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REPLY MEMORANDUM OF LAW IN SUPPORT

OF DEFENDANT’S MOTION TO DISMISS

Case No. 5:17-cv-00603-EJD

PATTERSON BELKNAP WEBB & TYLER LLP

Steven A. Zalesin (pro hac vice)

Michelle W. Cohen (pro hac vice)

1133 Avenue of the Americas

New York, NY 10036-6710

Telephone: (212) 336-2000

Facsimile: (212) 336-2222

SHOOK HARDY & BACON LLP

Tammy B. Webb

One Montgomery Tower, Suite 2700

San Francisco, CA 94104

Telephone: 415-544-1904

Facsimile: 415-391-0281

tbwebb@shb.com

Attorneys for Defendant

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JACKIE FITZHENRY-RUSSELL, ON BEHALF

OF HERSELF AND ALL OTHERS SIMILARLY

SITUATED

Plaintiff,

vs.

THE COCA-COLA COMPANY

Defendant.

Case No. 5:17-cv-00603-EJD

REPLY MEMORANDUM OF LAW

IN SUPPORT OF DEFENDANT’S

MOTION TO DISMISS

Case Removed: February 6, 2017

Hearing Date: May 25, 2017

Time: 9:00 a.m.

Courtroom: 4

Judge: Honorable Edward J. Davila

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i REPLY MEMORANDUM OF LAW IN SUPPORT

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Case No. 5:17-cv-00603-EJD

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ................................................................................................................ ii

PRELIMINARY STATEMENT ...........................................................................................................1

ARGUMENT.........................................................................................................................................2

I. PLAINTIFF HAS NOT ALLEGED A FALSE OR MISLEADING STATEMENT................2

A. Plaintiff Cannot Plausibly Allege That “Made With Real Ginger” Is False..................2

B. Plaintiff Cannot Plausibly Allege That “Made With Real Ginger” Is

Misleading......................................................................................................................4

II. PLAINTIFF DOES NOT ADEQUATELY ALLEGE A CONSUMERPROTECTION CLAIM BASED ON SUPPOSED REGULATORY VIOLATIONS .............6

III. PLAINTIFF’S NATIONWIDE CLASS CLAIMS SHOULD BE DISMISSED ....................11

IV. PLAINTIFF SHOULD NOT BE GIVEN LEAVE TO AMEND ...........................................13

CONCLUSION....................................................................................................................................13

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ii REPLY MEMORANDUM OF LAW IN SUPPORT

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Case No. 5:17-cv-00603-EJD

TABLE OF AUTHORITIES

Page(s)

Cases

Allstate Ins. Co. v. Hague,

449 U.S. 302 (1981).......................................................................................................................11

Bush v. Mondelez Int’l, Inc.,

2016 U.S. Dist. LEXIS 140013 (N.D. Cal. Oct. 7, 2016)................................................................7

Carvalho v. Equifax Info. Servs., LLC,

629 F.3d 876 (9th Cir. 2010) .........................................................................................................13

Coluci v. ZonePerfect Nutrition Co.,

2012 U.S. Dist. LEXIS 183050 (N.D. Cal. Dec. 28, 2012).............................................................6

Dvora v. General Mills, Inc.,

No. CV 11-1074-GW(PLAx), 2011 U.S. Dist. LEXIS 55513 (C.D. Cal. May 16,

2011) ................................................................................................................................................8

Elan Microelectronics Corp. v. Apple, Inc.,

2009 U.S. Dist. LEXIS 83715 (N.D. Cal. Sept. 14, 2009) ..............................................................3

In re Epogen & Aranesp Off-Label Mktg. & Sales Practices Litig.,

590 F. Supp. 2d 1282 (C.D. Cal. 2008) ...........................................................................................7

Figy v. Frito-Lay N. Am.,

67 F. Supp. 3d 1075, 1087 (N.D. Cal. 2014) .................................................................................12

General Tel. Co. v. Falcon,

457 U.S. 147 (1982).......................................................................................................................12

Gershman v. Bayer HealthCare LLC,

No. 14-05332-HSG, 2015 U.S. Dist. LEXIS 60835 (N.D. Cal. May 8, 2015)..............................12

Hadley v. Kellogg Sales Co.,

2017 U.S. Dist. LEXIS 40825 (N.D. Cal. Mar. 21, 2017).....................................................3, 7, 11

Ham v. Hain Celestial Gr., Inc.,

70 F. Supp. 3d 1188 (N.D. Cal. 2014) .............................................................................................6

Henderson v. Gruma Corp.,

2011 U.S. Dist. LEXIS 41077 (C.D. Cal. Apr. 11, 2011) ...............................................................5

Manchouck v. Mondelez Int’l, Inc.,

603 F. App’x 632, 633 (9th Cir. May 18, 2015)..............................................................................5

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iii REPLY MEMORANDUM OF LAW IN SUPPORT

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Case No. 5:17-cv-00603-EJD

Manchouck v. Mondelez Int’l, Inc.,

2013 U.S. Dist. LEXIS 138877 (N.D. Cal. Sept. 26, 2013). ...........................................................5

Mazza v. Am. Honda Motor Co.,

66 F.3d 581 (9th Cir. 2012) .....................................................................................................11, 12

