Judge: Daniel S. Murphy, Case: 23STCV27601, Date: 2024-03-22 Tentative Ruling

Case Number: 23STCV27601    Hearing Date: March 22, 2024    Dept: 32

BACKGROUND

            On November 9, 2023, Plaintiff April Reyes filed this action against Tootsie Roll Industries, Inc., asserting (1) fraud and (2) violation of the Consumer Legal Remedies Act (CLRA). The complaint arises from alleged deceptive packaging on Defendant’s candy product, Blow Pop Minis (the Product). Plaintiff alleges that the size of the Product’s packaging suggests a significantly higher quantity of product than is actually found within. Plaintiff alleges that the package is actually less than half full and contains an excessive amount of nonfunctional slack fill. Plaintiff is a consumer tester who purchased the Product in Fall 2023 to test compliance and for personal consumption.

            On February 15, 2024, Defendant filed the instant demurrer to the complaint. Plaintiff filed her opposition on March 11, 2024. Defendant filed its reply on March 15, 2024.

LEGAL STANDARD

A demurrer for sufficiency tests whether a pleading states a cause of action or defense. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the pleading, as it stands, unconnected with extraneous matters, states a cause of action or defense. (Hahn, supra, 147 Cal.App.4th at 747.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court notes that Defendant has complied with the meet and confer requirement. (See Friend Decl.)

EVIDENTIARY OBJECTIONS AND JUDICIAL NOTICE

            Plaintiff’s objections to the Friend Declaration are sustained. (Evid. Code, §§ 210, 352.)

            Defendant’s request for judicial notice is granted as to Exhibits 2 and 3 and denied as to Exhibit 1. (Evid. Code, §§ 451-452.)  

DISCUSSION

I. Safe Harbor

            CLRA prohibits deceptive practices in connection with the sale of goods or services. (Bus. & Prof. Code, §§ 1750 et seq.) Plaintiff alleges that Defendant violated CLRA in the following ways: “(1) misrepresenting the approval of the Product as compliant with 21 C.F.R § 100.100 and the Sherman Law; (2) representing the Product has characteristics and quantities that it does not have; (3) advertising and packaging the Product with intent not to sell it as advertised and packaged; and (4) representing that the Product has been supplied in accordance with a previous representation as to the quantity of product contained within each package, when it has not.” (Compl. ¶ 40.)

            Plaintiff also alleges that none of the slack fill exceptions in 21 C.F.R. § 100.100 applies to the Product. (Compl. ¶¶ 20-32.) For example, Plaintiff alleges that the packaging is not necessary for the protection of the Product, is not a result of the packaging process, etc. Defendant argues that these allegations are conclusory. However, Plaintiff has alleged sufficient ultimate facts for pleading purposes. A demurrer is not the place to test specific evidentiary facts proving or disproving the exceptions. Defendant also cites no authority requiring a plaintiff to affirmatively plead the non-applicability of each exception as an element of their CLRA claim.

            Defendant further argues that the packaging falls under one of the exceptions enumerated in Business and Professions Code section 12606.2, which defines nonfunctional slack fill as the empty space in a packaging that exists for a reason other than those listed. One of the listed exceptions is if “[t]he actual size of the product or immediate product container is clearly and conspicuously depicted on any side of the exterior packaging, excluding the bottom, accompanied by a clear and conspicuous disclosure that the depiction is the ‘actual size’ of the product or immediate product container.” (Bus. & Prof. Code, § 12606.2(c)(7)(B).) The image of the packaging for the Product, which Plaintiff incorporates into her complaint, shows that the packaging contains a depiction of the “actual size” of the product. (See Compl. ¶ 3; Def.’s RJN, Ex. 3.)

            However, Section 12606.2(c)(7)(B) requires the actual size disclosure to be “clearly and conspicuously depicted.” Whether the particular disclosure in this case was clear and conspicuous cannot be resolved on a demurrer. The fact that the image of the packaging is incorporated into the complaint does not authorize the Court to decide at the pleading stage whether the disclosure was clear and conspicuous. This role is reserved for the trier of fact. Whether a reasonable consumer is likely to be deceived by the packaging is likewise a factual issue. Ultimately, Plaintiff has alleged sufficient facts establishing a violation of CLRA.

II. Fraud

“The elements of fraud that will give rise to a tort action for deceit are: ‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974, quoting Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made. (Lazar, supra, 12 Cal.4th at p. 645.)

Plaintiff alleges that Defendant continuously misrepresented through its website, marketing materials, and packaging that the package was full of product when it was actually less than half full. (Compl. ¶ 34.) Plaintiff herself was allegedly deceived in Fall 2023 when she purchased the Product. (Ibid.) Plaintiff alleges that Defendant knew the package was mostly empty and that Defendant intended for consumers to purchase the Product on the belief that the package would be full. (Id., ¶¶ 35-36.) Plaintiff alleges that she reasonably relied on the size of the package and was induced into purchasing the Product. (Id., ¶¶ 37-38.) These allegations satisfy the elements of fraud with the requisite specificity.

Defendant argues that Plaintiff fails to allege any false statement. However, “a cause of action based in fraud may arise from conduct that is designed to mislead, and not only from verbal or written statements.” (Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 839.) Plaintiff alleges that Defendant misrepresented the quantity of product within a package through the size of the package. This is a sufficient basis for fraud.

Defendant also argues that Plaintiff’s reliance on the package size is not reasonable given the “actual size” disclosure. However, as discussed above, there is a factual dispute over whether the actual size depiction was clear and conspicuous. Plaintiff has sufficiently alleged reasonable reliance for pleading purposes.

Lastly, Defendant argues that its intent has not been adequately pled. However, at the pleading stage, “it is not necessary to allege the circumstantial evidence from which it may be inferred that the representation or promise was false -- these are evidentiary matters which give rise to the misrepresentation. The only essential allegation is the general statement that the representation or promise was false and that the defendant knew it to be false at the time it was made.” (Universal By-Products, Inc. v. City of Modesto (1974) 43 Cal.App.3d 145, 151.) Intent is generally an allegation of ultimate fact. (See Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.) Therefore, the fraud claim is adequately pled.

CONCLUSION

            Defendant’s demurrer is OVERRULED.