Scheibe v. Esupplements, LLC

681 F.Supp.3d 1101

Jacob SCHEIBE, on behalf of all those similarly situated, Plaintiff, v. ESUPPLEMENTS, LLC,a Utah limited liability company doing business as Nutricost, Defendant.

Case No.: 3:22-cv-01765-BEN-MSB

United States District Court, S.D. California

Signed July 10, 2023

Charles C. Weller, San Diego, CA, for Plaintiff.

Matthew Orr, Amin Talati Wasserman, LLP, Los Angeles, CA, William Paul Cole, Amin Talati Wasserman LLP, San Diego, CA, for Defendant.

ORDER GRANTING-IN-PART DEFENDANT'S MOTION TO DISMISS

[ECF No. 3]

ROGER T. BENITEZ, United States District Judge

I. INTRODUCTION

Plaintiff Jacob Scheibe ("Plaintiff"), on behalf of himself and all those similarly situated, brings this action against Defendant Esupplements, LLC d/b/a Nutricost ("Defendant") alleging the misrepresentation and false advertising of certain products. Before the Court is Defendant's Motion to Dismiss Plaintiff's Complaint. ECF No. 3. The Motion was submitted on the papers without oral argument pursuant to Civil Local Rule 7.1(d)(1) and Rule 78(b) of the Federal Rules of Civil Procedure. ECF No. 7. After considering the papers submitted and applicable law, the Court GRANTS-IN-PART Defendant's Motion to Dismiss.

II. BACKGROUND

This case arises from Defendant's alleged misrepresentation of nutritional labels on certain products that Plaintiff purchased.

A. Statement of Facts¹

Plaintiff "is a student who has recently sought to lose weight and add muscle mass, and to do so has begun to eat with intentionality and take dietary supplements." ECF No. 1 ("Compl.") at 2, ¶ 2. Defendant's "Products are dietary supplements that contain an amino acid blend that purportedly support endurance during workouts and aid in muscle repair when taken after workouts. They are used to increase muscle mass and lose weight associated with fat." Id. at 2, ¶ 3. On July 28, 2022, Plaintiff purchased Defendant's "EAA (blue raspberry flavor) and Pre-Workout (grape flavor) powders (the "Products") from third-party retailer Amazon.com (Order Nos. 114-9257336-4449848 and 114-1333444-3793004)." Id. at 1-2, ¶ 1.

Plaintiff "carefully reviews labels, including the Products' labels, to track calories in order to maintain progress toward his weight loss goals." Id. at 2, ¶ 2. Plaintiff alleges that:

Consumers including Plaintiff viewed and reasonably relied on Defendant's statements on the Products' labels, as described herein, and would not have purchased the Products from Defendant if the truth about the Products were known, or would have only been willing to pay a substantially reduced price for the Products had they known that Defendant's representations were false and misleading.

Compl. at 12, ¶ 63. "Consumers including Plaintiff especially rely on calories-per-serving and flavoring label claims made by food product manufacturers such as [Defendant], as they cannot confirm or disprove those claims simply by viewing or even consuming the Product." Id. at 13, ¶ 65. Plaintiff reasonably expected "that a dietary supplement that reports 5 calories per serving contains only 5 calories per serving," and "[h]ere, the explicit representation that the EAA powder contains only 5 calories per serving is false and deceptive." Id. at 7, ¶ 26. Plaintiff reasonably expected "that a dietary supplement that reports no calories per serving contains zero calories per serving," and "[h]ere, the implied representation that the Pre-Workout powder contains zero calories per serving is false and deceptive." Id. at 7, ¶ 27. "Plaintiff suffered economic injury by Defendant's fraudulent and deceptive conduct as stated herein, and there is a causal nexus between Defendant's deceptive conduct and Plaintiff's injury." Id. at 13, ¶ 67.

Plaintiff further alleges that the EAA "Product contains an ingredient identified as 'malic acid.' " Id. at 9, ¶ 38. "While there is a naturally occurring form of malic acid, it is extremely expensive to formulate in large quantities and is almost never used in mass-produced food products." Id. at 9, ¶ 39. Defendant uses "DL malic acid"—which is a synthetic petrochemical—in these Products. Id. "This type of malic acid is manufactured in petrochemical plants from benzene or butane—components of gasoline and lighter fluid, respectively—through a series of chemical reactions, some of which involve highly toxic chemical precursors and byproducts." Id. at 9, ¶ 40. Sugars, acids, lipids, and various volatile compounds interact to impart fruit flavors in food, and "[t]he sweetness or tartness of fruit flavor is determined by the ratio between the sugars (mainly glucose and fructose) and acids, such as malic acid." Id. at 9, ¶ 41. "The DL malic acid used in the Products is used to create, enhance, simulate, and/or reinforce the sweet and tart taste that consumers associate with the characterizing fruit flavors such as lemons, limes, and acai berries" (which have their own natural ratio of sugars and acids). Id. at 9, ¶ 42-43. "It does so by changing the ratio between acids and sugars in the Products." Id. at 9, ¶ 43.

