Jackson v. General Mills, Inc.

• Court: District Court, S.D. California
• Decided: September 23, 2019
• Docket: 3:18-cv-02634
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CHARLENE M JACKSON, Case No.: 18cv2634-LAB (BGS)

12 Plaintiff, ORDER GRANTING IN PART 13 v. MOTION TO DISMISS AND STRIKE 14 GENERAL MILLS, INC.,

15 Defendant. [Docket number 21.] 16 17 This putative consumer class action was originally filed in San Diego 18 Superior Court, and removed on the basis of diversity jurisdiction. Plaintiff 19 Charlene Jackson alleges she bought a box of Annie’s Frosted Oat Flakes cereal 20 in Bakersfield in December of 2016. She alleges that she was surprised when she 21 opened the box and discovered that the box was between 30% and 50% empty, 22 i.e., that it consisted of 30% to 50% “slack-fill.” Slack-filled containers may violate 23 Cal. Bus. & Prof. Code §§ 12606.2(b) (the California Fair Packaging and Labeling 24 Act, or CFPLA), though certain exceptions apply. Jackson seeks to represent both 25 a nationwide class and a California class consisting of consumers who bought any 26 of Annie’s HOMEGROWN brand cereal products. 27 Following removal, Defendant General Mills moved to dismiss. Instead of 28 opposing the motion, Jackson filed an amended complaint (the “FAC”), which is 1 now the operative pleading. It includes claims based on several California statutes. 2 Defendant has moved to dismiss under Fed. R. Civ. P. 12(b)(1), 12(b)(6), 3 and 9(b), and to strike certain class allegations under Fed. R. Civ. P. 12(f). 4 Legal Standards 5 A motion to dismiss tests the sufficiency of the complaint. Navarro v. Block, 6 250 F.3d 729, 732 (9th Cir. 2001). “Factual allegations must be enough to raise a 7 right to relief above the speculative level . . . .” Bell Atlantic Corp. v. Twombly, 550 8 U.S. 544, 555 (2007). “[S]ome threshold of plausibility must be crossed at the 9 outset” before a case is permitted to proceed. Id. at 558 (citation omitted). The 10 well-pleaded facts must do more than permit the Court to infer “the mere possibility 11 of misconduct”; they must show that the pleader is entitled to relief. Ashcroft v. 12 Iqbal, 556 U.S. 662, 679 (2009). 13 When determining whether a complaint states a claim, the Court accepts all 14 allegations of material fact in the complaint as true and construes them in the light 15 most favorable to the non-moving party. Cedars-Sinai Medical Center v. National 16 League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007) (citation 17 omitted). The Court does not weigh evidence or make credibility determinations. 18 Acosta v. City of Costa Mesa, 718 F.3d 800, 828 (9th Cir. 2013). At the same time, 19 the Court is “not required to accept as true conclusory allegations which are 20 contradicted by documents referred to in the complaint,” and does “not . . . 21 necessarily assume the truth of legal conclusions merely because they are cast in 22 the form of factual allegations.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 23 1136, 1139 (9th Cir. 2003) (citations and quotation marks omitted). 24 To meet the ordinary pleading standard and avoid dismissal, a complaint 25 must plead “enough facts to state a claim to relief that is plausible on its face.” 26 Twombly, 550 U.S. at 570. But claims that sound in fraud, including those arising 27 under state law, must be pled with particularity. Fed. R. Civ. P. 9(b); Vess v. Ciba- 28 Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir. 2003). This includes alleging who 1 made various misrepresentations, how the misrepresentations were conveyed to 2 the plaintiff, and under what circumstances. See Cooper v. Pickett, 137 F.3d 616, 3 627 (9th Cir. 1998). 4 New or expanded allegations in opposition to a motion to dismiss are 5 considered when deciding whether to grant leave to amend, but are not considered 6 when ruling on a 12(b)(6) motion. See Schneider v. Cal. Dep't of Corr. & Rehab., 7 151 F.3d 1194, 1197 n.1 (9th Cir. 1998). See also Broam v. Bogan, 320 F.3d 1023, 8 1026 n.2 (9th Cir. 2003). 9 Under Fed. R. Civ. P. 12(f), the Court has discretion either sua sponte or on 10 the motion of a party, to strike “an insufficient defense or any redundant, 11 immaterial, impertinent, or scandalous matter.” The purpose of a motion to strike 12 is to “avoid the expenditure of time and money that must arise from litigating 13 spurious issues by dispensing with those issues prior to trial.” Sidney-Vinstein v. 14 A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). 