Parham v. ALDI, Inc.

ERIC PARHAM, Plaintiff, v. ALDI, INC., Defendant.

No. 19 Civ. 8975 (PGG)

United States District Court, S.D. New York

September 21, 2021

ORDER

PAUL G. GARDEPHE UNITED STATES DISTRICT JUDGE

Plaintiff Eric Parham asserts false advertising claims under New York General Business Law (“GBL”) §§ 349 &350 against Defendant Aldi, Inc. pertaining to an unsweetened vanilla almond milk product. (Am. Cmplt. (Dkt No. 28) ¶¶ 1-4, 124-31) On October 9, 2020 Defendant moved to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (See Def. Mot. (Dkt. No 45); Def. Br. (Dkt. No. 46)) On January 22, 2021, this Court referred Defendant's motion to Magistrate Judge Stewart D. Aaron for a Report and Recommendation (“R&R”). (Dkt. No. 65)

On February 15, 2021, Judge Aaron issued an R&R recommending that Defendant's motion to dismiss be granted without leave to amend. (R&R (Dkt. No. 69)) Plaintiff has filed an objection to the R&R, seeking leave to file a second amended complaint. (Pltf. Obj. (Dkt. No. 77)) For the reasons stated below, the R&R will be adopted in its entirety and Plaintiff's request for leave to file a second amended complaint will be denied.^[1]

BACKGROUND

I. FACTS^[2]

Defendant “manufactures, distributes, markets, labels and sells organic unsweetened almond[]milk purporting to be flavored only with vanilla under the Friendly Farms brand (‘Product').” (Am. Cmplt. (Dkt. No. 28) ¶ 1) Plaintiff is a Bronx resident who purchased the Product at various Aldi stores, including an Aldi store in the Bronx. (Id. ¶¶ 109, 113) Plaintiff's most recent purchase occurred in September 2019. (Id. ¶ 113) Plaintiff purchased “the Product because he liked the product type for its intended use and expected its vanilla flavor to not to be enhanced by artificial flavors. . . .” (Id. ¶ 114)

Defendant sells its almond milk in 64-ounce cartons for $2.99. (Id. ¶¶ 2, 96) The Product is sold in retail stores and online. (Id. ¶ 2) The front label of the Product contains the brand name “Friendly Farms” at the top, along with a banner that says “Organic.” (Id. ¶ 3) Under the banner is the word “Almond” in larger font, below which the words “unsweetened” and “vanilla” appear. (See id. (including a picture of the carton))

Plaintiff contends that the label's

representations are misleading because although the characterizing flavor is represented as vanilla, its flavor is (1) not derived exclusively from vanilla beans, (2) has less vanilla than the label represents, (3) contains non-vanilla artificial flavors and (4) not disclosed to consumers on the front label or ingredients list as required by law and consumers' expectations.

(Id. ¶ 4)

The ingredient list on the Product carton does not mention vanilla flavoring, but refers instead to “Natural Flavor.” (Id. ¶ 48; see id. ¶ 52 (“‘Natural flavor' is the term used for a flavor that may contain some vanilla and non-vanilla natural flavors.” (citing 21 C.F.R. § 101.22(h)(1))

Based on a gas chromatography-mass spectrometry analysis of the Product, the Complaint alleges that it contains a “comparatively high level of vanillin” and “a trace or de minimis” amount of vanilla. (Id. ¶¶ 56, 60, 67) Vanillin simulates the taste of vanilla but is obtained from tree bark. (See id. ¶ 13)

Plaintiff alleges that had he known that the source of the vanilla flavor in the Product was not exclusively from vanilla beans, he and other members of the class he seeks to represent would not have purchased the Product or would have paid less for it. (Id. ¶ 95)

II. PROCEDURAL HISTORY

The Complaint was filed on September 26, 2019 (Cmplt. (Dkt. No. 1)), and the Amended Complaint was filed on June 8, 2020. (Am. Cmplt. (Dkt. No. 28)) Plaintiff seeks to represent a class “consist[ing] of all purchasers of the Product who reside[d] in New York during the applicable statutes of limitations.” (Id. ¶ 116) The Amended Complaint alleges claims under GBL §§ 349 and 350, as well as claims for negligent misrepresentation, breach of warranty, violations of the Magnuson Moss Warranty Act, fraud, and unjust enrichment. (Id. ¶¶ 124-57)

On July 2, 2020, Plaintiff voluntarily dismissed his negligent misrepresentation claim. (Order (Dkt. No. 33)) On July 13, 2020, this Court dismissed on consent Plaintiff's breach of warranty, fraud, and unjust enrichment claims, as well as Plaintiff's claims under the Magnuson Moss Warranty Act. (Mem. Endorsement (Dkt. No. 37))

