Opinion
No. 2:15-cv-02625-MCE-AC
05-17-2016
JACKLYN HADDIX, individually and on behalf of all others similarly situated, Plaintiff, v. GENERAL MILLS, INC.; GENERAL MILLS SALES, INC.; GENERAL MILLS OPERATIONS, LLC, and DOES 1-50, Defendants.
MEMORANDUM AND ORDER
Plaintiff Jacklyn Haddix ("Plaintiff") filed this putative class action against Defendants General Mills, Inc., General Mills Sales, Inc., and Does 1-50 (collectively "Defendants"), alleging seven claims for relief: (1) violation of California's Unfair Competition Law ("UCL"); (2) violation of California's False Advertising Law ("FAL"); (3) violation of California's Consumer Legal Remedies Act ("CRLA"); (4) violation of Kentucky's Consumer Protection Act ("KCPA"); (5) unjust enrichment; (6) breach of express warranty; and (7) negligence. Presently before the Court are Defendants' Motions to Dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) and Defendants' Motion to Strike Plaintiff's class allegations pursuant to FRCP 12(f). ECF No. 7. For the following reasons, Defendants' motions are GRANTED in part and DENIED in part.
All further references to "Rule" or "Rules" are to the Federal Rules of Civil Procedure unless otherwise indicated.
Because oral argument would not have been of material assistance, the Court ordered this matter submitted on the briefs. E.D. Cal. Local Rule 230(g).
Defendants also requested that the Court take judicial notice of various documents in support of the instant motions (ECF No. 8). Plaintiffs failed to oppose that request, and it is therefore GRANTED on that basis.
BACKGROUND
The following recitation of facts is taken, sometimes verbatim, from Plaintiff's Complaint (ECF No. 1) and Plaintiff's Opposition to Defendants' Motion to Dismiss (ECF No. 13).
Beginning in July 2015, Defendants began a manufacturing process to produce certain of their Cheerios cereal products without gluten. Defendants labeled these Cheerios products as "gluten free." After Defendants began selling these gluten free products, the U.S. Food and Drug Administration ("FDA") received complaints about the products' gluten level. Subsequent FDA testing confirmed that a sample of Defendants' gluten free products had levels of gluten that exceeded applicable FDA regulations.
On October 5, 2015, Defendants announced a voluntary recall of approximately 1.8 million units of Cheerios products produced in their Lodi, California, packaging facility. Defendants maintain that there was an isolated incident at the Lodi facility that resulted in wheat flour, which contains gluten, being inadvertently introduced into select batches of the gluten free Cheerios packaged at that facility.
Plaintiff Jacklyn Haddix is a citizen and resident of Fayette County, Kentucky. In late September 2015, Plaintiff purchased two boxes of Defendants' purportedly gluten free Cheerios from the Kroger store in Lexington, Kentucky. She subsequently learned that the Cheerios she purchased were recalled for containing gluten. She returned the Cheerios to the Kroger store on or about October 9, 2015. Plaintiff, on behalf of herself /// and all those similarly situated, seeks redress for damages caused by Defendants' allegedly unlawful conduct in advertising and selling products labeled as gluten free.
In February 2016, Defendants filed the instant motions. Defendants' Rule 12(b)(1) motion argues that Plaintiff lacks standing to pursue her claims because Defendants' recall program provides her with all of the relief they seek. The motion to strike seeks to excise Plaintiff's class action allegations from the Complaint. Finally, Defendants' Rule 12(b)(6) motion attacks the sufficiency of each of Plaintiff's claims.
STANDARD
A. 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction and are presumptively without jurisdiction over civil actions. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The burden of establishing the contrary rests upon the party asserting jurisdiction. Id. Lack of subject matter jurisdiction may be raised by either party at any point during the litigation, through a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006); see also Int'l Union of Operating Eng'rs v. Cnty. of Plumas, 559 F.3d 1041, 1043-44 (9th Cir. 2009).
