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Daniel v. Mondelez International, Inc.

United States District Court, E.D. New York

February 26, 2018

TAMIKA DANIEL, on behalf of herself and others similarly situated, Plaintiff,



         Plaintiff Tamika Daniel commenced a putative class action on behalf of herself and all others similarly situated against Defendant Mondelēz International Inc. (Compl., Docket Entry No. 1.) Plaintiff alleges that “non-functional slack-fill” (“excessive empty space”) in Defendant's Swedish Fish brand candy product (the “Product”) misrepresents the amount of food, (id. ¶¶ 2-4), which violates sections 349 and 350 of New York's General Business Law (“GBL”) and constitutes common law fraud under New York state law, (id. ¶¶ 58, 66, 72, 82). Plaintiff seeks monetary damages, injunctive relief, and attorneys' fees. (Id. ¶¶ 64, 71, 80, 87.) Defendant moves to dismiss the Complaint pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure. (Def. Mot. to Dismiss (“Def. Mot.”), Docket Entry No. 22; Def. Mem. in Supp. of Def. Mot. (“Def. Mem.”), Docket Entry No. 22-1.) For the reasons discussed below, the Court grants Defendant's motion to dismiss in its entirety. The Court grants Plaintiff leave to amend only her statutory claims and finds that she lacks standing to pursue injunctive relief.

         I. Background

         The facts alleged in the Complaint are assumed to be true for the purpose of deciding Defendant's motion. Plaintiff is a citizen of the state of New York and resides in Kings County. (Compl. ¶ 19.) Defendant is a corporation organized under the laws of Virginia with its headquarters in Illinois.[1] (Id. ¶ 21.) Plaintiff alleges that Defendant misleadingly “label[s], packag[es], and advertis[es]” its Product which is “regularly sold at convenience stores, grocery stores, and supermarkets.” (Id. ¶¶ 1, 22.)

         According to Plaintiff, the Product is “packaged in a transparent plastic pouch inside a non-transparent thin cardboard box” standing “almost exactly [six] inches tall.” (Id. ¶¶ 4-5.) Plaintiff asserts that the size of the box misleads purchasers by “mak[ing] it appear as though [consumers] are buying more than what is actually being sold.” (Id. ¶ 4.) While conceding that some “slack-fill, ” (the empty space within the Product's packaging), may be justified, Plaintiff alleges that the current amount “exceeds” what is necessary. (Id. ¶ 6.) By way of comparison, Plaintiff alleges that Trolli® Sour Brite Crawlers minis and Dots®, other gummy candies, are packaged in similar sized boxes with significantly less slack-fill. (Id. ¶¶ 6-9.) Relying on these comparisons, Plaintiff contends that the Product contains misleading slack-fill as defined by the Federal Food Drug & Cosmetic Act (“FDCA”) Section 403(d) (21 U.S.C. 343(d)), the Code of Federal Regulations Title 21 part 100, et seq., and parallel state laws. (Id. ¶¶ 2, 32-33.)

         Plaintiff purchased two boxes of the Product relying on the size of the containers. (Id. ¶ 19.) Plaintiff first purchased the Product on Long Island, New York in 2016. (Id.) Despite noticing the slack-fill, Plaintiff assumed that that particular box “had been inadequately filled by accident.” (Id.) Plaintiff only “realized that the slack-fill was there by design” after purchasing another box on December 8, 2016, at the Atlantic Center Target Store in Brooklyn, New York for $1.08. (Id.) Having purchased the Product “on the reasonable assumption that [the] box was filled to functional capacity, ” Plaintiff was disappointed by the extent of slack-fill, and “would not have paid [$1.08] had she known that the box was more than half empty or had the box been proportioned to its actual contents.” (Id. ¶ 20.)

