Feb. 28, 2022 – In a 31-page order, District Court Judge Gerald J. Pappert rejects Defendant Healthy Beverage Company’s motion to dismiss.
Plaintiffs alleged that Healthy Beverage misled consumers by labeling its organic iced green tea “lightly sweetened” notwithstanding its high sugar content. They brought a breach of warranty and unjust enrichment claims on behalf of a nationwide class, and state consumer protection claims on behalf of eight subclasses. Healthy Beverage moved to dismiss the Plaintiffs’ Amended Complaint. It argued that they lack standing and that their claims fail on the merits because, among other reasons, “lightly sweetened” is a subjective description of the tea’s taste.
First, the Court held that Plaintiffs met Article III’s standard for injury in fact. They plausibly alleged an injury in fact based on the price premium they paid for Healthy Beverage’s tea. The premium is the difference in price between a green tea misleadingly labeled as being low in sugar and tea consumers know is high in sugar. “Paying it constitutes classic economic harm,” said the Court. “That Plaintiffs do not allege they were physically harmed by consuming the tea is irrelevant,” the Court continued. “While their Amended Complaint describes health risks associated with excessive sugar consumption, it makes clear Plaintiffs’ theory of injury is that Healthy Beverage’s misleading labeling caused them to suffer economic harm by paying a price premium—not that they suffered adverse health consequences from consuming the tea.”
Next, the Court held that Plaintiffs have sufficiently established Article III standing for the nationwide breach of warranty and unjust enrichment claims. The Court concluded that they plausibly alleged an economic injury in facts which there is an Article III case or controversy. “There is no additional standing requirement for the putative nationwide class at this stage,” the Court explained.
Turning next to the causes of action, the Court held that Plaintiffs’ false advertising and consumer fraud claims satisfy Rule 9(b)’s requirements because they specify the “essential” facts by alleging that, during the previous four years, Healthy Beverage’s lightly sweetened label deceived Plaintiffs into buying the tea based on their belief it was low in sugar when it had high sugar content.
Although Health Beverage argued that Plaintiffs’ claims fail because they do not plausibly allege misleading or deceptive conduct, the Court could not conclude as a matter of law that its conduct was not misleading or deceptive, so the Court allowed Plaintiff’s misrepresentation claims to proceed to discovery.
Further, the Court held that Plaintiffs plausibly claim that the tea’s lightly sweetened label likely would have misled a reasonable consumer and the tea’s lightly sweetened label could deceive reasonable consumers into believing they were buying a beverage with low sugar content.
With respect to the breach of implied warranty count, the Court held that Plaintiffs plausibly claimed a breach of the implied warranty of merchantability because they contend the tea does not conform to its lightly sweetened label because it is high in sugar.
The case will now proceed to discovery.
The case is Pierre Jr. et al. v. Healthy Beverage, LLC, No. 20-cv-4934 (E.D. Pa.).