 (discussing that the terms such as “nutritious,” “wholesome,” “best choice,” or

28

“good for you” are implied nutrient content claims when used “in association” with
– 14 –

17cv2327

1

statements about a nutrient, and thus require FDA compliance). Claims based on such

2

statements are accordingly preempted. See Hadley, 273 F. Supp. 3d at 1077–78.

3

Applying this framework to Defendant’s statements, one of Defendant’s fiber

4

statements constitutes a preempted implied nutrient content claim. See Hadley, 273

5

F. Supp. 3d at 1077–78; see also Krommenhock, 255 F. Supp. 3d at 955–56. First,

6

using the terms “wholesome grains” and “slow-release carbs” implies the presence

7

of fiber, a nutrient. See Hadley, 273 F. Supp. 3d at 1077–78 (finding similar

8

implications regarding fiber through statements about whole grains). Second, the

9

Court considers whether Defendant’s fiber statements suggest their Products contain

10

a certain amount of fiber or contain an explicit claim or statement about fiber. 21

11

C.F.R. § 101.13(b)(2)(i), (ii). Defendant’s claim “a nutritious, convenient breakfast

12

choice that contains slow-release carbs from wholesome grains to help fuel your

13

body for 4 hours” implies that the Products contain a high enough amount of fiber

14

from whole grains to last four hours. Thus, this statement suggests the Products

15

include a high amount of fiber, and is an implied nutrient content claim. See 21 C.F.R.

16

§ 101.13(b)(2)(i) (providing the example of “high in oat bran”). Accordingly,

17

Plaintiff’s claims relying on this statement are preempted, and the Court dismisses

18

these claims.

19

Defendant’s other fiber claim is not as explicit. It states the Products are

20

“[b]aked with hearty whole grains, belVita Soft Baked Breakfast biscuits are

21

delicious, nutritious, and give you satisfying morning energy to start your day off

22

right.” This claim does not imply a high or low content of fiber, nor does it contain

23

an explicit claim about fiber. See 21 C.F.R. § 101.13(b)(2)(i), (ii); Hadley, 273 F.

24

Supp. at 1077 (citing 59 Fed. Reg. 24232, 24244 (May 10, 1994) (explaining that the

25

advertising statement must “explicitly or implicitly suggests that the food has a

26

particular nutrient profile”). This vague statement also does not fit with the examples

27

provided by the FDA. See id.; FDA Label Guide (“‘Nutritious, contains 3 grams of

28

fiber,’ ‘Best choice, contains 200 mg sodium,’ or ‘Good for you, contains 5 grams of
– 15 –

17cv2327

1

fat’ . . . .”). Instead, it is more akin to the statements the FDA recognized are not

2

implied nutrient content claims. See, e.g., FDA Label Guide (“Made with wholesome

3

ingredients”). Plaintiffs’ claims relating to this fiber statement is not preempted.

4

Additionally, Plaintiffs’ “nutritious” claims and general advertising statements do

5

not suggest that a nutrient is absent or present in the Products and, therefore, are not

6

implied nutrient content claims subject to preemption.

7
8

C.

9

Defendant next argues that the Plaintiffs have not plausibly alleged that the

10

Products contain “excessive” amounts of sugar because the amount of sugar in the

11

products is “well below the recommended limits recently set by the FDA.” (Mot. at

12

16.) At the Motion to Dismiss stage, however, the Court must “accept factual

13

allegations in the Complaint as true.” Manzarek, 519 F.3d at 1031.

Whether Plaintiffs Allege the Products Contain Excessive Sugar

14

The factual allegations in the FAC include the claim that “[e]xperimentally

15

sound, peer-review studies and analyses convincingly show that consuming

16

excessive added sugar—any amount above approximately 5% of daily caloric

17

intake—greatly increases the risk of cardiovascular disease, diabetes, liver disease

18

and a wide variety of other chronic diseases.” (FAC ¶ 1.) The FAC details the reason

19

plaintiffs allege these amounts of sugar are dangerous and the various peer-reviewed

20

studies and reports they rely on to support their argument that consuming sugar

21

beyond the five percent standard greatly increases health risks. (See, e.g., FAC ¶ 20

22

n.10, ¶ 110 n.90; see ECF No. 16 (delineating Defendant’s requests to the Court to

23

incorporate many of these studies into the Complaint).); see also Nat’l Council

24

Against Health Fraud, Inc. v. King Bio Pharms., Inc., 107 Cal. App. 4th 1336, 1348

25

(Cal. Ct. App. 2003) (“The falsity of . . . advertising claims may be established by

26

testing, scientific literature, or anecdotal evidence.”).

