United States District Court, N.D. Illinois, Eastern Division
IN RE 100% GRATED PARMESAN CHEESE MARKETING AND SALES PRACTICES LITIGATION This Document Relates to All Cases
MEMORANDUM OPINION AND ORDER
in this multidistrict litigation are purveyors of grated
parmesan cheese products with labels stating “100%
Grated Parmesan Cheese” or some variation thereof.
After the Judicial Panel on Multidistrict Litigation assigned
these suits to the undersigned judge, Doc. 1, Plaintiffs
filed five consolidated class action complaints, Docs.
120-123, 143, which alleged that they were misled by the
“100% Grated Parmesan Cheese” labels because the
products contained non-cheese ingredients such as cellulose.
Defendants moved to dismiss the complaints under Civil Rules
12(b)(1) and 12(b)(6). The court denied the Rule 12(b)(1)
motions but granted the Rule 12(b)(6) motions without
prejudice to repleading. Docs. 215-216 (reported at 275
F.Supp.3d 910 (N.D. Ill. 2017)).
then filed five amended consolidated class action complaints.
Doc. 225 (against Kraft Heinz Company); Doc. 226 (against
Publix Super Markets, Inc.); Doc. 227 (against Albertsons
Companies, Inc., Albertsons LLC, and SuperValu, Inc.); Doc.
228 (against Target Corp. and ICCO-Cheese Company, Inc.);
Doc. 229 (against Wal-Mart Stores, Inc. and ICCO-Cheese
Company, Inc.). Like the initial complaints, the amended
complaints allege that Plaintiffs were misled by the
“100% Grated Parmesan Cheese” labels because the
products in fact contained cellulose. In addition, the
amended complaints except for the one against Publix allege
that the products' ingredient lists were misleading
because they represented that the cellulose was added to
prevent caking, when in fact the cellulose also acted as
moved to dismiss the amended complaints under Rule 12(b)(6).
Docs. 237, 238, 243, 246, 249. Those motions were granted as
to the claims based on the “100% Grated Parmesan
Cheese” label (the “100% claims”) and
granted in part and denied in part as to the claims based on
the ingredient lists' representation that cellulose was
added to prevent caking (the “Anticaking
claims”), and Publix and Target/ICCO were dismissed as
defendants. Docs. 296-297 (reported at 348 F.Supp.3d 797
(N.D. Ill. 2018)). Plaintiffs now move under Rule 15(a)(2) to
amend their complaints to allege an Anticaking claim against
Publix and to cure the defects in their Anticaking claim
against Target/ICCO, Doc. 306; Albertsons/SuperValu moves
under Rule 56 for partial summary judgment and under Rule
12(c) for partial judgment on the pleadings, Doc. 309; and
Kraft moves under Rule 12(c) for judgment on the pleadings,
Doc. 314. Plaintiffs' motion is denied, and
Albertsons/SuperValu's and Kraft's respective motions
are granted in part and denied in part.
considering Albertsons/SuperValu's motion for partial
summary judgment, the facts are construed as favorably to
Plaintiffs, the non-movants, as the record and local Rule
56.1 permit. See Johnson v. Advocate Health & Hosps.
Corp., 892 F.3d 887, 893 (7th Cir. 2018). When
considering Albertsons/SuperValu's and Kraft's Rule
12(c) motions, the court assumes the truth of the operative
complaints' well-pleaded factual allegations, though not
their legal conclusions. See Bishop v. Air Line Pilots
Ass'n, Int'l, 900 F.3d 388, 397 (7th Cir. 2018).
The court must also consider “documents attached to the
complaint[s], documents that are critical to the complaint[s]
and referred to in [them], and information that is subject to
proper judicial notice, ” along with additional facts
set forth in Plaintiffs' opposition briefs, so long as
those additional facts “are consistent with the
pleadings.” Phillips v. Prudential Ins. Co. of
Am., 714 F.3d 1017, 1019-20 (7th Cir. 2013) (internal
quotation marks omitted); see also N. Ind. Gun &
Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449,
452 (7th Cir. 1998). The facts are set forth as favorably to
Plaintiffs as those materials allow. See Brown v.
