Caldwell v. Nordic Naturals, Inc.
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Opinion
1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CHERYL CALDWELL, Case No. 23-cv-02818-EMC
8 Plaintiffs, ORDER GRANTING IN PART AND 9 v. DENYING IN PART DEFENDANT'S MOTION TO DISMISS 10 NORDIC NATURALS, INC., 11 Defendants. Docket No. 21
12 13 Plaintiff Cheryl Caldwell has filed a putative class action on behalf of herself and a 14 nationwide class of those similarly situated against Defendant Nordic Naturals, Inc., based on the 15 sale of its dietary supplement product “Ultimate® Omega 2X.” Compl. ¶ 12. Plaintiff claims that 16 Defendant’s use of “2X” in conjunction with “Ultimate Omega” on the front of the package 17 misleads consumers into thinking that there is double the amount of omega-3 (“omega”) per 18 serving than the amount of omega in the Nordic Naturals product named “Ultimate® Omega.” 19 Compl. ¶ 12. This matter is before the Court on Defendant’s motion to dismiss for failure to state 20 a claim pursuant to Fed. R. Civ. P. 12(b)(6) (“Def.’s Mot.”). 21 Defendant argues that the Court should dismiss the following claims by Plaintiff: (1) 22 California consumer protection statute claims; (2) claims for breach of express and implied 23 warranty; (3) claims asserting quasi-contract, unjust enrichment, and restitution; (5) claims for 24 injunctive relief; and (6) claims by absent non-Californian class members for want of standing. 25 For reasons stated below, the Court hereby GRANTS Defendant’s motion to dismiss 26 Plaintiff’s quasi-contract, unjust enrichment, and restitution claims with leave to amend and grants 27 Defendant’s motion to dismiss claims for injunctive relief without leave to amend. The Court 1 I. FACTUAL & PROCEDURAL BACKGROUND 2 Plaintiff Cheryl Caldwell alleges, on behalf of herself and a nationwide class of those 3 similarly situated, that the labeling of Nordic Natural’s dietary supplement product “Ultimate® 4 |} Omega 2X” is deceptive. Compl. Jf 1-5, 12. Nordic Naturals sells two products (among others) 5 || named Ultimate® Omega (“Ultimate Omega”) and Ultimate® Omega 2X (“Ultimate Omega 6 || 2X”). Compl. § 12. Plaintiff alleges that the “2X” on the product in question misleads reasonable 7 consumers to believe that the product “has twice the amount of Omega-3s per serving than that 8 || found in Defendant’s regular Ultimate Omega product.” Compl. § 12. Ultimate Omega contains 9 1280 mg of omega per serving, while Ultimate Omega 2X contains 2150 mg. Compl. □ 14. 10
NORDIC NATURALS Saepetinne oe | men ah ee se cover wv ¥ Optimal Wellness* 13 | Chatto! Welimess™ □ = ® ULTIMATE ULTIMATE
a 16 1280 mq Omega-3 ntensity omega: + Clinically 17 shown to support a healthy heart THE NEXT GENERATION FISH OIL O More powerful, Naturally. Zz 18 eee ate 2150mg Omega-3 19 ate □□ an Superior rrighycerwe mee Merk 20 bo dn Bini ele) } Ma aa
22 || Id. Mathematically, for Ultimate Omega 2X to have double the amount of omega per serving than 23 Ultimate Omega, the 2X product would contain 2560 mg of omega (i.e., 1280 mg multiplied by 24 || two). Compl. { 14. Because Ultimate Omega 2X only contains 2150 mg per serving, Plaintiff 25 alleges that it has 16% less omega than represented by Nordic Naturals. Compl. 14, 15. 26 |} // 27 // 28 |] //
1 On or around July 2022, Plaintiff purchased Ultimate Omega 2X from a San Francisco 2 Whole Foods Market. Compl. ¶ 9. According to Plaintiff, she purchased the product under the 3 impression that it contained twice the amount of omega per serving than the Ultimate Omega 4 product did, based on the “2X” and “Ultimate Omega” descriptions on the front of the package. 5 Compl ¶ 9. Plaintiff alleges that had she known that it did not contain double the omega per 6 serving, she would not have purchased Ultimate Omega 2X. Compl. ¶ 9. 7 II. LEGAL STANDARD 8 Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss for 9 failure to state a claim for relief. See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) 10 motion to dismiss after the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009) 11 and Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations 12 [in the complaint] ‘must . . . suggest that the claim has at least a plausible chance of success.” 13 Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations 14 in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving 15 party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). “A 16 claim has facial plausibility when the Plaintiff pleads factual content that allows the court to draw 17 the reasonable inference that the Defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. 18 at 678. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more 19 than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 20 556). 21 III. DISCUSSION 22 A. Plaintiff’s CLRA, FAL and UCL Deceptive Label Claims 23 Plaintiff alleges three claims that require finding that the Ultimate Omega 2X label is 24 misleading to a reasonable consumer. Specifically, the California Unfair Competition Law 25 (“UCL”) prohibits “unlawful, unfair or fraudulent” business practices. Cal. Bus. & Prof. Code § 26 17200. The California False Advertising Law (“FAL”) prohibits “untrue or misleading” 27 1 advertisements. Id. § 17200.1 And the California Consumer Legal Remedies Act (“CLRA”) 2 prohibits “unfair or deceptive acts or practices.” Cal. Civ. Code § 1770.2 As explained by the 3 Ninth Circuit in Williams v. Gerber Products Company, “[a]lthough the statutes differ slightly, the 4 basic inquiry is the same: Would the defendant’s marketing likely mislead a reasonable 5 consumer?” 552 F.3d 934, 939 (9th Cir. 2009). Thus, “to state a viable claim under any of those 6 statutes, Plaintiffs must allege facts showing that the advertisement in question is misleading to a 7 reasonable consumer.” Chuang v. Dr. Pepper Snapple Grp., Inc., 2017 WL 4286577, at *3 (C.D. 8 Cal. Sept. 20, 2017) (citing Williams, 552 F.3d at 938). 9 The Ninth Circuit recently discussed the reasonable consumer standard in McGinity v. 10 Procter & Gamble Company:
11 [the reasonable consumer] standard requires that Appellants show that members of the public are likely to be deceived . . . The 12 reasonable consumer standard requires more than a mere possibility that the label might conceivably be misunderstood by some few 13 consumers viewing it in an unreasonable manner. . . . Rather, the reasonable consumer standard requires a probability that a 14 significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled. 15 The touchstone under the “reasonable consumer” test is whether the product labeling and ads promoting the products have a meaningful 16 capacity to deceive consumers.
