Stewart v. Kodiak Cakes, LLC

• Court: District Court, S.D. California
• Decided: October 25, 2021
• Docket: 3:19-cv-02454
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 TY STEWART, et al., Case No.: 19-cv-2454-MMA (MSB)

12 Plaintiffs, ORDER GRANTING IN PART AND 13 v. DENYING IN PART DEFENDANT’S MOTION TO DISMISS 14 KODIAK CAKES, LLC,

15 Defendant. [Doc. No. 91] 16 17 18 On May 17, 2021, Ty Stewart along with twenty-one (21) other named plaintiffs 19 (collectively, “Plaintiffs”) filed a second amended class action complaint against Kodiak 20 Cakes, LLC (“Defendant”) alleging violations of numerous state consumer protection 21 laws. See Doc. No. 90 (“SAC”). Before the Court is Defendant’s second motion to 22 dismiss. See Doc. No. 91. Plaintiff filed an opposition, to which Defendant replied. See 23 Doc. Nos. 92, 93. For the reasons set forth below, the Court GRANTS IN PART and 24 DENIES IN PART Defendant’s motion. 25 I. BACKGROUND 26 In their First Amended Complaint, Plaintiffs brought six causes of action against 27 Defendant based on two issues with Defendant’s products: “(1) the non-functional slack 28 fill and (2) deceptive marketing practices.” Doc. No. 37 (“FAC”) ¶ 3. Regarding the 1 former, Plaintiffs asserted that some of Defendant’s products contain “empty space in a 2 package that is filled to less than its capacity . . . that serves no lawful purpose. Id. ¶ 5 3 (internal citation and quotation marks omitted). As to the latter, Plaintiffs alleged 4 Defendant misleadingly labels and advertises its products as having “no preservatives,” 5 being “free of artificial additives,” “non-GMO,” “healthy,” and “protein-packed.” See id. 6 ¶¶ 10, 63, 97–126, 127–31, 132–48. Plaintiffs thus brought the following causes of 7 action: (1) “violation of the consumer protection acts of all 50 states (and the District of 8 Columbia)” on behalf of the nationwide class; (2) violation of the California Consumers 9 Legal Remedies Act (CLRA), Cal Civ. Code §§ 1750–1784, on behalf of the California 10 class; (3) violations of the California Unfair Competition Law (CUCL), Cal. Bus. & Prof. 11 Code §§ 17200–17210, on behalf of the California class; (4) violation of the California 12 False Advertising Law (CFAL), Cal. Bus. & Prof. Code §§ 17500–17606; (5) breach of 13 express warranty on behalf of the nationwide class; and (6) “[restitution] based on quasi- 14 contract and unjust enrichment” on behalf of the nationwide class. See id. ¶¶ 161–222. 15 On October 28, 2020, Defendant moved to dismiss each cause of action in the Plaintiffs’ 16 FAC. See Doc. No. 44. 17 On April 29, 2021, this Court issued an order granting in part and denying in part 18 Defendant’s motion to dismiss and denying Defendant’s motion to strike. See Doc. 19 No. 87 (“FAC Dismissal Order”). The Court dismissed Plaintiffs’ first cause of action 20 with leave to amend and directed Plaintiffs to separate their allegations of various state 21 law violations into independent causes of action. See id. at 23.1 The Court further 22 directed Plaintiffs to identify the state laws applicable to their breach of express warranty 23 claims. See id. at 66. The Court denied the motion to dismiss with respect to Plaintiffs’ 24 CLRA, CUCL, and CFAL causes of action. See id. at 63. The Court dismissed 25 Plaintiffs’ quasi-contract claim. See id. at 69. 26 27 28 1 With respect to the five deceptive marketing terms, the Court denied the motion to 2 dismiss as to Plaintiffs’: (1) “no preservatives” theory; (2) “free of artificial additives” 3 theory; and (3) “healthy” theory as it relates to the description of Defendant’s Double 4 Dark Chocolate Muffin Mix. See id. at 18, 57. The Court dismissed with leave to amend 5 Plaintiffs’ “non-GMO” and “protein-packed” theories. See id. at 52, 58. 6 On May 17, 2021, Plaintiffs filed the SAC. Plaintiffs are from eleven states: 7 California, Colorado, Connecticut, Florida, Illinois, Massachusetts, Michigan, Missouri, 8 New Jersey, New York, and Washington. See SAC at ¶¶ 16–66. In the SAC, Plaintiffs 9 reallege the three California consumer protection causes of action identified above— 10 violations of the CLRA, CUCL, CFAL—as well as bring a California state law claim for 11 breach of express warranty, Cal. Com. Code § 2313. See id at 53–60. As to the 12 remaining ten states, Plaintiffs bring a state law claim under each respective consumer 13 protection laws for deceptive practices,2 as well as a state law claim for breach of 14 warranty.3 See id. at 60–83. In essence, Plaintiffs assert that some of Defendant’s 15 products contain the non-functional slack-fill, see id. ¶ 64, and some are misleadingly 16

