UNITED STATES DISTRICT COURT EASTERN...

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

FRITO-LAY NORTH AMERICA, INC. “ALL NATURAL” LITIGATION

x : : : : : : x

CASE NO. 12-MD-02413-RRM-RLM

ECF Case

ANSWER TO CONSOLIDATED COMPLAINT

Pursuant to this Court’s August 29, 2013 Memorandum and Order in this action (the

“Order”), Plaintiffs’ Consolidated Complaint filed on July 3, 2012 in Case No. 1:12-cv-00408-

RRM-RLM (the “Complaint”) was dismissed in all respects against PepsiCo, Inc. (“PepsiCo”),

and with respect to Frito-Lay North America, Inc. (“Frito-Lay” or “Defendant”): (1) the

Magnuson Moss Warranty Act claim (Count I) was dismissed; (2) the New York General

Business Law claims (Counts II and III) were dismissed as to non-New York plaintiffs; (3) the

New York warranty claim (Count VIII) was dismissed; (4) the Florida warranty claim (Count X)

was dismissed; (5) the New York, California and Florida intentional misrepresentation claims

(Counts XI, XII and XIII) were dismissed; and (6) to the extent Plaintiffs’ claims were

predicated on representations anywhere other than the products’ packaging, those claims were

also dismissed.

Plaintiffs did not request leave to file an amended complaint by October 1, 2013 in

accordance with the Court’s deadline in the Order, and accordingly, substantial portions of the

Complaint relating to claims that were dismissed with and without prejudice are inoperative and

do not require a response. Notwithstanding, Frito-Lay responds to the Complaint, as follows:

Case 1:12-md-02413-RRM-RLM Document 46 Filed 10/10/13 Page 1 of 32 PageID #: 670

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GENERAL DENIAL

Frito-Lay denies any and all liability under California’s Unfair Competition Law, False

Advertising Law and Consumer Legal Remedies Act, New York’s General Business Law, and

Florida’s Deceptive and Unfair Trade Practices Act. Further, the Complaint contains allegations

pertaining to the conduct of another named but now dismissed defendant (PepsiCo), and no

response is required to these allegations. The Complaint also contains allegations pertaining to

other claims that were dismissed by the Order, and thus no response is required. To the extent a

response is required, such allegations are denied. In addition, a number of allegations in the

Complaint state legal conclusions that do not require a response; to the extent any response is

required, such allegations are denied.

SPECIFIC RESPONSES

“PRELIMINARY STATEMENT”

The Preliminary Statement purports to describe the Complaint and includes allegations

relating to claims that were dismissed by the Order, and thus no response is required. Insofar as

the Preliminary Statement relates to claims that were not dismissed and to the extent a response

is required, Defendant denies the allegations in the Preliminary Statement, except admits that

Plaintiffs have filed a complaint, which, as modified by the Order, speaks for itself.

I. “NATURE OF THE ACTION”

1. Paragraph 1 states conclusions of law to which no response is required. To the

extent a response is required, Defendant denies the allegations in paragraph 1.

2. The first sentence of Paragraph 2 states conclusions of law to which no response

is required. To the extent a response is required, Defendant denies all allegations in paragraph 2.

The statement from John Compton quoted in paragraph 2 speaks for itself.


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4. Defendant denies the allegations in paragraph 4.


extent a response is required, Defendant denies that this claim is deceptive or misleading.

6. Defendant denies the allegations in paragraph 6, except refers to the website

quoted therein, which speaks for itself.



II. “JURISDICTION AND VENUE”



10. Paragraph 10 includes allegations pertaining to claims that were dismissed by the

Order, and thus no response is required. Paragraph 10 also states conclusions of law to which no

response is required.


Order, and thus no response is required. Paragraph 11 also states conclusions of law to which no

response is required.


extent a response is required, Defendant denies the allegations in paragraph 12, except admits

that it sells products in New York.




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14. Defendant admits the allegations in paragraph 14.



III. “PARTIES”

A. “Plaintiffs”

17. Defendant lacks knowledge or information sufficient to admit or deny the

allegations in paragraph 17. To the extent a response is required, Defendant denies the

allegations about product packaging, denies that Plaintiff was injured or lost money, and denies

that Defendant engaged in improper conduct.















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B. “Defendants”


Order, and thus no response is required.



