Atik et al v. Welch Foods, Inc. et al
Filing
30
MEMORANDUM AND ORDER ADOPTING REPORT AND RECOMMENDATIONS. For the reasons set forth in the attached Memorandum and Order, the Court adopts Judge Scanlon's R&R in its entirety. Ordered by Judge Margo K. Brodie on 9/30/2016. (Reyneri, Rafael)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------------------ALIZA ATIK and WINNIE LAU, on behalf of
themselves and all others similarly situated,
Plaintiffs,
MEMORANDUM & ORDER
15-CV-5405 (MKB) (VMS)
v.
WELCH FOODS, INC. and THE PROMOTION IN
MOTION COMPANIES, INC.,
Defendants.
--------------------------------------------------------------MARGO K. BRODIE, United States District Judge:
Plaintiffs Aliza Atik and Winnie Lau commenced the above-captioned putative class
action on behalf of themselves and all others similarly situated against Defendants Welch Foods,
Inc. (“Welch”) and The Promotion in Motion Companies, Inc. (“PIM”). (Compl., Docket Entry
No. 1.) Plaintiffs allege claims of (1) breach of express warranty, (2) breach of implied
warranty, (3) unjust enrichment, (4) deceptive acts or practices in violation of the New York
General Business Law, N.Y. Gen. Bus. Law § 349, (5) false advertising in violation of the New
York General Business Law, N.Y. Gen. Bus. Law § 350, (6) unfair and deceptive acts and
practices in violation of the California Consumers Legal Remedies Act, Cal. Civ. Code § 1750
et seq., (7) unlawful business acts and practices in violation of the California Unfair Competition
Law, Cal. Bus. & Prof. Code § 17200 et seq., (8) fraudulent business acts and practices in
violation of the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq., and
(9) misleading and deceptive advertising in violation of the California False Advertising Law,
Cal. Bus. & Prof. Code § 17500 et seq. (Id. ¶¶ 69–135.) Plaintiffs seek money damages,
restitution and injunctive relief. (Id. at 29.) Defendants move to dismiss or stay the action
pursuant to the primary jurisdiction doctrine. (Defs. Mot. to Dismiss, Docket Entry No. 17;
Defs. Mem. of Law in Supp. of Mot. to Dismiss (“Defs. Mem.”) 9–12, Docket Entry No. 19.)
Defendants also move to dismiss the Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the
Federal Rules of Civil Procedure for lack of standing and for failure to state a claim. (Defs.
Mem. 4–8, 13–25.)
By report and recommendation dated August 5, 2016 (the “R&R”), Magistrate Judge
Vera M. Scanlon recommended that the Court grant Defendants’ motion to dismiss Plaintiffs’
claims for breach of implied warranty, unjust enrichment, injunctive relief and Plaintiffs’
remaining claims to the degree that they fall outside the relevant statutes of limitation, and that
the Court otherwise deny Defendants’ motion to dismiss. (R&R 29–30, Docket Entry No. 24.)
On August 19, 2006, Plaintiffs and Defendants objected to the R&R. (Pls. Obj. to R&R
(“Pls. Obj.”), Docket Entry No. 26; Defs. Objs. to R&R (“Defs. Objs.”), Docket Entry No. 27;
Defs. Resp. to Pls. Obj., Docket Entry No. 29.) For the reasons set forth below, the Court adopts
the R&R in its entirety.
I.
Background
The facts alleged in the Complaint are assumed to be true for purposes of this motion.
Plaintiffs’ claims arise from Defendants’ product labeling of Welch’s Fruit Snacks, which they
allege misrepresents the fruit content and nutritional and health qualities of the snacks. (Compl.
¶ 1.) Welch’s Fruit Snacks include Fruit Snacks, sold in eleven different flavors, 1 Fruit ’n Yogurt
Snacks, sold in strawberry and blueberry flavors, and PB&J Fruit Snacks, sold in strawberry
1
Fruit Snacks are sold in the following flavors: mixed fruit, island fruits, reduced sugar
mixed fruit, berries ’n cherries, concord grape, white grape raspberry, strawberry, tangy fruits,
fruit punch, white grape peach and apple orchard medley. (Compl. ¶ 1 n.2.)
2
creamy, strawberry crunchy, grape creamy and grape crunchy flavors (the “Products”). 2 (Id.
¶ 1 n.2.)
Welch is a Michigan corporation with its principal place of business in Massachusetts,
and PIM is a New Jersey corporation with its principal place of business in New Jersey. (Id.
¶¶ 20–21.) PIM is a “maker of fruit snacks, fruit rolls, and private label confections and food
products.” (Id. ¶ 21.) PIM licenses the trademark “Welch’s” from Welch and “produces,
markets, and distributes” the Products under Welch’s authority. (Id. ¶¶ 21–22.)
Plaintiffs allege that, beginning in 2009 and continuing to the present, “Defendants have
engaged in a deceptive marketing campaign to convince consumers that [the Products] contain
significant amounts of the actual fruits shown in the marketing and on the labeling of the
Products, were nutritious and healthful to consume, and were more healthful than similar
products.” (Id. ¶ 2.) Plaintiffs state as examples of these misrepresentations that Defendants
labeled the Products to state that they are “Made With REAL Fruit” and depicted pictures of the
fruit advertised as the flavor of the Product, (id. ¶¶ 35–38); labeled the Products as containing
“100% Vitamin C” and “25% Vitamins A & E,” as “FAT FREE,” and as containing no gluten or
preservatives, (id. ¶¶ 3, 35–36, 38); included on the packaging of the Products that “[t]he Welch’s
name has been built on the highest quality fruit proudly grown on family farms” and that “[i]n
this tradition of wholesome goodness come Welch’s Fruit Snacks, made with real fruit and fruit
juices,” (id. ¶ 32); and stated on Welch’s website that the Products are “wholesome” and of a
“quality that can only be Welch’s,” (id. ¶ 34).
2
Plaintiffs assert claims against Welch as to the Fruit Snacks, Fruit ’n Yogurt Snacks and
the PB&J Fruit Snacks, and against PIM only as to the Fruit Snacks. (See Compl. ¶ 1 n.2.)
3
According to Plaintiffs, these representations are deceptive because they permit
Defendants to “create the false impression that the fruit named and depicted on the labeling is
present in an amount greater than is actually the case,” (id. ¶ 6), when, in actuality, the Products
“contain only minimal amounts” of the fruits depicted on the label, 3 (id. ¶ 4). Plaintiffs also
allege that Defendants use these representations to market the Products as “healthful and
nutritious” snacks, (id. ¶¶ 34, 38–39), but contend that because “two of the first three ingredients
in the [Products] are added sweeteners” and because “[o]n average, sugar makes up 40% of each
serving of the regular Fruit Snacks, 50% of each serving of the Fruit ’n Yogurt Snacks, and more
than half of each serving of the PB & J Snacks,” (id. ¶ 4), they are not healthy snacks.
Plaintiffs purchased the Products after being exposed to and relying on Defendants’
marketing and labeling of the Products. (Id. ¶¶ 14–17.) Plaintiffs believed that the Products
“contained significant amounts of the actual fruit Defendants emphasized in the marketing and
labeling of the Products, were nutritious and healthful, and were more healthful than similar
products.” (Id. ¶ 15.) Of all the Products, Plaintiffs have purchased the Fruit Snacks in mixed
fruit, strawberry, white grape raspberry and concord grape flavors (the “Purchased Products”).
(Id. ¶¶ 16, 19.) Plaintiffs have not purchased the Fruit Snacks in the island fruits, reduced sugar
mixed fruit, berries ’n cherries, tangy fruits, fruit punch, white grape peach or apple orchard
medley flavors, nor have they purchased the Fruit ’n Yogurt Snacks or the PB&J Fruit Snacks
(the “Non-Purchased Products”). (See id.) “[H]ad Defendants not made certain
3
As an example of the minimal amounts of fruit contained in the Products, Plaintiffs
allege that the ingredients contained in the strawberry Fruit Snacks are juice from concentrates
(pear, peach, and pineapple), corn syrup, sugar, modified corn starch, strawberry puree, gelatin,
citric acid, lactic acid, natural and artificial flavors, ascorbic acid (Vitamin C), alpha tocopherol
acetate (Vitamin E), Vitamin A palmitate, sodium citrate, coconut oil, carnauba wax and Red 40.
