Stemm v. Tootsie Roll Indus., Inc., 18 C 2289

374 F.Supp.3d 734

Paige STEMM, individually and on behalf of all others similarly situated, Plaintiff,

v.TOOTSIE ROLL INDUSTRIES, INC., Defendant.

18 C 2289

United States District Court, N.D. Illinois, Eastern Division.

Signed March 19, 2019

Naomi B. Spector, Pro Hac Vice, KamberLaw LLP, La Jolla, CA, Adam C. York, Michael James Aschenbrener, KamberLaw LLC, Chicago, IL, Christopher Decker Moon, Pro Hac Vice, Moon Law APC, San Diego, CA, for Plaintiff.

Benjamin Eli Haskin, Nathan H. Lichtenstein, Aronberg, Goldgehn, Davis & Garmisa, Chicago, IL, David M. Jolley, Pro Hac Vice, Covington & Buling LLP, San Francisco, CA, for Defendant.

MEMORANDUM OPINION AND ORDER

John Z. Lee, United States District Judge

Plaintiff Paige Stemm filed this suit on behalf of herself and a putative class, alleging that Defendant Tootsie Roll Industries, Inc. ("Tootsie Roll") packaged and sold its Junior Mints candy product in opaque boxes that hid the large amount of empty space contained in them. Stemm believes that this practice violates the Illinois Consumer Fraud and Deceptive Business Practices Act (the "ICFA"), 815 Ill. Comp. Stat. 505/1 et seq. Stemm also brings a class action claim for unjust enrichment. Tootsie Roll has moved to dismiss Stemm's complaint pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6) and to strike Stemm's class claims for unjust enrichment under Rule 12(f). For the reasons set forth herein, Tootsie Roll's motion to dismiss is granted in part and stricken without prejudice in part, and its motion to strike is denied as moot.

Factual Background ¹

Stemm bought a box of Junior Mints (the "Product") from a Walgreens store in Belleville, Illinois for approximately one dollar in March 2018. Compl. ¶ 6, ECF No. 1. The Product was packaged in an opaque, cardboard box, and Stemm could not see its contents. Id. ¶¶ 19, 21–22. Images of the front and back of the box are shown below:

Compl. ¶ 21; Def's Mem. Supp. Mot. Dismiss ("Def.'s Mem.") at 2, ECF No. 17.²

When Stemm opened the box, she saw that only about 56% of the container was filled with candy. Compl. ¶¶ 3, 22. Defendant uniformly packages the Product in this manner. Id. ¶¶ 19, 21–23. An image of the front of the Product, with packaging cut out to expose the alleged empty space in the container ("slack-fill"), is shown below:

Id. ¶ 23.

According to Stemm, the size of the Product's packaging misled her and other members of the class to believe they were purchasing more of the Product than they actually received. Id. ¶¶ 47–49, 58, 70. Stemm further alleges that the empty space within the Product's packaging (commonly referred to as the "slack-fill") is non-functional, because it does not protect the candies, is not required for enclosing the candies, did not substantially result from product settling into the box, and fails to meet federal requirements regulating non-functional slack-fill. Id. ¶¶ 25, 29, 34–36, 38–41, 43–46; see 21 C.F.R. § 100.100.

Legal Standard

To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In addition, when considering motions to dismiss, the Court accepts "all well-pleaded factual allegations as true and view[s] them in the light most favorable to the plaintiff." Lavalais v. Vill. of Melrose Park , 734 F.3d 629, 632 (7th Cir. 2013). At the same time, "allegations in the form of legal conclusions are insufficient to survive a Rule 12(b)(6) motion." McReynolds v. Merrill Lynch & Co., Inc. , 694 F.3d 873, 885 (7th Cir. 2012) (citing Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). As such, "[t]hreadbare recitals of the elements of the cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

Moreover, allegations of fraud must also satisfy the pleading standards specified in Rule 9(b). Borsellino v. Goldman Sachs Group, Inc. , 477 F.3d 502, 507 (7th Cir. 2007) ; see Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co. , 631 F.3d 436, 446–47 (7th Cir. 2011) (applying Rule 9(b) to an ICFA claim when plaintiff alleged that defendant "unlawfully and intentionally concealed" information); Nieto v. Perdue Farms, Inc. , No. 08 C 7399, 2010 WL 1031691, at *5 (N.D. Ill. Mar. 17, 2010) (applying Rule 9(b) where "unjust enrichment claim sounds in fraud"). Under Rule 9(b), "a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). The "circumstances constituting fraud" include the identity of the person who committed the fraud, the time, place, and content of the fraud, and the method by which the fraud was communicated to the plaintiff. See Vicom, Inc. v. Harbridge Merch. Servs., Inc. , 20 F.3d 771, 777 (7th Cir. 1994). This is also known as the "who, what, when, where, and how" standard. DiLeo v. Ernst & Young , 901 F.2d 624, 627 (7th Cir. 1990). This requirement ensures that a defendant has fair notice of a plaintiff's claims and grounds, providing the defendant an opportunity to frame their answers and defenses. Reshal Assocs., Inc. v. Long Grove Trading Co. , 754 F.Supp. 1226, 1230 (N.D. Ill. 1990).