Dart, 876 F.3d 939, 940 (7th Cir. 2017). The court must
assume the truth of the facts relevant to each motion, but
does not vouch for them. See Donley v. Stryker Sales
Corp., 906 F.3d 635, 636 (7th Cir. 2018); Goldberg
v. United States, 881 F.3d 529, 531 (7th Cir. 2018).
detailed description of Plaintiffs' allegations appears
in the court's prior opinions, familiarity with which is
assumed. In brief, Defendants Kraft Heinz Company, Albertsons
Companies, Inc., Albertsons LLC (the two Albertsons entities
will be referred to together as “Albertsons”),
SuperValu, Inc., Target Corporation, Wal-Mart Stores, Inc.,
ICCO-Cheese Company, Inc., and Publix Super Markets, Inc.
design, develop, manufacture, sell, test, package, label,
distribute, promote, market, and/or advertise grated parmesan
cheese products. Doc. 225 at ¶ 19; Doc. 226 at ¶
10; Doc. 227 at ¶ 16; Doc. 228 at ¶¶ 13-14;
Doc. 229 at ¶¶ 15, 29. (Albertsons and SuperValu,
close corporate relatives, are named in one complaint. Doc.
227. ICCO manufactures the products for both Target and
Wal-Mart, and is named as a defendant in both the Target and
Wal-Mart complaints. Docs. 228-229.) At all relevant times,
Defendants' products bore labels stating “100%
Grated Parmesan Cheese, ” Doc. 225 at ¶ 21; Doc.
227 at ¶ 18; Doc. 228 at ¶ 18; Doc. 229 at ¶
18, or some variation thereof, Doc. 225 at ¶ 21; Doc.
226 at ¶ 12; Doc. 227 at ¶ 18; Doc. 228 at ¶
18; Doc. 229 at ¶ 18.
products are comprised largely of cured, dried hard Italian
cheeses, Doc. 225 at ¶ 26; Doc. 226 at ¶ 15; Doc.
227 at ¶ 22; Doc. 228 at ¶ 21; Doc. 229 at ¶
22, but also include a small but nontrivial percentage of
cellulose, an organic polymer with no nutritional value that
is “often used as a filler.” Doc. 225 at
¶¶ 23-24 (Kraft, 3.8%); Doc. 226 at ¶ 13
(Publix, “a significant portion”); Doc. 227 at
¶¶ 19-20 (Albertsons/SuperValu, 8.8%); Doc. 228 at
¶ 19 (Target/ICCO, no percentage specified); Doc. 229 at
¶¶ 19-20 (Wal-Mart/ICCO, 7.8%). Each product's
ingredient list, located on the rear label, lists cellulose
and asserts that the cellulose is used to prevent
“caking.” Doc. 225 at ¶ 4; Doc. 227 at
¶ 4; Doc. 228 at ¶ 4; Doc. 229 at ¶ 4.
However, grated parmesan “usually available in the
marketplace” is cured and dried in such a way that
there is “little problem of clumping or agglomeration,
” so there in fact is little need to ensure that grated
parmesan does not clump or “cake.” Doc. 225 at
¶ 26; Doc. 227 at ¶ 22; Doc. 228 at ¶ 21; Doc.