(Compl. ¶ 38.)
4
misrepresentations in the Products’ marketing and labeling,” Plaintiffs would not have purchased
the Purchased Products. (Id. ¶¶ 16, 19.) Plaintiffs no longer purchase the Products because they
are not “confident that the marketing and labeling of the Products [are], and will be, truthful and
non-deceptive,” but they would resume purchasing the Products if the marketing and labeling
were not deceptive. (Id.)
II. Discussion
a.
Standards of review
i.
Report and recommendation
A district court reviewing a magistrate judge’s recommended ruling “may accept, reject,
or modify, in whole or in part, the findings or recommendations made by the magistrate judge.”
28 U.S.C. § 636(b)(1)(C). When a party submits a timely objection to a report and
recommendation, the district court reviews the parts of the report and recommendation to which
the party objected under a de novo standard of review. Id.; see also United States v. Romano,
794 F.3d 317, 340 (2d Cir. 2015). The district court may adopt those portions of the
recommended ruling to which no timely objections have been made, provided no clear error is
apparent from the face of the record. John Hancock Life Ins. Co. v. Neuman, No. 15-CV-1358,
2015 WL 7459920, at *1 (E.D.N.Y. Nov. 24, 2015). The clearly erroneous standard also applies
when a party makes only conclusory or general objections, or simply reiterates its original
arguments. Chime v. Peak Sec. Plus, Inc., 137 F. Supp. 3d 183, 187 (E.D.N.Y. 2015) (“General
or conclusory objections, or objections which merely recite the same arguments presented to the
magistrate judge, are reviewed for clear error.” (citation omitted)); see also DePrima v. N.Y.C.
Dep’t of Educ., No. 12-CV-3626, 2014 WL 1155282, at *3 (E.D.N.Y. Mar. 20, 2014) (collecting
cases).
5
ii.
Rule 12(b)(1)
A district court may dismiss an action for lack of subject matter jurisdiction pursuant to
Rule 12(b)(1) when the court “lacks the statutory or constitutional power to adjudicate it.”
Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.À.R.L., 790 F.3d 411, 416–17 (2d Cir.
2015) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)); Shabaj v. Holder,
718 F.3d 48, 50 (2d Cir. 2013) (quoting Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d
635, 638 (2d Cir. 2005)). The plaintiff has the burden to prove that subject matter jurisdiction
exists, and in evaluating whether the plaintiff has met that burden, “‘[t]he court must take all
facts alleged in the complaint as true and draw all reasonable inferences in favor of plaintiff,’ but
‘jurisdiction must be shown affirmatively, and that showing is not made by drawing from the
pleadings inferences favorable to the party asserting it.’” Morrison v. Nat’l Austl. Bank Ltd., 547
F.3d 167, 170 (2d Cir. 2008) (citations omitted), aff’d, 561 U.S. 247 (2010). A court may
consider matters outside of the pleadings when determining whether subject matter jurisdiction
exists. M.E.S., Inc. v. Snell, 712 F.3d 666, 671 (2d Cir. 2013); Romano v. Kazacos, 609 F.3d 512,
520 (2d Cir. 2010).
iii. Rule 12(b)(6)
In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a court must “accept all factual allegations in the complaint as true and draw
inferences from those allegations in the light most favorable to the plaintiff.” Tsirelman v.
Daines, 794 F.3d 310, 313 (2d Cir. 2015) (quoting Jaghory v. N.Y. State Dep’t of Educ., 131 F.3d
326, 329 (2d Cir. 1997)); see also Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d Cir. 2011) (quoting
Connecticut v. Am. Elec. Power Co., 582 F.3d 309, 320 (2d Cir. 2009)). A complaint must plead
“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007). A claim is plausible “when the plaintiff pleads factual content that
6
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Matson, 631 F.3d at 63 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also
Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv.
Mgmt. Inc., 712 F.3d 705, 717–18 (2d Cir. 2013). Although all allegations contained in the
complaint are assumed true, this principle is “inapplicable to legal conclusions” or “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements.” Iqbal,
556 U.S. at 678.
b.
Unopposed recommendations
Plaintiffs do not object to Judge Scanlon’s recommendation that the Court dismiss their
claims for breach of implied warranty, unjust enrichment “and all of their remaining claims to the
degree that they fall outside the relevant statutes of limitation.” 4 (Pls. Obj. 1 & n.2.) Defendants
do not object to Judge Scanlon’s recommendation that the Court deny their motion to stay or
dismiss the action pursuant to the primary jurisdiction doctrine. (Defs. Objs. 4 & n.2.)
The Court has reviewed the unopposed portions of the R&R and, finding no clear error,
the Court adopts these recommendations pursuant to 28 U.S.C. § 636(b)(1). Accordingly, the
Court denies Defendants’ motion to stay or dismiss the action pursuant to the primary
jurisdiction doctrine and grants Defendants’ motion to dismiss Plaintiffs’ claims for breach of
implied warranty, unjust enrichment and any of Plaintiffs’ remaining claims to the degree they
fall outside the relevant statutes of limitation.
4
Judge Scanlon determined that a three-year statute of limitations governs Plaintiffs’
claims for violations of the New York General Business Law, California Consumers Legal
Remedies Act and California False Advertising Law, and that a four-year statute of limitations
governs Plaintiffs’ claims for breach of express warranty and violations of the California Unfair
Competition Law. (R&R 15.)
7
c.
Objections to the R&R
Plaintiffs object to Judge Scanlon’s recommendation that the Court find that they lack
standing to seek injunctive relief. (Pls. Obj. 1.) Defendants object to Judge Scanlon’s
recommendation that the Court deny their motion to dismiss Plaintiffs’ claims for lack of Article
III standing, Plaintiffs’ consumer claims and Plaintiffs’ breach of express warranty claims.
(Defs. Objs. 1–2.) Defendants argue: (1) that Plaintiffs do not have Article III standing to assert
claims against Defendants as to the Non-Purchased Products because “Plaintiffs have not
suffered injury in a ‘personal and individual way’ with respect to [the Non-Purchased Products],”
(id. at 6 (quoting Elkind v. Revlon Consumer Prod. Corp., No. 14-CV-2484, 2015 WL 2344134,
at *4 (E.D.N.Y. May 14, 2015))); (2) that Plaintiffs’ claims for violations of the New York
General Business Law, the California Consumers Legal Remedies Act, the California Unfair
Competition Law and the California False Advertising Law fail as a matter of law because
Defendant’s representations regarding the Products would not mislead a reasonable consumer,
(id. at 10); and (3) that Plaintiffs have not stated a breach of express warranty claim because they
have not identified any “affirmative representations or that Defendants’ products did not conform
to any alleged affirmative representations,” (id. at 11–12).
i.
Standing to seek injunctive relief
Judge Scanlon recommended that the Court find that Plaintiffs lack standing to seek
injunctive relief “because the Complaint fails to establish a likelihood of future or continuing
harm to Plaintiffs.” (R&R 9.) Plaintiffs object to this recommendation and argue that because
they allege that “they would resume their purchases if they knew that the [Products’] marketing
and packaging were truthful and not deceptive,” they have sufficiently alleged future injury and
therefore have standing to seek injunctive relief. (Pls. Obj. 1–2.)
8
When seeking injunctive relief, “a plaintiff must show the three familiar elements of
standing: injury in fact, causation, and redressability.” Cacchillo v. Insmed, Inc., 638 F.3d 401,
404 (2d Cir. 2011) (citing Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)). “[T]o meet
the constitutional minimum of standing” for injunctive relief, a plaintiff “must carry the burden
of establishing that ‘he has sustained or is immediately in danger of sustaining some direct injury
as the result of the challenged official conduct.’” Shain v. Ellison, 356 F.3d 211, 215 (2d Cir.
2004) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 101–02 (1983)); see also Nicosia v.
