ACKERMAN v. COCA-COLA COMPANY

Plaintiffs contend in the alternative that defendants have violated the "unlawful conduct" prong of the UCL through violations of California's Sherman law. See Sec. Am. Compl. ¶ 61. Because I find that plaintiffs have adequately pled a violation of the "unlawful conduct" prong through violations of California's FAL, I do not address this alternative contention.

California's False Advertising Law prohibits the dissemination in any advertising medium of any "statement" concerning real or personal property offered for sale, "which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading." Cal. Bus. Prof. Code § 17500. A claim under the FAL may be based "not only advertising which is false, but also advertising which[,] although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public." Kasky, 27 Cal. 4th at 951 (citations omitted). Accordingly, "a plaintiff must allege: (1) statements in the advertising are untrue or misleading, and (2) defendant knew, or by the exercise of reasonable care should have known, that the statements were untrue or misleading." VP Racing Fuels, Inc. v. Gen. Petroleum Corp., 673 F. Supp. 2d 1073, 1086 (E.D. Cal. 2009) (citation omitted).

Defendants contend that plaintiffs have not adequately pled reliance or injury under the UCL. I disagree.

The UCL previously authorized "any person acting for the interests of itself [sic], its members or the general public" (former § 17204) to file an action for relief; standing to bring such an action did not depend on a showing of injury or damage. In the November 2, 2004 General Election, California voters approved Proposition 64, which imposed restrictions on a private individual's right to sue under the UCL or False Advertising law to those individuals who have "suffered injury in fact and ha[ve] lost money or property as a result of such unfair competition." Californians for Disability Rights, 39 Cal. 4th at 227; see also Cal. Bus. Prof. Code §§ 17203-04 (UCL), 17535 (FAL). Accordingly, the UCL and FAL now contain a reliance requirement. As the California Supreme Court explained in a recent case discussing the post-Proposition 64 standing requirements for a UCL fraud case:

[T]here must be some connection between the injury and the defendant's conduct. . . . while a plaintiff must allege that the defendant's misrepresentations were an immediate cause of the injury-causing conduct, the plaintiff is not required to allege that those misrepresentations were the sole or even the decisive cause of the injury-producing conduct.

In re Tobacco II Cases, 46 Cal. 4th 298, 325-29 (Cal. 2009). See also Laster v. T-Mobile USA, Inc., No. 05cv1167, 2009 WL 4842801, at *5 n. 1 (S.D. Cal. Dec. 14, 2009) (applying the reliance requirement stated in In re Tobacco II to non-fraud UCL claim).

Plaintiffs' Second Amended Complaint identifies numerous specific statements alleged to be misleading, and alleges that those statements create "the central message . . . that VitaminWater is not a sugary soft drink. . . . [However] this message is false, misleading, deceptive, and unfair. Vitaminwater is not a beneficial fortified drink — it is just another flavored, sugary snack food like Coca-Cola, except that Defendants chose not to carbonate it." Id. at ¶ 4. The Second Amended Complaint further alleges that:

Each plaintiff relied on Defendants' false, misleading, and deceptive written misrepresentations that VitaminWater is a beneficial dietary supplement beverage including, but not limited to, "vitamins + water = all you need" and the name of the product itself — "VitaminWater" in deciding to purchase vitaminwater. Had Plaintiffs known the truth that the statements they relied on were false, misleading, deceptive, and unfair, they would have neither purchased VitaminWater nor paid the premium price Defendants charged for it.

