United States District Court, N.D. California
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
PLAINTIFF'S FIRST AMENDED COMPLAINT; AFFORDING PLAINTIFF
LEAVE TO AMEND; GRANTING DEFENDANT NESTLÉ USA'S
MOTION TO STRIKE; CONTINUING CASE MANAGEMENT CONFERENCE Re:
Dkt. Nos. 36, 38
M. Chesney United States District Judge.
the Court are two motions, both filed May 23, 2019: (1) a
Motion to Dismiss Plaintiff's First Amended Complaint,
filed jointly by all defendants to the instant action,
pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure; and (2) a Motion to Strike Portions of the First
Amended Complaint, filed by defendant Nestlé USA, Inc.
(“Nestlé” or “Nestlé
USA”), pursuant to Rule 12(f) of the Federal Rules of
Civil Procedure. Plaintiff Mark Beasley
(“Beasley”) has filed opposition to each said
motion, to which defendants have replied. Having read and
considered the papers filed in support of and in opposition
to the motions, as well as the parties' respective
objections filed in connection therewith, the Court rules as
instant case is a putative class action lawsuit brought by
Beasley, a California citizen, as a purchaser and consumer of
Coffee-mate, a line of coffee-creamer products. Beasley
alleges Nestlé “manufactures, markets, and
sells” Coffee-mate. (See First Am. Compl.
(“FAC”), filed Dec. 19, 2018, ¶ 3.) He also
alleges that four retailers, namely, defendants Lucky Stores,
Inc. (“Lucky”), Save Mart Super Markets
(“Save Mart”), Save Mart Companies, Inc.
(“SMCI”), and The Kroger Company
(“Kroger”), “sold Coffee-mate at their
grocery stores throughout California” (see id.
¶ 4) and that, during the class period, he purchased
Coffee-mate from grocery stores owned by said retailers (the
“retailers” or “retailer
to Beasley, Coffee-mate, during the class period, contained
partially hydrogenated oil (“PHO”), which is an
“[a]rtificial” form of trans fat (see
id. ¶ 20) and an “unsafe food additive”
(see id. ¶ 3). In addition, Beasley alleges
that, for portions of the class period, Coffee-mate's
labels bore “unauthorized nutrient content
claims” (see Id. ¶ 79), namely, “0g
Trans Fat” and/or “IT'S GOOD TO KNOW: 0g
TRANS FAT/SERV . . .” (the “‘0g Trans
Fat' statements” or “‘0g Trans Fat'
claim(s)”) (see id. ¶ 76; see also
Id. ¶¶ 8, 79), and that “[t]his language
was part of an intentional, long-term campaign to deceptively
market Coffee-mate as healthful and free of trans fat”
(see id. ¶ 77).
on the above allegations, Beasley, on October 29, 2018, filed
his initial complaint in the Superior Court of California, in
and for the County of San Francisco.
November 26, 2018, defendants removed the case to federal
December 19, 2018, Beasley filed the FAC, in which he asserts
six Causes of Action, brought both individually and on behalf
of the following two putative classes: (1) a “Class,
” defined as “[a]ll citizens of California who
purchased in California, on or after January 1, 2010,
Coffee-mate products containing [PHO]” (see
FAC ¶ 149); and (2) a “0g Trans Fat Claim
Subclass, ” defined as “[a]ll citizens of
California who purchased in California, on or after January
1, 2010, Coffee-mate containing the nutrient content claim
‘0g Trans Fat' and containing [PHO]” (see
first two Causes of Action, brought on behalf of Beasley and
the “Class, ” challenge defendants'
manufacturing and distribution of Coffee-mate on the basis
that it contains PHO (collectively, the “use
claims”). Said causes of action are predicated on,
respectively, the “unfair” and
“unlawful” prongs (see id. at 27:16
& 28:1) of California's “Unfair Competition
Law” (“UCL”), Cal. Bus. & Prof. Code
§§ 17200 et seq., and “Breach of
Implied Warranty of Merchantability” (see id.
