Walcoff v. Innofoods USA, Inc.

1

2

3

4

5

6

7

8

9 UNITED STATES DISTRICT COURT

10 SOUTHERN DISTRICT OF CALIFORNIA

11

12 CAROL WALCOFF, on behalf of herself Case No. 22-cv-1485-MMA (AHG)

and all others similarly situated,

13

ORDER GRANTING DEFENDANTS’

Plaintiff,

14 MOTION TO DISMISS

v.

15 [Doc. No. 11]

INNOFOODS USA, INC., et al.,

16

Defendants.

17

18

19 In this putative class action, Plaintiff Carol Walcoff (“Plaintiff”) alleges that

20 Defendants Costco Wholesale Corporation and Inno Foods, Inc.1 (“Defendants”)

21 misleadingly label and market certain snack products as “keto” and “keto-friendly,”

22 when, in fact, they are high in carbohydrates and added sugars—ingredients which could

23 easily thwart someone adhering to a ketogenic diet. Doc. No. 9 (First Amended

24 Complaint, the “FAC”) ¶¶ 1, 7. On December 12, 2022, Defendants filed a motion to

25 dismiss Plaintiffs’ FAC in its entirety pursuant to Federal Rules of Civil Procedure

26

27

1 Plaintiff incorrectly names Inno Foods USA, Inc. as a defendant in her FAC. See Doc. Nos. 9 at 2; 11-

28

1 12(b)(1) and 12(b)(6). Doc. No. 11. Plaintiff filed an opposition, Doc. No. 12, to which

2 Defendants replied, Doc. No. 13. The Court found the matter suitable for determination

3 on the papers and without oral argument pursuant to Federal Rule of Civil Procedure

4 78(b) and Civil Local Rule 7.1.d.1. See Doc. No. 14. For the reasons set forth below, the

5 Court GRANTS Defendants’ motion to dismiss.

6 I. BACKGROUND2

7 Plaintiff began purchasing Defendant Inno Foods, Inc.’s (“Inno”) Keto Coconut

8 Cluster and Dark Chocolate Keto Nuggets snacks (the “Products”) in August 2018 from

9 Defendant Costco Wholesale Corporation at several of its locations, including in

10 Carlsbad, California. FAC ¶¶ 1, 28, 76. After consulting her doctor, who advised

11 Plaintiff to “drastically reduce her carbohydrate intake,” Plaintiff began following a

12 ketogenic diet, which “involves heavily ‘restricting the number of carbohydrates and

13 sugar you consume.’” Id. ¶¶ 20–21 (internal citation omitted). Plaintiff alleges Inno’s

14 “labeling, advertising, and marketing campaign is false and misleading” because it touts

15 its Products as “keto” and “keto friendly” even though they contain high net carbs and

16 added high-carb sugars, which are not conducive to a keto diet. Id. ¶¶ 7–8. The front of

17 the Products’ packaging contains labels which state that they contain “4 g[rams] net

18 carbs” and “3 g[rams] of sugar” per serving.3 Id. ¶ 62. Over the last two years, Plaintiff

19 bought over $300 worth of Defendants’ Products because she believed they were “keto,”

20 meaning “no-sugar added and low carb[].” Id. ¶¶ 8, 31–32. If the Products did not

21 contain the phrases “keto,” “keto friendly,” “no funny stuff,” “pure,” and “It’s in the

22 chocolate!” on the labels, Plaintiff would not have paid the same price and would not

23 have been willing to purchase the Products. Id. Although Plaintiff alleges she would not

24

25

2 Reviewing Defendants’ motion to dismiss, the Court accepts as true all facts alleged in the FAC and

26 construes them in the light most favorable to Plaintiff. See Snyder & Assocs. Acquisitions LLC v. United

States, 859 F.3d 1152, 1157 (9th Cir. 2017).

27 3 More specifically, the front label of the “Keto Coconut Cluster” product features a notice that it

contains “4g net carbs per serving,” while the “Dark Chocolate Keto Nuggets” product features a notice

28

1 buy Defendants’ Products again if they contain “added simple carbs (sugars)” or high

2 amounts of carbohydrates, she would be willing to purchase them in the future if they

3 were “actually keto friendly.” Id. ¶¶ 8, 34.

4 Based on the foregoing, Plaintiff initiated this action on behalf of herself and all

5 other persons similarly situated for: (1) Violation of California’s Unfair Competition Law

6 (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. (Count I); (2) Violation of California’s

7 False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500 et seq. (Count II);

8 (3) Violation of California’s Consumer Legal Remedies Act (“CLRA”), Cal. Bus. & Prof.

9 Code § 1750 et seq. (Count III); (4) Unjust Enrichment (Count IV); (5) Breach of Express

10 Warranty (Count V); (6) Violations of the Consumer Fraud Laws of various other states4

11 (Count VI); and (7) Negligent Misrepresentation (Count VII). See generally FAC.