27

At this stage of the proceedings, the Court need not determine whether the

28

AHA’s or the World Health Organization’s recommendation is the correct standard.
– 16 –

17cv2327

1

See Hadley, 273 F. Supp. 3d at 1067 (“[O]n the instant motion to dismiss, the Court

2

need not adopt a 5% ‘standard’ for added sugar to find Plaintiff's allegations to be

3

adequate.”). Instead, the Court finds that Plaintiffs have adequately alleged that

4

Defendant’s Products contained “excessive” sugar under their theories of the case.

5

See id.; Iqbal, 556 U.S. at 678; Kearns, 567 F.3d at 1124. The Court denies

6

Defendant’s request to dismiss Plaintiffs’ claims on this ground.

7
Whether Defendant’s Statements are Likely to Deceive

8

D.

9

Defendant next claims that Plaintiffs fail to allege that Defendant’s labeling is

10

likely to deceive a reasonable consumer. Defendant argues: (1) the “steady energy”

11

statements are not actually false, (2) the remaining statements are non-actionable

12

puffery, and (3) the statements are ambiguous and are clarified by other statements.

13

(Mot. at 6-16.)

14

At the motion to dismiss stage, for the claims under California law, a plaintiff

15

must allege that “members of the public are likely to be deceived.” Freeman v. Time,

16

Inc., 68 F.3d 285, 289 (9th Cir. 1995). For the New York claims, a plaintiff must

17

similarly show that a deceptive business practice is “likely to mislead a reasonable

18

consumer acting reasonably under the circumstances.” Stutman v. Chemical Bank,

19

709 N.Y.S. 2d 892, 896 (N.Y. 2000); Leider v. Ralfe, 387 F. Supp. 2d 283, 292

20

(S.D.N.Y 2005) (quoting Oswego Laborers’ Local 214 Pension Fund v. Marine

21

Midland Bank, N.A., 623 N.Y.S. 2d 529, 533 (N.Y. 1995)). Courts “have recognized

22

that whether a business practice is deceptive will usually be a question of fact not

23

appropriate” for a motion to dismiss. Williams v. Gerber Products Co., 552 F.3d 934,

24

938 (9th Cir. 2008); Ackerman, 2010 WL 2925955, at *17 (declining to find, as a

25

matter of law, that statements could not have deceived a reasonable consumer).

26
27
28
– 17 –

17cv2327

i. Whether “Sustained Energy” Claims are False

1
2

Similar to its argument above regarding “excessive” sugar, Defendant argues

3

that none of its claims is likely to deceive a consumer because its “sustained energy”

4

claims are true. (Mot. at 6-9 (“Plaintiffs cannot identify in their FAC any affirmative

5

misrepresentation or material omission that supports a plausible claim of

6

deception.”).)

7

Contrary to Defendant’s characterization, Plaintiffs allege that the use of

8

certain terms and phrases, like “Nutritious Sustained Energy,” are a part of a

9

deceptive labeling practice intended to mislead consumers into believing that the

10

Products are healthy. According to Plaintiffs’ theory, these statements are deceptive

11

because consumers do not interpret “healthy” or “nutritious” products as containing

12

“excessive” amounts of sugar, which Plaintiffs allege the Products contain. As

13

discussed above, the Court finds that Plaintiffs sufficiently alleged its argument that

14

“excessive” sugar creates health risks. See King Bio Pharms., Inc., 107 Cal. App. 4th

15

at 1348. Thus, taking Plaintiffs’ allegations as true and drawing all reasonable

16

inferences in favor of Plaintiffs, Plaintiffs’ allegations illustrate a plausible basis that

17

Defendant’s statement could deceive a reasonable consumer with certain

18

expectations of health that do not include the amount of sugar in the Products. See

19

Williams, 552 F.3d at 938; see also Delacruz v. Cytosport, Inc., No. 11-3532, 2012

20

WL 1215243 (N.D. Cal. Apr. 11, 2012) (finding claim of “healthy fats” along with

21

“nutritious snack” was likely to deceive a customer, despite other factually accurate

22

claims relating to protein and trans fat). Additionally, even though Defendant focuses

23

on “steady energy” or “sustained energy” as being factually true, the Court finds that

24

these statements cannot be considered without the immediately preceding term,

25

“nutritious,” which Plaintiffs specifically argue is deceptive.

