1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ELIZABETH CASTILLO, Case No. 23-cv-03885-AMO
8 Plaintiff, ORDER GRANTING IN PART AND 9 v. DENYING IN PART MOTION TO DISMISS 10 PRIME HYDRATION LLC, Re: Dkt. No. 28 Defendant. 11
12 13 This case is about false advertising on sports drink labels. Prime Hydration LLC’s motion 14 to dismiss was heard before this Court on April 18, 2024. Having read the papers filed by the 15 parties and carefully considered their arguments therein and those made at the hearing, as well as 16 the relevant legal authority, the Court hereby GRANTS IN PART and DENIES IN PART the 17 motion to dismiss for the following reasons. 18 I. BACKGROUND 19 A. Factual Background 20 Defendant Prime Hydration LLC (“Prime Hydration”) formulates, manufactures, markets, 21 and sells Grape Sports Drink (“Sports Drink” or “product”). First Amended Complaint (“FAC”) 22 (ECF 26) ¶¶ 1, 5.1 Prime Hydration sells Sports Drink directly to consumers through its website, 23 at convenience stores, and at grocery stores. FAC ¶ 26. Castillo alleges that the product 24 advertises healthy ingredients but instead contains harmful “per- and polyfluoralkyl substances” 25 (“PFAS” or “forever chemicals”), rendering various representations false and misleading. 26
27 1 The Court accepts Castillo’s allegations in the complaint as true and construes the pleadings in 1 FAC ff] 1-2, 28. The front and side labels of Grape Sports Drink are depicted below: 2 3 es 4 6 ‘| fo "fa ll 12 \\ 5
15 16
18 || FAC 28-29. Castillo alleges that the drink “boasts” about healthy ingredients, as the label 19 states that it contains “250 mg BCAAs, B Vitamins, antioxidants, and 835 mg electrolytes.” 20 || FAC 4 29-34. The label also states that the drink helps “refresh, replenish, and refuel,” and lists 21 the first ingredient as “filtered water.” FAC {[] 35-39. 22 23 24 25 26
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1 FAC ¶¶ 35, 37. 2 Castillo conducted independent third-party testing and found “material levels of PFAS” in 3 the product. FAC ¶¶ 60-62. PFAS are “highly persistent and potentially harmful man-made 4 chemicals” that are “not naturally occurring.” FAC ¶¶ 40-41. PFAS include Perfluorooctanoic 5 acid (“PFOA”) and Perfluorooctanesulfonic acid (“PFOS”). FAC ¶ 41. Exposure to certain levels 6 of PFAS may lead to reproductive effects, developmental delays, increased risk of certain cancers, 7 reduced immune system functionality, and other harmful effects. FAC ¶¶ 50-51. Even “trace” 8 levels of PFAS can harm humans. FAC ¶ 66. The EPA health advisory levels for exposure to 9 certain PFAS in drinking water is 0.004 part per trillion (ppt) for PFOA and 0.02 ppt for PFOS. 10 FAC ¶ 67. Castillo’s testing showed that the product contains one and a half times the lifetime 11 health advisory for PFOA and three times the lifetime health advisory for PFOS. FAC ¶ 72. 12 Nowhere on the product does Prime Hydration indicate that there are PFAS chemicals in the 13 drink. 14 B. Procedural Background 15 Castillo filed her class action complaint on August 2, 2023, ECF 1, and the First Amended 16 Complaint, the operative complaint, on October 13, 2023. FAC (ECF 28). She asserts claims for: 17 (1) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. (“MMWA”), 18 (2) violation of California’s Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq. 19 (“CLRA”), (3) violation of all three prongs of California’s Unfair Competition Law, Cal. Bus. & 20 Prof. Code §§ 17200, et seq. (the “UCL”), (4) violation of California’s False Advertising Law, 21 Cal. Bus. & Prof. Code §§ 17500, et seq. ( “FAL”), (5) and breach of implied warranty under the 22 Song-Beverly Act, Cal. Civ. Code §§ 1790, et seq. and Cal. Comm. Code § 2314. FAC ¶¶ 154- 23 167, 168-187, 188-202, 203-215, 216-228. Castillo seeks to represent a nationwide class and a 24 California class of “all persons who Purchased the Product . . . for personal use and not for resale.” 25 FAC ¶¶ 143-44. 26 II. DISCUSSION 27 Prime Hydration challenges Castillo’s standing for lack of injury under Federal Rule of 1 Rule of Civil Procedure 12(b)(6) for failure to state a claim. Because standing is a threshold issue, 2 the Court addresses it first. Bates v. United Parcel Service, Inc., 511 F.3d 974, 985 (9th Cir. 3 2007). 4 A. Article III Standing 5 Prime Hydration argues that Castillo lacks standing because she does not allege facts 6 plausibly showing that the bottles of Sports Drink that she bought contained PFAS, and she fails to 7 plausibly allege that the level of PFAS in the drink is unsafe. Mot. (ECF 28) at 15-18. To have 8 standing under Article III of the Constitution, “[t]he plaintiff must have (1) suffered an injury in 9 fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to 10 be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338, (2016), 11 as revised (May 24, 2016) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). 12 Article III “standing is not dispensed in gross.” Lewis v. Casey, 518 U.S. 343, 358 n.6 (1996). 