Court Opinion

ID: 9366631
Source: CourtListenerOpinion
Date Created: 2023-01-27 16:00:37.634217+00
Date Added: 2024-06-11T17:15:54.059717
License: Public Domain

21-2827-cv
     Evergreen East Cooperative v. Whole Foods, Inc.

                                UNITED STATES COURT OF APPEALS
                                    FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER

     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
     SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
     FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1.
     WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
     CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
     “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
     ANY PARTY NOT REPRESENTED BY COUNSEL.

 1           At a stated term of the United States Court of Appeals for the Second Circuit, held at the
 2   Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
 3   27th day of January, two thousand twenty-three.
 4
 5   Present:
 6               JOHN M. WALKER, JR.,
 7               REENA RAGGI,
 8               EUNICE C. LEE,
 9                     Circuit Judges.
10   _____________________________________
11
12   EVERGREEN EAST COOPERATIVE,
13
14                            Plaintiff-Appellant,
15
16                   v.                                                       21-2827-cv
17
18   WHOLE FOODS MARKET, INC.,
19
20                            Defendant-Appellee,
21
22   THE HOME DEPOT, INC., BOTTOMLEY EVERGREENS
23   & FARMS, INC.,
24
25                     Defendants.
26   _____________________________________
27
28   For Plaintiff-Appellant:                          Ross M. Babbitt, Ross M. Babbitt Co., LPA,
29                                                     Cleveland, OH.
30
31   For Defendant-Appellee:                           Mitchell B. Levine, Fishman McIntyre Levine
32                                                     Samansky P.C., New York, NY.

                                                            1
1            Appeal from a judgment of the United States District Court for the Southern District of

2    New York (Alison J. Nathan, J.).

3            UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

4    DECREED that the October 22, 2021 judgment of the district court is AFFIRMED.

5            Plaintiff-Appellant Evergreen East Cooperative (“Evergreen”) appeals from an order

 6   dismissing its false advertising claims against Defendant-Appellee Whole Foods Market, Inc.

 7   (“Whole Foods”) pursuant to Fed. R. Civ. P. 12(b)(6).      We assume the parties’ familiarity with

 8   the underlying facts, the procedural history of this case, and the issues on appeal, which we address

 9   only as necessary to explain our decision to affirm.

10           In the operative First Amended Complaint (“FAC”), Evergreen sued Defendants

11   Bottomley Evergreens & Farms, Inc. (“Bottomley”), The Home Depot, Inc. (“Home Depot”), and

12   Whole Foods for false advertising in the sale of Christmas trees in violation of § 43 of the Lanham

13   Act, 17 U.S.C. § 1125, and New York General Business Law (“GBL”) § 349.                  As against

14   Bottomley and Home Depot, Evergreen pleaded specific facts based on personal knowledge, i.e.,

15   that it purchased two “Balsam Fir trees . . . advertised and labeled as Fraser Fir” trees, App’x 38,

16   from “a New York City Home Depot store on December 11, 2019,” and that the receipts for these

17   purchases “clearly indicate[d] that” the trees were “identified by Home Depot as . . . Bottomley

18   Fraser Fir[s],” id.   Indeed, Evergreen attached as Exhibit A to the FAC images of both Bottomley

19   and Home Depot labels identifying the trees in question as Fraser firs, even though the trees were

20   allegedly less-desirable balsam firs.

21           With respect to Whole Foods, however, Evergreen relied almost entirely on information

22   and belief. Thus, Evergreen alleged, “[o]n information and belief, labels identical or substantially

23   identical to Exhibit A were affixed to the Counterfeit Trees [balsam firs] sold by Defendants Home

                                                      2
 1   Depot and Whole Foods in 2019.” Id. at 38. It also alleged, “[o]n information and belief, Whole

 2   Foods sold Fraser Fir and Balsam Fir trees intermixed with each other with signage that indicated

 3   all of the trees offered for sale were Fraser Fir[s].” Id. at 39. Elsewhere, Evergreen alleged that

 4   “Whole Foods . . . sells . . . Bottomley Christmas trees to consumers throughout the New York

 5   City and surrounding regions,” id. at 36, and that, “[o]n information and belief, Whole Foods

 6   deliberately or negligently . . . s[old] [mislabeled trees] in 2019,” id. at 38.

 7           On March 26, 2021, the district court granted Whole Foods’ motion to dismiss the FAC,

 8   correctly stating that, “while a plaintiff may make allegations on information and belief, those

 9   allegations will be sufficient to support a claim for relief only when the factual matter pled supports

10   a plausible inference of culpability.” App’x 95–96 (citing Arista Records, LLC v. Doe 3, 604

11   F.3d 110, 120 (2d Cir. 2010)). Applying that standard, the district court observed that “Evergreen

12   does not identify any false labels on trees sold at Whole Foods” and “makes nearly all its

13   allegations on Whole Foods on information and belief, and those allegations appear to rest on

14   nothing more than the business relationship between Whole Foods and Bottomley. Moreover,

15   Evergreen alleges that Bottomley grows at least some Fraser firs, and so the fact that Whole Foods

16   sells Bottomley trees does not support a plausible inference that it necessarily sold mislabeled

17   balsam firs.” Id. at 96.

