Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 1 of 21
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`
`
`Richman Law Group
`Jaimie Mak (SBN 236505)
`jmak@richmanlawgroup.com
`535 Mission Street
`San Francisco, CA 94105
`T: (718) 705-4579
`F: (718) 228-8522
`
`Jay R. Shooster (admitted pro hac vice)
`jshooster@richmanlawgroup.com
`1 Bridge Street, Suite 83
`Irvington, NY 10533
`T: (718) 705-4579
`F: (718) 228-8522
`
`Attorneys for Plaintiffs
`
`
`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
`
`OAKLAND DIVISION
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`
`
`
`Sylvia Koh and David Green, on Behalf
`of Themselves and all Others Similarly
`Situated,
`
`
`Plaintiffs,
`
`
`v.
`
`The Kraft Heinz Company,
`
`
`
`
`Defendant.
`
`
`Case No. 4:20-Cv-04425-JSW
`
`Plaintiffs’ Memorandum of Law
`in Opposition to Defendant’s
`Motion to Dismiss
`
`Judge: Hon. Jeffrey S. White
`
`Date: December 18, 2020
`Time: 9:00 am
`Place: Courtroom 5
`*Oral Argument Requested
`
`Demand For Jury Trial
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 2 of 21
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`
`
`Table of Contents
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`INTRODUCTION ......................................................................................................................... 1
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`FACTS ........................................................................................................................................... 2
`
`ARGUMENT ................................................................................................................................. 3
`
`I. REASONABLE CONSUMERS PLAUSIBLY EXPECT NATURAL CHEESE TO
`BE PRODUCED WITHOUT THE USE OF ARTIFICIAL GROWTH HORMONES. .... 4
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`A. This Court Has Already Held That Consumers Plausibly Expect That “Natural”
`Products Are Made Without the Use of Artificial Hormones. ........................................... 4
`
`B. The FDA Has Not Found That the Use of Artificial Hormones Is Consistent With
`Consumer Perception of Natural Claims. ............................................................................ 8
`
`
`KRAFT HAS ALREADY FOUGHT AND LOST ON THE ARGUMENT THAT
`II.
`THE FDA’S REVIEW OF THE TERM “NATURAL” REQUIRES THAT THE COURT
`STAY OR DISMISS UCL, FAL, OR CLRA CLAIMS. ........................................................ 9
`
`PLAINTIFF KOH HAS STANDING TO REPRESENT A CLASS SEEKING
`III.
`INJUNCTIVE RELIEF. ......................................................................................................... 11
`
`THE COURT SHOULD NOT DISMISS PLAINTIFFS’ NATIONWIDE CLASS
`IV.
`ALLEGATIONS FOR LACK OF STANDING. .................................................................. 13
`
`
`CONCLUSION ........................................................................................................................... 15
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 3 of 21
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`
`
`Table of Authorities
`
`Cases
`Animal Legal Def. Fund v. Hormel Foods Corp., No. 2016 CA 004744 B, 2017 D.C. Super.
`LEXIS 9 (D.C. Super. Ct. Sept. 20, 2017). ................................................................................. 7
`Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................................... 3
`Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753 (9th Cir. 2015) .............................................. 10
`Balser v. Hain Celestial Grp., Inc., 640 Fed. Appx. 694 (9th Cir. 2016) ....................................... 6
`Balser v. Hain Celestial Grp., Inc., No. CV 13-05604-R, 2013 U.S. Dist. LEXIS 180220 (C.D.
`Cal. Dec. 18, 2013) ...................................................................................................................... 6
`Branca v. Bai Brands, LLC, No. 3:18-cv-00757, 2019 U.S. Dist. LEXIS 37105 (S.D. Cal. Mar. 7,
`2019) .......................................................................................................................................... 13
`Brazil v. Dole Packaged Foods, LLC, 660 Fed. Appx. 531 (9th Cir. 2016) ................................... 4
`Catholic Health Care West v. US Foodserv. (In re US FoodServ. Pricing Litig.), 729 F.3d 108
`(2d Cir. 2013) ............................................................................................................................ 15
`Cordes v. Boulder Brands USA, Inc., No. CV 18-6534, 2018 U.S. Dist. LEXIS 217534 (C.D.