Amazon.com, Inc., --- F.3d ---, ---, 2016 WL 4473225, at *12 (2d Cir. Aug. 25, 2016) (“Plaintiffs
lack standing to pursue injunctive relief where they are unable to establish a ‘real or immediate
threat’ of injury. (first citing Lyons, 461 U.S. at 111–12; and then citing Shain, 356 F.3d at 215–
16)); Pungitore v. Barbera, 506 F. App’x 40, 41 (2d Cir. 2012) (“[W]hen seeking prospective
injunctive relief, the plaintiff must prove the likelihood of future or continuing harm.”). The
alleged injury “must be ‘concrete and particularized’ and ‘actual or imminent, not conjectural or
hypothetical.’” Knife Rights, Inc. v. Vance, 802 F.3d 377, 383 (2d Cir. 2015) (quoting Susan B.
Anthony List v. Driehaus, 573 U.S. ---, ---, 134 S. Ct. 2334, 2341 (2014)); Am. Civil Liberties
Union v. Clapper, 785 F.3d 787, 800 (2d Cir. 2015) (“The Supreme Court has ‘repeatedly
reiterated that “threatened injury must be certainly impending to constitute injury in fact,” and
that “[a]llegations of possible future injury” are not sufficient.’” (alteration in original) (quoting
Clapper v. Amnesty Int’l USA, 568 U.S. ---, --- 133 S. Ct. 1138, 1147 (2013))).
A plaintiff “cannot rely on past injury to satisfy the injury requirement but must show a
likelihood that he . . . will be injured in the future.” Shain, 356 F.3d at 215; see also Nicosia, --F.3d at ---, 2016 WL 4473225, at *12 (stating that past injuries do not confer standing to seek
injunctive relief); Pungitore, 506 F. App’x at 42 (stating that, while past wrongs may be
9
“evidence bearing on whether there is a real and immediate threat of repeated injury, such
evidence does not in itself show a present case or controversy regarding injunctive relief . . . if
unaccompanied by any continuing, present adverse effects” (internal quotation marks omitted)
(quoting Lyons, 461 U.S. at 102)). “In establishing a certainly impending future injury, . . . the
plaintiff must establish how he or she will be injured prospectively and that the injury would be
prevented by the equitable relief sought.” Marcavage v. City of New York, 689 F.3d 98, 103
(2d Cir. 2012) (collecting cases). “[A]t the pleading stage, standing allegations need not be
crafted with precise detail, nor must the plaintiff prove his allegations of injury.” Baur v.
Veneman, 352 F.3d 625, 631 (2d Cir. 2003) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555,
561 (1992)).
The Second Circuit has not directly addressed whether plaintiffs alleging claims of false
or misleading advertising have standing to seek injunctive relief where the action the plaintiffs
seek to enjoin is still ongoing. 5 See Belfiore v. Procter & Gamble Co., 94 F. Supp. 3d 440, 444
(E.D.N.Y. 2015) (“The Court of Appeals for the Second Circuit has apparently not yet directly
addressed the issue of whether a plaintiff, with no claim of probable future injury, may pursue an
injunction under state consumer protection statutes.”). Nevertheless, some district courts in the
Second Circuit have concluded that consumer plaintiffs asserting deceptive advertising claims do
not have standing to seek injunctive relief because of insufficient allegations of future injury. 6
5
The Second Circuit recently held that a plaintiff alleging false or misleading advertising
claims lacks standing to seek injunctive relief where the defendant has stopped selling the
product in question. Nicosia v. Amazon.com, Inc., --- F.3d ---, ---, 2016 WL 4473225, at *12
(2d Cir. Aug. 25, 2016). However, no party has alleged that Defendants no longer sell the
Products.
6
Other district courts in the Second Circuit have held otherwise and “have declined to
follow Lyons in consumer protection cases.” Nicosia, 84 F. Supp. 3d at 157; see Belfiore v.
10
See Albert v. Blue Diamond Growers, 151 F. Supp. 3d 412, 417–18 (S.D.N.Y. 2015) (holding that
the plaintiffs, who did not allege they would purchase the deceptive product in the future, did not
have standing to seek injunctive relief); In re Avon Anti-Aging Skincare Creams & Prods. Mktg.
& Sales Practices Litig., No. 13-CV-150, 2015 WL 5730022, at *8 (S.D.N.Y. Sept. 30, 2015)
(finding that because the plaintiffs failed to allege a risk of future harm, “they lack[ed] standing
to seek a forward-looking injunction”), appeal withdrawn (Nov. 10, 2015); Elkind, 2015 WL
2344134, at *3 (holding that the plaintiffs did not have standing to seek injunctive relief because
they were “aware of the alleged misrepresentations that they challenge[d], so there [wa]s no
danger that they will again be deceived by them”); Tomasino v. Estee Lauder Cos. Inc.,
44 F. Supp. 3d 251, 256 (E.D.N.Y. 2014) (holding that the plaintiffs did not have standing to seek
Procter & Gamble Co., 94 F. Supp. 3d 440, 445 (E.D.N.Y. 2015) (holding that the plaintiff had
standing to seek injunctive relief even though the plaintiff alleged that he would not purchase the
deceptive product again); Delgado v. Ocwen Loan Servicing, LLC, No. 13-CV-4427, 2014 WL
4773991, at *14 (E.D.N.Y. Sept. 24, 2014) (same); Ackerman v. Coca-Cola Co., No. 09-CV-395,
2013 WL 7044866, at *15 n.23 (E.D.N.Y. July 18, 2013) (same). Some of these courts have
determined that, because a consumer cannot seek to enjoin deceptive conduct until they become
aware of the conduct by suffering an injury, holding that a consumer does not have standing to
seek injunctive relief would effectively bar consumers from ever being able to seek injunctions
in false advertising cases. See Belfiore, 94 F. Supp. 3d at 445 (holding that the plaintiffs had
standing to seek injunctive relief based on their false advertising claims “because to ‘hold
otherwise would effectively bar any consumer who avoids the offending product from seeking
injunctive relief’” (quoting Ackerman, 2013 WL 7044866, at *15 n.23)); Ackerman, 2013 WL
7044866, at *15 (noting that if standing for injunctive relief were denied because a plaintiff had
become aware of an allegedly deception, then “injunctive relief would never be available in false
advertising cases, a wholly unrealistic result” (citation omitted)). These courts have also held
that because the plaintiffs are still exposed to the allegedly deceptive statements, their injury is
ongoing. See Delgado, 2014 WL 4773991, at *14 (finding that the plaintiffs had standing to
seek injunctive relief because the plaintiffs would be “expos[ed]” to the allegedly ongoing and
misleading statements in the future); Ackerman, 2013 WL 7044866, at *15 n.23 (“Plaintiffs seek
to be relieved from defendants’ misleading and deceptive practices in the future, and the fact that
they discovered the alleged deception years ago does not render defendants’ advertising or
labeling any more accurate or truthful. This is the harm New York’s and California’s consumer
protection statutes are designed to redress.”).
11
injunctive relief because the plaintiffs alleged that the products at issue had been deceptively
advertised and that they would not have bought the products “absent the allegedly misleading
advertisements”). These courts have held that because the plaintiffs were aware of the deceptive
advertising and were unlikely to be deceived in the future, the plaintiffs failed to allege a risk of
future harm. See Albert, 151 F. Supp. 3d at 417 (“Plaintiffs have not alleged that they will
purchase [the deceptive products] in the future. . . . Since Plaintiffs have not alleged any future
injury, they do not have standing to seek injunctive relief on behalf of themselves or a class.”);
Avon, 2015 WL 5730022, at *8 (explaining that because each plaintiff stated “that, if she had
been aware of the alleged truth about Avon’s products, she would not have bought class
products,” and therefore failed to allege a risk of future harm, the plaintiffs “lack[ed] standing to
seek a forward-looking injunction”); Elkind, 2015 WL 2344134, at *3 (“Plaintiffs are now aware
of the alleged misrepresentations . . . , so there is no danger that they will again be deceived by
them.”). 7
Despite the absence of Supreme Court or Second Circuit law applying this standard to
consumer plaintiffs seeking injunctive relief, the requirement that a plaintiff allege a risk of
future injury in order to obtain injunctive relief is a constitutional requirement that all plaintiffs
must satisfy. See Lyons, 461 U.S. at 102 (stating that in order to “satisfy the threshold
7
Where the named plaintiffs do not have standing to seek an injunction, the putative
class also lacks standing to seek injunctive relief. Albert v. Blue Diamond Growers, 151
F. Supp. 3d 412, 417 (S.D.N.Y. 2015) (noting that “the named plaintiffs must have standing in
order to seek injunctive relief on behalf of the class” (citing Dodge v. Cty. of Orange, 103
F. App’x. 688, 690 (2d Cir. 2004))); Nicosia v. Amazon.com, Inc., 84 F. Supp. 3d 142, 158
(E.D.N.Y. 2015) (holding that the named plaintiff lacked standing to pursue injunctive relief on
behalf of a putative class because the named plaintiff “must personally have standing to secure
prospective relief on behalf of a class” and the named plaintiff lacked personal standing
(collecting cases)), aff’d in relevant part, vacated on other grounds, --- F. 3d ---, ---, 2016 WL
4473225 (2d Cir. Aug. 25, 2016).
