Harville v. Three Wishes Foods, Inc.

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION [7] 8 LYDIA HARVILLE, Case No. 5:22-cv-04774-EJD 9 Plaintiff, ORDER GRANTING MOTION TO STAY CASE 10 v. 11 THREE WISHES FOODS, INC., Re: ECF No. 34 Defendant. [12] 13 Before the Court is Defendant Three Wishes Foods Inc.’s (“Three Wishes”) Motion to 14 Stay Case pending Ninth Circuit decisions. The Court finds this motion suitable for decision 15 without oral argument pursuant to Civil Local Rule 7-1(b). In consideration of the parties’ 16 moving papers and in weighing the competing interests, the Court GRANTS the motion and 17 STAYS the case. 18 Plaintiff Lydia Harville brings this class action against Three Wishes seeking redress for 19 the brand’s allegedly deceptive practices in labeling and marketing the amount of protein on its 20 cereal packages and unlawfully fortifying its cereal. Compl., ECF No. 1. Three Wishes uses 21 plant-based proteins in its cereal products, such as proteins derived from chickpea, pea, and 22 tapioca. Id. ¶ 36. Plaintiffs allege that, on average, plant-based proteins are only 85% digestible. 23 Id. ¶ 33. Three Wishes’ cereal packaging states that it contains 8 grams of protein per serving on 24 its front label. Id. ¶ 22. 25 According to Harville, the cereals’ labels are false or misleading because they do not 26 include statements of the corrected amount of protein calculated using the Protein Digestibility 27 Corrected Amino Acid Score (“PDCAAS”) and expressed in %DV, which factors in the quality of 1 the protein source and digestibility of the protein in calculating the amount of protein in a food. 2 Id. ¶¶ 45–46, 51. Using the PDCAAS method would purportedly result in calculation of protein 3 that is lower than the 8 grams advertised on the label. Id. ¶ 53. Harville also alleges that the 4 cereals are unlawfully fortified “snack products” and therefore the cereals’ nutrition labels contain 5 “deceptive and misleading claims.” Id. ¶¶ 54, 57, 63. The complaint alleges violations of the 6 California Consumers Legal Remedies Act (the “CLRA”), false advertising, and common law 7 fraud and/or misrepresentation. 8 Three Wishes moved to dismiss the complaint asserting, in part, that Harville’s claims are 9 expressly or impliedly preempted by the Federal Food, Drug and Cosmetics Act (“FDCA”). See 10 ECF No. 17. This motion is pending before the Court. After moving for dismissal, Three Wishes 11 also moved to stay the case pending the Ninth Circuit’s decisions in Nacarino v. Kashi Company, 12 No. 22-15377 (“Nacarino”), Brown v. Kellogg Company, No. 22-15658 (“Brown”), and Davidson 13 v. Sprout Foods, Inc., No. 22-16656 (“Davidson”).1 See ECF No. 34. All three appeals address 14 the preemption issues raised by Three Wishes in this action. 15 “[T]he power to stay proceedings is incidental to the power inherent in every court to 16 control disposition of the cases on its docket with economy of time and effort for itself, for 17 counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). In determining 18 whether to grant a stay, “the competing interests which will be affected by the granting or refusal 19 to stay must be weighed.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing id. at 20 254–55). A stay is appropriate where the moving party demonstrates (1) there is a “fair 21 possibility” of “hardship or inequity,” (2) it would not result in “undue delay,” or (3) where the 22 court “find[s] it is efficient for its own docket and the fairest course for the parties to enter a stay 23 of an action before it, pending resolution of independent proceedings which bear upon the case.” 24 Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007) 25 (citations omitted). In addition, “Courts in this district have routinely granted stays where there [27] 1 The Ninth Circuit consolidated the Nacarino and Brown appeals. 1 are overlapping issues of fact or law with a case before different district courts or on appeal.” 2 Vance v. Google LLC, No. 5:20-CV-04696-BLF, 2021 WL 534363 , at *3 (N.D. Cal. Feb. 12, 3 2021) (collecting cases). 4 Turning to the first Landis factor, Three Wishes argues that it would suffer “hardship or 5 inequity in being required to go forward” by expending time and resources litigating the action. 6 299 U.S. at 254–55. Three Wishes asserts that the Ninth Circuit’s decisions will determine the 7 viability of three of Harville’s five theories of liability,2 and Three Wishes would therefore suffer 8 hardship in proceeding to litigate theories of liability depending on the outcome of the Davidson 9 decision. ECF No. 34 at 4–5. Three Wishes contends that staying the case pending the 10 disposition of Davidson would prevent the parties from “engaging in extensive discovery, expert 11 work, and motion practice” on theories of liability that may be invalid. Id. at 5. Harville counters 12 that “being required to defend a suit, without more, does not constitute a ‘clear case of hardship or 13 inequity’ within the meaning of Landis.” ECF No. 43 at 14 (quoting Lockyer v. Mirant Corp., 398 14 F.3d 1098, 1112 (9th Cir. 2005)). 