15 Normally class allegations are tested on a motion for class certification, 16 although “[s]ometimes the issues are plain enough from the pleadings to determine 17 whether the interests of the absent parties are fairly encompassed within the 18 named plaintiff's claim.” Gen. Tel. Co. of the Southwest v. Falcon, 457 U.S. 147, 19 160 (1982). Some courts have struck class allegations where it is clear from the 20 pleadings that class claims cannot be maintained. See, e.g., Sanders v. Apple Inc., 21 672 F.Supp.2d 978, 990 (N.D.Cal.2009). 22 The Court is also obligated to examine its own jurisdiction, including 23 jurisdictional issues such as standing; it must do this sua sponte if necessary. See 24 Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 954 (9th Cir. 2011) (en banc). 25 Judicial Notice 26 General Mills asks the Court to take judicial notice of two articles quoted in 27 the FAC, and of certain photographs of its products. This request is GRANTED 28 IN PART. While product packaging is generally noticeable in product-labeling 1 claims cases, see Kanfer v. Pharmacare US, Inc., 142 F. Supp. 3d 1091, 1098–99 2 (S.D.Cal., 2015), the photographs depict Defendant’s own demonstration of how 3 cereal fits into its containers. The photographs themselves are therefore 4 inappropriate for judicial notice. Some of the underlying facts demonstrated in the 5 photographs, however, are appropriately noticed. Most significantly, the ordinary 6 properties of cereal boxes, flexible plastic bags, and cereal are generally known, 7 particularly among consumers who buy cereal. If it were otherwise, consumers 8 could not have reasonable expectations about the cereal they were buying. 9 Plastic liner bags in cereal boxes conform to the shape of the boxes. When 10 their shape is changed in some way, the cereal moves around and the level of 11 cereal in the bag changes too. For example, if cereal boxes and bags are squeezed 12 or manipulated as in the photographs in the FAC, the level of cereal will be lower 13 than it would be in an average box on a supermarket shelf. It is also common 14 knowledge that cereal tends to settle more if it is shaken or handled.1 15 Because the FAC relies on language from the two articles (Exs. A and B) to 16 show it is plausible that a reasonable consumer would be deceived by the slack- 17 fill, the full articles can be considered as part of the FAC even without judicial 18 notice. See Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (citing Branch 19 v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994)) (holding that district court properly 20 considered full text of documents quoted in part in the complaint, without 21 converting motion to dismiss into motion for summary judgment). 22 Defendant’s Arguments 23 General Mills asks the Court to strike all reference to a nationwide class, 24 arguing that she lacks standing to represent them. They also argue that the FAC 25

26 27 1 These observations are consistent with the contents of the Federal Register discussed below, which is also subject to judicial notice. See Hadley v. Kellogg 28 1 is inadequately pled, for several reasons, including: 2 1. It fails to allege why the slack-fill was non-functional under the federal Food, 3 Drug, and Cosmetic Act (FDCA), 21 U.S.C. §§ 301, et seq., which means 4 the state claims are preempted. 5 2. Her deception claims are implausible in light of what reasonable consumers 6 know and expect of cereal and also in light of disclosures on the packaging. 7 3. Her fraud claims are not pled with adequate particularity. 8 4. Her claims under the “unlawful” prong of California’s Unfair Competition Law 9 fails because she did not plead any statutory violation. 10 5. She lacks standing to pursue injunctive relief because she does not allege 11 plans to purchase the products in future, and because now that she knows 12 about the alleged slack-fill, she cannot again be injured by it. 13 6. She lacks standing to assert claims based on other cereal products she did 14 not purchase, particularly because she does not allege how the product she 15 bought is similar to all others. 16 7. She may not represent out-of-state class members whose claims have no 17 affiliation with the forum state. 