Court Opinion

ID: 4468211
Source: CourtListenerOpinion
Date Created: 2019-12-30 18:00:29.449777+00
Date Added: 2024-06-11T08:48:41.030348
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 SHANA BECERRA, on behalf                       No. 18-16721
 of herself, all others similarly
 situated, and the general                       D.C. No.
 public,                                   3:17-cv-05921-WHO
             Plaintiff-Appellant,

                  v.                              OPINION

 DR PEPPER/SEVEN UP, INC.,
         Defendant-Appellee.

       Appeal from the United States District Court
            for the Northern District of California
      William Horsley Orrick, District Judge, Presiding

           Argued and Submitted December 4, 2019
                  San Francisco, California

                       Filed December 30, 2019

            Before: Eugene E. Siler,* Jay S. Bybee,
             and Ryan D. Nelson, Circuit Judges.

                       Opinion by Judge Bybee

    *
      The Honorable Eugene E. Siler, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
2              BECERRA V. DR PEPPER/SEVEN UP

                            SUMMARY**

                  California Consumer Fraud

   The panel affirmed the district court’s dismissal
of plaintiff’s third amended complaint alleging that
Dr Pepper/Seven Up, Inc. violated various California
consumer-fraud laws by branding Diet Dr Pepper using the
word “diet.”

    The panel held that the allegations in the complaint failed
to sufficiently allege that reasonable consumers read the word
“diet” in a soft drink’s brand name to promise weight loss,
healthy weight management, or other health benefits. The
panel held that diet soft drinks are common in the
marketplace and the prevalent understanding of the term in
that context is that the “diet” version of a soft drink has fewer
calories than its “regular” counterpart. Just because some
consumers may unreasonably interpret the term differently
does not render the use of “diet” in a soda’s brand name false
or deceptive. Accordingly, because plaintiff had not
sufficiently alleged that Diet Dr Pepper’s labeling was false
or misleading, dismissal was proper.

    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
             BECERRA V. DR PEPPER/SEVEN UP                  3

                        COUNSEL

Jack Fitzgerald (argued), Trevor M. Flynn, and Melanie
Persinger, The Law Office of Jack Fitzgerald PC, San Diego,
California; Andrew Sacks and John Weston, Sacks Weston
Diamond LLC, Philadelphia, Pennsylvania; for Plaintiff-
Appellant.

Evan A. Young (argued), Baker Botts L.L.P., Austin, Texas;
Van H. Beckwith, Baker Botts L.L.P., Dallas, Texas; Ariel D.
House, Baker Botts L.L.P., San Francisco, California; for
Defendant-Appellee.

                         OPINION

BYBEE, Circuit Judge:

    Appellant Shana Becerra sued appellee Dr Pepper/Seven
Up, Inc. (Dr Pepper), alleging that Dr Pepper violated various
California consumer-fraud laws by branding Diet Dr Pepper
using the word “diet.” After the district court dismissed her
third amended complaint with prejudice, Becerra appealed.
We affirm the judgment.

                              I

    In October 2017, Becerra filed her initial complaint,
alleging that Dr Pepper’s naming and marketing of Diet
Dr Pepper violated various provisions of California state law.
She then amended the initial complaint to correct the name of
the defendant, and Dr Pepper moved to dismiss the amended
complaint. Becerra again amended her complaint in response
to the motion to dismiss. Becerra’s second amended
4             BECERRA V. DR PEPPER/SEVEN UP

complaint alleged that the label “diet” misled Diet Dr Pepper
consumers by promising that the product would “assist in
weight loss” or at least “not cause weight gain.” Becerra
relied on several studies to allege that aspartame, the artificial
sweetener used in Diet Dr Pepper, “is likely to cause weight
gain” and “poses no benefit for weight loss,” rendering the
promise allegedly inherent in the word “diet” false and
misleading. The second amended complaint raised five
causes of action: (1) violations of the California False
Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq.;
(2) violations of the California Consumers Legal Remedies
Act, Cal. Civ. Code §§ 1750 et seq.; (3) violations of the
California Unfair Competition Law, Cal. Bus. & Prof. Code
§§ 17200 et seq.; (4) breach of express warranty in violation
of Cal. Com. Code § 2313(1); and (5) breach of the implied
warranty of merchantability in violation of Cal. Com. Code
§ 2314.

    Dr Pepper moved to dismiss the second-amended
complaint and the district court granted the motion without
prejudice, concluding that Becerra failed to sufficiently allege
that reasonable consumers would understand “diet” in a soft
drink’s brand name to promise weight loss and that, even if
she had, the scientific studies she cited failed to support her
allegations that this promise was false. Becerra amended her
complaint and Dr Pepper again moved to dismiss.

