CODY v. CONAGRA BRANDS INC (2025)

Order DENYING Conagra's Motion to Dismiss (Dkt. 25)

Defendant Conagra Brands, Inc. moves to dismiss Plaintiff Annette Cody's First Amended Complaint.¹ Dkt. 25 (Mot.). Cody opposes. Dkt. 26 (Opp'n). The Court deems this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; Local Rule 7-15. For the reasons stated below, the motion is DENIED.

I. BACKGROUND

Conagra manufactures and sells “Cauliflower Wings” in the “Sweet Chili” flavor (the Product) under the “BIRDS EYE” brand name. Dkt. 19 (FAC) ¶ 1. The Product is a popular frozen food and is sold in freezers at retail stores. Id. ¶¶ 1, 31. In July 2024, Cody purchased the Product from a Ralphs supermarket with dual motivations. Id. ¶¶ 25-26. She purchased the Product both because she had a genuine interest in consuming and enjoying the Product and because she is “a consumer rights ‘tester’ who creates public benefit by ensuring that companies comply with their obligations under California law.” Id. ¶¶ 25-26. Cody clarifies that she would not have purchased the Product had she known it contained slack fill that serves no functional purpose.² Id. ¶ 28. She alleges that none of the slack fill statutory exceptions apply here. Id. ¶¶ 29-49.

Because the Product's packaging is opaque and inflated with a gas to ensure it cannot be completely compressed, it is difficult for a consumer to determine how empty the Product's container is before purchasing the Product. Id. ¶ 20. The information on the Product's side label also “does not enable reasonable consumers to form any meaningful understanding about how to gauge the quantity of contents of the Product as compared to the size (i.e., volume) of the package itself.” Id. ¶ 21. For example, instead of providing the precise number of servings or pieces per container, the Product's Nutrition Facts side label refers to “about 3 servings per container” and a serving size of “about 5 sauced pieces.” Id. ¶ 23. Cody's “investigation of a sample of the Product's container indicates a range of between 12-14 pieces of cauliflower per container (plus one packet of sweet chili sauce) with an average fill of 13 pieces per container.” Id. ¶ 24. Cody alleges that Conagra “falsely represents the quantity of product in each of the Product's opaque packages” because “[t]he size of each package leads reasonable consumers to believe they are purchasing a package full of product when, in reality, consumers are actually receiving significantly less than what is represented by the size of the package.” Id. ¶ 18.

Cody asserts claims against Conagra for fraud and for violation of the California Consumers Legal Remedies Act (CLRA).

II. LEGAL STANDARD

Rule 12(b)(6) allows an attack on the pleadings for failure to state a claim on which relief can be granted. “[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam). Allegations contradicted by matters properly subject to judicial notice or by exhibit need not be accepted as true, Produce Pay, Inc. v. Izguerra Produce, Inc., 39 F.4th 1158, 1161 (9th Cir. 2022); and the court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Id. (alteration in original) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955). A complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. This means that the complaint must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. There must be “sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively ․ [and] the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

Allegations of fraud are excepted from the “notice pleading” standard of Rule 8(a)(2). Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 513, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). Under Federal Rule of Civil Procedure 9(b), fraud claims must be pleaded with particularity. Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009). Fraud claims under Rule 9(b) must still meet Iqbal's plausibility standard. Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011). “[A] plaintiff must set forth more than the neutral facts necessary to identify the transaction.” In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (superseded by statute on other grounds). A plaintiff must include “an account of the time, place, and specific content of the false representations” at issue. Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (simplified). Fraud allegations must “be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge and not just deny that they have done anything wrong.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003).

III. DISCUSSION

Conagra argues that Cody's fraud and CLRA claims fail under Federal Rule of Civil Procedure 9(b). Conagra also argues that Cody's claims fail because Cody does not sufficiently allege: (1) that a reasonable consumer would be misled by the Product's packaging; (2) that the Product's slack fill is nonfunctional; or (3) that she justifiably relied on or was reasonably misled by the Product's packaging.

