Willard v. Tropicana Mfg. Co.

577 F.Supp.3d 814

Jacqueline WILLARD, an individual, and Amie Blackman, an individual, on behalf of themselves individually, and on behalf of all others similarly situated, and the general public, Plaintiffs,

v.TROPICANA MANUFACTURING COMPANY, INC., Defendant.

No. 20-cv-01501

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

Signed December 30, 2021

Lilach Halperin, Pro Hac Vice, Michael Thomas Houchin, Pro Hac Vice, Marron A. Ronald, Ronald Albert Marron, Pro Hac Vice, Law Offices of Ronald A. Marron, David Elliot, San Diego, CA, for Plaintiff Jacqueline Willard.

Lilach Halperin, Pro Hac Vice, Michael Thomas Houchin, Pro Hac Vice, Marron A. Ronald, Ronald Albert Marron, Pro Hac Vice, Law Offices of Ronald A. Marron, San Diego, CA, for Plaintiff Amie Blackman.

Jason R. Meltzer, Pro Hac Vice, Gibson, Dunn & Crutcher LLP, Andrew S. Tulumello, Arianna Maureen Scavetti, Pro Hac Vice, Weil, Gotshal & Manges LLP, Washington, DC, Erik J. Ives, Fox, Swibel, Levin & Carroll, LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Franklin U. Valderrama, United States District Judge

This case is about fruit juice. Plaintiffs Jacqueline Willard (Willard) and Amie Blackman (Blackman) (collectively, Plaintiffs), bring claims on behalf of themselves and all other similarly situated against defendant Tropicana Manufacturing Company, Inc. (Defendant or Tropicana), alleging that Defendant misbrands and falsely advertises ten Tropicana juice products, in Illinois, California, and throughout the United States, in violation of federal and state unfair competition, false advertising, and consumer protection laws. R. 1, Compl.¹ Defendant moves to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). R. 23, Mot. Dismiss. For the reasons below, the Court grants in part and denies in part Defendant's motion.

Background

Defendant manufactures, packages, labels, advertises, markets, and sells numerous fruit juice products in California, Illinois, and throughout the United States. Compl. ¶¶ 7, 9.² Plaintiffs challenge the labeling of ten Tropicana juice products: "Trop 50 Farmstand Apple," "Tropicana 100% Juice Apple Juice," "Trop 50 No Pulp," "Trop 50 Orange Mango," "Trop 50 Orange Peach," "Trop 50 Pomegranate Blueberry," "Trop 50 with Calcium & Vitamin D," "Trop 50 with Vitamin C & Zinc," "Tropicana Grape Drink," and "Tropicana Fruit Medley" (collectively, the Products). Id. ¶¶ 34–36.

All of the Products contain an ingredient called dl-malic acid, which Plaintiffs claim is an artificial flavoring agent, which confers a "tart, fruity" flavor to the Products. Id. ¶¶ 37, 50–51. Plaintiffs allege that the Products’ labels violate federal and states law by: (1) failing to include an "artificially flavored" label on the front and back of the Products’ packaging, despite containing malic acid; (2) deceiving consumers into believing the Products are "all natural" based on the inclusion of the characterizing fruit flavor; and (3) misleadingly identifying "dl-malic acid" only as generic "malic acid" in the ingredient list. Id. ¶¶ 14, 17, 19, 20, 25, 41, 42, 44, 52, 59, 60, 61, 68, 72, 73, 75. Plaintiffs allege that they justifiably relied upon and were deceived by the Products’ deceptive labeling when they purchased one or more of the Products. Compl. ¶¶ 79–83. Plaintiffs allege that the following photograph is a true and accurate copy of the front label of the "Trop 50 Farmstand Apple" Product:

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Id. ¶ 23. Similarly, Plaintiffs allege that the following photograph is a true and accurate copy of the front label of the "Tropicana 100% Juice Apple Juice" Product:

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Id. ¶ 30. Plaintiffs do not include photographs of the other eight Products in the Complaint.

