PIERRE v. HEALTHY BEVERAGE LLC D/B/A THE HEALTHY BEVERAGE COMPANY

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

LAMARTINE PIERRE, JR. et al.,

Plaintiffs,

v. CIVIL ACTION

NO. 20-4934

HEALTHY BEVERAGE, LLC,

Defendant.

PAPPERT, J. February 28, 2022

MEMORANDUM

Plaintiffs allege Healthy Beverage misled consumers by labeling its organic iced

green tea “lightly sweetened” notwithstanding its high sugar content. They seek to

bring breach of warranty and unjust enrichment claims on behalf of a nationwide class,

and state consumer protection claims on behalf of eight subclasses. Healthy Beverage

moves to dismiss Plaintiffs’ Amended Complaint. It argues they lack standing and that

their claims fail on the merits because, among other reasons, “lightly sweetened” is a

subjective description of the tea’s taste. The Court grants the Motion in part and

denies it in part.

I

Healthy Beverage sells organic iced green tea in several flavors and labels it

“lightly sweetened.” (Am. Compl. ¶ 1, n.7, ECF 15.)1 A rectangular banner displaying

1 Plaintiffs named “The Healthy Beverage Company, LLC” as the defendant when they filed

their initial complaint in October of 2020. (ECF 1.) According to Defendant, “Healthy Beverage,

LLC” was a Pennsylvania limited liability company that converted to a Texas limited liability

company named “Steaz, LLC” in November of 2020. (Brief in Supp. of Mot. to Dismiss Compl. n.1,

ECF 9-1.) Plaintiffs subsequently named “Healthy Beverage LLC d/b/a The Healthy Beverage

1

the words “lightly sweetened” runs across the front of each can, and the same phrase

appears on its website. Ud. at 16-17.) One sixteen-fluid-ounce can contains twenty

grams of sugar, all added—which amounts to forty percent of the recommended

maximum daily intake. See (id. at 16). The amount of added sugar and number of

calories (eighty per can) are specified on the can’s nutrition facts panel. Ud.) This

information is important to consumers who prefer food and drinks with low sugar

content because of the health risks tied to excessive sugar consumption. See (id. at □□

17-18).

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Company” as the defendant in their Amended Complaint. (ECF 15.) The Court will refer to

Defendant as “Healthy Beverage.”

Lamartine Pierre Jr. is one of eleven named Plaintiffs residing in nine different

states who purchased the tea “several times over the last four years” at a grocery store

or retailer.2 (Id. at ¶¶ 25–36, 42–53.) They seek to bring claims on behalf of a

nationwide class and nine state-specific subclasses and invoke jurisdiction under the

Class Action Fairness Act, alleging at least 100 proposed class members, an aggregated

claim value in excess of five million exclusive of interests or costs and that some

members are citizens of states different from Healthy Beverage. (Id. at ¶ 38.)

Plaintiffs allege Healthy Beverage intentionally misled consumers by labeling

the tea “lightly sweetened” despite its high sugar content. See (id. at ¶¶ 1–6, 72–81).

They claim they took the lightly sweetened label to mean the tea had little sugar, that

they would not have purchased or paid more for it if they knew it did not have low

sugar and that they would repurchase it were it “remedied or reformulated” to conform

to the label. (Id. at ¶ 42.) They allege Healthy Beverage promotes the tea’s low sugar

content on its can to charge a premium and that consumers who pay it expect the tea’s

labeling to comport with its listed ingredients. (Id. at ¶¶ 63–65.) According to

Plaintiffs, the lightly sweetened label induces consumers to purchase a product they

believe is compatible with their health preferences in lieu of cheaper alternatives. (Id.

at ¶ 66.) They claim Healthy Beverage’s labeling of the tea is deceptive since the tea is

high in sugar. (Id. at ¶ 71.)

Plaintiffs assert claims for breach of express warranty and the implied warranty

of merchantability and, in the alternative, unjust enrichment on behalf of the

2 One plaintiff, Shannon Hood, voluntarily dismissed her claims after Healthy Beverage filed

its Motion. (ECF 29.)

3

nationwide class; and claims under Alaska, California, Illinois, Massachusetts, New

York, Oklahoma, Pennsylvania, Texas and Wisconsin law on behalf of the state-specific

subclasses.3 (Id. at ¶¶ 90–223, n.16.) Plaintiffs seek an order certifying the nationwide

class and subclasses pursuant to Federal Rule of Civil Procedure 23, and naming

Plaintiffs as class representatives and their lawyers as class counsel. (Id. at 43.) They

ultimately demand monetary, declaratory and injunctive relief. (Id. at 43–44.)

Healthy Beverage seeks dismissal under Rules 12(b)(1) and 12(b)(6). (ECF 19.)

It argues Plaintiffs have not plausibly alleged standing, that their claims lack factual

support, that their theory of how Healthy Beverage misled consumers is dubious and

that their claims for false advertising, consumer fraud, unjust enrichment and breach

of warranty fail for additional reasons. (Brief in Supp. of Mot. to Dismiss Am. Compl.

at 1–3, ECF 19-1.) Plaintiffs responded to Healthy Beverage’s Motion, and Healthy

Beverage filed a Reply. (ECF 20; ECF 22.) Healthy Beverage later filed separate

Notices of Supplemental Authority following two 2021 decisions from the Southern

District of New York, and Plaintiffs responded to both. (ECF 23–25, 27–28.)

II

A

A plaintiff bears the burden to establish Article III standing by satisfying “three

well-recognized” elements: (1) he suffered an injury in fact, (2) the injury is fairly

3 Plaintiffs bring their state law claims pursuant to the following statutes: Alaska Stat. Ann. §

45.50.471; Cal Bus. & Profs. Code §§ 17200, 17500; Cal Civ. Code § 1770; 815 Ill. Comp. Stat. Ann.

505/2, 510/2; Mass. Gen. Laws Ann. 93A, § 2; N.Y. Gen. Bus. Law §§ 349–50; Okla. Stat. Ann. tit. 15,

§ 753; 73 PA. Stat. and Cons. Stat. § 201-2, -3; and Tex. Bus. & Com. Code Ann. § 17.46, .50. The

Court grants Plaintiffs’ request to withdraw their claim under Wis. Stat. Ann. § 100.18. (Opp. to

Mot. to Dismiss Am. Compl. 24 n.12, ECF 20.)

4

traceable to the defendant’s challenged action and (3) it is likely rather than speculative

that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife,

504 U.S. 555, 560–61 (1992); In re Horizon Healthcare Servs. Inc. Data Breach Litig.,

846 F.3d 625, 633 (3d Cir. 2017). The plaintiff must make this showing for “each type

of relief sought.” Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009). The

standing inquiry is a “threshold” question in every case that asks “whether the litigant

is entitled to have the court decide the merits of the dispute or of particular issues.”

Warth v. Seldin, 422 U.S. 490, 498 (1975). A lawsuit’s status as a class action “adds

nothing to the question of standing,” because even a class’s named plaintiffs “must

allege and show that they personally have been injured.” Simon v. E. Ky. Welfare Rts.

Org., 426 U.S. 26, 40 n.20 (1976) (internal quotation marks omitted).

Article III standing’s three requirements must be proved “with the manner and

degree of evidence required at the successive stages” of litigation. Lujan, 504 U.S. at

561. On a motion to dismiss, “general factual allegations of injury” may be sufficient

because of the presumption that “general allegations embrace those specific facts that

are necessary to support the claim.” Id. (quoting Lujan v. Nat’l Wildlife Fed’n, 497 U.S.

