Panelli v. Target Corporation

• Court: District Court, S.D. California
• Decided: October 28, 2024
• Docket: 3:24-cv-01218
• Status: Unknown

Opinion

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8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10

11 ALEXANDER PANELLI, individually, Case No.: 24-cv-01218-H-DEB 12 and all others similarly situated, 13 ORDER GRANTING DEFENDANT’S Plaintiff, MOTION TO DISMISS WITHOUT 14 v. LEAVE TO AMEND 15 TARGET CORPORATION, [Doc. No. 36.] 16 Defendant. 17

18 On August 16, 2024, Defendant Target Corporation (“Target”) filed a motion to 19 dismiss Plaintiff Alexander Panelli’s first amended complaint pursuant to Federal Rule of 20 Civil Procedure 12(b)(6) for failure to state a claim and to strike certain class action 21 allegations. (Doc. No. 36.) On September 20, 2024, Plaintiff filed a response in opposition 22 to Defendant’s motion to dismiss. (Doc. No. 39.) On September 24, 2024, the Court took 23 the matter under submission. (Doc. No. 40.) On September 30, 2024, Defendant filed a 24 reply. (Doc. No. 41.) On October 3, 2024, Defendant filed a notice of supplemental 25 authority. (Doc. No. 42.) For the reasons below, the Court grants Defendant’s motion to 26 dismiss without leave to amend. 27 / / / 28 / / / 1 Background 2 The following factual background is taken from the allegations in Plaintiffs first 3 ||amended complaint. Defendant Target sells various bed sheets, which are advertised by 4 || Target as having a “thread count” of 600 or more. (Doc. No. 18, First Amended Complaint 5 || (“FAC”) 9§ 6-7.) Plaintiff alleges that “thread count” is a specific term used in the textile 6 || industry, and the globally accepted measurement test for thread count is the ASTM D 3775 7 ||method. (Ud. 48.) Plaintiff further alleges that a bedsheet with high thread count is more 8 desirable and worth an extra cost because “[h]igh thread counts have come to mean high 9 || quality sheets, whether they be ‘softer’ or ‘supple’ or ‘durable.’” (Id. 4 7.) 10 Plaintiff alleges that he purchased “a ‘100% cotton’ queen sheet set of ‘Threshold 11 Signature’ sheets with a thread count of 800” from Defendant. (Id. § 15.) Plaintiff provides 12 ||in his first amended complaint the following images depicting the actual packaging of the 13 || bed sheets he purchased: 14

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26 97 || As seen in the above images, the packaging states that the sheet set 1s “100% Cotton 28 Sateen” with a “800 Thread Count.” (Id.) Plaintiff further alleges that the bed sheets he

