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Kamal v. Eden Creamery, LLC

United States District Court, S.D. California

June 26, 2019

YOUSSIF KAMAL, et al., on their own behalf and on behalf of all others similarly situated, Plaintiffs,


          Hop. Cynthia Bash ant United States District Judge

         At the bottom of this case are allegations of underfilled Halo Top ice cream pints. Plaintiffs Youssif Kamal, Gillian Neely, Richard Lichten, Susan Cox, Nick Tovar, Michele Kinman, Ralph Jacobson, Ashley Petefish and Teri Brown (collectively, “Plaintiffs”) contend that what looks like a full pint of Halo Top ice cream to consumers on the outside is, for some consumers, less than a full pint- sometimes “dramatically” so. According to Plaintiffs, Defendant Eden Creamery, LLC d/b/a Halo Top (“Eden Creamery”), the company that produces, markets, and advertises, and sells Halo Top, “routinely underfills its pint containers of ice cream.”

         Plaintiffs bring this action against Eden Creamery and its founder and Chief Executive Officer, Defendant James Woolverton, alleging that the labeling, advertising, and marketing of Halo Top ice cream pints-all of which allegedly focuses on the Halo Top pint's pint-size-is misleading, deceptive, and fraudulent due to Eden Creamery's alleged underfilling. On the basis of this alleged conduct, Plaintiffs raise claims against Defendants for common law fraud under California law and statutory claims for violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; California's False Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq.; various provisions of the California Consumers Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1770(a)(5), (a)(7), (a)(9); the Arizona Consumer Fraud Act, ARS § 44-1521 et seq., (FAC ¶¶ 141-49); the Colorado Consumer Protection Act, Colo. Rev. Stat. § 6-1-101 et seq., (FAC ¶¶ 150-59); the Illinois Consumer Protection Fraud and Deceptive Business Practices Act, 815 ILCS § 505 et seq., (FAC ¶¶ 160-70); the Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. Ann. § 598.0903, et seq., (FAC ¶¶ 171-79); the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56.8-1, et seq., (FAC ¶¶ 180-88); and the New York General Business Law, N.Y. Gen. Bus. Law § 349, et seq., (FAC ¶¶ 189-95). Plaintiffs seek to represent a nationwide class of consumers who purchased one or more Halo Top ice cream pints and who received less than a pint or, alternatively, a multi-state class based on where one of the named Plaintiffs purchased an underfilled pint.

         Defendants Eden Creamery and Woolverton move to dismiss all claims in the operative First Amended Complaint (“FAC”). (ECF Nos. 14, 16.) Plaintiffs oppose. (ECF No. 15.) The motion is suitable for determination on the papers, without oral argument. S.D. Cal. Civ. L.R. 7.1(d). For the reasons herein, the Court grants in part and denies in part Defendants' motion to dismiss.


         Tracing its origins to Defendant Woolverton's home ice cream business started in 2011, Defendant Eden Creamery is a California limited liability corporation with its principal place of business and headquarters in Los Angeles, California. (FAC ¶¶ 18, 21.) Eden Creamery produces, markets, and sells a popular low-calorie, protein-based, and low-sugar ice cream, which has allowed Halo Top to develop "a cult-like following among consumers" and to take in tens of millions of dollars in revenue. (Id.¶¶2, 29-30.)

         Like their competitors, Defendants sell Halo Top ice cream in pints, the "recognizable standard measure of ice cream for consumers." (Id. ¶ 38.) Eden Creamery charges a "premium" price for its pints of Halo Top ice cream, ranging from $3.99 to $6.99 per pint. (Id. ¶¶ 2, 29, 32, 38.) The pint-sized container in which Defendants allegedly sell most Halo Top ice cream to retail customers is opaque, closed and sealed, as reflected in the following photograph:

         (Image Omitted)

