Biffar v. Pinnacle Foods Group LLC
Filing
32
ORDER denying 11 Motion to Dismiss. Signed by Judge David R. Herndon on 12/22/16. (klh)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
DIANE BIFFAR, individually
and on behalf of all others
similarly-situated,
Plaintiff,
v.
No. 16-0873-DRH
PINNACLE FOODS GROUP, LLC,
Defendant.
MEMORANDUM and ORDER
HERNDON, District Judge:
Introduction
Now before the Court is Pinnacle Foods Group, LLC’s motion to dismiss
(Doc. 11).
Plaintiff opposes the motion (Doc. 18). Based on the following, the
Court denies the motion to dismiss.
On August 8, 2016, Diane Biffar, individually and on behalf of all others
similarly-situated, filed a class action complaint against Pinnacle Foods Group,
LLC (“Pinnacle”) (Doc. 1).
Biffar alleges that Pinnacle labels its Duncan Hines
Simple Mornings Blueberry Streusel Premium Muffin Mix (“muffin mix”) as
containing “Nothing Artificial” when in fact the muffin mix contains synthetic,
artificial, and/or genetically modified ingredients, including but not limited to
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monocalcium phosphate, xanthan gum, soy lecithin, and corn starch. 1
Biffar
contends that Pinnacle’s representation that the muffin mix contains “Nothing
Artificial” is false, deceptive, unfair and misleading.
Biffar purports to represent
the following classes:
The Nationwide class: All citizens of all states other than
Missouri who purchased Duncan Hines Simple Mornings Blueberry
Streusel Premium Muffin Mix for personal, household, or family
purposes and not for resale in the five years preceding the filing of this
Petition (the “Class Period”); and
The Illinois Class: All citizens of Illinois who purchased
Duncan Hines Simple Mornings Blueberry Streusel Premium Muffin
Mix for personal, household, or family purposes and not for resale
during the Class Period.
(Doc. 1, p. 7). 2
Biffar’s complaint alleges claims for violations of the Illinois
Consumer Fraud and Deceptive Business Practices Act (“ICFA”) on behalf of the
Illinois Class (Count I); unjust enrichment on behalf of the nationwide class (Count
II) and breach of express warranty on behalf of the nationwide class (Count III).
On October 3, 2016, Pinnacle, pursuant to Federal Rules of Civil Procedure
8, 9(b), 12(b)(2) and 12(b)(6) moved to dismiss Biffar’s complaint based on various
grounds (Doc. 11).
On November17, 2016, Biffar filed her opposition to the
1 According to the complaint, monocalcuim phosphate is a synthetic chemical compound that is
used as a leavening agent and it is commercially manufactured and chemically synthesized by
mixing phosphoric acid with a calcium-containing medium; xanthan gum is a synthetic thickener
that is commercially manufactured; soy lechitin is a synthetic emulsifier and stabilizer; and corn
starch is a synthetic corn product used as an anti-caking and thickening agent.
2 A very similar case based on the same muffin mix is pending in the Eastern District of Missouri.
See Thornton v. Pinnacle Foods Group, LLC, 16-CV-0158-JAR. Thornton, individually and on
behalf of all others similarly-situated, sued Pinnacle asserting claims for violation of the Missouri
Merchandising Practices Act and unjust enrichment. Thorton seeks to certify a class consisting of
all persons in Missouri who purchased the muffin mix in the past five years. On September 30,
2016, District Judge John A. Ross granted a motion to stay and stayed the Thornton case pending
resolution of the FDA’s proceedings pertaining to the term “natural.” Id. at Doc. 31.
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motion (Doc. 23). As the motion is ripe, the Court turns to address the merits of
the motion. 3
Motion to Dismiss Standard
A motion under
Rule
12(b)(6)
challenges
the
sufficiency
of
the
complaint. Christensen v. Cty. of Boone, Ill., 483 F.3d 454, 457 (7th Cir. 2007).
Under the federal notice pleading standards, “a plaintiff's complaint need only
provide a short and plain statement of the claim showing that the pleader is entitled
to relief, sufficient to provide the defendant with fair notice of the claim and its
basis.” Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008); see
also Fed. R. Civ. P. 8(a)(2). When considering a motion to dismiss under Rule
12(b)(6), the Court must “accept [ ] as true all well-pleaded facts alleged, and draw [
] all possible inferences in [the plaintiff's] favor.” Tamayo, 526 F.3d at 1081.
