Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 1 of 12
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`Sheehan & Associates, P.C.
`Spencer Sheehan
`60 Cuttermill Rd Ste 409
`Great Neck NY 11021-5101
`Telephone: (516) 268-7080
`spencer@spencersheehan.com
`
`United States District Court
`Southern District of New York
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`
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`
`
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`James Prater, individually and on behalf of
`all others similarly situated,
`
`Plaintiff,
`
`1:20-cv-09108
`
`- against -
`
`Class Action Complaint
`
`Arizona Beverages USA LLC,
`
`Defendant
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`
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`Plaintiff by attorneys allege upon information and belief, except for allegations pertaining
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`to plaintiff, which are based on personal knowledge:
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`1.
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` Arizona Beverages USA LLC (“defendant”) manufactures, distributes, markets,
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`labels and sells iced tea and lemonade blends (“Arnold Palmers”) purporting to be “Lite” – under
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`its Arizona brand (“Product”).
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`2.
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`The Product is available to consumers from retail and online stores of third-parties
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`and is sold in bottles of various sizes including 20 OZ.
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`3.
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`The relevant front label statements include “Half & Half,” “Iced Tea Lemonade”
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`“Arnold Palmer” and “Lite.”
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`
`
`Sheehan & Associates, P.C.
`Spencer Sheehan
`60 Cuttermill Rd Ste 409
`Great Neck NY 11021-5101
`Telephone: (516) 268-7080
`spencer@spencersheehan.com
`
`United States District Court
`Southern District of New York
`
`
`
`
`
`
`
`James Prater, individually and on behalf of
`all others similarly situated,
`
`Plaintiff,
`
`1:20-cv-09108
`
`- against -
`
`Class Action Complaint
`
`Arizona Beverages USA LLC,
`
`Defendant
`
`
`
`
`
`Plaintiff by attorneys allege upon information and belief, except for allegations pertaining
`
`to plaintiff, which are based on personal knowledge:
`
`1.
`
` Arizona Beverages USA LLC (“defendant”) manufactures, distributes, markets,
`
`labels and sells iced tea and lemonade blends (“Arnold Palmers”) purporting to be “Lite” – under
`
`its Arizona brand (“Product”).
`
`2.
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`The Product is available to consumers from retail and online stores of third-parties
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`and is sold in bottles of various sizes including 20 OZ.
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`3.
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`The relevant front label statements include “Half & Half,” “Iced Tea Lemonade”
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`“Arnold Palmer” and “Lite.”
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`
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 2 of 12
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`4.
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`The terms “light” and “lite” in the context of food descriptions are used
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`interchangeably.
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`5.
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`Though “lite” may connote a wide variety of meanings, surveys have shown that
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`consumers believe the term means that the caloric level has been reduced significantly.
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 3 of 12
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`6.
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`The FDA established nutrient content claims to prevent consumers being deceived
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`by a product when the terms used to describe the food are not consistent with the message they
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`convey.
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`7.
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`“Lite” is a term which (1) is primarily a relative claim that compares one food to
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`another food and (2) is often used to directly describe the food itself in a way in which an absolute
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`term or claim is used, i.e., low in calories and/or sugar. 21 C.F.R. § 101.56.
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`8.
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`The term “Lite” is misleading because it gives the impression consumption of the
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`Product, when compared to other foods in its class, contributes substantially to the reduction of
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`calories in the diet.
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`9.
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`Relative claims are required to have certain additional information, including “the
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`identity of the reference food and the percentage (or fraction) of the amount of the nutrient in the
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`reference food by which the nutrient in the labeled food differs (e.g., "50 percent less fat than
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`(reference food)" or "1/3 fewer calories than (reference food)’).” 21 C.F.R. § 101.13(j)(2)(i).
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`10. Consumers will expect the Product to be lower in calories than it is.
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`11. According to the requirements for nutrient content claims, the Product is required to
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`be reduced in calories by at least one-third when compared to an appropriate reference food.
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`12. A “lite” claim is required to indicate a reference food, defined as “representative of
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`the type of food that includes the product that bears the claim…The nutrient value for the reference
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`food shall be representative of a broad base of foods of that type; e.g., a value in a representative,
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`valid data base.” 21 C.F.R. § 101.13(j)(1)(ii)(A).