There are two types of motions to dismiss for lack of subject matter jurisdiction: a facial attack, and a factual attack. Thornhill Publ'g Co. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979). Thus, a party may either make an attack on the allegations of jurisdiction contained in the nonmoving party's complaint, or may challenge the existence of subject matter jurisdiction in fact, despite the formal sufficiency of the pleadings. Id.
In the case of a factual attack, "no presumptive truthfulness attaches to plaintiff's allegations." Thornill, 594 F.2d at 733 (internal citation omitted). The party opposing the motion has the burden of proving that subject matter jurisdiction does exist, and must present any necessary evidence to satisfy this burden. St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). If the plaintiff's allegations of jurisdictional facts are challenged by the adversary in the appropriate manner, the plaintiff cannot rest on the mere assertion that factual issues may exist. Trentacosta v. Frontier Pac. Aircraft Ind., Inc., 813 F.2d 1553, 1558 (9th Cir. 1987) (quoting Exch. Nat'l Bank of Chi. v. Touche Ross & Co., 544 F.2d 1126, 1131 (2d Cir. 1976)). Furthermore, the district court may review any evidence necessary, including affidavits and testimony, in order to determine whether subject matter jurisdiction exists. McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988); Thornhill, 594 F.2d at 733. If the nonmoving party fails to meet its burden and the court determines that it lacks subject matter jurisdiction, the court must dismiss the action. Fed. R. Civ. P. 12(h)(3).
B. 12(b)(6) Motion to Dismiss for Failure to State a Claim
On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,337-38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations. However, "a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (internal citations and quotations omitted). A court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (quoting Twombly, 550 U.S. at 555). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) (stating /// that the pleading must contain something more than "a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.")).
Furthermore, "Rule 8(a)(2) . . . requires a showing, rather than a blanket assertion, of entitlement to relief." Twombly, 550 U.S. at 556 n.3 (internal citations and quotations omitted). Thus, "[w]ithout some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only 'fair notice' of the nature of the claim, but also 'grounds' on which the claim rests." Id. (citing 5 Charles Alan Wright & Arthur R. Miller, supra, at § 1202). A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570. If the "plaintiffs . . . have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id. However, "[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 'that a recovery is very remote and unlikely.'" Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
C. Leave to Amend
A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. Leave to amend should be "freely given" where there is no "undue delay, bad faith or dilatory motive on the part of the movant, . . . undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment . . . ." Foman v. Davis, 371 U.S. 178, 182 (1962); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to be considered when deciding whether to grant leave to amend). Not all of these factors merit equal weight. Rather, "the consideration of prejudice to the opposing party . . . carries the greatest weight." Id. (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 185 (9th Cir. 1987)). Dismissal without leave to amend is proper only if it is clear that "the complaint could not be saved by any amendment." Intri-Plex Techs. v. Crest Group, Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 1013 (9th Cir. 2005)); Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) ("Leave need not be granted where the amendment of the complaint . . . constitutes an exercise in futility . . . .")).
D. 12(f) Motion to Strike (Class Allegations)
The Court may strike "from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "[T]he function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial . . . ." Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). An immaterial matter is that which has no essential or important relationship to the claim for relief or the defenses being pleaded. Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds 510 U.S. 517 (1994) (internal citations and quotations omitted). An impertinent matter also consists of statements that do not pertain, and are not necessary, to the issues in question. Id.
ANALYSIS
The Court first addresses Defendants' motions to dismiss. Where the Court finds a lack of subject matter jurisdiction and grants Defendants' 12(b)(1) motion, it does not address the sufficiency of Plaintiff's pleadings in stating a claim. The Court then addresses Defendants' 12(f) motion to strike.