    Becerra’s third amended complaint—the operative
complaint in this case—contains the same general allegations
as her second amended complaint, but adds several categories
of allegations in an attempt to correct deficiencies the district
court identified. First, she cited dictionary definitions to
support her allegation that reasonable consumers understand
the word “diet” to promise assistance in weight loss. Second,
                 BECERRA V. DR PEPPER/SEVEN UP                           5

she included references to print and television advertisements
as further support of the allegation that consumers understand
‘diet” soft drinks to offer certain health benefits. Third, she
cited two online articles from the American Beverage
Association (ABA) to further reinforce her reading of the
word “diet.” Finally, she summarized the results of a survey
of California and national consumers, which she contends is
proof that the majority of soft-drink consumers believe “diet”
soft drinks will help them lose or maintain their weight.

    After a hearing, the district court granted Dr Pepper’s
third motion to dismiss. The district court found that no
reasonable consumer would believe that the word “diet” in a
soft drink’s brand name promises weight loss or healthy
weight management and, even if a reasonable consumer
would believe that, Becerra had not sufficiently alleged that
any such promise was false because of insufficient allegations
that aspartame consumption causes weight gain. The district
court dismissed Becerra’s breach-of-warranty claims for the
same reasons.1 Finally, because Becerra’s counsel agreed at
the hearing that there was nothing to add to the complaint, the
district court dismissed the complaint without leave to
amend.2 Becerra filed a timely appeal.

    1
        Becerra does not challenge the dismissal of these claims on appeal.
    2
      Becerra’s suit against Dr. Pepper in California was part of a series
of suits brought against soda manufacturers. Becerra also filed suit in
California against Coca-Cola. We dismiss that suit on jurisdictional
grounds in a memorandum decision filed concurrently with this opinion.
The Second Circuit recently affirmed dismissal of complaints similar to
Becerra’s that were filed under New York’s consumer-fraud laws.
Geffner v. Coca-Cola Co., 928 F.3d 198 (2d Cir. 2019) (per curiam);
Excevarria v. Dr. Pepper Snapple Grp., Inc., 764 F. App’x 108 (2d Cir.
2019); Manuel v. Pepsi-Cola Co., 763 F. App’x 108 (2d Cir. 2019).
6            BECERRA V. DR PEPPER/SEVEN UP

                               II

    We have jurisdiction under 28 U.S.C. § 1291. Dismissal
of a complaint for failure to state a claim is reviewed de novo.
Ebner v. Fresh, Inc., 838 F.3d 958, 962 (9th Cir. 2016). We
accept “all factual allegations in the complaint as true and
constru[e] them in the light most favorable to the nonmoving
party.” Id. (quoting Skilstaf, Inc. v. CVS Caremark Corp.,
669 F.3d 1005, 1014 (9th Cir. 2012)) (internal quotation
marks omitted). Dismissal is appropriate if the plaintiff has
not “allege[d] enough facts to state a claim to relief that is
plausible on its face.” Turner v. City & Cty. of San
Francisco, 788 F.3d 1206, 1210 (9th Cir. 2015) (internal
quotation marks and citation omitted). Determining whether
a complaint states a plausible claim for relief is “a context-
specific task that requires the reviewing court to draw on its
judicial experience and common sense.” Ashcroft v. Iqbal,
556 U.S. 662, 679 (2009).

     Claims sounding in fraud or mistake are subject to the
heightened pleading standard of Federal Rule of Civil
Procedure 9(b), which requires that such claims “state with
particularity the circumstances constituting fraud or mistake.”
This includes “the who, what, when, where, and how of the
misconduct charged.” Vess v. Ciba-Geigy Corp. USA,
317 F.3d 1097, 1106 (9th Cir. 2003) (internal quotation marks
and citation omitted). In fraud cases, plaintiffs “must set
forth what is false or misleading about a statement, and why
it is false.” Decker v. GlenFed, Inc., 42 F.3d 1541, 1548 (9th
Cir. 1994). The allegations of fraud “must be specific enough
to give defendants notice of the particular misconduct which
is alleged to constitute the fraud charged.” Swartz v. KPMG
LLP, 476 F.3d 756, 764 (9th Cir. 2007).
             BECERRA V. DR PEPPER/SEVEN UP                  7

                             III

    Becerra’s claims under the California consumer-
protection statutes are governed by the “reasonable
consumer” test. Williams v. Gerber Prods. Co., 552 F.3d
934, 938 (9th Cir. 2008). Under this standard, Becerra must
“show that members of the public are likely to be deceived.”
Id. (internal quotation marks and citation omitted); see also
Bank of West v. Superior Court, 833 P.2d 545, 553 (Cal.
1992). This requires more than a mere possibility that Diet
Dr Pepper’s label “might conceivably be misunderstood by
some few consumers viewing it in an unreasonable manner.”
Lavie v. Procter & Gamble Co., 129 Cal. Rptr. 2d 486, 495
(Cal. Ct. App. 2003); see id. at 492 (rejecting a “least
sophisticated consumer” standard). Rather, the reasonable
consumer standard requires a probability “that a significant
portion of the general consuming public or of targeted
consumers, acting reasonably in the circumstances, could be
misled.” Id.

