The opinion of the court was delivered by: Barry Ted Moskowitz, Chief Judge United States District Court
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT; DENYING MOTION TO STRIKE
Defendant United Brands Company, Inc. ("United Brands" or "Defendant") has filed a motion to dismiss Plaintiff's First Amended Complaint ("FAC") and a motion to strike portions of the FAC. For the reasons discussed below, Defendant's motion to dismiss is GRANTED IN PART and DENIED IN PART, and Defendant's motion to strike is DENIED.
Plaintiff Breanna Cueavas ("Plaintiff") brings this action on behalf of herself and a purported class of similarly situated individuals. Plaintiff alleges that Defendant engaged in deceptive business practices in connection with the marketing of its flavored caffeinated alcoholic beverage called "JOOSE" (the "Product"). JOOSE contained between 9.9 to 12 percent alcohol by volume in addition to approximately 124.95 milligrams of caffeine. (FAC ¶¶ 22, 24.) An 8-ounce cup of coffee contains 100 to 200 milligrams of caffeine and a 12- ounce Coke has 35 milligrams of caffeine. (FAC ¶ 24.)
JOOSE went on the market in late 2007. (FAC ¶ 23.) In November 2010, the FDA sent Defendant a warning letter stating: "FDA is aware that, based on the publicly available literature, a number of qualified experts have concerns about the safety of caffeinated alcoholic beverages. Moreover, the agency is not aware of data or other information to establish the safety of the relevant conditions of use for your product." (FAC ¶ 25; Ex. C to FAC.) The FDA stated that as used in Defendant's product, caffeine was an unsafe food additive, rendering the product adulterated under section 402(a)(2)(C) of the Federal Food, Drug, and Cosmetic Act. (Ex. C to FAC.) The FDA voiced concerns regarding the safety of caffeine when used in the presence of alcohol because studies indicated that caffeine reduces subjects' subjective perception of intoxication but does not improve diminished motor coordination or slower visual reaction times. (Id.) The FDA gave Defendant 15 days from receipt of the letter to respond in writing. (Id.)
On November 24, 2010, the FDA reported that it had been informed by Defendant that Defendant had ceased shipping JOOSE and expected to have the product off retails store shelves by December 13, 2010. (FAC ¶ 31.)
In April 2010, Plaintiff purchased a can of "Dragon JOOSE" for $5.00 from a 7-Eleven in Corona, California. (FAC ¶ 36.) Plaintiff subsequently consumed the beverage. (Id.) In August 2010, Plaintiff purchased two cans of "JOOSE Watermelon" for $8.00 from a 7-Eleven located in Ontario, California. (Id.) Plaintiff consumed those beverages as well. (Id.) Plaintiff alleges that she saw Product advertising and looked at the Product's labeling prior to purchasing the beverages. (Id.)
According to Plaintiff, "Nothing in UBC's packaging, labeling, advertising, marketing, promotion, or sale of the Products disclosed, or adequately disclosed, the amount of caffeine in the Products or the risks associated with caffeine as used in the Products . . . ." (FAC ¶ 36.) Plaintiff claims that the amount of caffeine in the Products and the risks associated with caffeine as used in the Products were material facts that would have affected her decisions to purchase the Products. (FAC ¶ 37.) Plaintiff alleges that she was deceived by Defendant into purchasing the Products. (Id.) Plaintiff claims that she suffered an economic injury because the Products had significantly less value than was reflected in the price Plaintiff paid for them. (FAC ¶ 38.) "In fact, had Plaintiff known the true facts about the Products as set forth above, she would not have purchased them at all." (FAC ¶ 39.)
The proposed class consists of all persons who during the Class Period purchased the Products for personal use and not for purposes of further retail sale or distribution. (FAC ¶ 40.)
The FAC asserts the following claims: (1) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq. ("UCL"); (2) violation of California's Consumer Legal Remedies Act, Cal. Civ. Code §§1750, et seq. ("CLRA"); (3) breach of express and implied warranties; and (4) violation of the Magnuson-Moss Warranty Act ("MMWA"), 15 U.S.C. §§ 2301, et seq.
Defendant moves to dismiss the FAC for failure to state a claim. The Court grants the motion to dismiss as to Plaintiff's breach of express warranty claim but otherwise denies the motion.
Defendant argues that federal law governing the labeling of alcohol preempts all of Plaintiff's claims. The Court disagrees.
27 U.S.C. § 215*fn1 provides that containers of alcoholic beverages must bear the following statement:
"GOVERNMENT WARNING: (1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. (2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems."
27 U.S.C. § 216 provides:
No statement relating to alcoholic beverages and health, other than the statement required by section 215 of this title, shall be required under State law to be placed on any container of an alcoholic beverage, or on any box, carton, or other package, irrespective of the material from which made, that contains such a container. (Emphasis added.)
Defendant contends that Plaintiff's claims are expressly preempted by § 216 because Plaintiff's claims seek to impose requirements of warnings regarding the potential risks of an alcoholic beverage beyond those prescribed by the ABLA. It appears that Defendant interprets the language "statement relating to alcoholic beverages and health" as encompassing any statement regarding an alcoholic beverage that pertains to health. The Court reads § 216 more narrowly.
Because advertising and consumer protection are traditionally regulated by the states, there is a presumption against preemption, and if the text of the preemption clause is susceptible of more than one plausible reading, courts ordinarily accept the reading that disfavors preemption. Altria Group, Inc. v. Good, 555 U.S. 70, 77 (2008). Keeping this presumption in mind and taking into account explicit congressional intent, the Court interprets "statement relating to alcoholic beverages and health," as a statement regarding health risks associated with consuming or abusing alcohol -- e.g., statements regarding the risk of intoxication, loss of motor ability, deterioration of judgment, or heightened risk of certain forms of cancer or other disease.
Congress enacted the ABLA to establish a comprehensive Federal program so that:
(1) the public may be adequately reminded about any health hazards that may be associated with the consumption or abuse of alcoholic beverages through a nationally uniform, non-confusing warning notice on each container of such beverages; and
(2) commerce and the national economy may be--(A) protected to the maximum extent consistent ...