McNulty v. Polar Corp.

KIMBERLY MCNULTY, et al., Plaintiffs, v. POLAR CORP., Defendant.

19 Civ. 8903 (LGS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

September 23, 2020

OPINION & ORDER

LORNA G. SCHOFIELD, District Judge:

Plaintiff Kimberly McNulty brings this putative consumer class action against Defendant Polar Corp., alleging various state law claims arising out of its labeling flavored seltzer beverages as "100% NATURAL." Defendant moves to dismiss the Amended Complaint (the "Complaint") pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(c), arguing that Plaintiff lacks standing and that the Complaint fails to state a claim. Defendant also seeks a stay of litigation. For the reasons below, the motion is granted in part and denied in part.

I. BACKGROUND

The following facts are drawn from the Complaint and are assumed to be true for the purposes of this motion. See Lynch v. City of New York, 952 F.3d 67, 71 (2d Cir. 2020).

Defendant manufactures flavored seltzer beverages (the "Products") that are sold in retail stores. The Products come in a variety of flavors and are labeled "100% NATURAL" on their packaging and container labels. In June 2019, Plaintiff purchased a Cranberry-Lime flavor box of the Products for $4.99 at Target. Plaintiff buys natural or organic products when possible and decided to purchase the Products after reading "100% NATURAL" on the label.

The Center for Applied Isotope Studies recently performed radiocarbon testing to determine whether Defendant's Products are flavored or made with synthetic substances. According to the Complaint, radiocarbon testing differentiates between "bio-based" and "petrochemical-based" content, which is one way to measure whether food is made with "synthetic" or "natural" ingredients. Testing revealed that extracts of the Products produced estimates of 58% to 96% non-bio-based carbon content, meaning the Products include artificial compounds.

The Complaint alleges that Plaintiff would not have purchased the Products or would have paid significantly less if she knew the Products were not as represented, i.e., not 100% natural. As a result of purchasing the Products, Plaintiff is "worse off," since she believed the Products were 100% natural and discovered that she did not receive the benefit of her bargain. Plaintiff would be interested in purchasing the Products in the future, if they were as represented.

Plaintiff filed this lawsuit on behalf of herself and others similarly situated, alleging that Defendant labels the Products as "100% NATURAL" to enhance its profits when the Products are not actually as represented. The Complaint alleges violations of New York laws on unfair and deceptive trade and sale practices, New York Gen. Bus. L. ("GBL") §§ 349 and 350, and breach of contract. Plaintiff seeks, among other remedies, monetary damages and declaratory relief.

II. LEGAL STANDARDS

"A suit brought in federal court is 'properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.'" Citizens for Responsibility & Ethics in Washington v. Trump, 953 F.3d 178, 188 (2d Cir. 2019) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)). Plaintiff bears the burden of establishing standing. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547, 194 L. Ed. 2d 635 (2016), as revised (May 24, 2016). When the parties are disputingstanding based solely on the pleadings, "all material allegations of the complaint" are accepted as true and the complaint is construed "in favor of the complaining party." Am. Psychiatric Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352, 357 (2d Cir. 2016); accord MSP Recovery Claims, Series LLC v. Tech. Ins. Co., Inc., No. 18 Civ. 8036, 2020 WL 91540, at *1 (S.D.N.Y. Jan. 8, 2020).

"The standard for granting a Rule 12(c) motion for judgment on the pleadings is identical to that [for granting] a Rule 12(b)(6) motion for failure to state a claim." Lynch v. City of New York, 952 F.3d 67, 75 (2d Cir. 2020) (quotation marks omitted)). To survive a motion to dismiss under Rule 12(b)(6), "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, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "[A]ll factual allegations in the complaint are accepted as true and all inferences are drawn in the plaintiff's favor." Littlejohn v. City of N.Y., 795 F.3d 297, 306 (2d Cir. 2015). "[T]he court's task is to assess the legal feasibility of the complaint; it is not to assess the weight of the evidence." Id. (citing Anderson News, L.L.C. v. American Media, Inc., 680 F.3d 162, 184-85 (2d Cir. 2012)).

III. DISCUSSION

A. Rule 12(b)(1)

Defendant argues that Plaintiff lacks standing to seek prospective declaratory relief and to assert claims on behalf of the putative class with respect to Products in flavors that she did not purchase. Plaintiff lacks standing to seek prospective declaratory relief, but she has standing to bring claims with respect to unpurchased products subject to further inquiry at the class certification stage.

1. Standing to Pursue Declaratory Relief

Because the Complaint fails to allege a sufficient likelihood of future injury, Plaintiff lacks standing to pursue declaratory relief. Under Article III, "a plaintiff must demonstrate standing for each claim and form of relief sought." Nat. Resources Def. Council, Inc. v. U.S. Food and Drug Admin., 710 F.3d 71, 86 (2d Cir. 2013) (quotation marks omitted); accord Duran v. Henkel of Am., Inc., No. 19 Civ. 2794, 2020 WL 1503456, at *11 (S.D.N.Y. Mar. 30, 2020). Thus, to have standing to pursue declaratory relief, a plaintiff must establish "the three familiar elements of standing: injury in fact, causation, and redressability." Cacchillo v. Insmed, Inc., 638 F.3d 401, 404 (2d Cir.2011) (citing Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)). "A plaintiff seeking injunctive or declaratory relief cannot rely on past injury to satisfy the injury requirement." McCormick ex rel. McCormick v. Sch. Dist. of Mamaroneck, 370 F.3d 275, 284 (2d Cir. 2004) (quoting Deshawn E. ex rel. Charlotte E. v. Safir, 156 F.3d 340, 344 (2d Cir. 1998)); accord In re Welspun Litig., No. 16 Civ. 6792, 2019 WL 2174089, at *6 (S.D.N.Y. May 20, 2019). Instead, "[t]o obtain prospective relief, such as a declaratory judgment or an injunction," "a plaintiff must show . . . 'a sufficient likelihood that he [or she] will again be wronged in a similar way.'" Marcavage v. City of New York, 689 F.3d 98, 103 (2d Cir. 2012) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983)); Dorce v. City of New York, No. 19 Civ. 2216, 2020 WL 2521320, at *8 (S.D.N.Y. May 17, 2020). Alleging "possible future injury" is insufficient. Am. Civil Liberties Union v. Clapper, 785 F.3d 787, 800 (2d Cir. 2015) (quotation marks omitted) (quoting Clapper v. Amnesty Int'l USA, 568 U.S. 398, 40 (2013)).

Plaintiff does not have standing to pursue declaratory relief. The Complaint alleges that Plaintiff "would be interested in purchasing" the Products, if they are produced "in conformity" with the "100% NATURAL" representation, and that if she had been aware of themisrepresentation, Plaintiff would not have purchased the Products at all. Because Plaintiff does not seek to purchase the Products while they are produced with synthetic ingredients, there is no likelihood of future harm. See, e.g., Duran, 2020 WL 1503456, at *12 (no standing for injunctive relief given no real or immediate threat of future injury where plaintiff alleges that he would purchase the product only if it had been "re-engineered" to live up to its representation) (collecting cases). But see Petrosino v. Stearn's Prod., Inc., No. 16 Civ. 7735, 2018 WL 1614349, at *5 (S.D.N.Y. Mar. 30, 2018). The claims for declaratory relief are dismissed.

2. Standing for Damages Claims Relating to Unpurchased Products

Plaintiff has standing to bring the surviving damages claims. Defendant contends that Plaintiff lacks Article III standing to pursue claims for Products in flavors that she did not purchase and that the flavors are not "sufficiently similar" to allow Plaintiff to serve as a class representative. These arguments are rejected. Evaluating standing in a class action requires a two-step inquiry. First, the plaintiffs and putative class representatives must have Article III standing, meaning "for every named defendant there . . . [is] at least one named plaintiff who can assert a claim directly against that defendant." See NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 159 (2d Cir. 2012). Second, a plaintiff must have class standing, which requires that "he plausibly alleges (1) that he personally has suffered some actual . . . injury as a result of the putatively illegal conduct of the defendant, and (2) . . . such conduct implicates the same set of concerns as the conduct alleged to have caused injury to other members of the putative class by the same defendants." Id. at 162 (internal citations and quotation marks omitted). Courts in this Circuit split over whether class standing should be resolved at the pleading stage. See Buonasera v. Honest Co., 208 F. Supp. 3d 555, 562-63 (S.D.N.Y. 2016) (collecting cases that have and have not resolved class standing at the motion todismiss stage). Some courts have held that, "subject to further inquiry at the class certification stage, a named plaintiff has standing to bring class action claims under state consumer protection laws for products that he did not purchase, so long as those products, and the false or deceptive manner in which they were marketed, are sufficiently similar to the products that the named plaintiff did purchase." Wai Chu v. Samsung Elecs. Am., Inc., No. 18 Civ. 11742, 2020 WL 1330662, at *3 (S.D.N.Y. Mar. 23, 2020) (quotation marks omitted) (emphasis in...