12 II. LEGAL STANDARDS

13 A. Rule 12(b)(1)5

14 A party may challenge the court’s subject-matter jurisdiction through a motion

15 filed pursuant to Federal Rule of Civil Procedure 12(b)(1). See Fed. R. Civ. P. 12(b)(1);

16 see also White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). Because “[f]ederal courts are

17 courts of limited jurisdiction,” “[i]t is to be presumed that a cause lies outside this limited

18 jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

19 Consequently, “the burden of establishing the contrary rests upon the party asserting

20 jurisdiction.” Id.

21 “Rule 12(b)(1) jurisdictional attacks can be either facial or factual.” White, 227

22 F.2d at 1242. “A ‘facial’ attack accepts the truth of the plaintiff’s allegations but asserts

23

24

25 4 Plaintiff alleges violations of various consumer fraud laws in forty states and the District of Columbia

on behalf of herself, a California Class (defined as “[a]ll person in California who purchased the

26 Products for personal or household use . . . between August 25, 2018 until the date of judgment in this

action”), and a Consumer Protection Class (defined as “[a]ll person who reside in states in the United

27 States with similar consumer protections laws . . . who purchased the Products from August 25, 2018

until the date of judgment in this action”). FAC ¶¶ 76, 140–156.

28

1 that they ‘are insufficient on their face to invoke federal jurisdiction.’” Leite v. Crane

2 Co., 749 F.3d 1117, 1121 (9th Cir. 2014) (quoting Safe Air for Everyone v. Meyer, 373

3 F.3d 1035, 1039 (9th Cir. 2004)). “The district court resolves a facial attack as it would a

4 motion to dismiss under Rule 12(b)(6): Accepting the plaintiff’s allegations as true and

5 drawing all reasonable inferences in the plaintiff’s favor, the court determines whether

6 the allegations are sufficient as a legal matter to invoke the court’s jurisdiction.” Id.

7 (citing Pride v. Correa, 719 F.3d 1130, 1133 (9th Cir. 2013)).

8 “A ‘factual’ attack, by contrast, contests the truth of the plaintiff’s factual

9 allegations, usually by introducing evidence outside the pleadings.” Id. (citing Safe Air

10 for Everyone, 373 F.3d at 1039; Thornhill Publ’g Co. v. Gen. Tel. & Elec. Corp., 594

11 F.2d 730, 733 (9th Cir. 1979)). “When the defendant raises a factual attack, the plaintiff

12 must support her jurisdictional allegations with ‘competent proof[]’” and “prov[e] by a

13 preponderance of the evidence that each of the requirements for subject-matter

14 jurisdiction has been met.” Id. (citing Hertz Corp. v. Friend, 559 U.S. 77, 96–97 (2010);

15 Harris v. Rand, 682 F.3d 846, 851 (9th Cir. 2012)). Generally, “if the existence of

16 jurisdiction turns on disputed factual issues, the district court may resolve those factual

17 disputes itself.” Id. at 1121–22 (citing Safe Air for Everyone, 373 F.3d at 1039–40;

18 Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983); Thornhill Publ’g, 594

19 F.2d at 733).

20 “Because standing . . . pertain[s] to a federal court’s subject-matter jurisdiction

21 under Article III, [it is] properly raised in a motion to dismiss under Federal Rule of Civil

22 Procedure 12(b)(1).” White, 227 F.3d at 1242 (citing Bland v. Fessler, 88 F.3d 729, 732

23 n.4 (9th Cir. 1996)).

24 B. Rule 12(b)(6)

25 “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to

26 state a claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’”

27 Conservation Force v. Salazar, 646 F.3d 1240, 1241–42 (9th Cir. 2011) (quoting

28 Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). “A district court’s dismissal for

1 failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is proper if there is

2 a ‘lack of a cognizable legal theory or the absence of sufficient facts alleged under a

3 cognizable legal theory.’” Id. at 1242 (quoting Balistreri v. Pacifica Police Dep’t, 901

4 F.2d 696, 699 (9th Cir. 1988)).

5 “Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a ‘short

6 and plain statement of the claim showing that the pleader is entitled to relief.’” Ashcroft

7 v. Iqbal, 556 U.S. 662, 677–78 (2009) (quoting Fed. R. Civ. P. 8(a)(2)). “[T]he pleading

8 standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands

9 more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 678

10 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, “[a]

11 pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of

12 a cause of action will not do.’” Id. (quoting Twombly, 550 U.S. at 555).

13 “To survive a motion to dismiss, a complaint must contain sufficient factual

14 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id.

15 (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff

16 pleads factual content that allows the court to draw the reasonable inference that the

17 defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

18 “[W]here the well-pleaded facts do not permit the court to infer more than the mere

19 possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the

20 pleader is entitled to relief.’” Id. at 679 (second alteration in original) (quoting Fed. R.

