Download - SJ Motion Brown v. Hain Celestial

7/28/2019 SJ Motion Brown v. Hain Celestial

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NOTICE OF MOTION AND MEMO OF LAW INSUPPORT OF DEF. MSJ

CV12-01862 EJD

6302738v.1

John W. Fowler (Bar No. 037463)[email protected] LLP303 Almaden Boulevard, Suite 500San Jose, CA 95110-2712Telephone: (408) 291-6200Facsimile: (408) 297-6000

Steven A. Zalesin (admitted pro hac vice)[email protected] J. Tu (admitted pro hac vice)[email protected] L. Kerwin (admitted pro hac vice)[email protected] A. Dixon (admitted pro hac vice)[email protected] BELKNAP WEBB & TYLER LLP1133 Avenue of the AmericasNew York, New York 10036

Telephone: (212) 336-2000Facsimile: (212) 336-2222

Attorneys for DefendantTHE HERSHEY COMPANY

UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIA

LEON KHASIN, on Behalf of Himself and

All Others Similarly Situated,

plaintiff,

v.

THE HERSHEY COMPANY,

Defendant.

CASE NO. 12-cv-01862 EJD

NOTICE OF MOTION AND MOTIONFOR PARTIAL SUMMARY JUDGMENTAND FOR A PROTECTIVE ORDER;MEMORANDUM OF POINTS ANDAUTHORITIES IN SUPPORT THEREOF

Judge: Honorable Edward J. DavilaDate: July 19, 2013Time: 9:00 a.m.Room: Courtroom 4, 5th FloorTrial Date: No date set

Case5:12-cv-01862-EJD Document68 Filed06/14/13 Page1 of 34


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CV12-01862 EJD

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TO ALL PARTIES AND THEIR COUNSEL OF RECORD:

PLEASE TAKE NOTICE THAT on July 19, 2013 at 9:00 a.m. or as soon thereafter as

counsel may be heard, in Courtroom 4, 5th Floor of the United States District Court, Northern

District of California, San Jose Division, located at 280 South 1st Street, San Jose, CA 95113,

before The Honorable Edward J. Davila, Defendant The Hershey Company (Hershey) will and

hereby does move this Court for partial summary judgment on claims pled in the Amended Class

Action and Representative Action Complaint (AC) of Plaintiff Leon Khasin (Khasin) [Dkt.

No. 27] and for a protective order.

Hershey brings this motion for partial summary judgment pursuant to Federal Rule of

Civil Procedure 56 and on the following grounds, which are discussed more fully in the attached

Memorandum of Points and Authorities: Khasin has admitted that, contrary to the allegations in

the AC, he did not actually rely on Hersheys website, advertising, or most of the disputed aspects

of Hersheys labeling. Because actual reliance is an essential element of each of Khasins claims,

Hershey is entitled to partial summary judgment as a matter of law.

In addition, Hershey brings this motion for a protective order pursuant to Federal Rule of

Civil Procedure 26 and on the following grounds, which are discussed more fully in the attached

Memorandum of Points and Authorities: Khasin should be barred from pursuing his burdensome

discovery demands relating to statements in Hersheys website, advertising and labeling that he

has conceded played no role in his purchasing decisions. Such discovery has no probative value

to any claims properly remaining in the case.

This motion is based on this Notice of Motion, the Memorandum of Points and

Authorities attached hereto, the declarations and exhibits submitted herewith, any reply papers

submitted in support of this motion, oral argument of counsel, the complete files and records in

this matter, and such additional matters as the Court may consider.



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CV12-01862 EJD

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DATED: June 14, 2013 PATTERSON BELKNAP WEBB & TYLER LLP

By: /s/ Steven A. ZalesinSteven A. Zalesin

1133 Avenue of the AmericasNew York, New York 10036Telephone: (212) 336-2000

John W. Fowler (Bar No. 037463)BERGESON LLP303 Almaden Boulevard, Suite 500San Jose, CA 95110-2712Telephone: (408) 291-6200Facsimile: (408) 297-6000

Attorneys for Defendant



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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .........................................................................................................iii

STATEMENT OF THE ISSUES TO BE DECIDED.................................................................... vi

PRELIMINARY STATEMENT..................................................................................................... 1

BACKGROUND ............................................................................................................................ 2

A. Khasins Allegations............................................................................................... 2

1. Hersheys Website and Advertising............................................................ 3

2. Hersheys Product Labeling........................................................................ 3

a. Milk Chocolate Products................................................................. 3

b. Mint Products .................................................................................. 3

c. Dark Chocolate and Cocoa Products............................................... 4

B. The Courts Motion to Dismiss Ruling................................................................... 4

C. Khasins Deposition Testimony.............................................................................. 5

D. Khasins Pursuit of His Defective Claims .............................................................. 7

ARGUMENT .................................................................................................................................. 8

I. SUMMARY JUDGMENT SHOULD BE ENTERED AS TO KHASINS

CLAIMS AGAINST STATEMENTS ON WHICH HE DID NOT RELY........................ 9

A. Actual Reliance Is a Necessary Element of Khasins Claims................................. 9

B. Khasin Did Not Actually Rely On Most of the Disputed Statements................... 10

1. Hersheys Website and Advertising.......................................................... 10

2. Hersheys Product Labeling...................................................................... 12

a. Milk Chocolate Products............................................................... 12

b. Mint Products ................................................................................ 14

c. Dark Chocolate and Cocoa Products............................................. 16

II. KHASIN CANNOT PURSUE HIS DEFECTIVE CLAIMS UNDER THE

UNLAWFUL PRONG OF THE UCL .......................................................................... 17

A. Californias UCL Requires Actual Reliance Even Under the UnlawfulProng ..................................................................................................................... 18



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B. Absent Proof of Actual Reliance, State-Law Claims to Enforce FDCARequirements Are Impliedly Preempted ............................................................... 20

III. HERSHEY IS ENTITLED TO A PROTECTIVE ORDER ............................................. 23

CONCLUSION............................................................................................................................. 25



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TABLE OF AUTHORITIES

Page(s)CASES

Alliance Mort. Co. v. Rothwell,10 Cal. 4th 1226 (1995) .......................................................................................................... 10

Animal Legal Def. Fund v. Provimi Veal Corp.,626 F. Supp. 278 (D. Mass. 1986) .......................................................................................... 21

Baghdasarian v. Amazon.com, Inc.,No. CV-05-8060-AG, 2009 U.S. Dist. LEXIS 115265 (C.D. Cal. Dec. 9, 2009) .................. 11

Bailey v. Johnson,48 F.3d 965 (6th Cir. 1995)..................................................................................................... 22

Bronson v. Johnson & Johnson, Inc.,No. C-12-04184-CRB, 2013 U.S. Dist. LEXIS 54029 (N.D. Cal. Apr. 16, 2013) ........... 10, 12

Buckman Co. v. Plaintiffs Legal Comm.,531 U.S. 341 (2001) ................................................................................................................ 21

Celotex Corp. v. Catrett,477 U.S. 317 (1986) .................................................................................................................. 9

Durell v. Sharp Healthcare,183 Cal. App. 4th 1350 (Cal. App. 4th Dist. 2010) .......................................................... 19, 20

Dvora v. Gen. Mills,

No. CV-11-1074-GW(PLAx), 2011 U.S. Dist. LEXIS 55513 (C.D. Cal. May 16,2011) ....................................................................................................................................... 12

Fox v. Good Samaritan L.P.,801 F. Supp. 2d 883 (N.D. Cal. 2010) .................................................................................... 20

Fraker v. KFC Corp.,No. 06-CV-01284-JM (WMC), 2007 U.S. Dist. LEXIS 32041 (S.D. Cal. Apr. 30,2007) ....................................................................................................................................... 21

Ginena v. Alaska Airlines, Inc.,No. 2:04-cv-01304-RCJ-CWH, 2011 U.S. Dist. LEXIS 116656 (D. Nev. Oct. 6, 2011) ........ 9

Groce v. Claudat,No. 09cv01630-BTM, 2012 U.S. Dist. LEXIS 69870 (S.D. Cal. May 18, 2012) .................. 25