13 A “quintessential injury-in-fact” can occur when plaintiffs allege that they “spent money 14 that, absent defendants’ actions, they would not have spent.” Maya v. Centex Corp., 658 F.3d 15 1060, 1069 (9th Cir. 2011). Castillo alleges that she purchased the Grape Sports Drink, which she 16 would not have purchased, or would have paid less, if she had known that it contained PFAS. 17 FAC ¶¶ 84-87. “Similar allegations in the food labeling context have repeatedly been held 18 sufficient to establish an economic injury for purposes of both constitutional and statutory 19 standing.” Rice-Sherman v. Big Heart Pet Brands, Inc., No. 19-CV-03613-WHO, 2020 WL 20 1245130, at *6 (N.D. Cal. Mar. 16, 2020) (“Big Heart”) (citing cases); see, e.g., Hamman v. Cava 21 Grp., Inc., No. 22-CV-593-MMA (MSB), 2023 WL 3450654, at *5 (S.D. Cal. Feb. 8, 2023) 22 (finding that plaintiffs pleaded economic injury for standing where they alleged that “they would 23 not have purchased Defendant’s Products or would have paid less for them had they known the 24 truth about the Products – that their packaging contained ‘heightened levels of organic fluorine,’ 25 an indicator of PFAS,” and that PFAS are dangerous even in small quantities); Brazil v. Dole 26 Food Co., Inc., 935 F. Supp. 2d 947, 961-62 (N.D. Cal. 2013) (finding plaintiff’s allegations that 27 he would not have purchased misbranded fruit products absent defendants’ representations 1 ConAgra Foods, Inc., 912 F. Supp. 2d 889, 901 (N.D. Cal. 2012) (concluding that allegation that 2 plaintiffs would not have purchased a product if it had been labeled accurately was sufficient to 3 establish injury under California’s consumer laws). 4 Prime Hydration further argues that Castillo has not alleged that “the ‘numerous’ bottles of 5 Grape Sports Drink that she bought actually contained PFAS at any level . . . [.]” Mot. at 15. At 6 this stage, however, Castillo does not need to allege that her specific purchases contained PFAS as 7 she alleges that testing showed substantial levels of PFAS in the product. See, e.g., Solis v. Coty, 8 Inc., No. 22-CV-0400-BAS-NLS, 2023 WL 2394640, at *11 (S.D. Cal. Mar. 7, 2023) (holding 9 that plaintiff was not required to allege specific unit of product she purchased contained PFAS 10 because “district courts must accept the allegations of the complaint as true and draw all 11 reasonable inferences from those allegations in favor of the plaintiff”); Big Heart, 2020 WL 12 1245130, at *7 (finding standing where plaintiffs alleged that defendants advertised that dog food 13 was grain-free but testing found that it was not because “[n]owhere in the FAC do plaintiffs allude 14 that some of [defendant’s product] is grain-free but that a subset of the product is not”). Prime 15 Hydration cites Bowen v. Energizer Holdings, Inc., No. CV214356MWFAGRX, 2023 WL 16 1786731, at *2-3 (C.D. Cal. Jan. 5, 2023), for the proposition that plaintiffs must connect testing 17 to the specific product purchased. Mot. at 15-17. This argument is not persuasive. In Bowen, the 18 sunscreen bottle that the plaintiff purchased was tested and found to contain 0.29 parts per million 19 (ppm) of a carcinogen benzene, but FDA guidance permits up to 2 ppm of benzene in sunscreen. 20 Id. at *4-5. The court found that plaintiff’s injury was too speculative as there were no allegations 21 that the level of benzene in the purchased sunscreen was likely to cause physical harm. Id. at *6. 22 By contrast, Castillo alleges that independent testing revealed PFAS in the Sports Drink – at a 23 level higher than the recommended EPA’s 2022 lifetime advisory for drinking water. FAC ¶¶ 8, 24 60-62, 67, 72. 25 Prime Hydration also argues that there is only a speculative risk of harm of PFAS because 26 the chemicals are “ubiquitous,” there are “thousands of PFAS with potentially varying effects and 27 toxicity levels,” and the EPA has issued drinking water regulations which state that the proposed 1 contaminant levels is 4.0 ppt (whereas Castillo only detected 0.06 ppt). Mot. at 16-17; ECF 18, 2 Ex. 1.2 However, as Castillo explained at the hearing, the EPA’s proposed maximum 3 contamination level for public water is a different standard from the interim lifetime health 4 advisory that Castillo cites, and the former did not supersede the latter.3 Thus, Castillo has 5 plausibly alleged that the level of PFAS in Grape Sports Drink is unsafe. FAC ¶¶ 52, 66, 72, 121. 6 This case is distinct from Boysen v. Walgreen Co., No. C 11-06262 SI, 2012 WL 2953069, at *2 7 (N.D. Cal. July 19, 2012), a case on which Prime Hydration relies. In Boysen, the plaintiff alleged 8 that he suffered economic injury by purchasing apple juice that was misleadingly marketed as 9 healthy but contained lead and arsenic. Although the levels of lead and arsenic in the juices were 10 higher than FDA guidelines for bottled water, the court reasoned that there was no standing 11 because the FDA had concluded that the levels of lead and arsenic in commercial fruit juices such 12 as defendant’s were safe and the levels of arsenic and lead in apply juice fellow below FDA 13 guidance. Id. at *1, 5-6. Distinctly, the FDA has not issued any relevant guidelines here and the 14 EPA advisory Plaintiff cites to remains unchallenged. 15 Although Prime Hydration may later show that the levels of PFAS in Grape Sports Drink 16 are safe, at this stage, the Court declines to resolve this “hotly contested issue of fact” as it goes to 17 the merits of Castillo’s claims. See Gagetta v. Walmart, Inc., 646 F. Supp. 3d 1164, 1173 (N.D. 18 Cal. 2022) (taking as true plaintiff’s allegations that Walmart spices contained dangerous heavy 19 metals and declining to resolve at the motion to dismiss stage whether the levels of metals are 20 unsafe); see also Rodriguez v. Mondelez Glob. LLC, 703 F. Supp. 3d 1191, 1205 (S.D. Cal. 2023), 21 2 The Court may take judicial notice of undisputed matters of public record, Lee v. City of Los 22 Angeles, 250 F.3d 668, 689 (9th Cir. 2001), and information on government entities’ websites, Daniels–Hall v. National Education Association, 629 F.3d 992, 999 (9th Cir. 2010) (citations 23 omitted). The Court takes judicial notice of the EPA proposed PFAS National Primary Drinking Water Regulation and State Water Resources Control Board. RJN (ECF 18), Exs. 1-2. 24