    Becerra’s consumer-fraud claims center on two primary
allegations: first, the word “diet” in Diet Dr Pepper’s brand
name promises that the product will assist in weight loss or
healthy weight management and, second, that promise is false
because aspartame causes weight gain. Because Becerra’s
claims depend on both allegations being true, she must
sufficiently allege both for her claims to survive. We will
affirm the judgment on the basis of Becerra’s first allegation
and not reach the second.

    Becerra alleges that, based on Diet Dr Pepper’s use of the
term “diet,” “consumers reasonably believe that drinking Diet
Dr Pepper will assist in weight loss or healthy weight
management.” She contends that the use of “diet” in Diet
8            BECERRA V. DR PEPPER/SEVEN UP

Dr Pepper’s brand name contains an “implicit promise [] that,
because Diet Dr Pepper does not contain sugar or calories, it
will assist in weight loss, or at least healthy weight
management . . . and that it is useful for those who must limit
their sugar intakes.”

    We will begin with the observation that Becerra’s
citations to dictionary definitions of the word “diet” are
citations to the word when used as a verb or noun, as in “he
is dieting” or “she is starting a diet.” But, as Dr Pepper and
the district court noted, “diet” in Diet Dr Pepper is either an
adjective or a proper noun, and that puts the word in a
different light. Becerra’s selective quotations omit the
definitions of “diet” as an adjective and the frequent usage of
“diet soft drinks” as the primary example of the word’s usage
in that context. For example, the Merriam Webster
Dictionary defines the adjective “diet” as “reduced in or
free from calories[—]a diet soft drink.” Diet, MERRIAM-
W EBS TER D I CTI O N A R Y , h t t ps : / / w ww.me r ri a m-
webster.com/dictionary/diet. The other dictionaries cited by
Dr Pepper have the same general definition of “diet” in this
context. See, e.g., Diet, AMERICAN HERITAGE DICTIONARY,
https://www.ahdictionary.com/word/search.html?q=diet
(“Having fewer calories . . . Sweetened with a noncaloric
sugar substitute”); Diet, CAMBRIDGE DICTIONARY,
https://dictionary.cambridge.org/us/dictionary/english/diet
(“(of food or drink) containing much less sugar than usual
and often sweetened artificially, or containing less fat than
usual: diet soda”); Diet, C OLLINS D ICTIONARY,
https://www.collinsdictionary.com/us/dictionary/english/diet
(“Diet drinks or foods have been specially produced so that
they do not contain many calories . . . sugar-free diet drinks”).
             BECERRA V. DR PEPPER/SEVEN UP                    9

    When considering the term in its proper context, no
reasonable consumer would assume that Diet Dr Pepper’s use
of the term “diet” promises weight loss or management. In
context, the use of “diet” in a soft drink’s brand name is
understood as a relative claim about the calorie content of
that soft drink compared to the same brand’s “regular” (full-
caloric) option. See Geffner, 928 F.3d at 200 (“the ‘diet’
label refers specifically to the drink’s low calorie content; it
does not convey a more general weight loss promise”
(footnote omitted)). And considering “diet” as a proper
noun—as in Diet Dr Pepper—does not further Becerra’s
argument. In common usage, consumers know that Diet
Dr Pepper is a different product from Dr Pepper—different
not only in name, but in packaging and, importantly, taste.

     Becerra argues that, regardless of the common
understanding of the word, dismissal was still improper
because she alleged a plausible misunderstanding of the
word. But we have previously affirmed dismissal of claims
based on similar unreasonable assumptions. In Ebner, the
plaintiff claimed that a net-weight statement on packaging for
a lip balm was deceptive because the design of the dispenser
left twenty-five percent of the product inaccessible. 838 F.3d
at 961. We held that similar dispensers were “commonplace
in the market,” such that a reasonable consumer “understands
the general mechanics of these dispenser tubes and further
understands that some product may be left in the tube” even
when pushed all the way up. Id. at 965. “A rational
consumer would not simply assume that the tube contains no
further product” when he or she could see the remaining
product in the tube. Id. at 966. And even if some consumers
would make that assumption, the packaging was not
deceptive just because some consumers could unreasonably
misunderstand the product. Id.
10             BECERRA V. DR PEPPER/SEVEN UP

    The same is true here. Diet soft drinks are common in the
marketplace and the prevalent understanding of the term in
that context is that the “diet” version of a soft drink has fewer
calories than its “regular” counterpart. Just because some
consumers may unreasonably interpret the term differently
does not render the use of “diet” in a soda’s brand name false
or deceptive. See Lavie, 129 Cal. Rptr. 2d at 495.