26

Moreover, Defendant’s argument that the front label and nutritional panel

27

disclose the Products’ sugar content—and thus makes the label as a whole not

28

deceptive—fails. The Ninth Circuit explicitly rejected this argument. See Williams,
– 18 –

17cv2327

1

552 F.3d at 939. In Williams, the defendant argued that, despite its advertising

2

statement on the front of the package describing the product as made with “fruit juice

3

and other all natural ingredients[,]” consumers should look to the nutritional panel to

4

determine the products’ actual ingredients. Id. The Ninth Circuit disagreed, stating

5

“reasonable consumers should [not] be expected to look beyond misleading

6

representations on the front of the box to discover the truth from the ingredient list

7

in small print on the side of the box.” Id. As the Court explained, “[w]e do not think

8

that the FDA requires an ingredient list so that manufacturers can mislead consumers

9

and then rely on the ingredient list to correct those misinterpretations and provide a

10

shield for liability for the deception.” Id.; see also Hughes v. Ester C Co., 930 F.

11

Supp. 2d 439, 464 (E.D.N.Y. 2013) (“At this early stage of the litigation, it cannot

12

be determined whether a disclaimer on the back of [the] products . . . eliminates the

13

possibility of a reasonable consumer being misled . . . .”); Ackerman, 2010 WL

14

2925955, at *16 (“[T]he presence of a nutritional panel, though relevant, does not as

15

a matter of law extinguish the possibility that reasonable consumers could be misled

16

by [a product’s] labeling and marketing.”). Thus, the mandated disclosure of the

17

amount of sugar on the front label and nutritional panel does not diminish the legal

18

impact of Defendant’s misleading advertisements.

19

Accordingly, the Court finds that Plaintiffs sufficiently plead that the

20

statements relating to “steady energy” are either false or misleading, and are likely

21

to deceive a reasonable consumer.

22
23

ii. Whether Statements are Non-Actionable Puffery

24

Under California and New York law, advertisements that “amount to ‘mere’

25

puffery are not actionable[.]” Abramson v. Marriott Ownership Resorts, Inc., 155 F.

26

Supp. 3d 1056, 1066 (C.D. Cal. 2016); Verizon Directories Corp. v. Yellow Book

27

USA Inc., 309 F. Supp. 2d. 401, 405–06 (E.D.N.Y. 2004) (collecting cases) (finding

28

puffery is not actionable under sections 349 and 350). Puffery includes “generalized,
– 19 –

17cv2327

1

vague and unspecific assertions . . . upon which a reasonable consumer could not

2

rely.” Glen Holly Entm’t, Inc. v. Tektronix Inc., 343 F.3d 1000, 1005 (9th Cir. 2003)

3

(citing Cook, Perkiss, & Liehe, Inc. v. Northern Cal. Collection Serv. Inc., 911 F.2d

4

242 (9th Cir. 1990)); Leonard v. Abbott Labs., Inc., No. 10-CV-4676 ADS WDW,

5

2012 WL 764199, at *21 (E.D.N.Y. Mar. 5, 2012) (citing Lacoff v. Buena Vista

6

Publishing, Inc., 705 N.Y.S. 2d 183, 191 (N.Y. Sup. Ct. 2000)) (“If an alleged

7

misrepresentation would not deceive a reasonable person because it is vague or

8

amounts to mere puffery or opinion, then a claim under the consumer protection

9

statutes may be dismissed, as a matter of law, on a motion to dismiss.” (emphasis in

10

original)).

11

The Court first addresses Defendant’s nutritious statements.2 Though

12

statements involving the term “nutritious” can constitute puffery, Cook, Perkiss, &

13

Liehe, Inc., 911 F.2d at 246, the Court does not find that to be the case here. See

14

Williams, 552 F.3d at 939; see also Ackerman, 2010 WL 2925955, at *16.

