In re Frito-Lay N. Am., Inc. All Natural Litig.

In re Frito-Lay North America, Inc. All Natural Litigation

12-MD-2413 (RRM)(RLM)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

Dated: August 29, 2013

MEMORANDUM & ORDER

ROSLYNN R. MAUSKOPF, United States District Judge.

In this consolidated multi-district litigation, plaintiffs bring a putative class action grounded in various federal and state-law claims, alleging that defendant Frito-Lay North America Inc., and its parent company, defendant PepsiCo, Inc., deceptively labeled and marketed as "All Natural" various Tostitos, SunChips, and Fritos Bean Dip products when, in fact, the products contained unnatural, genetically-modified organisms. Before the Court are defendants' motions to dismiss, (Doc. No. 23), and to take judicial notice of certain documents in support of their motion to dismiss, (Doc. No. 25). Plaintiffs oppose both motions, (Doc. Nos. 27, 28), and defendants filed replies, (Doc. Nos. 29, 30). For the following reasons, the motion to take judicial notice is granted, and the motion to dismiss is granted in part and denied in part.

BACKGROUND

I. Facts Alleged

Plaintiffs Chris Shake, Julie Gengo, Valarie Zuro, and Lisa Summerlin (collectively "plaintiffs") are purchasers of various Tostitos, SunChips, and Fritos Bean Dip products.¹ Frito-Lay North America, Inc. ("Frito-Lay") manufactures, markets, advertises, distributes, and sells Tostitos, SunChips and Bean Dip products. (Id. ¶ 24.) PepsiCo, Inc. ("PepsiCo") is the parent company of Frito-Lay, and wholly owns Frito-Lay. (Id. ¶ 22.)

The Tostitos and SunChips products that plaintiffs purchased were all stamped with the following "All Natural" label:

Image materials not available for display.

(Id. ¶ 37.)

The Fritos Bean Dip products that plaintiff Shake purchased were all stamped with the following "All Natural" label:

Image materials not available for display.(Id.) The Tostitos, SunChips, and Bean Dip products all allegedly contain "unnatural, genetically-modified organisms ("GMOs")." (Id. ¶ 1.) GMOs are "organisms in which the genetic material (DNA) has been altered in a way that does not occur naturally." (Id. ¶ 6.) One of the ingredients in all of these products - corn - has been genetically modified. (Id. ¶ 39.) Because the products contain genetically modified corn, plaintiffs allege, they are not in fact "natural" or "all natural." (Id. ¶ 42.) In fact, being "unnatural" is, according to plaintiffs, a defining characteristic of genetically modified foods. (Id.)

As alleged, defendants charged, and the plaintiffs paid, a premium price for the products as compared to other like products not bearing an "All Natural" label. (Id. ¶¶ 65, 64.) In purchasing the products at a premium price, plaintiffs assert that they relied on defendants' misleading and deceptive misrepresentations that the products were made of all natural ingredients. (Id. ¶ 63.) Had plaintiffs known that the products were not all natural, but instead contained GMOs, they claim they would not have purchased the products. (Id. ¶ 67.)

II. Procedural History

Shake filed his action in this Court in January 2012. Gengo and Zuro filed actions in the U.S. District Court for the Central District of California. Those actions were transferred to this Court, and consolidated with Shake's case. The plaintiffs filed the First Amended Complaint on July 3, 2012, adding Summerlin as a named plaintiff.

Plaintiffs seek to represent, in the alternative, the following classes: (1) nationwide classes seeking declaratory and injunctive relief pursuant to Fed. R. Civ. P. 23(b)(2) and monetary damages pursuant to Fed. R. Civ. P. 23(b)(3) for violations of the Magnuson-Moss Warranty Act and the statutory and common law of New York; or (2) a multi-state class of residents of New York, California, and Florida (the "New York-California-Florida classes")seeking declaratory and injunctive relief pursuant to Fed. R. Civ. P. 23(b)(2) and monetary damages pursuant to Fed. R. Civ. P. 23(b)(3) for violations of the Magnuson-Moss Warranty Act and the statutory and common law of New York; or (3) separate state-based classes wherein plaintiff Shake represents New York residents (the "New York classes"), plaintiffs Gengo and Zuro represent California residents (the "California classes"), and plaintiff Summerlin represents Florida residents (the "Florida classes"), each seeking declaratory and injunctive relief pursuant to Fed. R. Civ. P. 23(b)(2) and monetary damages pursuant to Fed. R. Civ. P. 23(b)(3) for violations of their respective states' statutory and common law.

