# McGarity v. Sun-Maid Growers of California

> District Court, S.D. California · October 1, 2024

URL: https://www.frixlaw.com/law-library/cases/10640618

## Case

- **Court:** District Court, S.D. California
- **Decided:** October 1, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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8 UNITED STATES DISTRICT COURT
9 SOUTHERN DISTRICT OF CALIFORNIA
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11 MARGARET MCGARITY, on behalf of Case No. 24-cv-0714-BAS-DEB
herself and all others similarly situated,
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Plaintiff,
13 ORDER GRANTING DEFENDANT’S
v. MOTION TO DISMISS (ECF No. 12)
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SUN-MAID GROWERS OF
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CALIFORNIA and DOES 1 through 10,
16 inclusive,
17 Defendants.
18 This case concerns whether Defendant Sun-Maid Growers of California (“Sun-
19 Maid” or “Defendant”) violates California consumer protection laws by using the term
20 “yogurt-covered” on the packages of its “Vanilla Yogurt Covered Raisins” and
21 “Strawberry & Vanilla Yogurt Covered Raisins” (collectively, “the Products”). Defendant
22 moves to dismiss Plaintiff Margaret McGarity’s (“Plaintiff” or “McGarity”) Complaint,
23 primarily on the grounds that federal law preempts Plaintiff’s state-law claims. (ECF No.
24 12 or “Mot.”) Plaintiff opposes. (ECF No. 13 or “Opp’n.”) Defendant replies. (ECF No.
25 14.)
26 The Court finds the motions suitable for determination on the papers submitted and
27 without oral argument. Fed. R. Civ. P. 78(b); CivLR 7.1(d)(1). For the reasons set forth
28 below, the Court GRANTS Defendant’s Motion to Dismiss. (ECF No. 12.)
1 I. BACKGROUND
2 Plaintiff brings this putative class action alleging that Sun-Maid’s “yogurt-covered
3 raisins” violate California false advertising and consumer protection law because the
4 Products are, in fact, not coated in yogurt as defined by federal regulations and as
5 understood by a reasonable consumer.
6 Specifically, Plaintiff challenges Sun-Maid’s labeling of the Products called
7 “Vanilla Yogurt Covered Raisins” and “Strawberry and Vanilla Yogurt Covered Raisins.”
8 Plaintiff alleges the Products are not coated with yogurt, but with a “highly-processed
9 candy coating.” (Compl. ¶ 28.) Plaintiff derives this allegation from the lists of ingredients
10 for the Products, which include “yogurt powder.” (Id. ¶¶ 29–30.)
11 The Food and Drug Administration (“FDA”), acting under the federal Food, Drug
12 & Cosmetic Act (“FDCA”), promulgated regulations defining yogurt as “the food
13 produced by culturing one or more of the basic dairy ingredients . . . with a characterizing
14 bacterial culture that contains the lactic acid-producing bacteria, Lactobacillus delbrueckii
15 subsp. bulgaricus and Streptococcus thermophilus.” 21 C.F.R. § 131.200(a).
16 Plaintiff tested the yogurt powder contained in the Products and found it does not
17 contain the requisite bacteria or any live cultures as specified by the FDA’s regulations.
18 (Compl. ¶ 39.) Plaintiff asserts that the yogurt powder “does not offer any of the expected
19 nutritional benefits of bona fide yogurt” and “does not contain any viable [yogurt]
20 cultures,” and therefore Sun-Maid’s labeling misrepresents the Products. (Id. ¶¶ 32–33.)
21 Over ten years ago, Sun-Maid received an informational letter from the FDA advising Sun-
22 Maid to more appropriately identify one of the Products as “Vanilla Yogurt-Flavored
23 Covered Raisins” rather than “Vanilla Yogurt Covered Raisins.” (Id. ¶ 43.) Sun-Maid
24 received this letter in 2014 but did not revise its label. (Id.; see also Compl., Ex. A.)
25 In 2021, the FDA issued a Yogurt Final Rule where it clarified that “yogurt-covered”
26 products, such as cereal or pretzels, need not be covered in “yogurt,” as defined by the
27 standard of identity above. Rather, such nonstandardized products with “yogurt” in the
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1 product name must contain yogurt powder that derives from yogurt. See Yogurt Final Rule,
2 86 Fed. Reg. 31117-01, 31124 (June 11, 2021) (to be codified at 21 C.F.R. pts. 130–131).
