Opinion
20-CV-2402 (PGG) (JLC)
11-04-2021
GILBERTO CRUZ, et al., Plaintiffs, v. D.F. STAUFFER BISCUIT CO., INC., Defendant.
To the Honorable Paul G. Gardephe, United States District Judge:
REPORT & RECOMMENDATION
JAMES L. COTT, United States Magistrate Judge.
Plaintiffs Gilberto Cruz and Norma Melendez, on behalf of themselves and those similarly situated, bring this false advertising action against D.F. Stauffer Biscuit Co., Inc. (“Stauffer”) alleging violations of Sections 349 and 350 of the New York General Business Law (“GBL”), negligent misrepresentation, fraud, and unjust enrichment under New York common law, and breach of warranty under the New York Uniform Commercial Code and the Federal Magnuson-Moss Warranty Act. Stauffer has moved to dismiss the First Amended Complaint with prejudice pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons set forth below, I recommend that Stauffer's motion be granted.
I. BACKGROUND
A. Facts
Stauffer manufactures, distributes, markets, labels, and sells snack crackers and cookies. First Amended Complaint (“FAC”), Dkt. No. 18, ¶ 1; Memorandum of Law in Support of Defendant's Motion to Dismiss (“Def. Mem.”), Dkt. No. 32, at 1. One of the products Stauffer manufactures and sells both in retail and online is Lemon Snaps (“the Product”) - crunchy, lemon-flavored cookies. FAC ¶ 3; Def. Mem. at 1. Plaintiffs allege that the Product's packaging purports that the cookies get their lemon taste only from lemons, rather than from non-lemon or artificial sources. Id. ¶ 4. Cruz claims he purchased the Product on one or more occasions near his residence in the Bronx during 2019 and 2020. Id. ¶48. Melendez claims she purchased the Product on one or more occasions near her residence in Manhattan in January 2020 and April 2020. Id. ¶ 49. The front of the Product's packaging is pictured below.
(Image Omitted)
Id. ¶ 3. The package contains the word “Lemon” above the word “Snaps,” and each word is written in large brown letters in the same font and size. The words “Quality Since 1871” appears below in smaller font and green letters. The package also has an image of the cookies in a pile in front of three lemons (two whole and one cut in half) without any other qualifying terms or phrases, such as “contains some lemon” or “made with a drop of lemon.” Id. ¶ 28. Plaintiffs allege that the Product's reference to “Lemon” and images of “freshly picked” lemons convey to a reasonable consumer that the Product's lemon flavor “comes predominantly, if not exclusively, from lemons.” Id. ¶¶ 3, 14-16, 21. Plaintiffs further allege that they relied on the representations of the packaging that the Product's lemon taste was from natural lemons. Id. ¶¶ 50-52.
The ingredient list, printed on the Product's back panel and pictured below, indicates that “Natural and Artificial Flavor,” rather than lemon oil and/or lemon extract, are used to provide the Product's lemon flavoring. Id. ¶¶ 18-19, 27. Plaintiffs allege that the ingredient list fails to tell consumers that “the lemon taste of the Product is predominantly from artificial lemon and citrus flavors, and not real lemon from the lemon tree.” Id. ¶ 20.
(Image Omitted)
Id. ¶ 18. Plaintiffs further allege that scientific testing has shown that “the lemon flavoring does not come exclusively or predominantly from lemons,” as the Product has only “a trace or de minimis amount” of real lemon. Id. ¶¶ 24-25. This testing has allegedly shown that the Product contains synthetic citral, which is incapable of providing “full richness of flavor found in the real lemon.” Id. ¶ 26. Plaintiffs allege the small print ingredient list that states “Natural and Artificial Flavor” fails to inform consumers that the amount of real lemon in the Product is “barely detectable, if present at all.” Id. ¶ 27.
Citral is derived from lemon and orange trees and can function as a natural preservative. Citral, THE FRAGRANCE CONSERVATORY, https://fragranceconservatory.com/ingredient/citral (last visited November 4, 2021).
Plaintiffs allege that they and other consumers have been misled to believe that the Product has natural lemon flavoring as opposed to artificial flavoring. Id. ¶¶ 6, 12, 13-15, 29. Plaintiffs further allege that consumers try to avoid artificial flavors, prefer products that derive their flavor from natural sources, and are willing to pay higher prices for naturally-flavored products. Id. ¶¶ 5-12. Plaintiffs contend that Stauffer “knows consumers will pay more for the Product” because the front label and ingredient listing fails to inform consumers that the lemon flavor comes from imitation lemon flavors rather than real lemon. Id. ¶ 29. As a result of the misleading label, Plaintiffs allege the Product is sold at higher prices ($2.49 for a 14-ounce package) than it would have in absence of the deceptive label. Id. ¶¶ 31-32, 35. Plaintiffs claim that they would not have bought the Product or would have paid less had they known about the real amount of real lemon in the Product. Id. ¶¶ 33-34.