A. Rule 9(b)

As an initial matter, the Court finds that Cody has satisfied the heightened pleading requirements of Rule 9(b).

For claims based on deceptive product packaging or labeling, many courts in California have applied a “relatively straightforward test for the application of Rule 9(b):” The “who” is the defendant; the “what” is the allegedly misleading packaging; the “when” is the proposed class period during which time the packaging was deceptive; the “where” is the packaging containing the allegedly misleading statement—or in the case of deceptive packaging, the packaging itself—and the “how” is the plaintiff's explanation for why the packaging is misleading.

Oh v. Fresh Bellies, Inc., No. CV 24-5417 PSG (JPRx), 2024 WL 4500727, at *5 (C.D. Cal. Oct. 15, 2024) (quoting In re 5-hour ENERGY Mktg. & Sales Pracs. Litig., No. MDL 13-2438 PSG (PLAx), 2014 WL 5311272, at *17 (C.D. Cal. Sept. 4, 2014)). Here, Cody alleges the “who” is Conagra; the misleading representation, or the “what,” is “the filling of the Product in an oversized container, which implied to the reasonable consumer that the container had more pieces of cauliflower than it actually contained;” and the “how” is Conagra's filling the containers with a significant amount of nonfunctional slack fill. FAC ¶¶ 55-56. Cody also alleges the “when” is July 2024 when she purchased the Product; the “where” is retail stores in California; and the “why” is “to induce Plaintiff to purchase the Product, to cause Plaintiff to pay more for the Product, and to take market share and profits from its competitors.” Id. ¶ 55. The FAC therefore satisfies the requirements of Rule 9(b).

B. Reasonable Consumer Test

Claims under California consumer protection laws “based on deceptive or misleading marketing must demonstrate that a ‘reasonable consumer’ is likely to be misled by the representation.” Moore v. Trader Joe's Co., 4 F.4th 874, 881 (9th Cir. 2021).

Under this standard, Plaintiff must show that members of the public are likely to be deceived. This requires more than a mere possibility that [the Product's packaging] might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner. Rather, the reasonable consumer standard requires a probability that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.

Ebner v. Fresh, Inc., 838 F.3d 958, 965 (9th Cir. 2016) (internal citations and quotation marks omitted). The California Consumers Legal Remedies Act “prohibit[s] ‘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.’ ” Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (quoting Kasky v. Nike, Inc., 27 Cal. 4th 939, 951, 119 Cal.Rptr.2d 296, 45 P.3d 243 (2002), as modified (May 22, 2002)). “California courts ․ have recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for decision on demurrer.” Id. “However, actions may be dismissed under the reasonable consumer test when ‘the advertisement itself [makes] it impossible for the plaintiff to prove that a reasonable consumer was likely to be deceived.’ ” Kennard v. Lamb Weston Holdings, Inc., No. 18-CV-04665-YGR, 2019 WL 1586022, at *3 (N.D. Cal. Apr. 12, 2019) (quoting Williams, 552 F.3d at 939).

Conagra argues that Cody fails to allege that the Product would mislead her or any other reasonable consumer because “the packaging is soft and pliable” and discloses both the approximate number of pieces of cauliflower in the package and the Product's net weight. Mot. at 5-9. Conagra contends that this case is distinguishable from the cases cited by Cody where “courts evaluated non-pliable product packaging for different types of products and where the packaging fails to state the number of pieces of the product on the label.” Dkt. 27 at 1. Cody argues it would be inappropriate to find that the information on the Product's label “dispelled the deception created by the oversized packaging of the Product as a matter of law.” Opp'n at 19-20.

