Rodriguez v. Target Corporation

Background

Jose Rodriguez and Sherri Morris sued Target Corporation and Lang Pharma Nutrition, Inc., individually and on behalf of a proposed class. They alleged that defendants’ dietary supplement was misleadingly labeled “100% Wild Alaskan 1000 mg Fish Oil” and that the label stated the product contained fish from Alaskan walleye pollock.

According to the Second Amended Complaint, the product was made from parts remaining after the fish was filleted. Plaintiffs alleged that the initial oil was not fit for human consumption and was later chemically changed through “trans-esterification” into fatty acid ethyl esters. They alleged that these compounds differ chemically from the naturally occurring triglycerides in traditional fish oil and are less readily absorbed by the body.

Plaintiffs asserted claims for breach of express warranty under New York and California law; violations of New York General Business Law §§ 349 and 350; violations of California’s Unfair Competition Law under its “unfair,” “fraudulent,” and “unlawful” prongs; violations of California’s False Advertising Law and Consumers Legal Remedies Act; and unjust enrichment or quasi-contract. Defendants moved to dismiss all claims.

Standing for Damages and Injunctions

The court held that the complaint adequately alleged standing to seek damages for past harm. Plaintiffs alleged that they paid for a product they would not have purchased, or would not have purchased on the same terms, absent the alleged deception. The court treated that alleged economic loss as a concrete injury, rather than merely an informational injury or a technical statutory violation.

The court dismissed the requests for injunctive relief. Because plaintiffs alleged that they had already learned the alleged truth about the product, the court found that any future purchase and resulting deception would be conjectural rather than an actual and imminent injury. The court therefore concluded that past purchasers lacked standing to seek an injunction against future harm and dismissed those requests.

Federal Preemption

Federal preemption is a rule that can prevent state-law claims from proceeding when federal law occupies the subject or when state requirements conflict with federal requirements. The court rejected defendants’ argument that most of plaintiffs’ claims were preempted by the federal Food, Drug, and Cosmetic Act.

The court held that the portion of the California Unfair Competition Law claim under the “unlawful” prong was impliedly preempted to the extent it relied on alleged violations of the federal statute or its regulations. That theory depended solely on federal-law violations, and the federal statute authorizes the federal government, rather than private litigants, to sue for noncompliance.

The court held that the same California Unfair Competition Law theory was not impliedly preempted to the extent it relied on violations of California law, including the False Advertising Law, the Consumers Legal Remedies Act, and California’s Sherman Law. The court also held that the other unfair-competition theories and the separate false-advertising, consumer-protection, New York General Business Law, and express-warranty claims were not impliedly preempted because they were based on traditional state-law duties against misleading consumers.

The court also rejected defendants’ express-preemption argument. The parties agreed that no federal standard of identity existed for fish oil. Even assuming the relevant federal preemption provision applied, the court found that plaintiffs alleged state-law claims targeting conduct that also allegedly violated federal requirements, rather than imposing conflicting requirements. The allegations that the product’s common or usual name should distinguish it from natural fish oil were plausible at the dismissal stage.

Whether Consumers Could Be Misled

The court held that the complaint plausibly alleged that a reasonable consumer could be misled by calling the product “fish oil.” Plaintiffs alleged that a reasonable consumer could understand that term to mean fish oil in its naturally occurring form, with the same health properties and without unidentified additives. The court found that the alleged chemical differences, reduced bioavailability, and differences in production supported that inference.

The court also held that plaintiffs plausibly alleged that the “fish oil” representation was literally untrue under their theory. The court did not find plausible, however, that a reasonable consumer would be misled by the separate descriptions “Wild” or “Alaskan,” because the complaint did not allege that those descriptions were untrue. The court stated that the motion to dismiss was denied to the extent it relied on failure to plead that a reasonable consumer would be misled.

Warranty and Unjust Enrichment Claims

The express-warranty claims survived for the same reasons as the New York General Business Law claims. Plaintiffs plausibly alleged that the product contained something other than what consumers understood as fish oil and did not provide at least some of the expected health benefits to the same degree as fish oil.

The court dismissed the unjust-enrichment or quasi-contract claims as duplicative. Under New York law, the claim duplicated plaintiffs’ conventional contract or tort claims. Under California law, the claim duplicated the express-warranty claim because that warranty concerned the same subject matter as the alleged contract.

Disposition

The court ordered that defendants’ motion to dismiss was GRANTED in part and DENIED in part. The court dismissed plaintiffs’ California Unfair Competition Law “unlawful” theory to the extent it rested on alleged violations of the federal Food, Drug, and Cosmetic Act or its regulations. It dismissed the unjust-enrichment or quasi-contract claims as duplicative and dismissed plaintiffs’ requests for injunctive relief on the other claims. All other claims survived to the extent plaintiffs sought damages or other relief for past harm. Judge Lorna G. Schofield directed the Clerk of Court to close the motion at Docket Number 43.