17 18 2 The ten remaining state law consumer protection claims are: (1) violation of Colorado Deceptive Trade Practices, Colo. Rev. Stat. Ann. § 6-1-105; (2) violation of the Connecticut Unfair Trade Practices Act, 19 Conn. Gen. Stat. §§ 42-110b(a); (3) violation of Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. Ann. §§ 501.201; (4) violation of the Illinois Consumer Fraud and Deceptive Business Practices 20 Act, 815 Ill. Comp. Stat. 505/1; (5) violation of Massachusetts Regulation of Business Practices for 21 Consumer Protection Act, Mass Gen. Laws ch. 93A, §§ 1; (6) violation of the Michigan Consumer Protection Act, Mich. Comp. Laws § 445.903; (7) violation of Missouri Merchandising Practices Act, 22 Mo. Rev. Stat. § 407.010; (8) violation of the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1; (9) violation of the New York Consumer Protection from Deceptive Acts and Practices, N.Y. Gen. Bus. 23 Law § 349; and (10) violation of the Washington Consumer Protection Act, Wash. Rev. Code §§ 19.86.010. 24

25 3 The ten remaining state law breach of warranty claims are: (1) breach of express warranty, Colo. Rev. Stat. §§ 4-2-313; (2) breach of warranty, CT Gen Stat § 42a-2-313; (3) breach of express warranty, Fla. 26 Stat. § 672.313; (4) breach of express warranty, 810 Ill. Comp. Stat. 5/2-313; (5) breach of express warranty, Mass Gen. Laws ch. 106, § 2-313; (6) breach of express warranty in violation of Mich. Comp. 27 Laws Ann. § 440.2313; (7) breach of express warranty, Mo. Rev. Stat. §§ 400.2-313; (8) breach of warranty, N.J. Stat. Ann. § 12A:2-313; (9) breach of express warranty, N.Y. UCC § 2-313; and 28 1 labeled and advertised as: (1) “no preservatives;” (2) “free of artificial additives;” 2 (3) “non-GMO;” and (4) “nourishing” and “healthy.” See id. ¶¶ 65. 3 II. REQUESTS FOR JUDICIAL NOTICE 4 In support of their briefing on this matter, both parties have filed requests for 5 judicial notice. See Doc. Nos. 91-2, 92-8. Plaintiffs object to Defendant’s request for 6 judicial notice. See Doc. No. 92-7. 7 While, generally, the scope of review on a motion to dismiss for failure to state a 8 claim is limited to the contents of the complaint, see Warren v. Fox Family Worldwide, 9 Inc., 328 F.3d 1136, 1141 n.5 (9th Cir. 2003), a court may, however, consider certain 10 materials, including matters of judicial notice, without converting the motion to dismiss 11 into a motion for summary judgment, see United States v. Ritchie, 342 F.3d 903, 908 (9th 12 Cir. 2003). For example, “a court may take judicial notice of matters of public record,” 13 Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 899 (9th Cir. 2018) (quoting Lee v. 14 City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001), overruled on other grounds by 15 Galbraith v. County of Santa Clara, 307 F.3d 1119, 1125–26 (9th Cir. 2002)), and of 16 “documents whose contents are alleged in a complaint and whose authenticity no party 17 questions, but which are not physically attached to the pleading,” Branch v. Tunnell, 14 18 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith, 307 F.3d at 19 1125–26; see also Fed. R. Evid. 201. A judicially noticed fact must be one not subject to 20 reasonable dispute in that it is either: (1) generally known within the territorial 21 jurisdiction of the trial court; or (2) capable of accurate and ready determination by resort 22 to sources whose accuracy cannot reasonably be questioned. See Fed. R. Evid. 201(b); 23 see also Khoja, 899 F.3d at 999 (quoting Fed. R. Evid. 201(b)). 24 Defendant asks the Court to take judicial notice of fifty-nine exhibits in support of 25 its motion to dismiss. See Doc. No. 91-2. Exhibits 1 through 58 are publicly available 26 images from Defendant’s website of various products’ labelling. Plaintiffs object to the 27 fifty-eight exhibits on the ground that they are “current printouts of the labels.” Doc. 28 No. 92-7 at 2. As Defendant notes, the Court previously took judicial notice of these 1 documents, which are publicly available images not subject to reasonable dispute. See 2 Doc. No. 91-2 at 2 (citing Doc. No. 87 at 4–7). Accordingly, for the same reasons set 3 forth in the FAC Dismissal Order, the Court OVERRULES Plaintiffs’ objection and 4 GRANTS Defendant’s request to judicially notice Exhibits 1 through 58. 