United States District Court, D. Oregon
VICKY SILVA, an Oregon consumer, individually and on behalf of all others similarly situated, Plaintiffs,
UNIQUE BEVERAGE COMPANY, LLC, a foreign corporation, Defendant.
Michael Fuller OLSEN DAINES PC Mark Geragos Benjamin J.
Meiselas GERAGOS & GERAGOS Attorneys for Plaintiff
Hochman HOCHMAN LEGAL GROUP, PLLC Attorney for Defendant
OPINION & ORDER
A. Hernandez United States District Judge
putative class action brought by Plaintiff Vicky Silva on
behalf of herself and all others similarly situated against
Defendant Unique Beverage Company, LLC, Plaintiff contends
that the labeling on one of Defendant's products is
misleading and in violation of Oregon's Unlawful Trade
Practices Act, Oregon Revised Statutes §§ (O.R.S.)
646.605-646.656 (UTPA). In a June 15, 2017 Opinion &
Order, I granted Defendant's motion to dismiss the
Amended Complaint but gave Plaintiff leave to amend.
Silva v. Unique Beverage Co., No. 3:17-cv-00391-HZ,
2017 WL 2642286 (D. Or. June 15, 2017) (hereinafter "the
June 15, 2017 Opinion"). On June 28, 2017, Plaintiff
filed a Second Amended Complaint, ECF 28. Defendant now moves
to dismiss the amended pleading for failure to state a claim.
I grant the motion as to the allegations in Paragraph 18,
deny the motion as moot as to any claim for injunctive
relief, and otherwise deny the motion.
Second Amended Complaint, Plaintiff alleges that in February
2017, she purchased a "Cascade Ice" beverage
product manufactured by Defendant. Sec. Am. Compl.
¶¶ 4, 5. The front label depicted large colorful
coconuts along with the word "Coconut."
Id. Below the word "Coconut, " the
label stated that the product is a "NATURALLY FLAVORED
SPARKLING WATER" beverage. Id. The front label
looks like this:
Decl., ¶ 2, ECF 40.
asserts that the product contains no coconut, coconut water,
coconut juice, coconut pulp, coconut jelly, or coconut
natural flavor. Id. at ¶ 4. Additionally, she
contends it does not taste like coconut and has no coconut
health qualities. Id. Plaintiff alleges that the
label violates O.R.S. 646.608(1)(b) because it causes the
likelihood of confusion and misunderstanding as to the source
of the flavoring, ingredients, and properties in
Defendant's product. Id. ¶ 15. Further, she
contends that the label violates O.R.S. 646.608(1)(e) because
it falsely represents that Defendant's coconut product
had ingredients, characteristics, benefits, quantities, or
qualities it did not have. Id. She also alleges that
the label violates O.R.S. 646.609(1)(g), because it falsely
represented that Defendant's coconut product was of a
standard, quality, or grade it did not have. Id.
seeks damages under three different theories: a diminished
value theory, a purchase price refund theory, and an
objective market value loss theory. Id. ¶¶
16, 17, 18. These damages allegations are discussed in more
detail below. Plaintiff seeks actual damages or $200
statutory damages. Id. ¶ 19. Finally, based on
her allegation that Defendant's violation of the UTPA was
reckless and in pursuit of profit, she seeks punitive
damages. Id./ / /
motion to dismiss for failure to state a claim may be granted
only when there is no cognizable legal theory to support the
claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief.
Shroyer v. New Cingular Wireless Servs., Inc., 622
F.3d 1035, 1041 (9th Cir. 2010). In evaluating the
sufficiency of a complaint's factual allegations, the
court must accept all material facts alleged in the complaint
as true and construe them in the light most favorable to the
non-moving party. Wilson v. Hewlett-Packard Co., 668
F.3d 1136, 1140 (9th Cir. 2012).
motion to dismiss under Rule 12(b)(6) will be granted if a
plaintiff alleges the "grounds" of his
"entitlement to relief" with nothing "more
than labels and conclusions, and a formulaic recitation of
the elements of a cause of action[.]" Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007).
"Factual allegations must be enough to raise a right to
relief above the speculative level on the assumption that all
the allegations in the complaint are true (even if doubtful
in fact)[.]" Id. (citations and footnote
survive a motion to dismiss, a complaint "must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face[, ]" meaning
"when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged." Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (internal quotation
marks omitted). Additionally, "only a complaint that
states a plausible claim for relief survives a motion to
dismiss." Id. at 679. A complaint must contain
"well-pleaded facts" which "permit the court
to infer more than the mere possibility of
misconduct[.]" Id. at 679.
argues that dismissal of the Second Amended Complaint is
warranted because no reasonable juror could be confused by
the product labels and thus, as a matter of law the product
is not deceptive. Defendant also argues that Plaintiff fails
to sufficiently allege damages.
whether a product's labels are deceptive under a consumer
protection statute is a question of fact for the jury.
