1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 SANDRA BROWN, Case No.: 18cv2286 JM (WVG)
10 Plaintiff, ORDER ON DEFENDANT’S 11 v. MOTION TO DISMISS PLAINTIFF’S FIRST AMENDED 12 STARBUCKS CORPORATION, COMPLAINT 13 Defendant. 14 15 Defendant Starbucks Corporation (“Starbucks”) moves to dismiss and/or strike 16 Plaintiff Sandra Brown’s First Amended Complaint (“FAC”) pursuant to Rules 12(b)(6), 17 12(b)(2), and 12(f). (Doc. No. 16.) Plaintiff Sandra Brown opposes. (Doc. No. 17.) The 18 court found this matter suitable for disposition without oral argument. (Doc. No. 20.) 19 Having carefully considered the moving papers and parties’ arguments, the court grants in 20 part and denies in part Starbucks’ motion to dismiss. 21 BACKGROUND 22 This is a putative class action lawsuit brought under the Class Action Fairness Act 23 of 2005 (28 U.S.C. § 1332(d)) and arising out of Brown’s purchase of fruit-flavored 24 gummy candies. Brown asserts eight claims on behalf of herself and putative class 25 members: (1) fraud by omission, (2) negligent misrepresentation, (3) violation of the 26 California Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et seq. (“CLRA”), (4) 27 violation of § 17200 of the California Business & Professions Code (“UCL”) for unlawful 28 business practices, (5) violation of § 17200 of the UCL for unfair business practices, (6) 1 || violation of California’s False Advertising Law, Business and Professions Code § 17500 2 ||et seq. (“FAL”), (7) breach of express warranties, and (8) breach of implied warranties. 3 |!(Doc. No. 15, “FAC,” 4§ 112-194.) 4 Brown alleges the packaging of Starbucks’ “Sour Gummies” product (the 5 ||““Gummies’”’) falsely informs consumers that the candies only contain natural ingredients 6 || because the front packaging does not disclose the presence of artificial flavors. The front 7 || packaging states, “Apple, watermelon, tangerine and lemon flavored candies.” (FAC 4 9.)
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23 24 When she purchased the Gummies, Brown sought a product that did not contain 25 artificial flavors. (FAC 959.) Brown paid a price premium for the Gummies because she 26 || believed the product did not contain artificial ingredients and was willing to pay more for 27 |{ —— SSS 28 Aq page citations refer to those generated by the court’s CM/ECF system.
1 a product made with only natural ingredients. (FAC ¶ 71.) 2 Brown alleges that California law required Starbucks to disclose on the front 3 packaging that the Gummies contained artificial flavors. Brown alleges that Starbucks 4 violated two federal Food and Drug Administration (“FDA”) regulations—21 C.F.R. 5 § 101.22, which regulates the labelling of food containing artificial ingredients, and 6 21 C.F.R. § 102.5, which requires food labels to accurately identify and describe the basic 7 nature of the food or its characterizing properties or ingredients. These FDA regulations 8 are incorporated into California’s Sherman Food, Drug, and Cosmetic Act (“Sherman 9 Act”), Cal. Health & Safety Code § 109875 et seq. See Sherman Act § 110100 (“All food 10 labeling regulations and any amendments to those regulations adopted pursuant to the 11 federal acts in effect on January 1, 1993, or adopted on or after that date shall be the food 12 regulations of this state.”). Brown relied on “the omission of the fact that this Product 13 contained artificial flavoring” on the front packaging to conclude that the Gummies did not 14 contain any artificial flavors. (FAC ¶ 82.) Starbucks does not concede these FDA 15 regulations required it to disclose the use of artificial flavors on the front packaging as it 16 argues this is an evidentiary matter Plaintiff must prove, but for purposes of its motion to 17 dismiss, Starbucks “assumes that the requirement applies . . . .” (Doc. No. 16-1 at 10 n.1.) 18 Accordingly, for purposes of this order, the court also assumes that Starbucks was required 19 to prominently disclose the presence of artificial flavors on the Gummies’ front packaging. 20 LEGAL STANDARDS 21 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the 22 legal sufficiency of the pleadings. To overcome such a motion, the complaint must contain 23 “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 24 Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff 25 pleads factual content that allows the court to draw the reasonable inference that 26 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 27 (2009). Facts merely consistent with a defendant’s liability are insufficient to survive a 28 motion to dismiss because they establish only that the allegations are possible rather than 1 plausible. Id. at 678-79. The court must accept as true the facts alleged in a well-pled 2 complaint, but mere legal conclusions are not entitled to an assumption of truth. Id. The 3 court must construe the pleading in the light most favorable to the non-moving party. 