         Plaintiff includes in the Complaint photographs of the Product's packaging as well as that of the alleged comparator candies. (See Id. ¶¶ 4, 6, 8.) Defendant proffers additional photographs and details regarding the Product's packaging and that of the comparator candies.[2](See Sandra Hanian Decl. in Supp. of Def. Mot. (“Hanian Decl.”) ¶ 3, Docket Entry No. 22-2.) Defendant's photographs include a snapshot of the Product's nutritional label listing various facts such as the serving size (seven pieces) and number of servings (two). (Id. ¶ 3(b).) Defendant also states that the candy boxes “indicate that [the Product] is manufactured by Mondelez Global LLC” while Trolli® Sour Brite Crawlers minis and Dots® are manufactured by Ferrara Candy Company and Tootsi Roll Industries, LLC respectively.[3] (Id. ¶ 4.) Plaintiff does not dispute the authenticity of the photographs and references in the Defendant's declaration and also relies extensively on the Product's packaging and that of the alleged comparators.

         II. Discussion

         a. Standards of review i. Rule 12(b)(6)

         In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must construe the complaint liberally, “accepting all factual allegations in the complaint as true and drawing all reasonable inferences in the plaintiff's favor.” Concord Assocs., L.P. v. Entm't Prop. Trust, 817 F.3d 46, 52 (2d Cir. 2016) (quoting Chambers v. Time Warner Inc., 282 F.3d 147, 152 (2d Cir. 2002)); see also Tsirelman v. Daines, 794 F.3d 310, 313 (2d Cir. 2015) (quoting Jaghory v. N.Y. State Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997)). A complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc., 712 F.3d 705, 717-18 (2d Cir. 2013). Although all allegations contained in the complaint are assumed true, this principle is “inapplicable to legal conclusions” or “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678.

         ii. Rule 9(b)

         “Rule 9(b) requires that ‘[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.'” United States ex rel. Ladas v. Exelis, Inc., 824 F.3d 16, 25 (2d Cir. 2016) (alteration in original) (quoting Fed.R.Civ.P. 9(b)). “To satisfy this Rule, a complaint alleging fraud must ‘(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.'” Id. (quoting Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994)). Ultimately, whether a complaint satisfies Rule 9(b) “depends ‘upon the nature of the case, the complexity or simplicity of the transaction or occurrence, the relationship of the parties and the determination of how much circumstantial detail is necessary to give notice to the adverse party and enable him to prepare a responsive pleading.'” United States v. Wells Fargo Bank, N.A., 972 F.Supp.2d 593, 616 (S.D.N.Y. 2013) (citation omitted); see United States ex rel. Wood v. Allergan, Inc., 246 F.Supp.3d 772, 787 (S.D.N.Y. 2017) (quoting same); Kane ex rel, U.S. v. Healthfirst, Inc., 120 F.Supp.3d 370, 383 (S.D.N.Y. 2015) (quoting same); U.S. ex rel. Bilotta v. Novartis Pharm. Corp., 50 F.Supp.3d 497, 508 (S.D.N.Y. 2014) (quoting same);; see also Rombach v. Chang, 355 F.3d 164, 171 (discussing the purpose of the particularity requirement and emphasizing fair notice to the defendant).

         b. Consideration of documents other than the Complaint

         When considering a motion to dismiss, courts generally are “limited to facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.” Wilson v. Kellogg Co., 628 F. App'x 59, 60 (2d Cir. 2016) (citation omitted); see also Nicosia v., Inc., 834 F.3d 220, 230-31 (2d Cir. 2016) (“A complaint ‘is deemed to include any written instrument attached to it as an exhibit or any statements or documents incorporated in it by reference.'” (citation omitted)). Even “[w]here a document is not [expressly] incorporated by reference, the court may nevertheless consider it where the complaint relies heavily upon its terms and effect, thereby rendering the document integral to the complaint.” Nicosia, 834 F.3d at 230-31. To take into account “materials extraneous to the complaint, ” a plaintiff must “rely on the terms and effect of the document in drafting the complaint; mere notice or possession is not enough.'” Id. (citation omitted). In addition, “[e]ven where a document is considered “‘integral' to the complaint, ” “it must be clear on the record that no dispute exists regarding the authenticity or accuracy of the document, ” and “[i]t must also be clear that there exist no material disputed issues of fact regarding the relevance of the document.” Id. (citations omitted).