5 Exhibit 59 is a sixty-four page compilation of what appears to be the Non-GMO 6 Project’s website and prospectus. See Doc. No. 91-61. Defendant explains that these 7 images and information are publicly available and thus not reasonably subject to dispute. 8 Alternatively, Defendant argues that the Court may consider Exhibit 59 through the 9 incorporation by reference doctrine. Plaintiffs do not oppose this request. 10 The Court agrees that Exhibit 59 contains publicly available information that is not 11 reasonably subject to dispute. Accordingly, the Court GRANTS the request and 12 judicially notices Exhibit 59.4 13 Plaintiffs request that the Court take judicial notice of the verified complaint in 14 Kodiak Cakes, LLC v. JRM Nutrasciences, LLC, 2:20-cv-00581-DBB (D. Utah Aug. 12, 15 2020). Courts may take judicial notice of their own records, and may also take judicial 16 notice of other court proceedings if they “directly relate to matters before the court.” 17 Hayes v. Woodford, 444 F. Supp. 2d 1127, 1136-37 (S.D. Cal. 2006). Because this 18 document is a matter of judicial record, and its authenticity is not in question, the Court 19 GRANTS Plaintiffs’ request and takes judicial notice of the existence of the verified 20 complaint in Kodiak Cakes, LLC v. JRM Nutrasciences, LLC, 2:20-cv-00581-DBB (D. 21 Utah Aug. 12, 2020). See In re Bare Escentuals, Inc. Sec. Litig., 745 F. Supp. 2d 1052, 22 1067 (N.D. Cal. 2010) (“[T]he court may take judicial notice of the existence of unrelated 23 court documents, although it will not take judicial notice of such documents for the truth 24

25 26 4 The Court notes, however, that Exhibit 59 is not appropriate for incorporation by reference. Plaintiffs only reference the Non-GMO Project once in the entire SAC, see SAC at ¶ 124, and certainly the Non- 27 GMO Project’s website and prospectus do not “form[] the basis of the [] claim.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); see also Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 28 1 of the matter asserted therein.”). 2 That said, the Court reminds the parties that while it may take judicial notice of 3 these exhibits, the Court will not rely on them to the extent they are irrelevant to the 4 issues presented in the present motion or are offered in an attempt to “short-circuit the 5 resolution of a well-pleaded claim.” In re Facebook, Inc. Sec. Litig., 405 F. Supp. 3d 6 809, 829–30 (N.D. Cal. 2019). 7 III. LEGAL STANDARD 8 A. Federal Rule of Civil Procedure 12(b)(1) 9 Pursuant to Rule 12(b)(1), a party may seek dismissal of an action for lack of 10 subject matter jurisdiction “either on the face of the pleadings or by presenting extrinsic 11 evidence.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003); 12 see also White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). Where the party asserts a 13 facial challenge, the court limits its inquiry to the allegations set forth in the complaint. 14 See Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “If the 15 challenge to jurisdiction is a facial attack . . . the plaintiff is entitled to safeguards similar 16 to those applicable when a Rule 12(b)(6) motion is made.” San Luis & Delta–Mendota 17 Water Auth. v. U.S. Dep’t of the Interior, 905 F. Supp. 2d 1158, 1167 (E.D. Cal. 2012) 18 (internal citation and quotation omitted). The “lack of Article III standing requires 19 dismissal for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 20 12(b)(1).” Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011); see also Wright 21 v. Incline Vill. Gen. Imp. Dist., 597 F. Supp. 2d 1191, 1199 (D. Nev. 2009) (“lack of 22 standing is a defect in subject-matter jurisdiction and may be properly challenged under 23 Rule 12(b)(1)”) (citing Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 24 (1986)). 25 B. Federal Rule of Civil Procedure 12(b)(6) 26 A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint. Navarro 27 v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A pleading must contain “a short and plain 28 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 1 8(a)(2). However, plaintiffs must also plead “enough facts to state a claim to relief that is 2 plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also 3 Fed. R. Civ. P. 12(b)(6). The plausibility standard demands more than a “formulaic 4 recitation of the elements of a cause of action,” or “‘naked assertions’ devoid of ‘further 5 factual enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 6 550 U.S. at 555, 557). Instead, the complaint “must contain sufficient allegations of 7 underlying facts to give fair notice and to enable the opposing party to defend itself 8 effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). 