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Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 1 of 15 PageID #: 167
`
`
`
`
`
`MEMORANDUM AND ORDER
`
`19-CV-3379(KAM)(SJB)
`
`
`
`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`----------------------------------X
`
`EVA RIVAS,
`
`
`
` Plaintiff,
`
`
`
`v.
`
`
`
`THE HERSHEY COMPANY,
`
`
`
` Defendant.
`
`
`----------------------------------X
`
`KIYO A. MATSUMOTO, United States District Judge:
`
`
`
`Eva Rivas (“Plaintiff”) all1eges that the “Kit Kat
`White” candy bar materially misleads consumers because it does
`not contain white chocolate. The defendant in this action, the
`Hershey Company (“Hershey” or “Defendant”), moves to dismiss the
`complaint for failure to state a claim pursuant to Federal Rule
`of Civil Procedure 12(b)(6).
`
`
`For the reasons herein, the complaint is DISMISSED
`with prejudice because the court lacks subject matter
`jurisdiction over the action, and Defendant’s motion to dismiss
`is therefore rendered moot.
`Background
`On June 7, 2019, Plaintiff, individually and on behalf
`of all others similarly situated, filed a complaint against
`Hershey. (ECF. No. 1, Complaint (“Compl.”).) Initially,
`Plaintiff raised seven causes of action: (1) violation of New
`
`
`
`1
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 2 of 15 PageID #: 168
`
`York’s General Business Law (“GBL”) §§ 349 and 350, and the
`consumer protection laws of the other 49 states; (2) violation
`of California’s False Advertising Law, Business and Professions
`Code § 17500; (3) violation of California’s Unfair Competition
`Law, Business and Professions Code § 17200; (4) negligent
`misrepresentation; (5) breach of express warranty and of the
`implied warranty of merchantability; (6) fraud; and (7) unjust
`enrichment. (See generally id.) At a pre-motion conference
`before the court in November 2019, Plaintiff agreed to dismiss
`the Jane Doe plaintiffs and six of the causes of action, and
`proceed only with “Plaintiff’s individual claims against
`Defendant . . . .” (ECF Minute Entry and Dkt. Order Nov. 13,
`2019.) The claims remaining in the case, therefore, are
`Plaintiff’s individual claims under New York GBL §§ 349 and 350.
`
`
`Defendant Hershey manufactures, distributes, and
`markets Kit Kat candy bars, which are crisp wafers coated in a
`variety of flavors, including, most commonly, milk chocolate.
`One variety, the Kit Kat White, is coated “in a white confection
`coating.” (Compl. ¶ 1.) Plaintiff alleges that Kit Kat White
`is misleading to consumers because it does not contain white
`chocolate. (See id. at ¶¶ 2-4.) Plaintiff alleges that the Kit
`Kat White is marketed as an “alternative[]” to the dark and milk
`chocolate versions of the Kit Kat, and in that context, “the
`
`
`
`2
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 3 of 15 PageID #: 169
`
`reasonable consumer expects the white variety to contain white
`chocolate,” which is “derived from cacao fat.” (Id. at ¶¶ 2-3.)
`Kit Kat White’s packaging describes the product as
`“[c]risp [w]afers [i]n [c]rème.” (Id. at ¶¶ 2, 6.) A depiction
`of the front of the packaging is shown below:
`
`
`
`
`
`
`(Id.)
`
`
`
`Plaintiff alleges that Kit Kat White is “intended to
`be viewed and understood as white chocolate” not only based on
`its packaging, but based on point-of sale marketing, retail
`displays, advertisements, and on the websites of third parties.
`(Id. at ¶ 6.) Plaintiff cites, as examples, the websites of
`retailers such as Target, Dollar General, and Amazon, which use
`“white chocolate” in the description of Kit Kat White bars.
`(Id.) In addition, Plaintiff alleges that Defendant’s own
`marketing and advertising suggest that Kit Kat White contains
`white chocolate, because it is advertised along with, or
`displayed next to, the milk chocolate and dark chocolate
`versions. (Id. at ¶¶ 10-11.)
`
`
`
`3
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 4 of 15 PageID #: 170
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`Plaintiff also contends that Kit Kat White used to
`
`
`contain white chocolate, but it no longer does. (Id. ¶¶ 36-
`37.) Because Defendant did not update the overall scheme of Kit
`Kat White’s packaging, Plaintiff avers that consumers are being
`misled into thinking that Kit Kat White still contains white
`chocolate. (Id.)