871, 889 (1990)). The standing question must be kept separate from “any assessment of

the merits,” and courts are to assume the plaintiff “has stated valid legal claims.”

Cottrell v. Alcon Labs., 874 F.3d 154, 162 (3d Cir. 2017) (noting that although standing

analysis “may necessarily reference the ‘nature and source of the claim[s] asserted,’”

courts must focus on “whether the plaintiff is the proper party” to bring them).

Rule 12(b)(1) governs motions to dismiss for lack of standing because standing is

jurisdictional. Ballentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007). The Court

5

must first determine whether a defendant’s challenge to standing is facial or factual.

Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357–58 (3d Cir. 2014). Whereas a

facial attack “contests the sufficiency of the pleadings,” a factual attack “concerns the

actual failure of a plaintiff’s claims to comport factually with the jurisdictional

prerequisites.” Id. at 358 (internal citations and quotation marks omitted) (alterations

removed). Healthy Beverage has yet to answer Plaintiffs’ Amended Complaint, so the

Court must construe its Motion as a facial challenge. See Mortensen v. First Fed. Sav.

& Loan Ass’n, 549 F.2d 884, 891–92, 892 n.17 (3d Cir. 1977).

For facial challenges to standing, the Court can consider only the complaint’s

allegations and “documents referenced therein and attached thereto.” Aichele, 757 F.3d

at 358 (quoting In re Schering Plough Corp. Intron, 678 F.3d 235, 243 (3d Cir. 2012));

see Thorne v. Pep Boys Manny Moe & Jack Inc., 980 F.3d 879, 885 (3d Cir. 2020)

(explaining that facial attacks argue plaintiffs’ “factual allegations cannot meet the

elements of standing”). It must take well-pleaded allegations as true and draw

reasonable inferences in the plaintiff’s favor. Hendrick v. Aramark Corp., 263 F. Supp.

3d 514, 517 (E.D. Pa.), appeal dismissed, 2017 WL 5664867 (3d Cir. Oct. 31, 2017)

(citing Aichele, 757 F.3d at 358). Like on a 12(b)(6) motion to dismiss, the complaint

must include “‘sufficient factual matter’ that would establish standing if accepted as

true.” Horizon Healthcare Servs., 846 F.3d at 633 (quoting Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009)).

B

Healthy Beverage attacks Plaintiffs’ Article III standing on three grounds.

(Brief in Supp. of Mot. to Dismiss. Am. Compl. 7–14.) First, it contends they do not

6

plausibly allege an injury in fact for any of their claims. (Id. at 7.) Second, it claims

Plaintiffs do not have standing to seek injunctive relief because they do not plausibly

allege likely future harm. (Id.) Third, it argues Plaintiffs do not have standing to bring

nationwide claims using the laws of states they do not reside or allege injury in. (Id.)

Plaintiffs respond that they have plausibly alleged standing since they suffered

an economic injury by paying a premium for the tea, that they can pursue injunctive

relief because the tea’s unreliable labeling dissuades them from purchasing a product

they want and that they can assert the nationwide state law claims because the Court

should defer ruling on the relevant standing question until class certification. (Opp. to

Mot. to Dismiss Am. Compl. 6–16.)

1

i

Injury in fact is the “[f]irst and foremost” of the three Article III standing prongs.

Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (quoting Steel Co. v. Citizens for Better

Env’t, 523 U.S. 83, 103 (1998)). To establish an injury in fact, a plaintiff must show the

“invasion of a concrete and particularized legally protected interest resulting in harm

that is actual or imminent, not conjectural or hypothetical.” Finkelman v. National

Football League, 877 F.3d 504, 510 (3d Cir. 2017) (internal quotation marks omitted).

These discrete “components” should be analyzed separately. See Cottrell, 874 F.3d at

163 (explaining that when courts “cast aside the essential components of injury in fact

in favor of more generalized, abstract discussion, they risk improperly, if inadvertently,

crossing over in their analysis from standing to merits”).

7

First, an economic interest is a “legally protected interest” for injury-in-fact

purposes, and such an interest can stem from the common law or “statutes creating

legal rights, the invasion of which creates standing.” Id. at 164 (quoting Lujan, 504

U.S. at 578 (internal quotation marks omitted)). Second, to be concrete an injury in fact

must be “real” and not “abstract,” and “actually exist.” Spokeo, 578 U.S. at 340. The

concreteness component is “distinct” from the particularity component, which requires

that the plaintiff be injured “in a personal and individual way.” Cottrell, 874 F.3d at

167 (internal quotation marks omitted). Finally, the actual-or-imminent component

aims to distinguish plaintiffs “who have alleged ‘that [they] ha[ve] been or will in fact

be perceptibly harmed by the challenged [defendants’] action’ from those who claim only

that they ‘can imagine circumstances in which [they] could be affected by the

[defendant’s] action.’” Id. at 168 (alterations in original) (quoting United States v.

Students Challenging Regul. Agency Procs. (SCRAP), 412 U.S. 669, 688–89, 693 (1973)).

Notwithstanding the need to prove injury in fact’s distinct components, it is

“not Mount Everest” but rather a “very generous” standard, demanding only that the

plaintiff allege a “specific, ‘identifiable trifle’ of injury.” Danvers Motor Co., Inc. v. Ford

Motor Co., 432 F.3d 286, 294 (3d Cir. 2005); Bowman v. Wilson, 672 F.2d 1145, 1151 (3d

Cir. 1982) (quoting SCRAP, 412 U.S. at 686–90, 689 n.14). Economic injury is a

“paradigmatic” form of injury in fact. Danvers Motor, 432 F.3d at 291; see id. at 293

(explaining that it is frequently “assumed without discussion” that “[m]onetary harm is

a classic” type of injury in fact); Cottrell, 874 F.3d at 163 (asserting that allegations of

financial injury “[t]ypically” will “easily satisfy” the injury-in-fact requirement). One

type of economic injury is “paying a [price] premium.” Kacocha v. Nestle Purina Petcare

8

Co., No. 15-5489, 2016 WL 4367991, at *7 (S.D.N.Y. Aug. 12, 2016); see generally In re

Johnson & Johnson Talcum Powder Prods. Mktg., Sales Pracs. & Liab. Litig., 903 F.3d

278, 282–83 (3d Cir. 2018).

Healthy Beverage argues Plaintiffs do not plausibly allege an injury in fact

because they have not specified how much sugar they believe the tea contained and how

the actual amount deviated from that belief. (Brief in Supp. of Mot. to Dismiss Am.

Compl. 1.) It describes Plaintiffs’ price premium allegations as speculative, conjectural,

conclusory and vague, and asserts Plaintiffs have made “generic allegations” regarding

excessive sugar and possible health concerns but they have not alleged their health was

adversely affected by consuming the tea, or even that they consumed it at all. (Id. at 8–

9; Reply in Supp. of Mot. to Dismiss Am. Compl. 2–3.)

