Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 1 of 34
`
`Philip Swain (SBN 105322)
`pcs@foleyhoag.com
`FOLEY HOAG LLP
`155 Seaport Boulevard
`Boston, Massachusetts 02210-2600
`Tel: (617) 832-1000
`Fax: (617) 832-7000
`
`August T. Horvath (pro hac vice motion forthcoming)
`ahorvath@foleyhoag.com
`FOLEY HOAG LLP
`1301 Sixth Avenue, 25th Floor
`New York, New York 10019
`Tel: (646) 927-5500
`
`Attorneys for Defendant
`Costco Wholesale Corporation
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE
`
`ANKUSH PURI, individually, and on behalf of
`those similarly situated,
`
`Case No. 5:21-CV-01202-EJD
`
` Plaintiff,
`
`v.
`COSTCO WHOLESALE COPORATION,
`Defendant.
`
`DEFENDANT COSTCO WHOLESALE
`CORPORATION’S NOTICE OF MOTION
`AND MEMORANDUM IN SUPPORT OF
`DEFENDANT’S MOTION TO DISMISS
`PLAINTIFF’S COMPLAINT
`
`Date: August 5, 2021
`Time: 9:00 a.m.
`Courtroom: 4 (San Jose Courthouse)
`Judge: Hon. Edward J. Davila
`
`DEFENDANT COSTCO WHOLESALE CORP.’S NOTICE OF MOTION AND MEMORANDUM IN SUPPORT
`OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 2 of 34
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`PLEASE TAKE NOTICE that on August 5, 2021, at 9:00 a.m., or as soon thereafter as
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`the matter may be heard, in Courtroom 4 of the above-entitled Court, located at 280 South 1st
`
`Street, San Jose, CA 95113, Defendant Costco Wholesale Corporation (“Defendant”) will and
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`hereby does move this Court for an Order dismissing Plaintiff’s Complaint (“Complaint”) filed
`
`by Plaintiff Ankush Puri (“Plaintiff”) in the above-captioned action, in its entirety with prejudice.
`
`This Motion is made pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
`
`Defendant seeks dismissal of the Complaint, with prejudice, on the grounds that the Complaint
`
`fails to state a claim upon which relief can be granted.
`
`This Motion is based upon the accompanying Memorandum of Points and Authorities,
`
`the files and evidence in this case, and any such evidence and arguments that may be proffered at
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`the hearing of this Motion.
`
`DATED: April 26, 2021
`
`Respectfully submitted,
`
`
`
`By: ___/s/ Philip C. Swain
`Philip Swain (SBN 105322)
`pcs@foleyhoag.com
`FOLEY HOAG LLP
`155 Seaport Boulevard
`Boston, Massachusetts 02210-2600
`Tel: (617) 832-1000
`Fax: (617) 832-7000
`
`August T. Horvath (pro hac vice motion
`forthcoming)
`ahorvath@foleyhoag.com
`FOLEY HOAG LLP
`1301 Sixth Avenue, 25th Floor
`New York, New York 10019
`Tel: (646) 927-5500
`
`Attorneys for Defendant Costco Wholesale
`Corporation
`
`DEFENDANT COSTCO WHOLESALE CORP.’S NOTICE OF MOTION AND MEMORANDUM IN SUPPORT
`OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 3 of 34
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`STATEMENT OF ISSUES TO BE DECIDED
`
`1. Does Plaintiff fail to plausibly allege that a reasonable consumer would be deceived by
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`Defendant’s packaging to believe that it contains less vegetable oil than it does, such that
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`Plaintiff fails to state a claim for relief under the California consumer protection statutes?
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`2. Are Plaintiff’s claims preempted by the Food, Drug and Cosmetics Act?
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`3. Does Plaintiff fail to plausibly allege that the Product does not comply with relevant
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`federal and state food laws and regulations?
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`4. Does Plaintiff lack standing to seek injunctive relief because he fails to plausibly allege a
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`future injury?
`
`5. Should Plaintiff’s claim for unjust enrichment be dismissed?
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`6. Should Plaintiff’s claims for breach of express and implied warranty be dismissed?
`
`7. Should Plaintiff’s claim for breach of the Magnuson-Moss Warranty Act claim be
`
`dismissed?