15 However, “hardship may nonetheless occur where . . . a denial of stay would cause both 16 parties to incur significant expenses on litigation that may be rendered moot.” Vance v. Google 17 LLC, No. 5:20-CV-04696-BLF, 2021 WL 534363 , at *5 (N.D. Cal. Feb. 12, 2021); see also Lal v. 18 Capital One Fin. Corp., No. 16-CV-00674-BLF, 2017 WL 282895 (N.D. Cal. Jan 23, 2017). 19 Harville disagrees, contending that discovery will overlap with the claims that will be unresolved 20 by the appeals. ECF No. 43 at 2–3, 9. Even so, both parties would expend additional resources 21 litigating liability theories that may be preempted. Moreover, continuing litigation also poses 22 “potential for inconsistent rulings and resulting confusion.” Hawai’i v. Trump, 233 F. Supp. 3d 23 850, 854 (D. Haw. 2017). For these reasons, the Court finds that this factor weighs slightly in 24 favor of granting a stay. [26] 2 The parties differ in their categorization of the theories of liability. Defendant’s motion 27 identifies three theories of liability while Plaintiff categorizes the theories into 5 categories. Under either formulation the majority of Plaintiffs’ theories of liability will be addressed on appeal. 1 Second, Three Wishes argues that Harville will not suffer prejudice or be unduly delayed 2 by a stay while the appeals are pending. ECF No. 34 at 6. Three Wishes points out that the stay is 3 not open-ended. Both appeals have been briefed and Nacarino/Brown has been argued before the 4 Ninth Circuit.3 5 Harville asserts that these decisions will not be “concluded within a reasonable time in 6 relation to the urgency of the claims presented to the court.” ECF No. 43 at 7 (quoting Leyva v. 7 Certified Grocers of California, Ltd., 593 F.2d 857, 864 (9th Cir. 1979)). According to Harville, a 8 stay is “indefinite” because appeals are slow and there is no way to determine when the Ninth 9 Circuit will decide the cases. ECF No. 43 at 8. In support, Harville cites Edwards where a court 10 in this district found this factor weighed against granting a stay “because it is impossible to predict 11 when the D.C. Circuit will decide the case and, as a result, [] [plaintiff] will be prejudiced in his 12 ability to conduct meaningful discovery.” Edwards v. Oportun, Inc., 193 F. Supp. 3d 1096 , 1101 13 (N.D. Cal. 2016). However, Edwards is distinguishable because the case on appeal had not been 14 briefed or set for oral argument. Here, the appeals process is much further along, and a ruling is 15 forthcoming in Nacarino/Brown. 16 In addition, Harville asserts that a stay will delay injunctive relief to class members. ECF 17 No. 43 at 13. However, Three Wishes notes that Harville challenges its old cereal labeling; the 18 new cereal labels include the information that is allegedly missing (i.e., the amount of protein 19 calculated using the PDCAAS method and expressed in %DV). ECF No. 34 at 6. Harville also 20 asserts that a delay “makes reaching potential class members more difficult and increases the risk 21 that evidence will dissipate.” Opp’n at 3 (citing Cabiness v. Educ. Fin. Sols., LLC, No. 16-CV22 01109-JST, 2017 WL 167678 , at *3 (N.D. Cal. Jan. 17, 2017). The Court recognizes that there 23 could be some harm to Plaintiff’s ability to litigate this suit by staying the case before discovery. 24 Accordingly, this factor weighs slightly against granting the motion. 25 Finally, the Court finds that the third Landis factor weighs heavily in favor of granting a [26] 27 3 According to the Ninth Circuit’s docket, Davidson is being considered for an upcoming oral argument calendar in October 2023. 1 stay. The third factor considers “the orderly course of justice measured in terms of the simplifying 2 || or complicating of issues, proof, and questions of law which could be expected to result from a 3 stay.” CMAX, 300 F.2d at 268 (citing Landis, 299 U.S. at 254-55 ). Although the appeals do not 4 || address every theory of liability raised by Harville, the Ninth Circuit’s decisions will nonetheless 5 || provide guidance to this Court. See Roffman v. Rebbl, Inc., No. 22-CV-05290-JSW, 2023 WL 6 || 4186011, at *2 (N.D. Cal. June 26, 2023) (finding the third Landis factor weighs in favor of a stay 7 and staying the action alleging similar claims pending the disposition of Davidson and 8 Nacarino/Brown). 9 Additionally, Harville asserts that the Court should deny the motion because Three Wishes 10 || has failed to meet its burden to show this is a “rare circumstance” where is a stay is warranted. ll ECF No. 43 at 14-15. This argument is not persuasive. Indeed, “[c]ourts in this district have 12 || routinely granted stays where there are overlapping issues of fact or law with a case before 13 different district courts or on appeal.” Vance, 2021 WL 534363 , at *3 (collecting cases). 14 For the forgoing reasons, Three Wishes’ motion is GRANTED and the case is STAYED. 3 15 The parties are ordered to file status reports regarding the status of the proceedings before the a 16 || Ninth Circuit every 180 days. This Order does not preclude any party from moving to lift the stay 3 17 before the appeals are resolved. 18 This Order terminates ECF No. 17. Three Wishes may re-notice the motion to dismiss 19 once the stay is lifted. 20 IT IS SO ORDERED. 21 Dated: July 13, 2023 [23] EDWARD J. DAVILA 24 United States District Judge [27] 28 || Case No.: 5:22-cv-04774-EJD ORDER GRANTING MOTION TO STAY CASE