Plaintiffs claim it is irrelevant that they have not alleged consuming the tea

adversely affected their health. (Opp. to Mot. to Dismiss Am. Compl. 7.) They argue

their theory is not based on “adverse health consequences” but rather an economic

injury arising from Healthy Beverage using misleading labeling to induce them to pay a

premium for highly sweetened tea purported to be low in sugar. (Id. at 7, 10.)

ii

Plaintiffs have plausibly alleged an injury in fact based on the price premium

they paid for Healthy Beverage’s tea. The premium is the difference in price between a

green tea misleadingly labeled as being low in sugar and a tea consumers know is high

in sugar. See (Am. Compl. ¶¶ 61–64). Paying it constitutes classic economic harm. See

Danvers Motor, 432 F.3d at 293. Plaintiffs have met Article III’s standard for injury in

fact. See Bowman, 672 F.2d at 1151. At this stage, the Court presumes Plaintiffs’

9

allegations encompass the specific facts needed to support their claims. See Lujan, 504

U.S. at 561.

It follows that Plaintiffs have plausibly shown the distinct components of injury

in fact. See Cottrell, 874 F.3d at 162–63. Plaintiffs had an economic interest in the

money they used to purchase the tea, and Healthy Beverage “invaded” it by using

deceptive labeling to induce them to purchase or pay more for the tea. See Lujan, 504

U.S. at 560. Plaintiffs’ economic injury is also concrete and particularized. See Cottrell,

874 F.3d at 167. It is concrete because Healthy Beverage’s misleading labeling of the

tea caused a real, not-abstract economic injury: enticing Plaintiffs to part with their

money. See Spokeo, 578 U.S. at 340. Their injury is also particularized because it

personally affected each Plaintiff who relied on Healthy Beverage’s misrepresentation

that the tea was lightly sweetened. See id. at 339. Finally, Plaintiffs allege they

suffered an actual, perceptible injury by paying a price premium for the tea. See

Cottrell, 874 F.3d at 168.

Courts evaluating allegations of economic injury similar to Plaintiffs’ have ruled

they plausibly alleged an injury in fact. In Kacocha, for example, the district court

denied dismissal on Article III standing grounds when a purchaser of dog-treat

products alleged he “paid [a] premium price” because defendant represented on the

products’ packaging and in commercials that bacon was the main ingredient when it

was not. 2016 WL 4367991, at *7. In a similar case, the Second Circuit vacated the

district court’s standing-based dismissal of allegations that Whole Foods overcharged

customers by overstating packaged food weights, pointing out that “overpaying for a

product results in a financial loss constituting a particularized and concrete injury in

10

fact.” John v. Whole Foods Mkt. Grp., Inc., 858 F.3d 732, 736–37 (2d Cir. 2017). And in

Manchouk v. Mondeléz Int’l Inc., the district court concluded a purchaser of Newton

cookies plausibly alleged an economic injury under a price premium theory from relying

on labeling that the cookies were “made with real fruit” when they contained only

“processed fruit purée.” No. 13-02148, 2013 WL 5400285, at *2 (N.D. Cal. Sept. 26,

2013); see also Rice v. Electrolux Home Prods., Inc., No. 15-371, 2020 WL 247284, at *8

(M.D. Pa. Jan. 15, 2020) (concluding the purchaser of a microwave oven plausibly

alleged an economic injury in fact on the ground that he would have paid less for or not

purchased it had he known its handle would overheat).4

That Plaintiffs do not allege they were physically harmed by consuming the tea

is irrelevant. While their Amended Complaint describes health risks associated with

excessive sugar consumption, it makes clear Plaintiffs’ theory of injury is that Healthy

Beverage’s misleading labeling caused them to suffer economic harm by paying a price

premium—not that they suffered adverse health consequences from consuming the tea.

(Am. Compl. ¶¶ 10–16.) These are distinct forms of injury in fact, and Paintiffs allege

only one of them. See, e.g., Adinolfe v. United Techs. Corp., 768 F.3d 1161, 1172 (11th

Cir. 2014) (noting that “[e]conomic harm and physical injury are well-established

4 The cases Healthy Beverage relies on are either distinguishable, unpersuasive or both. Most

notably, the Court’s ruling is consistent with In re Johnson & Johnson Talcum Powder Prods. Mktg.,

Sales Pracs. & Liab. Litig., 903 F.3d 278 (3d Cir. 2018). There, the Third Circuit set out a test for

one theory of economic injury: the “benefit of the bargain theory.” See id. at 281, 283. The Court

need not limit its analysis of Plaintiffs’ economic injury to one particular theory. Rather, it has a

“duty to ‘examine the allegations in the complaint from a number of different angles’ in order to see

if the ‘purported injury can be framed in a way that satisfies Article III.’” Id. at 282 (quoting

Finkelman v. Nat’l Football League, 810 F.3d 187, 197 (3d Cir. 2016)). Plaintiffs have framed their

allegations in a way that plausibly meets Article III standards under a price premium theory.

11

injuries-in-fact” for Article III purposes (emphasis added)); Manchouk, 2013 WL

5400285, at *2 (rejecting the argument that there was no injury in fact because the

purchaser did not allege physical injury).

2

A plaintiff pursuing standing for injunctive relief must satisfy the three prongs

of the Article III standing test. Summers, 555 U.S. at 493. For injury in fact, the

plaintiff needs to demonstrate he is “likely to suffer future injury from the defendant’s

conduct.” Johnson & Johnson, 903 F.3d at 292 (internal quotation marks omitted).

The threat of future injury must be “realistic,” “sufficiently real” and “immediate”—not

“speculative,” “conjectural” or “hypothetical.” McNair v. Synapse Grp. Inc., 672 F.3d

213, 223 (3d Cir. 2012) (quoting Roe v. Operation Rescue, 919 F.2d 857, 864 (3d Cir.

1990)); City of Los Angeles v. Lyons, 461 U.S. 95, 101–02, 106 n.7, 111 (1983). The

Supreme Court has “repeatedly reiterated that ‘threatened injury must be certainly

impending to constitute injury in fact,’ and that ‘[a]llegations of possible future injury’

are not sufficient.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 409 (2013) (emphases

in original) (quoting Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)).

Plaintiffs seek “injunctive relief as pleaded or as the Court may deem proper,”

pursuant to claims brought under state consumer protection statutes. (Am. Compl.

44g.) Healthy Beverage argues Plaintiffs lack standing to pursue injunctive relief

because they do not intend to purchase the tea again and they now acknowledge how

much sugar it contains. (Brief in Supp. of Mot. to Dismiss Am. Compl. 11–12.)

Plaintiffs respond that they would purchase the tea again were it “remedied or

reformulated” to conform with its labeling, and their inability to rely on the labeling

12

causes them to not buy the tea even though they want to. (Opp. to Mot. to Dismiss Am.

Compl. 11.)

Plaintiffs have not plausibly alleged standing to pursue injunctive relief; Third

Circuit case law forecloses their claim. In In re Johnson & Johnson, the Third Circuit

found plaintiff lacked standing to seek injunctive relief because she knew of the health

risks associated with a product she alleged was improperly marketed. 903 F.3d at 292–

93. The court reasoned plaintiff could not show a likelihood of future injury given she

was “well aware” of the information defendant’s marketing allegedly failed to disclose.

Id. (refusing to “give cognizance to this sort of ‘stop me before I buy again’ claim”). It

described as a “crucial fact” consumers’ awareness of the “allegedly deceptive business

practices from which they [seek] future protection” and noted the “law accords people

the dignity of assuming that they act rationally, in light of the information they

possess.” Id. at 293 (citing McNair).