1 purchased are substantially similar to all other 100% cotton sheets with an advertised thread 2 count of 600 of higher sold by Defendant during the alleged class period. (Id. ¶ 19.) 3 Plaintiff alleges that independent testing using the ASTM D 3775 thread counting 4 method was performed on the bed sheets he purchased, and the testing showed that the 5 bedsheet set he purchased actually had a thread count of 288 rather than the stated thread 6 count of 800. (Id. ¶ 18.) Plaintiff further alleges: “it is physically impossible for cotton 7 threads to be fine enough to allow for 600 or more threads in a single square inch of 100% 8 cotton fabric.” (Id. ¶ 24; see also id. ¶¶ 29–33.) In light of this, Plaintiff contends that any 9 marketing or advertising of 100% cotton bedsheets representing a thread count of 600 or 10 higher is false and misleading. (Id. ¶ 24.) 11 On April 4, 2024, Plaintiff filed a class action complaint against Defendant Target 12 in the Superior Court of California, County of San Francisco. (Doc. No. 1-1, Compl.) On 13 May 8, 2024, Target removed the action to the United States District Court for the Northern 14 District of California pursuant to 28 U.S.C. §§ 1441 and 1446 on the basis of jurisdiction 15 under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d). (Doc. No. 1, Notice 16 of Removal ¶ 3.) 17 On May 24, 2024, Plaintiff filed a first amended class action complaint (“FAC”) 18 against Target, alleging claims for: (1) violations of California’s Unfair Competition Law 19 (“UCL”), California Business and Professions Code §§ 17200 et seq.; and (2) violations of 20 the California Consumers Legal Remedies Act (“CLRA”), California Civil Code §§ 1750 21 et seq. (Doc. No. 18, FAC ¶¶ 55–80.) On July 15, 2024, the Northern California district 22 court transferred the action to the United States District Court for the Southern District of 23 California. (Doc. No. 25.) 24 By the present motion, Defendant Target moves pursuant to Federal Rule of Civil 25 Procedure 12(b)(6) to dismiss all of the claims in Plaintiff’s FAC with prejudice for failure 26 to state a claim. (Doc. No. 36-1 at 1, 6–15, 23.) In addition, Target moves pursuant to 27 Federal Rule of Civil Procedure 12(f) to strike certain class action allegations from the 28 FAC. (Id. at 2, 15–21, 24.) 1 Discussion 2 I. Legal Standards for a Rule 12(b)(6) Motion to Dismiss 3 A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal 4 sufficiency of the pleadings and allows a court to dismiss a complaint if the plaintiff has 5 failed to state a claim upon which relief can be granted. See Conservation Force v. Salazar, 6 646 F.3d 1240, 1241 (9th Cir. 2011) (citing Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 7 2001)). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading that states a claim 8 for relief contain “a short and plain statement of the claim showing that the pleader is 9 entitled to relief.” The function of this pleading requirement is to “‘give the defendant fair 10 notice of what the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. 11 Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). 12 A complaint will survive a Rule 12(b)(6) motion to dismiss if it contains “enough 13 facts to state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 14 plausibility when the plaintiff pleads factual content that allows the court to draw the 15 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 16 Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers ‘labels and conclusions’ or ‘a 17 formulaic recitation of the elements of a cause of action will not do.’” Id. (quoting 18 Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, 19 supported by mere conclusory statements, do not suffice.” Id. “While legal conclusions 20 can provide the framework of a complaint, they must be supported by factual allegations.” 21 Id. at 679. Accordingly, dismissal for failure to state a claim is proper where the claim 22 “lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 23 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008); see Los 24 Angeles Lakers, Inc. v. Fed. Ins. Co., 869 F.3d 795, 800 (9th Cir. 2017). 25 In reviewing a Rule 12(b)(6) motion to dismiss, a district court must “‘accept the 26 factual allegations of the complaint as true and construe them in the light most favorable 27 to the plaintiff.’” Los Angeles Lakers, 869 F.3d at 800 (quoting AE ex rel. Hernandez v.

