La Vigne v. Costco Wholesale Corp.

284 F.Supp.3d 496

Mary LA VIGNE, Kristen Hessler, and Kathleen Hogan on behalf of themselves and all others similarly situated, Plaintiffs,

v.COSTCO WHOLESALE CORPORATION, Defendant.

No. 16–CV–07924 (NSR)

United States District Court, S.D. New York.

Signed January 10, 2018

Matthew Tucker Insley–Pruitt, Robert Scott Plosky, Patricia I. Avery, Wolf Popper LLP, New York, NY, for Plaintiffs.

Richard P. O'Leary, Troutman Sanders LLP, New York, NY, Lindsey B. Mann, William N. Withrow, Jr., Troutman Sanders, LLP, Atlanta, GA, for Defendants.

OPINION & ORDER

NELSON S. ROMÁN, United States District Judge

Plaintiffs Mary La Vigne ("Plaintiff La Vigne"), Kristen Hessler ("Plaintiff Hessler"), and Kathleen Hogan ("Plaintiff Hogan") (collectively, "Plaintiffs") filed this proposed class action against the Costco Wholesale Corporation ("Defendant") alleging violations of New York, Pennsylvania, and Massachusetts statutes that prohibit deceptive marketing practices in the sale of consumer goods. Plaintiffs contend that Defendant has engaged in deceptive acts in connection with the marketing and sale of its Kirkland Signature Premium Chunk Chicken Breast ("Kirkland Canned Chicken"). Defendant now moves to dismiss Plaintiff's amended class action complaint ("Amended Complaint") pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted. Defendant argues that the Amended Complaint must be dismissed because (1) Plaintiffs' claims are preempted by federal law; (2) Plaintiffs cannot utilize a state law claim as a vehicle to privately enforce a federal statute that lacks a private right of action; and (3) no reasonable consumer would be misled by the plain language of the packaging and label of Kirkland Canned Chicken. For the reasons stated below, Defendant's motion is GRANTED.

BACKGROUND

In considering a Rule 12(b)(6) motion, a court is limited to the facts alleged in the complaint and is required to accept those facts as true. See LaFaro v. N.Y. Cardiothoracic Grp., PLLC , 570 F.3d 471, 475 (2d Cir. 2009). A court may, however, consider documents attached to the complaint; statements or documents incorporated into the complaint by reference; matters of which judicial notice may be taken, such as public records; and documents that the plaintiff either possessed or knew about, and relied upon, in bringing the suit. See, e.g. , Kleinman v. Elan Corp., PLC , 706 F.3d 145, 152 (2d Cir. 2013) ; Chambers v. Time Warner, Inc. , 282 F.3d 147, 153 (2d Cir. 2002) (applying that rule to district courts); accord Wechsler v. HSBC Bank USA, N.A , No. 15-CV-5907 (JMF), 2016 WL 1688012, at *1 (S.D.N.Y. Apr. 26, 2016), aff'd 674 Fed.Appx. 73 (2d Cir. 2017). Accordingly, the following facts are taken from the Amended Complaint and exhibits attached thereto or incorporated by reference therein.

Defendant is a Washington corporation that, together with its subsidiaries, operates membership warehouses throughout the country offering a range of branded and private-label products, including its house brand, Kirkland Signature. Defendant sells Kirkland Canned Chicken in its membership warehouse stores. (Am. Compl. (ECF No. 1) ¶¶ 9, 12.) The cans are grouped for sale in packages of six 12.5 ounce cans, each slightly more than two inches tall and four inches in diameter. (Id. ¶¶ 12, 14.) Each package is covered by an opaque plastic wrapper. (Id. ¶ 12.) The front of the bulk packaging reads, in large font, "Premium Chunk CHICKEN BREAST." (Id. ) Below, in smaller font, are the phrases "Packed in Water" and "Extra Lean." (Id. ) At the very bottom of this side of the packaging the net weight of the cans is listed as "NET WT 6–12.5 OZ (354g) CANS TOTAL 4.6 LB (2.1kg)." (Id. ) On the reverse side, the bulk packaging includes a Nutrition Facts panel and suggested recipes for the canned chicken. (Id. ¶ 13.) The Nutrition Facts panel includes, in bolded font, the phrase "Nutrition Facts" and immediately below, in smaller, non-bolded font the phrases "Serving Size 2 oz drained (56g)" and "Servings Per Container About 21." (Id. ) The individual labels on each can are not visible in the bulk package prior to purchase, but each can is covered with a front label containing the product name in large font, and immediately to left of the name in smaller font the terms "Packed in Water" and "Extra Lean." (Id. ¶ 14.) At the bottom of each front label the net weight of the individual can is listed as "NET WT 12.5 OZ (354g)." (Id. ) Each can also has a back label listing Nutrition Facts. (Id. ) Immediately beneath the bolded phrase "Nutrition Facts," in smaller, non-bolded font are the phrases "Serving Size 2 oz drained (56g)" and "Servings Per Container About 3.5." (Id. )