Here, Plaintiffs have not shown they are likely to suffer future injury from

Healthy Beverage’s allegedly misleading labeling of the tea. Plaintiffs’ claim to future

injury is hypothetical and not certainly impending because they allege no plans to

purchase the tea as presently formulated: they say they will not buy it again unless its

composition is modified to align with its labeling. See (Am. Compl. ¶¶ 42–53); Lyons,

461 U.S. at 101–02; Clapper, 568 U.S. at 409. If that happens and Plaintiffs then

purchase the tea, they will not suffer an injury since they will have bought a beverage

with a sugar content they expected.

For now, however, the Court must assume Plaintiffs will act rationally by not

purchasing a tea they allege is misleadingly labeled as a low-sugar beverage. See

13

Johnson & Johnson, 903 F.2d at 293; see also In re Subaru Battery Drain Prods. Litig.,

No. 20-3095, 2021 WL 1207791, at *31 (D.N.J. Mar. 31, 2021) (explaining the Third

Circuit has “squarely rejected” the argument that “repeat customers” have standing to

pursue injunctive relief based on the “threat of injury” they could suffer from

advertising tactics). To the extent Plaintiffs attempt to frame their future injury as an

allegation that they cannot rely on the tea’s labeling, it falls short of establishing

standing for injunctive relief. See Lisowski v. Henry Thayer Co., 501 F. Supp. 3d 316,

327–28 (W.D. Pa. 2020) (citing McNair and In re Johnson & Johnson).

A number of courts have held that allegations similar to Plaintiffs’ do not satisfy

the requirements for standing to seek injunctive relief. See, e.g., Stoneback v.

ArtsQuest, No. 12-3287, 2013 WL 3090714, at *12 (E.D. Pa. June 20, 2013) (concluding

plaintiffs did not have standing to pursue injunctive relief when they failed to show a

likelihood of future injury because they knew beer mugs and steins were made in China

even though defendants marketed them as being made in Germany); Rahman v. Mott’s

LLP, No. 13-3482, 2018 WL 4585024, at *3 (N.D. Cal. Sept. 25, 2018) (same because

plaintiff knew a “No Sugar Added” label did not mean defendant’s apple juice was lower

in sugar than other juices); Hesse v. Godiva Chocolatier, Inc., 463 F. Supp. 3d 453, 465–

66 (S.D.N.Y. 2020) (same because plaintiffs’ allegations of future injury were

“hypothetical” and they knew Godiva chocolates were made in Pennsylvania

notwithstanding the “Belgium 1926” representation on packaging and marketing

materials (emphasis in original)).

14

3

i

The constitutional standing requirements “do not change in the class action

context.” Horizon Healthcare Servs., 846 F.3d at 634. “[A]t least one named plaintiff”

must satisfy Article III. Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 359 (3d Cir.

2015) (internal quotation marks omitted). Named plaintiffs must demonstrate they

“personally have been injured”—not that “other, unidentified” members of the class

they represent were injured. Horizon Healthcare Servs., 846 F.3d at 634 (quoting Lewis

v. Casey, 518 U.S. 343, 357 (1996)); see also Holmes v. Pension Plan of Bethlehem Steel

Corp., 213 F.3d 124, 135 (3d Cir. 2000) (explaining that a plaintiff who does not have an

injury “required for standing to assert claims on his own behalf would also lack

standing to assert similar claims on behalf of a class”). But there is no need for

“unnamed, putative class members” themselves to establish constitutional standing.

Neale, 794 F.3d at 362. If a putative “class representative” has sufficiently alleged

“threshold individual standing,” there is an Article III case or controversy and no

“separate class standing requirement.” Id.; In re Prudential Ins. Co. Am. Sales Prac.

Litig. Agent Actions, 148 F.3d 283, 306–07 (3d Cir. 1998) (internal quotation marks

omitted).

This justiciability requirement is decided “vis-à-vis the named parties.”

Prudential Ins. Co., 148 F.3d at 306; see In re Remicade Antitrust Litig., 345 F. Supp.

3d 566, 585 (E.D. Pa. 2018) (noting that if one plaintiff has Article III standing,

unidentified class members “will not block class standing on a motion to dismiss”).

15

Once named plaintiffs show “they are properly before the court,” the question becomes

“one of compliance” with Rule 23, not Article III. Prudential Ins. Co., 148 F.3d at 307

(quoting Goodman v. Lukens Steel Co., 777 F.2d 113, 112 (3d Cir. 1985)); see Mielo v.

Steak ‘n Shake Operations, Inc., 897 F.3d 467, 480 (3d Cir. 2018) (explaining that

standing analysis “must be limited to a consideration of the class representatives

themselves,” and after that courts use Rule 23 “to ensure that classes are properly

certified” (internal quotation marks omitted)).

District courts routinely conclude at the motion to dismiss stage that any

“standing” questions regarding unnamed, putative class members do not preclude

named plaintiffs who themselves have plausibly alleged Article III standing from

pursuing claims on their behalf. See In re Liquid Aluminum Sulfate Antitrust Litig.,

No. 16-2687, 2017 WL 3131977, at *18–19 (D.N.J. July 20, 2017) (finding named

plaintiffs had standing and then reserving for after class certification “standing

questions” about unnamed, putative class members); Ramirez v. STi Prepaid LLC, 644

F. Supp. 2d 496, 505–06 (D.N.J. 2009) (concluding named plaintiffs had Article III

standing “to bring their individual claims” and that was “all that [was] required” for

standing at the pleading stage); Molock v. Whole Foods Mkt., Inc., 297 F. Supp. 3d 114,

130 (D.D.C. 2018) (named plaintiffs had Article III standing, and upon that showing

courts “should proceed to Rule 23 criteria to determine whether, and to what extent, the

plaintiff[s] may serve in a representative capacity on behalf of the class” (internal

quotation marks omitted)).

Healthy Beverage argues Plaintiffs do not have standing to assert breach of

warranty and unjust enrichment claims on behalf of the nationwide class. (Brief in

16

Supp. of Mot. to Dismiss Am. Compl. 13.) It contends the Court should not reserve a

“ruling on standing” for class certification and that Plaintiffs can assert claims under

the laws of states where they purchased the tea—namely, Alaska, California, Illinois,

Massachusetts, New York, Oklahoma, Pennsylvania, Texas and Wisconsin—but no

others. (Id. at 13–14.) Plaintiffs counter that they can sue under the laws of the

aforementioned states and that the question whether a nationwide class is appropriate

will be addressed during class certification. (Opp. to Mot. to Dismiss Am. Compl. 16.)

ii

Plaintiffs have sufficiently established Article III standing for the nationwide

breach of warranty and unjust enrichment claims. The Court concluded they plausibly

alleged an economic injury in fact, and Healthy Beverage does not argue they have

failed to establish constitutional standing’s causation or redressability prongs. See

supra subsection II.B.1. This means there is an Article III case or controversy. See

Neale, 794 F.3d at 362. There is no additional standing requirement for the putative

nationwide class at this stage. See Prudential Ins. Co., 148 F.3d at 306–07. Nor is

there any need for the unnamed, absent members to demonstrate they have standing.