24. Defendant denies the allegations in paragraph 24 except admits that Frito-Lay’s

headquarters are in Plano, TX and that it manufactures, markets, advertises, and distributes the

Products.

25. Defendant denies the allegations in paragraph 25, except refers to the websites

cited in paragraph 25, which speak for themselves.

26. Defendant denies the allegations in paragraph 26, except refers to the websites

cited therein, which speak for themselves.

C. Defendant denies the allegations in bold heading C.


Order, and thus no response is required. To the extent a response is required, Defendant denies

the allegations in paragraph 27.







the allegations in paragraph 30, except refers to the website quoted therein, which speaks for

itself.


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itself.




itself.








IV. “FACTUAL ALLEGATIONS”

A. Defendant denies the allegations in the bold heading A.



the allegations in paragraph 36, except admits that during certain periods during the Class Period,

the words “made with all natural ingredients” appeared on certain bags of Tostitos and SunChips

and certain cans of Fritos Bean Dip.


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37. Defendant denies the allegations in paragraph 37, except admits that during

certain periods during the Class Period, the words “made with all natural ingredients” appeared

on certain bags of Tostitos and SunChips and certain cans of Fritos Bean Dip.

38. Defendant denies the allegations in paragraph 38, except admits that during

certain periods during the Class Period, the words “made with all natural ingredients” appeared

on certain bags of Tostitos and SunChips and certain cans of Fritos Bean Dip.






the allegations in paragraph 40, except refers to the webpage quoted therein, which speaks for

itself.


B. Defendant denies the allegations in the bold heading B.



allegations in paragraph 43, except refers to the websites cited therein, which speak for

themselves.


allegations in paragraph 44, except refers to the website quoted therein, which speaks for itself.




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C. Defendant denies the allegations in the bold heading C.

49. Defendant denies the allegations in paragraph 49, except admits that during the

Class Period, Defendant did not distinguish between corn derived from genetically modified

seeds and corn derived from seeds that have not been genetically modified or bioengineered for

use in the Products. In light of the prevalence of corn derived from genetically modified and

bioengineered corn seeds in the U.S. corn supply (approximately 90% of the U.S. corn supply),

Defendant did purchase corn during this period that was derived from bioengineered seeds, and

Defendant believes that some of the Products were produced from corn that was grown with the

benefits of bioengineering. However, Defendant cannot say with certainty whether any

particular Product contained corn derived from genetically modified seeds. Nor can Defendant

say with certainty whether any particular Product contains trace amounts, if any, of

bioengineered or genetically modified material.


allegations in paragraph 50.

D. Defendant denies the allegations in bold heading D.





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allegations in paragraph 53, except refers to the article cited therein, which speaks for itself.


allegations in paragraph 54, except refers to the article cited therein, which speaks for itself.



56. Defendant denies the allegations in paragraph 56, except refers to the article





the allegations in paragraph 58, except refers to the webpage quoted therein, which speaks for

itself.







E. Defendant denies the allegations in bold heading E.




allegations in paragraph 63.


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V. “CLASS ACTION ALLEGATIONS”



that Plaintiffs purport to bring this action on behalf of a putative class.

















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that Plaintiffs purport to exclude certain persons from their proposed putative classes.



A. “Numerosity—Federal Rule of Civil Procedure 23(a)(1)”



B. “Commonality and Predominance—Federal Rule of Civil Procedure 23(a)(2) and 23(b)(3)”





C. “Typicality—Federal Rule of Civil Procedure 23(a)(3)”



D. “Adequacy of Representation—Federal Rule of Civil Procedure 23(a)(4)”


extent a response is required, Defendant denies the allegations in paragraph 80, except refers to

the websites referenced therein, which speak for themselves.

E. “Declaratory and Injunctive Relief—Federal Rule of Civil Procedure 23(b)(2)”


F. “Superiority—Federal Rule of Civil Procedure 23(b)(3)”


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VI. “CLAIMS FOR RELIEF”

“COUNT I” “Violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq.

(Brought on Behalf of the Nationwide Classes)”

83. Responding to paragraph 83, Defendant incorporates by reference its responses to

the preceding paragraphs as if fully set forth herein.



