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CHERYL CALDWELL, Case No. 23-cv-02818-EMC
8 Plaintiffs, ORDER GRANTING IN PART AND 9 v. DENYING IN PART DEFENDANT'S MOTION TO DISMISS 10 NORDIC NATURALS, INC., 11 Defendants. Docket No. 21
12 13 Plaintiff Cheryl Caldwell has filed a putative class action on behalf of herself and a 14 nationwide class of those similarly situated against Defendant Nordic Naturals, Inc., based on the 15 sale of its dietary supplement product “Ultimate® Omega 2X.” Compl. ¶ 12. Plaintiff claims that 16 Defendant’s use of “2X” in conjunction with “Ultimate Omega” on the front of the package 17 misleads consumers into thinking that there is double the amount of omega-3 (“omega”) per 18 serving than the amount of omega in the Nordic Naturals product named “Ultimate® Omega.” 19 Compl. ¶ 12. This matter is before the Court on Defendant’s motion to dismiss for failure to state 20 a claim pursuant to Fed. R. Civ. P. 12(b)(6) (“Def.’s Mot.”). 21 Defendant argues that the Court should dismiss the following claims by Plaintiff: (1) 22 California consumer protection statute claims; (2) claims for breach of express and implied 23 warranty; (3) claims asserting quasi-contract, unjust enrichment, and restitution; (5) claims for 24 injunctive relief; and (6) claims by absent non-Californian class members for want of standing. 25 For reasons stated below, the Court hereby GRANTS Defendant’s motion to dismiss 26 Plaintiff’s quasi-contract, unjust enrichment, and restitution claims with leave to amend and grants 27 Defendant’s motion to dismiss claims for injunctive relief without leave to amend. The Court 1 I. FACTUAL & PROCEDURAL BACKGROUND 2 Plaintiff Cheryl Caldwell alleges, on behalf of herself and a nationwide class of those 3 similarly situated, that the labeling of Nordic Natural’s dietary supplement product “Ultimate® 4 |} Omega 2X” is deceptive. Compl. Jf 1-5, 12. Nordic Naturals sells two products (among others) 5 || named Ultimate® Omega (“Ultimate Omega”) and Ultimate® Omega 2X (“Ultimate Omega 6 || 2X”). Compl. § 12. Plaintiff alleges that the “2X” on the product in question misleads reasonable 7 consumers to believe that the product “has twice the amount of Omega-3s per serving than that 8 || found in Defendant’s regular Ultimate Omega product.” Compl. § 12. Ultimate Omega contains 9 1280 mg of omega per serving, while Ultimate Omega 2X contains 2150 mg. Compl. □ 14. 10
NORDIC NATURALS Saepetinne oe | men ah ee se cover wv ¥ Optimal Wellness* 13 | Chatto! Welimess™ □ = ® ULTIMATE ULTIMATE
a 16 1280 mq Omega-3 ntensity omega: + Clinically 17 shown to support a healthy heart THE NEXT GENERATION FISH OIL O More powerful, Naturally. Zz 18 eee ate 2150mg Omega-3 19 ate □□ an Superior rrighycerwe mee Merk 20 bo dn Bini ele) } Ma aa
22 || Id. Mathematically, for Ultimate Omega 2X to have double the amount of omega per serving than 23 Ultimate Omega, the 2X product would contain 2560 mg of omega (i.e., 1280 mg multiplied by 24 || two). Compl. { 14. Because Ultimate Omega 2X only contains 2150 mg per serving, Plaintiff 25 alleges that it has 16% less omega than represented by Nordic Naturals. Compl. 14, 15. 26 |} // 27 // 28 |] //
1 On or around July 2022, Plaintiff purchased Ultimate Omega 2X from a San Francisco 2 Whole Foods Market. Compl. ¶ 9. According to Plaintiff, she purchased the product under the 3 impression that it contained twice the amount of omega per serving than the Ultimate Omega 4 product did, based on the “2X” and “Ultimate Omega” descriptions on the front of the package. 5 Compl ¶ 9. Plaintiff alleges that had she known that it did not contain double the omega per 6 serving, she would not have purchased Ultimate Omega 2X. Compl. ¶ 9. 7 II. LEGAL STANDARD 8 Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss for 9 failure to state a claim for relief. See Fed. R. Civ. P. 12(b)(6). To overcome a Rule 12(b)(6) 10 motion to dismiss after the Supreme Court’s decisions in Ashcroft v. Iqbal, 556 U.S. 662 (2009) 11 and Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), a plaintiff’s “factual allegations 12 [in the complaint] ‘must . . . suggest that the claim has at least a plausible chance of success.” 13 Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th Cir. 2014). The court “accept[s] factual allegations 14 in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving 15 party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). “A 16 claim has facial plausibility when the Plaintiff pleads factual content that allows the court to draw 17 the reasonable inference that the Defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. 18 at 678. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more 19 than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 20 556). 21 III. DISCUSSION 22 A. Plaintiff’s CLRA, FAL and UCL Deceptive Label Claims 23 Plaintiff alleges three claims that require finding that the Ultimate Omega 2X label is 24 misleading to a reasonable consumer. Specifically, the California Unfair Competition Law 25 (“UCL”) prohibits “unlawful, unfair or fraudulent” business practices. Cal. Bus. & Prof. Code § 26 17200. The California False Advertising Law (“FAL”) prohibits “untrue or misleading” 27 1 advertisements. Id. § 17200.1 And the California Consumer Legal Remedies Act (“CLRA”) 2 prohibits “unfair or deceptive acts or practices.” Cal. Civ. Code § 1770.2 As explained by the 3 Ninth Circuit in Williams v. Gerber Products Company, “[a]lthough the statutes differ slightly, the 4 basic inquiry is the same: Would the defendant’s marketing likely mislead a reasonable 5 consumer?” 552 F.3d 934, 939 (9th Cir. 2009). Thus, “to state a viable claim under any of those 6 statutes, Plaintiffs must allege facts showing that the advertisement in question is misleading to a 7 reasonable consumer.” Chuang v. Dr. Pepper Snapple Grp., Inc., 2017 WL 4286577, at *3 (C.D. 8 Cal. Sept. 20, 2017) (citing Williams, 552 F.3d at 938). 9 The Ninth Circuit recently discussed the reasonable consumer standard in McGinity v. 10 Procter & Gamble Company:
11 [the reasonable consumer] standard requires that Appellants show that members of the public are likely to be deceived . . . The 12 reasonable consumer standard requires more than a mere possibility that the label might conceivably be misunderstood by some few 13 consumers viewing it in an unreasonable manner. . . . Rather, the reasonable consumer standard requires a probability that a 14 significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled. 15 The touchstone under the “reasonable consumer” test is whether the product labeling and ads promoting the products have a meaningful 16 capacity to deceive consumers.
17 69 F.4th 1093, 1097 (9th Cir. 2023) (internal citations and quotations omitted). 18 In general, dismissal for failure to state a claim in this context is appropriate only where it 19 is “impossible for the plaintiff to prove that a reasonable consumer was likely to be deceived.” 20 Williams, 552 F.3d at 939. To this end, this Court has previously explained that the reasonable 21 consumer analysis is “usually . . . a question of fact not appropriate for decision” on a motion to 22 dismiss. Sultanis v. Champion Petfoods USA Inc., 2021 WL 3373934, at *9 (N.D. Cal. Aug. 3, 23 24 1 Cal. Bus. & Prof. Code § 17200 provides that: “As used in this chapter, unfair competition shall 25 mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing 26 with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.” (emphasis added). 27 1 2021) (Chen, J.). 2 Here, Plaintiff alleges that the Nordic Naturals product is false and deceptive because it 3 includes a “2X” moniker in the product name that misrepresents the strength or dosage of the 4 supplement. Compl. ¶ 1. Specifically, complainant alleges that the 2X moniker induces a 5 reasonable consumer to believe that the 2X product has twice the strength of the “regular” 6 Ultimate Omega product. Id. ¶¶ 9, 12-13. Because the 2X product contains only 2150 mg of 7 omega, and the regular product contains 1280 mg, the 2X products should contain 2560 mg (1280 8 x 2) per serving. Id. ¶¶ 3, 14. However, Ultimate Omega 2X only contains 2150 mg (a 16% 9 shortfall). Id. Defendant argues that Plaintiff’s claims fail as a matter of law because the product 10 label states on the front, in bold letters, that the contains 2150 mg of omega. Def.’s Mot. at 5-6. 11 Accordingly, Defendant argues, a rational consumer would not assume that the product contains 12 anything more than the amount. Id. Further, Defendant argues, because the front label contains 13 the statement “Next Generation Fish Oil,” and “More Powerful. Naturally.” a consumer would not 14 reasonably think that the term 2X refers to twice the amount of another product. Def.’s Mot. at 7. 15 Plaintiff contends she in fact was misled into thinking that the product was double (“2X”) the 16 strength of the company’s “regular” product, i.e., that 2150 mg equates to double the amount in 17 the regular product. Id. 18 Three seminal cases from the Ninth Circuit that apply the reasonable person standard, 19 McGinity, Moore, and Williams, are instructive here. 20 In McGinity, the Ninth Circuit recently addressed allegations necessary to survive a motion 21 to dismiss a claim that a product’s label is misleading. 