Court Allows Most Consumer Fraud Claims to Proceed Against Tea Company
A federal court in California has dismissed several of the claims in a putative nationwide class action alleging that Bromley Tea Co. makes unlawful and deceptive health-related claims on packaging labels and on its website for the company’s green and black teas. Clancy v. The Bromley Tea Co., No. 12-3003 (N.D. Cal., order entered August 9, 2013).
The court rejected the defendant’s challenge to the plaintiff’s standing to assert claims as to products he had not purchased or statements he did not see before buying the products he did purchase. According to the court, “The named plaintiff has standing to assert claims relative to the products he purchased. He does not claim to have standing to assert claims related to other products. What he does claim is that he may be a potential representative of a class of people who have such standing. He may or may not be able to certify such a class, and he may or may not be an adequate representative. But applying the concept of standing to dismiss proposed class action allegations is a category mistake.” The court also left to the class certification stage, for the same reasons, whether the plaintiff can represent class members who relied on different ads than those on which the plaintiff relied.
The court refused to strike the plaintiff’s nationwide class allegations on the basis of Mazza v. American Honda Motor Co., finding that a “detailed choice-of-law analysis is not appropriate at this stage of the litigation. Rather, such a fact-heavy inquiry should occur during the class certification stage, after discovery.” The court further rejected the defendant’s argument that the plaintiff’s Sherman Law claims were preempted under the Food, Drug, and Cosmetic Act (FDCA). According to the court, the plaintiff was suing for violations of state law, “not attempting to impose requirements greater than those imposed by the FDCA,” and his claim “does not depend on the FDCA, except in the sense that the Sherman Law mirrors the requirements of the FDCA.” The court also stated that it “cannot conclude that Plaintiff has failed to assert a legitimate nutrient content claim under California law, which is identical to what the FDA [Food and Drug Administration] classifies as a nutrient content claim.”
Finding the plaintiff’s fraud-related claims pleaded with sufficient particularity, the court denied this part of the defendant’s motion for judgment on the pleadings, but it dismissed with prejudice the plaintiff’s unjust enrichment and restitution count as superfluous and the Song-Beverly Consumer Warranty Act and Magnuson-Moss Warranty Act claims because the products at issue are “consumables” that do not come within their ambit. The plaintiff had conceded that “every court to hear similar claims has dismissed them and state[d] that he is preserving the issue for any potential appeal.” The court also found the federal warranty law inapplicable because it does not apply to warranties otherwise governed by federal law. According to the court, “the FDCA regulations at issue here are fatal to any Magnuson-Moss claim.”