Mohamed v. Kellogg Co.,

2015 U.S. Dist. LEXIS 181088 (S.D. Cal. Aug. 19, 2015) .............................................................6

Moua v. IBM,

2012 U.S. Dist. LEXIS 156311 (N.D. Cal. Oct. 30, 2012)..............................................................3

PhotoMedex, Inc. v. Irwin,

601 F.3d 919 (9th Cir. 2010) ...........................................................................................................7

Red v. Kraft Foods, Inc.,

2012 U.S. Dist. LEXIS 164461 (C.D. Cal. Oct. 25, 2012)..............................................................5

Salazar v. Honest Tea, Inc.,

2015 U.S. Dist. LEXIS 153397 (E.D. Cal. Nov. 11, 2015).............................................................7

Stack v. Lobo,

903 F. Supp. 1361 (N.D. Cal. 1995) ................................................................................................3

Sullivan v. Oracle Corp.,

51 Cal. 4th 1191 (2011) .................................................................................................................11

In re Tobacco II Cases,

46 Cal. 4th 298 (2009) .....................................................................................................................2

Trazo v. Nestle USA, Inc.,

2013 U.S. Dist. LEXIS 113534 (N.D. Cal. Aug. 9, 2013).........................................................7, 10

Van Koenig v. Snapple Beverage Corp.,

713 F. Supp. 2d 1066 (E.D. Cal. 2010)............................................................................................8

Victor v. R.C. Bigelow, Inc.,

2014 U.S. Dist. LEXIS 34550 (N.D. Cal. Mar. 14, 2014)...............................................................7

Williams v. Gerber Prods.,

552 F.3d 934 (9th Cir. 2008) .......................................................................................................2, 6

Wilson v. Frito-Lay N. Am.,

961 F. Supp. 2d 1134 (N.D. Cal. 2013) .........................................................................................13

Statutes/Administrative Regulations

21 C.F.R. § 101.22(i)(1)...............................................................................................................6, 9, 11

21 C.F.R. § 101.22(a)(1)......................................................................................................................11

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iv REPLY MEMORANDUM OF LAW IN SUPPORT

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Case No. 5:17-cv-00603-EJD

21 C.F.R. § 101.22(a)(2)....................................................................................................................6, 8

21 C.F.R. § 101.22(a)(3)........................................................................................................................8

21 C.F.R. § 101.22(h)(1)....................................................................................................................8, 9

21 C.F.R. § 102.5(a).............................................................................................................................10

21 C.F.R. § 102.5(b)-(c).............................................................................................................7, 10, 11

21 U.S.C. § 337(a) .................................................................................................................................7

Other Authorities

Fed. R. Civ. P. 8(a) ................................................................................................................................3

Fed. R. Civ. P. 9(b) ................................................................................................................................3

Fed. R. Civ. P. 12(b)(6)........................................................................................................................12

Fed. R. Civ. P. 15(a) ............................................................................................................................13

Fed. R. Evid. 201(b)(2)..........................................................................................................................8

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1 REPLY MEMORANDUM OF LAW IN SUPPORT

OF DEFENDANT’S MOTION TO DISMISS

Case No. 5:17-cv-00603-EJD

PRELIMINARY STATEMENT

In opposing Coca-Cola’s motion to dismiss, Plaintiff concedes that the statement “Made

With Real Ginger,” on Seagram’s Ginger Ale, does not suggest to consumers that the product

delivers health benefits. She also concedes that the statement does not convey the presence of ginger

in any specific quantity. As to literal truth, Plaintiff acknowledges that she “does not currently

know” whether the flavoring ingredients in Seagram’s Ginger Ale actually contain real ginger.

Finally, she concedes that her complaint stems entirely from the statement on Seagram’s Ginger Ale

packaging, as opposed to its appearance in marketing and advertising materials.

After these concessions, there is not much left of Plaintiff’s complaint. Nevertheless, she

argues that what remains is sufficient to state a claim under California’s consumer-protection

statutes. Plaintiff argues that “Made With Real Ginger” misleads consumers to believe that the

product contains “real ginger” when, she speculates, it actually contains only a “lab-manufactured

chemical compound . . . derived from ginger.” Plaintiff further posits that the labeling of Seagram’s

Ginger Ale violates several FDA regulations, giving rise to a claim under the “unlawful” prong of

the UCL.

These arguments are meritless. Plaintiff admits that she has no knowledge of how the

flavoring ingredients for Seagram’s Ginger Ale are produced, and cannot withstand dismissal by

speculating that they are “lab-manufactured” without real ginger. Seagram’s Ginger Ale does, in

fact, contain real ginger—not some “lab-manufactured chemical compound” designed to mimic the

flavor of ginger. A complaint does not state a cause of action simply because it sets forth an

unsupported fantasy that the defendant has outright lied about the contents of its product.

Plaintiff also cannot salvage her complaint by invoking technical FDA regulations and

asserting, in conclusory fashion, that Coca-Cola has violated them. The complaint contains no facts

that establish that any of the claimed violations occurred. And even if it did, a UCL claim cannot

proceed, under the “unlawful” prong or otherwise, absent an allegation that the violation in question

resulted in some injury. Plaintiff does not and cannot allege that the purported regulatory violations

to which she refers misled or injured consumers.

Finally, Plaintiff argues that she should be permitted to proceed with her claims on behalf of

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2 REPLY MEMORANDUM OF LAW IN SUPPORT

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Case No. 5:17-cv-00603-EJD

a putative nationwide class until such time as the court conducts a choice-of-law analysis in

connection with a motion for class certification. But Plaintiff bears the initial burden of

demonstrating a sufficient connection between the class members and the state of California. The

allegations of the complaint establish that she cannot meet this burden. Her claims on behalf of a

nationwide class should be dismissed now.