12
requirement imposed by Article III” a plaintiff seeking injunctive relief must demonstrate a
likelihood of future injury); Nicosia, --- F.3d at ---, 2016 WL 4473225, at *12 (noting that
“Article III limits federal judicial power” and that plaintiffs “lack standing to pursue injunctive
relief where they are unable to establish a ‘real or immediate threat’ of injury” (first quoting
Lyons, 461 U.S. at 111–12; and then citing Shain, 356 F.3d at 215–16)); Shain, 356 F.3d at 215
(noting that “[i]n order to meet the constitutional minimum of standing to seek injunctive relief,”
a plaintiff must “show a likelihood that he will be injured in the future” (alteration and internal
quotation marks omitted) (quoting Deshawn E. by Charlotte E. v. Safir, 156 F.3d 340, 344 (2d
Cir. 1998))); Albert, 151 F. Supp. 3d at 418 (declining to follow Ackerman because “binding
Supreme Court and Second Circuit precedent” requires that in order “[f]or a plaintiff to have
individual standing to seek injunctive relief, he or she must demonstrate a likelihood of future
injury” (first citing Lyons, 461 U.S. at 102; and then citing Shain, 356 F.3d at 215)).
Plaintiffs allege that they were injured in the past when they bought the Products because
they based their decisions to purchase the Products on Defendants’ alleged misrepresentations
and “would not have purchased the [Products] had Defendants not made” the alleged
misrepresentations. (Compl. ¶¶ 16, 19.) Plaintiffs also allege that they would resume purchasing
the Products in the future but only if the representations on the Products’ labels were “truthful
and non-deceptive.” (Id.) These allegations are insufficient to establish a likelihood of future
injury because Plaintiffs cannot rely on past injury. See Tomasino, 44 F. Supp. 3d at 256 (“[P]ast
exposure to illegal conduct does not in itself show a present case or controversy regarding
injunctive relief . . . if unaccompanied by any continuing, present adverse effects.’” (quoting
O’Shea v. Littleton, 414 U.S. 488, 495–96 (1974))). Moreover, in order to be injured by an
allegedly deceptive misrepresentation, Plaintiffs must actually be personally deceived by the
13
misrepresentation. See Poulos v. Caesars World, Inc., 379 F.3d 654, 665 (9th Cir. 2004) (stating
that, without reliance, “misrepresentations standing alone have little legal significance”);
LaCourte v. JP Morgan Chase & Co., No. 12-CV-9453, 2013 WL 4830935, at *10 (S.D.N.Y.
Sept. 4, 2013) (noting that “numerous courts have held that in order to have been injured by the
defendant’s deceptive act, a plaintiff must have been personally misled or deceived” (first citing
Solomon v. Bell Atl. Corp., 777 N.Y.S.2d 50, 55 (App. Div. 2004); and then citing Mascoll v.
Strumpf, No. 05-CV-667, 2006 WL 2795175 (E.D.N.Y. Sept. 26, 2006))). Because Plaintiffs
have failed to allege a risk of future injury, the Court adopts Judge Scanlon’s recommendation
and finds that Plaintiffs lack standing to seek injunctive relief.
ii.
Standing to bring suit for Non-Purchased Products
Judge Scanlon recommended that the Court find that Plaintiffs have standing to assert
claims against Defendants as to the Non-Purchased Products. (R&R 11.) Defendants object to
this recommendation and assert that Plaintiffs lack Article III standing to assert claims regarding
the Non-Purchased Products. (Defs. Objs. 5–7.) Defendants specifically argue that Plaintiffs
lack Article III standing “to assert claims for products they did not purchase because they have
not suffered any injury-in-fact with respect to [the Non-Purchased Products].” (Id. at 6.)
Defendants further argue that, unlike class standing, Article III standing “must be addressed” on
a motion to dismiss and cannot be deferred until class certification. (Id. at 7.)
The Second Circuit has clarified that Article III standing and class standing are distinct.
See NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 158 (2d Cir.
2012) (stating that “the class standing analysis is different” from the Article III standing
analysis); see also Reid v. GMC Skin Care USA Inc., No. 15-CV-277, 2016 WL 403497, at *4
(N.D.N.Y. Jan. 15, 2016) (“Article III standing and class standing are different issues that require
separate consideration; class standing is often considered at the class certification stage of the
14
litigation.” (collecting cases)); Martinez v. Capital One Bank, N.A., No. 10-CV-8028, 2015 WL
4270172, at *3 (S.D.N.Y. July 13, 2015) (“[T]he Second Circuit considers the questions of
Article III, statutory, and class standing as distinct.” (quoting In re LIBOR-Based Fin.
Instruments Antitrust Litig., 27 F. Supp. 3d 447, 481 (S.D.N.Y. 2014))); Bais Yaakov of Spring
Valley v. Houghton Mifflin Harcourt Publishers, Inc., 36 F. Supp. 3d 417, 420 (S.D.N.Y. 2014)
(“Article III standing is distinct from the issue of ‘class standing,’ i.e., standing to assert claims
on behalf of others . . . .”).
“[T]o establish Article III standing in a class action for every named defendant there must
be at least one named plaintiff who can assert a claim directly against that defendant, and at that
point standing is satisfied and only then will the inquiry shift to a class action analysis.”
NECA-IBEW, 693 F.3d at 159 (alteration omitted) (quoting Cent. States Se. & Sw. Areas Health
& Welfare Fund v. Merck–Medco Managed Care, L.L.C., 504 F.3d 229, 241 (2d Cir. 2007); see
also Catalano v. BMW of N. Am., LLC, --- F. Supp. 3d ---, ---, 2016 WL 844832, at *8 (S.D.N.Y.
Mar. 1, 2016) (“In the class action context, Article III standing requires that ‘for every named
defendant there must be at least one named plaintiff who can assert a claim directly against that
defendant.’” (first quoting Cent. States, 504 F.3d at 241; and then citing NECA-IBEW, 693 F.3d
at 159)). In NECA-IBEW, the Second Circuit explained that the named plaintiff, NECA-IBEW,
had Article III standing because it plausibly alleged an injury against it by the defendant, despite
the fact that NECA-IBEW also sought to bring claims on behalf of putative class members that
NECA “lack[ed] [Article III] standing to assert on its [own] behalf.” NECA-IBEW, 693 F.3d
at 158.
Here, Defendants do not contest that Plaintiffs have Article III standing to assert claims as
to the Purchased Products. (See Defs. Mem. 7.) Because the named Plaintiffs have standing to
15
assert a claim directly against every named Defendant, Plaintiffs have satisfied the Article III
standing requirement for class actions. See NECA-IBEW, 693 F.3d at 159 (stating that in order
to establish Article III standing in a class action there must be a named plaintiff who can assert a
claim directly against every named defendant); Catalano, --- F. Supp. 3d at ---, 2016 WL
844832, at *8 (same).