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`13. However, the Product has so many calories and grams of sugar per serving size that
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`it would be difficult to fathom a reference food which would have one-third more calories per
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`reference amount customarily consumed.
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 4 of 12
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`14. Far from being “Lite” and low in calories, a 12-ounce bottle has 130 calories, 10 less
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`than a can (12 OZ) of Coca Cola.
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`15.
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`In other words, a reference food likely does not exist for the Product because it
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`contains an absolute, high number of calories per RACC.
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`16.
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`In purchasing and consuming the Product, consumers are misled to believe it is lower
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`in calories than similar items in the marketplace, when it is not.
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`17. Defendant’s branding and packaging of the Product is designed to – and does –
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`deceive, mislead, and defraud plaintiffs and consumers.
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`18. Defendant sold more of the Product and at higher prices than it would have in the
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`absence of this misconduct, resulting in additional profits at the expense of consumers like
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`plaintiffs.
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`19. The value of the Product that plaintiff purchased and consumed was materially less
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`than its value as represented by defendant.
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`20. Had plaintiff and class members known the truth, they would not have bought the
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`Product or would have paid less for them.
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`21. As a result of the false and misleading labeling, the Product is an sold at a premium
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`price, approximately no less than $1.19 for 12 OZ, excluding tax, compared to other similar
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`products represented in a non-misleading way, and higher than the price of the Product if
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`represented in a non-misleading way.
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`Jurisdiction and Venue
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`22.
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`Jurisdiction is proper pursuant to Class Action Fairness Act of 2005 (“CAFA”). 28
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`U.S.C. § 1332(d)(2)
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`23. Under CAFA, district courts have “original federal jurisdiction over class actions
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`4
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 5 of 12
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`involving (1) an aggregate amount in controversy of at least $5,000,000; and (2) minimal
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`diversity[.]” Gold v. New York Life Ins. Co., 730 F.3d 137, 141 (2d Cir. 2013).
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`24. Plaintiff James Prater is a citizen of New York.
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`25. Defendant is a New York limited liability company with a principal place of business
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`in Woodbury, New York and at least one member, upon information and belief, is a citizen of a
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`state other than New York.
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`26. Minimal diversity exists because plaintiff seeks to represent citizens of New York,
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`New Jersey, Maryland, Ohio and Pennsylvania who purchased the Product. Gonzales v. Agway
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`Energy Services, LLC, No. 18-cv-235 (N.D.N.Y. Oct. 22, 2018) (“At this time, the allegation that
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`some class member maintains diversity with Defendant is sufficient to establish minimal diversity
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`under CAFA” and citing 28 U.S.C. § 1332(d)(1)(D) “‘the term ‘class members’ means the persons
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`(named or unnamed) who fall within the definition of the proposed or certified class in a class
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`action.”).
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`27. The “local controversy” exception to diversity jurisdiction does not apply because
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`less than two-thirds of the putative class members are citizens of New York.
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`28. The “home state controversy” exception to diversity jurisdiction does not apply
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`because less than two-thirds of the members of all proposed plaintiff classes are citizens of New
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`York.
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`29. Upon information and belief, sales of the Product in New York exceed $5 million
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`per year, exclusive of interest and costs and damages exceed this amount.
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`30. Venue is proper in this judicial district because a substantial part of the events or
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`omissions giving rise to the claim occurred in this District, viz, the decision of plaintiff to purchase
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`the Product and the misleading representations and/or their recognition as such.
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 6 of 12
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`31. This court has personal jurisdiction over defendant because it conducts and transacts
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`business, contracts to supply and supplies goods within New York.
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`Parties
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`32. Plaintiff James Prater is a citizen of Bronx, Bronx County, New York.
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`33. Defendant Arizona Beverages USA LLC is a New York limited liability company
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`with a principal place of business in Woodbury, New York.
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`34. During the relevant statutes of limitations for all claims alleged, plaintiff purchased
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`the Product within his district and/or State for personal and household use and/or consumption in
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`reliance on the representations of the Product referenced herein.