3 After the Court’s hearing on the instant motion to dismiss, Prime Hydration filed a notice of the 25 EPA’s Final PFAS National Primary Drinking Water Regulation. ECF 53. Castillo moves to strike the notice of new authority pursuant to Civil Local Rule 7-3(d), which prohibits filing of 26 supplementary materials after a reply is filed, without prior Court approval, unless a party offers a relevant judicial opinion (published after the opposition or reply) prior to the noticed hearing date. 27 Prime Hydration filed the EPA notice after the motion hearing. Accordingly, the Court GRANTS 1 reconsideration denied, 2024 WL 1361892 (S.D. Cal. Mar. 29, 2024) (concluding that plaintiffs 2 plausibly alleged that no amount of lead or cadmium is safe for human consumption and that what 3 constitutes an “unsafe level” is a “question of fact not appropriately resolved on a motion to 4 dismiss”). 5 By alleging that she purchased the product during the class period and that independent 6 testing showed unsafe levels of PFAS, Castillo has established standing. For this reason, the 7 Court DENIES Prime Hydration’s motion to dismiss for lack of standing. 8 B. Sufficiency of Castillo’s Allegations 9 Prime Hydration also moves to dismiss the FAC for failure to state a claim. Prime 10 Hydration argues that: (1) Castillo’s claims are an improper attempt to evade Proposition 65; (2) 11 the UCL, CLRA, and FAL claims are not well-pled, fail under the reasonable consumer test, and 12 Prime Hydration did not have exclusive pre-sale knowledge; (3) the warranty claims fail; and (4) 13 the claims for equitable relief fail. Mot. at 18-30. Prime Hydration also moves to dismiss the 14 Magnuson-Moss Warranty Act (“MMWA”) claim and Castillo’s nationwide class allegations. Id. 15 at 18. Castillo does not oppose dismissal of the MMWA claim. Opp. (ECF 34) at 7 n.1. 16 Accordingly, the Court GRANTS the motion and dismisses the MMWA claim. Because the 17 MMWA claim was the only claim asserted on behalf of a purported nationwide class, the Court 18 also dismisses the corresponding nationwide class allegations. After setting forth the relevant 19 legal standard, the Court addresses the parties’ remaining arguments. 20 1. Legal Standard 21 Federal Rule of Civil Procedure 8 requires a complaint to include “a short and plain 22 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 23 complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil 24 Procedure 12(b)(6). To overcome a Rule 12(b)(6) motion to dismiss, the factual allegations 25 “ ‘must . . . suggest that the claim has at least a plausible chance of success.’ ” Levitt v. Yelp! Inc., 26 765 F.3d 1123, 1135 (9th Cir. 2014) (quoting In re Century Aluminum Co. Sec. Litig., 729 F.3d 27 1104, 1107 (9th Cir. 2013) (alterations in original)). In ruling on the motion, courts “accept 1 to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th 2 Cir. 2008) (citation omitted). 3 “[A]llegations in a complaint . . . may not simply recite the elements of a cause of action 4 [and] must contain sufficient allegations of underlying facts to give fair notice and to enable the 5 opposing party to defend itself effectively.” Levitt, 765 F.3d at 1135 (quoting Starr v. Baca, 652 6 F.3d 1202, 1216 (9th Cir. 2011)). The court may dismiss a claim “where there is either a lack of a 7 cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal claim.” 8 Hinds Invs., L.P. v. Angioli, 654 F.3d 846, 850 (9th Cir. 2011) (citing Johnson v. Riverside 9 Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir. 2008)). “[T]he non-conclusory ‘factual 10 content’ and reasonable inferences from that content must be plausibly suggestive of a claim 11 entitling the plaintiff to relief.” Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009). 12 Because Castillo’s claims sound in fraud, her complaint must also meet the heightened 13 pleading standard of Federal Rule of Civil Procedure 9(b). See Kearns v. Ford Motor Co., 567 14 F.3d 1120, 1125 (9th Cir. 2009). Rule 9(b) requires a party alleging fraud or mistake to state with 15 particularity the circumstances constituting fraud or mistake. Fed. R. Civ. P. 9(b). To satisfy this 16 standard, the complaint must “identify the who, what, when, where, and how of the misconduct 17 charged, as well as what is false or misleading about the purportedly fraudulent statement, and 18 why it is false.” Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013) (citation and 19 internal quotation marks omitted). 20 2. Proposition 65 21 Under California Proposition 65, “[n]o person in the course of doing business shall 22 knowingly and intentionally expose any individual to a chemical known to the state to cause 23 cancer or reproductive toxicity without first giving clear and reasonable warning to such 24 individual” where the amount of exposure exceeds the “no significant risk level” established by 25 the California Environmental Protection Agency’s Office of Environmental Health Hazard 26 Assessment (“OEHHA”). Health & Saf. Code §§ 25249.6, 25249.10(c). The OEHHA listed 27 PFOA as a chemical known to the state to cause developmental issues in 2017 and cancer in 2022. 