See Williams v. Gerber Prods. Co., 552 F.3d 934,
938-39 (9th Cir. 2008) (in case challenging product's
labeling as deceptive under California law, court noted that
California courts "recognized that whether a business
practice is deceptive will usually be a question of
fact"). However, as with many fact questions, if the
court determines that no reasonable juror could conclude that
the product's label was not deceptive or misleading,
dismissal on a Rule 12(b)(6) motion is appropriate.
E.g., Davis v. HSBC Bank Nevada, N.A., 691
F.3d 1152, 1162 (9th Cir. 2012) (in false advertising claim
under California statute, court quoted Williams for
the proposition that the issue of deception is usually a
question of fact, but court nonetheless affirmed the district
court's dismissal of the claim at the pleading stage
because as a matter of law, the advertising at issue was not
likely to deceive a reasonable consumer); Pelayo v.
Nestle USA, Inc., 989 F.Supp.2d 973, 978 (C.D. Cal.
2013) (citing Williams for the proposition that the
"question of whether a business practice is deceptive in
most cases presents a question of fact not amenable to
resolution on a motion to dismiss[, ]" but concluding
that "where a Court can conclude as a matter of law that
members of the public are not likely to be deceived by the
product packaging, dismissal is appropriate");
Hairston v. S. Beach Beverage Co., No. CV
12-1429-JFW DTBX, 2012 WL 1893818, at *4 (C.D. Cal. May 18,
2012) (citing Williams but noting that "in
certain instances, the Court can properly make [the
deception] determination and resolve such claims based on its
review of the product packaging" and finding dismissal
on a Rule 12(b)(6) appropriate "where a Court can
conclude as a matter of law that members of the public are
not likely to be deceived by the product packaging[.]").
Pearson v. Philip Morris, Inc., the Oregon Supreme
Court indicated that whether a product's label was a
misrepresentation under the UTPA "is determined based on
an objective standard of what a reasonable consumer would
understand the representation to be[.]" 358 Or. 88, 135
n.26, 361 P.3d 3, 32 n.26 (2015); see also Andriesian v.
Cosmetic Dermatology, Inc., No. 3:14-cv-01600-ST, 2015
WL 1638729, at *3 (D. Or. Mar. 3, 2015) (to state a false
labeling claim under the UTPA, "plaintiff must
affirmatively plead and prove that the statements at issue
are either objectively false or at least likely to mislead a
reasonable consumer."), adopted, 2015 WL
1925944 (D. Or. Apr. 28, 2015).
argues that when the labeling of the entire bottle of its
Cascade Ice beverage is considered, no reasonable consumer
could be misled into believing that the product contained any
coconut. Cases suggest that it is appropriate to consider the
entirety of a label in ascertaining whether a reasonable
consumer would find a product deceptive or misleading. In
Freeman v. Time, Inc., 68 F.3d 285, 289-90 (9th Cir.
1995), the Ninth Circuit relied on qualifying language in
smaller font to conclude that no reasonable consumer would be
deceived by the larger font statements suggesting that the
mailer's recipient had won a sweepstakes. The court also
rejected the plaintiff's argument that a certain
statement was ambiguous because the contention was
"unreasonable in the context of the entire
document." Id. at 290; see also Lam v. Gen.
Mills, Inc., 859 F.Supp.2d 1097, 1104 (N.D. Cal. 2012)
(court looked at side panel as well as front, back, top, and
bottom panels of package in making reasonable consumer
Williams, the Ninth Circuit concluded that
misleading label information on the front of a product cannot
be corrected by an ingredient list. 552 F.3d at 939. There,
the court determined that a number of features on the
packaging "could likely deceive a reasonable
consumer." Id. at 939. In light of such
deceptive packaging, the court rejected the use of the
ingredient list as a "shield for liability for the
deception[, ]" explaining that a reasonable consumer is
not "expected to look beyond misleading representations
on the front of the box to discover the truth from the
ingredient list in small print on the side of the box."
does not hold, however, that an ingredient list, along with
other information on the label, is irrelevant in determining
whether the package as a whole is misleading or deceptive.
Rather, as a 2016 Ninth Circuit case put it, "[s]tated
straightforwardly, Williams stands for the
proposition that if the defendant commits an act of
deception, the presence of fine print revealing the truth is
insufficient to dispel that deception." Ebner v.