last four Causes of Action, brought on behalf of Beasley and
the “Subclass, ” challenge defendants'
manufacturing and distribution of Coffee-mate on the basis of
the “0g Trans Fat” statements (collectively, the
“labeling claims”). Said causes of action are
predicated on, respectively, the “unlawful, ”
“fraudulent, ” and “unfair” prongs
(see id. at 30:12, 32:18, & 33:3) of the UCL,
violation of California's “False Advertising
Law” (“FAL”), Cal. Bus. & Prof. Code
§§ 17500 et seq. (see id. at
33:23), “Breach of Express Warranty” (see
id. at 34:6), and California's “Consumer Legal
Remedies Act” (“CLRA”), Cal. Civ. Code
§§ 1750 et seq. (see id. at
instant motion to dismiss, defendants seek an order
dismissing the above-titled action. By the instant motion to
strike, Nestlé seeks an order striking paragraphs of
the FAC alleging it has a “pattern and practice”
of misconduct toward consumers. (See Def.
Nestlé's Mot. to Strike (“Nestlé
Mot.”) at 2:21; see also FAC ¶ 82.)
noted, defendants bring two separate motions. The Court will
begin with defendants' joint motion to dismiss, then turn
to Nestlé's motion to strike.
Motion to Dismiss
challenge Beasley's claims on a number of grounds, some
of which apply to a subset of such claims and/or defendants.
In particular, defendants contend the use claims are both
preempted and fail on their merits, that all of the labeling
claims are barred by statutes of limitations and equitable
principles, and that some of the labeling claims fail for
lack of a showing of reliance. In addition, defendants
contend the FAC, as a whole, fails to meet the heightened
pleading requirements for fraud and that, as to the
retailers, Beasley has failed to allege any actionable
under Rule 12(b)(6) of the Federal Rules of Civil Procedure
“can be based on the lack of a cognizable legal theory
or the absence of sufficient facts alleged under a cognizable
legal theory.” See Balistreri v. Pacifica Police
Dep't, 901 F.2d 696, 699 (9th Cir. 1990). Rule
8(a)(2), however, “requires only 'a short and plain
statement of the claim showing that the pleader is entitled
to relief.'” See Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (quoting Fed.R.Civ.P.
8(a)(2)). Consequently, “a complaint attacked by a Rule
12(b)(6) motion to dismiss does not need detailed factual
allegations.” See id. Nonetheless, “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.” See id.
(internal quotation, citation, and alteration omitted).
analyzing a motion to dismiss, a district court must accept
as true all material allegations in the complaint and
construe them in the light most favorable to the nonmoving
party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896,
898 (9th Cir. 1986). “To survive a motion to dismiss, a
complaint must contain sufficient factual material, 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).
“Factual allegations must be enough to raise a right to
relief above the speculative level[.]”
Twombly, 550 U.S. at 555. Courts “are not
bound to accept as true a legal conclusion couched as a
factual allegation.” See Iqbal, 556 U.S. at
678 (internal quotation and citation omitted).
that defendants challenge the FAC on numerous grounds, and
that the parties' objections pertain not only to such
grounds but to the motion to dismiss more generally, the
Court begins by addressing the objections.
noted, both parties have filed objections in connection with
the instant motion. In that regard, Beasley objects to
defendants' reply brief on multiple grounds, namely, that
defendants: (1) have “evaded their page limit” of
15 pages, by including “nearly five pages” of
footnotes (see Pl.'s Objs. to Defs.' Reply,
filed Jun. 17, 2019, at 1:3-4); (2) “make new arguments
on reply” (see id. at 1:12), with respect to
preemption and tolling; and (3) “misstate” a
decision cited therein (see id. at 2:10).
Defendants, in turn, object to Beasley's objection, and
ask that it be stricken, on the basis that it “makes
numerous legal arguments” and, consequently, is
“an improper sur-reply.” (See Defs.'
Obj. to Pl.'s Obj., filed Jun. 18, 2019, at 1:4-5.)
the applicable local rule, “[u]nless the Court
expressly orders otherwise pursuant to a party's request
. . ., the reply brief or memorandum may not exceed 15 pages
of text.” See Civ. L. R. 7-4(b). “Text .
