Court: District Court, W.D. Pennsylvania; March 25, 2014; Federal District Court
On August 13, 2012, this case was referred to United States Magistrate Judge Maureen P. Kelly for pretrial proceedings. On February 11, 2014, Judge Kelly issued Reports recommending that the Defendants’ Motions to Dismiss regarding Plaintiffs Funke and Ruff be granted for claims of unjust enrichment, but denied in other respects. Defendants filed Objections to the Reports. Following a de novo review, the District Court adopted the Reports, granting the Motions to Dismiss concerning the unjust enrichment claims but denying them for all other claims.
Plaintiff Mary Emily Funke filed a class action Complaint on October 16, 2012, against Defendants Milo’s Kitchen, LLC, and its parent company Del Monte Corporation, alleging misrepresentation of the quality of their chicken jerky and beef jerky dog treats. Funke claimed that after feeding the treats to her dog, which was in good health, the dog became ill and had to be euthanized within twenty-four hours. She contended that the treats contained contaminants and were not as advertised, contrary to claims made on the packaging and website regarding their quality and safety. The relevant claims included assertions that the treats were "100% Real, Wholesome and Delicious" and made in compliance with USDA and FDA standards. The case continues concerning claims other than unjust enrichment.
Plaintiff asserts that the FDA issued multiple warnings between 2007 and 2012 regarding illnesses in dogs linked to chicken jerky treats made in China, where Defendants’ products are allegedly sourced. These releases informed consumers about FDA investigations, which Congress criticized for inadequacy in identifying contamination sources and alerting pet owners. Plaintiff claims that Defendants misrepresented safety information on their websites, stating that no contaminants were found despite the presence of harmful substances in the treats. Allegations include inadequate quality control, failure to properly investigate illness reports, and deceptive marketing practices. Plaintiff filed a Class Action Complaint on October 16, 2012, in the Northern District of California, citing violations of the California Consumer Legal Remedies Act, False Advertising Law, Unfair Competition Law, and unjust enrichment. The case was transferred and consolidated with other actions in April and August 2013. The Defendants’ motion to dismiss is under review, with the court required to accept the complaint's material allegations as true, barring unsupported assertions.
The Court is not obligated to accept legal conclusions presented as factual allegations, as established in Bell Atlantic Corp. v. Twombly. For a complaint to survive dismissal under Federal Rule of Civil Procedure 12(b)(6), it must contain sufficient factual allegations that raise a right to relief above mere speculation, demonstrating a plausible claim on its face. The factual content must allow the court to infer that the defendant is liable. Additionally, mere labels or a formulaic recitation of elements are inadequate; the complaint must allege concrete facts that suggest the alleged misconduct and raise a reasonable expectation of discovering evidence supporting the claim.
In the case against Del Monte, the defendants argue for dismissal based on the plaintiffs' failure to allege any actionable conduct by Del Monte as the parent company of Milo's, asserting the legal principle that a parent corporation is generally not liable for its subsidiary's actions. This principle holds unless unusual circumstances exist, such as the corporate form being disregarded (alter ego liability), the subsidiary acting as an agent of the parent, or the parent corporation ratifying or participating in the subsidiary's wrongdoing. The plaintiff claims that Del Monte has complete authority over Milo’s conduct and highlights Del Monte's significant market presence in the pet food industry, generating substantial sales and reaching a wide consumer base.
Plaintiff alleges that Del Monte and/or Milo's misrepresented their jerky treats through packaging and online claims, asserting that the treats are "100% Real, Wholesome and Delicious" and made from high-quality ingredients. Specific claims include that the ingredients consist of chicken breast, glycerin, and natural preservatives, and that the treats are beneficial for pets. Additionally, representations state that Milo’s Kitchen treats are made with whole fillets of real jerky without artificial flavors or fillers and comply with U.S. regulatory standards. These allegations indicate that Plaintiff's claims against Del Monte are based on its own actions, not merely its relationship with Milo’s, leading to the denial of Defendants' motion to dismiss.
