Marilyn Williams v. Total Life Changes, LLC

Background

Marilyn Williams alleged that Total Life Changes, LLC (TLC), a Michigan-based company selling consumer health and wellness products, marketed its Iaso Raspberry Lemonade Tea Instant as containing no THC. The product packaging stated “0.0% THC” and described the tea as containing hemp extract with “0% laboratory certified THC content.” TLC’s website and marketing materials made similar statements.

Williams alleged that she told a TLC representative that her employer conducted random drug tests and that she needed a product that would not cause her to fail one. According to the amended complaint, the representative recommended the tea and said there was no THC in raspberry. Williams consumed the tea, then allegedly failed a workplace drug test that tested positive for THC. She alleged that her employer terminated her, causing her to lose income and move back to Alabama. She later tested servings of the tea with an at-home marijuana test kit, and both samples allegedly tested positive for THC.

Claims and motion

Williams asserted six claims: violations of the Minnesota Consumer Fraud Act; two claims under the Minnesota Unlawful Trade Practices Act; violation of the Minnesota False Statements in Advertising Act; fraud by omission; and unjust enrichment. Three statutory claims were brought under Minnesota’s Private Attorney General statute. Williams also sought damages, restitution, penalties, injunctive relief, and other equitable relief on behalf of a proposed class of people who bought the tea while residing in Minnesota.

TLC moved under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legally recognized claim for relief. At this stage, the court accepted the complaint’s factual allegations as true and considered whether they plausibly supported relief.

Minnesota statutory claims

The court held that Williams had standing to assert the Minnesota statutory claims even though she was no longer a Minnesota resident. The court found that, according to the amended complaint, she was a Minnesota resident when the claims arose, received the alleged misrepresentations in Minnesota, and suffered the alleged injuries in Minnesota.

The court also held that the claims brought under Minnesota’s Private Attorney General statute alleged a sufficient public benefit. The alleged representations appeared on TLC’s website, product packaging, and written marketing materials, including materials sent to more than 600 Minnesota consumers. The court considered the alleged effect on the public, the standardized form of the representations, the requested damages and injunctive relief, and the allegation that TLC’s representations were ongoing. It concluded that all four factors supported a public benefit.

The court separately held that the direct Unlawful Trade Practices Act claim in Count 3 stated a claim because Williams alleged that TLC knowingly misrepresented the tea’s ingredients to her while she was a Minnesota resident, causing her damage while she was a Minnesota resident.

Injunctive relief

The court rejected TLC’s argument that Williams could not seek injunctive relief because she was no longer a Minnesota resident. The court explained that Minnesota consumer statutes generally apply to conduct occurring in Minnesota. Williams alleged that she received the representations, bought and consumed the tea, and was injured in Minnesota while she was a Minnesota resident.

The court also concluded that Williams plausibly alleged a risk of future harm. She alleged that TLC continued to represent that the tea contained no THC, that no recall had been issued, and that consumers could be misled into purchasing or continuing to possess the product without knowing its actual THC content. The court concluded that it was premature at the motion-to-dismiss stage to reject the request for injunctive relief.

Fraud by omission

The court held that Williams adequately pleaded fraud by omission. She alleged that TLC had special knowledge about the tea’s THC levels based on laboratory analysis, that she lacked access to that information, and that TLC failed to disclose it. The court therefore denied the motion to dismiss this claim.

Unjust enrichment

The court also denied dismissal of the unjust-enrichment claim. It noted that Federal Rule of Civil Procedure 8 permits alternative pleading and that, at this stage, the court routinely allows unjust enrichment to be pleaded as an alternative theory.

Disposition

Judge Michael J. Davis ordered that TLC’s motion to dismiss the First Amended Class Action Complaint was DENIED. The order allowed the claims to proceed past the pleading stage; it did not determine whether TLC was liable or whether the proposed class would ultimately be certified.