B. Procedural History
Plaintiffs initiated this action on March 19, 2020. Dkt. No. 1. On August 10, 2020, Stauffer requested a pre-motion conference and identified several flaws with Plaintiffs' original complaint that would form the basis for a motion to dismiss. Dkt. No. 14. In response to Stauffer's letter-motion, on September 24, 2020, Plaintiffs filed their First Amended Complaint. Dkt No. 18. In their amended complaint, Plaintiffs assert class-wide claims for: (1) violations of Sections 349 and 350 of the GBL (¶¶ 64-72); (2) negligent misrepresentation, fraud, and unjust enrichment under New York common law (¶¶ 73-83, 97-106); and (3) breach of warranty under the New York Uniform Commercial Code and the federal Magnuson-Moss Warranty Act (¶¶ 84-96). Id. Plaintiffs defined the class as “all purchasers of the Product who reside in New York during the applicable statutes of limitations.” Id. ¶ 55. Stauffer moved to dismiss the First Amended Complaint on May 17, 2021. Motion to Dismiss, Dkt. No. 31; Def. Mem. Plaintiffs filed their opposition papers on June 7, 2021. Memorandum of Law in Opposition of Motion (“Pl. Opp.”); Dkt. No. 33. Stauffer filed its reply papers on June 14, 2021. Dkt. No. 34. The motion was referred to me for a report and recommendation on June 17, 2021. Dkt. No. 35.
II. DISCUSSION
A. Legal Standards on a Motion to Dismiss
Rule 12(b)(6) allows a party to move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In considering a Rule 12(b)(6) motion, a court accepts all factual allegations in the complaint as true and draws all reasonable inferences in the plaintiffs favor. See Palin v. N.Y. Times Co., 940 F.3d 804, 809 (2d Cir. 2019) (quoting Elias v. Rolling Stone LLC, 872 F.3d 97, 104 (2d Cir. 2017)); Chase Grp. All. LLC v. City of N.Y. Dep't of Fin., 620 F.3d 146, 150 (2d Cir. 2010).
To survive dismissal, a plaintiff must allege 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). Facial plausibility exists when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
Moreover, “[t]o survive dismissal, the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient ‘to raise a right to relief above the speculative level.'” ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (quoting Twombly, 550 U.S. at 555). Although Rule 8 “does not require ‘detailed factual allegations,' . . . it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555). Determining whether a complaint states a plausible claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.
B. New York General Business Law Claim
1. Legal Standards
Plaintiffs' first cause of action is under Sections 349 and 350 of the GBL. FAC ¶¶ 64-72. “Section 349 prohibits ‘[d]eceptive acts or practices in the conduct of any business, trade or commerce,' whereas [§] 350 prohibits ‘[f]alse advertising in the conduct of any business, trade or commerce.'” Wynn v. Topco Assocs., LLC, No. 19-CV-11194 (RA), 2021 WL 168541, at *2 (S.D.N.Y. Jan. 19, 2021) (alterations in the original) (quoting GBL §§ 349-50). “The standard for recovery under . . . [§] 350, while specific to false advertising, is otherwise identical to [§] 349, and therefore the Court will merge its analysis of the two claims.” Cosgrove v. Oregon Chai, Inc., 520 F.Supp.3d 562, 575 (S.D.N.Y. 2021) (citation omitted); see also Barreto v. Westbrae Nat., Inc., 518 F.Supp.3d 795, 802 (S.D.N.Y. 2021). To state 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) plaintiff suffered injury as a result of the allegedly deceptive act or practice.” Wynn, 2021 WL 168541, at *2 (quoting Orlander v. Staples, Inc., 802 F.3d 289, 300 (2d Cir. 2015)). To survive a motion to dismiss, “plaintiffs must do more than plausibly allege that a label might conceivably be misunderstood by some few consumers.” Twohig v. Shop-Rite Supermarkets, Inc., 519 F.Supp.3d 154, 160 (S.D.N.Y. 2021) (alteration and internal quotation marks omitted) (quoting Sarr v. BEF Foods, Inc., No. 18-CV-6409 (ARR) (RLM), 2020 WL 729883, at *3 (E.D.N.Y. Feb. 13, 2020)). Rather, they must “plausibly allege that a significant portion of the general consuming public or of targeted customers, acting reasonably in the circumstances, could be misled.” Id. (quoting Sarr, 2020 WL 729883, at *3). Finally, “[a]lthough the question of whether a business practice or advertisement is misleading to the reasonable consumer is generally a question of fact, it is ‘well settled that a court may determine as a matter of law that an allegedly deceptive advertisement would not have misled a reasonable consumer.'” Id. (internal quotations omitted).