`
`
`Lastly, Plaintiff asserts that “as a result of the
`false and misleading labeling, the [Kit Kat White bars] are sold
`at premium prices . . . compared to other similar products.”
`(Id. at ¶ 42.) Plaintiff alleges that if she had known that Kit
`Kat White bars did not contain real white chocolate, she would
`not have purchased the product, or she would have paid less for
`it. (Id. at ¶ 41.)
`
`
`In January 2020, Hershey’s filed the instant motion to
`dismiss the complaint. (ECF No. 12, Motion to Dismiss; see ECF
`No. 13, Memorandum in Support (“Mem.”).) Plaintiff opposed the
`motion (ECF No. 14, Memorandum in Opposition (“Opp.”)), and
`Hershey filed a reply brief (ECF No. 15, Reply in Support).
`With her opposition, Plaintiff filed two documents not
`referenced in her complaint.1 The first was a letter from
`
`
`1 In general, on a motion to dismiss, a court should only “consider the
`facts alleged in the complaint, documents attached to the complaint as
`exhibits, and documents incorporated by reference in the complaint”
`that the plaintiff relied upon in the complaint. DiFolco v. MSNBC
`Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010). Nonetheless, the
`court describes these documents briefly, though it does not find them
`relevant to this Memorandum and Order.
`4
`
`
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 5 of 15 PageID #: 171
`
`Hershey to the Food and Drug Administration (“FDA”), dated
`August 9, 1989, in which Hershey asked the FDA to establish a
`standard to identify white chocolate. (Opp., Ex. A.) Hershey
`noted in the letter that:
`In many cases, the use of fanciful names
`obscures the true nature of the product.
`Consumers who might expect to be purchasing a
`“chocolate” or “white chocolate” product may,
`in fact, be purchasing a coating-type product
`manufactured with cheaper ingredients made
`from other oils and/or fats and which contain
`little or no cacao ingredients.
`
`(Id. at 2.) In addition, Plaintiff filed with her opposition
`the results from a marketing survey conducted by Hershey “to
`determine the most common name used by adult candy consumers
`when shown a variety of confection products, including a generic
`white confection bar.” (Opp., Ex. B., at 1.) The results
`showed that “the majority of candy consumers tend[ed] to
`identify white confection as either ‘white chocolate’
`specifically or as some variety of chocolate.” (Id.)
`Defendant subsequently filed notices of additional
`authority, drawing the court’s attention to two recent decisions
`from the United States District Court for the Northern District
`of California: Cheslow v. Ghiradelli Chocolate Company, No. 19-
`cv-7467, 2020 WL 1701840 (N.D. Calif. April 8, 2020) (granting
`motion to dismiss complaint regarding Ghiradelli Premium Baking
`Chips Classic White Chips); and Prescott v. Nestle USA, Inc.,
`
`
`
`5
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 6 of 15 PageID #: 172
`
`No. 19-cv-7471, 2020 WL 3035798 (N.D. Cal. June 4, 2020)
`(granting motion to dismiss complaint regarding Nestle Toll
`House’s Premier White Morsels). (See ECF Nos. 17, 18, 19, 20.)
`Legal Standards
`
`Motion to Dismiss
`I.
`
`“To survive a motion to dismiss, a complaint must
`
`contain sufficient factual matter, accepted as true, to ‘state a
`claim to relief that is plausible on its face.’” Ashcroft v.
`Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
`Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial
`plausibility when the plaintiff pleads 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.
`The “court must accept as true all of the allegations
`contained in a complaint,” but the court need not accept a
`plaintiff’s “legal conclusions.” Id. Where the factual
`allegations, even accepted as true, do not plausibly suggest
`unlawful conduct, the plaintiff’s complaint must be dismissed.
`Id. at 679-80.
`II.
`New York GBL §§ 349 and 350
`A plaintiff is entitled to relief for a violation of
`GBL § 349, which prohibits deceptive business practices, if: (1)
`the act, practice, or advertisement was consumer-oriented; (2)
`
`
`
`6
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 7 of 15 PageID #: 173
`
`the act, practice or advertisement was misleading in a material
`respect, and (3) the plaintiff was thereby injured. Stutman v.