3 Plaintiff brings seven claims under (1) California’s Consumers Legal Remedies Act,
4 California Civil Code §§ 1750, et seq.; (2) California’s False Advertising Law, California
5 Business & Professions Code §§ 17500, et seq.; (3) California’s Unfair Competition Law,
6 California Business & Professions Code §§ 17200, et seq.; (4) breach of express warranty,
7 California Commercial Code § 2313; (5) breach of the implied warranty of
8 merchantability, California Commercial Code § 2314(2)(f); and (6) intentional
9 misrepresentation under California common law. Plaintiff seeks various forms of
10 declaratory, injunctive, and monetary relief, as well as attorney’s fees and costs
11 Defendant moves to dismiss this action pursuant to Federal Rules of Civil Procedure
12 (“Rules”) 9(b), 12(b)(1), and 12(b)(6). Defendant argues Plaintiff’s claims are preempted
13 and that Plaintiff fails to state a claim for breach of express or implied warranty, or of
14 intentional misrepresentation. Defendant also argues the economic loss rule bars Plaintiff’s
15 claim for intentional misrepresentation. Further, Defendant claims a reasonable consumer
16 could not believe the raisins would be covered with yogurt. Finally, Defendant argues that
17 Plaintiff has no standing to pursue the injunctive relief she seeks.
18 II. LEGAL STANDARD
19 Pursuant to Rule 12(b)(6), a defendant may move to dismiss an action for failure to
20 make sufficient factual allegations to “state a claim to relief that is plausible on its face.”
21 Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007) (citations omitted). In evaluating the
22 sufficiency of these factual allegations, the court “accept[s] factual allegations in the
23 complaint as true and construe[s] the pleadings in the light most favorable to the
24 nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031
25 (9th Cir. 2008).
26 In ruling on a motion to dismiss, a court may consider only “the complaint, materials
27 incorporated into the complaint by reference, and matters [subject to] judicial notice.”
28 UFCW Loc. 1500 Pension Fund v. Mayer, 895 F.3d 695, 698 (9th Cir. 2018) (citation
1 omitted). Mere “conclusory allegations of law and unwarranted inferences are insufficient
2 to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004)
3 (citations omitted); accord Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (“[T]he tenet that a
4 court must accept a complaint’s allegations as true is inapplicable to threadbare recitals of
5 a cause of action’s elements, supported by mere conclusory statements.”). A district court
6 may also dismiss a complaint when its allegations “give rise to an affirmative defense that
7 clearly appears on the face of the pleading.” Boquist v. Courtney, 32 F.4th 764, 774 (9th
8 Cir. 2022). “Preemption, on which the defendant bears the burden, . . . can be such a
9 defense.” Pardini v. Unilever U.S., Inc., 65 F.4th 1081, 1084 (9th Cir. 2023) (citation
10 omitted).
11 If a court grants a motion to dismiss, it may exercise discretion to grant or deny leave
12 to amend the complaint, and it “acts within its discretion to deny leave to amend when
13 amendment would be futile, when it would cause undue prejudice to the defendant, or when
14 it is sought in bad faith.” Nat’l Funding, Inc. v. Com. Credit Counseling Servs., Inc., 817
15 F. App’x 380, 383 (9th Cir. 2020) (citation omitted).
16 III. ANALYSIS
17 The concept of federal preemption of state laws is grounded in the Supremacy Clause
18 of the Constitution. Article VI of the Constitution provides that the laws of the United
19 States “shall be the supreme Law of the Land; . . . any Thing in the Constitution or Laws
20 of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. Thus, since
21 M’Culloch v. Maryland, 17 U.S. 316 (1819), the federal judicial system has held “that state
22 law that conflicts with federal law is ‘without effect,’” Cipollone v. Liggett Grp., Inc., 505
23 U.S. 504, 516 (1992) (citing Maryland v. Louisiana, 451 U.S. 725, 746 (1981)).
24 “The party contending that a claim is preempted bears the burden of establishing
25 preemption.” Corbett v. PharmaCare U.S., Inc., 567 F. Supp. 3d 1172, 1193 (S.D. Cal.