The Court considers the language of the Product label and its context in evaluating whether the packaging is deceptive. See, e.g., Pichardo v. Only What You Need, Inc., No. 20-CV-493 (VEC), 2020 WL 6323775, at *2 (S.D.N.Y. Oct. 27, 2020) (“When analyzing whether a label is deceptive, courts do not view the label in isolation. Instead, ‘[c]ourts view each allegedly misleading statement in light of its context on the product label or advertisement as a whole.'”) (internal citations omitted). “If a plaintiff alleges that an element of a product's label is misleading, but another portion of the label would dispel the confusion, the court should ask whether the misleading element is ambiguous. If so, the clarification can defeat the claim.” Reyes v. Crystal Farms Refrigerated Distrib. Co., No. 18-CV-2250 (NGG) (RML), 2019 WL 3409883, at *3 (E.D.N.Y. July 26, 2019) (quoting Davis v. Hain Celestial Grp., Inc., 297 F.Supp.3d 327, 334 (E.D.N.Y. 2018)).
2. Application
Plaintiffs allege that Stauffer misrepresented the “substantive, quality, compositional and/or environmental attributes of the Product,” which had “a material bearing on price and consumer acceptance” of the Product. FAC ¶¶ 67-68. Plaintiffs further allege they relied on Stauffer's statements, omissions, and representations on the packaging and ingredient list that there was a substantive amount of real lemon in the Product. Id. ¶¶ 69-72. Stauffer does not dispute that the conduct alleged here-the packaging of the Product-was “consumer-oriented.” Def. Mem. at 5. Instead, it argues that Plaintiffs have failed: (1) to plead any actual injury, and (2) to adequately allege that a reasonable consumer would be misled by the Product's packaging. Id. at 5-12.
a. Actual Injury
In order to satisfy the actual injury prong, a plaintiff must “allege that, on account of a materially misleading practice, [they] purchased a product and did not receive the full value of [their] purchase.” Orlander, 802 F.3d at 302. One way to demonstrate this-but not the only way-is to allege payment of a “price premium,” whereby a plaintiff pays more than she would have but for the deceptive practice. Id. Plaintiffs need not specify in their pleading the exact amount of price premium that they paid. See Izquierdo v. Panera Bread Co., 450 F.Supp.3d 453, 465 (S.D.N.Y. 2020) (“Plaintiff's contention that the [Product] ‘had significantly less value than it warranted' constitutes a ‘classic price premium theory of injury' that is ‘plausible and cognizable.'”) (citation omitted); Quiroz v. Beaverton Foods, Inc., No. 17-CV-7348 (NGG) (JO), 2019 WL 1473088, at *9 (E.D.N.Y. Mar. 31, 2019) (“Defendant denied [plaintiff] the full benefit of their bargains” when “[plaintiff] paid money for a Product that was represented to them as preservative-free, and then received a Product that was preservative-laden and had significantly less value for them.”). Allegations that plaintiffs would not have bought the product or paid less for it had they known the truth behind the misrepresentation satisfies an actual injury claim at the motion to dismiss stage. See, e.g., Singleton v. Fifth Generation, Inc., No. 15-CV-474 (BKS) (TWD), 2016 WL 406295, at *10 (N.D.N.Y. Jan. 12, 2016) (plaintiff alleged actual injury when he pled that had he “known ‘the truth,'” he “would not have bought the [product], or would have paid less for it.” (cleaned up)); Kacocha v. Nestle Purina Petcare Co., No. 15-CV-5489 (KMK), 2016 WL 4367991, at *14 (S.D.N.Y. Aug. 12, 2016) (plaintiffs' claim they paid price premiums based on defendants' misrepresentations “adequately alleged injury under GBL § 349”).
Here, Plaintiffs allege that as a result of the purportedly misleading labeling, the Lemon Snaps are sold at a premium price of approximately $2.49 per 14 ounces, which is “higher than the price of the Product if it were represented in a nonmisleading way.” FAC ¶ 35. Plaintiffs also allege that they would not have purchased the Product or paid as much if they had known the true facts regarding the lemon content. Id. ¶¶ 34, 72. Plaintiffs thus have alleged that the deception led the product to be sold at a premium price compared to similar products represented in a non-misleading way. Such allegations are sufficient for a section 349 claim to survive at this stage of the case. See, e.g., Singleton, 2016 WL 406295, at *10-11; Kacocha, 2016 WL 4367991, at *14. The Court will next consider whether Plaintiffs have adequately alleged that the Product's packaging was materially misleading.
b. Materially Misleading
For the purposes of this motion, the Court accepts as true Plaintiffs' allegations that the Product is not predominantly or exclusively flavored by natural lemon ingredients. FAC ¶¶ 24-25. At their core, Plaintiffs' allegations are that the Product's packaging is materially misleading because reasonable consumers would expect the Product's lemon flavor to come “mainly or exclusively” from “a real lemon ingredient,” rather than from artificial flavoring. Id. ¶ 50; Pl. Opp. at 6. Specifically, Plaintiffs point to the image of lemons on the packaging as creating a dispositive impression that the Product contains predominantly real lemons. Pl. Opp. at 6.