         The Court's consideration of Defendant's submissions regarding the labeling of the box does not convert this motion to dismiss to a motion for summary judgment. Defendant's submissions relate only to the packaging of the Product - the very basis for Plaintiff's claims. See St. John's Univ., New York v. Bolton, 757 F.Supp.2d 144, 156 (E.D.N.Y. 2010) (“In deciding a motion to dismiss under Rule 12(b)(6), the court may, at its discretion, consider matters of which judicial notice may be taken, as well as documents extrinsic to the complaint where a plaintiff ‘relies heavily upon [the documents] terms and effect, [thus] render[ing] the document integral to the complaint.'” (citing Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002))). “Where plaintiff has actual notice of all the information in the movant's papers and has relied upon these documents in framing the complaint the necessity of translating a Rule 12(b)(6) motion into one under Rule 56 is largely dissipated.” Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991).

         c. Plaintiff does not have standing to pursue injunctive relief

         Defendant argues that Plaintiff is not entitled to injunctive relief because she “fails to allege any intent to purchase [the Product] in the future, ” thereby failing to allege a likelihood of continuing or future injury. (Def. Mem. 25.) Rather than directly refuting Defendant's argument, Plaintiff advances two novel theories: (1) that she has “individual standing” and that Article III “must [be] adjusted” because there will never be a proper party otherwise under the circumstances; and (2) that she is “at risk of future harm regarding her non-pecuniary damages.” (Pl. Opp'n to Def. Mot. (“Pl. Opp'n”) 24, Docket Entry No. 23.)

         A plaintiff seeking injunctive relief “must show the three familiar elements of standing: injury in fact, causation, and redressability.” Cacchillo v. Insmed, Inc., 638 F.3d 401, 404 (2d Cir. 2011) (citing Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)). “[T]o meet the constitutional minimum of standing” for injunctive relief, a plaintiff “must carry the burden of establishing that ‘he has sustained or is immediately in danger of sustaining some direct injury as the result of the challenged official conduct.'” Shain v. Ellison, 356 F.3d 211, 215 (2d Cir. 2004) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 101-02 (1983)); see also Nicosia, 834 F.3d at 239 (“Plaintiffs lack standing to pursue injunctive relief where they are unable to establish a ‘real or immediate threat' of injury.” (first citing Lyons, 461 U.S. at 111-12; and then citing Shain, 356 F.3d at 215-16)); Pungitore v. Barbera, 506 F. App'x. 40, 41 (2d Cir. 2012) (“[W]hen seeking prospective injunctive relief, the plaintiff must prove the likelihood of future or continuing harm.”). The alleged injury “must be ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Knife Rights, Inc. v. Vance, 802 F.3d 377, 383 (2d Cir. 2015) (quoting Susan B. Anthony List v. Driehaus, 573 U.S. ---, ---, 134 S.Ct. 2334, 2341 (2014)); Am. Civil Liberties Union v. Clapper, 785 F.3d 787, 800 (2d Cir. 2015) (“The Supreme Court has ‘repeatedly reiterated that “threatened injury must be certainly impending to constitute injury in fact, ” and that “[a]llegations of possible future injury” are not sufficient.'” (alteration in original) (quoting Clapper v. Amnesty Int'l USA, 568 U.S. 398 (2013))).