`
`8. Should Plaintiff’s CLRA claims for monetary damages be dismissed?
`
`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
`i
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 4 of 34
`
`Table of Contents
`
`INTRODUCTION ...........................................................................................................................1
`FACTUAL BACKGROUND ..........................................................................................................3
`ARGUMENT ...................................................................................................................................6
`Plaintiff Has Not Plausibly Alleged That the Phrase “Chocolate
`Almond Dipped” is Misleading ...............................................................................6
`Even When Pleading Under the “Unlawful” Prong, Plaintiff
`Must Still Plead Plausibly that Reasonable Consumers Are
`Deceived ......................................................................................................6
`Plaintiff Has Not Plausibly Pled Reasonable Consumers Are
`Deceived ......................................................................................................7
`The Statement Is Truthful and Would Not Mislead a
`Reasonable Consumer ..................................................................................9
`The Product’s Labeling Complies with Applicable Regulations ...........................13
`Plaintiff Lacks Standing to Seek Injunctive Relief ................................................15
`Plaintiff’s Unjust Enrichment Claim Fails .............................................................17
`Plaintiff Fails to State a Claim for Breach of Express Warranty,
`Implied Warranty of Merchantability, or the Magnuson Moss
`Warranty Act. .........................................................................................................18
`Plaintiff’s Fraud Claim Fails ..................................................................................20
`Plaintiff’s CLRA Claims for Monetary Damages Should Be Dismissed ..............22
`CONCLUSION ..............................................................................................................................23
`
`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
`ii
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 5 of 34
`
`Cases
`
`Table of Authorities
`
`Anderson v. Jamba Juice Co.,
`888 F. Supp. 2d 1000 (N.D. Cal. 2012) .................................................................................... 19
`
`Barocio v. Bank of Am., N.A.,
`No. C 11-5636 SBA, 2012 U.S. Dist. LEXIS 128617 (N.D. Cal. Sep.10, 2012) ..................... 17
`
`Becerra v. Dr. Pepper/Seven Up, Inc.,
`945 F.3d 1225 (9th Cir. 2019) .............................................................................................. 7, 12
`
`Belfiore v. Procter & Gamble Co.,
`311 F.R.D. 29 (E.D.N.Y. 2015) ................................................................................................ 13
`
`Bush v. Mondelez International, Inc.,
`No. 16-cv-02460-RS, 2016 U.S. Dist. LEXIS 174391 (N.D. Cal. Dec. 16, 2016) .................... 6
`
`Campbell-Clark v. Blue Diamond Growers,
`No. 1:18-cv-5577-WFK (E.D.N.Y. Dec. 17, 2019) ................................................................... 8
`
`Campbell v. Freshbev LLC,
`322 F. Supp. 3d 330 (E.D.N.Y. 2018) ........................................................................................ 9
`
`Campion v. Old Republic Home Protections Co.,
`861 F. Supp. 2d 1139 (S.D. Cal. 2012) ..................................................................................... 17
`
`Cattie v. Wal-Mart Stores, Inc.,
`504 F. Supp. 2d 939 (S.D. Cal. 2007) ....................................................................................... 17
`
`Chapman v. Pier 1 Impos. Inc.,
`631 F.3d 939 (9th Cir. 2011) .................................................................................................... 15
`
`Clark v. Westbrae Nat., Inc.,
`No. 20-cv-03221-JSC, 2020 U.S. Dist. LEXIS 224966 (N.D. Cal. Dec. 1, 2020) ............... 7, 12
`
`Clark v. Westbrae Nat., Inc.,
`No. 20-cv-03221-JSC, 2021 U.S. Dist. LEXIS 78703
`(N.D. Cal. Apr. 22, 2021) ..................................................................................................... 8, 12
`
`Collins v. eMachines, Inc.,
`202 Cal. App. 4th 249 (2011) ................................................................................................... 17
`
`Cordes v. Boulder Brands USA, Inc.,
`No. CV 18-6534 PSG (JCx), 2018 U.S. Dist. LEXIS 217534 (C.D. Cal. Oct. 17, 2018) ........ 16
`
`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
`iii
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 6 of 34
`
`Davis v. Hain Celestial Group, Inc.,
`297 F. Supp. 3d 327 (E.D.N.Y. 2018) ...................................................................................... 10
`
`Durnford v. MusclePharm Corp.,
`907 F.3d 595 (9th Cir. 2018) ................................................................................................... 13
