Jackson v. General Mills, Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 CHARLENE M. JACKSON, Case No.: 18cv2634-LAB (BGS) 12 Plaintiff, ORDER DENYING MOTION FOR 13 v. LEAVE TO AMEND; AND 14 GENERAL MILLS, INC., ORDER OF DISMISSAL 15 Defendant. [Docket number 27.] 16 17 Plaintiff Charlene Jackson originally filed this putative consumer class action 18 in San Diego Superior Court, and Defendant General Mills, Inc. removed on the 19 basis of diversity jurisdiction. Jackson alleges she bought a box of Annie’s Frosted 20 Oat Flakes cereal in Bakersfield in December of 2016. She earlier alleged that 21 she was surprised when she opened the box and discovered that the box was 22 between 30% and 50% empty, i.e., that it consisted of 30% to 50% “slack-fill.” 23 Slack-filled containers may violate Cal. Bus. & Prof. Code §§ 12606.2 (the 24 California Fair Packaging and Labeling Act, or CFPLA), though certain exceptions 25 apply. Jackson seeks to represent a class of California consumers who bought 26 this cereal. 27 Two motions to dismiss have already been filed in this case. The Court 28 granted the second motion in part, denying only the request to dismiss the entire 1 complaint with prejudice. The Court struck nationwide class allegations and 2 dismissed certain claims without leave to amend. As to certain claims, however, 3 the Court directed Jackson, if she thought she could successfully amend, to file a 4 motion for leave to amend, attaching her proposed second amended complaint 5 (“SAC”) as an exhibit. She has done so, and General Mills filed an opposition. 6 Legal Standards 7 Leave to amend may be denied if amendment would be futile, or where the 8 proposed amended complaint would be subject to dismissal. Wheeler v. City of 9 Santa Clara, 894 F.3d 1046, 1059 (9th Cir. 2018); see also Sisseton-Wahpeton 10 Sioux Tribe v. United States, 90 F.3d 351, 355 (9th Cir. 1996) (“The district court’s 11 discretion to deny leave to amend is particularly broad where plaintiff has 12 previously amended the complaint.”) 13 When determining whether a complaint states a claim, the Court accepts all 14 allegations of material fact in the complaint as true and construes them in the light 15 most favorable to the non-moving party. Cedars-Sinai Medical Center v. National 16 League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007) (citation 17 omitted). The Court does not weigh evidence or make credibility determinations. 18 Acosta v. City of Costa Mesa, 718 F.3d 800, 828 (9th Cir. 2013). At the same time, 19 the Court is “not required to accept as true conclusory allegations which are 20 contradicted by documents referred to in the complaint,” and does “not . . . 21 necessarily assume the truth of legal conclusions merely because they are cast in 22 the form of factual allegations.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 23 1136, 1139 (9th Cir. 2003) (citations and quotation marks omitted). Nor is the Court 24 required to accept unwarranted deductions of fact, or unreasonable inferences. 25 See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). 26 Mere “labels and conclusions” do not amount to factual allegations. Ashcroft 27 v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 28 U.S. 544, 555 (2007). 1 “Factual allegations must be enough to raise a right to relief above the 2 speculative level . . . .” Twombly, 550 U.S. at 555. “[S]ome threshold of plausibility 3 must be crossed at the outset” before a case is permitted to proceed. Id. at 558 4 (citation omitted). The well-pleaded facts must do more than permit the Court to 5 infer “the mere possibility of misconduct”; they must show that the pleader is 6 entitled to relief. Iqbal, 556 U.S. at 679. Allegations that are merely consistent with 7 liability are insufficient. Id. at 678. 8 To meet the ordinary pleading standard and avoid dismissal, a complaint 9 must plead “enough facts to state a claim to relief that is plausible on its face.” 10 Twombly, 550 U.S. at 570. But claims that sound in fraud, including those arising 11 under state law, must be pled with particularity. Fed. R. Civ. P. 9(b); Vess v. Ciba- 12 Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir. 2003). This includes alleging who 13 made various misrepresentations, how the misrepresentations were conveyed to 14 the plaintiff, and under what circumstances. See Cooper v. Pickett, 137 F.3d 616, 15 627 (9th Cir. 1998). 