Kennard v. Lamb Weston Holdings, Inc.

Background

Angela Kennard filed a putative class action alleging that Lamb Weston’s Alexia brand sweet potato fries with sea salt were packaged in opaque containers containing more than 50% empty space. Her claims included a consumer-deception theory and a nonfunctional-slack-fill theory under the California Fair Packaging and Labeling Act (CFPLA), particularly California Business and Professions Code section 12606.2. She pursued claims under California’s Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA).

In an earlier order, the court dismissed the claims with prejudice to the extent they were based on the consumer-deception theory, finding that the packaging disclosures about net weight, servings, and the number of fries per serving meant Kennard had not plausibly alleged that a reasonable consumer would be deceived about the amount of fries. The court denied Lamb Weston’s motion to dismiss to the extent the claims were based on nonfunctional slack fill, finding that Kennard had sufficiently alleged that more than half of the container was empty space and that there was no practical reason for that empty space.

Motion and arguments

Lamb Weston moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). It argued that Kennard lacked both Article III standing under the U.S. Constitution and statutory standing under the UCL and CLRA. Lamb Weston contended that Kennard’s injury allegations necessarily depended on the consumer-deception theory that the court had rejected.

The court observed that the motion was essentially an attempt to obtain reconsideration of the earlier motion-to-dismiss order without first obtaining the required permission. It also noted that Lamb Weston had at least partly raised a similar injury argument earlier and cautioned that the proper procedures must be used to seek relief from the court’s prior orders. Despite those procedural concerns, the court considered the merits of the standing argument.

Court’s analysis

For UCL standing, a plaintiff must allege an injury in fact and loss of money or property resulting from unfair competition. The plaintiff must also show reliance on the allegedly deceptive or misleading conduct. Under the CLRA, the plaintiff must allege actual reliance and economic injury. Article III standing likewise requires a concrete, particularized, and actual or imminent injury.

Kennard alleged that she and the proposed class lost money because they would not have bought the product on the same terms, or at all, if they had known the true facts; paid a higher price because of the alleged misrepresentations; and received less of the product than represented. The court held that these allegations were sufficient at the pleading stage to plausibly allege economic injury resulting from the nonfunctional slack fill. Whether Kennard actually suffered an economic loss was a factual question for a later stage of the litigation.

The court emphasized that the CFPLA theory was separate from the reasonable-consumer deception theory. The court understood the CFPLA’s prohibition on nonfunctional slack fill to reach such slack fill whether or not there was additional proof of deception or fraud. Thus, even though the package disclosures defeated Kennard’s reasonable-consumer theory, they did not prevent her from pursuing a theory that the alleged nonfunctional slack fill violated the CFPLA and caused economic harm.

The court rejected Lamb Weston’s reliance on cases involving different alleged statutory violations and insufficient allegations connecting those violations to economic injury. It also rejected Kennard’s separate argument that an intangible, informational injury supported standing, explaining that the UCL and CLRA require loss of money or property, or economic injury. The court nevertheless found a plausible economic injury and therefore ruled that Lamb Weston was not entitled to judgment on the pleadings.

Disposition

Judge Yvonne Gonzalez Rogers denied Lamb Weston’s motion for judgment on the pleadings and terminated Docket Number 52. The opinion did not resolve whether Kennard ultimately suffered an economic loss; it held only that her allegations were sufficient to withstand this motion.