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Craig v. Twinings North America, Inc.

United States District Court, W.D. Arkansas, Fayetteville Division

February 5, 2015

JENNY CRAIG, individually and on behalf of all others similarly situated, Plaintiff,
v.
TWININGS NORTH AMERICA, INC., Defendant.

MEMORANDUM OPINION AND ORDER

TIMOTHY L. BROOKS, District Judge.

Currently before the Court are Defendant Twinings North America, Inc's ("Twinings") Motion to Dismiss, or Alternatively to Strike the Class Allegations (Doc. 19), and brief in support (Doc. 19-1); Plaintiff Jenny Craig's Response in Opposition (Doc. 26); and Twinings' Reply (Doc. 27). For the reasons set forth herein, Twinings' Motion to Dismiss (Doc. 19) is GRANTED.

I. BACKGROUND

Craig brings this putative class action on behalf of Arkansas consumers pursuant to the Arkansas Deceptive Trade Practices Act, Ark. Code Ann. § 4-88-101, et seq., and other state law causes of action, regarding allegedly deceptive and misleading labels on Twinings' tea products.

On May 22, 2014, Craig filed this action in the Circuit Court of Washington County, Arkansas. Twinings removed the matter to this Court on July 7, 2014, pursuant to diversity jurisdiction. Craig subsequently amended her Complaint on July 30, 2014. The allegations in the Complaint stem from a "natural source of antioxidants" label used in marketing and advertising Twinings' teas. Craig alleges that Twinings has labeled its teas deceptively because the "teas do not meet the minimum nutrient level threshold to make such a claim which is 10% or more of the Reference Daily Intake (RDI') or the Daily Reference Value (DRV') of a nutrient with a recognized RDI per reference amount customarily consumed." (Doc. 16, p. 4). Craig contends that Twinings mislabeled its tea as a "natural source of antioxidants" in order to charge a premium for the products. According to Craig, tea that has been labeled this way cannot be legally sold or possessed, and misbranded food has no economic value. She further contends that had she known that the misbranded teas were illegal to sell or possess, she would not have purchased the teas.

Craig alleges five claims, which are entirely based upon violations of the Arkansas Food, Drug, and Cosmetic Act ("AFDCA"), Ark. Code Ann. § 20-56-201, et seq.: (1) violations of the Arkansas Deceptive Trade Practices Act ("ADTPA"), Ark. Code Ann. § 4-88-101, et seq.; (2) unjust enrichment; (3) breach of implied warranty of merchantability; (4) breach of express warranty; and (5) negligence.

On September 15, 2014, Twinings filed this Motion requesting that the Court dismiss the matter due to Craig's lack of standing to pursue both her individual claims and claims for products she never purchased; express preemption by the federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. ("FDCA"); failure to make claims that are facially plausible[1] and to plead fraud with the requisite particularity pursuant to Rule 9(b); and failure to state a claim for relief pursuant to Rule 12(b)(6). In the alternative, Twinings requests that this Court strike the class action allegations for lack of an objectively ascertainable class.

In response, Craig alleges that she has standing because she has stated an economic injury-in-fact, as she alleges actual damages sufficient to state a claim under the ADTPA, and has standing to seek recovery for products similar to those she actually purchased. Craig also argues that she may bring suit to enforce state law food-labeling requirements that are identical to those of the FDCA. In addition, Craig contends that her Complaint complies with Rule 9(b) and that she has properly pled claims under Arkansas law. Finally, Craig argues that Twinings' alternate request to strike the class allegation should be denied.[2]

In its Reply, Twinings argues that because Arkansas has not expressly or implicity adopted any reference to the federal nutrition-labeling requirements, Craig's claims are completely preempted by federal law. Twinings further argues that tea products are exempt from nutrition labeling requirements, and also that the challenged statement is not a nutrient-content claim.

The Court addresses each claim in Twinings' Motion in turn.

II. LEGAL STANDARD

To survive a motion to dismiss pursuant to Rule 12(b)(6), the complaint must present "a short and plain statement of the claim that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The intention of this is to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Even so, the 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 Twombly, 550 U.S. at 570). "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." Id. "A pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Id. In short, "the pleading standard that Rule 8 announces does not require detailed factual allegations, ' but it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). When considering a motion to dismiss, the Court ordinarily does not consider matters outside the pleadings. Fed.R.Civ.P. 12(d). However, the Court may consider exhibits attached to the complaint and documents that are necessarily embraced by the pleadings. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003).

Claims sounding in fraud or mistake must additionally comply with the heightened pleading requirements of Fed.R.Civ.P. 9(b) by pleading with particularity the circumstances surrounding the fraud or mistake. Rule 9(b) applies to the state claims at issue here as they involve allegations that consumers were misled. Rule 9(b)'s pleading standard applies with equal force to state consumer fraud statutes as to common law fraud claims. In re Gen. Motors Corp. Anti-Lock Brake Prods. Liab. Litig., 966 F.Supp. 1525, 1536 (E.D. Mo. 1997), aff'd, Briehl v. GMC, 172 F.3d 623 (8th Cir. 1999); Pruitt v. Sw. Energy Co., 2013 WL 588998, at *5 (E.D. Ark. Feb. 13, 2013); Whatley v. Recontrust Co. NA, 2010 WL 4916372, at *6 (E.D. Ark. Nov. 23, 2010). This pleading standard "demands a ...


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