21 Civ. P. 8(a)(2)).

22 Additionally, allegations of fraud or mistake require the pleading party to “state

23 with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).

24 The context surrounding the fraud must “be ‘specific enough to give defendants notice of

25 the particular misconduct . . . so that they can defend against the charge and not just deny

26 that they have done anything wrong.’” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124

27 (9th Cir. 2009) (quoting Bly—Magee v. California, 236 F.3d 1014, 1019 (9th Cir. 2001)).

28 “Averments of fraud must be accompanied by the who, what, when, where, and how of

1 the misconduct charged. A party alleging fraud must set forth more than the neutral facts

2 necessary to identify the transaction.” Kearns, 567 F.3d at 1124 (internal quotation

3 marks omitted) (first quoting Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th

4 Cir. 2003); and then quoting In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.

5 1994), superseded by statute on other grounds).

6 “If a complaint is dismissed for failure to state a claim, leave to amend should be

7 granted ‘unless the court determines that the allegation of other facts consistent with the

8 challenged pleading could not possibly cure the deficiency.’” DeSoto v. Yellow Freight

9 Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well

10 Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). “A district court does not err in

11 denying leave to amend where the amendment would be futile.” Id. (citing Reddy v.

12 Litton Indus., 912 F.2d 291, 296 (9th Cir. 1990), cert. denied, 502 U.S. 921 (1991)).

13 III. REQUEST FOR JUDICIAL NOTICE

14 As an initial matter, Defendants asks the Court to consider two exhibits—a

15 document from the Paleo Foundation entitled “Keto Certified Standards” (Exhibit A) and

16 images of the labels from the Products (Exhibit B)—in support of their motion to dismiss

17 pursuant to the judicial notice doctrine. See Doc. No. 11-2.

18 While the scope of review on a motion to dismiss for failure to state a claim is

19 limited to the complaint, a court may consider evidence on which the complaint

20 necessarily relies if: “(1) the complaint refers to the document; (2) the document is

21 central to the plaintiff[’s] claim; and (3) no party questions the authenticity of the copy

22 attached to the 12(b)(6) motion.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998

23 (9th Cir. 2010) (internal quotation marks and citations omitted). Furthermore, courts may

24 take judicial notice of publications introduced to “indicate what was in the public realm at

25 the time, not whether the contents of those articles were in fact true.” Von Saher v.

26 Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2009) (citing

27 Premier Growth Fund v. All. Capital Mgmt., 435 F.3d 396, 401 n.15 (3d Cir. 2006)); see

28 also Brodsky v. Yahoo! Inc., 630 F. Supp. 2d 1104, 1111 (N.D. Cal. 2009) (“The Court

1 also grants Defendants’ request [for judicial notice] as to Exhibits 31 through 47, Yahoo!

2 Press releases, news articles, analyst reports, and third party press releases to which the

3 [second amended complaint] refers, but not for the truth of their contents”).

4 Here, Plaintiff “does not oppose Defendants’ [request for judicial notice] as it

5 pertains to the Products’ labels” (Exhibit B), but argues that the Court should not

6 consider Exhibit A from the Paleo Foundation. Doc. No. 12-1 at 2.6

7 As to the undisputed exhibit, courts addressing motions to dismiss product-labeling

8 claims routinely take judicial notice of images of the product packaging. See, e.g., Lam

9 v. General Mills, Inc., 859 F. Supp. 2d 1097, 1100 (N.D. Cal. 2012) (“The Court takes

10 judicial notice of the packaging of Fruit Roll–Ups and Fruit by the Foot, examples of

11 which were filed with the Court by General Mills.”); Rooney v. Cumberland Packing

12 Corp., 2012 WL 1512106, at *2 (S.D. Cal. Apr. 16, 2012) (taking notice of reproductions

13 of the panels of two boxes of Sugar in the Raw). Accordingly, the Court GRANTS

14 Defendants’ request for judicial notice as to Exhibit B, which features the Products’

15 labels.

16 As to the disputed exhibit, Defendant contends that Exhibit A is judicially

17 noticeable because it is a publicly available document. See Doc. No. 11-2 at 2. The

18 Court agrees and GRANTS Defendants’ request for judicial notice as to Exhibit A.

19 However, the Court will not consider Exhibit A for the truth of the matters asserted

20 therein. See, e.g., In re Bare Escentuals, Inc. Sec. Litig., 745 F. Supp. 2d 1052, 1067

21 (N.D. Cal. 2010) (granting defendants’ request to take judicial notice of SEC filings, but

22 specifying that they will not “where inappropriate” be considered for the truth of the

23 matter asserted).