18 Discussion 19 Nationwide Class Claims 20 It is undisputed that General Mills is a Delaware corporation with its principal 21 place of business in Minneapolis, Minnesota. Citing Bristol-Myers Squibb Co. v. 22 Superior Ct., 137 S. Ct. 1773 (2017), General Mills argues that the Court lacks 23 either general or specific personal jurisdiction over it. While it is questionable 24 whether Bristol-Myers applies in the federal class action context, see In re Morning 25 Song Bird Food Litigation, 2018 WL 1382746, at *5 (S.D. Cal., Mar. 19, 2018), the 26 issue of personal jurisdiction is fairly raised. 27 “When a defendant moves to dismiss for lack of personal jurisdiction, the 28 plaintiff bears the burden of demonstrating that the court has jurisdiction.” In re W. 1 States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 741 (9th Cir. 2013). The 2 only gesture Jackson made towards establishing personal jurisdiction was to 3 assert that the Court has specific personal jurisdiction over the nationwide class’s 4 claims, and to cite authority showing that Bristol-Myers probably does not apply to 5 class actions. It may be that the Court can exercise personal jurisdiction over these 6 claims, but it is Jackson’s burden to establish that, and she has not done so. 7 General Mills also correctly points out that other courts have stricken 8 nationwide claims based on California’s consumer protection laws. Applying 9 California’s consumer protection laws to transactions having no relationship at all 10 with California is problematic. In Mazza v. Am. Honda Motor Co., 666 F.3d 581 (9th 11 Cir. 2012), the Ninth Circuit considered class claims with a much stronger 12 California nexus. A nationwide class sued Honda, which was headquartered in 13 California for violations of California state laws in connection with alleged 14 misrepresentations made in California. Nevertheless, the court held that the 15 members’ consumer protection claims should be governed by the consumer 16 protection laws of the jurisdiction where the transactions took place. Id. at 594. 17 Here, there is absolutely no connection between California and claims by non- 18 California consumers: the product was manufactured, marketed, and sold 19 elsewhere by a non-California company, and purchased by consumers in other 20 states. None of the alleged misconduct or injuries occurred in California. This is a 21 serious problem, and likely fatal to the nationwide class’s claims. See Wilson v. 22 Frito-Lay N. Am., Inc., 961 F. Supp. 2d 1134, 1147–48 (N.D. Cal., 2013). See also 23 Edgar v. MITE Corp., 457 U.S. 624, 644–46 (1982) (holding that applying Illinois 24 law to transactions with inadequate nexus to the state would unduly burden 25 interstate commerce). 26 The California Supreme Court has made clear the laws of this state do not 27 purport to govern occurrences outside the state, “unless such intention is clearly 28 expressed or reasonably to be inferred from the language of the act or from its 1 purpose, subject matter or history.” Sullivan v. Oracle Corp., 51 Cal.4th 1191, 2 1207 (2011) (citation omitted). California’s Unfair Competition Law does not have 3 extraterritorial application. Id. Nor do California’s Consumer Legal Remedies Act, 4 or its False Advertising Law. Wilson, 961 F. Supp. 2d at 1147. The same would 5 appear to hold true for the California Fair Packaging and Labeling Act. See Gianino 6 v. Alacer Corp., 846 F. Supp. 2d 1096, 1103 (C.D. Cal., 2012) (citing Hernandez 7 v. Burger, 102 Cal. App. 3d 795, 802 (1980)) (holding that California’s interest in 8 applying its law to residents of other states who purchased and used products in 9 those other states was too attenuated). 10 The Ninth Circuit has directed district courts to determine whether California 11 law can apply to the class claims as a whole before certifying a class. In re Hyundai 12 and Kia Fuel Economy Litigation, 881 F.3d 679, 702 (9th Cir. 2018). Normally this 13 is done by carrying out a choice of law analysis to determine whether differences 14 among the laws of California and other states defeat the predominance 15 requirement. Id. But here, it is not necessary to do so because the FAC’s claims 16 arise solely under California’s consumer protection laws, and these laws simply do 17 not apply to transactions outside California involving non-California consumers. 