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Koenig v. Snapple Beverage Corp.

May 7, 2010


The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge


This matter is before the court on defendant Snapple Beverage Corporation's ("Snapple" or "defendant") motion to dismiss plaintiffs Frances Von Koenig ("Von Koenig") and Gay Cadwell's ("Cadwell") (collectively "plaintiffs") Corrected Consolidated Class Action Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b). Plaintiffs oppose the motion. For the reasons set forth below,*fn1 defendant's motion to dismiss is GRANTED in part and DENIED in part.


Defendant Snapple is in the business of producing and uniformly marketing beverage products to the general public throughout the United States. (Pls.' Corrected Consolidated Complaint [Docket #67] ("Compl."), filed Dec. 28, 2009, ¶ 20.) Plaintiffs Von Koenig and Cadwell purchased and consumed defendant's drink products between March 4, 2005 and March 4, 2009. (Id. ¶¶ 10-11, 41.)

Plaintiffs bring this action both on their own behalf and on behalf of a class comprised of California consumers seeking to redress defendant Snapple's allegedly deceptive, misleading, and untrue advertising and unlawful, unfair, and fraudulent business acts and practices and misrepresentations of the quality and contents of the drinks related to defendant Snapple's "natural products." (Id. ¶ 1.) Plaintiffs allege that as part of a "scheme" to make its "natural products" more appealing to consumers, boost sales, and increase profits, Snapple prominently stated in marketing, advertising, labeling, and packaging that its products were "All Natural." (Id. ¶ 2.) Specifically, plaintiffs allege that by using an "All Natural" marketing strategy, Snapple implies that its products are superior to, better than, more valuable, and more nutritious than competing products. (Id. ¶ 5.) Plaintiffs contend that as a result of this marketing, advertising, labeling, and packaging, a reasonable California consumer would be under the impression and belief that defendant's drink products did not contain High Fructose Corn Syrup ("HFCS"). (Id. ¶ 3.) Defendant does not mention that its drink products contain HFCS, except in inconspicuous and hard-to-read type in the "Ingredients" statement on the back or sides of its products. (Id. ¶ 32.) Plaintiffs further contend that as a result of this marketing strategy, plaintiffs and other members of the class purchased, purchased more of, or paid more for defendant's drink products than if the products were labeled differently and that they would have made different purchasing decisions had they known that the drink products contained HFCS. (Id. ¶ 6.)

Plaintiffs contend that HFCS does not occur naturally; rather, it is produced by milling corn to produce corn starch, processing the corn starch to yield corn syrup, which is almost entirely glucose, and then adding enzymes that change the glucose to fructose. (Id. ¶ 21.) The resulting syrup contains 90% fructose and is known as HFCS 90. (Id. ¶ 21.) To make other common forms of HFCS, the HFCS 90 is mixed with 100% glucose corn syrup in the appropriate ratios to form the desired HFCS. (Id. ¶ 22.)

Plaintiffs also allege that Snapple uses HFCS in its drink products for a variety of reasons, all of which benefit its monetary interests. (Id. ¶ 26.) First, HFCS is often cheaper to use than alternative sweeteners due to the relative abundance of corn and the relative lack of sugar beets, as well as farm subsidies and sugar import tariffs in the United States. (Id. ¶ 26.) Second, HFCS is also easier to blend and transport because it is a liquid. (Id.) Third, HFCS usage leads to products with a much longer shelf life. (Id.) Plaintiffs assert that the complicated process used to create HFCS does not occur in nature and that the molecules in HFCS were not extracted from natural sources, but instead were created through enzymatically catalyzed chemical reactions in factories. (Id. ¶¶ 27-28.) Therefore, plaintiff contends that any product containing HFCS cannot be called "All Natural" and that such language is deceptive and misleading to California consumers. (Id. ¶¶ 27, 30.)

On April 13, 2009, plaintiff Von Koenig filed her initial class action complaint in this court. On August 21, 2009, plaintiff Cadwell filed his initial class action complaint, alleging claims identical to those raised by Von Koenig, in the Southern District of California. The Southern District transferred Cadwell's suit to this court, where the two actions were consolidated on December 11, 2009. Plaintiffs filed the Corrected Consolidated Class Action Complaint*fn2 on December 28, 2009, alleging violations of (1) California Business & Professions Code § 17500 et seq.*fn3 arising out of misleading and deceptive advertising; (2) California Business & Professions Code § 17500 et seq. arising out of untrue advertising; (3) California Business & Professions Code § 17200 et seq.*fn4 arising out of unlawful business acts and practices; (4) California Business & Professions Code § 17200 et seq. arising out of unfair business acts and practices; (5) California Business & Professions Code § 17200 et seq. arising out of fraudulent business acts and practices; and (6) California Civil Code § 1750 et seq., the Consumers Legal Remedies Act (the "CLRA"). Plaintiff seek actual and punitive damages, injunctive relief, and attorneys fees and costs.


Under Federal Rule of Civil Procedure 8(a), a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Under notice pleading in federal court, the complaint must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). "This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims." Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002).

On a motion to dismiss, the factual allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege "'specific facts' beyond those necessary to state his claim and the grounds showing entitlement to relief." Twombly, 550 U.S. at 570. "A claim has facial plausibility 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, 129 S.Ct. at 1949.

Nevertheless, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, "it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 129 S.Ct. at 1949. A pleading is insufficient if it offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555; Iqbal, 129 S.Ct. at 1950 ("Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice."). Moreover, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the . . . laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

Ultimately, the court may not dismiss a complaint in which the plaintiff has alleged "enough facts to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 570 (2007)). Only where a plaintiff has failed to "nudge [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. at 1952. While the plausibility requirement is not akin to a probability requirement, it demands more than "a sheer possibility that a defendant has acted unlawfully." Id. at 1949. This plausibility inquiry is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950.


A. Requests for Judicial Notice

In ruling upon a motion to dismiss, the court may consider matters which may be judicially noticed pursuant to Federal Rule of Evidence 201. See Mir v. Little Co. of Mary Hospital, 844 F.2d 646, 649 (9th Cir. 1988); Isuzu Motors Ltd. v. Consumers Union of United States, Inc., 12 F. Supp. 2d 1035, 1042 (C.D. Cal. 1998). Rule 201 permits a court to take judicial notice of an adjudicative fact "not subject to reasonable dispute" because the fact is either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). The court can take judicial notice of matters of public record, such as pleadings in another action and records and reports of administrative bodies. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1198 (9th Cir. 1988).

"Even if a document is not attached to a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). "The defendant may offer such a document, and the district court may treat such a document as part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)."

Id. The policy concern underlying the rule is to prevent plaintiffs "from surviving a Rule 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based." ...

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