`Chem. Bank, 95 N.Y.2d 24, 29 (2000). Similarly, to establish a
`claim under GBL § 350, which prohibits false advertising, “a
`plaintiff must demonstrate that the advertisement (1) had an
`impact on consumers at large, (2) was deceptive or misleading in
`a material way, and (3) resulted in injury.” Horowitz v.
`Stryker Corp., 613 F. Supp. 2d 271, 287 (E.D.N.Y. 2009) (quoting
`Andre Strishak & Assocs., P.C. v. Hewlett Packard Co., 752
`N.Y.S.2d 400, 403 (2d Dep’t 2002)) (alteration omitted).
` “The standard for whether an act or practice is
`misleading is an objective one, requiring a showing that a
`reasonable consumer would have been misled by the defendant’s
`conduct.” Ackerman v. Coca-Cola Co., No. 09-cv-0395, 2010 WL
`2925955, at *22 (E.D.N.Y. July 21, 2010); see Goldemberg v.
`Johnson & Johnson Consumer Companies, Inc., 8 F. Supp. 3d 467,
`478 (S.D.N.Y. 2014) (“The New York Court of Appeals has
`established an objective standard for determining whether acts
`or practices are materially deceptive or misleading to ‘a
`reasonable consumer acting reasonably under the
`circumstances.’”) (quoting Oswego Laborers’ Local 214 Pension
`Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 26 (1995)).
`
`
`Moreover, “[c]laims under GBL §§ 349 and 350 are not
`subject to the pleading-with-particularity requirements of
`
`
`
`7
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 8 of 15 PageID #: 174
`
`[Federal Rule of Civil Procedure] 9(b).” Ackerman, 2010 WL
`2925955, at *22.
`
`Discussion
`Plaintiff alleges that Defendant violated GBL §§ 349
`
`
`and 350 by misleading consumers into believing that the Kit Kat
`White contains white chocolate, and thus consumers purchased it
`at a premium. Defendant argues that Plaintiff’s New York GBL
`claims should be dismissed because Plaintiff (1) failed to
`adequately plead that Defendant’s actions were objectively
`materially misleading, (2) failed to adequately plead causation,
`and (3) for purposes of GBL § 350, failed to adequately plead
`that she relied on the statements that she challenges. Because
`the court dismisses this case for lack of subject matter
`jurisdiction, it need not address the merits of Defendant’s
`arguments. Nonetheless, for purposes of determining whether
`Plaintiff should be granted leave to amend her complaint, the
`court will briefly address whether she can plausibly allege that
`Defendant engaged in materially misleading practices or
`advertising.
`I.
`Subject Matter Jurisdiction
`The only claims remaining in this case are the claims
`under the New York GBL. At the conference during which
`Plaintiff agreed to dismiss her other claims and the other
`plaintiffs, the court raised the issue of its subject matter
`
`
`
`8
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 9 of 15 PageID #: 175
`
`jurisdiction over the remaining state law claims, and expected
`that the “parties [would] address th[e] matter in their
`briefing.” (ECF Minute Entry and Dkt. Order Nov. 13, 2019.)
`The parties, however, did not address subject matter
`jurisdiction in their briefing. Defendant, in a footnote,
`“reserve[d] the right to raise such a defense in the future
`should the facts indicate it is appropriate.” (Mem. at 5 n.1.)
`“Although the parties did not brief the issue . . ., the [c]ourt
`may examine subject matter jurisdiction, sua sponte, at any
`stage of the proceeding.” F.D.I.C. v. Four Star Holding Co.,
`178 F.3d 97, 100 n.2 (2d Cir. 1999); see Oscar Gruss & Son, Inc.
`v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003) (“Failure of
`subject matter jurisdiction, of course, is not waivable and may
`be raised at any time by a party or by the court sua sponte.”).
`Because Plaintiff has brought only state law claims
`against Defendant, this court’s jurisdiction must be based on
`
`diversity of citizenship under 28 U.S.C. § 1332, which requires
`$75,000.” 28 U.S.C. § 1332(a)(1). There appears to be diversity
`
`that the parties be “citizens of different States,” and that
`“the matter in controversy exceed[] the sum or value of
`
`of citizenship here, because Plaintiff is a citizen of New York,
`and Defendant is incorporated in Delaware and its principal
`place of business is in Pennsylvania. (Compl. ¶¶ 49, 54.) The
`
`
`
`9
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 10 of 15 PageID #: 176
`
`amount in controversy, however, does not appear to approach
`anywhere near $75,000.