A. First, Second, and Third Claims for Violation of California's UCL, FAL, and CLRA
Plaintiff alleges that Defendants' labeling and advertising certain Cheerios products as gluten free violated California's UCL, FAL, and CLRA. Plaintiff's UCL claim contends that Defendants' gluten free Cheerios products contained gluten and as such the gluten free label constitutes an "unlawful" business practice within the scope of the UCL. ECF No. 1 ¶ 47. Plaintiff also contends that the gluten free label constitutes a "fraudulent" business practice under the UCL because Defendants' use of the label "created the misimpression that their products do not contain gluten and are therefore safe for those persons who may be sensitive to gluten." Id. at ¶ 48. In addition, Plaintiff alleges Defendants violated the UCL's "unfair" prong because the public harm stemming from the gluten free label outweighs any utility of the label. Id. at ¶ 50.
Plaintiff's FAL claim alleges Defendants committed acts of disseminating untrue and misleading statements under the purview of the FAL by inducing the public to purchase the gluten free products. Id. at ¶ 55. Public inducement was allegedly achieved by: representing that the gluten free products were safe for consumption by gluten-sensitive individuals, advertisements that created the "image, impression and belief by consumers that Cheerios cereals were free of gluten and safe for consumption by those sensitive to gluten," and representing that Defendants had developed a reliable method for ensuring the Cheerios were gluten free. Id. Finally, Plaintiff's CLRA cause of action alleges that Defendants intentionally sold misbranded gluten free Cheerios products to consumers.
By way of her FAL and UCL claims, Plaintiff seeks only injunctive relief. As to her CLRA claim, Plaintiff requests an order enjoining Defendants' actions as well as attorneys' fees and costs and states that she will amend her Complaint to seek damages as well.
Defendants move to dismiss all three claims for lack of subject matter jurisdiction and for failure to state a claim, arguing that Plaintiff lacks standing to pursue injunctive relief. Defendants also challenge the legal sufficiency of Plaintiff's claim for damages under the CLRA pursuant to Rule 12(b)(6).
1. Standing to Pursue Injunctive Relief
The Article III "case or controversy" requirement of the United States Constitution "restricts the authority of federal courts to resolving the legal rights of litigants in actual controversies." Genesis Healthcare Corp. v. Symcyzk, 133 S. Ct. 1523, 1528 (2013). Thus, for a federal court to have subject matter jurisdiction, there must be a "live" controversy for the court to adjudicate. Powell v. McCormack, 395 U.S. 486, 496 (1969).
Plaintiff's UCL and FAL causes of action both seek injunctive relief only. More specifically, Plaintiff's UCL cause of action seeks "an order requiring Defendants to immediately cease such acts of unlawful, unfair and fraudulent business practices and requiring Defendants to correct their actions." Compl., ECF No. 1 ¶ 52. Plaintiff's FAL cause of action seeks "judgment against Defendants for injunctive relief afforded under the FAL, and attorneys' fees and costs." Id. at ¶ 57.
For injunctive relief to be proper, however, Plaintiff must show she and the proposed class suffered an injury that is "likely" to be "redressed by a favorable decision." Lujan v. Def. Wildlife, 504 U.S. 555, 560-61 (1992). Moreover, Plaintiff must demonstrate "a sufficient likelihood that [he or she] will again be wronged in a similar way." Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983)).
When the moving party makes a factual attack in a motion to dismiss for lack of subject matter jurisdiction, the Court is not required to accept Plaintiff's allegations as true. Thornhill Publ'g Co. v. Gen. Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir. 1979). Rather, "[o]nce the moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (citing Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir.2003)).
Defendants make a factual attack on subject matter jurisdiction by attaching an affidavit from their Director of Global Consumer Relations. ECF No. 9-2. The affidavit declares that there was an isolated incident at General Mills' production facility in Lodi, California, resulting in the inadvertent introduction of gluten into certain Cheerios products. Id. ¶ 2. The affidavit also details the nature and availability of Defendants' voluntary recall program. Id. ¶¶ 3-7. With the affidavit as support, Defendants argue there is no likelihood that Plaintiff or any member of the putative class or public will be wronged again by the gluten free Cheerios products because all contaminated batches were successfully identified and recalled. Defs.' Mot., ECF No. 7 at 6-11. Defendants therefore contend that there is no live controversy for the Court to adjudicate and Plaintiff's claims should be dismissed for a lack of subject matter jurisdiction. Id.