16 Under Fed. R. Civ. P. 12(f), the Court has discretion either sua sponte or on 17 the motion of a party, to strike “an insufficient defense or any redundant, 18 immaterial, impertinent, or scandalous matter.” The purpose of a motion to strike 19 is to “avoid the expenditure of time and money that must arise from litigating 20 spurious issues by dispensing with those issues prior to trial.” Sidney-Vinstein v. 21 A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). 22 The Court is also obligated to examine its own jurisdiction, including 23 jurisdictional issues such as standing; it must do this sua sponte if necessary. See 24 Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 954 (9th Cir. 2011) (en banc). 25 Previous Judicial Notice 26 The Court has previously taken notice of certain facts, at Jackson’s request, 27 of the ordinary properties of cereal boxes, the flexible plastic bags that line them, 28 and breakfast cereal. These are generally known, particularly among consumers 1 who buy cereal. If it were otherwise, the Court held, consumers could not have 2 reasonable expectations about the cereal they were buying. 3 Among the well-known properties of plastic liner bags in cereal boxes is the 4 fact that they conform to the shape of the boxes. When their shape is changed in 5 some way, the cereal moves around and the level of cereal in the bag changes 6 too. For example, if cereal boxes and bags are squeezed or manipulated, the level 7 of cereal will be lower than it would be in an average box on a supermarket shelf. 8 It is also common knowledge that cereal tends to settle more if it is shaken or 9 handled. 10 The Court has already taken notice of two articles Jackson offered, and may 11 consider images of cereal boxes Jackson has incorporated into the complaint. See 12 Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (citing Branch v. Tunnell, 13 14 F.3d 449, 454 (9th Cir. 1994)) (holding that district court properly considered 14 full text of documents quoted in part in the complaint, without converting motion to 15 dismiss into motion for summary judgment). 16 In addition, the Court has taken notice of relevant sections of the Federal 17 Register dealing with slack-fill in packaging. See Hadley v. Kellogg Sales Co., 243 18 F. Supp. 3d 1074, 1087 (N.D. Cal., 2017). These are discussed below. 19 Discussion 20 Slack-Fill and Plausibility 21 At their heart, Jackson’s claims depend on the cereal box’s slack-fill being 22 non-functional slack-fill as defined in Cal. Bus. & Prof Code § 12606.2. Functional 23 slack-fill (as defined in the same statute) is permissible and non-actionable. See 24 § 12606.2(d) (“Slack fill in a package shall not be used as grounds to allege a 25 violation of this section based solely on its presence unless it is nonfunctional slack 26 fill.”) 27 Because a complaint must plead more than mere labels and conclusions, 28 Iqbal, 556 U.S. at 678, courts require a plaintiff to plead facts showing that slack- 1 fill is actionable non-functional slack-fill within the meaning of the relevant statute. 2 See Bush v. Mondelez Int’l, Inc., 2016 WL 7324990, at *4 (N.D. Cal., Dec. 16, 3 2016) (rejecting as conclusory a plaintiff’s assertion that any slack-fill was non- 4 functional). The Court, following this reasoning, has previously held that Jackson 5 must properly allege that the slack-fill is non-functional under both the CFPLA and 6 the FDCA: the former, to show she has a claim under that statute, and the latter, 7 to show her claim is not preempted by federal law. The CFPLA itself provides that 8 it is to be interpreted consistently with federal law, see Cal. Bus. & Prof. Code 9 § 12606.2(e), so in any event Jackson’s claim must be consistent with the FDCA. 10 Because the CFPLA and the FDCA’s requirements in pertinent part are identical 11 here, see 21 C.F.R. § 100.100, compliance with the FDCA amounts to compliance 12 with the CFPLA. 