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“COUNT II” “Violation of New York General Business Law § 349 (Deceptive Acts and Practices)

(Brought on Behalf of the Nationwide Classes, NY-CA-FL Classes, and New York Classes)”


paragraphs 1-82 as if fully set forth herein.


Order, and thus no response is required. Insofar as the allegations in paragraph 92 pertain to

claims that were not dismissed, paragraph 92 states conclusions of law to which no response is

required. To the extent a response is required, Defendant denies the allegations in paragraph 92.

93. Paragraph 93 states conclusions of law to which no response is required.



claims that were not dismissed, Defendant denies the allegations in paragraph 94.




96. Defendant denies the allegations in paragraph 96, except lacks knowledge or

information sufficient to admit or deny the allegations regarding Plaintiffs’ subjective beliefs.





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required. To the extent a response is required, Defendant denies the allegations in paragraph 98.

“COUNT III” “Violation of New York General Business Law § 350 (False Advertising)

(Brought on Behalf of the Nationwide Classes, NY-CA-FL Classes, and New York Classes)”



100. Paragraph 100 includes allegations pertaining to claims that were dismissed by

the Order, and thus no response is required. Insofar as the allegations in paragraph 100 pertain to


required. To the extent a response is required, Defendant denies the allegations in paragraph

100.

101. Paragraph 101 states conclusions of law to which no response is required.





102.





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the Order, and thus no response is required. To the extent a response is required, Defendant

denies the allegations in paragraph 105.





106.

“COUNT IV” “Violation of California Business & Professions Code §§ 17500 et seq.

(Brought on behalf of California Classes)”

107. Responding to paragraph 107, Defendant incorporates by reference its responses

to paragraphs 1-82 as if fully set forth herein.





denies the allegations in paragraph 109, except admits that during certain periods during the

Class Period, the words “made with all natural ingredients” appeared on certain bags of Tostitos

and SunChips and certain cans of Fritos Bean Dip.



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“COUNT V” “Violation of California Business & Professions Code §§ 17200 et seq.

(Brought on behalf of California Classes).”













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“COUNT VI” “Violation of the California Consumers Legal Remedies Act —

Cal. Civ. Code §§ 1750 et seq. (Brought on behalf of California Classes)”







128. Defendant denies the allegations in paragraph 128, except admits that it received a

demand letter prior to the filing of the Complaint that was attached as Exhibit A to the

Complaint.








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“COUNT VII” “Violation of the Florida Deceptive And Unfair Trade Practices Act § 501.201 et seq.

(Brought on behalf of Florida Classes)”
















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“COUNT VIII” “Breach of Express Warranty Under New York Law

(Brought on Behalf of the Nationwide Classes, NY-CA-FL Classes and New York Classes)”






















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“COUNT IX” “Breach of Express Warranty Under California Law

(Brought on Behalf of the California Classes)”















“COUNT X” “Breach of Express Warranty Under Florida Law

(Brought on Behalf of the Florida Classes)”







21
















“COUNT XI” “Intentional Misrepresentation Under New York Law

(Brought on Behalf of the Nationwide Classes, NY-CA-FL Classes and New York Classes)”







22



















“COUNT XII” “Intentional Misrepresentation Under California Law

(Brought on Behalf of the California Classes)”




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“COUNT XIII” “Intentional Misrepresentation Under Florida Law

(Brought on Behalf of the Florida Classes)”






















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“REQUEST FOR RELIEF”

The allegations set forth in Plaintiffs’ “Request for Relief” state conclusions of law to

which no response is required. To the extent a response is required, Defendant denies the

allegations in the Request for Relief. Defendant denies that the Plaintiffs or the putative classes

are entitled to any relief on any of the claims asserted in the Complaint.

“JURY DEMAND”

Defendant demands a trial by jury for all claims so triable.

AFFIRMATIVE DEFENSES

Without assuming the burden to prove that which properly falls on Plaintiffs, Defendant

pleads the following separate and additional defenses.

FIRST SEPARATE AND ADDITIONAL DEFENSE

Defendant denies all allegations not expressly admitted and specifically reserves all

affirmative or other defenses that it may have against Plaintiffs and the putative classes. It is not

necessary at this time for Defendant to delineate such defenses against the putative classes

because no class or classes have been certified, and the putative class members are not parties to

this litigation.

SECOND SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ Complaint, and each and every purported cause of action, fails to state a claim

upon which relief can be granted.

