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Hendricks v. StarKist Co.

United States District Court, N.D. California

March 25, 2014

PATRICK HENDRICKS, individually and on behalf of all others similarly situated, Plaintiffs,
v.
STARKIST CO., et al., Defendant

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For Patrick Hendricks, individually and on behalf of all others similarly situated, Plaintiff: Lawrence Timothy Fisher, LEAD ATTORNEY, Annick Marie Persinger, Sarah N Westcot, Sarah Nicole Westcot, Bursor and Fisher, P.A., Walnut Creek, CA; Scott A. Bursor, PRO HAC VICE, Bursor & Fisher P.A., New York, NY.

For Starkist Co, Defendant: Robert B. Hawk, LEAD ATTORNEY, Stacy R. Hovan, Hogan Lovells U.S. LLP, Menlo Park, CA; Gregg David Michael, John E Hall, PRO HAC VICE, Eckert Seamans Cherin and Mellott, LLC, Pittsburgh, PA.

For National Fisheries Institute, Amicus: Forrest Arthur Hainline, LEAD ATTORNEY, Goodwin Procter LLP, San Francisco, CA.

OPINION

YVONNE GONZALEZ ROGERS, UNITED STATES DISTRICT COURT JUDGE.

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Order Granting In Part And Denying In Part Motion To Dismiss; Denying Motion For Leave To File Amicus Declaration (Dkt. No. 21, 32)

Plaintiff Patrick Hendricks brings this putative class action against Defendant

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StarKist Co. (" Starkist" ). Plaintiff seeks monetary damages and injunctive relief on the grounds that four of StarKist's canned tuna products are underfilled and, thus, substantially underweight. Plaintiff alleges claims for breach of express and implied warranties (Counts I, II, and III), unjust enrichment (Count IV), negligent misrepresentation (Count VIII), and fraud (Count IX), as well as violations of California's Consumer Legal Remedies Act (" CLRA" ), Cal. Civil Code section 1750 et seq., Unfair Competition Law (" UCL" ), Cal. Bus. & Prof. Code section 17200 et seq., and False Advertising Law (" FAL" ), Cal. Bus & Prof. Code section 17500 (Counts V-VII).

StarKist has filed a Motion to Dismiss on several grounds: (1) federal preemption under the federal Food, Drug, and Cosmetic Act (" FDCA" ); (2) the primary jurisdiction doctrine; (3) failure to sufficiently plead claims for breach of express and implied warranties; (4) failure to plead fraud with particularity; (5) lack of standing; and (6) unjust enrichment does not constitute a claim for relief. (Dkt. No. 21).[1]

Having carefully considered the papers submitted,[2] the parties' oral arguments, and the pleadings in this action, and for the reasons set forth below, the Court hereby Orders that the Motion to Dismiss is Granted In Part And Denied In Part With Leave To Amend.

BACKGROUND

StarKist is a Delaware Corporation with its principal place of business in Pittsburgh, Pennsylvania. On February 19, 2013, Plaintiff filed this putative class action in his individual capacity and on behalf of a nationwide class of all similarly situated purchasers of four StarKist canned tuna products. The four products at issue are 5-ounce cans of StarKist: (1) Chunk Light Tuna in Water; (2) Chunk Light Tuna in Vegetable Oil; (3) Solid White Albacore Tuna in Water; and (4) Solid White Albacore Tuna in Vegetable Oil (collectively, the " Products" ). (Complaint [Dkt. No. 1] ¶ 1.)[3] Plaintiff also seeks to represent a subclass of individuals who purchased the Products in California.

The Complaint alleges that Plaintiff purchased two of the Products, and the cans were underfilled and substantially underweight. (¶ 2.) Plaintiff confirmed that the cans of tuna were underfilled by retaining a laboratory to conduct independent testing using the methodology prescribed in 21 C.F.R. section 161.190(c). (¶ ¶ 2, 3.) Plaintiff alleges that testing revealed StarKist's 5-ounce cans were " cheating" purchasers by providing anywhere from 1.1% to

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17.3% less tuna, on average, depending upon the variety of canned tuna, than purchasers were paying for, using to the weighing methodology and standard of fill set forth in the referenced federal regulations. ( Id. )

Section 341 of the Food Drug and Cosmetics Act (" FDCA" ) permits the Food and Drug Administration (" FDA" ) to promulgate regulations " fixing and establishing for any food... reasonable standards of fill of container," " [w]henever in the judgment of the Secretary such action will promote honesty and fair dealing in the interest of consumers." 21 U.S.C. § 341. The FDA, under its authority in 21 U.S.C. section 341, enacted 21 C.F.R. section 161.190, which sets forth the requirements governing the standard of fill of a container of canned tuna. Currently, both the standard of identity [4] and the standard of fill for canned tuna are set forth in that regulation, with the standard of fill provided at sub-section (c). Filling a container in a manner that is misleading is considered " misbranding" pursuant to 21 U.S.C. section 343.