28 Cty. of Tulare, 666 F.3d 631, 636 (9th Cir. 2012)). But a court need not accept “legal 1 conclusions” as true. Iqbal, 556 U.S. at 678. “Further, it is improper for a court to assume 2 the claimant “can prove facts which it has not alleged or that the defendants have violated 3 the . . . laws in ways that have not been alleged.” Associated Gen. Contractors of Cal., Inc. 4 v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 5 In addition, a court may consider documents incorporated into the complaint by 6 reference and items that are proper subjects of judicial notice. See Coto Settlement v. 7 Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010). If the court dismisses a complaint for 8 failure to state a claim, it must then determine whether to grant leave to amend. See Doe 9 v. United States, 58 F.3d 494, 497 (9th Cir. 1995); Telesaurus VPC, LLC v. Power, 623 10 F.3d 998, 1003 (9th Cir. 2010). 11 II. Analysis 12 In the FAC, Plaintiff alleges claims against Defendant for violations of California’s 13 UCL and CLRA. (Doc. No. 18, FAC ¶¶ 55–80.) Defendant argues that these claims should 14 be dismissed because Plaintiff has failed to adequately allege that a reasonable consumer 15 would be deceived by the labeling at issue. (See Doc. No. 36-1 at 6–10; Doc. No. 41 at 1- 16 4.) 17 Claims under the UCL and CLRA are governed by the “reasonable consumer” 18 standard. McGinity v. Procter & Gamble Co., 69 F.4th 1093, 1097 (9th Cir. 2023) (citing 19 Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008)). Under that standard, a 20 plaintiff “must ‘show that members of the public are likely to be deceived.’” Becerra v. 21 Dr Pepper/Seven Up, Inc., 945 F.3d 1225, 1228 (9th Cir. 2019) (quoting Williams, 552 22 F.3d at 938). 23 The reasonable consumer standard requires “more than a mere possibility that [the 24 defendant’s] label ‘might conceivably be misunderstood by some few consumers viewing 25 it in an unreasonable manner.’” Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016) 26 (quoting Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508 (2003)). Rather, a 27 plaintiff must plausibly allege “a probability ‘that a significant portion of the general 28 consuming public or of targeted consumers, acting reasonably in the circumstances, could 1 be misled.’” Id. (quoting Lavie, 105 Cal. App. 4th at 508); see also McGinity, 69 F.4th at 2 1097 (“The touchstone under the ‘reasonable consumer’ test is whether the product 3 labeling and ads promoting the products have a meaningful capacity to deceive 4 consumers.”). Put another way, “‘[a] representation does not become “false and deceptive” 5 merely because it will be unreasonably misunderstood by an insignificant and 6 unrepresentative segment of the class of persons to whom the representation is addressed.’” 7 Lavie, 105 Cal. App. 4th at 507 (citation omitted). “Indeed, a plaintiff’s unreasonable 8 assumptions about a product’s label will not suffice.” Moore v. Trader Joe’s Co., 4 F.4th 9 874, 882 (9th Cir. 2021); see also La Barbera v. Ole Mexican Foods Inc., No. 10 EDCV202324JGBSPX, 2023 WL 4162348, at *11 (C.D. Cal. May 18, 2023) (“The bottom 11 line is this: under Moore, the reasonable consumer does not approach purchasing decisions 12 with a professorial genius or inclination toward exhaustive research, but she is also not a 13 chump, too doltish or careless to engage [a] simple analysis.” (citation omitted)). 14 Plaintiff’s UCL and CLRA claims are based on his contention that Defendant’s 15 advertising and labeling of its 100% cotton bedsheets as having a “thread count” of 600 or 16 higher is false and misleading. (See Doc. No. 39 at 1; Doc. No. 18, FAC ¶¶ 7–14, 18–19, 17 24.) Plaintiff provides two factual bases for his contention that Defendant’s thread count 18 representations are false and misleading. First, Plaintiff alleges that he purchased a set of 19 100% cotton bedsheets from Defendant with a represented thread count of 800, and 20 independent testing was then performed on the sheets using the ASTM D 3775 thread 21 counting method. (Doc. No. 18, FAC ¶¶ 15–18.) Plaintiff alleges that the independent 22 testing showed that the bedsheet set purchased by Plaintiff did not have a thread count of 23 800 but instead had a thread count of 288 (64% lower than the represented thread count). 24 (Id. ¶ 18.) Second, Plaintiff alleges: “it is physically impossible for cotton threads to be 25 fine enough to allow for 600 or more threads in a single square inch of 100% cotton fabric.” 26 (Id. ¶ 24; see also id. ¶¶ 29–33; Doc. No. 39 at 1–2, 9.) 