69 F.4th at 1095-99. In McGinity, the 22 court found plaintiffs failed to state a claim that a shampoo’s label was misleading Id. at 1096. 23 The front label read “Nature Fusion” and featured images of an avocado, green leaf, and gold 24 vitamin. Id. The court did not find that the label would mislead a reasonable consumer to believe 25 that the product contained only natural ingredients. Id. The court recognized that the front label 26 might have been ambiguous as to whether the product contained only natural ingredients based on 27 the “Nature Fusion” tagline. Id. at 1098. However, because the back label listed synthetic 1 Ninth Circuit clarified that circuit precedent did not preclude the defendant from relying on the 2 ingredient list on the back of the product to dispel such ambiguity presented by the front of the 3 label. Id. at 1097. In other words, the court held that where the front label is ambiguous, and the 4 perhaps confusing meaning of the front label can be confirmed by reviewing the back label, a 5 reasonable consumer would not be misled by the product. Id. at 1099. 6 But the McGinity court explained that there are limits to this principle. Specifically, the 7 court there distinguished the case from Williams v. Gerber Products Company, 552 F.3d 934, 939 8 (9th Cir. 2008). In Williams, the court considered whether Gerber’s Fruit Juice snacks, which had 9 a front label bearing the words “fruit juice snacks,” alongside pictures of fruits, was misleading. 10 Id. at 936. The product at issue did not contain juice from the fruits pictured on the front and the 11 first two, most prominent ingredients listed on the back label were corn syrup and sugar, as 12 opposed to real fruit juice. Id. The court explained that the purpose of the ingredient list on a 13 back label is to confirm representations made on the front, not to allow contradictory statements to 14 be made on the front while using the back label to correct such falsities, shielding a defendant 15 from liability. Id. at 939-40. Thus, the court found plaintiffs stated a claim in Williams. Id. The 16 McGinity court endorsed Williams but distinguished McGinity on the ground that in McGinity, 17 unlike in Williams, the back label served to confirm what might be confusing on the front, while in 18 Williams the additional information was contradictory to the statements made on the front label. 19 69 F.4th at 1095-99. 20 McGinity also relied upon Moore v. Trader Joe’s Company, 4 F.4th 874, 882 (9th Cir. 21 2021). In Moore, the court considered a label for 100% New Zealand Manuka Honey, and found 22 it was not likely to deceive a reasonable consumer into believing the product contained only honey 23 from bees harvesting the Manuka flower. Id. at 876-77. The Moore court determined that there 24 may be some ambiguity as to what 100% meant, i.e., that it could be construed to mean that either 25 Manuka flower was the only source of honey or that all of the honey was from New Zealand. Id. 26 As the phrase on the front label was inherently ambiguous, it was appropriate to consider other 27 information available to the consumer, including the rest of the packaging, price of the product, or 1 would be misled. Id. The court found that while consumers are not expected to be experts in 2 honey, one would be expected to know beekeepers cannot force bees to gather honey from only 3 certain types of flowers. Id. Ultimately, the court found no claim was stated because common 4 sense would dissuade a reasonable consumer from interpreting the purportedly ambiguous phrase 5 to mean the honey was derived only from the Manuka flower nectar. Id. McGinity explained that 6 Moore stands for the proposition that the front label need not be viewed in complete isolation to 7 determine whether the label would mislead a consumer. 69 F.4th at 1095-99. Other facts such as 8 common sense or the back label informs whether a reasonable consumer would be confused by an 9 ambiguous front label. See id. 10 The following principles can be derived from the above cases. Where the label of a product 11 is ambiguous, meaning a reasonable consumer would realize the label could have more than one 12 meaning, the court should consider other information available to the consumer aside from the 13 label to determine if a reasonable consumer would be misled. To this end, a consumer might be 14 expected to consider information on the back label of the product; common consumer knowledge 15 and price of the product is also relevant to the analysis. See Moore, 4 F.4th at 876-77; McGinity, 16 69 F.4th at 1095-99. On the other hand, where the front of the product creates more than mere 17 ambiguity, but instead misleads a consumer into thinking one thing (i.e., that the product 18 contained snacks made of fruit juice) that in fact is not true, the consumer is not required to dig 19 through the other information (including the back label) to dispel that falsity. Williams, 552 F.3d 20 at 939-40. Otherwise, companies would be allowed to mislead a consumer into thinking one thing 21 is true about the product, while shielding the company from liability through fine print. Williams, 22 552 F.3d at 939-40. 23 Thus, the following questions are presented here: (1) does the front of the label 24 affirmatively mislead the consumer in the first instance; (2) to what extent is the label misleading 25 (i.e., is it only ambiguous, putting the consumer on notice that it needs to seek more information); 26 and (3) does other information that the consumer should be expected to consider dispel confusion 27 on the front label, rendering the front label not misleading? Each question is considered below. 1 1. The front label is misleading. 2 The label at issue would plausibly mislead a reasonable consumer. Specifically, “X” is a 3 multiplication symbol; “2X” is commonly understood to mean “two times” something else. See, 4 e.g., Coleman v. Nestle USA, Inc., 2023 WL 5944137, at *1 (M.D. Fla. May 26, 2023) (granting 5 motion to dismiss complaint alleging that “2X more” means two more than X (or 3), as 2X is a 6 “well-understood idiomatic phrase,” representing two times more than something else). Given the 7 commonality of the symbol “X” to mean “times,” it is plausible that a reasonable consumer would 8 think the product is two times the potency of the regular Ultimate Omega product. See id. 9 The Ultimate Omega 2X label having stated the milligrams of omega contained in the 10 product does not change the outcome. Defendant cites several cases standing for the proposition 11 that a label must be read in context of its surrounding language, and that common sense applies to 12 the reasonable consumer test. See Def.’s Mot. at 5-8. To be sure, a reasonable consumer could 13 not think that the product contains anything more than 2150 mg of omega, based on the statement 14 on the front of the label. See, e.g., Whiteside v. Kimberly-Clark Corp., 2023 WL 4328175, at *4 15 (C.D. Cal. June 1, 2023) (“Reviewing the packaging as a whole, the Court finds that a reasonable 16 consumer would not ‘simply assume’ the Asterisked Products contain 100% natural ingredients 17 when she can ‘plainly see’ that the wipes are 70% plant-based by weight and made of natural and 18 synthetic ingredients.”). But that fact does not negate Plaintiff’s claims. Rather, Plaintiff does not 19 allege she believed the product contained more than 2150 mg of omega, but that she was under the 20 impression that the amount of omega in the 2X product equated to two times the amount included 21 in the original product. See Opp. at 7-8 (citing Compl. ¶¶ 2, 12). To this end, the 2150 mg label 22 does nothing to clarify whether the product is two times stronger than the original product on its 23 face. Rather, the truth can only be learned by viewing the 2150 mg amount in relation to the 24 contents of the original product – an entirely separate product with its own label.3 25 And inclusion of the phrases “Next Generation Fish Oil,” and “More Powerful. Naturally.” 26 on the front label does not changes the calculus as Defendant argues. Def.’s Mot. at 6-7. Both of 27 1 those phrases are consistent with the interpretation that the product is two times the potency of the 2 original product. In other words, a reasonable consumer could think the product is two times 3 “More Powerful. Naturally.” and that the “Next Generation” product is better because it is again, 4 twice the potency. Indeed, Defendant does not take a position as to what the 2X moniker was 5 meant to convey at all, if not two times the potency. See Def.’s Mot. at 7. Defendant suggests as 6 an example, that the 2X moniker could mean second generation of product (i.e., the X is not a 7 multiplier at all but a stand in for the word “generation”). See Reply at 9 (“2X does not 8 unequivocally mean ‘twice,’ particularly given the presence of statements such as ‘The Next 9 Generation Fish Oil’ and ‘More powerful’ on the label.” (citing Cinebase Software, Inc. v. Media 10 Guar. Tr., Inc., 1998 WL 661465, at *1 (N.D. Cal. Sept. 22, 1998) (“Cinebase’s current digital 11 media data management product is Cinebase 1.X. Its next generation product is Cinebase 2.X.”))). 