ARGUMENT

I. PLAINTIFF HAS NOT ALLEGED A FALSE OR MISLEADING STATEMENT

As set forth in our initial brief, each of Plaintiff’s claims requires a plausible allegation that

Coca-Cola made a false or misleading statement. (See Def. Op. Br. at 7-9) To state a claim for

fraud, Plaintiff must point to a statement that was “actually false, [and] known to be false by the

perpetrator.” In re Tobacco II Cases, 46 Cal. 4th 298, 312 (2009). And to assert a claim under

California’s consumer-protection statutes, Plaintiff must identify a statement that is either false or

“actually misleading or . . . has a capacity, likelihood or tendency to deceive or confuse the public.”

Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (internal quotation marks omitted).

Plaintiff has done neither, and makes clear in her opposition brief that her objections to the claim

“Made With Real Ginger” are based on sheer speculation.

A. Plaintiff Cannot Plausibly Allege That “Made With Real Ginger” Is False

The statement that Seagram’s Ginger Ale is “Made With Real Ginger” is true: the product’s

flavoring ingredients include ginger root, the edible portion of the ginger plant. Plaintiff’s complaint

does not allege otherwise, and in fact acknowledges that real ginger root “may” be used in the ginger

flavoring. (Compl. ¶ 26)

In her opposition, however, Plaintiff claims that “Defendant’s Product is not flavored with

and does not contain any real ginger, but is instead flavored using a chemical compound developed

in a laboratory that mimics the flavor of real ginger.” (Pl. Opp. Br. at 6). In other words, Plaintiff

suggests that Seagram’s Ginger Ale contains no trace of ginger—either because no ginger is used in

the flavoring at all, or because the flavor formulation process alters the ginger so fundamentally as to

transform it into an entirely different “chemical compound.”

These assertions contradict the allegations in Plaintiff’s complaint, which acknowledged the

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3 REPLY MEMORANDUM OF LAW IN SUPPORT

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Case No. 5:17-cv-00603-EJD

possibility that Seagram’s Ginger Ale flavoring contained “extracted oils or essences from the ginger

root.” (Compl. ¶ 26) Moreover, Plaintiff concedes that her contentions regarding the absence of

ginger are nothing more than conjecture: she “[d]oes not currently know exactly what steps

Defendant[] . . . follows to synthesize the chemical flavoring compounds used in the Product.” (Pl.

Opp. Br. at 1) Simply put, Plaintiff has not alleged, and admits she has no basis to allege, that the

flavoring for Seagram’s Ginger Ale is devoid of “real ginger.” Her rank speculation is insufficient

to satisfy the pleading standards of Fed. R. Civ. P. 8(a) and 9(b).

Courts in this Circuit routinely dismiss consumer-protection claims that, like this one, are

based on guesswork. In Hadley v. Kellogg Sales Co., 2017 U.S. Dist. LEXIS 40825 (N.D. Cal. Mar.

21, 2017), the court considered a claim “premised on [the defendant’s] ‘excessive’ use of added

sugar,” where the plaintiff had failed to “allege the amount of added sugar for each product.” Id. at

*24. The court rejected the plaintiff’s protestations that “the precise amount of added sugar in [the

challenged] products [was] currently within [the defendant’s] exclusive knowledge,” reasoning that

“[if] Plaintiff conducted a proper Rule 11 investigation before filing the instant suit,” he “must have

access to at least some knowledge concerning the amount of sugar in [the defendant’s] products,” or

else his “claims are groundless.” Id. at *21-22; see also Moua v. IBM, 2012 U.S. Dist. LEXIS

156311, at *13 (N.D. Cal. Oct. 30, 2012) (Davila, J.), (cautioning “against unlocking the doors of

discovery to a plaintiff asserting mere speculation”) (internal quotation marks omitted); Elan

Microelectronics Corp. v. Apple, Inc., 2009 U.S. Dist. LEXIS 83715, at *10 (N.D. Cal. Sept. 14,

2009) (“[R]egardless of what knowledge may lie exclusively in the possession of [the defendant] . . .

[s]imply guessing or speculating that there may be a claim is not enough”); Stack v. Lobo, 903 F.

Supp. 1361, 1369 (N.D. Cal. 1995) (“Pure speculation [that a defendant made a misrepresentation]

does not enable Plaintiffs to survive a motion to dismiss and entitle them to conduct discovery on

their claims.”).

Here too, Plaintiff has premised her complaint on “pure speculation” that the flavoring for

Seagram’s Ginger Ale is a “lab-manufactured chemical” that merely “mimics” the taste of real

ginger. Nowhere does she assert that she performed any empirical tests of the product, or took any

other steps to verify her unsupported hunch that Coca-Cola’s “Made With Real Ginger” claim is

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4 REPLY MEMORANDUM OF LAW IN SUPPORT

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Case No. 5:17-cv-00603-EJD

false. Indeed, Plaintiff admits in her opposition brief that she has no facts to substantiate this

baseless charge. Her fraud and consumer-protection claims must be dismissed on this basis alone.