27 Defendant argues that Plaintiff’s claims fail because, if the Court accepts Plaintiff’s 28 allegations as true that it is physically impossible for cotton fabric to have a thread count 1 of 600 or more, then no reasonable consumer could be deceived by the representations at 2 issue. (Doc. No. 36-1 at 9–10; Doc. No. 41 at 4.) The Court agrees with Defendant. 3 The Ninth Circuit’s recent decision in Moore v. Trader Joe’s Co., 4 F.4th 874 (9th 4 Cir. 2021), is instructive on this point. In Moore, the plaintiffs brought claims under 5 various states’ consumer protection law, including California’s consumer protection laws, 6 against Trader Joe’s based on Trader Joe’s marketing of its store brand honey as “100% 7 New Zealand Manuka Honey.” Id. at 876. The plaintiffs in Moore contended that this 8 marketing was false, misleading, and deceptive because testing showed that only between 9 57.3% and 62.6% of the honey was derived from Manuka flower nectar. The Ninth Circuit 10 held that Trader Joe’s Manuka Honey labeling would not mislead a reasonable consumer 11 as a matter of law, and the Ninth Circuit affirmed the district court’s dismissal of the claims 12 without leave to amend. Id. at 877, 886. 13 In reaching this holding, the Ninth Circuit explained that “a reasonable consumer 14 would be quickly dissuaded from Plaintiffs’ ‘unreasonable or fanciful’ interpretation of 15 ‘100% New Zealand Manuka Honey’ based on . . . the impossibility of making a honey 16 that is 100% derived from one floral source.” Id. at 883. Thus, “given the sheer 17 implausibility of Plaintiffs’ alleged interpretation,” no consumer of any level of 18 sophistication would reasonably interpret the label in the manner proposed by the plaintiffs 19 (i.e., that the honey was 100% derived from Manuka flower nectar). Id. at 884. A 20 reasonable consumer would not interpret Trader Joe’s label “as promising something that 21 is impossible to find.” Id. at 883; see also Welk v. Beam Suntory Imp. Co., 124 F. Supp. 22 3d 1039, 1042–44 (S.D. Cal. 2015) (dismissing UCL and FAL claims with prejudice on 23 the grounds that no reasonable consumer could be deceived by the use of the word 24 “handcrafted” on bourbon bottle labels in the manner proposed by the plaintiff given the 25 fact that “[m]achines, including stills and other equipment, have always been necessary to 26 make bourbon” (i.e., it is impossible to make bourbon without machines)). 27 As in Moore and Welk, Plaintiff’s theory of consumer deception here is implausible 28 and based on an unreasonable interpretation of the representations at issue. According to 1 Plaintiff’s own allegations in the FAC, Plaintiff’s proposed interpretation of the phrase 2 “800 thread count” (and any representation of a thread count of higher than 600) in the 3 context of 100% cotton bedsheets is physically impossible to achieve. (See Doc. No. 18, 4 FAC ¶¶ 24, 29–33; see also Doc. No. 39 at 1–2, 9.) As such, no reasonable consumer 5 would interpret Defendant’s advertising and labeling in the manner proposed by Plaintiff. 6 See Moore, 4 F.4th at 884. No reasonable consumer would interpret Defendant’s 100% 7 cotton bedsheet advertising and labeling “as promising something that is impossible to 8 find.” Id. at 883. As such, no reasonable consumer would be deceived by the labeling and 9 advertising at issue in the manner proposed by Plaintiff, and, thus, Plaintiff’s UCL and 10 CLRA claims fail as a matter of law. See id. at 882–84; Welk, 124 F. Supp. 3d at 1044. 11 Plaintiff notes that several district courts have found similar thread count allegations 12 sufficient to state a claim under various states’ consumer protection laws. (See Doc. No. 13 39 at 9–11 (citing Lancaster v. Am. Textile Co., Inc., No. 1:22-CV-01280-BKS-ML, 2024 14 WL 1223746, at *7 (N.D.N.Y. Feb. 27, 2024); Bruno v. Am. Textile Co., Inc., No. 22-CV- 15 2937, 2023 WL 6976826, at *3 (N.D. Ill. Oct. 23, 2023); Hawes v. Macy’s Inc., 346 F. 16 Supp. 3d 1086, 1091 (S.D. Ohio 2018); Thomas v. Walmart Inc., No. 23 CV 5315, 2024 17 WL 1050179, at *2 (N.D. Ill. Mar. 11, 2024).) The Court acknowledges these decisions, 18 but the Court does not find any of them persuasive. None of the complaints at issue in 19 these decisions appear to have contained an allegation that the thread count representations 20 at issue were physically impossible to achieve. Further, Lancaster, Bruno, Hawes, and 21 Thomas are all out-of-circuit district court cases, and, as such, the district courts in those 22 decisions were not bound by the Ninth Circuit’s decision in Moore. In contrast, this court 23 sits in the Ninth Circuit and, therefore, is bound by Moore’s holding and reasoning.1 See 24

