Snarr v. Cento Fine Foods Inc.

Background

Derek Snarr, J. Michael Duca, and Candace Goulette filed an amended putative class action on behalf of proposed California and nationwide classes. They alleged that Cento Fine Foods Inc.’s packaging and labeling for “Certified San Marzano” tomato products falsely or misleadingly represented that the products were authentic San Marzano tomatoes.

The plaintiffs alleged that authentic San Marzano tomatoes must be grown in the Agro Sarnese-Nocerino region of Campania, Italy, meet specified requirements, and bear a certification marking from the Consortium. They alleged that Cento’s products lacked the Consortium’s Denominazione di Origine Protetta marking and did not meet other requirements, while the packaging referred to certification and geographic regions in a way that could lead reasonable consumers to believe the tomatoes were authentic. The lead plaintiffs alleged that they bought the products in 2019 and relied on the “Certified” marking.

The amended complaint asserted five causes of action: violations of California’s Unfair Competition Law, Consumers Legal Remedies Act, and False Advertising Law; unjust enrichment; and breach of express warranty.

Judicial notice

The court granted Cento’s requests to take notice of its website’s Frequently Asked Questions page and a May 15, 2019 demand letter. The court denied the request concerning a product label because the plaintiffs argued that the label differed from the one attached to the complaint and the court had to draw inferences in the plaintiffs’ favor at that stage. The court denied as moot the requests concerning Cento’s “San Marzano” trademark, its abandoned trademark application, and its Agri-Cert certification because those materials were not relevant to the court’s analysis.

Rule 12 motion

Cento moved under Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6). These rules address, respectively, subject-matter jurisdiction, personal jurisdiction, and failure to state a legally sufficient claim. The court explained that it had to accept well-pleaded factual allegations as true and view them in the plaintiffs’ favor, while disregarding conclusory allegations and unreasonable inferences. Because the allegations involved fraud or deception, the plaintiffs also had to plead the circumstances with particularity under Rule 9(b).

Consumer-protection claims

The court held that the plaintiffs adequately pleaded claims under the fraudulent prong of the Unfair Competition Law, the False Advertising Law, and the Consumers Legal Remedies Act. The plaintiffs alleged that they relied on the “Certified” marking and that the label’s references to geographic regions could mislead consumers about where the tomatoes were grown. The court concluded that the plaintiffs did not need to allege specifically that the tomatoes were not grown in the Agro Sarnese-Nocerino region because their theory was that Cento’s statements either implied a different growing location or left the relevant location ambiguous.

The court also held that the plaintiffs alleged enough facts about the certification issue to survive dismissal. Whether the Consortium was the only entity authorized to certify authentic San Marzano tomatoes, and whether the plaintiffs could prove that proposition with European Union, Italian, United States, or expert evidence, were matters for a later stage. The court further concluded that information on Cento’s website did not necessarily clarify the label’s “Certified” representation because the packaging itself did not disclose that the independent certifier was not the Consortium.

Consumers Legal Remedies Act notice

The court rejected Cento’s argument that the plaintiffs’ demand letter gave inadequate notice. The letter identified Cento’s Certified San Marzano tomatoes and alleged that Cento represented them as authentic San Marzano tomatoes in a way that caused reasonable consumers to pay more or choose them over other tomatoes. The court concluded that the letter provided sufficient notice before the plaintiffs amended their complaint to seek damages.

Standing for an injunction

The court held that the plaintiffs had standing to seek injunctive relief under the consumer-protection statutes. They alleged that they would buy the products in the future if they could rely on Cento’s labeling, but would not buy them until the representations could be relied upon. The court found that these allegations sufficiently described a threat of future harm.

Personal jurisdiction and the proposed nationwide class

The court denied Cento’s motion to dismiss for lack of personal jurisdiction. Cento argued that the Supreme Court’s decision in Bristol-Myers Squibb prevented the court from exercising jurisdiction over claims involving non-California members of a possible nationwide class. The court concluded that Bristol-Myers Squibb did not resolve that question and declined to extend it to the absent members of this proposed class at this stage.

Unjust enrichment

The court denied dismissal of the unjust-enrichment claim. It treated the claim as potentially proceeding under a quasi-contract theory seeking restitution and held that the plaintiffs adequately alleged that Cento accepted or retained benefits at their expense because of the alleged deception. The court also found that the allegations met the heightened pleading standard for fraud.

Breach of express warranty

The court dismissed the breach-of-express-warranty claims brought under the laws of jurisdictions other than California. It relied on decisions holding that, in a proposed class action, claims under the laws of states in which no named plaintiff resides should be dismissed at the motion-to-dismiss stage. The opinion states that all lead plaintiffs resided in California and purchased the products in California.

The court denied dismissal of the California express-warranty claim. The plaintiffs alleged that the “Certified” and “San Marzano” marks constituted an express warranty that the products were authentic San Marzano tomatoes certified by the Consortium. The court rejected Cento’s arguments concerning pre-suit notice and whether the products were certified for the same reasons it rejected Cento’s arguments about the consumer-protection claims.

Disposition

The court dismissed the breach-of-express-warranty claims under the laws of jurisdictions other than California. As to all remaining claims, it denied Cento’s motion to dismiss. The court also denied Cento’s statute-of-limitations argument because the amended complaint alleged purchases within the applicable limitations periods.