The Court agrees with Cody that the reasonable consumer test involves factual questions that should not be decided on a motion to dismiss. See Oh, 2024 WL 4500727, at *8 (stating “the Court is not convinced that this is one of the ‘rare situation[s]’ where it is appropriate to determine at the motion to dismiss stage—without any evidence—that a reasonable consumer would not be misled”) (quoting Williams, 552 F.3d at 939); see also Maisel v. Tootsie Roll Indus., LLC, No. 20-cv-05204-SK, 2021 WL 3185443, at *4 (N.D. Cal. July 27, 2021) (explaining that “decision at this stage risks substituting the judgment of the Court as to what constitutes reasonableness for a judgment on the merits of that question, supported by fulsome development of the factual record”). Cody plausibly alleges that a reasonable consumer could be deceived by the Product's packaging because the actual fill occupies only “approximately 39 percent[ ] of the maximum volume of the Product's packaging container.” FAC ¶ 3; see also Cordes v. Boulder Brands USA, Inc., No. CV 18-6534 PSG, 2018 WL 6714323, at *7 C.D. Cal. Oct. 17, 2018 (finding “it at least plausible that a consumer could be deceived by a package filled with forty percent air, regardless of whether the number of pretzels in the package is displayed on the ingredient list”).

The Court acknowledges that some district courts have found that packaging disclosing the actual number of pieces of the product could not mislead a reasonable consumer. See Kennard, 2019 WL 1586022, at *5 (finding the plaintiff failed to state a plausible claim of consumer deception where the “packaging disclose[d] the product's net weight, the number of fries per serving, and the approximate number of servings per container”); see also Bush v. Mondelez Int'l, Inc., No. 16-CV-02460-RS, 2016 WL 5886886, at *1-*3 (N.D. Cal. Oct. 7, 2016) (finding a reasonable consumer would not be deceived where “product labels accurately disclose the product's net weight, the number of cookies or crackers per serving and the number of servings per container”). But the Court agrees with the reasoning of the district courts that decline to make this determination on a motion to dismiss. See Oh, 2024 WL 4500727, at *8 (“Although the Court finds that Plaintiff can simply look at the Product's label and/or feel the pliable packaging to avoid future deception, the reasonable consumer test does not assume Plaintiff's knowledge of the Product.”). Therefore, although the packaging states the approximate number of pieces of cauliflower and the net weight of the Product, the Court cannot find as a matter of law that the Product's packaging would not deceive a reasonable consumer.

C. Nonfunctional Slack Fill

California Business and Professions Code § 12606.2 incorporates 21 C.F.R § 100.100 and generally prohibits the creation, formation or filling of food containers as to be misleading.³ Cal. Bus. & Prof. Code § 12606.2(b). “A container that does not allow the consumer to fully view its contents shall be considered to be filled as to be misleading if it contains nonfunctional slack fill.” Id. § 12606.2(c). “Slack fill is the difference between the actual capacity of a container and the volume of product contained therein.” Id.

Nonfunctional slack fill is the empty space in a package that is filled to substantially less than its capacity for reasons other than any one or more of the following:

(1) Protection of the contents of the package.

(2) The requirements of the machines used for enclosing the contents in the package.

(3) Unavoidable product settling during shipping and handling.

(4) The need for the package to perform a specific function, such as where packaging plays a role in the preparation or consumption of a food, if that function is inherent to the nature of the food and is clearly communicated to consumers.

(5) The fact that the product consists of a food packaged in a reusable container where the container is part of the presentation of the food and has value that is both significant in proportion to the value of the product and independent of its function to hold the food, such as a gift product consisting of a food or foods combined with a container that is intended for further use after the food is consumed or durable commemorative or promotional packages.

(6) Inability to increase the level of fill or to further reduce the size of the package, such as where some minimum package size is necessary to accommodate required food labeling exclusive of any vignettes or other nonmandatory designs or label information, discourage pilfering, facilitate handling, or accommodate tamper-resistant devices.

