Mantikas et al v. Kellogg Company

Motion to Dismiss for Failure to State a Claim

E.D.N.Y.October 7, 2016

1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK KRISTEN MANTIKAS, KRISTIN BURNS, and LINDA CASTLE, individually and on behalf of all others similarly situated, Plaintiffs, v. KELLOGG COMPANY, Defendant. Case No. 2:16-cv-02552-SJF-AYS Hon. Sandra J. Feuerstein NOTICE OF MOTION AND MOTION TO DISMISS CLASS ACTION COMPLAINT PURSUANT TO RULE 12(b)(6) PLEASE TAKE NOTICE that, upon the accompanying Memorandum of Law submitted herewith, the undersigned attorneys for Defendant Kellogg Company (“Kellogg”) shall move this Court, before the Honorable Sandra J. Feuerstein, United States District Court Judge for the Eastern District of New York, at the Long Island Courthouse located at 100 Federal Plaza, Central Islip, NY 11722, for an Order dismissing the Class Action Complaint of Plaintiffs Kristen Mantikas, Kristin Burns, and Linda Castle (collectively, “Plaintiffs”) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, on the ground that the Complaint fails to state a claim upon which relief can be granted. Case 2:16-cv-02552-SJF-AYS Document 17 Filed 10/07/16 Page 1 of 2 PageID #: 60 2 Dated: August 5, 2016 Respectfully submitted, JENNER & BLOCK LLP By:___/s/ Kenneth K. Lee _________________ Kenneth K. Lee (NY Reg. No. 4056750) 633 West 5th Street, Suite 3600 Los Angeles, CA 90071 Tel: (213) 239-5100 E-mail: klee@jenner.com Dean N. Panos (admitted pro hac vice) 353 N. Clark Street Chicago, IL 60654 Tel: (312) 222-9350 E-mail: dpanos@jenner.com Attorneys for Defendant KELLOGG COMPANY Case 2:16-cv-02552-SJF-AYS Document 17 Filed 10/07/16 Page 2 of 2 PageID #: 61 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK KRISTEN MANTIKAS, KRISTIN BURNS, and LINDA CASTLE, individually and on behalf of all others similarly situated, Plaintiffs, v. KELLOGG COMPANY, Defendant. Case No. 2:16-cv-02552-SJF-AYS Hon. Sandra J. Feuerstein MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS CLASS ACTION COMPLAINT JENNER & BLOCK LLP Kenneth K. Lee (NY Reg. No. 4056750) klee@jenner.com 633 West 5th Street, Suite 3600 Los Angeles, CA 90071 Tel.: (213) 239-5100 Fax: (213) 239-5199 -and- Dean N. Panos (admitted pro hac vice) dpanos@jenner.com 353 N. Clark Street Chicago, IL 60654 Tel.: (312) 222-9350 Fax: (312) 527-0484 Attorneys for Defendant KELLOGG COMPANY Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 1 of 25 PageID #: 62 i TABLE OF CONTENTS Page(s) INTRODUCTION ...................................................................................................................... 1 BACKGROUND ........................................................................................................................ 3 I. THE PACKAGING FOR CHEEZ-IT ACCURATELY DISCLOSES THAT WHOLE GRAIN IS ONE OF THE INGREDIENTS AND FURTHER DISCLOSES THE PRECISE AMOUNT OF WHOLE GRAINS PER SERVING. ........................................................................................... 3 II. PLAINTIFFS FILE A CLASS ACTION LAWSUIT AGAINST KELLOGG ALLEGING DECEPTION. ..................................................................... 4 ARGUMENT .............................................................................................................................. 5 I. PLAINTIFFS HAVE NOT PLAUSIBLY SHOWN THAT THE FACTUALLY TRUE “MADE WITH WHOLE GRAIN” STATEMENT WILL LIKELY DECEIVE A REASONABLE CONSUMER ................................... 5 II. PLAINTIFFS’ CLAIMS ARE PREEMPTED BECAUSE “MADE WITH WHOLE GRAINS” CONSTITUTES A PERMISSIBLE IMPLIED NUTRIENT CLAIM UNDER FEDERAL LAW .................................... 10 III. PLAINTIFFS FAIL TO STATE A CLAIM FOR UNJUST ENRICHMENT. ........................................................................................................ 13 A. The Court Lacks Subject Matter Jurisdiction Over Plaintiffs’ Unjust Enrichment Claim Under Michigan Law. .......................................... 14 B. Plaintiffs’ Unjust Enrichment Claim Must Be Dismissed Because Plaintiffs Have Not Conferred a Benefit On Kellogg. ................................... 14 C. Plaintiffs’ Attempt to Apply Michigan Law to a Nationwide Class Is Improper. .................................................................................................... 15 IV. PLAINTIFFS LACK STANDING FOR INJUNCTIVE RELIEF. ........................... 16 CONCLUSION ......................................................................................................................... 18 Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 2 of 25 PageID #: 63 ii TABLE OF AUTHORITIES Page(s) CASES A & M Supply Co. v. Microsoft Corp., No. 274164, 2008 WL 540883 (Mich. Ct. App. Feb. 28, 2008) ..............................................15 Ackerman v. Coca-Cola, No. 09-0395, 2010 WL 2925955 (E.D.N.Y. July 21, 2010) ....................................................12 Anderson v. The Hain Celestial Group, Inc., 87 F. Supp. 3d 1226 (N.D. Cal. 2015) .....................................................................................17 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...............................................................................................................6, 7 Backus v. Nestle USA, Inc., No. 15-1963, 2016 WL 879673 (N.D. Cal. Mar. 8, 2016) ......................................................12 Brod v. Sioux Honey Ass’n, Co-op., 927 F. Supp. 2d 811 (N.D. Cal. 2013) .......................................................................................5 Carrea v. Dreyer’s Grand Ice Cream, Inc., 475 F. App’x 113 (9th Cir. 2012) ..............................................................................................8 Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111 (N.D. Cal. 2010) .............................................................................12, 13 City of Los Angles v. Lyons, 461 U.S. 95 (1983) ...................................................................................................................16 Cohen v. JP Morgan Chase & Co., 498 F.3d 111 (2d. Cir. 2007)..................................................................................................5, 9 Dodge v. Cnty. of Orange, 103 Fed. App’x 688 (2d Cir. 2004) ..........................................................................................17 Elkind v. Revlon Consumer Prods. Corp., No. 14-2484, 2015 WL 2344134 (E.D.N.Y. May 14, 2015) ...................................................16 Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013).................................................................................................5, 10 Freeman v. Time, Inc., 68 F.3d 285 (9th Cir. 1995) .......................................................................................................9 Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 3 of 25 PageID #: 64 iii Garrison v. Whole Foods Mkt. Grp., Inc., No. 13-05222, 2014 WL 2451290 (N.D. Cal. June 2, 2014) ...................................................18 Grund v. Delaware Charter Guarantee & Trust Co., 788 F. Supp. 2d 226 (S.D.N.Y. 2011) ......................................................................................16 Hairston v. S. Beach Beverage Co., No. 12-1429, 2012 WL 1893818 (C.D. Cal. May 18, 2012) .............................................10, 13 Ham v. Hain Celestial Grp., Inc., 70 F. Supp. 3d 1188, 1196 (N.D. Cal. 2014) ...........................................................................18 Henderson v. Gruma Corp., No. 10-04173, 2011 WL 1362188 (C.D. Cal. Apr. 11, 2011) ...............................................6, 9 Hidalgo v. Johnson & Johnson Consumer Cos, Inc., No. 15-5199, 2015 WL 8375196 (S.D.N.Y. Dec. 8, 2015) .....................................................17 Hill v. Roll International Corp., 195 Cal. App. 4th 1295 (2011) ..................................................................................................5 Hodgers-Durgin v. de la Vina, 199 F.3d 1037 (9th Cir. 1999) .................................................................................................17 In re Aftermarket Filters Antitrust Litig., No. 08-4883, 2010 WL 1416259 (N.D. Ill. Apr. 1, 2010) .......................................................15 In re Grand Theft Auto Video Game Consumer Litig., 251 F.R.D. 139 (S.D.N.Y. 2008) .............................................................................................16 In re Hydrogen, L.L.C., 431 B.R. 337 (Bankr. S.D.N.Y. 2010) .....................................................................................16 In re Packaged Ice Antitrust Litig., 779 F. Supp. 2d 642 (E.D. Mich. 2011) ...................................................................................14 In re Pepsico, Inc., Bottled Water Mktg. & Sales Practices Litig., 588 F. Supp. 2d 527 (S.D.N.Y. 2008) ......................................................................................11 In re Refrigerant Compressors Antitrust Litig., No. 09-02042, 2013 WL 1431756 (E.D. Mich. Apr. 9, 2013) ................................................15 Karaus v. Bank of New York Mellon, 300 Mich. App. 9 (2012)..........................................................................................................14 Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496 (2003) ................................................................................................5, 9 Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 4 of 25 PageID #: 65 iv Machlan v. Procter & Gamble Co., 77 F. Supp. 3d 954, 960 (N.D. Cal. 2015) ...............................................................................18 Manchouck v. Mondelez, No. 13-02148, 2013 WL 5400285 (N.D. Cal. Sept. 26, 2013) ..................................................7 Marder v. Lopez, 450 F.3d 445 (9th Cir. 2006) .....................................................................................................3 Mayfield v. U.S., 599 F.3d 964 (9th Cir. 2010) ...................................................................................................17 McKinniss v. Sunny Delight Beverages Co., No. 07-02034, 2007 WL 4766525 (C.D. Cal. Sept. 4, 2007) ................................................5, 8 Mills v. Giant of Md., LLC, 441 F. Supp. 2d 104 (D.D.C. 2006) .........................................................................................10 Morales v. Unilever U.S., Inc., No. 13-2213, 2014 WL 1389613 (E.D. Cal. Apr. 9, 2014) .....................................................14 Mosely v. Vitalize Labs LLC, Nos. 13 CV 2470(RJD)(RLM), 14 CV 4474(RJD)(RLM), 2015 WL 5022635 (E.D.N.Y. Aug. 24, 2015) .........................................................................14 O’Shea v. Littleton, 414 U.S. 488 (1974) .................................................................................................................16 Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20 (1995) ..................................................................................................................5 Pension Benefit Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705 (2d Cir. 2013).......................................................................................................6 Peviani v. Hostess Brands, Inc., 750 F. Supp. 2d 1111 (C.D. Cal. 2010) ...................................................................................11 Red v. Kraft Foods, Inc., 754 F. Supp. 2d 1137 (C.D. Cal. 2010) ...........................................................................6, 9, 12 Salazar v Honest Tea, Inc., 74 F. Supp. 3d 1304 (E.D. Cal. 2014)......................................................................................12 Samet v. Procter & Gamble, No. 12-01891, 2013 WL 3124647 (N.D. Cal. June 18, 2013) ...................................................7 Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 5 of 25 PageID #: 66 v Sensible Foods, LLC v. World Gourmet, Inc., No. 11-2819, 2012 WL 566304 (N.D. Cal. Feb. 21, 2012) ...................................................6, 8 Smith v. Glenmark Generics, Inc., USA, No. 315898, 2014 WL 4087968 (Mich. Ct. App. Aug. 19, 2014) ...........................................14 Stoltz v. Fage Dairy Processing Indus., S.A., No. 14-3826, 2015 WL 5579872 (E.D.N.Y. Sept. 22, 2015) ............................................10, 14 Storey v. Attends Healthcare Prods., Inc., No. 15-13577, 2016 WL 3125210 (E.D. Mich. June 3, 2016) ................................................15 Tomasino v. Estee Lauder Cos., Inc., 44 F. Supp. 3d 251, 256 (E.D.N.Y. 2014) ...............................................................................18 Verzani v. Costco Wholesale Corp., No. 09-2117, 2010 WL 3911499 (S.D.N.Y. Sept. 28, 2010) ....................................................8 Workman v. Plum Inc., 141 F. Supp. 3d 1032 (N.D. Cal. 2015) .................................................................................7, 9 Wright v. Gen. Mills, Inc., No. 08-1532, 2009 WL 3247148 (S.D. Cal. Sept. 30, 2009) .....................................................3 Zurich Ins. Co. v. Shearson Lehman Hutton, Inc., 84 N.Y.2d 309 (N.Y. 1994) .....................................................................................................16 STATUTES 21 U.S.C. § 341 et seq..............................................................................................................10, 11 California’s Consumer Legal Remedies Act (CAL. CIV. CODE § 1750) ..........................................5 California’s False Advertising Law (CAL. BUS. & PROF. CODE § 17500) .......................................5 California’s Unfair Competition Law (CAL. BUS. & PROF. CODE § 17200) ....................................4 Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. ..................................................10 N.Y. GEN. BUS. LAW §§ 349, 350 ....................................................................................................4 OTHER AUTHORITIES 21 C.F.R. § 100.1 ...........................................................................................................................11 21 C.F.R. § 101.13 ...................................................................................................................11, 12 H.R. Rep. No. 101-538 (1990), reprinted in 1990 U.S.C.C.A.N. 3336 ........................................10 Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 6 of 25 PageID #: 67 1 INTRODUCTION The Kellogg Company makes Cheez-It, the iconic brand of baked crackers that consumers have enjoyed for nearly a century. Over the years, Kellogg has introduced different varieties of Cheez-It, including one that includes whole grains. The 2016 version of the packaging for the whole grain variety of Cheez-It states “MADE WITH WHOLE GRAIN” — a factually true statement saying that one of the ingredients is whole grain. Notably, the box does not state that the product is made with whole grains exclusively. As the ingredient list on the box discloses, Cheez-It contains both enriched flour and whole wheat flour (which is the third- highest ingredient by weight in the product). And the front of the Cheez-it box discloses exactly how many whole grains are in each serving: A prominent banner in high-contrast block font states, “MADE WITH 8g OF WHOLE GRAINS PER SERVING.” Despite this transparency, Plaintiffs have filed this putative class action lawsuit, alleging that they were deceived into believing that Cheez-It is made exclusively with whole grains and that therefore they mistakenly believed that there were more whole grains than there actually are in the snack. This lawsuit — which invokes the laws of New York, California, and Michigan — must be dismissed for several reasons. First, Plaintiffs have failed to plausibly show that a reasonable consumer would likely be deceived by the Cheez-It packaging. The statement “Made with Whole Grain” is a factually true statement because Plaintiffs do not dispute that whole grains are indeed one of the ingredients in Cheez-It. Plaintiffs’ objection is that they incorrectly construed that statement to mean that it has only 100% whole grains only and no other types of grain or flour ingredients. But over a half- dozen federal courts in recent years have rejected that same argument in virtually identical food labeling cases, where plaintiffs alleged that similar phrases (such as “Made with Vegetables” or “Made with Fruits”) misleadingly suggested that the food products contained substantially more amounts of vegetables or fruits than they believed. Court after court has dismissed such claims, ruling that the challenged statements are not deceptive as a matter of law because they merely indicate what they say — that “fruit” or “vegetable” (or “whole grain” in this case) is one of the Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 7 of 25 PageID #: 68 2 ingredients. Plaintiffs’ assertion of deception is even more implausible because they cannot solely fixate on “Made with Whole Grain” statement and cast a blind eye on the rest of the packaging. As the Second and Ninth Circuits have held, courts must review the packaging “as a whole” and “in context” in determining whether it is deceptive at the pleading stage. And here, the ingredient list discloses that Cheez-It contains both enriched flour and whole wheat flour. And to ensure there is no doubt about the ingredients in the product, the front of the Cheez-It box puts consumers on notice exactly how many whole grains are in Cheez-It: A banner prominently states that it is “MADE WITH 8g of WHOLE GRAIN PER SERVING.” In other words, Plaintiffs knew exactly how much whole grains were in Cheez-It, and they now cannot claim that they were duped about the amount of whole grains in the snack. Second, Plaintiffs’ claims are preempted because federal law expressly allows food companies to make nutrient content claims on the packaging. “Made with Whole Grain” and “Made with 8g of Whole Grain Per Serving” are implied and express nutrient content claims, respectively, under FDA’s food labeling regulations. Several courts have accordingly dismissed similar statements (e.g., “Made With Whole Grain Oat”) on preemption grounds. Likewise here, Plaintiffs cannot invoke state law to challenge these federally sanctioned statements. Third, Plaintiffs’ unjust enrichment claim under Michigan law must be dismissed for several reasons. For starters, Plaintiffs — who are citizens of New York or California and who bought Cheez-It in their home states — cannot invoke Michigan law merely because Kellogg is based there. In addition to this jurisdictional defect, Plaintiffs’ claim lacks merit substantively because Michigan requires plaintiffs to have previously provided direct benefits to defendants to assert unjust enrichment. But Plaintiffs bought Cheez-It from retailers, not directly from Kellogg. Finally, Plaintiffs lack standing for their injunctive relief claim because they no longer face any imminent threat of future harm. In their complaint, they allege that they will no longer purchase Cheez-It now that they are aware of the allegedly deceptive packaging. Many courts in similar food labeling cases have held that plaintiffs in such situations lack standing to demand Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 8 of 25 PageID #: 69 3 injunctive relief because there is no likelihood that they will be deceived in the future. BACKGROUND I. The Packaging for Cheez-It Accurately Discloses That Whole Grain Is One of the Ingredients and Further Discloses the Precise Amount of Whole Grains Per Serving. Kellogg offers Cheez-It baked snack crackers in a wide variety of flavors and ingredients, including a version that includes whole grains. Over the class period, the packaging of the whole grain variety of Cheez-It has varied. Plaintiffs take issue with the 2016 version of the Cheez-It packaging which stated in the front of the box “MADE WITH WHOLE GRAINS” along with a prominent statement “MADE WITH 8g OF WHOLE GRAINS PER SERVING” below it. Ex. A.1 The Nutrition Facts panel on the packaging further discloses that a serving size is 30 grams, which is guided by federal regulations governing serving sizes for various foods. Ex. A (Nutrition Facts). Notably, Plaintiffs’ allegations notwithstanding, Cheez-It has never been advertised as containing whole grains only. To the contrary, the ingredient list on the Cheez-It packaging discloses that it contains both enriched flour and whole wheat flour (as the third-highest ingredient by weight). Id., ¶ 52. And the front of the packaging makes clear exactly how many whole grains are found in each serving (“MADE WITH 8g OF WHOLE GRAIN PER SERVING”): 1 The amount of whole grains in each serving can vary depending on the size/variety of the Cheez-Its product. Images of the Cheez-It box are attached to the accompanying Declaration of Kenneth K. Lee. This Court can take judicial notice of the Cheez-It packaging because courts are entitled to consider “evidence on which the complaint ‘necessarily relies,’” even if the evidence is not physically attached to the complaint, in deciding a Rule 12 motion. Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006). Plaintiffs’ Complaint “necessarily relies” upon the packaging of Cheez-Its in alleging that the packaging is deceptive. See also Wright v. Gen. Mills, Inc., No. 08-1532, 2009 WL 3247148, at *4-5 (S.D. Cal. Sept. 30, 2009) (taking judicial notice of and incorporating by reference product labels and packaging items that served as the basis for the allegations in plaintiff’s complaint). Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 9 of 25 PageID #: 70 4 Ex. A. II. Plaintiffs File a Class Action Lawsuit Against Kellogg Alleging Deception. Despite the prominent disclosures on the Cheez-It box, Plaintiffs allege that they were deceived into believing that the crackers were “predominantly whole grain.” See Compl., ¶¶ 56- 60. Plaintiffs assert causes of action for violations of New York’s Consumer Protection from Deceptive Acts and Practices law (N.Y. GEN. BUS. LAW §§ 349, 350), California’s Unfair Competition Law (CAL. BUS. & PROF. CODE § 17200), California’s False Advertising Law (CAL. Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 10 of 25 PageID #: 71 5 BUS. & PROF. CODE § 17500), and California’s Consumer Legal Remedies Act (CAL. CIV. CODE § 1750), as well as a claim for unjust enrichment under Michigan law. Compl., ¶¶ 82-141. Plaintiffs seek injunctive relief, restitution, and statutory, compensatory, and punitive damages. See id. at 26-27 (Prayer for Relief). ARGUMENT I. Plaintiffs Have Not Plausibly Shown That the Factually True “Made With Whole Grain” Statement Will Likely Deceive a Reasonable Consumer.________________ To prevail on their consumer fraud claims under New York and California statutes, Plaintiffs “must establish that [Kellogg’s] allegedly deceptive statements were likely to mislead a reasonable consumer acting reasonably under the circumstances.” Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013); McKinniss v. Sunny Delight Beverages Co., No. 07-02034, 2007 WL 4766525, at *2 (C.D. Cal. Sept. 4, 2007) (same). Under the “reasonable consumer” standard, Plaintiffs must show that it is “probable that a significant portion of the general consuming public or of target consumers, acting reasonably in the circumstances, could be misled.” Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 508 (2003) (emphasis added); see also Cohen v. JP Morgan Chase & Co., 498 F.3d 111, 126 (2d. Cir. 2007) (“The New York Court of Appeals has adopted an objective definition of ‘misleading,’ under which the alleged act must be ‘likely to mislead a reasonable consumer acting reasonably under the circumstances.’”) (quoting Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 26 (1995)). Plaintiffs must show “more than a mere possibility that the advertisement might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner.” Brod v. Sioux Honey Ass’n, Co-op., 927 F. Supp. 2d 811, 828 (N.D. Cal. 2013), aff’d, 609 F. App’x 415 (9th Cir. 2015). Put another way, the challenged terms must be evaluated with reference to the “reasonable consumer,” not the “unwary consumer” or “least sophisticated consumer.” Hill v. Roll International Corp., 195 Cal. App. 4th 1295, 1304 (2011). Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 11 of 25 PageID #: 72 6 Additionally, to survive dismissal, a claim must be “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In other words, there must be “more than a sheer possibility that a defendant has acted unlawfully.” Id.; see also Pension Benefit Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 718 (2d Cir. 2013) (dismissal is appropriate where “the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct”); Sensible Foods, LLC v. World Gourmet, Inc., No. 11-2819, 2012 WL 566304, at *6 (N.D. Cal. Feb. 21, 2012) (the court “must determine, relying on its judicial experience and common sense, whether. . .allegations amount to a plausible claim.”). Federal courts have time and time again dismissed virtually identical claims where the plaintiffs have alleged that a “Made with [certain ingredient]” claim is misleading because the product did not contain sufficient amounts of the depicted or stated ingredient. These courts have held that such statements are factually true if the product indeed contains such an ingredient, and that they are therefore not deceptive as a matter of law. • In Red v. Kraft, the plaintiffs claimed that the statement “Made with Real Vegetables” on the packaging of Vegetable Thins crackers was misleading because they believed that the product contained large amounts of vegetables when in reality it contained only small amounts of vegetable powder. No. 10-1028, 2012 WL 5504011 (C.D. Cal. Oct. 25, 2012), enforced, 2012 WL 5502359 (C.D. Cal. Oct. 26, 2012). The court dismissed the claim, ruling that it the statement is factually true because vegetables are indeed one of the ingredients. It rejected the plaintiffs’ claim of deception, stating that it “strains credulity to imagine that a reasonable consumer will be deceived into thinking a box of crackers . . . contains huge amounts of vegetables simply because there are pictures of vegetables and the true phrase "Made with Real Vegetables" on the box.” Id. at *4. • Similarly, in Henderson v. Gruma Corp., the plaintiff claimed that a dip labeled “With Garden Vegetables” was mislabeled because it suggested that there were more vegetables in the dip than there actually were. No. 10-04173, 2011 WL 1362188, at *12 (C.D. Cal. Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 12 of 25 PageID #: 73 7 Apr. 11, 2011). The court dismissed the complaint, ruling that dip “in fact contain vegetables that can be grown in a garden” and that the “labeling statement does not claim a specific amount of vegetables in the product, but rather speaks to their presence in the product, which is not misleading [as a matter of law].” Id. • Another class action lawsuit challenged Plum’s Organics baby food, arguing that images of healthy and expensive fruits (e.g., pomegranate) in the packaging were deceptive because they were not in fact the most prominent ingredients in the products and that the product in fact had more cheap ingredients (e.g., banana puree). See Workman v. Plum Inc., 141 F. Supp. 3d 1032 (N.D. Cal. 2015). The court dismissed the complaint, ruling that there were no “affirmative misrepresentations” and that no reasonable consumer would be misled. See id. at 1035-37. It added that “any potential ambiguity could be resolved by the back panel of the products, which listed all ingredients in order of predominance, as required by the FDA. As our court of appeals stated in this context, ‘reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging.’” Id. at 1035. • In Manchouck v. Mondelez, the plaintiff challenged the term “Made with Real Fruit” in strawberry and raspberry Newtons, arguing that they were made primarily of “small amount of processed fruit puree.” No. 13-02148, 2013 WL 5400285 (N.D. Cal. Sept. 26, 2013), aff’d 603 Fed. App’x. 632 (9th Cir. 2015). The court dismissed the complaint stating that the plaintiff has not met the Iqbal plausibility requirement because the “complaint does not dispute that the cookies contain real fruits.” Id. at *3. • Similarly in Samet v. Procter & Gamble, the plaintiffs objected to the statement “Made with Real Fruit” on Fruity Snacks, arguing that the products contained little amount of fruits. No. 12-01891, 2013 WL 3124647, at *6 (N.D. Cal. June 18, 2013). The court dismissed that claim, ruling that “made with real fruit” is accurate because Fruity Snacks contain “apple puree concentrate.” Id. Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 13 of 25 PageID #: 74 8 • A plaintiff challenged the name of a product — Apple Straws — on the grounds that it was made primarily of potatoes, not apples. The court dismissed the claim, holding that the name of the product was not deceptive because it did indeed contain apples. See Sensible Foods, LLC v. World Gourmet, Inc., 2012 WL 566304, at *6 (N.D. Cal. Feb. 21, 2012). • And in McKinniss v. Sunny Delight, the plaintiff alleged that Sunny Delight drinks misleadingly suggested that they contained substantial amount of fruits in light of their fruit names and images of fruits. No. 07-02034, 2007 WL 4766525, *1-4 (C.D. Cal. 2007). The court dismissed the complaint, ruling that “no reasonable consumer, upon review of the label as a whole…would conclude that Defendant’s products contain significant quantities of fruit or fruit juice” because the bottle truthfully identifie[d] that each of its products contains 2% of less of concentrated [fruit] juice,” and included a Nutrition Facts panel listing water and high fructose corn syrup as the most prominent ingredients. Id. at *3-4. As the court explained, “[w]here a consumer can readily and accurately determine the composition and nutritional value of a product (here, by reading the front and back of the label), no reasonable consumer would be misled or deceived by depictions of fruit on a label.” Id. at *4.2 As in all of the cited cases above, the statement “Made with Whole Grains” is not deceptive as a matter of law because it is a factually true statement. That statement merely indicates what it says — that whole grains are one of the ingredients in Cheez-It. And it is undisputed that Cheez-It has whole grains, as disclosed in the ingredient list as the third-highest 2 See also, e.g., Verzani v. Costco Wholesale Corp., No. 09-2117, 2010 WL 3911499, at *2 (S.D.N.Y. Sept. 28, 2010), aff’d, 432 F. App’x 29 (2d Cir. 2011) (dismissing lawsuit alleging net weight of “shrimp tray with cocktail sauce” was deceptive because it included weight of cocktail sauce because a “reasonable consumer reading the tray’s label would not pick out ‘shrimp’ to the exclusion of all the information on the label”); Carrea v. Dreyer’s Grand Ice Cream, Inc., 475 F. App’x 113, 115 (9th Cir. 2012) (affirming dismissal of UCL, CLRA, and FAL claims and rejecting the plaintiff’s attempt to interpret words on a product’s label out of context). Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 14 of 25 PageID #: 75 9 ingredient by weight. Nowhere does the packaging suggest that it has only whole grains, but rather that statement “speaks to their presence in the product, which is not misleading.” Henderson, 2011 WL 1362188, at *12. In fact, the only reason why Plaintiffs know that Cheez- It contains other types of grains is that it is fully disclosed in the ingredient list on the box. See Workman, 141 F. Supp. 3d at 1035 (“any potential ambiguity could be resolved by the back panel of the products, which listed all ingredients in order of predominance, as required by the FDA”). And critically, the front of the Cheez-It box prominently discloses precisely how many whole grains are present in each serving (“Made with 8g of Whole Grains Per Serving”). Ex. A. Plaintiffs’ claim is thus even weaker than those in Red, Henderson and the other cited cases because the front of the Cheez-It box informs consumers exactly how many whole grains are in each serving. Simply put, Plaintiffs’ claims are not plausible because they have not shown that it is “probable that a significant portion of the general consuming public or of target consumers, acting reasonably in the circumstances” would find “Made with Whole Grains” and “Made with 8g of Whole Grains Per Serving” to be deceptive. Lavie, 105 Cal. App. 4th at 508; see also Cohen v. JP Morgan Chase & Co., 498 F.3d at 126 (2d. Cir. 2007) (applying similar standard under NY law). And even putting aside the half-dozen courts that have dismissed similar “Made with [certain ingredient]” claims as a matter of law and believes that “Made with Whole Grain” is potentially ambiguous, Plaintiffs’ claims still must fail because the entire packaging must be viewed as a whole. Plaintiffs essentially ask this Court to ignore the prominent statement in the front of the box — “Made with 8g of Whole Grains Per Serving” — and focus exclusively on “Made with Whole Grains,” which she claims could be misleading. But both the Second and Ninth Circuits have held that the entire packaging or advertisement “as a whole” must be viewed in context in determining at the pleading stage whether it is deceptive.3 And it is simply 3 As the Ninth Circuit put it, the challenging statement must be read “in the context of the entire document.” Freeman v. Time, Inc., 68 F.3d 285, 290 (9th Cir. 1995) (dismissing consumer protection claims because “[a]ny ambiguity that [plaintiff] would read into any particular Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 15 of 25 PageID #: 76 10 implausible that a reasonable consumer could believe that Cheez-It contains only whole grains when the ingredient list states that it has both whole wheat and enriched flour, and the front of the box prominently discloses exactly how many grams of whole grains are in each serving. II. Plaintiffs’ Claims Are Preempted Because “Made with Whole Grains” Constitutes A Permissible Implied Nutrient Claim Under Federal Law.__________________ Plaintiffs’ state law claims must also be dismissed because they are preempted under federal law. The Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. (FDCA), establishes a comprehensive and uniform federal scheme of food regulation to ensure that food is safe and labeled in a manner that does not mislead consumers. See 21 U.S.C. § 341 et seq. Congress amended the FDCA through the passage of the Nutrition Labeling and Education Act (NLEA) to “clarify and to strengthen the Food and Drug Administration’s legal authority to require nutrition labeling on foods, and to establish the circumstances under which claims may be made about nutrients in foods.” H.R. Rep. No. 101-538, at 9 (1990), reprinted in 1990 U.S.C.C.A.N. 3336, 3337. The NLEA sets forth specific requirements for the labeling of nutrition information and the making of nutrient content claims. See 21 U.S.C. § 343(q), (r). The NLEA establishes a uniform standard for food labeling by including a broad express preemption provision. 21 U.S.C. § 343-1(a)(3); see Mills v. Giant of Md., LLC, 441 F. Supp. 2d 104, 106-09 (D.D.C. 2006) (noting the expansive scope of the NLEA preemption clause). Congress established this express preemption provision because it did not want food makers to comply with potentially 50 different state food labeling standards, the costs of which would then statement is dispelled by the promotion as a whole.”). See also Hairston v. S. Beach Beverage Co., No. 12-1429, 2012 WL 1893818, at *4 (C.D. Cal. May 18, 2012) (dismissing plaintiff’s false advertising claims “based on a single out-of-context phrase found in one component of [defendants’ product] label.”). Likewise, the Second Circuit recognized that “context is crucial.” Fink, 714 F.3d at 742 (“the presence of a disclaimer or similar clarifying language may defeat a claim of deception.” Id. See also Stoltz v. Fage Dairy Processing Indus., S.A., No. 14-3826, 2015 WL 5579872, at *16 (E.D.N.Y. Sept. 22, 2015) (“[I]t is necessary to consider not only the allegedly misleading statement but also the surrounding context based on the content of the entire label or advertisement at issue.”). Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 16 of 25 PageID #: 77 11 be ultimately borne by consumers. Accordingly, the NLEA provides that “no State or political subdivision of a State may directly or indirectly establish . . . any requirement for nutrition labeling of food . . . that is not identical to the requirement[s]” set forth in the NLEA. 21 U.S.C. § 343-1(a)(4), (5) (emphasis added). “‘Not identical to’ does not refer to the specific words in the requirement but instead means that the State requirement directly or indirectly imposes obligations or contains provisions” that are “not imposed by or contained in” or that “[d]iffer from those specifically imposed by or contained in” the statute or its implementing regulations. 21 C.F.R. § 100.1(c)(4). In other words, states cannot impose their own unique labeling standards that go “beyond, or [are] different from” the federal labeling standards that Congress has established. In re Pepsico, Inc., Bottled Water Mktg. & Sales Practices Litig., 588 F. Supp. 2d 527, 532, 534 (S.D.N.Y. 2008); see also Peviani v. Hostess Brands, Inc., 750 F. Supp. 2d 1111, 1118-20 (C.D. Cal. 2010) (explaining claim must be preempted where it seeks to impose obligations different from or in addition to those imposed by federal law). Federal regulations issued pursuant to the NLEA expressly permit a food manufacturer to make both an “expressed nutrient content claim” and an “implied nutrient content claim.” An express nutrient content claim is “any direct statement about the level (or range) of a nutrient in the food, e.g., ‘low sodium’ or ‘contains 100 calories.’” 21 C.F.R. § 101.13(b)(1). In other words, it makes an explicit assertion about the amount of a nutrient in a product. An implied nutrient content claim, in contrast, is defined as “any claim that . . . [d]escribes the food or an ingredient therein in a manner that suggests a nutrient is absent or present in a certain amount.” 21 C.F.R. § 101.13(b)(2). As its name suggests, an implied nutrient content claim does not make an explicit statement about the amount of nutrients, but rather implies that it has a certain amount of nutrients in a product. Here, both “whole grain” statements on Cheez-Its are nutrient content claims and are expressly preempted: “Made with 8g of Whole Grain”: There can be no doubt that this statement is an express nutrient content claim because it expressly refers to the amount of whole grain in the product. Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 17 of 25 PageID #: 78 12 See Red v. Kraft Foods, Inc., 754 F. Supp. 2d 1137, 1139 (C.D. Cal. 2010) (“‘whole grain’ per serving [claims] were not actionable on the ground that they are preempted by federal law”).4 Accordingly, this statement is preempted. “Made with Whole Grain”: Likewise, this statement is preempted because it is an implied nutrient content claim. Based on Plaintiffs’ own reading of that statement, it “suggests a nutrient is . . . present in a certain amount” in an implicit manner (i.e., Plaintiffs suggest that “Made With Whole Grain” implies that it has a very substantial amount — 100% only— of whole grains). 21 C.F.R. § 101.13(b)(2). A highly instructive decision is Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111, 1121-22, 1127 (N.D. Cal. 2010). The plaintiffs there had challenged, among other things, the statement “Made With Whole Grain Oats,” even though “Plaintiffs do not contend that [the] statement is directly false” as “they acknowledge that Chewy Bars contain whole grain oats.” Id.at 1121-22. The court explained that while “a simple statement of an ingredient need not necessarily count as a nutrient content claim,” it noted that the “FDA has instructed, however, that it may function as such a claim under some circumstances.” Id. at 1121 (citing Ackerman v. Coca-Cola, No. 09-0395, 2010 WL 2925955, at *3 (E.D.N.Y. July 21, 2010). And in that case, the court held that “Made With Whole Grain Oats” was an implied nutrient content statement because, based on the plaintiffs’ theory of the case, that statement suggested that it had certain amount of whole grain oats and lacked certain unhealthful ingredients to be healthy. See id. at 1121-22. The court therefore ruled that “Made With Whole Grain Oats” was an implied nutrient content statement. Likewise here, “Made with Whole Grains” is an implied nutrient content claim that suggests a certain amount of nutrients because, under Plaintiffs’ theory, that statement implies it has a substantial (“100% only”) 4 Cf. e.g., Backus v. Nestle USA, Inc., No. 15-1963, 2016 WL 879673, at *7-8 (N.D. Cal. Mar. 8, 2016) (declaration of “0g Trans Fat” permitted by FDA regulations and therefore UCL claim preempted); Salazar v Honest Tea, Inc., 74 F. Supp. 3d 1304, 1312 (E.D. Cal. 2014) (UCL claims about alleged misrepresentation of antioxidant levels preempted); Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 18 of 25 PageID #: 79 13 amount of whole grain. Therefore, Plaintiffs’ state law claim challenging the “Made With Whole Grain” statement is preempted. Even if “Made with Whole Grain” was not determined to be an implied nutrient content claim, Plaintiffs’ argument still fails under a preemption analysis because this Court cannot separate “Made with Whole Grain” from “Made with 8g of Whole Grain.” A case directly on- point is Hairston v. S. Beach Beverage Co., No. 12-1429, 2012 WL 1893818, at *4 (C.D. Cal. May 18, 2012). There, the plaintiff alleged that SoBe Lifewater drinks were deceptively mislabeled due to the “all natural” label (because they allegedly had artificial or synthetic ingredients) and the names of fruits on the bottle (because the drinks did not have such fruits). The court ruled that state law claims challenging the names of various fruits were preempted because federal law permits the use of fruit names to indicate flavoring. See id. at *3-4. And while the “all natural” claim was not preempted, the court dismissed it because “once the preempted statements regarding fruit names and vitamin labeling are removed, Plaintiffs’ claim is based on a single out-of-context phrase found in one component of Lifewater’s label.” Id. (ruling that “Plaintiff’s selective interpretation of individual words or phrases from a product’s labeling cannot support” a claim). Similarly here, the statement “Made with 8g of Whole Grain” is undisputedly an express nutrient content claim that preempts state law causes-of-action. And “once [that] preempted statement” is “removed, Plaintiff’s claim is based on a single out-of-context phrase” that is not actionable. Id. at *4. In short, the statements “Made with 8g of Whole Grain” and “Made with Whole Grain” appear both in prominent font in the front of packaging, and must be read in context. Plaintiffs cannot selectively pick-and-choose one statement, especially where one of them is inarguably permitted under federal law. III. Plaintiffs Fail to State A Claim For Unjust Enrichment. Plaintiffs — who are citizens of New York or California — assert an unjust enrichment claim under Michigan law. Their claim fails for three independent reasons. Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 19 of 25 PageID #: 80 14 A. The Court Lacks Subject Matter Jurisdiction Over Plaintiffs’ Unjust Enrichment Claim Under Michigan Law. Plaintiffs lack standing to bring an unjust enrichment claim under Michigan law because they are citizens of New York or California and purchased Cheez-Its in their home states. Compl., ¶¶ 10, 11, 18, 19, 28, 29. They have no connection to Michigan, and any alleged injury thus occurred outside of the state of Michigan. It is black-letter law that “named plaintiffs lack standing to assert claims under the laws of states in which they do not reside or in which they suffered no injury.” In re Packaged Ice Antitrust Litig., 779 F. Supp. 2d 642, 657 (E.D. Mich. 2011); see also Stoltz v. Fage Dairy Processing Indus., S.A., No. 14-3826, 2015 WL 5579872, at *12-13 (E.D.N.Y. Sept. 22, 2015) (“Plaintiffs cannot assert claims under the laws of states for which they have not established standing.”); Morales v. Unilever U.S., Inc., No. 13-2213, 2014 WL 1389613, at *6 (E.D. Cal. Apr. 9, 2014) (“Accordingly, because neither plaintiff has standing to sue under the laws of any state but her own, the court must grant defendant’s motion to dismiss plaintiffs’ claims on behalf of the Class to the extent they arise under the laws of states other than California and Massachusetts.”). Moreover, Plaintiffs cannot invoke Michigan law merely “based on the fact that defendant[] . . . [is] headquartered” in that state. Cf. Mosely v. Vitalize Labs LLC, Nos. 13 CV 2470(RJD)(RLM), 14 CV 4474 (RJD)(RLM), 2015 WL 5022635, at *8 (E.D.N.Y. Aug. 24, 2015) (examining the question as it relates to New York law). B. Plaintiffs’ Unjust Enrichment Claim Must Be Dismissed Because Plaintiffs Have Not Conferred a Benefit On Kellogg. Under Michigan law, “[t]o sustain an action for unjust enrichment, [a] plaintiff must ‘establish (1) the receipt of a benefit by the other party from the complaining party and (2) an inequity resulting to the complaining party because of the retention of the benefit by the other party.’” Smith v. Glenmark Generics, Inc., USA, No. 315898, 2014 WL 4087968, at *1 (Mich. Ct. App. Aug. 19, 2014) (quoting Karaus v. Bank of New York Mellon, 300 Mich. App. 9, 22 (2012)). Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 20 of 25 PageID #: 81 15 Critically, the first element of unjust enrichment additionally requires “that defendant directly receive[] a benefit from the plaintiff.” Smith at *1 (affirming dismissal of unjust enrichment claim because plaintiff purchased contraceptives from a pharmacy instead of from the defendant) (emphasis added).5 Here, Plaintiffs plead that they purchased the product through retailers such as Stop and Shop, Target, Safeway, and Ralph’s. Compl., ¶¶ 11, 19, 29. Plaintiffs therefore do not allege any direct contact or transaction between themselves and Kellogg, nor do they allege that they have in any way directly conferred a benefit upon Kellogg. Because unjust enrichment in Michigan is generally only available to plaintiffs and defendants who directly transact with one another and where the plaintiff has directly conferred a benefit upon the defendant, and because Plaintiffs have failed to plead that in this case, this cause of action must be dismissed. C. Plaintiffs’ Attempt to Apply Michigan Law to a Nationwide Class Is Improper. Even assuming for argument’s sake that Plaintiffs have standing to bring the unjust enrichment claim and the claim has been adequately pled under Michigan law, it would still be improper for to apply Michigan’s unjust enrichment law to the nationwide class. “[A] federal 5 See also, e.g., Storey v. Attends Healthcare Prods., Inc., No. 15-13577, 2016 WL 3125210, at *13 (E.D. Mich. June 3, 2016) (“Plaintiffs have failed to state a claim for unjust enrichment under Michigan law because they have not alleged that they directly conferred a benefit on Defendant.”); In re Refrigerant Compressors Antitrust Litig., No. 09-02042, 2013 WL 1431756, at *26 (E.D. Mich. Apr. 9, 2013) (dismissing unjust enrichment count because “[o]nly the direct purchasers conferred a direct benefit on Defendants by paying Defendants artificially inflated prices for Hermetic Compressors” and plaintiffs were not direct purchasers); In re Aftermarket Filters Antitrust Litig., No. 08-4883, 2010 WL 1416259, at *2-3 (N.D. Ill. Apr. 1, 2010) (“Plaintiffs are unable to allege that they have conferred a benefit on defendants except to argue that they are the ultimate end users. Any benefit that plaintiffs have conferred, however, would be on others in the chain of distribution from whom they purchased, not on defendants. Only the direct purchasers have conferred a direct benefit on defendants.” The court went on to dismiss an unjust enrichment claim brought under Michigan law.); A & M Supply Co. v. Microsoft Corp., No. 274164, 2008 WL 540883, at *2 (Mich. Ct. App. Feb. 28, 2008) (“Plaintiff here can point to no similar direct contact between Microsoft and the indirect purchasers in the class they seek to have certified. Nor can they show that Microsoft received any direct payment or other benefit from those purchasers. We conclude that the unjust enrichment doctrine does not apply under the facts alleged by plaintiff here.”). Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 21 of 25 PageID #: 82 16 court generally must apply the choice-of-law principles of the state in which it sits,” in this case New York. In re Grand Theft Auto Video Game Consumer Litig., 251 F.R.D. 139, 146 (S.D.N.Y. 2008). New York applies a “significant-contacts” test for unjust enrichment, which “focuses upon (1) the place of contracting, (2) the place of negotiation, (3) the place of performance, (4) the location of the subject matter, and (5) the domicile or place of business of the contracting parties.” Id. at 149 (citing Zurich Ins. Co. v. Shearson Lehman Hutton, Inc., 84 N.Y.2d 309, 618 (N.Y. 1994). In similar circumstances to the current case, courts have found that “the significant-contacts test requires the application of the law of the state of purchase” to unjust enrichment or breach of warranty claims. Id. See also Grund v. Delaware Charter Guarantee & Trust Co., 788 F. Supp. 2d 226, 251 n. 9 (S.D.N.Y. 2011) (“Under New York choice of law rules, interest analysis is applied to claims arising in equity, such as claims for unjust enrichment. . . . As with the tort claims, the states in which Plaintiffs resided have the most significant contacts, as they are the places of contracting, where performance was to occur, and where Plaintiffs suffered losses.”); In re Hydrogen, L.L.C., 431 B.R. 337, 359 (Bankr. S.D.N.Y. 2010) (“The law of the place where the allegedly actions giving rise to the unjust enrichment claim occurred – should also govern the unjust enrichment claim.”). In sum, this Court should dismiss the first cause of action because it improperly seeks to apply Michigan law for all plaintiffs when New York choice of law provisions would require applying the law of each plaintiff’s home state. IV. Plaintiffs Lack Standing for Injunctive Relief. Plaintiffs’ alleged past harm does not confer standing to seek injunctive relief. See City of Los Angles v. Lyons, 461 U.S. 95, 95-96 (1983) (“Past exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects.”) (quoting O’Shea v. Littleton, 414 U.S. 488, 495-96 (1974)); Elkind v. Revlon Consumer Prods. Corp., No. 14-2484, 2015 WL 2344134, at *3 Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 22 of 25 PageID #: 83 17 (E.D.N.Y. May 14, 2015) (“Plaintiffs are now aware of the alleged misrepresentations that they challenge, so there is no danger that they will again be deceived by them . . . . Accordingly, because the Amended Complaint fails to establish any likelihood of future or continuing harm, injunctive relief is inappropriate here.”); Anderson v. The Hain Celestial Group, Inc., 87 F. Supp. 3d 1226, 1234 (N.D. Cal. 2015) (“Generally, ‘[p]ast exposure to harmful or illegal conduct does not necessarily confer standing to seek injunctive relief if the plaintiff does not continue to suffer adverse effects.’”) (quoting Mayfield v. U.S., 599 F.3d 964, 970 (9th Cir. 2010)). Further, “[u]nless the named plaintiffs are themselves entitled to seek injunctive relief, they may not represent a class seeking that relief. Any injury unnamed members of this proposed class may have suffered is simply irrelevant to the question of whether the named plaintiffs are entitled to the injunctive relief they seek.” Hodgers-Durgin v. de la Vina, 199 F.3d 1037, 1045 (9th Cir. 1999); see also Dodge v. Cnty. of Orange, 103 Fed. App’x 688, 690, (2d Cir. 2004) (“The parties also contend that this case differs materially from Shain II for the purposes of standing because this case is a class action. The argument is unavailing, because the named plaintiffs in this action must themselves have standing to seek injunctive relief.”). Plaintiffs themselves admit that they will not continue to purchase Cheez-It in the future. Compl., ¶17 (“Ms. Mantikas cannot purchase the products because she cannot be confident that the labeling of the products is, and will be, truthful and non-misleading.”); ¶27 (“Ms. Burns cannot purchase the products because she cannot be confident that the labeling of the products is, and will be, truthful and non-misleading.”); (“Ms. Castle cannot purchase the products because she cannot be confident that the labeling of the product sis, and will be, truthful and non- misleading”). Courts have found that when a complaint lacks any allegation of continuing harm, a plaintiff will lack standing to sue for injunctive relief. See, e.g., Hidalgo v. Johnson & Johnson Consumer Cos, Inc., No. 15-5199, 2015 WL 8375196, at *5 (S.D.N.Y. Dec. 8, 2015) (“A plaintiff lacks standing to bring an action for injunctive relief when, as here, she does not allege that she will suffer any future injury as a result of defendant’s continued conduct. As the Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 23 of 25 PageID #: 84 18 complaint contains no allegations that Hidalgo intends to purchase the Bedtime Products again, she has not plausibly alleged any future injury from these products.”); Tomasino v. Estee Lauder Cos., Inc., 44 F. Supp. 3d 251, 256 (E.D.N.Y. 2014) (Denying standing because plaintiff “has made clear that she does not believe the ANR products have the effects advertised by Estee Lauder, and that she would not have purchased them in the first place absent the allegedly misleading advertisements.”). Courts have singled out deception as something which is particularly unlikely to be repeated and therefore not worthy of an injunction. See Machlan v. Procter & Gamble Co., 77 F. Supp. 3d 954, 960 (N.D. Cal. 2015) (“But when the alleged unfair practice is deception, the previously-deceived-but-now-enlightened plaintiff simply does not have standing under Article III to ask a federal court to grant an injunction.”); Ham v. Hain Celestial Grp., Inc., 70 F. Supp. 3d 1188, 1196 (N.D. Cal. 2014) (“Consumers who were misled by deceptive food labels lack standing for injunctive relief because there is ‘no danger that they will be misled in the future.’”) (quoting Garrison v. Whole Foods Mkt. Grp., Inc., No. 13-05222, 2014 WL 2451290, at *5 (N.D. Cal. June 2, 2014)); Garrison, 2014 WL 2451290 at *5 (Court, stating while denying preliminary injunction, that “[t]he named plaintiffs in this case allege that had they known the Whole Foods products they purchased contained SAPP, they would not have purchased them. (Compl., ¶ 13). Now they know. There is therefore no danger that they will be misled in the future.”) Accordingly, because Plaintiffs have admitted that they have no intention to purchase the products at issue in the future, and because they cannot suffer any harm of being deceived again, they have no standing and therefore their seventh claim must be dismissed. CONCLUSION For the foregoing reasons, the Complaint must be dismissed. Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 24 of 25 PageID #: 85 19 Dated: August 5, 2016 Respectfully submitted, JENNER & BLOCK LLP By:___/s/ Kenneth K. Lee _________________ Kenneth K. Lee (NY Reg. No. 4056750) Attorneys for Defendant KELLOGG COMPANY Case 2:16-cv-02552-SJF-AYS Document 17-1 Filed 10/07/16 Page 25 of 25 PageID #: 86 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK KRISTEN MANTIKAS, KRISTIN BURNS, and LINDA CASTLE, individually and on behalf of all others similarly situated, Plaintiffs, v. KELLOGG COMPANY, Defendant. Case No. 2:16-cv-02552-SJF-AYS Hon. Sandra J. Feuerstein DECLARATION OF KENNETH K. LEE IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS CLASS ACTION COMPLAINT JENNER & BLOCK LLP Kenneth K. Lee (NY Reg. No. 4056750) klee@jenner.com 633 West 5th Street Suite 3600 Los Angeles, CA 90071 Tel.: 213 239-5100 Fax: 213 239-5199 -and- Dean N. Panos (admitted pro hac vice) dpanos@jenner.com 353 N. Clark Street Chicago, IL 60654 Phone: (312) 222-9350 Facsimile: (312) 527-0484 Attorneys for Defendant Kellogg Company Case 2:16-cv-02552-SJF-AYS Document 17-2 Filed 10/07/16 Page 1 of 4 PageID #: 87 1 DECLARATION OF KENNETH K. LEE I, Kenneth K. Lee, declare as follows: 1. I am an attorney in the Los Angeles office of Jenner & Block LLP, counsel in this action for Defendant, Kellogg Company. If called to testify, I would and could testify with personal knowledge as to all of the following. 2. Attached hereto as Exhibit A is a true and correct image of the front and side panels of a Cheez-It Whole Grain product package purchased from Ralphs grocery store, located at 645 West 9th St., Los Angeles, CA 90015, on July 21, 2016. Executed in Los Angeles, California on August 5, 2016. /s/ Kenneth K. Lee____ ___________________ By: Kenneth K. Lee Case 2:16-cv-02552-SJF-AYS Document 17-2 Filed 10/07/16 Page 2 of 4 PageID #: 88 Exhibit A Case 2:16-cv-02552-SJF-AYS Document 17-2 Filed 10/07/16 Page 3 of 4 PageID #: 89 Case 2:16-cv-02552-SJF-AYS Document 17-2 Filed 10/07/16 Page 4 of 4 PageID #: 90 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ______________________________________ KRISTEN MANTIKAS, KRISTIN BURNS, and LINDA CASTLE, individually and on behalf of all others similarly situated, Plaintiffs, v. KELLOGG COMPANY, Defendant. No. 2:16-cv-2552-SJF-AYS Hon. Sandra J. Feuerstein PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS CLASS ACTION COMPLAINT Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 1 of 31 PageID #: 91 i Table of Contents I. INTRODUCTION .................................................................................................................... 1 II. ARGUMENT ........................................................................................................................... 3 A. Legal Standard ................................................................................................................... 3 B. Plaintiffs Sufficiently Allege Violations of New York and California Consumer Protection Law. .................................................................................................................. 3 C. Federal Law Does Not Preempt Plaintiffs’ Claims............................................................ 8 1. Federal Statutory and Regulatory Background ............................................................ 8 2. There Is a Presumption Against Federal Preemption of State Law, Especially with Respect to State Law Governing Areas the States Traditionally Have Regulated, Such as Food Labeling. ................................................................................................ 9 3. Plaintiffs Seek to Enforce Requirements under State Law That Are Identical to the Requirements of Federal Law. ................................................................................... 11 4. Defendant’s Arguments in Favor of Preemption Are Wrong .................................... 14 D. Plaintiffs Have Stated a Claim for Unjust Enrichment. ................................................... 17 1. Plaintiffs May Bring an Unjust Enrichment Claim under Michigan Law against Defendant. .................................................................................................................. 17 2. Plaintiffs Have Conferred a Monetary Benefit on Defendant Sufficient to Support their Unjust Enrichment Claim. ................................................................... 19 3. Choice-of-Law Principles Do Not Warrant Dismissal of Plaintiffs’ Unjust Enrichment Claim under Michigan Law.................................................................... 20 E. Plaintiffs Have Standing to Seek Injunctive Relief. ......................................................... 22 III. CONCLUSION ...................................................................................................................... 25 Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 2 of 31 PageID #: 92 Table of Authorities Cases Ackerman v. Coca-Cola Co., No. 09-cv-395 (JG) (RML), 2010 WL 2925955 (E.D.N.Y. July 21, 2010) .................................................................................................................................. passim Albert v. Blue Diamond Growers, 151 F. Supp. 3d 412 (S.D.N.Y. 2015)...................................... 4 Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981)........................................................................... 18 Altria Grp., Inc. v. Good, 555 U.S. 70 (2008) ................................................................................ 9 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................................... 3 Atik v. Welch Foods, Inc., No. 1:15-cv-05405-MKB-VMS, 2016 U.S. Dist. LEXIS 106497 (E.D.N.Y. Aug. 5, 2016) ..................................................................................................... 4, 5, 7 Bank v. Am. Home Shield Corp., No. 10-CV-4014, 2013 WL 789203 (E.D.N.Y. Mar. 4, 2013) 21 Barber v. SMH (U.S.), Inc., 509 N.W.2d 791 (Mich. Ct. App. 1993) .......................................... 17 Belfiore v. Procter & Gamble Co., 94 F. Supp. 3d 440 (E.D.N.Y. 2015) .................................... 24 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ........................................................................... 3 Bonanno v. The Quizno’s Franchise Co. LLC, No. CIV.A. 06-CV-02358-W, 2008 WL 638367 (D. Colo. Mar. 5, 2008)............................................................................................................. 18 Boswell v. Costco Wholesale Corp., No. 8:16-cv-00278-DOC, 2016 WL 3360701 (C.D. Cal. June 6, 2016) ....................................................................................................................... 23, 24 Campagna v. Language Line Services, Inc., No. 08-CV-02488, 2012 WL 1565229 (N.D. Cal. May 2, 2012) ............................................................................................................................. 19 Cassese v. Washington Mut., Inc., 255 F.R.D. 89 (E.D.N.Y. 2008) ............................................. 20 Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111 (N.D. Cal. 2010) .................................... 16 Clothesrigger, Inc. v. GTE Corp., 236 Cal. Rptr. 605 (Ct. App. 1987) ........................................ 18 Coe v. Gen. Mills, Inc., No. 15-CV-05112-TEH, 2016 WL 4208287 (N.D. Cal. Aug. 10, 2016) 8, 11, 13 Collazo v. Wen by Chaz Dean, Inc., No. 215CV01974ODWAGR, 2015 WL 4398559 (C.D. Cal. July 17, 2015)............................................................................................................................ 18 Cortina v. Goya Foods, Inc., 94 F. Supp. 3d 1174, 1189 (S.D. Cal. 2015) .................................. 11 Delgado v. Ocwen Loan Servicing, No. 13-cv-4427, 2014 WL 4773991 (E.D.N.Y. Sept. 24, 2014) ......................................................................................................................................... 24 Ebin v. Kangadis Food Inc., 297 F.R.D. 561 (S.D.N.Y. 2014) .................................................... 22 Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 3 of 31 PageID #: 93 Elkind v. Revlon Consumer Prods. Corp., No. 2:14-cv-02484-JS-AKT (E.D.N.Y. May 6, 2014) ................................................................................................................................................... 23 Hairston v. South Beach Beverage Co., 2012 WL 1893818 (C.D. Cal. May 18, 2012) .............. 17 Harris v. Las Vegas Sand L.L.C., No. 2:12-cv-10858, 2013 WL 5291142 (C.D. Cal. Aug. 16, 2013) ......................................................................................................................................... 24 Henderson v. Gruma Corp., No. 10 CV 4173, 2011 WL 1362188 (C.D.Cal. Apr. 11, 2011) ..... 25 Hidalgo v. Johnson & Johnson Consumer Cos., Inc., 148 F. Supp. 3d 285 (S.D.N.Y. 2015) ..... 23 Holk v. Snapple Beverage Corp., 575 F.3d 329 (3d Cir. 2009) .................................................... 10 Holt v. Foodstate, Inc., No. 15CV78 L (JMA), 2015 WL 9592534 (S.D. Cal. Dec. 31, 2015) ... 11 In re Auto. Parts Antitrust Litig., 29 F. Supp. 3d 982, 1021 (E.D. Mich. 2014) .......................... 20 In re Checking Account Overdraft Litig., 307 F.R.D. 630 (S.D. Fla. 2015) ................................. 22 In re Frito-Lay N. Am. Inc. All Nat. Litig., No. 12-MD-2413 (RRM), 2013 U.S. Dist. LEXIS 123824 (E.D.N.Y. Aug. 29, 2013) .......................................................................................... 4, 6 In re Grand Theft Auto Video Game Consumer Litigation, 251 F.R.D. 139 (S.D.N.Y. 2008) .... 21 In re Mercedes-Benz Tele Aid Contract Litig., 257 F.R.D. 46 (D.N.J. 2009) .............................. 22 In re Nigeria Charter Flights Contract Litig., 233 F.R.D. 297 (E.D.N.Y. 2006) ........................ 20 In re Packaged Ice Antitrust Litigation, 779 F. Supp. 2d 642 (E.D. Mich. 2011).................. 18, 19 In re PepsiCo, Inc., Bottled Water Marketing & Sales Practices Litigation, 588 F. Supp. 2d 527 (S.D.N.Y. 2008) ........................................................................................................................ 16 Jovel v. i-Health, Inc., No. 12-CV-5614 JG, 2013 WL 5437065 (E.D.N.Y. Sept. 27, 2013) ...... 10 Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) ......................................................... 20 LaFaro v. New York Cardiothoracic Grp., PLLC, 570 F.3d 471 (2d Cir. 2009) ........................... 3 Lam v. Gen. Mills, 859 F. Supp. 2d 1097 (N.D. Cal. 2012) ........................................................... 6 Marcus v. AT&T Corp., 138 F.3d 46 (2d Cir. 1998) ...................................................................... 4 Matter of Allstate Ins. Co. (Stolarz), 613 N.E.2d 936 (N.Y. 1993) .............................................. 21 Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) ................................................................................ 9 Miller v. MSX-IBS Holding, Inc., No. 16-CV-10596, 2016 WL 4138238 (E.D. Mich. Aug. 4, 2016) ......................................................................................................................................... 20 Mills v. Giant of Maryland, LLC, 441 F. Supp. 2d 104 (D.D.C. 2006) ........................................ 16 National Consumers League v. Doctor’s Associates, 2014 D.C. Super. LEXIS 15 (D.D.C. Sept. 12, 2014) ..................................................................................................................................... 7 Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 4 of 31 PageID #: 94 NECA–IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012) .. 24 New York State Rest. Ass’n v. New York City Bd. of Health, 556 F.3d 114, 118 (2d Cir. 2009).... 8 Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) ................................................................ 21 Plumley v. Com. of Mass., 155 U.S. 461 (1894) ........................................................................... 10 Portanova v. Trump Taj Mahal Associates, 704 N.Y.S.2d 380 (2000) ........................................ 21 R.B. Dev., Co. v. Tutis Capital LLC, No. 12CV1460CBASMG, 2015 WL 10567830 (E.D.N.Y. Nov. 6, 2015) ............................................................................................................................ 21 Red v. Kraft, 2012 U.S. Dist. LEXIS 164461 (C.D. Cal. Oct. 25, 2012) ....................................... 7 Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947)................................................................. 10 Ries v. Arizona Beverages USA LLC, 287 F.R.D. 523 (N.D. Cal. 2012) ..................................... 23 Romantics v. Activision Publ’g, Inc., 574 F. Supp. 2d 758 (E.D. Mich. 2008) ............................ 17 Tomasino v. Estee Lauder Cos., Inc., No. 1:13-cv-04692-ERK-RML (E.D.N.Y. Oct. 15, 2013) 23 Williams v. Gerber Prods. Co., 552 F.3d 934 (9th Cir. 2008) ................................................ 3, 4, 7 Wyeth v. Levine, 555 U.S. 555 (2009) .......................................................................................... 10 Statutes 21 U.S.C. § 301 ............................................................................................................................... 8 21 U.S.C. § 321 ................................................................................................................... 9, 11, 13 21. U.S.C. § 343 ............................................................................................ 8, 9, 11, 13, 14, 15, 16 21. U.S.C. § 343-1 .................................................................................................................... 8, 14 GBL §§ 349 & 350 ......................................................................................................................... 4 Regulations 21 C.F.R. § 1.21 ........................................................................................................................ 9, 16 21 C.F.R. § 101.13 .................................................................................................................... 9, 15 21 C.F.R. § 101.15 .......................................................................................................................... 9 21 C.F.R. § 101.18 .............................................................................................................. 9, 13, 16 21 C.F.R. § 101.54 .......................................................................................................................... 9 21 C.F.R. § 101.65 .................................................................................................................... 9, 15 21 C.F.R. § 102.5 .......................................................................................................... 9, 11, 12, 13 Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 5 of 31 PageID #: 95 Rules 56 Fed. Reg. 60,528, 60,530 (Nov. 27, 1991)................................................................................. 8 FED. R. CIV. P. 23(b)(3)(D) ........................................................................................................... 21 Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 6 of 31 PageID #: 96 Kristen Mantikas, Kristin Burns, and Linda Castle (“Plaintiffs”) hereby respectfully submit their opposition to the motion to dismiss (“Mem.”) filed by defendant Kellogg Co. (“Defendant”). As Plaintiffs argue below, the Court should deny Defendant’s motion in full. I. INTRODUCTION Plaintiffs allege that Defendant Kellogg markets and sells “Cheez-It WHOLE GRAIN” crackers, emblazoning “WHOLE GRAIN” in large lettering on the front of the box over an enlarged picture of three of crackers, next to images of stalks of unprocessed wheat. ¶ 50, Illustration 1. 1 A reasonable consumer would rely on the large-print representations on the front of the box as an accurate description of its contents. This is material to consumers because they are increasingly aware of the important health benefits derived from consuming whole grain as opposed to refined grain. These “WHOLE GRAIN” representations are deceptive and misleading. Defendant intends to convey that the grain in Cheez-It Whole Grain is from whole grain and not refined grain and, consequently, a healthy and nutritious product. Indeed, the Federal Trade Commission (“FTC”) has found that these type of claims are misleading to consumers as they are likely to perceive them to mean that a product is 100% or nearly 100% whole grain. ¶ 49 (citing Comments of the Staff of the Bureau of Consumer Protection, the Bureau of Economics, and the Office of Policy Planning of the Federal Trade Commission, In the Matter of Draft Guidance for Industry and FDA Staff: Whole Grains Label Statements, Docket No. 2006-0066, at 13 (Apr. 18, 2006)). In reality, the primary ingredient in the product is not whole grain, but refined grain, which is considered inferior to whole grain. Whole grain is only a minor ingredient in the 1 Citations beginning with “¶” are to paragraphs of the complaint in this action, Dkt. No. 1. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 7 of 31 PageID #: 97 2 product. There is more oil in the product than there is whole grain. ¶ 52. “WHOLE GRAIN” Cheez-It crackers are not any healthier than “ORIGINAL” Cheez-It crackers. ¶ 5. The amount of whole grains in the “WHOLE GRAIN” product does not meet the United States Dietary Guidelines, which cite “strong and consistent evidence” that higher consumption of whole grains and lower intake of refined grains is associated with decreased risk of cardiovascular disease, and recommend that people dramatically increase their intake of whole grains. ¶ 46. In sum, consumers are deceived and not getting what they paid for. Despite these compelling facts, Defendant has moved to dismiss. First, Defendant asks this Court to rule as a matter of law on the pleadings that no reasonable consumer could be misled (as Plaintiffs were) to think that the grain in the product is whole grain, when in fact it is not. As courts repeatedly have recognized, it is improper to find as a matter of law on a motion to dismiss how a reasonable consumer would interpret the marketing of a food product such as at issue here. Second, Defendant’s preemption argument fails. Preemption of misleading labeling claims only occurs if there is express preemption. Here, Defendant’s argument fails because federal law, like state law, prohibits misleading labelling of food. Plaintiffs seek to enforce the same standard as federal law, so there is no preemption. Third, Defendant’s argument against Plaintiffs’ unjust enrichment claim also fails. Courts routinely allow a consumer the protection of the state law in which the Defendant is located and alleged to have formulated the misleading representations at issue. Last, Plaintiffs have standing to seek injunctive relief, because they allege that they would purchase the product if it conformed with its labeling. And even if they did not make such allegations, plaintiffs have standing to enjoin an ongoing practice on behalf of consumers. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 8 of 31 PageID #: 98 3 Accordingly, Defendant’s Motion to Dismiss should be denied in its entirety. II. ARGUMENT A. Legal Standard A motion to dismiss should be denied where the complaint contains “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is considered plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. In deciding a motion to dismiss, “a court must ‘accept all allegations in the complaint as true and draw all inferences in the non-moving party’s favor.’” LaFaro v. New York Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009)). Moreover, plausibility does not require probability. “[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.” Twombly, 550 U.S. at 556. Indeed, courts have repeatedly stated that food labeling cases where motions to dismiss should be granted are “rare.” Williams v. Gerber Prods. Co., 552 F.3d 934, 939 (9th Cir. 2008) (“Gerber”) (stating that the allegations of the complaint “do not amount to the rare situation in which granting a motion to dismiss is appropriate.”). Here, given the compelling claims of deceptive advertising practices, well-supported with factual allegations, the Complaint more than meets the notice pleading standards of the Federal Rules. B. Plaintiffs Sufficiently Allege Violations of New York and California Consumer Protection Law. Plaintiffs allege that Defendant’s representations of its Cheez-It “Whole Grain” crackers are false and misleading, in violation of the consumer protection laws of New York and California. ¶¶ 90-141. As courts in this District and elsewhere have observed, these claims are Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 9 of 31 PageID #: 99 4 all governed by the “reasonable consumer” test. Atik v. Welch Foods, Inc., No. 1:15-cv-05405- MKB-VMS, 2016 U.S. Dist. LEXIS 106497, at *24-25 (E.D.N.Y. Aug. 5, 2016) (citing Marcus v. AT&T Corp., 138 F.3d 46, 64 (2d Cir. 1998)) (GBL §§ 349 & 350); Gerber, 552 F.3d at 983 (9th Cir. 2008) (UCL, FAL, and CLRA). Courts uniformly “have recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for decision on” a motion to dismiss. See e.g. In re Frito-Lay N. Am. Inc. All Nat. Litig., No. 12-MD-2413 (RRM), 2013 U.S. Dist. LEXIS 123824, *49 (E.D.N.Y. Aug. 29, 2013) (stating that whether labeling is deceptive “is generally not resolved on a motion to dismiss”); Gerber, 552 F.3d at 938. The leading case construing the “reasonable consumer” standard in the food labeling context is the Ninth Circuit’s decision in Williams v. Gerber Prods. Co., 552 F.3d 934 (9th Cir. 2008), which has since been adopted by courts in this District. The district court in Gerber had concluded that a reasonable consumer reviewing the package as a whole could not have been misled. The Ninth Circuit disagreed and reversed: We disagree with the district court that reasonable consumers should be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box. The ingredient list on the side of the box appears to comply with FDA regulations and certainly serves some purpose. We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception. Instead, reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging. Id. at 939-40. Courts within the Eastern District of New York have adopted the Ninth Circuit’s logic in Gerber. For example, in Ackerman v. Coca-Cola Co., No. 09-cv-395 (JG) (RML), 2010 WL 2925955, at *1 (E.D.N.Y. July 21, 2010), consumers alleged that the defendants made false and Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 10 of 31 PageID #: 100 5 misleading marketing health claims regarding their “vitaminwater” product, and brought claims under New York and California consumer protection statutes. Plaintiffs alleged several misleading statements on the product’s labeling, portraying the product as healthy, when it was essentially a fortified junk food. Defendants contended that no reasonable consumer could have been misled by the product’s labeling, because the ingredient label contained accurate information about the amount of sugar per serving. This Court rejected Defendant’s contention, quoting the passage from Gerber above: “the presence of a nutritional panel, though relevant, does not as a matter of law extinguish the possibility that reasonable consumers could be misled by vitaminwater's labeling and marketing.” Id. at *62-63. The court in Ackerman concluded that consumers could reasonably be expected to rely on the label claims as accurate descriptions of the food, stating “it seems clear that such an impression was precisely what defendant intended to convey. If that were not the case, it is difficult to understand what defendant had in mind.” Id. at *67 (quoting Miller v. Am. Family Publishers, 663 A.2d 643 (N.J. Super. 