1 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK 2 ------------------------------x BATSHEVA ACKERMAN, ET AL 3 Plaintiffs, 4 5 versus 09 CV 395(JG) 6 COCA-COLA COMPANY, ET AL 7 Defendants. United States Courthouse Brooklyn, New York 8 ------------------------------x 9 February 5th, 2010 11:00 a. m. 10 11 12 TRANSCRIPT OF CIVIL CAUSE FOR MOTION 13 BEFORE THE HONORABLE JOHN GLEESON, USDJ 14 A P P E A R A N C E S 15 REPRESENTING THE PLAINTIFFS: Deborah Clark-Weintraub Whatley Drake & Kallas LLC 16 75 Rockefeller Plaza 19th Floor 17 New York, NY 10019 18 Stephen Gardner Center for the Science in the 19 Public Interest 5646 Milton Street 20 Suite 211 Dallas, TX 75206 21 Reese Richman LLP 22 230 Park Avenue 10th Floor 23 New York, NY 10169 BY: MICHAEL REESE, ESQ. 24 KIM RICHMAN, ESQ. 25 LISA SCHMID, CCR, RMR OFFICIAL COURT REPORTER
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1
1 UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
2 ------------------------------x
BATSHEVA ACKERMAN, ET AL
3 Plaintiffs,
4
5 versus 09 CV 395(JG)
6
COCA-COLA COMPANY, ET AL
7 Defendants. United States Courthouse
Brooklyn, New York
8 ------------------------------x
9 February 5th, 2010
11:00 a. m.
10
11
12 TRANSCRIPT OF CIVIL CAUSE FOR MOTION
13 BEFORE THE HONORABLE JOHN GLEESON, USDJ
14 A P P E A R A N C E S
15 REPRESENTING THE PLAINTIFFS: Deborah Clark-Weintraub
Whatley Drake & Kallas LLC
16 75 Rockefeller Plaza
19th Floor
17 New York, NY 10019
18 Stephen Gardner
Center for the Science in the
19 Public Interest
5646 Milton Street
20 Suite 211
Dallas, TX 75206
21
Reese Richman LLP
22 230 Park Avenue
10th Floor
23 New York, NY 10169
BY: MICHAEL REESE, ESQ.
24 KIM RICHMAN, ESQ.
25
LISA SCHMID, CCR, RMR
OFFICIAL COURT REPORTER
2
1 REPRESENTING THE DEFENDANTS: James R. Eiszner
SHOOK, HARDY & BACON L.L.P.
2 2555 Grand Avenue
Kansas City, MO 64108
3
Andrew G. Celli, Jr
4 Emery, Celli, Brinckerhoff &
Abady LLP
5 75 Rockefeller Plaza
20th Floor
6 New York, NY 10019
7 RUSSELL S. BONDS, ESQ.
BRIAN HOWARD, ESQ.
8 Litigation Counsel
Corporate Legal
9 The Coca-Cola Company
One Coca-Cola Plaza
10 Atlanta, Georgia 30313
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22 REPORTED BY:
LISA SCHMID, CCR, RMR
23 225 Cadman Plaza East
Brooklyn, New York 11201
24 Tel: (718) 613-2644 Fax: (718) 613-2379
Proceedings recorded by mechanical stenography, transcript
25 produced by computer.
LISA SCHMID, CCR, RMR
OFFICIAL COURT REPORTER
3
1 THE CLERK: All rise. Ackerman versus Coca-Cola
2 Company, et al.
3 THE COURT: Good morning, everyone. Please have a
4 seat. Sorry to keep everyone waiting.
5 Did you have appearances already, Lisa?
6 Could I have them, please?
7 MR. REESE: Good morning, Your Honor. Michael Reese,
8 Reese Richman, LLP, on behalf of the plaintiffs.
9 MR. GARDNER: Stephen Gardner, Center for Science in
10 the Public Interest on behalf of plaintiffs, Your Honor.