Id. Conagra argues that Cody does not adequately plead that any slack fill in the Product is nonfunctional. Mot. at 9. It asserts that Cody's “speculation is unsupported by any facts regarding [Conagra's] manufacturing processes or the specific product and defy common sense,” and that her “allegations are the equivalent of a bare recitation of the safe harbor statute which numerous courts have found insufficient to state a claim.” Id. at 11. Cody asserts that “while some empty space may be included in the Product's packaging as a result of such safe harbors, such empty space does not explain why only an approximately 39 percent fill level exists.”⁴ Opp'n at 13.

In the FAC, Cody alleges that because the pieces of cauliflower are frozen and “not at any serious risk of breaking,” the empty space in the packaging is not to protect the cauliflower, and in fact, makes it more likely the cauliflower will break or sustain damage during shipping and handling. FAC ¶¶ 31-32. Further, she alleges that “the machines used for enclosing the contents of the package have the capacity to add more content to the containers used to enclose the contents of the Product,” and that the slack fill in the package is not due to unavoidable settling of the frozen cauliflower during shipping and handling. Id. ¶¶ 35-37. She also alleges that the Product's package does not perform a specific function that requires slack fill, is not reusable, and does not provide any significant value to the Product. Id. ¶¶ 38-41. Finally, Cody alleges that Conagra could easily increase the quantity of cauliflower pieces in the package or decrease the package size. Id. ¶ 43. The Court finds that Cody has plausibly alleged that the Product contains nonfunctional slack fill.

D. Justifiable Reliance

Conagra argues that Cody fails to plead justifiable reliance because she “specifically and regularly does scrutinize product packaging such that she cannot have possibly been deceived by the Product.” Mot. at 14. However, Cody argues the fact she is a consumer rights “tester” is insignificant. Opp'n at 24-25.

In the FAC, Cody alleges that she “relied upon the opaque packaging, including the size of the package and product label,” and “would not have purchased the Product, or would not have paid a price premium for the Product, had [she] known that the size of the package and product label were false and misleading.” FAC ¶ 25. She further alleges that her “reliance on the size of the package was reasonable, as consumers reasonably expect that a package will be filled commensurate with its size.” Id. ¶ 58. The fact Cody is a “tester” does not mean as a matter of law that Cody did not rely on the alleged misrepresentation in this case. The Court finds Cody has plausibly alleged her justifiable reliance on Conagra's misrepresentation.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES Conagra's motion to dismiss.

IT IS SO ORDERED.

FOOTNOTES

1.   Conagra requests that the Court take judicial notice of the Product's label, which is incorporated by reference in the FAC, and five complaints filed by Cody in Los Angeles Superior Court. Dkt. 25-1. The Court grants Conagra's request as to the Product's label but denies its request as to the complaints. Other complaints filed by Cody are irrelevant.

2.   “Slack-fill is the difference between the actual capacity of a package and the volume of product contained therein.” FAC ¶ 17.

3.   Section 12606.2 “is not operative to the extent that it is not identical to the federal requirements.” Cal. Bus. & Prof. Code § 12606.2(f). The Court therefore does not address the requirements of § 12606.2(c)(7)-(8) because 21 C.F.R. § 100.100 does not contain these requirements. See 21 C.F.R § 100.100; see also Stewart v. Kodiak Cakes, LLC, 537 F. Supp. 3d 1103, 1155 (S.D. Cal. 2021) (finding the “mode of commerce” requirement in § 12606.2(c)(8) is “not operative”); Reyes v. Just Born, Inc., 729 F. Supp. 3d 971, 978 (C.D. Cal. 2024) (finding “the actual size exemption in [§ 12606.2(c)(7) of] the CLRA is not identical to the federal requirements and is therefore not operative”).

4.   Cody argues that the Court should follow the cases holding that the safe harbor provisions are affirmative defenses but that she has nonetheless plausibly alleged the safe harbor provisions do not apply here. Opp'n at 4-13.

Dale S. Fischer, United States District Judge