The claims under California’s Consumer Protection Statutes (CLRA, FLA, UCL) assert that Defendants misrepresented the safety and wholesomeness of the treats, which Defendants argue should be dismissed as they constitute "mere puffery"—general claims unlikely to mislead consumers. The distinction between actionable statements and puffery lies in the specificity of the claims; specific assertions are more likely to induce consumer reliance than general ones. Defendants did not specify which misrepresentations they consider puffery but referenced general allegations in the complaint.
The representations regarding Milo’s Kitchen dog treats assert that the products are '100% Real, Wholesome and Delicious' and made with high-quality ingredients that match owners' food standards, specifically listing ingredients such as chicken breast and natural preservatives. Claims emphasize that the jerky treats are genuine meat products and free from artificial flavors or fillers, produced in compliance with USDA and FDA regulations. Most of these representations are deemed verifiable facts capable of inducing consumer reliance, distinguishing them from mere puffery, as established in relevant case law. Even statements about the company's motivation for producing the treats and their benefits to pets, while potentially seen as puffery alone, contribute to the overall deceptive context of the product packaging, thus remaining actionable in conjunction with specific claims.
Defendants contend that the plaintiffs have not sufficiently pleaded the falsity of these representations as required by Federal Rule of Civil Procedure 9(b), which mandates specific details in fraud allegations. This rule necessitates clarity regarding the misconduct, specifying the 'who, what, when, where, and how' of the alleged fraud and outlining what is misleading about the statements made. To meet these requirements, plaintiffs must indicate what is false and the reasons for this assertion.
Plaintiff alleges that Defendants have consistently misrepresented the safety and quality of their jerky treats since 2007, specifically claiming the products are wholesome despite containing contaminants. These misrepresentations, found on packaging and websites, are argued to mislead the public and satisfy the heightened pleading requirements of Rule 9(b) by detailing the who, what, when, where, and how of the misconduct. The court references similar cases where allegations regarding food misbranding met this standard.
Defendants contend that the claims under the California Consumer Legal Remedies Act (CLRA), the False Advertising Law (FAL), and the Unfair Competition Law (UCL) should be dismissed due to insufficient pleading of reliance. To meet the heightened pleading standards, the plaintiff must assert not only the specifics of the misconduct but also that the fraudulent conduct directly caused injury. This requires demonstrating that the misrepresentation was the immediate cause of the injury, implying that the plaintiff would not have engaged in harmful actions but for the fraudulent statements. The legal standard highlights that reliance is crucial in fraud claims, necessitating actual reliance on the misleading statements. However, a presumption of reliance can be established if the misrepresentation is material, which means it must have prompted the plaintiff to alter their position detrimentally. The inferred reliance principle may apply when the misrepresentation is deemed material, affecting the reliance/causation elements under the CLRA, UCL, and FAL.
Plaintiff alleges she purchased Milo’s Jerky for personal use based on Defendants’ marketing claims regarding its efficacy, qualities, and safety. She asserts that neither she nor other members of the putative Class and Subclasses would have bought the product had the Defendants disclosed the truth about it. The Complaint specifies the marketing claims relied upon, establishing a basis for inferring that the purchase was influenced by alleged misrepresentations. As a result, the Plaintiff meets the pleading requirements of Fed. R. Civ. P. 9(b), leading to the denial of Defendants’ motion to dismiss.
Additionally, in Count IV, Plaintiff claims unjust enrichment, contending that Defendants have profited from misleading representations about the jerky treats. Defendants argue that unjust enrichment is not a standalone cause of action under California law and that it duplicates her statutory claims. However, Plaintiff cites cases supporting the notion that unjust enrichment can be synonymous with restitution claims. The legal landscape shows a lack of consensus on whether California recognizes unjust enrichment as a separate cause of action, with some courts allowing it under a quasi-contract theory while others dismiss it as duplicative of statutory claims. The undersigned finds the latter view persuasive, noting that Plaintiff seeks restitution for losses incurred from purchasing the jerky treats without arguing for a quasi-contract basis.