4 Concha v. London, 62 F.3d 1493, 1500 (9th Cir. 1995). 5 Under Federal Rule of Civil Procedure 9(b), a plaintiff must plead fraud with 6 particularity. “Averments of fraud must be accompanied by the who, what, when, where, 7 and how of the misconduct charged.” Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 8 1103 (9th Cir. 2003) (internal quotation marks omitted). Even if “fraud is not a necessary 9 element of a [particular] claim,” Rule 9(b) will apply if the plaintiff “allege[s] a unified 10 course of fraudulent conduct and rel[ies] entirely on that course of conduct as the basis of 11 [the] claim.” Id. at 1103. 12 DISCUSSION 13 Starbucks moves to dismiss Brown’s complaint for failure to state a claim and for 14 lack of personal jurisdiction over Starbucks for claims asserted by out-of-state class 15 members. Starbucks also moves to strike Brown’s nationwide class allegations. For the 16 reasons discussed below, the court grants in part and denies in part these motions. 17 A. CLRA, FAL, and UCL Claims 18 The CLRA, FAL, and UCL are California consumer protection statutes. The UCL 19 prohibits “unfair competition,” which is defined as “any unlawful, unfair or fraudulent 20 business act or practice.” Cal. Bus. & Prof. Code § 17200. Under the FAL, it is unlawful 21 to make or disseminate any statement concerning property or services that is “untrue or 22 misleading.” Id. § 17500. The CLRA prohibits “unfair methods of competition and unfair 23 or deceptive acts or practices.” Cal. Civ. Code § 1770. 24 The UCL, FAL, and CLRA all prohibit “not only advertising which is false, but also 25 advertising which although true, is either actually misleading or which has a capacity, 26 likelihood or tendency to deceive or confuse the public.” Kasky v. Nike, Inc., 27 Cal. 4th 27 939, 951 (2002) (quoting Leoni v. State Bar, 39 Cal. 3d 609 (1985)); Colgan v. Leatherman 28 Tool Group, Inc., 135 Cal. App. 4th 663, 680 (2006). Plaintiff’s claims for misleading 1 advertising under the UCL, FAL, and CLRA are governed by the “reasonable consumer” 2 standard. Williams v. Gerber Prod. Co., 552 F.3d 934, 938 (9th Cir. 2008) (citing Freeman 3 v. Time, Inc., 68 F.3d 285, 289 (9th Cir. 1995)). Under this standard, a plaintiff must 4 “show that ‘members of the public are likely to be deceived.’” Id. Although the 5 “reasonable consumer” is not one who is “versed in the art of inspecting and judging a 6 product,” Yumul v. Smart Balance, Inc., 733 F. Supp. 2d 1117, 1125 (C.D. Cal. 2010), this 7 test nonetheless “requires more than a mere possibility that [a product’s] label ‘might 8 conceivably be misunderstood by some few consumers viewing it in an unreasonable 9 manner.’” Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016) (quoting Lavie v. Procter 10 & Gamble Co., 105 Cal. App. 4th 496 (2003)). “Rather, the reasonable consumer standard 11 requires a probability ‘that a significant portion of the general consuming public or of 12 targeted consumers, acting reasonably in the circumstances, could be misled.’” Id. 13 The question of whether a business practice is “deceptive” in most cases presents a 14 question of fact not amenable to resolution on a motion to dismiss. See Williams, 552 F.3d 15 at 938. “However, in certain instances, [a] [c]ourt can properly make this determination 16 and resolve such claims based on its review of the product packaging.” Pelayo v. Nestle 17 USA, Inc., 989 F. Supp. 2d 973, 978 (C.D. Cal. 2013). 