`In her complaint, which was filed as a proposed class
`action on behalf of all individuals similarly situated,
`Plaintiff alleged $5 million in damages. (Id. at ¶ 45.) Now
`that Plaintiff has agreed to proceed only with her individual
`claims against Defendant, she would have to plead that she
`suffered damages of at least $75,000 in order for this court to
`have jurisdiction over her claims. New York GBL § 349 allows a
`plaintiff to recover her actual damages, and very modest
`statutory damages of up to $1,000.2 Plaintiff alleges that Kit
`Kat White bars sold at a premium of $1.99 per 1.5 ounce candy
`bar. (Id. at ¶ 43.) Thus, accepting as true Plaintiff’s
`allegation that she overpaid by $1.99 each time she purchased a
`Kit Kat White, she would need to have purchased 37,689 Kit Kat
`White bars in order to accumulate $75,000 in damages. Even if
`the court were to assume that Plaintiff’s damages were the full
`price of each Kit Kat White, and she were to succeed in
`recovering statutory damages, she still would need to have
`
`
`2 Under GBL § 349, “[c]itizens can . . . recover actual damages (or
`$50, whichever is greater) and obtain attorney’s fees.” Stutman, 95
`N.Y.2d at 28. “In addition, if a defendant knowingly or willfully
`engages in a deceptive practice, the court may, in its discretion,
`award treble damages up to a maximum of $1,000.” Id. at 28-29. GBL §
`350 does not specify recoverable damages, but the potential recovery
`is presumed to be the same as it is under GBL § 349. See Austin v.
`Albany Law Sch. of Union Univ., 957 N.Y.S.2d 833, 843 (Sup. Ct. 2013).
`10
`
`
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 11 of 15 PageID #: 177
`
`purchased many thousands of candy bars to reach damages of
`$75,000. It is not plausible that a single individual, unless
`she ate nothing but Kit Kat White bars over the course of many
`years, would purchase that many. See Maitland v. Lunn, No. 14-
`cv-5938, 2017 WL 1088122, at *5 (E.D.N.Y. Mar. 21, 2017)
`(plaintiff must “allege to a ‘reasonable probability’ that they
`suffered damages in excess of $75,000”).
`Accordingly, because the amount in controversy here is
`well below $75,000, this action must be dismissed for lack of
`subject matter jurisdiction. See Arbaugh v. Y&H Corp., 546 U.S.
`500, 514 (2006) (“[W]hen a federal court concludes that it lacks
`subject-matter jurisdiction, the court must dismiss the
`complaint in its entirety.”); Lyndonville Sav. Bank & Tr. Co. v.
`Lussier, 211 F.3d 697, 700–01 (2d Cir. 2000) (“If subject matter
`jurisdiction is lacking, the action must be dismissed.”).
`II.
`Materially Misleading Practices/Advertising
`Plaintiff could theoretically argue that she should be
`allowed to amend her complaint in order to plausibly invoke this
`court’s jurisdiction, and so the court will briefly consider
`whether such an amendment would be futile. See Ellis v. Chao,
`336 F.3d 114, 127 (2d Cir. 2003) (“[I]t is well established that
`leave to amend a complaint need not be granted when amendment
`would be futile.”). Because Plaintiff will not be able to
`
`
`
`11
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 12 of 15 PageID #: 178
`
`allege that Defendant engaged in misleading business practices
`or misleading advertising, any amendment would be futile.
`In determining whether a practice or advertisement is
`materially misleading, the inquiry is whether, objectively, the
`act or advertisement is likely to mislead “a reasonable consumer
`acting reasonably under the circumstances.” Oswego, 85 N.Y.2d
`at 26. A court may decide this question as a matter of law, see
`Fink v. Time Warner Cable, 714 F.3d 739, 741 (2d Cir. 2013),
`although generally the inquiry is a question of fact, see
`Buonasera v. Honest Co., 208 F. Supp. 3d 555, 566 (S.D.N.Y.
`2016). The Second Circuit has explained that “in determining
`whether a reasonable consumer would have been misled by a
`particular advertisement, context is crucial.” Geffner v. Coca-
`Cola Co., 928 f.3d 198, 200 (2d Cir. 2019).
