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In re Milo's Dog Treats

United States District Court, W.D. Pennsylvania

March 25, 2014

IN RE MILO'S DOG TREATS CONSOLIDATED CASES

Order Filed: February 11, 2014

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For LISA MAZUR, for plaintiff and the class members defined herein, Plaintiff: Clayton S. Morrow, LEAD ATTORNEY, Morrow & Artim, PC, Pittsburgh, PA; Catherine A. Ceko, PRO HAC VICE, Edelman Combs Latturner & Goodwin LLC, Chicago, IL; Daniel A. Edelman, Thomas E. Soule, PRO HAC VICE, Edelman, Combs & Latturner, Chicago, IL.

For MAXINE S. RUFF, on behalf of herself and all others similarly situated, Plaintiff Consolidated: Adam J. Levitt, Edmund S. Aronowitz, LEAD ATTORNEYS, Grant & Eisenhofer P.A., Chicago, IL; Jamie E. Weiss, Jeffrey A. Leon, Julie Diane Miller, LEAD ATTORNEYS, Complex Litigation Group LLC, Highland Park, IL; Jonathan Shub, LEAD ATTORNEY, Seeger Weiss LLP, Philadelphia, PA.

For MARY EMILY FUNKE, Plaintiff Consolidated: Gregory Bradley Linkh, LEAD ATTORNEY, Murray Frank LLP, New York, NY; Kara M Wolke, Marc L. Godino, Robert Vincent Prongay, LEAD ATTORNEYS, Glancy Binkow & Goldberg LLP, Los Angeles, CA.

For CHRISTOPHER V. LANGONE, Plaintiff Consolidated: Jeffrey S. Hyslip, LEAD ATTORNEY, Lifetime Debt Solutions, LLC, Chicago, IL; Mark T. Lavery, LEAD ATTORNEY, Hyslip & Taylor LLC LPA, Chicago, IL.

For MILO'S KITCHEN, LLC, Defendant: Anita B. Weinstein, LEAD ATTORNEY, F. Brenden Coller, PRO HAC VICE, Cozen O'Connor, Philadelphia, PA; Maria Ciccia, Richard Fama, PRO HAC VICE, Cozen O'Connor, New York, NY.

For DEL MONTE CORPORATION, doing business as DEL MONTE FOODS, Defendant: F. Brenden Coller, PRO HAC VICE, Cozen O'Connor, Philadelphia, PA; Maria Ciccia, Richard Fama, PRO HAC VICE, Cozen O'Connor, New York, NY.

For MILO'S KITCHEN, LLC, ThirdParty Plaintiff: Anita B. Weinstein, LEAD ATTORNEY, F. Brenden Coller, Cozen O'Connor, Philadelphia, PA; Maria Ciccia, Richard Fama, Cozen O'Connor, New York, NY.

For DEL MONTE CORPORATION, ThirdParty Plaintiff: Anita B. Weinstein, F. Brenden Coller, Cozen O'Connor, Philadelphia, PA; Maria Ciccia, Richard Fama, Cozen O'Connor, New York, NY.

For NOVA WORLD INC, ThirdParty Defendant: Keith D. Heinold, LEAD ATTORNEY, Marshall, Dennehey, Warner, Coleman & Goggin, Philadelphia, PA; Peter R. Glasser, Trevin E. Wray, PRO HAC VICE, Holbrook & Osborn, P.A., Overland Park, KS.

For NOVA WORLD INC, Counter Claimant: Keith D. Heinold, LEAD ATTORNEY, Marshall, Dennehey, Warner, Coleman & Goggin, Philadelphia, PA; Peter R. Glasser, Trevin E. Wray, PRO HAC VICE, Holbrook & Osborn, P.A., Overland Park, KS.

For DEL MONTE CORPORATION, Counter Defendant: Anita B. Weinstein, F. Brenden Coller, Cozen O'Connor, Philadelphia, PA; Maria Ciccia, Richard Fama, Cozen O'Connor, New York, NY.

Cathy Bissoon, United States District Judge. Magistrate Judge Maureen P. Kelly.

OPINION

MEMORANDUM ORDER

Cathy Bissoon, J.

On August 13, 2012, this case was referred to United States Magistrate Judge Maureen P. Kelly for pretrial proceedings in accordance with the Magistrates Act, 28 U.S.C. § § 636(b)(1)(A) and (B), and Rules 72.C, 72.D and 72.G of the Local Rules for Magistrates.

On February 11, 2014, the Magistrate Judge issued two Reports (Docs. 136 & 137), recommending that Defendants' Motions to Dismiss (Docs. 68 & 70) regarding Plaintiffs Funke and Ruff, respectively, be granted as to Plaintiffs' claims for unjust enrichment, but otherwise denied. Service of the Report and Recommendation was made, and Defendants have filed Objections. See Docs. 139-142.

