In re: Nestle Boost Nutritional Drink Litigation

District Court, N.D. California·Decided July 5, 2022·No. 3:21-cv-09812·Unknown

Opinion

BRUCE HORTI, et al., Case No. 21-cv-09812-PJH Plaintiffs,

v. ORDER GRANTING DEFENDANT’S MOTION TO DISMISS NESTLÉ HEALTHCARE NUTRITION, INC., Re: Dkt. No. 15 Defendant.

Defendant’s motion to dismiss plaintiffs’ second amended complaint (“SAC”) came on for hearing before this court on June 9, 2022. Plaintiffs appeared through their counsel, Nick Suciu, III, and J. Hunter Bryson. Defendant appeared through its counsel, Timothy W. Loose. Having read the papers filed by the parties and carefully considered their arguments and the relevant legal authority, and good cause appearing, the court hereby GRANTS defendant’s motion, for the following reasons. This is a putative consumer class action regarding advertising of nutritional drinks. Plaintiff Bruce Horti is a resident of Concord, California. SAC ¶ 8. Plaintiff Sandra George is a resident of Adelanto, California. SAC ¶ 9. Plaintiff Jeanette Craig is a resident of Kingston, New York. SAC ¶ 10. Defendant Nestlé HealthCare Nutrition, Inc. (“Nestlé”) is a Delaware Corporation with a headquarters in Bridgewater, New Jersey. SAC ¶ 11. // A. The Products Defendant makes several health drinks, including Boost Glucose Control, Boost Glucose Control High Protein, and Boost Glucose Control Max (“Boost Max”). SAC ¶ 1. Plaintiffs allege that the representations on the labels of each of these products mislead and “trick” reasonable consumers into believing that the products can prevent and treat diabetes. SAC ¶ 4. In particular, plaintiffs allege the following representations are misleading: (a) “Designed for people with diabetes”; (b) the name of the Products: “BOOST Glucose Control”; and (c) “Helps manage blood sugar.” SAC ¶ 33. Boost Max does not include the representation (a) “Designed for people with diabetes.” Id. Plaintiffs allege they bought Boost Glucose Control drinks in retail stores. SAC ¶¶ 60-62. Each plaintiff paid an unidentified “premium price” for the drink that was “more expensive than other [unidentified] choices.” SAC ¶¶ 60-62. And each plaintiff chose to purchase the drinks “based upon the Products’ diabetes-related representations.” SAC ¶¶ 60-62. Plaintiffs do not allege that they consumed the products, they do not describe if anything happened to them after they consumed the products, and they do not allege that they are diabetic. Much of plaintiffs’ complaint is dedicated to a general discussion of diabetes and other background information. SAC ¶¶ 15-59. As part of this discussion, plaintiffs concede that there is no known cure for diabetes, and that it is a condition that is managed both through “healthy eating” and taking “insulin or other medicines.” SAC ¶ 21 (citing Request for Judicial Notice (“RJN”) Ex. B). B. Procedural Posture Plaintiffs initiated this lawsuit by complaint filed December 20, 2021. Dkt. 1. They filed the first amended complaint the same day. Dkt. 2. Pursuant to stipulation, plaintiffs filed the now-operative second amended complaint with the corrected entity name for defendant on February 4, 2022. Dkt. 9 & 11. Plaintiffs assert the following claims against Nestlé: Count I: violations of violations of California’s False Advertising Law, Cal. Bus. & Prof. Code § 17500 (“FAL”); Count III: California’s Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et seq. (“CLRA”); Counts IV and V: New York General Business Law §§ 349 and 350 (together, “GBL”); Count VI: breach of express warranty; and Count VII: unjust enrichment. SAC ¶¶ 74-165. Plaintiffs seek to represent separate California and New York subclasses of “All persons in the [respective states] who purchased the [Boost drinks] for personal use and not for resale.” SAC ¶ 64. Nestlé now asks the court to dismiss the SAC in its entirety for failure to state a claim and for lack of standing. Dkt. 15. In support of the motion to dismiss, defendant requests that the court take judicial notice of certain materials. Dkt. 15-1. Federal Rule of Evidence 201 permits a court to notice a fact if it is “not subject to reasonable dispute.” Fed. R. Evid. 201(b). A fact is “not subject to reasonable dispute” if it is “generally known,” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(1)-(2). Under the incorporation by reference doctrine, the court has discretion to consider on a motion to dismiss “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff’s] pleading.” Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1160 (9th Cir. 2012); see also United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (“Even if a document is not attached to a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim.”). Here, defendant requests that the court take notice of Exhibit A, a reproduction of its webpages related to refunds for customers dissatisfied with the taste of Boost products. Dkt. 15-3. Though defendant contends that plaintiffs’ complaint relies heavily on the Boost website, a review of the SAC in totality reveals that it relies little on the Boost website itself and rather on images from other websites or retailers. Plaintiffs have defendant’s request is DENIED on this basis. Further, defendant’s reference to the refund page of the Boost website is DENIED as moot. Defendant contends that consumer plaintiffs lack standing where a full refund was made available to them prior to suit—the remedy of a refund moots plaintiff’s injury- in-fact. Savoy v. Collectors Universe, Inc., 2020 WL 4938464, at *4 (C.D. Cal. July 21, 2020). The Savoy case is much narrower than this general proposition, where a plaintiff’s claim for false advertising of a customer satisfaction guarantee was deemed moot because he never attempted to utilize the refund policy prior to filing suit. Id. at *4. But the court need not reach this argument regarding plaintiffs’ standing (and thus whether to consider this exhibit) because the SAC fails on other grounds, discussed below. In contrast, defendant’s Exhibit B is a copy of the same informational webpage titled, “What is Diabetes?” on the CDC website that plaintiffs cite to describe diabetes in the SAC. SAC ¶¶ 18-21 n.1-4 (Dkt. 11 at 5-6). Plaintiffs’ objection to the court’s consideration of this material because it merely provides background on diabetes is nonsensical. Defendant cites to the material for the same purpose as plaintiffs cite to the material in their pleading, and such background information aids in assessing the “reasonable consumer” standard, an element essential to plaintiffs’ claims. The court therefore GRANTS defendant’s request to take notice of Exhibit B. Dkt. 15-4. A. Legal Standards 1. Rule 12(b)(6) – Failure to State a Claim A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests for the legal sufficiency of the claims alleged in the complaint. Ileto v. Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003). Under

In re: Nestle Boost Nutritional Drink Litigation, (N.D. Cal. 2022).

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