     Aside from dictionary definitions of “diet,” Becerra also
pointed to Diet Dr Pepper’s advertisements, online articles
from the ABA, and the results of a consumer survey to
support her allegations that reasonable consumers understand
the word “diet” to contain an implicit weight-loss promise.
Becerra first cites a host of Dr Pepper print and television
advertisements dating back to the 1970s. But these ads are
either irrelevant to her claims,3 or make no reference to
weight loss or other health benefits. The statements in the ads
are mainly comparative—that is, they imply that “diet” drinks
often do not taste like their “regular” counterparts, but that
Diet Dr Pepper tastes more like its “regular” counterpart than
other diet soft drinks do. This further supports the conclusion
that reasonable consumers understand “diet” in this context
to be a relative term and not a promise of weight loss or other
health benefits. Becerra also alleges that the use of attractive,
fit models in the ads implies that Diet Dr Pepper will help its
consumers achieve those bodies. But, as the Second Circuit
pointed out when considering a nearly identical complaint,
“[t]he use of physically fit and attractive models using and
enjoying advertised products is so ubiquitous that it cannot be

     3
      Her claim is premised on the allegation that the word “diet” contains
certain inherent promises. Ads for “Sugar Free Dr Pepper” (the soda’s
name before it was rebranded) do nothing to support her claims that the
name “Diet Dr Pepper” is false or misleading.
             BECERRA V. DR PEPPER/SEVEN UP                  11

reasonably understood to convey any specific meaning at all.”
Geffner, 928 F.3d at 200.

    Becerra also cites two 2014 American Beverage
Association blog posts that she claims support her allegation
that reasonable consumers understand “diet” to promise
weight loss. But the content of these articles emphasize that
other lifestyle changes beyond merely drinking diet soft
drinks are necessary to see weight-loss results.

    Finally, Becerra’s third amended complaint summarizes
the results of a 2018 survey of 400 California soft-drink
consumers and 400 nationwide soft-drink consumers.
Becerra alleges that this survey “confirms that the vast
majority of consumers expect a diet soft drink to either help
them lose weight, or help maintain or not affect their weight.”

    As the district court noted, it is difficult to tell what
questions the survey asked to reach its conclusions, but it
appears to have asked four questions to gauge consumer
expectations of diet soft drinks related to one’s weight. Of
the California consumers, only 12.5 percent expected diet soft
drinks to help them lose weight (compared to 15 percent
nationwide), while 63.3 percent expected diet soft drinks to
help maintain/not affect their weight (compared to 62 percent
nationwide).

    The survey cannot, on its own, salvage Becerra’s claim.
Although we must accept the allegations surrounding the
survey as true at this stage of the litigation, a reasonable
consumer would still understand “diet” in this context to be
a relative claim about the calorie or sugar content of the
product. The survey does not address this understanding or
the equally reasonable understanding that consuming low-
12             BECERRA V. DR PEPPER/SEVEN UP

calorie products will impact one’s weight only to the extent
that weight loss relies on consuming fewer calories overall.
At bottom, the survey does not shift the prevailing reasonable
understanding of what reasonable consumers understand the
word “diet” to mean or make plausible the allegation that
reasonable consumers are misled by the term “diet.”

    Taken together, the allegations in the complaint fail to
sufficiently allege that reasonable consumers read the word
“diet” in a soft drink’s brand name to promise weight loss,
healthy weight management, or other health benefits.
Without this piece of the puzzle, Becerra’s consumer-fraud
claims fail.4

                                   IV

    Becerra has failed to sufficiently allege that reasonable
consumers understand the word “diet” in Diet Dr Pepper’s
brand name to promise weight loss, healthy weight
management, or other health benefits. Accordingly, Becerra
has not sufficiently alleged that Diet Dr Pepper’s labeling is
false or misleading and dismissal was therefore proper.

     AFFIRMED.

     4
      Becerra also argues that the district court failed to account for her
deceptive-omission theory of recovery. But this claim fails for the same
reason her false-and-misleading theory does. Because she has failed to
sufficiently allege a weight-loss promise from Dr Pepper, there was
nothing deceptive about Dr Pepper not disclosing to consumers the alleged
possibility of weight gain.