Sec. Am. Compl. ¶ 16. Such allegations adequately plead reliance for the purposes of the UCL. California courts have liberally construed the requirements for pleading reliance in cases in which it would be impractical to expect a plaintiff to recall with specificity each statement that he or she considered prior to making a purchase. See In re Tobacco II Cases at 329 ("[W]here, as here, a plaintiff alleges exposure to a long-term advertising campaign, the plaintiff is not required to plead with an unrealistic degree of specificity that the plaintiff relied on particular advertisements or statements."); see also Morgan v. AT T Wireless Servs., Inc., 177 Cal. App. 4th 1235, 1262 (Cal. Ct. App. 2009) ("plaintiffs need not allege the specific advertisements the individual plaintiffs relied upon; it is sufficient for the plaintiff to provide a representative selection of the advertisements or other statements to indicate the language upon which the implied misrepresentations are based."); Walter v. Hughes Commc'ns, Inc., 682 F. Supp. 2d 1031, 1045 (N.D. Cal. 2010) (element of reliance satisfied by complaint that "roughly" identified representations relied on).

Plaintiffs have also adequately pled injury. California courts have held that a plaintiff who fails to receive the benefit bargained for because of a misrepresentation made by a defendant suffers sufficient injury to state a claim under the UCL. See, e.g., Koh v. S.C. Johnson Son, Inc., No. C-09-00927 (RMW), 2010 WL 94265, at *2 (N.D. Cal. Jan. 6, 2010) (complaint adequately alleged injury under UCL through claims that plaintiff bought the product at a premium price in reliance on misleading suggestion that it was environmentally friendly); Chavez v. Blue Sky Natural Beverage Co., 340 Fed. Appx. 359 (9th Cir. 2009) (injury sufficiently pled where plaintiff purchased product because of misrepresentation that it was from New Mexico); see also Lozano, 504 F.3d at 734 (plaintiff "has properly stated an injury that he did not receive the full value of his contract with [defendant]" due to its alleged failure to disclose certain facts about its billing practices). Accordingly, the allegations in the Second Amended Complaint adequately allege a violation of California's FAL (§ 17500 et seq.), and in turn, California's UCL (§ 17200 et seq).

c. Unfair Business Practices (Claim 2)

A business practice is "unfair" for the purposes of a claim under the UCL when it "offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers." Wilner v. Sunset Life Ins. Co., 78 Cal. App. 4th 952, 965 (Ct. App. 2000) (citing State Farm Fire Cas. Co. v. Superior Court, 45 Cal. App. 4th 1093, 1104 (Sup. Ct. 1996)). "The test of whether a business practice is unfair `involves an examination of [that practice's] impact on its alleged victim, balanced against the reasons, justifications and motives of the alleged wrongdoer. In brief, the court must weigh the utility of the defendant's conduct against the gravity of the harm to the alleged victim." Id. To prevail, a plaintiff must establish that "the consumer injury is substantial, is not outweighed by any countervailing benefits to consumers or to competition, and is not an injury the consumers themselves could reasonably have avoided." Daugherty v. American Honda Motor Co., Inc., 144 Cal. App. 4th 824, 839 (2006). California state courts have indicated that a plaintiff may make out a prima facie case of unfair conduct by alleging wrongful conduct on the part of the defendant; the plaintiff needn't speculate at the pleading stage as to the defendant's countervailing interests. See Motors, Inc. v. Times Mirror Co., 102 Cal. App. 3d 735, 740 (1980) ("[S]ince the complaint is unlikely to reveal defendant's justification, if th[e] pleading states a prima facie case of harm, . . . the defendant should be made to present its side of the story.").