Stauffer contends that this case is similar to the so-called “SDNY Vanilla Cases,” in which plaintiffs have unsuccessfully alleged that various uses of the term “vanilla” on food product labels are misleading. Def. Mem. at 6-7. In each of these cases, the court found that the word “vanilla” and/or images of vanilla flowers on a product's front label made a representation about the flavor of the product rather than its source. See Oregon Chai, 520 F.Supp.3d at 581 (“vanilla” on the front of product package “appears to describe a flavor more than an ingredient”); Twohig, 519 F.Supp.3d at 162 (concluding that the word “vanilla” on the front label would not lead a reasonable consumer to believe that vanilla from vanilla beans is the exclusive or predominant flavor ingredient); Wynn, 2021 WL 168541, at *4 (“[d]efendant's ‘Vanilla Almondmilk' front label makes no representations whatsoever about the source of the vanilla flavor or the ingredients constituting it”); Barreto, 518 F.Supp.3d at 804 (product label containing the words “Vanilla Soymilk” and “Natural Vanilla Flavor With Other Natural Flavors” “makes a representation regarding its flavor and does not imply or represent [that] the source of that flavor comes exclusively or predominantly from natural vanilla”); Cosgrove v. Blue Diamond Growers, No. 19-CV-8993 (VM), 2020 WL 7211218, at *3 (S.D.N.Y. Dec. 7, 2020) (reasonable consumer would associate “vanilla” with flavor rather than particular ingredient); Pichardo, 2020 WL 6323775, at *5 (“reasonable consumers associate the world ‘vanilla' with a flavor, not with an ingredient”); Steele v. Wegmans Food Mkts., Inc., 472 F.Supp.3d 47, 50 (S.D.N.Y. 2020) (“vanilla” assists buyers in determining the flavor of a product, rather than the source of that flavor); Budhani v. Monster Energy Co., 527 F.Supp.3d 667, 679 (S.D.N.Y. 2021) (despite image of vanilla flower on product label, reasonable consumer “would not understand the [p]roduct's vanilla flavor to be derived predominantly or exclusively from vanilla bean extract”). Therefore, although the plaintiffs in each of these cases alleged that there was a de minimis amount of real vanilla in the vanilla-flavored products, the court held that such allegations were insufficient to adequately plead a material misrepresentation and dismissed the complaints for failure to state a claim. See Oregon Chai, 520 F.Supp.3d at 581-85; Twohig, 519 F.Supp.3d at 160-65; Wynn, 2021 WL 168541, at *2-5; Barreto, 518 F.Supp.3d at 802-06; Blue Diamond Growers, 2020 WL 7211218, at *3-5; Pichardo, 2020 WL 6323775, at *3-6; Steele, 472 F.Supp.3d at 50-51; Budhani, 527 F.Supp.3d at 678-83.
Plaintiffs counter that their case is more like Campbell v. Whole Food Markets Group, Inc. than the SDNY Vanilla Cases. 516 F.Supp.3d 370 (S.D.N.Y. 2021); Pl. Opp. at 5-6. In Campbell, the court considered whether a box of graham crackers labeled as “Honey Graham Crackers” and depicting an image of honey was materially misleading given that the whole grain content of the product was allegedly less than 15 percent and that honey was not the product's primary sweetener. Campbell, 516 F.Supp.3d at 382-85. The court found that “graham,” a type of flour, was not associated with a particular flavor, and therefore a reasonable consumer would infer that “graham” referred to the product's predominant ingredient. Id. at 382-83. The court then determined that because the “graphics of the packaging treat the words ‘graham' and ‘honey' as equivalents,” a reasonable consumer could reasonably infer that the product also contained honey as an ingredient, rather than merely a flavor. Id. at 385. The court further reasoned that even if “‘honey' was intended solely as a reference to the flavor of the [p]roduct,” a reasonable consumer could expect that the source of the honey flavor was actual honey - a purported ingredient in the product. Id. The court also noted that the complaint provided no basis to conclude that the flavor of honey can come from a product other than honey. Id. (comparing Sharpe v. A&W Concentrate Co., 481 F.Supp.3d 94, 100-02 (E.D.N.Y. 2020) (describing ethyl vanillin as a substitute source of vanilla flavoring)).
In the Court's view, this case hews closer to the SDNY Vanilla Cases than to Campbell, and therefore Plaintiffs have failed to plausibly allege that a reasonable consumer is likely to be misled by the Product's packaging. As an initial matter, Plaintiffs' allegations that reasonable consumers would “expect [the Product] to be flavored exclusively” or predominantly with real lemons are “conclusory statements that the Court is not required to accept.” Wynn, 2021 WL 168541, at *3 (citing Iqbal, 556 U.S. at 678). In addition, the Product label contains no ingredient claim such as “made with lemons” or “made from lemons.” See, e.g., Dashnau, 2021 WL 1163716, at *6 (dismissing GBL claim because product label did not contain ingredient claim); Campbell, 516 F.Supp.3d at 383 n.4 (“The absence or presence of the words ‘made with' can make a substantial difference where the relevant term is both an ingredient and a flavor.”).