`Cal. Oct. 17, 2018) ............................................................................................................... 12, 13
`Davidson v. Kimberly-Clark Corp., 889 F.3d 956 (9th Cir. 2018) ......................................... 11, 12
`Dependable Highway Express, Inc. v. Navigators Ins. Co., 498 F.3d 1059 (9th Cir. 2007) .......... 9
`Feller v. Transamerica Life Ins. Co., No. 2:16-cv-01378, 2017 U.S. Dist. LEXIS 206822 (C.D.
`Cal. Dec. 11, 2017) .................................................................................................................... 15
`Fraley v. Facebook, Inc., 830 F. Supp. 2d 785 (N.D. Cal. 2011) (Koh, J.) .................................... 3
`Friedman v. AARP, Inc., 855 F.3d 1047 (9th Cir. 2017) ................................................................ 4
`Friends of the Earth v. Sanderson Farms, Inc., No. 17-cv-03592-RS, 2018 U.S. Dist. LEXIS
`220547 (N.D. Cal. Dec. 3, 2018) ............................................................................................. 6, 7
`Garcia v. Harley-Davidson Motor Co., No. 19-cv-02054-JCS, 2019 U.S. Dist. LEXIS 199608
`(N.D. Cal. Nov. 15, 2019) ......................................................................................................... 13
`Gregorio v. Clorox Co., No. 17-cv-03824-PJH, 2018 U.S. Dist. LEXIS 19542 (N.D. Cal. Feb. 6,
`2018) .......................................................................................................................................... 10
`Henderson v. Gruma Corp., No. CV 10-04173, 2011 U.S. Dist. LEXIS 41077 (C.D. Cal. Apr.
`11, 2011) .................................................................................................................................... 11
`In re Coca-Cola Prods. Mktg. & Sales Practices Litig., No. 14-md-02555-JSW, 2020 U.S. Dist.
`LEXIS 26261 (N.D. Cal. Feb. 14, 2020) ................................................................................... 13
`In re Frito-Lay N. Am., Inc. All. Nat. Litig., No 12-MD-2413, 2013 U.S. Dist. LEXIS 123824
`(E.D.N.Y. Aug 29, 2013) ........................................................................................................... 14
`In re McCormick & Co., 217 F. Supp. 3d 124 (D.D.C. 2016) ...................................................... 14
`Jones v. Conagra Foods, Inc., 912 F. Supp. 2d 889 (N.D. Cal. 2012) (Breyer, J.) ...................... 10
`Jones, et al. v. Monsanto Co., No. 19-0102, 2019 U.S. Dist. LEXIS 232815 (W.D. Mo. June 13,
`2019) .......................................................................................................................................... 14
`Kane v. Chobani, LLC, 645 F. App’x 593 (9th Cir. 2016) ........................................................... 10
`Klein v. Cook, No. 5:14-CV-03634-EJD, 2015 U.S. Dist. LEXIS 67943 (N.D. Cal. May 22,
`2015) ...................................................................................................................................... 9, 10
`Koh v. S.C. Johnson & Son, Inc., No. C-09-00927, 2010 U.S. Dist. LEXIS 654 (N.D. Cal. Jan. 6,
`2010) (Whyte, J.) ....................................................................................................................... 13
`Lavie v. Procter & Gamble Co., 129 Cal. Rptr. 2d 486 (Cal. Ct. App. 2003) ............................... 4
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 4 of 21
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`
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`Lee v. Conagra Brands, Inc., 958 F.3d 70 (1st Cir. 2020) ............................................................. 8
`Machlan v. Proctor & Gamble Co., 77 F. Supp. 3d 954 (N.D. Cal. 2015) .................................. 11
`McGill v. Citibank, N.A., 2 Cal. 5th 945 (Cal. 2017) .................................................................... 12
`Morales, et al. v. Kraft Foods Grp., Inc., et al. 2:14-cv-04387-JAK-PJW (C.D. Cal. Dec. 2,
`2016) ............................................................................................................................................ 9
`NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co., 693 F.3d 145 (2d Cir. 2012) ... 14
`Organic Consumers Ass’n v. Sanderson Farms, Inc., 284 F. Supp. 3d 1005 (N.D. Cal. 2018)
`(Seeborg, J.) ................................................................................................................................. 7
`Pappas v. Chipotle Mexican Grill, Inc., No. 16-cv-612, 2016 U.S. Dist. LEXIS 202524 (S.D.