`
`Ebner v. Fresh, Inc.,
`838 F.3d 958 (9th Cir. 2016) ................................................................................................ 6, 7
`
`Fernandez v. Atkins Nutritionals, Inc.,
`No. 3:17-cv-01628-GPC-WVG, 2018 U.S. Dist. LEXIS 1189 (S.D. Cal. Jan. 3, 2018) ......... 16
`
`Fink v. Time Warner Cable,
`714 F.3d 739 (2d. Cir. 2013) .................................................................................................... 12
`
`Freeman v. Time, Inc.,
`68 F.3d 285 (9th Circ. 1995) ....................................................................................................... 7
`
`Garcia v. Gen. Motors, LLC,
`2019 WL 1209632 (E.D. Cal. Mar. 14, 2019) .......................................................................... 22
`
`Garrison v. Whole Foods Mkt. Grp., Inc.,
`No. 13-cv-05222-VC, 2014 U.S. Dist. LEXIS 75271 (N.D. Cal. Jun. 2, 2014) ....................... 16
`
`Gest v. Bradbury,
`443 F.3d 1177 (9th Cir. 2006) .................................................................................................. 15
`
`Girard v. Toyota Motor Sales, U.S.A., Inc.,
`316 F. App’x 561 (9th Cir. 2008) ............................................................................................. 20
`
`Gitson v. Trader Joe's Co.,
`No. 13-cv-01333-WHO, 2014 U.S. Dist. LEXIS 33936 (N.D. Cal. Mar. 14, 2014) ............... 13
`
`Hairston v. S. Beach Bev. Co.,
`No. CV 12-1429-JFW (DTBx), 2012 U.S. Dist. LEXIS 74279
` (C.D. Cal. May 18, 2012) ........................................................................................................ 19
`
`Ham v. Hain Celestial Grp., Inc.,
`70 F. Supp. 3d 1188 (N.D. Cal. 2014) ...................................................................................... 16
`
`Harris v. McDonald’s Corp.,
`No. 3:20-cv-06533 (N.D. Cal. March 24, 2021) ............................................................ 8, 10, 12
`
`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
`iv
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 7 of 34
`
`Hill v. Roll Int’l Corp.,
`195 Cal. App. 4th 1295, 128 Cal. Rptr. 109 (2011) .................................................................... 7
`
`In re iPhone 4S Consumer Litig.,
`2013 WL 3829653 (N.D. Cal. July 23, 2013) ........................................................................... 18
`
`In re Sony Gaming Networks & Customer Data Sec. Breach Litig.,
`996 F. Supp. 2d 942 (S.D. Cal. 2014) ......................................................................................... 7
`
`Jackson v. General Mills, Inc.,
`No. 18-cv-2634-LAB (BGS), 2019 U.S. Dist. LEXIS 162447 (S.D. Cal. Sept. 20, 2019) ...... 16
`
`Joslin v. Clif Bar & Co.,
`No. 4:18-cv-04941-JSW, 2019 U.S. Dist. LEXIS 192100 (N.D. Cal. Aug. 26, 2019) ............ 16
`
`Kearns v. Ford Motor Co.,
`567 F.3d 1120 (9th Cir. 2009) ................................................................................................. 13
`
`Kwikset Corp. v. Superior Court of Orange County,
`51 Cal. 4th 310, 120 Cal. Rptr. 3d 741, 246 P.3d 877 (2011) .............................................. 6, 22
`
`Lanovaz v. Twinings N. Am., Inc.,
`No. C-12-02646-RMW, 2013 U.S. Dist. LEXIS 25612 (N.D. Cal. Feb. 25, 2013) ................. 17
`
`Lavie v. Procter & Gamble Co.,
`105 Cal. App. 4th 496, 129 Cal. Rptr. 2d 486 (2003) ................................................................. 7
`
`Meaunrit v. ConAgra Foods Inc.,
`No. 09-2220, 2010 WL 2867393 (N.D. Cal. July 20, 2010) .................................................... 13
`
`Melendez v. One Brands,
`No. 18-cv-06650-CBA-SJB, 2020 U.S. Dist. LEXIS 49094
`(E.D.N.Y. Mar. 16, 2020) ......................................................................................................... 13
`
`Outboard Marine v. Superior Court,
`52 Cal. App. 3d 30, 124 Cal. Rptr. 852 (1975) ......................................................................... 22
`
`Peviani v. Hostess Brands, Inc.,
`750 F. Supp. 2d 1111 (C.D. Cal. 2010) .................................................................................... 13
`
`Pichardo v. Only What You Need, Inc.,
`No. 20-cv-493 (VEC), 2020 U.S. Dist. LEXIS 199791 (S.D.N.Y. Oct. 27, 2020) .................... 9
`
`Prescott v. Nestle USA, Inc.,
`No. 19-cv-07471-BLF, 2020 U.S. Dist. LEXIS 99261 (N.D. Cal. June 4, 2020) .................... 16
`
`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 8 of 34
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`Rahman v. Mott’s LLP,
`No. 13-cv-3482 SI, 2014 U.S. Dist. LEXIS 147102 (N.D. Cal. Oct. 15, 2014) ....................... 16
`
`Rahman v. Mott's LLP,
`No. 13-cv-03482-SI, 2018 U.S. Dist. LEXIS 164620 (N.D. Cal. Sep. 25, 2018) .................... 16
`
`Red v. The Kroger Co.,
`No. 10-1025, 2010 U.S. Dist. LEXIS 115238 (C.D. Cal. Sept. 2, 2010) ................................. 13
`
`Reyes v. Crystal Farms Refrigerated Distrib. Co.,
`No. 18-cv-2250, 2019 U.S. Dist. LEXIS 125971