Heckler v. Chaney,470 U.S. 821 (1985) ................................................................................................................ 22

Herrington v. Johnson & Johnson Consumer Co.,2010 U.S. Dist. LEXIS 90505 (N.D. Cal. Sept. 1, 2010)........................................................ 10



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Hillman v. Maretta,No. 11-1221, 2013 U.S. Lexis 4167 (U.S. June 3, 2013) ....................................................... 21

Hinojos v. Kohls Corp.,2013 U.S. App. LEXIS 10185 (9th Cir. May 21, 2013) ......................................................... 10

In re Actimmune Mktg. Litig.,No. C 08-02376 MHP, 2010 U.S. Dist. LEXIS 90480 (N.D. Cal. Aug., 31, 2010) ............... 20

In re Epogen & Aranesp Off-Label Mktg. & Sales Practices Litig.,590 F. Supp. 2d 1282 (C.D. Cal. 2008)............................................................................. 22, 23

In re Farm Raised Salmon Cases,42 Cal. 4th 1077 (2008) .................................................................................................... 23, 24

In re Ferrero Litig.,794 F. Supp. 2d 1107 (S.D. Cal. 2011)................................................................................... 10

In re Sears, Roebuck & Co. Tools Mktg & Sales Practices Litig.,

2007 U.S. Dist. LEXIS 89349 (N.D. Ill. 2007)....................................................................... 10

In re Tobacco II Cases,46 Cal. 4th 298 (2009) ............................................................................................................ 10

Kwikset Corp. v. Superior Ct.,51 Cal. 4th 310 (Cal. 2011) ................................................................................... 10, 19, 20, 21

Loreto v. Procter & Gamble,No. 10-4274, 2013 U.S. App. LEXIS 3813 (6th Cir. Feb. 22, 2013) ..................................... 22

Medrazo v. Honda of N. Hollywood,205 Cal. App. 4th 1 (Cal. App. 2d Dist. 2012) ....................................................................... 20

People ex rel. Lockyer v. Brar,115 Cal. App. 4th 1315 (2004)................................................................................................ 19

Perez v. Nidek Co.,711 F.3d 1109 (9th Cir. 2013)............................................................................... 21, 22, 23, 24

Pfizer, Inc. v. Superior Ct.,182 Cal. App. 4th 622 (2010).................................................................................................. 12

PhotoMedex, Inc. v. Irwin,601 F.3d 919 (9th Cir. 2010)............................................................................................. 22, 24

POM Wonderful LLC v. Coca-Cola Co.,679 F.3d 1170 (9th Cir. 2012)................................................................................................. 22

Price v. Cunningham,No. 1:08-cv-00425-AWI-BAM PC, 2012 U.S. Dist. LEXIS 157142 (E.D. Cal. Nov. 1,2012) ....................................................................................................................................... 24

Princess Cruise Lines, Ltd. v. Superior Ct.,179 Cal. App. 4th 36 (Cal. App. 2d Dist. 2009) ..................................................................... 11



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Riley v. Cordis Corp.,625 F. Supp. 2d 769 (D. Minn. 2009)..................................................................................... 23

Sateriale v. R.J. Reynolds Tobacco Co.,687 F.3d 1132 (9th Cir. 2012)................................................................................................. 10

Seattle Times Co. v. Rhinehart,467 U.S. 20 (1984) .................................................................................................................... 9

Sprint PCS Assets, L.L.C. v. City of Palos Verdes Estates,583 F.3d 716 (9th Cir. 2009)..................................................................................................... 9

Summit Tech. v. High-Line Med. Instruments, Co.,933 F. Supp. 918 (C.D. Cal. 1996) ......................................................................................... 22

Surfvivor Media, Inc. v. Survivor Prods.,406 F.3d 625 (9th Cir. 2005)............................................................................................... 9, 24

Travers v. Shalala,

20 F.3d 993 (9th Cir. 1994)..................................................................................................... 24

STATUTES

Cal. Bus. & Prof. Code 17200, et seq. ......................................................................................... 3

Cal. Bus. & Prof. Code 17204 ................................................................................................. 19

Cal. Bus. & Prof. Code 17500, et seq. ......................................................................................... 3

Cal. Civ. Code 1750, et seq.......................................................................................................... 3

OTHERAUTHORITIES

Fed. R. Civ. P. 26(b)(1)................................................................................................................. 24

Fed. R. Civ. P. 26(b)(2)(C)(iii) ..................................................................................................... 24

Fed. R. Civ. P. 56(c)........................................................................................................................ 9



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STATEMENT OF THE ISSUES TO BE DECIDED

1. Is the Hershey Company entitled to partial summary judgment on Plaintiff Leon

Khasins claims under California law when he admitted at his deposition that, contrary to the

allegations in the Amended Complaint, he did not actually rely on Hersheys website, advertising,

or most of the disputed aspects of Hersheys labeling?

2. Should a protective order be entered barring Khasin from seeking further

discovery concerning allegations in the Amended Complaint that Khasin contradicted and

affirmatively disavowed at his deposition?



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NOTICE OF MOTION AND MEMO OF LAW IN

SUPPORT OF DEF. MSJ

CV12-01862 EJD

6302738v.1

Defendant the Hershey Company (Hershey) submits this memorandum in support of its

motion for partial summary judgment pursuant to Federal Rule of Civil Procedure 56, and for a

protective order pursuant to Federal Rule of Civil Procedure 26.

PRELIMINARY STATEMENT

Plaintiff Leon Khasin (Khasin) commenced this action on April 23, 2012 alleging that

he was deceived into purchasing Hersheys dark chocolate and cocoa products by statements in

Hersheys website, advertising, and labeling that purportedly violate the federal Food Drug and

Cosmetic Act (FDCA) and California law. Khasin subsequently filed an Amended Complaint

(AC) alleging that Hershey has also made false and misleading statements in advertising and

labeling for its milk chocolate and mint products.

At the outset of the case, Hershey moved to dismiss and strike portions of the AC on

several grounds, including that Khasin could not plausibly have read and relied on the litany of

website, advertising, and labeling statements that the AC sought to attack. The Court denied

Hersheys motion in large part, finding that whether Khasin relied on all of the statements

disputed in the AC was a question of fact.

Following the Courts ruling, Hershey noticed Khasins deposition, and counsel for

Hershey questioned Khasin at length about the allegations in the AC and the actual reasons he

purchased Hersheys products. Under oath, Khasin revealed thatas Hershey had suspected all

alongHersheys website, advertising, and most of the disputed labeling statements played no

role whatsoever in Khasins purchasing decisions. In fact, Khasin purchased Hersheys products

because he likes the way they taste; he rarely, if ever, looked at the products labels; and he has

never once visited Hersheys website in his entire life. Moreover, whereas the AC cites chapter

and verse from FDA regulations concerning the serving sizes of mints, sugar-free claims, and the

labeling of ingredients such as PGPR, vanillin, and cocoa processed with alkali, Khasin testified

that he personally has no concerns about any of these aspects of Hersheys labeling.

It is well-established that, under each of the consumer protection statutes that Khasin

asserts, a plaintiff must plead and prove actual reliance on the defendants alleged

misrepresentations in order to establish a cause of action. Khasin has now admitted that he did



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not actually rely on the bulk of the alleged misrepresentations identified in the AC. Yet in spite

of his crippling testimony, Khasin has rebuffed Hersheys demands that he amend the AC to

conform his allegations to the actual facts. Instead, Khasins lawyers have asserted that,

notwithstanding Khasins lack of reliance on the disputed statements, they intend to pursue all of

the allegations in the AC, and have served Hershey with burdensome discovery demands

pertaining to claims that, according to Khasins own testimony, he does not actually possess.