12 In Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011) the court clarified that when “there 13 are two alternative explanations . . . plaintiff’s complaint survives a motion to dismiss . . . [unless] 14 defendant’s plausible alternative explanation is so convincing that plaintiff’s explanation is 15 implausible.” Here, Defendant is not even committing to an alternative meaning of the 2X 16 moniker. And its alternative explanation is hardly convincing. While “1.X” or “2.X” may mean 17 first or second generation, there is no period in the moniker here. “X” alone without the 1.X or 18 2.X most often refers to “times” as opposed to “generation.” See, e.g., Coleman, 2023 WL 19 5944137, at *1. Accordingly, Defendant’s weakly suggested alternative explanation is not “so 20 convincing” as to render Plaintiff’s explanation, that she viewed the moniker to mean two times 21 the potency of the original product, implausible. See id. 22 This outcome is bolstered by the fact that generally, dismissal for failure to state a claim in 23 this context is appropriate only where it is “impossible for the plaintiff to prove that a reasonable 24 consumer was likely to be deceived.” de Dios Rodriguez v. Ole Mexican Foods Inc., 2021 WL 25 1731604, at *2, *3, *5 (C.D. Cal. Apr. 22, 2021) (quoting Williams, 552 F.3d at 939); see also 26 Sultanis v. Champion Petfoods USA Inc., 2021 WL 3373934, at *9 (N.D. Cal. Aug. 3, 2021) 27 (Chen, J.) (the reasonable consumer analysis is “usually . . . a question of fact not appropriate for 1 decision” on a motion to dismiss).4 Defendant fails to make such a showing here. 2 2. A reasonable consumer would not be on notice to investigate further. 3 The label at issue does not include the sort of inherent ambiguity which might put a 4 consumer on notice to investigate the meaning of the label further. Indeed, the front label of the 5 Nordic Naturals product is less inherently ambiguous than the labels at issue in Moore and 6 McGinity. Specifically, in Moore the phrase “100% New Zealand Manuka Honey” was 7 ambiguous in the sense that “100%” could relate either to the place of origin (New Zealand) or 8 floral source (Manuka)—based on the syntax of the phrase. 4 F.4th at 876-77. And in McGinity, 9 the term “Nature Fusion” also presented inherent ambiguity because the term “Fusion” indicates a 10 mix of products but does not specify that mix—putting the consumer on notice that the product 11 might include both natural and synthetic ingredients with an unspecified portion of each. 69 F.4th 12 at 1095-99. Dissimilarly here, the “2X” moniker does not innately communicate two different 13 meanings, leaving a consumer to investigate which applies. “2X” commonly and clearly denotes 14 “two times.” Cf. Moore, 4 F.4th at 876-77; McGinity, 69 F.4th at 1095-99.5 15 The additional information that could be investigated (that two times the omega of the 16 original amounts to 2560 mg and not 2150 mg) is contradictory to and not a mere clarification of 17 an ambiguity in the front label. Cf. Moore, 4 F.4th at 876-77 (label reading “100% New Zealand 18 Manuka Honey” consistent with honey being fully sourced from New Zealand). 19 Thus, a reasonable consumer would not have been on notice to investigate the meaning of 20
21 4 The Court notes that while Plaintiff’s theory as to how she was misled may present materiality issues, that element of the deceptive advertising claims was not raised by Defendant in its opening 22 motion as a basis for dismissal. See Def.’s Mot. at 4-11. Rather Defendant raised the issue of materiality for the first time, and only briefly, in its Reply brief. Def.’s Reply at 6. Accordingly, 23 the Court does not consider materiality as a basis for dismissal here. See, e.g., Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) (“[A] district court need not consider arguments raised for the 24 first time in a reply brief.”). This is appropriate in the present case as Defendant was well aware of Plaintiff’s theory per the complaint and thus Defendant could have addressed materiality in its 25 opening brief. See, e.g., Compl. ¶¶ 2-4 (explaining that consumers believed the Ultimate Omega 2X product’s potency amounted to double the potency of the regular Ultimate Omega product). 26
5 As explained above, the additional language on the front label of “More Powerful. Naturally.” 27 And “Next Generation Fish Oil” are consistent with Plaintiff’s interpretation of 2X; these phrases 1 the front label further—even by reviewing the back label of the product at issue; this alone ends 2 the inquiry and distinguishes the case from McGinity and Moore. 3 3. The label’s meaning is only clarified by cross-checking another product’s label 4 which a reasonable consumer should not be expected to do under these 5 circumstances if at all. 6 McGinity is distinguishable not only because the front label in the case at bar is 7 affirmatively misleading, but also because the only way for a consumer to learn the truth about the 8 product here is to cross-reference the milligrams contained in Ultimate Omega 2X, against the 9 ingredient label of another product: the regular/original Ultimate Omega product. 10 None of the Ninth Circuit opinions discussed herein stand for the proposition that a consumer 11 should be required to cross-reference another product’s ingredient list to learn the truth about 12 information stated about the product on its label. Cf. Moore, 4 F.4th at 876-77 (considering the 13 rest of the packaging, price of the product, and common information known to the consumer); 14 McGinity, 69 F.4th at 1095-99 (ingredient list on the back label relevant in applying the reasonable 15 consumer test); see also Williams, 552 F.3d at 939 (consumer should not be expected to check 16 ingredient list on the back label to learn the truth about contradictory statement on the front 17 label).6 18 District courts considering this issue find that consumers should not be required to cross- 19 check information on other products to discern the precise strength or potency of a product. 20 In Whitaker v. Pharmavite LLC, for example, the court denied a motion to dismiss alleging 21 defendant’s “Extra Strength” chewable was misleading. 2023 WL 3370729, at *1-5 (C.D. Cal. 22 May 9, 2023). There, the allegedly misleading product was labeled “Extra Strength Chewable C” 23
24 6 The two cases that Defendant points to in its statement of recent decisions, Docket No. 33, are distinguishable on a similar basis. Specifically, in each case the back label on the product at issue 25 dispelled any confusion on the front which is not the case here. Slaten v. Christian Dior Perfumes, LLC., Case No. 3-23-cv-00409-JSC (N.D. Cal. Oct. 19, 2023) (finding confusion 26 caused by front label of foundation reading “24H Foundation” was dispelled due to information on back label, which specified the product needed to be reapplied every two hours for SPF 27 protection); Bryan v. Del Monte Foods, Inc., Case No. 23-cv-00865-MMC (N.D. Cal. Oct. 19, 1 and “1,000 mg per serving” was listed on the front label. Id at *1. Based on the label, plaintiffs 2 there understood that each tablet contained a higher dose of Vitamin C per tablet than the regular 3 strength product. Id. However, each tablet in the Extra Strength product included only 500 mg of 4 Vitamin C, though the back label advised the consumer to take two at a time. Id. The court 5 denied the motion to dismiss, explaining that for a consumer to understand the Extra Strength 6 product was only “Extra” due to its instruction to take two tablets, the court would have to take the 7 Extra Strength Product off the shelf, and the Regular Strength Product of the shelf, and compare 8 the labels. Id. at *4. The court there explained that “it is not reasonable to expect a consumer to 9 cross-check a product’s ingredient list against another product’s list and then perform arithmetic to 10 make sure she is comparing equivalent dosage volumes, all to ensure that the product she intends 11 to purchase has the qualities it purports to have.” Id. (citing Al Haj v. Pfizer, Inc., 338 F. Supp. 3d 12 741 (N.D. Ill. 2018) (finding plaintiffs stated a plausible claim where a “Maximum Strength” 13 product only provided more of the active ingredient where the buyer consumed more of the 14 product compared to the “Regular Strength” version)). See also Woodhams v. Pfizer, Inc., 2021 15 WL 5304309, at *3 (S.D.N.Y. Nov. 15, 2021) (finding that a reasonable consumer should not be 16 expected to cross-check ingredient list in Maximum Strength and Regular Strength Robitussin to 17 understand the strength of the product per dosage). 18 Likewise, in Elkies v. Johnson & Johnson Services, Inc., the court determined that the 19 packaging on the Infants’ Tylenol was deceptive. 2018 WL 11328613, at *5 (C.D. Cal. Feb. 22, 20 2018). Namely, the package included a photo of a mother-and-baby along with the word “Infant.” 