After a de novo review of the pleadings and documents in the case, together with the Reports and Recommendations and the Objections thereto, the following Order is entered:

Defendants' Motions to Dismiss (Docs. 68 & 70) are GRANTED regarding Plaintiffs' Funke and Ruff's claims for unjust enrichment, but, otherwise, the Motions are DENIED. The Reports and Recommendations of Magistrate Judge Kelly dated February 11, 2014 hereby are adopted as the Opinions of the District Court.

IT IS SO ORDERED.

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REPORT AND RECOMMENDATION

MAUREEN P. KELLY, J.

I. RECOMMENDATION

Plaintiff Mary Emily Funke (" Plaintiff" ) initiated this action on October 16, 2012, by filing a class action Complaint on behalf of herself and all customers who purchased chicken jerky and beef jerky dog treats (" jerky treats" ) manufactured, marketed, and sold by Defendant Milo's Kitchen, LLC (" Milo's" ), which is owned by Defendant Del Monte Corporation d/b/a Del Monte Foods (" Del Monte" ) (collectively, " Defendants" ). Plaintiff alleges that Defendants have misrepresented the quality of the jerky treats, that they contain contaminants and that, within twenty-four hours of feeding the treats to her dog, it became sick and ultimately had to be euthanized.

Presently before the Court is a Motion to Dismiss (" the Motion" ) submitted on behalf of Defendants. ECF No. 68. For the reasons that follow, it is respectfully recommended that the Motion be granted as to Plaintiff's claim for unjust enrichment brought at Count IV of the Complaint and denied in all other respects.

II. REPORT

A. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff contends that she purchased a package of Milo's jerky treats in August of 2012, which she fed to her dog on September 2, 2012. C.A. No. 13-519: ECF No. 1, ¶ ¶ 14, 15. Plaintiff alleges that, as of that date, her dog was five years old and in

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good health, but within twenty-four hours of feeding it Milo's jerky treats, it became ill and had to be taken to the veterinarian. Id. at ¶ ¶ 13, 15, 16. The veterinarian initially prescribed antibiotics but began administering intravenous fluids after the dog's condition worsened. Id. at ¶ ¶ 16, 17. Three days later, Plaintiff's dog became so ill that Plaintiff was forced to have it euthanized. Id. at ¶ 18.

Plaintiff avers that Defendants' jerky treats are neither 100% jerky nor wholesome as advertised, but rather contain contaminants that sicken and/or kill dogs. Id. at ¶ 41. Plaintiff takes particular issue with Defendants' representations on the jerky treats' packaging and/or on the Defendants' websites stating that: the contents are " 100 % Real - Wholesome and Delicious; " they started making Milo's Kitchen dog treats because they believed dogs deserve treats made with the same quality of ingredients and care that their owners want in their food; the ingredients in the jerky treats are chicken breast, glycerin, sugar, salt, natural flavors, and mixed tocopherals (a preservative and natural source of Vitamin E); the jerky treats are good for pets; " Milo's Kitchen Home-Style Dog Treats are 100% real jerky, sausage slices, and meatballs; " each piece of Milo's Kitchen Chicken Jerky " is made with whole fillets of 100% real jerky and the quality and care your dog deserves," without any artificial chicken flavors or filler ingredients; and that their products are made in compliance with specifications and procedures set forth by the U.S. Department of Agriculture, the Food & Drug Administration, and the Global Food Safety and Initiative. Id. at ¶ ¶ 38, 39.

Plaintiff also avers that the FDA issued releases on September 26, 2007, December 19, 2008, November 18, 2011 and July 18, 2012, cautioning consumers about illnesses and/or symptoms reported in dogs after consuming chicken jerky treats that were made in China where Defendants' treats are allegedly manufactured. Id. at ¶ ¶ 21, 23-28. The FDA releases also apprised consumers of the steps taken by the FDA to investigate the matter, which Congress has purportedly criticized. In particular, Plaintiff alleges that Congress has faulted the FDA's efforts in determining the source of the contamination and in warning pet owners of the potential dangers posed by the jerky treats. Id. at ¶ ¶ 29-36. Indeed, Plaintiff contends that Defendants' reassurances on their websites that neither the FDA nor the American Veterinarian Medical Association have been able to identify the cause of the illnesses or a connection between the illnesses and the jerky treats and that no contaminants have been found despite extensive testing are misrepresentations, is deceptive and/or misleading as the jerky treats contain contaminants that poison dogs. Plaintiff also contends that Milo's safety process does not ensure that the jerky teats are free from contaminants, and that the FDA's investigation, which failed to detect the contaminants, was fundamentally flawed. Id. at ¶ 41.