(Id. ¶ 33.) According to Plaintiffs, "one of the most important selling points to consumers" is "the number of calories per pint, ''' as is prominently displayed on "virtually every pint container of ice cream" that Eden Creamery sells. (Id. ¶¶ 1, 33-34 (emphasis in complaint).) Defendants' alleged advertising and marketing also "focuses on the pint," as reflected in Defendants' "aggressive nationwide social media marketing," and on Eden Creamery's website, which directs consumers to "find our pints" and encourages consumers to "select your favorite pints." (Id. ¶¶ 36-37.) Plaintiffs allege that consumers of Halo Top ice cream pints "understand the container to contain a pint of ice cream-regardless of flavor of ice cream or colors used on the label." (Id. ¶ 39.) And consumers "expect to be paying the advertised price for a full pint of ice cream." (Id. ¶43.)

         Yet, despite the labeling of the Halo Top pint, Defendants' advertising and marketing, and contrary to consumers' expectations, Eden Creamery "routinely underfills its pint containers," "[dramatically so at times, and as a course of business." (Id. ¶¶ 3-4, 43.) The "amount of underfilling appears to be random to consumers, it can vary in amount . . . and appears to be unrelated to flavor of ice cream or the location of purchase." (Id. ¶ 44.)

         Plaintiffs allege that, in reliance on the label and pint-size container, they have purchased various Halo Top pints in the last three years, but "each of them has received, to varying degrees and in different amounts, underfilled Halo Top pints." (Id. ¶ 46.) Plaintiffs provide photographs of some of the allegedly underfilled Halo Top pints that they purchased. (Id. ¶¶ 52, 56, 59, 61, 66, 75, 78, 81, 83, 85.) Some examples are as follows:

         (Image Omitted)

(Id. ¶¶ 52, 78.)[1]

(Image Omitted)

(Id. ¶¶ 75, 85.)[2]

         Plaintiffs would not have paid as much as they did for the Halo Top pints or would not have purchased them at all if they had known of the alleged underfilling. (Id. ¶ 47.)

         Plaintiffs allege that the underfilling of Halo Top ice cream pints “is known to Eden Creamery and its executives, and it has been going on for years.” (Id. ¶ 45.) Eden Creamery “has created a ‘low fill form response' form on its website specifically for consumers to report underfilled pint containers to Halo Top.” (Id. (citation omitted).) Defendants allegedly send customers who complain about underfilled pints a “boilerplate form response that blames everyone else in the distribution process” for the low fill. (Id. ¶ 5.) Defendants have allegedly told consumers since at least 2016 that they are working on addressing the low fill, but “have done nothing over the past two years . . . to stop the underfilling of Halo Top pint containers, or otherwise ensure that their containers are properly labelled.” (Id. ¶¶ 6, 45.) Several Plaintiffs allege that they received standardized form responses presumably “Chocolate” purchase).) from Halo Top customer representatives when they complained about allegedly underfilled Halo Top pints and provide allegations that quote from the statements verbatim. (FAC ¶¶ 53-54, 57-58, 62, 67-68, 70-72, 76, 79-80, 86, 105-06.)


         Plaintiffs Kamal and Neely filed the thirteen-page original complaint against Eden Creamery on June 15, 2018. (ECF No. 1.) These original plaintiffs sought to represent a putative nationwide class or, alternatively, a single-state California class for a breach of implied contract claim and claims asserted under the UCL, FAL, CLRA, for Eden Creamery's allegedly underfilled Halo Top pints. After Eden Creamery moved to dismiss the original complaint, (ECF No. 7), Plaintiffs filed the FAC, (ECF No. 8). The forty-five-page FAC adds seven new plaintiffs and names Woolverton as a defendant. The FAC discards the original complaint's breach of implied contract claim and, instead, asserts a common law fraud claim for intentional misrepresentation and omission. (FAC ¶¶ 134-40.) With the presence of new plaintiffs who allegedly purchased Halo Top pints in states other than California, the FAC includes a swath of state consumer law claims under the laws of Arizona, Colorado, Illinois, Nevada, New Jersey, and New York. The Court now turns to the merits of Defendants' motion to dismiss.