Moreover, nothing on the Product label states or implies that the cookies' flavor is derived entirely or predominantly from real lemons or from natural, nonartificial ingredients. See, e.g., Wallace v. Wise Foods, Inc., No. 20-CV-6831 (JPO), 2021 WL 3163599, at *2 (S.D.N.Y. July 26, 2021) (dismissing GBL claim based on cheddar and sour cream-flavored chips because product label did not state or imply that the chips' flavor was derived entirely from cheddar and sour cream or from natural ingredients); Twohig, 519 F.Supp.3d at 162 (product label not misleading because label “does not contain qualifying words that would lead a reasonable consumer to believe that vanilla from vanilla beans is the exclusive or predominant flavor ingredient.”); Budhani, 527 F.Supp.3d at 679 (reasonable consumer would not “understand the Product's vanilla flavor to be derived predominantly or exclusively from vanilla bean extract” when label contained the words “vanilla cream” and image of vanilla flower). A reasonable consumer would not make “broad assumptions about the [cookies'] ingredients based on the representation that they are [lemon] flavored,” Wallace, 2021 WL 3163599, at *2, and Plaintiffs have not provided any empirical basis in their pleading to suggest otherwise. See, e.g., Dashnau, 2021 WL 1163716, at *4 (plaintiffs failed to adequately allege that product label was misleading when they provided “no empirical basis” to establish that reasonable consumers would interpret product's label to imply an exclusive source of vanilla flavoring). Additionally, Plaintiffs do not allege that the Product does not taste like lemons, and therefore a consumer reasonably expecting a lemon-flavored cookie as a result of the packaging is not misled. See, e.g., Pichardo, 2020 WL 6323775, at *5 (“It is difficult to comprehend what is misleading when the Defendant's [Vanilla Product] tastes like vanilla.”).
Even if the Product's packaging “may create confusion” as to whether the cookies contain flavoring agents other than real lemon, lemon oil, or lemon extract, “such confusion is sufficiently dispelled by the ingredients on the back of the package.” Wallace, 2021 WL 3163599, at *2 (quoting Reyes, 2019 WL 3409883, at *3). Plaintiffs argue that the nutritional label is insufficient to cure the front label claim due to its smaller font and non-concise disclosure. Pl. Opp. at 8. However, because courts consider the packaging as a whole, “the presence of a disclaimer or similar clarifying language may defeat a claim of deception” in certain circumstances. Fink v. Time Warner Cable, 714 F.3d 739, 742 (2d Cir. 2013) (internal citations omitted).
Here, the Product's front label does not state that it is free of artificial flavors, suggest that real lemons are the only source of the cookies' lemon flavoring, or claim that the flavor from real lemons constitutes a certain percentage of the total lemon flavor. Therefore, the ingredient label's statement that the Product contains “natural and artificial flavors” is consistent with Stauffer's representations on the front of its packaging and serves as clarifying language about the source of the Product's lemon flavor. See, e.g., Mantikas v. Kellogg Co., 910 F.3d 633, 637 (2d Cir. 2018) (“reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging.”) (internal quotations omitted).
For these reasons, Plaintiffs have not sufficiently alleged a material misrepresentation under GBL sections 349 and 350, and this claim should be dismissed.
C. Plaintiffs' Common Law Claims
Plaintiffs also assert claims for negligent misrepresentation, breach of warranty, fraud, and unjust enrichment. These claims largely center on the same allegations of misleading business practices rejected above, and therefore, all fail as a matter of law. See Wynn, 2021 WL 168541, at *6 (dismissing claims for negligent misrepresentation, breach of warranty, fraud, and unjust enrichment after dismissing claims under GBL); Barreto, 518 F.Supp.3d at 806 (same). Moreover, each of these claims fail for an additional reason as well.
1. Negligent Misrepresentation
To state a claim for negligent misrepresentation under New York law, a plaintiff must allege that:
(1) the defendant had a duty, as a result of a special relationship, to give correct information; (2) the defendant made a false representation that he or she should have known was incorrect; (3) the information supplied in the representation was known by the defendant to be desired by the plaintiff for a serious purpose; (4) the plaintiff intended to rely and act upon it; and (5) the plaintiff reasonably relied on it to his or her detriment.Anschutz Corp. v. Merrill Lynch & Co., 690 F.3d 98, 114 (2d Cir. 2012). “Under the ‘duty' element, New York strictly limits negligent misrepresentation claims to situations involving ‘actual privity of contract between the parties or a relationship so close as to approach that of privity.'” Id. (quoting In re Time Warner Inc. Sec. Litig., 9 F.3d 259, 271 (2d Cir. 1993)). “In the commercial context, a closer degree of trust between the parties than that of the ordinary buyer and seller is required to establish the ‘existence of . . . a special relationship . . . [capable of] giv[ing] rise to an exceptional duty regarding commercial speech and justifiable reliance on such speech.'” Izquierdo v. Mondelez Int'l, Inc., No. 16-CV-04697 (CM), 2016 WL 6459832, at *8 (S.D.N.Y. Oct. 26, 2016) (quoting Kimmell v. Schaefer, 89 N.Y.2d 257, 264 (1996)) (alterations in original). In Kimmell, the New York Court of Appeals set forth several factors to determine whether a special relationship, and thus a duty to provide correct information, exists: “whether the person making the representation held or appeared to hold unique or special expertise, whether a special relationship of trust or confidence existed between the parties; and whether the speaker was aware of the use to which the information would be put and supplied it for that purpose.” Kimmell, 89 N.Y.2d at 264.