"Defendant uses the artificial petrochemically derived DL malic acid in its Products to create this sweet and tart flavor but pretends otherwise, conflating natural and artificial flavorings, misbranding the Products and deceiving consumers." Id. at 10, ¶ 44. Testing by independent third-party laboratories confirms the use of DL malic acid in the Products. Id. at 10. ¶ 46. Plaintiff alleges that "[t]he ingredients on the Products' label are declared in a way that is misleading and contrary to law, because Defendant designates the ingredients by its generic name, 'malic acid,' instead of by its specific name, 'DL malic acid.' " Id. at 10, ¶ 45.

Plaintiff further alleges that "[i]f a food product's characterizing flavor is not created exclusively by the named flavor ingredient, the product's front label must state that the product's flavor was simulated or reinforced with either natural or artificial flavorings or both." Id. at 11, ¶ 52. "If any artificial flavor is present that 'simulates, resembles or reinforces' the characterizing flavor, the front label must prominently inform consumers that the product is 'Artificially Flavored.' " Id. "Here, the Products' labels state the characterizing flavors and also use depictions of fruits to identify the characterizing flavor." Id. at 11, ¶ 51. "DL malic acid is not a "natural flavor" as this term is defined by federal and state regulations and is not derived from a fruit or vegetable or any other natural source." Id. at 11, ¶ 56. Because it is derived from petroleum products, the Products contain artificial flavorings. Id. However, the "Products have none of the required disclosures regarding the use of artificial flavors." Id. at 12, ¶ 58.

B. Procedural History

On November 10, 2022, Plaintiff filed his Complaint against Defendant alleging: (1) unfair conduct in violation of California Business & Professions Code sections 17200, et seq. (the "UCL"); (2) fraudulent conduct in violation of California Business & Professions Code sections 17200, et seq.; (3) unlawful conduct in violation of California Business & Professions Code sections 17200, et seq.; (4) violations of California Business & Professions Code sections 17500, et seq. (the "FAL"); (5) violation of the Consumer Legal Remedies Act, Cal. Civ. Code sections 1750, et seq. (the "CLRA"); and (6) unjust enrichment. See generally Compl. On December 5, 2022, Defendant filed the instant Motion to Dismiss. ECF No. 3 ("Motion"). Plaintiff filed an Opposition, see ECF No. 5 ("Oppo."), and Defendant filed a Reply, see ECF No. 6 ("Reply"). Defendant has subsequently filed three separate Notices of Supplemental Authority, and Plaintiff filed responses to two of those Notices. ECF Nos. 8-11. The Court has reviewed the requisite legal authority including the authority cited in Defendant's Notices.

III. LEGAL STANDARDS

Under Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed when a plaintiffs allegations fail to set forth a set of facts which, if true, would entitle the complainant to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (holding that a claim must be facially plausible to survive a motion to dismiss). The pleadings must raise the right to relief beyond the speculative level; a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). On a motion to dismiss, a court assumes the truth of all plausible non-conclusory allegations in the complaint. Grabowski, 69 F. 4th 1110. A court is not required to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

"Generally, unless the court converts the Rule 12(b)(6) motion into a summary judgment motion, it cannot consider material outside the complaint (e.g., facts presented in briefs, affidavits or discovery materials)." Phillips & Stevenson, California Practice Guide: Federal Civil Procedure Before Trial § 9:211 (The Rutter Group April 2020). Thus, in evaluating a Rule 12(b)(6) motion, review is ordinarily limited to the contents of the complaint and material properly submitted with it. Van Buskirk v. Cable News Network Inc., 284 F.3d 977, 980 (9th Cir. 2002); Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990). Courts may also consider any statements made in a pleading or motion, including concessions made in plaintiff's response to the motion to dismiss as well as in response to any other pleading or motion. Fed. R. Civ. P. 10(c).

Where a motion to dismiss is granted, leave to amend should be liberally allowed "unless the court determines that the allegation of other facts consistent...