Neither party discusses the elements of a claim of unfair competition under California law, an issue that remains somewhat unsettled in light of the California Supreme Court's decision in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal. 4th 163, 83 Cal. Rptr. 2d 548 (1999). Cel-Tech rejected the use of "amorphous" definitions of "unfair" (such as the definition in Wilner, supra) and held that a claim of unfair business practices requires "conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition." Cel-Tech at 184-85. However, in a footnote, the court explicitly limited its holding to cases filed by business competitors, as opposed to consumers. Id. at 187 n. 12. Subsequent cases have not been uniform in their assessment of whether Cel-Tech altered the analysis of a claim of Unfair Business Practices in claims brought by consumers. The better view appears to be that Cel-Tech standard is inapplicable in a consumer action, in view of the fact that (1) the opinion's reference to antitrust law is sensible in a suit alleging anti-competitive conduct, but makes little sense in a consumer action; and (2) a contrary view would render Cel-Tech's footnote 12 meaningless. That position is supported by case law in the Ninth Circuit. See, e.g., Lippitt v. Raymond James Financial Services, Inc., 340 F.3d 1033, 1043 (9th Cir. 2003) (citing pre- Cel-Tech analysis in consumer UCL case); Nat'l Rural Telecommunications Co-op. v. DIRECTV, Inc., 319 F. Supp. 2d 1059, 1075 (C.D. Cal. 2003) ("The test annunciated in Cel-Tech, however, applies only to cases between direct competitors"); see also Smith v. State Farm Mutual Automobile Ins. Co., 93 Cal. App. 4th 700, 720, n. 23 (2001) ("we are not to read Cel-Tech as suggesting that such a restrictive definition of `unfair' should be applied in the case of an alleged consumer injury"); but see Scripps Clinic v. Superior Court, 108 Cal. App. 4th 917, 940 (Cal. Super. Ct. 2003) (contra).

Defendants have not raised any basis for dismissing plaintiffs claim based on the "unfair" prong of the UCL other than those already rejected in connection with the discussion of plaintiffs' claims under the "unlawful" prong of the UCL.

d. UCL Fraud (Claim 3)

Plaintiffs' third claim states a claim for fraudulent business practices under the UCL. Aside from the use of the term "fraud," a claim for fraudulent business practices under the UCL has little in common with the elements of common law fraud. "A [common law] fraudulent deception must be actually false, known to be false by the perpetrator and reasonably relied upon by a victim who incurs damages. None of these elements are required to state a claim for injunctive relief under the UCL." In re Tobacco II Cases, 46 Cal. 4th at 312 (citation and quotation marks omitted). See also Capitol Records, Inc. v. MP3tunes, LLC, 611 F. Supp. 2d 342 (S.D.N.Y. 2009) ("Fraudulent as used in § 17200 does not refer to the common law tort of fraud but only requires a showing members of the public are likely to be deceived." (citing Express, LLC v. Fetish Group, Inc., 464 F. Supp. 2d 965, 980 (C.D. Cal. 2006))). To prevail, a plaintiff "must produce evidence showing `a likelihood of confounding an appreciable number of reasonably prudent purchasers exercising ordinary care.'" Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1025-26 (9th Cir. 2008) (citations omitted).

Courts have not been consistent regarding whether a UCL fraud claim must be pled with particularity. The California Supreme Court has held that the heightened pleading requirements generally applicable to fraud claims do not apply to a claim for "fraudulent" business practices under the UCL because the latter requires only that plaintiffs establish that members of the public are likely to be deceived, and contains no scienter requirement. See, e.g., Comm. on Children's Television, 35 Cal. 3d at 212 n. 11 ("The requirement that fraud be pleaded with specificity . . . does not apply to causes of action under the [UCL]"); Morgan, 177 Cal. App. 4th at 1256 (same); see also StreamCast Networks, Inc. v. IBIS LLC, No. CV 05-04239 (MMM), 2006 WL 5720345, at *11 (C.D. Cal. May 2, 2006) ("To prevail on a claim that a business practice is fraudulent under § 17200, "[i]t is not necessary to show that the defendant intended to injure anyone.") (citation omitted). However, a number of recent cases from the Ninth Circuit and California district courts have held that claims of fraudulent business practices under the UCL are subject to Rule 9(b)'s heightened pleading requirements where the claim is "grounded in fraud." See, e.g., Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009); see also Parrish v. Nat'l Football League Players Ass'n, 534 F. Supp. 2d 1081 (N.D. Cal. 2007). Even assuming plaintiffs' claims are subject to Rule 9(b), I conclude that they have met that standard.

