Gordon v. Target Corporation

Background

Lovelyn Gordon brought a proposed class action against Target Corporation concerning Target’s up & up “Toddler Next Stage” milk-based powder drink for toddlers over one year old. Gordon alleged that the product’s label closely resembled Target’s infant-formula label and falsely suggested that the toddler product had special nutritional value or was subject to the same type of federal regulation as infant formula. She also alleged that the product’s “non-GMO” graphic imitated the Non-GMO Project’s verification seal, even though the dairy ingredients allegedly came from cows fed genetically modified grain.

Gordon alleged claims under New York General Business Law §§ 349 and 350, the Magnuson-Moss Warranty Act, common-law express and implied warranty theories, negligent misrepresentation, fraud, and unjust enrichment. She sought damages and injunctive relief requiring corrected representations. Target moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The court considered documents incorporated into the complaint and publicly available Food and Drug Administration materials.

Court’s Rulings

The court held that Gordon lacked standing to seek injunctive relief. Although she alleged that she might buy the product again if its representations were corrected, the court found that she knew about the alleged problems and therefore could not plausibly be deceived by the label again. The court dismissed all claims for injunctive relief with prejudice, both for Gordon and for the proposed class.

The court dismissed the New York General Business Law claims. It found that Gordon had not identified a specific statement on the label claiming that the product was necessary for toddler development, uniquely nutritious, recommended by pediatric experts, or equivalent to infant formula. The court also found that the label disclosed two grams of added sugar in the Nutrition Facts panel and made no representation that the product contained no added sugar. Regarding the non-GMO graphic, the court found it implausible that a reasonable consumer would mistake the descriptive graphic for the distinctive Non-GMO Project verification seal. Separately, Gordon did not identify a specific label statement on which she relied when buying the product, which defeated her allegation of economic injury.

The court dismissed the express-warranty claim because Gordon did not identify a specific nutritional promise and, although “non-GMO” could potentially be a specific warranty, she did not adequately allege reliance or injury. The claim also failed because the complaint did not adequately allege that she gave Target pre-suit notice of the alleged breach. The implied-warranty claim was dismissed because Gordon conceded that she had not alleged that the product was unfit for human consumption. The Magnuson-Moss claim was dismissed because it depended on adequately pleaded state-law warranty claims, which were absent here.

The negligent-misrepresentation claim was dismissed because Gordon did not plausibly allege the special or near-privity relationship required under New York law. The fraud claim was dismissed because Gordon abandoned her response to Target’s argument that she had not adequately pleaded fraudulent intent, and the court separately found that a general profit motive and conclusory allegations about regulatory knowledge did not satisfy the heightened pleading requirement for fraud. The unjust-enrichment claim was dismissed as duplicative because it was based on the same facts and damages as Gordon’s other claims.

Disposition

Judge Karas granted Target’s motion to dismiss. The court stated that this was the first adjudication of Gordon’s claims on the merits, so the dismissal of the claims other than injunctive relief was without prejudice. Gordon could file a second amended complaint within 30 days if she had a good-faith basis for doing so. The court stated that failure to amend properly and on time would result in dismissal of those claims with prejudice.