24

25

26

27

28

1 IV. DISCUSSION

2 A. Motion to Dismiss for Lack of Standing

3 Defendants argue that Plaintiff lacks standing for two primary reasons: (1) she

4 lacks standing to bring claims based on laws of states where she does not reside, and

5 (2) she lacks standing to seek injunctive relief. See Doc. No. 11-1 at 24–28. In raising

6 their standing challenges, Defendants bring a facial attack to subject matter jurisdiction.

7 Article III standing requires a plaintiff to have “(1) suffered an injury in fact,

8 (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely

9 to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540,

10 1547 (2016) (first citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992); and

11 then citing Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167,

12 180–81 (2000)). The party invoking federal jurisdiction bears the burden to establish

13 standing. Id. The Court addresses Defendants’ standing challenges in turn.

14 1. Nationwide Class Claims

15 First, Defendants argue that Plaintiff, who resides in California, lacks standing to

16 assert nationwide class claims. See Doc. No. 11-1 at 25–26. Plaintiff responds that this

17 argument attempts to prematurely address class certification issues at the pleadings stage.

18 See Doc. No. 12 at 26–29.

19 District courts in California are split on the issue of whether standing inquiries can

20 be deferred until after class certification, but they note a trend that courts can address

21 standing at the pleadings stage and dismiss claims brought under state laws that have no

22 connection to the named plaintiff. Soo v. Lorex Corp., No. 20-cv-01437-JSC, 2020 WL

23 5408117, at *10 (N.D. Cal. Sept. 9, 2020) (“While the Ninth Circuit has not definitively

24 answered whether named plaintiffs have standing to pursue class claims under the

25 common laws of states to which the named plaintiffs have no connection, district courts

26 in this Circuit routinely hold that they do not.”); Senne v. Kansas City Royals Baseball

27 Corp., 114 F. Supp. 3d 906, 921 (N.D. Cal. 2015) (noting the split); see also Schertzer v.

28 Bank of Am., N.A., 445 F. Supp. 3d 1058, 1072, 1072 n.3 (S.D. Cal. 2020) (providing

1 examples and finding that there is a “growing trend” among California district courts to

2 address standing at the pleading stage and dismiss claims “under the laws of states in

3 which no plaintiff resides or has purchased products”); Mercado v. Audi of Am., LLC, No.

4 ED CV18-02388 JAK (SPx), 2019 WL 9051000, at *14 (C.D. Cal. Nov. 26, 2019) (“The

5 Ninth Circuit has not directly addressed this question in the context of multistate

6 claims.”); In re Carrier IQ, Inc., 78 F. Supp. 3d 1051, 1068 (N.D. Cal. 2015) (“Given the

7 prevalence of nationwide class actions, it is perhaps surprising that there is no Ninth

8 Circuit precedent specifically deciding this question.”).

9 Plaintiff brings three causes of action on behalf of a National Class and Consumer

10 Protection Class: violation of the consumer protection acts of “[f]orty states and the

11 District of Columbia,” breach of express warranty in thirty-nine states, and unjust

12 enrichment in all fifty states. FAC ¶¶ 119–156. However, the named Plaintiff is only

13 from California and does not allege that she purchased the at-issue Products in any other

14 state. See id. at ¶¶ 14, 28.

15 This Court agrees with the growing trend that courts can “address the issue of

16 Article III standing at the pleadings stage and dismiss claims asserted under the laws of

17 states in which no plaintiff resides or has purchased products.” Schertzer, 445 F. Supp.

18 3d at 1072; see also Vitiosus v. Alani Nutrition, LLC, No. 21-cv-2048-MMA-MDD, 2022

19 WL 2441303, at *10 (S.D. Cal. July 5, 2022) (“It is well within the Court’s discretion to

20 strike or dismiss Plaintiffs’ nationwide class allegations at the pleadings stage than at

21 class certification.”). Even in circumstances where courts have found they have

22 discretion to defer standing questions until after class certification, the standing inquiry

23 can be addressed when plaintiffs bring claims from states where they do not have a

24 connection. See In re Carrier IQ, Inc., 78 F. Supp. 3d at 1074, 1075; see also Senne, 114

25 F. Supp. 3d at 924 (agreeing with the reasoning of In re Carrier IQ, Inc.). Indeed, “[i]f a

26 complaint includes multiple claims, at least one named class representative must have

27 Article III standing to raise each claim.” Mercado, 2019 WL 9051000, at *15 (quoting

28 Los Gatos Mercantile, Inc v. E.I. DuPont De Nemours & Co., No. 13-cv-01180-BLF,

1 2014 WL 4774611, at *4 (N.D. Cal. Sept. 22, 2014)); see also Soo, 2020 WL 5408117, at

2 *11 (quoting Jones v. Micron Tech. Inc., 400 F. Supp. 3d 897, 909 (N.D. Cal. 2019))

3 (stating that standing must be shown for each claim and distinguishing the facts from