26 2021) (citation omitted). “Express preemption exists when a statute explicitly addresses
27 preemption.” Kroessler v. CVS Health Corp., 977 F.3d 803, 808 (9th Cir. 2020). Courts
28 apply a presumption against preemption because the “historic police powers of the States
1 were not to be superseded by [a] Federal Act unless that was the clear and manifest purpose
2 of Congress.” United States v. Locke, 529 U.S. 89, 107 (2000) (citation omitted). In the
3 area of proper marketing and labeling of food products, the presumption against
4 preemption is “strong.” Gustavson v. Wrigley Sales Co., 961 F. Supp. 2d 1100, 1117 (N.D.
5 Cal. 2013) (citing Fla. Lime & Avocado Growers v. Paul, 373 U.S. 132, 144 (1963)
6 (“States have always possessed a legitimate interest in ‘the protection of (their) people
7 against fraud and deception in the sale of food products’ at retail markets within their
8 borders.” (citation omitted))).
9 To escape FDCA preemption, private plaintiff claims must fit through a narrow
10 window. The claims may neither be brought because they violate the FDCA, nor may they
11 be brought for acts that the FDCA permits. In other words, “[t]he plaintiff must be suing
12 for conduct that violates the FDCA (or else his claim is expressly preempted by § 360k(a)),
13 but the plaintiff must not be suing because the conduct violates the FDCA.” Perez v. Nidek
14 Co., 711 F.3d 1109, 1120 (9th Cir. 2013). Private plaintiffs may only bring a state-law
15 claim where that state requirement “effectively parallels or mirrors the relevant sections of
16 the [Nutrition Labeling and Education Act].” Chacanaca v. Quaker Oats Co., 752 F. Supp.
17 2d 1111, 1118 (N.D. Cal. 2010). Here, Plaintiff’s claims fail to squeak through this
18 window because Plaintiff brings claims for something that does not violate the FDCA.
19 The Secretary of Health and Human Services has authority to promulgate regulations
20 to enforce the FDCA, 21 U.S.C. § 371(a), and has delegated this authority to the FDA, see
21 FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 126 (2000). With this
22 authority, the FDA has created a standard of identity for yogurt. See 21 C.F.R. § 131.200.
23 When it published this standard of identity, the FDA clarified that the standard does not
24 apply to products identified as “yogurt-covered.” See Yogurt Final Rule, 86 Fed. Reg. at
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1 31124 (listing “frozen yogurt, yogurt-coated cereal, and dried yogurt powder” as
2 “nonstandardized products”).1
3 As held in Kisor v. Wilkie, courts defer to an agency’s reasonable interpretation of
4 its own regulation, such as this, only when the regulation is “genuinely ambiguous” or
5 “susceptible to more than one reasonable reading.” 588 U.S. 558, 566 (2019). Here,
6 whether products claiming to be “yogurt-covered” must conform that yogurt coating with
7 the standard of identity for yogurt is ambiguous. On the one hand, something that is
8 “yogurt-covered” may be required to be covered with standardized yogurt. On the other,
9 there is a long history of “yogurt-covered” products being covered not with fresh yogurt,
10 but with a hardened shell coating.2 That such products need not be covered with “yogurt,”
11 comporting with the standard of identity laid out by the FDA, is a reasonable interpretation
12 of the FDA’s regulations. Applying this deference, the Court defers to the FDA’s
13 reasonable interpretation of its own genuinely ambiguous regulation regarding what must
14 comply with the “yogurt” standard of identity. Yogurt-covered raisins need not comply.
15 Each claim in Plaintiff’s Complaint rests on Defendant’s raisins being coated by a
16 product that does not conform with the standard of identity for yogurt. However, as
17 described above, the FDA, in interpreting its own regulations under the FDCA, does not
18 require “yogurt-coated” products to conform with that standard of identity. Yogurt Final
19 Rule, 86 Fed. Reg. at 31124. Therefore, requiring Defendant’s Products to conform with
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1 The Court GRANTS Defendant’s request for judicial notice of this guidance. (Mot. at 3 n.3) As a
23 matter of public record, it is judicially noticeable because the underlying facts are not subject to reasonable
dispute and are not disputed here. See MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986).