Plaintiff responds that the Court does have subject matter jurisdiction because the Complaint challenged the adequacy of the recall program. Pl's Opp'n., ECF No. 13 at 3. However, Plaintiff makes this assertion in her Opposition brief and the portions of the Complaint cited to as support do not even tangentially mention Defendants' recall program, let alone challenge it. Id. Moreover, because Defendants attached an affidavit to their motion detailing the comprehensive nature of the recall program, Plaintiff could not simply rely on contrary assertions in her Opposition brief to establish subject matter jurisdiction. See Safe Air for Everyone, 373 F.3d at 1039. Instead, it was incumbent on Plaintiff to furnish affidavits or other evidence challenging the efficacy of the recall program. Id. The bare assertion in Plaintiff's Opposition papers, unsupported by her Complaint, is not enough to carry the burden of establishing subject matter jurisdiction.
Plaintiff also maintains that Defendants' Motion must be denied because the merits of her claims are intertwined with the issue of subject matter jurisdiction and "[w]here factual jurisdictional issues are intertwined with factual questions going to the merits, a court may not decide those factual issues on a Rule 12(b)(1) motion." Pl.'s Opp'n., ECF No. 13 at 3-4; Nino v. United States, No. 13CV0469, 2015 WL 5032644, at *5 (S.D.. Cal. Aug. 25, 2015) (citing Sun Valley Gasoline, Inc. v. Ernst Enters., Inc., 711 F.2d 138, 140-41 (9th Cir. 1983)). However, for Plaintiff's argument to apply, a statute would have to provide the basis for both subject matter jurisdiction and Plaintiff's substantive claims for relief. Safe Air for Everyone, 373 F.3d at 1039 (the merits of an action and subject matter jurisdiction are intertwined where "a statute provides the basis for both the subject matter jurisdiction of the federal court and the plaintiff's substantive claim for relief."). ///
Plaintiff does not identify a statute that provides both the basis for subject matter jurisdiction and the basis for her substantive claims for relief. Rather, Plaintiff summarily states that the merits of her case are necessarily intertwined with the question of whether Defendants' recall program is adequate. Pl.'s Opp'n., ECF No. 13 at 3. Plaintiff's bald statement and coinciding failure to provide a statute precludes her from availing herself of Safe Air's "intertwined with the merits" jurisdictional exception. Contrary to Plaintiff's arguments in her Opposition, the Court has not determined whether Defendants' recall program was adequate; the Court has only determined that Plaintiff did not satisfy her burden of establishing subject matter jurisdiction in the face of Defendants' factual attack.
Defendants challenge the Court's jurisdiction over Plaintiff's request for injunctive relief under the CLRA for the same reasons. As with her UCL and FAL claims, Plaintiff lacks standing because she failed to present affidavits or other evidence establishing subject matter jurisdiction as was required when confronted by Defendants' factual attack on subject matter jurisdiction. Safe Air for Everyone, 373 F.3d at 1039.
Consequently, Defendants' motion to dismiss Plaintiff's UCL and FAL causes of action is GRANTED and Plaintiff's claims are DISMISSED. Furthermore, to the extent Plaintiff seeks injunctive relief under her CLRA claim, that claim is DISMISSED as well. Plaintiff may, however, be able to satisfy Article III's requirements if she can make factual allegations showing some continued threat of harm from Defendants' Gluten Free Cheerios products. The Court therefore grants Plaintiff leave to amend. See Figy v. Frito-Lay N. Am., Inc., 67 F. Supp. 3d 1075, 1085-86 (N.D. Cal. 2014) (granting leave to amend because the Court was not persuaded that amendment would be futile although Plaintiffs failed to offer evidence that the Court had subject-matter jurisdiction in the face of Defendants' factual attack). /// /// ///
2. Damages
a. Subject matter jurisdiction
Unlike the claim for injunctive relief, Plaintiffs' claim for damages under the CLRA is not dismissed for a lack of subject matter jurisdiction. Defendants' argument that all claims for economic damages are "moot" because Plaintiff was entitled to a refund through Defendants' voluntary recall program and indeed received that refund when she returned the Gluten Free Cheerios that she purchased is rejected. Def's Mot., ECF No. 7 at 7.