B. Plaintiff Cannot Plausibly Allege That “Made With Real Ginger” Is Misleading

Plaintiff has also failed to allege any facts that show that the statement “Made With Real

Ginger,” though literally true, is likely to mislead a reasonable consumer. Although both her

complaint and her opposition brief attribute a substantial array of health benefits to “real ginger,” she

disclaims any theory that the statement misleads consumers as to the health benefits of Seagram’s

Ginger Ale. (See Compl. ¶¶ 23-24, 45-46, 56; Pl. Opp. Br. at 8) She also disavows any suggestion

that consumers will understand the claim to mean that “the Product contains ‘a significant amount of

ginger’ or any ‘specific’ amount of ginger.” (Pl. Opp. Br. at 9)

Instead, Plaintiff asserts that “reasonable consumers . . . will expect that . . . Defendant’s

ginger ale is actually made or flavored with real ginger,” when in fact it is flavored with “some labmanufactured chemical compound. . . derived from ginger.” (Pl. Opp. Br. at 2) In other words, she

maintains that the claim is misleading because the ginger flavoring in Seagram’s Ginger Ale takes

the form of a “chemical compound”—a phrase that Plaintiff invokes nine times throughout her brief.

See, e.g., Pl. Opp. Br. at 3 (“Defendant does not disclose on its labels that the Product is flavored

with a chemical compound rather than real ginger”); id. at 6 (“it is literally false to claim that the

Product is ‘MADE WITH REAL GINGER’ if the truth is that it is ‘MADE WITH A CHEMICAL

COMPOUND THAT WAS DERIVED FROM REAL GINGER’’’); id. at 1, 2, 3, 4, 7, 10 n.3.

This is nonsensical. If Plaintiff means to suggest that the flavoring in Seagram’s Ginger Ale

does not include ginger in any recognizable form, that claim is entirely speculative for the reasons

discussed above. And if she means to suggest that the presence of any “chemical compound” that

contributes to the product’s ginger flavor renders the claim misleading, that is all the more illogical.

In a technical sense, Seagram’s Ginger Ale, like all physical matter on Earth, is composed entirely of

“chemical compounds,” the most predominant of which is water. Some of these compounds are

extracted from real ginger root, so the product is “made with real ginger.” The truism that

Seagram’s Ginger Ale is made up of “chemical compounds” cannot turn this true statement into a

false or misleading one.

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5 REPLY MEMORANDUM OF LAW IN SUPPORT

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To the extent Plaintiff’s claims arise from her charge that the flavoring incorporates “oils or

essences” from ginger root—as opposed to the whole root—that too is nonsensical. (Compl. ¶ 26;

Pl. Opp. Br. at 10) Consumers understand that it is not physically possible to incorporate ginger root

into a soft drink without first reducing it to “oils” or “essences.” A reasonable consumer would not

interpret the phrase “Made With Real Ginger,” affixed to a carbonated soft drink, to mean that the

soft drink contains the entire edible portion of the ginger plant.

This Court need not credit Plaintiff’s implausible suggestions to the contrary. It is well

settled that a consumer-protection claim cannot be premised on the notion that consumers reading

product labels will “disregard ‘well-known facts of life’ and assume things about the products other

than what the statement actually says.” Red v. Kraft Foods, Inc., 2012 U.S. Dist. LEXIS 164461, at

*9-10 (C.D. Cal. Oct. 25, 2012) (noting that “a reasonable consumer will be familiar with the fact of

life that a cracker is not composed of primarily fresh vegetables.”). In Manchouck v. Mondelez

International, Inc., 2013 U.S. Dist. LEXIS 138877 (N.D. Cal. Sept. 26, 2013), aff’d, 603 F. App’x

632, 633 (9th Cir. May 18, 2015), for example, the court rejected a claim that the statement “Made

With Real Fruit”—made in connection with Strawberry and Raspberry Newton sandwich cookies—

was misleading where the cookies contained only “a small amount of processed fruit puree.” The

court there concluded that the plaintiff had “not plausibly alleged why the statement ‘made with real

fruit’ would not include mechanically separated fruit puree,” and called it “ridiculous to say that

consumers would expect snack food ‘made with real fruit’ to contain only ‘actual strawberries or

raspberries,’ rather than those fruits in a form amenable to being squeezed inside a Newton

[cookie].” Id. at *9-10. It is just as “ridiculous” to posit that consumers are unaware of the fact that

the ginger in Seagram’s Ginger Ale must be present in a manner that renders it “amenable” to

absorption into a soft drink. See also Henderson v. Gruma Corp., 2011 U.S. Dist. LEXIS 41077, at

*33-34 (C.D. Cal. Apr. 11, 2011) (dismissing a claim based on the label statement “With Garden

Vegetables” where the product in question, a “Guacamole-Flavored dip,” contained “avocado

powder, dehydrated onion, garlic powder, and bell pepper”—all of which, the court reasoned,

constituted “vegetables that can be grown in a garden.”).

Although she asserts that dismissal of a consumer-protection complaint for failure to allege a

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misleading statement is “rare,” Plaintiff cites no case in which a court has upheld a complaint based

upon a truthful claim that a product is “made with” an identified ingredient. Most of the cases she

cites address statements that a product is “all natural” or “made with natural ingredients,” and are

accordingly irrelevant. See Ham v. Hain Celestial Grp., Inc., 70 F. Supp. 3d 1188, 1195 (N.D. Cal.