21 Id. The court determined that could lead a reasonable consumer to think that the product was 22 tailored to infants compared to the Children’s Tylenol. Id. As a consumer would only be able to 23 dispel that belief by cross-referencing the Children’s Tylenol product—which was an 24 inappropriate expectation—the plaintiffs had stated a claim. Id. 25 As in Whitaker and Elkies, here the only way for the Plaintiff to learn the truth about the 26 2X moniker is to cross-reference the regular product and engage in arithmetic (i.e., adding the 27 amount in the regular product by two and comparing to the 2X product) to discern whether the 2X 1 These cases are persuasive. Unlike cross-referencing the back label of a product, it is not 2 clear if another product will be available for inspection at time of purchase—rendering it less 3 appropriate for a consumer to be expected to reference that label. Indeed, the second product 4 could be out of stock or not carried at all by the store. As it is not reasonable to expect a consumer 5 to engage in this cross-referencing, Plaintiff has stated a claim, notwithstanding the possibility one 6 could learn the truth about the product by comparing to the potency of another product. See, e.g., 7 Whitaker, 2023 WL 3370729, at *4; Elkies, 2018 WL 11328613, at *5. 8 Defendant argues that applying the Whitaker line of cases is like “fitting a square peg into 9 a round hole.” Reply at 2-4. It argues that those cases are distinguishable because here, the 10 Omega 2X product is indeed stronger than the original whereas in Whitaker and similar cases, the 11 two products at issue were compositionally identical. Id. at 3. However, in Whitaker, for example 12 the product was labeled as “Extra,” so the only relevant question was whether the product was 13 some amount stronger (it was not). Whitaker, 2023 WL 3370729, at *4. Here, the question is 14 whether the product contains twice the amount of Omega as the original because the alleged 15 misleading moniker “2X” implies two times the omega. Thus, that the product here is some 16 amount stronger does not make Whitaker inapposite or render the label not misleading. While 17 Whitaker might be a more egregious case of deceptive advertising (i.e., advertising something as 18 “Extra Strength” when the only thing extra about it was an instruction to take two pills) the 19 principle stated therein still stands. Specifically, a consumer should not be expected to cross- 20 check the dosage in one product to figure out that another product is not what the front label 21 portrays it to be. See also Williams, 552 F.3d at 939 (finding a consumer should not be expected 22 to check back label ingredient list to correct contradictory claim made on the front label). The 23 wrongdoing here is a difference of degree, and not kind. 24 In summation, the 2X moniker on the product’s front label could plausibly lead a consumer 25 to think that the Ultimate Omega 2X product contains twice the amount of omega as the regular 26 product. As the Plaintiff would not be on notice to seek more information based on the front label, 27 and in any event, should not be expected to cross-reference the ingredients in another product to 1 4. Heightened pleading standard under Federal Rule 9(b) 2 Lastly as to these claims, Defendant states in its opening brief that the heightened pleading 3 standard set forth in Federal Rule 9(b) applies to Plaintiff’s California consumer protection claims. 4 Def.’s Mot. at 4. Accordingly, Defendant argues, Plaintiff’s complaint must set forth the requisite 5 level of particularity, i.e., the “who, what, what, when, where, and how” of the fraudulent conduct 6 alleged. Id. (citing Becerra v. Dr Pepper/Seven Up, Inc., 945 F.3d 1225, 1228 (9th Cir. 2019)). 7 Though, Defendant does not argue that dismissal is appropriate on the basis of insufficient 8 particularity of Plaintiff’s claims. See generally Def.’s Mot.; Def.’s Reply. For the avoidance of 9 doubt, the Court addresses this standard here. 10 Though Defendant is correct that Federal Rule 9(b) may apply to California consumer 11 protection statute claims, this is not always the case. Specifically, the Ninth Circuit has held that 12 “fraud is not a necessary element of a claim under the CLRA and UCL.” Kearns v. Ford Motor 13 Co., 567 F.3d 1120, 1125 (9th Cir. 2009). However, such claims, may rest upon a “unified course 14 of fraudulent conduct and rely entirely on that course of conduct as the basis of that claim.” Id. In 15 such a situation, the claim is “said to be grounded in fraud,” and thus must satisfy the particularity 16 requirement of Rule 9(b). Id. For example, the court there applied the heightened pleading 17 standard to the claims at issue, because those claims alleged a fraudulent course of conduct by car 18 a company, including conspiring with dealerships and misrepresenting benefits of a program by 19 the company over the course of time. Id. On the other hand, where California consumer protection 20 claims derive from purportedly misleading statements made on a product’s label, rather than a 21 course of conduct over time, as is the case here, the Ninth Circuit does not apply the heightened 22 Federal Rule 9(b) standard. See, e.g., McGinity, 69 F.4th at 1096 (applying the typical pleading 23 standard in reviewing a Federal Rule 12(b)(6) motion to dismiss UCL, FAL, and CLRA claims 24 resting upon an allegedly misleading statement made on product’s label). 25 Regardless, particularity is not an issue in the present case. Indeed, the purpose of Rule 26 9(b) is to ensure that the defendant has enough information (the who, what, when, where, and how 27 of the claimed fraud) so that “a defendant can prepare an adequate answer from the allegations.” 1 clear as to the conduct that purports to have misled the Plaintiff. Specifically, the complaint rests 2 upon Nordic Naturals including a “2X” moniker on the label of its Ultimate Omega 2X product, 3 which misled Plaintiff at the time of purchase. Given this, and that Defendant presents no 4 argument as to how or why it could not prepare an adequate answer from the allegations, 5 Plaintiff’s claims contain sufficient particularity to satisfy Federal Rule 9(b). In any event, the 6 who, what, when, where, and how question are plainly evident here. 7 Accordingly, the Court denies Defendant’s motion to dismiss Plaintiff’s CLRA, FAL and 8 UCL Deceptive Label Claims. 9 B. Breach of Warranty Claims 10 Defendant also argues that Plaintiff’s breach of express and implied warranty claims 11 should be dismissed for failure to state a claim. Def.’s Mot. at 11-14. As explained herein the 12 Court finds Plaintiff adequately states a breach of warranty claim. 13 To prevail on a breach of express warranty claim, the burden is on the plaintiff to prove 14 “(1) the seller’s statements constitute an “affirmation of fact or promise” or a “description of the 15 goods”; (2) the statement was “part of the basis of the bargain”; and (3) the warranty was 16 breached.” Weinstat v. Dentsply Int’l, Inc., 180 Cal. App. 4th 1213, 1227 (2010); Cal. Com. Code 17 § 2313(1). A statement does not constitute an express warranty unless it is “specific and 18 unequivocal.” Maneely v. Gen. Motors Corp., 108 F.3d 1176, 1181 (9th Cir. 1997). Defendant 19 argues, primarily, that the 2X moniker does not amount to a specific and unequivocal statement 20 that the product contains twice the amount of omega as that found in the Defendant’s regular 21 product. Def.’s Mot. at 12. For this reason, Defendant argues, Plaintiff’s claim fails. 22 As a threshold matter, some courts in this district find that where a plaintiff has adequately 23 stated a California consumer protection claim, which is the case here, the plaintiff has also 24 sufficiently stated a claim for breach of express warranty. See, e.g., Hadley v. Kellogg Sales Co., 25 273 F. Supp. 3d 1052, 1095 (N.D. Cal. 2017) (“[C]ourts in this district regularly hold that stating 26 a claim under California consumer protection statutes is sufficient to state a claim for express 27 warranty.”); Ham v. Hain Celestial Grp., Inc., 70 F. Supp. 3d 1188 (N.D. Cal. 2014) (denying 1 consumer could be misled by the packaging). 2 On the other hand, there are some district courts that find stating a claim for deceptive 3 advertising does not mean a plaintiff has necessarily stated a claim for breach of express warranty. 4 For example, in Nacarino v. KSF Acquisition Corporation, Judge Chesney found that a smoothie 5 mix claiming “20g HIGH PROTEIN,” but that required the addition of milk to get that amount of 6 protein misled a reasonable consumer. 642 F. Supp. 3d 1074, 1086 (N.D. Cal. 2022). At the 7 same time, the court held that the representation did not constitute an express warranty as to the 8 amount of protein included per serving or scoop. An in Cimoli v. Alacer Corporation, Judge 9 Freeman held that Vitamin C gummies touting “750 mg Vitamin C,” could mislead reasonable 10 consumers to believe that each gummy contained 750 mg of Vitamin C, but found the 11 representation was not an express warranty as to dosage per gummy. 546 F. Supp. 3d 897, 905 12 (N.D. Cal. 2021). 13 Scott v. Saraya recently addressed the tension between the two lines of reasoning. 2023 14 WL 3819366 (N.D. Cal. 2023) (holding that the plaintiff adequately stated an express warranty 15 claim because the representations “sweetened with monk fruit” or “monk fruit sweetened” could 16 reasonably mislead a consumer into believing that the product was entirely or predominantly 17 sweetened with monk fruit). There, Judge Orrick explained:
18 The express warranty claims in Nacarino and [Cimoli] involved representations about precise amounts of protein and Vitamin C in 19 the products at issue, and failed because they did not amount to express statements that those amounts were found in each serving, 20 scoop, or gummy vitamin. But [plaintiff’s] claims [here] do not rest on alleged misrepresentations about the specific amount of monk 21 fruit in each serving. Instead, she alleges that the statements misleadingly convey that the products are entirely or predominantly 22 sweetened with monk fruit. These allegations are more akin to some of the statements at issue in Hadley, where the plaintiff alleged that 23 the statement “lightly sweetened” implied that the products at issue were low in sugar when in fact the amount of added sugar was 24 “excessive.” 25 Id. at *6-7 (internal citations omitted). 26 This Court is not persuaded that the question should turn upon whether the allegedly 27 misleading representation involves a specific dosage. It is not clear why it matters whether the 1 amount (e.g., a light amount of an ingredient) in deciding whether an express warranty was made 2 and/or breached. Returning to first principles, the question is whether a promise was conveyed by 3 the seller and thus became “a term of the parties’ contract” and subsequently breached. See 4 Richard A. Lord, Williston on Contracts 4th § 52.45 (4th ed. 2004) (stating that an express 5 warranty is “a term of the parties’ contract”); Cal. Civ. Code § 1791.2(a)(1) (defining “express 6 warranty” as “[a] written statement arising out of a sale to the consumer of a consumer good 7 pursuant to which the manufacturer, distributor, or retailer undertakes to preserve or maintain the 8 utility or performance of the consumer good or to provide compensation if there is a failure in 9 utility or performance”); BLACK’S LAW DICTIONARY at 1582 (7th ed.1999) (defining “express 10 warranty” as “[a] warranty created by the overt words or actions of the seller”). To this end, 11 whether a plaintiff was promised 750 mg of Vitamin C per gummy, but received half that amount 12 per gummy or whether a plaintiff was promised that the product contained low sugar but received 13 a product with a high amount of sugar—in both instances a promise would have been made that 14 was not kept. See id. 15 Indeed, the precision of the promise is of no moment in this analysis, except to determine 16 whether the representation is an actionable statement of fact as opposed to mere opinion or 17 puffery. See Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1145 (9th Cir. 1997) 18 (distinguishing between “[p]uffing” which is “exaggerated advertising, blustering, and boasting 19 upon which no reasonable buyer would rely” and “misdescriptions of specific or absolute 20 characteristics of a product”). Interestingly, specific dosage claims—which Saraya would find 21 less likely to be actionable—have less in common with puffery or opinion statements than 22 descriptive phrases such as “lightly sweetened.” Namely, descriptive phrases characterize a 23 product with less precision than specific dosage statements and are leave more room for opinion, 24 e.g., as to what it means to be “lightly” sweetened. No such opinion can be found as to the 25 number of milligrams of an ingredient included in the product; that question is binary. For the 26 same reason, specific dosage claims are more amenable to evidence of breach than descriptive 27 claims; it is easier to show that a gummy does or does not contain 750 mg of Vitamin C, whereas 1 find the line drawn in Saraya persuasive.7 2 Instead, the question is, at bottom, whether the contract can be construed as including a 3 sufficiently specific warranty that was breached. As explained above, the Court has determined 4 that one plausible interpretation of the Ultimate Omega 2X label is that it promises twice the 5 amount of omega as the regular product. See Section III.A.1. Even assuming the label could be 6 interpreted differently, at the motion to dismiss phase, the Court must construe the representation 7 in the light most favorable to the Plaintiff. Saraya, 2023 WL 3819366, *7 (holding that the court 8 at this stage must accept all “allegations as true and [draw] all reasonable inferences in [plaintiff’s] 9 favor”); Toce v. Rentch, 2018 WL 280024, *4 (S.D. Cal. Jan. 3, 2018) (citation omitted) (similar); 10 see also In re Ferrero Litigation, 794 F. Supp. 1107, 1118 (S.D. Cal. 2011) (holding that a final 11 determination as to what statements create express warranties should often not be determined on a 12 motion to dismiss). Construing the terms in this way, Plaintiff has stated a claim for breach of 13 express warranty; it is undisputed that the amount of omega in the product (2150 mg) is not double 14 the original (i.e., double 1280 mg which amounts to 2560 mg). 15 Defendant’s reliance on Watkins v. MGA Entertainment Inc. does not require a different 16 outcome. 574 F. Supp. 3d 747, 756 (N.D. Cal. 2021). There, the court found that the phrase “Age 17 3+” did not constitute an express warranty that a toy was safe for children over the age of 3. But 18 the court in Watkins acknowledges that the statement “Age 3+” is “the sort of general statement 19 about product safety that has been found insufficient to give rise to an actionable express 20 warranty.” Watkins, 574 F. Supp. 3d at 756 (emphasis added). The statement was imprecise. As 21 Plaintiff correctly points out, this is not a product safety case, and outside of that context, courts 22 apply a less exacting standard in determining whether a breach of express warranty claim has been 23 stated. Compare Smith v. LG Elecs. U.S.A., Inc., 2014 WL 989742, at *5 (N.D. Cal. Mar. 11, 24 2014) (finding “vague” statements as to reliability and dependability such as “safe for residential 25 7 Additionally, the case at hand is meaningfully distinguished from Nacarino and Cimoli. The 26 representations in both of those cases were literally true statements, even if misleading. In Cimoli, the product did contain 750 mg of Vitamin C, though in the form of two gummies as opposed to 27 one. 546 F. Supp. 3d at 905. And in Nacarino, the consumer would indeed receive 20g of protein 1 use” are not actionable statements) with Hunt v. Sunny Delight Beverages Co., 2018 WL 2 4057812, at *5 (C.D. Cal Aug. 23, 2018) (finding that in the case of a product with photos of fruits 3 on the label, “[p]laintiffs have alleged that the Products’ labels implicitly describe the Products as 4 containing the depicted fruits and fruit juices” and thus state an express warranty claim). And 5 further, this Court is not bound by the holding of Watkins and does not find it persuasive to the 6 extent it warrants a different outcome here, for reasons discussed above. Accordingly, Plaintiff 7 has sufficiently stated an express warranty claim to survive dismissal at this stage. 8 Plaintiff also states a claim for breach of implied warranty under UCC § 2–314 of the 9 UCC, which was adopted in relevant part by California. See California. Cal. Com. Code § 2314. 10 Specifically, the implied warranty of merchantability provides that “a warranty that the goods shall 11 be merchantable is implied in a contract for their sale if the seller is a merchant with respect to 12 goods of that kind.” UCC § 2–314(1); accord California. Cal. Com. Code § 2314(1). 13 Defendant identifies that under UCC § 2–314(2)(c) the plaintiff must show that “the 14 product did not possess even the most basic degree of fitness for ordinary use.” Mot. at 21 (citing 15 Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 979 (C.D. Cal. 2014)). As 16 Plaintiff does not make such allegations, Defendant argues, Plaintiff’s claim fails. Id. However, 17 As Plaintiff points out, there are other ways to show that a product is not merchantable. 18 Specifically, subsection 2(f) provides that: “Goods to be merchantable must . . . conform to the 19 promises or affirmations of fact made on the container or label if any.” UCC § 2–314(2)(f); 20 accord California. Cal. Com. Code § 2314(2)(f). Under this subsection, a plaintiff only needs to 21 show that the goods “do not conform to the promises or affirmations of fact made on the container 22 or label if any.” Milan v. Clif Bar & Co., 2019 WL 3934918, at *3 (N.D. Cal. Aug. 20, 2019); see 23 also In re 5-hour ENERGY Mktg. 2017 WL 385042, at *11 (C.D. Cal. Jan. 24, 2017) (finding 24 plaintiff need not allege the product lacked fitness for ordinary use and could state a breach of 25 implied warranty claim based upon misrepresentations made on the product’s label); Clark v. 26 Hershey Co., No. C 18-06113 WHA, 2019 WL 913603, at *6 (N.D. Cal. Feb. 25, 2019) (similar). 27 Where an implied warranty claim rests on a representation made on the label, the analysis 1 (citing Hendricks v. StarKist Co., 30 F. Supp. 3d 917, 933 (N.D. Cal. 2014)). If both claims hinge 2 on representations made on the label of the product—which in this case, they do—the two claims 3 rise and fall together. See DiGiacinto v. RB Health (US) LLC, No. 22-CV-04690-DMR, 2023 WL 4 2918745, at *9 (N.D. Cal. Apr. 11, 2023) (holding that the plaintiff sufficiently alleged a breach of 5 implied warranty because they sufficiently alleged a breach of express warranty, and both claims 6 hinged on the representations on the label of the product). Since the Court has found that Plaintiff 7 has adequately alleged a breach of express warranty claim, the Court finds that Plaintiff has 8 adequately alleged a breach of implied warranty claim at the motion to dismiss stage. 