A complaint, however, must also allege “sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). For a claim to have facial plausibility, a plaintiff must plead “factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Id. Plausibility, however, “does not imply that the
district court should decide whose version to believe, or which version is more
3 On December 15, 2016, the Court denied Pinnacle’s motion to stay (Doc. 31).
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likely than not.” Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010).
Even so, the complaint does not need to state all possible legal theories. Dixon v.
Page, 291 F.3d 485, 486-87 (7th Cir. 2002). In addition to the complaint itself,
the Court may consider “documents attached to the complaint, documents that are
critical to the complaint and referred to in it, and information that is subject to
proper judicial notice.” Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th
Cir. 2012).
Since Biffar’s claim is of fraud under the ICFA, the sufficiency of that claim is
analyzed under the heightened pleading standard set forth in Federal Rule of Civil
Procedure 9(b). See Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v.
Walgreen Co., 631 F.3d 436, 446-47 (7th Cir. 2011).
Rule 9(b) requires a
pleading to “state with particularity the circumstances constituting fraud.”
Fed.R.Civ.P. 9(b).
While the precise level of particularity required under Rule
9(b) depends upon the facts of the case, the pleading “ordinarily requires describing
the who, what, when, where and how of the fraud.” Camasta v. Jos. A. Bank
Clothiers Inc., 761 F.3d 732, 737 (7th Cir. 2014)(quoting AnchorBank, FSB v.
Hofer, 649 F.3d 610, 615 (7th Cir. 2011)).
“One of the purposes of the
particularity and specificity required under Rule 9(b) is ‘to force the plaintiff to do
more than the usual investigation before filing his complaint.’” Camasta, 761
F.3d at 737 (quoting Ackerman v. Northwestern Mutual Life Ins. Co., 172 F.3d
467, 469 (7th Cir. 1999)).
It is Biffar’s burden to establish that Pinnacle is subject to this Court’s
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personal jurisdiction. N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th
Cir. 2014). On a Rule 12(b)(2) motion to dismiss, the Court may “receive and
weigh” affidavits and other evidence outside the pleadings. Purdue Research
Found. v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003) (citation
and internal quotation marks omitted).
Biffar “need only make out a prima
facie case of personal jurisdiction” because the Court has not held an evidentiary
hearing to resolve factual disputes. Id. (citation and internal quotation marks
omitted). The Court construes Biffar’s complaint “liberally with every inference
drawn” in her favor. GCIU–Employer Retirement Fund v. Goldfarb Corp., 565
F.3d 1018, 1020 n.1 (7th Cir. 2009).
Analysis
IFCA claim
The ICFA prohibits the “misrepresentation or the concealment, suppression,
or omission of any material fact” in the conduct of any trade or commerce. 815
ILCS § 505/2. The intent of the ICFA is “to protect consumers, borrowers, and
business persons against fraud, unfair methods of competition, and other unfair
and deceptive business practices.” Siegel v. Shell Oil Co., 612 F.3d 932, 934 (7th
Cir. 2010) (citing Robinson v. Toyota Motor Credit Corp., 201 Ill.2d 403, 416–
17, 266 Ill.Dec. 879, 775 N.E.2d 951 (2002)). In order to state a claim under
the ICFA, a plaintiff must show: “(1) a deceptive or unfair act or promise by the
defendant; (2) the defendant's intent that the plaintiff rely on the deceptive or unfair
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practice; and (3) that the unfair or deceptive practice occurred during a course of
conduct involving trade or commerce.” Wigod v. Wells Fargo Bank, N.A., 673
F.3d 547, 574 (7th Cir. 2012).
Pinnacle, argues that Biffar has not plausibly alleged that the muffin mix’s
labeling is deceptive as Biffar does not allege what “artificial” means; the muffin
mix’s labeling discloses the list of ingredients and Biffar wrongly relies on the U.S.
Department of Agriculture regulations while ignoring what the FDA has said.