2014) (addressing “All Natural” claim made on a box of waffles); Mohamed v. Kellogg Co., 2015

U.S. Dist. LEXIS 181088 (S.D. Cal. Aug. 19, 2015) (addressing claim that a product was “Made

With Natural Ingredients”); Campen v. Frito-Lay N.A., 2013 U.S. Dist. LEXIS 47126 (N.D. Cal.

Apr. 1, 2013) (addressing “All Natural” claims); Colucci v. ZonePerfect Nutrition Co., 2012 U.S.

Dist. LEXIS 183050 (N.D. Cal. Dec. 28, 2012) (addressing identification of products as “All-Natural

Nutrition Bars.”) And her citation to Williams v. Gerber gets her nowhere: that case concerned the

claim “Made With Real Fruit Juice,” juxtaposed with prominent vignettes of four fruits, where it was

undisputed that the product “contained no fruit juice from any of the fruits pictured on the

packaging.” Williams, 552 F.3d at 936 (emphasis added). Here, by contrast, the product actually

contains ginger—the only ingredient touted on the product packaging.

Plaintiff has failed to identify any statement that could plausibly mislead a reasonable

consumer. Her complaint must therefore be dismissed.

II. PLAINTIFF DOES NOT ADEQUATELY ALLEGE A CONSUMER-PROTECTION

CLAIM BASED ON SUPPOSED REGULATORY VIOLATIONS

In its opening brief, Coca-Cola noted that Plaintiff’s complaint cited to a laundry list of FDA

regulations Coca-Cola purportedly had violated, with virtually no supporting factual allegations.

(Def. Op. Br. at 10-11) In her opposition, Plaintiff narrows her focus to three regulations (only two

of which were mentioned in her complaint), and asserts— with minimal supporting facts—that the

labeling of Seagram’s Ginger Ale runs afoul of them. Plaintiff posits that, even if the claim “Made

With Real Ginger” did not mislead consumers, the Seagram’s Ginger Ale label violated FDA

regulations by (1) designating ginger as a “natural flavor” rather than declaring it specifically on the

ingredient list, see 21 C.F.R. §§ 101.22(a)(2), 101.22(h)(1); (2) failing to comply with specialized

regulations applicable to the small subset of foods “commonly expected to contain a characterizing

food ingredient,” see 21 C.F.R. § 101.22(i)(1)(i); and (3) failing to disclose the percentage of ginger

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in the product, see 21 C.F.R. § 102.5(b)-(c). Plaintiff urges the Court to overlook her failure to

allege any false or misleading statement, and to permit the case to proceed on an “unlawful” theory,

grounded on these purported regulatory violations. (See Pl. Opp. Br. at 12-13)

This gambit is unavailing. It is well established that a technical violation of FDCA

regulations—absent any plausible allegation of injury to consumers—cannot support a claim under

any provision of California’s consumer-protection statutes, including the “unlawful” prong of the

UCL. Rather, a “[p]laintiff[] must connect the dots showing how the alleged misbranding misled

plaintiffs in a way that a reasonable consumer would be deceived.” Trazo v. Nestle USA, Inc., 2013

U.S. Dist. LEXIS 113534, at *34 (N.D. Cal. Aug. 9, 2013); see also Bush v. Mondelez Int’l, Inc.,

2016 U.S. Dist. LEXIS 140013, at*11-12 (N.D. Cal. Oct. 7, 2016) (dismissing consumer-protection

complaint based on violation of FDA slack-fill regulations, on the grounds that “even claims based

on unlawful misrepresentations require a showing of reasonable reliance under the UCL”); Salazar

v. Honest Tea, Inc., 2015 U.S. Dist. LEXIS 153397, at *16 (E.D. Cal. Nov. 11, 2015) (“Courts

generally agree that a plaintiff cannot circumvent the reliance requirement by arguing that statements

are ‘per se’ misleading if the statements violate a technical FDA regulation”); Victor v. R.C.

Bigelow, Inc., 2014 U.S. Dist. LEXIS 34550, at *21 (N.D. Cal. Mar. 14, 2014) (holding that where a

consumer-protection plaintiff’s claim “sound in fraud, he must plead actual reliance for all his causes

of action, including his ‘unlawful’ claim”); Hadley, 2017 U.S. Dist. LEXIS 40825, at *42

(dismissing UCL claim based on technical FDCA violations where the plaintiff had failed to “set

forth what is false or misleading about the particular claims such that a reasonable consumer would

be misled.”) (internal quotation marks omitted).1 Here, Plaintiff has not alleged that any statement

on Seagram’s Ginger Ale packaging is misleading to reasonable consumers, and her invocation of

1 As these cases reflect, California courts have concluded, as a matter of statutory interpretation, that

the UCL does not permit claims for pure “technical” food-labeling violations absent a showing of

reliance and injury. In addition, all such claims are preempted by the FDCA, which does not permit

a private right of action for violation of its provisions or regulations. 21 U.S.C. § 337(a); see also

PhotoMedex, Inc. v. Irwin, 601 F.3d 919, 928 (9th Cir. 2010) (unfair-competition claims are

preempted when they would “require a court to usurp the FDA’s prerogative to enforce the FDCA

and to decide whether, under the FDCA and its regulations,” a regulatory violation occurred); In re

Epogen & Aranesp Off-Label Mktg. & Sales Practices Litig., 590 F. Supp. 2d 1282, 1290-91 (C.D.

Cal. 2008) (private plaintiffs are preempted from using “state unfair competition laws as a vehicle to

bring a private cause of action that is based on violations of the FDCA.”).