Although Plaintiff has yet to amend her Complaint to specifically seek damages under the CLRA, Plaintiffs' prayer for relief seeks an award of "compensatory, exemplary, punitive and statutory penalties and damages, including interest, in an amount to be proven at trial." ECF No. 1 at 18
Mootness resulting in a lack of subject matter jurisdiction occurs when "an opposing party has agreed to everything the other party has demanded." GCB Commc'ns v. U.S. S. Commc'ns, 650 F.3d 1257, 1267 (9th Cir. 2011). Here, however, Defendants have not so agreed. While Defendants have provided a full recall and offered replacement of contaminated boxes of their Cheerios products or a full refund of the purchase price of gluten free Cheerios products, that covers only a portion of Plaintiff's purported damages. Def's Mot., ECF No. 7 at 9. Indeed, Plaintiff requests damages that exceed the scope of the recall program and relate to Defendants' business practices prior to instituting the recall program. ECF No. 1 at 18. As Defendants have not provided all of the damages that Plaintiff seeks, Defendants have not "agreed to everything the other party has demanded," and Plaintiff's CLRA claim cannot be considered moot. GCB Commc'ns, 650 F.3d 1267.
Accordingly, Defendants' motion to dismiss Plaintiff's CLRA damages claim for a lack of subject matter jurisdiction is DENIED and the Court must assess whether Plaintiff's pleadings are sufficient to state a claim.
b. The pleadings are sufficient to state a claim
The CLRA enables a consumer to bring a class action if the consumer has suffered "any damage" from any "method, act, or practice" made unlawful by the Act. Cal. Civ. Code §§ 1780(a), 1781(a). The CLRA makes it unlawful for anyone to misrepresent "the source, sponsorship, approval, or certification of goods or services." Id. § 1770(a)(2). Plaintiff alleges that Defendants' gluten free Cheerios are a "good" that Defendants misrepresented as not containing gluten. ECF No. 1 at ¶ 66. The CLRA also makes it unlawful for anyone to represent that "goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have...." Id. § 1770(a)(5). Plaintiff alleges that Defendants' gluten free label represented that the Cheerios products had "sponsorship, approval, characteristics, uses, and benefits which they do not have under the governing law." ECF No. 1 at ¶ 67. The CLRA also makes it unlawful for anyone to represent "that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another." Cal. Civ. Code § 1770(a)(7). Plaintiff alleges that Defendants' gluten free label represented that the Cheerios products were "to be of a particular standard, quality, or grade which they are not under the governing law." ECF No. 1 at ¶ 68. The CLRA similarly makes it unlawful for anyone to "advertis[e] goods or services with intent not to sell them as advertised." Cal Civ. Code § 1770(a)(9). Plaintiff alleges that "[b]y introducing Cheerios products which contained gluten, but were labeled 'Gluten Free' into the stream of commerce ... Defendants thus intentionally sold misbranded products." ECF No. 1 at ¶ 69.
Defendants narrowly construe Plaintiff's request for damages under the CLRA as a request for the purchase price of the contaminated Cheerios products. ECF No. 7 at 7, 11. Based on this assumption, Defendants argue that they have already provided the damages relief sought by Plaintiff because all of the affected cereal products are eligible for a full refund from Defendants. Id. Defendants thus contend that Plaintiff cannot bring claim for damages under the CLRA. Id.