In this case, Plaintiffs have failed to adequately plead the existence of a special relationship. Although Plaintiffs argue that Stauffer had “special knowledge and experience” in the production and sale of baked goods and had a duty to “act with care,” Pl. Opp. at 15, nothing in the First Amended Complaint suggests that the parties were engaged in anything more than basic commercial transactions in 2019 and 2020. Without more, Plaintiffs' allegations are insufficient to establish the special relationship necessary to maintain a claim for negligent misrepresentation. See, e.g., Segedie v. Hain Celestial Grp., Inc., No. 14-CV-5029 (NSR), 2015 WL 2168374, at *14 (S.D.N.Y. May 7, 2015) (“Defendant's obligation to label products truthfully does not arise from any special relationship. There is nothing approximating privity between the parties.”); Stoltz, 2015 WL 5579872, at *25 (“The requisite special relationship may not . . . be based solely on Defendants' status as the manufacturer of the [products] because, if this alone were sufficient, a special relationship would necessarily always exist for purposes of misbranded food claims, which is not the case”).
Therefore, Plaintiffs' negligent misrepresentation claim should be dismissed.
2. Breach of Express Warranty
Plaintiffs' claims for breaches of express and implied warranties rely on identical allegations: Stauffer manufactured and labeled the Product in a manner that warranted to Plaintiffs and class members that the Product contained predominantly natural lemon ingredients. FAC ¶¶ 84-96. Plaintiffs allege that Stauffer had a duty, as “one of the most recognized companies in the nation in this sector,” to “disclose and/or provide non-deceptive descriptions and marketing of the Product.” Id. ¶¶ 86, 92.
A claim for breach of express warranty under New York law requires a plaintiff to allege an “affirmation of fact or promise by the seller, the natural tendency of which was to induce the buyer to purchase and that the warranty was relied upon.” Factory Assocs. & Exps., Inc. v. Lehigh Safety Shoes Co., 382 Fed.Appx. 110, 112 (2d Cir. 2010) (internal quotations omitted). To survive a motion to dismiss, a breach of express warranty claim must allege: “(1) the existence of a material statement amounting to a warranty, (2) the buyer's reliance on this warranty as a basis for the contract with the immediate seller, (3) breach of the warranty, and (4) injury to the buyer caused by the breach.” Goldemberg v. Johnson & Johnson Consumer Co., 8 F.Supp.3d 467, 482 (S.D.N.Y. 2014) (citations omitted). “Generalized statements by the defendant . . . do not support an express warranty claim if they are ‘such that a reasonable consumer would not interpret the statement as a factual claim upon which he or she could rely.'” Silva v. Smucker Nat. Foods, Inc., No. 14-CV-6154 (JG) (RML), 2015 WL 5360022, at *10 (E.D.N.Y. Sept. 14, 2015) (quoting Hubbard v. Gen. Motors Corp., No. 95-CV-4362, 1996 WL 274018, at *6 (S.D.N.Y. May 22, 1996)). Under New York law, a plaintiff must also give notice of the breach to the seller before he can recover under an express warranty claim. See N.Y. U.C.C. § 2-607(3)(a) (“[B]uyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach.”). “The notice requirement applies to consumer fraud actions,” such as this action. Colpitts v. Blue Diamond Growers, 527 F.Supp.3d 562, 589 (S.D.N.Y. 2021) (collecting cases).
For the reasons discussed above, Plaintiffs have not adequately pled that the Product “does not comport with the statements contained on the label,” and have therefore failed to adequately allege a breach of express warranty. Dashnau, 2021 WL 1163716, at *9 (quoting Wynn, 2021 WL 168541, at *7); see also Barreto, 518 F.Supp.3d at 806 (“The express warranty claim fails as [the defendant's] product does not state it is made exclusively with natural vanilla and a reasonable consumer would not interpret the representation of ‘Vanilla Soymilk' to make this claim.”).
Moreover, Plaintiffs have not adequately alleged that they satisfied the notice requirement of a breach of express warranty claim. The First Amended Complaint merely states that Plaintiffs “provided or will provide” notice to Defendant. FAC ¶ 93. This vague allegation cannot be construed as adequately pleading that Plaintiffs did in fact provide such notice before filing this lawsuit. See Colpitts, 527 F.Supp.3d at 588-89 (rejecting a verbatim pleading of notice); see also Campbell, 516 F.Supp.3d at 391 (“[i]f Plaintiff had provided notice, she could have written that, rather than pleading, in essence, both that she did provide notice, and that she did not do so but will in the future.”).