9 In reviewing a motion to dismiss under Rule 12(b)(6), courts must assume the truth 10 of all factual allegations and must construe them in the light most favorable to the 11 nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 (9th Cir. 1996) 12 (citing Nat’l Wildlife Fed’n v. Espy, 45 F.3d 1337, 1340 (9th Cir. 1995)). The court need 13 not take legal conclusions as true merely because they are cast in the form of factual 14 allegations. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir. 1987) (quoting W. Min. 15 Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Similarly, “conclusory allegations 16 of law and unwarranted inferences are not sufficient to defeat a motion to dismiss.” 17 Pareto v. FDIC, 139 F.3d 696, 699 (9th Cir. 1998). 18 In determining the propriety of a Rule 12(b)(6) dismissal, courts generally may not 19 look beyond the complaint for additional facts. See United States v. Ritchie, 342 F.3d 20 903, 907–08 (9th Cir. 2003). “A court may, however, consider certain materials— 21 documents attached to the complaint, documents incorporated by reference in the 22 complaint, or matters of judicial notice—without converting the motion to dismiss into a 23 motion for summary judgment.” Id. at 908; see also Lee v. City of Los Angeles, 250 F.3d 24 668, 688 (9th Cir. 2001), overruled on other grounds by Galbraith v. County of Santa 25 Clara, 307 F.3d 1119, 1125–26 (9th Cir. 2002). “However, [courts] are not required to 26 accept as true conclusory allegations which are contradicted by documents referred to in 27 the complaint.” Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295–96 (9th Cir. 28 1998). 1 Where dismissal is appropriate, a court should grant leave to amend unless the 2 plaintiff could not possibly cure the defects in the pleading. Knappenberger v. City of 3 Phoenix, 566 F.3d 936, 942 (9th Cir. 2009) (quoting Lopez v. Smith, 203 F.3d 1122, 1127 4 (9th Cir. 2000)). 5 IV. DISCUSSION 6 Defendant moves to dismiss the SAC on various grounds. See Doc. No. 91 at 2. 7 The Court considers each in turn. 8 A. Noncompliance with Local Rule 15.1(c) 9 As an initial matter, Defendant asserts the Court should strike the entire SAC due 10 to Plaintiffs’ failure to timely comply with Local Rule 15.1(c). See Doc. No. 91-1 at 8. 11 Local Rule 15.1(c) provides that “[a]ny amended pleading filed after the granting of a 12 motion to dismiss . . . must be accompanied by a version of that pleading that shows— 13 through redlining . . . or other similarly effective typographic methods—how that 14 pleading differs from the previously dismissed pleading.” CivLR 15.1(c). Defendant 15 correctly notes that Plaintiffs failed to attach a redline comparison to their SAC. 16 However, Plaintiffs explain that the mistake was inadvertent, and thereafter attached a 17 redline comparison of the FAC and SAC to their opposition. See Doc. Nos. 92-1 ¶ 3; 92- 18 2 (“Exhibit A”). Defendant does not argue, nor does the Court find, that any prejudice 19 resulted from Plaintiffs’ delayed compliance. See Doc. No. 91-1 at 8. Moreover, this 20 oversight could have been promptly cured during meet-and-confer discussions, which 21 apparently did not occur. See Doc. No. 92 at 9. Therefore, the Court DENIES 22 Defendant’s request to strike the entire SAC on this basis. 23 B. Claim-Specific Standing 24 Defendant argues that some named Plaintiffs lack claim-specific standing. See 25 Doc. No. 91-1 at 12–15. The Court has already concluded that at least one Plaintiff, Ty 26 27 28 1 Stewart, has satisfied both Article III standing and claim-specific standing. See FAC 2 Dismissal Order at 53. Defendant does not renew its prior standing arguments. Instead, 3 Defendant’s request for Rule 12(b)(1) dismissal is based on the argument that ten 4 Plaintiffs did not purchase a product that makes a “no preservatives” claim and eleven 5 Plaintiffs did not purchase a product that makes a “free of artificial additives” claim. See 6 Doc No. 91-1 at 12–15. 7 As Plaintiffs explain in opposition, “Plaintiffs specifically alleged that they do not 8 seek to represent a class of purchases based on representations they were not deceived 9 by.” Doc. No. 92 at 9. For example, Plaintiffs “allege that [Plaintiff Chad Humphrey] 10 brings his statutory consumer fraud claim only ‘[o]n behalf of all other Colorado 11 consumers regarding Defendants’ non-functional slack fill practices and deceptive 12 marking claims based on non-GMO and healthy.’” Doc. No. 92 at 10:7–13; see also id. 13 at 9:15–17; 10:23–27. Plaintiffs have also incorporated in the SAC a “Per-Product 14 Misrepresentation Chart” in which Plaintiffs are tracking the manner of alleged deception 15 to specific products.6 Doc. No. 90-2 at 26. At the pleading stage, this is sufficient. 