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Pom Wonderful LLC v. Ocean Spray Cranberries

July 16, 2009

POM WONDERFUL LLC, A DELAWARE LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
OCEAN SPRAY CRANBERRIES, INC., A DELAWARE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER DENYING MOTION TO DISMISS [Motion filed on April 16, 2009]

I. BACKGROUND

Plaintiff Pom Wonderful produces and sells pomegranate juice and juice blends. Defendant Ocean Spray Cranberries also sells various bottled juices, including a pomegranate and cranberry juice blend it began selling in 2007 (the "Beverage"). (Compl. ¶ 18.)

Plaintiff alleges that while Defendant primarily markets the pomegranate and cranberry juices in its Beverage on its product label, the product is almost entirely comprised of apple and grape juice. (Id. ¶ 19-20.) Of the five juices that comprise the product, according to its label, cranberry juice ranks third and pomegranate juice ranks fifth. (Id. ¶ 22.) Therefore, Plaintiff alleges that Defendant made false and misleading representations regarding the primary ingredients of its product. Plaintiff also alleges that Defendant markets its product as being high in antioxidants, as is pomegranate juice, when in fact the Beverage does not contain high levels of antioxidants. (Id. ¶ 23.) According to Plaintiff, Defendant also made similar misrepresentations regarding its Beverage at its website "www.oceanspray.com." (Id. ¶ 21.)

As a result of Defendant's misrepresentations, Plaintiff states that Defendant's costs to produce the Beverage are lower and Defendant can charge less for its product than competitors such as Plaintiff. Meanwhile, consumers are "tricked" into thinking they are getting a product that is similar to Plaintiff's (whose product is primarily pomegranate juice) for a lower price. (Id. ¶ 24.) Plaintiff thus alleges injury to its business and deprivation of goodwill in the juice market, to Defendant's benefit. (Id. ¶ 24-25.) Specifically, Plaintiff alleges the following federal and state claims:

1) false advertising under the Lanham Act, 15 U.S.C. § 1125(a);

2) false advertising under California Business & Professions Code § 17500; and

3) unfair competition under California Business & Professions Code § 17200, et seq. (Compl. 8-11.)

Defendant now moves to dismiss Plaintiff's complaint.

II. LEGAL STANDARD

Under Rule 12(b)(6), a complaint is dismissed when a plaintiff's allegations fail to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). When considering a 12(b)(6) motion, all allegations of material fact are accepted as true and should be construed in the light most favorable to the plaintiff. Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000). A court properly dismisses a complaint under Rule 12(b)(6) based upon the "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under the cognizable legal theory." Baliesteri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). The plaintiff's obligation requires more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal quotation omitted). However, the complaint must state "only enough facts to state a claim to relief that is plausible on its face." Id. at 1974. A well-pleaded complaint may proceed even if it appears "that a recovery is very remote and unlikely." Id. at 1964 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

III. DISCUSSION

A. Evidentiary Issues

Both parties submitted additional evidence to this Court for its consideration. Generally, a district court "may not consider any material beyond the pleadings" on a motion to dismiss (e.g., facts presented in briefs, affidavits, or discovery materials). Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.10 (9th Cir. 1989). Therefore, the Court declines to consider the parties' additional evidence and denies Defendant's request for judicial notice of a Federal and Drug Administration ("FDA") warning letter sent to it regarding its internet marketing.

B. Lanham Act - False Advertising Claim

Under the Lanham Act, any person that uses a "false description or representation" that is "in connection with any goods" is liable to another private individual "who believes he is or is likely to be damaged by the use of any such false description or representation." 15 U.S.C § 1125(a); see generally Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002)(citing Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997)). Defendant argues that Plaintiff's claim under the Lanham Act for false advertising is ...


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