Hawkins v. Nestle U.S.A. Inc.
Hawkins v. Nestle U.S.A. Inc.
Opinion of the Court
This matter is before the Court on Defendant's Motion to Dismiss. [Doc. No. 24]. The motion is fully briefed. For the reasons set forth below, the Motion is denied.
Defendant moves to dismiss the Amended Complaint under Fed. R. Civ. P. 12(b)(6) and 12(b)(1).
Facts and Background
Defendant manufactures Raisonets candy. The products are regularly sold at grocery stores, convenience stores, and other food retail outlets throughout Missouri and the rest of the United States. Plaintiff bought an opaque, non-pliable, cardboard box of Raisonets for about $1.59 apiece at a Walgreens store in Rolla, Missouri, for his personal, family, or household purposes. His lawsuit focuses on Defendant's packaging of the candies.
Consumers spend an average of 13 seconds making an in-store purchasing decision. The decision is heavily dependent on a product's packaging, in particular, the package dimensions. When faced with a large box and a smaller box, both containing the same amount of product, a consumer is more likely to choose the larger one, thinking it is a better value.
The dimensions of a Raisonets box are 3 ?? x 11/16? x 6 3/16?. The front of the box includes the description, "California Raisins *700covered in chocolate." The front of the box also states: "NET WEIGHT 3.5 OZ (99.2 g)"; "190 CALORIES"; "5 g SAT FAT"; "15 mg SODIUM"; and "28 g SUGARS" per ¼ cup. About 45% of each box has "slack filled," or empty, space.
Plaintiff alleges that she "attached importance" to the "size" of the Raisonets boxes, and was misled to believe that she was "purchasing more Product than was actually received." She alleges that boxes are "uniformly under-filled" or " 'slack-filled,' "; the slack-filled space serves no purpose; and had she known the boxes were "substantially slack-filled," she would not have purchased the products or would have purchased them on different terms. She alleges that she "suffered an ascertainable loss as a result of Defendant's unlawful conduct because the actual value of the Products as purchased was less than the value of the Products as represented." Plaintiff alleges that she "would...likely purchase the Products in the future if the Products complied with applicable laws."
Plaintiff filed this lawsuit as a putative class action. In Count I, she claims a violation of the Missouri Merchandising Practices Act (MMPA) for a Missouri Consumer Subclass, and she requests injunctive relief and damages under the statute. Count II is a claim for unjust enrichment brought on behalf of All Classes (class members in all states who purchased the products), in which Plaintiff requests restitution or disgorgement of Defendant's economic enrichment.
Discussion
Defendant argues that Count I must be dismissed because Plaintiff fails to state a claim under the MMPA and has no standing to seek injunctive relief. Defendant also argues that argues that Count II must be dismissed because it is derivative of her legally insufficient MMPA claim.
Legal Standards
To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal,
When considering a Defendant's motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the Court must first "distinguish between a 'facial attack' and a 'factual attack' " on the Court's jurisdiction. Osborn v. United States ,
Count I-MMPA claim
The elements of a claim under the MMPA are: (1) the purchase of goods or services, (2) primarily for personal or household purposes; and (3) an ascertainable loss of money or property, (4) as a result of, or caused by, the use or employment by another person of a method, act, or practice declared unlawful under the MMPA. §§ 407.020 and 407.025.1. See also Murphy v. Stonewall Kitchen, LLC,
Defendant argues that the MMPA count must be dismissed because Plaintiff's allegations concerning unlawful practice and ascertainable loss are not plausible. For the reasons discussed below, the Court concludes that the allegations are sufficient to state a claim.
Allegation of an unlawful practice
The Missouri Supreme Court has characterized the MMPA as " 'paternalistic legislation designed to protect those that could not otherwise protect themselves.' " High Life Sales Co. v. Brown-Forman, Corp.,
The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce ... in or from the State of Missouri, is declared to be an unlawful practice.