13 The Court also held that inapplicability of any of the six “safe harbor” 14 provisions is an element of the claim, because that is what renders ordinary and 15 permissible slack-fill nonfunctional, and therefore both deceptive and actionable. 16 See § 12606.2(d). Specifically: 17 A container that does not allow the consumer to fully view its contents shall be considered to be filled as to be misleading if it contains 18 nonfunctional slack fill. Slack fill is the difference between the actual 19 capacity of a container and the volume of product contained therein. Nonfunctional slack fill is the empty space in a package that is filled to 20 substantially less than its capacity for reasons other than any one or 21 more of the following [safe harbor provisions] . . . . 22 § 12606.2(c). One safe harbor provision is the requirements of the machines used 23 for enclosing the contents of the package. § 12606.2(c)(2). The SAC concedes 24 that 6.9% of the liner bag may be functional-slack fill under this provision, because 25 the bag cannot be sealed if it is full to the top. (SAC, ¶ 46.) Another — and the 26 more significant provision here — is unavoidable settling of package contents 27 during shipping and handling. § 12606.2(c)(3). The Court held that Jackson must 28 / / / 1 plead facts supporting her conclusion that none of the “safe harbor” provisions 2 applied. 3 The SAC repeatedly alleges that the box Jackson purchased included 4 “approximately 30%–50% empty space.” (SAC, ¶ 1; see also id., ¶ 27 (“roughly 5 30% — 50%”). ) She also alleges that the interior of the box, including the space 6 outside the plastic liner, contains more than 50% empty space. (Id., ¶¶ 21, 41.) 7 She alleges that boxes of this cereal could contain 30% to 50% or more slack-fill 8 (id., ¶ 44), though she does not allege the box she bought was more than this. 9 After conducting some measurements and performing some mathematical 10 calculations, she determined that her particular box of cereal was 43.1% non- 11 functional slack-fill. (Id., ¶¶ 47, 56, 57, 64, 99, 100, 124 (“Plaintiff paid for 43.1% 12 of cereal product she never received.”).) 13 The settling of contents refers to contents getting smaller. It is a “normal 14 unavoidable process for many types of food (e.g., cereal and potato chips) . . . [and 15 is] a function of the physical properties of the product . . . .” Misleading Containers; 16 Nonfunctional Slack-Fill, 58 Fed. Reg. 2957-01, 2961, 1993 WL 1564 (Jan. 6, 17 1993). Settling occurs after manufacture, during shipping and handling. Id. 18 The Court previously held Plaintiff’s allegation that cereal cannot settle by 19 30% to 50% to be implausible. See 58 Fed. Reg. 2957-01, 2959 (“Functional 20 slack-fill levels for cereal products after shipping [ranged] from 8.6 to 43.1 percent 21 of the container volume.”) Other courts have held similarly perfunctory allegations 22 about product settling to be conclusory and implausible, particularly where they 23 ignore or contradict federal guidance. See Bush, 2016 WL 7324990, at *4 24 (rejecting as implausible an allegation that slack-fill present in a container of 25 cookies was not the result of settling during shipping and handling) (quoting 58 26 Fed. Reg. 2957-01, 2961). 27 Jackson now alleges that normal settling for flake cereal is not greater than 28 30% (SAC, ¶ 52.) She bases this on her claim that, unlike a “powder product,” 1 Annie’s whole grain oat and wheat flakes “are more sturdy and are of a greater 2 density such that settling is less likely to occur.” (Id., ¶ 53.) The Court rejects this 3 conclusion for several reasons. First, alleging that cereal is more or less dense 4 than some other product whose tendency to settle is unknown provides no 5 meaningful comparison. Second, cereal flakes are less dense, not more dense, 6 than powdered foods such as flour. But most importantly, federal guidance 7 contradicts this allegation. See Alce v. Wise Foods, Inc., 2018 WL 1737750, at *8 8 (S.D. N.Y., Mar. 27, 2018) (citing Misleading Containers; Nonfunctional Slack-Fill, 9 58 Fed. Reg. 64123-01, 64135, 1993 WL 498605 (Dec. 6, 1993) and 58 Fed. Reg. 10 2957-01, 2961 to conclude that the FDA rejected the idea of specific volume 11 thresholds for particular products). Federal guidance also specifically mentions 12 that foods such as cereal and potato chips are prone to settling, because of their 13 physical properties, and mentions that cereal can settle by up to 43.1% after 14 shipping. 