. . must be double-spaced with no more than 28 lines per
page, except for” specified elements, including
“footnotes.” See id. 3-4(c)(2). In
addition, “[o]nce a reply is filed, ” absent an
applicable exception, “no additional memoranda, papers
or letters may be filed without prior Court approval.”
See id. 7-3(d) (setting forth, as exceptions,
“new evidence . . . submitted in the reply” and
“a relevant judicial opinion published after the date
the opposition or reply was filed”).
outset, the Court notes that Beasley's response to the
reply is, although titled “Objections, ” more
properly characterized as a sur-reply, as it primarily
consists of substantive legal arguments, and, as defendants
point out, Beasley neither sought nor obtained permission to
file a sur-reply. Further, as such sur-reply includes no
objection to newly submitted evidence or any notice of newly
decided legal authority, neither exception to Civil Local
Rule 7-3(d) applies. Nevertheless, the Court declines to
strike said submission, particularly when, as discussed
below, defendants' own filing is not fully in accordance
with the local rules.
defendants' reply may technically comply with Civil Local
Rule 7-4(b), as it contains 15 pages of text, exclusive of
the signature page, it contains 19 footnotes totaling 132
lines, which, at 28 lines per page, comes to 4.7 pages.
Moreover, nearly all of the footnotes contain substantive
legal argument, many at great length. (See, e.g.,
Reply at 2 n.1, 10 n.14.) Under such circumstances,
defendants' use of footnotes in the reply is
inappropriate, and, to the extent defendants have raised
arguments in the reply either for the first time or only in
footnotes, the Court has not considered them. See Estate
of Saunders v. Comm'r of Internal Revenue, 745 F.3d
953, 962 n.8 (9th Cir. 2014) (holding “[a]rguments
raised only in footnotes, or only on reply, are generally
deemed waived”). Lastly, to the extent Beasley asserts
defendants have mischaracterized any cases, the Court, having
read those cases, can assess for itself the accuracy of
defendants' description without need of further filings.
Court next considers Beasley's use and labeling claims.
Use Claims: First and Second Causes of Action
contend Beasley's use claims, which arise under state
law, are barred by the doctrine of conflict preemption. In
support thereof, defendants cite to this Court's decision
in Backus v. Nestlé USA, Inc., a related case
in which the Court found the use claims alleged therein,
which likewise challenged the use of PHO in Coffee-mate,
preempted. See Backus, 167 F.Supp.3d 1068, 1074
(N.D. Cal. 2016).
preemption applies where “compliance with both federal
and state regulations is a physical impossibility” or
where state law “stands as an obstacle to the
accomplishment and execution of the full purposes and
objectives of Congress, ” see Ting v.
AT&T, 319 F.3d 1126, 1136 (9th Cir. 2003) (internal
quotations and citations omitted); see also Geier v.
American Honda Motor Co., Inc., 529 U.S. 861, 873-75
(2000) (holding conflict preemption applies to lawsuits that
“prevent or frustrate the accomplishment of a federal
objective”; finding “common-law ‘no
airbag'” claim preempted where, based on various
objectives, Department of Transportation (“DOT”)
regulation provided vehicle manufacturers with range of
choices among different passive restraint devices).
“Parties seeking to invalidate a state law based on
preemption bear the considerable burden of overcoming the
starting presumption that Congress does not intend to
supplant state law.” See Stengel v. Medtronic,
Inc., 704 F.3d 1224, 1227 (9th Cir. 2013) (en banc)
(internal quotation and citation omitted).
as noted, Beasley's use claims are predicated on the
“unfair” and “unlawful” prongs of the
UCL (see FAC at 27:16 & 28:1) and on breach of
the implied warranty of merchantability (see id. at
29:18),  the same theories on which the use claims
in Backus were predicated (see Case No. C
15-1963, First Am. Compl., filed June 26, 2015, at 29:6
(alleging use of PHO violated “unfair prong” of
UCL); id. at 30:2 (alleging use of PHO violated
“unlawful prong” of UCL); id. at 31:9
(alleging use of PHO violated “implied warranty of
merchantability”)). As also noted, the Court, in
Backus, determined the use claims were preempted,
see Backus, 167 F.Supp.3d at 1074, and, as discussed
below, Beasley has provided the Court with no reason to alter
its prior determination.