18 Brown’s UCL, FAL, and CLRA claims are premised on Starbucks’ allegedly 19 misleading advertising. (Doc. No. 15.) Accordingly, the court applies the “reasonable 20 consumer” standard. See Williams, 552 F.3d at 938. In her original complaint, Brown 21 alleged that “[b]y operation of California law, identifying [the four fruit] flavors by name 22 on the Product label without any qualifying language warrants to the consumer that Product 23 is flavored only with natural flavors.” (Doc. No. 1, Compl. ¶ 30) (emphasis added.) The 24 court dismissed these claims as the complaint failed to plausibly allege a reasonable 25 consumer would be misled by the Gummies’ packaging. (Doc. No. 14.) The court based 26 its ruling on the fact that Brown did not allege the packaging made any misrepresentations; 27 the fruit “flavors” statement on the packaging would not plausibly lead a consumer to 28 believe the Gummies contain only natural ingredients; and Starbucks’ alleged failure to 1 abide by federal and California advertising and food labelling requirements, without more, 2 would not mislead a reasonable consumer. (Doc. No. 14.) Brown failed to “identif[y] any 3 other circumstances that would lead a reasonable consumer to conclude that the Gummies 4 do not contain artificial ingredients.” (Id. at 8.) The FAC’s allegations relating to 5 representations on the Gummies’ packaging thus remain insufficient to plausibly allege a 6 reasonable consumer would believe the Gummies contain only natural flavors. However, 7 Brown now alleges that “[c]onsumers did not know the Product contained artificial 8 flavoring ingredients due to Defendant’s omission of the legally-required [artificial 9 flavoring] disclosure . . . .” (FAC ¶ 65.) The court accepts this allegation as true. See 10 Iqbal, 556 U.S. at 678. At this stage, Starbucks does not dispute it had a duty to disclose 11 the presence of artificial flavors on the Gummies’ front packaging.2 Accordingly, unlike 12 Brown’s original complaint, the FAC goes beyond assertion of a mere regulatory violation. 13 Brown’s claims narrowly survive on her allegation, and the reasonable inferences drawn 14 from this allegation, that a reasonable consumer would expect a product only contains 15 natural flavors when the product’s packaging does not disclose the use of artificial flavors 16 near the description of its characterizing flavors. Whether Brown can prove this allegation 17 is a matter for summary judgment or trial. See Williams, 552 F.3d at 938. 18 The FAC also satisfies the pleading requirements of Rule 9(b) as Brown alleges that 19 Starbucks (the who) intentionally failed to disclose the presence of artificial flavors on the 20 Gummies’ front packaging (the what) when Brown purchased the candies in December 21 2017 (the when) in Santee, California (the where), which misled Brown to believe the 22 Gummies contained only natural ingredients as consumers in California expect products 23 with artificial characterizing flavors to prominently display that information on the 24 packaging (the how). See Vess, 317 F.3d at 1103. 25 26 27 2 Plaintiff’s claims are rooted in an alleged omission. The parties do not cite, but at the summary judgment stage, should be aware of the standards set forth in Daugherty v. Am. 28 Honda Motor Co., 144 Cal. App. 4th 824 (2006). 1 B. Standing 2 Starbucks argues Brown lacks standing for her FAL, CLRA, and UCL claims as she 3 fails to allege that she reasonably relied on Starbucks’ misrepresentations or suffered any 4 economic injury. “To establish standing to bring a claim under [the FAL, CLRA, and 5 UCL], plaintiffs must meet an economic injury-in-fact requirement, which demands no 6 more than the corresponding requirement under Article III of the U.S. Constitution.” Reid 7 v. Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015). Plaintiffs must “show that they 8 ‘ha[ve] suffered injury in fact and ha[ve] lost money or property as a result of the unfair 9 competition.’” Hawkins v. Kroger Co., 906 F.3d 763, 768 (9th Cir. 2018) (citing Cal. Bus. 10 & Prof. Code §§ 17204 (UCL); id. § 17535 (FAL)). “Under California law, the economic 11 injury of paying a premium for a falsely advertised product is sufficient harm to maintain 12 a cause of action.” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 965 (9th Cir. 2018). 13 “Thus, a consumer’s allegation that ‘she would not have bought the product but for the 14 misrepresentation . . . is sufficient to allege causation . . . [and] to allege economic injury.’” 15 Id. at 965-66 (quoting Kwikset Corp. v. Superior Court, 51 Cal. 4th 310 (2011)). “To 16 properly plead an economic injury, a consumer must allege that she was exposed to false 17 information about the product purchased, which caused the product to be sold at a higher 18 price, and that she would not have purchased the goods in question absent this 19 misrepresentation.” Davidson, 889 F.3d at 966 (quotation marks omitted). 20 Starbucks argues that Brown does not plausibly allege she relied on the Gummies 21 packaging as her “alleged reliance is her own unique interpretation about what the 22 statements on the Gummies’ packaging allegedly meant to her.” (Doc. No. 16-1 at 18.) 