11 MS. CLARK-WEINTRAUB: Deborah Clark-Weintraub,
12 Whatley, Drake and Kallas, also on behalf of the plaintiffs.
13 MR. RICHMAN: Kim Richman, from Reese Richman, for the
14 plaintiffs. Good morning.
15 THE COURT: Sorry. Your last name is Richman?
16 MR. RICHMAN: Correct.
17 MR. CELLI: Your Honor, I'm Andrew Celli from Emery,
18 Celli, Brinckerhoff and Abady. I'm here for the Coca-Cola
19 Company and Energy Brands.
20 MR. EISZNER: Your Honor, I am James Eiszner of Shook,
21 Hardy and Bacon. I'm from Kansas City, representing the
22 Coca-Cola Company and Energy Brands.
23 THE COURT: Okay. Good morning.
24 MR. BONDS: And I'm Russell Bonds, from the Coca-Cola
25 Company.
LISA SCHMID, CCR, RMR
OFFICIAL COURT REPORTER
4
1 THE COURT: Good morning. Okay. Who's going to argue
2 on behalf of the motion?
3 MR. EISZNER: I am, Your Honor.
4 THE COURT: All right.
5 MR. EISZNER: Can Your Honor hear me?
6 THE COURT: Yes.
7 MR. EISZNER: Okay. Then I'll proceed.
8 Your Honor, as I was preparing for oral argument
9 today, I asked one of my colleagues to go look at some of your
10 former preemption decisions. And the colleague came back to me
11 and said that there was one thing that could be discerned from
12 those decisions, was that Your Honor preferred not to rule on
13 preemption and find other ways of ruling. That may or may not
14 be fair. That was his conclusion. And I don't know if it's a
15 Doctrine of Constitutional Avoidance. I don't know if it's
16 simply preemption asks sticky questions, but that was the
17 appearance.
18 So I put my mind thinking. Was there a principle here
19 that would allow us to dispose of this matter without reaching
20 the issue of preemption? And Your Honor, I think the answer
21 is, we've come close.
22 I'd like to call the principle the "First Sip
23 Principle." You may remember law school and the dog that had
24 the first bite, the first free bite. The plaintiffs get a free
25 sip here. They don't get a second.
LISA SCHMID, CCR, RMR
OFFICIAL COURT REPORTER
5
1 The plaintiffs' key theory here, their whole theory is
2 upon, is that the production, Vitamin Water, contains sugar,
3 that they were harmed because they bought a product that
4 contained sugar. Paragraph 19 of the complaint, they allege
5 that the product is packed full of sugar. Paragraph 31 of the
6 complaint says it's loaded with sugar. I think common sense
7 tells me -- I hope it tells you that anything that's packed or
8 loaded with sugar, as the plaintiffs allege here, you can taste
9 the presence of sugar.
10 I think, Your Honor, it's also common sense that water
11 isn't sweet. Vitamins are not sweet. Sugar is sweet. So if
12 you taste the product, you can taste sweetness and you're put
13 on notice of the presence of something that is sweetening the
14 product. How does that fit in here? I believe, Your Honor, it
15 fits with in with the plausibility requirements of Iqbal and
16 Twombly. Obviously, they have got to state a claim that gives
17 them plausible entitlement to relief.
18 We have one plaintiff, Ms. Ackerman, who is from New
19 York. What do we know about Ms. Ackerman from the complaint?
20 We know she didn't have one sip. She purchased Vitamin Water
21 Revive, and Multi V Lemonade, at a premium price, approximately
22 one to two weeks -- two times per week between October 2007 and
23 October 2008. That's paragraph nine of the complaint.
24 Paragraph ten of the complaint deals with the
25 plaintiff, Mr. Antonov, who is from California. And he bought
LISA SCHMID, CCR, RMR
OFFICIAL COURT REPORTER
6
1 four to eight times per month during the class period, which is
2 a period of four years, from various convenience stores located
3 throughout San Francisco. Mr. Antonov didn't take one sip.
