Milan v. Clif Bar & Company ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RALPH MILAN et al., Case No. 18-cv-02354-JD 8 Plaintiffs, ORDER RE MOTION FOR 9 v. JUDGMENT ON THE PLEADINGS AND SETTING DISCOVERY 10 CLIF BAR & COMPANY, HEARING 11 Defendant. Re: Dkt. No. 46 12 In this putative consumer class action, plaintiffs Ralph Milan, Sarah Aquino and Elizabeth 13 Arnold challenge the “health and wellness message[s]” on defendant Clif Bar & Company’s “Kid 14 Zbars” and “‘Classic’ Clif Bars.” In plaintiffs’ view, the messages are “deceptive because they are 15 incompatible with the dangers of the excessive sugar consumption to which the Products 16 contribute.” Dkt. No. 1 (“Compl.”) ¶¶ 2-3. The complaint alleges nine claims against Clif 17 including a claim under California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code 18 § 17200, and it seeks injunctive relief, a corrective advertising campaign, restitution and damages. 19 Id. ¶ 283. 20 The Court denied Clif Bar’s motion to dismiss because plaintiffs had “stated a claim and, 21 ‘given the opportunity, . . . could plausibly prove that a reasonable consumer would be deceived 22 by’ the Clif bars’ packaging.” Dkt. No. 37 at 4 (quoting Williams v. Gerber Products Co., 552 23 F.3d 934, 940 (9th Cir. 2008)). Clif answered the complaint, and now moves for a judgment on 24 the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure on two grounds. Clif 25 argues that (1) plaintiffs lack Article III standing for injunctive relief, and (2) the governing 26 choice-of-law analysis does not permit application of California law to a nationwide class, as 27 sought by plaintiffs. Dkt. No. 46. The motion is denied. 1 DISCUSSION 2 I. PLAINTIFFS’ STANDING FOR INJUNCTIVE RELIEF 3 Clif’s standing challenge is limited to plaintiffs’ request for injunctive relief, and it is based 4 on the circuit’s decision in Davidson v. Kimberly-Clark Corp., 889 F.3d 956 (9th Cir. 2018). Dkt. 5 No. 46 at 3-6. The point is not well taken. 6 To start, it is not at all clear why Clif Bar did not raise this during the prior motion to 7 dismiss proceedings. Davidson was published in October 2017 and amended on May 9, 2018. 8 That was before Clif Bar filed its motion on May 31, 2018, and before the hearing on the motion 9 in August 2018. Dkt. Nos. 19, 32. There is no good reason why Clif Bar waited until now to take 10 a stand on that case. In effect, it has given itself an improper successive motion to dismiss on 11 arguments it could, and should, have asserted in its prior motion. This is questionable litigation 12 conduct. 13 In any event, Clif Bar misreads the case. It says that Davidson set out “two tests for how a 14 previously deceived plaintiff could allege a threat of future harm.” Dkt. No. 46 at 3. It relies on 15 the underlined language from Davidson for this proposition: 16 It is an open question in this circuit to what extent a previously deceived consumer who brings a false advertising claim can allege that her inability 17 to rely on the advertising in the future is an injury sufficient to grant her Article III standing to seek injunctive relief. With no guidance from our 18 court, district courts applying California law have split dramatically on this issue. 19 . . . 20 We resolve this district court split in favor of plaintiffs seeking injunctive 21 relief. We hold that a previously deceived consumer may have standing to seek an injunction against false advertising or labeling, even though the 22 consumer now knows or suspects that the advertising was false at the time of the original purchase, because the consumer may suffer an “actual and 23 imminent, not conjectural or hypothetical” threat of future harm. Summers, 555 U.S. at 493. Knowledge that the advertisement or label was false in the 24 past does not equate to knowledge that it will remain false in the future. In some cases, the threat of future harm may be the consumer’s plausible 25 allegations that she will be unable to rely on the product’s advertising or labeling in the future, and so will not purchase the product although she 26 would like to. See, e.g., Ries, 287 F.R.D. at 533. In other cases, the threat of future harm may be the consumer’s plausible allegations that she might 27 purchase the product in the future, despite the fact it was once marred by sentiment that we are “not persuaded that injunctive relief is never available 1 for a consumer who learns after purchasing a product that the label is false.” Duran v. Creek, 2016 WL 1191685, at *7 (N.D. Cal. Mar. 28, 2016) 2 (emphasis added). 