The Court rejects Pinnacle’s reasoning and the line of cases it argues that
support such reasoning. 4 Whether a reasonable consumer would be deceived by a
product label or a reasonable consumer’s understanding of the term ‘artificial’ are
questions of fact that cannot be resolved on a motion to dismiss. Murphy, 2016
WL 6596083 at *2. Biffar alleges facts that, if true, establish a deceptive or false
claim to the muffin mix. In her complaint, Biffar alleges a definition of “artificial”
as something that is “synthetic” and cites to the Merriam-Webster definition of
“synthetic” in her complaint (Doc. 1, ¶ 7). Moreover, Biffar alleges that xanthan
gum and monocalcium phosphate are synthetic and that no reasonable consumer
4 Defendant relies, inter alia, on Murphy v. Stonewall Kitchen, LLC, No. 2016 WL 614570 (Mo. Cir.
Ct. St. Louis, January 26, 2016)(Moriarty, J.)(holding that “a reasonable consumer who had any
concern or question at all as to whether a particular food product item with the phrase ‘all natural’
on its labeling did in fact comport with the consumer’s own subjective notion or definition of what
the phrase meant, would presumably examine the ingredients list on the package labeling”). Very
recently, the Missouri Court of Appeals reversed the trial court’s decision in Murphy. See Murphy v.
Stonewall Kitchen, LLC, 2016 WL 6596083 (Mo. Ct. App. November 8, 2016)(holding “the bare
assertion that ‘all natural’ is subjective and ambiguous does not cause Murphy’s entire MMPA claim
to fail at this early stage of litigation because a reasonable consumer’s understanding of the term ‘all
natural’ or whether a practice is unfair or deceptive are questions of fact.” and rejecting “the notion
that the ‘ingredient list’ defense asserted … defeats Murphy’s claim as a matter of law.”).
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would know or should know that those ingredients are synthetic, artificial and/or
GMO ingredients (Doc. 1, ¶ ¶ 15, 33, 34). Biffar alleges that Pinnacle’s “Nothing
Artificial” muffin mix is misleading because it contains synthetic substances (Doc.
1, ¶¶ 2-16). The Court finds that these allegations are sufficient to state a cause of
action under the ICFA.
As to the “ingredient list” defense, the Court finds that it is plausible that a
consumer might rely on the “Nothing Artificial” without examining the ingredients
or that a consumer might not know what “artificial” ingredients are.
2016 WL 6596083, at *3.
See Murphy,
Biffar alleges that she did not know and other
reasonable consumers would not know that the ingredients listed were artificial,
synthetic, and/or GMO ingredients. At this stage, the allegations are sufficient to
withstand dismissal.
Lastly, as to Pinnacle’s argument regarding the U.S. Department of
Agriculture and the FDA, the Court agrees with Biffar in that this is not a “naturals”
case and whether a reasonable consumer would expect a synthetic raising agent in
muffin mix labeled “Nothing Artificial” is a question of fact that cannot be resolved
on a motion to dismiss. Thus, the Court denies the motion as to the IFCA claim.
ICFA Damages
Pinnacle argues that Biffar’s ICFA claim fails because she has not plausibly
alleged any ascertainable harm. Specifically, Pinnacle argues that Biffar has not
plead any facts suggesting that the muffin mix was not worth the $3.49 she
allegedly paid. Biffar counters that she has alleged that as a result of Pinnacle’s
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deceptive “Nothing Artificial” label, she paid a premium for the muffin mix because
the muffin mix was worth less than it was represented to be because it contained
artificial, synthetic, and GMO ingredients.
When the plaintiff is a private party as Biffar is here, an action brought under
the ICFA requires the plaintiff to show she suffered “actual damage” as a result of
the defendant’s violation of the act. 815 ILCS 505/10a; Kim v. Carter's Inc., 598
F.3d 362, 365 (7th Cir. 2010); Mulligan v. QVC, Inc., 382 Ill.App.3d 620, 321
Ill.Dec. 257, 888 N.E.2d 1190, 1196 (2008).
In a private ICFA action, the
element of actual damages “requires that the plaintiff suffer actual pecuniary
loss.” Kim, 598 F.3d at 365 (internal citation omitted).