4 Melendres v. Arpaio, 784 F.3d 1254 (9th Cir. 2015)); In re Glumetza Antitrust Litig., No.

5 C 19-05822 WHA, 2020 WL 1066934, at *10 (N.D. Cal. Mar. 5, 2020) (same). The

6 Supreme Court has insisted that “a plaintiff must demonstrate standing separately for

7 each form of relief sought.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)

8 (quoting Friends of the Earth, Inc., 528 U.S. at 185). The fact that this case is a putative

9 class action does not excuse Plaintiff’s obligation to show standing for each claim

10 asserted. See Spokeo, Inc., 136 S. Ct. at 1547 n.6 (quoting Simon v. E. Kentucky Welfare

11 Rts. Org., 426 U.S. 26, 40 n.20 (1976)) (“That a suit may be a class action . . . adds

12 nothing to the question of standing, for even named plaintiffs who represent a class ‘must

13 allege and show that they personally have been injured, not that injury has been suffered

14 by other, unidentified members of the class to which they belong.’”). Plaintiff does not

15 allege a connection to any of the jurisdictions where she does not reside or has not

16 purchased Defendant’s Products. Therefore, the Court finds Plaintiff lacks standing to

17 bring claims under the laws of the states where she does not reside or did not purchase

18 the at-issue Products.

19 Even if the Court found that it had discretion to defer the standing issue until after

20 class certification, the Court would decline to exercise its discretion. See In re Carrier

21 IQ, Inc., 78 F. Supp. 3d at 1074–75. Plaintiff resides in only one jurisdiction, but raises

22 claims from fifty-one jurisdictions. The claims from fifty jurisdictions without a named

23 Plaintiff is vast when compared to the mere seven claims from a jurisdiction with a

24 named Plaintiff. The Court has reservations about subjecting Defendants “to the expense

25 and burden of nationwide discovery without Plaintiff[] first securing actual plaintiffs who

26 clearly have standing and are willing and able to assert claims under these state laws.”

27 Id. at 1074; see also Soo, 2020 WL 5408117, at *10; Jones, 400 F. Supp. 3d at 909; cf.

28 Fed. R. Civ. P. 1.

1 Accordingly, the Court GRANTS Defendants’ Rule 12(b)(1) motion to dismiss

2 and DISMISSES with leave to amend the causes of action under the laws of states

3 where a named Plaintiff does not reside or did not purchase the at-issue Products. If

4 Plaintiff wishes to file a second amended complaint, the Court DIRECTS Plaintiff to

5 identify the applicable state laws and separate the allegations of various state law

6 violations into separate causes of action.

7 2. Injunctive Relief

8 Second, Defendants argue that Plaintiff lacks Article III standing to seek injunctive

9 relief because Plaintiff has not plausibly alleged a threat of future harm. Doc. Nos. 11-1

10 at 26–28; 13 at 13. The Court agrees.

11 To establish standing for injunctive relief, a plaintiff must plead a “threat of injury”

12 that is “actual and imminent, not conjectural or hypothetical.” Davidson v. Kimberly-

13 Clark Corp., 889 F.3d 956, 967 (9th Cir. 2018) (quoting Summers v. Earth Island Inst.,

14 555 U.S. 488, 493 (2009)). Once plaintiffs have been wronged, they are entitled to

15 injunctive relief only if they can show that they face a “real or immediate threat that

16 [they] will again be wronged in a similar way.” Mayfield v. United States, 599 F.3d 964,

17 970 (9th Cir. 2010) (citations and internal punctuation omitted). “Where standing is

18 premised entirely on the threat of repeated injury, a plaintiff must show ‘a sufficient

19 likelihood that he will again be wronged in a similar way.’” Davidson, 889 F.3d at 967

20 (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 102 (1983)). “[A] previously

21 deceived customer may have standing to seek an injunction against false advertising or

22 labeling” based on “inability to rely on the advertising in the future,” “even though the

23 consumer now knows or suspects that the advertising was false at the time of the original

24 purchase, because the consumer may suffer an ‘actual and imminent, not conjectural or

25 hypothetical’ threat of future harm.” Id. at 967, 969 (quoting Summers, 555 U.S. at 493).

26 “Knowledge that the advertisement or label was false in the past does not equate to

27 knowledge that it will remain false in the future.” Id.; see also Brown v. Van’s Int’l

28 Foods, Inc., No. 22-CV-00001-WHO, 2022 WL 1471454, at *11 (N.D. Cal. May 10,

1 2022) (applying the Davidson rule to omissions on labels).