23 The court finds that Brown adequately pleads reliance on Starbucks’ omission of an 24 artificial flavor disclosure and resulting economic injury. Brown alleges she was unaware 25 the Gummies contained artificial flavors when she purchased them because the front 26 packaging did not disclose the use of artificial flavors. (FAC ¶¶ 56, 77.) Plaintiff was 27 seeking products that only used natural ingredients and would not have purchased the 28 Gummies if she knew they contained artificial flavors. (FAC ¶ 57.) Plaintiff alleges the 1 Gummies’ packaging deceived her into paying a price premium for a product she thought 2 contained only natural ingredients. (FAC ¶¶ 66, 82.) Accordingly, Plaintiff alleges she 3 lost money in the amount of the price premium she paid for the Gummies. (FAC ¶ 84.) 4 Plaintiff further alleges she would not have purchased the Gummies in the absence of the 5 misleading packaging. (FAC ¶ 81.) As discussed above, the FAC plausibly alleges a 6 reasonable consumer would be misled by Starbucks’ failure to disclose on the front 7 packaging that the Gummies contain artificial flavors. Accordingly, the FAC sufficiently 8 pleads reliance on the Gummies’ misleading packaging and resulting economic harm.3 9 C. Express Warranty 10 California Commercial Code § 2313 provides, in relevant part, “(a) Any affirmation 11 of fact or promise made by the seller to the buyer which relates to the goods and becomes 12 part of the basis of the bargain creates an express warranty that the goods shall conform to 13 the affirmation or promise[;] [and] (b) Any description of the goods which is made part of 14 the basis of the bargain creates an express warranty that the goods shall conform to the 15 description.” Cal. Com. Code § 2313(1). “To prevail on a breach of express warranty 16 claim, a plaintiff must prove that the seller (1) made an affirmation of fact or promise or 17 provided a description of its goods; (2) the promise or description formed part of the basis 18 of the bargain; (3) the express warranty was breached; and (4) the breach caused injury to 19 the plaintiff.” Plaintiff must plead “facts showing a ‘specific and unequivocal written 20 statement’ of warranty.” Cruz v. Anheuser-Busch Companies, LLC, 682 F. App’x 583, 21 584 (9th Cir. 2017) (quoting Maneely v. Gen. Motors Corp., 108 F.3d 1176, 1181 (9th Cir. 22 1997)). 23 Plaintiff alleges three bases for her warranty claim: (1) “[t]he failure to disclose the 24
25 3 Starbucks also argues that Brown does not explain how she could have relied on the 26 misleading Gummies packaging if she read the ingredients list on the back packaging, 27 which disclosed the use of artificial flavors. (Doc. No. 16-1 at 18.) The FAC does not allege that Plaintiff read the back ingredients; Brown alleges she was unaware the 28 Gummies contained artificial flavors when she purchased them. (FAC ¶ 56.) 1 use of artificial flavoring on the Product’s front label, by operation of law, informs 2 consumers that the Product does not contain artificial flavors,” (FAC ¶ 169); 3 (2) “Starbucks’ health and wellness campaign further reinforced reasonable consumers’ 4 beliefs that the Product did not contain artificial flavors,” (FAC ¶ 170); and (3) “[t]he 5 Product does not solely contain apple, watermelon, tangerine, and lemon flavors as the 6 label suggests – it contains artificial apple, watermelon, tangerine, and lemon flavors,” 7 (FAC ¶ 171) (emphasis in original). 8 First, the failure to disclose a fact is not “a ‘specific and unequivocal written 9 statement’ of warranty.” See Cruz, 682 F. App’x at 584. Second, Plaintiff fails to identify 10 any statements in Starbucks’ health and wellness campaign warranting its products do not 11 contain artificial flavors. See id. Plaintiff alleges Starbucks’ health and wellness campaign 12 states “that Starbucks listens to its customers and continues to evolve its health and wellness 13 options influenced by customer feedback.” (FAC ¶ 27.) Starbucks’ Director of Retail 14 Brand Partnerships allegedly stated that Starbucks “know[s] customers are snacking on the 15 go and looking for snacks that are healthier.” (FAC ¶ 28.) Plaintiff alleges Starbucks 16 “offers ‘packaged snacks’ as ‘a great opportunity to expand [its] offerings to those with 17 specific dietary needs, like gluten-free and vegan.’” (FAC ¶ 29.) None of these statements 18 warrant, or even imply, that Starbucks does not use artificial flavors. Plaintiff fails to 19 connect the fact that Starbucks may know its customers are looking for “healthier” snacks 20 to the use of artificial flavors in its products. Lastly, the statement that the Gummies are 21 “[a]pple, watermelon, tangerine and lemon flavored candies” accurately describes the 22 product; the Gummies contain these flavors. Cf. Hadley v. Kellogg Sales Co., 243 F. Supp. 23 3d 1074, 1093 (N.D. Cal. 2017) (“The statement ‘MADE WITH Real Fruit’ does not 24 reference the presence, or lack thereof, of trans fat. In fact, the product packaging for the 25 Nutri-Grain bars does not mention trans fat at all. Defendant’s factually true statement 26 would not cause a reasonable consumer to believe that the Nutri-Grain Bars are free of trans 27 fat.”). As the court previously held, this statement does not plausibly suggest the Gummies 28 contain only natural ingredients. (Doc. No. 14.) Accordingly, Brown’s express warranty 1 claim is dismissed with prejudice. See Viggiano v. Hansen Nat. Corp., 944 F. Supp. 2d 2 877, 893-94 (C.D. Cal. 2013) (dismissing express warranty claim where the plaintiff failed 3 to allege the representations on the product’s packaging were false); Lam v. Gen. Mills, 4 Inc., 859 F. Supp. 2d 1097, 1106 (N.D. Cal. 2012) (dismissing warranty claims where the 5 plaintiff “fail[ed] to point to any affirmative statement, whether it be in General Mills’s 6 advertising or the Fruit Snacks’ packaging, indicating that the Fruit Snacks are healthful”). 7 D. Implied Warranty 8 California Commercial Code § 2314 provides that “a warranty that the goods shall 9 be merchantable is implied in a contract for their sale,” and enumerates six requirements of 10 merchantable goods. The FAC focuses on three of these requirements. Brown alleges the 11 Gummies (1) do not “[p]ass without objection in the trade under the contract description,” 12 Cal. Com. Code § 2314(2)(a); (2) are not “adequately contained, packaged, and labeled as 13 the agreement may require,” id. at subdiv. (2)(e); and (3) do not “[c]onform to the promises 14 or affirmations of fact made on the container or label if any,” id. at subdiv. (2)(f). (FAC ¶¶ 15 187-189.) 16 Starbucks argues that the FAC fails to cure any of the deficiencies identified by the 17 court in its prior order dismissing Plaintiff’s original complaint. But as discussed above, 18 the FAC now plausibly alleges a reasonable consumer may believe the Gummies did not 19 contain artificial flavors because the packaging failed to prominently disclose their 20 presence. At this stage, Starbucks does not dispute it was required to prominently display 21 an artificial flavors disclosure on the Gummies and failed to do so. As Starbucks fails to 22 address Plaintiff’s allegation that the Gummies were not adequately labeled and packaged 23 as § 2314(2)(e) requires, the court denies Starbucks’ motion to dismiss Plaintiff’s breach of 24 the implied warranty claim. See Hendricks v. StarKist Co., 30 F. Supp. 3d 917, 933 (N.D. 25 Cal. 2014) (“The Complaint sufficiently sets forth a claim that the Products here were not 26 adequately packaged, consistent with an implied promise that they were adequately filled 27 with tuna.”); In re Trader Joe’s Tuna Litig., 289 F. Supp. 3d 1074, 1093 (C.D. Cal. 2017) 28 (same). 1 E. Fraudulent Omission 2 Plaintiff asserts a common law and statutory fraud by omission claim. (FAC ¶¶ 112- 3 117.) California Civil Code § 1709 provides that “[o]ne who willfully deceives another 4 with intent to induce him to alter his position to his injury or risk, is liable for any damage 5 which he thereby suffers.” Section 1710 defines “deceit,” in relevant part, as “[t]he 6 suppression of a fact, by one who is bound to disclose it, or who gives information of other 7 facts which are likely to mislead for want of communication of that fact.” The common 8 law elements of fraud in California are: “(a) misrepresentation (false representation, 9 concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to 10 defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Davis 11 v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1163 (9th Cir. 2012) (quoting Kearns v. Ford 12 Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009)) (emphasis in original). See also Robinson 13 Helicopter Co. v. Dana Corp., 34 Cal. 4th 979, 990 (2004). “Concealment is a species of 14 fraud or deceit.” Stofer v. Shapell Indus., Inc., 233 Cal. App. 4th 176, 186 (2015). “The 15 elements of an action for fraud and deceit based on concealment are: (1) the defendant must 16 have concealed or suppressed a material fact, (2) the defendant must have been under a 17 duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed 18 or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have 19 been unaware of the fact and would not have acted as he did if he had known of the 20 concealed or suppressed fact, and (5) as a result of the concealment or suppression of the 21 fact, the plaintiff must have sustained damage.” Id. (quotations omitted). 