16 Moreover, the Court finds that Defendant’s request that the Court parse through the 17 SAC to determine which Plaintiffs can bring which claims based upon which alleged 18 deceptions is premature. This is precisely what will occur at class certification: Plaintiffs 19 will propose classes whereby each named Plaintiff will seek to represent a class of 20 persons who bought the same products based upon the same alleged deceptions. Thus, it 21 is unnecessary at this time to identify, parse, and group each Plaintiff, product, and theory 22 23

24 25 5 In the context of class actions, “standing is satisfied if at least one named plaintiff meets the requirements.” Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1021 (9th Cir. 2011) (quoting Bates v. 26 United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007) (en banc)); see also Doc. No. 87 at 12. 6 The Court attempted to ascertain the specific products purchased according to state by comparing 27 Plaintiff’s Exhibit A with SAC ¶¶ 17–63 but was unable to do so either because product names did not match, or the product was omitted from the list. See, e.g., id. ¶ 44. Accordingly, at the class 28 1 as such an undertaking is more appropriate for the class certification stage. Therefore, 2 the Court DENIES Defendant’s motion to dismiss on this basis. 3 C. “Non-GMO” Theory 4 Defendant next takes issue with Plaintiffs’ allegations that support their “non- 5 GMO” theory. See Doc. No. 91-1 at 16. The Court previously found that the FAC failed 6 to provide a plausible definition of “non-GMO” for the court to assess how a reasonable 7 consumer could be misled. See Doc. No. 87 at 50–51. In the SAC, Plaintiffs assert that 8 Defendant’s dairy ingredients are not GMO free “because the animals from which they 9 are derived eat feed containing GMOs.” SAC ¶ 124. 10 As the Court noted in Pappas v. Chipotle Mexican Grill, Inc., No. 16CV612-MMA 11 (JLB), 2016 WL 11703770 (S.D. Cal. Aug. 31, 2016), the prefix “non-” is defined by 12 Merriam-Webster’s Dictionary as: not, other than, reverse of, or absence of.7 Id. at *7. 13 Thus, non-GMO would mean not genetically altered, or in the absence of genetically 14 altered organisms. See id. In Pappas, the Court found the plaintiff’s definition of “non- 15 GMO”—“not derived from animals that have consumed GMO-containing feed”—was 16 implausible and unlikely to be shared by reasonable consumers. Id. at *7. Here, 17 Plaintiffs have provided a similar definition for “non-GMO”: “100% GMO free, both in 18 genetic makeup and the absence of foreign material content.” SAC ¶ 123. At bottom, 19 like the plaintiff in Pappas, Plaintiffs argue that Defendant’s dairy ingredients are not 20 GMO-free “because the animals from which they are derived eat feed containing 21 GMOs.” Id. ¶ 124. Accordingly, the Court concludes that it is not plausible for a 22 reasonable consumer to believe that “non-GMO” means ingredients not derived from 23 animals that eat feed containing GMOs. The Court therefore finds that Plaintiffs’ “non- 24 GMO” allegations lack plausibility. The Court thus GRANTS Defendant’s motion and 25 26

27 7 See Merriam-Webster’s Learner's Dictionary, http://www.merriam-webster.com/dictionary/non- 28 1 DISMISSES Plaintiffs’ claims to the extent they are premised on the “non-GMO” 2 theory. 3 D. “Healthy” and “Nourishing” Theories 4 Defendant challenges Plaintiffs’ “healthy” and “nourishing” theories on four 5 different grounds. The Court addresses each in turn. 6 1. Reliance on “Healthy” Advertisements 7 Defendant argues that because only two Plaintiffs allege that they were exposed 8 to “healthy” terms, Plaintiffs’ “healthy” theory should be dismissed as to the other 9 twenty Plaintiffs who did not rely on any “healthy” terms. See Doc. No. 91-1 at 21. 10 Defendant’s reliance argument fails for the same reasons discussed above. The Court 11 has already found that one plaintiff satisfies claim-specific standing. See FAC 12 Dismissal Order. The Court declines to consider these issues now as they will be better 13 addressed at class certification. And importantly, even if the Court agreed to undertake 14 the task Defendant requests, no single cause of action would be extinguished at this 15 stage. Accordingly, the Court DENIES Defendant’s motion on this basis. 