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Timothy Smith, Rohit Fedane, and Misty Johnson, Individually and On Behalf of All Others Similarly Situated v. Cabot Creamery Cooperative

February 25, 2013

TIMOTHY SMITH, ROHIT FEDANE, AND MISTY JOHNSON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
CABOT CREAMERY COOPERATIVE, INC. AND AGRI-MARK, INC.,
DEFENDANTS.



ORDER GRANTING MOTION TO DISMISS

I. INTRODUCTION

Plaintiffs Timothy Smith, Rohit Fedane, and Misty Johnson 21 ("Plaintiffs") filed a putative class action lawsuit against 22 Defendants Cabot Creamery Cooperative, Inc. ("Cabot") and its 23 parent Agri-Mark, Inc. ("Defendants"), asserting a variety of 24 statutory and common law claims. ECF No. 16 ("FAC"). Plaintiffs' 25 claims are all based on the core allegation that Defendants' yogurt 26 product, which Plaintiffs purchased, was misbranded under federal 27 food regulations. See id. ¶¶ 1-6. Now before the Court is 28 Defendants' motion to dismiss Plaintiffs' FAC. ECF No. 22 ("MTD").

The motion is fully briefed, ECF Nos. 27 ("Opp'n"), 32 ("Reply"), 2 and suitable for decision without oral argument, Civ. L.R. 7-1(b). 3

For the reasons discussed below, Defendants' motion is GRANTED, and 4

Plaintiffs' claims are DISMISSED WITH PREJUDICE.

II. BACKGROUND

Yogurt is a dairy product made by combining milk with certain 8 food-grade bacteria. FAC ¶¶ 16-18. The bacteria ferment the 9 milk's lactose to produce lactic acid. Id. This fermentation 10 process causes the milk to coagulate and thicken into a liquid- solid mixture. Id. "Regular" yogurt maintains both the liquid and 12 solid portions of the yogurt manufacturing process, while Greek 13 yogurt keeps only the solid. Id. ¶¶ 19-20. As a result it is 14 thicker, higher in protein, and lower in sugar than regular yogurt. 15 Id. ¶ 20.

It also tends to be more expensive than regular yogurt. 16

Id. ¶ 5.

Cabot markets "Cabot Greek," the product at issue in the 18 instant matter, as "Greek-Style YOGURT." Id. ¶ 22. Cabot Greek 19 contains whey protein concentrate ("WPC") and milk protein 20 concentrate ("MPC"). Id. ¶ 26. WPC and MPC are concentrated 21 protein powders that are essentially byproducts of cheese 22 manufacturing. Id. ¶ 28. If the protein powder contains mostly 23 whey protein, it is WPC. Id. ¶ 29. If it contains whey and casein 24 proteins in the same proportion as they appear in cow's milk, it is 25 MPC. Id. Plaintiffs allege that Cabot uses WPC and MPC as "filler 26 material" to thicken Cabot Greek and increase its protein content, 27 instead of making Greek yogurt the "authentic" way, which involves 28 filtering the liquid whey byproduct during the manufacturing process and keeping only the protein-rich solid portion. Id. ¶¶ 1-2 2, 20-21, 27-29, 32.

Plaintiffs are all consumers who purchased Cabot Greek 4 believing it to be yogurt. FAC ¶ 6. According to Plaintiffs, the 5 problem with Cabot Greek's manufacturing process arises from the Food and Drug Administration's ("FDA") strict guidelines, called Standards of Identity ("SOI(s)"), which define what may legally be called "yogurt." Id. ¶¶ 37-40. Plaintiffs allege that Cabot Greek is not "yogurt" under FDA regulations and the Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 341, because it contains MPC and WPC, which Plaintiffs claims the FDA forbids as ingredients in 12 yogurt. Id. ¶¶ 35-36, 43-44. Plaintiffs allege that Cabot's 13 branding misled them into believing that they were purchasing 14 genuine Greek yogurt and thereby paying a premium for it, which 15 they would not have done if it were not so branded. See id. ¶¶ 5-16 6, 36.

Per these allegations, Plaintiffs bring the following causes 18 of action against Cabot: (1) breach of express warranty; (2) breach 19 of the implied warranty of merchantability; (3) breach of the 20 implied warranty of fitness for a particular purpose; (4) unjust 21 enrichment; (5) violation of California's Consumer Legal Remedies 22

Act ("CLRA"), Cal. Civ. Code sections 1751 et seq.; (6) violation 23 of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. 24 Code sections 17200 et seq.; (7) violation of California's False 25 Advertising Law ("FAL"), Cal. Bus. & Prof. Code sections 17500 et 26 seq.; (8) negligent misrepresentation; and (9) fraud. 27 Defendants now move to dismiss Plaintiffs' FAC, arguing 28 primarily that the FDA permits the addition of MPC and WPC to yogurt, thereby rendering all of Plaintiffs' claims baseless 2 because they are predicated on the FDA's purported prohibition of 3 those ingredients. MTD at 6-15.*fn1

III. LEGAL STANDARD

A motion to dismiss under Federal Rule of Civil Procedure 7 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. 8 Block, 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal can be based 9 on the lack of a cognizable legal theory or the absence of 10 sufficient facts alleged under a cognizable legal theory."

Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 12 1988). "When there are well-pleaded factual allegations, a court 13 should assume their veracity and then determine whether they 14 plausibly give rise to an entitlement to relief." Ashcroft v. 15

Iqbal, 556 U.S. 662, 679 (2009). However, "the tenet that a court 16 must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the 18 elements of a cause of action, supported by mere conclusory 19 statements, do not suffice." Id. (citing Bell Atl. Corp. v. 20 Twombly, 550 U.S. 544, 555 (2007)). A court's review is generally 21 "limited to the complaint, materials incorporated into the 22 complaint by reference, and matters of which the court may take 23 judicial notice." See Kourtis v. Cameron, 419 F.3d 989, 994 n.2 24 (9th Cir. 2005).

IV. DISCUSSION

The parties' dispute is ultimately based on one predicate 3 issue: whether FDA regulations forbid cultured dairy products 4 containing WPC and MPC from being called "yogurt." Plaintiffs say 5 they do. Defendants say they do not. Defendants are right. Since 6 all of Plaintiffs' claims are premised on the FDA ...


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