Rodriguez v. Target Corp.

JOSE RODRIGUEZ, ET AL., Plaintiffs, v. TARGET CORPORATION, Defendant.

No. 22 Civ. 2982 (LGS)

United States District Court, S.D. New York

December 30, 2022

OPINION AND ORDER

LORNA G. SCHOFIELD, UNITED STATES DISTRICT JUDGE

Plaintiffs Jose Rodriguez and Sherri Morris, individually and on behalf of a putative class of others, bring this action against Defendants Target Corporation (“Target”) and Lang Pharma Nutrition, Inc. (“Lang”), alleging breach of express warranty under New York and California law violation of the New York General Business Law (“GBL”) §§ 349 and 350, violation of the California's Unfair Competition Law (“UCL”) on each of the “unfair,” “fraudulent” and “unlawful” prongs (including violations of several underlying laws), violation of the California False Advertising Law (“FAL”) violation of the California Consumers Legal Remedies Act (“CLA”) and unjust enrichment. Defendants move to dismiss all claims in the Second Amended Complaint (“SAC”). For the reasons below, the motion is granted in part and denied in part.

I. BACKGROUND

The following facts are taken from the SAC and assumed to be true for purposes of this motion. See Francis v. Kings Park Manor, Inc., 992 F.3d 67, 72 (2d Cir. 2021).

Defendants market a dietary supplement product labeled “100% Wild Alaskan 1000 mg Fish Oil” (the “Product”). The Product's label asserts that it “Contains Fish: Alaskan Walleye Pollock.” The Product's Supplement Facts state that each serving of two 1000-milligram capsules contains 2000 milligrams of “Fish Oil” and 600 milligrams of “Omega-3 Fatty Acids.” The side panel of the Product label contains the following paragraph:

This unique fish oil is sourced from walleye pollock caught wild in Alaskan waters. This oil is extracted within hours to ensure maximum freshness and is pressed and purified by a family-owned American company using advanced processing technology.

Regular consumption of fatty fish, which include omega-3 fatty acids and several other nutrients, is associated with several health benefits. Fish are rich in two of the three omega-3 fatty acids most important to human health: docosahexaenoic acid (“DHA”) and eicosapentaenoic acid (“EPA”). Because many people do not eat such fish regularly, fish oil containing those fatty acids is commonly used as a dietary supplement.

Fish oil traditionally has been produced by pressing and processing small, fatty fish for their omega-3-rich oil. That traditional process involves several steps to separate the oil from water and remove undesirable components and attributes. Those processes do not alter the naturally-occurring chemical structure of the triglycerides formed by the omega-3 fatty acids.

Defendants' Product is produced from walleye pollock, a larger, less fatty fish that is mainly caught or farmed for its meat. Defendants' Product is produced by processing the parts of the fish that remain after the fish is filleted, which Plaintiffs refer to as “fish offal” or “fish waste.” The oil initially derived from this material is not fit for human consumption. This precursor oil is then shipped from Alaska to Ohio and undergoes a process called “trans-esterification.”

Trans-esterification breaks down naturally-occurring triglycerides into free fatty acids and a free glycerol molecule. Free fatty acids are reacted with ethanol to create “fatty acid ethyl esters” (“FAEE”). This produces a product with higher concentration of FAEE by volume than the concentration of triglycerides per volume produced by traditional methods. The fatty acid content can then be adjusted by the manufacturer to mimic that of “natural fish oil.”

The FAEE that result from trans-esterification are chemically distinct from natural triglycerides and lack many of the constituent components of natural fish oil. The compounds have different molecular structures, molecular weights, chemical names and CAS Registry Numbers. The compounds have different entries in the United States Pharmacopeia (“USP”) National Formulary (“USP-NF”), and their mass spectra indicate that they have different compositions. The Codex Alimentarius, a set of standards created by the United Nations Food and Agriculture Organization and the World Health Organization, also recognizes a distinction between “fish oils” and “concentrated fish oils ethyl esters.” A monograph produced by the Global Organization for EPA and DHA omega-3s (“GOED”) distinguishes between “Refined EPA and/or DHA Omega-3 Oil Triglycerides” and “EPA and/or DHA Omega-3 Oil Ethyl Ester Concentrates” among other kinds of “EPA and/or DHA containing product classes.” U.S. Customs and Border Protection (“CBP”) ruled that an FAEE product could not be classified under the section of the tariff schedule for “fish-liver oils and their factions, whether or not refined, but not chemically modified.” FAEE are less readily absorbed by the body than natural fish oils, and the compounds may differ in other ways that affect their consumption.