`(E.D.N.Y. July 26, 2019) ............................................................................................... 9, 12, 13
`
`Rhynes v. Stryker Corp.,
`No. 10-5619 SC, 2011 U.S. Dist. LEXIS 58286 (N.D. Cal. May 31, 2011) ............................ 17
`
`Sarr v. BEF Foods,
`No. 18-cv-6409-ARR, 2020 U.S. Dist. LEXIS 25594 (E.D.N.Y. Feb.
`13, 2020) .................................................................................................................................... 8
`
`Sibrian v. Cento Fine Foods, Inc.,
`No. 19-cv-0974-JS-ST, 2020 U.S. Dist. LEXIS 117300
`(E.D.N.Y. July 2, 2020) ............................................................................................................. 8
`
`Smith v. Allstate Ins. Co.,
`160 F. Supp. 2d 1150 (S.D. Cal. 2001) ..................................................................................... 21
`
`Solak v. Hain Celestial Grp., Inc.,
`No. 3:17-cv-0704-LEK-DEP, 2018 U.S. Dist. LEXIS 64270
`(N.D.N.Y. April 17, 2018) ......................................................................................................... 9
`
`Steckman v. Hart Brewing, Inc.,
`143 F.3d 1293 (9th Cir. 1998) .................................................................................................. 21
`
`Steele v. Wegmans Food Mrkts. Inc.,
` No. 1:19-cv-09227 (LLS), 2020 U.S. Dist. LEXIS 123637 (S.D.N.Y. July 14, 2020) ........ 9, 20
`
`Sukonik v. Wright Med. Tech., Inc.,
`2015 WL 10682986 (C.D. Cal. Jan. 26, 2015) ......................................................................... 21
`
`Swearingen v. Amazon Preserv. Partners, Inc.,
`2014 WL 3934000 (N.D. Cal. Aug. 11, 2014) ......................................................................... 18
`
`Vess v. Ciba-Geigy Corp. USA,
`317 F.3d 1097 (9th Cir. 2003) .................................................................................................. 20
`
`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 9 of 34
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`Viggiano v. Hansen Nat. Corp.,
`944 F. Supp. 2d 877 (C.D. Cal. 2013) ...................................................................................... 19
`
`Von Grabe v.Sprint PCS,
`312 F. Supp. 2d 1285 (S.D. Cal. 2003) ..................................................................................... 22
`
`Statutes & Regulations
`
`21 C.F.R. § 163 ............................................................................................................................. 15
`
`21 U.S.C. § 343 ............................................................................................................................... 6
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`Cal. Civ. Code § 1782 ................................................................................................................... 23
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`CLRA § 1782 ................................................................................................................................ 23
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`Fed. R. Civ. P. 9(b) ......................................................................................................................... 2
`
`U.C.C. § 2-314 .............................................................................................................................. 18
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`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 10 of 34
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`INTRODUCTION
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`The Complaint (Dkt. 1, “Complaint”) is not only one of many in a campaign of over 100
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`recent cut-and-paste putative class-action lawsuits filed by the same plaintiff’s counsel against
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`products that bear flavor designations such as “chocolate” or “vanilla,” but it is a copy-cat of
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`allegations made in a suit currently pending in the Eastern District of New York about the same
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`product – Tinelli v. Costco Wholesale Corp., 1:20-cv-02983-GBD. Both lawsuits focus on
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`allegations regarding Costco Wholesale Corporation’s (“Costco’s” or “Defendant’s”) ice cream
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`bars sold under the Kirkland Signature brand as “Chocolate Almond Dipped Vanilla Ice Cream
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`Bars” (the “Product”). The Complaint alleges that the Product’s packaging communicates to
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`consumers an extensive series of implied messages about the ingredient makeup of the chocolate
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`coating. Plaintiff contends that the contents of Costco’s Chocolate Almond Dipped Vanilla Ice