         Federal Rule of Civil Procedure 8(a)(2) requires that a complaint set forth “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 Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A defendant may move to dismiss a complaint under Rule 12 for any one of several specified grounds, including lack of subject matter jurisdiction, Fed.R.Civ.P. 12(b)(1), and failure to state a claim upon which relief may be granted, Fed.R.Civ.P. 12(b)(6).

         A Rule 12(b)(1) tests whether the plaintiffs have met their burden to show that the court possesses subject matter jurisdiction over the action such that it may adjudicate the claims pressed in the action. See Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (1994); Ass'n of Am. Med. Colleges v. United States, 217 F.3d 770, 778-79 (9th Cir. 2000). A request to dismiss for lack of Article III standing is properly raised as Rule 12(b)(1) challenge to a court's subject matter jurisdiction. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). A party may seek a Rule 12(b)(1) dismissal based “either on the face of the pleadings or by presenting evidence.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003). When a party asserts a facial challenge to subject matter jurisdiction, as Defendants do here, the court limits its inquiry to the allegations set forth in the complaint. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).

         A Rule 12(b)(6) motion tests the sufficiency of a complaint's allegations. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). To survive a Rule 12(b)(6) motion, a plaintiff is required to set forth “enough facts to state a claim for 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 reasonable inferences that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). Factual allegations must be enough to raise a right to relief above the speculative level. Twombly, 550 U.S. at 556. In assessing the legal sufficiency of a complaint, a court accepts as true the complaint's factual allegations and construes them in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984). Yet, the court need not accept as true legal conclusions pled in the guise of factual allegations. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994). A pleading is insufficient if it offers only “labels and conclusion” or “a formulaic recitation of the elements of a cause of action, ” without adequate factual allegations. Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 676.

         When an action alleges fraud, Rule 9(b) imposes additional pleading requirements. A plaintiff alleging fraud “must state with particularity the circumstances constituting fraud[.]” Fed.R.Civ.P. 9(b). This requirement means that the plaintiff must identify the “time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (citations omitted). “[A]llegations of fraud must be specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged ‘so that they can defend against the charge and not just deny that they have done anything wrong.'” Sanford v. MemberWorks, Inc., 625 F.3d 550, 558 (9th Cir. 2010) (citation omitted).


         Defendants' motion to dismiss advances seven overarching arguments: (1) Plaintiffs lack standing, (2) Plaintiffs' claims are preempted under federal law, (3) Plaintiffs fail to state California common law fraud claims, (4) Plaintiffs fail to state claims under the California UCL, CLRA, and FAL, (5) Woolverton is improperly sued simply because he is a corporate executive of Eden Creamery, (6) the various non-California Plaintiffs fail to state claims under the applicable state consumer protection statute, and (7) Plaintiffs may not assert any of the state consumer protection statutory claims on behalf of a nationwide class.[3] The Court concludes that the majority of Defendants' arguments do not warrant dismissal of Plaintiffs' claims at this stage because central to Defendants' motion are factual contentions not appropriate for resolution at the motion to dismiss stage.

         A. Standing

         Defendants contend that Plaintiffs lack standing under Article III, the UCL, and the CLRA to challenge Defendants' alleged misleading and deceptive labeling, advertising, and marketing for the allegedly underfilled Halo Top pints that Plaintiffs purchased. (ECF No. 14-1 at 11-12.) Defendants further argue that Plaintiffs lack standing to challenge Defendants' conduct with respect to Halo Top pints that Plaintiffs did not purchase. (Id.) The Court rejects both arguments.

         1. Standing to Assert Claims for Purchased Pints

         In a class action, at least one of the named plaintiffs must meet the Article III standing requirements. Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007). To establish Article III standing, a plaintiff must allege the irreducible constitutional minimum of: (1) an injury in fact via “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical”; (2) causation, i.e. the injury is “fairly traceable to the challenged action of the defendant”; and (3) redressability, i.e. it is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). “Each element of standing must be supported with the manner and degree of evidence required at the successive stage of litigation.” Maya v. Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011). At the pleading stage, a trial court must accept as true all material allegations of the complaint and construe the complaint in favor of the complaining party. Warth v. Seldin, 422 U.S. 490, 501 (1975).

