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Cesare v. Champion Petfoods USA Inc.

United States District Court, W.D. Pennsylvania

December 20, 2019

ANTHONY CESARE, et al., Plaintiffs,
v.
CHAMPION PETFOODS USA INC., et al., Defendants.

          MEMORANDUM ORDER

          Cathy Bissoon United States District Judge.

         Pending before the Court is Defendants' Motion to Dismiss Plaintiffs' Class Action Complaint (“Motion to Dismiss, ” Doc. 36). For the reasons below, Defendants' Motion to Dismiss will be granted in part, and denied in part.

         I. Memorandum

         On June 5, 2018, Plaintiffs Anthony Cesare, Elizabeth Donatucci and Taylor Kennedy (“Plaintiffs”) filed a Class Action Complaint on behalf of a putative class of Pennsylvania purchasers of dog food from Defendants Champion Petfoods USA Inc. and Champion Petfoods LP (“Defendants” or “Champion”). On February 26, 2019, Plaintiffs filed a Motion for Leave to File an Amended Complaint, which was granted on the same day, and the attached Amended Complaint (“FAC, ” Doc. 29-1) was deemed filed.

         The FAC alleges that Defendants, nationwide sellers of premium-priced dry dog foods under the Orijen and Acana brand names (“Products”), have misrepresented the Products to sell them at higher prices-that is, more than four times the prices of their competitors. ¶¶1-2. Contrary to Defendants' representations, Plaintiffs claim that “the Products do not mirror what a dog would eat in the wild because they contain virtually no animal muscle meat and instead consist largely of animal waste and byproducts”; “[t]he Products are not made from ingredients that are fresh and regionally sourced and, instead, contain ingredients sourced from foreign suppliers and shipped through middle men throughout the continent”; and “[t]he Products are also not made from ingredients of a quality fit for human consumption, as evidenced by the fact that the Products contain levels of heavy metals exponentially higher than those found in foods consumed by humans.” Id. at ¶2.

         Plaintiffs state that “Champion touts its products as ‘The World's Best Petfood, '” (id. at ¶ 11), and that the Products' packaging materials contain various misrepresentations regarding their quality and ingredients, (id. at ¶¶ 12-14). For example, Plaintiffs claim that the packaging of one of the Products, Acana Appalachian Ranch Regional, states that it is “‘Biologically Appropriate', contains ‘Unmatched Regional Ingredients,' uses ingredients that are ‘Never Outsourced,' and is filled with ingredients that are ‘Delivered Fresh or Raw in Wholeprey ratios, and brimming with goodness and taste.'” Id. at ¶12.

         Plaintiffs claim that another variety of Acana “states that the product is ‘bursting with richly nourishing meat and protein from free-run chicken, whole, nest-laid eggs and wild-caught flounder-all delivered fresh from our region so they're loaded with goodness and taste, '” and “further boasting that all content is ‘from poultry, fish and eggs passed fit for human consumption.'” FAC ¶16.

         Likewise, according to Plaintiffs, the packaging of another Product, Orjen Original dry dog food, “touts the food as ‘the fullest expression of our biologically appropriate and fresh regional ingredients commitment,' and further describes its supposed ‘unmatched inclusions of free-run poultry, wild-caught fish and whole nest-laid eggs - sustainably farmed or fished in our region and delivered daily, fresh or raw and preservative-free.” Id. at ¶¶13-15.

         Plaintiffs contend that each of these claims were false and misleading. For example:

• “biologically appropriate” - Plaintiffs contend that the Products were made “primarily from animal byproducts obtained from pet food processors throughout the world, ” containing virtually no muscle meat, and “made from ingredients of a quality much inferior to that represented by Champion” such as “cartilage, bone [and] filtering organs…” Id. at ¶¶17, 25.
• “fresh” - Plaintiffs contend that Defendant “(a) knowingly uses expired ingredients in the Products; (b) obtains meal ingredients and fats from unsanitary pet food rendering facilities around the world; (c) uses a variety of ingredients that are frozen; and (d) routinely utilizes “regrinds” (i.e., items that were not fit to be sold after their original preparation) in the Products, even if the Product is a different diet from the ‘regrind.'” Id. at ¶18.
• “regional” - Plaintiffs contend that Defendant mainly imports its ingredients from outside the Commonwealth of Kentucky, with many of those ingredients imported from outside the United States, including from areas as far as New Zealand. Plaintiffs also contend that the “few ingredients” sourced from Kentucky are processed in Massachusetts before being shipped back to Defendant's facility in Kentucky. Id. at ¶19.

         These allegations give rise to six Counts against Defendants, all under Pennsylvania law: (I) violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law, 73 Pa. C.S. §§ 201-1 et seq. (the “UTPCPL”); (II) breach of express warranty; (III) breach of implied warranty; (IV) fraudulent omission; (V) unjust enrichment; and (VI) negligent misrepresentation. FAC ¶¶39-95.