THIRD SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ Complaint, and each and every purported cause of action, is barred pursuant to

the primary jurisdiction doctrine.


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FOURTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ Complaint, and each and every purported cause of action, is barred because

federal law (including the Federal Food, Drug, and Cosmetic Act and related U.S. Food and

Drug Administration (“FDA”) regulations) expressly preempts this action and because there is

no private right of action to enforce the Federal Food, Drug and Cosmetic Act and the related

FDA regulations.

FIFTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ claims are barred in whole or in part by Defendant’s free speech guarantees of

the First Amendment to the United States Constitution, the Due Process Clause of the Fourteenth

Amendment to the United States Constitution, and the analogous provisions contained in the

California, New York, and Florida Constitutions.

SIXTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ claims and the claims of the putative class members are barred, in whole or in

part, because Plaintiffs and the putative class members lack standing.

SEVENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs and the putative class members have not sustained any injury or damage as a

result of any actions allegedly taken by Defendant, and are thus barred from asserting any claims

against Defendant. Plaintiffs and the putative class members also did not suffer any economic

harm and are therefore precluded from monetary recovery under the consumer protection laws of

California, New York, and Florida.

EIGHTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ claims are barred, in whole or in part, because the damages sought by Plaintiffs

and the putative class members are speculative, remote, and/or impossible to ascertain.

NINTH SEPARATE AND ADDITIONAL DEFENSE

Each of the causes of action of the Complaint, in whole or in part, is barred by the

applicable statutes of limitation and statutes of repose.


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TENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ Complaint and each purported cause of action are barred, in whole or in part,

by the doctrines of estoppel and waiver.

ELEVENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs and the putative class members’ claims for equitable relief are barred to the

extent there is, or Plaintiffs assert that there is, an adequate remedy at law.

TWELFTH SEPARATE AND ADDITIONAL DEFENSE

No labels for Defendant’s products contain or contained any false or misleading

statement or promises or promised any good not intended to be delivered. As such, the product

labels are not, and were not, deceptive, false, misleading, fraudulent, unlawful, and/or unfair, and

were not intended to mislead or deceive consumers.

THIRTEENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ claims, and those of some or all of the putative classes, for alleged violations

of California, New York, or Florida consumer protection laws are barred because: (a) Plaintiffs

and the putative class members do not have standing to assert these claims and/or the Court does

not have jurisdiction over these claims; (b) there is no reliance on an alleged misrepresentation or

omission leading to a product purchase and subsequent loss; (c) there is no causal link between

the alleged misrepresentation or omission and a resulting loss; (d) the information allegedly

concealed is not the kind of information required to be disclosed under the applicable consumer

protection acts; and/or (e) some or all of these statutes do not apply to actions authorized by a

federal agency.

FOURTEENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs may not maintain this lawsuit as a class action because the purported claims of

the putative Plaintiffs’ class representatives are not sufficiently typical of those of the purported

class members, common issues of fact and law do not predominate over individual issues and

liability and damages cannot be proven on a class-wide basis, the putative Plaintiffs’ class

representatives will not adequately represent the purported putative Plaintiffs’ classes, the


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putative Plaintiffs classes are not ascertainable, and a class action is not a superior method for

adjudicating the purported claims set forth in Plaintiffs’ Complaint.

FIFTEENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs and the putative class members are precluded from recovery because the

representations, actions or omissions alleged by Plaintiffs were and are not material to Plaintiffs’

decisions to purchase or consume Defendant’s products.

SIXTEENTH SEPARATE AND ADDITIONAL DEFENSE

To the extent that Plaintiffs or the putative class rely upon any theory of breach of

warranty, such claims are barred for lack of timely notice of breach and failure to provide an

opportunity to cure, because the advertising at issue does not constitute an affirmation of fact or

promise sufficient to support any warranty claim, because a warranty claim may not be based on

an alleged omission, and/or because of lack of privity between Plaintiffs or the putative class and

Defendant.

SEVENTEENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ claims and the claims of the putative class members are barred, in whole or in

part, because Defendant is not in privity with Plaintiffs or the putative class members.