Defendants contend that plaintiffs have not pled their claims with particularity because they have not identified which statements in vitaminwater's labeling were relied on by each individual plaintiff. Such a detailed complaint would be helpful, but it is not required by Fed.R.Civ.Pro. 9(b). To satisfy the pleading requirements of Rule 9(b), a complaint must "(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994). Here plaintiffs have alleged that each plaintiff relied on at least two specific misleading statements (the name vitaminwater and the statement "vitamins + water = all you need"); explicitly identified a number of other statements made in vitaminwater's labeling which are alleged to have created that misleading impression, and identified the basis for plaintiffs' belief that the statements are deceptive. The California plaintiffs have identified the general locations where they purchased vitaminwater, the frequency with which they purchased vitaminwater, and (with the exception of plaintiff Ruslan Antonov) the specific flavors they purchased. See Sec. Am. Compl. ¶¶ 9, 10. Accordingly, the allegations underlying plaintiffs' California state law claims meet Rule 9(b)'s essential requirements of "provid[ing] a defendant with fair notice of a plaintiff's claim . . . safeguard[ing] a defendant's reputation from improvident charges of wrongdoing, and [] protect[ing] a defendant against the institution of a strike suit." Rombach v. Chang, 355 F.3d 164, 171 (2d Cir. 2004) (citing O'Brien v. Nat'l Prop. Analysts Partners, 936 F.2d 674, 676 (2d Cir. 1991)).

California law also does not require such specificity. As California courts have recognized: "[w]hen an unfair-competition claim is based on an alleged fraudulent business practice — that is, a practice likely to deceive a reasonable consumer — `a plaintiff need not plead the exact language of every deceptive statement; it is sufficient for [the] plaintiff to describe a scheme to mislead customers, and allege that each misrepresentation to each customer conforms to that scheme." Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115, 135 (Cal. Ct. App. 2007) (citation omitted).

e. Unfair Methods of Competition or Unfair or Fraudulent Acts or Practices in Violation of § 1770(a)(7) of the CLRA (Claim 6)

California's CLRA, Cal. Civ. Code § 1750 et seq., prohibits specified "unfair methods of competition and unfair or deceptive acts or practices" in connection with the sale or lease of goods or services to a consumer. See Civ. Code, § 1770(a). Among the practices prohibited by the CLRA is "[r]epresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have" and "[r]epresenting that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another." Civ. Code, §§ 1770(a)(5) (a)(7). Civil Code section 1760 states that the CLRA "shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection." Neither party has attempted to distinguish plaintiffs' CLRA claims from the UCL claims discussed above. Interpreting the CLRA liberally in accordance with its language, I conclude that defendants have adequately pled a violation of the CLRA through the same allegations that satisfy their claims under the UCL and FAL.

The Second Amended Complaint cites only Cal. Civ. Code § 1770(a)(7).

Pursuant to Civil Code section 1782, prior to a suit for damages under the CLRA, a plaintiff must notify the defendant of the alleged violation and allow the defendant an opportunity to remedy it. There is no dispute that this prerequisite has been met.

3. New York State Law Claims

a. Gen. Bus. Law. §§ 349 350 (Claim 7 8)