Defendants argue that Plaintiffs have an additional burden within the Article III analysis
to establish standing to bring claims as to the Non-Purchased Products, and that this requires
Plaintiffs to allege that they “suffered injury in a ‘personal and individual way’ with respect to
those products.” (Defs. Objs. 6.) However, based on the Second Circuit’s clear pronouncement
of Article III standing in NECA-IBEW, Plaintiffs have no further burden to demonstrate Article
III standing. Plaintiffs have sufficiently stated a cognizable injury by Defendants and have
therefore established Article III standing. 8
iii. New York and California consumer claims
Judge Scanlon recommended that the Court deny Defendants’ motion to dismiss
Plaintiffs’ state law consumer protection claims. 9 (R&R 26.) Judge Scanlon determined that in
view of Plaintiffs’ allegation “that there is not a significant amount of the fruit depicted on the
8
Defendants do not argue that Plaintiffs lack class standing to assert claims as to the
Non-Purchased Products, and the Court does not reach this issue. (See Defs. Objs. 7 (stating that
“[t]he issues of class standing and Article III standing are distinct” and that “[w]hether a plaintiff
has class standing to assert claims on behalf of other purchasers is irrelevant if the plaintiff does
not have Article III standing to bring the claims”)); see also Bais Yaakov of Spring Valley v.
Houghton Mifflin Harcourt Publishers, Inc., 36 F. Supp. 3d 417, 421 (S.D.N.Y. 2014) (“Because
Plaintiff in this case has satisfied the requirements for Article III standing, the issue of whether
Plaintiff has standing to represent putative class members . . . is an issue to be decided on a
motion for class certification.” (citing In re Frito–Lay N. Am., Inc. All Natural Litig.,
No. 12-MD-2413, 2013 WL 4647512, at *12 (E.D.N.Y. Aug. 29, 2013))).
9
Plaintiffs’ state law consumer protection claims assert violations of the New York
General Business Law, the California Consumers Legal Remedies Act, the California Unfair
Competition Law and the California False Advertising Law.
16
packaging in the [Products] and that they are unhealthy relative to real, whole fruit[,] it would be
premature to hold that no reasonable consumer would be misled by Defendants’ representations.”
(Id. at 21.) Defendants object to this recommendation and argue that the Court should dismiss
these claims because Defendant’s representations regarding the Products are “not misleading to a
reasonable consumer as a matter of law.” (Defs. Objs. 10.)
Plaintiffs contend that they have alleged sufficient facts to show that a reasonable
consumer would be misled by Defendants’ representations. (Pls. Opp’n to Defs. Mot. (“Pls.
Opp’n”) 20, Docket Entry No. 21.) Plaintiffs argue that a reasonable consumer could be misled
into thinking that the Products contain “significant amounts” of the fruit depicted on the
Products’ labeling because the label is “(1) dominated by images of whole fruit (2) alongside
‘Made With REAL Fruit’ graphics (3) with the word ‘FRUIT’ prominently displayed (4) paired
with claims that the product will provide significant amounts of nutrients.” (Id. at 17–18.)
Under both California and New York law, a plaintiff must establish that a reasonable
consumer would likely be misled by the alleged misrepresentation. See Ebner v. Fresh, Inc., 818
F.3d 799, 806 (9th Cir. 2016) (“California consumer protection statutes are governed by the
‘reasonable consumer’ test. Under this standard, Plaintiff must ‘show that members of the public
are likely to be deceived.’” (internal quotation marks omitted) (quoting Williams v. Gerber
Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008))); Orlander v. Staples, Inc., 802 F.3d 289, 300 (2d
Cir. 2015) (“[T]he New York Court of Appeals has adopted an objective definition of
‘misleading,’ under which the alleged act must be ‘likely to mislead a reasonable consumer
acting reasonably under the circumstances.’” (internal quotation marks omitted) (quoting Cohen
v. JP Morgan Chase & Co., 498 F.3d 111, 126 (2d Cir. 2007))); Larin v. Bank of Am., NA, 617
F. App’x 651, 652 (9th Cir. 2015) (“[The plaintiff’s] claims under the [California] Consumer
17
Legal Remedies Act, Unfair Competition Law, and False Advertising Law are evaluated under a
‘reasonable consumer standard’ by which he must ‘show that members of the public are likely to
be deceived.’” (quoting Williams, 552 F.3d at 938)); People ex rel. Schneiderman v. One Source
Networking, Inc., 3 N.Y.S.3d 505, 508 (App. Div. 2015) (“[A]n act or practice that is deceptive
or misleading in a material way is defined as a representation or omission ‘likely to mislead a
reasonable consumer acting reasonably under the circumstances.’” (quoting Gaidon v. Guardian
Life Ins. Co. of Am., 94 N.Y.2d 330, 344 (1999))).
“[I]n determining whether a reasonable consumer would have been misled by a particular
advertisement, context is crucial.” Fink v. Time Warner Cable, 714 F.3d 739, 742 (2d Cir. 2013);
see also Belfiore v. Procter & Gamble Co., 311 F.R.D. 29, 53 (E.D.N.Y. 2015) (“Courts view
each allegedly misleading statement in light of its context on the product label or advertisement
as a whole. The entire mosaic is viewed rather than each tile separately.” (internal quotation
marks omitted) (first citing Delgado, 2014 WL 4773991, at *8; and then citing Time Warner
Cable, Inc. v. DIRECTV, Inc., No. 06-CV-14245, 2007 WL 1138879, at *4 (S.D.N.Y. Apr. 16,
2007))); Koenig v. Boulder Brands, Inc., 995 F. Supp. 2d 274, 288 (S.D.N.Y. 2014) (“[I]n
resolving the reasonable consumer inquiry, one must consider the entire context of the label.”
(alteration in original) (internal quotation marks omitted) (quoting Frito-Lay, 2013 WL 4647512,
at *16)); Ackerman, 2010 WL 2925955, at *15 (conducting the reasonable consumer analysis by
“[v]iewing each allegedly misleading statement in light of its context on the label and in
connection with the marketing of [the product] as a whole”). “[T]he reasonable consumer
standard . . . raises questions of fact that are appropriate for resolution on a motion to dismiss
only in ‘rare situation[s].’” Reid v. Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015)
(second and third alterations in original) (quoting Williams, 552 F.3d at 939)); see also Hidalgo v.
18
Johnson & Johnson Consumer Cos., Inc., 148 F. Supp. 3d 285, 295 (S.D.N.Y. 2015) (“[U]sually
[the reasonable consumer] determination is a question of fact.” (quoting Goldemberg v. Johnson
& Johnson Consumer Cos., 8 F. Supp. 3d 467, 478 (S.D.N.Y. 2014))); Wilner v. Allstate Ins. Co.,
893 N.Y.S.2d 208, 217 (App. Div. 2010) (noting that consumer reasonableness was a question of
fact).
In determining whether the Products would deceive a reasonable consumer, the Court
finds Williams, 552 F.3d 934, and McKinnis v. Kellogg USA, No. 07-CV-2611, 2007 WL
4766060 (C.D. Cal. Sept. 19, 2007), to be instructive. In Williams, the plaintiffs alleged that the
defendant’s “Fruit Juice Snacks” were misleading because the products’ labeling used the words
“fruit juice” and depicted pictures of fruit but did not contain “fruit juice from any of the fruits
pictured on the packaging.” Williams, 552 F.3d at 936. The products instead contained only
grape juice from concentrate, which was not depicted on the label. Id. The plaintiffs in Williams
also alleged that the products’ use of the phrase “made with real fruit juice and other all natural
ingredients” was deceptive because “the two most prominent ingredients were corn syrup and
sugar.” Id. The plaintiffs argued that these representations misled them into thinking that the
fruit juice snacks were healthy. Id. The district court granted the defendant’s motion to dismiss
on the grounds that no reasonable consumer could be misled by these representations. Id. at 939.
The Ninth Circuit reversed the district court, finding that the products “could likely deceive a
reasonable consumer” because:
The product is called “fruit juice snacks” and the packaging pictures
a number of different fruits, potentially suggesting (falsely) that
those fruits or their juices are contained in the product. Further, the
statement that Fruit Juice Snacks was made with “fruit juice and
other all natural ingredients” could easily be interpreted by
consumers as a claim that all the ingredients in the product were
natural, which appears to be false.