Based on these allegations, Plaintiffs filed a class action complaint against Defendant, bringing six claims under Illinois and California law, specifically: (1) violation the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS § 505/1, et seq. (ICFA); (2) violation of the "unlawful" and "unfair" prongs of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 (UCL) ; (3) violation of California's Consumer Legal Remedies Act, Cal. Civ. Code § 1750 (CLRA) ; (4) violation of California's False Advertising Law, Cal. Bus. & Prof. Code § 17500 (FAL) ; (5) fraud by omission under 815 ILCS 505/2 and Cal. Civ. Code §§ 1709 - 1710 ; and (6) negligent misrepresentation under Illinois common law and Cal. Civ. Code §§ 1709 – 1710. Compl. ¶¶ 114–94. Plaintiffs seek to represent a nationwide class of consumers, as well as Illinois and California sub-classes. Id. ¶¶ 93–95. Defendant now moves to dismiss the Complaint pursuant to Rule 12(b)(6), arguing that Plaintiffs’ claims are preempted, implausible, and inadequately pled. Mot. Dismiss. Defendant also argues that Plaintiffs lack standing to bring their claims under Article III. Id.

Standard of Review

A Rule 12(b)(1) motion tests whether the court has subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7 , 570 F.3d 811, 820 (7th Cir. 2009). Standing is an "essential component of Article III's case-or-controversy requirement," and the plaintiff "bears the burden of establishing standing ... in the same way as any other matter on which the plaintiff bears the burden of proof ...." Apex Digit., Inc. v. Sears Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009). In order to survive a Rule 12(b)(1) motion, the plaintiff bears the burden of establishing subject matter jurisdiction. Ctr. for Dermatology & Skin Cancer, Ltd. v. Burwell , 770 F.3d 586, 588–89 (7th Cir. 2014). When deciding a facial challenge to subject matter jurisdiction—that is, when the defendant argues that the plaintiff's allegations as to jurisdiction are inadequate—"the court must accept all well-pleaded factual allegations as true and draw all reasonable inferences in favor of the plaintiff." Silha v. ACT, Inc. , 807 F.3d 169, 173 (7th Cir. 2015) (citing Apex Digit. , 572 F.3d at 443–44 ).

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint. Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7 , 570 F.3d 811, 820 (7th Cir. 2009). To survive a motion to dismiss, a complaint need only contain factual allegations, accepted as true, sufficient 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) (citing 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." Id. The allegations "must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal , 556 U.S. at 678–79, 129 S.Ct. 1937.

Under Rule 8(a)(2), a complaint must include only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). However, claims alleging fraud must also satisfy the heightened pleading requirement of Rule 9(b), which requires that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). And Rule 9(b) ’s heightened pleading standard applies to securities fraud claims. Cornielsen v. Infinium Cap. Mgmt., LLC , 916 F.3d 589, 598 (7th Cir. 2019). So, generally speaking, Rule 9(b) requires a complaint to "state the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff." Uni*Quality, Inc. v. Infotronx, Inc. , 974 F.2d 918, 923 (7th Cir. 1992) (internal citation omitted). Put differently, a complaint "must describe the who, what, when, where, and how of the fraud." Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co. , 631 F.3d 436, 441–42 (7th Cir. 2011) (internal quotation marks and citation omitted).

Analysis

I. Article III Standing for Non-Purchased Products

Though Defendant does not explicitly reference Rule 12(b)(1), it argues that Plaintiffs lack standing to pursue claims for any of the Products that they did not purchase. Mot. Dismiss at 15–17. Plaintiffs counter that they do have standing to assert claims for all of the Products, even if Plaintiffs did not purchase them, because the Products—and Plaintiffs’ claims regarding them—are all substantially similar. Resp. at 11.

Article III standing is a matter of subject matter jurisdiction, consisting of three elements: "[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins , 578 U.S. 330, 338, 136 S. Ct. 1540, 194 L.Ed.2d 635 (2016) ; see also TransUnion LLC v. Ramirez , ––– U.S. ––––, 141 S. Ct. 2190, 2203, 210 L.Ed.2d 568 (2021). The complaint "need only plausibly suggest each element of standing." Bazile v. Fin. Sys. of Green Bay, Inc. , 983 F.3d 274, 278 (7th Cir. 2020) (internal citations omitted). Although neither party starts with the standing argument, the Court must ensure it has proper subject matter jurisdiction over Plaintiffs’ claims before it can address Defendant's 12(b)(6) arguments. Cook v. Winfrey , 141 F.3d 322, 325 (7th Cir. 1998) ("It is axiomatic that a federal court must assure itself that it possesses jurisdiction over the subject matter of an action before it can proceed to take any action respecting the merits of the action.") (citations omitted).

Here, Plaintiffs allege that "Willard purchased one or more of the Products several times since April 2018" and ...