Bronson v. Johnson & Johnson, Inc.

BARBARA BRONSON, MICHAEL FISHMAN,AND ALVIN KUPPERMAN, Plaintiffs,

v. JOHNSON & JOHNSON, INC.AND MCNEIL NUTRITIONALS, INC., Defendants.

No. C 12-04184 CRB

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

Dated: April 16, 2013

ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANTS'

MOTION TO DISMISS

Before the Court is Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint. MTD (dkt. 32). The First Amended Complaint ("FAC") alleges that Defendants' product labels and marketing campaign were deceptive and misleading, in violation of California law. See dkt. 16. The Court GRANTS in part and DENIES in part the Motion to Dismiss.

I. BACKGROUND

The Court takes its account of the facts from the allegations in Plaintiffs' FAC. Plaintiffs Barbara Bronson, Michael Fishman, and Alvin Kupperman, on behalf of themselves and others similarly situated, filed this class action suit against Defendants Johnson & Johnson, Inc. and McNeil Nutritionals, LLC, on August 9, 2012. See Compl. (dkt. 1). They subsequently filed the FAC on September 6, 2012. The FAC centers on three of Defendants' products: Splenda Essentials with Antioxidants, Splenda Essentials withFiber, and Splenda Essentials with B Vitamins. Id. Plaintiffs allege that the product labeling and marketing campaign contains deceptive and misleading information. Id.

Plaintiffs challenge the marketing as misleading when viewed in its entirety. Specifically, they take issue with the: (1) product name Splenda "Essentials"; (2) label on Splenda with Fiber, which includes the statement "1 gram of fiber in each packet" and "healthy fiber" placed next to a photo of fruit and whole-grain cereal; (3) label on Splenda with Antioxidants, which includes the statement "20% of the daily value of antioxidant vitamins C and E, like those found in fruits and vegetables" placed near a picture of berries; and (4) label on Splenda Essentials with B Vitamins, which includes the statement "helps support a healthy metabolism."¹ Id. Plaintiffs also allege that print and website materials for all three products contributed to the misleading and deceptive marketing. Id.

Plaintiffs claim that they purchased Defendants' products because they "relied heavily on the written misrepresentations" and "deceptive health claims" on the labels, FAC ¶¶ 9, 10, 11, but they do not allege that they relied on any website or print marketing. See generally FAC. Plaintiffs purchased Splenda Essentials at full price at various grocery stores in California. Id. ¶ 8. Splenda Essentials costs 25% more than regular Splenda. Id. ¶ 17. Plaintiffs say that they would not have purchased Splenda Essentials had they known thatDefendants' products were mislabeled, id. ¶ 11, and that they were harmed when they paid an excessive premium for Defendants' mislabeled products, see, e.g., id. ¶¶ 17, 49, 57.

Based on the above-alleged practices, Plaintiffs assert the following claims: (1) California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq. - Unlawful Business Acts and Practices; (2) UCL - Unfair Business Acts and Practices; (3) UCL - Fraudulent Business Acts and Practices; (4) California's False Advertising Laws ("FAL"), Cal. Bus. & Prof. Code § 17500, et seq. - Misleading and Deceptive Advertising; (5) FAL - Untrue Advertising; (6) Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750, et seq.; (7) Unjust Enrichment; and (8) Breach of Implied Warranty of Merchantability.² See generally FAC.

Defendants filed this MTD on October 30, 2012, seeking to dismiss all of the claims in the FAC.

II. LEGAL STANDARD

A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir. 2003). Dismissal is proper where a cause of action fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). The Rule calls for sufficient factual matter to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). On a motion to dismiss, all well-pleaded allegations of material fact are taken as true and construed in the light most favorable to the non-moving party. Wyler-Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). A complaint should not be dismissed without leave to amend unless it is clear that the claims could not be saved by amendment. Swartz v. KPMG LLP, 476 F.3d 756, 760 (9th Cir. 2007).

Under Rule 9(b), the "circumstances constituting fraud" or any other claim that "sounds in fraud" must be stated "with particularity." Fed. R. Civ. P. 9(b); Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-04 (9th Cir. 2003). To comply with Rule 9(b), a plaintiff must plead with particularity the time and place of the fraud, the statements made and by whom, an explanation of why or how such statements were false or misleading, and the role of each defendant in the alleged fraud. KEMA, Inc. v. Koperwhats, No. C-09-1587 MMC, 2010 WL 3464737, at *3 (N.D. Cal. Sept. 1, 2010). In short, the complaint must include the "who, what, when, where, and how." Cooper v. Pickett, 137 F.3d 616, 627 (1997) (internal quotations omitted).