1995)). In Atik v. Welch Foods, Inc., No. 15-CV-5405 (MKB) (VMS), 2016 U.S. Dist. LEXIS 106497 (E.D.N.Y. Aug. 5, 2016), plaintiffs brought claims under the UCL and GBL, alleging that Welch’s deceptively marketed a “fruit snack” product as “Made With REAL Fruit,” when in fact the product was no more healthy than candy, and was predominantly made of sugar and unhealthy ingredients. The court credited plaintiffs’ allegations on defendants’ motion to dismiss, “that the effect of the labeling was to mislead potential purchasers into believe there is a significant amount of the fruit depicted on the packaging in the Fruit Snacks when, in fact, there is not[.]” Id. at *27-28. The court stated, “it would be premature to hold that no reasonable consumer would be misled by Defendants’ misrepresentations.” Id. at *28. See also Lam v. Gen. Mills, 859 F. Supp. 2d 1097, 1099–1100 (N.D. Cal. 2012) (fruit roll-up products’ names, in Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 11 of 31 PageID #: 101 6 combination with their “made with real fruit” claims, could mislead a reasonable consumer into thinking the product was made primarily of fruit); Wilson v. Frito–Lay N. Am., 2013 WL 1320468, at *12 (N.D. Cal. Apr. 1, 2013) (claim “Made with ALL NATURAL Ingredients” on the products’ labels could mislead a reasonable consumer into thinking the products were entirely made of natural ingredients); Albert v. Blue Diamond Growers, 151 F. Supp. 3d 412, 418-19 (S.D.N.Y. 2015) (sustaining claims under New York and California consumer law; manufacturer conveyed impression that almond milk products contained a significant amount of almonds, with the health benefits ascribed to almonds, when in fact the product was mostly water and contained a small percentage of almonds). The case here fits squarely with the holdings and reasoning of Gerber, Ackerman, Albert and Atik, denying motions to dismiss in food cases. Defendant’s statement that its product is “WHOLE GRAIN” is false and misleading, which Defendant knew or should have known was false and misleading, and which has a capacity or deceive or confuse a reasonable consumer. Kellogg represents that Cheez-It is “WHOLE GRAIN” to create the impression that the product is composed substantially or entirely of whole grain, and consumers purchase the product to obtain the nutritional benefits that whole grain foods provide. Defendant makes the same argument that Gerber and other courts have rejected: “Cheez- It has never been advertised as containing whole grains only. To the contrary, the ingredient list on the Cheez-It packaging discloses that it contains both enriched flour and whole wheat flour (as the third-highest ingredient by weight).” Mem. at 3. It is well-established that a retailer cannot make any representations it wants on the front of its packaging as long as it corrects itself in small print on the side of the box. See, e.g., Gerber, 552 F.3d at 939 (quoted above). It is Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 12 of 31 PageID #: 102 7 precisely this kind of misleading behavior that consumer protection laws seek to remedy and deter. Finally, two relatively recent cases in the District of Columbia sustained consumer claims that “whole grain” products were deceptively labeled. See National Consumers League v. Doctor’s Associates, 2014 D.C. Super. LEXIS 15 (D.D.C. Sept. 12, 2014) (“The court finds that whether the overall representations made by BBUSA are representations about the "characteristics, ingredients, uses, benefits, or quantities," "particular standard," or "quality" is an issue of fact, which should not be resolved at the motion to dismiss stage but more appropriately at trial.”); National Consumers League v. Bimbo Bakeries USA, 2015 D.C. Super. LEXIS 5, 2-4 (D.D.C. Apr. 2, 2015) (products marketed as containing significant amounts of whole grain in fact contained minimal amounts of whole grain, which would mislead consumers as to other products that did contain substantial amounts of whole wheat). 2 Accordingly, Defendant’s argument regarding the reasonable consumer must be rejected. 2 Defendant only argues that Plaintiffs have not plausibly “shown” that the phrase “Made With Whole Grain,” which they make clear only appears on a version of the box that they sold only in 2016, is likely to deceive a reasonable consumer, and limits its argument to cases featuring a “made with” claim. Mem. at 5-10. Even if this argument were dispositive here, it has no merit. The primary authority that Defendant relies on, Red v. Kraft, 2012 U.S. Dist. LEXIS 164461 (C.D. Cal. Oct. 25, 2012) completely undermines this argument, and Defendant ignores Atik, which distinguishes that very case. Plaintiffs in Red alleged that Kraft cracker products carrying the claim “Made with Real Vegetables” were deceptive because they did not contain significant amounts of vegetables. The court concluded that no reasonable consumer would look at box of crackers claiming that it was “made with real vegetables,” and conclude that it contained significant amounts of vegetables. “[T]he product is a box of crackers, and a reasonable consumer will be familiar with the fact of life that a cracker is not composed of primarily fresh vegetables.” Id. It is a very different “fact of life” when the misrepresentation concerns the primary ingredient of the product, as this Court explained in Atik: “Red dealt with a product that made clear it was one food item, crackers, while advertising that it included another type of food item, vegetables. The packaging at issue made it clear to the consumer that they were purchasing a box of crackers, which the ordinary person would know are not generally made of vegetables.” Atik, 2016 U.S. Dist. LEXIS 106497, at *34. Thus, in Atik, a claim that fruit snacks were “made with real fruit” was potentially deceptive, because “Fruit Snacks are advertised as primarily fruit.” Id. A cracker that is “made with real vegetables” only suggests that it contains real vegetables in some amount, not that they predominate over some other similar, lesser ingredient. By its reasoning, Red would have gone the other way if its claim was “made with whole grain,” because grain is the primary ingredient in crackers. That is the case here: “WHOLE GRAIN” is represented not as a flavoring or a supporting player in crackers, but as the main event. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 13 of 31 PageID #: 103 8 C. Federal Law Does Not Preempt Plaintiffs’ Claims. Defendant argues that federal law preempts Plaintiff’s claims. Mem. at 10–13. Defendant is wrong. It is black letter law that actions for misleading food labels are not preempted, as the federal law Defendant relies upon itself prohibits “labeling [that] is false or misleading” See, e.g., Coe v. Gen. Mills, Inc., No. 15-CV-05112-TEH, 2016 WL 4208287, at *3 (N.D. Cal. Aug. 10, 2016) (“By its terms, the express preemption provision does not bar the enforcement of state laws imposing requirements [that mirror] the requirement in § 343(a)(1) addressing false or misleading labels.”). Accordingly, Defendant’s preemption arguments must be rejected. 1. Federal Statutory and Regulatory Background Congress enacted the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. in 1938 (“FDCA”). The FDCA generally prohibits misbranding of food. 21 U.S.C. § 343; New York State Rest. Ass’n v. New York City Bd. of Health, 556 F.3d 114, 118 (2d Cir. 2009). In 1990, Congress amended the FDCA by enacting the Nutrition Labeling and Education Act of 1990, Pub. L. No. 101–535, 104 Stat. 2353 (1990) (the “NLEA”). Among other things, the NLEA added an express preemption provision to the FDCA. See 21 U.S.C. § 343-1. Congress expressly limited the NLEA’s preemptive reach, stating that the statute “shall not be construed to preempt any provision of State law, unless such provision is expressly preempted under [21 U.S.C. § 343-1].” NLEA § 6(c) (statutory note to 21 U.S.C. § 343-1); accord New York State Rest. Ass’n, 556 F.3d at 123. As the FDA has explained, this statutory language “clearly manifests Congress’ intention that the 1990 amendments” are not to preempt state law unless they fall within the NLEA’s express terms. 56 Fed. Reg. 60,528, 60,530 (Nov. 27, 1991). Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 14 of 31 PageID #: 104 9 Claims are not preempted “(1) if the plaintiffs’ claims seek to impose requirements that are identical to those imposed by the FDCA; or (2) if the requirements plaintiffs seek to impose are not with respect to claims of the sort” set forth in the express preemption clause. See Ackerman, 2010 WL 2925955, at *6. (“If there is no applicable Federal requirement that has been given preemptive status by Congress, there is no competing claim of jurisdiction, and, therefore, no basis under the 1990 amendments for Federal preemption[.]”). Significantly, the FDCA states that a food is misbranded and in violation of the law if:  “its labeling is false or misleading in any particular,” § 343(a)(1); see also 21 U.S.C. § 321(n); 21 C.F.R. §§ 1.21(a)–(b), 101.18(b);  the information the FDCA requires to appear on the label “is not prominently placed thereon with such conspicuousness (as compared with other words, statements, designs, or devices, in the labeling) and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use,” § 343(f); see also 21 C.F.R. § 101.15(a).  its label does not bear “the common or usual name of the food, if any there be,” § 343(i); see also 21 C.F.R. § 102.5, or  its label bears “nutrient content claims” that fail to comply with federal law. See § 343(r)(1)(A), (r)(2); see also 21 C.F.R. §§ 101.13, 101.54, 101.65 2. There Is a Presumption Against Federal Preemption of State Law, Especially with Respect to State Law Governing Areas the States Traditionally Have Regulated, Such as Food Labeling. A court’s inquiry into the preemptive effect of a federal statute “is guided by the rule that ‘the purpose of Congress is the ultimate touchstone in every pre-emption case.” Altria Grp., Inc. v. Good, 555 U.S. 70, 76 (2008) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996). “Congress does not cavalierly pre-empt state-law causes of action.” Medtronic, 518 U.S. at 485. In all preemption cases, and particularly in those in which Congress has “legislated . . . in a field which the States have traditionally occupied,” the courts “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 15 of 31 PageID #: 105 10 the clear and manifest purpose of Congress.” Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947) (emphasis added); accord Wyeth v. Levine, 555 U.S. 555, 565 (2009). Health and safety regulation (including regulation of food labeling) is a field that states have traditionally occupied, and for this reason, “there is a strong presumption against federal preemption.” Jovel v. i-Health, Inc., No. 12-CV-5614 JG, 2013 WL 5437065, at *5 (E.D.N.Y. Sept. 27, 2013); accord Holk v. Snapple Beverage Corp., 575 F.3d 329, 334 (3d Cir. 2009) (“Health and safety issues have traditionally fallen within the province of state regulation. This is true of the regulation of food and beverage labeling and branding.”); Ackerman, 2010 WL 2925955, at *6. Indeed, as the U.S. Supreme Court has held: “[i]f there be any subject over which it would seem the states ought to have plenary control . . . it is the protection of the people against fraud and deception in the sale of food products.” Plumley v. Com. of Mass., 155 U.S. 461, 472 (1894). 3. Plaintiffs Seek to Enforce Requirements under State Law That Are Identical to the Requirements of Federal Law. Federal law does not preempt Plaintiffs’ state law claims because, as detailed below, Plaintiffs’ claims align with the FDCA and its implementing regulations. Specifically, Plaintiffs’ state law claims for false or misleading advertising parallel the general federal prohibition in 21 U.S.C. § 343(a) against false and misleading food labeling. Accordingly, the FDCA’s express preemption provision does not apply to these claims here. See, e.g., Coe v. Gen. Mills, Inc., No. 15-CV-05112-TEH, 2016 WL 4208287, at *3 (N.D. Cal. Aug. 10, 2016) (“By its terms, the express preemption provision does not bar the enforcement of state laws imposing requirements [that mirror] the requirement in § 343(a)(1) addressing false or misleading labels.”); Holt v. Foodstate, Inc., No. 15-CV-78 L (JMA), 2015 WL 9592534, at *4 (S.D. Cal. Dec. 31, 2015); Cortina v. Goya Foods, Inc., 94 F. Supp. 3d 1174, 1189 (S.D. Cal. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 16 of 31 PageID #: 106 11 2015); Chavez v. Blue Sky Nat. Beverage Co., 268 F.R.D. 365, 370 (N.D. Cal. 2010); Zupnik v. Tropicana Products, Inc., No. CV 09-6130 DSF RZX, 2010 WL 6090604, at *6 (C.D. Cal. Feb. 1, 2010). Second, independent of the general prohibition under the NLEA against false or misleading labeling, Plaintiffs’ state law claims align with 21 C.F.R. § 102.5, which states: The common or usual name of a food shall include a statement of the presence or absence of any characterizing ingredient(s) or component(s) . . . when the presence or absence of such ingredient(s) or component(s) in the food has a material bearing on price or consumer acceptance[.] 21 C.F.R. § 102.5(c). In promulgating § 102.5, the FDA stated that the disclosure of the amount (or, by implication, the presence) of a characterizing ingredient is a “material fact” within the meaning of 21 U.S.C. § 321(n) and that “[d]isclosure of this fact is often necessary for the consumer to choose between two competing products when the amount of the ingredient is important to the value of the food.” Common or Usual Names for Nonstandardized Foods, 38 Fed. Reg. 6964, 6964 (Mar. 14, 1973). Plaintiffs’ state law claims seek to impose requirements that are identical to the requirements of § 102.5. Plaintiffs allege that enriched flour is a characterizing ingredient of “Whole Grain” Cheez-It that has a material bearing on the product’s price and on consumer acceptance of the product. ¶¶ 43–48, 56–65. The common or usual name of the product, “baked snack crackers whole grain” or “baked snack crackers made with whole grain,” misleadingly fails to mention the presence of this characterizing ingredient. ¶ 50. Thus, Plaintiffs allege the “Whole Grain” Cheez-It product’s name violates § 102.5(c) and identical state laws prohibiting misleading labeling, and, as a result, federal law does not preempt Plaintiffs’ claims. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 17 of 31 PageID #: 107 12 Similarly, Plaintiffs’ state law claims parallel § 102.5(b), which requires that: The common or usual name of a food shall include the percentage(s) of any characterizing ingredient(s) or component(s) when the proportion of such ingredient(s) or component(s) in the food has a material bearing on price or consumer acceptance or when the labeling or the appearance of the food may otherwise create an erroneous impression that such ingredient(s) or component(s) is present in an amount greater than is actually the case. Plaintiffs allege that whole grain is a characterizing ingredient of “Whole Grain” Cheez-It that has a material bearing on price or consumer acceptance, as the level of whole grain is material to consumers’ decisions to purchase the product. ¶¶ 43–48, 56–65. Further, the name “baked snack crackers whole grain,” or “baked snack crackers made with whole grain,” is misleading because it creates the misimpression that whole grain is present in the product in an amount greater than is actually the case. ¶ 50. Thus, Plaintiffs allege the “Whole Grain” Cheez- It product’s name violates § 102.5(b) and identical state laws prohibiting misleading labeling, and, as a result, federal law does not preempt Plaintiffs’ claims. Third, under § 101.18(b), the FDA recognizes that “[t]he labeling of a food which contains two or more ingredients may be misleading by reason (among other reasons) of the designation of such food in such labeling by a name which includes or suggests the name of one or more but not all such ingredients, even though the names of all such ingredients are stated elsewhere in the labeling.” 21 C.F.R. § 101.18(b); see also 21 U.S.C. § 321(n). Plaintiffs’ state law claims align with § 101.18(b). Plaintiffs allege that while Defendant prominently identifies whole grain in the name of the “Whole Grain” Cheez-It product, Defendant fails to state that the primary ingredient in the product is enriched white flour, and that this omission misleads reasonable consumers. ¶¶ 1-9. Thus, Plaintiffs’ state law misleading Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 18 of 31 PageID #: 108 13 labeling claims are identical to claims based on a violation of § 101.18(b) and, consequently, federal law does not preempt Plaintiffs’ claims. Finally, regardless of whether the product violates 21 C.F.R. § 102.5 or 101.18, it falls within the catch-all, anti-consumer deception provision of 21 U.S.C. § 343(a), which prohibits any false or misleading food label. The recent case of Coe v. General Mills, Inc., No. 15-CV- 05112-TEH, 2016 WL 4208287, at *3 (N.D. Cal. Aug. 10, 2016) (N.D. Cal. 2016), illustrates this point: plaintiffs alleged that defendant’s product label, and specifically its name, “Cheerios Protein,” was misleading because consumers expected that the product would contain substantially more protein than regular Cheerios. Defendant moved to dismiss on preemption grounds. The court rejected the argument: Under 21 U.S.C. § 343(a)(1), a food is “misbranded” if its “labeling is false or misleading in any particular.” This catch-all prohibition against false or misleading labeling is a more general obligation to refrain from deceptive conduct. By its terms, the express preemption provision does not bar the enforcement of state laws imposing requirements of that type –that is, a state-law mirror of the requirement in § 343(a)(1) addressing false or misleading labels. Fairly but narrowly construed, § 343-1(a) does not prohibit Plaintiffs from asserting a claim premised on a violation of § 343(a)(1). * * * Because Congress has also allowed states, at the very least, to pass statutes identical to § 343(a), a private party equipped with a private right of action under state law is able to sue to enforce a state statute identical to § 343(a), just as the FDA would be able to sue to enforce § 343(a) itself. Id. at *3. In sum, because Plaintiffs seek to enforce state law requirements that are identical to federal law requirements that prohibit misleading labeling, nothing in the NLEA’s express preemption provision, or federal law generally, preempts Plaintiffs’ claims. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 19 of 31 PageID #: 109 14 4. Defendant’s Arguments in Favor of Preemption Are Wrong. Kellogg argues that federal law preempts Plaintiffs’ claims because “Made with 8g of Whole Grain” 3 is an express nutrient content claim, and “Made with Whole Grain” is an implied nutrient content claim, and “[f]ederal regulations issued pursuant to the NLEA expressly permit a food manufacturer to make both an ‘expressed nutrient content claim’ and an ‘implied nutrient content claim.’” Mem. at 11. First, Defendant is wrong to assert that Made with Whole Grain is an implied nutrient claim. Specifically, 21 C.F.R. § 101.65 states as follows: (b) Label statements that are not implied claims. Certain label statements about the nature of a product are not nutrient content claims unless such statements are made in a context that would make them an implied claim under § 101.13(b)(2). The following types of label statements are generally not implied nutrient content claims and, as such, are not subject to the requirements of § 101.13 and this section: * * * * * (3) A claim about the presence of an ingredient that is perceived to add value to the product, e.g., “made with real butter,” “made with whole fruit,” or “contains honey,” except that claims about the presence of ingredients other than vitamins or minerals or that are represented as a source of vitamins and minerals are not allowed on labels or in labeling of dietary supplements of vitamins and minerals that are not in conventional food form. 21 C.F.R. § 101.65(b)(3) (emphasis added). 4 The FDA has further clarified that: A few comments stated that claims about ingredients that provide added value to products convey important information about the quality of the products and should not be considered implied nutrient content claims. The comments suggested that claims such as “made with butter,” “contains buttermilk,” “made with whole wheat flour,” “contains real 3 With respect to the statements “Made with 5g of Whole Grain” and “Made with 8g of Whole Grain,” Plaintiffs allege that nothing on the “Whole Grain” Cheez-It product’s box “provides any context for how much 5 or 8 grams of whole grain is, in relationship to the much larger amount of refined grain.” ¶ 53. 4 Cheez-it Whole Grain (which is the label that is the focus of the Complaint, but which Defendant ignores) is also not an implied nutrient claim. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 20 of 31 PageID #: 110 15 fruit,” or “made with natural, not processed, cheese” would be examples of added value claims. Food Labeling: Nutrient Content Claims, General Principles, Petitions, Definition of Terms, 58 Fed. Reg. 2302, 2369 (Jan. 6, 1993) (emphasis added). Nonetheless, even assuming arguendo that the Whole Grain statement is a nutrient content claim (which it is not), simply stating that a representation is a “nutrient content claim” does not mean that a product label can be false and misleading. If it did, any nutrient content claim would immunize a manufacturer from liability. Mem. at 11-13. Rather, it is subject to the catch-all anti-consumer deception provision of 21 U.S.C. § 343(a)(1) that prohibits and false or misleading labeling. See also 21 C.F.R. § 101.13 (f) & (i)(3) (requiring that any nutrient content claim not be “false or misleading in any respect,” and moreover, not be unduly prominent in size). Plaintiffs’ state law claims do not seek to impose requirements with respect to the status of the representations at issue as nutrient content claims. Rather, Plaintiffs assert that the representations are false and misleading, in violation of 21 U.S.C. § 343(a)(1), and, additionally, that they violate 21 C.F.R. § 102.5(b) and (c), and 21 C.F.R. § 101.18(b). See ¶ 108. Consequently, the NLEA’s express preemption provision does not bar Plaintiffs’ claims. The cases Defendant cites are inapposite. In Mills v. Giant of Maryland, LLC, 441 F. Supp. 2d 104 (D.D.C. 2006) (cited in Mem. at 10), plaintiffs did not bring consumer fraud claims; rather, they claimed that milk products should inform consumers that they were likely to be lactose-intolerant, and their failure to do so constituted a negligent failure to warn. Id. at 105. Mills is also off-point because the effect of the plaintiffs’ claims, if they were successful, would have been to impose requirements that contradicted the requirements of the standard of identity Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 21 of 31 PageID #: 111 16 of the milk products at issue, id. at 108. Here, there is no standard of identity for the “Whole Grain” Cheez-It products, and no FDA requirement that is contradicted. 