See Neale, 794 F.3d at 362. The Court will decide questions like typicality and

predominance during class certification. See Prudential Ins. Co., 148 F.3d at 307.5

5 Healthy Beverage mistakenly relies on In re Niaspan Antitrust Litigation. 42 F. Supp. 3d

735 (E.D. Pa. 2014) (Niaspan I). There, our court concluded plaintiffs did not have standing to bring

claims on behalf of state-specific classes for states in which they did not reside or suffer injury. See

Niaspan I, 42 F. Supp. 3d at 758–59; see also In re Niaspan Antirust Litig., No. 13-2460, 2015 WL

8150588, at *2–3 (E.D. Pa. Dec. 8, 2015) (Niaspan II) (explaining its prior decision was “unaffected

by Neale, which addressed the Article III standing of absent class members”). That holding does not

dictate whether Plaintiffs can pursue claims on behalf of certain absent members of a putative,

nationwide class.

17

III

A

To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must allege

“sufficient factual matter, accepted as true, to state a claim for relief that is plausible

on its face.” Iqbal, 556 U.S. at 678 (internal quotation marks and citation omitted). A

complaint must contain “more than labels and conclusions” or “a formulaic recitation of

the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

Its factual allegations must be sufficient to “raise a right to relief above the speculative

level on the assumption that all the allegations in the complaint are true (even if

doubtful in fact).” Id. While these allegations need not be detailed, the complaint must

provide “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.”

Iqbal, 556 U.S. at 678.

Twombly and Iqbal require the Court to take three steps to determine whether

the complaint survives a motion to dismiss. See Connelly v. Lane Constr. Corp., 809

F.3d 780, 787 (3d Cir. 2016). First, it needs to “take note of the elements the plaintiff

Healthy Beverage’s other cases implicate a split in authority within (and outside) the Third

Circuit over whether, at the motion to dismiss stage, named plaintiffs who have Article III standing

in their own right can pursue claims on behalf of members of the putative class they seek to

represent under the laws of states they neither reside nor suffered an injury in. In re Generic

Pharms. Pricing Antitrust Litig., 368 F. Supp. 3d 814, 829–30 (E.D. Pa. 2019). Many courts hold this

question should not be decided before class certification. See, e.g., In re Liquid Aluminum Sulfate,

2017 WL 3131977, at *18–19. But some hold such claims must be dismissed for lack of standing.

See, e.g., In re Magnesium Oxide Antitrust Litig., No. 10-5943, 2011 WL 5008090, at *10 (D.N.J. Oct.

20, 2011). The Court is persuaded by the former approach, which is grounded in Third Circuit case

law and Article III’s case-or-controversy requirement. See Neale, 794 F.3d at 362; Prudential Ins.

Co., 148 F.3d at 306–07.

Healthy Beverage’s arguments relying on the Rules Enabling Act and Rule 1 fare no better.

The Court’s ruling would not have the effect of a civil rule “abridg[ing], enlarg[ing] or modify[ing]” a

substantive right because the Court’s determination is consistent with Article III. See 28 U.S.C. §

2072(b). It also complies with Rule 1: the “just” decision is to follow binding case law.

18

must plead to state a claim.” Id. (internal quotation marks omitted) (alterations

removed). Next, it must identify the allegations that are “not entitled to the

assumption of truth” because they are only legal conclusions. Iqbal, 556 U.S. at 679.

Finally, if the complaint includes well-pleaded factual allegations, the Court “should

assume their veracity and then determine whether they plausibly give rise to an

entitlement to relief.” Connelly, 809 F.3d at 787. The Court must construe factual

allegations in the “most favorable” light for the plaintiff and draw from them “all

reasonable inferences.” Id. at 790.

B

Healthy Beverage argues several of Plaintiffs’ false advertising and consumer

fraud claims do not satisfy Rule 9(b)’s pleading standard. (Brief in Supp. of Mot. to

Dismiss Am. Compl. 21–23.) It also claims more generally that Plaintiffs’ allegations

fail to comply with Rule 8(a)(2)’s less stringent standard. (Id. at 14–17.) Plaintiffs

respond that the Rule 9(b) standard is “relaxed” in the Third Circuit and that their

allegations satisfy Rule 8(a)(2). (Opp. to Mot. to Dismiss Am. Compl. 21–26.)

1

Under Rule 9(b), a party alleging fraud must state its circumstances “with

particularity.” The rule’s particularity requirement places defendants “on notice of the

precise misconduct” they are charged with and safeguards “against spurious charges of

immoral and fraudulent behavior.” Seville Indus. Mach. Corp. v. Southmost Mach.

Corp., 742 F.2d 786, 791 (3d Cir. 1984). But “focusing exclusively on its particularity

language is too narrow an approach and fails to take account of the general simplicity

and flexibility” the rule contemplates. Id. (quoting Christidis v. First Pennsylvania

19

Mortg. Trust, 717 F.2d 96, 100 (3d Cir. 1983)). Fraud allegations will satisfy Rule 9(b)

if the plaintiff specifies time, place or date, or uses “alternative means of injecting

precision and some measure of substantiation” into them. Seville, 742 F.2d at 791. In

particular, Rule 9(b) requires that a plaintiff allege the “essential factual background

that would accompany the first paragraph of any newspaper story—that is, the who,

what, when, where and how of the events at issue.” In re Suprema Specialties, Inc. Sec.

Litig., 438 F.3d 256, 276 (3d Cir. 2006) (quoting In re Rockefeller Center Prop. Sec.

Litig., 311 F.3d 198, 217 (3d Cir. 2002)).

Plaintiffs’ false advertising and consumer fraud claims satisfy Rule 9(b)’s

requirements. They specify the “essential” facts by alleging that, during the previous

four years, Healthy Beverage’s lightly sweetened label deceived Plaintiffs into buying

the tea based on their belief it was low in sugar when it had high sugar content. See

(Am. Compl. ¶¶ 3–5, 42–53, 68–69, n.15); cf. Ham v. Hain Celestial Grp., Inc., 70 F.

Supp. 3d 1188, 1194–95 (N.D. Cal. 2014).6

2

Plaintiffs’ allegations also satisfy Federal Rule 8(a)(2). They have fulfilled the

Rule’s purpose of giving Healthy Beverage “fair notice” of what their claims are and the

“grounds” they rest on. Twombly, 550 U.S. at 155 (internal quotation marks omitted).

6 Healthy Beverage homes in on the when and how questions. As an initial matter, its

arguments are beside the point. This case “turns on an assessment of the very particularly identified

‘what’ in the product label.” Dumont v. Reily Foods Co., 934 F.3d 35, 39 (1st Cir. 2019). In any

event, there is nothing “open-ended” about Plaintiffs’ four-year purchase window. Eromon v. Grand

Auto Sales, Inc., 351 F. Supp. 2d 825, 828 (N.D. Ill. 2004); cf. Whitaker v. Herr Foods, Inc., 198 F.

Supp. 3d 476, 485 (E.D. Pa. 2016) (concluding consumers purchasing the product “between 2010 and

the present” comported with Rule 9(b)). Nor is it unclear how Healthy Beverage allegedly deceived

Plaintiffs: they relied on the tea’s lightly sweetened label in believing it had low sugar content, but it

did not. See (Am. Compl. ¶¶ 42–53).

20

Their allegations “raise [their] right to relief above the speculative level.” Id. While

Healthy Beverage argues Rule 8(a)(2) requires that Plaintiffs “plead basic information

about their alleged purchases,” the allegations satisfy even Rule 9(b)’s “heightened”

pleading standard. See supra subsection III.B.1.7

C

Healthy Beverage argues Plaintiffs’ claims fails because they do not plausibly

allege misleading or deceptive conduct. (Brief in Supp. of Mot. to Dismiss Am. Compl.

