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MELISA GONZALEZ, individually and on behalf of a class and subclass of similarly situated persons, et al., Plaintiffs, v. PEPSICO, INC., et al., Defendants. CIVIL ACTION No. 06-2163-KHV UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS 2007 U.S. Dist. LEXIS 38175 May 24, 2007, Decided May 24, 2007, Filed COUNSEL: [*1] For MeLisa Gonzalez, for herself and for a class of similarly situated persons, Mark Haley, with wife Linda Haley, for themselves and for a class and subclass of similarily situated persons, Linda Haley, with husband Mark Haley, for themselves and for a class and subclass of similarily situated persons, Jenifer Noel Guth, for herself and for a class and subclass of similarily situated persons, Ryan James Coffelt, for himself and for a class and subclass of similarily situated persons, Richard Hernandez, for himself and for a class and subclass of similarily situated persons, Plaintiffs: Andrew A. Rainer, LEAD ATTORNEY, McRoberts, Roberts & Rainer, LLP, Boston, MA; Gregory M. Garvin, Neil S. Sader, LEAD ATTORNEYS, Sader & Garvin LLC, Kansas City, MO. For John Doe Companies 6-100, The Coca Cola Company, Defendants: Lori R. Schultz, LEAD ATTORNEY, Shook, Hardy & Bacon L.L.P. -- Kansas City/Grand, Kansas City, MO. For PepsiCo Inc, Defendant: Lori R. Schultz, LEAD ATTORNEY, Shook, Hardy & Bacon L.L.P. -- Kansas City/Grand, Kansas City, MO; Matthew J. Verschelden, LEAD ATTORNEY, Stinson Morrison Hecker LLP- Walnut, Kansas City, MO; Ricky L. Shackelford, LEAD ATTORNEY, Jones Day [*2] - Los Angeles, Los Angeles, CA. For Sunny Delight Beverages, Co., Defendant: Jill P. Meyer, LEAD ATTORNEY, Frost Brown Todd LLC - OH, Cincinnati, OH; Leland H. Corley, LEAD ATTORNEY, Lewis, Rice & Fingersh, LC -- Kansas City, Kansas City, MO; Lori R. Schultz, LEAD ATTORNEY, Shook, Hardy & Bacon L.L.P. -- Kansas City/Grand, Kansas City, MO. For Rockstar, Inc., Defendant: Ian K. Boyd, LEAD ATTORNEY, Harvey Siskind LLP, San Francisco, CA. For Coca Cola Enterprises, Inc, Defendant: Ian K. Boyd, LEAD ATTORNEY, Harvey Siskind LLP, San Francisco, CA; Lori R. Schultz, LEAD ATTORNEY, Shook, Hardy & Bacon L.L.P. -- Kansas City/Grand, Kansas City, MO. JUDGES: Kathryn H. Vratil, United States District Judge. OPINION BY: Kathryn H. Vratil OPINION: MEMORANDUM AND ORDER AND ORDER TO SHOW CAUSE MeLisa Gonzalez, Mark Haley, Linda Haley, Jenifer Noel Guth, Ryan James Coffelt and Richard Hernandez bring suit individually and on behalf of similarly situated persons against PepsiCo, Inc. ("Pepsi"), Sunny Delight Beverages Co. ("Sunny Delight"), Rockstar, Inc. ("Rockstar"), Coca-Cola Enterprises, Inc. ("Coke Enterprises") and John Doe Companies six through 100. n1 Under Kansas law, plaintiffs [*3] allege breach of the implied warranty of merchantability under Article II of the Kansas Uniform Commercial Code, K.S.A. ? 84-2-101 et seq. (Count I), unfair trade practices under the Kansas Consumer Protection Act, K.S.A. ? 50-623 et seq. (Count II), and unjust enrichment (Count III). This matter is before the Court on Defendants' Joint Motion To Dismiss Second Amended Complaint (Doc. # 37) filed November 14, 2006, and Plaintiffs' Motion For Leave To File Sur-Reply Memorandum In Opposition To Defendants' Motion To Dismiss (Doc. # 55) filed January 26, 2007. For reasons stated below, the Court overrules the motions. n2 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - - n1 Plaintiffs' second amended complaint also named the Coca-Cola Company ("Coke") as defendant. On May 14, 2007, plaintiffs voluntary dismissed Coke from the case. See Notice of Voluntary Dismissal With Prejudice As To The Coca-Cola Company (Doc. # 70). n2 The Tenth Circuit has stated that generally, a nonmoving party should be given an opportunity to respond to new material raised for the first time in a reply brief. Green v. New Mexico, 420 F.3d 1189, 1196 (10th Cir. 2005). Here, plaintiffs seek leave to file a surreply "in order to respond to a number of specific mischaracterizations in defendants' reply brief." Plaintiffs' Sur-Reply Memorandum In Opposition To Defendants' Joint Motion To Dismiss (Doc. # 55-2) filed January 26, 2007 at 1. Plaintiffs do not, however, identify any new material which defendants presented in their reply, and the Court therefore finds that they are not entitled to file a surreply on the motion. In any event, plaintiffs' proposed surreply is obviated by the Court's findings on the issues which plaintiffs argue in their surreply. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*4] Legal Standards Defendants seek to dismiss plaintiffs' claims under Rules 12(b)(1) and (b)(6), Fed. R. Civ. P., for lack of subject matter jurisdiction and failure to state a claim on which relief can be granted. Rule 12(b)(1) motions generally take the form of facial attacks on the complaint or factual attacks on the accuracy of its allegations. Holt v. United States, 46 F.3d 1000, 1002-03 (10th Cir. 1995) (citing Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990)). Defendants challenge the face of the complaint, so the Court presumes the accuracy of plaintiffs' factual allegations and does not consider evidence outside the complaint. Id. Courts may exercise jurisdiction only when specifically authorized to do so, see Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994), and must "dismiss the cause at any stage of the proceeding in which it becomes apparent that jurisdiction is lacking." Scheideman v. Shawnee County Bd. of County Comm'rs, 895 F. Supp. 279, 280 (D. Kan. 1995) (citing Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974)); Fed. R. Civ. P. 12(h)(3) [*5] . Because federal courts are courts of limited jurisdiction, the law imposes a presumption against jurisdiction. Marcus v. Kan. Dep't