19
Id. Thus, because the defendant’s representations were actually false, dismissal was
inappropriate. 10 Id.
In contrast, in McKinnis, the plaintiffs claimed that the defendant’s “Froot Loops” cereal
was likely to mislead consumers into believing the cereal contained actual fruit given: “(1) the
use of the word ‘Froot’ in the name; (2) the depiction of brightly colored rings of cereal that
Plaintiffs claim[ed] resemble[d] fruit; and (3) the depiction of illustrate[d] fruit around a banner
stating ‘NATURAL FRUIT FLAVORS,’” which the plaintiffs claimed was in “disproportionately
small type.” McKinnis, 2007 WL 4766060, at *1. The court dismissed the plaintiffs’ claims and
found that “[a] reasonable consumer, even on the most cursory review of the Froot Loops box,
could not, as a matter of law, be misled into believing that the cereal contain[ed] actual fruit.” Id.
at *4. The court found that the defendant’s representations were not deceptive because “the
product’s name is spelled F-R-O-O-T” and “[n]o reasonable consumer would view the trademark
‘FROOT LOOPS’ name as describing the ingredients of the cereal.” Id. Moreover, the
plaintiffs’ “allegation that the cereal pieces themselves resemble fruit [was] not rational, let alone
reasonable” because “[t]he cereal pieces are brightly colored rings, which in no way resemble
any currently known fruit.” Id. In addition, “[t]he front panel of the box clearly and accurately
describe[d] the product as a “SWEETENED MULTI-GRAIN CEREAL,” not any sort of fruit-
10
Defendants argue that “Williams is inapposite where an affirmative misrepresentation
is not alleged.” (Defs. Objs. 8.) However, nothing in Williams suggests that the court’s decision
hinged on the fact that the defendant made affirmative misrepresentations. See Williams v.
Gerber Prod. Co., 552 F.3d 934, 936 (9th Cir. 2008) (finding that a reasonable consumer could
be deceived by a product that did not contain real fruit because the product was called “fruit juice
snacks” and its packaging depicted pictures of fruit). The Ninth Circuit did not characterize the
depiction of “a number of different fruits” on the product’s packaging as an affirmative
representation that the product contained real fruit, but rather found that the depictions of fruit
could deceive a reasonable consumer because they “potentially suggest[ed]” that the product
contained those fruits. Id.
20
based cereal.” Id.; see also Sugawara v. Pepsico, Inc., No. 08-CV-1335, 2009 WL 1439115,
at *3 (E.D. Cal. May 21, 2009) (dismissing the plaintiffs’ claims that “Cap’n Crunch with
Crunchberries” cereal deceived customers into believing the cereal contained fruit given that the
cereal’s name included the word “berries” and its packaging displayed “crunchberries,” which
were pieces of cereal shaped to resemble berries, because a “crunchberry” was not a real fruit
and the cereal’s label stated that the product was a “sweetened corn & oat cereal”).
The labeling on the Products here depicts pictures of actual fruits and states that the
Products are “made with real fruit.” (E.g., Compl. ¶ 38.) Because the Products contain some of
the fruit depicted on the label, (see e.g., id.), Defendants’ representations are not literally false
like the representations in Williams. However, the Products’ primary ingredients are juices from
concentrate of fruits other than the fruits depicted on the Products’ label, in addition to corn
syrup, sugar and corn starch. (E.g., id.) While Defendants may ultimately prevail on their
argument that based on the Products’ labeling, a reasonable consumer would not assume that the
Products contain significant amounts of the fruit depicted on the label, the allegations in the
Complaint “do not present the type of patently implausible claim that warrants dismissal as a
matter of law based on the reasonable consumer prong.” See Stoltz v. Fage Dairy Processing
Indus., S.A., No. 14-CV-3826, 2015 WL 5579872, at *20 (E.D.N.Y. Sept. 22, 2015); see also
Goldemberg, 8 F. Supp. 3d at 479–80 (finding that cosmetics that contained the phrase “Active
Naturals” on their label could mislead consumers into believing that the cosmetics contained
only natural ingredients, even though the cosmetics did in fact contain active, natural
ingredients); Ackerman, 2010 WL 2925955, at *16 (finding that a drink marketed as
“vitaminwater” could mislead consumers into believing that the drink contained only vitamins
and water, even though the drink did in fact contain vitamins and water).
21
Defendants rely on three unreported California federal district court cases to argue that
Defendants’ representations regarding the Products would not mislead a reasonable consumer.
(Defs. Objs. 8–9 (citing Red v. Kraft Foods, Inc., No. 10-CV-1028, 2012 WL 5504011 (C.D. Cal.
Oct. 25, 2012); Manchouck v. Mondelez Int’l Inc., No. 13-CV-2148, 2013 WL 5400285 (N.D.
Cal. Sept. 26, 2013), aff’d, 603 F. App’x 632 (9th Cir. 2015); Romero v. Flowers Bakeries, LLC,
No. 14-CV-5189, 2016 WL 469370 (N.D. Cal. Feb. 8, 2016)).) The Court is not persuaded by
these cases. In Red, the plaintiffs alleged that crackers labeled as “made with real vegetables”
and sold in a box depicting pictures of vegetables would deceive a reasonable consumer into
believing that the crackers were “healthful” or contained a significant amount of vegetables.
Red, 2012 WL 5504011, at *3. The court dismissed the plaintiffs’ claim, holding that, because “a
reasonable consumer will be familiar with the fact of life that a cracker is not composed of
primarily fresh vegetables,” no reasonable consumer would be deceived by the challenged
representations. Id. at *3 & n.4 (citing Webster’s Ninth New Collegiate Dictionary 302 (1990)).
Similarly, in Manchouck, the plaintiff purchased cookies that were labeled as “made with real
fruit” but contained only “mechanically processed fruit purée,” which the plaintiff alleged was
“not ‘real fruit.’” Manchouck, 2013 WL 5400285, at *1. The plaintiff claimed that the label
“made with real fruit” would deceive a reasonable consumer “because fruit purée is processed,
and therefore not equivalent to real fruit.” Id. at *2. The court dismissed the plaintiff’s claim,
finding that she did not “plausibly allege[] why the statement ‘made with real fruit’ would not
include mechanically separated fruit purée” because “even the most narrow definition of ‘real
fruit’ does not exclude fruit that has been strained or blended into puréed form” and because the
cookies’ packaging “prominently display[ed] a depiction of the cookies’ puréed fruit filling.” Id.
at *3 (citing American Heritage Dictionary (5th ed. 2011)). Finally, in Romero, the plaintiff
22
alleged that bread labeled as “wheat” and sold in packaging depicting pictures of stalks of wheat
would deceive a reasonable consumer into believing that the bread was healthier than white
bread and contained a significant amount of whole wheat. Romero, 2016 WL 469370, at *6.
The court dismissed the plaintiffs’ claim, finding that the bread was in fact healthier than white
bread and that the representations on the bread’s labeling and packaging would not lead a
reasonable consumer to believe that the bread contained a significant amount of whole wheat.
Id. at *7.
Unlike the crackers made with real vegetables in Red, which no reasonable consumer
could conclude were made primarily of vegetables, Red, 2012 WL 5504011, at *3, a reasonable
consumer could expect a fruit snack to contain a significant amount of fruit, especially where, as
here, the packaging and labeling emphasize the presence of fruit in the Products. While the
labeling and packaging of the cookies at issue in Manchouck may be similar to those of the
Products here, the allegations are substantively different. Unlike the plaintiffs in Manchouck,
Plaintiffs here do not dispute that the Products contain real fruit. See Manchouck, 2013 WL
5400285, at *3. Instead, Plaintiffs allege that the Products do not contain enough fruit as
compared to the amount of fruit a reasonable consumer could expect it to contain based on the
Products’ labeling. (Compl. ¶¶ 4, 6, 34, 38–39.) Were Plaintiffs alleging that the Products do not
contain real fruit, the reasoning of the Manchouck court regarding the “definition of ‘real fruit’”
might apply. Manchouck, 2013 WL 5400285, at *3. While the Manchouck court held that it was
“ridiculous to say that consumers would expect snack food ‘made with real fruit’ to contain only
‘actual strawberries or raspberries,’ rather than these fruits in a form amenable to being squeezed
inside a Newton,” id., here, the Court cannot likewise conclude that it is ridiculous to say that a
reasonable consumer would expect the Products to contain significant amounts of fruit or to be
23
“healthful and nutritious,” as Plaintiffs allege the labeling led them to believe, (Compl. ¶¶ 4, 34,
38–39).