         “To establish standing to bring a claim under [California's UCL and CLRA], plaintiffs must meet an economic injury-in-fact requirement, which demands no more than the corresponding requirement under Article III of the U.S. Constitution.” Reid v. Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015) (citing Hinojos v. Kohl's Corp., 718 F.3d 1098, 1104 (9th Cir. 2013)). The requisite economic injury under the UCL is: (1) an expenditure of money due to the defendant's acts of unfair competition; (2) lost money or property; or (3) a denial of money to which the plaintiff has a cognizable claim. Chacanaca v. Quaker Oats Co., 752 F.Supp.3d 1111, 1125 (N.D. Cal. 2010). Under the CLRA, an action may be brought by “[a]ny consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770. . . .” Cal. Civ. Code § 1780(a). A plaintiff must allege that he or she was damaged by an alleged unlawful practice. Dorfman v. Nutramax Labs., Inc., No. 13cv0873 WQH (RBB), 2013 WL 5353043, at *6 (S.D. Cal. Sept. 23, 2013).

         Plaintiffs allege that they purchased multiple pints of Halo Top ice cream that were underfilled. (FAC ¶¶ 48-52, 55-56, 58-61, 63-66, 70, 72-75 77-78, 81-83, 85.) Plaintiffs collectively allege that they relied on “the representation and common understanding that the container would contain a pint of Halo Top ice cream” when purchasing the ice cream and they “would not have paid as much to purchase [the Halo Top ice cream containers], or would not have purchased them at all” if they had known the containers were underfilled. (Id. ¶¶ 46-47.) These allegations suffice to establish Plaintiffs' Article III standing as well as the standing of Plaintiffs Kamal, Neely and Lichten to sue under California's UCL, FAL, and CLRA.[4] Reid, 780 F.3d at 958 (concluding that consumer had standing when he alleged that he paid more for a product than he otherwise would have paid by relying on an alleged misrepresentation on a product label); Ivie v. Kraft Foods Global, Inc., No. C-12-02554-RMW, 2013 WL 685372, at *4 (N.D. Cal. Feb. 25, 2013).

         Defendants, however, contend that Plaintiffs lack standing because “they fail to allege facts suggesting that Defendants caused any products to be under-filled” and, instead, the FAC “indicates that the alleged under-filling, if any, is caused by third parties.” (ECF No. 16 at 5.) In other words, Defendants contend that Plaintiffs fail the Article III requirement that an alleged injury be “fairly traceable” to the defendant. See Wash. Envtl. Council v. Bellon, 732 F.3d 1131, 1141-42 (9th Cir. 2013). The UCL and CLRA similarly require a causal connection between a plaintiff's alleged economic injury and the defendant's alleged conduct. See Antman v. Uber Techs., Inc., No. 3:15-CV-01175, 2015 WL6123054, *11 (N.D. Cal. Oct. 19, 2015) (UCL claim requires causation); Hale v. Sharp Healthcare, 108 Cal.Rptr.3d 669, 680 (Cal.Ct.App. 2010) (CLRA requires causation as well). The Court readily rejects Defendants' causation challenge.

         Plaintiffs allege that Eden Creamery-not third parties-allegedly underfills its pints and that Defendants are the source of the allegedly deceptive and misleading pint representations. (FAC ¶¶ 1, 3-4, 33-34, 36-37, 43, 45, 88, 90-92, 95.) The Court must treat these factual allegations as true. For reasons the Court discusses in its analysis of the pleadings, Plaintiffs have also plausibly alleged deceptive and misleading representations. Defendants' causation challenge otherwise repackages under the label of standing Defendants' merits argument that Eden Creamery makes only full pints of Halo Top ice cream. This argument is premised on factual matter that is both not alleged in and contradicts the FAC's express allegations. As such, Defendants' argument is not proper at the motion to dismiss stage. Accordingly, the Court concludes that Plaintiffs have standing under Article III, the UCL, and CLRA to challenge Defendants' conduct for the allegedly underfilled pints Plaintiffs purchased.