relevant federal law is the Food, Drug, and Cosmetic Act
(“FDCA”), which prohibits, inter alia,
“[t]he introduction or delivery for introduction into
interstate commerce of any food . . . that is adulterated,
” see 21 U.S.C. § 331(a), and
“[t]he receipt in interstate commerce of any food . . .
that is adulterated . . ., and the delivery or proffered
delivery thereof, ” see id. § 331(c). A
food is deemed adulterated “if it is or if it bears or
contains . . . any food additive that is unsafe within the
meaning of section 348 of this title [21 U.S.C. § 348],
” see id. § 342(a)(2)(C)(i). A food
additive, in turn, is deemed unsafe unless, in pertinent
part, it complies with “a regulation issued under this
section [21 U.S.C. § 348] prescribing the conditions
under which such additive may be safely used.” See
id. § 348(a)(2).
17, 2015, the FDA published a final determination and
declaratory order, finding “there is no longer a
consensus among qualified experts” that PHOs “are
generally recognized as safe (GRAS) for any use in human
food, ” see Final Determination Regarding
Partially Hydrogenated Oils (“Final
Determination”), 80 Fed. Reg. 34650-01, 34650 (June 17,
2018), and that, as a result, PHOs “are food additives
subject to” 21 U.S.C. § 348, see id.
Pursuant to said order, the FDA “require[d]
discontinuation of the use of” PHOs, see id.
at 34656, and set a “compliance date” of June 18,
2018, see id. at 35653, 34668-69 (explaining
three-year compliance deadline would provide time for
“submission and review of food additive
petitions” for PHOs and time to address challenges in
“reformulat[ing] products to remove
Congress passed the Consolidated Appropriations Act for 2016,
which provides that “[n]o [PHOs] as defined in the
[Final Determination] shall be deemed unsafe within the
meaning of section 409(a) [21 U.S.C. § 348(a)] and no
food that is introduced or delivered for introduction into
interstate commerce that bears or contains a [PHO] shall be
deemed adulterated under section . . . 402(a)(2)(C)(i) [21
U.S.C. § 342(a)(2)(C)(i)] by virtue of bearing or
containing a [PHO] until the compliance date as specified in
such order (June 18, 2018).” Consol. Appropriations
Act, 2016, Pub. L. 114-113 § 754, 129 Stat. 2242 (Dec.
18, 2015) (“§ 754”).
Beasley's use claims challenge the sale of PHO-containing
Coffee-mate, “on or after January 1, 2010.”
(See FAC ¶ 149.) As in Backus, such
claims “would effectively negate the FDA's order
setting a compliance date in 2018, ” see
Backus, 167 F.Supp.3d at 1072, and “conflict with
Congress's decision not to deem PHOs unsafe, or the food
containing them adulterated, pending the June 18, 2018,
compliance date set by the FDA, ” see id. at
1074. Beasley's arguments to the contrary are not
outset, as defendants point out, Beasley reiterates a number
of arguments made in Backus. In particular, Beasley
relies on the “presumption against preemption”
(see Opp'n at 12:7) and contends that: (1) the
FDA, in the Final Determination, “disclaimed preemption
of state prohibitions or limits on PHO use” (see
id. at 13:4-5); (2) the FDA, having determined PHO is
not GRAS, “lack[ed] the statutory authority to . . .
authorize the sale of PHO” (see id. at 13:12)
(emphasis omitted) and, consequently, the compliance period
entailed “a question of enforcement discretion, not
legality” (see id. at 13:11); (3) § 754
merely “regulate[s] what the FDA may do between the
date of its passage, December 15, 2015[, ] and June 18,
2018” (see id. at 11:2-3); and (4) § 754
does not “apply retroactively, ” i.e., prior to
the Final Determination (see id. at 11:12). In
Backus, the Court, while acknowledging the
presumption against preemption, see Backus, 167
F.Supp.3d at 1070-71, nonetheless found the use claims
preempted. In reaching such conclusion, the Court expressly
rejected the first two arguments set forth above, as to the
FDA's asserted disclaimer and lack of authority, see
id. at 1073 (noting FDA “‘declined to take a
position'” as to preemptive effect of Final
Determination; finding argument FDA lacked authority to
authorize use of PHO “mooted” by enactment of
§ 754, “by which Congress essentially
ratified” Final Determination), and implicitly rejected
the latter two arguments, as to the scope of § 754.