Fresh, Inc., 838 F.3d 958, 966 (9th Cir. 2016). Thus, an
ingredient list alone cannot remedy an otherwise misleading
or deceptive package but it still plays a part in assessing
whether the package as a whole is misleading.
points to six features of the label that it argues dispel any
notion that the product contains coconut. First, the front of
the label states, as indicated above, that it is
"NATURALLY FLAVORED SPARKING WATER." Def. Req. for
Jud. Notice, Ex. C. Second, the front label also states that
the beverage has "Zero Calories." Id.
Third, the back or side of the label, near the top and above
the Nutrition Facts section, states that it "Contains No
Coconut." Id., Ex. A. Fourth, immediately below
the "Contains No Coconut" language, and immediately
above the Nutrition Facts section, the label states that it
contains "1% Fruit Juice." Id. Fifth, the
Nutrition Facts section shows that the beverage has zero
calories, zero fat, zero sugars, and no potassium.
Id. Finally, the ingredient list confirms there is
no coconut of any kind in the product. Id. The
entire label, in relevant part, looks like this:
Req. for Jud. Notice, Ex. C.
argues that taken as a whole, no reasonable consumer would
conclude that the beverage contains coconut or has coconut
health qualities. Defendant contends that although the label
depicts coconuts, the statement "Zero Calories" on
the front, as well as the Nutrition Facts section on the back
or side which recites zero calories, zero fat, zero sugars,
and no potassium, are all inconsistent with a product that
actually contains coconut. Notably, the back or side label
states, separately from the Nutrition Facts section or the
ingredient list, that the product "Contains No
Coconut." Because the product label itself establishes
that it is not misleading or deceptive, Defendant argues that
dismissal is appropriate.
be seen from the images of the product's label reproduced
in this Opinion, the front of the bottle is adorned with
fairly large images of several coconuts. The word
"Coconut" is prominently displayed on a white
background. Although the words "NATURALLY FLAVORED
SPARKLING WATER" appear on the front, they are in
smaller font than the word "Coconut." Moreover,
these words are separate from the word "Coconut"
such that a reasonable consumer would not necessarily
understand the label to represent a naturally
coconut-flavored drink. A reasonable consumer could
understand a phrase like "naturally coconut-flavored
sparkling water" to mean a drink that was flavored to
taste like coconut but not necessarily containing
coconut. But when the word "Coconut" is
not part of the "naturally flavored" phrase, that
understanding is not necessarily the only reasonable one to
be drawn. Instead, a reasonable consumer could understand
that he or she was purchasing a drink containing coconut and
which also was naturally flavored. The large coconut
depictions, the prominence of the word "Coconut, "
and the words "NATURALLY FLAVORED SPARKLING WATER,
" plus the location of those words separate from the
word "Coconut" could cause a reasonable consumer to
believe that he or she was buying a sparkling water beverage
understanding is not diminished by the "Zero
Calories" statement on the front of the bottle or by the
Nutrition Facts showing that the product has zero calories,
zero fat, and zero sugars. Reasonable consumers do not
necessarily possess information about the calories of any
given fruit, vegetable, or other featured characteristic and
so may not know that if the product contained actual coconut
it would likely have some calories or fat. Many consumers
could rationally assume that the product had zero calories,
fat, or sugar yet still contain some natural coconut flavor.
After all, the beverage contains pear juice concentrate yet
obviously not in sufficient quantity to provide calories,
fat, or sugars. Moreover, contrary to Defendant's
suggestion, the Nutrition Facts section does not expressly
state that it has no potassium. It lists, as is relevant
here, the total fat, sodium, total carbohydrate, and protein
as all zero, and then states in fairly small print that the
product is "[n]ot a significant source of other
nutrients." Thus, unless the purchaser knows that
coconuts are a good source of potassium, and there is no
reason to conclude that a reasonable consumer would actually
possess that knowledge, the fact that the Nutrition Facts
section lacks any information about the potassium content of
the product is meaningless. Moreover, the ingredient list
includes "Potassium Benzoate (Preservative), " and
a reasonable consumer could mistakenly assume this was
potassium, the element. The ingredient list also shows that
the product contains potassium citrate, further reinforcing
the suggestion, for those who know about the amount of
potassium in coconut, that coconut is in the product.
the "1% Fruit Juice" language on the back or side
of the label, Defendant argues that a reasonable consumer
would understand the product contains no coconut because a
coconut "is a nut, not a fruit." Def.'s Mot.
15, ECF 29. Defendant states that "the FDA confirms that
coconut is a nut, not a fruit." Id. Defendant
provides no authority or citation for this assertion. A
coconut is defined as "the fruit of the coconut palm
that is a drupe consisting of an outer fibrous husk that
yields coir and a large nut containing the thick edible meat,
and in the fresh fruit, a clear fluid called coconut
milk." Webster's Third New Int'l
Dictionary 437 (unabridged ed. 2002). Regardless of
what the FDA considers a coconut to be, given that a
dictionary defines it as the ...