`Cal. Aug. 31, 2016) ..................................................................................................................... 6
`Pelayo v. Nestle USA, Inc., 989 F. Supp. 2d 973 (C.D. Cal. 2013) ................................................ 6
`Penrose v. Buffalo Trace Distillery, Inc., No. 4:17CV294, 2018 U.S. Dist. LEXIS 18340 (E.D.
`Mo. Feb. 5, 2018) ...................................................................................................................... 14
`Rahman v. Motts LLP, No. 13-cv-03482-SI, 2018 U.S. Dist. LEXIS 164620 (N.D. Cal. Sep. 25,
`2018) (Illston, J.) ................................................................................................................. 12, 13
`Reid v. Johnson & Johnson, 780 F.3d 952 (9th Cir. 2015) ............................................................. 4
`Ries v. AriZona Bevs. USA LLC, 287 F.R.D. 523 (N.D. Cal. 2012) (Seeborg, J.) ....................... 11
`Rubenstein v. Neiman Marcus Grp. LLC, 687 Fed. Appx. 564 (9th Cir. 2017) ............................. 4
`Safe Air for Everyone v. Meyer, 373 F.3d 1035 (9th Cir. 2004) ..................................................... 3
`Santos v. Carmax Bus. Servs., LLC, No. 17-cv-02447-RS, 2018 U.S. Dist. LEXIS 231077 (N.D.
`Cal. May 8, 2018) ...................................................................................................................... 13
`Savage v. Glendale Union High Sch. Dist. No. 205, 343 F.3d 1036 (9th Cir. 2003) ..................... 3
`School Dist. v. Lake Asbestos (In re Sch. Asbestos Litig.), 789 F.2d 996 (3d Cir. 1986) ............. 15
`Shank v. Presidio Brands, Inc., No. 17-cv-00232-DMR, 2018 U.S. Dist. LEXIS 10894 (N.D.
`Cal. Jan. 23, 2018) ..................................................................................................................... 10
`Siracusano v. Matrixx Initiatives, Inc., 585 F.3d 1167 (9th Cir. 2009) .......................................... 3
`Summers v. Earth Island Inst., 555 U.S. 488 (2009) .................................................................... 11
`Susan Tran v. Sioux Honey Association, Coop., No. 8:17-cv-00110-JLS-SS (C.D. Cal. Feb. 24,
`2020) .......................................................................................................................................... 12
`Tsan v. Seventh Generation, Inc., No. 15-cv-00205-JST, 2015 U.S. Dist. LEXIS 149042 (N.D.
`Cal. Nov. 3, 2015) ....................................................................................................................... 6
`United States v. Redwood City, 640 F.2d 963 (9th Cir. 1981) ........................................................ 3
`Westways World Travel v. AMR Corp., 182 F. Supp. 2d 952 (C.D. Cal. 2001) ............................. 3
`White v. Lee, 227 F.3d 1214 (9th Cir. 2000) ................................................................................... 3
`Williams v. Gerber Prods. Co., 552 F.3d 934 (9th Cir. 2008) ................................................ 2, 3, 4
`Statutes
`Cal. Bus. & Prof. Code § 1750 ....................................................................................................... 4
`Cal. Bus. & Prof. Code § 17500 ............................................................................................... 4, 11
`Cal. Civ. Code § 17200 ............................................................................................................. 4, 11
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 5 of 21
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`INTRODUCTION
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`The substance of Kraft’s motion more closely resembles a motion for summary judgment
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`than it does a motion to dismiss. Kraft asks this Court to step into the mind of a consumer and
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`rule as a matter of law that no reasonable consumer could plausibly expect “natural” cheese to
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`be made without the use of artificial growth hormones. Notably, Kraft asks this of the Court
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`despite its own admissions that (1) rbST is an “artificial” hormone, (2) a majority of Kraft’s
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`consumers want cheese made without the use of artificial hormones, and (3) the bulk of Kraft’s
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`“natural” cheese products (as opposed to other Kraft cheese products) are now produced without
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`artificial hormones because that is what its consumers desire.
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`Kraft’s position is indefensible. It is fundamentally a factual question whether consumers
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`expect “natural” dairy products to be made with the use of “artificial” hormones. Courts have
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`made it clear that cases based on the reasonable consumer standard should only be dismissed in
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`“rare” situations in which the plaintiff’s allegations about consumer expectations are wholly
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`implausible. This is not that “rare” case. Here, there is a wealth of consumer research that supports
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`Plaintiffs’ factual allegations, including consumer surveys that have been endorsed by Kraft itself.