229 at ¶ 22. According to the U.S. Food and Drug
Administration (“FDA”), dried cheese products
should be, at most, 2% cellulose. Grated Cheeses; Amendment
of the Standard of Identity, 51 Fed. Reg. 30, 210, 30, 210
(Aug. 25, 1986). After commissioning an independent
laboratory to test several cured, dried cheese products,
Bloomberg reported that many such products contained
significantly more than 2% cellulose and specified the
percentage of cellulose found in the Albertsons/SuperValu,
Wal-Mart/ICCO, and Kraft products. See Lydia
Mulvaney, The Parmesan Cheese You Sprinkle on Your Penne
Could Be Wood, Bloomberg (Feb. 16, 2016, 4:00 AM),
are consumers who purchased Defendants' products at
grocery stores in Alabama (Kraft, Albertsons/SuperValu,
Wal-Mart/ICCO), California (Kraft, Target/ICCO,
Wal-Mart/ICCO), Connecticut (Kraft), Florida (Kraft, Publix,
Target/ICCO, Wal-Mart/ICCO), Illinois (Kraft,
Albertsons/SuperValu, Target/ICCO), Michigan (Kraft),
Minnesota (Kraft, Wal-Mart/ICCO), Missouri (Target/ICCO), New
Jersey (Wal-Mart/ICCO), and New York (Kraft, Wal-Mart/ICCO).
Doc. 225 at ¶¶ 9-17; Doc. 226 at ¶¶ 8-9;
Doc. 227 at ¶¶ 9-11; Doc. 228 at ¶¶ 9-12;
Doc. 229 at ¶¶ 9-14. Plaintiffs purchased the
products believing that they contained only cheese. Doc. 225
at ¶¶ 9-17; Doc. 226 at ¶¶ 8-9; Doc. 227
at ¶¶ 9-11; Doc. 228 at ¶¶ 9-12; Doc. 229
at ¶¶ 9-14. In addition, in every amended complaint
except the one against Publix, Plaintiffs allege that the
products' ingredient lists stated that cellulose was
added “to prevent caking, ” Doc. 225 at ¶
46; Doc. 227 at ¶ 39; Doc. 228 at ¶ 40; Doc. 229 at
¶ 4, but that the amount of cellulose exceeded what was
necessary to prevent caking, Doc. 225 at ¶ 27; Doc. 227
at ¶ 23; Doc. 228 at ¶ 22; Doc. 229 at ¶ 23,
and therefore that the cellulose must also serve the
undisclosed purpose of acting as filler, Doc. 225 at ¶
4; Doc. 227 at ¶ 4; Doc. 228 at ¶ 2; Doc. 229 at
noted, Plaintiffs' 100% claims have been dismissed,
leaving only their Anticaking claims. Kraft argues that
Plaintiffs cannot bring those claims in federal court because
their allegations do not satisfy the causation requirement of
Article III standing. Doc. 316 at 19-21. As the court
explained in its more recent opinion in this case-and as
reiterated below- Plaintiffs by necessary implication allege
in the operative complaints that they did not see the
Anticaking representation on the products' ingredient
labels before purchase. 348 F.Supp.3d at 810. Kraft reasons
that because Plaintiffs never saw the Anticaking
representation, they cannot have sustained an injury that is
“fairly traceable to” that statement and thus do
not have standing. Spokeo, Inc. v. Robins, 136 S.Ct.
1540, 1547 (2016).
argument fails for the reasons given in the court's first
opinion in this case. 275 F.Supp.3d at 918-19. As the court
explained, under In re Aqua Dots Products Liability
Litigation, 654 F.3d 748, 750-51 (7th Cir. 2011), a
plaintiff has standing to bring a consumer protection claim
if the allegedly deceptive practice caused her to pay more
for the product than she otherwise would have paid. That test
is satisfied here: If Defendants had disclosed on their
labels that cellulose was added in part as filler, at least
some consumers would not have purchased the products or would
not have been willing to pay as much for them, which-
applying basic supply-and-demand principles-would have driven
down the price for all consumers, even those who did not read
the labels. Indeed, that Defendants included the Anticaking
representation on the products' ingredient labels-even
though, as they conceded at the motion hearing, the
representation is not required by law, Doc. 341-strongly
suggests that the representation helped Defendants sell more
cheese at higher prices, thereby driving up the price for all
consumers. Plaintiffs therefore have Article III standing to
pursue the Anticaking claims.