Based on these allegations, the Complaint sets forth claims for breach of express warranty, and breach of the implied warranties of merchantability and fitness for a particular purpose. The express warranty claim alleges that StarKist, as the manufacturer, market and distributor of its products, expressly warranted that the Products contained an " adequate" amount of tuna for a 5-ounce can, but in reality they did not do so, and thus are not " legal for sale" in the United States. (¶ ¶ 19, 20.) The implied warranty claims each alleged that StarKist impliedly warranted that the cans contained an adequate amount of tuna, but the tuna cans were defective and unfit for their intended purpose, such that Plaintiff and the putative class members did not receive the goods as warranted. (¶ ¶ 24-30, 34-35.) As to all these claims, Plaintiff alleges that he and other putative class members were injured because they would not have purchased the Products on the same terms if the true facts were known, and that they paid a premium price based on StarKist's " promises" that the Product cans contained an adequate amount for their size. (¶ ¶ 21, 31, 37.) Plaintiff further alleges, in his " Unjust Enrichment" count, that StarKist's retention of revenues under these circumstances is unjust and inequitable, and that they should be required to pay restitution to Plaintiff and the class. (¶ ¶ 40-42.)

Similarly, Plaintiff's CLRA, FAL, and UCL claims allege that StarKist misrepresented that its Products contained an adequate amount of tuna for a 5-ounce can consistent with the FDA standard, and that they would not have purchased the Products had they known the true facts concerning the quantity of the Product and StarKist's failure to comply with the FDA standard. (¶ ¶ 46-47, 52-56, 59-63.) The CLRA, California Civil Code section 1770(a)(5), prohibits persons " [r]epresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have."

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The FAL, Business & Professions code 17500, makes it unlawful for any person to make, in any advertising device or any other manner or means, a statement that is untrue or misleading. Plaintiff alleges that StarKist's misrepresentations violated the " unlawful," " unfair," and " fraudulent" prongs of the UCL.

Finally, Plaintiff alleges state law claims for negligent misrepresentation and fraud because StarKist misrepresented or omitted material facts about its Products, specifically that their Product cans contained an adequate amount of tuna for that size can, and are " legal for sale." (¶ ¶ 67-68, 74.)

At the hearing on the motion to dismiss, Plaintiff's counsel confirmed that he is relying on the FDA regulations as the basis for claiming that the amount of tuna is inadequate and not " legal for sale in the United States." ( See Tr. at 18:21-19:8.) The Complaint cites no other legal predicate for claiming that StarKist's 5-ounce cans of tuna are unlawful, deceptive, or misleading. The Complaint does not allege that the labeling of the packages was inaccurate.

APPLICABLE STANDARD

StarKist moves under Fed.R.Civ.P. 12(b)(6) and challenges the legal sufficiency of the claims alleged. " Federal Rule of Civil Procedure 8(a)(2) requires only a 'short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 554, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Fed.R.Civ.P. 8(a)(2)). The pleading is construed in the light most favorable to the non-moving party and all material allegations in it are taken to be true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). However, even under the liberal pleading standard of Rule 8(a)(2), " a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) (internal brackets and quotation marks omitted)). Hence, the Court need not assume unstated facts, nor will it draw unwarranted inferences. Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (" Determining whether a complaint states a plausible claim for relief... [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." ).

Under Twombly, a plaintiff must not merely allege conduct that is conceivable but must instead allege " enough facts to state a claim to relief that is plausible on its face." 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, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). " The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully... [w]hen a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. (quoting Twombly, 550 U.S. at 556-57) (internal quotation marks omitted). In sum, if the facts alleged foster a reasonable inference of liability--stronger than a mere possibility--the claim survives; if they do not, the claim must be

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dismissed. See Iqbal, 556 U.S. at 678-79.

DISCUSSION

I. Preemption


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