Hodges v. King's Hawaiian Bakery West, Inc.

Background

Dieisha Hodges and other plaintiffs brought a proposed class action concerning King’s Hawaiian Original Hawaiian Sweet Rolls. They alleged that the product’s packaging and marketing would lead a reasonable consumer to believe that the rolls were currently made in Hawaii using traditional ingredients, including pineapple juice and honey. The rolls were made in Torrance, California, and the packaging identified the manufacturer’s California address and listed the ingredients.

The complaint asserted claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act; New York consumer-protection statutes; and unjust enrichment. The proposed classes included California residents and New York residents who purchased the product for personal or household use during the period identified in the complaint. The plaintiffs sought declaratory and injunctive relief, damages, equitable monetary relief, and punitive damages.

Judicial Notice

The court granted the defendant’s request for judicial notice of the product packaging, letters referenced in the complaint, and a King’s Hawaiian webpage. It denied as moot the defendant’s requests concerning court papers from another case and other additional documents. The court granted the plaintiffs’ requests for judicial notice of specified court orders and filings, as well as a letter incorporated by reference into the complaint. Thus, the court granted in part and denied in part both sides’ requests for judicial notice.

Standing and Pleading Standards

The defendant argued that the plaintiffs lacked standing to seek an injunction because they now knew where the rolls were made and what ingredients they contained. The court explained that a consumer who was allegedly deceived may still have standing to seek an injunction if there is a plausible threat of future deception. The court stated that, if the plaintiffs had alleged a plausible deceptive-marketing claim, they would have standing to pursue injunctive relief.

The court evaluated the complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim, and Rule 9(b), which requires fraud-based allegations to describe the alleged misconduct in detail, including who made the statement, what was said, when and where it was said, how it was misleading, and why it was false.

Reasonable-Consumer Claims

The court held that the plaintiffs failed to show that a significant portion of reasonable consumers would likely be deceived. First, the reference to “Est. 1950” and “Hilo, Hawaii” conveyed the company’s historical origin, not that the rolls were currently produced in Hawaii. The court found that the package’s statement identifying the California manufacturing facility was sufficient to tell consumers where the rolls were produced.

Second, the court rejected the claim that reasonable consumers would expect the rolls to contain particular Hawaiian ingredients, such as honey and pineapple juice. The court found no words or images on the package representing that the rolls were made using the traditional methods or ingredients described in the complaint. It also found that the ingredient list clearly omitted pineapple and honey, and that consumers could not reasonably ignore that list.

Third, the court found that the company’s website and parade float did not create a misleading impression. The website disclosed that manufacturing had moved from Hawaii to California and that the rolls were baked in California. The parade float evoked the spirit of Hawaii but did not establish that the rolls were made there.

Based on these conclusions, the court dismissed the plaintiffs’ first through fifth claims: the California statutory claims and the New York consumer-protection claims. The court did not need to separately decide the plaintiffs’ argument concerning whether the ingredient list could cure a misleading front-label statement because it found no misleading statement in the first place.

Rule 9(b) and Unjust Enrichment

The court also concluded that the complaint did not satisfy Rule 9(b). The plaintiffs did not identify where the alleged representation that the rolls were made in Hawaii appeared, and they did not allege that they had visited the website or seen the parade float. The court found that the plaintiffs failed to explain how the various statements and images, considered together with the package’s ingredient list and California address, misled reasonable consumers.

The court dismissed the unjust-enrichment claim because the plaintiffs had not identified an actionable deception separate from the statutory claims. Without an actionable deception under the reasonable-consumer test, the unjust-enrichment claim also failed.

Disposition

The court granted the defendant’s motion to dismiss the complaint with leave to amend. The plaintiffs had 28 days from the date of the order to file an amended complaint. The court did not deny leave to amend based on the defendant’s argument that the plaintiffs’ counsel had pursued similar claims elsewhere, because these plaintiffs had not previously pursued these claims against this defendant and had not previously failed to correct deficiencies by amendment.