In addition, Plaintiff alleges that Defendants failed to adequately respond once the contamination was found in the jerky treats. Specifically, Plaintiff alleges that Defendants failed to conduct adequate quality control and testing of the jerky treats; failed to use proper manufacturing and production practices; failed to adequately investigate reports of dogs that became sick and/or died; failed to adequately warn consumers of the potential dangerous contaminants; marketed and sold the jerky treats without determining whether it was safe for dogs using deceptive advertising and packaging; and failed to take steps to remove the product from the market once the unsafe condition of

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the jerky treats became suspected or known. Id. at ¶ 42.

Plaintiff filed the instant Class Action Complaint (" the Complaint" ), on October 16, 2012, in the United States District Court for the Northern District of California, bringing claims against Defendants for violating the California Consumer Legal Remedies Act (" CLRA" ), Cal. Civ. Code § 1750, et seq. (Count I); violating California's False Advertising Law (" FAL" ), Cal. Bus. & Prof. Code § 17500, et seq. (Count II); violating California's Unfair Competition Law (" UCL" ), Cal. Bus. & Prof. Code § 17200, et seq. (Count III); and for unjust enrichment (Count IV). See C.A. No. 13-519: ECF No. 1.

The case was transferred to this Court on April 10, 2013, and docketed at C.A. No. 13-519. Id. at ECF Nos. 29, 30. On August 6, 2013, an Order was issued consolidating this case with Civil Action Nos. 12-1011, 13-518, 13-709, and directing that all filings relative to the consolidated cases be filed at the above-captioned C.A. No. 12-1011 as the Lead Case. Id. at ECF No. 53. It was also ordered that any motions pending in the non-lead cases be re-filed at C.A. 12-1011. Id.

Defendants re-filed the instant Motion on August 9, 2013, to which Plaintiff responded on that same date. C.A. No. 12-1011: ECF Nos. 68, 74. Defendants filed a Reply Memorandum of Law in Support of Motion to Dismiss on August 14, 2013. Id. at ECF No. 76. As such, the Motion is ripe for review.

B. STANDARD OF REVIEW

In assessing the sufficiency of the complaint pursuant to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must accept as true all material allegations in the complaint and all reasonable factual inferences must be viewed in the light most favorable to the plaintiff. Odd v. Malone, 538 F.3d 202, 205 (3d Cir. 2008). The Court, however, need not accept bald assertions or inferences drawn by the plaintiff if they are unsupported by the facts set forth in the complaint. See California Pub. Empl. Ret. Sys. v. The Chubb Corp., 394 F.3d 126, 143 (3d Cir. 2004), citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). Nor must the Court accept legal conclusions set forth as factual allegations. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Rather, " [f]actual allegations must be enough to raise a right to relief above the speculative level." Id., citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). Indeed, the United States Supreme Court has held that a complaint is properly dismissed under Fed.R.Civ.P. 12(b)(6) where it does not allege " enough facts to state a claim to relief that is plausible on its face," id. at 570, or where the factual content does not allow the court " to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (finding that, under Twombly, " labels, conclusions, and a formulaic recitation of the elements of a cause of action" do not suffice but, rather, the complaint " must allege facts suggestive of [the proscribed] conduct" and that are sufficient " to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s] of his claim" ). The question is not whether the plaintiff will prevail in the end but, rather, is whether the plaintiff is entitled to offer evidence in support of his or her claims. Oatway v. American Int'l Group, Inc., 325 F.3d 184, 187 (3d Cir. 2003).

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C. DISCUSSION

1. Claims brought against Defendant Del Monte

Defendants first argue that the claims brought against Del Monte must be dismissed because Plaintiff's allegations in the Complaint that Del Monte, as the parent company and owner of Milo's, " has complete authority and control over Milo's conduct" fails to allege any actionable conduct by Del Monte and is insufficient to overcome the conventional maxim that a parent company and its subsidiary are to be treated as separate entities.

As a general rule, a " parent corporation ... is not liable for the acts of its subsidiaries." United States v. Bestfoods (" Bestfoods" ), 524 U.S. 51, 61, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998) (internal citations omitted). " Only in unusual circumstances will the law permit a parent corporation to be held either directly or indirectly liable for the acts of its subsidiary." E. & J. Gallo Winery v. EnCana Energy Servs., Inc., 2008 WL 2220396, at *5 (E.D. Cal. May 27, 2008) (internal citation omitted). " Among the 'unusual circumstances' where law will hold a parent corporation liable for the acts of a subsidiary are: (1) where the circumstances of the organization of the two entities are such that the corporate form should be disregarded (often referred to as 'alter ego' liability); (2) where the subsidiary acts as an ...


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