Here, the Court finds that Biffar has pled damages sufficiently under the
ICFA. Specifically, Biffar alleges:
Because the Product in fact contains Artificial Ingredients, the Product
as sold was worth less than the Product as represented, and Plaintiff
and Class Members paid a premium for it. Had the truth be known,
Plaintiff and Class Members would not have purchased the Product or
would have paid less for it. Plaintiff and Class Members were
deceived by the “Nothing Artificial” label on the Product and suffered
economic damages as a proximate result of Defendant’s unlawful
conduct as alleged herein, including the difference between the actual
value of the Product and the value of the Product if it had been
represented.
(Doc. 1, ps. 12, ¶¶ 57 & 58). She alleges that the price of the muffin mix as
represented was too much, or more than the value of the muffin mix as sold and
that she would not have purchased it or would have paid less for it had she known
it contained synthetic ingredients. Based on the allegations, which the Court must
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accept as true for the purposes of the motion, the Court finds that Biffar has pled a
plausible theory of damages. Thus, the Court denies the motion on this ground.
IFCA claim and Rule 9(b)
Next Pinnacle argues that Biffar has not satisfied Rule 9(b)’s particularity
requirements. Specifically, that Biffar does not plead the “who, what, when, where
and how” of the alleged fraud. Pinnacle further asserts that Biffar does not plead
what she believed “nothing artificial” meant at the time of purchase or otherwise
explain how she was deceived.
“While Rule 9(b) ‘does not require a plaintiff to plead all facts that if true
would show that the defendant’s alleged misrepresentations were indeed false, it
does require the plaintiff to state the identity of the person making the
representation, the time, the place, and content of the misrepresentation, and the
method by which the misrepresentation was communicated to the plaintiff.’”
Camasta, 761 F.3d at 737 (quoting Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d
918, 923 (7th Cir. 1992)(internal citations and quotations omitted)).
After reviewing the pleadings, the Court concludes that Biffar’s complaint
meets the Rule 9(b) standard. Biffar’s complaint adequately alleges (a) the who:
Pinnacle; (2) the what: “Nothing Artificial” labeling on the muffin mix containing
synthetic and GMO ingredients, monocalcium phosphate, xanthan gum and corn
starch; (3) the when: purchases made during the five years preceding the filing of
the complaint and, including May 2016; (4) the where: on the label of the muffin
mix, a copy contained in the complaint; and (5) the how: by representing that the
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muffin mix contains “Nothing Artificial” when in fact it contains synthetic and GMO
ingredients. The Court finds these allegations sufficient and denies the motion on
this ground.
Express Warranty Claims
Next, Pinnacle argues that Biffar’s express warranty claim fails because Biffar
never provided the pre-litigation notice required by the Illinois Uniform
Commercial Code and if she had contacted Pinnacle, Biffar could have received a
full refund of her purchase under the “Satisfaction Guarantee” offered on the muffin
mix. Pinnacle also asserts that she cannot prove falsity given that she has offered
no plausible objective definition of “artificial.” Biffar contends that she was not
required to provide pre-suit notice; that Pinnacle’s guarantee argument has been
repeatedly rejected and that she is not required to prove the falsity of Pinnacle’s
representation at this stage. The Court agrees with Biffar.
“To state a claim for breach of express warranty, a plaintiff must allege that
(1) the seller made an affirmation of fact or promise; (2) relating to the goods; (3)
which was part of the basis for the bargain; and (4) seller guaranteed that the goods
would conform to the affirmation or promise.” To obtain monetary damages on
an express warranty claim, Biffar must demonstrate “by a preponderance of the
evidence the terms of the warranty, * [a breach or failure of the warranty], a
demand upon the defendant to perform under the terms of the warranty,
a failure of the defendant to do so, a compliance with the terms of the warranty by
the plaintiff, and damages measured by the terms of the warranty.” Hasek v.
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DaimlerChrysler Corp., 745 N.E.2d 627, 638, 319 Ill.App.3d 780, 253 Ill.Dec. 504
(2001). The demand requirement is included in the Uniform Commercial Code, as
adopted in Illinois. It requires that a purchaser-plaintiff “within a reasonable time
after he discovers or should have discovered any breach notify the seller of
the breach or be barred from any remedy.” 810 Ill. Comp. Stat. Ann. 5/2–607.