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`But more importantly, this court has already held—based on this same survey evidence—that it
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`is plausible that reasonable consumers believe animal food products marketed as “natural” are
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`produced without the use of “drugs at any point.”
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`Kraft’s procedural arguments have also already been rejected in numerous other cases in
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`the Ninth Circuit, including some in which Kraft itself was the defendant. Kraft’s previously
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`unsuccessful arguments must be rejected once again and its Motion should be denied.
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 6 of 21
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`FACTS
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`At this stage of proceedings, the facts alleged in Plaintiffs’ Complaint are assumed to be
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`true. See Williams v. Gerber Prods. Co., 552 F.3d 934, 937 (9th Cir. 2008). As alleged in the
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`Complaint, Defendant The Kraft Heinz Company (“Kraft”) sells cheese under the Kraft brand.
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`According to the labels on these Products, the Products are “natural.” (Compl. ¶¶ 4-5.) The
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`Products, however, were produced with the use of an artificial growth hormone known as rbST,
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`which has been banned in Canada, the European Union, and other countries. (Compl. ¶¶ 4, 5, 34.)
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`The use of rbST puts cows at significantly higher risk for serious health problems, contributes to
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`increased use of antibiotics in dairy cows, and, in turn, contributes to the threat of antibiotic
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`resistance. (Compl. ¶¶ 35, 36.) Furthermore, studies have suggested that rbST use may increase
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`the risk of certain cancers in humans who consume milk products by elevating levels of insulin-
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`like growth factor 1. (Compl. ¶ 38.) The Complaint also alleges that milk from cows treated with
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`rbST tend to have increased fat content and decreased level of proteins, as well as higher counts
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`of somatic cells (i.e., pus), which makes the milk turn sour more quickly. (Compl. ¶ 39.)
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`Kraft admits that consumers seek natural cheese products made with milk from cows that
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`are not treated with artificial hormones. (Compl. ¶ 4.) The use of the growth hormone rbST is
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`not consistent with consumer perception of “natural” cheese products. (Compl. ¶¶ 32-40.)
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`Numerous surveys have found that consumers do not expect artificial hormones like rbST to be
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`used in products labeled as “natural.” (Compl. ¶¶ 40-42.) Therefore, Kraft’s marketing of the
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`Products is false and misleading. Plaintiffs bring this action on behalf of themselves and a class
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`of purchasers of the Products.
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 7 of 21
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`ARGUMENT
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`“A Rule 12(b)(1) motion to dismiss tests whether a complaint alleges grounds for federal
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`subject matter jurisdiction.” Fraley v. Facebook, Inc., 830 F. Supp. 2d 785, 793 (N.D. Cal. 2011)
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`(Koh, J.). A Rule 12(b)(1) motion may be facial, i.e., based on the on the allegations in the
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`complaint, or factual. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (citing
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`White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000)). A facial attack, like the attack on the
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`Complaint brought by Kraft, may be resolved on the allegations in the Complaint itself. See White,
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`227 F.3d at 1242.1
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`Rule 12(b)(6) dismissal is proper only in “extraordinary” cases. United States v. Redwood
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`City, 640 F.2d 963, 966 (9th Cir. 1981) (citations omitted); see also Williams, 552 F.3d at 939.
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`“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to
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`draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
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`Iqbal, 556 U.S. 662, 678 (2009). On a motion to dismiss, the court must “accept the plaintiffs’
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`allegations as true and construe them in the light most favorable to the plaintiffs.” Siracusano v.
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`Matrixx Initiatives, Inc., 585 F.3d 1167, 1177 (9th Cir. 2009). Furthermore, “[i]t is the burden of
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`the party bringing a motion to dismiss for failure to state a claim to demonstrate that the
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`requirements of Rule 8(a)(2) have not been met.” Westways World Travel v. AMR Corp., 182
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`F. Supp. 2d 952, 955 (C.D. Cal. 2001). As demonstrated below, Kraft has not met this burden.
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`1 A factual attack, in which the challenger disputes the very truth of the allegations “by presenting
`affidavits or other evidence properly brought before the court,” may require the Court to look
`beyond the Complaint. Safe Air, 373 F.3d at 1039 (citing Savage v. Glendale Union High Sch.