This charade should not be allowed to continue. Because he cannot prove actual reliance,

Khasin cannot recover on the majority of his claims. California law does not permit Khasin or his

lawyers to act as private attorneys general when Khasin was not actually misled. And Hershey

should not have to shoulder the substantial burden and expense of discovery concerning

allegations that Khasin has affirmatively disavowed, and that never had any basis in fact. Rather,

to streamline this litigation and protect Hershey from further harassment and expense, the Court

should enter partial summary judgment on Khasins claims against Hersheys website,

advertising, and labeling statements on which he did not actually rely. In addition, a protective

order should be entered barring Khasin from seeking further discovery on these defective claims.

BACKGROUND

A. Khasins Allegations

Khasin filed the AC on July 23, 2012. The AC asserts that Hersheys website, advertising

and product labels contain statements that allegedly violate the FDCA and provisions of

California law that purport to make the FDCA and FDAs implementing regulations the law of

the state. Based on these allegations, Khasin asserts claims under Californias UCL, see Cal. Bus

& Prof. Code 17200, et seq., False Advertising Law (FAL), see Cal. Bus. & Prof. Code

17500, et seq., the Consumer Legal Remedies Act (CLRA), see Cal. Civ. Code 1750, et seq.,

and for unjust enrichment. The Court is already familiar with the ACs allegations from

adjudicating Hersheys motion to dismiss. For that reason, we have briefly summarized only the

key allegations below.



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1. Hersheys Website and Advertising

Most of the AC is devoted to Hersheys website. Specifically, Khasin alleged that

statements regarding the nutritional benefits of dark chocolate and cocoa that appeared on

Hersheys website were unlawful health claims that falsely implied that Hersheys products

treat or prevent disease. (AC 103). The AC also alleged that Hershey has made false and

misleading statements in its advertising. (AC 129, 146, 203). Contrary to the facts adduced at

Khasins deposition, the AC alleged that Khasin read and relied on Hersheys website and

advertising when he made his purchasing decisions. (AC 16, 17, 67, 97, 98, 99, 116).

2. Hersheys Product Labeling

The remainder of the AC attacks Hersheys labeling for its milk chocolate, mint, dark

chocolate and cocoa products. Again, contrary to the actual facts, the AC alleged that Khasin

read each and every one of the labeling statements disputed in the AC, and that he relied on these

statements when he made his purchasing decisions. (AC 198, 199).

a. Milk Chocolate Products

The AC alleged that the labeling of Hersheys milk chocolate products is false and

misleading in two respects. First, the AC alleged that it is deceptive for Hershey to abbreviate the

ingredient PGPR on product labels because the common and usual name for this ingredient

purportedly is polyglycerol polyricineolate. (AC 159, 160, 162, 163, 166, 167). Second, the

AC alleged that it is false and misleading for Hershey to identify vanillin only in the ingredients

list on its products back labels because FDA regulations purportedly require vanillin to be listed

on the front of the labels. (AC 162, 163, 166, 167, 171-173, 178).

b. Mint Products

The AC alleged that two aspects of Hersheys Ice Breakers Mints labels are false and

misleading. First, the AC alleged that Hersheys mints are deceptively labeled with a one-mint

serving size when FDA regulations purportedly specify that the correct serving size is two mints.

(AC 142, 148, 149, 150). Second, the AC alleged that it is false and misleading for Hershey to

label its mints as sugar free without an accompanying disclosure that the mints are not a low

calorie food. (AC 119, 123-128).



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c. Dark Chocolate and Cocoa Products

The AC alleged that the labeling of Hersheys dark chocolate and cocoa products is false

and misleading in four respects. First, as with Hersheys milk chocolate labels, the AC alleged

that PGPR should not be abbreviated on dark chocolate labels. (AC 162, 163). Second, the

AC objected to the fact that vanillin is listed only on the products back labels. (AC 171,

175).1

Third, the AC alleged that it is false and misleading for Hershey to include the statement

cocoa processed with alkali on the back labels of its dark chocolate and cocoa products because

FDA regulations purportedly require this information to appear on the front.2

(AC 162, 171,

175). Fourth, the AC alleged that the antioxidant seal on Hersheys dark chocolate and cocoa

labels, which states that dark chocolate and cocoa are each a natural source of flavanol

antioxidants, is false and misleading because the phrase natural source is purportedly a

nutrient content claim defined by FDA regulations and cannot be used to describe antioxidants

like flavanols for which FDA has not yet established a Recommended Daily Allowance.

(AC 53-58, 65, 66).

B. The Courts Motion to Dismiss Ruling

On August 23, 2012, Hershey filed a motion to dismiss the AC on multiple grounds.

Chief among them, Hershey argued that the ACs allegations that Khasin read and relied on all of

the allegedly false and misleading statements in Hersheys website, advertising and labeling were

facially implausible. (Hershey Mot. to Dismiss [Dkt. # 30], pp. 16-20). Hershey also moved to

strike the ACs allegations concerning Hersheys website because, in Hersheys view, the AC did

not specifically allege that Khasin read and relied on the websites purported health claims for

dark chocolate and cocoa. Id. at 15.

Khasin successfully opposed dismissal. To overcome Hersheys motion, however,

Khasins lawyers represented to the Court that Khasin had in fact read the labels, including the

1The AC makes the PGPR and vanillin allegations only as to Hersheys dark chocolate

products. Hersheys cocoa products do not contain PGPR or vanillin.

2The AC makes this allegation only as to Hersheys dark chocolate and blended cocoa

products. Hersheys other cocoa products do not contain cocoa processed with alkali.



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serving sizes, ingredients, antioxidant, nutrient content, sugar free and health claims, and that

Khasin had relied upon these misrepresentations, and was thereby deceived, in deciding to

purchase [Hersheys] products. (Khasin Opp. To Mot. to Dismiss [Dkt. #32], p. 1; see also id. at

p. 18-19). Khasins attorneys deployed the same tactic in opposing Hersheys motion to strike.

Indeed, in their opposition brief, Khasins lawyers accused Hershey of turning a blind eye to

allegations in the AC that purportedly corroborated the fact that Khasin actually saw and relied

on all of the disputed health related claims on Hersheys website. Id. at p. 13.

Because courts must accept a plaintiffs factual allegations as true at the motion to dismiss

stage, the Court denied Hersheys motions. Khasin v. Hershey Co., No. 12-CV-161300, 2012

U.S. Dist. LEXIS 161300, *21 (N.D. Cal. Nov. 9, 2012) (hereinafter MTD Order). But in

doing so, the Court noted that the many questions of fact as to whether [Khasin] was or was not

deceived, as the AC alleged, would be answered through discovery. Id.at *26.

C. Khasins Deposition Testimony

Following the Courts dismissal ruling, the parties submitted a joint Case Management

Statement to the Court, and Hershey indicated that it intended to notice Khasins deposition early

in discovery. Hershey anticipated that Khasins deposition testimony may establish that this

case [is] ripe for summary adjudication on one or more grounds prior to the close of the discovery

period, potentially saving the Court and the parties significant resources and effort. [Dkt. # 55,

p. 5]. As it turned out, Khasins case began to unravel even before Hershey had the opportunity

to depose him.

On March 20, 2013, Hershey received an unprompted e-mail from Khasins attorney

Richard Barrett in which Mr. Barrett acknowledged that certain allegations in the AC were

incorrect.3

(Tu Decl., Ex. B). Mr. Barrett explained that while he and his co-counsel, Pierce

Gore, were preparing Khasin for his upcoming deposition, Khasin told them that he did not, in

fact, visit the Hershey websites at any time. Id. (emphasis added). Mr. Barrett recognized that

3Copies of all cited correspondence and Khasins deposition transcript are attached to the

accompanying declaration of Travis J. Tu, Esq. (hereinafter Tu Decl.).



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this directly contradicted allegations in the AC and wrote that he and Mr. Gore felt obliged to

notify Hershey of this fact for your deposition preparation. Id.

Khasin was deposed on March 26, 2013. At his deposition, Khasin confirmed under oath

that what Mr. Barrett had said in his e-mail was correct. Khasin testified that he never visited

Hersheys website; he never viewed any of the health claims that the AC attributed to

Hersheys website; and Hersheys website played no role whatsoever in his decision to purchase

any of Hersheys products.4

This testimony, however, was just the tip of an iceberg worth of

devastating admissions.

