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Zarinebaf v. Champion Petfoods USA, Inc.

United States District Court, N.D. Illinois, Eastern Division

July 30, 2019

AFSHIN ZARINEBAF and ZACHARY CHER-NIK, individually and on behalf of a class of similarly situated individuals, Plaintiffs,
v.
CHAMPION PETFOODS USA INC. and CHAMPION PETFOODS LP, Defendants.

          MEMORANDUM OPINION AND ORDER

          Virginia M. Kendall, United States District Judge.

         Plaintiffs Afshin Zarinebaf and Zachary Chernik filed a class action suit against Defendants Champion Petfoods USA, Inc. and Champion Petfoods LP on behalf of a putative class of Illinois consumers. (Dkt. 26.) The Complaint alleges common law fraud (Count III), violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), 815 ILCS 505/1, et seq. (Count IV), fraudulent omission (Count V), and unjust enrichment (Count VI).[1] (Id.) Defendants moved to dismiss all claims for failure to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6), and all claims sounding in fraud (Counts III, IV, and V) for failure to state a claim with particularity as required by Federal Rule of Civil Procedure 9(b). (Dkt 34.) For the following reasons, Defendants' motion to dismiss is granted in part and denied in part.

         BACKGROUND

         The following facts are based on the allegations in the Complaint as well as the May 2017 White Paper referred to in and attached (via an embedded link) to the Complaint and attached to Defendants' Motion to Dismiss. (Dkt. 26; Dkt. 34-1); see also Fed. R. Civ. P. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”); Cmty. Bank of Trenton v. Schnuck Markets, Inc., 887 F.3d 803, 809 (7th Cir. 2018) (“A court deciding a motion to dismiss under Rule 12(b)(6) may consider documents that are attached to a complaint or that are central to the complaint, even if not physically attached to it.”). The Court accepts all well-pleaded facts in the Complaint as true for purposes of the motion to dismiss and draws all inferences in Plaintiffs' favor. Cmty. Bank, 887 F.3d at 811.

         Defendants manufacture, market, advertise, label, distribute, and sell pet food under the brand names Acana and Orijen throughout the United States, including in this District. (Dkt. 26 ¶ 2.) Defendants market the Acana and Orijen brands as being “Biologically Appropriate” and free of anything “nature did not intend for your dog to eat.” (Id. ¶¶ 10, 56.) Defendants state that the brands “nourish as nature intended” and “deliver[] nutrients naturally.” (Id. ¶¶ 59-60.) Defendants also state that the brands are made with “natural and not synthetic” nutrients and with “fresh and natural” ingredients “deemed fit for human consumption.” (Id. ¶¶ 11-12, 60-61.) Defendants also advertise the brands as being “Never Outsourced” and made from fresh and regional ingredients delivered daily. (Id. ¶¶ 14-15, 57-58.) Defendants charge a premium for this purportedly higher-quality dog food. (Id. ¶ 3.)

         On their website, Defendants advertise that they make their pet foods using “state-of-the art fresh food processing technologies, ” in their “own kitchen, where [they] oversee every detail of food preparation-from where [their] ingredients come from, to every cooking, quality and food safety process.” (Id. ¶ 73.) Defendants state that their “[s]tandards . . . rival the human food processing industry for authenticity, nutritional integrity, and food safety.” (Id.) Since 2016, Defendants have produced all Acana and Orijen pet foods sold in the United States in their DogStar Kitchens facility in Bowling Green, Kentucky. (Id. ¶ 64.) Defendants tout this facility as having “the most advanced pet food kitchens on earth, with standards that rival the human food processing industry” and meet the EU's standard for pet food, which are stricter than those set by the FDA or Canadian Food Inspection Agency. (Id. ¶¶ 66, 88.)