16 2. “Nourishing” Statements 17 Defendant argues that statements asserting its products are “nourishing” 18 constitute “mere puffery.” See Doc. No. 91-1 at 22, 26. One “nourishing” statement is 19 Defendant’s slogan: “Nourishment for Today’s Frontier.” SAC ¶ 127. Other 20 “nourishing” statements include “the nutritional benefits early pioneers relied on to get 21 through each day,” in relation to the Oatmeal Dark Chocolate Cookie Mix and the 22 Double Chocolate Chunk Brownie Mix, and “a nourishing treat you can feel good about 23 indulging in” in relation to the Double Dark Chocolate Muffin Mix. Id. ¶ 19, 139. The 24 question is whether these “nourishing” statements constitute nonactionable puffery. 25 Mere puffery is described as “[g]eneralized, vague, and unspecified assertions . . . 26 upon which a reasonable consumer could not rely.” Oestreicher v. Alienware Corp., 27 544 F. Supp. 2d 964, 973 (N.D. Cal. 2008) (citation omitted). Claims of product 28 superiority and vague descriptions of product quality or features are non-actionable 1 puffery. For example, statements such as: “superb, uncompromising quality,” “higher 2 performance,” “longer battery life,” “richer multimedia experience,” “faster access to 3 data,” and “faster, more powerful, and more innovative than competing machines” are 4 not actionable. Id. (citing Brothers v. Hewlett-Packard Co., No. C-06-02254 RMW, 5 2006 WL 3093685, at *4–5 (N.D. Cal. Oct. 31, 2006) (rejecting “high-performance” 6 and “top of the line” as mere puffery)); Long v. Hewlett-Packard Co., No. C 06-02816 7 JW, 2007 WL 2994812, at *7 (N.D. Cal. July 27, 2007), aff’d, 316 F. App’x 585 (9th 8 Cir. 2009) (rejecting “reliable mobile computing solution” and “do more on the move” 9 as puffery). Conversely, “misdescriptions of specific or absolute characteristics of a 10 product are actionable.” Id. (citation omitted). 11 Defendant asserts “there is no dispute Kodiak’s product provide ‘nutritional 12 benefits’ as all food has some nutritional benefit.” Doc. No. 91-1 at 26. In opposition, 13 Plaintiffs argue that a reasonable consumer could find that “nourishing” is synonymous 14 with “healthy.” SAC ¶ 127; Doc. No. 92 at 24. Plaintiffs cite to Hadley v. Kellogg 15 Sales Company, in which the court found that comparable health-related terms such as 16 “nutritious,” “essential nutrients,” and “wholesome” could lead “a reasonable consumer 17 to think that a product is healthy.” Hadley v. Kellogg Sales Co., 273 F. Supp. 3d 1052, 18 1083 (N.D. Cal. 2017) (citing Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111, 19 1126 (N.D. Cal. 2010)). While the Court agrees with the reasoning in Hadley and 20 Chacanaca, the context in which Defendant’s “nourishing” statements are presented 21 here make it implausible for a reasonable consumer to find that “nourishing” is 22 synonymous with “healthy.” 23 The crux of Plaintiffs’ “healthy” theory is that Defendant has “deceive[d] 24 consumers into believing that several of its baking mixes create a ‘healthy’ food, which is 25 misleading.” SAC ¶ 139. Specifically, Plaintiffs allege Defendant’s products that 26 include “healthy” claims are unhealthy for the following reasons: 27 28 1 they actually contain unhealthy levels of (1) fat and saturated fat, the consumption of which has been shown to cause heart disease and other serious 2 health problems, (2) cholesterol, which has been shown to increase the risk of 3 heart attack, stroke, and narrowed arteries (atherosclerosis), among other serious health problems; (3) contains high levels of sugar that can lead to heart 4 disease, type 2 diabetes, and cancer, among other serious health conditions 5 and (4) fails to meet at least 10% of the DV of Vitamin A, Vitamin C, calcium, iron, protein or fiber. 6

7 Id. ¶ 130. The Court can infer that a reasonable consumer could conclude the term 8 “healthy” refers to foods that: are low-fat; can lower cholesterol; contain low sugar; or 9 meet recommended daily values of vitamins, minerals, and proteins. “Nourishment,” on 10 the other hand, is defined by Merriam-Webster’s Dictionary as simply “food, nutriment” 11 or “sustenance.”8 Based on Plaintiffs’ pleading of “healthy,” it is implausible for a 12 reasonable consumer to infer from the statements “Nourishment for Today’s Frontier” 13 and “the nutritional benefits early pioneers relied on to get through each day” that 14 Defendant’s products are healthy as that term is defined by Plaintiffs, i.e., that the 15 products are low-fat; can lower cholesterol; contain low sugar; or meet the recommended 16 daily values of vitamins, minerals, and proteins. Instead, the Court concludes that the 17 “nourishing” statements in this context constitute mere puffery and that no reasonable 18 consumer could be misled by Defendant’s “nourishing” marketing statements. Because 19 these “nourishing” statements constitute nonactionable puffery, the Court GRANTS the 20 motion and DISMISSES Plaintiffs’ claims to the extent they are premised on the 21 “nourishing” allegations. 