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Surzyn v. Diamond Foods, Inc.

United States District Court, N.D. California, Oakland Division

May 28, 2014

DOMINIKA SURZYN, individually and on behalf of all others similarly situated, Plaintiff,
DIAMOND FOODS, INC., a Delaware limited liability company, and DOES 1 through 10, inclusive, Defendants.



Plaintiff Dominika Surzyn, individually and on behalf of all others similarly situated, brings the instant putative consumer fraud class action against Defendant Diamond Foods, Inc. She alleges state law claims, inter alia, for unfair competition, false advertising and negligent misrepresentation, based on Defendant's "All Natural" designation on the packaging of certain of its Kettle Brand TIAS! tortilla chips. The Court has jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2).

The parties are presently before the Court on Defendant's Motion to Dismiss and Strike Complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6) and (f), respectively. Dkt. 15. Having read and considered the papers filed in connection with this matter and being fully informed, the Court hereby GRANTS the motion to dismiss and DENIES the alternative motion to strike as moot. Plaintiff is granted leave to amend. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See Fed.R.Civ.P. 78(b); N.D. Cal. Civ. L.R. 7-1(b).


Defendant manufactures and markets Kettle brand TIAS! tortilla chips, including the following varieties which are at issue: All Natural Nacho Cheddar Tortilla Chips, All Natural Zesty Ranch Tortilla Chips, All Natural Salsa Picante Tortilla Chips, All Natural Sweet Baja Barbeque Tortilla Chips and All Natural Chili Con Queso Tortilla Chips (collectively, "Products" or "Chips"). Compl. ¶ 1. The packaging for each variety of the Chips bears the label "All Natural." Id.

According to Plaintiffs, the "All Natural" designation is false, misleading and likely to deceive consumers because the Chips contain maltodextrin and/or dextrose, which are alleged to be "unnatural, synthetic, and/or... artificial ingredient[s]." Id . ¶¶ 30, 36. Plaintiff states that she "purchased one or more of the Products during the Class Period, including, but not limited to, a purchase made during 2013 from a Whole Foods market located in Alameda County, California, for the purchase price of approximately $3.00 to $4.00." Id . ¶ 55.

The Complaint alleges five causes of action: (1) violation of the California's False Advertising Law ("FAL"); (2) violation of the fraudulent and unfair prongs of the Unfair Competition Law ("UCL"); (3) violation of the unlawful prong of the UCL; (4) violation of the California Legal Remedies Act ("CLRA"); and (5) negligent misrepresentation. Plaintiff seeks to represent a Class comprised of all California residents who purchased the Chips "from January 9, 2010, through and to the date notice is provided to the Class." Compl. ¶ 56.

Defendant now moves to dismiss or strike all claims of the Complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and (f), and for failure to plead fraud with particularity under Rule 9(b).[1] Defendant also seeks to dismiss or strike Plaintiff's allegations regarding its allegedly deceptive marketing and advertising campaign. The motion is fully briefed and is ripe for adjudication.


Rule 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal under Rule 12(b)(6) is proper when the complaint either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a cognizable legal theory." Somers v. Apple, Inc. , 729 F.3d 953, 959 (9th Cir. 2013). "Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires not only fair notice of the nature of the claim, but also grounds on which the claim rests.'" Zixiang Li v. Kerry , 710 F.3d 995, 998-99 (9th Cir. 2013) (quoting in part Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556 n.3 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Twombly , 550 U.S. at 570). A complaint must contain more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action"; it must contain factual allegations sufficient to "raise a right to relief above the speculative level." Twombly , 550 U.S. at 555.

In assessing the sufficiency of the pleadings, "courts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322 (2007). The court is to "accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Outdoor Media Group, Inc. v. City of Beaumont , 506 F.3d 895, 899-900 (9th Cir. 2007). Where a complaint or claim is dismissed, leave to amend generally is granted, unless further amendment would be futile. Chaset v. Fleer/Skybox Int'l , 300 F.3d 1083, 1087-88 (9th Cir. 2002).



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