Tabler v. Panera LLC

BRIANNA TABLER, Plaintiff, v. PANERA LLC, Defendant.

Case No. 19-CV-01646-LHK

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

October 29, 2019

ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND, DENYING REQUEST TO STAY, AND DENYING AS MOOT REQUEST TO STRIKE

Re: Dkt. Nos. 21, 22, 29

Before the Court is Defendant Panera LLC's motion to dismiss, or in the alternative, to stay the instant case or strike portions of Plaintiff's complaint. ECF No. 21. Having considered the submissions of the parties, the relevant law, and the record in this case, the Court GRANTS Defendant's motion to dismiss with leave to amend, DENIES Defendant's request to stay the instant case, and DENIES as moot Defendant's request to strike portions of Plaintiff's complaint.

I. BACKGROUND

A. Factual Background

Plaintiff Brianna Tabler is a citizen of Santa Clara County, California. ECF No. 1 ("Compl.") ¶ 64. Defendant Panera LLC is a limited liability company that was formed under the laws of England and that maintains a domestic headquarters in New York City. Id. ¶ 67. Defendant manufactures, markets, and distributes "bread products," such as Defendant's Whole Grain Bagel (the "Products"), in retail outlets in California. Id. ¶¶ 5, 67, 68.

Plaintiff alleges that Defendant falsely and deceptively labels and markets the Products as "clean" or "100% clean." Id. ¶ 10. According to Plaintiff, the claim that the Products are "clean" features prominently in Defendant's advertising and marketing materials. Id. ¶ 15. Plaintiff asserts that this claim is "ubiquitous at the point of sale of the Products—on bags, signs, and labels throughout Panera's physical locations." Id. For example, Plaintiff indicates that signs and placards at Defendant's retail outlets display statements such as, "Food should be clean. No artificial colors, preservatives, sweeteners, flavors, or anything else you wouldn't want to serve your family." Id. ¶ 16. Plaintiff provides several images of advertisements that Plaintiff deems "representative":

Image materials not available for display.

Id.

Further, Plaintiff asserts that Defendant's bags display statements such as, "100% clean food," encircled by the statement, "No artificial flavors, sweeteners, preservatives / No colors from artificial sources." Id. ¶ 17. Once again, Plaintiff includes an image of an advertisement on a bag that Plaintiff deems "representative":

Image materials not available for display.

Id.

According to Plaintiff, Defendant also "uses a number of other representations to portray an image of 'clean,' chemical-free food, such as the earthy green and brown color schemes throughout its stores, webpages, and on its logo." Id. ¶ 18.

Notwithstanding these statements, Plaintiff alleges that the Products contain the residue of glyphosate, a synthetic biocide. Id. ¶ 21. Glyphosate is an artificial chemical derived from the amino acid glycine. Id. ¶¶ 23, 25. Glyphosate was invented by the agrochemical and agricultural biotechnology corporation Monsanto, which marketed the biocide under the trade name "Roundup." Id. ¶ 22.

According to Plaintiff, the fact that the Products contain glyphosate residue renders Defendant's statements that the Products are "clean" or "100% clean" misrepresentations. Id. ¶ 28. Indeed, Plaintiff asserts that Defendant's statements indicate to reasonable consumers that the Products "do not contain residue of non-food items such as synthetic chemicals used during the ingredients' growing, harvest, or processing." Id. ¶ 19. Plaintiff claims that Defendant does not disclose that glyphosate residue is present in the Products on Defendant's website, packaging, signage, or in a biannual "Responsibility Report" that Defendant disseminates to provide information about the Products. Id. ¶¶ 29, 30-36, 50.

Plaintiff alleges that Defendant is aware that the Products contain glyphosate residue and that Defendant is also aware of the source of the glyphosate residue in the production process. Id. ¶¶ 39, 40. Plaintiff asserts that Defendant purposefully fails to disclose this information in order to charge a premium from consumers, and in order to ensure that consumers do not cease purchasing the Products and switch to one of Defendant's competitors. Id. ¶¶ 46, 47.

Plaintiff purchased Defendant's Whole Grain Bagel, as well as other unspecified Products, at unspecified times from three different retail outlets located in California. Id. ¶ 65. Plaintiff alleges that in deciding to make these purchases, Plaintiff "saw, relied upon, and reasonably believed" Defendant's "representations that the Products were '100% clean' or 'clean.'" Id. ¶ 66.

B. Procedural History

On March 29, 2019, Plaintiff filed the instant putative class action complaint against Defendant and two related entities. Id. ¶ 1. The complaint alleges causes of action under: (1) California's Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750-1785; (2) California's False Advertisement Law ("FAL"), Cal. Bus. & Prof. Code § 17500 et seq.; and (3) California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200-17210. Id. ¶¶ 82-112. On May 15, 2019, Plaintiff filed a notice of voluntary dismissal of the two related entities. ECF No. 5. Thus, Defendant is the only remaining defendant in the instant case. Id.

On July 10, 2019, Defendant filed the instant motion to dismiss, or in the alternative, tostay the instant case or strike portions of Plaintiff's complaint. ECF No. 21 ("Mot."). On August 12, 2019, Plaintiff filed an opposition, ECF No. 23 ("Opp."), and on September 9, 2019, Defendant filed a reply, ECF No. 28 ("Reply").

On July 10, 2019, Defendant filed a request for judicial notice in support of Defendant's motion to dismiss, or in the alternative, to stay Plaintiff's complaint or strike portions thereof. ECF No. 22. On September 9, 2019, Defendant filed a second request for judicial notice in support of Defendant's reply. ECF No. 29. On September 17, 2019, Plaintiff opposed Defendant's two requests for judicial notice. ECF No. 30. Finally, on October 18, 2019, Plaintiff filed a statement of recent decision. ECF No. 33.

II. LEGAL STANDARD

A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)

Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to include "a short and plain statement of the claim showing that the pleader is entitled to relief." A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). The U.S. Supreme Court has held that Rule 8(a) requires a plaintiff to 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 (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 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

The Court, however, need not "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011)(per curiam) (internal quotation marks omitted). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

B. Motion to Dismiss Under Federal Rule of Civil Procedure 9(b)

Claims sounding in fraud are subject to the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001). Under the federal rules, a plaintiff alleging fraud "must state with particularity the circumstances constituting fraud." Fed. R. Civ. P. 9(b). To satisfy this standard, the allegations must be "specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong." Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Thus, claims sounding in fraud must allege "an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations." Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007). In other words, "[a]verments of fraud must be accompanied by 'the who, what, when, where, and how' of the misconduct charged." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (citation omitted). The plaintiff must also plead facts explaining why the statement was false when it was made. See In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1549 (9th Cir. 1994) (en banc), superseded by statute on other grounds as stated in Marksman Partners, L.P. v. Chantal Pharm. Corp., 927 F. Supp. 1297 (C.D. Cal. 1996).

"When an entire complaint . . . is grounded in fraud and its allegations fail to satisfy the heightened pleading requirements of Rule 9(b), a district court may dismiss the complaint . . . ." Vess, 317 F.3d at 1107. A motion to dismiss a complaint "under Rule 9(b) for failure to plead with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6) for failure to state a claim." Id.

C. Leave to Amend

If the Court determines that a complaint should be dismissed, the Court must then decide whether to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend "shall be freely given when justice...