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technical regulatory provisions cannot cure that fundamental deficiency.

Moreover, any suggestion that consumers were misled by these putative regulatory violations

is not only unsupported by factual allegations, but inconsistent with the allegations that do appear in

Plaintiff’s complaint. Plaintiff claims in her opposition brief that if Seagram’s Ginger Ale were

“actually flavored using real ginger, FDA regulations would require ginger to be listed as an

ingredient,” rather than subsumed under the heading “natural flavors,” as was the case in a nowdiscontinued version of the Seagram’s Ginger Ale package.2

See Pl. Opp. at 9-10 (citing 21 C.F.R.

§§ 101.22(a)(2), 101.22(h)(1)). But even if Plaintiff could show that Coca-Cola’s use of the “natural

flavors” designation was improper, she has not alleged any facts suggesting that Coca-Cola’s

omission of “ginger” from the Seagram’s ingredient list was misleading to reasonable consumers.

Indeed, such an allegation would undermine her central claim: her objection to the labeling of

Seagram’s Ginger Ale is that it overstated the presence of ginger in the product.

In any event, Plaintiff’s charge that listing ginger as a “natural flavor” violated FDCA

regulations has no merit. Natural flavors, including those derived from “spices,” may be declared

generically as “natural flavors” per 21 C.F.R. § 101.22(h)(1); see also 21 C.F.R. § 101.22(a)(3)

(providing that a “natural flavor” may be “derived from a spice”). The separate designation “spices”

is appropriate only when the ingredient appears “in the whole, broken, or ground form”—which, as

detailed above, could never be the case in a soft drink. 21 C.F.R. § 101.22(a)(2).3

2 As shown in Coca-Cola’s Request for Judicial Notice and Exhibit A thereto, the current labels for

Seagram’s Ginger Ale specifically identify “ginger” as an ingredient. (See Dkt. No. 26-1)

Plaintiff’s opposition to Coca-Cola’s Request for Judicial Notice is unfounded: courts regularly take

judicial notice of product labels that are specifically referenced in the pleadings. The fact that CocaCola submitted a two-dimensional proof rather than a full product sample, for the Court’s

convenience, does not foreclose judicial notice. See, e.g., Dvora v. General Mills, Inc., No. CV 11-

1074-GW(PLAx), 2011 U.S. Dist. LEXIS 55513, at *4 (C.D. Cal. May 16, 2011) (taking judicial

notice of a color copy of the cereal box referenced throughout the plaintiff’s complaint); Van Koenig

v. Snapple Beverage Corp., 713 F. Supp. 2d 1066, 1073 (E.D. Cal. 2010) (same for juice bottle

labels). Should the Court credit Plaintiff’s contention that a two-dimensional proof is not amenable

to judicial notice, Coca-Cola is prepared to submit a three-dimensional product sample for judicial

notice. Similarly, although Coca-Cola disagrees with Plaintiff’s assertion that authentication is

necessary for a document whose “accuracy cannot reasonably be questioned,” Fed. R. Evid.

201(b)(2), Coca-Cola is prepared to submit an authenticating declaration from a representative with

personal knowledge if the Court so requests.

3

Plaintiff’s charge that Coca-Cola’s decision “to leave ginger off of the ingredient list . . . is

arguably an admission that real ginger has ‘no technical or functional effect in that food,’ meaning

that real ginger could not have been the flavoring agent,” is an exercise in circular reasoning. (See

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Plaintiff’s citation to 21 C.F.R. § 101.22(i)(1)(i) is likewise unpersuasive. That regulation

provides that, for any food that is “commonly expected to contain a characterizing food ingredient,

e.g., strawberries in ‘strawberry shortcake,’” but does not contain enough of the ingredient to give

the food the flavor in question, the name of the “expected” characterizing ingredient must be

followed by the word “flavored.” Id. (emphasis added). According to Plaintiff, this regulation

requires Coca-Cola to label Seagram’s Ginger Ale as “made with natural ginger flavor” rather than

“made with real ginger.”4

Plaintiff, however, alleges no facts to support her claim that the Seagram’s Ginger Ale label

violated this provision. By its terms, the regulation applies only to those products that contain “an

amount of characterizing ingredient [i.e., ginger] insufficient to independently characterize the

food.” Id. (emphasis added). Plaintiff cannot does not and cannot allege that is true of Seagram’s

Ginger Ale: as she has admitted, she has no knowledge about how the ginger flavoring for

Seagram’s is formulated, how much ginger it contains, or whether that quantity is sufficient to

“independently characterize the food.” Accordingly, Plaintiff’s claim that the labeling for Seagram’s

Ginger Ale violated § 101.22(i)(1)(i) is just as speculative as her claim that the product contains no

real ginger at all.

Moreover, Plaintiff does not explain, either in her complaint or in her opposition brief, how

this violation, if it occurred, would have caused reasonable consumers to be misled. In particular,

she has not alleged that reasonable consumers “commonly expect” a product labeled as a “ginger

ale” to contain ginger. Indeed, she cannot allege that, because the gravamen of her complaint is that

“Made With Real Ginger” claim gave Seagram’s Ginger Ale an unfair competitive advantage over

other ginger ales. See Compl. ¶ 46 (alleging that “Made With Real Ginger” positions Seagram’s as

Pl. Opp. Br. at 10) As Coca-Cola explained in its opening brief, it did not “leave ginger off of the

ingredient list,” but included it under the heading “natural flavors,” precisely because ginger acted as

a flavoring agent. (See Def. Op. Br. at 6 (citing 21 C.F.R. § 101.22(h)(1)) Plaintiff’s theory that

ginger must have had “no technical or functional effect” in the product assumes the accuracy of her

erroneous position that ginger cannot be listed as a “natural flavor.”