Defendant provides members of its warehouse stores with a calculation of the unit price for its Kirkland Canned Chicken, which allegedly "allows customers to compare the price of its product with a competitor's chicken on a per pound basis...[T]he unit price provided by [Defendant] is calculated using the gross weight of the contents, which includes chicken and water." (Id. ¶ 21.)

An opened can of Kirkland Canned Chicken reveals chicken covered by a layer of water. (Id. ¶ 15.) If the consumer drains the 2/3 of a cup of water that the can contains, she is left with between seven and eight ounces of meat, meaning that as much as 44% of the weight of the can's contents is water. (Id. ¶¶ 16–17.) According to the Amended Complaint, the consumer receives little benefit from the water in the can and Defendant does not intend for consumers to use the water, as evidenced by the recipes Defendant includes with each bulk package, which direct consumers to drain the chicken before using it in a dish. (Id. ¶ 20.)

Plaintiff La Vigne, Plaintiff Hessler, and Plaintiff Hogan purchased Kirkland Canned Chicken from Defendant at warehouse locations in New York, Pennsylvania, and Massachusetts, respectively, for between $10.99 and $11.99 per bulk package. (Id. ¶¶ 22, 23, 25.) They allege that they "reasonably believed that they were purchasing a package that contained an adequate amount of chicken in each can because of the misrepresentations on the label, the packaging, the price label on the shelf, the unit pricing, the other materials included with the package, and the size of the can." (Id. ¶ 27.) However, upon using the chicken to prepare meals, each Plaintiff allegedly came to learn that she had received a product with "substantially less chicken than should have been in the can." (Id. ) Plaintiffs admit that they received the amount of chicken indicated under the Nutrition Facts label on the back of the bulk packaging and on the back label of each can, i.e., 42 ounces divided among six cans. (Id. ¶ 1.)

Plaintiffs support their claim that Kirkland Canned Chicken, as labeled, contains too much water and not enough chicken largely through their invocation of federal standards for the marketing of chicken products. Specifically, the Poultry Products Inspection Act ("PPIA"), 21 U.S.C. §§ 451 – 72, authorizes regulations relating to the disclosure of the amount of water in canned chicken products. See 9 C.F.R. § 381.157. According to Plaintiffs, these regulations state that "if the poultry meat is only between 50% and 80% with 20% to 50% water or broth, then the product name must disclose the percentage of water or broth." (Am. Compl. ¶ 18.) They further claim that Kirkland Canned Chicken does not comply with this requirement since each can, when opened subsequent to purchase, contains less than 80% chicken, even though the product name does not disclose the percentage of water in the can. (Id. )

Put simply, Plaintiffs allege, on behalf of themselves and all others similarly situated, that Defendant's conduct violates the PPIA and misleads consumers into believing that they are being charged "a reasonable price to pay for chicken" when they buy cans of Kirkland Canned Chicken, even though almost half of the contents of each can is water, and that such conduct constitutes "an unconscionable and deceptive commercial practice" in violation of consumer protection laws in New York, Pennsylvania, and Massachusetts.¹ (Id. ¶¶ 1–5; see also ¶¶ 41–62.) Defendant moves to dismiss the Amended Complaint in its entirety.

STANDARD OF REVIEW

On a motion to dismiss for "failure to state a claim upon which relief can be granted," Fed. R. Civ. P. 12(b)(6), dismissal is proper unless the complaint "contain[s] 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, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ); accord Hayden v. Paterson , 594 F.3d 150, 160 (2d Cir. 2010). "Although for the purposes of a motion to dismiss [a court] must take all of the factual allegations in the complaint as true, [it is] '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 ). "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 679, 129 S.Ct. 1937.

When there are well-pleaded factual allegations in the complaint, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. A claim is facially plausible when the factual content pleaded allows a court "to draw a reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678, 129 S.Ct. 1937. Ultimately, determining whether a complaint states a facially plausible claim upon which relief may be granted must be "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937.

JUDICIAL NOTICE

As a preliminary matter, the Court must assess whether the document Defenda...