Liou v. Organifi, LLC

District Court, S.D. California·Decided October 1, 2020·No. 3:20-cv-01077·Unknown

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 SOUTHERN DISTRICT OF CALIFORNIA 8 9 10 GLENN LIOU, Case No.: 20-cv-1077-CAB-DEB

11 Plaintiff, ORDER GRANTING IN PART AND 12 v. DENYING IN PART DEFENDANTS’ MOTION TO DISMISS 13 ORGANIFI, LLC et al.,

14 Defendants. [Doc. No. 3] 15 16 17 18 This matter is before the Court on Defendants Organifi, LLC’s and Andrew Canole’s 19 motion to dismiss Plaintiff’s complaint. [Doc. No. 3.] The motion has been fully briefed 20 and the Court finds it suitable for determination on the papers submitted and without oral 21 argument. See S.D. Cal. CivLR 7.1(d)(1). For the reasons set forth below, Defendants’ 22 motion to dismiss is granted in part and denied in part with leave to amend. 23 I. BACKGROUND 24 Plaintiff Glenn Liou filed this putative consumer class action complaint against 25 Defendants Organifi, LLC and Andrew Canole (collectively “Defendants”) in the Superior 26 Court of California, County of San Diego, on August 30, 2019. [Doc. No. 1-2.] On January 27 6, 2020, Plaintiff filed a First Amended Complaint (“FAC”) [Doc. Nos. 1-3, 1-4], and 28 Defendants removed the action to this Court on June 12, 2020. [Doc. No. 1.] 1 The FAC asserts claims for: (1) Breach of Implied Warranties of Merchantability 2 and Fitness for Particular Purpose; (2) Breach of Express Warranty; (3) Violation of 3 California’s Consumer Legal Remedies Act (“CLRA”), California Civil Code § 1750 et 4 seq.; (4) Violation of California’s Unfair Competition Law (“UCL”), California Business 5 & Professions Code § 17200 et seq.; and (5) Restitution, Money Had and Received, Unjust 6 Enrichment, and/or Quasi-Contract and Assumpsit. [Doc. No. 1-4 at ¶¶ 68–116.] 7 Defendant Organifi, LLC (“Organifi”) manufactures, promotes, advertises, and sells 8 its product Organifi Green Juice (“Green Juice” or “Product”). [Doc. No. 1-3 at ¶ 1.] 9 Defendant Andrew Canole is the founder, manager, and primary promoter of Organifi. [Id. 10 at ¶ 6.] Plaintiff alleges that based on information disseminated by Organifi through its 11 website, on or about January 29, 2019, he placed an order for a one-month supply of the 12 Green Juice, spending $72.90. [Id. at ¶ 21.] Plaintiff alleges that Defendants specifically 13 state that the Green Juice’s efficacy had been established by numerous clinical trials 14 published on a prominent government website and supported by a prestigious medical 15 university (“Clinical Trial Statements”), Georgetown University Medical Center. [Id. at 16 ¶¶ 21, 28.] As alleged in the FAC, the Clinical Trial Statements made by Defendants are 17 false and misleading as neither the links that Defendants cited to, nor the search results on 18 the web pages returned references to any clinical trials. [Id. at ¶¶ 25, 27, 28, 29, 30.] 19 Additionally, Plaintiff specifies twenty statements Defendants made relating to the Green 20 Juice’s benefits (“Benefit Statements”) that are allegedly false or misleading. [Id. at ¶ 21 31(a)–(t).] 22 Plaintiff seeks to represent a class of “All persons who have purchased the [Green 23 Juice] in the past four years other than for purposes of resale or distribution.” [Id. at ¶ 11.] 24 On June 19, 2020, Defendants moved to dismiss Plaintiff’s FAC. [Doc. No. 3.] 25 II. LEGAL STANDARD 26 The familiar standards on a motion to dismiss apply here. To survive a motion to 27 dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted 28 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 1 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, 2 the Court “accept[s] factual allegations in the complaint as true and construe[s] the 3 pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire 4 & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). On the other hand, the Court is 5 “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 6 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Nor is the Court “required to accept as 7 true allegations that contradict exhibits attached to the Complaint or matters properly 8 subject to judicial notice, or allegations that are merely conclusory, unwarranted deductions 9 of fact, or unreasonable inferences.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 10 (9th Cir. 2010). “In sum, for a complaint to survive a motion to dismiss, the non-conclusory 11 factual content, and reasonable inferences from that content, must be plausibly suggestive 12 of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 13 (9th Cir. 2009) (quotation marks omitted). 14 III. DISCUSSION 15 Defendants move to dismiss Plaintiff’s FAC for the following reasons: 1) Plaintiff 16 fails to state a claim for breach of an implied warranty of fitness for a particular purpose 17 because Plaintiff fails to allege that the very nature of the product made the product unfit 18 for its purpose; 2) Plaintiff’s claim for breach of express warranty fails because it is based 19 on a lack of substantiation; 3) Plaintiff’s claims of violation of the CLRA and UCL fail 20 because: (a) the complaint only alleges a claim for lack of substantiation, which is not 21 actionable by a private plaintiff; (b) the claims fail under the primary jurisdiction doctrine 22 since as predicated on violations of the Food, Drug, and Cosmetic Act (“FDCA”) and the 23 Dietary Supplement Health and Education Act of 1994 (“DSHEA”) and are thus 24 preempted; and 4) Plaintiff’s claims for the common counts fail because they do not 25 constitute specific causes of action and because Plaintiff failed to allege facts sufficient to 26 show that the money Plaintiff paid Defendants was intended to be used for the benefit of 27 Plaintiff, as opposed to consideration for a purchase. 28 1 A. Rule 9(b) Heightened Pleading Requirements 2 As a preliminary matter, the parties disagree whether Plaintiff’s complaint is 3 grounded in fraud which would require heightened pleading standards. Plaintiff attempts 4 to argue that some of his claims are based on violations of state and federal laws for 5 mislabeling and therefore not grounded in fraud. This argument is unconvincing. The 6 entirety of Plaintiff’s complaint is premised on alleged fraudulent activity by the 7 Defendants with regard to the Clinical Trial and Benefit Statements to promote the efficacy 8 of the Green Juice. Even if fraud is not a necessary element of a claim, the plaintiff must 9 still comply with Rule 9(b) if he “allege[s] in the complaint that the defendant has engaged 10 in fraudulent conduct.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 11 2003). This is true when the plaintiff “allege[s] a unified course of fraudulent conduct and 12 rel[ies] entirely on that course of conduct as the basis of a claim.” Id. This renders the 13 claim “grounded in” or “sounding in” fraud. Id. A claim grounded in fraud must meet the 14 heightened pleading requirements of Rule 9(b). Id. at 1103–04. 15 Because Plaintiff’s claims are all grounded in fraud, the complaint must satisfy the 16 heightened pleading requirements of Federal Rule of Civil Procedure

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