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Brown v. Starbucks Corporation

United States District Court, S.D. California

September 3, 2019

SANDRA BROWN, Plaintiff,
v.
STARBUCKS CORPORATION, Defendant.

          ORDER ON DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT

          JEFFREY T. MILLER UNITED STATES DISTRICT JUDGE.

         Defendant Starbucks Corporation (“Starbucks”) moves to dismiss and/or strike Plaintiff Sandra Brown's First Amended Complaint (“FAC”) pursuant to Rules 12(b)(6), 12(b)(2), and 12(f). (Doc. No. 16.) Plaintiff Sandra Brown opposes. (Doc. No. 17.) The court found this matter suitable for disposition without oral argument. (Doc. No. 20.) Having carefully considered the moving papers and parties' arguments, the court grants in part and denies in part Starbucks' motion to dismiss.

         BACKGROUND

         This is a putative class action lawsuit brought under the Class Action Fairness Act of 2005 (28 U.S.C. § 1332(d)) and arising out of Brown's purchase of fruit-flavored gummy candies. Brown asserts eight claims on behalf of herself and putative class members: (1) fraud by omission, (2) negligent misrepresentation, (3) violation of the California Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et seq. (“CLRA”), (4) violation of § 17200 of the California Business & Professions Code (“UCL”) for unlawful business practices, (5) violation of § 17200 of the UCL for unfair business practices, (6) violation of California's False Advertising Law, Business and Professions Code § 17500 et seq. (“FAL”), (7) breach of express warranties, and (8) breach of implied warranties. (Doc. No. 15, “FAC, ” ¶¶ 112-194.)

         Brown alleges the packaging of Starbucks' “Sour Gummies” product (the “Gummies”) falsely informs consumers that the candies only contain natural ingredients because the front packaging does not disclose the presence of artificial flavors. The front packaging states, “Apple, watermelon, tangerine and lemon flavored candies.” (FAC ¶ 9.)

         (Image Omitted)

         (FAC at 7, Figure 1.)[1] An ingredients list on the back packaging states that the Gummies contain “sugar, cornstarch, fumaric acid, citric acid, fruit juice concentrates (tangerine, apple, lemon), pectin, sodium citrate, color added (saffron, annatto, vegetable and spirulina extracts), natural flavors.” (FAC at 8, Figure 2.)

         (Image Omitted)

         When she purchased the Gummies, Brown sought a product that did not contain artificial flavors. (FAC ¶ 59.) Brown paid a price premium for the Gummies because she believed the product did not contain artificial ingredients and was willing to pay more for a product made with only natural ingredients. (FAC ¶ 71.)

         Brown alleges that California law required Starbucks to disclose on the front packaging that the Gummies contained artificial flavors. Brown alleges that Starbucks violated two federal Food and Drug Administration (“FDA”) regulations-21 C.F.R. § 101.22, which regulates the labelling of food containing artificial ingredients, and 21 C.F.R. § 102.5, which requires food labels to accurately identify and describe the basic nature of the food or its characterizing properties or ingredients. These FDA regulations are incorporated into California's Sherman Food, Drug, and Cosmetic Act (“Sherman Act”), Cal. Health & Safety Code § 109875 et seq. See Sherman Act § 110100 (“All food labeling regulations and any amendments to those regulations adopted pursuant to the federal acts in effect on January 1, 1993, or adopted on or after that date shall be the food regulations of this state.”). Brown relied on “the omission of the fact that this Product contained artificial flavoring” on the front packaging to conclude that the Gummies did not contain any artificial flavors. (FAC ¶ 82.) Starbucks does not concede these FDA regulations required it to disclose the use of artificial flavors on the front packaging as it argues this is an evidentiary matter Plaintiff must prove, but for purposes of its motion to dismiss, Starbucks “assumes that the requirement applies . . . .” (Doc. No. 16-1 at 10 n.1.) Accordingly, for purposes of this order, the court also assumes that Starbucks was required to prominently disclose the presence of artificial flavors on the Gummies' front packaging.

         LEGAL STANDARDS

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the legal sufficiency of the pleadings. To overcome such a motion, the complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Facts merely consistent with a defendant's liability are insufficient to survive a motion to dismiss because they establish only that the allegations are possible rather than plausible. Id. at 678-79. The court must accept as true the facts alleged in a well-pled complaint, but mere legal conclusions are not entitled to an assumption of truth. Id. The court must construe the pleading in the light most favorable to the non-moving party. Concha v. London, 62 F.3d 1493, 1500 (9th Cir. 1995).

         Under Federal Rule of Civil Procedure 9(b), a plaintiff must plead fraud with particularity. “Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 2003) (internal quotation marks omitted). Even if “fraud is not a necessary element of a [particular] claim, ” Rule 9(b) will apply if the plaintiff “allege[s] a unified course of fraudulent conduct and rel[ies] entirely on that course of conduct as the basis of [the] claim.” Id. at 1103.

         DISCUSSION

         Starbucks moves to dismiss Brown's complaint for failure to state a claim and for lack of personal jurisdiction over Starbucks for claims asserted by out-of-state class members. Starbucks also moves to strike Brown's nationwide class allegations. For the reasons discussed below, the court grants in part and denies in part these motions.

         A. CLRA, FAL, and UCL Claims

         The CLRA, FAL, and UCL are California consumer protection statutes. The UCL prohibits “unfair competition, ” which is defined as “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. Under the FAL, it is unlawful to make or disseminate any statement concerning property or services that is “untrue or misleading.” Id. ยง 17500. The CLRA prohibits ...


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