18 Types of Cereal Products 19 General Mills correctly points out another problem with overbreadth, in that 20 Jackson is attempting to represent the purchasers of all types of Annie’s cereals, 21 not just the one type she bought. Jackson has not alleged how other types of cereal 22 are similar to the type she bought, or if they are similar at all. Some courts have 23 held that a named plaintiff has standing to bring claims on with regard to the 24 products she purchased, while others hold that she can represent class members 25 who purchased sufficiently similar products. See Clancy v. The Bromley Tea Co., 26 / / / 27 / / / 28 / / / 1 308 F.R.D. 564, 569 (N.D. Cal., 2013). But regardless of which approach the 2 Court takes, Jackson lacks standing to sue on behalf of purchasers of different 3 kinds of cereal. One key issue in this case is the degree to which slack-fill results 4 from unavoidable settling of the cereal, see Cal. Bus. & Prof. Code § 12606.2(c)(3), 5 which obviously will vary depending on the type, shape, and texture of the cereal, 6 and possibly other factors as well.3 Furthermore, the expectation of consumers 7 who bought different kinds of cereal is likely to be different.4 Jackson does not 8 have standing to sue on behalf of consumers who bought different kinds of cereal. 9 Standing to Seek Injunctive Relief 10 General Mills points out that Jackson presently has no intention to buy 11 Annie’s cereal in the future, and also that even if she was deceived once, she is 12 unlikely to be deceived in the future. Therefore, it argues, she has no standing to 13 seek injunctive relief. Jackson bears the burden of establishing standing. See 14 DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 and n.3 (2006). 15 Jackson alleges that both she and the class members “will not purchase the 16 Products in the future, although they would like to do so, unless and until Defendant 17

18 19 2 A third approach is to defer the issue until the class certification stage, and analyze it under Fed. R. Civ. P. 23. Id. But the Court believes this issue is clear 20 enough that it ought to be addressed at the pleading stage, which it has discretion 21 to do. See Tietsworth v. Sears, 720 F. Supp. 2d 1123, 1146 (N.D. Cal., 2010) (holding that, under Rule 23(c)(1)(A) and 23(d)(1)(D), courts have authority to 22 strike class allegations before discovery). 23 3 The FAC alleges that while the cereal she bought settled to 50% slack-fill, two other varieties of Annie’s HOMEGROWN cereals settle to 30% slack-fill. (FAC, 24 § 11.) It does not mention the slack-fill percentage of any other type of cereal. 25 4 The FAC includes photographs of the three types of cereal, in bags. (FAC, § 22– 23.) The appearance is dramatically different. While the oat flakes cereal appears 26 to fill roughly 50% of the liner bag, the other two cereals appear rather full. See 27 Cordes v. Boulder Brands USA, Inc., 2018 WL 6714323, at *5 (C.D. Cal., Oct. 17, 2018) (products were not sufficiently similar, where plaintiff failed to show that 28 1 takes corrective action.” (FAC, ¶ 31.) In other words, she is not buying Annie’s 2 cereal and has no immediate plans to buy it. Allegations that the entire class is 3 refraining from buying Annie’s cereal is obviously implausible, because that would 4 mean no one in the country was buying it. Such an allegation should not have 5 been included. 6 Jackson cites the now-superseded decision in Davidson v. Kimberly-Clark 7 Corp., 873 F.3d 1103 (9th Cir. 2017), amended and superseded on denial of reh’g 8 en banc, 889 F.3d 956 (9th Cir. 2018) for the principle that consumers deceived by 9 false advertising have standing to seek injunctive relief. In fact, that decision is not 10 nearly as broad as Jackson believes. Rather, it merely holds that injunctive relief 11 may be available; the consumer must still establish the threat of actual and 12 imminent injury. See id. at 967. A plaintiff who is deceived by false advertising 13 may be injured by her inability to rely on advertising in the future. See id. at 969– 14 70. The panel did not, however, hold that consumers deceived by false advertising 15 automatically have standing to seek injunctive relief. The decision also 16 acknowledged that the question was a close one, id. at 971, implying that standing 17 was unlikely in cases where the threat of future harm was weaker. 