22 Here, Brown alleges that Starbucks knows consumers prefer naturally flavored 23 products over those using artificial flavors and are willing to pay a premium for these 24 products. (FAC ¶ 15, 25-27.) Brown alleges that Starbucks knew the Gummies contained 25 artificial flavors and knew it was required to disclose this information on the front 26 packaging. (FAC ¶¶ 64, 84.) At this stage of the proceedings, Starbucks does not dispute 27 that the Sherman Act and incorporated FDA regulations required it to prominently display 28 an artificial flavors disclosure on the Gummies’ front packaging. (Doc. No. 16-1 at 10 1 n.1.) Plaintiff alleges that Starbucks intentionally omitted this artificial flavor disclosure 2 on the Gummies’ front packaging to give consumers the false impression that the product 3 only contained natural flavors. (FAC ¶¶ 15-16, 30, 114.) Plaintiff and consumers relied 4 on this omission and purchased the Gummies without knowing they contained artificial 5 flavors. (FAC ¶¶ 65, 82.) If Plaintiff had known the Gummies contained artificial flavors, 6 she would not have purchased them. (FAC ¶ 86.) Plaintiff and consumers thus paid a 7 premium for the Gummies, believing they contained only natural ingredients, and lost the 8 amount of this premium as a result of Starbucks’ intentional failure to prominently display 9 an artificial flavor disclosure on the Gummies’ packaging. (FAC ¶¶ 87-89.) The FAC 10 adequately alleges that the Gummies are not what Starbucks holds them out to be and that 11 a reasonable consumer would be deceived by Starbucks’ omission. See Deutsch v. 12 Flannery, 823 F.2d 1361 (9th Cir. 1987) (“[A] pleading satisfies the particularity 13 requirement of [Rule 9(b)] if it identifies the circumstances constituting fraud so that the 14 defendant can prepare an adequate answer from the allegations.”) (internal quotation marks 15 omitted). 16 First, Starbucks argues it did not conceal the fact that the Gummies contained 17 artificial flavors as the ingredients list on the back packaging disclosed all ingredients. As 18 noted above, the Sherman Act incorporates FDA food labeling regulations. See Sherman 19 Act § 110100. 21 C.F.R. § 101.22(i) provides, in relevant part, that when a label makes 20 “direct or indirect representations with respect to the primary recognizable flavor(s), by 21 word, vignette, e.g., depiction of a fruit, or other means, . . . such flavor shall be considered 22 the characterizing flavor.” If the product “contains any artificial flavor which simulates, 23 resembles or reinforces the characterizing flavor, . . . the name of the characterizing flavor 24 shall be accompanied by the word(s) ‘artificial’ or ‘artificially flavored’ . . . .” 21 C.F.R. 25 § 101.22(i)(2). This regulation further provides that “[w]herever the name of the 26 characterizing flavor appears on the label (other than in the statement of ingredients) so 27 conspicuously as to be easily seen under customary conditions of purchase, the words 28 prescribed by this paragraph shall immediately and conspicuously precede or follow such 1 name, without any intervening written, printed, or graphic matter . . . .” 21 C.F.R. 2 § 101.22(i)(3). For purposes of its motion to dismiss, Starbucks does not dispute that, 3 pursuant to these regulations, it was required to disclose the presence of artificial flavors 4 on the Gummies’ front packaging. Accordingly, at the pleading stage, the FAC sufficiently 5 alleges that Starbucks concealed the fact that the Gummies contained artificial flavors as 6 Starbucks does not dispute it had a duty to disclose this information “immediately and 7 conspicuously” before or after the alleged characterizing flavor description—“[a]pple, 8 watermelon, tangerine and lemon flavored candies,” (FAC at 7)—on the front packaging. 9 Second, Starbucks argues that Brown fails to plausibly allege she reasonably relied 10 on Starbucks’ omission of an artificial flavor disclosure or suffered any damages. As 11 discussed above, Brown sufficiently alleges she relied on the misleading Gummies 12 packaging at the time of purchase, was unaware the Gummies contained artificial flavors, 13 and paid a price premium for a product she thought was naturally flavored but actually 14 contained artificial flavors. Accordingly, Starbucks’ motion to dismiss Brown’s fraud 15 claim is denied. 