Plaintiffs' Motion for Leave to Amend as to Publix and
move for leave to file second amended consolidated complaints
against Publix and Target/ICCO. Doc. 306. The court's
more recent opinion dismissed Publix and Target as defendants
after holding that Plaintiffs did not bring an Anticaking
claim against Publix and that their Anticaking claims against
Target/ICCO were too vague to satisfy federal pleading
standards because they did not allege the percentage of
cellulose in the Target/ICCO products. 348 F.Supp.3d at 803,
808, 818. Plaintiffs attempt in their proposed second amended
complaints to remedy both defects by bringing Anticaking
claims against Publix and by alleging the amount of cellulose
in the Publix and Target/ICCO products. Doc. 306 at 2.
parties dispute which standard governs Plaintiffs'
motion. Plaintiffs contend that the lenient Rule 15(a)(2)
standard applies. Doc. 306 at 2; Doc. 327 at 2-4. Publix and
Target/ICCO contend that the court's more recent order
must be considered a final judgment dismissing all claims
against them with prejudice, and therefore that the more
demanding standards for amending a judgment under Rule 59(e)
or Rule 60(b) govern. Doc. 324 at 5-9; Doc. 325 at 10-11. The
court need not resolve the dispute because Plaintiffs'
motion fails even under the more lenient Rule 15(a)(2)
15(a)(2) provides that leave to amend “shall be freely
given when justice so requires.” Fed.R.Civ.P. 15(a)(2).
That said, district courts “have broad discretion to
deny leave to amend where there is undue delay, bad faith,
dilatory motive, repeated failure to cure deficiencies, undue
prejudice to the defendants, or where the amendment would be
futile.” Right Field Rooftops, LLC v. Chi. Cubs
Baseball Club, LLC, 870 F.3d 682, 693 (7th Cir. 2017).
Although a plaintiff ordinarily should be given at least one
opportunity to amend, see Pension Trust Fund for
Operating Eng'rs v. Kohl's Corp., 895 F.3d 933,
941 (7th Cir. 2018), she is not entitled to additional
opportunities if she fails to remedy defects apparent at the
time of the prior amendment, nor is she entitled to amend if
she made a considered, strategic choice not to include
information known to her at that time. See Mulvania v.
Sheriff of Rock Island Cnty., 850 F.3d 849, 855 (7th
Cir. 2017) (affirming the district court's denial of
leave to amend to assert an ADA claim where the plaintiff
“could have alleged the ADA claim at the beginning of
the suit, ” “[t]he lengthy delay could not be
justified by newly discovered information, ” and
“the [district] court suggested that the delay was
strategic”); McCoy v. Iberdrola Renewables,
Inc., 760 F.3d 674, 687 (7th Cir. 2014) (“Outland
presented no excuse for omitting … three [proposed
legal] theories originally, and the unexplained delay looks
more like procedural gamesmanship than legitimate ignorance
or oversight.”); First Wis. Fin. Corp. v.
Yamaguchi, 812 F.2d 370, 373 (7th Cir. 1987) (“By
its own account, First Wisconsin did not try to amend the
complaint for six months after learning of Yamaguchi's
complicity. First Wisconsin explains that it waited because
it did not want to risk a postponement of the trial scheduled
for May 1986. This damns rather than justifies the delay,
however; First Wisconsin concedes that it tried to split this
case and, for its own convenience, obtain two trials.
District courts are entitled to protect themselves, and other
litigants whose cases would be affected, against such
Plaintiffs were on notice after the court issued its first
opinion, which dismissed without prejudice their 100% claims,
that those claims suffered from serious and potentially
irremediable defects. When Plaintiffs filed their amended
complaints, they not only repleaded their 100% claims, but
also added Anticaking claims (except against Publix),
undoubtedly because they realized that their 100% claims
might again be dismissed. Docs. 225 at ¶ 50; Doc. 227 at
¶ 43; Doc. 228 at ¶ 44; Doc. 229 at ¶ 46. To
support their Anticaking claims against Kraft, Wal-Mart/ICCO,
and Albertsons/SuperValu, Plaintiffs alleged the percentage
of cellulose in those Defendants' ...