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PELMAN v. MCDONALD'S CORPORATION

September 3, 2003

ASHLEY PELMAN, A CHILD UNDER THE AGE OF 18 YEARS, BY HER MOTHER AND NATURAL GUARDIAN ROBERTA PELMAN, ROBERTA PELMAN, INDIVIDUALLY, JAZLYN BRADLEY, A CHILD UNDER THE AGE OF 18 YEARS, BY HER FATHER AND NATURAL GUARDIAN ISRAEL BRADLEY, AND ISRAEL BRADLEY, INDIVIDUALLY, PLAINTIFFS, AGAINST MCDONALD'S CORPORATION, DEFENDANT


The opinion of the court was delivered by: Robert Sweet, Senior District Judge Page 2

OPINION

Defendant McDonald's Corporation ("McDonald's") has moved pursuant to Rule 12(b) (6) to dismiss the amended complaint of plaintiffs Ashley Pelman, Roberta Pelman, Jazlyn Bradley and Israel Bradley. The plaintiffs have cross-moved for partial summary judgment.

For the reasons set forth below, the motion to dismiss by McDonald's is granted and the motion for partial summary judgment by plaintiffs is denied. Leave to amend the complaint is denied.

Prior Proceedings

The plaintiffs commenced suit by filing their initial complaint on August 22, 2002 in the State Supreme Court of New York, Bronx County. Defendants removed the action to the Southern District of New York on September 30, 2002. By opinion of January 22, 2003, this Court dismissed the original complaint, but granted leave to amend the complaint within 30 days in order to address the deficiencies listed in the opinion. See Pelman v. McDonald's Corp., 237 F. Supp.2d 512 (S.D.N.Y. 2003).

On February 19, 2003, plaintiffs filed an amended complaint. McDonald's filed a motion to dismiss the amended complaint on April 14, 2003. On May 16, 2003, plaintiffs cross-moved Page 3 for summary judgment and in opposition to the motion. After submission of briefs, oral argument on both motions was held on June 25, 2003, and the motions were considered fully submitted at that time.

Facts

As befits a motion to dismiss, the following facts are drawn from the allegations in the complaint and do not constitute findings of fact by the Court.

Parties

Ashley Pelman, a minor, and her mother and natural guardian Roberta Pelman are residents of the Bronx, New York.

Jazlyn Bradley, a minor, and her father and natural guardian Israel Bradley are residents of New York, New York.

The infant plaintiffs are consumers who have purchased and consumed the defendant's products in New York State outlets and, as a result thereof, such consumption has been a significant or substantial factor in the development of their obesity, diabetes, coronary heart disease, high blood pressure, elevated cholesterol intake, and/or other detrimental and adverse health effects and/or diseases. Page 4

Defendant McDonald's Corporation is a Delaware corporation with its principal place of business in Oak Brook, Illinois. It does substantial business with outlets in the State of New York, as well as throughout the fifty States and the world.

McDonald's Advertising Campaigns

In one survey of the frequency of purchases by visitors to McDonald's restaurants, McDonald's found that 72% of its customers were "Heavy Users," meaning they visit McDonald's at least once a week, see Amended Compl., Exh. E, p. 45 (trial testimony of David Green, McDonald's U.S. Vice-President of Marketing), and that approximately 22% of its customers are "Super Heavy Users," or "SHUs," meaning that they eat "at McDonald's ten times or more a month." Id. at 43. Super Heavy Users make up approximately 75% of McDonald's sales. Many of McDonald's advertisements, therefore, are designed to increase the consumption of Heavy Users or Super Heavy Users. The plaintiffs allege that to achieve that goal, McDonald's engaged in advertising campaigns which represented that McDonald's foods are nutritious and can easily be part of a healthy lifestyle.

Advertising campaigns run by McDonald's from 1987 onward claimed that it sold "Good basic nutritious food. Food that's been the foundation of well-balanced diets for generations. And will be for generations to come." Amended Compl. ¶ 44(B) (1) (quoting Page 5 McDonald's advertisement, Exh. G-3). McDonald's also represented that it would be "easy" to follow USDA and Health and Human Services guidelines for a healthful diet "and still enjoy your meal at McDonald's." Id. at § 44(B) (3) (quoting McDonald's advertisement, Exh. G-7). McDonald's has described its beef as "nutritious" and "leaner than you think." Id. at ¶ 44(E) (1) (quoting McDonald's advertisement, Exh. G-15). And it has described its french fries as "well within the established guidelines for good nutrition." Id. at ¶ 44(F) (1) (quoting McDonald's advertisement, Exh. G-17).

While making these broad claims about its nutritious value, McDonald's has declined to make its nutrition information readily available at its restaurants. In 1987, McDonald's entered into a settlement agreement with the New York State Attorney General in which it agreed to

provide [nutritional] information in easily understood pamphlets or brochures which will be free to all customers so they could take them with them for further study [and] to place signs, including in-store advertising to inform customers who walk in, and drive through information and notices would be placed where drive-through customers could see them.
Id. at ¶ 41. Despite this agreement, the plaintiffs have alleged that nutritional information was not adequately available to them for inspection upon request. Id. at ¶ 42. Page 6

Page 7

Claims

In the amended complaint, the plaintiffs alleged four causes of action as members of a putative class action of minors residing in New York State who have purchased and consumed McDonald's products. Shortly before oral argument, however, the plaintiffs informed the Court that they are dropping their fourth cause of action, which alleged negligence by McDonald's because of its failure to warn plaintiffs of the dangers and adverse health effects of eating processed foods from McDonald's.

The three remaining causes of action are based on deceptive acts in practices in violation of the Consumer Protection Act, New York General Business Law §§ 349 and 250. Count I alleges that McDonald's misled the plaintiffs, through advertising campaigns and other publicity, that its food products were nutritious, of a beneficial nutritional nature or effect, and/or were easily part of a healthy lifestyle if consumed on a daily basis. Count II alleges that McDonald's failed adequately to disclose the fact that certain of its foods were substantially less healthier, as a result of processing and ingredient additives, than represented by McDonald's in its advertising campaigns and other publicity. Count III alleges that McDonald's engaged in unfair and deceptive acts and practices by representing to the New York Attorney General and to New York consumers that it provides nutritional brochures and information at all of its stores when in Page 8 fact such information was and is not adequately available to the plaintiffs at a significant number of McDonald's outlets.

The plaintiffs allege that as a result of the deceptive acts and practices enumerated in all three counts, they have suffered damages including, but not limited to, an increased likelihood of the development of obesity, diabetes, coronary heart disease, high blood pressure, elevated cholesterol intake, related cancers, and/or detrimental and adverse health effects and/or diseases.

Discussion

I. The Motion to Dismiss Standard

In reviewing a Rule 12(b) (6) motion, courts must "accept as true the factual allegations made in the complaint and draw all inferences in favor of the pleader." Grandon v. Merrill Lynch & Co. Inc., 147 F.3d 184, 188 (2d Cir. 1998) (citing Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir. 1993)). However, "legal conclusions, deductions or opinions couched as factual allegations are not given a presumption of truthfulness." Ying Jing Gan v. City of New York, 996 F.2d 522, 534 (2d Cir. 1993) (quoting Moore's Federal Practice ΒΆ 12.07[2.-5], at 12-63 to 12-64 (2d ed. 1993)). The complaint may only be dismissed when "it appears beyond doubt that the plaintiff can prove not set of facts Page 9 in ...


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