As indicated above, Plaintiff seeks more than a mere refund. Rather, Plaintiff's Complaint seeks "compensatory, exemplary, punitive and statutory penalties and damages, including interest, in an amount to be proven at trial." ECF No. 1 at 18. Moreover, whether Defendants' recall program correctly and fully identified all batches of contaminated Cheerios products is a factual question that can only be resolved after Plaintiff has an opportunity to pursue discovery. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996) (stating that motions to dismiss for failure to state a claim require a Court to accept all allegations of material fact as true and "[a] complaint should not be dismissed unless a Plaintiff can prove no set of facts in support of his claim which would entitle him to relief."). Because Plaintiff has stated sufficient facts to state a plausible claim for relief under the CLRA, Defendants' motion to dismiss for failure to state a claim is DENIED. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
C. Fourth Claim - Violation of KCPA
Plaintiff purchased her gluten free Cheerios in Kentucky and accordingly brings a claim under the KCPA. The KCPA makes unlawful any "[u]nfair, false, misleading, or deceptive acts or practices in the conduct of any trade or commerce." Ky. Rev. Stat. Ann. § 367.170. Plaintiff alleges Defendants violated the KCPA "by the use of false and misleading representations or omissions of material fact in connection with the marketing, promotion, and sale of the recalled Products, including the fact that the Cheerios were advertised as 'Gluten Free' when in fact, they contained 43 ppm of gluten." ECF No. 1 at ¶¶ 74-76. Defendants move to dismiss for failure to state a claim on the ground that Kentucky law requires privity of contract between the parties. Defendants contend that because Plaintiff purchased her Cheerios at the Kroger grocery store rather than directly from Defendants, there is no privity of contract and as such her KCPA must be dismissed. Id. at 18.
The Court disagrees. The KCPA does not require privity of contract where a defendant provided express warranties to the ultimate purchaser. Naiser v. Unilever U.S., Inc., 975 F. Supp. 2d 727, 743 (W.D. Ky. 2013) (citing Skilcraft Sheetmetal, Inc. v. Ky. Mach., Inc, 836 S.W. 2d 907, 909 (Ky. App. 1992). As the packaging on Defendants' gluten free Cheerios included an express warranty for Plaintiff's benefit, her KCPA claim falls within this exception. Defendants' motion is therefore DENIED as to Plaintiff's Fourth Claim for Violation of the KCPA.
Defendants' contention that Naiser is the "sole case to allow consumers to bring express warranty and KCPA claims without privity with the manufacturer" is inaccurate. Compare ECF No. 14 at 8 with Bosch v. Bayer Healthcare Pharmaceuticals, Inc., 13 F. Supp. 3d 730, 748-749 (W.D. Ky. April 8, 2014) (applying the Naiser exception to Kentucky's privity requirement). Furthermore, Defendant's reliance on Taylor v. Southwire Tools & Equipment is misplaced because the defendant in that case, unlike Defendants here, "neither manufactured nor packaged" the product in question. Taylor v. Southwire Tools & Equipment, 130 F. Supp. 3d 1017, 1023 (E.D. Ky. Sept. 11, 2015).
D. Fifth Claim - Unjust Enrichment
Plaintiffs also assert a cause of action for unjust enrichment. ECF No. 1 at 16. Defendants argue this cause of action should be dismissed for failure to state a claim because California does not recognize a cause of action for unjust enrichment and "it is, in fact, not a claim at all." ECF No. 7 at 18 (quoting McVicar v. Goodman Glob., Inc., 1 F. Supp. 3d 1044, 1059 (C.D. Cal. 2014). The Court agrees. "Courts consistently have held that unjust enrichment is not a proper cause of action under California law." McVicar v. Goodman Glob., Inc., 1 F. Supp. 3d 1044, 1059 (C.D. Cal. 2014) (quoting In re Toyota Motor Corp. Unintended Acceleration, Mktg., Sales Practices, & Prods. Liab. Litig., 754 F.Supp.2d 1145, 1194 (C.D. Cal. 2010)). Thus, Defendants' motion to dismiss Plaintiff's unjust enrichment claim is GRANTED without leave to amend.