22 3. New Amendments to the “Healthy” Theory 23 Defendant next asserts that Plaintiffs’ amendments to their “healthy” theory are 24 impermissible under the FAC Dismissal Order. See Doc. No. 91-1 at 25. In the FAC 25 Dismissal Order, the Court dismissed Plaintiffs’ “healthy” theory as it pertained to 26

27 8 See Merriam-Webster’s Learner's Dictionary, https://www.merriam- 28 1 Defendant’s general comments on the importance of breakfast on its blog post. See FAC 2 Dismissal Order at 56. The Court granted Plaintiffs leave to amend “to the extent 3 Plaintiffs can show that the blog post shows a direct connection that implies Defendant’s 4 products are healthy and goes beyond mere generalizations on health and breakfast.” Id. 5 Plaintiffs contend the Court should allow the amendments to the “healthy” theory 6 pursuant to Federal Rule of Civil Procedure Rule 15. See Doc. No. 91 at 29. 7 Rule 15 provides: “A party may amend its pleading only with the opposing party’s 8 written consent or the court’s leave. The court should freely give leave when justice so 9 requires.” Fed. R. Civ. P. 15(a)(2). A court’s discretion to grant leave to amend “must 10 be guided by the strong federal policy favoring the disposition of cases on the merits.” 11 Valley v. Automated Sys. of Am., Inc., No. 11CV0325 JAH WMC, 2012 WL 113753, at 12 *2 (S.D. Cal. Jan. 13, 2012) (citing DCD Programs Ltd. v. Leighton, 833 F.2d 183, 186 13 (9th Cir. 1987)). “The district court may deny a motion for leave to amend if permitting 14 an amendment would, among other things, cause an undue delay in the litigation or 15 prejudice the opposing party.” Zivkovic v. S. California Edison Co., 302 F.3d 1080, 1087 16 (9th Cir. 2002). 17 Plaintiffs have consistently pleaded a “healthy” theory at various stages throughout 18 this litigation. See, e.g., Doc. No. 1 ¶¶ 9, 18, 34, 42; Doc. No. 37 ¶¶ 63, 137. Plaintiffs’ 19 factual allegations sufficiently provide Defendant fair notice of the nature of their claims. 20 See Bell Atl. Corp. v. Twombly, 550 U.S. at 555. At the pleading stage, and in 21 accordance with the federal policy favoring disposition of cases on the merits, the Court 22 finds Defendant will not be prejudiced by allowing Plaintiffs to supplement their 23 “healthy” theory with additional examples.9 Accordingly, the Court DENIES 24 Defendant’s motion on this basis. 25 26 27 9 To the extent Defendant challenges Plaintiffs’ “nourishing” allegations as an extension of their “healthy” theory, the Court declines to address those arguments, having already dismissed those 28 1 4. “Healthy” Statements 2 Finally, Defendant challenges four statements that support Plaintiffs’ “healthy” 3 theory on the ground that Plaintiffs “fail to plausibly allege any facts showing the 4 abovementioned new terms are misleading.” Doc. No. 91-1 at 27, 29. The four new 5 “healthy” statements include: (1) “healthy end to your day,” which appears on the 6 Defendant’s Oatmeal Dark Chocolate Cookie Mix and the Triple Chocolate Brownie 7 Mix; (2) “healthy end to your meal” with respect to the Double Chocolate Chunk 8 Brownie Mix; and (3) “healthier end to your day” in relation to the Chocolate Fudge 9 Brownie Mix. SAC ¶¶ 19, 25, 26, 27. Plaintiffs also point to (4) Defendant’s 10 representations on the television show Shark Tank in which Defendant highlighted 11 customers “can’t believe [pancakes made from Defendant’s products] are so healthy.” 12 Id. ¶ 138. The Court now turns to whether a reasonable consumer would be deceived by 13 each new “healthy” statement. 