1 See Cal. Code Regs. § 27001(b). 2 “Proposition 65’s warning requirement can be enforced by a public or private enforcement 3 action . . . [.]” Sciortino v. Pepsico, Inc., 108 F. Supp. 3d 780, 787 (N.D. Cal. 2015) (citing Cal. 4 Chamber of Com. v. Brown, 196 Cal. App. 4th 233, 239 (2011) (citing Cal. Health & Saf. Code § 5 25249.7(a), (b))). A plaintiff may privately enforce Proposition 65’s warning requirement only if 6 the plaintiff has provided notice more than 60 days from the commencement of the lawsuit to, 7 among others, the Attorney General, and to the alleged violator. Cal. Health & Safety Code § 8 25249.7(d)(1). In other words, “[s]tatutory notice is a mandatory condition precedent to 9 establishing a citizen’s right to commence a Proposition 65 enforcement action in the public 10 interest.” Ctr. for Self–Improvement & Cmty. Dev. v. Lennar Corp., 173 Cal. App. 4th 1543, 1551 11 (2009). 12 Prime Hydration argues that all of Castillo’s claims are an improper attempt to evade 13 Proposition 65. Mot. at 18-19. In order to assess whether Castillo has attempted to “plead 14 around” Proposition 65, the Court considers whether the claims are “entirely derivative of an 15 unspoken Proposition 65 violation, or whether [Castillo] assert[s] claims independent of 16 Proposition 65.” Sciortino, 108 F. Supp. 3d at 791-92; see Harris v. R.J. Reynolds Vapor Co., No. 17 15-CV-04075-JD, 2016 WL 6246415, at *2 (N.D. Cal. Sept. 30, 2016) (concluding that “[a] 18 plaintiff cannot sidestep [notice] requirements by trying to use the UCL or CLRA to plead around 19 a claim that would be barred under Proposition 65.”). Claims may be “derivative of Proposition 20 65” where the “gravamen” of the complaint seeks to “vindicate a right created by Proposition 65.” 21 Sciortino, 108 F. Supp. 3d at 792 (finding claims entirely derivative of Proposition 65 where 22 plaintiff alleged he would not have purchased Pepsi One if he had known it contained a chemical 23 at a level that required a Proposition 65 warning); see also Hanna v. Walmart Inc., 2020 WL 24 7345680, at *3 (C.D. Cal. Nov. 4, 2020) (persuading that complaint’s emphasis on glyphosate “is 25 about a ‘failure to warn’ and as such does not provide for an ‘independent claim under the UCL’”) 26 (citation omitted). 27 Here, in addition to allegations that PFAS can lead to cancer, reproductive harm, and birth 1 response, hormonal distribution, increased cholesterol, obesity, and cardiovascular issues, FAC ¶¶ 2 50, 64, 121. Thus, her claims are not entirely derivative of Proposition 65. See Rodriguez, 703 F. 3 Supp. 3d at 1208 (concluding that plaintiffs alleged an independent duty to disclose irrespective of 4 Proposition 65 where they alleged that lead and cadmium pose a risk of cancer and reproductive 5 issues as well as additional health problems such as damage to brain development, liver, kidneys, 6 and bones). Moreover, Castillo alleges more than mere failure to disclose the presence of forever 7 chemicals in the product. Castillo posits that Grape Sports Drink’s advertising is also misleading 8 by implying that the product is healthy. FAC ¶¶ 28-37, 63, 75. For example, Castillo notes that 9 Grape Sports Drink highlights antioxidants, vitamins, and electrolytes, and includes labels that it is 10 “hydrat[ing]” and “replenish[ing].” FAC ¶¶ 28, 35. Such allegations also make clear that 11 Castillo’s claims go beyond the failure to disclose pursuant to Proposition 65. See, e.g., Bland v. 12 Sequel Nat. Ltd., 2019 WL 4658361, at *4 (N.D. Cal. Jan. 18, 2019) (concluding that plaintiffs’ 13 allegations support a “duty to disclose irrespective of Proposition 65” where plaintiff alleged that 14 Defendants had an “independent duty to disclose based on their partial representations about the 15 healthfulness of the [] Products” and plaintiff alleged that consumption of the product can cause 16 various health complications in addition to cancer and reproductive harm). Ultimately, the 17 pleadings allege harm beyond Proposition 65. The Court therefore DENIES Prime Hydration’s 18 motion to dismiss this action on Proposition 65 grounds. 19 3. Sufficiency of Allegations Under the UCL, FAL, and CLRA 20 Castillo brings three causes of action under California statutes: the Consumer Legal 21 Remedies Act (“CLRA”), the Unfair Competition Law (“UCL”), and the False Advertising Law 22 (“FAL”). Cal. Civ. Code § 1770 (CRLA); Cal. Bus. & Prof. Code § 17200 (UCL), Cal. Bus. & 23 Prof. Code § 17500 (FAL). Prime Hydration argues that Castillo fails to state a claim under the 24 CLRA, UCL, and FAL because (1) she fails to allege facts establishing that the challenged 25 representations on the product label are likely to deceive a reasonable consumer; (2) she fails to 26 plead specific allegations that satisfy Rule 9(b); and (3) she does not allege that Prime Hydration 27 had exclusive pre-sale knowledge. Mot. at 19-26. Because the Court finds that the claims fail 1 under Rule 9(b) or exclusive pre-sale knowledge. 