5 Defendant also cites Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111 (N.D. Cal. 2010), in which the plaintiffs alleged that Quaker’s “Chewy Bars” labeling was misleading because it represented the bars were “made with whole grain oats,” which, according to the plaintiffs, implied the products were “wholesome and healthful,” even though the products also contained “dangerous amounts” of artificial trans fat. Mem at 11 citing Chacanaca, 752 F. Supp. 2d at 1121-22. The court held that federal law preempted these claims because they would effectively treat trans fat as a “disqualifying nutrient,” even though the FDA had “expressly decided not to recognize trans fats as a disqualifying nutrient.” Id. at 1122. Here, Plaintiffs do not seek to treat enriched flour as a disqualifying nutrient; rather, they allege Kellogg represents the products at issue are made of “WHOLE GRAIN,” when in fact the products are made primarily of inferior, refined grain. Finally, the decision in Hairston v. South Beach Beverage Co., 2012 WL 1893818 (C.D. Cal. May 18, 2012) (cited in Def. Mem. at 13), is also inapposite. In Hairston, the label stated that the products were “all natural with vitamins” or “all natural with B vitamins.” Id. at *4. The court concluded that “no reasonable consumer would read the ‘all natural’ language as modifying the ‘with vitamins’ language and believe that the added vitamins are suppose[d] to be ‘all natural vitamins.’” Id. at *5. Plaintiffs do not ask the Court to make the sort of illogical leap that was at issue in Hairston. 5 Similarly, Kellogg’s citation to In re PepsiCo, Inc., Bottled Water Marketing & Sales Practices Litigation, 588 F. Supp. 2d 527 (S.D.N.Y. 2008) (“PepsiCo”) (see Mem. at 11), is misplaced, because in PepsiCo, the court held the plaintiffs’ claims would impose requirements that exceeded the requirements of the standard of identity for the purified water products at issue. PepsiCo, 588 F. Supp. 2d at 534–37. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 22 of 31 PageID #: 112 17 D. Plaintiffs Have Stated a Claim for Unjust Enrichment. 1. Plaintiffs May Bring an Unjust Enrichment Claim under Michigan Law against Defendant. Defendant argues that Plaintiffs “lack standing to bring an unjust enrichment claim under Michigan law because they are citizens of New York or California and purchased Cheez-Its in their home states.” Mem. at 14. Defendant is wrong. Under Michigan law, “[t]he elements of a claim for unjust enrichment are: (1) receipt of a benefit by the defendant from the plaintiff and (2) an inequity resulting to plaintiff because of the retention of the benefit by defendant." Romantics v. Activision Publ’g, Inc., 574 F. Supp. 2d 758, 771 (E.D. Mich. 2008) (quoting Barber v. SMH (U.S.), Inc., 509 N.W.2d 791, 796 (Mich. Ct. App. 1993)). Plaintiffs have plainly satisfied both requirements. They allege that “Defendant received a benefit of monetary compensation without providing the ‘WHOLE GRAIN’ benefits Defendant promised to Plaintiffs and the Class members.” ¶ 86. Plaintiffs also allege that it would be inequitable to for Defendant to retain the benefits it received from Plaintiffs and the proposed class, given that the product and its benefits were not from Defendant represented them to be. ¶ 87. Furthermore, Plaintiffs may assert an unjust enrichment claim under Michigan law against Defendant because: (i) its headquarters are in Michigan, ¶ 37; (ii) its misrepresentations concerning the “Whole Grain” Cheez-It products originated in, and emanated from, Michigan; and (iii) its misrepresentations concerning the Cheez-It products directly led to Plaintiffs’ injuries. These connections between Plaintiffs’ injuries and Michigan are sufficient to enable Plaintiffs to invoke Michigan law. See e.g. Collazo v. Wen by Chaz Dean, Inc., No. 215CV01974ODWAGR, 2015 WL 4398559, at *5 (C.D. Cal. July 17, 2015) (“Decisions regarding contents of a product and advertising a product are decisions that inherently begin and end at a company’s principal place of business.”); Allstate Ins. Co. v. Hague, 449 U.S. 302, 317– Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 23 of 31 PageID #: 113 18 18 (1981) (“By virtue of its presence, Allstate can hardly claim unfamiliarity with the laws of the host jurisdiction and surprise that the state courts might apply forum law to litigation in which the company is involved.”); Bonanno v. The Quizno’s Franchise Co. LLC, No. CIV.A. 06-CV- 02358-W, 2008 WL 638367, at *3 (D. Colo. Mar. 5, 2008) (“Here, the Plaintiffs allege that the Defendants have perpetuated a fraud arising out of business practices conducted in Colorado by a Colorado company. The alleged deceptive trade practices resulted from corporate policies and decisions instituted in Colorado.”); Clothesrigger, Inc. v. GTE Corp., 236 Cal. Rptr. 605, 609–10 (Ct. App. 1987) (“Clothesrigger identified California’s fraud deterrence and consumer protection interests in applying its law to the claims of nonresident plaintiffs. Under certain facts California may have an important interest in applying its law to punish and deter the alleged wrongful conduct.”). 6 The question of whether Plaintiffs may bring an unjust enrichment claim under Michigan law is not jurisdictional, given the facts Plaintiffs have alleged. The court’s analysis in Campagna v. Language Line Services, Inc., No. 08-CV-02488, 2012 WL 1565229 (N.D. Cal. May 2, 2012) is on point. In Campagna, the plaintiffs, which included an Iowa resident, brought employment-related claims under California law against their employer, the defendant, which had employees throughout the country. Id. at *1. The defendant argued the court did not have subject matter jurisdiction over the claims of non-California employees, including the Iowa- based plaintiff, because California law did not apply to those employees. Id. at *2. The court, however, stated that resolution of this issue was “not truly jurisdictional” and was “better viewed as a request for judgment on the pleadings.” Id. The court further stated that “[t]o justify 6 In re Packaged Ice Antitrust Litigation, 779 F. Supp. 2d 642 (E.D. Mich. 2011), which Defendant cites (Mem. at 14), is distinguishable because the plaintiffs pled claims for violation of the laws of 26 states in which the plaintiffs did not reside, but the plaintiffs pled no facts on which to find a “connection” between an alleged injury and some wrongful conduct that would implicate the laws of any of the 26 states. See In re Packaged Ice Antitrust Litigation, 779 F. Supp. 2d at 646–51, 657–59. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 24 of 31 PageID #: 114 19 dismissal for lack of subject matter jurisdiction on the grounds requested by [the defendant], the court would have to conclude that the facts alleged cannot support a claim on behalf of a class that would give rise to federal jurisdiction” and that “[n]one of [the defendant’s] arguments is sufficiently persuasive on the facts before the court at this time to justify dismissal for want of jurisdiction.” Id. Here as in Campagna, none of Kellogg’s arguments are sufficiently persuasive on the facts to justify dismissal for want of jurisdiction. 2. Plaintiffs Have Conferred a Monetary Benefit on Defendant Sufficient to Support their Unjust Enrichment Claim. Defendant argues that Plaintiffs cannot state a claim for unjust enrichment under Michigan law because Plaintiffs have not pled facts to satisfy the first element of the claim, as they “do not allege any direct contact or transaction between themselves and Kellogg, nor do they allege that they have in any way directly conferred a benefit upon Kellogg.” Mem. at 15. Defendant is wrong. “Michigan law does not require a benefit to be conferred directly by plaintiff to a defendant.” In re Auto. Parts Antitrust Litig., 29 F. Supp. 3d 982, 1021 (E.D. Mich. 2014); accord Miller v. MSX-IBS Holding, Inc., No. 16-CV-10596, 2016 WL 4138238, at *7 (E.D. Mich. Aug. 4, 2016) (“Plaintiffs are correct that Michigan law does not require a direct link between defendants’ benefit and plaintiffs’ detriment; rather, the question is whether plaintiffs have shown that their detriment and defendants’ benefit ‘are related and flow from the challenged conduct.’”); Here, Plaintiffs have alleged Kellogg unjustly received from Plaintiffs the purchase price of the Cheez-It products Plaintiffs purchased. ¶ 85. This is sufficient to support a Michigan claim for unjust enrichment. Id. at *7. Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 25 of 31 PageID #: 115 20 3. Choice-of-Law Principles Do Not Warrant Dismissal of Plaintiffs’ Unjust Enrichment Claim under Michigan Law. Without explaining why a conflict-of-law analysis is necessary on a motion to dismiss, Defendant argues that conflict-of-law principles prohibit Plaintiffs from bringing an unjust enrichment claim under Michigan law. Mem. at 15–16. The Court should reject Kellogg’s argument for at least three reasons. 7 First, Defendant’s conflict-of-law argument is premature. Most courts in the Second Circuit “have declined to consider potential variation in state law among the plaintiffs’ claims” even at the class certification stage. In re Nigeria Charter Flights Contract Litig., 233 F.R.D. 297, 305 (E.D.N.Y. 2006) (certifying class despite alleged conflicts in state law); see also Cassese v. Washington Mut., Inc., 255 F.R.D. 89, 97 (E.D.N.Y. 2008) (certifying nationwide class despite “potential variations among state consumer protection statutes”). Moreover, the question of whether material differences among state laws render the proposed nationwide class unmanageable “is not independent of the class certification inquiry [under Rule 23(b)(3)] and should not be applied prior to that stage of the litigation.” See Bank v. Am. Home Shield Corp., No. 10-CV-4014, 2013 WL 789203, at *3 (E.D.N.Y. Mar. 4, 2013); FED. R. CIV. P. 23(b)(3)(D). Second, Defendant has not carried its burden of showing, on the facts of this case, an actual conflict between application of Michigan law and the law of another jurisdiction. According to the Court of Appeals of New York, “[t]he first step in any case presenting a potential choice of law issue is to determine whether there is an actual conflict between the laws of the jurisdictions involved.” Matter of Allstate Ins. Co. (Stolarz), 613 N.E.2d 936, 937 (N.Y. 1993); accord R.B. Dev., Co. v. Tutis Capital LLC, No. 12CV1460CBASMG, 2015 WL 7 Plaintiffs agree that New York’s choice-of-law rules apply. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (holding that a federal court sitting in diversity must apply the choice-of-law rules of the state in which the court is located). (See Mem. 15–16.) Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 26 of 31 PageID #: 116 21 10567830, at *3 (E.D.N.Y. Nov. 6, 2015). 8 “An actual conflict exists when there are ‘relevant substantive differences that could have a significant impact on the outcome of the case.’” R.B. Dev., Co., 2015 WL 10567830, at *3. If there is no actual conflict, the choice-of-law analysis ends. Matter of Allstate Ins. Co. (Stolarz), 613 N.E.2d at 938; accord Innovation Ventures, LLC v. Ultimate One Distrib. Corp., No. 12CV5354KAMRLM, 2016 WL 1274014, at *3 (E.D.N.Y. Mar. 31, 2016); see also Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 816 (1985) (“There can be no injury in applying Kansas law if it is not in conflict with that of any other jurisdiction connected to this suit.”). The burden is on the party raising the choice-of-law issue to assert that a conflict actually exists. Portanova v. Trump Taj Mahal Associates, 704 N.Y.S.2d 380, 383 (2000). As the party asserting that a choice-of-law analysis is necessary, Defendant bears the burden of showing an actual conflict between Michigan’s unjust enrichment law and the unjust enrichment laws of the other states. Id. at 383. Yet Defendant simply omits this step from its analysis. It provides no examples of conflicts between the relevant state laws, let alone conflicts that, based on the facts of this litigation, might make a “material difference that would affect the merits of the class’s . . . claims at trial.” Ebin v. Kangadis Food Inc., 297 F.R.D. 561, 570 (S.D.N.Y. 2014). For this independent reason, the Court should reject Kellogg’s choice-of-law argument. Third, while it is not Plaintiffs’ burden to show this is the case, the states’ unjust enrichment laws are substantially the same across the country. 9 Indeed, due to these similarities, courts have certified nationwide unjust enrichment classes. “There is general agreement among 8 Kellogg relies significantly upon In re Grand Theft Auto Video Game Consumer Litigation, 251 F.R.D. 139 (S.D.N.Y. 2008) (see Mem. at 15–16.), which is in accord with this proposition. See id. at 147. 9 See Exhibit A (chart showing unjust enrichment laws nationwide). Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 27 of 31 PageID #: 117 22 courts that the ‘minor variations in the elements of unjust enrichment under the laws of the various states . . . are not material and do not create an actual conflict.’” In re Checking Account Overdraft Litig., 307 F.R.D. 630, 647 (S.D. Fla. 2015); see also In re Mercedes-Benz Tele Aid Contract Litig., 257 F.R.D. 46, 58 (D.N.J. 2009) (“While there are minor variations in the elements of unjust enrichment under the laws of the various states, those differences are not material and do not create an actual conflict.”). E. Plaintiffs Have Standing to Seek Injunctive Relief. Finally, Defendant argues that Plaintiffs lack standing to seek injunctive relief. More specifically, that since “Plaintiffs themselves admit that they will not continue to purchase Cheez-It [Whole Grain] in the future,” they cannot individually be harmed again and, a fortiori, lack standing. Def. Mem. at 16-18. Defendant is wrong on the facts and the law. First, Defendant plainly contradicts the allegations of the complaint. Plaintiffs allege that they would purchase Cheez-It Whole Grain if Defendant ceased its deception and optimized the product consistent with its labeling ¶17 (“Mantikas knew that the Cheez-It Whole Grain crackers’ labels were truthful and non-misleading, she would continue to purchase the products in the future.” (emphasis added)), ¶ 27 (same for Plaintiff Burns), ¶ 35 (same for Plaintiff Castle). Many courts have held that plaintiffs have standing to obtain injunctive relief where they allege an intent and/or willingness to purchase a product again after deceptive marketing is remedied. 10 Because in this case Plaintiffs intend and/or are willing to purchase in the future and allege as much, they have standing to bring injunctive claims. 10 See, e.g., Ackerman v. Coca-Cola Co., No. 09-cv-0395, 2013 WL 7044866, at *15 n.23 (E.D.N.Y. July 18, 2013) (collecting cases); see also Ries v. Arizona Beverages USA LLC, 287 F.R.D. 523, 533 (N.D. Cal. 2012) (noting plaintiffs “request to be relieved from false advertising by defendant in the future,” and “stated an intent to purchase in the future” that the court “is devoid of any grounds to discount.”). The Second Circuit authority cited by Defendant is fully consistent with Plaintiffs’ analysis here. The plaintiffs in Elkind, Hidalgo, and Tomasino, expressly alleged that they would not purchase the challenged product in the future even upon the correction of its deceptive labeling. See First Am. Class Action Compl. at ¶ 72, Elkind v. Revlon Consumer Prods. Corp., No. 2:14- Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 28 of 31 PageID #: 118 23 Second, contrary to Defendant’s assertions, a majority of courts find that plaintiffs have standing to bring claims of injunctive relief irrespective of allegations concerning future purchasing intent. As this Court recently explained, “courts have consistently held that plaintiffs have standing to seek injunctive relief based on the allegation that a product’s labeling or marketing is misleading to a reasonable consumer.” Ackerman, 2013 WL 7044866, at *15 n.23 (E.D.N.Y. July 18, 2013) (emphasis added). Boswell v. Costco Wholesale Corp., No. 8:16-cv- 00278-DOC, 2016 WL 3360701, at *11 (C.D. Cal. June 6, 2016) (“Plaintiffs need not allege they are willing to subject themselves to future injury to seek injunctive relief on behalf of a class.”). In analyzing standing, moreover, courts stress the important public policy underlying consumer class actions—that is, providing a vehicle to protect consumers, including those who remain unwitting about the fraud even after class representatives have learned. Put simply, “[a]n injunction in connection with a class action is designed to afford protection of future consumers from the same fraud. It does this by permitting the plaintiff to sue on their behalf.” Belfiore v. Procter & Gamble Co., 94 F. Supp. 3d 440, 443 (E.D.N.Y. 2015). As stated in Ackerman, plaintiffs’ knowledge of the fraud does not negate the fraud: defendants' allegedly deceptive conduct is ongoing. Plaintiffs seek to be relieved from defendants' misleading and deceptive practices in the future, and the fact that they discovered the alleged deception years ago does not render defendants' advertising or labeling any more accurate or truthful. This is the harm New York's and California's consumer protection statutes are designed to redress. 11 cv-02484-JS-AKT (E.D.N.Y. May 6, 2014), ECF No. 12; Hidalgo v. Johnson & Johnson Consumer Cos., Inc., 148 F. Supp. 3d 285, 296 (S.D.N.Y. 2015) (noting that plaintiff “asserts that regardless of whether [defendant’s] allegedly deceptive practices are enjoined, [plaintiff] will refrain from purchasing the [challenged products]”); Am. Class Action Compl. at ¶¶ 19–21, Tomasino v. Estee Lauder Cos., Inc., No. 1:13-cv-04692-ERK-RML (E.D.N.Y. Oct. 15, 2013), ECF No. 8 (alleging no intent to purchase the challenged product in the future, even upon the correction of its deceptive marketing). 11 Ackerman, 2013 WL 7044866, at *15 n.23 (emphasis supplied). See also Boswell, 2016 WL 3360701, at *11 (noting “likelihood of repeat injury for the class as a whole since some class members do not have the same knowledge” as Plaintiffs). Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 29 of 31 PageID #: 119 24 A contrary finding would “eviscerate the intent of the California legislature in creating consumer protection statutes.” Delgado v. Ocwen Loan Servicing, No. 13-cv-4427, 2014 WL 4773991, at *14 (E.D.N.Y. Sept. 24, 2014); see also Belfiore, 94 F. Supp. 3d at 445 (“To hold otherwise would denigrate the New York consumer protection statute”). As with all class claims, Plaintiffs seek to represent interests broader than their own. So too, their alleged injury “implicates the same concerns as the injury of those putative class members who will be harmed by their lack of knowledge of [Defendant’s] conduct.” Harris v. Las Vegas Sand L.L.C., No. 2:12-cv-10858, 2013 WL 5291142, at *5 (C.D. Cal. Aug. 16, 2013) (citing NECA–IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145, 162 (2d Cir. 2012). Plaintiffs have pled their intent to purchase Cheez It Whole Grain in the future once the deception ceases, and also have plead that a reasonable consumer would be misled by Defendant’s advertising. For the foregoing reasons, they clearly have standing to represent unnamed consumer class members by way of their claims for injunctive relief here. As recognized in Ackerman v. Coca–Cola Co., “[t]o hold otherwise would “effectively bar any consumer who avoids the offending product from seeking injunctive relief.” Ackerman, 2013 WL 7044866, at *15. As explained by the court: If the Court were to construe Article III standing for FAL and UCL claims as narrowly as the Defendant advocates, federal courts would be precluded from enjoining false advertising under California consumer protection laws because a plaintiff who had been injured would always be deemed to avoid the cause of the injury thereafter (‘once bitten, twice shy’) and would never have Article III standing. Id. at *15 (quoting Henderson v. Gruma Corp., No. 10 CV 4173, 2011 WL 1362188, at *7 (C.D. Cal. Apr. 11, 2011). Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 30 of 31 PageID #: 120 25 III. CONCLUSION For the reason stated above, Defendant’ Motion to Dismiss should be denied. Date: September 16, 2016 Respectfully Submitted, By: /s Craig L. Briskin MEHRI & SKALET, PLLC cbriskin@findjustice.com 1250 Connecticut Avenue, Northwest, Suite 300 Washington, DC 20036 Telephone: (202) 822-5100 REESE LLP Michael R. Reese mreese@reesellp.com 100 West 93rd Street, 16th Floor New York, NY 10025 Telephone: (212) 643-0500 CENTER FOR SCIENCE IN THE PUBLIC INTEREST Maia Kats (admitted pro hac vice) mkats@cspinet.org 1220 L Street, Northwest, Suite 300 Washington, DC 20005 Telephone: (202) 777-8381 Counsel for Plaintiffs Case 2:16-cv-02552-SJF-AYS Document 17-3 Filed 10/07/16 Page 31 of 31 PageID #: 121 Exhibit A Survey of Unjust Enrichment Law of 50 States and the District of Columbia Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 1 of 10 PageID #: 122 1 Jurisdiction Elements of Unjust Enrichment Alabama “To prevail on a claim of unjust enrichment under Alabama law, a plaintiff must show that: (1) the defendant knowingly accepted and retained a benefit, (2) provided by another, (3) who has a reasonable expectation of compensation.” Northstar Marine, Inc. v. Huffman Const., Inc., No. CIV.A. 13-0037-WS-C, 2015 WL 82942, at *7 (S.D. Ala. Jan. 6, 2015) (internal citation and quotation marks omitted). “[T]he plaintiff must show that the defendant holds money which, in equity and good conscience, belongs to the plaintiff or holds money which was improperly paid to defendant because of mistake or fraud.” Chartis Aerospace Ins. Servs., Inc. v. AUA, Inc., No. 2:12-CV-1087-JHH, 2013 WL 2249095, at *4 (N.D. Ala. May 21, 2013) (internal citation and quotation marks omitted). Alaska Under Alaska law, the elements of a claim of unjust enrichment are: “(1) a benefit conferred to defendant, (2) appreciation by defendant of that benefit; and (3) inequity of allowing defendant to retain the benefit without paying value therefor.” U.S. ex rel. N. Star Terminal & Stevedore Co. v. Nugget Const., Inc., 445 F. Supp. 2d 1063, 1077 (D. Alaska 2006) (citing Reeves v. Alyeska Pipeline Serv. Co., 926 P.2d 1130, 1143 (Alaska 1996)). Arizona Under Arizona law, “[t]o recover under a theory of unjust enrichment, a plaintiff must demonstrate five elements: (1) an enrichment, (2) an impoverishment, (3) a connection between the enrichment and impoverishment, (4) the absence of justification for the enrichment and impoverishment, and (5) the absence of a remedy provided by law.” Premier Funding Grp. LLC v. Aviva Life & Annuity Co., No. CV-14-01633-PHX-DGC, 2015 WL 789743, at *3 (D. Ariz. Feb. 25, 2015) (internal citation and quotation marks omitted). Arkansas Under Arkansas law, “an action based on unjust enrichment is maintainable where a person has received money . . . under such circumstances that, in equity and good conscience, he or she ought not to retain.” Buckley v. G.D USA, Inc., No. 5:13-CV-05216, 2014 WL 3896178, at *4 (W.D. Ark. Aug. 7, 2014) (internal citation and quotation marks omitted). “Pursuant to Arkansas Model Jury Instruction . . . 2445, the claim of Unjust Enrichment requires (1) Plaintiff provided services or money to the Defendant who received the benefit of the money, (2) Plaintiff expected to be paid the value of such services or money, (3) Defendant was aware Plaintiff was providing such services or money with the expectation of being paid, and (4) the reasonable value of such services or money received by the Defendant.” Goza v. Multi-Purpose Civic Ctr. Facilities Bd. for Pulaski Cnty., Ark., No. 6:12-CV- 6125, 2013 WL 4523366, at *4 (W.D. Ark. Aug. 27, 2013). “To find unjust enrichment, a party must have received something of value to which he is not entitled and which he should restore.” Id. “There must be some operative act, intent, or situation to make the enrichment unjust and compensable.” Id. California “Under California law, the elements of unjust enrichment are: (1) receipt of a benefit; and (2) unjust retention of the benefit at the expense of another.” Valencia v. Volkswagen Grp. of Am. Inc, No. 15-CV-00887-HSG, 2015 WL 4747533, at *8-9 (N.D. Cal. Aug. 11, 2015) (citing Lectrodryer v. SeoulBank, 91 Cal. Rptr. 2d 881, 883 (Ct. App. 2000)); see also Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 2 of 10 PageID #: 123 2 Jurisdiction Elements of Unjust Enrichment Colorado To state a claim for unjust enrichment under Colorado law, a plaintiff “need only allege that the defendant knowingly received a benefit at the plaintiff’s expense that it would be unjust for the defendant to retain.” Arapahoe Surgery Ctr., LLC v. Cigna Healthcare, Inc., No. 13-CV-3422-WJM-CBS, 2015 WL 1041515, at *8 (D. Colo. Mar. 6, 2015) (internal citations omitted). Connecticut Under Connecticut law, “[a] plaintiff seeking recovery for unjust enrichment must prove: (1) that the defendants were benefitted, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs’ detriment.” Carney v. Montes, No. 3:12-CV-00183 SRU, 2014 WL 671263, at *12 (D. Conn. Feb. 21, 2014) (citing Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 649 A.2d 518, 521–22 (Conn. 1994)). Delaware Under Delaware law, “[t]o establish a claim for unjust enrichment, a plaintiff must prove: (1) an enrichment, (2) an impoverishment, (3) a relation between the enrichment and impoverishment, (4) the absence of justification, and (5) the absence of a remedy provided bylaw.” Esprit Health, LLC v. Univ. of Delaware, No. 1:13-CV-01385-RGA, 2013 WL 6773571, at *4 (D. Del. Dec. 19, 2013) (internal citation and quotation marks omitted). The District of Columbia In the District of Columbia, “[a] party states a legally cognizable unjust enrichment claim when: (1) the plaintiff confers a benefit on the defendant; (2) the defendant retains the benefit; and (3) under the circumstances, the defendant’s retention of the benefit is unjust.” Vila v. Inter-Am. Inv. Corp., No. CV 06-2143 (RBW), 2015 WL 1138326, at *3 (D.D.C. Mar. 16, 2015) (internal citation, quotation marks, and brackets omitted). Florida Under Florida law, “[t]o state a claim for unjust enrichment, the Plaintiffs must allege that they conferred a benefit upon the Defendants, that the Defendants appreciated that benefit, and that the Defendants accepted and retained that benefit under circumstances that make it inequitable for them to retain it.” Parker v. Am. Traffic Solutions, Inc., No. 14-CIV-24010, 2015 WL 4755175, at *3 (S.D. Fla. Aug. 10, 2015) (internal citation omitted). Georgia Under Georgia law, “[u]njust enrichment is available when the party seeking relief has conferred a benefit on another party and the benefitting party equitably ought to return that benefit.” Cadle Co. II v. Menchion, No. 1:14- CV-1418-TWT, 2014 WL 5019520, at *6 (N.D. Ga. Oct. 7, 2014) (internal citation and footnote omitted). Hawai‘i Under Hawai‘i law, “[a]n unjust enrichment claim consists of two elements: (a) receipt of a benefit without adequate legal basis by Defendants; and (b) unjust retention of that benefit at the expense of Plaintiffs.” Liberty Mut. Ins. Co. v. Sumo-Nan LLC, No. CIV. 14-00520 DKW, 2015 WL 2449480, at *11 (D. Haw. May 20, 2015) (internal citation and quotation marks omitted). Idaho Under Idaho law, “[t]he elements of unjust enrichment are: (1) a benefit is conferred on the defendant by the plaintiff; (2) the defendant appreciates the benefit; and (3) it would be inequitable for the defendant to accept the benefit without payment of the value of the benefit.” Bryant v. Tamarack Mun. Ass’n, Inc., No. 1:14-CV-00339- BLW, 2015 WL 2035326, at *3 (D. Idaho May 1, 2015) (internal citation and quotation marks omitted). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 3 of 10 PageID #: 124 3 Jurisdiction Elements of Unjust Enrichment Illinois Under Illinois law, “a claim of unjust enrichment arises when a defendant unjustly retains a benefit to the plaintiff’s detriment.” Miner v. Gov't Payment Serv., Inc., No. 1:14-CV-07474, 2015 WL 3528243, at *10 (N.D. Ill. June 4, 2015). Indiana “Indiana courts articulate three elements for unjust enrichment claims: (1) a benefit conferred upon another at the express or implied request of this other party; (2) allowing the other party to retain the benefit without restitution would be unjust; and (3) the plaintiff expected payment.” Moss v. Geared 2 Serve Staffing, LLC, No. 1:14-CV-546- WTL-MJD, 2015 WL 263598, at *4 (S.D. Ind. Jan. 21, 2015) (internal citation, quotation marks, and brackets omitted). Iowa “To recover for unjust enrichment under Iowa law, the plaintiff must show: (1) the defendant was enriched by the receipt of a benefit; (2) the enrichment was at the expense of the plaintiff; and (3) it is unjust to allow the defendant to retain the benefit under the circumstances.” Cmty. Voiceline, L.L.C. v. Great Lakes Commc’n Corp., No. C 12- 4048-MWB, 2014 WL 357782, at *4 (N.D. Iowa Jan. 31, 2014) (internal citation, quotation marks, and brackets omitted). Kansas “[I]n Kansas the elements of an unjust enrichment claim are: (1) a benefit conferred; (2) an appreciation or knowledge of the benefit of the one receiving the benefit; and (3) the acceptance or retention of the benefit under circumstances as to make it inequitable to retain the benefit.” Deutsch v. Robro Royalty Partners, Ltd., No. CIV.A. 15-1092-MLB, 2015 WL 3884379, at *2 (D. Kan. June 24, 2015) (internal citation omitted). Kentucky Under Kentucky law, “to properly state a claim for unjust enrichment, a plaintiff must allege (1) a benefit conferred upon the defendant at the plaintiff’s expense; (2) a resulting appreciation of the benefit by the defendant; and (3) an inequitable retention of the benefit without payment for its value.” Church Mut. Ins. Co. v. Smith, No. 3:14-CV- 749-JHM, 2015 WL 3480656, at *5 (W.D. Ky. June 2, 2015) (internal citation and quotation marks omitted). Louisiana Under Louisiana law, “[t]he five requirements for a showing of unjust enrichment . . . are: (1) there must be an enrichment, (2) there must be an impoverishment, (3) there must be a connection between the enrichment and resulting impoverishment, (4) there must be an absence of ‘justification’ or ‘cause’ for the enrichment and impoverishment, and (5) there must be no other remedy at law available to plaintiff.” Main Iron Works LLC v. Rolls Royce Marine N. Am., Inc., No. CIV.A. 14-1109, 2015 WL 3952709, at *2 (E.D. La. June 29, 2015) (citing and quoting Baker v. Maclay Properties Co., 648 So. 2d 888, 897 (La. 1995)). Maine “In Maine, a party claiming unjust enrichment must show that: (1) it conferred a benefit on the other party; (2) the other party had appreciation or knowledge of the benefit; and (3) the acceptance or retention of the benefit was under such circumstances as to make it inequitable for it to retain the benefit without payment of its value.” United States v. Mays, 826 F. Supp. 2d 298, 305 (D. Me. 2011) (internal citation and quotation marks omitted). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 4 of 10 PageID #: 125 4 Jurisdiction Elements of Unjust Enrichment Maryland “In order to state a claim for unjust enrichment under Maryland law, a plaintiff must plead: (1) a benefit conferred upon the defendant by the plaintiff; (2) an appreciation or knowledge by the defendant of the benefit; and (3) the acceptance or retention by the defendant of the benefit under such circumstances as to make it inequitable for the defendant to retain the benefit without the payment of its value.” Connecticut Gen. Life Ins. Co. v. Advanced Surgery Ctr. of Bethesda, LLC, No. CIV.A. DKC 14-2376, 2015 WL 4394408, at *23 (D. Md. July 15, 2015) (internal citation and quotation omitted). Massachusetts “The elements of the more general action of unjust enrichment [i]n Massachusetts . . . are unjust enrichment of one party and unjust detriment to the other party.” Depianti v. Jan-Pro Franchising Int’l, Inc., 39 F. Supp. 3d 112, 142 (D. Mass. 2014) (citing Massachusetts Eye & Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 240 (1st Cir. 2005) (internal quotation marks omitted)). Michigan Under Michigan law, “‘in order to sustain a claim of quantum meruit or unjust enrichment, a plaintiff must establish (1) the receipt of a benefit by the defendant from the plaintiff and (2) an inequity resulting to the plaintiff because of the retention of the benefit by the defendant.’” Auto. Interior Innovations, LLC v. Mata AHSAP VE OTOMOTIV TIC SAN AS, No. 13-CV-12542, 2015 WL 4162489, at *18 (E.D. Mich. July 9, 2015) (citing and quoting Morris Pumps v. Centerline Piping, Inc., 729 N.W.2d 898, 904 (Mich. Ct. App. 2006)) (additional internal citation omitted). Minnesota “Under Minnesota law, [t]he elements of unjust enrichment are: (1) a benefit conferred; (2) the defendant’s appreciation and knowing acceptance of the benefit; and (3) the defendant’s acceptance and retention of the benefit under such circumstances that it would be inequitable for him to retain it without paying for it.” OrthoAccel Technologies, Inc. v. Devicix, LLC, No. CIV. 15-1503 DWF/TNL, 2015 WL 4563134, at *5 (D. Minn. July 29, 2015) (internal citation and quotation marks omitted). Mississippi “Mississippi law provides that, in an action for unjust enrichment, the plaintiff need only allege and show that the defendant holds money which in equity and good conscience belongs to the plaintiff. The requirements of proof of unjust enrichment are neither technical nor complicated and, [plaintiff] can state a claim against Defendants on the basis that [defendants] were unjustly enriched because they received the profits [which] they should not have been permitted to [receive].” Ovella v. B & C Const. & Equip., LLC, No. 1:10CV285 LG-RHW, 2011 WL 2912865, at *2 (S.D. Miss. July 18, 2011) (internal citation and quotation omitted). Missouri Under Missouri law, “[t]o state a claim for unjust enrichment, a plaintiff must allege (1) a benefit was conferred upon the defendant, (2) at the expense of the plaintiff, and (3) it would be unjust to allow the defendant to retain the benefit.” TCP Printing Co., LLC v. Enter. Bank & Trust, No. 4:15-CV-178 JAR, 2015 WL 4747102, at *4 (E.D. Mo. Aug. 11, 2015) (internal citation omitted). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 5 of 10 PageID #: 126 5 Jurisdiction Elements of Unjust Enrichment Montana Under Montana law, “‘[u]njust enrichment occurs when one has and retains money which in justice or equity belongs to another.’” Guschausky v. Am. Family Life Assur. Co. of Columbus, No. CV 10-59-H-DWM, 2011 WL 1897183, at *4 (D. Mont. May 10, 2011) (citing and quoting Edwards v. Cascade Cnty., 212 P.3d 289, 295 (Mont. 2009)). Nebraska “To recover under a theory of unjust enrichment in Nebraska, one must allege facts that the law of restitution would recognize as unjust enrichment. . . . Restitution constitutes an independent basis of liability comparable to a liability in contract or tort. . . . Unjust enrichment may result . . . from a transaction that the law treats as ineffective to work a conclusive alteration in ownership rights. . . . [And] there may also be cases in which the remedy for unjust enrichment gives the plaintiff something, such as the defendant’s wrongful gain, that the plaintiff did not previously possess.” Infogroup, Inc. v. DatabaseLLC, No. 8:14-CV-49, 2015 WL 1499066, at *20 (D. Neb. Mar. 30, 2015) (internal citations and quotation marks omitted). “A person who obtains a benefit by conscious interference with a claimant’s legally protected interests (or in consequence of such interference by another) is liable in restitution as necessary to prevent unjust enrichment. . . . Conscious interference with property rights of any kind, with contractual expectations, or with other interests to which the law of torts extends a similar protection, will support the claim in restitution described in this section.” Id. (internal citations and quotation marks omitted). Nevada “In Nevada, the elements of an unjust enrichment claim or ‘quasi contract’ are: (1) a benefit conferred on the defendant by the plaintiff; (2) appreciation of the benefit by the defendant; and (3) acceptance and retention of the benefit by the defendant (4) in circumstances where it would be inequitable to retain the benefit without payment. . . . However, a plaintiff need not have directly conferred the benefit upon the defendant to recover under a claim of unjust enrichment, so long as the benefit was conferred as a result of the plaintiff’s actions.” Ergon Asphalt and Emulsions, Inc. v. Capriati Const. Corp, No. 2:13-cv-01683-GMN-NJK, 2015 WL 1959851, at *6 (D. Nev. Apr. 29, 2015) (internal citations and quotation marks omitted). New Hampshire Under New Hampshire law, “[t]he doctrine of unjust enrichment holds that one shall not be allowed to profit or enrich himself at the expense of another contrary to equity. . . . A plaintiff in an unjust enrichment case is not required to prove that the defendant obtained the benefit through wrongful acts; passive acceptance of a benefit may also constitute unjust enrichment. . . . To justify restitution, there must be more than a moral claim for reimbursement. Instead, there must be some specific legal principle or situation which equity has established or recognized to bring a case within the scope of the doctrine.” DesRoches v. Potter, No. 05-CV-088-PB, 2009 WL 1240726, at *2 (D.N.H. May 5, 2009) (internal citations, quotation marks, and brackets omitted). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 6 of 10 PageID #: 127 6 Jurisdiction Elements of Unjust Enrichment New Jersey Under New Jersey law, “[t]o establish a claim for unjust enrichment, a plaintiff must show both that defendant received a benefit and that retention of that benefit without payment would be unjust.” Revera Inc. v. Lindeman, No. CIV.A. 12-05051 SDW, 2015 WL 1969100, at *5 (D.N.J. Apr. 29, 2015) (internal citations omitted). New Mexico Under New Mexico law, “[t]o prevail on a claim for unjust enrichment, one must show that: (1) another has been knowingly benefitted at one’s expense (2) in a manner such that allowance of the other to retain the benefit would be unjust.” City of Rio Rancho v. Amrep Sw. Inc., 260 P.3d 414, 428–29 (N.M. 2011). New York Under New York law, “[t]o state a claim for unjust enrichment, a plaintiff must allege that: (1) the defendant was enriched, (2) at plaintiff’s expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered.” In re Libor-Based Fin. Instruments Antitrust Litig., No. 11 MDL 2262 NRB, 2015 WL 4634541, at *67 (S.D.N.Y. Aug. 4, 2015) (internal citations, quotation marks, and brackets omitted). North Carolina “[U]nder North Carolina law, a plaintiff asserting [a claim of unjust enrichment] must show that it conferred a benefit on another, the other party consciously accepted the benefit, and the benefit was not conferred gratuitously.” Jacobs Vehicle Sys., Inc. v. Zhou Yang, No. 1:12CV181, 2015 WL 4622734, at *10 (M.D.N.C. July 31, 2015) (internal citation omitted). North Dakota Under North Dakota law, “[u]njust enrichment is a broad, equitable doctrine which rests upon quasi or constructive contracts implied by law to prevent a person from unjustly enriching himself at the expense of another. . . . To recover under a theory of unjust enrichment, the plaintiff must prove: (1) an enrichment, (2) an impoverishment, (3) a connection between the enrichment and the impoverishment, (4) the absence of a justification for the enrichment and impoverishment, and (5) the absence of a remedy provided by law. . . . The theory may be invoked when a person has and retains money or benefits which in justice and equity belong to another. . . . For a complainant to recover, it is sufficient if another has, without justification, obtained a benefit at the direct expense of the complainant, who then has no legal means of retrieving it. . . . The essential element in recovering under the theory is the receipt of a benefit by the defendant from the plaintiff which would be inequitable to retain without paying for its value.” McColl Farms, LLC v. Pflaum, 837 N.W.2d 359, 367 (N.D. 2013) (internal citations and quotation marks omitted). Ohio “In Ohio, the elements of a claim for unjust enrichment are as follows: (1) a benefit conferred by a plaintiff upon a defendant; (2) knowledge by the defendant of the benefit; and (3) retention of the benefit by the defendant under circumstances where it would be unjust to do so without payment.” Patel v. Dish Network L.L.C., No. 2:12-CV- 1078, 2015 WL 4776894, at *4 (S.D. Ohio Aug. 12, 2015) (citing Hambleton v. R.G. Barry Corp., 465 N.E.2d 1298, 1302 (Ohio 1984). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 7 of 10 PageID #: 128 7 Jurisdiction Elements of Unjust Enrichment Oklahoma “Under Oklahoma law, before a party may recover unjust enrichment, there must be an enrichment to another coupled with a resulting injustice.” N. Am. Ins. Agency, Inc. v. Bates, No. CIV-12-544-M, 2014 WL 3810534, at *9 (W.D. Okla. Aug. 1, 2014) (internal citation and quotation marks omitted). Oregon “In Oregon, the elements of the quasi-contractual claim of unjust enrichment are (1) a benefit conferred, (2) awareness by the recipient that she has received the benefit, and (3) it would be unjust to allow the recipient to retain the benefit without requiring her to pay for it. . . . The last element is a legal conclusion. . . . Benefit is broadly defined and includes money.” Great Am. Ins. Co. v. Linderman, No. 3:15-CV-0115-MO, 2015 WL 4387943, at *10 (D. Or. July 15, 2015) (internal citations, quotation marks, and brackets omitted). Pennsylvania Under Pennsylvani law, “[u]njust enrichment occurs when one party has been unjustly enriched at the expense of another. . . . The elements of unjust enrichment are benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value. . . . A claimant must show that the party against whom recovery is sought either wrongfully secured or passively received a benefit that . . . would be unconscionable for her to retain.” Mackereth v. Kooma, Inc., No. CIV.A. 14-04824, 2015 WL 2337273, at *9 (E.D. Pa. May 14, 2015) (internal citations and quotation marks omitted). Rhode Island “Unjust enrichment is ‘[t]he retention of a benefit conferred by another, who offered no compensation, in circumstances where compensation is reasonably expected.’” S. Cnty. Post & Beam, Inc. v. McMahon, 116 A.3d 204, 210 (R.I. 2015) (citing and quoting Black’s Law Dictionary 1771 (10th ed. 2014)). “‘Instances of unjust enrichment typically arise * * * when a benefit is conferred deliberately but without a contract * * *.’” Id. (citing and quoting Black’s Law Dictionary 1771 (10th ed. 2014)). “‘The resulting claim of unjust enrichment seeks to recover the defendant’s gains.’” Id. (citing and quoting Black’s Law Dictionary 1771 (10th ed. 2014)). “It is well settled in [Rhode Island] that, to recover for unjust enrichment, a claimant must prove: (1) that he or she conferred a benefit upon the party from whom relief is sought; (2) that the recipient appreciated the benefit; and (3) that the recipient accepted the benefit under such circumstances that it would be inequitable for the recipient to retain the benefit without paying the value thereof.” Id. (internal citation, quotation marks, and brackets omitted). South Carolina Under South Carolina law, “[t]o recover for unjust enrichment, [the plaintiff] must show the following three elements: (1) a benefit conferred upon the defendant by plaintiff; (2) realization of that benefit by the defendant; and (3) retention by the defendant of the benefit under conditions that make it unjust for it to retain the benefit.” Brown v. Goodman Mfg. Co., L.P., No. 1:13-CV-03169-JMC, 2015 WL 1006319, at *8 (D.S.C. Mar. 5, 2015) (internal citation omitted). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 8 of 10 PageID #: 129 8 Jurisdiction Elements of Unjust Enrichment South Dakota “[U]nder South Dakota law, for a plaintiff to succeed on an unjust enrichment claim, the plaintiff must show (1) the defendant received a benefit from the plaintiff; (2) the defendant was aware of the benefit; and (3) that it is inequitable to allow the defendant to retain the benefit without paying for it.” Superior Homes, L.L.C. v. Comardelle, No. CIV. 12-4126-KES, 2013 WL 6146051, at *5 (D.S.D. Nov. 21, 2013) (internal citation omitted). Tennessee “In Tennessee, the theory of unjust enrichment is founded on the principle that a party receiving a benefit desired by him, under circumstances rendering it inequitable to retain it without making compensation, must do so. . . . Plaintiffs bringing an unjust enrichment claim must establish three elements: 1) a benefit conferred upon the defendant by the plaintiff; 2) appreciation by the defendant of such benefit; and 3) acceptance of such benefit under such circumstances that it would be inequitable for him to retain the benefit without payment of the value thereof.” Adams v. Diversicare Leasing Corp., No. 14-2990, 2015 WL 4208779, at *7 (W.D. Tenn. July 10, 2015) (internal citations, quotation marks, and brackets omitted). Texas Under Texas law, “[t]he unjust enrichment doctrine applies the principles of restitution to disputes which for one reason or another are not governed by a contract between the contending parties. . . . Unjust enrichment demands restitution when a party receiving property or benefits would be unjustly enriched if it were permitted to retain the property or benefits at the expense of another.” Bent v. U.S. Bank Nat. Ass’n., No. 3:15-CV-340-N, 2015 WL 3454226, at *3 (N.D. Tex. May 29, 2015) (internal citations and quotation marks omitted). Utah Under Utah law, “[t]o prove a claim for unjust enrichment, a plaintiff must establish three elements. First, there must be a benefit conferred on one person by another. Second, the conferee must appreciate or have knowledge of the benefit. Finally, there must be the acceptance or retention by the conferee of the benefit under such circumstances as to make it inequitable for the conferee to retain the benefit without payment of its value.” KAM Fin. v. Silverleaf Fin., No. 2:12-CV-01111, 2015 WL 1432610, at *14 (D. Utah Mar. 27, 2015) (internal citation and quotation marks omitted). Vermont Under Vermont law, “[u]njust enrichment arises when the law implies a promise to pay because a party receives a benefit and the retention of the benefit would be inequitable. . . . Although most restitution cases involve benefits conferred in connection with contracts, restitution is not limited to such cases, and can apply in cases where a benefit has been conferred upon the defendant without mistake and without wrongdoing or breach of an agreement by the defendant.” JW, LLC v. Ayer, 101 A.3d 906, 914 (Vt. 2014) (internal citations, quotation marks, and brackets omitted). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 9 of 10 PageID #: 130 9 Jurisdiction Elements of Unjust Enrichment Virginia Under Virginia law, “[t]o establish a claim for unjust enrichment, a plaintiff must show: (1) plaintiffs conferring of a benefit on the defendant; (2) defendant’s knowledge of the conferring of the benefit; and, (3) defendant’s acceptance or retention of the benefit under circumstances that render it inequitable for the defendant to retain the benefit without paying for its value.” Microsoft Corp. v. John Does 1-8, No. 1:14-CV-811, 2015 WL 4937441, at *12 (E.D. Va. Aug. 17, 2015) (internal citation and quotation marks omitted). Washington Under Washington law, “[a] claim for unjust enrichment requires the following elements: (1) a benefit conferred upon the defendant by the plaintiff; (2) knowledge by the defendant of the benefit; and (3) the defendant retains the benefit under circumstances that make it inequitable to do so.” Accretive Tech. Grp., Inc. v. Adobe Sys., Inc., No. C15-309RSM, 2015 WL 4920079, at *11 (W.D. Wash. Aug. 17, 2015) (citing Young v. Young, 191 P.3d 1258, 1262 (Wash. 2008)). West Virginia “Under West Virginia law, a claim of unjust enrichment generally entails the establishment of three elements: (1) a benefit conferred upon the defendant, (2) an appreciation or knowledge by the defendant of such benefit, and (3) the acceptance or retention by the defendant of the benefit under such circumstances as to make it inequitable for the defendant to retain the benefit without payment of its value.” CUMIS Ins. Soc., Inc. v. Raines, No. CIV.A. 3:12- 6277, 2013 WL 500305, at *2 (S.D.W. Va. Feb. 11, 2013) (internal citation, quotation marks, and brackets omitted). Wisconsin Under Wisconsin law, “‘[t]o establish a claim for unjust enrichment, the plaintiff must prove three elements: (1) the plaintiff conferred a benefit upon the defendant; (2) the defendant had an appreciation or knowledge of the benefit; and (3) the defendant accepted or retained the benefit under circumstances making it inequitable for the defendant to retain the benefit without payment of its value.’” Don-Rick, Inc. v. QBE Americas, 995 F. Supp. 2d 863, 873–74 (W.D. Wis. 2014) (citing and quoting Buckett v. Jante, 767 N.W.2d 376, 380 (Wis. Ct. App. 2009)). Wyoming Under Wyoming law, “[u]njust enrichment is the unjust retention of a benefit to the loss of another. It exists as a basis for recovery for goods or services rendered under circumstances where it would be inequitable if no compensation was paid in return. In Wyoming, the elements of unjust enrichment are: 1) valuable services were rendered; 2) to the party to be charged; 3) which services were accepted, used and enjoyed by the charged party; and 4) under circumstances that reasonably notified the party being charged that the other party would expect payment for the services.” Redland v. Redland, 288 P.3d 1173, 1203 (Wyo. 2012) (internal citations and quotation omitted). Case 2:16-cv-02552-SJF-AYS Document 17-4 Filed 10/07/16 Page 10 of 10 PageID #: 131 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK KRISTEN MANTIKAS, KRISTIN BURNS, and LINDA CASTLE, individually and on behalf of all others similarly situated, Plaintiffs, v. KELLOGG COMPANY, Defendant. Case No. 2:16-cv-02552-SJF-AYS Hon. Sandra J. Feuerstein REPLY IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS CLASS ACTION COMPLAINT JENNER & BLOCK LLP Kenneth K. Lee (NY Reg. No. 4056750) klee@jenner.com 633 West 5th Street, Suite 3600 Los Angeles, CA 90071 Tel.: (213) 239-5100 Fax: (213) 239-5199 -and- Dean N. Panos (admitted pro hac vice) dpanos@jenner.com 353 N. Clark Street Chicago, IL 60654 Tel.: (312) 222-9350 Fax: (312) 527-0484 Attorneys for Defendant KELLOGG COMPANY Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 1 of 23 PageID #: 132 i TABLE OF CONTENTS Page(s) INTRODUCTION ...................................................................................................................... 1 ARGUMENT .............................................................................................................................. 2 I. The Complaint Must Be Dismissed Because Plaintiffs Have Not Plausibly Shown that the “Whole Grain” Label Is Likely to Mislead a Reasonable Consumer ............................................................................................. 2 II. Plaintiffs’ Claims are Preempted Under Federal Law ........................................... 7 a. Kellogg’s Conduct Does Not Run Afoul of Plaintiffs’ Cited Regulations ..................................................................................................... 