On October 9, 2020, Defendant moved to dismiss, and Plaintiff filed his opposition that same day. (See Def. Mot. (Dkt. No. 45); Def. Br. (Dkt. No. 46); Goldstein Decl. (Dkt. No. 47); Pltf. Br. (Dkt. No. 50). Def. Reply Br. (Dkt. No. 49))^[3] On January 22, 2021, this Court referred this case to Judge Aaron for general pretrial supervision as well as for an R&R concerning Defendant's motion to dismiss. (Order (Dkt. No. 65))

On February 15, 2021, Judge Aaron issued his R&R recommending dismissal of Plaintiff's claims under GBL §§ 349 and 350. (R&R (Dkt. No. 69) at 8) Judge Aaron found that “as a matter of law . . . a reasonable consumer would not have been misled by the labeling on the Product container.” (Id. at 6) Judge Aaron further recommends that this Court “decline to grant leave to amend sua sponte.” (Id. at 8 n.5)

Plaintiff filed a timely objection to the R&R. (See Mar. 1, 2021 Memo Endorsement (Dkt. No. 72); Pltf. Obj. (Dkt. No. 77)) Plaintiff contends that the R&R “does not specify whether the [Amended Complaint] should be dismissed with or without prejudice, ” and he “objects to the Report only to the extent that the Report recommends dismissal with prejudice.” (Pltf. Obj. (Dkt. No. 77) at 5) Plaintiff also seeks leave to file a second amended complaint, which Plaintiff argues pleads “viable claims . . . under [GBL] §§ 349 and 350.” (Id.) Defendant filed an opposition to Plaintiff's objection on April 12, 2021 (Def. Opp. (Dkt. No. 79)), and Plaintiff filed a reply on April 19, 2021. (Ptf. Reply Obj. (Dkt. No. 80))^[4]

DISCUSSION

I. LEGAL STANDARDS

A. Review of Magistrate Judge's Report and Recommendation

A district court's review of a magistrate judge's report and recommendation “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C). Where a timely objection has been made to a magistrate judge's recommendation, the district court judge “shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id.

However, “[o]bjections that are merely perfunctory responses argued in an attempt to engage the district court in a rehashing of the same arguments set forth in the original papers will not suffice to invoke de novo review.” Phillips v. Reed Grp., Ltd., 955 F.Supp.2d 201, 211 (S.D.N.Y. 2013) (citation, quotation marks, and alteration marks omitted). “[T]o the extent . . . that the [objecting] party makes only conclusory or general arguments, or simply reiterates the original arguments, the Court will review the [R&R] strictly for clear error.” DiPilato v. 7-Eleven, Inc., 662 F.Supp.2d 333, 339 (S.D.N.Y. 2009) (citation and quotation marks omitted). For portions of the R&R to which no objection is made, a court's review is limited to a consideration of whether there is any “clear error on the face of the record” that precludes acceptance of the recommendations. Wingate v. Bloomberg, No. 11-CV-188 (JPO), 2011 WL 5106009, at *1 (S.D.N.Y. Oct. 27, 2011) (citation and quotation marks omitted).

B. Rule 12(b)(6) Motion to Dismiss

“To survive 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, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “In considering a motion to dismiss . . . the court is to accept as true all facts alleged in the complaint, ” Kassner, 496 F.3d at 237, and must “draw all reasonable inferences in favor of the plaintiff.” Id.

A complaint is inadequately pled “if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement, '” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557), and does not provide factual allegations sufficient “to give the defendant fair notice of what the claim is and the grounds upon which it rests.” Port Dock & Stone Corp. v. Oldcastle Northeast, Inc., 507 F.3d 117, 121 (2d Cir. 2007) (citing Twombly, 550 U.S. at 555-56).

II. MOTION TO DISMISS AMENDED COMPLAINT'S GBL CLAIMS^[5]

“To successfully assert a claim under either [GBL §§ 349 or 350], a plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice.” Beck v. Manhattan Coll., 20 Civ. 3229 (XLS), 2021 WL 1840864, at *5 (S.D.N.Y. May 7, 2021) (citations and quotations marks omitted). “‘An act is deceptive within the meaning of the New York statute only if it is likely to mislead a reasonable consumer.'” Id. (quoting Marcus v. AT&T Corp., 138 F.3d 46, 64 (2d Cir. 1998)). Additionally, “[u]nder either provision, it is well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer.” Chufen Chen v. Dunkin' Brands, Inc., 954 F.3d 492, 500 (2d Cir. 2020) (citation, quotation marks, and alteration marks omitted).

In his R&R, Judge Aaron finds that Defendant's labeling is not misleading, because “[a] reasonable consumer would understand that the word ‘vanilla' on the front of the carton describes how the Product tastes, not what it contains, especially in circumstances where the...