Similarly, Plaintiffs' allegation that the notice requirement has been satisfied because Stauffer “received notice and should have been aware of these misrepresentations due to numerous complaints by consumers to its main office over the past several years regarding the Product,” FAC ¶ 9, is too conclusory and is unsupported by any specific factual allegations. Plaintiffs fail to point to any other lawsuits concerning the Product or any specific customer complaints that Stauffer received about the Product. Moreover, “the existence of prior complaints by other consumers cannot satisfy the notice requirement for the suit.” Colpitts, 527 F.Supp.3d at 590. Plaintiffs' failure to satisfy the pre-suit notice requirement is fatal to their breach of express warranty claim.
For these reasons, the breach of express warranty claim should be dismissed.
3. Implied Warranty of Merchantability
As an initial matter, Plaintiffs' breach of implied warranty claim also fails for lack of pre-suit notice for the reasons discussed above. See Campbell, 516 F.Supp.3d at 392 (collecting cases that notice requirement also applies to breach of implied warranty claims).
In addition, Plaintiffs have failed to allege any facts to support a breach of implied warranty claim. To state a claim for breach of implied warranty of merchantability, Plaintiff must plead that a merchant seller breached its “guarantee . . . that its goods are fit for the intended purpose for which they are used and that they will pass in the trade without objection.” Wojcik v. Empire Forklift, Inc., 783 N.Y.S.2d 698, 700-01 (3d Dep't 2004). Where a sale of food is concerned, courts have ruled that “the product need only be fit for human consumption to be of merchantable quality.” Silva v. Smucker Nat. Foods, Inc., No. 14-CV-6154 (JG) (RML), 2015 WL 5360022, at *11 (E.D.N.Y. Sept. 14, 2015).
Therefore, even when misleading food packaging has been alleged, courts dismiss implied warranty of merchantability claims for failure to allege that the product was unfit for human consumption. See Campbell, 516 F.Supp.3d at 392 n.14. Because Plaintiffs have not alleged that the Product was unfit for human consumption, this claim should be dismissed.
4. Magnuson-Moss Warranty Act
Plaintiffs' claim under the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. §§ 2301, et seq., similarly fails. FAC ¶¶ 84-96. The MMWA grants relief to a consumer “who is damaged by the failure of a . . . warrantor . . . to comply with any obligation . . . under a written warranty.” Wilbur v. Toyota Motor Sales, U.S.A., 86 F.3d 23, 26 (2d Cir. 1996) (quoting 15 U.S.C. § 2301(d)(1)) (internal quotations omitted)). A written warranty is defined as:
any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time.15 U.S.C. § 2301(6)(A).
In this case, Plaintiffs have not alleged the existence of a written warranty within the meaning of the MMWA. The references on the Product packaging to “lemon” simply describe the product's flavor profile, and do not suggest that the cookies are “defect free or that they will meet a specified level of performance over a specified period of time.” See Campbell, 516 F.Supp.3d at 393 (“honey” and “graham” not written warranty); Chufen Chen v. Dunkin' Brands, Inc., No. 17-CV-3808 (CBA) (RER), 2018 WL 9346682, at *6 (E.D.N.Y. Sept. 17, 2018) (term “Angus beef” was a product description, not written warranty under MMWA), aff'd, 954 F.3d 492 (2d Cir. 2020). Therefore, Plaintiffs' MMWA should be dismissed as well.
5. Fraud
Plaintiffs' fraud claim also fails. FAC ¶¶ 97-104. In order to state a claim for fraud under New York law, a plaintiff must allege: “(1) a misrepresentation or omission of material fact; (2) which the defendant knew to be false; (3) which the defendant made with the intention of inducing reliance; (4) upon which the plaintiff reasonably relied; and (5) which caused injury to the plaintiff.” Wynn v. AC Rochester, 273 F.3d 153, 156 (2d Cir. 2001) (citing Lama Holding Co. v. Smith Barney, Inc., 88 N.Y.2d 413, 421 (1996)).
To adequately plead fraud, a plaintiff must also meet the particularity requirement of Rule 9(b) of the Federal Rules of Civil Procedure, which “requires that the plaintiff (1) detail the statements (or omissions) that the plaintiff contends are fraudulent, (2) identify the speaker, (3) state where and when the statements (or omissions) were made, and (4) explain why the statements (or omissions) are fraudulent.” Fin. Guar. Ins. Co. v. Putnam Advisory Co., 783 F.3d 395, 403 (2d Cir. 2015) (citation omitted). In addition, a plaintiff must “allege facts that give rise to a strong inference of fraudulent intent.” Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir. 2006) (internal quotation marks omitted). Plaintiffs may raise this inference “either (a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness.” Id. at 290-91.