17–21.) Plaintiffs counter that Healthy Beverage’s reliance on the tea’s nutrition facts

panel is misplaced. (Opp. to Mot. to Dismiss Am. Compl. 16–21.) The question whether

the tea’s lightly sweetened label is deceptive or misleading underlies all Plaintiffs’

7 Healthy Beverage makes several other meritless arguments. First, it contends

Plaintiffs have not shown their claims comply with applicable statutes of limitations. (Brief in Supp.

of Mot. to Dismiss Am. Compl. 15.) But the Court can grant a motion to dismiss based on an

affirmative defense, such as a statute of limitations, only if its predicate is “apparent from the face of

the complaint.” Bethel v. Jendoco Constr. Corp., 570 F.2d 1168, 1174 n.10 (3d Cir. 1978).

Second, Healthy Beverage argues Plaintiffs do not allege they provided notice, as required

for their breach of express warranty claim. (Brief in Supp. of Mot. to Dismiss Am. Compl. 16.)

Plaintiffs allege their counsel sent Healthy Beverage a demand letter on September 23, 2020—

“[w]ithin a reasonable time after Plaintiffs and other similarly situated consumers knew or should

have known” the tea allegedly had more sugar than its label indicated—that set out Healthy

Beverage’s “misconduct, including that Defendant misrepresented the contents of Steaz tea

regarding its sugar content.” (Am. Compl. ¶ 96.) This is a “factual allegation[],” rather than a

“conclusory statement[],” that Plaintiffs reasonably notified Healthy Beverage of its alleged

breaches, and it properly includes the “date and method by which” Plaintiffs did so. Petrosino v.

Stearn’s Prods., Inc., No. 16-7753, 2018 WL 1614349, at *8 (S.D.N.Y. Mar. 30, 2018). Further,

whether notice is reasonable is a “factual matter left for the jury.” Am. Fed’n of State Cnty. & Mun.

Emps. v. Ortho-McNeil-Janssen Pharms., Inc., No. 08-5904, 2010 WL 891150, at *7 (E.D. Pa. Mar.

11, 2010).

Finally, Healthy Beverage claims Plaintiffs erred by not alleging the varieties of the tea they

purchased. (Brief in Supp. of Mot. to Dismiss Am. Compl. 17.) This argument overlooks how the

Amended Complaint specifies that the allegations are limited to varieties of the tea that are labeled

lightly sweetened but contain allegedly high sugar content. See (Am. Compl. ¶¶ 1, 5, 42–53, n.7).

21

claims under state consumer protection laws. The Court cannot conclude as a matter of

law that it is not, so those claims can proceed to discovery.

1

Many jurisdictions apply an objective reasonable consumer standard to

determine whether a representation on a food or drink label is deceptive or misleading.

See, e.g., Boswell v. Bimbo Bakeries USA, Inc., No. 20-8923, 2021 WL 5144552, at *2

(S.D.N.Y. Nov. 4, 2021) (applying New York law); Montanez v. HSBC Mortg. Corp.

(USA), 876 F. Supp. 2d 504, 519 (E.D. Pa. 2012) (applying Pennsylvania law). Under

this standard, a plaintiff must show the statement was “likely to mislead a reasonable

consumer acting reasonably under the circumstances.” Mantikas v. Kellogg Co., 910

F.3d 633, 636 (2d Cir. 2018) (quoting Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d

Cir. 2013)). There must be “more than a mere possibility” that a defendant’s label

“might conceivably be misunderstood by some few consumers viewing it in an

unreasonable manner.” Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016) (internal

quotation marks omitted). The standard “requires a probability ‘that a significant

portion of the general consuming public or of targeted consumers, acting reasonably in

the circumstances, could be misled.’” Id. Consumers can be deceived by statements

other than “literal falsities.” Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1162

(9th Cir. 2012).

The “primary evidence” in a deceptive advertising case like this is “the

advertising itself.” Fink, 714 F.3d at 742. But “context is crucial.” Id. The Court must

assess the “advertisement as a whole, including disclaimers and qualifying language.”

Mantikas, 910 F.3d at 636. Reasonable consumers, however, are not “expected to

22

consult the Nutrition Facts panel on the [back] of the [can] to correct misleading

information set forth” prominently on the front of it. Id. at 637.

The pleading stage is typically not the “appropriate” time to determine “whether

a business practice is deceptive”—a “question of fact.” Williams, 552 F.3d at 938.

Courts should grant dismissal only “rare[ly].” Id. at 939. An interpretation’s

reasonableness “as a matter of law” usually is addressed at the motion to dismiss stage

“only where, for instance, a plaintiff’s claims as to the impressions that a reasonable

consumer might draw are ‘patently implausible’ or unrealistic.” Eidelman v. Sun

Prods. Corp., No. 16-3914, 2017 WL 4277187, at *4 (S.D.N.Y. Sept. 25, 2017).

2

Plaintiffs plausibly claim the tea’s lightly sweetened label likely would have

misled a reasonable consumer. To start, no such consumer would miss it: “lightly

sweetened” in white letters is set against a rectangular green banner running across

the front of the can, sandwiched between the brand (Steaz) and product type (iced green

tea).8 (Am. Compl. 16.) Plaintiffs allege they expected the “amount of sugar advertised

on the front of the [tea’s] label [to] not substantially deviate” from its ingredients. (Id.

at ¶ 19.) The label led them to believe the tea had low sugar content and ultimately

purchase the tea. See (id. at ¶¶ 4, 42–53). But the tea is not low in sugar. In fact, it

contains twenty grams of added sugar, roughly equal to five teaspoons, as well as 53%

and 80% of the American Heart Association’s recommended maximum daily intake for

men and women, respectively. See (id. at ¶¶ 22–23). Plaintiffs claim they would not

8 Although Plaintiffs point to “lightly sweetened” representations on Healthy Beverage’s

website, their allegations focus on the can label. See, e.g., (Am. Compl. ¶¶ 42–53).

23

have purchased or paid a premium for the tea had they known how much sugar it

contained. (Id. at ¶¶ 42–53.)

The tea’s lightly sweetened label could deceive reasonable consumers into

believing they were buying a beverage with low sugar content. See, e.g., Mantikas, 910

F.3d at 634 (concluding plaintiffs plausibly claimed a reasonable consumer would have

been deceived by defendant’s “whole grain” labels for Cheez-its, whose “primary grain

content” was actually “enriched white flour”); Campbell v. Whole Foods Mkt. Grp., Inc.,

516 F. Supp. 3d 370, 380–88 (S.D.N.Y. 2021) (finding plaintiff plausibly alleged “Honey

Graham Crackers” were deceptively labeled when they contained more refined than

whole grain flour and were primarily sweetened by cane sugar rather than honey);

Gubala v. CVS Pharm., Inc., No. 14-9039, 2016 WL 1019794, at *12 (N.D. Ill. Mar. 15,

2016) (denying dismissal of claims that whey protein powder was deceptively named, as

the name suggested the protein comprises “pure whey protein” rather than “whey

protein mixed with other non-protein substances”).