         2. Standing to Assert Claims for Unpurchased Pints

         Defendants also argue that Plaintiffs lack standing to assert claims relating to Halo Top “ice cream products” that Plaintiffs did not purchase. (ECF No. 14-1 at 22; ECF No. 16 at 9.) The Court rejects Defendants' argument.

         Whether a plaintiff has standing to sue for products the plaintiff did not purchase turns on the nature of the differences between the purchased and unpurchased products as well as the conduct challenged. A plaintiff lacks standing to assert claims related to products he or she did not purchase when there are “significant differences” between the products the plaintiff alleges he or she purchased and the unpurchased products. Dysthe v. Basic Res. LLC, No. CV 09-8013 AG (SSx), 2011 WL 5868307, at *4-5 (C.D. Cal. June 13, 2011). But “[a] plaintiff has standing for claims relating to products that she did not purchase if the ‘products are the same kind, . . . comprised of largely the same ingredients, and . . . bear[ ] the same alleged mislabeling.'” Alvarez v. NBTY, Inc., No. 17-cv-00567-BAS-BGS, 2017 WL 6059159, at *8 (S.D. Cal. Dec. 6, 2017) (quoting Hunter v. Nature's Way Prods., LLC, No. 16-cv-532-WQH-BLM, 2016 WL 4262188, at *14 (S.D. Cal. Aug. 12, 2016)); Holt v. Foodstate, Inc., No. 15-cv-78 L (JMA), 2015 WL 9592534, at *3 (S.D. Cal. Dec. 31, 2015); Dorfman, 2013 WL 5353043, at *6. Even products with some variation in the constituent ingredients may be deemed “substantially similar” for standing purposes when the same wrongful conduct by the defendant embraces both products. Vasic v. PatentHealth, L.L.C., 171 F.Supp.3d 1034, 1044 (S.D. Cal. 2016).

         Plaintiffs readily fall within the circumstances in which a plaintiff has standing for unpurchased products. Plaintiffs allege that “in all material aspects regarding the amount of ice cream in the container, every Halo Top pint label is the same” and everyone “understand[s] the container to contain a pint of ice cream.” (FAC ¶ 39.) And Plaintiffs' allegations of allegedly underfilled pints encompass Halo Top pints that cut across multiple flavors and locations. (Id. ¶¶ 48-52, 55-56, 58-61, 63-66, 70, 72-75 77-78, 81-83, 85.) At this stage, the Court can discern no reason why allegedly underfilled Halo Top pints Plaintiffs did not purchase fall outside the scope of Plaintiffs' claims regarding allegedly deceptive and misleading labeling, advertising, and marketing of the Halo Top pint. To the extent Defendants' true concern is about non-pint Halo Top ice cream products, such a concern is unwarranted because, by definition, Plaintiffs' claims concern Halo Top ice cream pint products. Accordingly, at this stage, Plaintiffs have adequately shown their standing to assert claims for allegedly underfilled Halo Top ice cream pints they did not purchase.

         B. FDCA Preemption of Plaintiffs' State Law Claims

         Defendants argue that Plaintiffs' claims are preempted because Eden Creamery's products comply with a Food and Drug Administration (“FDA”) regulation that implements the Food, Drug and Cosmetics Act (“FDCA”), 21 U.S.C. § 301 et seq., as amended by the Nutrition, Labeling, and Education Act in 1990. (ECF No. 14-1 at 5-9.) Preemption is an affirmative defense on which Defendants bear the burden. See Holt, 2015 WL 9592534, at *3; Trazo v. Nestle USA, Inc., No. 5:12-cv-2272-PSG, 2013 WL 4083218, at *6 (N.D. Cal. Aug. 9, 2013). Because Defendants bear the burden on their preemption defense, the Court will not undertake a searching inquiry to find that Plaintiffs' ...

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