Contrary to the allegations in the AC and his counsels representations to the Court in

opposing Hersheys motion to dismiss, Khasin further testified that:

He never relied on any of Hersheys advertisements;

He never reviewed the ingredients list on any of Hersheys products;

He purchased Hersheys mint products because he likes the way they taste, notbecause of their serving size or anything else on the products labels;

He never noticed, let alone actually relied upon, the fact that PGPR is abbreviatedon the labeling of Hersheys products; and

He has no concerns whatsoever about Hersheys labeling of vanillin or cocoaprocessed with alkali.

Indeed, out of the numerous website, advertising and labeling statements referenced in the AC,

Khasin testified that he actually noticed just one before he purchased Hersheys productsthe

antioxidant seal on the labeling of Hersheys dark chocolate and cocoa.5

Khasin offered no explanation why the allegations in the AC bore no resemblance to the

4Relevant excerpts from Khasins deposition, along with page and line number citations

to the transcript, are reproduced in Section I.B below.

5Khasins testimony concerning the importance of the antioxidant seal to his purchasing

decisions was self-contradictory, and there is no evidence that the sealwhich merely states that

the products are natural sources of flavanol antioxidantsis false or misleading in any respect.

Nevertheless, because Khasin testified that he noticed the antioxidant seal prior to purchasingHersheys dark chocolate and cocoa products, Hershey is not moving for summary judgment on

that aspect of the AC at this time. No amount of discovery, however, can salvage Khasins

claims against aspects of Hersheys website, advertising and labeling that Khasin admitted played

no role in his purchasing decisions, and those claims are now ripe for dismissal.



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actual facts, but the reason nonetheless became obvious. Khasin testified that prior to being

enlisted for this lawsuit, he had been purchasing Hersheys products his entire life without

complaints. (Tu Decl., Ex. A (hereinafter Dep. Tr.) 28:9-29:3, 60:9-17, 64:8-16, 131:16-19).

He had never considered filing a lawsuit against Hershey or anyone else until his wife told him

that her bossPierce Gorewas looking for people to help with his class action stuff. (Dep.

Tr. 23:9-24:7; 92:4-14). Khasin then went to his wifes office to meet with Mr. Gore. But even

when he went into that meeting, Khasin had no reason or desire to sue Hershey. (Dep. Tr. 17:17-

18; 23:21-29:14). The case was entirely Mr. Gores idea. (Dep. Tr. 34:6-8, 9:25-40:23). Indeed,

according to Khasin, he was never even asked to review the complaint (or the AC for that matter)

before it was filed in his name. (Dep. Tr. 254:10-19, 255:24-256:24).

D. Khasins Pursuit of His Defective Claims

On April 3, 2013, Hersheys counsel wrote to Khasins lawyers and asked whether, in

light of the numerous admissions Khasin made at his deposition, Khasin would be dropping

certain of his claims. Specifically, counsel for Hershey noted that Khasin had given testimony

that makes clear that certain allegations in the Amended Complaint are inaccurate and at odds

with Mr. Khasins own experience, and that Hershey did not believe that Khasin could in good

faith maintain the allegations in the Amended Complaint any longer. (Tu Decl., Ex. C).

Khasins counsel Mr. Barrett responded by e-mail on April 9, 2013. Mr. Barrett asserted

that under California law, it is not necessary to prove that anyone was actually misled by the

statements challenged in the AC. (Tu Decl., Ex. D (emphasis added)). Nevertheless, with an

eye toward streaming this case for the Court, Mr. Barrett stated that Khasin will drop his claim

under the misleading prong of the UCL, at least as to Hersheys website and Hersheys labeling

of vanillin, alkali, and mints serving sizes. Id. Mr. Barrett went on to state, however, that

notwithstanding his lack of reliance, Khasin planned to pursue allof the allegations in the AC on

the theory that Hersheys website, advertising and labeling are unlawful as differentiated from

misleading. Id.

On April 17, 2013, Hersheys counsel wrote to Mr. Barrett and disputed his position that

Khasin could continue to litigate his unlawful claims without proof of reliance. (Tu Decl., Ex.



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E). Hershey also suggested that Khasin file a second amended complaint and remove those

factual allegations from the AC that Khasin had affirmatively contradicted at his deposition. Id.

Mr. Barrett never wrote back. Rather, on April 19 and May 2, 2013, Khasin served Hershey with

document demands and requests for admissions seeking broad discovery on all of the allegations

in the AC, including statements in Hersheys website, advertising and labeling on which Khasin

never actually relied. (Tu Decl., Exs. F & G). Among other things, Khasin has demanded that

Hershey produce all documents concerning its website; substantiation for every purported health

claim that ever appeared on Hersheys website; all documents concerning Hersheys advertising;

all documents concerning PGPR, vanillin, and cocoa processed with alkali; and all market

research, sales, and pricing information for Hersheys milk chocolate, mints, dark chocolate and

cocoa products.

Despite Hersheys objections to these improper discovery requests, Khasin has refused to

withdraw his demands. Rather, in a meet-and-confer session held on June 14, 2013, Khasin

threatened Hershey with a motion to compel. (Tu Decl. 9). Hershey now moves for partial

summary judgment and a protective order to preclude Khasin from continuing to litigate those

claims and allegations in the AC that Khasin has affirmatively disavowed.

ARGUMENT

Summary judgment is appropriate when the evidence adduced in discovery reveals the

absence of a genuine dispute as to any material fact. Fed. R. Civ. P. 56(c); see Sprint PCS

Assets, L.L.C. v. City of Palos Verdes Estates, 583 F.3d 716, 720 (9th Cir. 2009). A defendant

may carry its burden by pointing to a lack of evidence supporting any necessary element of the

plaintiffs claims. See Celotex Corp. v. Catrett, 477 U.S. 317 (1986).

Courts have broad discretion to decide when a protective order is appropriate. See

Seattle Times Co. v. Rhinehart, 467 U.S. 20, 36 (1984). Because [p]roduction of information

that is not relevant is an inherently undue burden, Ginena v. Alaska Airlines, Inc., No. 2:04-cv-

01304-RCJ-CWH, 2011 U.S. Dist. LEXIS 116656, *4-5 (D. Nev. Oct. 6, 2011), protective orders

are routinely entered to bar discovery concerning claims or allegations on which the plaintiff

cannot recover. See Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 635 (9th Cir. 2005).



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I. SUMMARY JUDGMENT SHOULD BE ENTERED AS TO KHASINSCLAIMS AGAINST STATEMENTS ON WHICH HE DID NOT RELY

A. Actual Reliance Is a Necessary Element of Khasins Claims

The AC asserts claims under Californias UCL, FAL, and CLRA. California law is clear

that actual reliance is required to prevail on any of these statutory claims. In re Ferrero Litig.,

794 F. Supp. 2d 1107, 1111 (S.D. Cal. 2011); see also Sateriale v. R.J. Reynolds Tobacco Co.,

687 F.3d 1132 (9th Cir. 2012) (affirming dismissal of UCL and CLRA claims where plaintiffs

had not relied on the defendants alleged misrepresentations).6

Reliance exists when the

misrepresentation or nondisclosure was an immediate cause of the plaintiffs conduct and when

without such misrepresentation or nondisclosure he or she would not, in all reasonable

probability, have entered into the contract or other transaction. Alliance Mort. Co. v. Rothwell,

10 Cal. 4th 1226, 1239 (1995); see also In re Tobacco II Cases, 46 Cal. 4th 298, 306 (2009)

(plaintiff must demonstrate actual reliance on the allegedly deceptive or misleading statements,

in accordance with well-settled principles regarding the element of reliance in ordinary fraud

actions).

To establish actual reliance in a case based on alleged misrepresentations in labeling or

advertising, it is not enough for a plaintiff to show that he was exposed to the defendants

advertising or purchased an allegedly mislabeled product. See Bronson v. Johnson & Johnson,

Inc., No. C-12-04184-CRB, 2013 U.S. Dist. LEXIS 54029, *8-9 (N.D. Cal. Apr. 16, 2013).