         A plaintiff “cannot rely on past injury to satisfy the injury requirement but must show a likelihood that he . . . will be injured in the future.” Shain, 356 F.3d at 215; see also Nicosia, 834 F.3d at 239 (stating that past injuries do not confer standing to seek injunctive relief); Pungitore, 506 F. App'x. at 42 (stating that, while past wrongs may be “evidence bearing on whether there is a real and immediate threat of repeated injury, ' such evidence ‘does not in itself show a present case or controversy regarding injunctive relief . . . if unaccompanied by any continuing, present adverse effects'” (quoting Lyons, 461 U.S. at 102)). “In establishing a certainly impending future injury, . . . the plaintiff must establish how he or she will be injured prospectively and that the injury would be prevented by the equitable relief sought.” Marcavage v. City of New York, 689 F.3d 98, 103 (2d Cir. 2012) (collecting cases). “[A]t the pleading stage, standing allegations need not be crafted with precise detail, nor must the plaintiff prove his allegations of injury.” Baur v. Veneman, 352 F.3d 625, 631 (2d Cir. 2003) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).

         In light of these principles, Plaintiff's arguments are meritless. Essentially, Plaintiff's first argument is an attempt to artfully plead around the constitutional requirements for third-party standing, including as discussed in this Court's decision in Greene v. Gerber Products Co., 262 F.Supp.3d 38, 55-56 (E.D.N.Y. 2017). As in Greene, Plaintiff seeks to assert standing on behalf of individuals who are not yet aware of the alleged misrepresentation. Greene, 262 F.Supp.3d at 56. The Court acknowledges the persuasive value of Plaintiff's argument that, without third-party standing, consumers could not enjoin false or deceptive advertising because “(1) if they were unaware of the falsity of the advertising and therefore at risk of future injury, they would not bring suit, and (2) once they become aware that a product is falsely or deceptively advertised, they cannot plausibly allege that they would re-purchase the product.” Id. Nevertheless, as explained in Greene, third-party standing is generally limited to situations where “constitutional rights are at risk” and “the relationship between a class representative and would-be consumers ‘is not the type of close relationship courts have recognized as creating a ‘prudential exception' to the third-party standing rules.'”[4] Id.; see also Kommer v. Bayer Consumer Health, a division of Bayer AG, 710 F. App'x 43, 44 (2d Cir. 2018) (“[A]ssuming his past purchases . . . resulted in [an] injury . . ., [plaintiff] has not shown that he is likely to be subjected to further [injurious] sales of that sort because he fail[s] to allege that he intends to [purchase the offending product] in the future . . . Accordingly, he has no standing under Article III.”); Albert v. Blue Diamond Growers, 151 F.Supp.3d 412, 418 (S.D.N.Y. 2015) (“Although Ackerman [v. Coca-Cola Co., No. 09-CV-0395, 2010 WL 2925955, at *15 n.23 (E.D.N.Y. July 21, 2010)] and other cases from the Eastern District of New York may suggest that future injury is not required in the consumer protection context, this Court declines to follow these cases because binding Supreme Court and Second Circuit precedent dictates otherwise.”).

         As to future “non-pecuniary damages, ” Plaintiff proffers two injuries recognized by district courts within the Ninth Circuit: that absent an injunction, a “plaintiff-consumer will 1) no longer be able to confidently rely on the defendant's representations, and 2) refrain from purchasing products in the future even if they in fact conform to her expectations.” Duran v. Creek, No. 15-CV-05497, 2016 WL 1191685, at *7 (N.D. Cal. Mar. 28, 2016) (citations omitted); Ries v. Arizona Beverages USA LLC, 287 F.R.D. 523, 533 (N.D. Cal. 2012); but see Victor v. R.C. Bigelow, Inc., 708 F. App'x 333, 334 (9th Cir. Dec. 20, 2017) (holding that plaintiffs lacked Article III standing where they “[would] not consider buying even properly labeled [product] until they receive an injunction”). However, Plaintiff fails to provide any binding or even persuasive authority from this Circuit or New York state courts. In addition, although non-pecuniary harm such as emotional distress is cognizable under section 349 of the GBL, the type of injury alleged by Plaintiff does not appear to rise to the level of harms already recognized. See, e.g., Bose v. Interclick, Inc., No. 10-CV-9183, 2011 WL 4343517, at *9 (S.D.N.Y. Aug. 17, 2011) (finding that “courts have recognized . . . privacy violations” to be actionable injuries under section 349) (emphasis added); Wood v. Capital One Servs., LLC, 718 F.Supp.2d 286, 292 (N.D.N.Y. 2010) (finding pleading requirements for injury satisfied where plaintiff alleged he suffered from “humiliation, anger, anxiety, emotional distress, fear, frustration and embarrassment”); Midland Funding, LLC v. Giraldo, 961 N.Y.S.2d 743, 749 (Dist. Ct. 2013) (listing plaintiff's alleged non-pecuniary injuries including “[s]leep deprivation; anxiety; nervousness; fear; worry; fright; shock; strain to her marriage; humiliation and intimidation”). Plaintiff's annoyance at being unable to confidently purchase Defendant's Product does not rise to the type of non-pecuniary injury recognized under New York law.

