`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`
`CV 19-10658 DSF (SKx)
`
`Order DENYING Defendants’
`Motion to Dismiss (Dkt. 21)
`
`
`NARGUESS NOOHI and ROBERT
`BRYCE STEWART III,
`individually and on behalf of other
`members of the public similarly
`situated,
`
` Plaintiffs,
`
`
`v.
`
`
`THE KRAFT HEINZ COMPANY
`and KRAFT HEINZ
`INGREDIENTS CORP.,
`
` Defendants.
`
`
`
`Defendants The Kraft Heinz Company and Kraft Heinz
`Ingredients Corp. move to dismiss the Second Amended Complaint
`(SAC) filed by Plaintiffs Narguess Noohi and Robert Bryce Stewart III.
`Dkt. 21 (Mot.). Plaintiffs oppose. Dkt. 23 (Opp’n). The Court deems
`this matter appropriate for decision without oral argument. See Fed.
`R. Civ. P. 78; Local Rule 7-15. For the reasons stated below, the motion
`is DENIED.
`
`I. BACKGROUND
`Defendants sell drink products throughout the United States
`under the brand name “Crystal Light” that are advertised as
`containing no artificial flavors, when in fact they contain synthetic DL-
`Malic Acid. Dkt. 20 (SAC) ¶¶ 9, 10. Due to Defendants’ allegedly false
`and misleading claim that Crystal Light products contain no artificial
`flavors, Plaintiffs have been misled into purchasing products they
`
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`Case 2:19-cv-10658-DSF-SK Document 29 Filed 07/20/20 Page 2 of 12 Page ID #:458
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`would not have otherwise purchased. Id. ¶¶ 16, 18. Therefore,
`Plaintiffs brought claims on behalf of themselves and others similarly
`situated for 1) violation of the California False Advertising Act, Cal.
`Bus. & Prof. Code §§ 17500 et seq.; 2) violation of California’s Unfair
`Business Practices Act (UCL), Cal. Bus. & Prof. Code §§ 17200 et seq.;
`3) fraud; 4) unjust enrichment; 5) negligent misrepresentation;
`6) breach of express warranty; 7) violation of the New York General
`Business Law Sections 349, 350, and 350-a(1); 8) violation of the Texas
`Deceptive Trade Practices Act, Tex. Bus. & Com. Code §§ 17.46 et seq.;
`9) violation of the Georgia Uniform Deceptive Trade Practices Act,
`OCGA §§ 10-1-372 et seq.; 10) violation of the Georgia Fair Business
`Practices Act, OCGA §§ 10-1-393 et seq.; and 11) violation of the
`California Consumer Legal Remedies Act (CLRA), Cal. Civ. Code §§
`1750 et seq.
`
`II. LEGAL STANDARD
`Rule 12(b)(6) allows an attack on the pleadings for failure to state
`a claim on which relief can be granted. “[W]hen ruling on a defendant’s
`motion to dismiss, a judge must accept as true all of the factual
`allegations contained in the complaint.” Erickson v. Pardus, 551 U.S.
`89, 94 (2007) (per curiam). However, a court is “not bound to accept as
`true a legal conclusion couched as a factual allegation.” Ashcroft v.
`Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
`U.S. 544, 555 (2007)). “Nor does a complaint suffice if it tenders ‘naked
`assertion[s]’ devoid of ‘further factual enhancement.’” Id. (quoting
`Twombly, 550 U.S. at 557) (alteration in original) (citation omitted). A
`complaint must “state a claim to relief that is plausible on its face.”
`Twombly, 550 U.S. at 570. This means that the complaint must plead
`“factual content that allows the court to draw the reasonable inference
`that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S.
`at 678. There must be “sufficient allegations of underlying facts to give
`fair notice and to enable the opposing party to defend itself
`effectively . . . and factual allegations that are taken as true must
`plausibly suggest an entitlement to relief, such that it is not unfair to
`require the opposing party to be subjected to the expense of discovery
`
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`2
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`and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir.
`2011).