15

Defendant’s nutritious statements are more akin to alleged factual misrepresentations

16

than general assertions of superiority. Cf. Cook, Perkiss, & Liehe, Inc., 911 F.2d at

17

246 (determining that statements like “we’re the low cost commercial collection

18

experts” constituted non-actionable puffery because they were “general assertions of

19

superiority” rather than “factual misrepresentations”); see Chacanaca, 52 F. Supp.

20

2d at 1125–26 (rejecting a defendant’s argument that statements including the term

21

“wholesome” were non-actionable puffery). Each use of the term “nutritious” (or

22

similar) is followed by a claim that the Products provide sustained energy or are a

23

nutritious breakfast choice. (See, e.g., FAC at App’x 1 (“Nutritious Sustained

24

Energy” and “a nutritious, convenient on-the-go breakfast choice”).) Even more

25
26
27
28

2

For the purposes of this section, the Court also considers the remaining fiber
statement because it also includes the term “nutritious” and is similar to the nutritious
statements in effect. (FAC at App’x 1 (“Baked with hearty whole grains, belVita Soft
Baked Breakfast biscuits are delicious, nutritious, and give you satisfying morning
energy to start your day off right.”)
– 20 –
17cv2327

1

specific are Defendant’s statements that nutritionists were consulted when creating

2

the Products. (Id. (“We worked closely with nutritionists to design a new kind of

3

breakfast biscuit with energy for the morning. Energy that is nutritious and

4

sustained.”).) Moreover, Plaintiffs allege that the nutritious statements speak to the

5

Products’ overall healthiness, which is misleading or false because the Products are

6

not “healthy” due to the amount of sugar they contain. Though “nutritiousness can

7

be difficult to measure concretely,” the Court finds that, like in Williams, these

8

statements do contribute to the context of the alleged deceptive labeling practices as

9

a whole, and are not non-actionable puffery. Williams, 552 F.3d at 939 n.3.

10

However, the Court finds that Defendant’s general advertising statements are

11

puffery. See Abramson, 155 F. Supp. 3d at 1066; see also Glen Holly Entm’t, Inc.,

12

343 F.3d at 1005; Cook, Perkiss, & Liehe, Inc., 911 F.2d 242. “Power Up People,”

13

“delicious,” “part of a balanced breakfast,” “specifically baked to release energy

14

regularly and continuously to fuel your body throughout the morning,” and

15

“satisfying morning energy” involve unspecified assertions that cannot be measured

16

concretely. See Williams, 552 F3d at 939. There are no means of measuring “power

17

up,” “delicious,” “satisfying,” or “part of a balanced breakfast.” The terms are

18

general and vague, such that no reasonable consumer could rely on them. See Lavie,

19

105 Cal. App. 4th at 508.

20

Plaintiffs point to a district court case that found that statements like “an

21

example of a healthy and balanced breakfast” were “sufficiently specific and

22

unequivocal to constitute an affirmation of fact or promise.” In re Ferrero Litig., 794

23

F. Supp. 2d 1107, 1118 (S.D. Cal. 2011); (Opp’n at 17.) The Court agrees that

24

Defendant’s statements regarding a “delicious, wholesome breakfast” are not

25

puffery, but finds that these statements are distinguishable from the “part of a

26

balanced breakfast” statements. First, in Ferrero, the term “healthy” was used in the

27

statements, thus further specifying and characterizing the assertion to imply

28

healthiness. The same reasoning applied here because the earlier statement included
– 21 –

17cv2327

1

the term “wholesome.” (See FAC at App’x 1 (“We all need energy to start the

2

morning. We also need a delicious, wholesome breakfast”).) However, “part of a

3

balanced breakfast” does not include these modifying terms to imply healthiness or

4

wholesomeness. Second, the statement that the Product is “part of a balanced

5

breakfast” implies the Products will be eaten with other items. The phrase “part of”

6

is immeasurable because it is dependent on the other components of the consumer’s

7

breakfast. Thus, the statement cannot be sufficiently specific or absolute because it

8

is based on the consumer’s additional actions.

9

Accordingly, the Court does not find that Plaintiffs’ claims based on the

10

nutritious statements are non-actionable puffery, but finds Defendant’s general

11

advertising statements are puffery. The Court therefore grants Defendant’s motion to

12

dismiss Plaintiffs’ claims relating to the general advertising statements on these

13

grounds.