Plaintiff Maxine S. Ruff filed a class action lawsuit against Del Monte Corporation and its subsidiary, Milo’s Kitchen, alleging that their chicken jerky dog treats are defectively manufactured and unsafe. Ruff claims that after feeding the treats to her healthy dog, it suffered from kidney failure and died within days. She challenges the misleading marketing claims that the treats are “100% REAL” and free from artificial ingredients, arguing they are contaminated and dangerous, supported by FDA warnings about adverse effects in dogs.
The excerpt concludes that Ruff's claim for unjust enrichment, which is based on the same facts as her statutory claims, should be dismissed because the statutes involved (UCL, FAL, CLRA) allow for restitution, suggesting that unjust enrichment is redundant. The recommendation is to grant the Motion to Dismiss concerning the unjust enrichment claim while denying it for other claims. Parties are permitted to file objections within the specified timeline, with failure to do so waiving the right to appeal.
Defendants have acknowledged the FDA’s warnings regarding jerky treats on Milo’s website, but Plaintiff argues that their response is insufficient and misleading, as it fails to mention major symptoms outlined in the FDA notice, only listing minor symptoms. Plaintiff notes a rise in complaints since 2011 but claims Defendants downplay the risks, asserting that the FDA has not established a direct link between the treats and reported illnesses while promoting their safety protocols. Furthermore, Plaintiff alleges that Defendants have not adequately warned consumers about the dangers of the jerky treats, lacking warnings on both the product packaging and their website. Additionally, Plaintiff contends that Defendants have not recalled the treats and have concealed crucial safety information to boost sales, violating their duty to ensure product safety and inform the public about FDA warnings. Plaintiff asserts that had she known about the serious risks, including the death of her dog, she would not have purchased the jerky treats. The Class Action Complaint was filed on October 10, 2012, in the Northern District of California, citing violations of various laws including California’s Unfair Competition Law, North Carolina’s Unfair and Deceptive Trade Practices Act, and others, along with claims for unjust enrichment, negligence, strict product liability, and declaratory relief. The case was transferred and consolidated with other related actions, with motions pending for review. The standard of review for motions to dismiss under Federal Rule of Civil Procedure 12(b)(6) requires the court to accept material allegations as true and view facts in the light most favorable to the plaintiff, while not accepting unsupported assertions or legal conclusions as factual allegations.
A complaint can be dismissed under Fed. R.Civ. P. 12(b)(6) if it fails to present sufficient facts to support a plausible claim for relief or if it does not allow the court to reasonably infer the defendant's liability. In the context of product liability, the plaintiff must establish a defect in manufacture or design, which cannot be inferred solely from an accident. However, circumstantial evidence can be used to demonstrate a manufacturing defect through the malfunction theory, which posits that a defect is the most likely cause of an incident after excluding other reasonable explanations.
In this case, the plaintiff alleges that after feeding her healthy dog Milo’s jerky treats, the dog became ill and subsequently died, with a veterinary diagnosis of kidney failure. The plaintiff cites over 900 reports to the FDA regarding pet illnesses and deaths associated with jerky treats, alongside FDA warnings about symptoms linked to these products. These allegations, when viewed favorably towards the plaintiff, suggest a plausible defect in the jerky treats and a causal link to the dog’s illness.
Additionally, the plaintiff asserts claims under California's Consumer Legal Remedies Act (CLRA), False Advertising Law (FLA), and Unfair Competition Law (UCL), based on alleged misrepresentations by the defendants regarding the safety and wholesomeness of the jerky treats.
Defendants seek dismissal of Plaintiff's claims on the grounds of lack of standing, arguing that many alleged misrepresentations amount to "mere puffery" that no reasonable buyer would rely upon, and that the claims are inadequately pled under Federal Rule of Civil Procedure 9(b). They cite Gentges v. Trend Micro Inc. to assert that California’s consumer protection laws (UCL and CLRA) do not apply to non-residents for conduct occurring outside California. However, California courts have ruled that California law may apply if the defendant is a California corporation and some alleged conduct originates from California. This is supported by cases such as Gross v. Symantec Corp. and Parkinson v. Hyundai Motor Am., which allowed non-residents to bring claims based on conduct linked to California operations.