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`35. Plaintiff James Prater purchased the Product on one or more occasions during the
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`relevant period, at stores including but not necessarily limited to, Bravo Supermarket, 1869 Archer
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`St, Bronx, NY 10460, in October 2020.
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`36. Plaintiff bought the Product because he wanted to consume a product that was lower
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`in calories than similar products, so he relied on the “Lite” claim.
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`37. Plaintiff bought the Product at or exceeding the above-referenced price because he
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`liked the product for its intended use and consumption and expected it would be lower in calories
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`than similar products and than it was separately, because of the term “Lite.”
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`38. Plaintiff was deceived by and relied upon the Product's deceptive labeling.
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`39. Plaintiff would not have purchased the Product in the absence of Defendant’s
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`misrepresentations and omissions.
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`40. The Product was worth less than what Plaintiff paid for it and she would not have
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`paid as much absent Defendant's false and misleading statements and omissions.
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`41. Plaintiff intend to, seek to, and will purchase the Product again when he can do so
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`with the assurance that Product's labels are consistent with the Product’s components.
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 7 of 12
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`Class Allegations
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`42. The class will consist of all purchasers of the Product who reside in New York, Ohio,
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`New Jersey, Pennsylvania and Maryland during the applicable statutes of limitations.
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`43. Plaintiff will seek class-wide injunctive relief based on Rule 23(b) in addition to
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`monetary relief class.
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`44. Common questions of law or fact predominate and include whether defendant’s
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`representations were and are misleading and if plaintiff and class members are entitled to damages.
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`45. Plaintiff's claims and basis for relief are typical to other members because all were
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`subjected to the same unfair and deceptive representations and actions.
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`46. Plaintiff is an adequate representatives because his interests do not conflict with other
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`members.
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`47. No individual inquiry is necessary since the focus is only on defendant’s practices
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`and the class is definable and ascertainable.
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`48.
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`Individual actions would risk inconsistent results, be repetitive and are impractical
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`to justify, as the claims are modest relative to the scope of the harm.
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`49. Plaintiff's counsel is competent and experienced in complex class action litigation
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`and intends to protect class members’ interests adequately and fairly.
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`50. Plaintiff seeks class-wide injunctive relief because the practices continue.
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`New York General Business Law (“GBL”), §§ 349 & 350 and Consumer Protection
`Laws of New Jersey, Ohio, Maryland, Pennsylvania
`(Consumer Protection Statutes)
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`51. Plaintiff incorporates by reference all preceding paragraphs.
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`52. Plaintiff and class members desired to purchase and consume products which were
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`as described and marketed by defendant and expected by reasonable consumers, given the product
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 8 of 12
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`type.
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`53. Defendant’s acts and omissions are not unique to the parties and have a broader
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`impact on the public.
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`54. Defendant misrepresented
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`the substantive, quality, compositional and/or
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`environmental attributes of the Product by giving consumers the impression it was lower in
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`calories than it was, compared to similar representative foods.
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`55. Plaintiff relied on the statements, omissions and representations of defendant, and
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`defendant knew or should have known the falsity of same.
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`56. Plaintiff and class members would not have purchased the Product or paid as much
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`if the true facts had been known, suffering damages.
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`Negligent Misrepresentation
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`57. Plaintiff incorporates by reference all preceding paragraphs.
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`58. Defendant misrepresented
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`the substantive, quality, compositional and/or
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`environmental attributes of the Product.
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`59. Defendant had a duty to disclose and/or provide non-deceptive marketing of the
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`Product and knew or should have known same were false or misleading.
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`60. This duty is based on defendant’s position as an entity which has held itself out as
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`having special knowledge and experience in the production, service and/or sale of the product type.
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`61. The representations took advantage of consumers’ cognitive shortcuts made at the
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`point-of-sale and their trust in defendant, a well-known and respected brand or entity in this sector.
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`62. Plaintiff and class members reasonably and justifiably relied on these negligent
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`misrepresentations and omissions, which served to induce and did induce, the purchase of the
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`Product.
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 9 of 12
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`63. Plaintiff and class members would not have purchased the Product or paid as much
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`if the true facts had been known, suffering damages.
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`Breaches of Express Warranty, Implied Warranty of Merchantability and
`Magnuson Moss Warranty Act, 15 U.S.C. §§ 2301, et seq.