3 Davidson, 889 F.3d at 967, 969-70 (some internal citations omitted). 4 This is not the teaching of a two-test method, as Clif Bar would have it. The Court 5 provided the full context of Clif Bar’s selective references because it shows that the circuit was 6 simply offering two illustrations of how a plaintiff who has learned the hard way that a company’s 7 statements were deceptive can have standing under Article III to enjoin the deceptive practice. 8 After resolving that issue by holding that “a previously deceived plaintiff may have standing to 9 seek injunctive relief,” the circuit turned to whether the plaintiff in that case had adequately 10 alleged such standing. Davidson, 889 F.3d at 970-72. The circuit did not set out any definitive 11 tests for that inquiry, and its conclusion that Davidson had “adequately alleged that she faces an 12 imminent or actual threat of future harm due to Kimberly-Clark’s false advertising,” id. at 971, 13 was not tethered to a “two test” analysis. 14 If anything, Davidson amply demonstrates that plaintiffs may pursue injunctive relief 15 against Clif Bar. Clif Bar says that plaintiffs lack standing because they did “not allege any actual 16 desire to purchase Products in the future, stating instead ‘they would consider purchasing’ them.” 17 Dkt. No. 46 at 4 (quoting Compl. ¶ 207). But this contention is based on another 18 mischaracterization by Clif Bar, this time of the plain language in the complaint. The complaint 19 expressly alleges that plaintiffs “continue to desire to purchase healthy nutrition bars, and continue 20 to see the Clif Products when they shop”; plaintiffs “would purchase the challenged Clif Products 21 in the future if they were in fact healthy”; and they “would likely purchase the challenged Clif 22 Products if they could trust that the health and wellness claims were not false or misleading.” 23 Compl. ¶¶ 203-05. Why Clif Bar ignored this obvious language to make the argument it presses 24 for judgement on the pleadings raises additional troubling concerns about its tactics. 25 Substantively, plaintiffs’ allegations are indistinguishable from those upheld for injunctive 26 relief in Davidson. See 889 F.3d at 970-71 (“Davidson alleged that she ‘continues to desire to 27 purchase wipes that are suitable for disposal in a household toilet’; ‘would purchase truly 1 where [Kimberly-Clark’s] “flushable” wipes are sold’; and is continually presented with 2 Kimberly-Clark’s flushable wipes packaging”). The additional statement in the complaint that 3 plaintiffs “would consider purchasing the Products in the future” does not make a lick of 4 difference to plaintiffs’ express allegations that they would buy Clif Bar products again if the 5 company were honest in its health and wellness claims. 6 Clif Bar also suggests that plaintiffs cannot establish “a sufficient likelihood that [they] 7 will again be wronged in a similar way,” Davidson, 889 F.3d at 971 (quoting Lyons, 461 U.S. at 8 111), because “Plaintiffs’ new understandings regarding the impact of sugar on their bodies means 9 that they [now] know to review the Products’ Nutrition Facts panel for the accurately declared 10 amounts of total and added sugars.” Dkt. No. 46 at 5. In effect, this is a rather cynical application 11 of the old adage, “fool me once, shame on you; fool me twice, shame on me.” The problem for 12 Clif Bar is that plaintiffs have called into plausible question all of its health and nutrition 13 representations, and have alleged that they “will be unable to trust the representations on the Clif 14 Products” absent an injunction. Compl. ¶ 205. Consequently, the Court declines at this pleadings 15 stage of the case to conclude that plaintiffs cannot, as a matter of law, ever be deceived again by 16 Clif Bar. See Williams, 552 F.3d at 939 (consumers should not “be expected to look beyond 17 misleading representations on the front of the box to discover the truth from the ingredient list in 18 small print on the side of the box.”). 