In this case, Plaintiff's claims under California consumer protection statutes are based not solely on her purchase in North Carolina, but on Defendants' alleged misrepresentations regarding the jerky treats, which originated from California. Plaintiff alleges that Del Monte's main corporate offices and marketing operations are located in California, and that all relevant corporate decisions were made there. The claims are further supported by assertions that the misrepresentations were made on the product packaging and websites. Consequently, Defendants' motion to dismiss on these grounds is denied.
Defendants contend that many alleged misrepresentations made by Plaintiff are non-actionable puffery rather than factual statements that consumers would rely on. The distinction between actionable misrepresentation and puffery hinges on the specificity of the claims. General, unverifiable claims are unlikely to induce reliance, while specific statements can be actionable. Defendants have not pinpointed any specific misrepresentation as mere puffery but refer generally to certain claims made in the Complaint regarding the jerky treats’ packaging and website. Claims such as the treats being made with quality ingredients and not containing artificial additives are deemed specific and verifiable, thus not qualifying as puffery. The statement about the treats being made with "love and care" is considered puffery but contributes to the overall misleading context of the product's presentation. Even if some statements are puffery, they cannot be separated from other actionable representations, which means claims cannot be dismissed solely based on some statements being puffery.
Defendants seek dismissal of Plaintiffs' claims under the CLRA, FAL, and UCL, arguing insufficient pleading of the falsity of their alleged misrepresentations under Federal Rule of Civil Procedure 9(b). This rule mandates detailed averments of fraud, requiring plaintiffs to specify the "who, what, when, where, and how" of the misconduct. Plaintiffs assert that since November 2011, Defendants misrepresented their jerky treats as wholesome and healthy, despite these products being contaminated and dangerous. The court finds these allegations sufficiently detailed to meet the heightened pleading standard.
Additionally, Defendants argue that Plaintiffs have failed to adequately plead reliance, a necessary element under the CLRA, FAL, and UCL claims. To comply with Rule 9(b), plaintiffs must demonstrate that the misrepresentation was the immediate cause of their injury, indicating that, but for the fraudulent statements, they would not have engaged in the conduct leading to harm. The court highlights that under California law, establishing reliance is essential for false advertising claims.
A plaintiff claiming misrepresentation must demonstrate actual reliance on the allegedly false statements, meaning they acted or refrained from acting based on the truth or falsity of those statements. A presumption of reliance applies when the misrepresentation is material, defined as a statement that induces the plaintiff to change their position detrimentally. In this case, the plaintiff asserts that she purchased jerky treats for her dog based on the defendants' claims that the treats were 100% real and of quality ingredients, arguing that she would not have purchased them had she known about potential contamination. This assertion is deemed sufficient to satisfy the pleading requirements under Federal Rule of Civil Procedure 9(b), allowing the case to proceed.
Additionally, the plaintiff brings a claim for unjust enrichment, arguing that the defendants have unjustly benefited from the sale of defective treats. The defendants seek dismissal of this claim, contending it is not a recognized cause of action in California and is duplicative of statutory claims. However, the plaintiff cites case law supporting unjust enrichment claims as synonymous with restitution, arguing for the claim's validity.
There is a lack of consensus among state and federal courts regarding California's recognition of a separate cause of action for unjust enrichment. Some courts permit claims under a quasi-contract theory, while the majority reject them, viewing such claims as either restitution or duplicative of statutory or tort claims. The court finds the majority viewpoint persuasive, particularly since the plaintiff has not advanced a quasi-contract argument and the allegations indicate a pursuit of restitution for losses incurred from purchasing jerky treats. The plaintiff's claim for unjust enrichment overlaps with the factual basis of her statutory claims, which provide for restitution under the Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA). Consequently, the unjust enrichment claim is dismissed.