58 Fed. Reg. 2957-01, 2959. Any further settling due to handling (e.g., 15 by store employees or customers) is apparently not included in that figure. 16 Jackson’s unexplained rejection of federal guidance renders her allegation 17 implausible. 18 Jackson’s allegation that the entire 43.1% is non-functional is also 19 implausible, in light of her concession that 6.9% of the slack-fill results from the 20 needs of sealing machinery (SAC, ¶ 46) and the additional inevitable settling that 21 the Federal Register says is normal for products such as cereal. At best, Jackson’s 22 allegations are consistent with a claim that a portion of the 43.1% slack-fill was 23 non-functional. That is, the SAC shows it is possible that some of the alleged 24 43.1% slack-fill is non-functional. However, her allegations are also fully consistent 25 with the possibility that the entire 43.1% is functional (and thus non-actionable) 26 slack-fill. The mere possibility that a claim might be present is not enough. See 27 Iqbal, 556 U.S. at 678–79. 28 / / / 1 Jackson has attempted to bolster her claim by including images of a different 2 product, Kellogg’s Frosted Flakes, and showing images of a bag that includes 3 significantly less slack-fill. There are several problems with this, however. First, 4 the images themselves are not comparable, which renders them less useful.1 5 The two cereals, even if they are similar, are not the same. The packages 6 show that Annie’s Frosted Oat Flakes are made of whole grain oat and wheat 7 flakes, while the Kellogg’s package identifies Frosted Flakes as being made of 8 corn. Furthermore, while the SAC alleges that the two cereals are of “similar size, 9 shape, and density,” (SAC, ¶ 62) mere similarity does not imply that the two cereals 10 settle to the same extent, even assuming they were handled identically before 11 reaching the consumer. Federal guidance recognizes that similar products — and 12 even products within the same product line — vary significantly in the amount of 13 slack-fill. See Misleading Containers; Nonfunctional Slack-Fill, 58 Fed. Reg. 14 64123-01, 64135, 1993 WL 498605 (Dec. 6, 1993). 15 In any case, the fact that any two or three given boxes of cereal have different 16 amounts of slack-fill does not reasonably suggest a pattern. At most, it is consistent 17 with there being a pattern. The SAC does not allege that the fill levels of the boxes 18 are typical of all boxes of their type, nor would such an allegation be plausible in 19 20 21 1 The box of cereal Jackson bought has been opened and the sides squeezed outwards, allowing more room for cereal to sink to the bottom of the bag. (SAC at 22 6.) Another photograph of the bag, out of the box, shows it in its expanded state, 23 with a lower fill line. Later photographs show a different Annie’s box with an unopened bag, which has a different box design than the one Jackson bought. 24 (Id. at 7–8.) The Kellogg’s bag has not been opened and the box’s sides appear 25 straight, not bowed outwards. (Id. at 17.) The Annie’s flakes have also settled more than the Kellogg’s flakes, though the reason for this is unclear. It may result 26 from different properties of the two cereals, or from the boxes’ having been 27 handled differently in transit or in the store. To be clear, the Court does not rely on its own evaluation of the differences in the boxes, however, and these 28 1 light of federal guidance on the subject, which makes clear that such estimates 2 would not be reliable. Other courts similarly reject this comparison method of 3 establishing that slack-fill is non-functional. See Morrison v. Barcel USA, LLC, 4 2019 WL 95477, at *3 (S.D. N.Y. Jan. 2, 2019). 