By contrast, the reasoning of the court in Romero was based on facts regarding the
labeling at issue that are distinct from the facts before this Court. The plaintiff in Romero alleged
that the defendant’s labeling of its bread as “wheat” and depiction of stalks of wheat on the
bread’s packaging could lead a reasonable consumer to conclude that the bread contained a
significant amount of whole wheat and was “healthier than other white breads.” Romero, 2016
WL 469370, at *7. The court found that the bread’s packaging used the word “wheat” in the
context of representations that the bread contained “a blend of wholesome wheat” and “healthy
grains,” but that the defendant did not market its bread as “whole wheat” bread. The court
concluded that, based on the context of the defendant’s representations regarding the bread’s
ingredients, a reasonable consumer could not assume that the bread contained a significant
amount of whole wheat, as opposed to what the bread did contain, an enriched wheat and flour
combination. Id. at *6. Here, Plaintiffs allege that the Products are labeled as “made with real
fruit” but do not contain significant amounts of fruit. (Compl. ¶¶ 4, 34, 38–39.) Thus, unlike the
plaintiff in Romero, who assumed that the defendant’s bread contained a particular type of wheat
because the defendant used the word “wheat” on the bread’s packaging, Plaintiffs do not assume
from the Products’ labeling and marketing that the Products contain a type of fruit that is not
plainly advertised on the packaging; rather, they are relying on Defendants’ representation that
the Products are made with real fruit to argue that a reasonable consumer could be deceived into
thinking that the Products contain significant amounts of real fruit, which, Plaintiffs allege, the
Products do not contain. Moreover, the court in Romero also found, contrary to the plaintiff’s
allegations, that despite not containing the presumed amount of “whole wheat,” the bread was
24
still “healthier than other white breads.” Romero, 2016 WL 469370, at *6. Even if the Romero
plaintiff was correct that the defendant’s bread labeling had impliedly misrepresented that the
bread contained a significant amount of whole wheat, the plaintiff was nevertheless not misled,
as the bread was healthier than other breads. Id. Here, Plaintiffs have alleged — and the Court
must accept as true — that the Products are not healthy relative to fruits. (Compl. ¶¶ 4, 34, 38–
39.) The Court thus finds Romero factually distinguishable.
Accordingly, the Court adopts Judge Scanlon’s recommendation, and denies Defendants’
motion to dismiss Plaintiffs’ consumer protection claims pursuant to New York and California
state laws.
iv. Express warranty claims
Judge Scanlon recommended that the Court deny Defendants’ motion to dismiss
Plaintiffs’ breach of express warranty claims under New York and California law. (R&R 26–27.)
Judge Scanlon determined that, based on Plaintiffs’ allegations, Defendants have represented that
“[the Products] come from ‘the highest quality fruit proudly grown on family farms’ in a
‘tradition of wholesome goodness,’” that “this warranty formed part of the basis of Plaintiffs’
decision to purchase” the Products, and that these representations were not true. (Id. at 27.)
Judge Scanlon found that “[f]or the reasons stated in the discussion of Plaintiffs’ statutory
claims,” 11 Defendants’ representations “regarding [the Products’] wholesome nature is sufficient
to constitute an express warranty, and dismissal at this point would be premature.” (Id.)
Defendants argue that their representations regarding the Products were not affirmations of fact
11
Judge Scanlon recommended that the Court deny Defendants’ motion to dismiss
Plaintiffs’ state law consumer protection claims because Plaintiffs sufficiently alleged that a
reasonable consumer could be misled by the representations on the Products’ labeling that the
Products contain a significant amount of the fruit depicted on the labeling and that the Products
are healthy. (R&R 21.)
25
or descriptions and therefore did not create express warranties, and that Plaintiffs have failed to
show that the Products do not conform with Defendant’s representations. (Defs. Objs. 11–12.)
Under New York law, “[t]o prevail on a claim of breach of express warranty, a plaintiff
must show ‘an affirmation of fact or promise by the seller, the natural tendency of which was to
induce the buyer to purchase and that the warranty was relied upon.’” Factory Assocs. &
Exporters, Inc. v. Lehigh Safety Shoes Co. LLC, 382 F. App’x 110, 111–12 (2d Cir. 2010)
(quoting Schimmenti v. Ply Gem Indus., Inc., 549 N.Y.S.2d 152, 154 (App. Div. 1989)); see also
Koenig, 995 F. Supp. 2d at 289 (“To state a claim for breach of express warranty [under New
York law], a plaintiff must allege that ‘there was an affirmation of fact or promise by the seller,
the natural tendency of which was to induce the buyer to purchase and that the warranty was
relied upon to the plaintiff’s detriment.’” (quoting DiBartolo v. Abbott Labs., 914 F. Supp. 2d
601, 625 (S.D.N.Y. 2012))); Goldemberg, 8 F. Supp. 3d at 482 (“To state a claim for breach of
express warranty under New York law, a plaintiff must allege (1) the existence of a material
statement amounting to a warranty, (2) the buyer’s reliance on this warranty as a basis for the
contract with the immediate seller, (3) breach of the warranty, and (4) injury to the buyer caused
by the breach.” (citing Avola v. La.–Pac. Corp., 991 F. Supp. 2d 381, 391 (E.D.N.Y. 2013))).
Under California law, “to prevail on a breach of express warranty claim, the plaintiff
must prove (1) the seller’s statements constitute an ‘affirmation of fact or promise’ or a
‘description of the goods’; (2) the statement was ‘part of the basis of the bargain’; and (3) the
warranty was breached.” Weinstat v. Dentsply Int’l, Inc., 103 Cal. Rptr. 3d 614, 626
(Cal. Ct. App. 2010) (quoting Keith v. Buchanan, 220 Cal. Rptr. 392, 392 (Cal. Ct. App. 1985));
see also In re ConAgra Foods, Inc., 90 F. Supp. 3d 919, 984 (C.D. Cal. 2015) (“To prevail on a
breach of express warranty claim under California law, a plaintiff must prove that: ‘(1) the
26
seller’s statements constitute an affirmation of fact or promise or a description of the goods;
(2) the statement was part of the basis of the bargain; and (3) the warranty was breached.’”
(quoting Allen v. ConAgra Foods, Inc., No. 13-CV-1279, 2013 WL 4737421, *11 (N.D. Cal.
Sept. 3, 2013))); Hauter v. Zogarts, 14 Cal. 3d 104, 115 (1975) (noting that to state a claim for
breach of express warranty “the seller’s statements — whether fact or opinion — must become
‘part of the basis of the bargain’” (citing Cal. Com. Code § 2313)).
“Any description of the goods which is made part of the basis of the bargain creates an
express warranty that the goods shall conform to the description.” N.Y. U.C.C. Law
§ 2-313(1)(b); Cal. Com. Code § 2313(1)(b)); Dagher v. Ford Motor Co., 190 Cal. Rptr. 3d 261,
274 n.10 (Cal. Ct. App. 2015); N.Y.C. Off-Track Betting Corp. v. Safe Factory Outlet, Inc., 809
N.Y.S.2d 70, 73–74 (App. Div. 2006). Under New York and California law, a product label or
advertisement can create an express warranty. See Simmons v. Washing Equip. Techs., 857
N.Y.S.2d 412, 413 (App. Div. 2008) (stating that the defendant’s brochure advertising its product
created an express warranty); Martinez v. Metabolife Int’l, Inc., 6 Cal. Rptr. 3d 494, 501 (Cal. Ct.
