Gardner v. Starkist Co.

418 F.Supp.3d 443

Warren GARDNER, et al., Plaintiffs,

v.STARKIST CO., et al., Defendants.

Case No. 19-cv-02561-WHO

United States District Court, N.D. California.

Signed December 2, 2019

Bradley Matthew Beall, Christopher Chagas Gold, Dorothy P. Antullis, Ricardo J. Marenco, Stuart Andrew Davidson, Pro Hac Vice, Robbins Geller Rudman Dowd LLP, Boca Raton, FL, Carrie Ann Laliberte, Elaine A. Ryan, Pro Hac Vice, Bonnett Fairbourn Friedman Balint, Phoenix, AZ, Manfred Patrick Muecke, Patricia Nicole Syverson, Bonnett, Fairbourn, Friedman, & Balint, P.C., San Diego, CA, Brian M. Brown, Zaremba Brown PLLC, New York, NY, Brian Douglas Penny, Goldman Scarlato & Penny, P.C., Conshohocken, PA, for Plaintiffs.

Levi M. Downing, Michael Ryan Dover, Pro Hac Vice, Michael Charles Lynch, Jr., Kelley Drye and Warren LLP, New York, NY, Joseph A. Boyle, Pro Hac Vice, Kelley Drye and Warren LLP, Parsippany, NJ, Tahir Lynn Boykins, Kelley Drye & Warren LLP, Los Angeles, CA, Christopher Kao Pillsbury Winthrop Shaw Pittman LLP San Francisco, CA, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART STARKIST'S MOTION TO DISMISS; GRANTING DONGWON'S MOTION TO DISMISS

William H. Orrick, United States District Judge

INTRODUCTION

Plaintiffs are purchasers of StarKist Co. ("StarKist") tuna from various states who bring a class-action lawsuit alleging that StarKist promises consumers that its tuna products are 100% "dolphin-safe" and sustainably sourced and that those promises are false and misleading. First Amended Complaint ("FAC") [Dkt. No. 37] ¶ 14. They have met the pleading standard for their state law fraud claims because they sufficiently allege that: (i) StarKist entered into a pervasive advertising campaign since 1990 that led consumers to believe it sets itself to a higher dolphin-safe standard than required under the Dolphin Protection Consumer Information Act ("DPCIA") 16 U.S.C. § 1385 ; (ii) StarKist tuna cannot be 100% dolphin-safe given that the fishing techniques it uses are known to harm or kill at least some dolphins; and (iii) consumers would not have bought StarKist tuna but-for its dolphin-safe promises.

However, plaintiffs do not adequately plead a RICO claim between StarKist and its alleged co-conspirators because they simply characterize StarKist's routine commercial dealings as evidence of a RICO enterprise. They have also not pleaded an alter ego or agent relationship between StarKist and its South Korean parent company Dongwon Industries ("Dongwon") sufficient to confer personal jurisdiction over Dongwon. I GRANT Dongwon's motion to dismiss for lack of personal jurisdiction. I DENY StarKist's motion to dismiss the state law fraud claims but GRANT its motion to dismiss the RICO claim.

BACKGROUND

I. FACTUAL BACKGROUND

A. Origin of "Dolphin-Safe" Tuna

In the 1950s, fishermen recognized that tuna schools (swimming deeper in the water) often congregate with dolphin schools (swimming at observable depths) and began encircling tuna and dolphin schools with purse seine nets to haul both schools aboard. FAC ¶ 7. This led to millions of dolphins being killed as unintended bycatch. Id. ¶ 8. Heightened public awareness of these mass dolphin deaths led to the development and enhancement of fishing regulations, including a strengthening of the Marine Mammal Protection Act and enactment of the DPCIA in 1990. Id. ¶ 10. This also prompted major U.S. sellers of tuna fish products – including StarKist, Bumble Bee, and Chicken of the Sea – to promise consumers that the tuna they sold would only be procured through dolphin-safe fishing practices. Id. ¶ 11.

Plaintiffs allege that, in the last four years ("Class Period"), reasonable consumers expected that all StarKist tuna products "are dolphin-safe because they have been indoctrinated to believe precisely that by Defendants' and other tuna companies' highly effective dolphin safety and sustainable fishing practices marketing campaigns." FAC ¶¶ 2, 13. However, plaintiffs contend, StarKist tuna is not dolphin-safe or sustainably sourced and that defendants' representations are false, misleading and/or deceptive. Id. ¶ 14.

B. Defendants' Dolphin-Safe Representations

As the Ninth Circuit recognized, "[g]iven the choice of whether to purchase dolphin-safe tuna or to purchase tuna not labeled dolphin-safe, American consumers overwhelmingly chose to purchase tuna that was labeled dolphin-safe." Earth Island Institute v. Hogarth , 494 F.3d 757, 761 (9th Cir. 2007). Plaintiffs allege that the importance consumers place on dolphin-safety continues to this day. FAC ¶ 21; see also id. ¶ 22 (listing many retailers have refused to sell tuna that is not caught using dolphin-safe methods, including Whole Foods Market, Safeway, Giant Eagle, and Wegmans).