18 Here, Plaintiff is aware that the cereal in question is sold by weight, and that 19 the package identifies the number of servings. She has not alleged that either of 20 these are false or misleading. Rather, she alleges that consumers do not bother 21 to look at either of these, and base their evaluation of the amount of cereal on the 22 box dimensions. (FAC, ¶ 1; Opp’n to Mot. to Dismiss, at 2:1–4.) That may be true 23 of other consumers, but she has not shown why it is true for her and, more 24 importantly, why it will still be true for her in the future. She also suggests that the 25 amount of cereal is properly determined by the number of flakes in the box. (Id., 26 11:11–13.) The Court rejects this. Reasonable consumers do not judge the 27 amount of cereal by the number of flakes, or expect a particular flake count in each 28 serving. 1 Given that she now knows she can ascertain the amount of cereal she is 2 buying by looking at the label, she has not shown any likelihood she will be 3 deceived in the future. See Davidson, 889 F.3d at 972 (noting that the plaintiff 4 alleged she had no way of determining whether future representations would be 5 true); Cordes, 2018 WL 6714323 at *4 (customer was unlikely to be deceived in 6 future by slack-fill in pretzel bag, where he could “easily determine” the amount of 7 product in the package by reading the back panel). 8 Jackson’s allegation that she would like to buy the cereal again, if the 9 problems she points to are remedied, is also implausible. If she is dissatisfied 10 enough with the cereal that she has stopped buying it, there is no reason to 11 suppose that changed product labeling to tell her what she already knows about 12 the amount of cereal in the box would change that. See Lanovaz v. Twinings N. 13 Am., Inc., 726 Fed. Appx. 590, 591 (9th Cir. 2018) (plaintiff’s statement that she 14 would “consider buying” products in the future if misleading labels were removed 15 does not satisfy standing requirements). 16 Jackson has not met her burden of establishing standing to seek injunctive 17 relief. 18 Non-Functionality of Slack-Fill 19 General Mills argues that Jackson must properly allege that the slack-fill is 20 non-functional under both the CFPLA and the FDCA: the former, to show she has 21 a claim under that statute, and the latter, to show her claim is not preempted by 22 federal law. Jackson is not suing under the FDCA, which affords no private right 23 of action. See Ivie v. Kraft Foods Global, Inc., 2013 WL 685372, at *1 (N.D. Cal., 24 Feb. 25, 2013). Under the FDCA, however, no state may establish a requirement 25 for food that is not identical to the FDA standard. Hendricks v. StarKist Co., 30 F. 26 Supp. 3d 917, 926 (N.D. Cal., 2014) (citing 21 U.S.C. § 343-1(a)(1)). Therefore, 27 any state law seeking to establish different standards is preempted. Id. The 28 CFPLA itself provides that it is to be interpreted consistently with federal law, see 1 Cal. Bus. & Prof. Code § 12606.2(e), so in any event Jackson’s claim must be 2 consistent with the FDCA. Because the CFPLA and the FDCA’s requirements in 3 pertinent part are identical here, see 21 C.F.R. § 100.100, compliance with the 4 FDCA amounts to compliance with the CFPLA. 5 Jackson argues that the inapplicability of “safe harbor” provisions is an 6 affirmative defense, and she need not plead facts showing it does not apply. She 7 argues, however, that she has adequately pled facts showing that the slack-fill is 8 non-functional. 9 Federal courts in California are divided about whether the “safe harbor” 10 provisions are affirmative defenses, or whether their inapplicability is an element 11 that must be pled. See Matic v. U.S. Nutrition, Inc., 2019 WL 3084335, slip op. at 12 *6 (C.D. Cal., Mar. 27, 2019) (surveying cases). In the Court’s view, the language 13 of the statute suggests that inapplicability of any of the six “safe harbor” provisions 14 is an element of the claim, because that is what renders ordinary slack-fill 15 nonfunctional, and therefore both deceptive and actionable. Specifically: 16 A container that does not allow the consumer to fully view its contents shall be considered to be filled as to be misleading if it contains 17 nonfunctional slack fill. Slack fill is the difference between the actual 18 capacity of a container and the volume of product contained therein. Nonfunctional slack fill is the empty space in a package that is filled to 19 substantially less than its capacity for reasons other than any one or 20 more of the following [safe harbor provisions] . . . .