Parties may be excused from the pre-litigation notice requirement when they
allege a physical injury or when the defendant had actual knowledge of the
product's defect. Connick v. Suzuki Motor Co., 675 N.E.2d 584, 590–91, 174
Ill.2d 482, 221 Ill.Dec. 389 (1996)). In Connick, the Illinois Supreme Court held
that because the plaintiffs suffered only economic damages stemming from their
increased risk of physical injury, dismissal was appropriate in light of
plaintiffs' failure to provide pre-litigation notice. Connick, 675 N.E.2d at 591,
174 Ill.2d 482, 221 Ill.Dec. 389
First, Biffar’s complaint alleges that Pinnacle had actual knowledge and that
notice is not required because others already alerted Pinnacle to the problems with
the muffin mix (Doc. 1, ¶ 71). Specifically, Biffar states: “Because Defendant has
actual knowledge that its Product contains artificial ingredients and because others
have already alerted Defendant to the issues with its Product, pre-suit notice of
this claim is not required.”
Whether and to what extent notice is sufficient is a
question of fact not susceptible to a motion to dismiss. See, e.g., Maldonado v.
Creative Woodworking Concepts, Inc., 296 Ill.App.3d 935, 230 Ill.Dec. 743, 694
N.E.2d 1021, 1026 (1998)(“Whether sufficient notice has been provided is
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generally a question of fact to be determined based upon the particular
circumstances of each case”). Further, as to the “guarantee” argument, the Court
finds that whether or not the label is deceptive and whether or not Pinnacle
intended for Biffar to rely on it are factual questions not appropriate for a motion to
dismiss.
Similarly, Biffar is not required to prove the falsity of Pinnacle’s
representations at this point. Biffar alleges that the muffin mix represented that it
contained “Nothing Artificial.”
At this stage, the Court finds that Biffar’s
allegations are sufficent regarding breach of warranty at the early stage of this
litigation. The Court denies the motion on this basis.
Unjust enrichment
Pinnacle argues that Biffar’s unjust enrichment claim should be dismissed
because she has not plausibly alleged deception. Pinnacle also argues that Biffar’s
unjust enrichment claim cannot stand alone if the Court dismisses the ICFA claim
and the warranty claim.
To state a claim for unjust enrichment under Illinois law, “a plaintiff must
allege that the defendant has unjustly retained a benefit to the plaintiff’s detriment
and that the defendant’s retention of the benefit violates the fundamental principles
of justice, equity and good conscience.”
HPI Health Care Servs., Inc. v. Mt.
Vernon Hosp., Inc., 131 Ill.2d 145, 137 Ill.Dec. 19, 545 N.E.2d 672, 679 (Ill. 1989).
As previously discussed supra, Biffar has alleged claims under the ICFA
and for breach of warranty. Additionally, it is permissible to pursue alternative
theories at the pleading stage. See Fed.R.Civ.P. 8(e)(2) (authorizing a party to “set
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forth two or more statements of a claim or defense alternately or hypothetically”
and “to state as many separate claims or defenses as the party has regardless of
consistency and whether based on legal, equitable or maritime grounds.”). Thus,
the Court denies the motion on this ground.
Non-Illinois Residents’ claims
Lastly, Pinnacle argues that the Court lacks personal jurisdiction over
Pinnacle with respect to the claims of the out-of-state plaintiffs.
Specifically,
Pinnacle argues that Biffar cannot establish general or specific jurisdiction over
Pinnacle as to the non-Illinois putative class. Pinnacle argues that it is a Delaware
LLC with its principal place of business in New Jersey; therefore, it is not “at home”
in Illinois and the Court lacks general jurisdiction over Pinnacle. Pinnacle further
argues that Biffar has not alleged any activities of Pinnacle in Illinois sufficient to
justify the exercise of specific jurisdiction over Pinnacle as to claims of the putative
class members residing in states other than Illinois. Biffar counters that these
arguments are premature as there are no named plaintiffs who are not citizens of
Illinois and that Biffar has not moved to certify any class at this time.
Biffar
contends that these issues are more proper at the class certification stage. The
Court agrees with Biffar and finds that this issue must be addressed later in the
litigation.
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Conclusion
Accordingly, the Court DENIES Pinnacle’s motion to dismiss (Doc. 11).
IT IS SO ORDERED.
Signed this 22nd day of December, 2016.
Judge Herndon
2016.12.22
15:03:19 -06'00'
United States District Judge
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