2 i. Reasonable Consumer Test 3 “Under the consumer protection laws of California, . . . claims based on deceptive or 4 misleading marketing must demonstrate that a ‘reasonable consumer’ is likely to be misled by the 5 representation.” Moore v. Trader Joe’s Co., 4 F.4th 874, 881 (9th Cir. 2021); see Consumer 6 Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351, 1360 (2003). “The California 7 Supreme Court has recognized that these laws prohibit not only advertising which is false, but also 8 advertising which[,] although true, is either actually misleading or which has a capacity, likelihood 9 or tendency to deceive or confuse the public.” Williams v. Gerber Prod. Co., 552 F.3d 934, 938 10 (9th Cir. 2008) (internal quotation marks omitted) (quoting Kasky v. Nike, Inc., 27 Cal.4th 939, 11 951 (2002)). The reasonable consumer test requires more than a mere possibility that defendant’s 12 product “might conceivably be misunderstood by some few consumers viewing it in an 13 unreasonable manner.” Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508 (2003). 14 Rather, the test requires a probability “that a significant portion of the general consuming public or 15 of targeted consumers, acting reasonably in the circumstances, could be misled.” Id.; see also 16 Moore, 4 F.4th at 881. Generally, “whether a reasonable consumer would be deceived . . . [is] a 17 question of fact not amenable to determination on a motion to dismiss.” Ham v. Hain Celestial 18 Grp., Inc., 70 F. Supp. 3d 1188, 1193 (N.D. Cal. 2014); see Reid v. Johnson & Johnson, 780 F.3d 19 952, 958 (9th Cir. 2015). “However, in rare situations a court may determine, as a matter of law, 20 that the alleged violations of the UCL, FAL, and CLRA are simply not plausible.” Ham, 70 F. 21 Supp. 3d at 1193. 22 Castillo brings her claims under theories of misrepresentation and omission. The Court 23 examines each. 24 a. Misrepresentation Theory 25 To plausibly allege a CLRA, FAL, or UCL claim based on misrepresentation, plaintiffs 26 “must allege that they relied on a misrepresentation and suffered injury as a result.” Hammerling 27 v. Google LLC, 615 F. Supp. 3d 1069, 1083 (N.D. Cal. 2022) (citing Mirkin v. Wasserman, 5 Cal. 1 jurisprudence – “literal truth,” “common sense,” the “front-back problem,” and “nature of the 2 brand name.” Brady v. Bayer Corp., 26 Cal. App. 5th 1156, 1172 (2018). Castillo appears to 3 proceed under a “common sense” theory and alleges that the following representations on the label 4 – though not literally false – were misleading because they would lead a reasonable consumer to 5 believe that Grape Sports Drink contained only “healthy and natural ingredients” and “would not 6 contain harmful man-made PFAS chemicals.” FAC ¶¶ 84, 97. The labels included the following 7 statements: 8 • “refresh, replenish, and refuel” (FAC ¶ 35); 9 • “perfect boost for every endeavor” (FAC ¶ 35); 10 • “10% coconut water, branched chain amino acids (“BCCAs”), B-vitamins, electrolytes 11 and antioxidants” (FAC ¶¶ 24, 29); 12 • “to fill the void where great taste meets function” (FAC ¶ 25); 13 • “hydration drink” (FAC ¶ 28); 14 • “filtered water” (FAC ¶ 39) 15 “[G]eneral, vague statements about product superiority” are insufficient to mislead 16 consumers. Silver v. BA Sports Nutrition, LLC, 2020 WL 2992873, at *1, 4-5 (N.D. Cal. June 4, 17 2020) (finding that sports drinks marketed with flavors such as “Fruit Punch,” “Blackout Berry,” 18 and “Grape,” and advertising that they provide “superior” and “better” hydration and are “packed 19 with Vitamin E [and C]” are vague statements that do not misdescribe a “specific or absolute 20 characteristic of the product”); see also Manchouck v. Mondelez Int’l Inc., 2013 WL 5400285, at 21 *1-3 (N.D. Cal. Sept. 26, 2013), aff’d, 603 F. App’x 632 (9th Cir. 2015) (finding that cookie 22 packaging that stated “made with real fruit” when cookies contained only fruit puree would not 23 mislead a reasonable consumer). Castillo alleges that Grape Sports Drink represents that it helps 24 consumers “refresh, replenish, or refuel,” is the “perfect boost for every endeavor” and “fill[s] the 25 void where great taste meet function.” FAC ¶¶ 25, 35. These statements are too vague and 26 general to mislead a reasonable consumer. See, e.g., Hadley v. Kellogg Sales Co., 273 F. Supp. 3d 27 1052, 1087-88 (N.D. Cal. 2017) (concluding that statements such as “great start,” “sets us up to do 1 and unspecified assertions” that were not actionable) (citations omitted). 2 Castillo also contends that the product label “purposefully highlights” that Grape Sports 3 Drink contains electrolytes, BCAAs, B vitamins, and antioxidants “in order to convince 4 consumers that the Product is, in fact, a healthy drink that is good for the body.” FAC ¶¶ 29-34. 5 However, the product label also lists ingredients, including “artificial sweeteners” such as 6 “sucralose” and “acesulfame potassium.” FAC ¶¶ 24, 37. “[Q]ualifiers in packaging, usually on 7 the back of a label or in ingredient lists, ‘can ameliorate any tendency of the label to mislead.’ ” 8 Moore v. Mars Petcare US, Inc., 966 F.3d 1007, 1017 (9th Cir. 2020) (citing Brady, 26 Cal. App. 9 5th at 1167). Thus, even if a reasonable consumer were to believe that emphasizing vitamins and 10 electrolytes indicates that the Sports Drink contains healthy and natural ingredients, this belief 11 would be dispelled by the artificial ingredients listed on the label. See Silver, 2020 WL 2992873 12 at *8 (concluding that a reasonable consumer purchasing a sports drink in a flavor such as Grape 13 or Tropical Fruit “would not be misled into thinking that simply because the label states that it 14 provides ‘Superior Hydration’ and contains vitamins and electrolytes, that this necessarily means 15 anything about the overall health benefits of the product given the disclosure of the sugar 16 content.”); Brown v. Starbucks Corp., 2019 WL 996399, at *4 (S.D. Cal. Mar. 1, 2019) (finding 17 that the complaint “fails to plausibly allege that a reasonable consumer would simply assume the 18 absence of artificial ingredients disclosure on the Gummies’ front packaging means the product 19 contains only natural ingredients”). Thus, Prime Hydration’s statements would not mislead a 20 reasonable consumer. 21 Moreover, unlike the cases cited by Castillo, nowhere on the labeling does it state that the 22 Sports Drink is healthy, nutritious, or good for consumers. Cf. Johnson-Jack v. Health-Ade LLC, 23 587 F. Supp. 3d 957, 965 (N.D. Cal. 2022) (finding that “the prominent use of the word ‘health’ 24 and the homophonic connection between ‘ade’ and ‘aid’ make it plausible that reasonable 25 consumers would construe ‘Health-Ade’ to mean healthy”); LeGrand v. Abbott Lab’ys, 655 F. 26 Supp. 3d 871, 891 (N.D. Cal. 2023) (reasoning that statements such as “nutrition shake,” 27 “complete, balanced nutrition,” and “#1 doctor recommended” plausibly could mislead consumers 1 Finally, Castillo alleges that listing the first ingredient as “filtered water” is misleading 2 because a reasonable consumer would believe that “Defendant’s filtration process would have 3 removed any incidental impurities or chemicals.” Opp. at 18 (citing FAC ¶ 39). However, 4 Castillo cites no authority for this proposition. Moreover, Castillo fails to convince where several 5 courts have rejected a similar theory that reasonable consumers might understand the word 6 “natural” to indicate that a food product is “completely free of any trace pesticides.” Hawyuan Yu 7 v. Dr Pepper Snapple Grp., Inc., 2020 WL 5910071, at *4-5 (N.D. Cal. Oct. 6, 2020) (citing 8 cases). The Court therefore finds that using the phrase “filtered water” would not mislead a 9 reasonable consumer into believing that there were no PFAS in the product. 10 Accordingly, Castillo has not plausibly alleged that a reasonable consumer would be 11 misled by the representations on the label of Grape Sports Drink, and her claims cannot proceed 12 on this theory. 13 b. Omission 14 California consumer protection laws also allow for “omission theor[ies] of consumer 15 fraud.” Hodsdon v. Mars, Inc., 891 F.3d 857, 861 (9th Cir. 2018). “[T]o be actionable the 16 omission must be contrary to a representation actually made by the defendant, or an omission of a 17 fact the defendant was obliged to disclose.” Id. (quoting Daugherty v. Am. Honda Motor Co., 144 18 Cal. App. 4th 824, 834 (2006)). To establish a duty to disclose under California law, a plaintiff 19 must plead that (1) “the defendant is in a fiduciary relationship with the plaintiff,” (2) “the 20 defendant ha[s] exclusive knowledge of material facts not known to the plaintiff,” (3) “the 21 defendant actively conceals a material fact from the plaintiff,” or (4) “the defendant makes partial 22 representations but also suppresses some material fact.” Falk v. Gen. Motors Corp., 496 F. Supp. 23 2d 1088, 1094-95 (N.D. Cal 2007) (quoting LiMandri v. Judkins, 52 Cal. App. 4th 326, 336 24 (1997) (citation omitted)). 25 Castillo proceeds under the exclusive knowledge theory and alleges that Prime Hydration 26 omitted material facts about the ingredients and safety of its products (i.e., the presence of PFAS), 27 and had exclusive knowledge of the ingredients used in Grape Sports Drink, as well as its quality 1 allegations to support the contention that Prime Hydration knew about the existence of PFAS in 2 the Grape Sports Drink when it was sold. To show “actual knowledge,” a plaintiff must allege 3 “how the defendant obtained knowledge of the specific defect . . . [.]” Stewart v. Electrolux Home 4 Prod., Inc., 304 F. Supp. 3d 894, 908 (E.D. Cal. 2018) (citing Wilson v. Hewlett-Packard Co., 668 5 F.3d 1136, 1145-48 (9th Cir. 2012)). “[G]eneralized assertion[s] that . . . [a] manufacturer had 6 ‘access to the aggregate information and data regarding the [alleged] risk . . .’ ” are “speculative 7 and do[] not suggest how any tests or information could have alerted [the manufacturer] to the 8 defect.” Wilson, 668 F.3d at 1147 (citing cases); see also Oestreicher v. Alienware Corp., 544 F. 9 Supp. 2d 964, 974 (N.D. Cal. 2008), aff’d, 322 F. App’x 489 (9th Cir. 2009) (concluding that 10 allegations that the company had “exclusive knowledge as the manufacturer” failed to contain any 11 factual basis or satisfy Rule 9(b)’s heightened pleading requirements). Castillo fails to plead any 12 factual allegations showing that Prime Hydration had exclusive knowledge – or any knowledge – 13 about the presence of PFAS in the product.4 Therefore, Castillo cannot proceed under an omission 14 theory and the Court GRANTS the motion to dismiss the CLRA, FAL, and UCL claims. 15 iii. Equitable Relief 16 Having concluded that Castillo’s claims are insufficiently pled, the Court need not reach 17 Prime Hydration’s arguments that Castillo’s claims for equitable relief under the UCL, FAL, and 18 CLRA should be dismissed. Mot. at 26. Nevertheless, for Castillo’s benefit, the Court addresses 19 Prime Hydration’s arguments. 