1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LISABETH HANSCOM, Case No. 21-cv-03434-JSW

8 Plaintiff,

ORDER DENYING MOTION TO

9 v. DISMISS SECOND AMENDED

COMPLAINT

10 REYNOLDS CONSUMER PRODUCTS LLC, et al., Re: Dkt. No. 61 11 Defendants.

12 13 Now before the Court for consideration is the motion to dismiss the second amended 14 complaint (“SAC”) filed by defendants Reynolds Consumer Products Inc., and Reynolds 15 Consumer Products LLC (collectively, “Reynolds” or “Defendants”). The Court has considered 16 the parties’ papers, relevant legal authority, and the record in the case, and it finds this matter 17 suitable for disposition without oral argument. See N.D. Civ. L.R. 7-1(b). For the following 18 reasons, the Court DENIES Reynolds’ motion. 19 BACKGROUND 20 Plaintiff Lisabeth Hanscom (“Plaintiff”) alleges that the labeling of Reynolds’ recycling 21 bags misleads consumers into believing that the bags are recyclable and suitable for disposing of 22 recyclable waste. Plaintiff asserts claims for: (1) violations of California’s Consumers Legal 23 Remedies Act, sections 1750 et seq.; (2) violations of California’s False Advertising Law, 24 Business and Professions Code sections 17500 et seq.; (3) “fraud, deceit, and/or 25 misrepresentation”; (4) negligent misrepresentation; and (5) violations of California’s Unfair 26 Competition Law, Business and Professions Code sections 17200 et seq. The allegations in this 27 case are more fully addressed in this Court’s Order granting, in part, and denying, in part, 1 On January 21, 2022, the Court dismissed Plaintiff’s claims for equitable relief to the 2 extent they sought restitution on the basis that Plaintiff failed to allege that she lacked an adequate 3 remedy at law. (Dkt. No. 55 (“1/21/22 Order”).) The Court also found Plaintiff’s allegations 4 failed to establish her standing to seek injunctive relief. (Id.) The Court granted Plaintiff leave to 5 amend with regard to standing to pursue injunctive relief. 6 Plaintiff filed the SAC on May 11, 2022. (Dkt. No. 60.) Plaintiff makes the following 7 amendments: 8 Allegations in First Amended Complaint Amended Allegations in SAC “As a general rule, recyclables should be clean “As a general rule, recyclables should be clean 9 and dry and should be placed directly in a and dry and should be placed directly in a 10 collection bin without the use of a plastic bag collection bin without the use of a plastic bag or liner.” FAC ¶ 29 or liner.” SAC ¶ 29 11 “Accordingly, the Products are not beneficial “Accordingly, Because the Products are 12 to either the collection or transport processes; made of LDPE film, and for the other which are designed to work without such reasons discussed above, the Products are not 13 bags.” FAC ¶ 29 beneficial to either the collection or transport 14 processes, which are designed to work without not currently designed to work with such 15 bags.” SAC ¶ 29