Plaintiff must prove that the alleged misrepresentations actually motivated his purchasing

decision. See Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 330 (Cal. 2011) (plaintiff

establishes reliance by showing that he or she would not have bought the product but for the

misrepresentation); see also Hinojos v. Kohls Corp., 2013 U.S. App. LEXIS 10185, *26 (9th

6The AC also includes a redundant claim for unjust enrichment. However, courts have

held that a plaintiff cannot maintain a stand-alone claim for unjust enrichment if his statutory

claims are defective. See Herrington v. Johnson & Johnson Consumer Co., 2010 U.S. Dist.

LEXIS 90505, *42 (N.D. Cal. Sept. 1, 2010). In other words, a plaintiffs unjust enrichmentclaim rises or falls with his UCL, FAL, or CLRA claims. Id.; see also In re Sears, Roebuck &

Co. Tools Mktg & Sales Practices Litig., 2007 U.S. Dist. LEXIS 89349, *7 (N.D. Ill. 2007)

(recognizing that when plaintiffs unjust enrichment claims are premised on allegedly false or

misleading advertising, plaintiffs still have to demonstrate that they were deceived).



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Cir. May 21, 2013) (actual reliance means the plaintiff would not have purchased the product

otherwise).

B. Khasin Did Not Actually Rely On Most of the Disputed Statements

To be clear, Hershey maintains that all of the disputed statements in its website,

advertising and labeling are true and accurate, and do not violate the FDCA, FDA regulations, or

California law in any respect. The Court, however, need not resolve whether Khasins novel

interpretations of federal and state food labeling requirements are correct because Khasins claims

suffer from a more fundamental defect: Khasin did not actually rely on the allegedly false and

misleading statements in Hersheys promotions. Summary judgment is appropriate for this

reason alone. See Baghdasarian v. Amazon.com, Inc., No. CV-05-8060-AG, 2009 U.S. Dist.

LEXIS 115265, *12-17 (C.D. Cal. Dec. 9, 2009) (summary judgment is required when the

[p]laintiffs own deposition testimony establishes that [he] cannot show actual reliance);

Princess Cruise Lines, Ltd. v. Superior Ct., 179 Cal. App. 4th 36 (Cal. App. 2d Dist. 2009)

(same).

1. Hersheys Website and Advertising

Khasins deposition testimony establishes beyond doubt that Hersheys website played no

role in Khasins purchasing decisions. As noted above, Khasins counsel conceded even in

advance of the deposition that Khasin did not, in fact, visit the Hershey websites at any time.

(Tu Decl., Ex. B). Khasin confirmed this under oath:

Q: . . . Prior to purchasing any of the Hersheys products that you purchased,did you ever visit a Hershey branded website?

A: No, I did not.

Q: Since the filing of this lawsuit, have you ever visited a Hershey brandedwebsite?

A: No, I did not.

Q: Is it fair to say that the Hershey websites played no role in your decisionabout which Hershey products to purchase?

A: That is correct.

(Dep. Tr. 148:22-149:7).



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Indeed, at the time of his deposition, Khasin was not even aware that the AC disputed

statements from Hersheys website:

Q: Are you aware that there are quotations from Hershey website in thecomplaint that was filed in your name in this action?

A: No, I [am] not.

Q: Let me represent to you that there are quotations in the complaint fromvarious Hersheys websites. Will you accept my representation to you thatthose quotations exist?

A: Yes.

Q: Fair to say since you havent been to a Hersheys website, you personallyhavent viewed any of those quotations; correct?

A: Correct.

Q: And fair to say that since you didnt visit a Hershey website, none of thosequotations played a role in your decision to purchase a Hershey product;correct?

A: Correct.

(Dep. Tr. 150:16-151:7).7

Plainly, Khasin cannot prove actual reliance on Hersheys website. As other courts have

recognized, one who was not exposed to the alleged misrepresentations . . . could not possibly

have relied on them. Pfizer, Inc. v. Superior Ct., 182 Cal. App. 4th 622, 631 (2010). Khasins

claims challenging statements from Hersheys website must, therefore, be dismissed. See Dvora

v. Gen. Mills, No. CV-11-1074-GW(PLAx), 2011 U.S. Dist. LEXIS 55513, *21 (C.D. Cal. May

16, 2011) (dismissing plaintiffs challenge to statements on the defendants website because he

never read or relied upon such statements in making his purchase); Bronson, 2013 U.S. Dist.

LEXIS 54029, at *8-9 (same).

Khasins testimony also dooms his claims against Hersheys advertisements. Although he

testified that he probably has seen ads for Hersheys products, Khasin was adamant that

Hersheys advertising played no role in his purchasing decisions:

7Counsel for Khasin made numerous speaking objections throughout the deposition.

Those objections are reflected in the official transcript but have been omitted from the quotations

excerpted here due to space contraints.



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Q: Were there any statements in advertisements for Hersheys MilkChocolate that played a role in your decision to buy the product?

A: No. [. . .]

Q: And fair to say that no advertising for Hersheys Dark Chocolate played arole in your decision purchase any Hersheys Dark Chocolate products;correct?

A: Correct. [. . .]

Q: Did any -- fair to say that no advertising for Hersheys regular cocoaplayed a role to purchase that product; correct?

A: Correct. [. . .]

Q: Fair to say that advertising for Hersheys mint and gum products playedno role in your decision to purchase those products; correct?

A: Correct. [. . .]

(Dep. Tr. 216:4-7, 16-20, 217:3-6, 218:3-6). In light of these admissions, Khasin cannot meet his

burden of proving actual reliance on any of Hersheys advertisements. Khasins claims premised

on Hersheys advertising also must be dismissed.

2. Hersheys Product Labeling

Khasin testified that he has purchased Hersheys milk chocolate, mint, cocoa, and dark

chocolate products, but most of the allegedly false and misleading statements on Hersheys labels

had no effect whatsoever on his purchasing decisions. Contrary to the allegations in the AC,

Khasin was not deceived into purchasing Hersheys products based on statements on the

products labels. He bought Hersheys products because he likes the way they taste, for his

wifes baking needs, or to add to his childrens milk. (Dep. Tr. 67:5-6, 125:5-11, 144:14-25,

154:12-15, 203:21-24).

a. Milk Chocolate Products

Khasin testified that he first purchased Hersheys milk chocolate as a child because I

thought it would taste good. (Dep. Tr. 123:22). He continued to purchase Hersheys milk

chocolate products as an adult [b]ecause they tasted good. (Dep. Tr. 125:11). Over those many

years, Khasin could not recall a single instance when he actually reviewed the label for Hersheys

milk chocolate or inspected the ingredients list:



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Q: At any point over the years when you have purchased Hersheys milkchocolate bars, can you recall looking at the label?

A: I cant recall specifically looking at a Hersheys label.

Q: . . . But in all of the times that you purchased Hersheys milk chocolatebars, did you ever read the ingredients list on a Hersheys milk chocolatebar?

A: I cant recall at this time.

Q: Did the ingredients list on the Hersheys milk chocolate bar ever factorinto your decision about whether to buy Hersheys milk chocolate or not?

A: I dont remember.

(Dep. Tr. 128:4-23).

Given Khasins inattention to the labels, it is not surprising that their disclosures with

respect to PGPR and vanillin played no role in Khasins purchasing decisions. Regarding PGPR,

Khasin testified:

Q: If the labels for Hersheys milk chocolate bars had said on themPolyglycerol Polyricinoleic Acid instead of PGPR, would you have stillpurchased Hersheys milk chocolate bars?

A: If I looked at the Hersheys labels, then it would not have made adifference to me.

(Dep. Tr. 140:3-11). Similarly, Khasin testified that he had no objection to the way vanillin is

currently identified on Hersheys labels:

Q: Other than PGPR, is there anything sitting here today that concerns youabout the labeling of Hersheys milk chocolate bars?

A: No, there is not. [. . .]

Q: We've talked about the Hersheys brand name. No concerns; correct?

A: Correct.

Q: Weve talked about the fact that it says milk chocolate. No concerns; correct?

