Balistreri v. McCormick & Company, Inc.

Background

Seven individuals sued McCormick & Company, Inc., individually and on behalf of proposed classes. Plaintiffs alleged that they purchased McCormick herbs and spices after relying on the product packaging, including the statement “The Taste You Can Trust.” They claimed that certain products contained, or risked containing, lead, arsenic, and cadmium, collectively called “Heavy Metals,” and that McCormick failed to disclose that information.

The complaint asserted 11 counts involving California’s Unfair Competition Law, California’s False Advertising Law, the California Consumers Legal Remedies Act, implied warranties under the Song-Beverly Act and the Uniform Commercial Code, fraud, unjust enrichment under California and Washington law, negligent failure to warn, and the Washington Consumer Protection Act. Plaintiffs sought damages, restitution, disgorgement, declaratory and injunctive relief, punitive damages, and class certification.

McCormick moved to dismiss under Rule 12(b)(1), which concerns subject-matter jurisdiction, and Rule 12(b)(6), which concerns whether a complaint states a legally sufficient claim.

Judicial Notice

The court allowed judicial notice of the existence of several exhibits, including Consumer Reports materials and publications from the Food and Drug Administration and Environmental Protection Agency. For some exhibits, however, the court did not accept as judicially noticeable the disputed facts McCormick attempted to draw from those documents.

Standing

The court rejected McCormick’s argument that Plaintiffs lacked an injury because they alleged no physical harm. Plaintiffs alleged that they paid for products they would not have purchased had they known that the products contained, or risked containing, Heavy Metals. The court held that this alleged economic loss was sufficient to plead an injury in fact.

The court also rejected McCormick’s argument that Plaintiffs’ injury was merely hypothetical because they did not allege that every product they purchased actually contained unsafe levels of Heavy Metals. At the standing stage, the court assumed the merits of Plaintiffs’ allegations and found that they had pleaded more than a hypothetical injury.

The court further held that Plaintiffs had standing to seek injunctive relief. Their allegations could be read to mean that they would consider buying McCormick products in the future if the labeling and marketing were changed to disclose information about Heavy Metals, allowing them to make their own purchasing decisions.

Preemption

McCormick argued that federal food-labeling law preempted Plaintiffs’ state-law claims because the Food and Drug Administration had not regulated Heavy Metal levels or labeling for herbs and spices, and because federal regulations address Heavy Metals in some other products.

The court rejected that argument. It concluded that the absence of federal requirements for Heavy Metal labeling in herbs and spices did not clearly show that Congress intended to prevent states from enforcing consumer-protection laws in this area. The court therefore found that Plaintiffs’ claims were not preempted.

Primary Jurisdiction

McCormick also argued that the case should be stayed or dismissed under the primary-jurisdiction doctrine, which can defer a court case when an issue should first be addressed by a regulatory agency with specialized authority.

The court rejected this argument because McCormick had not shown that the Food and Drug Administration was actively conducting rulemaking concerning Heavy Metals and their labeling in herbs and spices. The court also found that Plaintiffs’ claims primarily concerned whether the product labels were misleading, rather than issues requiring the agency’s unique expertise. The claims therefore were not barred by primary jurisdiction.

Failure to State a Claim

The court held that Plaintiffs’ claims were grounded in alleged fraud and therefore had to satisfy the heightened pleading standard in Rule 9(b), which requires the circumstances of the alleged fraud to be stated with particularity.

For the California Consumers Legal Remedies Act, California Unfair Competition Law, and California False Advertising Law claims, the court focused on the statement “The Taste You Trust.” It held that the statement was non-actionable puffery: a generalized and vague assertion that did not describe a specific characteristic, ingredient, or safety feature of the products. Plaintiffs alleged that they relied on the front labels, not the McCormick website, and did not allege facts showing that the website statements influenced their purchases. The court concluded that Plaintiffs had not identified an actionable misrepresentation or omission likely to mislead a reasonable consumer.

The court rejected the Song-Beverly Act and Uniform Commercial Code implied-warranty claims because Plaintiffs did not plead facts plausibly showing that the products contained Heavy Metals at levels making them unfit for human consumption. The Consumer Reports materials ranked McCormick’s products as presenting “Some Concern,” and the court found that this did not, without more, show that the products failed to meet the minimum quality standard for herbs and spices. The court also found that the related California Unfair Competition Law claim based on allegedly unlawful conduct failed because Plaintiffs had not plausibly pleaded violations of the underlying statutes.

The court dismissed the California Unfair Competition Law claims based on unfair and fraudulent business practices for the same reason: Plaintiffs had not pleaded an actionable misrepresentation or omission that would lead a reasonable consumer to believe the products did not contain Heavy Metals. The common-law fraud claim also failed because it depended on the same alleged misrepresentation and omission.

The California unjust-enrichment claim failed because Plaintiffs had not plausibly alleged that McCormick’s retention of the purchase money was unjust based on an actionable misrepresentation or omission. The Washington unjust-enrichment claim failed because Plaintiffs did not plead facts showing McCormick’s required knowledge of the benefit or why retaining the money was inequitable.

The negligent-failure-to-warn claim failed because Plaintiffs did not allege facts identifying the applicable standard of care or explaining how McCormick’s conduct fell below that standard. The Washington Consumer Protection Act claim failed because Plaintiffs had not plausibly alleged an unfair or deceptive act involving the alleged omission or misrepresentation about Heavy Metals.

Equitable Relief

The court did not separately resolve McCormick’s argument that Plaintiffs had an adequate remedy through monetary relief. It found that issue moot at that stage because Plaintiffs had not pleaded a plausible claim that could support equitable relief.

Disposition

The court found that Plaintiffs had sufficient standing and that their claims were not preempted or subject to primary jurisdiction. Nevertheless, it granted McCormick’s motion to dismiss under Rule 12(b)(6) as to Counts 1 through 11, with leave to amend. The court ordered Plaintiffs to file an amended complaint by October 5, 2023.