14
15

iii. Whether Statements are Ambiguous, But Clarified

16

Defendant further argues that its remaining statements are not likely to deceive

17

a consumer because, if the statements are, at best, ambiguous, the statements are

18

clarified by the Products’ mandatory sugar content labeling that appears on the front

19

of the packaging and nutrition panel. (Mot. at 12-15.) In other words, Defendant

20

contends that a consumer can easily know exactly how much sugar is in each product

21

and would not be deceived, despite whatever ambiguous statement Defendant makes.

22

(Id.) Defendant relies on Freeman v. Time, Inc. 68 F.3d 285, 290 (9th Cir. 1995) and

23

to Bobo v. Optimum Nutrition Inc., No. 14cv2408-BEN(KSC), 2015 WL 13102417

24

at *4 (S.D. Cal. 2015) arguing that merely ambiguous statements are not actionable

25

when considered along with other aspects of the packaging.

26

Defendant’s reliance on these cases is misplaced. In Freeman, the court

27

addressed a promotional advertisement containing small-print, qualifying language

28

for the promotion itself. The court found that the qualifying language was not
– 22 –

17cv2327

1

unreadable and such language appeared immediately next to the promotional

2

statements it qualified. Freeman, 68 F.3d at 289. Based on these factors, the court

3

found the advertising statements could not be “ambiguous” and, therefore,

4

misleading. Id. In Bobo, a label reading “100% Whey” also included statements that

5

the product was “Naturally and Artificially Flavored” and “Double Chocolate Rich”

6

flavored, as well as clarification that “100% of the Protein is from Whey.” Bobo, at

7

*4.

8

Freeman and Bobo are both distinguishable because the statements alleged in

9

this case are not immediately qualified or clarified by other statements on the

10

packaging. Moreover, as discussed above, the Ninth Circuit made it clear that

11

“reasonable consumers should [not] be expected to look beyond misleading

12

representations on the front of the box to discover the truth from the ingredient list

13

in small print on the side of the box.” Williams, 552 F.3d at 939; Ackerman, 2010

14

WL 2925955, at *16 (“[T]he presence of a nutritional panel, though relevant, does

15

not as a matter of law extinguish the possibility that reasonable consumers could be

16

misled by [a product’s] labeling and marketing.”). Accordingly, while keeping in

17

mind that the Court considers the advertising statements in context of the overall

18

advertisement, it also does not find that the Products’ mandated content disclosures

19

cure any ambiguities of the health and nutrition claims that Plaintiffs are challenging.

20

Cf. Hairston v. South Beach Beverage Co., No. 12-1429, 2012 WL 1893818, at *4

21

(C.D. Cal. May 18, 2012) (finding that “all natural” advertising statements were

22

clarified by other advertising statements about fruit names and vitamins appearing

23

on a fruit drink’s packaging).

24
25

E.

26

Finally, Defendant disputes that Plaintiffs properly allege their breach of

27

warranty claims (Mot. at 23-24), and also states that Plaintiffs’ claims fail for a lack

28

of notice. (Reply at 10.) To quickly revisit preemption, breach of warranty claims are

Breach of Warranty Claims

– 23 –

17cv2327

1

not found to impose additional requirements under state law because the

2

manufacturer voluntarily takes on the obligation to honor a specific warranty, and

3

thus such an obligation is imposed by the manufacturer upon themselves, not by state

4

law. Ackerman, 2010 WL 2925955, at *24 (citing Cipollone v. Liggett Group,

5

Inc., 505 U.S. 504, 518 (1992)). Thus, the warranty claims are not preempted. Id.

6

Plaintiffs make two breach of express warranty claims that involve the same

7

underlying allegations. These causes of action arise under California Commercial

8

Code § 2313 and New York U.C.C. § 2-313(1)(a). Under California law, “to plead a

9

cause of action for breach of express warranty, one must allege the exact terms of the

10

warranty, plaintiff’s reasonable reliance thereon, and a breach of that warranty which

11

proximately causes plaintiff injury.” Williams v. Beechnut Nutrition Corp., 229 Cal.

