Strumlauf v. Starbucks Corp.

192 F.Supp.3d 1025

Siera STRUMLAUF, et al., Plaintiffs,

v.STARBUCKS CORPORATION, Defendant.

Case No. 16-cv-01306-TEH

United States District Court, N.D. California.

Signed June 17, 2016

Lawrence Timothy Fisher, Julia A. Luster, Bursor & Fisher, P.A., Walnut Creek, CA, Gerald R. Healy, Military Justice Attorneys, PLLC, Beaufort, SC, John Hafemann, Military Justice Attorneys, PLLC, Savannah, GA, Scott A. Bursor, Bursor & Fisher, P.A., New York, NY, for Plaintiffs.

Robert James Guite, Sheppard Mullin Richter & Hampton LLP, San Francisco, CA, Fred R. Puglisi, Robin Andrea Achen, Sascha Von Mende Henry, Sheppard Mullin Richter & Hampton LLP, Los Angeles, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTIONS TO DISMISS

THELTON E. HENDERSON, United States District Judge

This matter came before the Court on June 1, 2016, on Defendant Starbucks Corporation's motions to dismiss Plaintiffs Siera Strumlauf and Benjamin Robles' Class Action Complaint. Having carefully considered the parties written and oral arguments, and for the reasons set forth below, the Court now GRANTS IN PART and DENIES IN PART Defendant's motions.

BACKGROUND

Plaintiffs Siera Strumlauf and Benjamin Robles (collectively "Plaintiffs") filed their Class Action Complaint ("Compl.") on March 16, 2016, alleging that Starbucks lattes are underfilled. Docket No. 1. Plaintiffs allege that "Starbucks represents on its menu that its Lattes contain ‘12 fl. oz.’ for a Tall, ‘16 fl. oz.’ for a Grande, and ‘20 fl. oz.’ for a Venti." Compl. ¶ 1. Plaintiffs allege, however, that "Starbucks Lattes are uniformly underfilled pursuant to a standardized recipe. Tall Lattes are not 12 fluid ounces, Grande Lattes are not 16 fluid ounces, and Venti Lattes are not 20 fluid ounces. Starbucks cheats purchasers by providing less fluid ounces in their Lattes than represented. In fact, Starbucks Lattes are approximately 25% underfilled." Id. Both Plaintiffs allege that they purchased "Grande" sized lattes from Starbucks, and that they would not have purchased the lattes "on the same terms" if they "had known that they were not, in fact, 16 fluid ounces." Id. ¶¶ 5, 6.

In the Complaint, Plaintiffs allege the following eight claims for relief: (1) Breach of Express Warranty; (2) Breach of the Implied Warranty of Merchantability; (3) Unjust Enrichment; (4) Violation of California's Consumers Legal Remedies Act ("CLRA"); (5) Violation of California's Unfair Competition Law ("UCL"); (6) Violation of California's False Advertising Law ("FAL"); (7) Negligent Misrepresentation; and (8) Fraud.

On April 11, 2016, Defendant Starbucks Corporation ("Defendant") moved to dismiss all eight counts, on the bases of (1) lack of standing under Fed. R. Civ. P. 12(b)(1) ; and (2) failure to state a claim under Fed. R. Civ. P. 12(b)(6). Docket No. 16. Plaintiffs filed a timely opposition (Docket No. 21), and Defendant timely replied (Docket No. 22).

LEGAL STANDARD

I. Federal Rule of Civil Procedure 12(b)(1)

"If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3). A party may raise this defense by filing a motion under Rule 12(b)(1). "A party invoking federal jurisdiction has the burden of establishing that it has satisfied the ‘case-or-controversy’ requirement of Article III of the Constitution [and] standing is a ‘core component’ of that requirement." Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (citation omitted). "To satisfy Article III's case or controversy requirement, [a plaintiff] needs to show that he has suffered an injury in fact, that the injury is traceable to the challenged action of [the defendant], and that the injury can be redressed by a favorable decision." Fortyune v. Am. Multi – Cinema, Inc. , 364 F.3d 1075, 1081 (9th Cir.2004).

In ruling on a motion to dismiss for want of standing, the court must accept as true all material allegations of the complaint and construe the complaint in favor of the complaining party. Lema v. Courtyard Marriott Merced , 873 F.Supp.2d 1264, 1267 (E.D.Cal.2012) (citing Warth v. Seldin , 422 U.S. 490, 501–02, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ).