EIGHTEENTH SEPARATE AND ADDITIONAL DEFENSE

Any finding of liability under the consumer protection laws of California, New York, or

Florida would violate the Due Process Clauses of the Fourteenth Amendment to the United

States Constitution, and of any analogous provision contained in the California, New York, or

Florida Constitutions, because the standards of liability under these consumer protection laws are

unduly vague and subjective, and permit retroactive, random, arbitrary, and capricious

punishment.

NINETEENTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ and the putative class members’ claims for restitution under the consumer

protection laws of California, New York, or Florida are barred to the extent that Plaintiffs and the

putative class members did not pay money directly to Defendant, and/or Plaintiffs and the


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putative class members seek a return of monies not in Defendant’s possession.

TWENTIETH SEPARATE AND ADDITIONAL DEFENSE

Application of New York law to the claims of non-residents under the circumstances of

this case would violate the Due Process Clause, dormant Commerce Clause, and the Full Faith

and Credit Clause of the United States Constitution and would otherwise be unconstitutional.

TWENTY-FIRST SEPARATE AND ADDITIONAL DEFENSE

As a matter of constitutional right and substantive due process, Defendant would be

entitled to contest by jury trial their liability to any particular individual Plaintiffs, even if the

representatives of the purported Plaintiffs classes prevail on their claims. Trying this case as a

class action would violate the United States Constitution and the Constitution of California, New

York, and Florida.

TWENTY-SECOND SEPARATE AND ADDITIONAL DEFENSE

To the extent that Plaintiffs seek punitive damages for an alleged act or omission of

Defendant, any award of punitive damages is barred under the relevant state law. An award of

punitive damages would also, if granted, violate Defendant’s state and federal constitutional

rights.

TWENTY-THIRD SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs and the putative class members have failed to mitigate their damages, if any,

and any recovery should be reduced or denied accordingly.

TWENTY-FOURTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs and putative class members’ claims are barred, in whole or in part, by the

doctrines of laches and unclean hands.


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TWENTY-FIFTH SEPARATE AND ADDITIONAL DEFENSE

Plaintiffs’ and putative class members’ claims under New York, California, and Florida

law are barred by the Safe Harbor doctrine because Defendant’s alleged actions, at all relevant

times and places, were in compliance with applicable laws. Defendant is absolved from any and

all liability for the wrongs alleged in the Complaint by reason of its full compliance with all

statutes, regulations, or other laws in effect at the time of the conduct alleged in the Complaint.

TWENTY-SIXTH SEPARATE AND ADDITIONAL DEFENSE

Defendant has insufficient knowledge or information upon which to form a basis as to

whether it may have additional, as yet unstated, separate defenses available. Defendant has not

knowingly or intentionally waived any applicable affirmative defenses and reserves the right to

raise additional affirmative defenses as they become known to it through discovery in this

matter. Defendant further reserves the right to amend its answer and/or affirmative defenses

accordingly and/or to delete affirmative defenses that it determines are not applicable during the

course of subsequent discovery.

PRAYER

WHEREFORE, DEFENDANT prays for the following relief:

A. That judgment on the Complaint, and on each cause of action against Defendant,

be entered in favor of Defendant;

B. That this Court finds that this suit cannot be maintained as a class action;

C. That Plaintiffs and the members of the putative classes take nothing by Plaintiffs’

Complaint;

D. That the request for injunctive relief be denied;

E. That Defendant be awarded its costs incurred, including reasonable attorneys’

fees; and

F. For such other and/or further relief as this Court may deem just and proper.


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Dated: October 10, 2013

GIBSON, DUNN & CRUTCHER LLP By: _____/s/ Jason R. Meltzer______ Andrew S. Tulumello [email protected] Jason R. Meltzer [email protected] 1050 Connecticut Avenue, N.W. Washington, D.C. 20036-5306 Tel: (202) 955-8500 Fax: (202) 467-0539 Attorneys for Defendant Frito-Lay North America, Inc.


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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

FRITO-LAY NORTH AMERICA, INC. “ALL NATURAL” LITIGATION

x : : : : : : x

CASE NO. 1:12-MD-02413-RRM-RLM

CERTIFICATE OF SERVICE

I, Jason R. Meltzer, hereby certify that I served this Answer to Consolidated Complaint

on October 10, 2013 on counsel for all parties using the CM/ECF system.

Dated: October 10, 2013 _____/s/ Jason R. Meltzer______ Jason R. Meltzer


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