Beasley has not provided the Court with any authority or
other reason to suggest its conclusion in Backus was
incorrect or that it should reach a different conclusion in
the instant case. First, to the extent Beasley now argues the
existence of federal regulations “permitting a food is
not grounds for conflict preempting a state law that imposes
heavier regulations or prohibits the same food”
(see Opp'n at 8:2- 3), the cases he cites in
support of such proposition are inapposite, as each said case
considered whether a broadly applicable federal law governing
an industry preempted a narrower state law prohibiting
specific conduct not encompassed by the broader statute.
See, e.g., Ass'n des Éleveurs de
Canards et d'Oies du Québec v. Becerra, 870
F.3d 1140, 1153 (9th Cir. 2017) (finding no conflict between
federal poultry law regulating establishments where slaughter
and processing occur and state law prohibiting force-feeding
ducks and geese); Chinatown Neighborhood Ass'n v.
Harris, 794 F.3d 1136, 1139-43 (9th Cir. 2015) (finding
no conflict between federal law vesting “exclusive
fishery management authority” in federal government and
state law making it a misdemeanor to sell detached shark fins
within state). The instant case, by contrast, presents the
inverse of such circumstances, a situation where the
plaintiff relies on a broadly applicable state law to
challenge specific conduct expressly permitted under federal
Beasley's reliance on Hawkins v. Kroger Co.,
2019 WL 1506845 (S.D. Cal. 2019), is misplaced. In
Hawkins, as in the instant case, the plaintiff
brought both use and labeling claims, challenging the use of
PHO in a food product and the “0g Trans Fat”
statement on the packaging. See id. at *1. Although,
as Beasley points out, the Ninth Circuit found the
plaintiff's “label claims are not preempted,
” and instructed the district court to consider, on
remand, “whether the use claims are preempted, ”
see Hawkins v. Kroger Co., 906 F.3d 763, 773 (9th
Cir. 2018) (noting “[t]he preemption issue was not
fully briefed on appeal”), the district court's
decision on remand appears to address preemption only with
respect to the labeling claims, see Hawkins, 2019 WL
1506845, at *4 (holding “0g Trans Fat” statement
“made outside the nutrition label is not
preempted”; distinguishing, as a “line of
authority address[ing] a different issue than that before the
court, ” cases holding use claims preempted). In any
event, even assuming the district court did conclude the use
claims were not preempted, this Court, for the reasons stated
above, disagrees. Moreover, numerous other district courts,
faced with similar arguments as those presented here, have
likewise found claims challenging the use of PHO preempted.
See, e.g., Beasley v. Conagra Brands, Inc.,
374 F.Supp.3d 869, 874- 78 (N.D. Cal. 2019) (holding conflict
preemption barred UCL and implied warranty of merchantability
claims challenging use of PHOs in popcorn snack prior to June
18, 2018; rejecting plaintiff's arguments as to
presumption, enforcement discretion, and scope of §
754); Backus v. General Mills, Inc., 2018 WL
6460441, at *3-6 (N.D. Cal. 2018) (holding conflict
preemption barred UCL claims challenging use of PHO in baking
mix products; rejecting plaintiff's arguments as to
presumption and scope of § 754); Backus v.
Biscomerica Corp., 2017 WL 1133406, at *2-4 (N.D. Cal.
2017) (holding conflict preemption barred UCL claims
challenging use of PHO in packaged cookies; rejecting
plaintiff's arguments as to enforcement discretion and
FDA's view regarding preemptive effect of Final
faced with the same type of use claims, the same regulatory
and statutory framework, and, by and large, the same
arguments, the Court concludes Beasley's use claims, like
those in ...