20 “It is well-established that claims for relief under the FAL and the UCL are limited to 21 restitution and injunctive relief.” Roffman v. Rebbl, Inc., 653 F. Supp. 3d 723, 731 (N.D. Cal. 22 2023) (citing Korea Supply Co. v. Lockheed Martin, 29 Cal. 4th 1134, 1146-49 (2003)). In 23 contrast, the CLRA provides for equitable relief and for damages. Relying on Sonner v. Premier 24 Nutrition Corp., 971 F.3d 834 (9th Cir. 2020), and Guzman v. Polaris Industries, Inc., 49 F.4th 25 4 Prime Hydration also argues that the “ubiquitous presence of PFAS in the environment, food, 26 and other products” show that information about the “pervasive nature of PFAS” is not “exclusive” to Prime. Mot. at 25. The Court does not find this argument persuasive as Castillo 27 has alleged that Prime Hydration, as the manufacturer, controlled the ingredients used and quality 1 1308 (9th Cir. 2022), Prime Hydration contends that Ninth Circuit law clearly resolves this issue 2 in its favor and warrants dismissal of the claims for equitable relief. Mot. at 26. 3 In Sonner, a mislabeling class action involving “Joint Juice,” the plaintiff initially brought 4 claims for equitable relief under the UCL and CLRA and for damages under the CLRA. 971 F.3d 5 at 838. On the eve of trial, after litigating the case for four years, the plaintiff dismissed her state 6 law damages claim and elected to move forward only on the state law equitable claims for 7 restitution and injunctive relief. Id. at 837. The district court then dismissed the restitution claims 8 because an adequate remedy at law, i.e., damages, was available. Id. On appeal, the Ninth Circuit 9 affirmed the dismissal because the plaintiff “fail[ed] to establish that she lack[ed] an adequate 10 remedy at law” in the UCL and CLRA, holding that “a federal court must apply traditional 11 equitable principles before awarding restitution under the UCL and CLRA.” Id. at 841, 844. 12 In Guzman, also a mislabeling case, the district court granted summary judgment in favor 13 of the defendants and dismissed the plaintiff’s UCL claim with prejudice. 49 F.4th at 1310. The 14 Ninth Circuit affirmed in part and reversed in part. Id. Based in part on Sonner, the Ninth Circuit 15 affirmed the portion of the district court order dismissing the UCL claim. Id. at 1313. It agreed 16 that the plaintiff had an adequate remedy at law through his CLRA claim for damages, even 17 though he could no longer pursue the claim because it was time-barred. Id. at 1313. As to the 18 portion of the district court’s order that dismissed the UCL claim with prejudice, the Ninth Circuit 19 reversed with instructions to dismiss without prejudice for lack of equitable jurisdiction, which 20 would allow the plaintiff to re-file the claim in state court. Id. at 1315. 21 Here, Sonner and Guzman do not mandate dismissal of Castillo’s claims because the 22 decisions “require far less at the pleading stage.” See In re Natera Prenatal Testing Litig., 664 F. 23 Supp. 3d 995, 1012 (N.D. Cal. Mar. 28, 2023). However, Castillo fails to allege why damages 24 would be inadequate or provide any allegations about the adequacy of the various remedies. 25 Castillo seeks restitution “if monetary damages are not available,” or even if they are 26 available because “such relief would not be adequate to address the injury suffered . . . [.]” FAC ¶¶ 27 202, 215. She also seeks “injunctive and equitable relief” to “enjoin Defendant from continuing 1 survive the motion to dismiss as Castillo has not alleged why damages would not make her whole 2 or why they are inadequate. See Roffman, 653 F. Supp. 3d at 731 (granting motion to dismiss and 3 allowing plaintiff leave to amend her allegations regarding the inadequacy of her legal remedies 4 where allegations about the inadequacy of legal remedies were conditional and plaintiff “d[id] not 5 suggest that she s[ought] a different amount in damages than she d[id] in restitution” or that there 6 was a limitation inherent to the available legal remedy itself that would make it inadequate); Bryan 7 v. Apple, 2023 WL 2333893, at *3 (N.D. Cal. Mar. 2, 2023) (granting motion to dismiss on a 8 “narrow basis” where plaintiffs did not explain how their claims for damages and equitable relief 9 were based on different theories and did not allege that they lacked an adequate remedy at law); 10 Smith v. Apple, Inc., 2023 WL 2095914, at *3 (N.D. Cal. Feb. 17, 2023) (dismissing claims for 11 equitable relief based on Sonner and Guzman where the plaintiffs had “not adequately alleged that 12 their remedies at law are inadequate” or “address[ed] why monetary damages would be inadequate 13 to make [p]laintiffs whole.”); cf. Murphy v. Olly Pub. Benefit Corp., 651 F. Supp. 3d 1111, 1129 14 (N.D. Cal. 2023) (declining to dismiss the request for equitable relief where the plaintiffs alleged 15 that legal remedies were not as certain as equitable remedies because, for example, a full refund 16 would require a showing that the product at issue had no market value but no such showing was 17 required for restitution). For these reasons, even if Castillo’s UCL, FAL, and CLRA claims had 18 been sufficiently plead, the Court would have dismissed Castillo’s claims for equitable relief with 19 leave to allege that a legal remedy would be inadequate. 