A: Correct. [. . .]

Q: No concerns about Vanillin; correct?

A: Correct.



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(Dep. Tr. 141:20-25, 143:7-21).8

Khasins testimony establishes that he did not actually rely on

the labeling of PGPR or vanillin when he made his purchasing decisions. Khasins claims

regarding Hersheys milk chocolate products must be dismissed.

b. Mint Products

Khasin admitted that he purchased Hersheys mint products for the sole reason that he

liked the way they taste. Specifically, when asked why he first purchased Hersheys IceBreakers

mints, Khasin testified:

A: Because I wanted some mints.

Q: Why did you want mints?

A: Because most of the time they taste good.

Q: Any other reason you bought IceBreakers Mints that first time?

A: No.

(Depo Tr. 88:5-10). Khasin then was asked about the reasons why he continued to buy

IceBreakers mints, and he gave a similar answer:

Q: And you bought IceBreakers again after the first time again; right?

A: I believe so.

Q: And why did you buy it again?

A: I enjoyed the flavor.

(Dep. Tr. 89:5-9).

With respect to the allegation that Hersheys mints should be labeled with a two-mint

serving size, Khasin testified that he personally consumes one mint at a time, and one mint (not

two) is the most appropriate serving size for him:

Q: And when you [eat] those IceBreakers Mints, do you pop them one at atime, two at a time, three at a time? How many do you eat at a time?

A: One.

8Khasin testified that he purchased HERSHEYS Milk Chocolate Bars and

HERSHEYS KISSES Brand Milk Chocolate. In the deposition excerpts quoted here, Khasin

was discussing milk chocolate bars, but Khasin gave virtually identical answers when questioned

about Hersheys Kisses milk chocolate. (Dep. Tr. 146:12-147:6).



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[. . .]

Q: So for you, the serving size that was appropriate was one mint; correct?

A: Yes.

(Dep. Tr. 90:16-91:3). Indeed, when Khasin was asked specifically what his objections were to

the serving size on labels for Hersheys mints, he denied having any concerns. (Dep. Tr. 98:11-

15) (Q: And do you have any concerns about the serving size printed on the IceBreakers Mints

label? A: Not that Im aware of.).

Khasin also was questioned about the ACs allegation that the phrase sugar free is false

and misleading in the absence of a disclosure that Hersheys mints are not a low calorie food.

Although Khasin tried to parrot back the ACs allegations, he made clear that he personally was

not deceived in any way by the statement sugar free. Specifically, when asked whether he

believed that sugar free on the IceBreakers mints label is false or in any way inaccurate, Khasin

answered, Not that I know of. (Dep. Tr. 97:16-19). And, when asked whether he even looked

at the label for IceBreakers mints before he purchased the product, Khasin testified, Im not sure

if I looked at it or not. (Dep. Tr. 88:25-89:4).

Moreover, when Khasin tried to explain in his own words how, if at all, Hersheys mints

are mislabeled, he told an entirely different story from the one alleged in the AC. Khasin testified

that the disclosure that he personally would like to see added to Hersheys mints labels is

shouldnt be substituted as an entre or as a lunch. (Dep. Tr. 94:10-18). This disclosure is

purportedly necessary, according to Khasin, because, You know, it may be seen that if you have

a lot of these mints, it could replace a meal. (Dep. Tr. 96:2-3).9

Putting aside whether Khasins desired disclosure makes any sense (and it clearly does

not), Khasin did not purchase IceBreakers mints on the mistaken belief that he could have a lot

of them as a meal replacement. On the contrary, Khasin testified that he purchased the mints

9After Khasin stated multiple times on the record that Hersheys mints labels should

disclose that the mints are not a substitute for an entre or lunch, Khasins attorney requested that

questioning be suspended so that he and his client could take a break. Fifteen minutes later

Khasin returned and miraculously remembered that what he meant to say was not a low calorie

food. (Dep. Tr. 111:9-112:16).



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because he liked their taste, and that the most mints he ever consumed at any one time was one.

Khasin did not rely on any purported misrepresentation about the serving size of Hersheys

mints, and he did not purchase Hersheys mints on the mistaken belief that they are a low-calorie

food. Khasins claims against the labeling for Hersheys mint products must be dismissed.10

c. Dark Chocolate and Cocoa Products

The AC identified four purported labeling defects with Hersheys dark chocolate and

cocoa products: PGPR, vanillin, cocoa processed with alkali, and the antioxidant seal.

According to Khasin, the only one he considered prior making his purchasing decisions was the

antioxidant seal. Khasin testified that PGPR had no impact on his decision to purchase Hersheys

dark chocolate:

Q: So is it fair to say that PGPR played no role in your decision whether topurchase Hersheys dark chocolate?

A: Correct. If I had looked and seen PGPR, it would not have affected mydecision.

(Dep. Tr. 162:20-163:2). Khasin admitted that he had no concerns about the labeling of vanillin

on dark chocolate:

Q: Any concerns about Vanillin [on Hersheys dark chocolate labels]?

A: No. [. . .]

(Dep. Tr. 169:4-5). Nor did Khasin rely to his detriment on the presence or absence of

cocoa processed with alkali on Hersheys labels:

10The meal-replacement theory of deception espoused by Khasin at his deposition is

actually inconsistentwith the ACs allegations. In explaining why he believes that Hersheysmints should disclose that they are not a substitute for an entre or lunch, Khasin testified thatsomeone could think that Hersheys mints can be substituted for a meal and mistakenly consume

too few calories. (Dep. Tr. 96:14-18 (Q: Well, what if one of your kids said, Dad, Im skipping

lunch, and Im having mints instead. What would you say in response? A: Well, I would say,Eat something else too.). The AC, however, alleges the opposite. According to the AC,

Hersheys mints labels should disclose that they are not a low calorie food because a consumer

might think that Hersheys mints are low calorie and consume more calories than they intend

to. (AC 123-126).



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Q: Any concerns about the use of alkalized cocoa in the product?

A: No. [ . . . ]

Q: Did the presence or absence of [alkalized] cocoa have any role in yourdecision to purchase Hersheys Dark Cocoa?

A: No, it did not.

(Dep. Tr. 169:1-3, 198:3-6). Thus, with respect to Hersheys labeling for its dark chocolate and

cocoa products, Khasin cannot establish that he actually relied on any statements regarding

PGPR, vanillin, or alkalized cocoa.

* * *

At the motion to dismiss stage, Hershey argued that Khasins case was premised on a

legal fiction that he was somehow injured as a result of the numerous website, advertising and

labeling statements disputed in the AC. Now that he has testified under oath, it is readily

apparent that Khasins allegations were not merely a legalfiction, they were an actual fiction.

Khasins admissions leave no genuine issue of material fact to be decided. With the possible

exception of the antioxidant seal on Hersheys dark chocolate and cocoa products, none of the

statements challenged in the AC played any role in Khasins purchasing decisions. Hershey is

entitled to partial summary judgment on Khasins claims against its website and advertising, and

its labeling statements concerning PGPR, vanillin, cocoa processed with alkali, serving sizes and

sugar-free mints.

II. KHASIN CANNOT PURSUE HIS DEFECTIVE CLAIMS UNDER THE

UNLAWFUL PRONG OF THE UCL

Notwithstanding their clients meltdown at deposition, Khasins lawyers have insisted that

they intend to pursue all of his existing claims, including those that concern statements that

caused him no injury. In particular, Khasins attorneys have assertedand will likely argue

herethat they need not prove that Khasin or anyone else was actually misled by Hersheys

alleged misrepresentations, and that Khasin can pursue all of the allegations in the AC under the

unlawful prong of the UCL.11

11Khasins fallback unlawful theory has no relevance whatsoever to his FAL or CLRA



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This argument must be rejected for at least two reasons. First, California law does not

permit private plaintiffs to proceed under the unlawful prong of the UCL without proof of

actual reliance. Second, now that he has admitted that he was never misled or deceived by most

of the disputed statements, Khasins claims are nothing more than a naked attempt by a private

plaintiff to enforce the FDCA through state law. Such claims are absolutely barred by the

doctrine of implied preemption.