"In order to show that Plaintiff is entitled to relief for a violation of New York General Business Law ("GBL") § 349, relating to deceptive business practices, or § 350, relating to false advertising, a plaintiff must show: (1) that the act, practice, or advertisement was consumer-oriented; (2) that the act, practice, or advertisement was misleading in a material respect, and (3) that the plaintiff was thereby injured. See Stutman v. Chem. Bank, 95 N.Y.2d 24, 29 (2000) (§ 349); Horowitz v. Stryker Corp., 613 F. Supp. 2d 271, 287 (E.D.N.Y. 2009) (§ 350) (citation omitted). The standard for whether an act or practice is misleading is an objective one, requiring a showing that a reasonable consumer would have been misled by the defendant's conduct. Marcus v. AT T, 138 F.3d 46, 64 (2d Cir. 1998); Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 N.Y.2d 20, 26 (N.Y. 1995)); but see Flattau v. John Hancock Mut. Life Ins. Co., No. 85 Civ. 5487 (JFK), 1986 WL 14977, at *3 (S.D.N.Y. Dec 12, 1986) (suggesting that courts should "not look to the average customer but to the vast multitude which the statutes were enacted to safeguard — including the ignorant, the unthinking and the credulous who, in making purchases, do not stop to analyze but are governed by appearances and general impressions.") (citation omitted). Claims under GBL §§ 349 and 350 are not subject to the pleading-with-particularity requirements of Fed.R.Civ.P. 9(b). See Pelman ex rel. Pelman v. McDonald's Corp., 396 F.3d 508, 511 (2d Cir. 2005) (GBL § 349); United Magazine Co. v. Murdoch Magazines Distrib., Inc., No. 00 Civ. 3367, 2001 WL 1607039, at *12 (S.D.N.Y. Dec. 17, 2001) (GBL § 350). To prevail on a claim under GBL § 350, a plaintiff must demonstrate reliance on defendants' false advertising. However § 349 does not require proof of reliance. See Leider v. Ralfe, 387 F. Supp. 2d 283, 292 (S.D.N.Y. 2005); see also Stutman v. Chem. Bank, 95 N.Y. 2d 24, 29 (2000) ("[A]s we have repeatedly stated, reliance is not an element of a section 349 claim.").

Defendants contend that plaintiffs have failed to adequately plead claims under GBL sections 349 and 350 because they have not adequately alleged reliance or injury. Neither contention is persuasive. As noted above, reliance is not an element of a § 349 claim. Moreover, plaintiffs have adequately pled the reliance element of a claim under § 350 through the same allegations discussed above in connection with plaintiffs' California UCL claims. See Pelman, 396 F.3d at 512 (if plaintiffs' allegation of a generalized campaign to create a false impression is vague, "the cure for such deficiencies, in a claim not required to be plead with particularity, is a motion for a more definite statement under Rule 12(e), Fed.R.Civ.P., rather than dismissal") (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514-15 (2002)).

Injury is adequately alleged under GBL §§ 349 or 350 by a claim that a plaintiff paid a premium for a product based on defendants' inaccurate representations. See Jernow v. Wendy's Intern., Inc., No. 07 Civ. 3971 (LTS) (THK), 2007 WL 4116241, at *3 (S.D.N.Y. Nov. 15, 2007) (citing Goshen v. Mut. Life Ins. Co. of New York, 98 N.Y.2d 314, 324 (N.Y. 2002)). Defendants' contention that Small v. Lorillard Tobacco Co., Inc., 94 N.Y.2d 43 (N.Y. 1999), compels a contrary conclusion is unpersuasive. In Lorillard, plaintiffs sued a number of tobacco companies, alleging that they had used deceptive commercial practices to sell their cigarettes to New Yorkers. Plaintiffs contended that their injury consisted of the fact that they had bought a product they otherwise would not have purchased and had become addicted to nicotine as a result of defendants' deceptive conduct. The Appellate Division, First Department, rejected plaintiffs' theory that the mere purchase of the product was sufficient to establish injury, holding that: "[i]f plaintiffs do not prove addiction, they cannot show that they were harmed." Small v. Lorillard Tobacco Co., 252 A.D.2d 1, 7 (N.Y. App. Div. 1998). On plaintiffs' appeal to the New York Court of Appeals, the New York Attorney General submitted an amicus brief supporting plaintiffs' theory of injury and arguing that "[t]he Appellate Division's holding, by removing a fundamental category of consumer injury from being actionable under § 349, threatens to severely undermine the statute's utility to injured consumers." Amicus Curiae Brief of the New York State Attorney General, 1999 WL 33660064, at *7 (Aug. 30, 1999). Agreeing, the Court of Appeals observed: "[t]he Attorney General may be right that a plaintiff might have a claim" where a consumer paid a higher price for a product as the result of a misrepresentation, such as in a case "where a distributor asserts that its bottled water is from a pure and pristine mountain stream while in reality, it was only tap water." Small v. Lorillard Tobacco Co., Inc., 94 N.Y.2d 43, 56 n. 5 (N.Y. 1999). Though the court concluded that dismissal was warranted because the plaintiffs had failed to allege that that the cost of cigarettes was affected by defendants' alleged misrepresentation, id. at 56, plaintiffs here explicitly allege that "[d]efendants command a premium price for vitaminwater by distinguishing it from soft drinks (including their own), and by marketing and advertising it as a fortified beverage, a dietary supplement in liquid form." Sec. Am. Compl. ¶ 5. Accordingly, I conclude that plaintiffs' allegations of misleading marketing and labeling have adequately stated a claim under GBL §§ 349 and 350.