16 F. Negligent Misrepresentation 17 “Under California law, ‘[a] negligent misrepresentation claim requires a positive 18 assertion, not merely an omission.’” In re Vizio, Inc., Consumer Privacy Litig., 238 F. 19 Supp. 3d 1204, 1230 (C.D. Cal. 2017) (citing Lopez v. Nissan N. Am., Inc., 201 Cal. App. 20 4th 572, 596 (Ct. App. 2011)). “An ‘implied’ assertion or representation is not enough.” 21 Wilson v. Century 21 Great W. Realty, 15 Cal. App. 4th 298, 306 (1993). Here, as 22 discussed above and in the court’s prior order, Brown fails to plausibly allege a 23 misrepresentation. Brown does not challenge the veracity of the statement that the 24 Gummies are “[a]pple, watermelon, tangerine and lemon flavored candies,” but instead 25 alleges that Starbucks’ omission of an artificial flavor disclosure on the Gummies’ front 26 packaging misled her to believe the Gummies contained only natural ingredients. 27 Accordingly, Brown’s negligent misrepresentation claim is dismissed with prejudice. 28 1 G. Out-of-State Class Allegations 2 Brown asserts fraudulent omission and negligent misrepresentation claims on behalf 3 of a nationwide class. Her fraud claim is asserted “pursuant to California Civil Code 4 §§ 1709-1710, et seq. and the common law of all states.” (FAC ¶ 113.) Brown’s negligent 5 misrepresentation claim is premised on Starbucks’ failure to disclose the artificial flavoring 6 “pursuant to California and federal law,” and she asserts this claim under California Civil 7 Code §§ 1709-1710 “and the common law of all states.” (FAC ¶ 119.) Brown asserts 8 express and implied warranty claims on behalf of a nationwide class of persons in “all 9 states with substantially similar laws.” (FAC ¶¶ 166-187.) These claims are premised on 10 alleged warranties created “by operation of California law.” (FAC ¶¶ 167, 177.) 11 Starbucks moves to strike or dismiss Brown’s allegations relating to a nationwide 12 class and a class of those in “all states with substantially similar laws,” arguing that 13 California law does not apply to out-of-state putative class members’ claims and, to the 14 extent Brown seeks to apply the law of fifty different states, this would be “wholly 15 impractical.” (Doc. No. 16-1 at 33.) Brown argues that these issues are better determined 16 at class certification; Starbucks has not identified a conflict between California and the 17 laws of other states; and a nationwide class is manageable. (Doc. No. 17 at 26-27.) 18 The court dismisses Brown’s allegations relating to a nationwide class and a class of 19 those in “all states with substantially similar laws” as they are impermissibly vague. See 20 Fed. R. Civ. P. 8(a). Neither Starbucks nor the court can determine whether Brown alleges 21 California law applies to the claims of out-of-state putative class members, or if she alleges 22 the laws of various unidentified states apply to these putative class members’ claims. 23 Brown also appears confused. The FAC alleges claims on behalf of class members 24 pursuant to “the common law of all states,” (FAC at 15, 18), and on behalf of “all states 25 with substantially similar laws,” (FAC at 25-26). But in her opposition to Starbucks’ 26 motion to dismiss, Brown argues California law applies to a nationwide class. 27 Such vague and confusing class allegations are insufficient. Especially here, where 28 Brown’s entire theory hinges on Starbucks’ violation of a California statute. To the extent 1 Brown intended to assert that California law applies to the claims of out-of-state putative 2 class members, she fails to allege “that California has ‘significant contact or significant 3 aggregation of contacts’ to the claims of each class member,” such that application of 4 California law is constitutional. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 589 (9th 5 Cir. 2012) (quoting Wash. Mut. Bank v. Superior Court, 24 Cal. 4th 906, 921 (2001)). 