18           “We review a district court’s grant of a motion to dismiss de novo, ‘accepting as true all

19   factual claims in the complaint and drawing all reasonable inferences in the plaintiff’s favor.’”

20   Henry v. County of Nassau, 6 F.4th 324, 328 (2d Cir. 2021) (quoting Fink v. Time Warner Cable,

21   714 F.3d 739, 740–41 (2d Cir. 2013)).       To survive a motion to dismiss, a complaint must allege

22   “enough facts to state a claim to relief that is plausible on its face.”   Bell Atl. Corp. v. Twombly,

23   550 U.S. 544, 570 (2007).     “A claim is plausibly alleged ‘when the plaintiff pleads factual content

                                                        3
 1   that allows the court to draw the reasonable inference that the defendant is liable for the misconduct

 2   alleged.’” Nat’l Rifle Ass’n of Am. v. Vullo, 49 F.4th 700, 713 (2d Cir. 2022) (quoting Ashcroft

 3   v. Iqbal, 556 U.S. 662, 678 (2009)). A plaintiff may satisfy the plausibility standard by pleading

 4   facts upon information and belief, but a plaintiff “cannot merely plop ‘upon information and belief’

 5   in front of a conclusory allegation and thereby render it non-conclusory. Those magic words will

 6   only make otherwise unsupported claims plausible when ‘the facts are peculiarly within the

 7   possession and control of the defendant or where the belief is based on factual information that

 8   makes the inference of culpability plausible.’” Citizens United v. Schneiderman, 882 F.3d 374,

 9   384–85 (2d Cir. 2018) (quoting Arista Records, 604 F.3d at 120).

10          Evergreen’s allegations against Whole Foods, made almost entirely “on information and

11   belief,” are neither based on facts “peculiarly within the possession and control of” Whole Foods

12   nor “based on factual information that makes” them plausible.            Id. (internal quotation marks

13   omitted)   The key facts here—how Whole Foods labeled Christmas trees it sold to the general

14   public—are not peculiarly within Whole Foods’ possession or control, as Evergreen could have

15   gone to a Whole Foods store and examined one or more of the Christmas trees offered for sale.

16   Indeed, Evergreen apparently did just that with respect to Bottomley and Home Depot, as

17   demonstrated by Evergreen’s having included with its pleadings labels and receipts for allegedly

18   mislabeled trees sold by Bottomley and Home Depot.            It is thus not the case that Evergreen’s

19   claims against Whole Foods turned on facts unavailable to it prior to discovery.            See Citizens

20   United, 882 F.3d at 384–85 (rejecting as conclusory allegations made on “information and belief”

21   about past public disclosures made by New York’s Attorney General because “[t]here is no reason

22   Appellants could not find at least one inadvertent publication without any help from subpoenas,

23   depositions, or interrogatories.   They are, after all, alleging public disclosures . . . . ”).

                                                        4
 1           As for Evergreen’s other allegations, the only fact supporting the pleading that Whole

 2   Foods sold mislabeled Christmas trees is that Whole Foods sourced some of the Christmas trees it

 3   sold from Bottomley. But this does not admit a plausible inference that Whole Foods sold any

 4   trees bearing a false label because the FAC alleges that Bottomley sold both Fraser firs and balsam

 5   firs.   See Fillmore E. BS Fin. Subsidiary LLC v. Capmark Bank, 552 F. App’x 13, 18 (2d Cir.

 6   2014) (“[T]he ‘factual allegations describe only actions that are consistent with lawful conduct,’

 7   and accordingly ‘the conclusory allegation on information and belief that the observed conduct

 8   was the product of culpable conduct is insufficient to make the claim plausible.’” (alteration marks

 9   omitted) (quoting Arista Records, 604 F.3d at 120)).

10           Insofar as Evergreen also faults the district court for failing to accompany its dismissal

11   order with a sua sponte grant of leave to amend, the argument is defeated by precedent. See

12   Williams v. Citigroup Inc., 659 F.3d 208, 212 (2d Cir. 2011) (“We have described the contention

13   that ‘the District Court abused its discretion in not permitting an amendment that was never

14   requested’ as ‘frivolous.’” (quoting Horoshko v. Citibank, N.A., 373 F.3d 248, 249–50 (2d Cir.

15   2004)). For the first time in its reply brief, Evergreen says that it never had an opportunity to

16   move for leave to amend. It offers no explanation to support the assertion, and the record makes

17   it implausible. There was a seven-month interval between the district court’s ruling on the

18   motions to dismiss and Evergreen’s acceptance of an offer of judgment. We see no reason why

19   Evergreen could not have sought to amend its pleadings during this period.

20           We have considered Evergreen’s remaining arguments and find them to be without merit.

21   Accordingly, we AFFIRM the judgment of the district court.

22                                                          FOR THE COURT:
23                                                          Catherine O’Hagan Wolfe, Clerk of Court

                                                      5