25 1 In addition, in his opposition, Plaintiff cites to an order denying a motion to dismiss 26 in Nelson v. American Textile Company, Inc., No. 23-cv-1879-CAB-SBC (S.D. Cal., Feb. 27 27, 2024) (See Doc. No. 29 at 1–2.) The Court also does not find Plaintiff’s citation to Nelson persuasive given that the Nelson order contains no reference to or analysis of the 28 1 Hart v. Massanari, 266 F.3d 1155, 1171 (9th Cir. 2001) (“[c]ircuit law . . . binds all courts 2 within a particular circuit”). 3 In sum, Defendant’s representations regarding the thread count of its bed sheets are 4 not misleading to a reasonable consumer in the manner proposed by Plaintiff as a matter 5 of law. See Moore, 4 F.4th at 886; Welk, 124 F. Supp. 3d at 1044. As a result, Plaintiff 6 has failed to adequately state a claim under either the UCL or CLRA, and, therefore, the 7 Court dismisses Plaintiff’s UCL and CLRA claims. 8 Having dismissed Plaintiff’s UCL and CLRA claims, the Court must now consider 9 whether Plaintiff should be granted leave to amend those claims. “Leave to amend is 10 warranted if the deficiencies can be cured with additional allegations that are ‘consistent 11 with the challenged pleading’ and that do not contradict the allegations in the original 12 complaint.” United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011) 13 (quoting Reddy v. Litton Indus., Inc., 912 F.2d 291, 296–97 (9th Cir. 1990)). Under this 14 standard, leave to amend should not be granted. The Court’s dismissal of Plaintiff’s UCL 15 and CLRA claims is based on Plaintiff’s allegation that it is physically impossible for 100% 16 cotton fabric to have a thread count of 600 or more. Because it is impossible for Plaintiff 17 to state a viable UCL or CLRA claim without contradicting that allegation, leave to amend 18 should be denied here. See Garmon v. Cnty. of Los Angeles, 828 F.3d 837, 846 (9th Cir. 19 2016) (“A district court does not abuse its discretion in denying leave to amend where it 20 would have been impossible for the plaintiff to amend the complaint to state a viable claim 21 ‘without contradicting any of the allegations of his original complaint.’” (quoting Reddy, 22 912 F.2d at 296–97)). As such, the Court dismisses Plaintiff’s UCL and CLRA claims 23 with prejudice and without leave to amend. See, e.g., Moore, 4 F.4th at 877, 886 (affirming 24 district court’s dismissal of claims without leave to amend where plaintiff could not allege 25 26

27 Indeed, the Nelson order contains no analysis at all of the issues presented in that case. 28 1 ||facts to state a plausible claim that the defendant’s labeling is false, deceptive, or 2 || misleading). 3 Conclusion 4 For the reasons above, the Court grants Defendant Target’s motion to dismiss, and 5 Court dismisses Plaintiffs complaint with prejudice and without leave to amend.” The 6 Clerk is directed to close the case. 7 IT IS SO ORDERED. 8 || DATED: October 28, 2024 | | ul | | | MARILYN HUFF, Distri ge 10 UNITED STATES DISTRICT COURT 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 In its motion, Defendant also moves pursuant to Rule 12(f) to strike certain class 27 || allegations from Plaintiffs first amended complaint. (Doc. No. 36-1 at 15-21.) Because 28 the Court dismisses all the claims in the first amended complaint with prejudice and without leave to amend, the Court need not address Defendant Rule 12(f) motion to strike.