See also 34 Mo. Practice Personal Injury and Torts Handbook § 29:2, "Elements of the action" (2016 ed.) ("The prohibitions of V.A.M.S. § 407.020 are construed broadly to reach any deception or unfair practice[.]") (and citations therein). The focus of the statutory scheme is on the defendant's conduct. "A consumer's reliance on an unlawful practice is not required under the MMPA." Murphy ,
"[I]n order to prevent evasion by overly meticulous definitions," the statutory scheme does not provide definitions of any particular unlawful practices. Clement v. St. Charles Nissan, Inc.,
*702The MMPA does grant the Missouri Attorney General authority to promulgate rules, and the rules that have been promulgated under the MMPA are instructive here. See United Pharmacal Co. of Mo. v. Mo. Bd. of Pharmacy,
At the motion to dismiss stage, the Court's focus is on what is alleged in a plaintiff's complaint. Plaintiff alleges that Defendant's packaging, containing slack-filled space, misled her to believe that the boxes contained more candy than they actually did, and that Defendant's conduct constituted the act, use or employment of deception, fraud, false pretenses, false promises, misrepresentation, unfair practices and the concealment, suppression, or omission of any material facts in connection with the sale of advertisement of their products, in violation of the MMPA. She also alleges that the actual value of the product he purchased was less than the value of the product as represented by the packaging. More specifically, Plaintiff alleges that consumers spend an average of 13 seconds making an in-store purchasing decision. The decision is heavily dependent on a product's packaging, in particular, the package dimensions. When given a choice, consumers are more likely to choose larger boxes, thinking they are a better value. Defendant makes its candy boxes from opaque, non-pliable cardboard. Defendant fills the boxes such that 45% of a box of Raisonets is empty. The empty, or slack-filled, space in the boxes serves no purpose, such as protection of the contents. The slack-filled space is not attributable to settling of the contents. Nothing prevents Defendant from placing more candy in the boxes, or reducing the size of the boxes.
As discussed above, consumer protection is paramount under the MMPA and its prohibitions are construed broadly. The Missouri Supreme Court has explained that an "unfair practice" under the MMPA covers every unfair practice imaginable and every unfairness, to whatever degree. Practices made unlawful by the act are also broadly defined by regulation, such as deception, which is any practice having the tendency or capacity to mislead, deceive, cheat, or create a false impression; or misrepresentation, which is an assertion not in accord with the facts. A plaintiff need not even allege or prove reliance on an unlawful practice to state a claim under the act. Defendant's candy boxes are opaque and non-pliable, and a reasonable consumer could conclude that the size of a box suggests the amount of candy in it. Larger packages are attractive to consumers, and consumers tend to make their purchasing decision in 13 seconds. Yet there is 45% non-functional, slack-filled space in a Raisonets's box. Plaintiff has plausibly alleged, at minimum, that the packaging unfairly suggests the boxes contain more product than they actually do, or tends to *703or has the capacity to mislead consumers or to create a false impression, which is sufficient for purposes of alleging an unlawful practice under the MMPA. The Court cannot conclude as a matter of law and at this stage of the litigation that the packaging is not misleading. See, e.g., Murphy v. Stonewall Kitchen, LLC ,
The Court's conclusion that Plaintiff has plausibly alleged an unlawful practice is reinforced by Bratton's allegations concerning a Federal regulation that prohibits slack-fill in packaging, subject to six exceptions which Plaintiff alleges do not apply here.
Defendant argues that a reasonable consumer, upon picking up the Raisonets' container, would instantly realize that it is not filled to the brim: with each movement of the package, its contents noticeably and audibly "maraca-like rattle. No such allegations are in Defendant's complaint, which is the pleading that controls for purposes of Defendant's motion to dismiss.
*704Furthermore, to the extent that Defendant's statements are couched as facts, they are not facts of which the Court may take judicial notice. Under Federal Rule of Evidence 201(b), the Court may take judicial notice of a "fact that is not subject to reasonable dispute because it ... can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Such facts "can include[,]" for example, "well-established scientific theories and principles." Williams v. Employers Mut. Cas. Co. ,
Moreover, Defendant's statement that a reasonable consumer would instantly realize upon picking up a box that it is not filled to the brim because the contents rattle does not go to what Plaintiff has alleged. Plaintiff has alleged that the boxes are substantially empty, have substantial, non-functional slack-fill, and have an amount of slack-fill that cannot be justified; that industry-standard machines are capable of filling and enclosing the boxes with far less slack-fill; and that the level of fill can certainly be increased. She does not allege that the boxes should be filled to the brim, let alone that the packaging is misleading because the contents do not rattle. Nonetheless, even in the context of what Plaintiff has alleged, whether a reasonable consumer would notice rattling in the 13-second course of making the purchasing decision and what a consumer would make of it, let alone instantly conclude the boxers are as much as much as 45% slack-filled, are questions of fact.
In addition, Defendant's statement that "some" empty space in the boxes is related to "efficient manufacturing and distribution" is at odds with Plaintiff's allegation that the slack-filled space in the boxes takes up as much as 45% of the box's space, that the slack-filled space serves no purpose and is not related to the settling of the contents, and that nothing about the manufacturing process prevents Defendant from filling the boxes fuller. To the extent that Defendant disputes these allegations, such dispute cannot be resolved on a motion to dismiss.
