Phillip Stonehart and Moussa Kouyate, on behalf of themselves and all others similarly situated v. Now Health Group, Inc. d/b/a Now Foods

Summary

The United States District Court for the Northern District of Illinois considers Now Health Group, Inc.’s motion to dismiss claims arising from alleged mislabeling of magnesium citrate supplements. The court denies dismissal of the remaining claims, including fraudulent concealment, unjust enrichment, New York General Business Law violations, breach of express warranty under New York and Utah law, and breach of implied warranty under Utah law. The opinion also addresses alleged duties to disclose, materiality, reliance, intent, privity, and the availability of alternative pleading.

Holdings

1. Plaintiffs plausibly alleged fraudulent concealment under New York and Utah law because the manufacturer allegedly possessed superior knowledge of the supplement's composition, made potentially partial or ambiguous labeling statements, and knew or should have known that the undisclosed composition was material to consumers.
2. Plaintiffs may plead unjust enrichment in the alternative to their other claims, even when the claims arise from the same underlying conduct.
3. Plaintiffs plausibly alleged that NOW's labeling was materially misleading to a reasonable consumer under New York General Business Law.
4. Plaintiffs plausibly alleged that NOW's front and back labels created express warranties under New York and Utah law by representing that the supplement's magnesium was derived from the identified forms and omitting magnesium oxide.
5. Plaintiffs plausibly alleged a Utah implied-warranty-of-merchantability claim without establishing contractual privity because Utah's third-party-beneficiary provision extends a seller's warranty to reasonably expected users, and the alleged labeling deficiency plausibly supported breach.
6. The court declined to decide at the motion-to-dismiss stage whether the Utah Consumer Sales Practices Act limits or bars the requested Utah class relief.
7. Plaintiffs' claim for injunctive relief was not moot because the alleged deceptive conduct could continue despite NOW's revised label, and plaintiffs plausibly could show that the new label remained inaccurate.

Questions Presented

1. Whether plaintiffs adequately pleaded fraudulent concealment under New York and Utah law, including a duty to disclose, materiality, detrimental reliance, and intent to deceive.
2. Whether plaintiffs could plead unjust enrichment in the alternative to their other claims.
3. Whether plaintiffs adequately pleaded that NOW's labeling was materially misleading under New York General Business Law.
4. Whether the supplement labels plausibly created express warranties under New York and Utah law.
5. Whether plaintiffs adequately pleaded a Utah implied-warranty-of-merchantability claim despite the asserted lack of contractual privity and breach.
6. Whether the court should dismiss Stonehart's putative Utah class claims based on the Utah Consumer Sales Practices Act's alleged limitation on class actions.
7. Whether plaintiffs' request for injunctive relief was moot because NOW changed the supplement label.

Disposition

other