`Ruling on a motion to dismiss will be “a context-specific task that
`requires the reviewing court to draw on its judicial experience and
`common sense. But where the well-pleaded facts do not permit the
`court to infer more than the mere possibility of misconduct, the
`complaint has alleged – but it has not ‘show[n]’ – ‘that the pleader is
`entitled to relief.’” Iqbal, 556 U.S. at 679 (alteration in original)
`(citation omitted) (quoting Fed. R. Civ. P. 8(a)(2)).
`
`
`A.
`
`III. DISCUSSION
`False or Misleading Statements
`Each of Plaintiffs’ claims relies on the allegation that Crystal
`Light’s label indicating that it contains “no artificial flavors” is false or
`misleading. See SAC ¶¶ 85, 99, 104, 108, 113, 120, 125, 136, 147, 157,
`169, 182, 191, 201, 205.1 Defendants move to dismiss Plaintiffs’ claims
`on the grounds that Plaintiffs have not adequately alleged that the
`statement “no artificial flavors” is false or misleading. Specifically,
`Defendants contend that Plaintiffs have not adequately alleged that the
`malic acid in Crystal Light is “artificial” or a “flavor.”
`Artificial
`1.
`FDA regulations specifically address malic acid, noting that there
`are two types: L-malic acid which “occurs naturally in various foods”
`and DL-malic acid which “is made commercially by hydration of
`fumaric acid or maleic acid.” 21 C.F.R. § 184.1069(a). Plaintiffs allege
`that “[a]ll of the Products contain artificial DL-Malic Acid.” SAC ¶ 14.
`As additional factual support, Plaintiffs allege that Defendants
`
`1 The parties agree that Plaintiffs’ common-law claims for breach of express
`warranty, common-law fraud, negligent misrepresentation, and unjust
`enrichment rise or fall with the statutory consumer fraud claims. See Mot. at
`12-14; Opp’n at 16-17; Dkt. 24 (Reply) at 2 n.1.
`
`
`
`3
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`“intentionally used artificial DL-Malic Acid because it was likely
`cheaper and/or it more accurately resembled natural flavors than Citric
`Acid or other acids.” Id. ¶ 32; see also id. ¶ 63 (Defendants “chose to
`include DL-Malic Acid because it was cheaper for Defendants than
`using natural L-Malic Acid and because they did not believe their
`customers were educated enough to know the difference”). Defendants
`contend these allegations amount to nothing more than speculation,
`which does not move the allegations across the line from “mere
`possibility” to plausibility. Mot. at 8. The Court disagrees. Plaintiffs
`may be speculating as to why Defendants use DL-Malic Acid, but they
`allege unequivocally that the Defendants do in fact use DL-Malic Acid.
`See, e.g., SAC ¶ 33.
`The court in Branca v. Bai Brands, LLC, No. 3:18-cv-00757-BEN-
`KSC, 2019 WL 1082562 (S.D. Cal. Mar. 7, 2019) rejected a similar
`argument, finding it to be sufficient for the plaintiff to allege that
`“Defendants use an artificial petrochemical, d-1-malic acid in their
`Products” and to “discuss[] with particularity how artificial malic acid
`is created, is used in beverage products like Bai, and why Defendants
`use d–1–malic acid in place of natural malic acid.” Id. at *3 (internal
`quotation marks omitted). The court noted that the plaintiff’s
`“assumption as to the type of malic acid contained in Defendants’
`Products ultimately may be incorrect,” but at the pleading stage the
`allegations must be accepted as true. Id. Other district courts have
`come to similar conclusions. See, e.g., Marotto v. Kellogg Co., No. 18
`CIV. 3545 (AKH), 2018 WL 10667923, at *7 (S.D.N.Y. Nov. 29, 2018)
`(finding it sufficient that “Plaintiff distinguishes the natural and
`artificial forms of the ingredients and alleges that the Product contains
`the latter form”); Allred v. Kellogg Co., No. 17-CV-1354-AJB-BLM,
`2018 WL 1158885, at *2 (S.D. Cal. Feb. 23, 2018) (concluding that
`allegations “discuss[ing] the process to create artificial malic acid and .
`. . defendants[‘] use the artificial version of malic acid, ‘d-l-malic acid,’
`in the product” was sufficient at the motion to dismiss stage because
`“the allegation’s truthfulness is a summary judgment hurdle”).
`Defendants seek to impose a requirement that Plaintiffs explain
`“how they discovered that the malic acid in Crystal Light is ‘artificial.’”
