Telesco v. Starbucks Corp.

682 F.Supp.3d 397

Kenneth TELESCO, individually and on behalf of all others similarly situated, Plaintiff, v. STARBUCKS CORPORATION, Defendant.

No. 22 Civ. 2687 (NSR)

United States District Court, S.D. New York

Signed July 18, 2023

Frederick John Klorczyk, Bursor & Fisher P.A., New York, NY, for Plaintiff.

Dale J. Giali, Keri Elizabeth Borders, King & Spalding, Los Angeles, CA, for Defendant.

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge:

This putative class action on behalf of purchasers of Starbucks Cold Brew Concentrate alleges that the defendant, Starbucks Corporation ("Defendant") manufactured, distributed, and sold underfilled coffee products. Plaintiff Kenneth Telesco ("Plaintiff"), individually and on behalf of others similarly situated, brings this action against Defendant asserting claims for: (1) breach of express warranty; (2) violation of New York General Business Law § 349 ("GBL § 349") for deceptive acts or practices; and (3) violation of New York General Business Law § 350 ("GBL § 350") for false advertising. Presently before the court is Defendant's motion to dismiss Plaintiff's First Amended Class Action Complaint ("FAC") (ECF No. 16) under Federal Rule of Civil Procedure 12(b)(6) (the "Motion") (ECF No. 25). For the following reasons, the Court GRANTS Defendant's Motion.

BACKGROUND

I. Factual Background

The following facts are derived from the FAC; they are taken as true and construed in the light most favorable to Plaintiff for the purposes of this Motion.

Defendant is an American multinational chain of coffeehouses and roastery reserves that manufactures, distributes, and sells coffee products. (FAC ¶ 2.) Plaintiff Kenneth Telesco, a resident of New Rochelle, New York, alleges that the Defendant's advertising and marketing of its Coffee Products are false and misleading and omit material information. (Id. ¶ 12.) The product in issue is Defendant's Cold Brew Concentrate (the "Coffee Products"). (Id. ¶ 1.)

Specifically, Plaintiff alleges that the packaging and labeling on the Coffee Products misrepresent the amount of cold brew coffee a consumer can make when using the Coffee Products. (Id.) The Coffee Products prominently advertise on the front of the bottle: "Makes 8 servings when prepared as directed," but it only yields 5 servings when following the FDA's Reference Amounts Customarily Consumed Per Eating Occasion ("RACC"). (Id. ¶ 5.)

The FDA's Code of Regulations defines serving sizes for a wide variety of food products, including coffee: "by law, serving sizes must be based on how much food [or beverages] people actually consume," reflecting consumer habits and preferences, not recommended portion sizes. (Id. ¶ 4.) Specifically regarding "coffee or tea, flavored or sweetened," the RACC defines one serving size as 12 fluid ounces. (Id. ¶ 5.) This is the generally accepted minimum size for iced coffee beverages, and other high selling beverages on the market also follow this generally accepted minimum serving size. (Id. ¶ 6.)

When using the RACC definition of a 12-ounce serving size, the Coffee Products produce 5 servings of coffee per 32-ounce bottle (Id. ¶ 9.) The Nutrition Facts label on the back of the Coffee Products clearly advertises this fact for consumers; it reads, "3/4 cup (180 mL) concentrate makes 1-½ cups (260 mL), or 5 servings when using 12 ounces per serving." (Id.) However, when following the instructions on the side of the Coffee Products, the Coffee Products produce 8 servings of coffee, as these instructions are for an 8 ounce, rather than 12 ounce serving. (Id. ¶ 11.) Per the instructions located on the side of the bottle, one serving of the Coffee Product equals 4 ounces of the Coffee Products plus 4 fluid ounces of water, for a total of 8 fluid ounces. Plaintiff alleges that the Coffee Products are, therefore, underfilled by 33 percent, as Defendant's use of an 8-ounce serving leaves the Coffee Products 2/3 the size of a bottle that contains 8 servings of an FDA 12 ounce serving. (Id. ¶¶ 8,19.)

