Wright v. Costco Wholesale Corporation

Background

Melinda Wright filed a class-action complaint against Costco Wholesale Corporation concerning Kirkland Signature White Albacore Tuna in Water. Wright alleged that she purchased eight cans in 2021 after seeing labeling, packaging, and advertising representing that the tuna was “dolphin safe.” She alleged that she understood those representations to mean the tuna was caught using methods that did not kill or harm dolphins. She further alleged that she would not have purchased the product, and would not have paid a premium for it, had she known that it was not dolphin-safe.

The first amended complaint asserted six claims: violations of California’s Consumers Legal Remedies Act, False Advertising Law, and Unfair Competition Law on behalf of a California subclass; and breach of express warranty, breach of implied warranty, and unjust enrichment on behalf of a nationwide class. The court considered Costco’s motion to dismiss that complaint.

Wright alleged that Costco used a dolphin-safe logo and related statements on the product’s label, packaging, and website. She also pointed to statements that the tuna was “100% Traceable from Sea to Shelf,” used “100% Monofilament Leaders & Circle Hooks,” and was sourced through sustainability and conservation practices. According to Wright, those representations led consumers to believe that the tuna was sustainably sourced and did not harm dolphins. She alleged instead that the fishing methods involved could injure or kill dolphins and other marine life, and that Costco could not actually trace its tuna completely from sea to shelf.

Costco’s Arguments

Costco argued that Wright had not alleged a concrete injury because she did not claim that the specific tuna she purchased came from a vessel that harmed or killed a dolphin. Costco also argued that the federal Dolphin Protection Consumer Information Act, which establishes federal requirements for using a “dolphin safe” label, preempted Wright’s state-law claims. In addition, Costco argued that the court should dismiss or stay the case under primary jurisdiction, a doctrine allowing an agency to address technical or policy issues before a court does.

Costco further argued that the complaint did not allege that Costco itself made a promise exceeding the federal standard. It challenged whether the allegations satisfied Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particularity, and whether the alleged statements were likely to deceive a reasonable consumer.

Court’s Analysis

The court denied Costco’s request for judicial notice of documents attached to its motion. The court found that the documents, which included a letter from Federal Trade Commission staff, were not proper subjects for judicial notice because the letter was not binding and the relevant facts were reasonably disputable.

Standing and Injury

The court denied Costco’s motion to dismiss for lack of standing. Standing is the requirement that a plaintiff show a concrete injury connected to the defendant’s conduct that a court can remedy. The court held that Wright adequately alleged monetary harm because she claimed that she paid $15 for a product she would not have purchased, or would not have paid a premium for, without Costco’s alleged misrepresentations.

Heightened Promise and Federal Preemption

The court held that the complaint plausibly alleged that Costco made its own heightened promise that the tuna was dolphin-safe, meaning a promise above the standard required by the federal law. The court relied on the combination of the dolphin-safe statements and logo, the traceability and fishing-method statements, and Costco’s broader statements about sustainable seafood sourcing and protection of marine ecosystems.

The court ruled that the claims were not preempted. It distinguished between challenging Costco’s compliance with the federal labeling law and challenging whether Costco’s own representations to consumers were false or misleading. The court concluded that Wright’s claims concerned the latter and did not seek to impose a different federal labeling system or enforce the federal law.

The court also declined to apply primary jurisdiction. It reasoned that the claims were based on California consumer-protection laws, did not present an issue of first impression, and did not involve the type of unusually complicated issue that required initial resolution by a federal regulatory agency.

Fraud Pleading and Consumer Deception

The court held that Wright satisfied Rule 9(b). The complaint identified who allegedly made the statements, what the statements said, where they appeared, when they were made, and why Wright alleged they were false. It also alleged that Wright relied on the representations when purchasing the tuna.

The court further held that Wright adequately alleged that a reasonable consumer would be deceived. Under the reasonable-consumer test, a plaintiff must allege that a significant portion of ordinary consumers could be misled, not merely that a few consumers might misunderstand a statement. The court concluded that the dolphin-safe logo and related statements could lead a reasonable consumer to believe that the tuna did not result in harm to dolphins.

Disposition

The court denied Costco’s motion to dismiss. The opinion did not decide whether Wright would ultimately prove her claims; it held that the claims were sufficiently alleged to proceed past the motion-to-dismiss stage.

Judge

The order was issued by William H. Orrick, United States District Judge.