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`Cream Bars contradict those implied messages, but common sense and common knowledge
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`dictate the opposite conclusion - that consumers understand the “chocolate” portion of the
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`Product description to refer to the flavor of the coating in which the vanilla ice cream is dipped.
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`A reasonable consumer would not perceive from the use of the word “chocolate” in “chocolate
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`almond dipped vanilla” the misleading messages Plaintiff alleges.
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` Despite extensive allegations, many of them gratuitous and unrelated to the facts and
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`substantive allegations of the lawsuit, Plaintiff has failed to plead any plausible basis as to why a
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`reasonable consumer would care what the exact makeup of the chocolate coating was, and even
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`if he did, why he would expect that the chocolate coating would exclude ingredients such as
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`certain vegetable oils. Though Plaintiff asserts that “chocolate may be beneficial to the heart and
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`arteries” citing unidentified “numerous studies,” (Complaint ¶ 13) consumers do not choose to
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`consume chocolate-dipped vanilla ice cream for chocolate’s nutritive properties, and Plaintiff
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`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 11 of 34
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`does not contend that consumers eat chocolate coated ice cream bars as a health food. The
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`chocolate and almond coating is simply a flavor.
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`Plaintiff’s substantive allegations are concerned almost entirely with accusations that
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`Costco violated the Food, Drug & Cosmetic Act (FDCA), as interpreted incorrectly by Plaintiff,
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`and the California Sherman Food, Drug, and Cosmetic Law (“Sherman Law”). This theory is
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`fatally flawed, for two primary reasons. First, Plaintiff incorrectly interprets the FDCA, as he
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`mischaracterizes and misconstrues the regulations under the statute, and relies on his own non-
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`expert intuition for his interpretations. In fact, as detailed below, Costco’s labels comply with
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`the FDCA. Second, to plead a cause of action, even if he had plausibly established non-
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`compliance with food regulations, Plaintiff would have to step away from the alleged technical
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`violations of the FDCA, and plausibly plead that a reasonable consumer would interpret the
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`phrase “chocolate almond dipped” to mean that only the particular kind of “real chocolate”
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`asserted by Plaintiff is used. (Complaint ¶¶ 4, 7, 30, 66-67). Plaintiff is unable to do so. This
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`lawsuit merely continues Plaintiff’s counsel’s strategy in their filings against food companies
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`that consists of spotting what they believe is a technical violation of the FDA regulations and
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`then holding up these companies for expensive settlements.
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`Furthermore, Plaintiff’s claims sound in fraud, including a specific count of fraud, and
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`therefore must be pled with the particularity required by Fed. R. Civ. P. 9(b). See Kearns v. Ford
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`Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). However, there are almost no allegations
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`specific to Costco’s ice cream products in the Complaint. Plaintiff’s factual allegations about
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`Costco’s conduct and the contents of its ice cream products are based on unfounded speculation
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`about the meaning of its ingredient statements and now, placing unfounded meaning on the order
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`of ingredients.