14 Defendant argues that the first “healthy” statement should be understood in 15 context. See Doc. No. 91-1 at 11, 12. The “healthy” statement, in full, is: “Made with 16 100% whole grains for a healthy end to your day.” Id. (citing SAC ¶ 66, Figure 4) 17 (emphasis added). Defendant argues that the advertisement is focused on the health 18 benefit derived from whole grains, generally. Doc. No. 91-1 at 27. But as noted above, 19 Plaintiffs allege that Defendant’s products are unhealthy because they include high levels 20 of fat, cholesterol, sugar and fall below the recommended daily values of vitamins, 21 minerals, and proteins. See SAC ¶ 130. Thus, the Court finds that this first statement 22 does not speak to any of these unhealthy attributes. Because the advertisement in full 23 refers to the health benefit derived from whole grains, the Court finds that it is 24 implausible for the reasonable consumer to be deceived by this statement. 25 The second and third new “healthy” statements are: “healthy end to your meal” in 26 relation to the Double Chocolate Chunk Brownie Mix and “healthier end to your day” in 27 relation to the Chocolate Fudge Brownie Mix. SAC ¶ 25. Defendant’s assumption that 28 these statements must be read in connection to whole grains is improper. See Doc. 1 No. 91-1 at 28. “[U]nwarranted inferences are not sufficient to defeat a motion to 2 dismiss.” Pareto, 139 F.3d at 699. Unlike the first “healthy” statement, these— 3 according to the SAC and documents duly incorporated by reference—are not made in 4 the whole grain context. Thus, the Court can plausibly infer that the reasonable consumer 5 could read these statements and believe the products are low in fat, cholesterol, sugar and 6 provide the recommended daily values of vitamins, minerals, and proteins. 7 Finally, Plaintiffs’ “healthy” theory is premised on a Shark Tank episode in which 8 Defendant “highlight[s] how consumers ‘can’t believe they are so healthy.’” SAC ¶ 138. 9 Defendant argues that such statements are “just other consumers’ opinions.” Doc. No. 10 91-1 at 29. At this stage, the Court must accept Plaintiffs’ factual allegations as true and 11 construe them in Plaintiffs’ favor. See Erickson v. Pardus, 551 U.S. 89, 93–94 (2007) 12 (citing Bell Atl. Corp., 550 U.S. at 555–56). The Court finds that a reasonable consumer 13 could be misled by consumer opinions about a product when those opinions are used to 14 advertise and market the product in question. The Court thus finds that this particular TV 15 advertisement could lead a reasonable consumer to believe that Defendant’s products are 16 healthy. 17 Accordingly, the Court GRANTS Defendant’s motion and DISMISSES Plaintiffs’ 18 “healthy” theory as it pertains to the “Made with 100% whole grains for a healthy end to 19 your day” statement which appears on the Kodiak Cakes Oatmeal Dark Chocolate Cookie 20 Mix and the Triple Chocolate Brownie Mix. The Court DENIES the motion as to the 21 “healthy” statements on the Double Chocolate Chunk Brownie Mix and Chocolate Fudge 22 Brownie Mix, as well as the “healthy” description in the Shark Tank episode. 23 V. CONCLUSION 24 In sum, the Court GRANTS IN PART and DENIES IN PART Defendant’s 25 motion to dismiss. The Court GRANTS Defendant’s motion and DISMISSES 26 Plaintiffs’ claims to the extent they are based upon the following: (1) the “non-GMO” 27 theory; (2) the “nourishing” allegations; and (3) the “Made with 100% whole grains for a 28 healthy end to your day” statement which appears on the Kodiak Cakes Oatmeal Dark 1 || Chocolate Cookie Mix and the Triple Chocolate Brownie Mix with prejudice. The Court 2 || DENIES the remainder of Defendant’s motion. 3 This case has now been pending for nearly two years and it remains stalled in the 4 || pre-answer stage. The Court finds that none of the above deficiencies can be cured via 5 amendment, and it is time to move forward. For that reason, and based on the procedural 6 || posture of this case, the Court DIRECTS Plaintiffs to file a Third Amendment 7 ||Complaint, removing the above dismissed theories and allegations, on or before 8 || November 19, 2021. Defendant must then file an answer in the time prescribed by 9 || Federal Rule of Civil Procedure 15(a)(3). 10 The Court cautions Plaintiffs that amendment is solely granted to secure a clean 11 || operative pleading upon which the case can proceed. Amendment to include any further 12 || allegations, theories, or causes of action is not permitted.'!° Moreover, the Court reminds 13 ||the parties that they must meet and confer and propose a joint briefing schedule on 14 || Plaintiffs’ forthcoming motion for class certification within fourteen (14) days of the date 15 this Order. See Doc. No. 100. 16 IT IS SO ORDERED. 17 Dated: October 25, 2021 18 bituh Wl Liphlr 19 HON. MICHAEL M. ANELLO 20 United States District Judge 21 22 23 24 25 26 27 28 This 1s without prejudice to Plaintiffs seeking leave to further amend after class certification.