A. Californias UCL Requires Actual Reliance Even Under theUnlawful Prong

Khasins theory that he can maintain a claim under the unlawful prong of the UCL

against statements on which he did not actually rely is contradicted by the plain language of the

UCL itself. The statute expressly limits standing to plaintiffs who have lost money or property

as a result of the defendants alleged misconduct. Cal. Bus. & Prof. Code 17204. This as a

result of language was added to the UCL in 2004 by the Proposition 64 ballot initiative, and in

its plain and ordinary sense means caused by and requires plaintiffs to show a causal

connection between the alleged misrepresentations and their purchasing decisions. Kwikset

Corp. v. Superior Ct., 51 Cal. 4th 310, 326 (Cal. 2011).

This voter-initiated reliance requirement dooms Khasins unlawful theory. Proposition

64 was enacted specifically to address the abuses that can result when a so-called private

attorney general uses the UCL to challenge labeling and advertising on which he did not actually

rely. See People ex rel. Lockyer v. Brar, 115 Cal. App. 4th 1315, 1317 (2004) (explaining that

Proposition 64 was enacted to stop attorneys from scour[ing] public records on the Internet for

what are often ridiculously minor violations of some regulation or law and then finding a

consumer to serve as a front). Thus, in the years since Proposition 64 was passed, California

courts have recognized that omitting an actual reliance requirement when the defendants

alleged misrepresentation has not deceived the plaintiff would blunt Proposition 64s intended

reforms. Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 1363 (Cal. App. 4th Dist. 2010)

claims. Unlike the UCL, these statutes do not have multiple prongs, and Khasins admission

that he was not misled by Hersheys statements is clearly fatal to these claims.



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(internal quotation marks omitted).

In fact, Khasins position that the unlawful prong of Californias UCL authorizes him to

challenge statements that did not deceive him has been squarely rejected. It is the nature of the

alleged wrongdoing that determines whether actual reliance is required, not the specific prong

of the UCL the consumer invokes. Durell, 183 Cal. App. 4th at 1355, 1363. Thus, when the

alleged wrongdoing concerns misrepresentations in labeling or advertising, a plaintiff is required

to prove actual relianceeven under the UCLs unlawful prong. See id. at 1355 (to bring a

claim under the unlawful prong of the UCL, in which the predicate unlawful conduct is based

on misrepresentations, . . . actual reliance is an element of the claim); see also Kwikset Corp. v.

Superior Ct., 51 Cal. 4th 310, 326 n.9 (2011) (because the theory of the [unlawfulness] case is

that Kwikset engaged in misrepresentations and deceived consumers, plaintiff must prove the

element of reliance). This is true whether the predicate unlawful act alleged is based on

Californias Sherman Law or some other statute. See In re Actimmune Mktg. Litig., No. C 08-

02376 MHP, 2010 U.S. Dist. LEXIS 90480, *26 (N.D. Cal. Aug., 31, 2010) (finding that

plaintiffs reliance on the Sherman Law did not change the fact that the alleged wrong involved

representations intended to persuade a consumer to purchase a product,such that actual

reliance is necessary).

At the motion to dismiss stage, Khasin asserted that reliance may not be required for his

UCL claim. The cases that Khasin cited at that time, however, suggest only that actual reliance

may not be required in UCL actions that are not based upon a fraud theory. Medrazo v. Honda

of N. Hollywood, 205 Cal. App. 4th 1, 12 (Cal. App. 2d Dist. 2012). Khasins case, in contrast, is

predicated on a fraud theory because the AC alleges that he was deceived by purported

misrepresentations. See, e.g. Fox v. Good Samaritan L.P., 801 F. Supp. 2d 883, 896 (N.D. Cal.

2010) (recognizing that the allegations in the pleadings serve to frameand limitthe issues

to be decided on summary judgment). In fact, the Court recognized that Khasins claims sound

in fraud when it decided that the heightened pleading requirements of Rule 9(b) applied at the

motion to dismiss stage. MTD Order at 12-13. California law is clear that in cases such as this

one, where plaintiffs claims are rooted in allegations of fraud and misrepresentations, actual



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reliance is an indispensable requirement. See Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 326

(Cal. 2011) (imposing a reliance requirement in a case brought under all three prongs of the

UCL based on alleged misrepresentations on product labeling concerning the products country of

origin).

B. Absent Proof of Actual Reliance, State-Law Claims to Enforce FDCARequirements Are Impliedly Preempted

California law does not authorize plaintiffs to challenge unlawful conduct that did not

actually mislead them or cause them harm. But even if such claims were permitted as a matter of

state law, the U.S. Supreme Court and the Ninth Circuit have held that such claims are impliedly

preempted by the FDCA. This Court addressed the issue of implied preemption in its ruling on

Hersheys motion to dismiss. In the months since the Court issued its MTD Order, however, a

number of important rulings have been handed down that clarify that the doctrine of implied

preemption is distinct from express preemption and serves an entirely different purpose.12

See

Hillman v. Maretta, No. 11-1221, 2013 U.S. Lexis 4167, *26 (U.S. June 3, 2013) (the existence

of a separate [express] pre-emption provision does notbar the ordinary working of [implied] pre-

emption principles (internal citations, quotation marks omitted)); Perez v. Nidek Co., 711 F.3d

1109, 1119-20 (9th Cir. 2013) (same).

The doctrine of implied preemption under the FDCA is rooted in Congresss intent. In

enacting the FDCA, Congress manifested a clear intent that the statutes enforcement be entrusted

solely to the FDA. See Buckman Co. v. Plaintiffs Legal Comm., 531 U.S. 341, 349 n.4 (2001)

(the FDCA leaves no doubt that it is the Federal Government rather than private litigants who

are authorized to file suit for noncompliance). This legislative policy decision to give FDA

12To the extent that the Courts MTD Order can be read to suggest that Khasins claims

cannot be impliedly preempted because he is suing under California state law, rather than the

FDCA itself, Hershey respectfully disagrees that is an accurate statement of the law. See Fraker

v. KFC Corp., No. 06-CV-01284-JM (WMC), 2007 U.S. Dist. LEXIS 32041, at *11 (S.D. Cal.Apr. 30, 2007) (to the extent Plaintiff contends that alleged violations of the FDCA and Sherman

Law give rise to viable state law claims, such claims are impliedly preempted by the FDCA);

Animal Legal Def. Fund v. Provimi Veal Corp., 626 F. Supp. 278, 283 (D. Mass. 1986) (same

under Massachusetts parallel food-and-drug statute).



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exclusive enforcement authority has major advantages. Bailey v. Johnson, 48 F.3d 965, 968

(6th Cir. 1995). FDA has substantial expertise that it brings to bear; has the ability to solicit

comment from appropriate sources; provides direct representation of the public interest; and

can maintain a unitary enforcement policy for the country as a whole.13

Id.

Out of deference to Congresss intent and FDAs authority, courts have held that private

parties cannot use state unfair competition laws as a vehicle to bring a private cause of action

that is based on violations of the FDCA. In re Epogen & Aranesp Off-Label Mktg. & Sales

Practices Litig., 590 F. Supp. 2d 1282, 1290-91 (C.D. Cal. 2008). Thus, even when a plaintiff

asserts claims exclusively under state law, those state-law claims are impliedly preempted if they

are in substance (even if not in form) a claim for violating the FDCA. Loreto v. Procter &

Gamble, No. 10-4274, 2013 U.S. App. LEXIS 3813, at *5 (6th Cir. Feb. 22, 2013) (internal

quotation marks, citations, and alterations omitted). Courts in the Ninth Circuit have repeatedly

barred state-law claims premised wholly on noncompliance with the FDCA or its implementing

regulations, including claims under Californias UCL. See, e.g., See Perez v. Nidek Co., 711 F.3d

1109, 1119-20 (9th Cir. 2013); PhotoMedex, Inc. v. Irwin, 601 F.3d 919, 928 (9th Cir. 2010)14

;

Epogen, 590 F. Supp. 2d at 1290-91 (plaintiffs may not use the UCL as a vehicle to bring a

private cause of action that is based on violations of the FDCA); Summit Tech. v. High-Line

Med. Instruments, Co., 933 F. Supp. 918, 943 n.21 (C.D. Cal. 1996) (Plaintiff may not bring a

[UCL] claim that is, in fact, an attempt to state a claim under the federal FDCA.).15

13FDA also has broad discretion to fashion remedies that best serve the public interest.