Here, Plaintiffs have failed to plead any facts that give rise to a strong inference of fraudulent intent. Plaintiffs allege only that Stauffer's fraudulent intent is “evinced by its failure to accurately identify the Product on the front label and ingredient list, when it knew its statements were neither true nor accurate and misled consumers.” FAC ¶ 103. However, this conclusory allegation falls short of the Rule 9(b) standard for pleading fraudulent intent. See Colpitts, 527 F.Supp.3d at 586 (plaintiff's allegation that defendant “evinced by its failure to accurately identify the Product on the front label, when it knew its statements were not true nor accurate” insufficient to adequately plead fraudulent intent); Twohig, 519 F.Supp.3d at 166 (identical allegations too conclusory to support strong inference of fraudulent intent). Nor do Plaintiffs allege any facts that would allow for a circumstantial finding of fraudulent intent, such as by showing Stauffer's awareness of the Product's deceptive nature. Cf. Greene v. Geber Prod. Co., 262 F.Supp.3d 38, 73-74 (E.D.N.Y. 2017) (plaintiff adequately pled facts supporting inference by alleging defendant sponsored study whose results refuted claims on label). Accordingly, Plaintiffs' fraud claim should be dismissed.
6. Unjust Enrichment
Finally, Plaintiffs' unjust enrichment should be dismissed because it is duplicative of their “core theory of deception, and ‘if [P]laintiffs' other claims are defective, an unjust enrichment claim cannot remedy the defects.” Barreto, 518 F.Supp.3d at 809 (quoting Corsello v. Verizon, 18 N.Y.3d 777, 790 (2012)). Plaintiffs' unjust enrichment claim is based on Stauffer's “obtain[ing] benefits and monies because the Product was not as represented and expected, to the detriment and impoverishment of plaintiffs and class members, who seek restitution and disgorgement of inequitably obtained profits.” FAC ¶¶ 105-06. These allegations are identical to the allegations underlying Plaintiffs' other claims for consumer deception, and therefore this claim should be dismissed as duplicative of the GBL and other common law claims. Dashnau, 2021 WL 1163716, at *10 (quoting Barreto, 518 F.Supp.3d at 808-09); see also Axon v. Florida's Nat. Growers, Inc., 813 Fed.Appx. 701, 706 (2d Cir. 2020) (affirming dismissal of unjust enrichment claim when court had rejected plaintiff's underlying theory for why the enrichment was “unjust”); Alce v. Wise Foods, Inc., No. 17-CV-2402 (NRB), 2018 WL 1737750, at *12 (S.D.N.Y. Mar. 27, 2018) (dismissing unjust enrichment claim based on “a mere regurgitation of those [allegations] made with respect to plaintiffs' . . . claims under the GBL”); Weisblum v. Prophase Labs, Inc., No. 14-CV-3587 (JMF), 2015 WL 738112, at *11 (S.D.N.Y. Feb. 20, 2015) (dismissing plaintiff's unjust enrichment claim under New York law as duplicative of negligent misrepresentation and fraud claims).
D. Leave to Amend
Plaintiffs request, in the alternative, that the Court grant them leave to file a Second Amended Complaint. Pl. Opp. at 17. A district court should “freely give leave [to amend] when justice so requires,” F.R.C.P. 15(a)(2) , but “has discretion to deny leave for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing party.” McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 200 (2d Cir. 2007).
Here, Plaintiffs have already amended their complaint once, after having the benefit of a pre-motion letter from Stauffer stating the grounds on which it would move to dismiss. Dkt. Nos. 14, 18. “In general, a plaintiff's failure to fix deficiencies in the previous pleading, after being provided notice of them, is alone sufficient ground to deny leave to amend.” Twohig, 519 F.Supp.3d at 168-69 (citing Natl Credit Union Admin. Bd. v. U.S. Bank Nat'l Assn, 898 F.3d 243, 257-58 (2d Cir. 2018)). Moreover, Plaintiffs seek permission to further amend only in passing, and have not “suggested that they are in possession of facts that would cure the deficiencies” identified in this report and recommendation. Id. at 169 (collecting cases); cf. Wynn, 2021 WL 168541, at *7 (court “skeptical” that plaintiffs had good faith basis to file second amended complaint, but nevertheless granted leave to do so).
Given the FAC's insufficient allegations and the fact that Plaintiffs have already had an opportunity to amend their complaint, leave to further amend would be futile in this case and the request to do so should be denied. See, e.g., Pichardo, 2020 WL 6323775, at *6.
III. CONCLUSION
For the foregoing reasons, Stauffer's motion to dismiss the First Amended Complaint should be granted.
PROCEDURE FOR FILING OBJECTIONS
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Opinion to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to such objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Paul G. Gardephe, United States Courthouse, 40 Foley Square, New York, New York. Any requests for an extension of time for filing objections must be directed to Judge Gardephe.
FAILURE TO FILE OBJECTIONS WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Garwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).