9 Accordingly, Plaintiff’s breach of warranty claims survive. 10 C. Claims for injunctive relief 11 Defendant also moves to dismiss Plaintiff’s claims requesting injunctive relief, arguing 12 that Plaintiff lacks standing, as no threat of similar, future harm exists; Plaintiff is now aware of 13 the omega content in the product, and thus she cannot be deceived again. Def.’s Mot. at 15. 14 A plaintiff must demonstrate constitutional standing separately for each form of relief 15 requested. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC) Inc., 528 U.S. 167, 185 16 (2000). The three well-known “irreducible constitutional minim[a] of standing” are injury-in-fact, 17 causation, and redressability. Lujan v. Defs. Of Wildlife, 504 U.S. 555, 560-61 (1992). A plaintiff 18 bears the burden of demonstrating that her injury-in-fact is “concrete, particularized, and actual or 19 imminent; fairly traceable to the challenged action; and redressable by a favorable ruling.” 20 Monsanto Co. v. Geertson Seed Farms, 561 U.S. 139, 149 (2010). 21 For injunctive relief, which is a prospective remedy, the threat of injury must be “actual 22 and imminent, not conjectural or hypothetical.” Summers v. Earth Island Inst., 555 U.S. 488, 493 23 (2009). Where standing is premised entirely on the threat of repeated injury, a plaintiff must show 24 “a sufficient likelihood that he will again be wronged in a similar way.” City of Los Angeles v. 25 Lyons, 461 U.S. 95, 111 (1983). 26 Davidson v. Kimberly-Clark Corp., 889 F.3d 956 (9th Cir. 2018) is instructive in this 27 context. There, the plaintiff purchased the defendant’s flushable wipes product, but later learned 1 amongst district courts, explaining that a plaintiff does not necessarily lack standing to seek 2 injunctive relief just because she has learned that the label of a product is false during litigation. 3 Id. at 970. There, the plaintiff alleged that she desired to purchase the wipes again in the future. 4 Id. at 970-71. Although plaintiff became aware that the “flushable” labeling was false at the time 5 of her initial purchase, the court found that should she encounter a “flushable” package in the 6 future, the plaintiff would have no way of determining whether the representation “flushable” 7 remained false—absent purchasing the product and trying to flush it again. Id. Accordingly, the 8 plaintiff had standing to assert claims for injunctive relief. Id. 9 There is a split of authority in district courts in this circuit applying Davidson. Some 10 courts find that standing is present only when the true nature of the product can be learned only 11 through purchase of the product (e.g., attempting to flush a wipe like in Davidson). Other courts 12 hold that even if the plaintiff can remedy confusion about the product before purchase (such as by 13 the looking at the back label) instead of post-purchase only, the plaintiff still has standing to assert 14 injunctive relief. 15 For example, in Matic v. United States Nutrition, Inc., the court considered whether 16 plaintiffs, who had adequately stated a claim under the California consumer protection statutes that 17 the package was misleading, lacked standing for injunctive relief. 2019 U.S. Dist. Lexis 131576, 18 at *23 (C.D. Cal. March 19, 2023). The product at issue was protein powder that contained 40 19 precent slack fill (i.e., empty space) in an opaque package. Id. at *2. Although the court found 20 plaintiffs stated a claim that they were misled into thinking there was more protein in the package, 21 the court explained that the case at bar was not like that in Davidson. Id. at *23-24. Specifically, 22 the plaintiff in Matic was now aware that he could learn how much protein powder was in the 23 product by reading the label, instead of assuming the product was full to the top as he did 24 previously. Id. at *24. He could therefore discern the nature of the product before buying it, 25 unlike the flushable wipes in Davidson. Id. Accordingly, the plaintiff in Matic lacked standing to 26 seek injunctive relief. Id. See also Cordes v. Boulder Brands USA, Inc., 2018 WL 6714323, at 27 *6 (C.D. Cal. Oct. 17, 2018) (finding plaintiff lacked standing for injunctive relief because “now 1 pretzels in each package before making a future purchase by simply reading the back panel”); 2 Shanks v. Jarrow Formulas, Inc., 2019 WL 7905745, at *5 (C.D. Cal. 2019) (finding plaintiff 3 lacked standing because “in the future [plaintiff can] simply look at the label on Defendant's 4 coconut oil . . . and put it back”). 5 Similarly, in Cimoli v. Alacer Corp., 546 F.Supp.3d 897 (N.D. Cal. 2021) the Court 6 concluded that the Plaintiff did not have standing for injunctive relief in a product 7 misrepresentation claim. There, the plaintiff alleged that the label on a Vitamin-C gummies 8 product, which read “750g Vitamin C,” misled consumers into thinking that each gummy 9 contained 750 grams of Vitamin C. Id. at 906. The product’s back label clarifies that the dosage 10 of Vitamin C is per serving (two gummies), and not per single gummy. Id. at 903. Judge Freeman 11 distinguished the case from Davidson. Id. at 906. Specifically, the court held that the plaintiff 12 lacked standing because the plaintiff knew to determine the dosage by consulting the back label 13 before purchase. Id. Therefore, the plaintiff could not plausibly allege that he faces a real or 14 immediate threat of similar, future harm. Id. at 907 15 On the other hand, in Vizcarra v. Unilever United States, 2020 WL 4016810, *17 (N.D. 16 Cal. 2020), Judge Gonzalez Rogers considered whether the plaintiff, that stated a claim she was 17 misled about the ingredients of ice cream labeled “natural vanilla,” had standing for injunctive 18 relief. The ice cream in fact derived its vanilla flavoring from unnatural sources, as was reflected 19 by the ingredient list. Id. Judge Gonzalez Rogers held that the plaintiff had standing to seek 20 injunctive relief. Id. (“That the carton for the ice cream at issue contains a list of ingredients does 21 not change this conclusion.”). Similarly, in Schwartz v. Bai Brands, 2020 WL 5875019, at *8 22 (C.D. Cal. 2020), the court found the plaintiff had standing for injunctive relief. The product 23 there, a beverage, included photos of two fruits on the front that led the plaintiff to think the 24 flavoring came from the fruits pictured. Id. at *2. The court rejected the argument that the 25 plaintiff lacked standing to assert injunctive relief, despite the fact that the plaintiff needed only 26 review the ingredient list on the back to identify that the product did not actually contain a fruit 27 shown on the front, which the plaintiff would know to do post-litigation. Id. at *8. 1 accordingly, Plaintiff here lacks standing to pursue injunctive relief. Specifically, a foundational 2 prerequisite of standing is that the plaintiff must face the threat of suffering similar harm in the 3 future. Lyons, 461 U.S. at 111. But here, Plaintiff is now aware that twice the omega as that in 4 the regular Ultimate Omega product amounts to 2560 mg. As the Plaintiff is now armed with this 5 information, it strains credibility to say that Plaintiff will purchase the Ultimate Omega 2X 6 product again, which states that it contains 2150 mg of omega, while thinking the product contains 7 double the amount of omega as the regular product. And armed with the current knowledge, 8 Plaintiff can now take the step of comparing this product with the original product. It is difficult to 9 reason around this aspect of Plaintiff’s circumstances to find that Plaintiff might be injured again 10 in a similar way in the future. See, e.g., Matic, 2019 U.S. Dist. Lexis 131576, *23 (finding plaintiff 11 lacked standing for injunctive relief where plaintiff was now aware, through litigation, that she 12 could learn the amount of protein powder in the opaque container by checking the label); Cimoli, 13 546 F.Supp.3d 897 (finding no standing for injunctive relief where plaintiff could check back label 14 to learn the dosage in Vitamin C gummies); but see Vizcarra, 2020 WL 4016810 (plaintiff had 15 standing for injunctive relief notwithstanding ability to check ingredient list to discern if the 16 product contained only natural sources of vanilla flavoring to avoid deception). 17 While Davidson came to a different outcome, the facts there were unique, leaving plaintiff 18 vulnerable to be injured again—irrespective of knowledge gained by the plaintiff during litigation. 19 889 F.3d at 961-62, 970-71. Specifically, the plaintiff alleged that she wanted to purchase the 20 product in the future and might think the product had been fixed. Id. Yet the plaintiff was 21 powerless to confirm the veracity of the label herself before buying the product; rather, she would 22 again be forced to rely on the label’s representation about the wipes being flushable at the time of 23 purchase in deciding whether to buy. Id. As the flush-friendly statement was previously shown to 24 be unreliable, she faced a similar, future injury—i.e., relying on a false or misleading statement to 25 inform her purchase. Id. Here, the Plaintiff need not purchase the product to confirm the meaning 26 and veracity of the label; the Plaintiff can compare it to the label on the original product without 27 having to purchase the product in question. Accordingly, Plaintiff does not face a threat of 1 before purchasing the product. She thus lacks standing to assert claims for injunctive relief. Cf. 2 id. 3 D. Quasi-Contract, Unjust Enrichment, and Restitution 4 Defendant moves to dismiss Plaintiff’s claim asserting unjust enrichment through quasi- 5 contract. Plaintiff seeks restitution as a remedy for these claims. 