12

Rptr. 605, 608 (Ct. App. 1986); see Cal. Com. Code § 2313. Section 2313(1)(a) states

13

that an express warranty is “any affirmation of fact or promise made by the seller to

14

the buyer which relates to the goods and becomes part of the basis of the bargain

15

creates an express warranty that the goods shall conform to the affirmation or

16

promise.” Under New York law, “[t]o prevail on a claim of breach of express

17

warranty, a plaintiff must show ‘an affirmation of fact or promise by the seller, the

18

natural tendency of which was to induce the buyer to purchase and that the warranty

19

was relied upon.’” Factory Assocs. & Exporters, Inc. v. Lehigh Safety Shoes Co.

20

LLC, 382 Fed. App’x. 110, 111-12 (2d Cir. 2010) (quoting Schimmenti v. Ply Gem

21

Indus., Inc., 549 N.Y.S. 2d 152, 154 (2d Dep’t 1989)).

22

Under New York and California law, a product label or advertisement can

23

create an express warranty. See Simmons v. Washing Equip. Techs., 857 N.Y.S. 2d

24

412, 413 (4th Dep’t 2008) (stating that the defendant’s product label created an

25

express warranty). A representation on a product label does not, however, create an

26

express warranty if it “is of such a general nature that a reasonable consumer would

27

not rely on it as a statement of fact regarding” the product. Simmons v. Washing

28

Equip. Techs., 912 N.Y.S. 2d 360, 361 (4th Dep’t 2010).
– 24 –

17cv2327

1

Plaintiffs also allege breaches of implied warranties of merchantability under

2

California Commercial Code § 2314 and New York U.C.C. § 2-314. Section 2314

3

states that “a warranty that the goods shall be merchantable is implied in a contract

4

for their sale if the seller is a merchant with respect to goods of that kind.” See

5

Viggiano v. Hansen Nat. Corp., 944 F. Supp. 2d 877, 896 (C.D. Cal. 2013) (“Unless

6

specific disclaimer methods are employed, an implied warranty of merchantability

7

arises and accompanies every retail sale of consumer goods.”). California Civil Code

8

section 1794 permits a consumer to recover when she “is damaged by a failure to

9

comply with any obligation under this chapter or under an implied or express

10

warranty or service contract may bring an action for the recovery of damages and

11

other legal and equitable relief.” To allege a breach of implied warranty of

12

merchantability, a plaintiff must show that the product “did not possess even the most

13

basic degree of fitness for ordinary use.” Mocek v. Alfa Leisure, Inc., 7 Cal. Rptr. 3d

14

546, 549 (Cal. Ct. App. 2003); see Denny v. Ford Motor Co., 87 N.Y.S. 2d 248, 258

15

(N.Y. 1995) (holding that, if the seller is a merchant, there is an implied contract that

16

the goods will be of merchantable quality). Under both California and New York

17

law, a plaintiff may allege a breach of implied warranty of merchantability if a

18

product fails to “[c]onform to promises or affirmations of fact made on the container

19

or label if any.” Cal. Com. Code § 2314(2)(f); N.Y. U.C.C. § 2-314(2)(f).

20

Plaintiffs do not sufficiently plead their warranty claims. Plaintiffs only allege

21

that Defendant “made an affirmation of fact or promise that the products were

22

‘healthy, as well as related affirmations of facts, promises, and descriptions.’” (FAC

23

¶ 238.) Plaintiffs never specify what terms actually appearing on Defendant’s labels

24

form the alleged express warranties. (Id.); Hadley, 273 F. Supp. 3d at 1092 (“[T]he

25

plaintiff must identify a specific and unequivocal written statement about the product

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that constitutes an explicit guarantee.” (internal quotations and citations omitted)).

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Plaintiffs’ inclusion of the general phrase “related affirmations of facts, promises,

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and descriptions” does not cure this lack of specificity because “[s]uch conclusory
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language fails to ‘give the defendant fair notice of what the . . . claim is and the

2

grounds upon which it rests.” Ackerman, 2010 WL 2925955, at *24 (citing

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Twombly, 550 U.S. at 555) (addressing both California and New York express

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warranty claims). Therefore, Plaintiffs fail to sufficiently plead their claims for

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breach of express warranty. Id.; see, e.g., Lake v. Kardjian, 874 N.Y.S. 2d 751, 755

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(N.Y. Sup. Ct. 2008) (“Plaintiff has not identified any specific statements by [the

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defendant] which would constitute an express warranty, and has thereby failed to

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establish the existence of a claim which would escape federal preemption and survive

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this motion to dismiss.”); cf. Hadley, 273 F. Supp. 3d at 1092 (finding that, following

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a previous dismissal, the plaintiff sufficiently amended the complaint to allege the

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specific statements underlying the express warranty claims).