5 Finally, Jackson includes a series of allegations based on serving size, as 6 given on the side pane of an Annie’s box. (SAC, ¶¶ 7, 24–25, 57.) The panel says 7 the box includes seven servings, and gives the serving size as “1 cup (42g)”. She 8 calculates that this means customers are being “shortchanged roughly 3.2 9 servings per box.” (Id., ¶ 57.) This is true, to an extent; depending on the degree 10 of settling, customers may not get seven cups of cereal, though they will get more 11 than seven 42g servings. But given the fact that settling is well-known to occur in 12 products such as cereal, the SAC does not plead facts sufficient to show that 13 customers expect the volume of cereal to be consistent from one box to the next. 14 By the same token, the SAC does not suggest any reason why customers would 15 believe a particular number of grams of cereal consistently translates into a 16 particular volume. The fact that a per-serving weight is also provided underscores 17 the fact that customers do not rely solely on volume measurements. Furthermore, 18 the SAC alleges that customers generally ignore the Nutrition Facts panel when 19 deciding how much cereal is in the box. (SAC, ¶ 147.) 20 As before, the proposed SAC again does not plead facts plausibly supporting 21 her conclusion that the slack-fill in the box of cereal she bought was non-functional 22 slack-fill as defined by statute. 23 Standing to Seek Injunctive Relief 24 The Court previously dismissed Jackson’s claim for injunctive relief, based 25 both on the lack of a plausible allegation that a change in labeling would lead her 26 to buy the same cereal again, and also based on the fact that she is now aware of 27 everything she wants the Court to order General Mills to disclose. Jackson bears 28 / / / 1 the burden of establishing standing. See DaimlerChrysler Corp. v. Cuno, 547 U.S. 2 332, 342 and n.3 (2006). 3 A customer who is deceived by false advertising may have standing to seek 4 injunctive relief forbidding the defendant from engaging in the same false 5 advertising again. See Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 6 2017), amended and superseded on denial of reh’g en banc, 889 F.3d 956 (9th 7 Cir. 2018) for the principle that consumers deceived by false advertising have 8 standing to seek injunctive relief. In fact, that decision is not nearly as broad as 9 Jackson believes. Rather, it merely holds that injunctive relief may be available; 10 the consumer must still establish the threat of actual and imminent injury. See id. 11 at 967. A plaintiff who is deceived by false advertising may be injured by her 12 inability to rely on advertising in the future. See id. at 969–70. 13 Jackson earlier relied on allegations that consumers do not bother to look at 14 the weight marked on cereal boxes but instead base their evaluation of the amount 15 of cereal on the box dimensions. Given that she now knows she can ascertain the 16 amount of cereal she is buying by looking at the label, she has not shown any 17 likelihood she will be deceived in the future. See Davidson, 889 F.3d at 972 (noting 18 that the plaintiff alleged she had no way of determining whether future 19 representations would be true). 20 This case is unlike those cases involving product descriptions that cannot be 21 verified merely by looking at the label. In Davidson, the plaintiff could not 22 reasonably rely in future on labeling claims that wipes were “flushable.” 889 F.3d 23 at 971–72. By contrast, where a plaintiff learns information during litigation that 24 enables her to evaluate product claims and make appropriate purchasing 25 decisions going forward, an injunction would serve no meaningful purpose as to 26 that plaintiff. 27 Courts in this Circuit, re-examining their earlier holdings on the basis of 28 Davidson, have reached the same conclusion as this Court. For example, in 1 Cordes, a customer was found to lack standing to seek injunctive relief. He was 2 unlikely to be deceived in future by slack-fill in pretzel bag, where he — unlike the 3 plaintiff in Davidson — could “easily determine” the amount of product in the 4 package by reading the back panel. 