Levy v. HU Prods.

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SONYA F. LEVY, on behalf of herself and all others similarly situated, Plaintiff, v. HU PRODUCTS LLC, HU MASTER HOLDINGS LLC, and MONDELEZ GLOBAL LLC, Defendants.

No. 23 Civ. 1381 (AT)

United States District Court, S.D. New York

March 1, 2024

ORDER

ANALISA TORRES, DISTRICT JUDGE:

Plaintiff Sonya F. Levy, brings this putative class action against Defendants Hu Products LLC, Hu Master Holdings LLC, and Mondelez Global LLC (collectively, “Hu”) alleging that Defendants deceptively marketed their dark chocolate bars as “clean” and “simple” when they in fact contained significant amounts of lead. Levy alleges (1) breach of express warranty (2) fraud; and (3) violations of New York General Business Law §§ 349 and 350. See Proposed Amended Complaint (“PAC”), ECF No. 51-1.^[1]

Defendants move to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) and (b)(6). Def. Mot., ECF No. 42; Def. Mem., ECF No. 43. For the following reasons, the motion is DENIED.

BACKGROUND^[2]

Hu manufactures, markets, advertises, and distributes a line of “Organic Simple Dark Chocolate 70% Cocoa chocolate bars” in eleven flavors including “Simple,” “Salty,” “Cashew Butter + Pure Vanilla Bean,” and “Almond Butter + Puffed Quinoa” (the “Products”). PAC ¶¶ 1, 23. Hu targets “discerning,” “health focused” consumers. Id. at 15 ¶ 58.^[3]Its packaging for the “Simple” 70% cacao bar, for example, lists only three ingredients: “organic fair-trade cacao, unrefined organic coconut sugar, organic fair-trade cocoa butter.” Id. ¶¶ 60-61. On its website, Hu purports to “obsessively vet every ingredient,” “replacing weird, industrial ingredients with simple, healthier ones.” Id. at 17 ¶ 58. The website includes Hu's tagline: “NO WEIRD INGREDIENTS. EVER.” Id. ¶¶60, 63.

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Id. ¶¶ 62-63.

In December 2022, testing by Consumer Reports revealed traces of lead and cadmium in dark chocolate bars from a variety of brands, including the Products. Id. ¶¶ 35-37. Researchers purchased dark chocolate bars from 21 brands between “April and May 2022 from online and stores in the New York area,” and tested “2-3 samples with at least two distinct lot codes of each model.” ECF No. 445 at 2. The study found that Hu's “Organic Simple Dark Chocolate 70% Cacao” bar contained more than double the maximum allowable dose level (“MADL”) of lead under California's Proposition 65. See id.; Kevin Loria, Lead and Cadmium Could Be in Your Dark Chocolate, Consumer Reports (Dec. 15, 2022).^[4]The publication noted that although “lead is both common and naturally occurring, ‘it is not inevitable'” and can be minimized by taking certain measures during the cacao harvesting and manufacturing processes. PAC ¶ 33. Lead exposure can cause a range of adverse effects including “neuropathy, brain damage, hypertension, decreased renal function, increased blood pressure, gastrointestinal and cardiovascular effects, reduced fetal growth, and lower birth weights in pregnant women.” Id. ¶ 30.

Levy is a New York resident who purchased and consumed the Products “multiple times” in September 2022. Id. ¶ 16. She alleges that she “purchased the Products in reliance on Defendants' representations that the Products contained only the dark chocolate ingredients that were “simple” and “clean” and safe for consumption.” Id. ¶ 17. Had Defendants disclosed that the Products contained lead, Levy alleges, she “would not have paid the same amount for the Products and/or would not have been willing to purchase” them. Id. ¶ 18.

Levy filed this action on February 17, 2023, and amended her complaint on July 3, 2023. ECF Nos. 1, 40. Levy moved for leave to amend her complaint a second time, ECF No. 51, and Hu moved to dismiss the complaint, ECF No. 42. See supra n.1.

DISCUSSION

I. Judicial Notice

As an initial matter, Hu asks the Court to take judicial notice of thirteen documents in support of its motion to dismiss. Notice Mot., ECF No. 45.

Under Federal Rule of Evidence 201, a court may take judicial notice of any fact that is “not subject to reasonable dispute because it . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” “Under Rule 201(b)(2), courts may take judicial notice of publicly available documents such as regulatory filings.” Lewis v. M&T Bank, No. 21-933, 2022 WL 775758, at *1 (2d Cir. Mar. 15, 2022). “But they must do so to determine what statements the documents contained . . . and not for the truth of the matters asserted in the documents.” Id. (cleaned up); accord Porrazzo v. Bumble Bee Foods, LLC, 822 F.Supp.2d 406, 412 (S.D.N.Y. 2011).