         Defendants' Motion to Dismiss rests on seven arguments: (1) All claims in the First Amended Complaint (“FAC”) fail to state a claim for relief; (2) The economic loss doctrine bars the UTPCPL, fraudulent omission and negligent misrepresentation claims; (3) Plaintiffs fail to plead the UTPCPL, fraudulent omission and negligent misrepresentation claims with sufficient particularity to satisfy Federal Rule of Civil Procedure 9(b); (4) Plaintiffs' fraudulent omission claim fails because they do not allege that Defendants had a duty to disclose; (5) Plaintiffs' breach of express warranty claim fails because they have not pleaded the existence of a warranty or facts suggesting that any of Defendants' statements are untrue; (6) Plaintiffs' breach of implied warranty claim fails because they do not allege that the dog food was unmerchantable or unfit for its ordinary use; and (7) Plaintiffs' unjust enrichment claim fails because they have not pleaded facts establishing that it would be inequitable for Defendants to retain any benefits conferred. Motion to Dismiss at ¶1.[1]

         A. All Claims

         As a threshold matter, the Court will address Defendants' Rule 12(b)(6) argument, before addressing the merits of each individual count. Defendants argue that Plaintiffs cannot state any claims on either the alleged presence of heavy metals or based on the ingredients in the Products purchased. Defendants state that Plaintiffs have failed to show that the heavy metal content of Defendants' Products are “exponentially high” compared to reported averages in human foods, and cite its publicly available White Paper, published in May 2017, to support its contention. Def. Mem. at 7-8.

         According to Defendants, the White Paper states that the presence of certain heavy metals is within the maximum tolerable limits established by the Federal Drug Administration in its Target Animal Safety Review Memorandum. Id. at 4. Plaintiffs respond that the presence of higher levels of heavy metals in Defendants' Products goes against Defendants' claims that their Products consist of “human-grade ingredients prior to inclusion in the Products.” Pl. Opp. at 5. They also oppose Defendants' usage of the White Paper to support their arguments about the heavy metals in their Products. Id. at 7.

         The Court finds that Plaintiff has opened the door to the admittance of the White Paper. Plaintiffs cite the White Paper as part of the FAC to support their allegations that Defendants' Products contain “high levels of heavy metals.” FAC at ¶26. As this is an explicit basis for Plaintiffs' claims, the very case cited by Plaintiff supports admitting the White Paper. The general concern about courts looking to documents outside the complaint, lack of notice to the plaintiff, “is dissipated where plaintiff has actual notice … and has relied upon these documents in framing the complaint.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (internal quotations and citations omitted).

         A court “may consider an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document.” Id. (internal quotations and citations omitted). While the facts in the White Paper are in dispute, neither party disputes the authenticity of the actual White Paper itself, and the Court will admit the White Paper.

         Nonetheless, the Court agrees with the rationale in Reitman, and that Defendants' citations to the White Paper “do not prove whether the alleged statements are deceptive, misleading, or false, especially in light of contradicting allegations in the [FAC].” Reitman v. Champion Petfoods, USA, Inc., 2019 WL 1670718, at *3 (C. D. Cal. Feb. 6, 2019).

         Also, Defendants' claim in the White Paper that its Products purportedly contain heavy metal under the maximum tolerable limits for animal safety do not contradict Plaintiffs' claims that the heavy metal occurred in levels significantly higher than those safe for human consumption. The Court finds Plaintiffs' argument that the presence of significantly higher levels of heavy metals than those found in human foods is a sufficient fact that, taken as true, forms a plausible claim that Defendants' statements that its Products consist of “human grade ingredients prior to inclusion in the Products” were deceptive and misleading.

         Similarly, the Court finds that Plaintiffs have alleged sufficient facts with respect to their claims that Defendants' marketing of the ingredients in their Products is false and misleading. Plaintiffs have alleged that contrary to Defendants' claims, ingredients are not “fresh” but are “expired”; rather than being “regional, ” ingredients are mostly “import[ed]…from outside the Commonwealth of Kentucky” with “a substantial portion [being] imported from outside the United States”; instead of being supplied by “PEOPLE WE TRUST, ” ingredients are acquired through a “complex, convoluted supply chain” with multiple processors that Defendants may be unaware of; and that ingredients are “clearly [designated by bills of lading] to be inedible and unfit for human consumption” before inclusion in the Products. FAC ¶¶18-20, 22, 28-29. These facts, if true, are sufficient under Fed.R.Civ.P. 12(b)(6).[2]

         B. Individual Claims

         1. Count I: UTPCPL

         Plaintiffs allege that Defendants have violated the UTPCPL by “lying about the quality of their products” and “engag[ing] in deceptive conduct which created the likelihood that Plaintiffs would misunderstand the nature of the Products…” and that “Defendants['] products were nothing like they were warranted and represented.” FAC ¶43. Plaintiffs allege that such actions constituted “unfair or deceptive acts or practices” under the following provisions of the UTPCPL:

(v) Representing that goods or services have…characteristics, ingredients, [or] ...

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