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Plaintiffs also fail to state their implied warranty of merchantability claims.

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Both parties agree that the Products are fit for their ordinary purpose, but Plaintiffs

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base their claims on the Products’ failure to “[c]onform to promises or affirmations

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of fact made” on the labeling. Cal. Com. Code § 2314(2)(f); N.Y. U.C.C. § 2-

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314(2)(f); (see Opp’n at 24.) “When an implied warranty of merchantability cause of

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action is based solely on whether the product in dispute conforms to the promises or

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affirmations of fact on the packaging of the product, the implied warranty of

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merchantability claim rises and falls with express warranty claims brought for the

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same product.” Hadley, 273 F. Supp. 3d at 1096 (internal quotations and alterations

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omitted). Accordingly, because the Court found that Plaintiffs have not sufficiently

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pled their express breach of warranty claims, the Court likewise finds that Plaintiffs

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fail to plead their implied breach of merchantability claims.

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Lastly, in one line in the Reply,3 Defendant states that “Plaintiffs concede that

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they did not provide pre-suit notice of the breach of warranty, which is a precondition

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As a general matter, a “district court need not consider arguments raised for
the first time in a reply brief.” See Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir.
2007). Nonetheless, because notice of breach of warranty must be alleged, the Court
addresses this issue.
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3

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of bringing a breach-of-warranty claim.” Id. Under both California and New York

2

law, a plaintiff is required to notify the seller of the breach of warranty within a

3

reasonable time after discovery of it. See Cal. Com. Code § 2607(3)(A); see also

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New York U.C.C. § 2-607. To avoid dismissal, “[a] buyer must plead that notice of

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the alleged breach was provided to the seller within a reasonable time after discovery

6

of the breach.” Stearns v. Select Comfort Retail Corp., 763 F. Supp. 2d 1128, 1142

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(N.D. Cal. 2010). Defendant states that Plaintiffs concede that they did not provide

8

pre-suit notice of the breach of warranty, but does not provide a citation in the record

9

of this concession. Nevertheless, upon review of the FAC, Plaintiffs failed to allege

10

that they provided notice to Defendant for either their express or implied breach of

11

warranty claims. (See FAC ¶ 221 (alleging written notice for the CLRA claims, but

12

failing to provide details of this notice or a copy of the letter for the Court’s review).)

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Thus, the Court must also dismiss Plaintiffs’ breach of warranty claims for failing to

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plead that they provided proper notice for these claims

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Accordingly, the Court GRANTS WITH LEAVE TO AMEND Defendant’s

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motion to dismiss Plaintiff’s breach of express warranty and breach of implied

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warranty of merchantability claims. Plaintiffs may amend the FAC to allege which

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specific statements create the warranties they alleged were breached, as well as notice

19

of these claims.

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IV.

CONCLUSION
For the foregoing reasons, the Court GRANTS IN PART and DENIES IN

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PART Defendant’s motion to dismiss. (ECF No. 15.) Specifically, the Court:

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1. GRANTS WITHOUT LEAVE TO AMEND the motion to

25

dismiss Plaintiff’s claims relying on the following advertising

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statements: “a nutritious, convenient breakfast choice that contains

27

slow-release carbs from wholesome grains to help fuel your body

28

for 4 hours” “Power up People,” “Enjoy belVita Breakfast Biscuits
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as part of a balanced breakfast with a serving of low-fat dairy and

2

fruit,” “specifically baked to release energy regularly and

3

continuously to fuel your body throughout the morning,” and

4

“satisfying morning energy to start your day off right.”

5

2. GRANTS WITH LEAVE TO AMEND the motion to dismiss

6

Plaintiffs’ claims for breach of express and implied warranties; and

7

3. DENIES the motion to dismiss as to the remaining advertising

8

statements.

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Accordingly, Plaintiffs may file a Second Amended Complaint that only

10

provides additional factual allegations relating to the breach of express and implied

11

warranty claims no later than August 31, 2018. If Plaintiffs do not file a Second

12

Amended Complaint, Defendant must answer the First Amended Complaint no later

13

than September 14, 2018.

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IT IS SO ORDERED.

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DATED: August 17, 2018

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