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Kumar v. Salov North America Corp.

United States District Court, N.D. California

February 3, 2015

ROHINI KUMAR, individually and on behalf of the general public and those similarly situated, Plaintiff,
v.
SALOV NORTH AMERICA CORP., Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

YVONNE GONZALEZ ROGERS, District Judge.

Plaintiff Rohini Kumar brings this putative class action against Defendant Salov North America Corp. alleging claims for: (1) violation of the California Consumer Legal Remedies Act ("CLRA"), California Civil Code § 1750, et. seq. ; (2) violation of the California False Advertising Law("FAL"), Business and Professions Code § 17500, et. seq. ; (3) breach of contract; (4) breach of the covenant of good faith and fair dealing; (5) fraud, deceit and/or misrepresentation; and (6) violation of the California Unfair Competition Law ("UCL"), Business and Professions Code § 17500, et. seq. Salov has filed a Motion to Dismiss on the grounds that Kumar lacks standing, has not alleged plausible claims, failed to plead fraud with particularity, and failed to set forth sufficient facts to state a claim for breach of contract.

Having carefully considered the papers submitted, the arguments made at the hearing on this matter, and the pleadings in this action, and for the reasons set forth below, the Court ORDERS that the Motion is GRANTED IN PART AND DENIED IN PART. While Plaintiff has sufficiently alleged claims for violation of the CLRA, FAL, and UCL, as well as a claim for fraud and deceit, the allegations in support of breach of contract, and covenant of good faith and fair dealing claims do not set forth a cognizable basis for relief since there is no authority for finding privity of contract under the circumstances alleged.

I. BACKGROUND

Defendant Salov imports, markets, and sells several different types of olive oil under its "Filippo Berio" brand, including: "Robusto Extra Virgin Olive Oil, " "Extra Virgin Olive Oil, " "Delicato Extra Virgin Olive Oil, " "Organic Extra Virgin Olive Oil, " "Olive Oil, " and "Extra Light Olive Oil." (Complaint, Dkt. No. 1, at ¶ 17.) The words "Imported from Italy" appear prominently on the front label of each product. ( Id. at ¶ 23.) However, a smaller statement on the back of the products indicates that the olives are grown, and pressed, in many other countries, such as Spain, Greece, and Tunisia, and the oils are shipped to Italy where they are blended and bottled for export. ( Id. ) Kumar alleges that the "Imported from Italy" statement on the product labels is false and violates federal regulations concerning country of origin and misbranding of food products. ( Id. at ¶¶ 24-26.)

In addition, on two varieties of Salov's products ("Extra Virgin Olive Oil" and "Organic Extra Virgin Olive Oil"), the label contains the term "Extra Virgin, " a descriptor reserved for the highest grade and quality of olive oil. (Complaint at ¶ 27.) The International Olive Council, the United States Department of Agriculture and the State of California all maintain standards for use of the term "extra virgin" in olive oil. ( Id. at ¶¶ 27-30.) Kumar alleges that her counsel, in March of 2014, had several bottles of Salov's "Extra Virgin" products tested in an independent lab, which found that none of the sampled products met extra virgin standards. ( Id. at ¶ 31.) Kumar alleges that Salov: (1) adulterates its olive oil with cheaper, refined olive oil; and (2) uses substandard, non-light protective (clear) bottles and unprotected transport/storage methods which allow the oil to degrade. As a consequence, the products do not meet the "extra virgin" standard at the time of sale or the "Best By" date on the package. ( Id. at ¶¶ 35-38.)

Kumar alleges that she purchased a bottle Filippo Berio Extra Virgin Olive Oil at a Safeway in Berkeley, California, for approximately $6.00. (Complaint at ¶ 48.) She alleges that she later learned that the product she purchased was not extra virgin and was not made from olives grown and pressed in Italy. ( Id. at ¶ 49.) She alleges that she relied on the statements on the label to assure that she was purchasing extra virgin olive oil that was made from olives grown and pressed in Italy. ( Id. at ¶ 47.) But for Salov's misrepresentations on the label, she would not have purchased the product or, at a minimum, would have paid less for the product she purchased. ( Id. at ¶ 48.) Kumar seeks to represent three putative classes defined as follows:

• All persons who, between May 23, 2010, and the present, purchased, in California, any of Salov's products labeled as "Imported from Italy" (the "California Italian Class");
• All persons who, between May 23, 2010 and the present, purchased, in the United States, any of Salov's products labeled as "Extra Virgin" (the "EVOO Class"); and
• All members of the EVOO Class who made their purchases in California (the "California EVOO Subclass").

II. APPLICABLE STANDARDS

Salov moves under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, challenging 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 (2007) (quoting Fed.R.Civ.P. 8(a)(2)). 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 (1986) (internal brackets and quotation marks omitted)). The Court will not assume facts not alleged, nor will it draw unwarranted inferences. Ashcroft v. Iqbal, 556 U.S. 662, 679 (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.").

Rule 9(b) of the Federal Rules of Civil Procedure requires that "[i]n allegations of fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." To satisfy the rule, a plaintiff must allege the "who, what, where, when, and how" of the charged misconduct. Vess v. Ciba-Geigy Corp. U.S.A., 317 F.3d 1097, 1106 (9th Cir. 2003). "[T]he circumstances constituting the alleged fraud must be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge and not just deny that they have done anything wrong." Id.

Pursuant to Rule 12(b)(6), a complaint may be dismissed for failure to state a claim upon which relief may be granted against that defendant. Dismissal may be based on either "the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988) (citing Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir. 1984)). The complaint must plead "enough facts to state a claim [for] relief that is plausible on its face." Twombly, 550 U.S. at 570. A claim is plausible on its face "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. If the facts alleged do not support a reasonable inference of liability, stronger than a mere possibility, the claim must be dismissed. Id. ...


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