of Revenue, 170 F.3d 1305, 1309 (10th Cir. 1999). Plaintiffs bear the burden of showing that jurisdiction is proper, see id., and must demonstrate that the case should not be dismissed, see Jensen v. Johnson County Youth Baseball League, 838 F. Supp. 1437, 1439-40 (D. Kan. 1993). Conclusory allegations of jurisdiction are not enough. Id. A Rule 12(b)(6) motion to dismiss for failure to state a claim should not be granted unless it appears beyond doubt that plaintiffs can prove no set of facts which would entitle them to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). The Court accepts as true all well-pleaded factual allegations in the complaint and draws all reasonable inferences from those facts in favor of plaintiffs. See Shaw v. Valdez, 819 F.2d 965, 968 (10th Cir. 1987). In reviewing the sufficiency of plaintiffs' complaint, the issue is not whether plaintiffs will [*6] prevail, but whether they are entitled to offer evidence to support their claims. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Although plaintiffs need not precisely state each element of their claims, they must plead minimal factual allegations on those material elements that must be proved. See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). Factual Background Plaintiffs' second amended complaint is summarized as follows: Plaintiffs purchased beverage products from defendants which contained sodium benzoate and ascorbic acid, citric acid or erythoribic acid. The Food and Drug Administration ("FDA") has reported that these ingredients may interact to form benzene, a hazardous substance which the Environmental Protection Agency ("EPA") knows to potentially cause anemia, nervous systems disorders and immunosuppression in persons who are exposed at levels greater than five parts per billion for short periods of time. In the event of long term exposure to levels greater than five parts per billion, benzene may cause cancer and chromosomal aberrations. The EPA has established five parts per billion as the maximum acceptable level [*7] of benzene in drinking water. In December of 1990, representatives of the National Soft Drink Association ("NSDA") (now, the American Beverage Association) met with the FDA to discuss the discovery of benzene in certain beverage products. n3 In a memorandum dated January 18, 1991, the FDA reported that when the beverages have been exposed to heat and light, benzene may form as a result of the interaction between sodium benzoate and ascorbic acid, citric acid or erythoribic acid. The FDA then called on the NSDA to identify methods to impede the formation of benzene in the beverage products and to adopt voluntary measures among manufacturers to address the problem. While some manufacturers developed alternative product formulations, others continued to manufacture beverage products containing the combination of sodium benzoate and ascorbic acid, citric acid or erythoribic acid to reduce costs and preserve flavor. Between 1995 and 2001, the FDA conducted blind testing on soft drinks and juices which revealed levels of benzene in some products above the five parts per billion level approved for drinking water. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - - n3 Pepsi is a leading member of the NSDA. The Complaint does not reveal whether Sunny Delight, Rockstar and Coke Enterprises are also members. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [*8] In the spring and summer of 2006, independent testing revealed the presence of benzene levels in beverage products which defendants manufactured and/or distributed. n4 Specifically, Pepsi manufactures "Diet Pepsi Wild Cherry;" Sunny Delight manufactures "Sunny D Baja Orange," "Sunny D Baja Berry" and "Sunny D Intense Lemon Lime;" Rockstar manufactures and Coke Enterprises distributes "diet Rockstar." Each of these beverage products has been found to contain benzene at levels greater than five parts per billion. Since 1990, Pepsi has known of the potential presence of benzene in beverage products and has conducted its own research to confirm the existence of benzene in its beverage products. Since at least the beginning of 2006, Sunny Delight has known of the potential presence of benzene in beverage products. All defendants have manufactured and/or distributed their beverage products deliberately and notwithstanding their knowledge that such products have a tendency to contain benzene at levels greater than five parts per billion. n5 In doing so, defendants did not disclose to consumers that such products had a tendency to contain benzene at levels greater than five parts per billion. [*9] Plaintiffs would not have purchased defendants' beverage products had defendants disclosed the tendency of those products to contain benzene. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - - n4 Laboratory testing has not been conducted to confirm these results. n5 Plaintiffs have sued John Doe Companies 6 through 100, other companies who have manufactured or distributed beverage products known to possibly contain high levels of benzene, but whose identities are unknown to plaintiffs. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - Plaintiffs have sued defendants individually and on behalf of similarly situated persons seeking economic damages and injunctive relief. They allege breach of implied warranty of merchantability under Article II of the Kansas Uniform Commercial Code ("UCC"), K.S.A. ? 84-2-101 et seq., unfair trade practices under the Kansas Consumer Protection Act ("KCPA"), K.S.A. ? 50-623 et seq., and unjust enrichment under Kansas common law. Plaintiffs do not allege that any of the beverage products which they purchased and consumed [*10] actually contained benzene or that they have suffered any personal injuries. |