Defendant further argues that the clear and accurate labeling on the packages-net weight, number of pieces of candy per serving, and number of servings per box-is fatal to Plaintiff's claim because it tells a consumer how much candy is in the box. The Missouri Court of Appeals recently rejected an analogous argument in Murphy. That case involved a consumer's claim under the MMPA against the manufacturer of a muffin mix that was labelled "all natural."
The "all natural" package labelling in Murphy is analogous to the information suggested to consumers by the dimensions of Defendant's opaque, non-pliable cardboard boxes. As discussed above, the dimensions of the boxes can suggest to reasonable consumers how much candy is in them, and consumers tend to choose larger packages, thinking they are a better value. Consumers also tend to make their purchasing decision in about 13 seconds. Following the Murphy rationale, a reasonable consumer would expect the candy box's' labeling information to comport with the dimensions of the box and it is Defendant that is in the superior position to know whether the dimensions do. In other words, similar to the Murphy scenario, the question of whether a consumer would figure out, from the labeling information and in the 13 seconds spent making a purchasing decision, that the box contained 45% slack-filled space rather than the amount suggested by the dimensions of the box goes to reasonableness, which is a question of fact. Moreover, Defendant's narrow focus and emphasis on the net weight, number of pieces of candy per serving, and servings per box, as printed on the boxes, overlooks that the Court must consider the plausibility of the complaint as a whole, not the plausibility of each individual allegation. Zoltek,
Both parties cite a number of decisions, rendered by courts nationwide and involving other states' laws, in support of their respective arguments about the slack-fill. Extended discussion of the various cases cited by the parties would not be useful to the analysis, largely because it is Missouri law that controls in this case. The Missouri Supreme Court has also explained that courts must make case-by-case determinations of whether a defendant's conduct violates Missouri's consumer protection law. Huch,
The Murphy case discussed above is a recent, analogous case decided under the MMPA by the Missouri Court of Appeals, which rejected the "ingredient label defense" and held that the question of a how a "reasonable consumer" would perceive certain packaging information was a question appropriately addressed on a motion for summary judgment or trial, not a motion to dismiss. The issues in this case are controlled by Missouri law, which is at odds with the slack-fill cases Defendant cites.
Moreover, courts that have allowed slack-fill, consumer protection cases to proceed beyond the motion to dismiss stage tend to do so because reasonableness was at issue and could not be resolved short of summary judgment or trial. See, e.g., Izquierdo v. Mondelez International, Inc.,
*706Thomas v. Costco Wholesale Corp. ,
The Court concludes that the analysis consistent with Missouri law leads to the conclusion that Plaintiff has plausibly alleged a claim under the MMPA and that reasonableness is an issue of fact, which cannot be resolved on a motion to dismiss.
Allegation of an ascertainable loss
Defendant further argues that Plaintiff failed to allege ascertainable loss under the MMPA. This element is straightforward. Ascertainable loss involves "the benefit-of-the-bargain rule, which compares the actual value of the item to the value of the item if it had been as represented at the time of the transaction." Murphy ,
Murphy was a challenge under the MMPA to the labelling of a muffin mix as "all natural," notwithstanding that the mix had synthetic ingredients. The plaintiff alleged that the mix was worth less than the product as represented. The Missouri Court of Appeals held that the plaintiff stated an ascertainable loss under the benefit of the bargain rule. The court further concluded that the plaintiff had adequately alleged the loss was the result of the allegedly deceptive labeling when he pled that consumers were interested in purchasing healthy food products without potentially harmful synthetic ingredients, and that the defendant had taken advantage of that desire by using the "all natural" label to entice consumers to pay a premium for the product. See also Plubell ,
Plaintiff's allegations of ascertainable loss are analogous to those held sufficient in Murphy. Plaintiff alleged that the boxes were opaque and that the size of the boxes led her to believe there was more candy in them than they actually contained. She alleged that the value of the products she purchased was less than the value of the products as represented by size of the boxes. She alleged that product purchasing decisions are heavily dependent on the packaging, and on the package dimensions in particular, and that consumers tend to choose a larger package over a smaller one, thinking it is a better value. Plaintiff has sufficiently alleged ascertainable loss for purposes of withstanding the motion to dismiss and that the alleged loss was the result of the packaging.
Standing to pursue injunctive relief under Count I
The MMPA expressly provides for injunctive relief, as well as damages and *707attorney fees, § 407.025.2, "not only to remedy violations..., but also to prospectively deter prohibited conduct and protect Missouri citizens," Berry v. Volkswagen Grp. of Am., Inc.,
Defendant argues that whatever comes of Plaintiff's claim for damages under the MMPA, her claim for injunctive relief must be dismissed for lack of standing. According to Defendant, now that Plaintiff is aware of the slack-filled space in the boxes, she cannot plausibly claim that she will be subject to continuing injury, so injunctive relief would not affect her.
