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Clark v. The Hershey Co.

United States District Court, N.D. California

November 15, 2019

HOWARD CLARK, TODD HALL, ANGELA PIRRONE, individually and on behalf of all others similarly situated, Plaintiffs,
v.
THE HERSHEY COMPANY, a Delaware corporation, Defendant.

          ORDER RE MOTION FOR SUMMARY JUDGMENT AND CLASS CERTIFICATION

          WILLIAM ALSUP, UNITED STATES DISTRICT JUDGE.

         INTRODUCTION

         In this food-mislabeling case, defendant moves for summary judgment to dismiss all plaintiffs' claims. For the following reasons, the motion is Granted.

         STATEMENT

         Defendant The Hershey Company sells small ball-shaped dark chocolates with a fruit-flavored center called “Brookside Dark Chocolate.” Each of the Brookside products at issue in this action are sold in packages with labels that represent the product is made with “No Artificial Flavors.” These products contain malic acid, a synthetic chemical (SAC ¶¶ 6, 18).

         Plaintiff Howard Clark purchased the Brookside Dark Chocolate Acai & Blueberry Flavored Product between April and July 2018. Plaintiff Todd Hall purchased the Brookside Dark Chocolate Pomegranate Flavored Product, the Brookside Dark Chocolate Acai & Blueberries Flavored Product, and the Brookside Dark Chocolate Goji & Raspberry Flavored Product from around 2014 until approximately June 2018. Plaintiff Angela Pirrone purchased Brookside Dark Chocolate Acai & Blueberry Flavored Product and the Brookside Dark Chocolate Pomegranate Flavored Product from approximately March 2014 to August 2018 (SAC ¶¶ 63, 67, 71). Based on these facts, plaintiffs allege defendant's Brookside Dark Chocolate candy products violate California, New York, and federal statutes because the “No Artificial Flavors” labeling statement is false and misleading due to the presence of malic acid in the product.

         Plaintiffs filed their initial complaint in October 2018. The operative complaint, filed in March 2019 alleges twelve claims, including (1) fraud by omission, Cal. Civ. Code §§ 1709-1710, (2) negligent misrepresentation, Cal. Civ. Code §§ 1709-1710, (3) violation of California's Consumers Legal Remedies Act (CLRA), Cal. Civ. Code §§ 1750, et seq., (4) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq., (5) violation of California's False Advertising Law, Cal. Bus. & Prof. Code §§ 17500, et seq., (6) breach of express and implied warranties, Cal. Com. Code §§ 2313 and 2314, (7) violations of §§ 349 and 350 of New York General Business Laws, and (8) claims for breach of express and implied warranties under New York U.C.C. §§ 2-313 and 2-314.

         In December 2018, defendant filed a motion to dismiss on the ground plaintiffs failed to state particularized facts that the products use malic acid as an “artificial flavor” for many distinctly flavored products rather than for its actual use as a pH control aid. The motion was treated as a summary judgment motion under Rule 12(d) and denied given the genuine dispute as to whether malic acid acts as a flavoring agent in the Brookside products (Dkt. Nos. 18, 44, 84). In September 2019, plaintiffs moved for class certification. Two weeks later defendant filed the instant summary judgment motion. This order follows full briefing and oral argument.

         ANALYSIS

         Under Rule 56(a), a movant is entitled to summary judgment if “there is no genuine dispute as to any material fact.” A fact is material when it affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Although the moving party bears “the initial burden of production and the ultimate burden of persuasion” on summary judgment, Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 210 F.3d 1099, 1102 (9th Cir. 2000), once it has discharged that burden, the nonmovant must “go beyond the pleadings and . . . designate specific facts showing there is a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986) (internal citation and quotation marks omitted). The nonmoving party's evidence must be sufficient such that the record, taken as a whole, could support a rational trier of fact in finding for the nonmoving party on that issue. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). If conflicting inferences may be drawn from the facts, the case must go to the jury.” LaLonde v. Cnty. Of Riverside, 204 F.3d 947, 959 (9th Cir. 2000).

         1. Artificial Flavor.

         As an initial matter, there is a distinction between the terms artificial ingredient and artificial flavor. Plaintiffs cite to various decisions in our district and from the United States District Court for the Southern and Central Districts of California to argue that the two terms are interchangeable. Not so. Although our court of appeals hasn't yet provided any guidance regarding the two terms, FDA regulations define artificial flavor as “any substance, the function of which is to impart flavor.” “Artificial ingredients, ” by contrast, cover a wider range of substances. See 7 C.F.R. § 205.2. Put another way, artificial ingredients include all artificial flavors but artificial flavors do not include all artificial ingredients. For example, erythrosine is a red, artificial compound that is used for food coloring. Erythrosine would be classified as an artificial ingredient. It would not, however, be classified as an artificial flavor because it is flavorless and accordingly, not used to impart flavor in a product.

         In the instant case, plaintiffs have alleged that each of the Brookside products in question “contain an artificial flavoring ingredient called d-1 malic acid.” The crux of plaintiffs' argument based on their second amended complaint is that they were misled by the “No Artificial Flavors” label into believing the products were “flavored only with natural ingredients” (SAC ¶¶ 6-7).

         2. Injury and Causation.

         The California consumer protection laws under which plaintiffs raises claims under allow remedies only to consumers who suffer an injury as a result of the alleged misconduct. An injury can occur in instances where a consumer was deceived by a product's label into spending money to purchase the product he would not have otherwise purchased. Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 317 (2011). An injury can also occur in instances where the product purchased costs more than similar products without misleading labeling. Koh v. S.C. Johnson & Son, Inc., No. C-09-00927 RMW, 2010 WL 94265, at *2 (N.D. Cal. Jan. 6, 2010). Causation is also a necessary element under California law. Specifically, plaintiff must demonstrate that he or she would not have bought the product but for the misrepresentation. Kwikset at 330. The New York laws plaintiffs raise their claims under similarly provide remedies only to consumers who are injured “by reason of” the alleged mislabeling but does not explicitly require reliance. New York GBL§ 349(h).

         A. Plaintiff Clark.

         Plaintiff Howard Clark, a California resident, claims he suffered an injury as a result of the alleged product mislabeling because he would not have purchased the Brookside products if had known the product contained d-1 malic acid. He stated in his April 2019 deposition:

Q: Now, you've alleged in this lawsuit that you would not have purchased the product, or you would have paid less if you had known that there was DL malic acid in ...

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