Analysis

I. ICFA (Count I)

A. Consumer Deception

To state a claim under the ICFA, a plaintiff must allege "(1) a deceptive act or practice by [the defendant]; (2) that the act or practice occurred in [a] course of conduct involving trade or commerce; (3) that [the defendant] intended [the plaintiff] to rely on the deception; and (4) that actual damages were proximately caused by the deception." Oshana v. Coca-Cola Co. , 472 F.3d 506, 513 (7th Cir. 2006) (citing Avery v. State Farm Mut. Auto. Ins. Co. , 216 Ill.2d 100, 296 Ill.Dec. 448, 835 N.E.2d 801, 850 (2005) ). Whether an act is deceptive must be evaluated "in light of the totality of the information made available to the plaintiff." Davis v. G.N. Mortg. Corp. , 396 F.3d 869, 884 (7th Cir. 2005) (citing Tudor v. Jewel Food Stores, Inc. , 288 Ill.App.3d 207, 224 Ill.Dec. 24, 681 N.E.2d 6, 8 (1997) ); accord Phillips v. DePaul Univ. , 385 Ill.Dec. 823, 19 N.E.3d 1019, 1031 (2014).

A deceptive act or practice under the ICFA is one that "creates a likelihood of deception or has the capacity to deceive."

Bober v. Glaxo Wellcome PLC , 246 F.3d 934, 938 (7th Cir. 2001). Courts apply a "reasonable consumer" standard in evaluating the likelihood of deception. See Mullins v. Direct Digital, LLC , 795 F.3d 654, 673 (7th Cir. 2015) (finding that whether "statements would have misled a reasonable consumer" is a common question suitable for class treatment); see also Barbara's Sales, Inc. v. Intel Corp. , 227 Ill.2d 45, 316 Ill.Dec. 522, 879 N.E.2d 910, 925–27 (2007) (explaining that puffery is not deceptive because "no reasonable consumer would rely on such an implicit assertion as the sole basis for making a purchase").

"[A] court may dismiss an ICFA claim at the pleading stage if the statement is ‘not misleading as a matter of law.’ " Fuchs v. Menard, Inc. , No. 17-CV-01752, 2017 WL 4339821, at *3 (N.D. Ill. Sept. 29, 2017) (quoting Ibarrola v. Kind, LLC , 83 F.Supp.3d 751, 756 (N.D. Ill. 2015) ), appeal filed. A statement or label cannot mislead unless it actually conveys untrue information about a product. See, e.g. , Bober , 246 F.3d at 938 (statements claiming that drugs were different medications were not deceptive because "that claim [was] completely true"); Fuchs , 2017 WL 4339821, at *3 (labels stating lumber dimensions were not misleading because they were "literally true" and complied with labeling standards set forth by the National Institute of Standards and Technology); Galanis v. Starbucks Corp. , No. 16 C 4705, 2016 WL 6037962, at *3 (N.D. Ill. Oct. 14, 2016) (product advertised as an "iced" drink was not deceptive because "a reasonable consumer who purchases an ‘iced’ drink, expects there to be ice in the drink"); Gubala v. CVS Pharmacy, Inc. , No. 14 C 9039, 2015 WL 3777627, at *2 (N.D. Ill. June 16, 2015) (the wording "Whey Protein Powder," displayed alongside the clearly visible and prominently placed phrases "Naturally & Artificially Flavored Drink Mix" and "high-quality protein," was not deceptive because it was "clear to any consumer upon first glance that the Product is not pure whey protein").

By contrast, when the necessary factual determinations "cannot be made based on pleadings and isolated pictures of certain products on shelves," a Rule 12(b)(6) motion to dismiss an ICFA claim will be denied. Grabowski v. Dunkin' Brands, Inc. , No. 17 C 5069, 2017 WL 6059966, at *2 (N.D. Ill. Dec. 7, 2017) (explaining that "the proximity of [the defendant's] products with real blueberries to those with fake blueberries could possibly be relevant" to an ICFA claim for selling "blueberry" products that lacked actual blueberries); see Korte v. Pinnacle Foods Grp., LLC. , No. 17-CV-199-SMY-SCW, 2018 WL 1508855, at *4 (S.D. Ill. Mar. 27, 2018) ("[W]hether listing other ingredients on the back would be sufficient to dispel any misunderstanding the name and description on the front of the package might cause is a question of fact."); Burton v. Hodgson Mill, Inc. , No. 16-CV-1081-MJR-RJD, 2017 WL 1282882, at *6 (S.D. Ill. Apr. 6, 2017) (finding that whether a pancake mix labeled "all natural" but including synthetic ingredients could mislead a reasonable consumer was "an intricate question of fact"); see also Terrazzino v. Wal-Mart Stores, Inc. , 335 F.Supp.3d 1074, 1083 (N.D. Ill. 2018) (declining to dismiss ICFA complaint where defendant sold pita chips on the internet falsely labeled as "All Natural," because "the ingredients were arguably much more...