20 4. Implied Warranty Claims 21 Castillo also alleges that the Sports Drink was not fit for the particular purpose of human 22 consumption and was not merchantable. Castillo contends that Prime Hydration breached both its 23 implied warranty of fitness and merchantability because the labels implied that the drink was 24 unadulterated and safe. Opp. at 23 (citing FAC ¶¶ 101-06, 162-63, 221-26). The Court analyzes 25 both the implied warranty of fitness for a particular purpose and the implied warranty of 26 merchantability below. 27 “An implied warranty of fitness for a particular purpose arises only where (1) the purchaser 1 of contracting has reason to know of this particular purpose, (3) the buyer relies on the seller’s 2 skill or judgment to select or furnish goods suitable for the particular purpose, and (4) the seller at 3 the time of contracting has reason to know that the buyer is relying on such skill and judgment.” 4 Keith v. Buchanan, 173 Cal. App. 3d 13, 25 (1985) (citation omitted); see Frenzel v. AliphCom, 76 5 F. Supp. 3d 999, 1021 (N.D. Cal. 2014). “A ‘particular purpose’ differs from the ordinary purpose 6 for which the goods are used in that it envisages a specific use by the buyer which is peculiar to 7 the nature of his business whereas the ordinary purposes for which goods are used are those 8 envisaged in the concept of merchantability and go to uses which are customarily made of the 9 goods in question.” Am. Suzuki Motor Corp. v. Superior Court, 37 Cal. App. 4th 1291, 1295 n. 2 10 (1995) (citation omitted). Castillo argues that the intended purpose of the product, “a drink, was 11 to drink it.” Opp. at 24. This is not a “particular purpose,” but rather the ordinary purpose for 12 which a sports drink is used. See Am. Suzuki, 37 Cal. App. 4th at 1295 n.2. Thus, Castillo cannot 13 proceed under a theory of implied warranty of fitness for a particular purpose. 14 Distinctly, the implied warranty for merchantability requires that goods “(1) pass without 15 objection in the trade under the contract description; (2) are fit for the ordinary purpose for which 16 those goods are used; (3) are adequately contained, packaged, and labeled; and (4) conform to the 17 promises or affirmation of fact made on the container or label.” Birdsong v. Apple, Inc., 590 F.3d 18 955, 958 n.2 (9th Cir. 2009). The implied warranty of merchantability “provides for a minimum 19 level of quality” in a good. Am. Suzuki Motor Corp., 37 Cal. App. 4th at 1296 (citation omitted). 20 To state a claim for breach of the implied warranty of merchantability, a plaintiff must allege a 21 “fundamental defect that renders the product unfit for its ordinary purpose.” T & M Solar & Air 22 Conditioning, Inc. v. Lennox Int’l Inc., 83 F. Supp. 3d 855, 878 (N.D. Cal. 2015) (citation 23 omitted); see also Mexia v. Rinker Boat Co., 174 Cal. App. 4th 1297, 1303 (2009) (“The core test 24 of merchantability is fitness for the ordinary purpose for which such goods are used.”) (citation 25 omitted). “Such fitness is shown if the product is in safe condition and substantially free of 26 defects[.]” Mexia, 174 Cal. App. 4th at 1303 (internal quotation marks and citation omitted). 27 “In cases involving human food, a party can plead that a product violates the implied 1 contaminated, or contained foreign objects.” Barnes v. Nat. Organics, Inc., 2022 WL 4283779, at 2 *8 (C.D. Cal. Sept. 13, 2022) (citing Thomas v. Costco Wholesale Corp., 2014 WL 5872808, *3 3 (N.D. Cal. Nov. 12, 2014) (citation omitted)). Castillo alleges that the dangerous chemicals 4 present in the Grape Sports Drink compromised its safety and fitness for consumption. Opp. at 5 23-24 (citing FAC ¶¶ 221-26). The FAC states that PFAS found in Defendant’s product are 6 “poisonous or deleterious” and “indisputably linked to negative health consequences.” 7 FAC ¶ 101. Further, the PFOA and PFOS found in the product exceed the EPA’s recommended 8 limit for drinking water. FAC ¶ 102. These allegations are sufficient at this stage. See Barnes, 9 2022 WL 4283779, at *8 (finding breach of implied warranty sufficiently pleaded where plaintiffs 10 alleged that the product promoted a healthy pregnancy but was actually contaminated with heavy 11 metals and was thus not favorable for pregnancy); Rodriguez, 703 F.Supp.3d at 1212-13 (same 12 where plaintiffs alleged that the products were unsafe for consumption because they contained 13 high levels of lead or cadmium). Accordingly, the Court DENIES Prime Hydration’s motion to 14 dismiss the implied warranty of merchantability claim. 15 III. CONCLUSION 16 For the foregoing reasons, the Court DENIES Prime Hydration’s motion to dismiss for 17 lack of standing. The Court DENIES the motion to dismiss the breach of the implied warranty of 18 merchantability claim and GRANTS the motion to dismiss the claim for breach of implied 19 warranty of fitness for a particular purpose with leave to amend. The Court GRANTS the motion 20 to dismiss the MMWA claim and corresponding nationwide class allegations without leave to 21 amend. The Court GRANTS Prime Hydration’s motion to dismiss with leave to amend the 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 1 CLRA, UCL, and FAL claims for failure to state a claim. Any amended complaint must be filed 2 || by October 9, 2024. No additional parties or claims may be added without leave of Court or 3 stipulation of Defendant. 4 5 IT IS SO ORDERED. 6 || Dated: September 9, 2024 cob Weck 8 ARACELI MARTINEZ-OLGUIN 9 United States District Judge 10 11 g 12
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