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2 Indeed, the guidance accompanying the Yogurt Final Rule is not the only time the FDA has noted this.
25 In the FDA’s 2014 letter to Defendant attached to Plaintiff’s Complaint, the FDA specifically notes that
“If the ingredient that you have identified as ‘yogurt powder’ . . . . is yogurt that has been dried, then we
26 do not object to the inclusion of the term ‘yogurt’ in the statement of identity for each product.’” (Compl.,
Ex. A at 1.) While the letter goes on to state that a “more appropriate statement of identity for each product
27 appears to be ‘Vanilla Yogurt-Flavored Covered Raisins,’” it does not state than any particular provision
of the FDCA requires the change and there is no indication the FDA later sought to enforce that
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1 that standard of identity in California, but not anywhere else, would impose the exact kind
2 of regulatory asymmetry preempted by the FDCA. 21 U.S.C. § 343-1.
3 The Court notes that the FDA also requires that yogurt-covered products be coated
4 with a product containing yogurt powder derived from dried yogurt that conforms with the
5 standard of identity for yogurt. Yogurt Final Rule, 86 Fed. Reg. at 31124. Plaintiff states
6 that the dried yogurt powder used in the Products’ coating does not contain the live cultures
7 or bacteria required by the standard of identity.3 (Compl. ¶ 39.) However, the Complaint
8 is vague as to whether that means the yogurt the powder derived from did not contain those
9 cultures or bacteria, or if the processing of yogurt into yogurt powder deprives the yogurt
10 of these cultures or bacteria.4 (See, e.g., id. ¶ 33 (describing the yogurt powder process as
11 one that is “highly processed and heat-treated”).) Because Plaintiff’s claims are predicated
12 upon the idea that the coating does not comply with the standard definition of yogurt, rather
13 than that the yogurt powder in the coating did not derive from standardized yogurt, the
14 claims as pled must be preempted.
15 IV. CONCLUSION
16 Because each of Plaintiff’s claims is based on the allegation that Defendant violates
17 state law because the Products are not covered with yogurt that conforms with the FDA’s
18 standard of identity for yogurt, the Complaint in its entirety is preempted by the FDA’s
19 guidance that yogurt-covered products are nonstandardized foods that need not be covered
20 with conforming yogurt. Therefore, the Court need not reach the parties’ remaining
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22 3 The Court GRANTS Defendant’s request for judicial notice as to the backside of the Products’
packaging, which includes “yogurt powder” listed with the other ingredients. (Mot. at 2 n.1.) The
23 Complaint refers to the ingredients list, it is central to Plaintiff’s claim, and no party questions the
authenticity of the version included in Defendant’s Motion to Dismiss. See Marder v. Lopez, 450 F.3d
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445, 448 (9th Cir. 2006).
25 4 Plaintiff’s opposition to Defendant’s motion explicitly states the yogurt powder is not derived from
standardized yogurt (Opp’n at 5–6), but her Complaint does not (see generally Compl.). Motions to
26 dismiss are measured against the operative complaints and not the arguments. UFCW Loc. 1500 Pension
Fund v. Mayer, 895 F.3d 695, 698 (9th Cir. 2018) (In ruling on a motion to dismiss, a court may consider
27 only “the complaint, materials incorporated into the complaint by reference, and matters [subject to]
judicial notice.” (citation omitted)). Plaintiff may not amend her Complaint through briefing to insert
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1 ||arguments. The motion to dismiss is GRANTED. (ECF No. 12.) However, Plaintiff may
2 a claim where the yogurt powder used in the Products’ coating does not derive from
3 || yogurt. Accordingly, amendment is not futile and Plaintiff shall be granted leave to amend.
4 || Nat’l Funding, Inc., 817 F. App’x at 383. If Plaintiff wishes to amend her Complaint, she
5 do so on or before October 22, 2024.
6 IT IS SO ORDERED.
7 A ,
8 || DATED: October 1, 2024 Lin A (Lyohaa 6
9 United States District Judge
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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10640618. Public record. Not legal advice.