Plaintiffs point to StarKist's labels, website, and press releases as evidence of how StarKist has marketed its tuna. FAC ¶ 15. Every StarKist tuna product has a "Dolphin Safe" logo on it, and directs consumers to visit its website for more information on its dolphin-safe policy. Id. ¶ 17. The website explains its definition of "Dolphin Safe" and promises that it will not purchase any tuna caught in association with dolphins, and will refuse to purchase tuna caught with "gill or drift nets," which it describes as indiscriminate fishing methods that trap dolphins and other marine life. Id. ¶ 18.

Plaintiffs contend that the special dolphin-safe logo defendants place on each StarKist product is intended to convey the message "No harm to dolphins." FAC ¶ 23.

They allege that reasonable consumers believe that "dolphin-safe" means "no" dolphins were harmed in the process of catching the tuna in StarKist products. FAC ¶ 71. They assert that "unbeknownst to consumers, substantial numbers of dolphins and other marine life are killed and harmed by the fishermen and fishing methods used to catch Defendants' tuna," and that these "dolphin-safe label representations are false, misleading, and/or deceptive, and constitute systematic acts of mail and wire fraud." Id. ¶ 24.

C. Dolphin Safety Legislation

The DPCIA created its own official dolphin-safe mark, codified in 50 C.F.R. § 216.95. FAC ¶ 26. This mark contains the words "U.S. Department of Commerce," along with the words "Dolphin Safe" in red with a blue-colored dolphin profile on the logo. Id. ¶ 28.

StarKist elected not to utilize the official dolphin-safe logo, but rather use their own alternate logo to convey its tuna products are dolphin-safe. Id.

The DPCIA provides a separate rule for those who label their tuna products with any label or mark other than the official dolphin-safe mark. Such labels violate the Federal Trade Commission Act ("FTCA"), 15 U.S.C. § 45, unless:

(i) no dolphins were killed or seriously injured in the sets or other gear deployments in which the tuna were caught; (ii) the label is supported by a tracking and verification program which is comparable in effectiveness to the program established under subsection (f); and (iii) the label complies with all applicable labeling, marketing, and advertising laws and regulations of the Federal Trade Commission, including any guidelines for environmental labeling.

16 U.S.C. § 1385(d)(3)(C). The DPCIA further adds that it is a violation of the FTCA to "willingly and knowingly [ ] use a label referred to in subparagraph (C) in a campaign or effort to mislead or deceive consumers about the level of protection afforded [to] dolphins under the International Dolphin Conservation Program." 16 U.S.C. § 1385(d)(3)(E). Plaintiffs allege that defendants set themselves to a higher standard than the DPCIA and falsely represent that its tuna products are completely dolphin-safe because its tuna fishing practices are known to kill or harm at least some dolphins each year. FAC ¶ 31.

D. Defendants' Violation of their Dolphin-Safe Representations

1. Plaintiffs Claim Defendants' Fishing Practices Are Not In Fact Dolphin-Safe

Plaintiffs argue that only tuna caught by "traditional methods" are "actually ‘dolphin-safe.’ " FAC ¶ 41. They contend that these traditional methods, described as "traditional pole-and-line and trolling methods," ensure that dolphins are not harmed in the process because "fish are caught using barbless hooks and poles one at a time near the sea's surface and unintended captured species are easily released in a timely manner." Id. ; see also id. ¶ 5 (citing to United States National Oceanic and Atmospheric Administration ("NOAA") article that describes different types of fishing methods).¹ They allege that defendants are not among the tuna companies that "use only dolphin-safe pole-and-line or trolling techniques to capture their tuna." Id. ¶ 42. Rather, they list other methods used on defendants' fishing vessels that they claim are not "actually dolphin safe." Id. ¶ 43 (describing longlines, modern purse seine fishing techniques, and fish aggregating devices ("FADs") as not dolphin-safe and alleging defendants employ these techniques).

Plaintiffs claim that defendants' fishing techniques not only often lead to dolphin deaths but also harm dolphins in other ways like mother-calf separation, acute cardiac and muscle damages, cumulative organ damage, failed or impaired reproduction and compromised immune function. FAC ¶ 51. They allege that these "indirect harmful effects" of defendants' fishing practices also "likely result in [dolphin] mortality." Id. ¶ 53 (quoting 50 C.F.R. § 216.3, which defines "serious injury" as "any injury that will likely result in mortality"); see also id. ("It is conservatively estimated that total reported dolphin mortality rate is underestimated by 10-15% for spotted dolphins and 6-10% for spinner dolphins given these indirect harmful effects and unobserved and underreported kills.") (internal citation omitted). Therefore, they conclude, defendants' tuna is not actually dolphin-safe as they represent it to be. Id. ¶ 53.

Plaintiffs further contend that the use of FADs, purse seine nets, and longlines are recognized as "unsustainab...