Court Finds Sufficient Concrete Monetary Losses for Plaintiff to Have Standing and Finds Plaintiff Adequately Alleged Civil RICO Violations

Bell v. Dave, 2022 WL 2667017 (D.N.J., July 11, 2022)

Defendants filed a motion to dismiss the class action complaint of plaintiffs for lack of jurisdiction and failure to state a claim under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).   The court rejected these claims.

Standing

To have standing, the Plaintiff must show concrete monetary losses, and the court did so find.  The court discussed that in sum, the Complaint alleges that “every bottle of Synergy Kombucha contains greater than 0.5% ABV by the time the product reaches consumers” that the beverage has “no legal market value on any legitimate markets” and that Plaintiffs “would not have purchased or consumed said products had [they] known the true alcohol contents of said beverages,” which was an illicit beverage.

The court disagreed with Defendant’s assertions, specifically stating the Court must accept Plaintiffs’ factual allegations as true and plaintiffs do not need to prove their case at the pleading stage. Defendants may ultimately prevail on this issue on summary judgment or at trial after having the benefit of discovery and a more substantial factual record. 

Regarding the concreteness of the injury, the Court also stated that a plaintiff may sufficiently plead injury-in-fact by alleging that the consumer product she purchased was worth less than what she paid for. See In re Johnson & Johnson Talcum Powder, 903 F.3d at 285. “Plaintiff[s] may rely on the testing results attached to [their] complaint to nudge [their] claims based on” defendant’s misrepresentations “across the line from conceivable to plausible.” 

The court concluded that plaintiffs have plausibly alleged a concrete and particularized injury, fairly traceable to the conduct of Defendants, that may be redressed by an award of monetary damages. Therefore, Plaintiffs had standing to pursue monetary damages. 

RICO Enterprise

Plaintiffs bring a RICO claim against GT Dave, as “a person who was employed by or associated with GT’s Living Foods, an enterprise,” for “conduct[ing] or participat[ing] directly or indirectly, in the conduct of that enterprise’s affairs through a pattern of racketeering activity.” The Complaint alleges that GT Dave, the sole shareholder and chief executive officer of GT’s Living Foods, “being a person who was employed by or associated with [GT’s Living Foods], an enterprise, conducted or participated, directly or indirectly, in the conduct of that enterprise’s affairs through a pattern of racketeering activity.” Plaintiffs allege that GT Dave “manages and exercises control over the day-to-day activities of Defendant GT’s Living Foods and he is the individual primarily responsible for the conduct of Defendant GT’s Living Foods and the continuing violations of federal and state law alleged herein.” (Id. ¶ 11). Therefore, Plaintiffs sufficiently allege GT Dave, the person, participated in a pattern of racketeering activity.

N.J. Statute

For the reasons discussed in Section II.B.(i), supra, the Court is satisfied that Plaintiffs sufficiently pleaded mail fraud and Travel Act violations as NJRICO predicate acts. As previously noted, Plaintiffs allege the following series of facts: GT Living Foods distributes Synergy Kombucha products to retail stores throughout New Jersey and the United States where it is sold among non-alcoholic beverages available to consumers of all ages and markets Synergy Kombucha as a health product on its label.  Plaintiffs would not have purchased and/or consumed Synergy Kombucha from retail stores had they known the true alcohol content and/or that Synergy Kombucha was an alcoholic beverage; both Defendants either knew or should have known that every bottle of Synergy Kombucha contains greater than 0.5% ABV by the time it reaches consumers; and GT Dave is the sole shareholder and chief executive officer of GT’s Living Foods. Accepting the allegations as true, Plaintiffs sufficiently alleged that Defendants are engaged in trade or commerce and that GT Dave participated in the conduct of the affairs of GT’s Living Foods through a pattern of racketeering activity that proximately caused Plaintiffs’ injuries.

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