19 Davidson bolsters this result. On several occasions, the circuit cited with approval the 20 decision in Ries v. Arizona Beverages USA LLC, 287 F.R.D. 523 (N.D. Cal. 2012), which found 21 Article III standing for injunctive relief because the plaintiff had plausibly alleged that “she will be 22 unable to rely on the product’s advertising or labeling in the future, and so will not purchase the 23 product although she would like to.” Davidson, 889 F.3d at 969-70; see also id. at 971. As 24 Davidson states, the plaintiffs in Ries had alleged “that the defendants engaged in false advertising 25 by marketing their ‘AriZona Iced Tea’ beverages as ‘All Natural’ and ‘100% Natural’ even though 26 the product contained the non-natural ingredients high fructose corn syrup and citric acid.” 27 Davidson, 889 F.3d at 968. The Ries plaintiffs were allowed to seek an injunction against the “All 1 iced tea bottles’ list of ingredients. See Ries v. Arizona Beverages USA LLC, Case No. 10-1139- 2 RS (N.D. Cal.), Dkt. No. 1, Exs. A-C. Davidson favorably cites Ries as an example of a case in 3 which a plaintiff, despite now knowing that a product’s label was false at the time of purchase, 4 still “could not rely on [the same] representation with any confidence” going forward and so had 5 standing to seek injunctive relief. See Davidson, 889 F.3d at 971-72. So too, here. Defendant 6 Clif cannot so easily thwart plaintiffs from seeking an injunction, which is “the primary form of 7 relief available under the UCL to protect consumers from unfair business practices.” Machlan v. 8 Procter & Gamble Company, 77 F. Supp. 3d 954, 961 (N.D. Cal. 2015) (quoting In re Tobacco II, 9 46 Cal. 4th 298, 319 (2009)). 10 Clif Bar’s effort to escape a potential injunction on the basis of an FDA rule is equally 11 unavailing. Clif Bar says that it now “expressly call[s] out” added sugars in its Nutrition Facts 12 panel, in compliance with an FDA Final Rule that went into effect January 1, 2020. Dkt. No. 46 at 13 5-6. This representation is extrinsic to the complaint and not properly cognizable in a pleadings 14 motion. In addition, it goes to the merits of whether plaintiffs’ request for injunctive relief should 15 be granted, and if so, what the scope should be. The present issue of plaintiffs’ standing to seek 16 such relief in the first place is another matter altogether.1 17 II. APPLICATION OF CALIFORNIA LAW ON A NATIONWIDE CLASS 18 Clif Bar makes a second stab under Mazza v. American Honda Motor Co., Inc., 666 F.3d 19 581 (9th Cir. 2012), at barring plaintiffs from seeking to apply California law to a national class. 20 Dkt. No. 46 at 6-15. It made the same argument in a motion to strike plaintiffs’ nationwide class 21 allegations under Rule 12(f). Dkt. No. 20. The Court denied the request as premature. Dkt. No. 22 37 at 6 (“Clif’s motion appears to raise premature Rule 23 arguments that are not suited for 23 resolution on a Rule 12(f) motion.”). 24 Nothing has changed since then, and Clif Bar’s renewed request is effectively an improper 25 motion for reconsideration that is entirely unsupported by new facts or law. See Civil L.R. 7-9. 26 The choice-of-law issue is best resolved in this case at the class certification stage. That is 27 1 especially true now that class certification briefing is well underway, and plaintiffs have asked to 2 || reserve the choice-of-law analysis until a full record is presented with the certification motion. 3 Dkt. No. 51. That request makes good sense and will be the procedure followed here. 4 CONCLUSION 5 Judgment on the pleadings is denied. Dkt. No. 46. The Court sets a discovery hearing for 6 October 22, 2020, at 2 p.m., to resolve all pending discovery disputes in this case. For all 7 || discovery dispute letters for which no response has yet been filed, the opposing side may file a 8 || response by October 15, 2020. The parties are directed to file updates to their previously-filed 9 letters as appropriate, and they must jointly advise the Court if any of the discovery disputes have 10 || been resolved and no longer need the Court’s attention. The discovery hearing will be held by 11 Zoom webinar, and the Zoom information will be posted separately on the docket. 12 IT IS SO ORDERED. 13 Dated: September 28, 2020 14 15 JAMES JONATO = 16 United fftates District Judge 19 20 21 22 23 24 25 26 27 28