2018 WL 6714323 at *4. In Rahman v. Motts 5 LLP, 2018 WL 458024 (N.D. Cal., Sept. 25, 2018), the Northern District 6 distinguished Davidson to hold that the plaintiff lacked standing to seek an 7 injunction to prevent him from being deceived by the defendant’s use of the phrase 8 “No Sugar Added” on its 100% apple juice. Because he knew that this simply 9 meant no sugar had been added, and not that the juice was healthier than other 10 100% apple juice, there was no likelihood of future deception. Id. at *3. In 11 Fernandez v. Atkins Nutritionals, Inc., 2018 WL 280028 (S.D. Cal., Jan. 3, 2018), 12 the plaintiff claimed she was deceived by the defendant’s claim about “net carbs” 13 and sought an injunction to protect her from future deception. However, after she 14 learned how “net carbs” were calculated, she lacked standing because she knew 15 what “net carbs” were and how they were calculated, and she would not be misled 16 in future by the phrase “net carbs” on the defendant’s product labels. Id. at *15. 17 In her motion, Jackson now claims she still intends to rely on box size and 18 nothing more. (Docket no. 27 at 4:11–5:2.) Whatever other customers might know 19 or not know, however, Jackson is on notice of facts in her own complaint. If she 20 chooses to ignore them and rely on box size alone, her reliance would not be 21 reasonable. 22 Importantly, under Cal. Bus. & Prof. Code § 12606.2(c)(7) clear disclosures 23 that allow a customer to know how much product is in the container amount to a 24 safe harbor. For example, a clear and conspicuous disclosure of the product size 25 on the outside of the container, or a line or graphic showing the actual fill line of 26 the package will render slack-fill non-actionable. § 12606.2(c)(7)(B)–(C). These 27 provisions illustrate the principle that a customer only has the right to a reasonable 28 way of knowing how much product she is buying. Jackson’s knowledge, as 1 embodied in her complaint, shows that she knows how to determine how much 2 cereal a box of Annie’s Frosted Oat Flakes contains. The fact that other customers 3 might benefit from an injunction and therefore might have standing does not mean 4 Jackson does. See Gratz v. Bollinger, 539 U.S. 244, 289 (“To have standing, it is 5 elementary that the petitioners’ own interests must be implicated.”) 6 Jackson has not met her burden of establishing standing to seek injunctive 7 relief. 8 Other Issues 9 Jackson’s claims are derivative of her slack-fill claim. Because it is not 10 adequately pled, the other claims fail as well. 11 Because Jackson’s claims sound in fraud, she is obligated to plead 12 supporting facts with greater particularity. As discussed above, the allegations do 13 not satisfy the ordinary Rule 8 standard. A fortiori they do not satisfy the Rule 9(b) 14 standard. 15 Because Jackson has not adequately pled any violation of a statute, her 16 claim under the “unlawful” prong of the UCL is inadequately pled. 17 Conclusion and Order 18 Granting Jackson leave to file her proposed second amended complaint 19 would be futile. For reasons discussed above, the complaint would be subject to 20 dismissal on General Mills’ motion as soon as it was filed. Jackson’s motion for 21 leave to file a second amended complaint (Docket no. 27) is DENIED. 22 Jackson has amended her complaint once, and her proposed second 23 amended complaint would be dismissed as well. The Court’s discretion to deny 24 leave to amend is particularly broad where plaintiff has previously amended. Allen 25 v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990) The defects identified in 26 this order have already been pointed out to Jackson, and there is no reason to 27 believe she could successfully amend them even if given more opportunities. 28 / / / 1 This action is therefore DISMISSED WITHOUT LEAVE TO AMEND. 2 ||Jackson’s claims are DISMISSED WITH PREJUDICE and the putative class 3 ||claims are DISMISSED WITHOUT PREJUDICE. 4 5 IT IS SO ORDERED. 6 ||Dated: August 28, 2020 ( third 4. JB nl 8 Hon. Lafry Alan Burns 9 Chief United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28