Plaintiffs bring thirteen causes of action against defendants: (I) breach of warranty, in violation of the Magnuson-Moss Warranty Act ("MMWA"), 15 U.S.C. § 2301 et seq. (brought on behalf of the nationwide classes); (II) deceptive acts and practices, in violation of N.Y. Gen. Bus. Law ("GBL") § 349 (brought on behalf of the nationwide classes, New York-California-Florida classes, and New York classes); (III) false advertising, in violation of N.Y. Gen. Bus. Law § 350 (brought on behalf of the nationwide classes, New York-California-Florida classes, and New York classes); (IV) violations of California's False Advertising Law ("FAL"), Cal. Bus. & Prof. Code §§ 17500 et seq. (brought on behalf of California classes); (V) violations of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq. (brought on behalf of California classes); (VI) violations of the California Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750 et seq. (brought on behalf of California classes); (VII) violations of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA") § 501.201 et seq. (brought on behalf of Florida classes); (VIII) breach of express warranty under New York law (brought on behalf of the nationwide classes, New York-California-Florida classes, and New York classes); (IX) breach of express warranty under California law (broughton behalf of California classes); (X) breach of express warranty under Florida law (brought on behalf of Florida classes); (XI) intentional misrepresentation under New York law (brought on behalf of the nationwide classes, New York-California-Florida classes, and New York classes); (XII) intentional misrepresentation under California law (brought on behalf of California classes); and (XIII) intentional misrepresentation under Florida law (brought on behalf of Florida classes).

In recent months, a number of follow-on suits had been filed in district courts around the country. Defendants moved before the Judicial Panel on Multidistrict Litigation to consolidate all of the actions. The JPML consolidated them before this Court in December 2012, and continues to add related cases to this multidistrict litigation. Defendants then filed this motion.

STANDARD OF REVIEW

A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) requires the court to examine the legal, rather than factual, sufficiency of a complaint. As required by Rule 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." To withstand a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A court considering a 12(b)(6) motion must "take[] factual allegations [in the complaint] to be true and draw[] all reasonable inferences in the plaintiff's favor." Harris v. Mills, 572 F.3d 66, 71 (2d Cir. 2009) (citation omitted). A complaint need not contain "'detailed factual allegations,'" but it must contain "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 555). In other words, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555). Rather, the plaintiff's complaint must include "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 570). The determination of whether "a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-158 (2d Cir. 2007)).

DISCUSSION

I. Motion to Take Judicial Notice

In support of their motion to dismiss, defendants request that the Court take judicial notice of twenty-three exhibits that are: various documents published by the Federal Trade Commission ("FTC"), the Food and Drug Administration ("FDA"), and the United States Department of Agriculture ("USDA"); reports published by industry and consumer groups; a handful of federal and state statutes; a state regulation; and the contents of a state ballot initiative along with its corresponding election results. (See Defs.' Mot. to Take Judicial Notice (Doc. No. 26) at 2-4.)

A district court may consider matters of which judicial notice may be taken without converting a motion to dismiss into one for summary judgment. Staehr v. Hartford Fin. Servs. Grp., Inc., 547 F.3d 406, 425 (2d Cir. 2008). Courts may judicially notice facts that are "notsubject to reasonable dispute because [they] . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b)(2).²

Defendants request notice "of the fact that the respective agencies or industry groups published these reports to consumers." (Defs.' Mot. to Take Judicial Notice at 4.) Defendants ask for notice of these documents in...