III. DISCUSSION

Defendants move to dismiss the FAC on the grounds that (A) Plaintiffs lack standing under the UCL, the FAL, and the CLRA; (B) Plaintiffs' claims are preempted by Federal law (C) Defendants' labeling practices qualify for "safe harbor" protection; and (D) Plaintiffs fail to state a claim for relief.

A. Standing Under the UCL, the FAL, and the CLRA

Plaintiffs have not adequately alleged that they relied on Defendants' website or print ads. In order to have standing to bring a UCL, FAL, or CLRA claim, Plaintiffs must plead that they relied on the misleading materials. Delacruz v. Cytosport, Inc., No. C 11-3532 CW, 2012 WL 1215243, at *8 (N.D. Cal. Apr. 11, 2012); Kwikset Corp. v. Sup. Ct., 51 Cal. 4th 310, 326 (2011); In re Ferrero Litig., 794 F. Supp. 2d 1107, 1111 (S.D. Cal. 2011). A plaintiff is not permitted to support a claim alleging misleading product packaging with statements that he "never read or relied upon" when making his purchase. Dvora v. Gen. Mills, Inc., No. CV 11-1074-GW(PLAx), 2011 WL 1897349, at *8 (C.D. Cal. May 16, 2011). In this case, Plaintiffs clearly state that they relied on the product packaging, FAC ¶ ¶ 9, 10, 11, but never allege they relied on the website or print advertisements beyond one vague reference to "commercial marketing," see FAC ¶ 62. In fact, during the hearing on this motion, Plaintiff's counsel admitted that the named Plaintiffs relied only on the product packaging.

Plaintiffs point to In re Tobacco II Cases, 46 Cal. 4th 298, 306 (2009), arguing that they are not required to plead their exposure to the advertising campaign with an "unrealisticdegree of specificity." Opp'n at 31. However, that case was predicated on the plaintiffs' exposure to an "extensive and long-term advertising campaign." Id. at 328. Plaintiffs cannot rely on Tobacco II unless they have alleged an advertising campaign that is similarly extensive and lengthy. See Mazza v. Am. Honda Motor Co., 666 F.3d 581, 596 (9th Cir. 2012); Delacruz v. Cytosport, No. C 11-3532 CW, 2012 WL 1215243, at *8 (N.D. Cal. Apr. 11, 2012). At best, Defendants' marketing campaign began in 2012, which is substantially less than the "long-term" campaign at issue in Tobacco II that lasted at least seven years. FAC ¶ 12; Tobacco II, 46 Cal. 4th at 306.

Thus, Plaintiffs have not alleged that they have standing to challenge Defendants' web and print advertising. This Court GRANTS the MTD with leave to amend for the allegations concerning those advertisements.

B. Preemption

"Federal preemption can be either express or implied." Chicanos Por la Causa, Inc. v. Napolitano, 544 F.3d 976, 982 (9th Cir. 2008). The Court's "inquiry into the scope of a statute's pre-emptive effect is guided by the rule that [t]he purpose of Congress is the ultimate touchstone in every pre-emption case." Altria v. Good, 555 U.S. 70, 76 (2008) (internal quotation marks and citations omitted). Courts begin their analysis "with the assumption that the historic police powers of the States [are] not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). "That assumption applies with particular force when Congress has legislated in a field traditionally occupied by the States." Id. (internal quotation marks and citation omitted). Where Congress does provide for express preemption, the presumption against preemption requires courts to read the clause narrowly. Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996).

The Federal Food, Drug, and Cosmetic Act ("FDCA") was enacted in 1938 and prohibits the misbranding of food. The FDA has promulgated regulations pursuant to its authority under the statute. See, e.g., 21 C.F.R § 101.1, et. seq. Congress amended the FDCA in 1990 through the passage of the Nutritional Labeling and Education Act("NLEA"). The purpose of the NLEA was to "'clarify and to strengthen [FDA's] authority to require nutrition labeling on foods, and to establish the circumstances under which claims may be made about the nutrients in foods.'" Nat'l Council for Improved Health v. Shalala, 122 F.3d 878, 880 (11th Cir. 1997) (quoting H.R. Rep. No. 101-538, at 7 (1990), reprinted in 1990 U.S.C.C.A.N. 3336, 3337).

The FDCA sets guidelines for when food is "misbranded." See 21 U.S.C. § 343. This includes when food "labeling is false or misleading in any particular." Id. § 343(a)(1). There are also more specific labeling requirements. For example, the FDCA establishes guidelines regarding what nutrition information must be disclosed on food labels, see id. § 343(q), and what voluntary nutrition and health-related claims may be made on food labels, see id. § 343(r). There is no private...