6 Even if California law could be constitutionally applied, courts “follow[ ] a three-step 7 ‘governmental interest analysis’ to address conflict of laws claims and ascertain the most 8 appropriate law applicable to the issues where there is no effective choice-of-law 9 agreement.” Washington Mut. Bank, 24 Cal. 4th at 919. This analysis requires the party 10 advocating for application of foreign law to identify the applicable rule of law in each 11 potentially concerned state and to demonstrate how it materially differs from California 12 law. Id. Brown’s vague allegations make it impossible for the parties or the court to 13 identify potentially applicable foreign law. To the extent Brown intended to assert that 14 other states’ laws apply to the claims of out-of-state-putative class members, she fails to 15 identify these states or the laws she alleges apply. Nor does Brown establish that she would 16 have Article III standing to assert such claims on behalf of non-California putative class 17 members. These failures are grounds for dismissal. See Augustine v. Talking Rain 18 Beverage Co., Inc., 386 F. Supp. 3d 1317 (S.D. Cal. 2019) (“Plaintiffs[’] failure to identify 19 which state laws govern their common law claims means the claims brought on behalf of 20 the nationwide class have not been adequately pled.”). Lastly, the FAC fails to define the 21 apparent subclass of persons in “all states with substantially similar laws.” See Civ. L.R. 22 23.1(b) (requiring class action complaints “include a statement describing the class or 23 classes on behalf of which the action is sought to be maintained”). 24 Accordingly, the court grants Starbucks’ motion to dismiss Brown’s allegations 25 relating to a nationwide class and a class of persons in “all states with substantially similar 26 laws,” but grants Brown leave to amend. For each claim asserted on behalf of out-of-state 27 putative class members, Brown is instructed to specifically identify (1) which states’ laws 28 apply, (2) which specific laws of these states apply, and (3) the class definition of persons 1 in “all states with substantially similar laws,” if she intends to assert claims on behalf of 2 this class. The court further cautions Brown, in light of the multiple amendments allowed 3 in this case, that failure to adequately plead an out-of-state class may demonstrate the 4 deficiencies identified above cannot be cured by amendment.4 5 CONCLUSION 6 Starbucks’ motion to dismiss is granted in part and denied in part as follows: 7 1. Starbucks’ motion to dismiss Plaintiff’s UCL, FAL, CLRA, fraudulent omission, 8 and breach of an implied warranty claims is denied; 9 2. Starbucks’ motion to dismiss Plaintiff’s breach of an express warranty and 10 negligent misrepresentation claims is granted; 11 3. Plaintiff’s claims brought on behalf of a nationwide class and/or a class of 12 persons in “all states with substantially similar laws” are dismissed without 13 prejudice. Plaintiff has up to and including September 23, 2019, to file an 14 amended complaint addressing the issues identified related to the claims being 15 brought on behalf of the nationwide class and/or the class of persons in “all states 16 with substantially similar laws.” If Plaintiff intends to file an amended complaint 17 that re-asserts these claims, Plaintiff shall file a notice with the court stating that 18 intention on or before September 13, 2019. If Plaintiff does not file a notice with 19 the court by September 6, 2019, Starbucks shall file its answer to the Second 20 Amended Complaint within the limits established by the Federal Rules of Civil 21 Procedure; and 22 4. Because the court has dismissed the nationwide class claims, Plaintiff cannot rely 23 on the damages attributable to those non-California class claims to satisfy 24 CAFA’s $5,000,000 amount in controversy requirement. In light of this, the 25 26 27 4 Starbucks also argues the court does not have personal jurisdiction over it for out-of-state putative class members’ claims. Because the court dismisses Brown’s out-of-state class 28 allegations, the court need not address Starbucks’ argument at this time. 1 court is concerned that it lacks jurisdiction to entertain Plaintiff’s CAFA claim. 2 Accordingly, if Plaintiff does not amend, she is ORDERED TO SHOW 3 CAUSE in writing, on or before September 13, 2019, as to why this action should 4 not be dismissed for lack of subject matter jurisdiction. Plaintiff must provide 5 the court with evidence that $5,000,000 is in controversy based on the remaining 6 California class action claims. Starbucks is permitted, but not obligated, to 7 respond in writing on or before September 20, 2019, with authority and evidence 8 it believes may assist the court in determining whether subject matter jurisdiction 9 exists. 10 IT IS SO ORDERED. 11 DATED: September 3, 2019 JEFFREY T. MILLER 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28