4. New Jersey State Law Claims

a. N.J. Consumer Fraud Act, N.J.S.A. 56:8-1 (Claim 9)

A party asserting a claim under New Jersey's Consumer Fraud Act ("NJCFA") must establish (1) wrongful conduct; (2) an ascertainable loss; and (3) and a causal relationship or nexus between the wrongful conduct and the loss. See Int'l Union of Operating Eng'rs Local No. 68 Welfare Fund v. Merck Co., Inc., 192 N.J. 372, 389 (N.J. 2007). The New Jersey Supreme Court has explained that the requirement of ascertainable loss in the NJCFA replaces the traditional reliance requirement of a common law tort claim. See id. Plaintiffs' NJCFA claims are based on allegations that defendants both affirmatively misrepresented and intentionally omitted material facts with intent to cause consumers to purchase vitaminwater. See Sec. Am. Compl. ¶ 125. The heightened pleading standards of Rule 9(b) are therefore applicable to plaintiffs' claims under the NJCFA. See Frederico v. Home Depot, 57 F.3d 188, 202 (3d Cir. 2007).

Defendants have not contended that plaintiffs' NJCFA claims would be preempted or "subsumed" by the Products Liability Act ("PLA"), N.J.S.A. 2A:58C-1 et seq. (1987), and this opinion therefore does not address whether such a defense would have merit under New Jersey law. See, e.g., Vercellono v. Gerber Products Co., No. 09-CV-2350 (DMC), 2010 WL 455388, at *6 (D.N.J. 2010) (dismissing CLA claim as preempted by PLA).

Plaintiffs fail to plead their claims under New Jersey law with the requisite particularity. The Second Circuit has held that "[A] plaintiff should specify the time, place, speaker, and content of the alleged misrepresentations." Luce v. Edelstein, 802 F.2d 49, 54 (2d Cir. 1986). In contrast to the detail in the Second Amended Complaint regarding the California claims, the Second Amended Complaint contains no information regarding: (1) when or how often during the class period the New Jersey plaintiffs purchased vitaminwater; (2) where they purchased vitaminwater, or whether any purchases occurred within the state of New Jersey; (3) what variety of vitaminwater they purchased. While Rule 9(b) is not designed to "require the impossible," and a plaintiff does not necessarily need to specify the precise time or date on which each allegedly misleading statements was made, see, e.g., Pollack v. Laidlaw Holdings, Inc., No. 90 Civ. 5788 (DLC), 1995 WL 261518, at *9 (S.D.N.Y. May 3, 1995), the New Jersey state law claims are devoid of all but the most bare facts regarding plaintiffs' purchase of vitaminwater. Such allegations are insufficient to withstand Rule 9(b) scrutiny.