21 § 12606.2(c). 22 The FAC’s allegations concerning the reason for slack-fill in part 23 misunderstand the nature of food settling. The settling of contents refers to 24 contents getting smaller. It is a “normal unavoidable process for many types of 25 food (e.g., cereal and potato chips) . . . [and is] a function of the physical properties 26 of the product . . . .” 58 Fed. Reg. 2957-01, 2961, 1993 WL 1564 (Jan. 6, 1993). 27 Settling occurs after manufacture, during shipping and handling. Id. 28 / / / 1 The FAC has hardly anything to say about settling. It alleges that “[w]hile 2 some settling may occur in products, it is unrealistic and unbelievable” that cereal 3 would settle to the degree that a package was 30% to 50% empty. (FAC, ¶ 12.) It 4 also, confusingly, suggests that slack-fill is included at manufacture to account for 5 later product settling. (Id., ¶ 15.) Without more supporting detail, the FAC’s 6 allegation that cereal cannot settle by 30% to 50% is implausible. See 58 Fed. 7 Reg. 2957-01, 2959 (“Functional slack-fill levels for cereal products after shipping 8 [ranged] from 8.6 to 43.1 percent of the container volume.”) 9 Other courts have held similarly perfunctory allegations about product 10 settling to be conclusory and implausible. See Bush v. Mondelez Int’l, Inc., 2016 11 WL 7324990, at *4 (N.D. Cal., Dec. 16, 2016). Jackson also fails to allege facts 12 showing that consumers expect cereal liner bags to be fuller than Annie’s are. 13 Anyone who has bought a box of cold cereal will know the liner bag is likely to be 14 much less than 100% full. Photographs included in the FAC do not lend much 15 support, because the cereal bags and boxes shown there do not show how full the 16 boxes would have been when purchased. Jackson has pled no facts to suggest 17 that reasonable consumers would expect a cereal liner bag such as the one she 18 bought and the ones shown in the photographs to be more than 50% to 70% full. 19 Other Issues 20 Because Jackson’s claims sound in fraud, she is obligated to plead 21 supporting facts with greater particularity. As pled, they do not even satisfy the 22 ordinary Rule 8 standard, however, much less the Rule 9(b) standard. 23 Because Jackson has not adequately pled any violation of a statute her claim 24 under the “unlawful” prong of the UCL is inadequately pled. 25 Conclusion and Order 26 General Mills’ motion is GRANTED IN PART. Because it is clear Jackson 27 cannot represent a nationwide class and cannot successfully amend her complaint 28 to correct that defect, the request to strike the nationwide class claims is 1 ||GRANTED. Because it is not absolutely certain Jackson cannot salvage her 2 ||complaint by amendment, her other claims are DISMISSED WITHOUT 3 ||, PREJUDICE. But she has already amended once in response to a motion to 4 ||dismiss, and it appears unlikely she can successfully amend again. If she wishes 5 ||to amend, and believes she can successfully do so, she must seek leave to do so, 6 filing an ex parte motion by October 11, 2019. This motion must comply with 7 || Civil Local Rule 15.1(b), which means it must attach a copy of her proposed second 8 ||amended complaint and a redline version showing what changes she made. The 9 ||motion itself must explain how she has corrected the defects this order identified. 10 she fails to seek leave to amend as ordered within the time permitted, this action 11 be dismissed. If she files an ex parte motion, General Mills may file an 12 |/opposition by October 25, 2019. No reply is to be filed without leave. The Court 13 ||may, if appropriate, set a hearing, but otherwise this matter will be deemed 14 ||submitted on the papers. 15 If Jackson does not believe she can successfully amend, or does not wish to 16 ||amend, she should file a notice so stating and this action will be dismissed. 17 18 IT IS SO ORDERED. 19 ||Dated: September 20, 2019 20 / Ut □ 4. (Ba ny 21 Hon. Larry Alan Burns 29 Chief United States District Judge 23 24 25 26 27 28