`Dist. No. 205, 343 F.3d 1036, 1039 n.2 (9th Cir. 2003)). Kraft has not presented any affidavits or
`other evidence that questions the allegations in the Complaint.
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 8 of 21
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`
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`I.
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`REASONABLE CONSUMERS PLAUSIBLY EXPECT NATURAL
`CHEESE TO BE PRODUCED WITHOUT THE USE OF ARTIFICIAL
`GROWTH HORMONES.
`A. This Court Has Already Held That Consumers Plausibly Expect That
`“Natural” Products Are Made Without the Use of Artificial Hormones.
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`Claims made under the CLRA, FAL, and UCL are governed by the “reasonable consumer”
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`test. Williams, 552 F.3d at 938. Under the reasonable consumer test, a plaintiff will prevail where
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`it is probable that “a significant portion of the general consuming public or of targeted consumers,
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`acting reasonably in the circumstances,” would be misled. Brazil v. Dole Packaged Foods, LLC,
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`660 Fed. Appx. 531, 532 (9th Cir. 2016) (citing Lavie v. Procter & Gamble Co., 129 Cal. Rptr.
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`2d 486, 496 (Cal. Ct. App. 2003)). By its nature, the reasonable consumer standard “inquiry
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`‘raises questions of fact that are appropriate for resolution on a motion to dismiss only in rare
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`situations’.” Friedman v. AARP, Inc., 855 F.3d 1047, 1055 (9th Cir. 2017) (quoting Reid v.
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`Johnson & Johnson, 780 F.3d 952, 958 (9th Cir. 2015)); see also Rubenstein v. Neiman Marcus
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`Grp. LLC, 687 Fed. Appx. 564, 566 (9th Cir. 2017); Williams, 552 F.3d at 938-39.
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`Kraft contends that this is an extraordinary case, in which the Court should decide, on
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`behalf of consumers, that Kraft is not misleading them about whether its Products are “natural.”
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`Kraft’s position is disingenuous. Kraft knows that its customers prefer hormone-free milk and
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`that they are willing to pay more for cheese products made without rbST. (Compl. ¶¶ 41-42.) In
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`January of 2019, Kraft issued a press release stating that its Natural Cheese would now be
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`hormone free, stating, “Our goal is to give families KRAFT cheese the way it should be, with the
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`same great taste and without the artificial hormone rbST,” and “[o]ver half of all consumers try
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`to avoid added hormones in their food.” (Compl. ¶¶ 41-42.) Kraft also concedes that bovine
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`growth hormone is “artificial.” (Compl. ¶ 48.)
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 9 of 21
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`Kraft is right about its consumers’ preferences, and for years it has knowingly profited off
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`of consumers seeking cheese made without the use of artificial hormones. As cited in the
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`Complaint, a 2015 nationally representative consumer survey conducted by Consumer Reports
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`Survey Group found that 64% of consumers believe the claim “natural” on food means that no
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`artificial growth hormones were used. (Compl. ¶ 30.) A separate 2019 survey conducted by
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`Purdue University economist Jayson Lusk found that more than half of consumers believe the
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`claim “natural” for food means “no hormones and antibiotics.” (Compl. ¶ 31.) These consumer
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`beliefs are consistent with the facts: There is nothing natural about the use of rbST in dairy
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`production. rbST is an artificial growth hormone that is synthetically produced using genetic
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`technology. It is injected in dairy cows to artificially increase milk production and thereby reduce
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`the cost of milk production. (Compl. ¶ 32.) Despite this survey evidence, Kraft contends that a
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`reasonable consumer would not expect “natural” cheese to be made without the use of rbST, even
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`though they recently announced that they removed rbST specifically from their “natural” cheese
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`products, citing consumer preferences.2
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`Kraft knows its position is unsupported by California law, which is why it relies almost
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`entirely on two New York cases, Podpeskar v. Dannon Co. and Newton v. Kraft Heinz Foods Co.
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`(MTD 2, 8-9), in support of its argument that Kraft has not violated California law. (See MTD 7-
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`2 Kraft’s contention that “the dairy industry and U.S. Government have long used the term
`‘natural cheese’ to refer to cheese made directly from milk, as distinguished from ‘process cheese’”
`(MTD 7) is disputed and irrelevant. The federal regulations cited by Kraft do not actually define
`“natural cheese” as “cheese made from milk” (an overly expansive definition that would apply to
`all manner of unnatural cheese products so long as they are made from milk). (MTD 3-4.) Most
`importantly, the issue is not how the dairy industry or U.S. Government might purportedly use
`the term “natural cheese,” but how consumers interpret a “natural cheese” product label.