`
`
`
`4
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`Reply at 4. Certainly, had Plaintiffs included the results of their
`testing in the SAC,2 their factual allegations would have been even
`stronger. See, e.g., Augustine v. Talking Rain Beverage Co., Inc., 386
`F. Supp. 3d 1317, 1326 (S.D. Cal. 2019) (finding allegations that “the
`malic acid used in the Products is not the natural form of the L-malic
`acid” are plausible where “Plaintiffs have tested the Product and
`identified the malic acid used in the beverages as the synthetic
`industrial flavoring chemical called d-1 malic acid”); Morris v. Mott’s
`LLP, No. SACV 18-01799 AG (ADSx), 2019 WL 948750, at *3 (C.D. Cal.
`Feb. 26, 2019) (“Plaintiffs connect these more generic allegations to
`Defendant’s snack products specifically by alleging that Defendant’s
`snacks test positive for d-l malic acid”). But failing to include such
`allegations is not fatal. Rather, the remedy for filing a lawsuit “without
`any idea as to its veracity . . . would lie in Rule 11,” not Rule 12. See
`Allred, 2018 WL 1158885, at *1.
`Defendants cite three district court cases that they contend
`require a different result. In Figy v. Frito-Lay N. Am., Inc., 67 F. Supp.
`3d 1075 (N.D. Cal. 2014), “Plaintiffs’ FAC provide[d] no detail
`whatsoever about how or why the offending ingredients are unnatural.”
`Id. at 1090. Here, Plaintiffs have explained in detail how DL-malic acid
`is unnatural. Similarly, in Osborne v. Kraft Foods Group, Inc., No. 15-
`cv-02653-VC (N.D. Cal. Oct. 15, 2015), the complaint did not “specify
`whether all citric acid is unnatural or some types of citric acid is
`unnatural” or “what type of citric acid Kraft uses in its Capri Sun
`drinks.” Dkt. 22-1 at 5-6.3 Here, Plaintiffs have explained the two
`types of malic acid and alleged that the artificial malic acid is used in
`Crystal Light. Finally, in Tarzian v. Kraft Heinz Foods Co., No. 18 C
`7148, 2019 WL 5064732 (N.D. Ill. Oct. 9, 2019), the court dismissed
`plaintiff’s state law fraud claims, finding that the allegations that
`
`2 Plaintiffs now state that they hired an expert to test the product and the
`expert identified the presence of DL-malic acid. Opp’n at 8-9 & Ex. 1.
`3 The Court GRANTS Defendants’ unopposed request for judicial notice (Dkt.
`22) of the hearing transcript and order from the Osborne case. Fed. R. Evid.
`201(b).
`
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`
`5
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`“Capri Sun contains industrially manufactured citric acid, and
`industrial citric acid is artificial because it is usually produced through
`the industrial fermentation process” and that “it is more economically
`viable to produce citric acid for industrial use through this
`fermentation process” “are insufficient to link fermented citric acid to
`that used in Capri Sun.” Id. at *1, *4. There, the plaintiff had not
`alleged that Capri Sun contained artificial citric acid. Rather, it said
`that industrial citric acid is “usually” artificial because it is more
`economically viable. Here, Plaintiffs have explicitly alleged that
`Crystal Light contains artificial malic acid. See, e.g., SAC ¶¶ 10, 14.
`Plaintiff has adequately alleged that the malic acid used in
`Crystal Light is artificial.
`Flavor
`2.
`As relevant here, product labels that contain “any direct or
`indirect representations with respect to the [product’s] primary
`recognizable flavor(s)” must contain the word “artificial” or the phrase
`“artificially flavored” where “the food contains any artificial flavor
`which simulates, resembles or reinforces the characterizing flavor.” 21
`C.F.R. § 101.22(i)(2). The FDA regulations acknowledge that malic acid
`can be used as a flavor enhancer, a flavoring agent and adjuvant, and a
`pH control agent. 21 C.F.R. § 184.1069(c).4 “An ingredient is classified
`as an artificial flavor based on its function in a product, not its impact
`on taste.” Clark v. Hershey Co., No. 18-CV-06113 WHA, 2019 WL
`2288041, at *2 (N.D. Cal. May 29, 2019).