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`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 12 of 34
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`Plaintiff also pleads assorted secondary causes of action that should all fail together with
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`his core false advertising claims, but in the alternative, should be dismissed because they are
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`inappropriate for the situation alleged by Plaintiff, who therefore does not, and cannot, plead the
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`necessary elements of these causes of action. Plaintiff also pleads for injunctive relief under
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`Rule 23(b), which should be dismissed because, by his own admission, he is now aware of the
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`alleged deception, and therefore is at no risk of being deceived and injured in the future.
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`FACTUAL BACKGROUND
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`Costco makes and sells chocolate-coated ice cream bars under the Kirkland Signature
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`brand, including Chocolate Almond Dipped Vanilla Ice Cream Bars, the Product at issue in this
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`case. Plaintiff alleges that “the chunks of chocolate, the chocolate almond coating of the Product
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`and the statement ‘Chocolate Almond Dipped’ are false and deceptive and misleading because
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`the ‘chocolate’ consists mainly of ingredients consumers do not expect in chocolate – vegetable
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`oils.” (Complaint ¶ 4). According to Plaintiff, the representation of “chocolate almond dipped
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`vanilla” ice cream is intended to appeal to consumers who “want chocolate in chocolate products
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`to come from a real source, i.e., from cacao beans” because “chocolate provides greater satiety
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`and a creamy and smooth mouthfeel compared to other ingredients which substitute for
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`chocolate, like vegetable oils.” (Complaint ¶¶ 7-8). Plaintiff therefore alleges that the Product’s
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`front label is “very misleading and at best, a ‘half-truth,’ because the chocolate part of the
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`Product contains ingredients not found in real chocolate – ‘Coconut Oil’ and ‘Soybean Oil.’”
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`(Complaint ¶ 32). Plaintiff further alleges that this supposed mislabeling permits Costco to sell
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`the Product at “a premium price, approximately no less than $10.99 per box of 18 bars…”
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`(Complaint ¶ 56). None of these allegations has any factual support, plausibility, or merit.
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`As any reasonable consumer would suppose, creating a chocolate-coated ice cream treat
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`is not as simple as merely dipping a chunk of vanilla ice cream into melted chocolate. The high
`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 13 of 34
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`melting point of cacao fat relative to ice cream and frozen desserts makes it difficult or
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`impractical to apply what Plaintiff considers “real” chocolate as a coating on a frozen dessert. In
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`order to produce a chocolate dipped ice cream product that consumers can enjoy, such as the
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`Product at issue here, a precise ingredient formula is utilized to maintain the flavor and
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`consistency consumers expect. That formula is fully disclosed on the packaging. In fact,
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`Plaintiff does not dispute that the Product actually contains chocolate, and that all of its chocolate
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`flavor comes from chocolate. Instead, Plaintiff alleges that it is misleading for Costco to not
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`have included the additional ingredients besides chocolate in the Product name so that it would
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`read “Milk Chocolate and Vegetable Oil Coating Almond Dipped Vanilla Ice Cream Bars,”
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`because the current name “fails to disclose the presence of vegetable oil components.” Id. ¶¶ 43,
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`50. This, however, is inconsistent with both FDA requirements and consumer expectations.
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`Plaintiff admits that the FDA expressly allows the use of vegetable oils in chocolate
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`coatings, so long as the ingredient statement, where the full name of each ingredient is stated,
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`correctly discloses their presence to consumers. (Complaint ¶ 50); see also 21 C.F.R. § 163.155.
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`Costco complies with this requirement. The Product’s ingredient list accurately and
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`conspicuously indicates that the Product’s “milk chocolate flavored coating with almonds”
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`(which, contrary to Plaintiff’s misinterpretation, is not presented as an ingredient, but a part of
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`the food, i.e., the coating) includes soybean and coconut oils, as acknowledged by Plaintiff.