5. Breach of Warranty Under NY, NJ and CA Law (Claims 10 11)

The Second Amended Complaint alleges that defendants breached express and implied warranties that vitaminwater was "beneficial and had particular beneficial characteristics as set forth above." Sec. Am. Compl. ¶¶ 128, 132. The Supreme Court has held that breach of warranty claims do not impose an additional "requirement" under state law, because the duty to honor a promise voluntarily undertaken "[can] not fairly be said to be `imposed under state law,' but rather is best understood as undertaken by the manufacturer itself," and are therefore not preempted. Cipollone, 505 U.S. 526. Nonetheless, plaintiffs have failed to plead a claim for violation of an express warranty. The Second Amended Complaint states that "Defendants provided Plaintiffs and other members of the Class with written and express warranties, including, but not limited to, warranties that their vitaminwater beverages were beneficial and had particular beneficial characteristics as set forth above." Plaintiffs do not allege that any bottle of vitaminwater contains the word "beneficial," do not state which words they allege to have created an express warranty, and do not clarify what is referred to by the words "as set forth above." Such conclusory language fails to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests" and does not adequately plead a claim for breach of an express warranty under state law. Twombly, 550 U.S. at 555 (citation omitted). See, e.g., Lake v. Kardjian, 874 N.Y.S.2d 751, 755 (N.Y. Sup. Ct. 2008) (finding plaintiff "has not identified any specific statements by [defendant] which would constitute an express warranty, and has thereby failed to establish the existence of a claim which would escape federal preemption and survive this motion to dismiss.")); Simmons v. Stryker Corp., No. 08-3451 (JAP), 2008 WL 4936982, at *2 (D.N.J. Nov. 17, 2008) (dismissing express warranty claim where plaintiff did not identify source of warranty); Blennis v. Hewlett-Packard Co., No. C 07-00333 JF, 2008 WL 818526 (N.D. Cal. Mar. 25, 2008) (same).

Plaintiffs' claim for breach of an implied warranty of merchantability fails as well. The law of all three states is similarly based on the Uniform Commercial Code ("UCC"). See Cal. Com. Code § 2314; N.J. Stats. § 12A:2-314; N.Y. U.C.C. § 2-314. Under the UCC, if a seller is a merchant, there is an implied contract that the goods will be of merchantable quality. See Denny v. Ford Motor Co., 87 N.Y.2d 248 (N.Y. 1995) (citing section 2-314(2)(c) of the UCC). A warranty of merchantability, however, "does not mean that the product will fulfill a "buyer's every expectation" but rather simply "provides for a minimum level of quality." Viscusi v. Proctor Gamble, No. 05-CV-01528 (DLI) (LB), 2007 WL 2071546, at *13 (E.D.N.Y. July 16, 2007) (citing Denny, 87 N.Y.2d at 259). See also Sugawara v. Pepsico, Inc., No. 2:08-cv-01335-MCE-JFM, 2009 WL 1439115, at *5 (E.D. Cal. 2009) (same) (citations omitted); see generally 18 Williston on Contracts § 52:76 (4th ed. 2009) (equating "merchantable" quality with "fitness for human use or consumption."). Even crediting each of the allegations of the complaint, plaintiffs cannot establish that vitaminwater failed to constitute a merchantable product.

Plaintiffs contend that defendants also breached an implied warranty of fitness for a particular purpose. Such an allegation is not in the Second Amended Complaint. If it were, it would be dismissed. An implied warranty of fitness for a particular purpose use arises "[w]here the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods." Potler v. MCP Facilities Corp., 471 F. Supp. 1344, 1349 (E.D.N.Y. 1979). Plaintiffs allege that their "particular purpose" for purchasing vitaminwater was to drink a "healthy" beverage. However, the Second Amended Complaint does not allege that defendants knew any particular plaintiff purchased vitaminwater for that purpose. Consumers may seek beverages for a variety of purposes; indeed some may desire the beverage precisely because it contains high levels of sugar.