4 Mr. Koh is a resident of San Francisco, another
5 California claimant. And Mr. Koh purchased Vitamin Water
6 Rescue and Revive flavors at a premium price, approximately
7 five times per month between October 2007 and July 2008. Mr.
8 Koh from California did not take one sip. He took many more.
9 Mr. Pelkey, we don't know how much -- what the
10 frequency of his purchases were, but we know that he regularly
11 purchased three difference flavors: Multi V, Vitamin Water,
12 Formula 50, also. There may have been others in paragraph 12
13 of the complaint. Mr. Pelkey did not take one sip.
14 Then at lastly, we have our New Jersey plaintiffs.
15 They are discussed in paragraphs 13 and 14 of the complaint,
16 Your Honor, and there, they just allege that they purchased
17 Vitamin Water during the class period. We don't know the
18 frequency.
19 Now, I believe that by alleging that they purchased
20 more -- multiple times a product that contains sugar, they, in
21 fact, stated -- they alleged a claim that is implausible on its
22 face. If you are complaining about the presence of sugar in a
23 product, your repeated purchase of the product over a long
24 period of years suggests that you're not really worried about
25 sugar in the product. There is something else at issue here.
LISA SCHMID, CCR, RMR
OFFICIAL COURT REPORTER
7
1 So I believe that the principle, the first sip
2 principle, knocks out all the claims of all the plaintiffs from
3 New York and California.
4 As to our plaintiffs from New Jersey, about whom we
5 know nothing except that they bought the product during the
6 class period, I believe that Iqbal and Twombly require a
7 pleading here -- because of the first sip principle -- require
8 affirmative pleading that they had only one sip, that as soon
9 as they knew the product had sugar, they ceased buying it.
10 Common sense, if you're going to complain about sugar,
11 you don't keep buying the product over and over and over again.
12 On the other hand, it's possible -- it's possible that
13 Mr. Petty and Ms. Valentine had brought ahead, bought one
14 Vitamin Water and had one stip.
15 If so, Iqbal requires them to plead that fact, because
16 you're not entitled to plead facts that are consistent with
17 liability. That's the old Conley versus Gibson standard, which
18 the Supreme Court threw out in Twombly and Iqbal. You have to
19 show facts that entitled you to relief.
20 So my view, Your Honor, is with respect to this case,
21 we can throw out the New York claims, and we can throw out the
22 California claims because of the first sip principle, and it
23 renders their claims implausible, all of them under the state
24 laws of California and New York.
25 Under New Jersey, they might be required to re-plead.
LISA SCHMID, CCR, RMR
OFFICIAL COURT REPORTER
8
1 So that brings me unfortunately to preemption. Preemption here
2 is very important, because it's important Your Honor understand
3 that we're not contending certain things. We are not
4 contending that there's field preemption at play here.
5 When Congress passed a Nutritional Labeling and
6 Education Act, it put in savings clause, which said that lots
7 of things are reserved for state law. That is inconsistent
8 with field preemption, and we are not arguing before Your Honor
9 field preemption. We are not arguing that because the FDA can
10 regulate deceptive conduct under the Federal Food and Drug Act
11 and Cosmetic Act, that that displaces state regulation of
12 deceptive conduct. Plaintiffs somewhat suggest that that is
13 what we're arguing. We are not arguing that.
14 Our argument is based on the Nutritional Labeling and
15 Education Act, and Section R(1)(a), I believe, delegated to the
16 Secretary of the Food and Drug Administration to develop rules
17 that define certain terms, implied nutrient content claims,
18 which is a Congressional fancy word for "healthy."
19 So the Food and Drug Administration, acting -- and the
20 NLEA says that the definition that you've got there, that you
21 are asking the Secretary to make, that has preemptive effect.
22 So we're really arguing the preemptive effect as to a
23 definition.
24 And if you look at the part of the NLEA that became