2 At this stage of the proceedings, the Court must presume the truth of Plaintiff’s

3 allegations and construe the allegations in her favor. See Davidson, 889 F.3d at 971

4 (citing Daniels-Hall, 629 F.3d at 998). However, Plaintiff argues that her “allegations in

5 the instant matter ‘track those found in Davidson, almost exactly.’” Doc. No. 12 at 30

6 (emphasis in original) (internal citations omitted). Not so. The Davidson court held that

7 a plaintiff bringing consumer protection causes of action had standing to pursue

8 injunctive relief where she adequately alleged an imminent or actual threat of future harm

9 because the plaintiff:

10

alleged that she “continues to desire to purchase wipes that are suitable for

11

disposal in a household toilet”; “would purchase truly flushable wipes

12 manufactured by [Kimberly–Clark] if it were possible”; “regularly visits

stores . . . where [Kimberly–Clark’s] ‘flushable’ wipes are sold”; and is

13

continually presented with Kimberly–Clark’s flushable wipes packaging but

14 has “no way of determining whether the representation ‘flushable’ is in fact

true.

15

16 Davidson, 889 F.3d at 970–71 (recognizing this conclusion was a “close question”).

17 Here, Plaintiff’s allegation that she “would be willing to purchase products from

18 Defendants in the future so long as Defendants produced a product without added simple

19 carbs (sugars) and low carbohydrates that was actually ‘keto friendly,’” FAC ¶ 34, lacks

20 the specificity in Davidson where the plaintiff there “continu[ed] to desire” the specific

21 product manufactured by defendant. Compare FAC ¶ 34, with Davidson, 889 F.3d at

22 970–71.

23 In addition, Plaintiff fails to establish standing for injunctive relief because she

24 cannot show a likelihood of further harm. Plaintiff alleges that Defendants falsely market

25 their Products with “buzzwords” and phrases such as “keto,” “keto-friendly,” “no funny

26 stuff,” “pure,” and “it’s in the chocolate!” See FAC ¶¶ 60–62. However, Plaintiff

27 “do[es] not dispute the veracity of the nutrition facts or ingredient labeling on the

28 [P]roducts.” See Stewart v. Kodiak Cakes, LLC, 537 F. Supp. 3d 1103, 1127 (S.D. Cal.

1 2021). For example, Plaintiff does not challenge the information on the front labels of

2 each of the at-issue Products, which state that they contain “4g net carbs” and “3g sugars”

3 per serving. See generally FAC. Rather, Plaintiff only complains about the marketing

4 language found on the Products’ packaging. In the future, Plaintiff can check the

5 nutrition facts or ingredient labeling to assess if the Products contain ingredients which

6 she believes are not conducive to her keto diet. Therefore, Plaintiff does not establish

7 Article III standing to assert her claim for injunctive relief based on her theory of

8 misleading “buzzword” marketing statements, such as “keto” and “keto-friendly.”

9 Accordingly, the Court GRANTS Defendants’ Rule 12(b)(1) motion to dismiss

10 and DISMISSES Plaintiff’s claim for injunctive relief without leave to amend.

11 3. Conclusion

12 For the foregoing reasons, the Court GRANTS Defendants’ motion to dismiss

13 brought under Rule 12(b)(1).

14 B. Motion to Dismiss for Failure to State a Claim

15 Defendants challenge each of Plaintiff’s causes of action.7 See generally Doc.

16 No. 11-1. The Court will begin by addressing whether Plaintiff states a claim for her

17 consumer protection causes of action.

18 Plaintiff’s causes of action under California’s consumer protection statutes are

19 governed by the “reasonable consumer” standard. See Williams v. Gerber Products, 552

20 F.3d 934, 938 (9th Cir. 2008); Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496,

21 506–07 (2003) (“[U]nless the advertisement targets a particular disadvantaged or

22 vulnerable group, it is judged by the effect it would have on a reasonable consumer.”).

23 To plead UCL and FAL claims “based on false advertising or promotional practices,” a

24 plaintiff need “‘only to show that members of the public are likely to be deceived.’”

25

26

27 7 As the Court already dismissed Plaintiff’s claims to the extent they are brought under the laws of states

where Plaintiff does not reside or did not purchase the Products, see supra § IV.A.1, the Court solely

28

1 Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979, 985 (9th Cir. 2015). The same

2 reasonable consumer standard applies to CLRA claims, see Williams, 552 F.3d at 938;

3 and the analysis of a CLRA claim is essentially the same as for UCL and FAL claims.

4 See In reConAgra Foods, Inc., 90 F.Supp.3d 919, 982 (C.D. Cal. 2015) (“Courts

5 generally consider claims under the [UCL, FAL, and CLRA] together.”). “[T]hese laws

6 prohibit not only advertising which is false, but also advertising which, although true, is

7 either actually misleading or which has the capacity, likelihood or tendency to deceive or

8 confuse the public.” Kasky v. Nike, Inc., 27 Cal. 4th 939, 951 (2002) (quoting Leoni v.

9 State Bar, 39 Cal. 3d 609, 626 (1985)).

10 This Court is mindful of the Ninth Circuit’s general rule that “whether a business

11 practice is deceptive will usually be a question of fact not appropriate for decision on

12 demurrer. [Emphasis added].” Williams, 552 F.3d at 938–39 (“The facts of this case . . .