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`(Complaint ¶ 32). This ingredient statement on the Product fulfills the FDA’s requirements, and
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`Plaintiff’s lawsuit is accordingly preempted as it seeks to hold Costco liable for conduct that is
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`expressly authorized by federal law. Plaintiff further alleges that the Product has more coconut
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`oil than unsweetened chocolate, and more coconut oil than unsweetened chocolate processed
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`with alkali, based on the listing of ingredients on the label. (Complaint ¶¶ 34-35). Plaintiff goes
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`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 14 of 34
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`even further to allege that “the combined total of coconut oil and soybean oil exceeds the amount
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`of the two chocolate ingredients.” (Complaint ¶ 36). These claims are baseless interpretations
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`that cannot be legitimately inferred from the Product’s ingredient statement or any other source
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`cited by Plaintiff.
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`Despite Plaintiff’s claim to mandate it, FDA regulations do not require that the oils listed
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`as ingredients in the coating be repeated on the front-panel flavor designator of the entire
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`product. To the contrary, the FDA has stated that the flavor of a food can be labeled “chocolate”
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`so long as its only source of chocolate flavoring is chocolate, which is undisputedly true of the
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`chocolate coating of the Product. See FDA Compliance Policy Guide § 515.800, Labeling of
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`Products Purporting to be “Chocolate” or “Chocolate Flavored.”1 Thus, for example, a chocolate
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`cake can be called a chocolate cake even though the cake contains many other ingredients, likely
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`including vegetable fats, in addition to chocolate. The same is true of a chocolate dipped ice
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`cream bar. This reflects the FDA’s recognition of the purpose of a flavor designator, which is to
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`tell the consumer what the product tastes like. It does not taste like coconut oil; it tastes like
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`chocolate. Plaintiff’s allegation that Costco violates the FDA’s food labeling regulations is
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`facially incorrect.
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`1 Available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/cpg-
`sec-515800-labeling-products-purporting-be-chocolate-or-chocolate-flavored.
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`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 15 of 34
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`ARGUMENT
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`Plaintiff Has Not Plausibly Alleged That the Phrase “Chocolate Almond Dipped” is
`Misleading
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`Even When Pleading Under the “Unlawful” Prong, Plaintiff Must
`Still Plead Plausibly that Reasonable Consumers Are Deceived
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`As a threshold issue, even if Plaintiff plausibly pleads that the Product’s labels do not
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`comply with FDA regulations, this supplies only one element of Plaintiff’s cause of action under
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`the unlawful prong. Plaintiff must still plead that he, and members of the purported class,
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`reasonably relied on the purported misrepresentations to their detriment, and were injured
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`thereby. See Kwikset Corp. v. Superior Court of Orange County, 51 Cal. 4th 310, 120 Cal. Rptr.
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`3d 741, 246 P.3d 877 (2011) (emphasis added). Further, Plaintiff may not bootstrap alleged
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`regulatory violations to satisfy these elements by pleading that Plaintiff relied on the Product
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`being labeled in accordance with law or “legal for sale.” Bush v. Mondelez International, Inc.,
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`No. 16-cv-02460-RS, 2016 U.S. Dist. LEXIS 174391, at *9-10 (N.D. Cal. Dec. 16, 2016).
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`This case is much like Bush v. Mondelez, 2016 U.S. Dist. LEXIS 174391 where the
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`plaintiff alleged that the defendant underfilled the containers of travel-size cookie products in
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`violation of the FDCA, 21 U.S.C. § 343(q), as incorporated by reference in the Sherman Law.
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`Like the Plaintiff here, the Bush plaintiff wanted to go directly from pleading a regulatory
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`violation to the collection of damages. The court rejected the theory that an alleged regulatory
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`violation is sufficient to state a UCL claim. “These are claims brought under California
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`consumer laws, and courts, not the FDA, determine whether a product is misleading under those
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`laws.” Id. at *7-8, citing Ebner v. Fresh, Inc., 838 F. 3d 958 (9th Cir. 2016). Whether it
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`complies with food regulations or not, even when asserted under the “unlawful” prong of the
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`UCL, the labeling challenged by the Plaintiff must be independently assessed under the
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`deception standard to determine whether reasonable consumers would have relied on it to their
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`DEFENDANT COSTCO WHOLESALE CORPORATION’S NOTICE OF MOTION AND MEMORANDUM IN
`SUPPORT OF MOTION TO DISMISS COMPLAINT-- CASE NO. 5:21-CV-01202-EJD
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`Case 5:21-cv-01202-EJD Document 12 Filed 04/26/21 Page 16 of 34
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`detriment. Id. (holding that in this d