II. STANDARD

On a motion to dismiss, a court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in favor of the non-moving party but does not consider “conclusory allegations or legal conclusions couched as factual allegations.” Dixon v. von Blanckensee, 994 F.3d 95, 101 (2d Cir. 2021) (internal quotation marks omitted). 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.” Melendez v. Sirius XM Radio, Inc., 50 F.4th 294, 299 (2d Cir. 2022) (internal quotation marks omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678; accord Noto v. 22nd Century Grp., Inc., 35 F.4th 95, 104 (2d Cir. 2022). It is not enough for a complaint to allege facts that are consistent with liability; it must “nudge[]” claims “across the line from conceivable to plausible.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); accord Bensch v. Est. of Umar, 2 F.4th 70, 80 (2d Cir. 2021). To survive dismissal, “plaintiffs must provide the grounds upon which their claim rests through factual allegations sufficient to raise a right to relief above the speculative level.” Rich v. Fox News Network, LLC, 939 F.3d 112, 121 (2d Cir. 2019) (cleaned up).

III. DISCUSSION

With the exception of part of Plaintiffs' claim under the “unlawful” prong of the UCL, Defendants' motion to dismiss is denied to the extent that the remaining claims seek damages. The claims that survive are not preempted; the SAC adequately alleges that a reasonable consumer would be misled by the Product's label; and Plaintiffs have Article III standing to seek damages for past harms. A portion of Plaintiffs' claim under the “unlawful” prong of the UCL is impliedly preempted; Plaintiffs' unjust enrichment/quasi-contract claim is dismissed as duplicative; and Plaintiffs' request for an injunction is denied for lack of Article III standing.

A. Standing

1. Damages to Compensate for Past Harm

The SAC adequately alleges the elements of Plaintiffs' Article III standing to seek damages for past harm: “an injury in fact that is concrete and particularized,” fairly traceable to the challenged action and likely redressable by a favorable decision. Fund Liquidation Holdings LLC v. Bank of Am. Corp., 991 F.3d 370, 381 (2d Cir. 2021) (internal quotation marks omitted). Defendants challenge only the “injury in fact” element. Contrary to Defendants' argument, the SAC's allegations of past harm do not allege a mere “informational injury that causes no adverse effects” or “bare procedural violations divorced from any concrete harm.” TransUnion LLC v. Ramirez, 141 S.Ct. 2190, 2213-14 (2021) (cleaned up). The SAC alleges that Plaintiffs spent money on the Product that they would not have spent had they not been misled.

As discussed below, unlike in the cases Defendants cite, Plaintiffs do not seek redress for a bare statutory violation, but for allegedly deceptive marketing that tricked Plaintiffs into a purchase they would not have made at all or on the terms they made it. Plaintiffs thus allege a concrete, economic injury in the past sufficient for standing to seek damages. That is so whether or not the future harm alleged in the SAC is purely informational and cannot confer standing to seek an injunction. See In re Coca-Cola Marketing and Sales Litig., No. 20-15742, 2021 WL 3878654, at *2 (9th Cir. Aug. 31, 2021) (relying on TransUnion to find that plaintiffs lacked standing to seek an injunction); Berni v. Barilla S.p.A., 964 F.3d 141, 147 (2d Cir. 2020).

2. Injunction to Prevent Future Harm

The SAC's request for an injunction is struck from the SAC because Plaintiffs lack standing to seek such relief. “[T]he Second Circuit has squarely foreclosed the possibility of injunctive relief for past purchasers ....” Gordon v. Target Corp., No. 20 Civ. 9589, 2022 WL 836773, at *9 n.3 (S.D.N.Y. Mar. 18, 2022) (putting a different plaintiff's lawyer on notice that such requests are frivolous and may result in Rule 11 sanctions). “[P]ast purchasers of a consumer product who claim to be deceived by that product's packaging . . . have, at most, alleged a past harm.” Berni, 964 F.3d at 147. Plaintiffs' allegation that they might purchase the Product in the future is “conjectural [and] hypothetical” rather than “actual and imminent.” Id. (quoting Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)). No reasonable inference of a future purchase causing future injury can be drawn because Plaintiffs now know the “truth” and will not be deceived if they purchase the Product again. Id.

B. Preemption

The SAC...