Plaintiffs alleged that ConAgra deceptively marketed Wesson cooking oils as “100% Natural,” when they’re actually made from unnatural genetically modified organisms. They were consumers from Nebraska, ConAgra’s HQ, and 14 other states and they sought to represent a nationwide class alleging claims under the Magnusson–Moss Warranty Act and the Nebraska Consumer Protection Act and Uniform Deceptive Trade Practices Act. They also sought various state subclasses for consumer protection, breach of warranty, and unjust enrichment claims.
ConAgra argued that the complaint failed to meet Rule 9(b)’s particularity requirements, since only 2 of 21 plaintiffs alleged a purchase location and only a handful provided dates of purchase. Plaintiffs responded that they provided enough information to put ConAgra on notice of their claims, and that demanding these additional details would do nothing to enhance ConAgra’s ability to answer the allegations, which was the purpose of Rule 9(b). The court agreed that the necessary “where” for Rule 9(b) purposes was where ConAgra made its misrepresentations—here, the label. Plaintiffs were not required to identify specific stores; they showed where the claim at issue appeared on the bottles and alleged that this was true throughout the class period. Likewise, they adequately pled the “when” by pleading when the allegedly misleading statement was made or when they saw it, not when it resulted in a purchase. Alleging that the statement was made throughout the class period was sufficient, and they also pled at least some information about the frequency with which they saw the allegedly misleading statements. Requiring specific dates was neither necessary nor realistic.
ConAgra next argued that the complaint wasn’t specific enough because plaintiffs didn’t allege how they were misled—it didn’t describe what meaning any plaintiff ascribed to “100% Natural” or state that they understood it to exclude bioengineered ingredients. But the complaint did detail plaintiffs’ plausible position on why GM products couldn’t be considered “natural,” and that was enough at this stage. Further allegations that, had they not been deceived by the labels, they wouldn’t have purchased the products, were sufficient under Rule 9(b).
The claims under the Magnuson-Moss Warranty Act were dismissed because the “100% Natural” statement wasn’t an assertion that the product was defect free, that it would meet a specific level of performance, or that the seller would take any remedial action, as required to fall within the scope of the law for a written warranty. The scope of “implied warranty” was broader, however, and covered implied warranties arising under state law—thus creating a federal cause of action for state law implied warranty claims. “While plaintiffs have not alleged that implied warranties that attached to Wesson Oils violated the act, the court cannot conclude that such a claim would be futile, particularly given plaintiffs' allegations concerning implied warranties elsewhere in the complaint.” Thus, the claim was dismissed with leave to amend, though the court noted that there was no claim if the amount in controversy of any individual claim was less than $25.
Nebraska Consumer Protection Act: ConAgra argued that the act didn’t apply to regulated industries, citing a provision that states that “the Consumer Protection Act shall not apply to actions or transactions otherwise permitted, prohibited, or regulated under laws administered by the Director of Insurance, the Public Service Commission, the Federal Energy Regulatory Commission, or any other regulatory body or officer acting under statutory authority of this state or the United States.” The question isn’t whether the defendant is generally regulated (everyone is), but whether the challenged practice is regulated. Here, the labeling and ads were already regulated by the FDA, which bars labeling that’s “false or misleading in any particular.” In fact, the FDA has regulated the use of “natural” by sending a warning letter to a company that branded its bagel product as “All Natural.” (As the recent ABA PAL teleconference I wrote briefly about explained, this is ridiculous: the FDA has done everything it can not to regulate "natural.") The exception to the Nebraska statute was broader than federal preemption, so though the claim was not preempted it was still excepted from the Nebraska CPA.
Nebraska UDTPA: the law only protects individuals “likely to be damaged by a deceptive trade practice of another,” so it doesn’t cover past damage. These plaintiffs won’t suffer future damage because they’re now aware of the alleged misrepresentation, so the claim was dismissed with prejudice. (Jam tomorrow, and jam yesterday, but never jam today.)
As for the remaining state claims, ConAgra raised various individual deficiencies. It argued that the New Jersey and Oregon consumer protection claims failed to allege the requisite “ascertainable loss.” The allegation that plaintiffs wouldn’t have bought Wesson Oils at all, or wouldn’t have paid as much for them, was insufficient under New Jersey law because it didn’t set out the difference in value between what was promised and what was received. Absent any specific information concerning the price of the products or the price of any comparable products, allegations of ascertainable loss were conclusory statements that were insufficient to withstand a motion to dismiss. Lee v. Carter–Reed Co., L.L.C., 203 N.J. 496 (2010), was not to the contrary; it found ascertainable loss when the allegation was that defendant’s product was worthless, making the ascertainable loss the total value of the product.
Oregon has tended to require less rigorous pleading of ascertainable loss; the state Supreme Court sustained a claim based on the fact that a plaintiff paid a stated price for a tent advertised with specific features that it didn’t have; the ascertainable loss was the difference between the price paid and the value received, and the court was willing to infer it though the price of a tent with the actual features wasn’t in evidence. So, under Oregon law, allegations that plaintiffs wouldn’t have bought the product or would have paid less had they known the truth were sufficient to survive a motion to dismiss.
ConAgra then argued that reliance was required in at least California, Oregon, South Dakota, Texas, and Wyoming, and that plaintiffs had insufficiently alleged how they were deceived, what they believed the challenged statement meant or why it mattered to them. The court disagreed: the complaint alleged what plaintiffs believed “100% Natural” meant and detailed why GMOs aren’t natural. Coupled with the explicit allegation that they wouldn’t have bought the oils for the price paid or at all if they’d known the truth, plaintiffs adequately alleged reliance.
ConAgra argued that California, Massachusetts, Texas and Wyoming require that plaintiffs give a defendant notice of their intent to sue before they commence an action. Plaintiffs alleged that they gave notice “to the extent required,” which would ordinarily count as an insufficient bare assertion, but Rule 9(c) provides that, “[i]n pleading conditions precedent, it suffices to allege generally that all conditions precedent have occurred or been performed.” So the motion to dismiss was denied. The court noted, however, that ConAgra attached the notices it claimed to have received, and they were just under California and Massachusetts law. Plaintiffs argued that ConAgra had been on notice for nearly a year because of their “plain English request for nationwide relief,” but the court wasn’t convinced that these notices were sufficient to put ConAgra on notice of potential claims under other state statutes. As for ConAgra’s argument that notice to the AGs of New Jersey, Oregon, and Washington was required, nothing in those laws required presuit notice, so plaintiffs were simply directed to provide such notice if they hadn’t already done so.
ConAgra then argued that plaintiffs’ claims over a four-year period contradicted with shorter limitations periods on some states, such as Ohio (2) and New York (3). But the allegations from those states’ plaintiffs indicated that they bought Wesson oils within those periods, and if there were ultimately certified classes their definitions could be modified.
Similar conclusions followed on various other claims; claims for implied warranty were dismissed as to states that required privity.