7 b. Kellogg’s “Made with Whole Grains” Statement Is an Explicitly Allowed Implied Nutrient Claim .................................................................... 8 c. Plaintiffs Do Not Deny that “Made with 8g of Whole Grain Per Serving” Is an Express Content Claim Under FDA Regulations ................. 10 III. Plaintiffs’ Unjust Enrichment Claim Must Be Dismissed .................................. 10 a. Plaintiffs May Not Bring a Claim Under Michigan Law ............................. 10 b. Plaintiffs’ Alleged Indirect Benefit Conferred Is Not Enough to Satisfy the Requirements of Unjust Enrichment in Michigan ...................... 12 IV. Plaintiffs Do Not Have Standing to Seek Injunctive Relief ............................... 14 a. Future Intentions Are Not Enough to Grant Standing ................................. 14 b. Plaintiffs’ Public Policy Concerns Cannot Trump Article III Requirements ................................................................................................ 16 CONCLUSION ......................................................................................................................... 17 Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 2 of 23 PageID #: 133 ii TABLE OF AUTHORITIES Page(s) CASES A & M Supply Co. v. Microsoft Corp., No. 274164, 2008 WL 540883 (Mich. Ct. App. Feb. 28, 2008) ..............................................13 Ackerman v. Coca-Cola Co., No. 09-0395, 2010 WL 2925955 (E.D.N.Y. July 21, 2010) ......................................................6 Ackerman v. Coca-Cola Co., No. 09-395, 2013 WL 7044866 (E.D.N.Y. July 18, 2013) ........................................5, 6, 15, 16 Albert v. Blue Diamond Growers, 151 F. Supp. 3d 412 (S.D.N.Y. 2015)........................................................................................6 Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981) .................................................................................................................11 Atik v. Welch Foods, Inc., No. 15-5405, 2016 WL 5678474 (E.D.N.Y. Sept. 30, 2016) ..........................................5, 6, 14 Barron v. Snyder’s-Lance, Inc., No. 13-62496, 2015 WL 11182066 (S.D. Fla. Mar. 20, 2015)................................................14 Belfiore v. Procter & Gamble Co., 94 F. Supp. 3d 440, 445 (E.D.N.Y. 2015) ...............................................................................16 Bonanno v. The Quizno’s Franchise Co. LLC, No. 06-02358, 2008 WL 638367 (D. Colo. Mar. 5, 2008) ......................................................11 Campagna v. Language Line Servs., Inc., No. 08-02488, 2012 WL 1565229 (N.D. Cal. May 2, 2012) ...................................................11 Clothesrigger, Inc. v. GTE Corp., 191 Cal. App. 3d 605 (Ct. App. 1987) .....................................................................................11 Coe v. Gen. Mills, Inc., No. 15-05112, 2016 WL 4208287 (N.D. Cal. Aug. 10, 2016) ..................................................8 Collazo v. Wen by Chaz Dean, Inc., No. 15-01974, 2015 WL 4398559 (C.D. Cal. July 17, 2015) ..................................................11 Delgado v. Ocwen Loan Servicing, No. 13-4427, 2014 WL 4773991 (E.D.N.Y. Sept. 24, 2014) ..................................................16 Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 3 of 23 PageID #: 134 iii Ebner v. Fresh, Inc., No. 13-56644, 2016 WL 5389307 (9th Cir. Sept. 27, 2016) .................................................2, 4 Elkind v. Revlon Consumer Prod. Corp., No. 14-2484, 2015 WL 2344134 (E.D.N.Y. May 14, 2015) ...................................................15 Fenerjian v. Nongshim Co., Ltd, 72 F. Supp. 3d 1058 (N.D. Cal. 2014) .....................................................................................13 Fink v. Time Warner Cable, 714 F.3d 739 (2d Cir. 2013)...................................................................................................2, 4 Freeman v. Time, Inc., 68 F.3d 285 (9th Cir. 1995) .......................................................................................................4 Hairston v. S. Beach Bev. Co., Inc., No. 12-1429, 2012 WL 1893818 (C.D. Cal. May 18, 2012) ...............................................2, 10 Henderson v. Gruma Corp., No. 10-04173, 2011 WL 1362188 (C.D. Cal. Apr. 11, 2011) ...................................................3 In re Aftermarket Filters Antitrust Litig., No. 08-4883, 2010 WL 1416259 (N.D. Ill. Apr. 1, 2010) .......................................................13 In re Flonase Antitrust Litig., 610 F. Supp. 2d 409 (E.D. Pa. 2009) .......................................................................................12 In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d 1011 (N.D. Cal. 2007) ...................................................................................12 In re HSBC BANK, USA, N.A., Debit Card Overdraft Fee Litig., 1 F. Supp. 3d 34, 49 (E.D.N.Y. 2014) .....................................................................................12 In re: Lamictal Indirect Purchaser & Antitrust Consumer Litig., No. 12-5120, 2016 WL 1135368 (D.N.J. Mar. 22, 2016) .......................................................12 In re Packaged Ice Antitrust Litig., 779 F. Supp. 2d 642 (E.D. Mich. 2011) ...................................................................................11 In re Refrigerant Compressors Antitrust Litig., No. 09-02042, 2013 WL 1431756 (E.D. Mich. Apr. 9, 2013) ................................................13 Khasin v. R. C. Bigelow, Inc., No. 12_02204, 2016 WL 1213767 (N.D. Cal. Mar. 29, 2016) ................................................14 Koehler v. Litehouse, Inc., No. 12-04055, 2012 WL 6217635 (N.D. Cal. Dec. 13, 2012) .................................................16 Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 4 of 23 PageID #: 135 iv Larsen v. Trader Joe’s Co., No. 11-05188, 2012 WL 5458396 (N.D. Cal. June 14, 2012) .................................................16 Lucas v. Jos. A. Bank Clothiers, Inc., No. 14-1631, 2015 WL 2213169 (S.D. Cal. May 11, 2015) ...................................................14 McKinniss v. Sunny Delight Beverages Co., No. 07-02034, 2007 WL 4766525 (C.D. Cal. Sept. 4, 2007) ................................................5, 6 Morgan v. Wallaby Yogurt Co., Inc., No. 13-00296, 2014 WL 1017879 (N.D. Cal. Mar. 13, 2014) ................................................16 Mosely v. Vitalize Labs, LLC, No. 13-2470, 2015 WL 5022635 (E.D.N.Y. Aug. 24, 2015) ..................................................12 National Consumer’s League v. Doctor’s Assocs., Inc., No. 2013 CA 006549 B, 2014 D.C. Super. LEXIS 15 (D.C. Super. Ct. Sept. 12, 2014) ....................................................................................................................................6 National Consumers League v. Bimbo Bakeries USA, No. 2013 CA 006548 B, 2015 D.C. Super. LEXIS 5 (D.C. Super. Ct. Apr. 2, 2015) ..........................................................................................................................................6 Nguyen v. Medora Holdings, LLC, No. 14-00618, 2015 WL 4932836 (N.D. Cal. Aug. 18, 2015) ................................................16 Nicosia v. Amazon.com, Inc., 84 F. Supp. 3d 142, 157 (E.D.N.Y. 2015) ...............................................................................15 Nicosia v. Amazon.com, Inc., No. 15-423, 2016 WL 4473225 (2d Cir. Aug. 25, 2016) ........................................................15 Parks v. Dick’s Sporting Goods, Inc., No. 05-6590, 2006 WL 1704477 (W.D.N.Y. June 15, 2006) ..................................................12 Rahman v. Mott’s LLP, No. 13-3482, 2014 WL 5282106 (N.D. Cal. Oct. 15, 2014) .............................................14, 17 Red v. Kraft Foods, Inc., No. 10-1028, 2012 WL 5504011 (C.D. Cal. Oct. 25, 2012)......................................................4 Romero v. Flowers Bakeries, LLC, No. 14-05189, 2016 WL 469370 (N.D. Cal. Feb. 8, 2016) ...............................................4, 5, 6 Sensible Foods, LLC v. World Gourmet, Inc., No. 11-2819, 2012 WL 566304 (N.D. Cal. Feb. 21, 2012) .......................................................3 Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 5 of 23 PageID #: 136 v Smith v. Glenmark Generics, Inc., USA, No. 315898, 2014 WL 4087968 (Mich. Ct. App. Aug. 19, 2014) ...............................12, 13, 14 Stoltz v. Fage Dairy Processing Indus., S.A., No. 14-3826, 2015 WL 5579872 (E.D.N.Y. Sept. 22, 2015) ....................................................4 Storey v. Attends Healthcare Prods., Inc., No. 15-13577, 2016 WL 3125210 (E.D. Mich. June 3, 2016) ..........................................13, 14 Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464 (1982) .................................................................................................................16 Whitmore v. Arkansas, 495 U.S. 149 (1990) .................................................................................................................15 Williams v. Gerber Products Co., 552 F.3d 934 (9th Cir. 2008) .....................................................................................................3 Workman v. Plum Inc., 141 F. Supp. 3d 1035 (N.D. Cal. 2015) .....................................................................................3 STATUTES 21 U.S.C. § 343(a)(1) ...................................................................................................................8, 9 OTHER AUTHORITIES 21 C.F.R. §101.13 ..................................................................................................................8, 9, 10 21 C.F.R. § 101.18 ...........................................................................................................................7 21 C.F.R. §101.65 ........................................................................................................................8, 9 21 C.F.R. § 102.5 .............................................................................................................................7 Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 6 of 23 PageID #: 137 1 INTRODUCTION Despite Plaintiffs’ best efforts to complicate this case with supposed factual disputes, this lawsuit presents a very simple question: Are the statements “Made with whole grain” and “Made with 8g of whole grain per serving” found on the front of the packaging of Cheez-It crackers truthful? The answer is undisputedly yes — and this lawsuit must therefore be dismissed. First, the statement “Made with whole grain” is a truthful statement because it is undisputed that Cheez-It crackers are indeed made with whole grains. No fewer than eight district courts have recently dismissed similar “Made with . . .” lawsuits, ruling that such statements are true. Plaintiffs in their opposition do not even try to distinguish most of these cases. Instead, Plaintiffs argue that they somehow believed that the product had 100% whole grains only and no other types of grains, even though the product was never advertised as “Made with 100% whole grain.” Even if this Court were to credit that strained reading, it would still be implausible because the front of the Cheez-it box in prominent font also discloses the exact amount of whole grains in each serving: “Made with 8g of whole grain per serving.” As the Second and Ninth Circuits have held, courts must review the packaging “as a whole” in assessing alleged false advertising claims at the pleading stage. And here, a reasonable consumer would understand these statements to mean what they say: Cheez-Its crackers are made with 8 grams of whole grains per serving — and nothing more. Second, Plaintiffs’ claims are preempted under the Nutrition Labeling and Education Act’s (NLEA) broad preemption provision. “Made with whole grains” and “Made with 8g of whole grains per serving” are implied and express nutrient content claims, respectively, that are expressly allowed under FDA regulations. Accordingly, Plaintiffs cannot use state law to challenge them as deceptive. Plaintiffs try to argue that “Made with Whole Grains” is not an implied nutrient content claim, but FDA’s regulation and case law make clear that it is indeed an implied nutrient content claim because it characterizes the amount of a particular nutrient (whole grain) in the product. Notably, Plaintiffs do not dispute that “Made with 8g of whole grain per serving” is an express Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 7 of 23 PageID #: 138 2 nutrient content claim. That concession alone dooms their case. As the court in the Hairston v. S. Beach Bev. Co., Inc. case held, once a statement is preempted (here, “Made with 8g of whole grain per serving” here), the remaining statement (“Made with whole grain”) cannot be actionable where the preempted statement provides the proper and full context (i.e., how much whole grains are in the product). Third, Plaintiffs — who are California and New York citizens suing in New York— cannot bring an unjust enrichment claim under Michigan law. Courts have repeatedly held that plaintiffs cannot assert such out-of-state claims. Fourth, Plaintiffs lack standing for their injunctive relief claim because there is no imminent threat that they will be allegedly duped again, now that they know that Cheez-It crackers do not have 100% whole grains exclusively. Plaintiffs raise public policy objections, but courts have rightly held that such concerns cannot trump Article III requirements. ARGUMENT I. The Complaint Must Be Dismissed Because Plaintiffs Have Not Plausibly Shown That the “Whole Grain” Label Is Likely to Mislead a Reasonable Consumer.____ Plaintiffs’ lawsuit must be dismissed because their claim that a reasonable consumer would be deceived about the amount of whole grains in Cheez-It Whole Grain crackers is simply not plausible. See Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013) (“To prevail on their consumer fraud claims under New York and California law, Plaintiffs must establish that [the] allegedly deceptive advertisements were likely to mislead a reasonable consumer acting reasonably under the circumstances.”); Ebner v. Fresh, Inc., No. 13-56644, 2016 WL 5389307, at *6 (9th Cir. Sept. 27, 2016) (affirming dismissal of false advertising claims because “Plaintiff [could not] plausibly allege that [defendant’s] design and packaging is deceptive”). Plaintiffs object to the phrase of “Made with whole grain,” arguing that they believed that the product contained “100% whole grain” exclusively (even though the product was never advertised as having “100% whole grain” only). But it is undisputed that Cheez-It Whole Grain crackers are, in fact, made with whole grains. As set forth in Kellogg’s motion to dismiss, over a Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 8 of 23 PageID #: 139 3 half-dozen courts in similar cases dismissed “made with …” lawsuits, ruling that such statements are factually true. For example, in Henderson v. Gruma Corp., the court held that the phrase “With Garden Vegetables” on the label of defendant’s guacamole product was unlikely to deceive a reasonable consumer because “[t]he product does in fact contain vegetables that can be grown in a garden.” No. 10-04173, 2011 WL 1362188, at *12 (C.D. Cal. Apr. 11, 2011) (“The labeling statement does not claim a specific amount of vegetables in the product, but rather speaks to their presence in the product, which is not misleading.”). Likewise, in Workman v. Plum Inc., the court held that a reasonable consumer would not be deceived by the packaging of defendant’s puree pouches and fruit bars because the ingredients pictured on the front panel – though not the only, or most prominent ingredients – were “actually present in the product.” 141 F. Supp. 3d 1032, 1035 (N.D. Cal. 2015); see also Sensible Foods, LLC v. World Gourmet, Inc., No. 11-2819, 2012 WL 566304, at *6 (N.D. Cal. Feb. 21, 2012) (holding that use of the word “apple” in the name of defendant’s Apple Straws product was not deceptive because “that the product contains pureed apples.”); see also Kellogg’s Memo. ISO Mot. to Dismiss, at 6-8. Plaintiffs fail to distinguish these cases in their Opposition, and instead misconstrue the Ninth Circuit’s decision in Williams v. Gerber Products Co. to argue that the challenged “Whole Grain” label must be evaluated in isolation, without reference to the package as a whole. Opp., at 4. Plaintiffs’ reading of Williams is wrong — and has been rejected by other courts. Williams stands for the unremarkable proposition that a company cannot make a false representation on the front of the box and then try to cure it by telling the truth on the back. In that case, the plaintiffs alleged that the packaging of Gerber’s Fruit Juice Snacks for toddlers was deceptive because it juxtaposed the words “fruit juice” alongside images of oranges, peaches, strawberries, and cherries, when in fact, none of those fruits was actually in the product. 552 F.3d 934, 936 (9th Cir. 2008). And in light of this affirmative misrepresentation on the front of the packaging, the court rejected the use of the ingredients list on the back of the packaging as a “shield for liability,” explaining that a reasonable consumer is not “expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 9 of 23 PageID #: 140 4 box.” Id. at 939. As the Ninth Circuit itself recently clarified in Ebner, “Williams stands for the proposition that if the defendant commits an act of deception, the presence of fine print revealing the truth is insufficient to dispel that deception.” 2016 WL 5389307, at *5; see also Red v. Kraft Foods, Inc., No. 10-1028, 2012 WL 5504011, at *3 (C.D. Cal. Oct. 25, 2012) (“[A] close reading of Williams and its progeny discloses that … the case merely bars a defendant from correcting an affirmative misrepresentation on the front packaging through a back of the box ingredient list.’”); Romero v. Flowers Bakeries, LLC, No. 14-05189, 2016 WL 469370, at *7 (N.D. Cal. Feb. 8, 2016) (agreeing with Red’s reading of Williams). Here, unlike in Williams, no affirmative misrepresentation is alleged. And when the Cheez-It cracker box is viewed in the context of the entire product packaging — including the entire front of the packaging — it is clear that the whole grain statements on the Cheez-It box would not mislead a reasonable consumer.1 The exact whole grain content of each serving of crackers is clearly disclosed on the front panel of the box in bold, high-contrast font: “MADE WITH 8g OF WHOLE GRAIN PER SERVING.” See, Decl. of Kenneth K. Lee, Ex. A. The Nutrition Facts panel on the side of the box further discloses that a serving size is 28 grams. Id. And just below, the ingredients list shows that whole wheat flour is the third-most ingredient by weight, whereas enriched flour is listed first. Id. Under Second and Ninth Circuit case law, Plaintiffs cannot cast a blind eye to other statements on the front of the Cheez-It box (“Made with 1 As the Second and Ninth Circuits have both recognized, in assessing whether a product label is likely to deceive a reasonable consumer, “it is necessary to consider not only the allegedly misleading statement but also the surrounding context based on the content of the entire label or advertisement at issue.” Stoltz v. Fage Dairy Processing Indus., S.A., No. 14-3826, 2015 WL 5579872, at *16 (E.D.N.Y. Sept. 22, 2015); see Fink v. Time Warner Cable, 714 F.3d 739, 742 (2d Cir. 2013) (“[I]n determining whether a reasonable consumer would have been misled by a particular advertisement, context is crucial… under certain circumstances, the presence of a disclaimer or similar clarifying language may defeat a claim of deception.); Freeman v. Time, Inc., 68 F.3d 285, 290 (9th Cir. 1995) (dismissing consumer protection claims because “[a]ny ambiguity that [plaintiff] would read into any particular statement is dispelled by the promotion as a whole.”). Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 10 of 23 PageID #: 141 5 8g whole grain per serving”), and fixate on “Made with whole grain” to the exclusion of other statements. The recent decision in Romero v. Flowers Bakeries, LLC is instructive here. In that case, the plaintiff alleged that the packaging of defendant’s Honey Wheat and Whitewheat breads were deceptive because they included the word “wheat” in the product name, as well as the phrases “wholesome wheat,” “healthy grains,” or “Healthy White,” alongside images of wheat stalks and honey pots. No. 14-05189, 2016 WL 469370, at *7 (N.D. Cal. Feb. 8, 2016). The Court dismissed plaintiff’s UCL, FAL, and CLRA claims, holding that “no reasonable consumer would understand the packaging, taken as a whole, to mean that the breads ‘contains a significant amount of whole wheat’” – particularly since the packaging clearly stated “ENRICHED BREAD.” Id.; see also McKinniss v. Sunny Delight Beverages Co., No. 07-02034, 2007 WL 4766525, at *3-4 (C.D. Cal. Sept. 4, 2007) (holding that “no reasonable consumer, upon review of the label as a whole” would be deceived by the use of fruit names and images on Sunny D beverages because the product label truthfully identified that the product contains 2% or less of concentrated fruit juice.). Likewise, here, the totality of the packaging, including the front of the box, makes clear that Cheez-It crackers are not made of whole grains exclusively. The cases relied upon by Plaintiffs in their Opposition support the proposition that a challenged product label must be considered in its entirety. In those cases, a review of the product label as a whole led the court to conclude that a reasonable consumer was likely to be misled. In Atik v. Welch Foods, Inc., the court held that the packaging of Welch’s Fruit Snacks created false impression that the product contained a significant amount of fruit because: (i) the label “Made with REAL Fruit” was surrounded by pictures of fruit; (ii) the statements “100% Vitamin C” and “25% Vitamins A & E” suggested that those vitamins were from the fruits themselves; and (iii) the assertion that “this tradition of wholesome goodness come Welch's Fruit Snacks, made with real fruit and fruit juices” again suggested a high amount of fruit content. No. 15-5405, 2016 WL 5678474, at *2 (E.D.N.Y. Sept. 30, 2016) (adopting Magistrate Judge’s Aug. 5, 2016 report and recommendation). Similarly, in Ackerman v. Coca-Cola Co., the court held that the VitaminWater Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 11 of 23 PageID #: 142 6 label was likely to mislead consumers into believing that the beverage contained only vitamins and water because it included the phrases “vitamins + water = all you need,” and “vitamins + water = what's in your hand,” as well as the product description “nutrient enhanced water beverage.” No. 09-0395, 2010 WL 2925955, at *15 (E.D.N.Y. July 21, 2010); see also Albert v. Blue Diamond Growers, 151 F. Supp. 3d 412 (S.D.N.Y. 2015) (holding that the packages of two brands of almond milk were likely to mislead a reasonable consumer into concluding that the products contained a significant amount of almonds because of number of almonds pictured on the label and the description of the product as “almond milk made from real almonds.”). Here — unlike in Atik, Ackerman, and Albert — the Cheez-It Whole Wheat box is unlikely to create any confusion as to the whole wheat content of the crackers, given the prominent disclosure on the front panel informing consumers that each serving contains 8g of whole grain. This case is far more akin to Romero, McKinniss and other cases cited in Kellogg’s motion to dismiss, since any ambiguity is swiftly dispelled by the disclosure on the front panel, as well as the disclosures in the Nutrition Facts and ingredients list.2 2 Plaintiffs’ reliance on two state court decisions, National Consumer’s League v. Doctor’s Assocs., Inc., No. 2013 CA 006549 B, 2014 D.C. Super. LEXIS 15 (D.C. Super. Ct. Sept. 12, 2014) and National Consumers League v. Bimbo Bakeries USA, No. 2013 CA 006548 B, 2015 D.C. Super. LEXIS 5 (D.C. Super. Ct. Apr. 2, 2015) is inapposite for similar reasons. In Doctor’s Assocs., Inc., the D.C. Superior Court held that a the manner in which Subway markets its 9-Grain Wheat and Honey Oat breads could have a tendency to mislead a reasonable consumer,” particularly “[i]n light of Subway’s extensive marketing of its healthy offerings.” 2014 D.C. Super. LEXIS 15, at *19-20. Likewise, in Bimbo Bakeries USA, the court held that the packaging of Thomas’ Light Multi-Grain Hearty Muffins and Sara Lee Classic Honey Wheat bread could lead to consumer confusion given that the packages and product names were “confusingly similar” to those of defendant’s healthier products. 2015 D.C. Super. LEXIS 5, at *1-2. Here, there are no allegations that Kellogg markets Cheez-It crackers as a “healthy” product, or that consumers will confuse Cheez-Its for some other whole wheat product. Further, any potential confusion regarding the whole wheat content of the Cheez-It crackers is readily dispelled by the disclosures on the front and side panels. Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 12 of 23 PageID #: 143 7 II. Plaintiffs’ Claims are Preempted Under Federal Law. Unable to convincingly rebut that “Made with whole grain” and “Made with 8g whole grain per serving” are nutrient content statements expressly allowed under FDA regulations, Plaintiffs try to change the subject and respond that Cheez-It Whole Grain box violates numerous other federal regulations. Plaintiffs further assert that the claims on the Cheez-It box are not properly characterized as implied nutrient content claims. As discussed below, however, the Cheez-It Whole Grain packaging does not violate any of the cited regulations and, in any event, the statements are permissible content claims and therefore cannot be subject to the state law attacks. a. Kellogg’s Conduct Does Not Run Afoul of Plaintiffs’ Cited Regulations. Plaintiffs assert that Kellogg is in violation of a number of technical FDA regulations. This is, simply put, not true. For example, Plaintiffs assert that the common or usual name of Cheez- Its is “baked snack crackers whole grain” or “backed snack crackers made with whole grain,” and that Kellogg runs afoul of 21 C.F.R. § 102.5(c) because of this. Opp., at 11. In order to make this assertion, Plaintiffs craft a new name for Cheez-Its, which are properly titled “Cheez-Its Baked Snack Cracker.” If Plaintiffs are attempting to manufacture a new name based on the box of the Whole Grain Cheez-Its, they must take into account the “Made with 8g of Whole Grain” label as well (which they do not do at all here). Manufactured noncompliance is different than actual noncompliance. Plaintiffs attempt a similar renaming of Cheez-It Baked Snack Crackers in their argument concerning 21 C.F.R. § 102.5(b). Plaintiffs’ assertions are, therefore, wrong again. Plaintiffs additionally argue that Kellogg runs afoul of 21 C.F.R. § 101.18(b). But § 101.18(b) merely states that labeling “may” be misleading if the name of a multi-ingredient product suggests the name of one ingredient but not all of them. First, even if it were true that the statements on the Cheez-It box could be considered misleading, they are still expressly allowed nutrient content claims, so preemption applies and any state law claim based off of this general regulation cannot stand. Secondly, to claim that the name or statements on the Cheez-It box are Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 13 of 23 PageID #: 144 8 misleading is off-base when the exact amount of whole grain is stated on the front of the box, e.g., “Made with 8g of Whole Grain.” Plaintiffs still claim that, even if the whole grain statement were a nutrient content claim, it would still be subject to the “catch-all anti-consumer deception provision of 21 U.S.C. § 343(a)(1).” Opp., at 15. This sets the preemption doctrine on its head. Contrary to Plaintiffs’ argument, if a nutrient content claim is expressly allowed by the FDA, then any cause-of-action challenging that allowed nutrient content claim is preempted. The catch-call provision is intended to capture deceptive claims that are not expressly allowed under the FDA regulations. As discussed below, however, the statements on the Cheez-It box are expressly permitted implied and express content claims and therefore do not fall under the reach of § 343. See Coe v. Gen. Mills, Inc., No. 15-05112, 2016 WL 4208287, at *4 (N.D. Cal. Aug. 10, 2016) (“These claims would be governed by specific federal regulations and therefore could not form the basis of a claim under § 343(a).”). b. Kellogg’s “Made with Whole Grains” Statement Is an Explicitly Allowed Implied Nutrient Claim. Plaintiffs claim that “Made with Whole Grain” is not an implied nutrient content claim, citing 21 C.F.R. §101.65 (b) and (b)(3) as support. But § 101.65(b) specifically states (emphasis added): Label statements that are not implied claims. Certain label statements about the nature of a product are not nutrient content claims unless such statements are made in a context that would make them an implied claim under § 101.13(b)(2). The following types of label statements are generally not implied nutrient content claims and, as such, are not subject to the requirements of § 101.13 and this section:, however, that certain label statements that are usually not content claims may be made implied nutrient content Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 14 of 23 PageID #: 145 9 claims if they “are made in a context that would make them an implied claim under § 101.13(b)(2).” § 101.13(b)(2)(i) lists the following as an implied nutrient content claim: Describes the food or an ingredient therein in a manner that suggests that a nutrient is absent or present in a certain amount (e.g., “high in oat bran”) Despite Plaintiffs’ protestations to the contrary, their entire complaint is based on the idea that various “whole grain” statements suggest that an ingredient — in this case, whole grain — is present in a high amount. Opp., at 6 (“Kellogg represents that Cheez-It is “WHOLE GRAIN” to create the impression that the product is composed substantially or entirely of whole grain, and consumers purchase the product to obtain the nutritional benefits that whole grain foods provide.”). Further, 21 C.F.R. § 101.65(c)(3) expressly describes the standard for claims involving “made with,” (emphasis added): Claims may be made that a food contains or is made with an ingredient that is known to contain a particular nutrient, or is prepared in a way that affects the content of a particular nutrient in the food, if the finished food is either “low” in or a “good source” of the nutrient that is associated with the ingredient or type of preparation. By Plaintiffs’ own allegations, “Made with whole grain” constitutes an implied nutrient content claim because it implies that the Cheez-Its have a certain amount of whole grain. In other words, Plaintiffs’ claims that assorted “Whole Grain” statements are misleading cannot fall under the reach of §343 precisely because they are, by Plaintiffs’ own allegations, permissible implied content claims. This additionally means that, because the nutritional statements are either permitted implied content claims as discussed above, or permitted express content claims as discussed below, any state law claims are preempted. Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 15 of 23 PageID #: 146 10 c. Plaintiffs Do Not Deny that “Made with 8g of Whole Grain Per Serving” Is an Express Content Claim Under FDA Regulations. Plaintiffs do not contest that “Made with 8g of whole grain per serving” is an acceptable express nutrient content claim. At best, they reference that no context is provided for how much 8g is. Opp., at 14 n. 3. But 21 C.F.R. §101.13(i)(3) explicitly allows “the label or labeling of a product” to “contain a statement about the amount or percentage of a nutrient if . . . . the statement does not in any way implicitly characterize the level of the nutrient in the food and is not false or misleading in any respect (e.g., “100 calories” or “5 grams of fat”), in which case no disclaimer is required.” (emphasis added). Kellogg’s claim about the 8 grams of whole grain is nearly identical to the example given in the regulations of a permissible express content claim. Because “Made with 8g of whole grain per serving” is clearly allowed — and any challenge against it preempted — Plaintiffs are forced to attempt to claim that “made with whole grains” read alone is misleading. In other words, Plaintiffs’ claim becomes “based on a single out-of- context phrase found in one component” of the label, which “cannot support” a state law claim concerning unfair labeling. Hairston v. S. Beach Bev. Co., Inc., No. 12-1429, 2012 WL 1893818, at *4 (C.D. Cal. May 18, 2012) (ruling that once a particular statement is preempted, the remaining statement cannot be actionable because it cannot be read in isolation). This is not a case where “Made with 8g of Whole Grain” is hidden on the side or back panel. It sits prominently on the front and therefore is an integral portion of any statement made concerning whole grains on the front of the box. III. Plaintiffs’ Unjust Enrichment Claim Must Be Dismissed. Plaintiffs — who are New York or California citizens — attempt to salvage their Michigan unjust enrichment claim, but their defenses of this claim are off-base. a. Plaintiffs May Not Bring a Claim Under Michigan Law. The first issue is whether Plaintiffs may even avail themselves to Michigan law. If Plaintiffs cannot, then their claim for unjust enrichment under Michigan law must necessarily fail. Plaintiffs Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 16 of 23 PageID #: 147 11 do not contest that the named plaintiffs live in states other than Michigan and that the injuries occurred in states other than Michigan. Instead, they argue that because Kellogg is headquartered in Michigan and the alleged misrepresentations which caused the alleged injuries emanated from Michigan, this confers upon Plaintiffs the ability to sue using Michigan law. The cases Plaintiffs cite are distinguishable because they involve out-of-state plaintiffs suing in-state corporations in that particular state. Collazo v. Wen by Chaz Dean, Inc., No. 15- 01974, 2015 WL 4398559 (C.D. Cal. July 17, 2015) concerned a California corporation being sued by out-of-state Plaintiffs in California. Allstate Ins. Co. v. Hague, 449 U.S. 302, 317 (1981) involved a suit brought in Minnesota over an injury that occurred in Minnesota against a company that routinely did business in Minnesota. Bonanno v. The Quizno's Franchise Co. LLC, No. 06- 02358, 2008 WL 638367 (D. Colo. Mar. 5, 2008) involved a Colorado company being sued in Colorado over a fraud arising out of conduct in Colorado. Clothesrigger, Inc. v. GTE Corp., 191 Cal. App. 3d 605, 613 (Ct. App. 1987) involved a number of companies, many of whom were located in California and being sued in California. Here, Plaintiffs are non-Michigan citizen who were injured outside of Michigan, yet they seek relief under Michigan law in a non-Michigan court. Plaintiffs state that the court’s analysis in Campagna v. Language Line Servs., Inc., No. 08-02488, 2012 WL 1565229, at *2 (N.D. Cal. May 2, 2012) is “on point.” Opp., at 18. If anything, Campagna supports Kellogg’s position. The court there granted a motion to dismiss claims by out-of-state employees, including the Iowa resident mentioned by Plaintiffs in their brief, because there was a presumption against applying California law to out-of-state plaintiffs. Campagna, 2012 WL 1565229 at *4. As the court in Campagna correctly noted, the exact styling of the motion — whether under 12(b)(1), 12(b)(6), or 12(c) — may be subject to dispute, but what actually “matters is the substance of the request, not the movant’s characterization of the request.” Id. at *2 n. 2. Instead, the court looked at the root of the motion, the fact that out of state individuals were attempting to avail themselves to California law, and decided accordingly. Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 17 of 23 PageID #: 148 12 To determine standing, courts should look at where the plaintiffs reside and where the alleged injury took place. In re Packaged Ice Antitrust Litig., 779 F. Supp. 2d 642, 657 (E.D. Mich. 2011) (“[N]amed plaintiffs lack standing to assert claims under the laws of the states in which they do not reside or in which they suffered no injury.”).3 Plaintiffs spend a significant amount of time focusing on Kellogg’s contacts with Michigan, but this misses the point. Plaintiffs themselves have no contacts with Michigan, and therefore cannot avail themselves to the laws of Michigan. Plaintiffs are not suing in Michigan. Plaintiffs may generally only assert a state claim if a named plaintiff resides in, does business in, or has some other connection to that state. Cf. Mosely v. Vitalize Labs, LLC, No. 13-2470, 2015 WL 5022635, at *8 (E.D.N.Y. Aug. 24, 2015) (“Finally, plaintiff's attempt to invoke the laws of New Jersey and New York, based on the fact that defendants make sales in those states or are headquartered there, lacks merit.”). Because Plaintiffs have no connection with Michigan, their Michigan unjust enrichment claim must be dismissed. b. Plaintiffs’ Alleged Indirect Benefit Conferred Is Not Enough to Satisfy the Requirements of Unjust Enrichment in Michigan. Plaintiffs deny that Michigan law requires a direct benefit to be conferred by a plaintiff onto a defendant, but the weight of the authority rejects Plaintiffs’ proposition. See, e.g., Smith v. Glenmark Generics, Inc., USA, No. 315898, 2014 WL 4087968, at *1 (Mich. Ct. App. Aug. 19, 3 See also, e.g., In re: Lamictal Indirect Purchaser & Antitrust Consumer Litig., No. 12-5120, 2016 WL 1135368, at *20 (D.N.J. Mar. 22, 2016) (same); In re HSBC BANK, USA, N.A., Debit Card Overdraft Fee Litig., 1 F. Supp. 3d 34, 49 (E.D.N.Y. 2014) (“Plaintiffs may only assert a state claim if a named plaintiff resides in, does business in, or has some other connection to that state.”); In re Flonase Antitrust Litig., 610 F. Supp. 2d 409, 418 (E.D. Pa. 2009) (“Because no named Plaintiff has alleged injury in Florida or sufficient contact with Florida, the named Plaintiffs have not stated a claim under Florida's consumer protection statute.”); In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d 1011, 1027 (N.D. Cal. 2007) (“ Again, there is no named plaintiff from those states who has suffered injury as a result of defendants' conduct, so those claims must be dismissed.”); Parks v. Dick's Sporting Goods, Inc., No. 05-6590, 2006 WL 1704477, at *2 (W.D.N.Y. June 15, 2006) (“Plaintiff, Daniel Parks, lacks standing to assert state-law claims arising under the laws of states other than New York, since he was never employed by defendant anywhere other than New York.”). Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 18 of 23 PageID #: 149 13 2014) (“Notably, caselaw does not specifically state that the benefit must be received directly from the plaintiff, but these decisions make it clear that it must.”).4 While there are limited exceptions to the direct benefit rule, such as “where the plaintiff is a subcontractor and the defendant is a party that hired the general contractor,” “[o]rdinarily, a plaintiff can establish the first element of the unjust enrichment claim only by proof that the plaintiff directly conferred a benefit on the defendant.” Storey v. Attends Healthcare Prods., Inc., No. 15-13577, 2016 WL 3125210, at *12 (E.D. Mich. June 3, 2016). Storey also mentions a “direct interaction” exception, which stands as a slightly broader exception and is wholly inclusive of the general contractor exception. Id. at *12. Plaintiffs here allege no direct interaction between the parties, as at best there was a one-sided transmission of the alleged deceptive marketing. See also Smith, 2014 WL 4087968 at *1 (fact that purchase was made through pharmacy meant benefit too attenuated); Storey, 2016 WL 3125210 at *12-13 (“Plaintiffs have failed to state a claim for unjust enrichment under Michigan law because they have not alleged that they directly conferred a benefit on Defendant. The instant case is a case involving consumer plaintiffs and a remote manufacturer. Whatever benefit Plaintiffs conferred on Defendant they conferred indirectly . . . there is no allegation of direct 4 See also, e.g., Fenerjian v. Nongshim Co., Ltd, 72 F. Supp. 3d 1058, 1088 (N.D. Cal. 2014) (“[T]he transactions and relationships between the indirect purchaser plaintiffs and the defendants are too attenuated to state an unjust enrichment claim under Michigan law.”); In re Refrigerant Compressors Antitrust Litig., No. 09-02042, 2013 WL 1431756, at *26 (E.D. Mich. Apr. 9, 2013) (dismissing unjust enrichment count because “[o]nly the direct purchasers conferred a direct benefit on Defendants by paying Defendants artificially inflated prices for Hermetic Compressors” and plaintiffs were not direct purchasers); In re Aftermarket Filters Antitrust Litig., No. 08-4883, 2010 WL 1416259, at *2-3 (N.D. Ill. Apr. 1, 2010) (“Plaintiffs are unable to allege that they have conferred a benefit on defendants except to argue that they are the ultimate end users. Any benefit that plaintiffs have conferred, however, would be on others in the chain of distribution from whom they purchased, not on defendants. Only the direct purchasers have conferred a direct benefit on defendants.” The court went on to dismiss an unjust enrichment claim brought under Michigan law.); A & M Supply Co. v. Microsoft Corp., No. 274164, 2008 WL 540883, at *2 (Mich. Ct. App. Feb. 28, 2008) (“Plaintiff here can point to no similar direct contact between Microsoft and the indirect purchasers in the class they seek to have certified. Nor can they show that Microsoft received any direct payment or other benefit from those purchasers. We conclude that the unjust enrichment doctrine does not apply under the facts alleged by plaintiff here.”). Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 19 of 23 PageID #: 150 14 interaction between Plaintiffs and Defendants.”). Here, any alleged purchases were made through a third party, just as in Smith and Storey. There are no allegations of close, direct interaction such as what might be expected between a subcontractor, a general contractor, and a principal. Absent some sort of direct interaction between the parties, the unjust enrichment claim must be dismissed. IV. Plaintiffs Do Not Have Standing to Seek Injunctive Relief. Plaintiffs argue two points concerning injunctive relief: first, that an intent to purchase a reformulated product in the future grants standing to pursue injunctive relief, and second, that public policy concerns support a finding of standing. Neither is persuasive. a. Future Intentions Are Not Enough to Grant Standing. Plaintiffs argue that their alleged intention to buy a reformulated Cheez-It product in the future grants them standing to seek injunctive relief despite the fact that they have no intention of purchasing an allegedly deceptively labeled product ever again. Opp., at 22. Such an argument misses the point that the key inquiry is about harm, not intent to purchase, and intent to purchase is not enough to demonstrate harm. See Rahman v. Mott's LLP, No. 13-3482, 2014 WL 5282106, at *6 (N.D. Cal. Oct. 15, 2014) (“Absent showing a likelihood of future harm, a plaintiff may not manufacture standing for injunctive relief simply by expressing an intent to purchase the challenged product in the future.”).5 Plaintiffs’ allegation that they will only purchase a 5 This position is supported by a laundry list of cases in different districts. See, e.g., Atik v. Welch Foods, Inc., 2016 WL 5678474, at *6 (“Plaintiffs also allege that they would resume purchasing the Products in the future but only if the representations on the Products' labels were ‘truthful and non-deceptive.’ These allegations are insufficient to establish a likelihood of future injury because Plaintiffs cannot rely on past injury.”) (citation omitted); Khasin v. R. C. Bigelow, Inc., No. 12_02204, 2016 WL 1213767, at *5 (N.D. Cal. Mar. 29, 2016) (“Second, standing for injunctive relief in this case requires more than simply declaring an intent to purchase the Green Tea Products in the future. Even if Khasin were to satisfactorily demonstrate a future intent to purchase the products, he has not established a likelihood of suffering the same harm he has alleged.”); Lucas v. Jos. A. Bank Clothiers, Inc., No. 14-1631, 2015 WL 2213169, at *4 (S.D. Cal. May 11, 2015) (“An interest in purchasing a product in the future, without more, isn't sufficient to establish standing if the plaintiffs are not ‘realistically threatened by a repetition of the violation.’”) (quoting Gest v. Bradbury, 443 F.3d 1177, 1181 (9th Cir.2006)); Barron v. Snyder's-Lance, Inc., No. 13-62496, 2015 WL 11182066, at *10-11 (S.D. Fla. Mar. 20, 2015) (desire to purchase Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 20 of 23 PageID #: 151 15 reformulated product essentially amounts to an admission that they will not be harmed in the future by the allegedly deceptive behavior. Plaintiffs rely on Ackerman v. Coca-Cola Co., No. 09-395, 2013 WL 7044866, at *15 n. 23 (E.D.N.Y. July 18, 2013), but numerous courts have ignored Ackerman on the injunctive relief issue while noting that they were bound by applicable Supreme Court and Second Circuit precedent that conflicts with Ackerman. See Elkind v. Revlon Consumer Prod. Corp., No. 14- 2484, 2015 WL 2344134, at *3 n.2 (E.D.N.Y. May 14, 2015) (“Plaintiffs point to and the Court is aware of a number of cases that suggest that the requirement of a future or continuing injury is not applicable in those cases where injunctive relief is sought in the consumer context. See, e.g., Ackerman v. Coca–Cola Co., No. 09-0395, 2013 WL 7044866, at *15 (E.D.N.Y. July 18, 2013) (citing cases). Because Lyons[] remains binding precedent, however, the Court remains bound by its holding.”); see also Nicosia v. Amazon.com, Inc., 84 F. Supp. 3d 142, 157 at n. 10 (E.D.N.Y. 2015), aff'd in part, vacated in part, remanded, No. 15-423, 2016 WL 4473225 (2d Cir. Aug. 25, 2016) (“Several courts have declined to follow Lyons in consumer protection cases. . . . This Court declines to follow these cases because Lyons remains binding precedent.”) (citing Ackerman as an example of a nonconforming court). On reviewing Nicosia, the Second Circuit reaffirmed that there must be a threat of future harm in order to seek injunctive relief. Nicosia v. Amazon.com, Inc., No. 15-423, 2016 WL 4473225, at *12 (2d Cir. Aug. 25, 2016) (“Although past injuries may provide a basis for standing to seek money damages, they do not confer standing to seek injunctive relief unless the plaintiff can demonstrate that she is likely to be harmed again in the future in a similar way.”). Because Plaintiffs do not adequately allege future harm, and because Lyons, not Ackerman, is the controlling case, Plaintiffs’ request for injunctive relief must be dismissed. “compliant” version of product in the future irrelevant for standing because this would not result in any potential harm, and therefore no future harm alleged). Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 21 of 23 PageID #: 152 16 b. Plaintiffs’ Public Policy Concerns Cannot Trump Article III Requirements. Plaintiffs describe a number of public policy concerns in support of their contention that Plaintiffs must be allowed to seek injunctive relief despite their apparent lack of future harm. Plaintiffs are, simply put, wrong that public policy concerns can ever outweigh a lack of Article III jurisdiction. See Whitmore v. Arkansas, 495 U.S. 149, 161 (1990) (“It is not for this Court to employ untethered notions of what might be good public policy to expand our jurisdiction in an appealing case.”); see also, e.g., Nguyen v. Medora Holdings, LLC, No. 14-00618, 2015 WL 4932836, at *7 (N.D. Cal. Aug. 18, 2015) (“And no matter their wisdom or fairness, courts and legislatures don't get to create exceptions to Article III.”). Plaintiffs contend that preventing them from seeking injunctive relief would eviscerate the purpose of the state consumer protection statutes and make it difficult to find suitable plaintiffs. Opp., at 24. Such justifications to expand standing on public policy grounds have been expressly rejected by the Supreme Court. See Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 489 (1982) (“The assumption that if respondents have no standing to sue, no one would have standing, is not a reason to find standing.”) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 227 (1974)) (internal quotation marks omitted); see also Morgan v. Wallaby Yogurt Co., Inc., No. 13-00296, 2014 WL 1017879, at *6 (N.D. Cal. Mar. 13, 2014) (“While granting an injunction would undoubtedly further the California legislature's intent of protecting consumers, a federal court's power to grant relief is limited by the authority granted by the United States Constitution as interpreted by the courts.”). Because Plaintiffs’ arguments concerning public policy have been rejected at the highest level of the judiciary, they may not properly serve as a justification to find standing in the current case. Plaintiffs largely rely on three cases to argue that public policy concerns may factor into the Article III standing analysis – Ackerman, 2013 WL 7044866 at *15 n. 23, Belfiore v. Procter & Gamble Co., 94 F. Supp. 3d 440, 445 (E.D.N.Y. 2015), and Delgado v. Ocwen Loan Servicing, No. 13-4427, 2014 WL 4773991, at *14 (E.D.N.Y. Sept. 24, 2014). In reaching their conclusions, Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 22 of 23 PageID #: 153 17 these three cases rely heavily on Koehler v. Litehouse, Inc., No. 12-04055, 2012 WL 6217635, at *6 (N.D. Cal. Dec. 13, 2012) and Larsen v. Trader Joe's Co., No. 11-05188, 2012 WL 5458396, at *4 (N.D. Cal. June 14, 2012), both of which made the “eviscerate” argument in support of a public policy-fueled broad interpretation of Article III standing. Judge Susan Illston — who wrote both Litehouse and Larsen — later changed her reasoning and endorsed the principle that “the power of the federal courts is limited, and that power does not expand to accommodate the policy objectives underlying state law.” Rahman v. Mott's LLP, No. 13-3482, 2014 WL 5282106, at *6 (N.D. Cal. Oct. 15, 2014) (quoting Garrison v. Whole Foods Mkt. Grp., Inc., 13-05222, 2014 WL 2451290 at * 5 (N.D. Cal. June 2, 2014)). Plaintiffs are thus left citing cases which rely on out- of-circuit opinions which are no longer supported, if not specifically overturned. There is simply no legitimate reason to find Article III standing on public policy grounds. Therefore, the Court should deny Plaintiffs’ request for injunctive relief. CONCLUSION For the foregoing reasons, the Complaint must be dismissed. Dated: October 7, 2016 Respectfully submitted, JENNER & BLOCK LLP By:___/s/ Dean Panos _________________ Dean Panos Attorneys for Defendant KELLOGG COMPANY Case 2:16-cv-02552-SJF-AYS Document 17-5 Filed 10/07/16 Page 23 of 23 PageID #: 154