`
`
`The gravamen of Plaintiff’s complaint is that the Kit
`Kat White is “intended to be viewed and understood as white
`chocolate, on the labels, point-of-sale marketing, retailers’
`display ads and promotion, television and radio ads and websites
`of third-parties.” (Compl. ¶ 6.) Crucially, there is no
`statement anywhere on Kit Kat White’s packaging, or in any
`Hershey advertisement cited by Plaintiff, that describes the
`product as containing white chocolate. It is simply described
`as being “[w]hite,” and “[c]risp wafers [i]n [c] rème.”
`
`
`
`12
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 13 of 15 PageID #: 179
`
`The Second Circuit’s recent decision in Geffner v.
`Coca-Cola is instructive for how a court should approach a
`modifying adjective, such as “white,” on a product’s packaging.
`In Geffner, the plaintiff alleged that the modifier “diet” on a
`soda can was misleading to consumers, as a promise that the
`product would help with weight loss. 928 F.3d at 200. The
`Second Circuit looked to the dictionary, which defined “diet”
`as, “reduced in or free from calories.” Id. Based on the
`“clear meaning” of the term “diet,” the label was not misleading
`because the product was indeed “free from calories,” and the
`plaintiff’s allegations were therefore “implausible on their
`face.” Id.
`Returning to the present case, the dictionary defines
`“white” as, inter alia, “of the color of new snow or milk.”3
`There is no dispute that the Kit Kat White is, as the modifying
`adjective suggests, white in color. See Cheslow, 2020 WL
`1701840, at *5 (“The adjective ‘white’ in ‘White Chips’ does not
`define the food itself but rather defines the color of the
`food.”). Plaintiff’s claim, therefore, cannot be that Hershey’s
`packaging of Kit Kat White contains false information. Instead,
`Plaintiff’s claim is that, because the Kit Kat White is
`advertised and displayed next to dark and milk chocolate Kit
`
`
`3 “White,” MARRIAM-WEBSTER, available at https://www.merriam-
`webster.com/dictionary/white.
`
`
`
`13
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 14 of 15 PageID #: 180
`
`Kats, consumers will infer that the Kit Kat White is also
`chocolate, and, due to the modifier, that it is white chocolate.
`(See Compl. ¶ 2.)
`
`
`Plaintiff’s complaint alleges no plausible facts that
`the presence of the word “white” on the package of Kit Kat White
`bars gives rise to a plausible claim that consumers would be
`misled into believing that chocolate was an ingredient. See
`Prescott, 2020 WL 3035798, at *4 (“No reasonable consumer could
`believe that a package of baking chips contains white chocolate
`simply because the product includes the word ‘white’ in its name
`or label.”). Even if Plaintiff’s allegation may have been
`plausible if the packaging only included the words “Kit Kat
`White,” the product is also clearly described as “[c]risp wafers
`[i]n [c] rème.” “Crème” is defined as, inter alia, “cream or a
`preparation made with or resembling cream used in cooking.”4 A
`reasonable consumer would not be misled into believing that the
`wafers are dipped in white chocolate when the packaging does not
`mention chocolate, and states that the wafers are dipped in
`crème, which is not the same as white chocolate.
`Accordingly, Plaintiff cannot plausibly state a claim
`that the marketing of Kit Kat White is misleading to a
`reasonable consumer, and therefore, any amendment to her
`
`
`4 “Crème,” MARRIAM-WEBSTER, available at https://www.merriam-
`webster.com/dictionary/creme.
`
`
`
`14
`
`

`

`Case 1:19-cv-03379-KAM-SJB Document 23 Filed 07/27/20 Page 15 of 15 PageID #: 181
`
`complaint in an effort to invoke the court’s subject matter
`jurisdiction would be futile.
`Conclusion
`For the foregoing reasons, Plaintiff’s complaint is
`DISMISSED in its entirety, with prejudice. Defendant’s motion
`to dismiss is moot. The Clerk of Court is respectfully directed
`to enter judgment for Defendant and close this case.
`SO ORDERED.
`Dated:
`Brooklyn, New York
`
`
`July 27, 2020
`
`
`
`
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`
`
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`
`__________/s/_______________
`Hon. Kiyo A. Matsumoto
`United States District Judge
`
`
`
`15
`
`

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