16 “Plaintiff Hanscom continues to desire to “Plaintiff continues to desire to purchase from purchase from Defendants trash bags that are Defendants trash bags that are suitable for 17 suitable for recycling and are recyclable.” recycling and recyclable because it is her 18 FAC ¶ 41 belief that such a product would be cleaner and more convenient than directly 19 disposing of her recyclable waste into her curbside recycling bin.” SAC ¶ 41 20 21 On June 1, 2022, Reynolds filed the present motion arguing that the SAC again fails to 22 establish Plaintiff’s standing to seek injunctive relief. 23 The Court will address additional facts as necessary in the analysis. 24 ANALYSIS 25 To establish standing to seek injunctive relief, a plaintiff must “demonstrate that [she] has 26 suffered or is threatened with a ‘concrete and particularized’ legal harm, coupled with a ‘sufficient 27 likelihood that [she] will again be wronged in a similar way.’” Bates v. United Parcel Serv., Inc., 1 (1992); City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983)). The purported “threat of future 2 injury cannot be ‘conjectural or hypothetical’ but must be ‘certainly impending.’” Morizur v. 3 Seaworld Parks & Entm’t, Inc., No. 15-2172, 2020 WL 6044043, at *12 (N.D. Cal. Oct. 13, 2020) 4 (quoting Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 967 (9th Cir. 2018)). Under Davidson, 5 a consumer can establish Article III standing by plausibly alleging “that she will be unable to rely 6 on the product’s advertising or labeling in the future, and so will not purchase the product 7 although she would like to.” Davidson, 889 F.3d at 970. 8 In its prior Order granting Reynolds’ motion to dismiss for lack of Article III standing, the 9 Court found Plaintiff’s allegations that she continued to desire to purchase Defendants’ recycling 10 bags implausible. Although Plaintiff alleged she wanted to buy recycling bags from Reynolds in 11 the future and would be deterred from doing so because she would be unable to determine the 12 truthfulness of the “Recycling” label, the FAC elsewhere alleged that “recyclables should be clean 13 and dry and placed in a collection bin without the use of a plastic bag or liner” and that the 14 recycling collection and transport process is “designed to work without such bags.” (FAC ¶ 29.) 15 Thus, the Court concluded Plaintiff’s alleged desire to purchase the bags again in the future was 16 implausible because the allegations suggested that recycling bags had no role in the recycling 17 process regardless of the recyclability of the bag itself. The Court distinguished the allegations in 18 the FAC from those in Davidson where the plaintiff’s continued desire to purchase flushable 19 wipes was based on her belief in the wipes’ utility. In contrast, in the FAC, Plaintiff did not allege 20 “any underlying belief in the utility of the recycling bags, either generally or as pertain[ed] to her 21 own recycling experience…” (1/21/22 Order at 7:22-23.) Because there were “grounds in the 22 FAC to discount [Plaintiff’s] stated intent to purchase bags in the future,” Plaintiff’s allegation that 23 she continued to desire to purchase Defendants’ bags in the future was implausible. (Id. at 8:3-4). 24 Plaintiff’s amendments have cured this deficiency. Plaintiff now alleges that she continues 25 to desire to purchase bags that are suitable for recycling and are recyclable because she believes 26 such bags would be cleaner and more convenient than placing her recyclables directly into the bin. 27 (See SAC ¶ 41.) Additionally, Plaintiff’s amendments clarify that recycling bags are not currently 1 work with bags made from LDPE plastics. Whereas the FAC suggested that recycling bags in 2 general added no benefit to the recycling collection and transport process, the SAC makes clear 3 that the issue is with recycling bags as currently designed. 4 Reynolds argues that Plaintiff’s amendments contradict her earlier pleadings. According 5 to Reynolds, Plaintiff’s allegation that she believes recycling bags would be cleaner and more 6 convenient than placing her recyclables directly into the bin cannot be reconciled with her earlier 7 allegation that “recyclables…should be placed directly in a collection bin without the use of a 8 plastic bag or liner.” (FAC ¶ 29.) The Court does not find Plaintiff’s amendments inconsistent 9 with her earlier pleadings.1 At this stage of the proceedings, drawing inferences in Plaintiff’s 10 favor, the Court finds Plaintiff’s amendments clarify, but do not contradict, her earlier allegations. 11 Plaintiff’s allegation that she believes recycling bags would offer convenience and cleanliness to 12 her recycling experience is not a retreat from her earlier allegation that recyclables should be 13 placed directly in a collection bin without a bag or liner. She has clarified that allegation 14 expresses a general rule that exists because recycling bags as currently designed are incompatible 15 with the collection and transport process. The allegation does not foreclose the possibility that 16 recycling bags could benefit the recycling process if they were reformulated to be recyclable, and 17 Plaintiff has now expressly alleged her belief that such bags would provide convenience and 18 cleanliness to her recycling. As amended, the SAC does not give the Court grounds “to discount 19 [Plaintiff’s] stated intent to purchase bags in the future.” (1/21/22 Order at 8:3-5.) Plaintiff has 20 plausibly alleged her desire to purchase the recycling bags in the future. 21 Reynolds also argues that even if the Court accepts Plaintiff’s amendments, the SAC still 22 precludes standing for injunctive relief because Plaintiff continues to allege that plastic bags are 23 not compatible with municipal recycling programs. Because Reynolds’ bags—regardless of their 24

25 1 The Court notes that Ninth Circuit precedent is inconsistent as to whether an amended pleading may contradict earlier pleadings. Compare Air Aromatics, LLC v. Opinion Victoria’s Secret 26 Stores Brand Mgmt., Inc., 744 F.3d 595, 600 (9th Cir. 2014) (“A party cannot amend pleadings to directly contradict an earlier assertion made in the same proceeding.”), with PAE Gov’t Servs., Inc. 27 v. MPRI, Inc., 514 F.3d 856, 860 (9th Cir. 2007) (“The short of it is that there is nothing in the ] composition or labeling—will remain effectively unrecyclable absent industry-wide changes to the 2 || recycling process, it is implausible that Plaintiff would purchase Reynolds’ recycling bags in the 3 future. The Court finds this argument unpersuasive. Plaintiffs allegations about the plastic bag 4 || policies at municipal recycling facilities reflect issues related to LDPE bags, not a blanket 5 assertion that recycling bags will never be acceptable at such facilities. 6 Reynolds also asserts that because Plaintiff cannot reliably predict if and when the 7 || recycling industry will make the changes necessary for recycling bags to become suitable for 8 || recycling, she cannot allege a credible threat of real and immediate harm. Accepting this 9 || argument, however, would go beyond the pleading requirements set forth in Davidson. Plaintiff 10 || has plausibly alleged an inability to rely on the truth of the labeling of Defendants’ recycling bags 11 despite her desire to purchase truly recyclable bags. Under Davidson, this 1s sufficient to confer 12 || standing. E 13 The Court concludes Plaintiff's amendments have cured the defects in her earlier pleading 14 || with regard to her standing to seek injunctive relief. 3 15 CONCLUSION 16 For the foregoing reasons, the Court DENIES Reynolds’ motion. i 17 IT IS SO ORDERED. 18 || Dated: August 18, 2022 , fh ‘ 19 \ LCF#3

JEFFREY /5./WHI

20 United Stfles DisfAct Judge 21 22 23 24 25 26 27 28