         d. New York statutory claims under GBL sections 349 and 350

         GBL section 349 prohibits “[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” N.Y. Gen. Bus. Law § 349. GBL section 350 prohibits “[f]alse advertising in the conduct of any business, trade or commerce or in the furnishing of any service in this state.” N.Y. Gen. Bus. Law § 350.

         To assert a claim under either section, “a plaintiff must allege that a defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and that (3) [the] plaintiff suffered injury as a result of the allegedly deceptive act or practice.”[5] Orlander v. Staples, Inc., 802 F.3d 289, 300 (2d Cir. 2015) (citing Koch v. Acker, Merrall & Condit Co., 18 N.Y.3d 940, 944 (2013)); see Maurizio v. Goldsmith, 230 F.3d 518, 521 (2d Cir. 2000) (citing the elements for a prima facie case under section 349).

         Claims under GBL sections 349 and 350 are not subject to the pleading-with-particularity requirements of Rule 9(b). Greene, 262 F.Supp.3d at 67; Schwartzco Enters. LLC v. TMH Mgmt., LLC, 60 F.Supp.3d 331, 359 (E.D.N.Y. 2014) (quoting Pelman ex rel. Pelman v. McDonald's Corp., 396 F.3d 508, 511 (2d Cir. 2005)); see also Leonard v. Abbott Labs., Inc., No. 10-CV-4676, 2012 WL 764199, at *19 (E.D.N.Y. Mar. 5, 2012) (considering case law and discerning a categorical rule that New York GBL section 349 claims, “regardless of whether they ‘sound in fraud, ' or are premised on specific misrepresentations rather than an ‘advertising scheme, ' are not subject to the heightened pleading requirement of Rule 9(b)”). With an exception not relevant here, [6] “[t]he standard for recovery under . . . [section] 350, while specific to false advertising, is otherwise identical to section 349.” Goshen v. Mut. Life Ins. Co. of N.Y., 98 N.Y.2d 314, 324 n.1 (2002).

         i. Misleading slack-fill under the FDCA and parallel state statutes

         Defendant first asserts that Plaintiff fails to sufficiently allege that the Product's slack-fill is misleading as defined by the FDCA and incorporated by the parallel New York state statutes.[7] (Def. Mem. 9-14.); see also N.Y. Agric. & Mkts. Law § 201(4) (deeming food to be misbranded “[i]f its container is so made, formed, colored or filled as to be misleading”); 1 NYCRR § 259.1(a)(2) (adopting federal definitions and standards for food packaging and labeling).[8]

         Under the FDCA, “[s]lack-fill is the difference between the actual capacity of a container and the volume of product contained therein.” 21 C.F.R. § 100.100(a). Recognizing the inevitability and value of slack-fill in many products, the FDCA only considers “non-functional” slack-fill to be misleading when placed in a package where consumers are unable to fully view the contents.[9] ...

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