E. Sixth Claim - Breach of Express Warranty
To state a claim for breach of express warranty, a plaintiff is required to "allege the exact terms of the warranty, plaintiff's reasonable reliance thereon, and a breach of that warranty which proximately causes plaintiff injury." Williams v. Beechnut Nutrition Corp., 185 Cal. App. 3d 135, 142 (Ct. App. 1986). Plaintiff alleges that Defendants' gluten free label expressly warranted that products bearing that label complied with all laws and regulations relating to gluten free foods, and that the products "would indeed be gluten free and could be consumed by persons who were sensitive to gluten or desired to exclude foods containing gluten from their diets." ECF No. 1 at ¶¶ 92-93. Plaintiff also alleges that she relied on Defendants' advertising and gluten free label in purchasing the gluten free Cheerios and that Defendants breached the express warranty "by failing to ensure that the oats used in the Cheerios met the regulatory guidelines, by failing to ensure the oat flour was free of gluten, and failing to test the finished cereal products." Id. at ¶¶ 93-96. Defendants nonetheless claim that Plaintiffs' claim should be dismissed because Plaintiff was required to allege that she provided Defendants with pre-suit notice of the breach and failed to do so. ECF No. 7 at 18-19 (citing Alvarez v. Chevron Corp., 656 F.3d 925, 932 (9th Cir. 2011)).
Defendants also contend that Plaintiff's breach of warranty claim should be dismissed pursuant to Kentucky law because "Plaintiff asserts" that she brought her claim under the laws of that state. ECF No. 14 at 8, n.3. That argument is specious. While the Complaint does not specify whether Plaintiff's breach of warranty claim is brought under California or Kentucky law, Plaintiff's Opposition is utterly devoid of any such assertion and, in fact, opposes Defendants' notice argument under California law. --------
Under most circumstances, plaintiffs are required to provide defendants with pre-suit notice within a reasonable time after discovering an alleged breach of warranty. Cal. Com. Code § 2607; Alvarez, 656 F.3d at 932 (9th Cir. 2011). Plaintiff concedes that notice was not given, but contends this failure should be excused because Defendants' were on actual notice of the alleged breach. ECF No. 13 at 17. Indeed, the California Supreme Court has construed a previous, analogous statute and found that pre-suit notice is not required where a breach of express warranty claim is "brought by injured consumers against manufacturers with whom they have not dealt." Greenman v. Yuba Power Products, Inc., 59 Cal.2d 57, 61 (Cal. 1963); see also, e.g., McVicar v. Goodman Global, Inc., 1 F. Supp. 3d 1044, 1058 (C.D. Cal. 2014); Sanders v. Apple Inc., 67 F. Supp. 2d 978 (N.D. Cal. 2009).
Plaintiff's argument that pre-suit notice was not required here is persuasive. While Alvarez succinctly states the general rule, the Ninth Circuit had no reason to consider the Greenman exception because the plaintiffs in in that case had dealt directly with the defendant manufacturers. See Alvarez, 656 F. 3d at 928. The Greenman exception remains good law in California, and its application here is reinforced by the fact that the purpose of § 2607's pre-suit notice requirement is to "allow the breaching party to cure the breach and thereby avoid the necessity of litigating the matter in court." Alvarez, 656 F.3d at 932. Because of the fact that Defendants were indisputably aware of the alleged breach prior to Plaintiff's filing of the instant action, imposing § 2607's pre-suit notice requirement here would fail to serve its purpose. Accordingly, Defendants' motion is DENIED as to Plaintiff's breach of express warranty claim.