This is not one of the rare cases where the Court can determine at the motion to

dismiss stage that no reasonable consumer likely would have been deceived by a

representation on a food or drink label. See e.g., Ackerman v. Coca-Cola Co., No. 09-

0395, 2010 WL 2925955, at *15 (E.D.N.Y. July 21, 2010) (refusing to determine that a

“reasonable consumer could not be misled into believing that vitaminwater is a product

that may help maintain healthy dietary practices and fail to appreciate that the

product is not solely composed of vitamins and water”). Plaintiffs’ understanding of

“lightly sweetened” as low in sugar is far from unrealistic or “fanciful.” See Eidelman,

2017 WL 4277187, at *4; Bell v. Publix Super Markets, Inc., 982 F.3d 468, 477 (7th Cir.

24

2020). Rather, it is consistent with commonplace definitions of the relevant terms. See

“lightly,” Merriam-Webster’s Unabridged Dictionary (“in a small degree or quantity: to

no great extent or amount”); “sweeten,” Oxford English Dictionary (“[t]o make sweet to

the taste,” especially by “add[ing] sugar or other sweet substance to (food or drink)”).

That the tea’s nutrition facts panel discloses how much sugar it contains does

not change the analysis. True, the Court—to the extent it can9— must consider all the

tea can’s representations, including its nutrition facts panel. See Mantikas, 910 F.3d at

636. But a panel does not immunize food and drink providers who deceive consumers

elsewhere on the same product package. See Bell, 982 F.3d at 477; e.g., Thornton v.

Pinnacle Foods Grp. LLC, No. 16-158, 2016 WL 4073713, at *3 (E.D. Mo. 2016)

(explaining an ingredient list’s “mere presence” “on the back of a product does not

eliminate the possibility that reasonable consumers may be misled” (internal quotation

marks omitted)).

Nor is “lightly sweetened” a subjective description of taste. (Mot. to Dismiss Am.

Compl. 29.) Healthy Beverage’s argument to this effect, stated otherwise, is that the

lightly sweetened label is mere “puffery.” Castrol Inc. v. Pennzoil Co., 987 F.2d 939,

945 (3d Cir. 1993) (defining puffery as an “exaggeration or overstatement expressed in

broad, vague, and commendatory language”). Plaintiffs reasonably allege otherwise—

that they took “lightly sweetened” to mean the tea had low sugar content. See, e.g.,

(Am. Compl. ¶ 19). In their view, lightly sweetened does not just describe the tea’s

taste. It is a “specific and testable representation” that the tea will have low sugar

9 The picture pasted in the Amended Complaint (and on page two of this Memorandum) does

not show the panel’s precise location on the can. Nonetheless, it indicates the panel is somewhere

toward the back. See (Am. Compl. 16).

25

content, it “can be proven true or false” and it describes the tea’s contents in a manner

Plaintiffs relied on when purchasing it. See Duran v. Henkel of Am., Inc., 450 F. Supp.

3d 337, 347 (S.D.N.Y. 2020); Ackerman, 2010 WL 2925955, at *17.10

IV

A

Healthy Beverage argues Plaintiffs’ claim for breach of the implied warranty of

merchantability fails because they do not allege the tea was unfit for human

consumption. (Brief in Supp. of Mot. to Dismiss Am. Compl. 24–26.) It further asserts

this claim should be dismissed for lack of privity under New York, California, Illinois

and Wisconsin law. (Id. at 26–27.)

1

To be merchantable, goods must, among other requirements, “pass without

objection in the trade,” be of “fair average quality” and “fit for the ordinary purposes”

the goods are used for, and “conform to the promises or affirmations of fact” on their

10 Healthy Beverage also invokes a rule distinguishing claims based on labels that are

“unambiguous and misleading” from claims aimed at ambiguous labels though the ambiguity can be

resolved by a nutrition facts panel or ingredient list; only the former survive a Rule 12(b)(6) motion.

See Boswell v. Bimbo Bakeries USA, Inc., No. 20-8923, 2021 WL 5144552, at *2–3 (S.D.N.Y. Nov. 4,

2021) (relying on In re 100% Grated Parmesan Cheese Mktg. & Sales Pracs. Litig., 275 F. Supp. 3d

910 (N.D. Ill. 2017)). That rule has been repudiated in its own circuit and conflicts with the law in

three other circuits, as well as the doctrine for other consumer protection statutes. See Bell, 982

F.3d at 476–80. In any event, applying the rule here would not change the result. “Lightly

sweetened” is not ambiguous in the relevant sense: a reasonable consumer would likely understand

it to mean low sugar content. While the phrase may not specify the tea’s precise amount of sugar,

“lightly sweetened” sends a message that the tea contains little of it.

As for Boswell in particular, the parties filed supplemental briefing on that and another 2021

decision from the Southern District of New York, Mazella v. Coca-Cola Co., --- F. Supp. 3d ---. See

(ECF 23–25, 27–28). Neither case is persuasive. The Boswell court erred in relying on the

ambiguity rule. See id. at *2–*3. While the other decision involved iced tea labeled “Slightly Sweet,”

the Court need not parse “slightly” and “lightly,” nor “sweet” and “sweetened,” to distinguish it:

Mazella placed undue reliance on the product’s nutrition facts panel. See id. at *3.

26

labels. U.C.C. § 2–314(2)(a)–(c), (f). While Plaintiffs claim the tea does not meet any of

these standards, their theory of liability is tailored to label nonconformance. See (Am.

Compl. ¶¶ 3–5, 100); see also (Opp. to Mot. to Dismiss Am. Compl. 26–27 (emphasizing

this ground for breach)). Every relevant jurisdiction has adopted this provision by

statute. Alaska Stat. Ann. § 45.02.314(b)(6); Cal. Com. Code § 2314(2)(f); 810 Ill. Comp.

Stat. Ann. 5/2-314(2)(f); Mass. Gen. Laws Ann. Ch. 106, § 2-314(2)(f); N.Y. U.C.C. § 2-

314(2)(f); Okla. Stat. Ann. title 12A, § 2-314(2)(f); 13 Pa. Stat. and Cons. Stat. §

2314(b)(6); Tex. Bus. & Com. Code Ann. § 2.314(b)(6).

Plaintiffs plausibly claim a breach of the implied warranty of merchantability.

They contend the tea does not conform to its lightly sweetened label because it is high

in sugar. See (Am. Compl. ¶ 5); U.C.C. § 2–314(f) (as adopted by local statute). The

Court need not address their other alleged grounds for breach.11

2

Vertical privity exists when the buyer and seller are “in adjoining links of the

distribution chain.” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir.

2008). Consumers who buy a manufacturer’s products from a retailer do not stand in

privity with the manufacturer. Id. California, Illinois, New York and Wisconsin law all

require privity between the consumer-plaintiff and manufacturer-defendant. Corbett v.

11 Healthy Beverage is mistaken in its belief Plaintiffs must allege the tea was unfit for human

consumption. Label nonconformance is a “distinct” way Healthy Beverage can breach the implied

warranty of merchantability. See Piro v. Exergen Corp., No. 15-11834, 2016 WL 1255630, at *11 (D.

Mass. Mar. 29, 2016) (claiming plaintiffs plausibly stated a breach of the implied warranty of

merchantability because thermometers with foreign-made parts did not conform to their labels’

“MADE IN U.S.A.” representations); Augustine v. Talking Rain Beverage Co., 386 F. Supp. 3d 1317,

1132 (S.D. Cal. 2019) (rejecting the argument plaintiffs needed to show defendant’s sparkling water

lacked “basic fitness for ordinary use” when their implied warranty of merchantability claim was

based on deceptive labeling).