`
`
`4 “Flavoring agents and adjuvants” are defined as “[s]ubstances added to
`impart or help impart a taste or aroma in food” while “[f]lavor enhancers” are
`“[s]ubstances added to supplement, enhance, or modify the original taste
`and/or aroma of a food, without imparting a characteristic taste or aroma of
`its own.” 21 C.F.R. § 170.3(o)(11), (12). While an ingredient list need only
`describe flavoring agents and adjuvants as “natural flavor” or “artificial
`flavor,” 21 C.F.R. § 101.22(h)(1), flavor enhancers “must be declared in the
`ingredient list by their common or usual names,” FDA, Food Labeling;
`Declaration of Ingredients, 56 Fed. Reg. 28592, 28598 (June 21, 1991).
`
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`6
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`Here, Plaintiffs allege that “Defendants include DL-Malic Acid to
`help make their products taste tart and fruity.” SAC ¶ 31; see also id.
`¶ 25 (“The sugar to acid ratio has a great impact on the perceived
`sweetness and tartness of fruit juices, as well as the flavor perception
`and balance, and overall consumer acceptability.”), ¶ 42 (“Defendants
`flavors depend upon a ratio of sugar and DL-Malic Acid”), ¶ 46 (“the
`flavor of the Products . . . [is] an artificial combination of sugar and DL-
`Malic Acid”), ¶ 53 (“The Products’ fruit flavors containing DL-Malic
`Acid resemble the natural characterizing fruity flavors Defendants
`claims are in their products”). Defendants contend that “[f]ar from
`establishing that Kraft Heinz uses malic acid as a flavoring agent, the
`allegations of the complaint actually suggest that Kraft Heinz uses
`malic acid as a “flavor enhancer.” Mot. at 10. Specifically, “Plaintiffs’
`allegations establish that malic acid ‘enhances’ and ‘modifies’ the other
`characteristic fruit flavors present in each variety of Crystal Light,
`which makes it a textbook example of a flavor enhancer.” Id. at 11.
`District courts to have considered whether a plaintiff has
`adequately alleged that malic acid acts as a flavoring agent, flavor
`enhancer, or a pH control agent in a particular product have concluded
`that the issue was a factual dispute not properly resolved at the motion
`to dismiss stage. See, e.g., Branca, 2019 WL 1082562, at *8 (whether
`“the malic acid in their Products functions exclusively as a pH control
`agent and not as a flavor” is “inappropriate for determination on a
`motion to dismiss” (quoting Ivie v. Kraft Foods Glob., Inc., No. C-12-
`02554-RMW, 2013 WL 685372, at *10 (N.D. Cal. Feb. 25, 2013))); Sims
`v. Campbell Soup Co., No. EDCV 18-668 PSG (SPx), 2018 WL 7568640,
`at *6 (C.D. Cal. Sept. 24, 2018) (declining to conclude at the motion to
`dismiss stage that d-1 malic acid was not functioning as artificial flavor
`and collecting cases reaching the same conclusion); Allred v. Frito-Lay
`N. Am., Inc., No. 17-CV-1345 JLS (BGS), 2019 WL 1040018, at *5 (S.D.
`Cal. Mar. 5, 2019) (“Although it appears, even from Plaintiffs’ exhibits,
`that Defendants’ argument that malic acid is a flavor enhancer may
`have some validity,” it remains “a factual determination . . . that would
`be inappropriately resolved on a motion to dismiss” (alteration in
`original)); Allred v. Frito-Lay N. Am., Inc., No. 17-CV-1345 JLS (BGS),
`
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`2018 WL 1185227, at *5 (S.D. Cal. Mar. 7, 2018) (“The distinction
`between an artificial flavor that ‘simulates, resembles or reinforces’ the
`characterizing flavor, 21 C.F.R. § 101.22(i)(2), and a ‘flavor enhancer’
`that does not impart its own taste, 21 C.F.R. § 170.3(o)(11), in this
`instance is a factual determination. Whether malic acid falls into one
`of these categories is also a factual determination that would be
`inappropriately resolved on a motion to dismiss.”); see also Clark v.
`Hershey Co., No. 18-CV-06113 WHA, 2019 WL 2288041, at *3 (N.D.