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`64. Plaintiff incorporates by reference all preceding paragraphs.
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`65. The Product was manufactured, labeled and sold by defendant or at its express
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`directions and instructions, and warranted to plaintiff and class members that they possessed
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`substantive, quality, compositional and/or environmental which they did not – lower in calories
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`than similarly situated products.
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`66. Defendant had a duty to disclose and/or provide non-deceptive descriptions and
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`marketing of the Product.
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`67. This duty is based, in part, on defendant’s position as one of the most recognized
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`companies in the nation in this sector.
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`68. Plaintiff provided or will provide notice to defendant, its agents, representatives,
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`retailers and their employees.
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`69. Defendant received notice and should have been aware of these misrepresentations
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`due to numerous complaints by consumers to its main office over the past several years regarding
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`the Product, of the type described here.
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`70. The Product did not conform to its affirmations of fact and promises due to
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`defendant’s actions and were not merchantable.
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`71. Plaintiff and class members would not have purchased the Product or paid as much
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`if the true facts had been known, suffering damages.
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 10 of 12
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`Fraud
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`72. Plaintiff incorporates by reference all preceding paragraphs.
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`73. Defendant misrepresented
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`the substantive, quality, compositional and/or
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`environmental attributes of the Product.
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`74. Defendant’s fraudulent intent is evinced by its failure to accurately describe the
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`Product on the front label, when it knew its statements were neither true nor accurate and misled
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`consumers.
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`75. Plaintiff and class members would not have purchased the Product or paid as much
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`if the true facts had been known, suffering damages.
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`76. Plaintiff incorporates by reference all preceding paragraphs.
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`Unjust Enrichment
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`77. Defendant obtained benefits and monies because the Product was not as represented
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`and expected, to the detriment and impoverishment of plaintiff and class members, who seek
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`restitution and disgorgement of inequitably obtained profits.
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`Jury Demand and Prayer for Relief
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`Plaintiff demands a jury trial on all issues.
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` WHEREFORE, Plaintiff prays for judgment:
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`1. Declaring this a proper class action, certifying plaintiff as representative and the
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`undersigned as counsel for the class;
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`2. Entering preliminary and permanent injunctive relief by directing defendant to correct the
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`challenged practices to comply with the law;
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`3. Injunctive relief to remove, correct and/or refrain from the challenged practices and
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`representations, and restitution and disgorgement for members of the class pursuant to the
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 11 of 12
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`applicable laws;
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`4. Awarding monetary damages and interest pursuant to the common law and other statutory
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`claims;
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`5. Awarding costs and expenses, including reasonable fees for plaintiff's attorneys and
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`experts; and
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`6. Other and further relief as the Court deems just and proper.
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`Dated: October 29, 2020
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`Respectfully submitted,
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`Sheehan & Associates, P.C.
`/s/Spencer Sheehan
`Spencer Sheehan
`60 Cuttermill Rd Ste 409
`Great Neck NY 11021-3104
`Tel: (516) 303-0552
`Fax: (516) 234-7800
`spencer@spencersheehan.com
`E.D.N.Y. # SS-8533
`S.D.N.Y. # SS-2056
`
`
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`11
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`Case 1:20-cv-09108-GBD Document 1 Filed 10/29/20 Page 12 of 12
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`1:20-cv-09108
`United States District Court
`Southern District of New York
`
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`James Prater, individually and on behalf of all others similarly situated,
`
`
`
`
`
` - against -
`
`
`Arizona Beverages USA LLC,
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`Plaintiff,
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` Defendant
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`Class Action Complaint
`
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`Sheehan & Associates, P.C.
`60 Cuttermill Rd Ste 409
`Great Neck NY 11021-3104
`Tel: (516) 268-7080
`Fax: (516) 234-7800
`
`
`
`
`
`
`Pursuant to 22 NYCRR 130-1.1, the undersigned, an attorney admitted to practice in the courts of
`New York State, certifies that, upon information, and belief, formed after an inquiry reasonable
`under the circumstances, the contentions contained in the annexed documents are not frivolous.
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`Dated: October 29, 2020
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` /s/ Spencer Sheehan
` Spencer Sheehan
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