27

PharmaCare U.S., Inc., --- F. Supp. 3d --- (S.D. Cal. 2021); Voelker v. Porsche Cars N.

Am., Inc., 353 F.3d 516, 525 (7th Cir. 2003); Hesse, 463 F. Supp. 3d at 470; Lamont v.

Winnebago Indus., Inc., 569 F. Supp. 2d 806, 815–16 (E.D. Wis. 2008).

Plaintiffs are not in privity with Healthy Beverage: they allege they purchased

the tea from grocery stores and retailers rather than directly from the Defendant. (Am.

Compl. ¶¶ 42–53.) They try to get around the privity requirement by invoking three

exceptions. (Opp. to Mot. to Dismiss. Am. Compl. 28–29 (citing the direct dealing,

sealed food products and third-party beneficiary exceptions).) Exceptions save their

claim under California and Illinois law—but not New York’s or Wisconsin’s.

California law provides a privity exception for “foodstuffs.” Corbett, --- F. Supp.

3d --- (internal quotation marks omitted). A similar exception is available under

Illinois law. Bietsch v. Sergeant’s Pet Care Prods., Inc., No. 15-5432, 2016 WL 1011512,

at *6 (N.D. Ill. Mar. 15, 2016). The Court is aware of no applicable exception under

New York or Wisconsin law. See, e.g., Kyszenia v. Ricoh USA, Inc., No. 20-2215, 2022

WL 326981, at *8–9 (E.D.N.Y. Feb. 3, 2022) (concluding the third-party beneficiary

exception under New York law did not apply when the complaint failed to allege

contracts between a camera manufacturer and retailers intended to benefit plaintiffs).

B

Healthy Beverage argues Plaintiffs fail to adequately plead their unjust

enrichment claim by not identifying applicable state law. (Brief in Supp. of Mot. to

Dismiss Am. Compl. 27–28.) It also contends this claim should be dismissed under

Alaska, Illinois, Massachusetts, New York and Oklahoma law because there is no

allegation of a lack of adequate remedies at law. (Id. at 29.)

28

1

Although the “common denominator” for an unjust enrichment claim is the

“shared principle that it is unjust for a defendant who is enriched at the expense of the

plaintiff to accept and retain the ill-gotten benefit,” the elements “vary state by state.”

In re Processed Egg Prods. Antitrust Litig., 851 F. Supp. 2d 867, 912 (E.D. Pa. 2012).

Courts in this District have dismissed unjust enrichment claims brought on behalf of

multi-state classes when plaintiffs do not identify which states’ laws apply. U.S. ex rel.

Krahling v. Merck & Co., 44 F. Supp. 3d 581, 609 (E.D. Pa. 2014); In re Flonase

Antitrust Litig., 610 F. Supp. 2d 409, 419 (E.D. Pa. 2009); In re Wellbutrin XL Antitrust

Litig., 260 F.R.D. 143, 167 (E.D. Pa. 2009).

Plaintiffs allege unjust enrichment on behalf of the nationwide class without

specifying any state law. (Am. Compl. ¶¶ 104–09.) The claim cannot go forward as is,

and the Court will allow amendment so Plaintiffs can identify applicable state law. See

(Opp. to Mot. to Dismiss Am. Compl. 31 n.17); Flonase, 610 F. Supp. 2d at 419.

2

District courts regularly deny dismissal of unjust enrichment claims on the

ground that there is no allegation of a lack of adequate remedies at law. Sandee’s

Catering v. Agri Stats, Inc., No. 20-2295, 2021 WL 963812, at *7 (N.D. Ill. Mar. 15,

2021); see, e.g., Los Gatos Mercantile, Inc. v. E.I. DuPont De Nemours & Co., No. 13-

1180, 2015 WL 4755335, at *29–30 (N.D. Cal. Aug. 11, 2015). Federal Rule 8

authorizes pleading claims in the alternative and inconsistently. This means Plaintiffs

have a right to “plead unjust enrichment as an alternative to other legal remedies.” In

re Pork Antitrust Litig., 495 F. Supp. 3d 753, 798 (D. Minn. 2020); see also Levine v.

29

First Am. Title Ins. Co., 682 F. Supp. 2d 442, 468–69 (E.D. Pa. 2010) (allowing plaintiffs

to plead an unjust enrichment claim in the alternative because, though there was an

available legal remedy, it was not exclusive). When it remains “unclear” whether “legal

remedies will prevail,” there is no need to dismiss an alternatively pleaded unjust

enrichment claim. Pork, 495 F. Supp. 3d at 799.

Plaintiffs pleaded their nationwide unjust enrichment claim in the alternative to

their breach of warranty claims. (Am. Compl. 24 n.16.) The claim can go forward, even

though the warranty claims ultimately may give rise to legal remedies. See In re Light

Cigarettes Mktg. Sales Pracs. Litig., 751 F. Supp. 2d 183, 191 (D. Me. 2010).12

An appropriate Order follows.

12 Healthy Beverage also makes two arguments specific to New York, Pennsylvania and

Wisconsin law. Neither succeeds. First, it contends Plaintiffs do not meet the New York and

Wisconsin law requirement for unjust enrichment claims that they allege they directly conferred a

benefit on Healthy Beverage. (Brief in Supp. of Mot. to Dismiss Am. Compl. 29–30.) There is no

such requirement under either state’s laws. See Egg Products, 851 F. Supp. 2d at 930 (applying New

York Law); In re Amla Litig., 282 F. Supp. 3d 751, 766 (S.D.N.Y. 2017) (same); Waldman v. New

Chapter, Inc., 714 F. Supp. 2d 398, 403–04 (E.D.N.Y. 2010) (same); Sheet Metal Workers Local 441

Health & Welfare Plan v. GlaxoSmithKline, PLC, 737 F. Supp. 2d 380, 447–48 (E.D. Pa. 2010)

(applying Wisconsin law); In re Packaged Seafood Prods. Antitrust Litig., 242 F. Supp. 3d 1033, 1093

(S.D. Cal. 2017) (same).

Second, Healthy Beverage asserts Plaintiffs do not accuse it of failing to provide a good or

service, as required under Pennsylvania law. (Brief in Supp. of Mot. to Dismiss Am. Compl. 30–32.)

To establish a prima facie case of unjust enrichment under Pennsylvania law, a plaintiff must show

the conferral of a “benefit” on the defendant, the defendant “appreciated” it and its retention and

acceptance “would be inequitable under the circumstances without” the defendant paying for it.

Steinberg v. CVS Caremark Corp., 899 F. Supp. 2d 331, 341 (E.D. Pa. 2012). Plaintiffs plausibly

allege a prima facie case: They conferred a benefit on Healthy Beverage by purchasing the tea at a

premium; Healthy Beverage appreciated this benefit because it knew it could boost the tea’s price if

it were marketed to have low sugar content; and it would be inequitable for Healthy Beverage to

retain the benefit because it deceived consumers into purchasing a beverage that is high in sugar.

See (Am. Compl. ¶¶ 6–9). Plaintiffs need not allege anything else. See, e.g., Cesare, 429 F. Supp. 3d

at 65–66.

30

BY THE COURT:

/s/ Gerald J. Pappert

GERALD J. PAPPERT, J.

31