4

In this, too, Plaintiff is incorrect: if 21 C.F.R. § 101.22(i)(1)(i) applied to Seagram’s Ginger Ale

(which it does not), it would actually require Coca-Cola to label the product “Seagram’s Ginger

Flavored Ale”— a name that, to Coca-Cola’s knowledge, has never been affixed to any product in

the marketplace, and would be profoundly confusing to consumers.

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“superior to, better than, and more nutritious and healthful than other brands of ginger ale” and that

Coca-Cola included the statement to compete with “other brands of ginger ales that do not contain

the . . . representation”); ¶ 58 (alleging that Plaintiff paid a price premium over “similar soft

drink[s]” as a result of the claim). Plaintiff cannot have it both ways: if the claim “Made With Real

Ginger” induced consumers to choose Seagram’s over competing ginger ales, it cannot also be true

that consumers “commonly expect” ginger ale to be made with real ginger. In short, Plaintiff cannot

“connect the dots” and show that this supposed regulatory violation “misled plaintiffs in a way that a

reasonable consumer would be deceived.” Trazo, 2013 U.S. Dist. LEXIS 113534, at *36.

Finally, Plaintiff’s invocation of 21 C.F.R. § 102.5(b)-(c)—which, as she admits, she did not

cite in her complaint—suffers from similar defects. Those paragraphs establish an exception to the

default rule, laid out in § 102.5(a), that every food should be identified by its “common or usual

name . . . that states, in clear terms, what it is.” They provide that, in certain discrete circumstances,5

the common or usual name of the food should be accompanied by “a statement of the presence or

absence of any characterizing ingredient(s) or component(s)” and/ or “the percentage(s) of any

characterizing ingredient(s) or components.” Id.

The problem with Plaintiff’s reliance on this provision is that Seagram’s Ginger Ale already

features “a statement of the presence or absence of [its] characterizing ingredient,” ginger. As

detailed above, Plaintiff cannot plausibly allege that this statement is false. Nor has Plaintiff alleged

that any reasonable consumer would have expectations regarding the percentage of ginger in the

product based upon either its designation as “ginger ale” or the statement “Made With Real Ginger.”

To the contrary, her opposition brief explicitly disclaims that theory: “Plaintiff does not allege that

consumers understand ‘MADE WITH REAL GINGER’ to mean the Product contains a ‘significant

amount of ginger’ or any ‘specific’ amount of ginger.” (Pl. Opp. Br. at 9 (quotation marks omitted))

If Plaintiff’s claims were to proceed, discovery would show that the labeling for Seagram’s

5 Those circumstances, which apply to a small minority of foods, exist where (1) “the labeling or the

appearance of the food may otherwise create an erroneous impression” as to the presence, absence,

or proportion of the ingredient; or (2) the presence, absence, or proportion of the ingredient “has a

material bearing on price or consumer acceptance” of the food. Plaintiff has alleged no facts to

establish that either circumstance exists here.

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Ginger Ale complies with all applicable laws and regulations.6 But Coca-Cola should not have to

undergo that costly discovery simply because Plaintiff has copied-and-pasted a few regulatory

provisions and claimed—with virtually no supporting facts, and no connection to consumer

deception—that the labeling for Seagram’s Ginger Ale violates them. Plaintiff does not and cannot

“set forth what is false or misleading about the particular claims such that a reasonable consumer

would be misled”; accordingly, her invocation of technical labeling FDA regulations cannot save her

complaint. Hadley, 2017 U.S. Dist. LEXIS 40825, at *42.

III. PLAINTIFF’S NATIONWIDE CLASS CLAIMS SHOULD BE DISMISSED

As set forth in Coca-Cola’s opening brief, Plaintiff’s assertion of claims on behalf of all

Seagram’s Ginger Ale purchasers nationwide, under California consumer-protection laws, is

impermissible given California’s presumption against extraterritorial application of its laws.

Sullivan v. Oracle Corp., 51 Cal. 4th 1191, 1207 (2011). In her opposition, Plaintiff argues that (1)

the applicability of California law to non-California class members cannot be determined until the

Court undertakes a choice-of-law analysis; and (2) that analysis should be deferred until the classcertification stage of the case, at which point Coca-Cola will have the burden of showing that

California law should not apply.

This puts the cart before the horse. “Under California’s choice of law rules, the class action

proponent bears the initial burden to show that California has ‘significant contact or significant

aggregation of contacts’ to the claims of each class member.” Mazza v. Am. Honda Motor Co., 66

F.3d 581, 589 (9th Cir. 2012) (emphases added). This showing “is necessary to ensure that

application of California law is constitutional.” Id. at 589-90 (citing Allstate Ins. Co. v. Hague, 449

U.S. 302, 310-11 (1981) (holding that “if a State has only an insignificant contact with the parties

6 As noted above, Plaintiff’s assertion that ginger should have been classified as a “spice”—and thus

called out separately in the ingredient list—is incorrect because ginger is classified as a “spice” only

when it appears in food in “whole, broken, or ground form.” 21 C.F.R. § 101.22(a)(1). Her

assertion that Seagram’s Ginger Ale should have been labeled in accordance with 21 C.F.R. §

101.22(i)(1)(i) is incorrect because a soft drink is not “commonly expected” to contain a

characterizing ingredient; accordingly, that provision does not apply, and Coca-Cola instead labels

Seagram’s Ginger Ale pursuant to 21 C.F.R. § 101.22(i)(1)(iii). And her claim that Seagram’s

Ginger Ale should have been labeled in accordance with 21 C.F.R. § 102.5(b)-(c) is incorrect

because ginger ale is not among the few food products to which those provisions apply.