See Heckler v. Chaney, 470 U.S. 821, 835 (1985) (FDCA commit[s] complete discretion to

[FDA] to decide how and when its enforcement powers should be exercised).

14The PhotoMedex opinion referred chiefly to PhotoMedexs federal Lanham Act claim.

However, the courts holding affirmed the dismissal of the UCL claim on the same grounds, 601F.3d at 930-31 & n.7, and the Ninth Circuit relied heavily on U.S. Supreme Court precedent

addressing implied preemption of state-law claims.

15The Ninth Circuits decision in Pom Wonderful v. Coca-Cola used a similar rationale to

hold that a private partys claims under the federal Lanham Act were precluded by the FDCA.See POM Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170, 1175-76 (9th Cir. 2012) (plaintiff

may not undermine Congresss decision to limit enforcement of the FDCA to the federal

government by using federal Lanham Act as a vehicle to usurp, preempt, or undermine FDA

authority to enforce the FDCA).



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The Ninth Circuits recent decision in Perez v. Nidekis instructive. There, the plaintiffs

were patients who sued their physicians under California law for failing to warn them that the

laser that was used to treat their farsightedness was not FDA-approved for that condition. See

Perez, 711 F.3d at 1112. The plaintiffs did not allege that they had been injured, or even that

their surgeries were unsuccessful. Rather, plaintiffs alleged that the physicians had violated the

FDCA by using the lasers for an unapproved purpose, and that they would not have had their

surgeries but for the physicians misleading omissions. Id. at 1117.

The Ninth Circuit held that plaintiffs claims were impliedly preempted, reasoning that the

claims sought to improperly usurp the FDAs authority to enforce the FDCA and its

implementing regulations. Id. at 1119. As the Ninth Circuit explained, the FDCA does not

impliedly preempt traditional state-law torts such as failure to exercise reasonable care because

those duties imposed by tort law predate, and exist independently of, the FDCA. But state-law

claims that exist solely by virtue of the FDCA requirements are impliedly preempted. Id.

(internal citation, quotation marks, and alterations omitted).

Because Khasins claims are no longer tethered to the traditional tort principles of

deception, reliance and injury, Khasins unlawful claims under the UCL are indistinguishable

from the claims that the Ninth Circuit held preempted in Perez. Traditional state-law principles

do not prohibit Hersheys label statements concerning PGPR, vanillin, cocoa processed with

alkali, serving sizes or sugar-free mints. Nor does conventional state tort law bar Hershey from

making health claims that FDA supposedly has not authorized or approved. Rather, the duties

that Khasin seeks to impose under state law would not exist absent the federal regulatory scheme

established by the FDCA. See Riley v. Cordis Corp., 625 F. Supp. 2d 769, 777 (D. Minn. 2009)

(technical non-compliance with the FDCA is not the type of conduct that would traditionally

give rise to liability under state tort law). Khasins claims are therefore impliedly preempted.

Id.; see also Epogen, 590 F. Supp. 2d at 1290 (describing the crucial distinction between pure-

FDCA-violation claims and claims involving inherently deceptive conduct).16

16Plaintiff will undoubtedly invoke the California Supreme Courts decision in In re

Farm Raised Salmon Cases, which rejected an implied-preemption defense to a UCL action



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By attempting to proceed under the UCLs unlawful prong without any proof of reliance

or deception, Khasin is seeking to stand in the shoes of the FDA and enforce FDCA requirements

through the backdoor of state law. That is precisely what Congress has forbidden. Khasins

claims are thus preempted.

III. HERSHEY IS ENTITLED TO A PROTECTIVE ORDER

Not only has Khasin insisted upon proceeding with a liability theory that is not recognized

by California law (and, in any event, is preempted by federal law), he has refused to withdraw his

numerous discovery demands relevant to his defective claims. To avoid the significant burdens

and costs that compliance with these demands would impose upon Hershey, the Court should

issue a protective order prohibiting Khasin from pursuing discovery on the claims he has admitted

under oath he does not possess.

The scope of discovery is properly limited to matters that are relevant to any partys

claim or defense. Fed. R. Civ. P. 26(b)(1). As such, courts must limit the extent of discovery

otherwise allowed whenever the burden or expense of the proposed discovery outweighs its

likely benefit. Id. 26(b)(2)(C)(iii). This is especially true when a party is seeking discovery that

is not relevant to any claim in the case. See Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d

625, 635 (9th Cir. 2005); Travers v. Shalala, 20 F.3d 993, 999 (9th Cir. 1994); Price v.

Cunningham, No. 1:08-cv-00425-AWI-BAM PC, 2012 U.S. Dist. LEXIS 157142, *4-5 (E.D.

Cal. Nov. 1, 2012).

Most of the documents and information that Khasin seeks relate to website, advertising,

and labeling statements on which Khasin did not rely. For example, Khasin has requested that

involving alleged violations of Californias Sherman Law. 42 Cal. 4th 1077 (2008). But the facts

ofIn re Salmon are distinguishable because the plaintiffs in that case alleged that they had beenmisled by the defendant grocery stores practice of selling farmed salmon as wild salmon byadding undisclosed artificial colorants. Salmon, 42 Cal. 4th at 1083-84. Although that

nondisclosure happened to violate the FDCA and parallel provisions of the Sherman Law, the

plaintiffs case was based on a traditional state-law tort duty not to deceive. Id. at 1084. Bycontrast, Khasin has conceded that he was never personally misled by Hersheys website,

advertising, and most of the disputed labeling statements. In any event, a California courts

holding on an issue of federal law, such as preemption, is not binding on this Court, and the In re

Salmon decision predates the Ninth Circuits decisions in PhotoMedex and Perez.



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Hershey collect and produce all documents relating to Hersheys website (which Khasin admitted

he never visited); substantiation for all of Hersheys purported health claims regarding dark

chocolate and cocoa (which Khasin conceded he never saw); all documents concerning the

labeling of products containing PGPR, vanillin, cocoa processed with alkali (ingredients that

Khasin testified played no role in his purchasing decisions); and all documents concerning

Hersheys sugar-free mints and their serving sizes (products that Khasin testified he purchased

for the sole reason that he liked their taste).

The documents and information sought by Khasin have no probative value. Whatever

information there is to be gleaned from these documents, it will not change the fact that Khasin

cannot recover on his claims. Moreover, given the broad wording of Khasins requests and the

sweeping nature of the allegations in the AC, the burden and expense on Hershey to collect,

review for privilege, and produce these documents would be enormous. Many of these

documents also contain highly valuable and confidential trade secrets that Hershey should not be

made to disclose. See Groce v. Claudat, No. 09cv01630-BTM (WMc), 2012 U.S. Dist. LEXIS

69870, *10-11 (S.D. Cal. May 18, 2012) (granting protective order where production of the

documents would subject defendant to disclosure of highly private and confidential matters that

have little if any probative value to plaintiffs claims).

Hershey is a large global company, and Khasins discovery demands concern some of its

flagship products that have been sold and marketed for decades. Khasins document requests,

therefore, implicate dozens of potential custodians, span many aspects of Hersheys business, and

could require Hershey to track down archival information that goes back years. Conservatively,

collecting and producing this material could cost Hershey hundreds of thousands of dollars in

costs and associated legal fees. All that time, money and effort will have been wasted because, at

the end of the day, Khasin cannot prevail on his claims absent proof of actual reliance.

Accordingly, the Court should enter a protective order precluding further discovery on

Khasins claims regarding Hersheys website and advertising, and Hersheys labeling of PGPR,

vanillin, cocoa processed with alkali, serving sizes and sugar-free mints. None of these issues

had anything to do with the reasons t

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