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Evan Weiner and Timothy Mcclausland v. Snapple Beverage Corporation

January 21, 2011

EVAN WEINER AND TIMOTHY MCCLAUSLAND, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
SNAPPLE BEVERAGE CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION & ORDER

This case concerns whether defendant's labeling of its teas and juice drinks as "All Natural," despite their inclusion of high fructose corn syrup ("HFCS"), was misleading to consumers. The defendant has moved for summary judgment. For the following reasons, the motion is granted.

BACKGROUND The facts of this case were discussed in detail in the Court's August 5, 2010 Opinion and Order denying class certification. Weiner v. Snapple Beverage Corp., 2010 WL 3119452 (S.D.N.Y. Aug. 5, 2010). Briefly, defendant Snapple Beverage Corporation ("Snapple"), a New York company, manufactures and distributes teas and juice drinks. Snapple markets its beverages as being "All Natural." At the time plaintiffs filed this lawsuit, Snapple used HFCS to sweeten its beverages. It is undisputed that Snapple disclosed the use of HCFS on its beverages' ingredient lists. Beginning in 2009, Snapple began the process of substituting sugar for HCFS in all of its products that are labeled "All Natural." Snapple represents that it "no longer sells any products containing HCFS and labeled as 'All Natural.'"

Plaintiffs Evan Weiner ("Weiner") and Timothy McCausland ("McCausland") allege that they paid a premium for Snapple beverages as a result of the "All Natural" labeling. They contend that the "All Natural" labeling is misleading because the beverages they purchased were sweetened with HFCS.

Weiner, a New Jersey resident, purchased Snapple beverages "hundreds of times" in New York and New Jersey. "Numerous reasons" motivated those purchases, but the primary motivation was to "find something that tasted good." Weiner does not recall the specific price he paid for Snapple products on any given occasion, but thinks that he generally paid between $1.49 and $1.79 per bottle. He last purchased a Snapple beverage labeled "All Natural" and containing HCFS sometime in 2005.

McCausland, a resident of New York, similarly made numerous purchases of Snapple products and does not recall the specific prices he paid for those products, with the exception of one purchase of a Snapple beverage for $1.79. Like Weiner, he was motivated by a host of factors in his purchase of Snapple, including taste and marketing. McCausland last purchased a Snapple beverage that was labeled "All Natural" and that contained HCFS in the summer of 2006 or 2007.

Plaintiffs filed their original class action complaint on October 10, 2007. The operative pleading for this motion is the Second Amended Class Action Complaint (the "Complaint"), which was filed on October 2, 2009 and was brought on behalf of a putative class consisting of "all persons and entities who, within the State of New York, purchased for personal consumption and not for resale or assignment, a Snapple beverage marketed, advertised and promoted as 'All Natural,' but that contained [HCFS], from October 10, 2001 to January 1, 2009." Jurisdiction was premised on the Class Action Fairness Act ("CAFA"), 28 U.S.C. § 1332(d). The Complaint asserted claims for violation of N.Y. Gen. Bus. L. § 349, unjust enrichment, and breach of express and implied warranty.

On August 5, 2010, the Court denied plaintiffs' motion for class certification. Defendant moved for summary judgment against the two named plaintiffs, Weiner and McCausland, on September 17, 2010. Plaintiffs do not oppose defendant's motion for summary judgment on their implied warranty claim. Although plaintiffs originally sought both damages and injunctive relief, the parties stipulated on October 4, 2010, that all claims for injunctive relief have been rendered moot by Snapple's substitution of sugar for HCFS in its beverages labeled "All Natural."

JURISDICTION Before turning to the merits of the defendant's motion, it is necessary to address the question of whether the denial of class certification divested this Court of subject matter jurisdiction over this case. As it currently stands, the lawsuit does not satisfy the requirements of original diversity jurisdiction set forth in 28 U.S.C. § 1332(a): plaintiffs claim damages of less than $75,000, and plaintiff McCausland is not diverse from defendant Snapple. In response to the Court's Order of January 4, 2011, the parties submitted a joint brief on January 12 which argued that the Court retains jurisdiction over the case despite its denial of class certification. This lawsuit was brought pursuant to CAFA, which provides, The district courts shall have original jurisdiction of any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which . . . any member of a class of plaintiffs is a citizen of a State different from any defendant.

28 U.S.C. § 1332(d)(2). The statute does not speak directly to the issue of whether class certification is a prerequisite to federal jurisdiction, and the Second Circuit has not addressed the issue. The circuits that have considered the issue, however, have uniformly concluded that federal jurisdiction under CAFA does not depend on class certification. See Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805, 806 (7th Cir. 2010); United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int'l Union, AFL-CIO, CLCv. Shell Oil Co., 602 F.3d 1087, 1092 (9th Cir. 2010); Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1268 n.12 (11th Cir. 2009). This conclusion accords with the general proposition, endorsed by the Second Circuit, that federal jurisdiction is determined at the outset of the litigation. See, e.g., LeBlanc v. Cleveland, 248 F.3d 95, 100 (2d Cir. 2001) ("questions of fact, such as how much money is actually at stake and where each party lives, will also be determined with reference to the date on which the relevant complaint was filed" (citation omitted)). Accordingly, this Court retains jurisdiction over this case despite the denial of class certification.

DISCUSSION The defendant primarily contends that summary judgment is appropriate here because the plaintiffs have failed to offer any evidence showing that they were injured as a result of Snapple's "All Natural" labeling. According to Snapple, because the plaintiffs have not offered evidence showing either the price they paid for Snapple or the prices charged by competitors for comparable beverages, they cannot demonstrate that they paid a premium for the "All Natural" Snapple product and thus cannot show harm stemming from the allegedly misleading label.*fn1

Summary judgment is "'appropriate where there exists no genuine issue of material fact and, based on the undisputed facts, the moving party is entitled to judgment as a matter of law.'" Lumbermens Mut. Cas. Co. v. RGIS Inventory Specialists, LLC, 2010 WL 5064377, at *4 (2d Cir. Dec. 9, 2010) (quoting D'Amico v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998)). "The role of the court in deciding a motion for summary judgment 'is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party.'" Wilson v. Northwestern Mut. Ins. Co., 625 F.3d 54, 59-60 (2d Cir. 2010) (quoting Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986)).

1. Section 349, N.Y. Gen. Bus. L.

Section 349, N.Y. Gen. Bus. L., provides: "Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful." N.Y. Gen. Bus. L. § 349. "Generally, claims under [§ 349] are available to an individual consumer who falls victim to misrepresentations made by a seller of consumer goods through false or misleading advertising." Small v. Lorillard Tobacco Co., Inc., 720 N.E.2d 892, 897 (N.Y. 1999). "To state a claim under § 349, a plaintiff must allege: (1) the act or practice was consumer-oriented; (2) the act or practice was misleading in a material respect; ...


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