App. 2003) (stating that the defendant’s product label created an express warranty); see also
Ham v. Hain Celestial Grp., Inc., 70 F. Supp. 3d 1188, 1195 (N.D. Cal. 2014) (stating that under
California law “[a] food label can create an express warranty” (first citing Brown v. Hain
Celestial Grp., Inc., 913 F. Supp. 2d 881, 900 (N.D. Cal. 2012); and then citing Vicuna v. Alexia
Foods, Inc., No. 11-CV-6119, 2012 WL 1497507, at *2 (N.D. Cal. Apr. 27, 2012))); see also
Frito-Lay, 2013 WL 4647512, at *27 (holding that under New York and California law, a food
label could form the basis of an express warranty (citing Vicuna, 2012 WL 1497507, at *2));
Rosales v. FitFlop USA, LLC, 882 F. Supp. 2d 1168, 1178 (S.D. Cal. 2012) (“Product
advertisements, brochures, or packaging can serve to create part of an express warranty.” (first
27
citing Cal. Com. Code § 2313(1)(b); and then citing Fundin v. Chi. Pneumatic Tool Co., 199
Cal. Rptr. 789 (Cal. Ct. App. 1984))).
However, a representation on a product label does not create an express warranty if it “is
of such a general nature that a reasonable consumer would not rely on it as a statement of fact
regarding” the product. Simmons v. Washing Equip. Techs., 912 N.Y.S.2d 360, 361 (App. Div.
2010) (first citing Anderson v. Bungee Int’l Mfg. Corp., 44 F. Supp. 2d 534, 541 (S.D.N.Y. 1999);
and then citing Serbalik v. Gen. Motors Corp., 667 N.Y.S.2d 503, 504 (App. Div. 1998)); see
also Forouzesh v. Starbucks Corp., No. 16-CV-3830, 2016 WL 4443203, at *4 (C.D. Cal. Aug.
19, 2016) (finding that the defendant’s representations that its beverages were sold “in cups of
various sizes . . . could [not] support a breach of express warranty claim” under California law
because a reasonable consumer would not have interpreted the defendant’s representation to be
an affirmation of fact or description regarding the “specific amount of liquid” in the defendant’s
beverages); Singleton v. Fifth Generation, Inc., No. 15-CV-474, 2016 WL 406295, at *11
(N.D.N.Y. Jan. 12, 2016) (stating that whether the plaintiff’s “interpretation of the label was
erroneous or reflected a promise made by [the] [d]efendant necessarily depends on what a
reasonable consumer would believe” (citing Ault v. J.M. Smucker Co., No. 13-CV-3409, 2014
WL 1998235, at *6 (S.D.N.Y. May 15, 2014))); Silva v. Smucker Nat. Foods, Inc.,
No. 14-CV-6154, 2015 WL 5360022, at *10 (E.D.N.Y. Sept. 14, 2015) (“Generalized statements
by a defendant, however, do not support an express warranty claim if they are ‘such that a
reasonable consumer would not interpret the statement as a factual claim upon which he or she
could rely.’” (quoting Hubbard v. Gen. Motors Corp., No. 95-CV-4362, 1996 WL 274018, at *6
(S.D.N.Y. May 22, 1996))); Paulino v. Conopco, Inc., No. 14-CV-5145, 2015 WL 4895234, at *2
(E.D.N.Y. Aug. 17, 2015) (same); ConAgra Foods, 90 F. Supp. 3d at 985 (stating that “[a]s with
28
California’s consumer protection statutes,” a claim of breach of express warranty requires the
plaintiff to “demonstrate that the alleged misrepresentation would have been material to a
reasonable consumer” (citing Astiana v. Kashi Co., 291 F.R.D. 493, 509 (S.D. Cal. 2013))).
“What a reasonable consumer’s interpretation of a seller’s claim might be is generally an issue of
fact which is not appropriate for decision on a motion to dismiss.” Paulino, 2015 WL 4895234,
at *2 (citing Ault, 2014 WL 1998235, at *6); Silva, 2015 WL 5360022, at *10 (same); see also
Boswell v. Costco Wholesale Corp., No. 16-CV-0278, 2016 WL 3360701, at *10 (C.D. Cal. June
6, 2016) (stating that “whether a particular statement is an expression of opinion or an
affirmation of a fact is often difficult, and frequently is dependent upon the facts and
circumstances existing at the time the statement is made” (citing Keith v. Buchanan, 220
Cal. Rptr. 392, 396 (Cal. Ct. App. 1985))).
As discussed above with regard to Plaintiffs’ state law consumer protection claims,
because the Court cannot conclude that the Products’ labeling would not mislead a reasonable
consumer, the Court cannot conclude as a matter of law that a reasonable consumer would not
rely on the Products’ labeling as a statement of fact or description of the Products. See Singleton,
2016 WL 406295, at *11 (finding that because the plaintiff had stated a New York consumer
protection claim that the defendant’s vodka bottle labels could mislead a reasonable consumer,
the plaintiff had plausibly stated a claim for breach of express warranties for the same reasons);
Tsan v. Seventh Generation, Inc., No. 15-CV-205, 2015 WL 6694104, at *7 (N.D. Cal. Nov. 3,
2015) (finding that because the plaintiffs had satisfied the reasonable consumer standard with
respect to their California consumer protection claims, the same “allegations [we]re sufficient to
state a claim for breach of express warranty” (citing Garrison v. Whole Foods Market Grp., Inc.,
No. 13-CV-5222, 2014 WL 2451290, at *6 (N.D. Cal. June 2, 2014))); Ham, 70 F. Supp. 3d
29
at 1195 (finding that the plaintiff had stated California consumer protection claims because the
defendant’s waffle labels could deceive a reasonable consumer and denying a motion to dismiss
the plaintiff’s breach of express warranty claim “for the same reasons as the consumer
protection . . . claims); Goldemberg, 8 F. Supp. 3d at 483 (“Defendant reiterates its GBL § 349
argument that none of the above statements are false and misleading as a matter of law.
However, as the Court is unable to determine as a matter of law that the statements are not
misleading under GBL § 349, it is equally inappropriate to determine they are not misleading for
the [express] warranty claim.”).
Defendants argue that Judge Scanlon improperly analyzed Plaintiffs’ breach of express
warranty claims under the reasonable consumer standard, which Defendants argue is applicable
only to Plaintiffs’ state law consumer protection claims. (Defs. Objs. 12.) However, Judge
Scanlon did not apply the reasonable consumer standard to Plaintiffs’ breach of express warranty
claims, but instead applied the reasoning from her analysis of Plaintiffs’ state law consumer
protection claims to conclude that Defendants’ representations “regarding [the Products’]
wholesome nature is sufficient to constitute an express warranty.” (R&R 27.) As Defendants
acknowledge in their objections, courts determine whether a defendant’s representation can
support a breach of express warranty claim by considering whether “a reasonable person would
[] rely” on the statement as an affirmation of fact or whether the representation would be
interpreted as a “generalized” opinion. (Id. at 11 (quoting Bologna v. Allstate Ins. Co., 138
F. Supp. 2d 310, 324 (E.D.N.Y. 2001))). Thus, although an express warranty claim is not
analyzed under the reasonable consumer standard, it is analyzed by reference to a reasonable
consumer’s interpretation of, and reliance on, a defendant’s representation. See Singleton, 2016
WL 406295, at *11 (stating that whether the plaintiff’s “interpretation of the label was erroneous
30
or reflected a promise made by [the] [d]efendant necessarily depends on what a reasonable
consumer would believe” (citing Ault, 2014 WL 1998235, at *6)). In discussing the law
applicable to an express warranty claim, Judge Scanlon merely indicated that both claims require
the court to consider the reasonableness of a consumer’s interpretation of Defendants’ label, and
therefore the conclusions are analogous. See Goldemberg, 8 F. Supp. 3d at 483 (“[A]s the
[c]ourt is unable to determine as a matter of law that the statements are not misleading under
GBL § 349, it is equally inappropriate to determine they are not misleading for the warranty
claim.”).
Accordingly, the Court adopts Judge Scanlon’s recommendation and denies Defendants’
motion to dismiss Plaintiffs’ breach of express warranty claims under New York and California
law.
III. Conclusion
For the foregoing reasons, the Court adopts the R&R in its entirety.
SO ORDERED:
s/ MKB
MARGO K. BRODIE
United States District Judge
Dated: September 30, 2016
Brooklyn, New York
31
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?