`Cal. May 29, 2019) (denying summary judgment and holding “[t]here is
`a genuine dispute as to whether malic acid acts as a flavoring agent in
`the [defendant’s] products”); Gitson v. Trader Joe’s Co., No. 13-CV-
`01333-WHO, 2014 WL 1048640, at *4 (N.D. Cal. Mar. 14, 2014)
`(“whether sodium citrate, citric acid, and tocopherol function as
`artificial flavors, chemical preservatives, or both, is inappropriate to
`determine at this stage of the litigation”). The Court agrees that
`whether the malic acid in Crystal Light acts as a flavor or flavor
`enhancer is a factual dispute that cannot be resolved at this stage.5
`Therefore, Plaintiff has adequately alleged that the malic acid
`used in Crystal Light acts as a flavor, and not just a flavoring agent.
`B. Common Law Claims
`Defendants additionally contend that Plaintiffs’ negligent
`misrepresentation and common-law fraud claims fail because Plaintiffs
`
`5 In fact, the parties’ briefing highlights one facet of this factual dispute.
`Plaintiff apparently believes that “[t]he issue is not whether Malic Acid itself
`is a flavor or not” because malic acid imparts flavor based on a product’s
`sugar to acid ratio. See Opp’n at 10; id. at 11 (“chemical combinations of
`acids and sugars . . . create the unique taste sensations of sweetness and
`sourness that are the specific characterizing fruit flavors of Defendants’
`products”). According to Defendants, Plaintiffs’ allegations “conflate[] taste
`sensations, such as sour and sweet, with the ‘characterizing flavors’ – such as
`cherry, kiwi, and lime – present in Crystal Light.” Reply at 8. Defendants
`appear to assume that if the malic acid only “impacts the tartness of the
`characterizing flavor” it does not “‘resemble[]’ that flavor in any respect.”
`Mot. at 12.
`
`
`
`8
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`have not alleged with particularity that Defendants intended to induce
`reliance. Mot. at 13. However, intent “may be alleged generally.” Fed.
`R. Civ. P. 9(b). Here, Plaintiffs allege that “Defendants, through their
`employees, did know that DL-Malic Acid was not naturally occurring
`and would fundamentally alter any natural combination of sugar and
`L-Malic Acid in their products, but chose to include DL-Malic Acid
`because it was cheaper for Defendants than using natural L-Malic Acid
`and because they did not believe their customers were educated enough
`to know the difference.” SAC ¶ 63. Plaintiffs further allege that “[a]t
`the time Defendants made the statements to Plaintiff, Defendants
`intended to induce Plaintiffs to purchase the Products.” Id. ¶ 115; see
`also ¶ 131 (“The misrepresentations and/or omissions made by
`Defendants . . . were intended to induce and actually induced Plaintiffs
`and the Class and Sub-Classes’ Members to purchase the Products.”).
`This is sufficient at the pleading stage.
`C. Class Issues
`Personal Jurisdiction
`1.
`Defendants contend that the Court does not have personal
`jurisdiction over them “with respect to the claims of putative class
`members outside of California.” Mot. at 14. In Bristol-Myers Squibb
`Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773
`(2017), the Supreme Court held that “[t]he mere fact that other
`plaintiffs were prescribed, obtained, and ingested [the product] in
`California – and allegedly sustained the same injuries as did the
`nonresidents – does not allow the State to assert specific jurisdiction
`over the nonresidents’ claims.” Id. at 1781. Plaintiffs contend that this
`rule does not apply to nonresident putative class members. Opp’n at
`17.
`
`The Ninth Circuit has not yet spoken on whether Bristol-Myers
`applies to a class action in which a plaintiff injured in the forum state
`seeks to represent a nationwide class of plaintiffs, not all of whom were
`injured in that state. The D.C. Circuit has held that it was
`“premature” to consider the issue on a motion to dismiss because “prior
`
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`to class certification putative class members are not parties to the
`action.” Molock v. Whole Foods Mkt. Grp., Inc., 952 F.3d 293, 296 (D.C.
`Cir. 2020); see also Cruson v. Jackson Nat’l Life Ins. Co., 954 F.3d 240,
`250 (5th Cir. 2020) (a personal jurisdiction defense is not “available” at
`the motion to dismiss stage because non-resident putative class
`members are not before the court until after a class is certified). The
`Court agrees.
