Kell v. Lily's Sweets, LLC

Background

Annalisa Kell sued Lily's Sweets, LLC and The Hershey Company after purchasing Lily's Extra Dark Chocolate 70% Cocoa chocolate bars. She alleged that the defendants manufactured, marketed, advertised, and distributed the products, and that they failed to disclose the possibility that the products contained lead. She asserted claims for breach of implied warranty, violations of New York General Business Law §§ 349 and 350, and unjust enrichment, on behalf of herself and similarly situated individuals.

Kell relied on a Consumer Reports article reporting lead and cadmium in certain dark chocolate bars. Consumer Reports had examined two or three samples of each of 28 chocolate varieties from 21 brands. The article reported that Lily's Extra Dark Chocolate 70% Cocoa contained lead at 144% of California's stated Maximum Allowable Dose Level. Kell did not allege that she suffered physical injury or illness from lead exposure. Instead, she alleged that she would have paid less for the products, or would not have bought them, if she had known about possible lead contamination.

The defendants moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Rule 12(b)(1) concerns whether the federal court has authority to hear a case; Rule 12(b)(6) concerns whether a complaint states a legally sufficient claim.

Legal standard

The court explained that the Constitution limits federal courts to actual cases and controversies. A plaintiff must have standing, including an injury in fact that is concrete, particularized, and actual or imminent. In a proposed class action, the named plaintiff must show that she personally suffered an injury; alleging that other, unidentified class members were injured is not enough.

On a Rule 12(b)(1) motion, the plaintiff must affirmatively establish jurisdiction. The court may consider nonconclusory statements outside the pleadings when deciding whether jurisdiction exists.

Analysis

The court held that Kell had not plausibly alleged an injury in fact. Her theory depended on showing that the specific chocolate bars she purchased contained lead, because only then could she plausibly claim that she overpaid. The court declined to infer that every Lily's Extra Dark Chocolate 70% Cocoa bar contained lead based on Consumer Reports' testing of only two or three samples.

The court also noted that Kell did not allege that she obtained her chocolate from the same source as Consumer Reports. Consumer Reports had stated only that most samples came from online sources and stores in the New York area. Kell did not provide facts about whether her purchases were made at a similar time or place, or otherwise explain why the test results could reasonably be applied to her products.

The court distinguished a Second Circuit case involving comprehensive testing that found widespread and systematic mislabeling at specific grocery-store locations, where the plaintiff alleged regularly purchasing the same products from those locations during the relevant period. The court also acknowledged that a Southern District of California court had reached a different conclusion in a similar case, but stated that the Second Circuit's precedent required a different result in this case.

Disposition

The court granted the defendants' Rule 12(b)(1) motion. It dismissed Kell's complaint in its entirety without prejudice because she had not adequately pleaded an injury in fact and therefore lacked standing. The court did not rule on the defendants' Rule 12(b)(6) motion. The clerk was directed to close the case.