         Nowhere on the packaging or in any advertising or marketing do Defendants disclose that the dog foods contain (or have a high risk of containing) heavy metals, pentobarbital, toxins, BPA, non-regional and non-fresh ingredients, or unnatural or other ingredients that do not conform to the dog foods' packaging or advertising. (Id. ¶ 6) Specifically, the dog foods are known to contain-presumably based on third-party scientific testing[2]-the following levels of heavy metals and BPA, which are “all known to pose health risks to humans and animals, including dogs:”

Product Name

Arsenic (ug/kg)

BPA (ug/kg)

Cadmium (ug/kg)

Mercury (ug/kg)

Lead (ug/kg)

Acana Regionals Wild Atlantic New England

3256.40

32.50

113.00

51.20

249.30

Orijen Six Fish

3169.80

39.50

200.50

54.90

38.70

Orijen Original Chicken

907.60

0.00

93.20

10.80

489.80

Orijen Regional Red Angus Beef, Boar, Goat, Lamb, Pork

849.40

43.60

123.10

21.40

167.70

Acana Regionals Meadowland

846.40

82.70

37.50

8.70

489.00

Acana Regionals Appalachian Ranch

358.20

82.90

32.50

14.90

336.70

Acana Regionals Grasslands

262.80

0.00

30.30

9.60

305.00

Orijen Regional Red Angus Beef, Ranch Raised Lamb

1066.50

37.70

62.10

21.70

138.50

Acana Singles Duck & Pear

523.40

102.70

30.90

15.40

537.40

Acana Singles Lamb & Apple

401.20

73.20

35.00

3.20

423.40

Acana Heritage Free-Run

292.90

62.20

27.80

3.30

290.20

Acana Heritage Freshwater

977.70

0.00

56.20

27.40

486.80

Orijen Tundra Freeze Dried

23.13

6.02

27.64

5.35

12.26

Orijen Adult Dog Freeze Dried

23.21

13.41

7.74

9.45

7.33

Orijen Regional Red Freeze Dried

102.66

0.00

23.40

19.60

16.85

Orijen Six Fish Wild-Caught

2173.90

39.70

92.20

58.80

55.10

Orijen Tundra Goat, Venison

1628.50

40.30

134.50

43.60

471.80

Orijen Grain Free Puppy

791.20

32.20

87.20

12.20

490.80

Orijen Singles Mackerel

1510.70

40.10

112.20

29.60

251.10

Acana Heritage Meats

384.80

53.80

24.40

6.40

1731.90

Acana Singles Pork & Squash

373.70

57.60

25.60

4.00

329.60

(Id. ¶ 7.) The EU provides maximum levels for undesirable substances in animal feed and specifically requires that arsenic must not exceed 2 parts per million (or 2000 ppb). (Id. ¶ 68.) The testing results show that some of Defendants' products exceed that level. (Id.) Exposure to toxins like arsenic, mercury, cadmium, and lead can cause serious illness in humans and animals. (Id. ¶ 26.) BPA is an industrial chemical and has also been linked to various health issues, including reproductive disorders, heart disease, diabetes, cancer, and neurological problems. (Id. ¶ 53.)

         The Clean Label Project found and informed Defendants that their cat and dog food products contained higher levels of heavy metals when compared to other pet foods. (Id. ¶ 100.) In response to these findings, Defendants issued a White Paper titled “Orijen and Acana Foods in Comparison to Pet Food Safety Standards” acknowledging the presence of heavy metals in their products. (Id. ¶ 101; Dkt. 34-1 at 1.) In the White Paper, Defendants stated that they “systematically test” their Orijen and Acana products for heavy metals in third-party laboratories and reported data from the last three years of third-party testing that shows heavy metals are present in their dog food products only at levels lower than the maximum tolerable limits (MTLs) for animals set by the National Research Council (NRC) and/or FDA:

Heavy Metal

Average (mg/kg)

Standard Deviation (mg/kg)

NRC/FDA MTL (mg/kg)

Arsenic

0.89

1.05

12.50

Cadmium

0.09

0.09

10.00

Lead

0.23

0.15

10.00

Mercury

0.02

0.02

0.27

(Id. ¶ 101; Dkt. 34-1 at 2.) Defendants contend such levels of heavy metals in pet foods are acceptable and did not change the packaging, labeling, advertising, or marketing of their Orijen or Acana brands to disclose the White Paper findings. (Id. ¶¶ 102-03.)