Three of the documents-Exhibits 1, 3, and 5 to Hu's motion-are quoted and cited in the PAC. The Court, therefore, takes judicial notice of these documents, which are incorporated by reference and which Levy knew about and relied upon in bringing the suit. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); PAC ¶¶ 4 & n.3, 6 & n.5.

Exhibits 2, 4, 7, 8, 9, 10, 11, and 12 are “documents available on the websites of the U.S. Food and Drug Administration [(the “FDA”)], [the] New York State Department of Health, the California Attorney General's Office, and the Federal Register.” Notice Mot. at 4. These documents are publicly posted on government websites, and can be judicially noticed because their accuracy cannot reasonably be questioned. See Becker v. Cephalon, Inc., No. 14 Civ. 3864, 2015 WL 5472311, at *3 (S.D.N.Y. Sept. 15, 2015) (collecting cases taking judicial notice of FDA documents). Levy argues, however, that Hu's use of these documents is inadmissible hearsay that cannot be used to prove, for example, that the amount of lead in the Products would not pose a significant health risk. ECF No. 48 at 4-5; see, e.g., Def. Mem. at 2-3, 10, 14 (citing FDA guidance and opinions). The Court agrees. Although the Court takes judicial notice of these documents, it does so “only to determine what the documents state[]”-not to accept “the truth of their contents.” Kramer v. Time Warner Inc., 937 F.2d 767, 774 (2d Cir. 1991).

Exhibits 6 and 13 are a consent judgment entered in California state court and an order entered in New Jersey state court. “[C]ourts routinely take judicial notice of documents filed in other courts, again not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings.” Id. The Court will likewise take judicial notice of these documents, but not for the truth of the matters asserted therein.

II. Rule 12(b)(1)

A. Legal Standard

Under Rule 12(b)(1), a district court must dismiss a complaint if the plaintiff has not established standing. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). “At the pleading stage, Plaintiffs have the burden of alleging facts that affirmatively and plausibly suggest that they have standing to sue.” Amadei v. Nielsen, 348 F.Supp.3d 145, 154 (E.D.N.Y. 2018) (cleaned up) (citing Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016)). A plaintiff has standing if she has pleaded a case or controversy in which she has a personal stake in the outcome. Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.a.r.l, 790 F.3d 411, 417 (2d Cir. 2015). For a plaintiff to have standing to bring a lawsuit under Article III of the United States Constitution, “(1) the plaintiff must have suffered an injury-in-fact; (2) there must be a causal connection between the injury and the conduct at issue; and (3) the injury must be likely to be redressed by a favorable decision.” Nicosia v. Amazon.com, Inc., 834 F.3d 220, 239 (2d Cir. 2016) (citation omitted). The injury in fact must be “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560 (internal quotation marks and citations omitted). An injury is particularized if it “affect[s] the plaintiff in a personal and individual way.” Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016) (quoting Lujan, 504 U.S. at 560 n.1). A concrete injury must be “‘de facto'; that is, it must actually exist.” Id. at 340.

Because standing is challenged here on the basis of the pleadings, [the Court] therefore accept[s] as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party.” Carver v. City of New York, 621 F.3d 221, 225 (2d Cir. 2010) (cleaned up).

B. Standing

First, Hu argues that Levy has not shown an injury-in-fact because she has not plausibly alleged that “she purchased any Hu 70% bars containing allegedly ‘unsafe levels' of lead.” Def. Mem. at 11. Hu contends that that Levy did not personally test any of the chocolate bars that she purchased, and that the Consumer Reports study does not establish that “that every single Hu 70% bar sold in the United States” contained unsafe levels of lead. Id. at 8. Consequently, Hu argues, Levy has not alleged that she actually consumed a bar containing an unsafe amount of lead.

Hu misstates the plaintiff's burden on a motion to dismiss. At this stage, the Court must “draw from the pleadings all reasonable inferences in the plaintiff's favor and . . presume that general allegations embrace those specific facts that are necessary to support the claim.'” John v. Whole Foods Mkt. Grp., Inc., 858 F.3d 732, 737 (2d Cir. 2017) (cleaned up). In John, for example, the plaintiff alleged that (1) a third-party study had found that Whole Foods' New York City stores “routinely overstated the weights of its pre-packaged products,” and (2) he “routinely” purchased such pre-packaged products from the relevant Whole Foods stores during that time period. Id. at 734-35. The Second Circuit held that these allegations were sufficient to confer standing, overturning the...