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`9.)3 Contrary to the New York caselaw cited by Kraft, the Northern District of California has
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`ruled, in a case strikingly similar to the one at hand, that it is plausible that a reasonable consumer
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`would expect that “no synthetic pharmaceuticals” were administered to chickens used in chicken
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`products marketed as “natural.” Friends of the Earth v. Sanderson Farms, Inc., No. 17-cv-03592-
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`RS, 2018 U.S. Dist. LEXIS 220547, at *9 (N.D. Cal. Dec. 3, 2018). In denying the defendant’s
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`motion to dismiss, this court held that the plaintiffs had “sufficiently allege[d] [that] a reasonable
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`consumer expects a product labeled as ‘natural’ to have never come into contact with antibiotics
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`during its production, not simply be without antibiotics at point of sale, and such consumer is
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`willing to pay more for such a product.” Id. (emphasis in original). Thus, this court has explicitly
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`rejected Kraft’s theory that, as a matter of law, animal husbandry practices are irrelevant to
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`consumer perception of “natural” food products. To the contrary, this court held that it is plausible
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`that “a reasonable consumer understands the use of ‘natural’ to mean a host of expectations,
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`including the fair inference that the animal was allowed to move outdoors.” Id. at *15. The court
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`in Sanderson reached its conclusions by relying on “surveys indicating a majority of consumers
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`believe [that] a ‘natural’ poultry product is produced without the use of antibiotics or other drugs
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`3 Kraft’s other cited cases do not support its position. The reasoning in Pelayo v. Nestle USA, Inc.,
`989 F. Supp. 2d 973, 978-80 (C.D. Cal. 2013) (relied upon by Pappas v. Chipotle Mexican Grill,
`Inc., No. 16-cv-612, 2016 U.S. Dist. LEXIS 202524, at **17-21 (S.D. Cal. Aug. 31, 2016)), has
`been repeatedly criticized in subsequent decisions. See, e.g., Tsan v. Seventh Generation, Inc.,
`No. 15-cv-00205-JST, 2015 U.S. Dist. LEXIS 149042, at **13-14 (N.D. Cal. Nov. 3, 2015)
`(stating that “Pelayo’s reasoning has been heavily criticized by other courts,” collecting cases,
`and declining to adopt Pelayo’s reasoning). Balser v. Hain Celestial Grp., Inc., No. CV 13-05604-
`R, 2013 U.S. Dist. LEXIS 180220 (C.D. Cal. Dec. 18, 2013), was reversed by the Ninth Circuit,
`which held that the plaintiffs did allege plausible consumer interpretations of the term “natural.”
`Balser v. Hain Celestial Grp., Inc., 640 Fed. Appx. 694, 696 (9th Cir. 2016).
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 11 of 21
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`at any point.” Organic Consumers Ass’n v. Sanderson Farms, Inc., 284 F. Supp. 3d 1005, 1014
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`(N.D. Cal. 2018) (Seeborg, J.) (emphasis added). Notably, the survey approvingly referenced by
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`the court in Sanderson is one of the exact same surveys that Plaintiffs cite to in their Complaint
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`in this case. (Compare Compl. ¶ 30, with Third Amended Compl. ¶¶ 48-49, Friends of the Earth,
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`2018 U.S. Dist. LEXIS 220547, ECF No. 117-2 (Oct. 8, 2018)).4 Other courts have also found
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`that “natural” product claims plausibly “mislead consumers into believing that the animals used
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`in [the] products are raised without the use of hormones.” Animal Legal Def. Fund v. Hormel
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`Foods Corp., No. 2016 CA 004744 B, 2017 D.C. Super. LEXIS 9, at *7 (D.C. Super. Ct. Sept.
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`20, 2017).
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`As in Sanderson, the facts alleged in the current case similarly do not “compel the
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`conclusion” that a reasonable consumer could not plausibly expect their “natural” cheese to be
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`free of milk produced with artificial growth hormones. Organic Consumers Ass’n, 284 F. Supp.
