Cimoli v. Alacer Corp.

Background

Alacer Corp. manufactures and sells dietary supplement gummies. Jeffrey Cimoli alleged that Alacer’s product labels stated that a bottle contained “750 mg Vitamin C” and “45 Gummies,” leading him to believe that each of the 45 gummies contained 750 milligrams of vitamin C. He alleged that three gummies were required to obtain the stated 750 milligrams.

Cimoli brought claims for a California class under California’s Unfair Competition Law, Consumer Legal Remedies Act, False Advertising Law, unjust enrichment or quasi-contract, and common-law fraud. He also brought a claim under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law for a nationwide class.

Alacer moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint legally states a claim, to dismiss the Pennsylvania claim. Alacer also moved under Rule 12(f) to strike the nationwide class allegations. Alacer argued that choice-of-law principles prevented Cimoli from asserting consumer-protection claims under both California and Pennsylvania law and required application of California law. Cimoli argued that he could plead claims under both states’ laws and that the choice-of-law issue should instead be resolved at class certification.

Choice-of-Law Analysis

The court declined to postpone the choice-of-law analysis. It found that Cimoli had not shown that additional discovery was likely to change the result and concluded that the issue could be resolved at the pleading stage.

Applying California’s governmental-interest test, the court first found material differences between California and Pennsylvania consumer-protection law. The court identified differences involving scienter, or the level of knowledge or intent required; reliance requirements; and available remedies. It rejected Cimoli’s argument that discovery might show these differences were immaterial.

The court then found that California law applied. Under the court’s reading of California choice-of-law rules, the place of the wrong is where the last event necessary for liability occurred. Here, Cimoli allegedly saw the product label, relied on it, and bought the gummies in California. The court therefore concluded that California had the predominant interest in regulating the transaction. It rejected Cimoli’s arguments that Pennsylvania law should apply because Alacer had connections to Pennsylvania or because the product-labeling decisions occurred there.

The court also held that choice-of-law principles require selecting the substantive law of one state for Cimoli’s claims. It concluded that Cimoli could not simultaneously bring claims under California and Pennsylvania unfair-competition laws based on the same underlying conduct.

Rulings

The court dismissed Cimoli’s Pennsylvania Unfair Trade Practices and Consumer Protection Law claim without leave to amend, finding that amendment would be futile. “Without leave to amend” means the court did not permit Cimoli to file another version of that claim in this action.

Because the Pennsylvania claim was the only claim asserted for the nationwide class, the court struck Cimoli’s nationwide class allegations. The order granted Alacer’s motion to partially dismiss and partially strike class claims. The opinion’s final order did not state that Cimoli’s separate California-law claims were dismissed or stricken.