Jacquelyn McGee v. S-L Snacks National, LLC

982 F.3d 700
CourtCourt of Appeals for the Ninth Circuit
DecidedDecember 4, 2020
Docket17-55577
StatusPublished
Cited by40 cases

This text of 982 F.3d 700 (Jacquelyn McGee v. S-L Snacks National, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jacquelyn McGee v. S-L Snacks National, LLC, 982 F.3d 700 (9th Cir. 2020).

Opinion

FOR PUBLICATION

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

JACQUELYN MCGEE, on behalf of No. 17-55577 herself and all others similarly situated, D.C. No. Plaintiff-Appellant, 3:14 cv-2446- JAH v.

S-L SNACKS NATIONAL, in place of OPINION DIAMOND FOODS, INC., Defendant-Appellee.

Appeal from the United States District Court for the Southern District of California John A. Houston, District Judge, Presiding

Argued and Submitted December 5, 2018 Pasadena, California

Filed December 4, 2020

Before: A. Wallace Tashima and Kim McLane Wardlaw, Circuit Judges, and Robert W. Pratt,* District Judge.

Opinion by Judge Tashima

* The Honorable Robert W. Pratt, United States District Judge for the Southern District of Iowa, sitting by designation. 2 MCGEE V. S-L SNACKS NATIONAL

SUMMARY**

Article III Standing

The panel affirmed the district court’s dismissal for lack of constitutional Article III standing of a putative class action brought by a plaintiff-consumer who alleged claims arising when Diamond Foods, Inc. included partially hydrogenated oils as an ingredient in Pop Secret popcorn.

The panel held that the plaintiff did not plausibly allege that, as a result of her purchase and consumption of Pop Secret, she suffered economic or immediate physical injury, or that she was placed at substantial risk of adverse consequences.

Concerning plaintiff’s alleged economic injury, the panel held that plaintiff had not alleged that she was denied the benefit of her bargain. Although plaintiff may have assumed that Pop Secret contained only safe and healthy ingredients, her assumptions were not included in the bargain, particularly given the labeling disclosure that the product contained artificial trans fat. The panel also held that plaintiff failed to allege an economic injury based on an overpayment theory. Plaintiff did not allege that Pop Secret contained a hidden defect, or that Pop Secret was worth objectively less than what she paid for it.

Concerning plaintiff’s alleged present physical injury, the panel held that plaintiff had not plausibly alleged that she

** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. MCGEE V. S-L SNACKS NATIONAL 3

suffered physical injuries due to her consumption of Pop Secret.

Concerning plaintiff’s alleged future physical injury, the panel held that plaintiff had not plausibly alleged that her consumption of Pop Secret substantially increased her risk of disease.

COUNSEL

Gregory S. Weston (argued), The Weston Firm, San Diego, California, for Plaintiff-Appellant.

Andrew C. Nichols (argued) and Stephanie A. Maloney, Winston & Strawn LLP, Washington, D.C.; Amanda L. Groves, Winston & Strawn LLP, Charlotte, North Carolina; for Defendant-Appellee.

OPINION

TASHIMA, Circuit Judge:

Plaintiff Jacquelyn McGee purchased and consumed Pop Secret brand popcorn manufactured by defendant, Diamond Foods, Inc. (“Diamond”). McGee contends that Diamond engaged in unfair practices, created a nuisance, and breached the warranty of merchantability by including partially hydrogenated oils (“PHOs”) as an ingredient in Pop Secret. She further alleges that PHOs, the primary dietary source of industrially produced trans fatty acids (also known as artificial trans fat), are an unsafe food additive that causes heart disease, diabetes, cancer, and other ailments. The 4 MCGEE V. S-L SNACKS NATIONAL

district court dismissed the action for lack of constitutional standing, concluding that McGee failed sufficiently to allege injury in fact. McGee v. Diamond Foods, Inc., 2017 WL 1135569, at *3 (S.D. Cal. 2017) (“McGee II”); see also McGee v. Diamond Foods, Inc., 2016 WL 816003 (S.D. Cal. 2016) (“McGee I”).

We hold that McGee has not plausibly alleged that, as a result of her purchase and consumption of Pop Secret, she suffered economic or immediate physical injury, or that she was placed at substantial risk of adverse health consequences. We therefore affirm.

I. BACKGROUND

McGee alleges that “Diamond manufactures, distributes, and sells a variety of popcorn products (collectively ‘Pop Secret’) containing partially hydrogenated oil (‘PHO’), a food additive banned in many parts of the world because it is the only dietary source of artificial trans fat, a toxic carcinogen for which there are many safe and commercially acceptable substitutes.” First Am. Compl. ¶ 1 (the “complaint”). She alleges that “PHO causes cardiovascular heart disease, diabetes, cancer, and Alzheimer’s disease, and accelerates memory damage and cognitive decline,” and that “[t]here is ‘no safe level’ of PHO or artificial trans fat intake.” Id. ¶¶ 15–16. Her complaint cites a number of studies linking consumption of artificial trans fat to adverse health effects. Id. ¶¶ 10–53 & nn. 2–41.

In 2015, the U.S. Food and Drug Administration (“FDA”) “made a final determination that there is no longer a consensus among qualified experts that [PHOs] . . . are generally recognized as safe (GRAS) for any use in MCGEE V. S-L SNACKS NATIONAL 5

human food.” Final Determination Regarding Partially Hydrogenated Oils, 80 Fed. Reg. 34,650 (June 17, 2015). The FDA gave the food industry until June 18, 2018, to comply with its decision. Id. at 34,653. McGee alleges that, as a result of the FDA’s determination, Diamond’s inclusion of PHOs in Pop Secret was unlawful under federal and California law, Compl. ¶¶ 54–66, 78–85, allegations that Diamond disputes.1

McGee filed this putative class action against Diamond in 2014. The complaint alleges four causes of action: violation of the unlawful prong of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200–17210; violation of the unfair prong of the UCL, id.; nuisance, Cal. Civ. Code §§ 3479–93; and breach of the implied warranty of merchantability. Compl. ¶¶ 111–44. The complaint seeks

1 Under the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. §§ 301–399i, any substance that is reasonably expected to become a component of food is a food additive that is subject to pre- market approval by the FDA unless it is GRAS among qualified experts. In light of the FDA’s 2015 determination, McGee alleges that PHOs have never been GRAS, and hence that their inclusion in Pop Secret violated federal and California law. Compl. ¶¶ 54–66. Diamond contends that the use of PHOs was lawful until June 18, 2018, a contention with which the district court agreed. In addition, Diamond points out that, following the FDA’s 2015 determination, Congress adopted legislation providing that “no food that is introduced or delivered for introduction into interstate commerce that bears or contains a [PHO] shall be deemed adulterated under sections 402(a)(1) or 402(a)(2)(C)(I) [of the FDCA] by virtue of bearing or containing a [PHO] until the compliance date as specified in such order (June 18, 2018).” Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, § 754, 129 Stat. 2242, 2284 (2015). For purposes of this appeal, we need not resolve the parties’ dispute about whether Diamond’s use of PHOs was lawful. 6 MCGEE V. S-L SNACKS NATIONAL

restitution, disgorgement, damages, injunctive relief, and other remedies.

McGee alleges that she “purchased Pop Secret approximately once every two to three months for many years,” consuming “nearly half [a] pound” of trans fat from Pop Secret since 2008. Id. ¶¶ 68, 92. She alleges that she was injured by Diamond’s actions in three ways.

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