Regarding the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA), defendants argue for dismissal on the grounds that the plaintiff did not plead actual reliance or show that misrepresentation caused her injury. However, since the court previously found that the plaintiff adequately pled reliance concerning her California consumer protection claims, it declines to revisit this issue for the UDTPA, denying the defendants' motion.
For the Magnuson-Moss Warranty Act claim, defendants seek dismissal by arguing that the plaintiff, as an end consumer purchasing from a retailer, lacks privity of contract necessary to assert a breach of implied warranty of merchantability. This argument references relevant case law indicating that without privity, the plaintiff cannot state a claim.
Defendants assert that the privity requirement does not apply in cases involving written labels or advertisements or foodstuffs, but argue these exceptions are not relevant to the current case since the former pertains only to express warranties and the latter to food intended for human consumption. The Plaintiff acknowledges the applicability of the Magnuson-Moss Warranty Act concerning implied warranty of merchantability but does not dispute the lack of privity with Defendants. However, Plaintiff argues that both exceptions should apply. While the Plaintiff fails to effectively counter Defendants' point regarding express warranties, they reference Burr v. Sherwin Williams Co., which supports the notion that the label and advertisement exception applies only to express warranties. The Court determines that this case falls under the foodstuffs exception, citing California case law that establishes an implied warranty of fitness for human consumption extends from the manufacturer to the consumer irrespective of privity. Defendants reference Burr to support their position, but the Court notes that it did not address foodstuff exceptions as the product in question was an insecticide. Additionally, cases like Klein and Vaccarezza demonstrate that implied warranties apply to food products intended for human consumption. The Court finds no definitive rejection of the foodstuffs exception for products consumed by animals, particularly pets, although some older, non-binding cases suggest it may apply to processed animal food.
In Larson v. Farmers’ Warehouse Co., the court held the defendant-seller liable for breaching an implied warranty regarding the sale of hay intended for livestock, specifically that it must be free of harmful substances. This precedent supports the notion that jerky treats can be classified as foodstuffs, allowing for a breach of implied warranty of merchantability claim under the Magnuson-Moss Warranty Act without requiring privity of contract. Consequently, the defendants' motion to dismiss is recommended to be granted solely concerning the plaintiff's claim for unjust enrichment (Count VI), while all other claims should be denied.
Parties may file objections to this recommendation according to the established schedule, with failure to do so waiving the right to appeal. California law is agreed to apply in this case. The Ninth Circuit has confirmed that Rule 9(b)’s heightened pleading standard applies to claims under the California Consumer Legal Remedies Act (CLRA) and the Unfair Competition Law (UCL). To establish a fraud claim, a plaintiff must allege a false misrepresentation, the defendant's knowledge of its falsity, intent to induce reliance, justifiable reliance by the plaintiff, and resultant damages, all meeting Rule 9(b) requirements. Additionally, the defendants' request to stay discovery pending the motion to dismiss was deemed misplaced and largely moot, as it was raised after significant delay.
Defendants argue for a stay of discovery based on a previous decision in the Lead Case (Mazur) where a stay was deemed appropriate pending a motion to dismiss. However, the Court clarifies that the referenced Memorandum Order addressed a Motion for Leave to Commence Limited Discovery that was denied, indicating that no discovery had commenced, thereby rendering any proposed stay irrelevant. The Court emphasizes that the superfluous language in the earlier order about staying discovery does not substantiate the Defendants' request, as discovery has not yet begun in this case, similar to the situation in Mazur. Furthermore, under California law, to successfully plead a fraud claim, a plaintiff must establish five elements: a misrepresentation, the defendant’s knowledge of its falsity, intent to induce reliance, justifiable reliance by the plaintiff, and resultant damages, as outlined in Rule 9(b). The Court notes that Defendants should have filed a separate motion to address the stay more promptly, as the issue became moot with the filing of the Report and Recommendation. Ultimately, Defendants' rationale for a stay is deemed misplaced.