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`3d at 1015. Kraft seeks to avoid a finding of fact as to the expectations and beliefs of its customers,
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`because it already knows that what they expect is consistent with Plaintiffs’ allegations.
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`4 Kraft argues that this survey is irrelevant because it concerned meat and poultry products, rather
`than packaged cheese. (MTD 10.) However, Kraft offers no evidence to demonstrate that
`consumers’ expectations for “natural” cheese products differ significantly from their expectations
`for “natural” meat products. Moreover, Kraft completely fails to address the additional survey
`cited by Plaintiffs which found that the use of artificial hormones is inconsistent with consumer
`expectations of “natural” food products generally. (Compl ¶ 31.) Plaintiffs’ consumer perception
`evidence is more than sufficient to demonstrate plausibility at the pleading stage. Kraft’s nit-
`picking regarding the implications of the consumer perception evidence cited by Plaintiffs only
`further demonstrates that its argument is fundamentally a factual dispute that cannot be resolved
`on a motion to dismiss.
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`Case 4:20-cv-04425-JSW Document 28 Filed 11/12/20 Page 12 of 21
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`B. The FDA Has Not Found That the Use of Artificial Hormones Is
`Consistent With Consumer Perception of Natural Claims.
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`In making its argument that this case constitutes the “rare situation” in which consumer
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`understanding can be determined on a motion to dismiss, Kraft relies on admittedly “unofficial”
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`FDA guidance, which is not informative, let alone dispositive, on the issue of consumer
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`understanding. Kraft “confuses the FDA’s informal policy ‘not to restrict the use of the term
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`‘natural’ with a rule defining it.” Lee v. Conagra Brands, Inc., 958 F.3d 70, 77 (1st Cir. 2020).
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`“Where, as here, an agency has issued no binding rule defining a term, the agency’s
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`pronouncements do not dictate whether a representation has the capacity to deceive a reasonable
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`shopper.” Id. “Because the FDA’s statements to date concerning the use of the word ‘natural’ are
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`both nonbinding and nonexclusive, they would not foreclose a jury from finding” that reasonable
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`consumers are misled by “natural” cheese products made with milk from cows treated with
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`artificial hormones. See id. at 78. To accept Kraft’s position that the FDA’s nonexclusive policy
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`precludes a finding of consumer deception “would be to say that food manufacturers can lie with
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`impunity as long as the FDA has yet to bar the particular lie they wish to tell.” Id. at 80.
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`Kraft’s argument that FDA policy makes Plaintiffs’ claims implausible is also directly
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`contradicted by Kraft’s plea for the Court to stay this case pending FDA rulemaking on the
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`definition of “natural” products. Kraft itself argues that the “FDA has specifically inquired and
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`undertaken the issue of whether ‘the manner in which an ingredient is produced or sourced
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`[should] affect whether a food containing that ingredient may be labeled as natural.’” (MTD 11-
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`12.) But the very fact that the FDA has solicited comments on this question proves that the
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`informal FDA policy currently in place should not be viewed as persuasive, let alone dispositive,
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`evidence of consumer perception of the claims at issue in this case. To the contrary, the FDA’s
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`2015 request for factual evidence regarding whether consumers perceive “natural” claims as
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`implicating production processes (such as the use of artificial hormones) makes clear that this is
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`not the “rare” case where the facts are so obvious that federal courts can decide what consumers
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`believe as a matter of law.
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`II.
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`KRAFT HAS ALREADY FOUGHT AND LOST ON THE ARGUMENT
`THAT THE FDA’S REVIEW OF THE TERM “NATURAL” REQUIRES
`THAT THE COURT STAY OR DISMISS UCL, FAL, OR CLRA CLAIMS.
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`Kraft argues that Plaintiffs’ claims must be dismissed or stayed because five years ago the
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`FDA sought public comment regarding consumer perception of the term “natural” on food labels.
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`The Central District of California has ruled on this exact issue, against Kraft, and held that “FDA
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`standards are not determinative of the ultimate question presented by the UCL, FAL, and CLRA
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`claims. That issue is whether the reasonable consumer is likely to be deceived by [“natural”]
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`product packaging.” Min. in Chambers, 15, Morales, et al. v. Kraft Foods Grp., Inc., et al. 2:14-
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`cv-04387-JAK-PJW, ECF No. 271 (C.D. Cal. Dec. 2, 2016). In 2016, the Court in Morales denied
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`Kraft’s motion for partia