13 do not amount to the rare situation in which granting a motion to dismiss is appropriate.

14 [Emphasis added]”). However, “usually” and “rare” do not connote “never,” and there

15 have been an ever-increasing number of cases in which a motion to dismiss was found to

16 be appropriately granted where the issue was whether a product label was deceptive or

17 misleading to a reasonable consumer. See, e.g., Becerra v. Dr. Pepper/Seven Up, Inc.,

18 945 F.3d 1225, 1228–31 (9th Cir. 2019); Ebner v. Fresh, Inc., 838 F.3d 958, 965–66 (9th

19 Cir. 2016); Clark v. Westbrae Natural, Inc., No. 20-cv-03221-JSC, 2020 WL 7043879

20 (N.D. Ca. Dec. 1, 2020); Cheslow v. Ghirardelli Chocolate Co., 472 F.Supp.3d 686 (N.D.

21 Cal. 2020). Further, considering a motion to dismiss to determine whether allegations

22 amount to a “plausible” claim is a “context-specific task that requires the reviewing court

23 to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 669.

24 The gravamen of Plaintiff’s claims in her FAC is that Defendants’ Products are

25 falsely and misleadingly labeled as “keto” and “keto-friendly” because they “are high in

26 net carbohydrates, and contain . . . high glycemic sweeteners such as cane sugar, brown

27 rice syrup, and tapioca syrup.” See FAC ¶¶ 90–91, 101–102.

28

1 However, as highlighted by Defendants, the Products’ front labels prominently

2 disclose that the Products contain “4g net carbs” and “3g sugars” per serving. See id.

3 ¶¶ 4, 62; Doc. No. 11-1 at 17, 19. The Ninth Circuit has stated that “Williams stands for

4 the proposition that if the defendant commits an act of deception, the presence of fine

5 print revealing the truth is insufficient to dispel that deception.” Ebner, 838 F.3d at 966

6 (citing Williams, 552 F.3d at 939). Here, the Court finds no deceptive act to be dispelled.

7 See id.

8 In her FAC, Plaintiff attaches photos of Defendants’ Products. See FAC ¶¶ 4, 62.

9 Each of these photos show in large, bold typeface the word “keto” on the front of the

10 packaging. See id. However, each of the photos also clearly show the number of grams

11 of net carbs and sugars per serving almost directly below the word “keto.” See id.

12 Plaintiff does not dispute the representation on the Products’ labels that they contain “4g

13 net carbs” and “3g sugars” per serving. Instead, she contends that Defendants’

14 disclosures of the net carb and sugar content on the front of the Products “actually

15 contribute to misleading the reasonable consumer.” Doc. No. 12 at 19.

16 Plaintiff argues that the disclosures “lack critical clarification about the source of

17 the ‘4g Net Carbs’ and the ‘3g Sugars.’” Id. In addition, Plaintiff claims that “[n]owhere

18 on the Products’ packaging does Defendant Inno Foods advertise or draw attention to the

19 truth that the ‘4g Net Carbs Per Serving’ and ‘3g Sugars Per Serving’ are sourced from

20 high-carb sweeteners,” such as cane sugar, brown rice sugar, and tapioca syrup. Id.; FAC

21 ¶ 7. However, the ingredient list on the back of the Products—which Plaintiff does not

22 dispute the veracity of in her FAC—clearly discloses that the Products contain the

23 aforementioned “high-carb sweeteners.”8 Doc. No. 12 at 19. Therefore, based on

24

25

26 8 The Court does not accept as true allegations contradicted by documents attached to or referred to in

the complaint, “unwarranted deductions of fact, or unreasonable inferences.” Seven Arts Filmed Ent.

27 Ltd. V. Content Media Corp. PLC, 733 F.3d 1251, 1254 (9th Cir. 2013) (quoting Daniels-Hall, 629 F.3d

at 998); Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295–96 (9th Cir. 1998) (citing In re Stac

28

1 Plaintiff’s own definitions of a ketogenic diet in her FAC, if a consumer were uncertain

2 of the meaning of “keto” after seeing the net carb and sugar content listed clearly on the

3 front labels of the Products, a reasonable consumer would be aware of the nutrition facts

4 and ingredients lists on the back of the Products to clarify any uncertainty. See Ebner,

5 838 F.3d at 966 (holding where there is no deception on the front label, accurate

6 information on the back of the package is sufficient to inform the reasonable consumer).