6 Under California law, the elements of an unjust enrichment claim are the “receipt of a 7 benefit and [the] unjust retention of the benefit at the expense of another.” Lectrodryer v. 8 SeoulBank, 77 Cal.App.4th 723, 726 (2000). The Ninth Circuit has construed California common 9 law to allow an unjust enrichment cause of action through quasi-contract. See, e.g., Astiana v. 10 Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015) (“When a plaintiff alleges unjust 11 enrichment, a court may ‘construe the cause of action as a quasi-contract claim seeking 12 restitution.’”) (quoting Rutherford Holdings, LLC v. Plaza Del Rey, 223 Cal.App.4th 221, 231 13 (2014)); ESG Cap. Partners, LP v. Stratos, 828 F.3d 1023, 1038-39 (9th Cir. 2016) (allowing a 14 plaintiff to state a cause of action for unjust enrichment, because it states a claim for relief as an 15 independent cause of action or as a quasi-contract claim for restitution). In other words, Plaintiff’s 16 claims for quasi-contract, unjust enrichment, and restitution rise and fall together. 17 Defendant argues that Plaintiff cannot assert a quasi-contract/unjust enrichment claim 18 where she has separately alleged breach of express warranty, because a contract covers the same 19 subject matter. Def.’s Mot. at 15. As a matter of law, Defendant argues, a quasi-contract claim 20 for unjust enrichment “cannot lie where there exists between the parties a valid express contract 21 covering the same subject matter.” Nguyen v. Stephens Inst., 529 F. Supp. 3d 1047, 1057 (N.D. 22 Cal. 2021) (citation omitted). In response, Plaintiff argues that under the Federal Rule 8(d)(2), a 23 party may set out two or more statements of a claim or defense alternatively or hypothetically, 24 either in a single count or defense or in separate ones. 25 Plaintiff is correct that, at the pleading stage, she may alternatively allege both a breach of 26 contract claim and a quasi-contract claim. Fed. R. Civ. P. 8(d)(2). Thus, Plaintiff’s claim does not 27 fail on this basis. However, to adequately assert quasi-contract/unjust enrichment claim, Plaintiff 1 Univ. of the Pac., 503 F. Supp. 3d 986, 998-99 (N.D. Cal. 2020); see also Nguyen, 529 F.Supp.3d 2 at 1057 (dismissing plaintiff’s quasi-contract claim because he failed to allege that the contract 3 was unenforceable or void); Segura v. Wells Fargo Bank, 2014 WL 4798890, at *11 (C.D. Cal. 4 2014) (“[T]here cannot be a claim for unjust enrichment where a contract covers the same subject 5 matter.”). Crucially, the Plaintiff here does not allege that the contract at issue is invalid or 6 unenforceable. See generally Compl. Therefore, the Court grants Defendant’s motion to dismiss 7 Plaintiff’s quasi-contract and related claims. 8 E. Standing of Absent, Non-Californian Class Members 9 Plaintiff asserts violations of California’s consumer protection laws on behalf of a 10 nationwide class, i.e., on behalf of consumers that do not live in California. Compl. ¶ 25. 11 Defendant argues that Plaintiff’s nationwide claims fail because Plaintiff does not make 12 allegations that the absent class members purchased the product or were harmed in California. 13 Def.’s Mot. at 17. Accordingly, Defendant argues, absent Plaintiffs lack standing to assert 14 California consume protection statute claims. 15 Plaintiff argues that to bring nationwide claims at the pleading stage she need only allege 16 that the Defendant is a corporation with its principal place of business in California, which 17 Plaintiff has alleged. Opp. at 18 (citing Compl. ¶ 11). At that point, Plaintiff argues, the burden 18 shifts to Defendant to show, under California’s choice of law rules, why California law should not 19 apply to Plaintiff’s nationwide claims. Id. n.8 (citing Clay v. CytoSport, Inc., No. 3:15-CV-00165- 20 L-AGS, 2018 WL 4283032, at *15 (S.D. Cal. Sept. 7, 2018) (citing Mazza v. Am. Honda Motor 21 Co., 666 F.3d 581, 589 (9th Cir. 2012)). As Defendant has not engaged in this analysis in its 22 motion, Plaintiff argues it has not met its burden to show Plaintiff’s claims should be dismissed. 23 Id. Defendant rebuts that the inquiry does not turn on the place of business of the Defendant, but 24 rather, each Plaintiff. Reply at 10. 25 Plaintiff has the better argument. In Mazza v. American Honda Motor Company, the Ninth 26 Circuit considered the propriety of certifying a nationwide class, alleging claims under 27 California’s consumer protect laws. 666 F.3d 581, 589 (9th Cir. 2012), overruled on other 1 Cir. 2022). First, the court found that the federal court sitting in diversity “looks to the forum 2 state’s choice of law rules to determine the controlling substantive law.” Id. Applying 3 California’s choice of law rules, the Mazza court explain that the class action proponent bears the 4 initial burden of showing whether California has “significant contact or significant aggregations of 5 contacts” to the claims of each class member. Id. On that question, the court explained, whether a 6 nonresident plaintiff can assert a claim under California law is, at bottom, a question whether 7 California has sufficiently significant contacts with the plaintiff’s claims. Id. at 589-90. Once that 8 burden is met, the burden shifts to the other side to demonstrate that “foreign law, rather than 9 California law, should apply to class claims.” Id. at 590. 10 Courts applying Mazza have determined that where the Defendant is incorporated and 11 headquartered in California, this is sufficient to show there is significant contact or aggregation of 12 contacts to the claims of the out-of-state class members to shift the burden back to defendant to 13 demonstrate that other state laws apply. Forcellati v. Hyland’s, Inc., 876 F. Supp. 2d 1155, 1159- 14 60 (C.D. Cal. 2012) (denying motion to dismiss as to nationwide claims where plaintiff alleged 15 defendants were “headquartered in Los Angeles, California.”); see also Thomas v. Dun & 16 Bradstreet Credibility Corp., 100 F. Supp. 3d 937, 946 (C.D. Cal. 2015) (denying motion to 17 dismiss where “Plaintiff similarly alleges that Defendant maintains a principal place of business in 18 California.”). 19 Here, Plaintiff similarly alleges that the Defendant is a corporation that maintains its 20 principal place of business in California. Compl. ¶ 11. Accordingly, the Plaintiff set forth 21 sufficient allegations to shift the burden back to Defendant to show why the choice-of-law analysis 22 favors the application of foreign law to non-California consumers. See Mazza, 666 F.3d at 590; 23 Forcellati, 876 F. Supp. 2d at 1159-60; Thomas, 100 F. Supp. 3d at 946. Because Defendant has 24 not made such an argument, its motion to dismiss nationwide claims at this stage in the litigation 25 is denied. 26 F. Leave to Amend 27 In deciding whether to grant leave to amend, the Court must consider the factors set forth 1 in Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2003). A district court 2 || ordinarily must grant leave to amend unless one or more of the Foman factors is present: (1) 3 undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by 4 amendment, (4) undue prejudice to the opposing party, and (5) futility of amendment. Eminence 5 Capital, 316 F.3d at 1052. When considering these factors, “prejudice to the opposing party .. . 6 carries the greatest weight.” Jd. However, a strong showing with respect to one of the other 7 || factors may warrant denial of leave to amend. Id. 8 Defendant’s motion is granted without leave to amend in relation to Plaintiff's claims for 9 injunctive relief because Plaintiffs cannot cure the allegation with additional facts given the nature 10 || of the product at issue. In other words, no amount of amending the complaint would render the 11 product more akin to the flushable wipes in Davidson. However, the Court cannot say with 12 || certainty that Plaintiff is unable to allege additional facts (namely the existence of a void or 5 13 unenforceable contract) to cure its equitable relief claims for quasi-contract, unjust enrichment, 14 || and restitution. 3 15 IV. CONCLUSION 16 Accordingly, the Court GRANTS in part and DENIES in part Defendant’s motion to 3 17 dismiss. Defendant’s motion is denied in relation to Plaintiff's CLRA, FAL, and UCL claims, 18 || breach of warranty claims, and in relation to Plaintiff's claims stated on behalf of absent non- 19 || California class members. Defendant’s motion is granted as to Plaintiff's claims for injunctive 20 || relief without leave to amend and granted as to Plaintiff's equitable claims (quasi-contract, unjust 21 enrichment, restitution) with leave to amend. 22 23 IT IS SO ORDERED. 24 25 Dated: January 2, 2024 26 LL 27 for 28 EDWARD M. CHEN United States District Judge
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Caldwell v. Nordic Naturals, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/caldwell-v-nordic-naturals-inc-cand-2024.