Plaintiff purchased a bottle of the Coffee Products in or about September 2021 at his local Stop & Shop grocery store in New Rochelle, New York. (Id. ¶ 12.) Plaintiff alleges that he bought the bottle after reviewing the Coffee Products' labeling and packaging on the front of the bottle, which advertised that the Coffee Products contained 8 servings of coffee. (Id.) Plaintiff claims that he relied on said labeling and packaging when choosing the Coffee Products over comparable products and understood them as representations and warranties on which he could reliably depend. (Id.) Plaintiff avers that had he known the Coffee Products only made 5 FDA servings, he would not have purchased a bottle of the Coffee Products at what he characterizes is a substantial price premium. (Id.) As a result, Plaintiff alleges that he did not receive the benefit of the bargain because his bottle of the Coffee Products did not contain 8 servings of 12 ounces of cold brew coffee, a representation and warranty that he claims was provided on the product's labeling and packaging. (Id.) In sum, Plaintiff, class and subclass allege: (1) they paid money for coffee products that were not what Defendant represented, (2) they were deprived of the benefit of the bargain because the coffee products they purchased were different than what the defendant advertised, and (3) they were deprived of the benefit of the bargain because the coffee products they purchased had less value than what the defendant represented. (Id. ¶ 25.)

II. Procedural Background

On or around May 18, 2021, Defendant was served with a pre-suit notice letter that complied in all respects with U.C.C. §§ 2-213, 2-607. (FAC ¶ 42.) The letter advised Defendant of breaching an express warranty and demanded that Defendant cease and desist from such breaches and pay full restitution to customers affected by the violation. (Id.)

On April 1, 2022, Plaintiff filed the operative class action complaint, asserting claims for violations of (1) express warranty, (2) New York General Business Law § 349 for deceptive acts or practices, and (3) New York General Business Law § 350 for false advertising. (ECF No. 1.) As relief, Plaintiff seeks monetary relief and injunctive relief that would require Defendant to correct the allegedly misleading label on the packaging. (Id.) Plaintiff demands a trial by jury on all claims so triable. (Id.)

On July 6, 2022, Plaintiff filed their first amended class action complaint. (ECF No. 16.) Subsequently, on November 21, 2022, Defendant filed its notice of motion and motion to dismiss the FAC. (ECF No. 25); Defendant moves to dismiss this action with prejudice pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), on the grounds that the FAC fails to state a claim upon which relief can be granted. (Id.) On that same day, Defendant filed its memorandum of law in support of its motion to dismiss the first amended complaint. (ECF No. 26). Plaintiff filed its memorandum of law in opposition to defendant's motion to dismiss (ECF No. 28), and Defendant filed its reply in support of the motion to dismiss. (ECF No. 30).

LEGAL STANDARD

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

On a motion to dismiss under 12(b)(6) for "failure to state a claim upon which relief can be granted," the "Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in plaintiff's favor." Wargo v. Hillshire Brands Co., 599 F. Supp. 3d 164 at 171 (S.D.N.Y. 2022). To survive a motion to dismiss, the complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662 at 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "A claim has facial plausibility when the plaintiff pleads factual conduct that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. Id. However, "threadbare recitals of the elements cause of action, supported by mere conclusory statements, do not suffice" because "we are not bound to accept as true a legal conclusion couched as a factual allegation. Id. In applying these principles, the court should consider the specific facts that have been alleged in the complaint to determine if it is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. Id.

DISCUSSION

A. Plaintiff's claims pursuant to GBL § 349 and GBL § 350 are dismissed.

Under GBL § 349, "deceptive acts or practices in the conduct of any business, trade of commerce in the furnishing of any services in this state are [ ] declared unlawful." N.Y. Gen. Bus. Law § 349 (McKinney). Similarly, GBL § 350 states that "false advertising in the conduct of any business, trade, or commerce or in the furnishing of any service in this state is [ ] declared unlawful." N.Y. Gen. Bus. Law § 350 (McKinney). It has further been established that the standard for recovery under [§] 350, while specific to false advertising, is otherwise identical to [§] 349." Wargo v. Hillshire Brands Co., 599 F. Supp. 3d 164 (S.D.N.Y. 2022) (quoting Goshen v. Mut. Life Ins. Co. of New York, 98 N.Y.2d 314, 324, 774 N.E.2d 1190, 1195, 746 N.Y.S.2d 858 (2002)). Therefore, the Court addresses these claims together.

"Claims under GBL §§ 349 and 350 are available to 'an individual consumer who falls victim to misrepresentations made by a seller of consumer goods through false or misleading advertising." Solomon v. Bell Atl. Corp., 9 A.D.3d 49, 777 N.Y.S.2d 50 at 54 (2004). Through a three-prong analysis, a plaintiff must allege that a defendant has engaged in: (1) consumer-oriented conduct that is (2) materially misleading and that (3) the plaintiff suffered an injury as a result of the allegedly deceptive acts or practices. Orlander v. Staples, Inc.,...