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and the occurrence or transaction, application of its law is unconstitutional”)). Only after the

plaintiff makes this initial showing does the burden shift to the defendant to show that, under choiceof-law principles, another state’s law should apply. Id. at 590.

Here, the Court need not reach the choice-of-law analysis, because it is clear from the face of

the complaint that Plaintiff cannot meet her “initial burden” of establishing that each class member

has the constitutionally-required “significant contact or significant aggregation of contacts” to

warrant application of California law. By its terms, Plaintiff’s proposed class definition—which

includes “[a]ll persons” who purchased Seagram’s Ginger Ale between December 23, 2012 and the

present—encompasses individuals who do not live in California, have never purchased Seagram’s

Ginger Ale in California, and have never even set foot in California. Accordingly, this Court can

and should dismiss her claims on behalf of a nationwide class pursuant to Fed. R. Civ. P. 12(b)(6).

See General Tel. Co. of the Southwest v. Falcon, 457 U.S. 147, 160 (1982) (“Sometimes the issues

are plain enough from the pleadings to determine whether the interests of the absent parties are fairly

encompassed within the named plaintiff’s claim.”).

Although Plaintiff notes that some courts have considered this issue at the class-certification

stage, she articulates no reason why that approach is preferable in this case, and there is none. CocaCola should not be subject to costly nationwide discovery, or compelled to brief a complex choiceof-law issue, when it is apparent from the face of Plaintiff’s complaint that she cannot meet her

burden of establishing “significant contact” between California and the class members who have no

connection to California. That is why some courts have addressed this issue at the pleading stage—

not, as Plaintiff suggests, because they “got the analysis wrong.” See, e.g., Gershman v. Bayer

HealthCare LLC, No. 14-05332-HSG, 2015 U.S. Dist. LEXIS 60835, at *19 (N.D. Cal. May 8,

2015) (“Plaintiffs also argue that choice-of-law analyses should not be considered until the class

certification stage . . . [b]ut at this stage the Court is determining the jurisdictional reach of the UCL,

not deciding what substantive law should apply to a certified class”); Figy v. Frito-Lay N. Am., Inc.,

67 F. Supp. 3d 1075, 1087 (N.D. Cal. 2014) (dismissing claims on behalf of non-California class

members for whom “none of the alleged misconduct or injuries occurred in California,” and

distinguishing this analysis from “the choice of law inquiry often required at the class certification

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stage”); Wilson v. Frito-Lay N. Am., 961 F. Supp. 2d 1134, 1148 (N.D. Cal. 2013) (dismissing class

claims on behalf of non-California purchasers, after concluding that “there is no plausible way for a

non-California citizen who purchased Defendant’s Products outside California to bring these

claims.”). This Court should take the same approach here.

IV. PLAINTIFF SHOULD NOT BE GIVEN LEAVE TO AMEND

Finally, having failed to state a claim in her complaint, or to identify any plausible bases for

her claim in her opposition brief, Plaintiff asks for yet another chance to state a claim for relief, this

time by obtaining leave to amend her pleading. The Court should deny this request.

Courts have discretion to deny leave to amend on the grounds of “futility of amendment.”

See Fed. R. Civ. P. 15(a); Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 893 (9th Cir. 2010)

(upholding denial of leave to amend on futility grounds). Here, Plaintiff has admitted that she has no

facts to back up her core contention that the claim “Made With Real Ginger” is false. She has

repeatedly failed to articulate any manner in which the claim is misleading to consumers. And she

has not alleged that any putative regulatory violation had the potential to mislead consumers. No

amendment can cure these fundamental deficiencies. Her request for leave to amend should be

denied.

CONCLUSION

Plaintiff has filed a bogus action premised upon the mistaken assertion that Seagram’s

Ginger Ale contains no real ginger, and instead is flavored with a “chemical compound” that merely

“mimics” the flavor of ginger. There is no support for this baseless assertion in Plaintiff’s

complaint, and indeed, it is false. For the reasons set forth above and in its opening brief, The CocaCola Company respectfully requests that this Court dismiss the complaint, in its entirety, with

prejudice.

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Dated: April 3, 2017

Respectfully submitted,

/s/ Steven A. Zalesin

Steven A. Zalesin (admitted pro hac vice)

Michelle W. Cohen (admitted pro hac vice)

PATTERSON BELKNAP WEBB & TYLER LLP

1133 Avenue of the Americas

New York, NY 10036-6710

Telephone: 212-336-2000

Facsimile: 212-336-2222

sazalesin@pbwt.com

mcohen@pbwt.com

Tammy B. Webb

SHOOK HARDY & BACON LLP

One Montgomery Tower, Suite 2700

San Francisco, CA 94104

Telephone: 415-544-1904

Facsimile: 415-391-0281

tbwebb@shb.com

Attorneys for Defendant

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