`Pilgrim v. Gen. Motors Co., 408 F. Supp. 3d 1160 (C.D. Cal.
`2019), Mot. at 15-16 is clearly distinguishable. There the court
`considered whether it had personal jurisdiction over non-resident
`named plaintiffs, not over unnamed putative class members. Id. at
`1167 (“the issue in this case is whether Bristol-Myers applies to the
`forty out-of-state named plaintiffs bringing claims that have no
`connection to California and are based on the laws of twenty different
`states” (emphasis added)). The same is true for Andrade-Heymsfield v.
`Danone US, Inc., No. 19-CV-589-CAB-WVG, 2019 WL 3817948 (S.D.
`Cal. Aug. 14, 2019. See id. at *3-*4 (court does not have personal
`jurisdiction over claims brought by named plaintiff who “is a New York
`resident who purchased and consumed the Coconut Milk in New
`York”). To the extent the court in Carpenter v. PetSmart, Inc., No. 19-
`CV-1731-CAB-LL, 2020 WL 996947 (S.D. Cal. Mar. 2, 2020) held that a
`personal jurisdiction defense can be asserted as to unnamed members
`of a putative nationwide class at the motion to dismiss stage, id. at *6,
`this Court disagrees as it relates to this case.6
`
`
`6 Additionally, in Carpenter it was not clear that the $5,000,000 amount in
`controversy requirement would be satisfied without the non-California class
`claims, and therefore the court was concerned that it “lack[ed] CAFA
`jurisdiction and must dismiss this complaint in its entirety.” 2020 WL
`996947, at *10. Here, the Court has no reason to believe that CAFA’s
`$5,000,000 amount in controversy requirement would not be easily satisfied
`even if the class were limited to purchases of Crystal Light made in
`California. Therefore, the Court need not decide whether plaintiffs alleging
`CAFA jurisdiction can rely on the damages attributable to claims by putative
`
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`10
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`It is premature to determine whether the Court has personal
`jurisdiction over putative claims brought by putative class members
`who are not yet parties to this action.
`Standing
`2.
`Defendants ask the Court to “dismiss any claims on behalf of
`putative class members outside of the[] four states [where Plaintiffs
`purchased Crystal Light] for lack of standing.” Mot. at 18. However,
`for the same reasons explained above, any putative common law claims
`based on the laws of states other than California, Georgia, Texas, and
`New York are not currently before the Court and therefore it is
`premature to consider whether Plaintiffs have standing to bring them.
`Defendants contend that “[t]he Supreme Court and the Ninth
`Circuit have both held that district courts may ‘address[] issues of
`standing before . . . address[ing] issues of class certification.’” Mot. at
`10 n.6 (alterations in original) (quoting Easter v. Am. W. Fin., 381 F.3d
`948, 962 (9th Cir. 2004)). The Court agrees that on a motion to dismiss
`it must consider whether named plaintiffs have standing to assert the
`claims brought in the complaint, such as whether a given plaintiff
`actually purchased an offending product, or where there are statutory
`claims brought solely under another state’s laws. For example, if one of
`the claims in the SAC was based on a Nevada consumer fraud statute,
`that claim could be subject to dismissal prior to class certification. But
`that is not the challenge here.7 Rather, Defendants seek to dismiss
`claims that are not currently a part of this action, but that they
`
`
`
`class members that may ultimately be dismissed or excluded from the
`certified class.
`7 Defendants’ contention that “[t]he fact that Plaintiffs do not assert any
`claims under the consumer protection statutes of other states is irrelevant, as
`Article III standing requirements apply with equal force to both statutory
`and common-law claims,” Mot. at 19, misses the point. Prior to class
`certification, the common law claims are brought only under the laws
`applicable to Plaintiffs.
`
`
`
`11
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`anticipate may become a part of this action if a nationwide class is
`certified. It is premature for the Court to make that determination.
`IV. CONCLUSION
`Defendants’ motion to dismiss is DENIED.
`
`
`
`IT IS SO ORDERED.
`
`Date: July 20, 2020
`
`
`
`
`
`___________________________
`Dale S. Fischer
`United States District Judge
`
`12
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`