         Defendants also sold dog food containing pentobarbital, which was caused by cross-contamination resulting from one of Defendants' suppliers having accepted euthanized horses in earlier production runs for other customers. (Id. ¶¶ 13, 48.) Defendants were notified in May 2018 that one of their suppliers sold them beef tallow containing pentobarbital. (Id. ¶ 48.) There is no safe level of pentobarbital in dog food and ingestion by a pet can lead to adverse health issues. (Id. ¶ 41.)

         Defendants source ingredients internationally (e.g., from New Zealand, India, France, Denmark, Ireland, Australia, and Canada) and from across the United States. (Id. ¶ 14.) Defendants use frozen products (some of which have been stored for years) and store the delivered meals at their kitchens for several months prior to use. (Id.) Defendants do not test their ingredients or finished products for heavy metals, pentobarbital, BPA, or other unnatural ingredients. (Id. ¶ 9.)

         Plaintiff Zarinebaf is an Illinois resident who purchased Orijen and Acana dog foods for his two dogs from his local pet stores approximately once a month from 2013 through 2018. (Id. ¶ 20.) Plaintiff Chernik is an Illinois resident who purchased Orijen and Acana dog foods for his 19 dogs from his local pet stores approximately once a week from 2006 through 2017. (Id. ¶ 19.) Both Plaintiffs saw the nutritional claims on the packaging before purchasing the dog food, relied on those claims in deciding to purchase the dog food, paid a premium to purchase the dog food, and would not have purchased the dog food had Defendants disclosed that it contained heavy metals, pentobarbital, toxins, BPA, and non-regional and non-fresh ingredients. (Id. ¶¶ 19-20.)

         Plaintiffs Zarinebaf and Chernik bring their claims individually and on behalf of all Illinois residents who purchased the “contaminated” dog food from July 1, 2013 to the present. (Id. ¶ 110.)

         DISCUSSION

         Defendants first move to dismiss all claims under Rule 12(b)(6) on the grounds that Plaintiffs fail to state sufficient facts to support their contention that Defendants' statements were deceptive. Defendants then individually address the unjust enrichment claim under Rule 12(b)(6). Defendants also move to dismiss the fraud claims under Rule 9(b). The Court addresses these claims below, applying Illinois law. See Selective Ins. Co. of S.C. v. Target Corp., 845 F.3d 263, 266 (7th Cir. 2016).

         “To survive a motion to dismiss under 12(b)(6), a complaint must ‘state a claim to relief that is plausible on its face.'” Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Ashcroft v. Iqbal, 566 U.S. 662, 678 (2009)). “[I]t is not enough for a complaint to avoid foreclosing possible bases for relief; it must actually suggest that the plaintiff has a right to relief . . . by providing allegations that ‘raise a right to relief above the speculative level.'” E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 777 (7th Cir. 2007) (citing Twombly, 550 U.S. at 555) (emphasis in original). The Court construes the complaint “in the light most favorable to the nonmoving party, accept[s] well-pleaded facts as true, and draw[s] all inferences in her favor.” Reynolds, 623 F.3d at 1146. “[L]egal conclusions and conclusory allegations merely reciting the elements of the claim are not entitled to this presumption of truth.” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (citing Iqbal, 566 U.S. at 678).

         Rule 9(b) requires a party alleging fraud to “state with particularly the circumstances constituting fraud.” Fed.R.Civ.P. 9(b). This heightened pleading requirement was intended to protect against the “great harm to the reputation of a business firm or other enterprise a fraud claim can do.” Borsellino v. Goldman Sachs Grp., Inc., 477 F.3d 502, 507 (7th Cir. 2007). Thus, pursuant to Rule 9(b), a plaintiff must “describe the ‘who, what, when, where, and how' of the fraud- ‘the first paragraph of any newspaper story.'” United States ex rel. Presser ...


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