7 To the extent that Plaintiff’s theory of her case rests on the premise that “4g net

8 carbs” and “3g sugars” per serving effectively makes the Products not “keto,” this

9 contention is belied by Plaintiff’s allegations in her FAC. Plaintiff alleges that a “‘well-

10 formulated’ ketogenic diet is composed of less than 20-50 grams of net total

11 carbohydrate[s], per day.” FAC ¶¶ 22– 23, 51. Thus, if adhering to the recommended

12 serving size on Defendants’ Products, a consumer should be able to stay within the 20 to

13 50 grams of net carbs per day that Plaintiff alleges is compatible with a keto diet in her

14 FAC. In addition, Plaintiff does not allege in her FAC that a ketogenic diet requires a

15 person to completely exclude from their diet sugars or what she calls “high-carb

16 sweeteners,” such as cane sugar, brown rice sugar, and tapioca syrup. Moreover, the

17 Court finds Plaintiff’s expectation that the Products be “no-sugar-added” just because

18 they contain the word “keto” as part of their name, implausible. See FAC ¶ 32. Given

19 that each of the front labels on the Products gives notice of the net carbohydrate content,

20 and that Plaintiff notes that “sugars” are one of the three “different types of

21 carbohydrates,” a reasonable consumer would check the back packaging to confirm

22 whether Defendants’ Products are in line with their version of the keto diet and whether

23 they contain sugar.10 Id. ¶¶ 52, 62; Ebner, 838 F.3d at 966. Therefore, because Plaintiff

24 does not dispute the truth of the “4g net carbs” and “3g sugars” claims on the front labels

25

26

unreasonable inferences or deductions of fact in the face of the contradictory packaging pictured in

27 Plaintiff’s own FAC.

9 See FAC ¶¶ 6–8, 41–59.

28

1 of the Products, and—based on Plaintiff’s allegations in her FAC—these claims are not

2 necessarily incompatible with a keto diet, the Court finds that Plaintiff has not

3 demonstrated any affirmative misrepresentations which would preclude a consumer from

4 having to consider the rear labels of the Products.

5 Based on the foregoing, the Court finds that Plaintiff has not pleaded any plausible

6 claims based on misrepresentations under the applicable consumer protection laws cited

7 above.11 Because Plaintiff has failed to overcome this preliminary hurdle, the Court

8 declines to address any of Plaintiff’s remaining arguments. In addition, Plaintiff’s

9 remaining causes of action, which are based on the same labels for the at-issue Products,

10 are defective for the same reasons.12 As such, the Court GRANTS Defendants’ motion

11 to dismiss brought under Rule 12(b)(6) with leave to amend.

12 V. CONCLUSION

13 For the foregoing reasons, the Court GRANTS Defendants’ motion to dismiss.

14 Plaintiff may file a second amended complaint on or before June 1, 2023. Any second

15 amended complaint will be the operative pleading, and therefore Defendants must

16 respond within the time prescribed by Federal Rule of Civil Procedure 15. Any claim not

17 re-alleged in the second amended complaint will be considered waived. See CivLR 15.1;

18 Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1546 (9th Cir.

19

20

21 11 Although only mentioned once in the general allegations in her FAC, see ¶ 62, to the extent Plaintiff

also rests her claims on the following statements: “pure,” “it’s in the chocolate!” and “no funny stuff,”

22 the Court finds that these statements are non-actionable puffery because they “do not describe ‘specific

or absolute characteristics’ of the [P]roduct[s], but rather involve ‘generalized, vague, and unspecified

23 assertions.” Hadley v. Kellogg Sales Co., 243 F. Supp. 3d 1074, 1088 (N.D. Cal. 2017) (quoting

Anunziato v. eMachines, Inc., 402 F. Supp. 2d 1133, 1139 (C.D. Cal. 2005)). Therefore, the Court

24

DISMISSES Plaintiff’s claims premised on the aforementioned statements without leave to amend.

25 12 See Gudgel v. Clorox Co., 514 F. Supp. 3d 1177, 1186–88 (N.D. Cal. 2021) (dismissing UCL, FAL,

CLRA, unjust enrichment, and negligent misrepresentation claims “because plaintiff alleges no facts

26 showing” any misrepresentation or deception on the product’s label); Nibbi Bros. v. Home Fed. Sav. &

Loan Ass’n, 205 Cal. App. 3d 1415, 1423 (1988) (an unjust enrichment claim fails if the defendant made

27 no actionable misrepresentation); Rice v. Sunbeam Prods., Inc., No. 12-cv-7923-CAS-AJWx, 2013 WL

146270, at *12 (C.D. Cal. Jan. 7, 2013) (dismissing an express warranty claim absent an “unequivocal

28

1 || 1989) (“[A]n amended pleading supersedes the original.”). In addition, Plaintiff is

2 || cautioned that any future filings not compliant with Civil Local Rules 5.1 and 7.1(h) will

3 || be stricken.

4 IT IS SO ORDERED.

5 || Dated: May 4, 2023

7 United States District Judge

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 8 Plaintiff's FAC and opposition to Defendants’ motion to dismiss were in a font size smaller than the

14-point standard font size required by the Court’s Local Rules.