II. Federal Rule of Civil Procedure 12(b)(6)

Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when a plaintiff's allegations fail "to state a claim upon which relief can be granted." To survive a motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Plausibility does not equate to probability, but it requires "more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "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." Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.

In ruling on a motion to dismiss, courts must "accept all material allegations of fact as true and construe the complaint in a light most favorable to the non-moving party." Vasquez v. Los Angeles Cty. , 487 F.3d 1246, 1249 (9th Cir.2007). However, courts are not "bound to accept as true a legal conclusion couched as a factual allegation." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ).

DISCUSSION

I. Standing

A. Plaintiffs sufficiently allege Article III standing for damages relief.

Under Article III of the United States Constitution, a plaintiff must show "injury in fact" to have standing in federal court. Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In Lujan , the United States Supreme Court held that to establish an injury in fact, a plaintiff must demonstrate the "invasion of a legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical." Id. at 560, 112 S.Ct. 2130 (internal quotations and citations omitted). "Particularized" means "that the injury must affect the plaintiff in a personal and individual way." Id. at 560, 112 S.Ct. 2130 n.1. Injury in fact is similarly required to allege statutory standing under the UCL, FAL and CLRA.

Defendant's standing challenge is based on the contention that Plaintiffs fail to sufficiently plead injury in fact, because Plaintiffs fail to allege that the particular lattes they purchased were underfilled.

Mot. at 18. However, contrary to Defendant's assertions in briefing and at oral argument, even without Plaintiffs measuring their own lattes and finding them lacking, Plaintiffs have sufficiently alleged Article III standing.

Plaintiffs allege that Starbucks lattes are uniformly underfilled using three different theories. First, Plaintiffs assert that the milk foam, which makes up the top layer of the latte, should not be counted toward the total volume of the latte, because according to the "food science community" and the "weights and measures community," the industry standard is to let the foam dissipate, or to measure the drink without the foam. See Compl. ¶ 23. Second, Plaintiffs allege that lattes at all Starbucks locations are created using pitchers that have "fill to" lines that are too low to for the finished product to conform to Defendant's fluid ounce representations. See id. ¶ 22. Finally, in the Complaint, Plaintiffs reproduce a recipe card which is allegedly used by all Starbucks baristas to make their lattes. Id. ¶ 15. Plaintiffs allege that the last step of the recipe instructs the barista to "leav[e] at least 1/4 [inch] of space below the rim of the serving cup," and because the serving cup's capacity is exactly the amount which Defendant represents on the menu, the lattes are all underfilled. Compl. ¶ 23.

Plaintiffs' three theories of underfilling are sufficient for Plaintiffs to establish standing because the allegations allow the Court to make the following reasonable inference: If all Starbucks lattes are made pursuant to a standardized recipe which results in the lattes being uniformly underfilled, and Plaintiffs allege that they purchased lattes, it is reasonable to conclude that—even without measuring—Plaintiffs' lattes were underfilled. Having established their own individual standing, Plaintiffs in this putative class action may also allege claims of other class members "based on transactions in which the named plaintiffs played no part." Garrison v. Whole Foods Mkt. Grp., Inc. , No. 13–cv–5222–VC, 2014 WL 2451290 at *5 (N.D.Cal. June 2, 2014). Accordingly, Defendant's motion to dismiss Plaintiffs' claim for damages is DENIED.

B. Plaintiffs do not sufficiently allege Article III standing for injunctive relief.

Plaintiffs seek "injunctive relief as pleaded or as the Court may deem proper" for all claims in the Complaint. Compl. at 18. A plaintiff seeking injunctive relief from a federal court must allege not only that s/he has "suffered or is threatened with a concrete and particularized legal harm," but also that there is "a sufficient likelihood that [s/he] will again be wronged in a similar way." Bates v. United Parcel Serv. , Inc., 511 F.3d 974, 985 (9th Cir.2007) (citation and internal quotation marks omitted). In a putative class action such as this, "[u]nless the named plaintiffs are themselves entitled to seek injunctive relief, they may not represent a class seeking that relief." Hodgers – Durgin v. de la Vina , 199 F.3d 1037, 1045 (9th Cir.1999).

Plaintiffs allege that they were "induced" to purchase Starbucks lattes by Defendant's misrepresentations and omissions, Compl. ¶¶ 85, 91, and had they known that the lattes were underfilled, they would not have purchased them on the same terms. Compl. ¶¶ 42, 52, 63, 72,...