6. Common Law Deceit/Misrepresentation Under NY, NJ and CA Law (Claim 12)

Under New Jersey law, "fraud or misrepresentation consists of the following elements: (1) a material misrepresentation of a presently existing or past fact; (2) knowledge of the falsity by the person making the misrepresentation; (3) intent that the misrepresentation be relied upon; (4) justifiable reliance of the misrepresentation; (5) resultant damage." Cipollone v. Liggett Group, Inc., 683 F. Supp. 1487, 1499 (D.N.J. 1988) (citations omitted); see also Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) (substituting "reasonable reliance" as fourth element). Failure to disclose facts may constitute misrepresentation where the facts concealed were "`significant and material.'" Id. (citation omitted).

Under California law, "to state a claim for negligent misrepresentation, a plaintiff must allege: (1) the defendant made a misrepresentation of a past or existing material fact; (2) without reasonable grounds for believing it to be true; (3) with intent to induce another's reliance on the fact misrepresented; (4) ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed; and (5) damages." Stevens v. JPMorgan Chase Bank, N.A., No. C 09-03116 (SI), 2010 WL 329963, at *6 (N.D. Cal. Jan. 20, 2010) (citing B.L.M. v. Sabo Deitsch, 64 Cal. Rptr. 2d 335, 342 (Ct. App. 1997)).

To sustain claim for intentional misrepresentation under New York law, a plaintiff must show that: (1) the defendant made a material false statement or omission; (2) the defendant intended to defraud the plaintiff; (3) the plaintiff reasonably relied upon the representation or omission; and (4) the plaintiff suffered damage as a result of such reliance. B M Linen, Corp. v. Kannegiesser, USA, Corp., 679 F. Supp. 2d 474, 480 (S.D.N.Y. 2010). The Court of Appeals of New York has stated that "[A] negligent statement may be the basis for recovery of damages, where there is carelessness in imparting words upon which others were expected to rely and upon which they did act or failed to act to their damage, but such information is not actionable unless expressed directly, with knowledge or notice that it will be acted upon, to one to whom the author is bound by some relation of duty, arising out of contract or otherwise, to act with care if he acts at all." White v. Guarente, 43 N.Y.2d 356, 363-64 (1977) (citation omitted).

Defendants contend that each deceit/misrepresentation claim must be dismissed because it has not been pled with sufficient particularity. Although the New Jersey claims must be dismissed because they are not pled with sufficient particularity, the New York and California claims have both adequately alleged a claim for intentional or negligent misrepresentation. As discussed above, the California claims have been pled with sufficient particularity. With respect to the New York claims, the Second Amended Complaint alleges that plaintiff Batsheva Ackerman purchased vitaminwater's "revive" and "multi-v" flavors at their premium price approximately one to two times per week between October 2007 and October 2008 from various drug stores such as Duane Reade located in New York. When considered alongside the allegations already discussed, this suffices to plead plaintiffs New York claims with particularity. Accordingly, a deceit/misrepresentation claim is adequately pled by the New York and California plaintiffs, but is dismissed with respect to the New Jersey plaintiffs.

7. Unjust Enrichment (Claim 13)

Unjust enrichment is an equitable remedy requiring "that a plaintiff show that a defendant benefitted at plaintiff's expense, and equity and good conscience require plaintiff to recover. Watts v. Jackson Hewitt Tax Serv. Inc., 579 F. Supp. 2d 334, 354 (E.D.N.Y. 2008) (citation omitted). "A disgruntled customer may only bring a claim if he received `less than what he bargained for.' Id. (citing In re Canon Cameras, 237 F.R.D. 357, 359 (S.D.N.Y. 2006)). Defendants sole basis for dismissal of the unjust enrichment claim is that they believe all of the remaining claims fail as well. Because that premise has been rejected, the unjust enrichment claim will not be dismissed.

CONCLUSION

For the reasons set forth above, defendants' motion to dismiss claims nine, ten, and eleven is granted without prejudice to a timely amendment consistent with this opinion. The motion is denied in all other respects.

So Ordered.