Article III of the United States Constitution grants federal courts limited jurisdiction to decide "cases and controversies." To satisfy this jurisdictional standing requirement, a plaintiff must establish (1) an injury in fact, which is (2) fairly traceable to the defendant's conduct, and which (3) will likely be redressed by a favorable decision. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,
Plaintiff has pled a threat of ongoing or future harm, which is fairly traceable to Defendant's conduct. Specifically, she alleges that the she was misled by the packaging to believe the boxes contained more product than they actually did, and suffered an ascertainable loss, and that had she known the boxes contained substantial slack-filled space she would not have purchased them or would have purchased them on different terms. She alleges that Defendant continues to sell slack-filled candy boxes, i.e., the unlawful practice is ongoing.
Plaintiff has also pled that she would personally benefit in a tangible way from injunctive relief, by alleging that if Defendant changes its practices, she is likely to buy the products in the future, and that she seeks to be relieved from Defendant's unlawful practice by the issuance of injunctive relief.
Defendant places emphasis on Plaintiff's discovery of the slack-fill in the Raisonet box. But the fact that Plaintiff discovered Defendant's allegedly unlawful practice does not make the packaging less misleading, nor mean that the practice is not ongoing. Plaintiff need plead nothing more to survive a motion to dismiss a request for injunctive relief for lack of Article III standing. See Whitmore v. Arkansas,
Defendant's motion to dismiss the request for injunctive relief is denied.
Count II-Unjust enrichment
Plaintiff's unjust enrichment count is brought on behalf of a putative nationwide class. Plaintiff alleges that by purchasing the products, she and the putative class members conferred a benefit on Defendant in the form of the purchase price of the slack-filled products; Defendant knew of the benefit; Defendant appreciated the benefit because the sales generated revenue; Defendant's acceptance and retention of the benefit is inequitable and unjust because it was obtained by Defendant's fraudulent and misleading representations and omissions; and equity cannot in good conscience permit Defendant to be economically enriched for such actions. Plaintiff further alleged, with respect to herself, that she purchased the products for about $1.49 in a Missouri Walgreens store.
Defendant argues that the count should be dismissed because the count is premised on the same facts as the MMPA count which fails to state a claim and so should be dismissed on the same basis.
There are three elements to a claim of unjust enrichment under Missouri law. First, a plaintiff must confer a benefit and enrich a defendant. Second, the enrichment must be at the expense of the plaintiff. Finally, the Court must determine that it would be unjust for the defendant to retain the benefit. Miller v. Horn,
As discussed in a preceding section, the Court has concluded that Plaintiff states a claim under the MMPA. It is generally permissible to pursue alternative theories at the pleading stage, and courts generally permit unjust enrichment claims to proceed alongside a properly-pled MMPA claim. See, e.g., Murphy,
Plaintiff has also alleged sufficient facts to demonstrate Article III standing to pursue the claim, in that she has alleged an injury in fact, which is fairly traceable to Defendant's conduct, and which will likely be redressed by a favorable decision.
*709Friends of the Earth,
For the foregoing reasons, Defendant's motion to dismiss Count II is denied.
Conclusion
Based upon the foregoing analysis, Plaintiff's Amended Complaint satisfies the requirements of Rules 12(b)(6) and 12(b)(1).
Accordingly,
IT IS HEREBY ORDERED that Defendant's Motion to Dismiss, [Doc. No. 24] is denied.
For purposes of deciding the motion to dismiss for failure to state a claim, the Court accepts the factual allegations contained in the Amended Complaint as true. Eckert v. Titan Tire Corp.,
See also In re McCormick & Co., Inc., Pepper Prod. Mktg. & Sales Practices Litig. ,
Specifically, in the Amended Complaint, Plaintiff cites
The regulation then provides six exceptions to the prohibition against slack-fill: (1) protection of the package's contents; (2) the requirements of the machinery used to enclose the contents in the package; (3) unavoidable product settling during shipping and handling; (4) the need for the package to perform a specific function, such as playing a role in preparation of a food, where clearly communicated to consumers; (5) the package is a reusable container which has a part in the preparation of the food, and has a significant and independent value; or (6) the inability to increase the level of fill or reduce the packaging, such as to accommodate required food labeling or to accommodate tamper-resistant devices.
As noted above, Plaintiff alleges that the six exceptions do not apply to Defendant's packaging.
Reference
- Full Case Name
- Lahonee HAWKINS, individually and on behalf of all others similarly situated v. NESTLE U.S.A. INC.
- Cited By
- 21 cases
- Status
- Published