F. Seventh Claim - Negligence
Plaintiff also brings a claim for negligence on behalf of the Kentucky Class. To state a negligence cause of action under Kentucky law, a plaintiff must plead factual allegations plausibly giving rise to (1) a duty on the part of the defendant; (2) a breach of that duty; and (3) consequent injury. Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245, 247 (Ky. 1992). Plaintiff alleges that Defendants owed Plaintiff and the proposed class a duty "to use reasonable care to provide true, reliable and safe information regarding the Cheerios." ECF No. 1 at ¶ 99. Plaintiff further alleges that Defendants breached that duty by intentionally selling gluten free Cheerios when Defendants "could not provide the promised gluten free benefits." Id. at ¶ 100. Plaintiff also alleges that she and the proposed class suffered damages "in an amount to be proven at trial." Id. at ¶ 104.
Defendants argue that Plaintiff's claim is barred by the economic loss rule because the Complaint does not allege any injury apart from the economic loss Plaintiff suffered from the purchase of Defendants' gluten free Cheerios. This argument lacks merit. First, Plaintiff alleged that she and the proposed class were "damaged in an amount to be proven at trial." ECF No. 1 at ¶ 104. In addition, Plaintiff has provided enough information regarding gluten sensitivity in the Complaint for the Court to infer that Plaintiff and the proposed class suffered physical injury as a result of consuming Defendants' gluten free Cheerios. See Compl. ECF No. 1 at ¶¶ 4-6. Accordingly, Defendants' Motion to Dismiss Plaintiff's negligence claim is DENIED.
G. Motion to Strike Class Allegations
Finally, Defendants move to strike Plaintiff's class allegations arguing that the class certification requirements of FRCP 23 cannot be met. ECF No. 7 at 11-15. Specifically, Defendants argue that Plaintiff cannot establish that a class action is a superior procedure, Plaintiff is an inadequate class representative and the proposed class is overbroad. Id. at 12-15. An argument that Plaintiff has not met the class certification requirements of FRCP 23 is more properly brought at the class certification stage. See Long v. Graco Children's Products Inc., No. 13-CV-01257-JD, 2014 WL 7204652, at *4 (N.D. Cal. Dec. 17, 2014) ("[M]any courts have recognized that the sufficiency of class allegations are better addressed through a class certification motion, after the parties have had an opportunity to conduct some discovery."). Accordingly, Defendants' Motion to Strike is DENIED.
CONCLUSION
Defendants' Motions (ECF No. 7) are GRANTED in part and DENIED in part:
(1) Plaintiff's First Cause of Action under California's Unfair Competition Law is DISMISSED with leave to amend.
(2) Plaintiff's Second Cause of Action for Violation of the California False Advertising Law is DISMISSED with leave to amend.
(3) Plaintiff's Third Cause of Action for Violation of California's Consumer Legal Remedies Act is DISMISSED with leave to amend to the extent that it seeks injunctive relief. Defendants' motion is DENIED to the extent that it seeks to dismiss Plaintiff's CRLA claim for damages.
(4) Defendants' motion to dismiss Plaintiff's Fourth Cause of Action for Violation of the Kentucky Consumer Protection Act is DENIED.
(5) Plaintiff's Fifth Cause of Action for Unjust Enrichment is DISMISSED without leave to amend.
(6) Defendants' motion to dismiss Plaintiff's Sixth Cause of Action for Breach of Express Warranty claim is DENIED.
(7) Defendants' motion to dismiss Plaintiff's Seventh Cause of Action for Negligence claim is DENIED.
(8) Plaintiff may, but is not required to, file an amended complaint with respect to those causes of action that have been dismissed with leave to amend. If no amended complaint is filed within twenty-one (21) days from the date this Order is electronically filed, the causes of action dismissed by this Order shall be dismissed with prejudice without further notice to the parties.
(9) Defendants' Motion to Strike is DENIED.
IT IS SO ORDERED. Dated: May 17, 2016
/s/_________
MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE