November 7, 2014
9:15 AM – 10:30 AM
Session 108: Food Fraud! Avoiding and Litigating Food Labeling
Cases
Food labeling litigation is exploding. The food and beverage industry is under fire – from
plaintiffs’ lawyers, public interest organizations, and in some cases, government
regulators – for claiming that products are “all natural,” free of harmful ingredients, or
have other health benefits. In the absence of FDA guidance in numerous key areas,
there has been a spike in new class actions focused on allegedly false and misleading
food labels and marketing claims. Our expert panel – consisting of in-house food
company attorneys and seasoned litigators from both the plaintiffs and defense bar –
will discuss why the increase in food related litigation; the legal battle grounds (at both
the pleading and class certification stages) where food fraud cases are won and lost;
and how companies can avoid or mitigate their exposure to food labeling litigation. The
panel will also discuss the particular risks posed to Asian and Asian American food
companies, whose marketing campaigns may be targets for the next wave of food
labeling class actions.
Program Chair & Speaker:
Pau S. Chan, Partner, Bird Marella Boxer Wolpert Nessim Drooks
Lincenberg & Rhow PC
Moderator:
Nilay Vora, Associate, Bird Marella Boxer Wolpert Nessim Drooks
Lincenberg & Rhow PC
Speakers:
Kristi Bonfiglio, Senior Counsel, Merchandising and Strategic Planning,
Petsmart
Kush Desai, Executive Director of Legal Affairs, Beachbody, LLC
Don Wiseman, Senior Associate General Counsel, Walmart Stores, Inc.
American Jou rnal of Law & Medicine, 39 (20 I 3): 617 -647
@2013 American Societyof law, Medicine & Ethics
Boston University School ofLaw
A Comprehensive Strategy to Overhaul
FDA Authority for Misleading Food
Labels
Jennifer L, Pomeranzt
CONTENTS
I.
II.
III.
IV,
D,
2.
3.
4.
620
620
622
625
62s
626
627
629
630
630
631
Fortifrcation
Definitions
Misbranding
Summary....
FDA ENGAGEMENT AUTHoRITY
A. Warning Letters Versus Civil Monetary Penalties..
B.
Substantiation Documents
C.
Litigation
D.
Funding.........,..
E.
Summary..........
STRENGTUEN
as "Regulation" Has
634
Not Fulfilled Regulatory Gaps
B
D
E
F.
Versus Deterrence Regulatory System
Revise Food Labeling Requirements for All Claims.
The First Amendment
Increased Resources Through Registration Fees.......
Civil Monetary Penalties
Summary
Co¡¡cr-usror.t
,.
635
636
637
637
Tu¡ FDA
A, Compliance
C
V
618
INTRoDUcrroN...............
CURRENT FooN L¡SEÍ-INC CLRIVS ,,....
A, Misleading Food ........,..
B. C1aims..,......
C. Misleading Label Examples..........
l. Product Names
638
639
642
643
645
646
646
environmenl is considered a primary driver of obesily and other
nutrition-related chronic diseases. A significant conlribution lo this environment is the
proliferation of claims on food packaging that provides a misleading picture of a
The modern
þod
1J.D., M.P.H. Jennifer Pomeranz is supported
Robert Wood Johnson Foundation,
by grants from the Rudd Foundation and the
618
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL.
39 NO. 4 2OI3
product's healthfulness. The Food and Drug Administation (FDA) is the agency
responsible for food labels but it laclc the regulatory authority and adequate
resources lo address the majority of questionable labeling practices. The FDA's
current syslem of enforcemenl is thus essentially based on voluntary compliance and
consumer- and manufacturer-initiated litigation has not successfully lilled the
regulatory gap. This manuscripl reviews the current state of þod labeling claims and
the FDA's inadequale aulhority over misbrandedfood producls. Il analyzes competing
views on regulatory compliance strategies and argues that a regulalory overhaul
consislenl wilh lhe best science and the First Amendmenl is necessary. Ilith increased
resources and aulhority, the FDA can meet currenl public heqlth challenges and
adequalely ensure thal labels are clear and consumers are properly inþrmed and
prolecled,
I, INTRODUCTION
The greatest challenge to public health in the United States stems from ch¡onic
diseases related to poor nutrition.r Over thirry-five percent of adults and almost
seventeen percent of children and adolescents are obese in the United States.2
Studies reveal that obesity increases as people consume a higher proportion of
processed food and beverages (collectively "food") in their diets.3'a Technological
innovation in processed food manufacturing has led to the creation of thousands of
new products a year, adding to the abundance ofproducts (more than 300,000) on
U.S. store shelves.5 Experts point to this modern food environment as the primary
driver of the obesity epidemic.6
A significant development within this current food environment is the
proliferation of claims on food packaging that gives a misleading picture of a
product's healthfulness,' Current food labeling practices include both actual
misbranding and permissible but potentially misleading claims about the
healthfulness of processed foods. The latter is due to regulations that are too lax or
do not reflect the most current science on nutrition. Such confusing food labels
I Loren Cordain et al., Origins and Evolution of the lhestern Diet: Health Implications
for the
st Century,Sl AM. J. CLTNIcAL NurRIrroN 341, 341 (2005).
2
Cy¡rtHtn L. OcDEN ET AL., CTRS. FoR DtsEAsE Cotrnol & PREVÊNT|oN, PREVALENCE oF
OBESlry rN rHE UNTTED STATES, 2009-2010, l-2 (2012); Cynthia L. Ogden et il., Prevalence of
Obesity and Trends in Body Mass Index Among U.S. Children and Adolescents, 1999-2010,30'l J.
AM. MED. Ass'N 483, 485 (2012).
I Abay Asfaw, Does Consumption of Processed Foods Explain Disparilies in the Body lteight of
Individuals? The Case oîGuatemala,20 HEALTH EcoN, 184, 184 (201l); Dariush Mozaffarian et al,,
Changes ¡n D¡et and Lifestyle and Long-Term l{eight Gain in llomen and Men, 364 NEw ENc, J.
2I
MqD.2392,2392 (20tt).
a
David M. Cutler et al., lVhy Have Americans Become More Obese?,17 J. EcoN. PERSP. 93, 9395 (2003); see also Bo Maclnnis & Gordon Rausser, Does Food Processing Contribute to Childhood
Obesity Disparities?,87 AM. J. AcRtc. EcoN., I154, ll54 (2005).
5
Fooo & NurRrÏoN SERV., USDA, IMpLrcATroNs oF REsrRlcrrNc rHE UsE oF FooD STAMP
BENEFTTS
SUMMARY
3
(2007),
available
at
www. fn s.usda, gov/oralmenu/Publi shed/snap/F I LES/ProgramOperations/FSPFoodRestr ictions.pdf.
ó KEI-LY BRO'¡/NELL, FOOD FIOHT: THE INSIDE SToRY oF THE FooD INDUSTRY, AMERICA'S
OBEsrTy CRrsrs, AND WHAr WE CAN Do ABoUT lt 27 (2004); c/ Shu Wen Ng et al,, Use of Caloric
and Noncqloric Sw)eeteners in U.S. Consumer Packaged Foods, 2005-2009, l12 J. AcAD. NurRrrtoN
& DIEr 1828, 1828, 1833 (2012) (noting that because caloric sweeteners represented seventy-seven
percent ofall calories purchased from consumer packaged goods from 2005-2009, it is critical to
focus legislative and research effols on this issue).
7.9ee Marion Nestle & David S. Ludwig, Front-of-Pockage Food Labels: Public Health or
Propaganda?,303 J. AM. MED. Ass'N 7'11,77 l-72(2010).
A COMPREHENSIVE STRATEGY
619
undermine public health and have become a widespread problem of their own, in
need of regulatory response.
Congress granted the Food and Drug Administration (FDA) the authority to
protect consumers and the public health from misbranded products such as
prescription drugs, food, medical devices, and cosmetics.s However, the agency's
enforcement authority is not uniform, ln the area of food labeling, the FDA lacks
paficular authorities that it holds over other products or that Congress has granted to
another consumer protection agency, the Federal Trade Commission (FTC;.e the
FDA does not have the resources to sufficiently address the current state of labeling,
nor is there funding allocated to feasibly increase its enforcement power. Due to
competing interests and First Amendment concerns, the FDA has not utilized what
little authority it does have to adequately address food misbranding or revise current
regulations on permissible claims.'o Thus, the FDA's current system of enforcement
is essentially based on voluntary compliance. The agency issues a Warning Letter to
put a company on notice that it violated a regulation;this is typically the extent of its
enforcement activity,
As a result of these regulatory deficiencies, consumers and manufacturers have
turned to litigation to reign in questionable claims. There is no private right of action
under the Food Drug and Cosmetic Act (FDCA). Consumers thus sue food
manufacturers under theories of tort liability and pursuant to state consumer
protection acts. Similarly, manufacturers litigate pursuant to the Lanham Actlr as a
method to police their competitors' false or misleading labels, The premise
underlying these lawsuits is that labels should be truthful and not misleading to
ensure a fair and efficient marketplace. But litigation is not a global solution and has
not corrected the problematic labeling environment or provided an
adequate
substitute for stronger regulations.
The FDA's forced reliance on a system of voluntary compliance has led to an
overwhelming number of legal (but questionable) and non-legal claims and
statements on food packaging, There currently seems to be little business incentive
to comply with food labeling regulations (or FDA guidance documents). Whatever
practical threat a Warning Letter holds, this is not a primary disincentive to follow
food labeling regulations. The potential for negative publicity and the threat of a
lawsuit likely are more compelling incentives to comply; however, these are also not
very imposing. So far, labeling non-compliance has not resulted in significantly
adverse consequences for companies.12 The high rate of non-compliance and
8
See Michelle Meadows, Promoting Saþ and Effective Drugs
(Jan.-Feb,
MAc.
for I0
Years, FDA CONSUMER
2006),
http://www.fda.goviAboutFDA/WhatWeDo/History/ProductRegu lation/PromotingSafeandEffectiveDr
ugsforl 00Years/defau lt,htm.
n
Compore LrsA SHAMES ET AL,, U.S. Gov'T AccouNTABtLtrY OFFlcE, GAO-08-597, FooD
FDA NEEDS To BETTER LEVERAGE RESOURCES, IMPROVE OVERSIOHT, AND EFFECTIVELY
UsE AVATLABLE DATA ro HELP CoNsuMERs SELECT HEALTHY FooDs 13, l8 (2008), with A Brief
Overyiew of the Federal Trade Commission's Invesligative and Law Enlorcemenl Aulhority, FED.
TRADE CoN4M'N (revised July 2008), http://www.ftc. gov/ogc/brfovrvw.shtm.
'0 sHeMes Er AL,, U.S. Gov'T AccouNrABrl-rry oFFtcE, GAo-08-597, FooD LABEL|NG, at 5-7,
6t-64.
"12 t5 u.s.c. g ll2s(aXl) (2012),
For example, one of the more notable cases of a regulatory response !o a questionable claim
occurred when the FTC reprimanded Kellogg's for its immunity claims in June 2010. During that
month, the company's stock pr¡ces did not significantly dip and Kellogg's remains a Fortune 500
LABELTNG:
company.
See
Forrune
500:
Kellogg,
http://money.cnn.com/magazines/fortune/fortune500/2012lsnapshots/242.html
2013);
Kellogg
Company (K):
Historical
Prices,
CNN
MoNEY,
(last visited Oct.23,
YAHoo!
FrN.,
620
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO. 4 2OI3
questionable claims are due to lax enforcement, no threat of penalty, ineffectiveness
of litigation as a regulatory mechanism, and little threat of reputational tarnish.
This paper will review the current state of food labeling claims in Part II. Part
III will discuss the FDA's inadequate authority over misbranded food products and
the need for increased regulations to control the use of misleading claims. In Part IV,
the paper
will
analyze competing views on regulatory compliance strategies and
argue that a regulatory overhaul to require all claims be pre-approved is necessary.
This is consistent with the First Amendment and would support honest competition
and informed consumer decision making, The paper argues that Congress should
ensure the FDA is properly funded through a registration fee structure and amend the
FDCA to expressly provide the FDA with revised authority to enforce its regulation.
Specifically, the FDA needs the authority to seek civil penalties, prohibit claims
proven to be deceptive, and compel companies to turn over their substantiation
documents when new claims are proffered. With increased resources and authority,
the FDA can meet current public health challenges and adequately ensure that labels
are clear and consumers are properly informed and protected.
II. CURRENT FOOD LABELING CLAIMS
A, MISLEADTNG FOOD
In the food labeling context, it is unlawful to introduce misbranded food into
interstate commerce.13 A food meets the definition of misbranded if it has a false or
misleading label, is not properly named or identified, is missing required disclosures
or nutrition information, or if health and nutrition claims are not made according to
specified requirements,ra Although the definition includes "misleading" as a
condition of misbranding, this is one area the FDA does not generally address,
meaning it does not send Warning Letters or otherwise seek correction for labels
solely deemed misleading. Misleading labels are their own issue; the prohibition
against them is in need of enforcernent. Further, although there are specific
requirements for certain permissible health-related claims, others are permitted
baÀed on the manufacturers' representation of accuracy,'t The requirements for the
former have become too permissive in light of the proliferation of food-based claims
and the allowances made for the latter leaves labels susceptible to a variety of
questionable claims.16 This paper will refer to the dual issue of misbranded claims
and permissible but questionable claims as "misleading" food claims.
http://finance.yahoo.com/q/hp?s:K&a:04&b=3 0&c:201 0&d -06&e=l &'f:2010&g=m (last visited
Oct.23,2013). tn 2012, Kellogg's ranked number four out of fourteen food companies on the Fortune
500 List. Fortune 500 Induslries: Food Consumer Producls, CNN
http://money.cnn.com/magazines/fortune/fortune500/2012lindustries/198/index.html
MONEY'
(last visited Oct.
14,2013).
ri
2l u.s.c.
Id. ç34J.
ts
g 331(a) (2012).
to
Id.
For example, food products are permitted to make claims about "whole grain" content, whether
or not the product is high in sugar, calories, or contains trans fat. 2l C.F.R. $ I0l.l3 (2013); id.
$101.54. Given the current emphasis on consuming a diet rich in whole grains, many products with
whole grain claims might be attractive to consumers despite the fact that they contain other
ingredients rendering them not healthful. Rebecca S. Mozaffarian et al., Idenrifuing l|hole Grain
Foods: A Conparison of Different Approaches for Selectìng More Heallhlul Il/hole Groin Producls,
l5 PuB. HEALTH NurRrrloN 2 (2013).
16
A COMPREHENSIVE STRATEGY
62t
Misleading food claims are a barrier to a fair and efficient marketplace.
Research shows that from 2001 to 2010, the number of health- and nutrition-related
claims on ne\ry products increased from 2.2 to 2.6 per product. It However, research
also reveals that consumers are confused by the intent of commonly used claims on
food packagingr8 and are misled by such claims to underestimate total calorie
le
content in the product and overestimate a product's overall positive attributes.
Claims create a "health halo" around the product, whether or not the consumer is
seeking a healthier choice,2o This means that consumers misperceive the total
Manufacturers additionally have a financial interest in consumers choosing their
products over their competitors' products; thus, they have a stake in ensuring that
consumers are not deceived by the competition through misleading labels, Clear
factual information is necessary to meet these compatible interests,
The current food labeling environment suffers from dual problems of lack of
regulations
that restrict questionable claims and inadequate enforcement of
questionable claims that do violate the regulations. The first problem stems from the
lt Steve Martinez, IJSDA, Introduction of New Food Products lYith Voluntary Heolth- and
Nutrition-related Claims, 1989-2010, 108 EcoN. INFo. BULL. i, iii (2013).
18
Jennifer L. Harris etal., Nutrition-Related Claims on Children's Cereals: llhat Do They Mean
Parenls
and Do They Influence llillingness to Buy?, 14 PuB. HEALTH NurRITloN 2207,2207
to
(20r r).
le Se¿ Pierre Chandon & Brian Wansink, The Bìasing Health Halos of Fast-Food Restaurant
Heolth Claims: Lower Calorie Estimates and Higher Side-Dísh Consumplion Intentions, S4 J.
CoNsuMER REs. 301, 302 (2007); Adam Drewnowski et al., Testing Consumer Perception ofNutr¡ent
Content Claims Using Conjoint Analysis, l3 PUB. HEALTH NuTRlrroN 688,692 (2010).
20
,S¿e Chandon & Wansink, supra note I 9, at 30 | -02, 3 I I
2'
Id. at 3ll.
22
Harris, supra îote 18, at 2207 .
2r
Press Release, Acad. of Nutrition and Dietetics, How lmportant ls It to You? Dietand Physical
Activity Differ for Men and Women, Says American Dietetic Association Survey (Sept.27,2Oll),
ava i lab Ie øt http://www.eatri ght.org/nutritiontrends/.
'a MnnttNEz, supra îote 17, at2'l .
25
.!ee Open Letter from Margaret A. Hamburg, Comm'r of Food & Drugs, FDA, to lndustry
at
available
2010),
(Mar.
3,
htrp://www.fda.gov/Food/lngredientsPackagingLabeling/LabelingNutrition/ucm202733.htm ("Today,
ready access to reliable information about the calorie and nutrient content of food is even more
important, given the prevalence of obesity and diet-related diseases in the United States."). Whether
or not one views diet and obesity as a personal responsibility issue, truthful factual information is a
prerequisite to making an informed choice. Consumers'decisions to purchase the product should be
based on the actual properties of the food. Industry associations have publicly stated lhat nutrition
education and information are the best solutions to obesity.,Se¿ Press Release, Am, Beverage Ass'n,
Beverage Industry Addresses Sugar-sweetened Beverages and Obesity Articles in lhe New England
.
Joumal of Medicine (Sept. 21, 2012), availoble at hltpi/lwww.ameribev.orglnews-media/newsreleases-statements/more/285/ ("Taxes, bans and other forms oF government regulation are nol the
solution to childhood obesity-nutrition education, information and support for physical education
are."); The Industry's Commitmenl to Keeping Kids Healthy,
http://www. gmaon
I i
ne.
orgli ssues-po
I
i
GROcERY MFRS. Ass'N,
cylheal th-n u trition/respons i ble-pub I ic-pol i cy-sol ut ion s/the-
industrys-commitment-to-keeping-kids-healthy/ (last visited Oc¡. 24,2013) ("The Healthy Weight
Commitment Foundation helps kids and adults achieve a healthy weight through energy balance and
focuses on three critical areas-the marketplace, the workplace and schools. The key component is a
public education campaign aimed at 6-l I year olds and their parents."),
622
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO.4 2OI3
evolution of permissible claims so that now even misleading and deceptive claims
are expressly permitted or tactically ignored. The second problem stems from a lack
of authority and resources granted to the FDA to properly address misleading claims
or misbranded food products. Both are reviewed below.
B. Clnnrls
Food manufacturers are permitted to utilize four types of claims on food
packaging, but in practice, over eighty-five porcent of them are nutrient content or
-(collectively,
nutrient content claims).26 The
implied nutrient content claims
remaining claims are health claims, qualified health claims, and structure/function
claims.27 Nutrient content claims expressly or implicitly characterize the level of a
nutrient of the type required to be disclosed in nutrition labeling, such as "low
sodium,"28 and must be made in accordance with Reference Amounts Customarily
Consumed or the Recommended Daily Value of a food or nutrient.2e Health claims
characterize the relationship of a substance to a disease or health-related condition
and must be based on a "significant scientiltc agreement standard."30 An example is:
"Healthñrl diets with adequate folate may reduce a woman's risk of having a child
with a brain or spinal cord defect."3r Qualified health claims are permitted when
credible emerging or limited scientific evidence supports a relationship between a
food and reduced risk of a disease or health-related condition.32 They are similar in
intent to health claims but additionally must contain a disclaimer such as, "very
limited and preliminary scientific research suggests" and a notation that the "FDA
concludes thât there is little scientific evidence supporting this claim."33'34 The fÌnal
category, structure/function claims, describes the role of a nutrient or ingredient
intended to affect or maintain normal structure or function in the body; for example,
"calcium builds strong bones."35 Structure/function claims do not need preapproval
and there are no specific requirements for their use, so the manufacturer alone is
26
u.s. Gov'r AccouNrABrLrrY oFFtcE, GAo-ll-102,
REASSESS ITS APPRoACH
To PRoTEcTINc CoNsUMERS
FOOD LABELINC:
FDA
NEEDS rO
FRON4 FALSE OR MISLEADING CLAIMS
I3
(20r l).
71
Id.
282r c.F.R. g lol.l3(b) (2013).
told. l0l.l3(i). Nutrient content claims characterize the level ofa nutrient ofthe type required
ç
to be disclosed ¡n nutr¡tion labeling, such as "low sodium." /d, $ l0l.l3.
rold. g lot.t4.
3r
ld ç tot .79.
12
Guidance for Industry: Evidence-Based Review System for the Scientific Evalualion of Health
http://www.
on/ucm073
fd a.go
3
&.
FooD
Claims-Final,
DRUC
ADMIN.
(Jan.
v/food/gu idanceregu ation/gu id ancedocumentsregulatoryi nformation/l
I
abe
2009),
I ¡
ngnutriti
32.htm.
rr Id,; Summary of
Qualified Health Claims Subject to Enforcemenl Discretion, FooD & DRUG
ADM
rN.,
hrrp://www. fda.gov/food/ingredi entspackagin glabeling/labelin gnutrition/ucm073 992. htm
(last updated Mar. 13,2013) ("Very limited and preliminary scientific research suggests that eating
one-halfto one cup oflomatoes and/or tomato sauce a week may reduce the risk ofprostate cancer.
FDA concludes that there is little scientific evidence supporting this claim."),
3o U.S. cov'r AccouNrABlLIry oFFtcE, GAo-ll-102, FooD LABELINc: FDA NEEDS ro
To PRoTECTING CoNSUMERS FROM FALSE OR MISLEADINC CLAIMS I I
(reporting that the FDA has spent at least $12.8 million dollars implementing just health claims
and qualified health claims between 2000 and 2010).
tt Cloimt That Can Be Madefor Conventional Foods and Dietary Supplements, FooD & DRUG
2003),
(Sept.
ADMTN.
http://www, fda.gov/food/ingredients packaginglabeling/labe lingnutrit ion/ucm I I I 447. htm.
REASSESS ITS APPRoACH
(201
l)
A COMPREHENSIVE STRATEGY
623
responsible for their accuracy.3u The general requirement that claims on food
packaging must be truthful and not misleading applies to all claims, including
structure/function claims,37 but the FDA does not routinely enforce this general
prohibition. Misleading or suspect structure/function claims may be and have been
ignored.3s
Legally permissible health and nutrition claims on product packaging may
present a misleading picture of a product's overall healthfulness because they are
permitted on food despite other less healthful characteristics of the product. Health
claims are not permitted on products that contain "disqualifying nutrient levels" of
total fat (13 grams), saturated fat (4 grams), cholesterol (60 milligrams) or sodium
(480 milligrams).3e The FDA has not instituted a disqualifying level of artificial
trans fat o¡ added sugar in order for manufacturers to make claims,a0 Thus, products
containing artificial trans fat and high levels of added sugar may bear health claims.
The regulations for nutrient content claims are more permissive because the
disqualifying nutrient list above does not prevent a manufacturer from making such
a claim, Manufacturers are peÍnitted to make nutrient content claims even if a
nutrient in the product exceeds the level indicated above as long as the package
bears a statement about the suspect nutrient as follows: "See nutritíon information
for [subject nutrient] content."al It is unclear how effective this directive to examine
the Nutrition Facts Panel is in terms of consumer education or attention. Regardless,
this requirement likewise does not apply to foods high in artifltcial trans fat or added
sugar.o2 Thus, products containing high levels of total and saturated fat, cholesterol,
sodium, artifìcial trans fat, and added sugar can bear nutrient content claims, the
latter two without any note to consult the Nutrition Facts Panel,
Perhaps the most problematic result of these lax regulations is that products high
in added sugar carry a wide variety of nutrient content glaims, which misleadingly
convey healthfulness in an otherwise unhealthy product.as For example, in one study
of I l5 cereal brands, a large percent ofthe least healthy cereals that were marketed
to children bore the most number of health or nutrition-related claims, at three to
four per box.aa In another study, products bearing the V/hole Grain Stamp, a symbol
manufacturers pay an organization to use, had the most sugar of the 545 products
t6
r?
Id.
Se¿ U.S.
Gov'T AccouNTABrLrrY OFFtcE, GAO-l l-102, FooD LABELING, at 40-41 ; see also
Structure/Function
h
ttp://www.fda.gov/food/i
updated
Claims,
n
FooD
gred i entspackaginglabe
I
&
DRUG
ing/label ingnutriti on/uc m200ó8
8 I .h
tm
ADMIN.,
(last
Aug.2l,2013).
U.S. Gov'rAccouNTABrLrry oFFrcE, GAo-ll-102, FooD LABELING, at l3 (suggesting that
the FDA should provide clear guidance to companies for structure function claims so they are not
false or misleading and that the FDA should provide food inspectors with clear instructions to identify
false and misleading ctaims). This is a valid suggestion; however, without the authority to enforce the
guidance or obtain substantiation documents, it may not go all the way to change industry practices.
See also discussion infra Pàrl lll.B.
"
re
2r c.F.R. g tot.ra(aX¿) (20r3).
ao
See id,
or
ld, ç tot.t31h)(l). Disclaimers are also required if the sratement implicitly characterizes the
level ofthe nulrient in the food but is not consistent with the allowance for the claim, such as "only
200 mg of sodium per serving, not a low sodium food. " /d. $ I 0 l. t 3(i),
a2Seeid. l0l.l3(h).
$
ar
Hanis eral.,supra note 18, a¡2207-08.
oo
JENrNtFen L. HARRTS ET AL., YALE UNtv., RUDD CTR. FoR FooD PoL'Y AND OBESITY,
EvALUATTNc rHE NurRrrloN Qunlrrv AND MARKETTNG oF CHTLDREN's CEREALS 76-77 (2009),
available øt http://www.cerealfacts.org/media/Cereal_FACTS_Report_2009.pdf.
624
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO.4 2013
assessed.45 Candy manufacturers have also begun advertising the protein content of
their products (e,g., Baby Ruth) derived from peanuts as an ingredient,a6 Given that
health and nutrition-related claims create a perception of health notwithstanding the
a7
actual properties of the food or whether consumers are seeking a healthy product,
it is problematic that foods of less than optimal nutritional value increasingly bear
such claims.
The proliferation of questionable but legal claims likety has its origin from
litigation in the 1990s, which marked the advent of qualified health claims. The FDA
had originally disallowed the use of a health claim that did not meet the robust
"significant scientific agreement" standard.as Marketers of dietary supplements
brought litigation against the FDA claiming the restriction violated their First
Amendment rights,4e ln Pearson v. Shalala, a federal appellate court agreed with the
marketers and held that the FDA could not ban health claims that failed to meet this
standard.s0 The court held that the agency must allow a modified health claim or one
with a clarifying disclaimer.5r The FDA has since applied this rationale to food
products, so claims with substantially less evidence, i.e., qualified health claims, are
now permitted.s2 Since Pearson, there has been a recognizably more lax
environment for all claims, likely due in part to the court's strong language
supporting the manufacturer's First Amendment rights.s3
At the time the court decided Pearson, the finding was supportable from both an
evidence-based and First Amendment perspective. Truthful labeling is considered
commercial speech, protected by the First Amendment,so However, false, deceptive,
and misleading speech on a product label is not protected and may be regulated.55
The government may ban speech that has been proven to be misleading.56 If the
speech is only potentially misleading, which means that it can be presented in a way
that is not deceptive, or can be explained through disclaimers or disclosures, it
cannot be banned.57 The government can only require that potentialty misleading
speech be presented in a non-misleading manner by requiring factual disclosures or
a5
Mozaffarian elal., supra note 16, at 7-8.
The candy bar Baby Ruth states lhat it has "4 grams protein per bar" (which is accurate due to
peanuts as an ingredient), but, because it is a candy bâr, it contains thirty-three grams ofadded sugar.
Baby Ruth Touts Prolein Conlent, Archived in ll/orst Food Marketing Praclices, YALE RUDD CENTER
(May
2012),
AND
OBESITY
PoL'y
FoR
FooD
http://www. ya leruddcenter.org/bestandworstfoodma rketingarchive.aspx?t=w. Goobers a lso h as
packaging stating that it contains 5 grams of protein, which, as with Baby Ruth, comes from its peanut
a6
content.
See
Neslle
Goobers
Candy,
WEcMANS,
http://www. wegmans.com/webapp/wcsi stores/servlet/Prod uctDi splay?productld=39 I 582 &storeld= I 00
52&langld= (last visited Oct. l?, 2013).
a7
Chandon & Wansink, supra nole 19, ât 301-03, 3 I l,
a8
Pearson v. Shalala, 164 F.3d ó50,653 (D.C. Cir. 1999).
4e
Id. at 654.
50
td. ar 661 .
5r
/d. ar 658-59.
t' Guidon"" for lnduslry, supra nofe 32; Summary of Qualitìed Health Claims, supra noT.e 33
("Very limited and preliminary scientific research suggests that eating one-half to one cup of tomatoes
and/or tomato sauce a week may reduce the risk of prostate cancer. FDA concludes that there is little
scientifÌc evidence supporting this claim.").
tt 5"",
Notice Regarding Implementation of Pearson Court Decision, 65 Fed. Reg. 59,855,
59,856 (Oct.".g,
6, 2000) (stating that the FDA will use its enforcement discretion to allow certain health
claims in appropriate circumstances).
5o
Rubin v. Coors Brewing Co., 514 U.S. 476, 481 (1995).
ss
In re R.M.J.,455 U.S. 191,203 (1982).
s6
Id.
s'
Id,
A COMPREHENSIVE STRATEGY
625
explanations to cure the potential deception.5s At the time of Pearson,thete were no
studies to indicate the proposed claim was misleading. Thus, the court prescribed
further explanation through disclosures consistent with First Amendment
jurisprudence. Since Pearson, however, several studies confirm that qualified health
claims are
in fact confusing to
consumers.se
Still, the FDA has not indicated
a
renewed interest in addressing qualified health claims. Practically, the food industry
rarely uses qualified health claims.óo Legally, since Pearson, the Supreme Court's
interpretation of the First Amendment has provided increasing protection to
commercial speech (and other forms of business-related speech),o' creating a
disincentive for the agency to address questionable marketing practices and risk
negative judgment in court. At this point, no activityon health-related claims seems
imminent and these four types of claims remain permissible.
In addition to confusing but legally permissible claims, a whole range of
questionable labeling practices can be found on food product packaging. Some of
them directly violate FDA regulations or guidance documents; others are perfectly
legal but highly questionable. Consumers, competitors, and government ofhcials
seeking to protect the public have initiated litigation or issued formal requests to the
FDA to address such claims utilized on food and beverages,o' An examination of
select cases related to labeling deficiencies provides a useful lens to review the
different types of misleading claims that adorn processed food products. The
confusing nature of these claims helps shed light on the need for increased FDA
oversight, authority, and resources.
C. MISLEADINC LABEL EXAMPLES
l,
Product Names
FDA regulations require that the principal disptay panel of a food bear a
of identity of the product,63 Unless there is a legally required name, this is
generally the common name of the food or a "fanciful name commonly used by the
public fãr such food,"ø such as "Vanilla Wafers."65 FDA regulations also explain
statement
that the name of a food "shall accurately identify or describe, in as simple and direct
terms as possible, the basic nature of the food or its characterizing properties or
ingredients."6ó However, products have names that do not follow this directive; for
sB
Id.
5e
Llsn SH,cvps ET AL., U.S. Gov'r AccouNrABtLlrY OFFlcE, GAO-08-597, FooD LABELING:
NEEDS To BETTER LEVERAGE REsoURcEs, IMPRoVE OVERSICHT, AND EFFECTIVELY USE
AvATLABLE DATA To HELp CoNsuMERs SELEcT HEALTHv FooDs 5 (2008); see a/so Harris et al.,
supra note 18, at 2209.
60 U.S. Cov'r AccouNrABtLlrY OFFlcE, GAo-ll-102, FooD LABELINC: FDA NEEDS ro
FDA
REASSESS ITS APPROACH
TO PROTECTINC CONSUMERS FROM FALSE OR MISLEADINA CLAIMS I3
(20r l).
6tSee, e.g,, Sorrell v.
IMS Health lnc.,
infra Pan ll.C.
or
2l c.F.R. g rol.3(a) (20t3).
drd. g tot.3(b).
ó2
65
(Oct.
h
l3l
S.
Ct.2653,2672 (2011).
See discussion
Guidorce
for
Indusrry: A Food Labeling Guide (4. Name of Food), FooD & DRUG ADMIN.
ttp l//www. fd a. gov/food/guidanceregu I ati on/gu idancedocumen tsregu I atoryinformati on/l abel
on/ucm064872. htm,
ó6
2l c.F.R. g I02.5(a).
2009),
i
n
gnutriti
626
AMEzuCAN JOURNAL OF LAW &
MEDICINE VOL. 39 NO.4 2013
example, popular ready-to-eat cereals have "blue_berry" named versions of a product
line that do not actually contain any blueberries.o'
A regulation in the beverage context explicitly permits confusing names, which
undermines the force of the general naming regulation. Specifically, the name of
juice may reflect one of many juice ingredients as long as there is a qualifying word,
such as "blend,"68 This results in misleading product names, such as a Minute Maid
juice named, "Pomegranate Blueberry," but which contains 99.4% apple and grape
juices (and only 0.3% pomegranate juice,0.2Yo blueberry juice, and 0,I % raspberry
juice),óe Pom Wonderful, manufacturer of 100% pomegranate juice, sued Minute
Maid's manufacturer, Coca-Cola, under the Lanham Act. Pom Wonderful claimed
that the name of Minute Maid's juice misled consumers to believe that it primarily
consists of pomegranate and blueberry juices,70 Pom was unsuccessful because the
product adhered to FDA regulations.Tl In pursuit of its claim, Pom conducted a
survey that determined that more than 30% of consumers misunderstood the juice's
ingredients based on the label.72 As noted by the Ninth Circuit in this case, this is an
area where
the FDA would need to amend the regulations to prevent
such
deception.Tl
2. Fortification
Fortifrcation is the addition of nutrients to a foodTa and nutrient content claims
are permitted when the nutrient is added to a product through fortification.Tt It is
unclear whcther there are health benefits or detriments to consuming a diet largely
derived from fortified products, but it is clear that fortification increases the
perception of healthfulness for consumers.t6 Market ¡esearch indicates that healthseeking consumers look for specific ingredients or fortifìcation elements including
u'
Sr",
e.g., Blueberry Cereal, KELLoc's FRosrED MINI
WHEATS,
(last visited Sept. 17, 2013)
http://www,frostedminiwheats.com/Products/Blueberry-muffin
("Ingredients: Whole grain wheat, sugar, contains 2olo or less of milled com, brown rice syrup, corn
syrup, natural and artificial flavor, modified corn starch, gelatin, soybean oil, glycerin, sorbitol, blue 2
lake, red 40 lake, red 40, BHT for freshness.").
68
2l c.F.R. g 102.33(c).
6e
Pom Wonderful L.L.C. v. Coca-Cola Co.,679 F.3d I170, I l?3 (9th Cir. 2012) (showing the
label of Coca-Cola's Pomegranate Blueberry Juice which includes both the description "Flavored
Blend of 5 Juices" in relatively small type font and a picture of an equally large apple and
pomeB,ranate surrounded by berries).
10
ll'r.4.
Id.
Id, ^t
at I177 (citing 2l c.F.R. $ 102.33(c), (d)).
?2
Ponr Wonderful L.L.C. v. Coca Cola Co.,727 F. Supp. 2d849,857 n.8 (C.D. Cal.2010)' atf'd
in part and vacated in part , 679 F.3d I I 70 (9th Cir. 2012) ("According to Pom, '360/o of the test group
in the Field Survey indicated that they believed the Juice mainly contains pomegranate and blueberry
juice, and not other types of fruit juice,' . . . '32% of the test group in the Field Survey indicated that
they believed the Juice mainly contains pomegranate and blueberry juice, and not other types of fruit
1t
juice, because ofthe words'pomegranate bluebeny' on the label."').
1r
Pom Wonderful L.L.C.,679 F.3d at I178 (stating that by holding that the Lanham Act claim is
barred, the court does "not hold that Coca-Cola's label is non-deceptive," instead putting the onus on
the FDA to act if "the FDA believes that more should be done to prevent deception, or that CocaCola's label misleads consumers"); see also Pom llonderlul L.L.C.,727 F. Supp.2d at 872 (noting
that Pom's only recourse was to "lobby Congress or petition FDA to change its rules").
g toa.2o(a),
'o 2l c.F,R.
"7ó 1d, $$ l0r.s4(e)(ii), l0t.65(dX2Xiv).
.9e¿
Caroline Scott-Thomas, Fortificalion Drives Consumer DeÍìn¡tion of "Healthy", Fooo
25,
http://www.foodnavigator201l),
NAvrcAroR-USA,coM (July
usa.
com/contenlv i ew/prin13 8 8462.
A COMPREHENS IVE STRATEGY
627
antioxidants, among others.T? This has led to carbonated beverages touting
fortification in direct violation of the FDA's Fortification Policy against fortifying
candy and carbonated beverages.Ts Diet Coke PlusTe and 7Up with Antioxidantss0 are
two such products. The FDA sent a lùy'arning Letter to Coca-Cola for Diet Coke
Plus,sl but the agency failed to send a Warning Letter to the manufacturer of 7UP
with Antioxidants, Dr. Pepper Snapple Group, despite the fact that the products
violated the same regulations.st Consumet groups have sued over both products with
few results.83'84
3. Definitions
Due
to evolving prefe rences, fads, and dietary
guidelines, among other
influences, certain properties of food become more or less attractive to consumers
over time. The food processing industry reported that in 2010, the majority of the top
ten most successful new products in the packaged food and beverage genre focused
on "health and wellness."85 This trend is evident by the increasing use of organic and
71
See
id. (noting that in a nationally
representative
poll, the four ìngredients that grocery
shoppers said they looked for most in a product were fiber, whole grain, protein, and omega-3).
7E
2l C.F,R. $ 104.20(a) ("The Food and Drug Administration does not encourage indiscriminate
addition of nutrients to foods, nor does it consider it appropriate to fortify fresh produce; meat,
poultry, or fish products; sugars; or snack foods such as candies and carbonated beverages."). This
policy is weakly stated and includes "snack foods" in the list ofproducts that should not be fortified
but does not define the term. See $ 104.20. Regardless, the FDA does not seem to enforce this
regulation outside the two products listed, carbonated beverages and candy, because snack products
a¡e regularly fortified and bear nutrient content claims. See, e.9.,
PoPTARTS'
(touting Pop-Tarts as a good source of 7
http://www.poptarts.com/flavors/chocolate/hot-fudge-sundae
vitamins and m inerals).
TeSee
Waming Letter from Roberta F, Wagner, Dir., Office of Compliance, Ctr. For Food Safety
& Applied Nutrition, FDA, to Muhtar Kent, Pres. and Chief Exec. Offìcer, The Coca-Cola Co. (Dec.
I
0,
2008),
available
http://www. fda. gov/ICECI/EnforcementActions/WarningLetters/2008/ucm
I
at
048050.htm.
80 Se¿ Steve Tanner, Review: Cherry 7up Antioxidant, BEvREVIEw (May a, 2009),
http://www. bevreview.com/2009 105 l04l cheny -7up-antioxidant/.
8r
See Warning LelÌ.er, supra note 79.
82
An antioxidant claim can be a permissible nutrient content claim when all the conditions ofuse
are meq this includes the conditions for the nutrient claim and those imposed by the FDA's
Fortification Policy. See 2l C.F.R. $$ 101.5¿(g), 104.20. tn regards to these two regulations, the 7Up
antioxidant claim violated the latter. See id. $ 104.20(a).
8t Ma.on v. Coca-Cola Co., 774 F. Supp. 2d' 699, 705 n.4 (D.N.J. 201 l) ("At its core, lhe
complaint is an attempt to capitalize on an apparent and somewhat arcane violation of FDA food
labeiing regulations. But not every regulatory v¡olation amounts to an act ofconsumel'fraud . . , . The
complaint does not allege that consumers bought the product because they knew of and attributed
something meaningful to the regulatory term 'Plus' and therefore relied on it. Rather, they allege
merely that they thought they were buying a 'healthy' product that happened to apparently run afoul
of FDA regu lations.").
8{
CSPI sued Dr. Pepper Snapple Group, with Dr. Pepper Snapple Croup recently agreeing to
stop lortifying with vitamins some of its 7UP drinks as well as to stop claiming that its fortified 7UP
drinks contain antioxidants. See 7UP To Drop "Anlioxidant" Marketing, CTR. FoR SclENcE lN THE
PuB. INTEREST (July 22,2013), http://www.cspinet.org/new/20130722 l.html.
E5
Food Trends: The Most Success/ul Packaged Food Brands of20l0, FooD PRocESSINc (Mar.
29,2011), http://www.foodprocessing.com/industrynews/201l/020.html; see also A. Elizabeth Sloan,
Top I0 Food Trends, INsr. oF FooD TEcHNoLoolsrs (Apr. 20ll), http://www.ift'org/foodtechnology/past-issues/201 l/april/features/food-trends.aspx?page:viewall (food trend number five:
"Get Real").
628
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO.4 20I3
eco-friendly labels,86 with the newest descriptor, "natural," spurring litigation over
the accurate definition of the term.87
Products ranging from cereals, savory chips, sugary beverages, dairy creamers,
and artificial sweeteners have labels claiming that they are "natural." In the beverage
context, several plaintiffs have sued manufacturers alleging that the addition of high
fructose corn s)¡rup and citric acid renders the "natural" claim on the product false or
misleading. These Iawsuits have generally not been successful. Courts have
dismissed such claims due to lack of FDA guidance on a precise defrnition of the
term.88 Plaintiffs have not been successful even when a court is willing to entertain
the claim; in one case the judge dismissed the case despite recognizing that the
ingredients were "produced" and not "grown in a garden or field," because he found
plaintiffs' arguments were simply "rhetoric," 8e
Notwithstanding repeated requests by both consumers and companies,e0 the
FDA has declined to define the term "natural" beyond its statement that it will not
"restrict the use of the term 'natural' except for added color, synthetic substances,
and flavors
The FDA explained that "resource limitations and other agency
priorities" prevent the agency from "undertaking rulemaking to establish a def,rnition
for'natural'
86 ,Sea Kacey Kulliney, The Power of Organic: Turning Snacks inlo Health Foods?,
I 8, 2012), http:/lwww.foodnavigator-usa.com/MarkeVThe-power-oforganic-Turning-snacks-into-health-foods; Caroline Scott-Thomas, Study Reveals the'Health Halo'of
Organic Foods, BexenYANDSNAcKs.coM (Apr. 12, 201l), http://www.bakeryandsnacks.com/RD/Study-reveals+he-health-halo-of-organic-foods; Caroline Scott-Thomas, Too Many Eco-Labels
Could Hinder Uptake, ,Says Organic Monitor, FoODNAVIcAToR-USA (Jan. 10, 2013),
FooDNAvTcAToRUSA (Oct,
http://www. food n avigator-usa.com/MarkeVToo-many-eco- labe ls-cou ld-h inder-uptake-says-OrganicMonitor?utm_source=copyright&utm_med ium=OnSite&utm_campaign:copyright.
87 See Ashby Jones,
Is Your Dinner 'AIl Naturat'?, WALL Sr. J. (Sept. 20, 201l),
http://online.wsj.com/article/SB10001424053111903374004576580671156407598.htm1.
88
See, e.g., Holk v. Snapple Bev. Corp,, No.07-3018 (MLC),2010 U.S. Dist. LEXIS 81596, ât
*8 (D.N.J. Aug. 10, 2010). Recognizing that the FDA had not officially defined the term "natural," the
court stayed the case for six months and deferred to the FDA ¡o determine if the presence of HFCS
disqualifies a product from calling itself "natural.",1d. Nonetheless, the FDA declined to address the
issue.,9ee Holk v. Snapple Bev. Corp,, No.07-3018 (MLC),2010 U.S. Dist. LEXIS 110024, at tl
(D.N.J. Oct. 15, 2010). The plaintiff later became a putative class member of a similar action alleging
Snapple's "natural" claim violated New York consumer pro¡ection laws. ,!¿e Weiner v. Snapple
Beverage Corporation, No. 07 Civ. 8742 (DLC),20ll U.S. Dist. LEXIS 6094 (S.D.N.Y.lan.2l,
20r r).
8e.See
Ries v. Arizona Beverages, No. l0-01139 RS,20l3 U.S. D¡s1. LEXIS 46013, at 15, tl5
(N.D. Cal. Mar.28,2013) (decertifying the class previously granted in Ries v. Arizona Beverages,
No. l0-01 139 RS, 2012 U.S. Dist. LEXIS 169853 (N.D.C.A Nov.27,2012)).
s Among other groups, the Sugar Association petitioned the FDA for clarification of the term
"natural." S¿¿ Letter lrom Andrew C. Briscoe lll, Pres. & CEO, SugarAssociation, to Docket Mgmt,
Branch, Food
&
Drug
Admin.
(Feb.
28,
2006),
available
at
ttp://www. fda.gov/ohrms/d ockets/dockets/06p0094/06p -0094-let000l -vol2.pd f. S ign ificantly, th e
Corn Refiners Association, producers ofhigh fructose com syrup, submitted comments opposing such
a clarification, stating that the FDA should not "waste scarce agency resources" to define the term but
rather should let the marketplace resolve Ìhe issue, ,S¿e Letter from Audrae Erikson, Pres., Com
Refiners Association, to Dockets Mgmt. Branch, Food & Drug Admin. (Nov. 14, 2006), available at
http://www,fda.gov/ohrms/dockets/dockets/O6p0094/06p-0094-c000004-voll.pdf; see also Jones,
supra nole 87,
o'58 Fed. Reg.2302,2407 (Jan.6, 1993) (to becodiñed at2l C.F.R. pts.5, l0l).
n2
Id.; see Oliver Neiburg, Frito Lay Hít tvith Lavsuit on All-Natura! Cloims, FooDNAVTcAToRUSA (Dec. 20,2Oll), http://www.foodnavigator-usa.com/RegulationiFrito-Lay-hit-with-lawsuit-onall-natural-claims (FDA repeating that it had no plans to define the term "all-natural" due to a lack of
h
agency resources).
A COMPREHENSIVE STRATECY
629
4. Misbranding
uct
categories provide ongoing challenges for
a relatively new category of beverages marketed as
They generally contain, and tout, high levels of
roved food additives and unapproved ingredients.es
The FDA issued a non-binding guidance document in 2009, which distinguished
between beverages and liquid dietary supplements.e6 According to this guidance,
energy drinks are beverages which should be labeled as conventional food and not
dietary supplements.eT The FDA has not enforced this in a comprehensive manneres
and litigation has not addressed this issue either. When confronted with this issue,
one court dismissed the claim, stating that it was a "straightforward misbranding
claim best resolved by the FDA."ee
The FDA warned one energy drink manufacturer that labeling its product an
"energy supplement" did not make it a dietary supplement, and further that it was
adding unapproved additives into the food supply (i.e., Rockstar Roasted Coffee &
Energy, containing Ginko).100 However, the agency is not consistent in even these
effofts and ignores other products with the same deficiencies by different
manufacturers (e,g., Monster Java containing the unapproved additives taurine and
er
For example, alcoholic whipped cream. Sarah Schwartz, Groceries Get Odd: l0 lheird New
Food Products, DELtsH, http://www.delish.com/lood-fun/new-food-products#slide-1 (last visited Oct.
24,2011). In addition to energy drinks, other drinks touting functional benefits are emerging in the
marketplace, including drinks that promise you bliss, increased sex drive, and better sleep. See
NEURo, http://drinkneuro.com/ (last visited Oct. 23, 2013).
oo
Hansen Bev. Co. v. Innovation Ventures, LLC, No. 08-CV'1166 IEC (POR),2008 U,S. Dist.
LEXIS 7ó243, at *8 (S.D. Cal. Sept.28,2008). According to the expert representing an energy shot
company, the ingredients contained in the drink 5-Hour Energy give users a "perception of'energy"'
that is comparable to illegal drugs, such as methamphetamines, because they similarty "give users the
Id.al)11 n.3.
perceptionof increasedenergybysuppressingthebrain'sreceiptoffatiguesignals.").
e5
See Jennifer L. Pomeranz et al,, Energy Drinks: An Emerging Public Health Hazardfor Youth,
HEnlrs PoL'y 254, 254-71 (2013).
See Dra.ft Guidance lor Induslry: Factors thar Distinguish
34 J. PuB.
e6
Liquid Dielary Supplements from
for Beverages and Other
2009),
ADMIN. (Dec.
Beverages, Consideralions Regarding Novel Ingredíents, and Labeling
Conventional Foods,
FooD
&
DRUc
http://www. fda.gov/Food/GuidanceRegulation/GuidanceDocumentsRegulatorylnformation/DietarySu
pplements/ucm 192702.htm (explaining that even if a liquid product characterizes itself as a dietary
supplement, it may be a beverage for regulatory purposes and can be distinguished based on factors
such as packaging, volume, advertising, name, and similarity to other recognized beverages (e.g., soda
and juice)). A dietary supplement, on the other hand, is deñned as "a product taken by mouih that
contains a 'dietary ingredient' intended to supplement the diet." Q&A On Dietary Suppelemenls,
(last
FooD & Dnuc Aor.,uN., http://www,fda.gov/Food/DietarySupplements/QADietarySupplements/
Aug.28,2013).
Draft Guidance for Indus!ry, supra note 96.
et The FDA has stated that it will issue finalized non-binding guidance. Letter from Jeanne
Ireland, Assistant Comm'r for Legislation, Dep't of Health & Human Servs., to Richard J. Durbin,
updated
e1
See
Senator,
U.S.
Senate
(Aug.
10,
2012),
available
at
http://www.du rbin.senate.govlpubl ic/index,cfm/fi les/serve?Fi le_id= I Teadaa I -85e7-4ceb-a827be244fbddfa5.
s Hansen Bev. Co. v. lnnovation Ventures, LLC, No. 08-Cv-1166-lEC (POR),2009 U.S. Dist.
LEXIS f27605 at '29 (S.D. Cal. Dec.22,2009).
Rockstar, warning the
'@ The FDA sent a Waming Letter to another energy drink manufacturer,
company that its Roasted Coffee & Energy varieties violated the FDCA, were not dietary
supplements, and the addition of Cinkgo to the product rendered it adulterated within the meaning of
the Act. See Warning Letter No. 20l20NOL-22 from Patricia K. Schafer, Dist. Dir., New Orleans
Dist., Food & Drug Admin., to Russell Weiner, CEO, Rockstar, lnc. (May 23, 2012), available at
http://www.fda,gov/ICECVEn forcementActions/WarningLetters/201 2/ucm309080.htm.
630
AMER]CAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO. 4 20I3
panax ginseng).'o' It is unclear why there is inconsistent enforcement for these two
products.l02 But inconsistent enforcement minimizes any deterrent effect 'Warning
Letters may have.
D. Sut'¿v¡Rv
The cases above indicate various types of claims consumers face on a regular
basis but which are largely unaddressed by the FDA. The norm is now a supermarket
full of food with claims that are misleading or create an impression that even some
of the
least healthy products are nutritious.l03 Permissible claims adorn highly
food with unhealthy properties, especially those high in added sugar.
Other practices have proven to be confusing or have provoked litigation claiming
that they misrepresent a product's overall healthfulness or its true properties.'00 The
FDA is faced with a wide array of misleading claims that overwhelm the little
regulatory authority it does have, The agency's lack of regulatory authority is
explored below.
processed
III. FDA ENFORCEMENT AUTHOzuTY
The FDA has regulatory authority over consumer products including
drugs,
medical devices, dietary supplements, food, and cosmetics,'0t Ho*euer, the FDA's
enforcement authority differs for each type of product, In various sections of the
FDCA, Congress has made its intent clear that the FDA's power to enforce most
food labeling violations is limited as compared to the FDA's authority in other
contexts.
l06
The FDA's authority is also limited as compared to the FTC's authority over
false, unfair, and deceptive advertising which includes all other media outside of
food packaging. The FDA and FTC divided the responsibility over food marketing
pursuant to a Memorandum of Understanding, under which the FDA has primary
responsibility for regulating food labeling and the FTC has primary responsibility
'0' The FDA has not sent a similar letter
to Monster regarding its
Java energy drink line although
it existed simqltaneously and suffered from the same problems as Rockstar's coffee variety: they were
labeled as dietary supplements despite being coffee-like drinks (containing coffee extract) and
containing the unapproved food additives taurine and panax ginseng. Since at least June 2007,
Monster Java line. See Java Monster, BEV|{ET,
http://www.bevnet.com/reviews/Java_Monster (last visited OcL 27, 2013). The CEO announced on
February 13,2013 that the company would begin labeling its beverages correctly as beverages and
include a nutrition facts panel. S¿e Karen Bleier, Monster Beverage changes label to qualifi as
Monster has had a
"drink", CBS MoNEY WATcH (Feb. I3, 2013),
http://www.cbsnews.com/8301 -505123_162-
57569295lmonster-beverage-changes-label-to-qualify-as-drink/. However,
problems with unapproved additives in the drink.
this will not fix
the
102
See Stephanie Strom, Drink Ingredient Gets a Look, N.Y. TIMES, Dec. 12, 2012,
ttp://www.nytimes.com/20 I 2/ I 2/ I 3/bus iness/an other- look-at-a-drin k-ingredient-brominatedvegetable-oil,html?pagewanted=all&_r=0 ("4 company can create a new additive, publish safety data
about it on its Web site and pay a law firm or consulting firm to vet it to establish it as'generally
recognized as safe'-without ever notifying the F.D.A., Mr. Neltner said.").
l0r
See Jennifer L. Harris elal.,supra note l8 at2208.
rq See Sarah L. Brew el al., Food Labeting Remains Ripefor Consumer Fraud Class Aclions,
HB Lrrrc. CoNFERENcES, http://litigationconferences.com /2p=2590t (last visited Sept. 27, 201 3).
r05 See Pl¡hat lle Do, FooD &. DRUc ADMTN. (Sept. 19, 2013),
http ://www. lda. gov/AboutFDA./WhatWeDo/defau lt. htm.
ltr See Wallace F, Janssen, The Story of the Laws Behind the Lobels,FDA CoNsuMER (Food &
Washington, D.C.),
1981,
available at
Drug
Admin.,
June
http://www. fda.gov/AboutFDA/WhatWeDo/Hi story/Overviews/ucm056044.htm.
h
A COMPREHENSIVE STRATEGY
for
631
regulating food advertising.rot This division was further solidi{ìed when
Congress passed the Nutrition Labeling and Education Act of 1990, providing the
FDA authority to require standardized nutrition,and health related information on
food packaging.r08 The following analysis respects this division of authority.
However, an alternative method to address problematic food labeling practices
would be for the agencies to amend the Memorandum of Understanding to recognize
the FTC as the primary entity responsible for misleading claims on food packaging.
Congress could also mandate this, Currently, the FTC has more authority to pursue
questionable marketing practices, including the authority to obtain civil penalties for
unfair and deceptive acts or
advertisements.l
practicesr0e
and the dissemination of
false
lo
A. 'WARNINC LETTERS
VERSUS CTVIL MONETARY PENALTIES
The FDA has the authority to pursue civil penalties in non-food labeling
for example, for the dissemination of false or misleading direct-toconsumer advertisements for drugs."' However, Congress explicitly precluded the
FDA from exacting penalties in the food context based on advertisements on
packaging that are materially false or misleading (or if vitamin or mineral ingredient
labeling is incorrect),rr2 The definition of materially false or misleading advertising
in this context is quite broad,rr3 which would be positive if the FDA had the
authority to address it properly. Instead it is a categorical brush away of enforcement
authoriry over a large field of labeling deficiencies.
The FDA does have the authority to issue civil monetary fines in the context of
food safety, for the introduction of an article of food containing an unsafe pesticide
chemical residue and, since the enactment of the Food Safety Modernization Act of
20ll (FSMA), for violations of a recall order.rro The FSMA provided the FDA with
the authority to enforce compliance with recall orders if the agency fìnds an article
of food is adulterated or misbranded, but only ín terms of missing allergen
information.r's The purpose of this authority is to protect the public frorn being
exposed to an article that "will cause serious adverse health consequences or
death."ll6 ln the context of food labeling, Congress determined that non-acute health
contexts,
outcomes from misbranding do not rise to the level of requiring such an enforcement
t07 Enlorcement Poticy Stolement on Food Adverlising, FED. TRADE CoMM'N (May 1994),
http://www.ftc.gov/bcp/pol icystmt/ad- food,shtm#5.
r08
See Nutrition Labeling and Education Act of 1990, Pub. L. No. l0l-535, (104 Stat. 2353)
(codified in part at 2l U.S.C. $ 343 (2012).
roe
See l5 U.S.C. $ as(m) (2012).
tto
See id. $$ 52, 54.
tltSee2t U.S.C.
tt2
$ 333(g) (2012).
id. g 333(d).
'rr /d $ 321(n) ("lf an article is alleged to be misbranded because the labeling or advertising is
misleading, then in determining whether the labeling or advertising is misleading there shallbe taken
¡nto account (among other things) not only representations made or suggested by statement, word,
design, device, or any combination thereof, but also the extent to which the labeling or advertising
fails to reveal facts material in the light of such representations or material with respect to
consequences which may result from the use of the articles to which the labeling or advelising relates
under the conditions of use prescribed in the labeling or advertising thereof or under such conditions
of use as are customary or usual.").
I'o,rd, 333(Ð(2XA).
$
rr5
ld g 35t1a; (adulterated pursuant to $ 342 or misbranded under $ 3a3(w)).
tt6
See id. $ 342.
See
632
AMERICAN JOURNAL OF LAW &
MEDICINE VOL. 39 NO,4
mechanism."T Thus, the FDA lacks the ability to impose or seek a
2OI3
civil penalty or
recall otherwise misbranded or misleading food products that are placed into the
str€am of commerce,
If the FDA discovers a labeling violation, it has a short list of recourse options
available to it. First, the agency is instructed to issue a Waming Letter or hold a
regulatory meeting to discuss the labeling violation,lrs The purpose of the Warning
Letter is to put the company on notice that a violation occurred. The FDA has
explained that this is "the Agency's principal means of achieving prompt voluntary
lle
compliance with the Act."
Pursuant to the FDCA, the FDA is permitted to condemn and seize misbranded
food after the agency gives the company proper notice and an opportunity to
respond.r'0 This is permissible only when the agency has "probable cause to believe
. . . that the misbranded article is dangerous to health, or that the labeling of the
misbranded article is fraudulent, or would be in a material respect misleading to the
injury or damage of the purchaser or consumer,"l2l This does not generally occur in
the typical misbranding context (i.e., not related to allergens or pesticides), which is
the type of misbranding of concem in this paper.
Another option available to the FDA after issuing a Warning Letter is to work
with the Department of Justice (DOJ) to seek an injunction or initiate a criminal
ltt Ho*"ue.,
the FDA has little guidance to determine when a food123
and misbranding rarely rises to
related violation rises to the level of criminality,
the level of criminal sanctions. The FDA understandably would be reluctant to
pursue violations of the misbranding regulation with the DOJ since Congress did not
intend for it to make that a regular practice, The FDCA specihcally admonishes the
agency from reporting "minor violations" to the DOJ when the Secretary "believes
that the public interest will be adequately served by a suitable written notice or
warning,"l24 Congress seemed to have made its intention clear that it believes the
public interest is adequately served by written Warning Letters and the FDA has
prosecution.
taken the cue, The FDA seeks relatively few criminal actions for food
misbranding,l25 although it uses this remedy widely for other violations of the Act,r26
The result is that the FDA regularly issues Warning Letters alerting the responsible
ttl See id.
"t DArreL R. LEvtsoN, oFFIcE oF |NSPEcroR GEN., FooD & DRUG ADMIN., INSPEcrloNs oF
DoMEsrrc FooD FAcrLrrlEs 4 (Apr. 2010).
'., FOOD & DRUC ADMIN., REGUL,{TORY PROCEDURES MANUAL, PROCEDURES FOR CLEARING
(JUIY 2OI2)'
FDA WARNING LETTERS AND UNTITLED LETTERS, 5
http://www.fda.gov/downloads/ICECI/ComplianceManuals/RegulatoryProceduresManual/UCMl7
5. pd f.
t20
696
Inspeclions, Compliance, Enforcemenl, and Criminal Invesl¡galions, Regulatory Procedures
Manuol,
http://www.
Lr 2l
FooD
fda.
gov/lC
u,s.c.
&
DRUG
ADMIN.
EC UComp lianceM anua I s/RegulatoryProcedu
(Sept.
13'
201l)'
resM anua l/ucm I 7673 3 ,htm.
g 334(aXl).
See id. g 335. The FDA must issue a Waming Letter to the company before reporting a
violation to the DOJ for criminal proceedings. /d.
r2r .S¿¿ Fooo & DRUC ADMIN., REGULAToRY PRocEÞURES MANUAL, Cueprr'n 6: Juolcl¡l
(2011),
47-50
AcnoNs
http://www.fda.gov/down loads/lCECl/ComplianceManuals/Regu latoryP roceduresManual/UCM0743 I
122
7.pd
f
''o
2l u.s.c.
ç 336.
v. Randazzo, 80 F.3d 623,626-27 (lst Cir. 1996).
See lnspections, Compliance, Enîorcement, and Crininal Investigations: Press Releases,
FooD & DRUc ADM¡N., http://www.fda.gov/ICECI/Criminallnvestigations/ucml23086.htm (lâst
updated Aug. 15,2013).
But t"e United States
"t
t26
A COMPREHENSIVE STRATEGY
633
company of the violation and seeks assurance from the company that it will change
its practices.l2?
The FDA has said that Vy'arning Letters should be issued for violations "that
may actually lead to an enforcement action" if not corrected;128 however, this is not
an accurate account of its enforcement activity. Rather, the Warning Letter
represents lhe enforcement action for cases of mislabeled food products. There is no
other viable enforcement action when a violation occurs and worse, not all violations
actually garner a letter. l2e'130 This represents an error of enforcement, which dilutes
deterrence,l3l In the area of misbranded food products, seeking voluntary
compliance is thus the agency's primary avenue of enforcement for labeling
violations,
The FDA database houses Warning Letters dating from 1996 onward. Starting
on September 1,2009, the agency began tracking whether it issued a close-out letter,
which it "may issue when, based on FDA's evaluation, the firm has taken corrective
action to address the violations contained in the Warning Letter."l32 The FDA states
that it requires proof of the corrective action.'t' For all Warning Letters sent, a small
percentage have been "closed out" according to the FDA's databasel3a and an even
srnaller peicentage have letters of response from the responsible business.l3s The
Warning Letter method of enforcement is lax, does not sufficiently deter
or definitively lead to corrective actions, As discussed fr.¡rther
noncompliance,
Itt FooD & DRUc ADMIN., PRocEDUREs FoR CLEARTNc FDA WARNTNc LETTERS AND UNTTTLED
Exhibit 4-1, Bt $ 4.1 (2012),
696
http://www.fda.gov/downloads/ICECI/ComplianceManuals/RegulatoryProceduresManual/UCMl7
5.pdf ("Typically, a Warning Letter notiñes a responsible individual or firm that the Agency considers
one or more products, practices, processes, or other activities to be in violation of the Federal Food,
Drug, and Cosmetic Act (the Act), its implementing regulations and other federal statules. Warning
Letters should only be issued for violations of regulatory significance, i.e., those thÂt may actually
lead to an enforcement action ifthe documented violations are not promptly and adequately corrected.
A Warning Letter is one of the Agency's principal means of achieving prompt voluntary compliance
LETTERS, REcULAToRy PRoCEDURES MANUAL
with the Act.").
,,, Id,
r2e
Warning Letter from Roberta F. Wagner, Dir., Office of Compliance, Ctr. for Food Safety &
Applied Nutrition, to Brad Alford, Chairman and CEO, Nestle U.S.A. (Dec. 4, 2009) (failing to
mention Juicy Juice's "brain development" claim despite the fact that this claim is likely an
at
function
claim),
available
structure
http://www. fda.gov/ICECI/EnforcementActions/Warn ingLetters/2009/ucm I 94|,22.htm.
t)0 See 7Up Maker
Sued Over Antioxidant Claims, CBS NEws (Nov. 8, 2012, 3144 PM),
This is
http://www.cbsnews.com/8301-204_162-57541263/7up-maker-sued-over-antioxidant-claims/.
another example of lortification of a soda.
lrl A. Mitchell Polinsky & Steven Shavell, The Economic Theory of Public Enlorcement of Law,
38 J. EcoN. LTTERATURE 45, 60-61 (2000).
tt2 Inspections, Compliance, Enforcement, and Criminal Invesl¡gat¡ons: About llarning and
unsupported
Close-Out
Leilers,
FooD
&.
DRUG
ADMIN.,
http://www.fda,gov/lCECUEnforcementActions/WarningLetters/ucm2'l8624.htm (last updated Dec.8,
20r r),
ß) Id.
'ro
The FDA has closed out 779 Waming Letters as of September 28,2013. See List of ll/arning
Leuers that
have Close-Out Letlers, FooD &
DRUG
ADMIN.,
http://www. accessdata, fda. gov/scripts/warn ingletters/wlS ea rchResu lt.cfm?compan5&_ I _issueDt:&
_2_issue Dt=&offìce=&subj ect:&hasResponseLetter=Both &hasC IoseoutLetter:Yes&recsPerPa geDef
=500&Search=Search&errMsg= (last visited Sept. 28, 2013).
'r5 The FDA has received 92 response letters as of September 28,2013. See List o! lilarning
Letlers with
Response Letters Posted, FooD &.
DRUC
ADMIN,
gov/scripts/warn ingletters/wlSearchResu lt.cfm?compa ny:&_ I _issueD¡:&
_2_i ssueDt=&olfice:&subj ect=&has ResponseLetter=Yes&hasCloseoutLetter=Both&recsPerPageDef
=500&Search=Search&enMsg: (lasr visited Sept. 28, 2013).
http://www. accessdata.
fda.
634
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO. 4 2013
below, the agency's lack of resources and other authorities necessary to
meaningfully enforce the regulations further compound its inability to enforce
misbranding regulati ons.
B. SUeSTRNTIATIoN DOCUMENTS
The FDA lacks the authority to require that companies provide the agency with
substantiation documents if it questions a claim, which means that the agency cannot
compel the responsible company to disclose the research or scientific data that
presumably served as the basis for the claim.136 The burden is on the FDA to conduct
its own resea¡ch. l37 This puts the agency at a disadvantage and hinders it from
challenging questionable claims.
rWithout the authority to obtain substantiation documents, the FDA cannot
always effectively challenge questionable claims. Conversely, the FTC has the
authority to compel companies to turn over substantiation documents and the
Commission successfully uses this power to protect consumers by addressing
questionable claims.r3s For example, Kellogg's placed an "lmmunity" claim on its
Rice and Cocoa IGispies children's cereals.rle The FDA has jurisdiction over such
claims on packaging, but it did not address the "Immunity" claim, likely because it is
considered a structure/function claim, where enforcement authority is at its weakest,
and also because the FDA could not require the company to submit its scientific
basis for the claim. However, the FTC did respond to the related advertising
campaign and publicly reprimanded the company.ra0
Obtaining substantiation documents is a normal and necessary part of regulatory
control. There is no logical basis to bar the FDA from obtaining the scientific data to
support a company's questionable claim, especially given that the FTC, and state
attorneys general for that matter, are legally permitted to obtain the identical
documents based on the same principles of enforcement.
rró
,s¿e oFFrcn oF INSpEcroR GEN., DEp'T oF HEALTH & HUMAN SERVS., FDA INspEcrIoNs oF
DoMEsTrc FooD FAcrltrrEs iii (2010) (recommending that the FDA "[s]eek statutory authority to
allow FDA access to facilities' records during the inspection process"), available
al
U.S. Gov'T AccouNTABlLlrY OFFIcE, supra noTe
https://oig.hhs.gov/oei/reports/oei-02-08-00080.pdf;
34.
rr7,s¿e
U.S. Gov'T AccouNTABlLtry oFFtcE, supra noref4, a¡25.
t!8
See id. at26.
'30 Bruce
Horovitz, Critics Blast Kellogg's Claìm that Cereals Can Boosl Immunily, USA
http://www. usatoday.com/money/industries/food/2009 -l I -02-cereai-
TODAY (Nov. 6, 2009),
immunity-claim_N.htm. This was during the time period wben "swine flu" was making headlines.
Krispies
'oo P.ess Release, Fed. Trade Comm'n, FTC lnvestigation of Ad Claims that Rice
Benefits Children's Immunity Leads to Stronger Order Against Kellogg (June 3, 2010), available at,
http://www.ftc.gov/opa/2010106/kellogg.shtm (ordering Kellogg's to refrain from making misleading
health benefit claims not supported by scientific evidence). Chairman Leibowitz and Commissioner
Brill issued â separate opinion expressly admonishing Kellogg's for its actions. See Concurring
Statement of Commissioner Julie Brill and Chairman Jon Leibowitz, In lhe Matter of Kellogg
Company, FTC Docket No. C-4262 (June 3, 2010), available at
http://www.ltc.gov/os/caselist/0823 145/l00602kelloggstatement.pdf. The FTC did not issue civil
fines. Besides the threat ofa fine for breaking the settlement, this settlement essentiallyjust requires
Kellogg's to abide by the law, which says that manufacturers cannot make claims nor backed by
scientific evidence or that are misleading. See Susan Carey, Snap Crackle Slap: FTC Objects to
Kellogg's Rìce Krispies Health Claim, WALL ST. J.,
http://online.wsj.com/article/SB
June 4'
100014240527 48703340904575284701223216466.htm1.
2010,
A COMPREHENSIVE STRATEGY
63s
C, LnIC¡TION AS ..REGULATION,'HAS NoT FILLeo REGULAToRY GAPS
In the food
Iabeling context, private plaintiffs have sought
to reign
in
questionable claims through litigation. Because there is no private right of action
under the FDCA, plaintiffs bring cases pursuant to common law tort claims and state
consumer protection statutes, The initiation of such lawsuits has been increasinglal
but has not led to a global change in food labeling. Litigation oosts a substantial
amount of time and resources,'ot and could be avoided by both st¡icter labeling
regulations enforced by the FDA and by manufacturers spending initial resources
ensuring their claims are compliant. la3
Only a small handñ.¡l of cases among the dozens filed have been successful.
Courts infrequently find that a plaintiff has brought an actionable claim.'oo Even
more rare are the cases that make it to trial and where the judge or jury hnds a claim
was sufficiently misleading, deceptive, or false to constitute an injury.'ot On"
notable example of such a case was when a plaintiff sued Gerber Products Company
pursuant to California's unfair business practices statute, arguing that the package of
Gerber Fruit Snacks was deceptive because the fruit represented in the picture was
not the fruit in the product.raó The Ninth Circuit agreed, finding that the package
could likely deceive a reasonable consumer who should not "be expected to look
beyond misleading representations on the front of the box to discover the truth from
the ingredient list in small print on the side of the box."ra7 More often than not,
however, courts find that reasonable consumers would not be misled by fruit
imageslas or that there is no cognizable harm despite violations of the FDCA.rae
Even under the best conditions, the threat of tort liability is a highly imperfect and
inconsistent method to reign in questionable claims.
'o' Ela¡ne watson, lmproper Nutrient Content Clains Cited in New llave olClass Action Suits,
FooD NAVIcAToR-USA (Apr. 19, 2012), http://www.foodnavigator-usa.com/Regulation/lmpropernutrient-content-claims-cited-in-new-wave-of-class-action-suits (reporting that according to a
"leading" attorney practicing in food law, "class action lawsuits alleging labeling violations [are] now
'filed almost daily in California . . ."'),
t42
/d. 1"¡F1ood manufacturers are spending 'hundreds of thousands of dollars in legal fees and
settlement amounts' to resolve cases that are entirely avoidable [by having someone review their
labels], according to one leading food law attorney.").
tot Id.
See ¿/so Elaine Watson, PepsiCo Targeted
in
New Class Aclion Lawsuit over Improper
Nutrient Content Claim, Fooo NAvrcAToR-USA (Apr. 4, 2012), http://www.foodnavigatorusa.com/Regu lati on/Pepsi Co-targeted- in-new-c lass-acti on- lawsuit-over-i mproper-nutrien t-contentclaims. The plaintiffs pointed out a clear regulatory violation. However minor, it was easily avoided
by Pepsi following the regulation. Delense attorneys not associated with the case stated thal these
lawsuits are provoked by plaintiffs'attomeys who scour labels for technical violations. It is
unnecessary to take a position on this point, The problem stems from the fact that lax regulatory
oversight leads to lax regulatory compliance. The reasons there are so many technical violations is
that only plaintiffs' auorneys are seeking to enforce the FDCA.
'oo See, e.g., Sugawara v. PepsiCo, Inc., No. 2:08-cv-O1335, 2009 U.S. D¡st. LEXIS 43127, at
+14 (8,D. Cal. May 21
,2009) (finding that Plaintiffs had failed to state a claim that the labeling of
Cap'n Crunch with Crunchberries was misleading, even though the cereal contains no actual berries).
far
See Watson, supra note 143 ("tl]f these cases ever make it to completion, plaintiffs may be
hard pressed to prove any significant damage.").
la6
Williams v. Cerber Prods. Co., 552 F.3d 934,936 (9th Cir. 2008).
'41
Id. atgJg.
Sugawara,2009 U.S, Dist. LEXIS 43127, at 13 ("This Court is not awâre of, nor has Plaintilf
alleged the existence of, any actual fruit referred to as a'crunchberry.'Furthermore, the
'Crunchberries'depicted on the [principal display panel] are round, crunchy, brightly-colored cereal
balls . . . . Thus, a reasonable consumer would not be deceived into believing that the Product in the
instant case contained a fruit that does not exist.").
rae
Mason v. Coca-Cola Co.,774 F. Supp. 2d 699,'t}s (D,N.J. 201l).
'08
636
AMERICAN JOURNAL OF LAW &
MEDICINE VOL. 39 NO.4
2OI3
Manufacturers also use litigation pursuant to the Lanham Act to restrain their
competitors' use of misleading claims. The Lanham Act provides a cause of action
to a company that may be injured by its competitor's false or misleading
representation of the latter's product. l50 However, this provides a remedy for direct
competitors only and "does not act as a 'vicarious avenger' of the public's right to
be protected against false advertising."lsl Some Lanham Act cases do result in the
withdrawal of questionable claims from the marketplace, thereby protecting
consumers; however, this has not significantly altered the food labeling
environment. Moreover, if a claim misleads consumers but does not hurt
competition, it would not be subject to such litigation.
Litigation through the Lanham Act suffers from the same dehciencies as private
plaintifÊbased litigation as a non-viable substitute for regulation.'52 Plaintiffs and
manufacturers cannot enforce the FDCA, so they must seek to establish an
individualized injury, which, even if successful, does not generally extend to correct
a market-wide problem. Thus, violations of the FDCA that do not rise to that level of
cognizable injury would remain unresolved. Second, a party that wins monetary
damages (as opposed to injunctive relief) is the party that profits, and this does not
benefit other similarly situated groups. Third, litigation does not provide a consistent
regulatory mechanism to ensure a uniform labeling requirement. It is often
and can have inconsistent (or wrong) outcomes that do not
bad activity.r53 Litigation has not effectively reigned in
he more effective solution is to improve the regulatory
D. FwotNc
Finally, the FDA is under-funded in the food labeling area. In 2008, the
Government Accountability Offrce found that the FDA's resource sonstraints and
numerous responsibilities made it difficult for the agency to enforce all of its
r5o
r5 u.s.c. g l125(aXr) (2012).
15r
Sandoz Pharms. Corp. v, Richardson-Vicks, Inc., 902 F.2d222,230 (3d Cir. 1990) (quoting
American Home Prods. Corp. v. Johnson & Johnson, 672 F, Supp. 135, 145 (S.D.N.Y. 1987)).
tsz C¡. Clifford Rechtscbaffen, Delerrence vs. Cooperolion and the Evolvíng Theory of
Environmental Enforcement,71 S. CAL. L. REv. ll8l, 1233-34 (1998) (explaining that citizen
enforcers cannot replace the cooperative system of enforcement in the environment context because,
among other reasons, they "do not have the resources, expertise, or access to company information to
be consultants" and "do not enjoy continuing relationships with regulated firms").
r5r
Timothy D. Lytton, IJsing Tort L¡t¡gqtion lo Enhance Regulatory Policymakìng: Evaluating
Climate-Change Litigation in Light of Lessons from Gun-lnduslry and Clergy-Sexual-Abuse Lawsuils,
86 TEX. L. REv. I 837, 1864-65 (2008).
r5a
Manufacturers do not seem to be sufficiently threatened by current litigation elforts because
they do not invest in the time or resources to confirm that their labels comply with the NLEA prior to
releasing the product, as reported by Food Navigator. Sea Watson, supra note 143.
'55 Proponents of litigation consider it a viable option to fill the gaps lelt by regulatory control.
See Bnuce STLVERcLADE & ILLENE HELLER, FooD LABELTNc CHAos: THE CASE FoR REFoRM Vlll-9
(2010); Jennifer L. Pomeranz etal., InnovolÍve Legal Approaches to Address Obesity, ST MILBANK Q.
185, 199 (2009). One legal scholar and co-author noted: "The argument against litigation, however,
assumes the existence of an effective regulatory process that renders litigation unnecessary, which
does not seem to be the case. Regulatory agencies are notoriously understaffed and underfunded, so
they often are unable to carry out their regulatory purpose." Id, at 199. The current article argues that
the better solution is to address the regulatory deficiencies.
A COMPREHENSIVE STRATEGY
637
of sufficient resources to address food
labeling issues remains today. In the FDA's fiscal year 2013 budget, food lab_eling
allocations were the lowest of all nineteen programs under its jurisdiction.t5t The
FDA has cited lack of resources as a reason for not addressing pressing labeling
issues.l5s ln order to address the pervasive labeling problems outlined above,
labeling requirements."6 The same lack
increased resources
will be necessary,
E. Sutvttrl¡,ny
Warning Letters are the FDA's primary response to labeling violations. These
do not pose a sufficient threat to companies to abide by labeling regulations or avoid
misleading claims. Further, the FDA does not have the resources to issue a letter for
all violations. The absence of a true penalty, coupled with errors of enforcement,
dilutes deterrence.l5e This lack of regulatory oversight diminishes any concern by
food companies about compliance. Against this background, there has been a
proliferatión of legal and ìon-legal questionable claims on food products'160
Litigation has arisen as a method to reign in questionable claims, but this has not
been successful for most plaintiffs and certainly has not effectively altered the
labeling environment. 16lA new regulatory regime is warranted to enhance the
FDA's authority over labeling violations,
IV. STRENGTHEN THE FDA
There is not an effective regulatory mechanism in place for the FDA to promote
compliance or deter non-compliance for misleading food labels. The FDA lacks the
authority necessary to both deter noncompliance and address the non-compliance
once it occurs. The regulatory environment for food ìabeling claims is essentially
voluntary based, Thus, Ieft to its own devices, the market has failed to support the
utilization of factually accurate non-misleading food labels. A revìsed regime is
necessary.
Pursuant to various theories of regulation, there is a consensus that industry
members are more likely to comply with regulations with which they agree, and this
includes regulations that support honest competition and protect the integrity of the
marketplace.'6' Clear labeling requirements support both goals' The Lanham Act
cases dedicated to food claims reveal a business interest in companies' competitors
complying with fair labeling standards. Straightforward regulations would benefit
competition and minimize the need for inefhcient and expensive litigation.
¡56
LtsA SHAMES ET AL,, U.S, Gov'T AccoUNTABILITY OnptcB, GAO-08-597, FooD LABELING:
RESOURCES, IMPROVE OVERSIGHT, AND EFFECTIVELY USE
FDA NEEDS TO BETTER LEVERAGE
AvA¡LABLE DATA TO HELP CONSUMERS SELECT HEALTHY FOODS 42-43 (2008),
't? Fooo &
DRUG ADt\4|N., FtscAL YEAR 2013, JusTlFIcATloN
oF EsrlMATEs FoR
AppRopR¡AiloNs CoMMtrrEEs 548 (20 l2).
r58
Food Labeling: Nutrient Content Claims, Ceneral Principles, Petitions, Defrnition of Tefms;
Defìnitions of Nutrient Content Claims for the Fat, Fatty Acid, and Cholesterol Content of Food' 58
also Olive¡ Nieburg'
,2407 (Ja
wilh La
dnavigato
DA told
because
fre
of limited resources").
Polinsky & Shavel[, supra nole l3 l, at 7l; see also Watson, supra oote
losee Harris etal.,supra note 18, ø12207-08.
16l
,se" watson, supra note 143,
I62
Rechtschalfen, suPra note I 52, at I I 93.
A (Dec. 20' 201l),
natural-claims
he term 'all-natural'
l4l-
638
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO. 4 2OI3
Congress should concurrently increase the FDA's authority and resources to
revise food labeling regulations to address misleading labels, and permit the agency
to recover penalties for noncompliance.
A.
COMPLIANCE VERSUS DETERRENCE REcULRTORY SYSTEM
Two theoretical underpinnings exist to support a regulatory system of
government: a cooperative-compliance based system and a deterrence based system.
In practice, most enforcement agencies use a hybrid of both strategies and undertake
both cooperative and coercive measures.'6'
Legal and economic scholars debate the efflrcacy of a cooperatìve-compliance
based system versus deterrence-based enforcement in other contexts.r6a Discourse in
valuable lens to think about a proper
the environmental enforc
.'ót The EPA and FDA are both
regulatory system for
s to address modern conditions that
"protective agencies"l66
population
health,
serve as a barrier to
Under a cooperative system of regulation, an agency seeks to work with the
ló7
The agency's role is to foster conditions
regulated industry to support compliance.
that induce compliance so that any sanctions are typically withdrawn if compliance
is achieved.r6s This theory of enforcement tends to view industry members as
"citizens," "influenced by civic and social motives," seeking to avoid tort liability,
lóe
Agency officials are considered partners to
and maintain a good corporate image.
the regulated industry members and they work togetþer to ensure compliance. In the
EPA context where this is the case, government offrcials engage in on-site
inspections to confirm compliance with technical requirements, s.o^partnerships are a
170
The combination
naùral and perhaps positive outcome of the cooperative system.
of regulations and inspections reportedly create a "culture of compliance" in the
I7|
environmental context,
The deterrence-based model, on the other hand, is concerned with detecting
noncompliance and penalizing violators. This theory of enforcement tends to view
industry members ai "rationãl economic actors that act to maximize profits."t?2
t6t Id,
tT
l6a Diana
ll8g.
Crumley, Achieving Optimal Deterrence ín Food Safety Regulatio¡t,31 REv. LITtc.
353,400 (2012); Neil A. Gunningham et al., Molivating Management: Corporate Complìance in
Environmental Prolection,2T LAw & PoL'Y 289,289 (2005); Polinsky & Shavell, suprd note 131;
Rechtschaffen, supra note 152; Dorothy Thomton el al., General Deterrence and Corporale
Environmental Behavior, 21 LAw & PoL'Y 262, 262 (2005).
ró5
Rechtschaffen, supra note 152, at I 189 (noting that many enlorcement agencies use a hybrid
of cooperative-compliance and deterrence-based strategies)'
l6u
Renu Steinzor, The Future of Regulatìon: The Trulh About Regulation in America,5 HARV. L.
& PoL'y REV. 323, 325 (2011) (identifying six protector agencies with the mission to safeguard
people and the environment, including the FDA and EPA).
I67
.See Rechtschaffen, supra note I 52, at I I 84.
ró8
/¿ at I 188.
t6e
Id.at 1191,1195.
lT0seeCunninghametal., supranote'l64,al 295-96:seealso Rechtschaffen, supranotel52,at
1204.
l7l Gunningham eL al., supra note 164, at 309. Note also that unlike under the FDCA, in the
envíronmental context, the Clean Water Act expressly permits citizen suits with the potential for civil
monetary penalties or injunctive relief. 33 U.S.C. $ 1165 (2012). The citizen enforcement provision
has been found to play "an extremely valuable role in achieving compliance with environmental law,
including . . , providIing] an important deteffenl to non-compliance when government agencies fail to
act ei ther because oi lack of resources or pol itical wi ll." Rechtschaffen, supra note I 52, at l23l .
r72
Rechtschaffen, supra note I 52, at I I 86.
A COMPREHENSIVE STRATEGY
639
Therefore, penalties are utilized as a mechanism to punish rule-breakers and deter
future violations. This theory of enforcement looks skeptically at partnerships
formed out of the regulatory relationship based on concerns of agency capture and
the potential for unequal treatment.rT3 Penalties thus additionally send a message that
everyone is treated uniformly.l?a
In the food labeling context, stronger and clearer regulations would need to be
enacted, as explored below. Thereafter, the FDA should enforce the regulations
through a deterrence-based model, with the threat of civil penalties for noncompliance. ln order to comply, food manufacturers need only dedicate an
insignificant amount of time and resources to reviewing regulations to ensure
compliance. lTt As opposed to the environmental context, where agency partnerships
make sense, cooperation would not be a necessary element of addressing violations
of the revised food labeling standards.rT6 After the questionable package is
introduced and the misleading label is in the stream of commerce, it is on store
shelves and in home kitchens possibly for years. Post-marketplace cooperative
enforcement to ensure a corrected label would not deter future non-cornpliance or
correct the damaging label already present.
Pursuant to the plan delineated below, Congress should require the FDA to
overhaul its regulations for permissible food claims and create a deterrence-based
enforcement system.
B. ITEVISE FoOo LABELNG REQUIREMENTS FOR ALL CINTVS
Congress should require the FDA to revise and update its regulations related to
health, nutrition, and structure/ñ¡nction claims, At a minimum, the lax
requirements identified above should be corrected, This includes creating a preapproval structure for structure/function claims, instituting disqualifying levels of
trans fat and added sugar for manufacturers to be able to make health claims,
extending this disqualifying list to disqualiff nutrient content claims, and enabling
the FDA to obtain substantiation documents for questionable claims. Further, the
FDA should strengthen and enforce its requirements for product names and product
fortification. It should define terms such as "natural" and address clear misbranding
cases, such as the case of energy drinks labeled as dietary supplements. These
remedies would certainly resolve some of the most pervasive problems in need of
all
attention.
The FDA could enact the aforementioned regulatory amendments and stop
there. However, resource limitations would remain and this would leave in place a
reactionary regulatory system that would not enable the FDA to address noncompliance any better than it does now. In addition, innovative product types and
new misleading labeling practices will arise that will require FDA responses not yet
t?t Id. at 1222-23; see also Thomas M. Arnold & Jerry L. Stevens, Mixed Agendas and
Government Regulation of Business: Con ll/e Clean Up the Mess? 45 U. RlcH. L. REv. 1059, 1068
(20r r ).
I7{
Rechtschaffeo, supra note I 52, at I I 88, 1226-27.
175
Hank Schultz, Protecting Against Label Claims Lawsuils, FooD NAVIGATOR-USA (Jan. 19,
20 I 3 ), http l//www. floodnavigator-u sa.com/Regulation/Protecting-again st- label-claims-lawsui ts; see
a/so Watson, supra nole 143.
ofthe
'7ó This presumes the regulatory overhaul discussed below, where cooperative resolution
underlying permissible and non-permissible claims would be achieved. However, after the revised
claim regulations are enacted, post-market cooperative compliance would not effectuate the puçose
behind the regulatory overhaul.
640
AMERICAN JOURNAL OF LAW &
MEDICTNE VOL.
39 NO.4 2OI3
conceived. The regulatory system would remain labor and resource intensive and
over time these remedies might turn out to be a temporary solution to much larger
regulatory deficiencies in FDA authority. Thus, a regulatory overhaul is warranted.
The goal of the overhaul will be to address the defrciencies identified but also to
ultimately create a system of regulatory control over food labels that would not be
possible without greater intervention.
Congress may look to the European Union (EU) for guidance. In 2006, the
European Parliament and Council enacted Regulation 192412006, setting EU-wide
conditions for the use of nutrition and health claims."'The goal of the measure was
to ensure claims on food are "clear, accurate and based on evidence accepted by the
whole scientific community," thereby eliminating claims that "could mislead
consumers."lTs The European Parliament sought to support "informed and
meaningful choic
protecting innovat
must now be aut
register of appro
provides comprehensive guidance
to manufacturers for the thousands of claims
previously considered.
The European Commission is supposed to establish specihc nutrient profiles
with which "food or certain categories of food must comply . . . in order to bear
nutrition or health claims,"l83 but these are outstanding to date.lsa The legislation
provides that the nutrient profiles should account for "the quantities of certain
nutrients and other substances contained in the food, such as fat, saturated fatty
acids, trans-fatty acids, sugars and sallsodium,"l85 Once enacted, this should assist
in restricting claims on unhealthy food products.
The United States could likewise move towards a system of prior approval for
all claims to minimize the existence of questionable and misleading claims and
support fair competition. Through its notice and comment procedures, the agency
would gain the perspectives of manufacturers, public health researchers, consumer
advocates, and the public. When a manufacturer proffers a new claim, FDA approval
will be required prior to the release of a claim. Part of the approval process would be
the requirement that manufacturers submit substantiation documents in support of
the newly proposed claim. A pre-approval process would require the agency to work
cooperatively with stakeholders to ensure claims are truthful, non-misleading, and
based on scientific evidence, The FDA would then establish a register of approved
r7t
Council Regulation 192412006,2006 O.J. (L 404) 9 (EC).
r?8
EURoPEAN coMM'N'
Claims,
Nutrilion
and
Health
http://ec.europa.eu/food/lood/labellingnutrition/claims/index_en.htm (lsst updated Aug.8,2013).
I79
EUNOPEEN RESPONSIBLE NUTRITf ON ALLIANCE, THE APPLICATION OF THE NUTRITION AND
HEALTH CLATMS REcuLArroN 192412006: GUtDANCE FoR FooD OPERAToRS 17 (2012).
t&o
Id. at 20.
t8t
Health and Nutrition Claims,supra note 178.
t82 EtJ Register ol Nutrition and Health Claims Made on Foods, EURoPEAN Covu'N'
http://ec.europa.eu/nuhclaims/?event=register.home (last updated June 12, 2013)'
l8r
Council Regulation 1924/2006,2006 O.J. (L 404) 9, l4-l 5.
tBo
General Conditions for Use oÍ Nutrit¡on and Heolth Claims, FooD SAFETY AUTH. oF lR.,
(last
http://www, fsai, ielscience_and_hea Ith/nutrition_and_health_c laims/cond itions_for_u se.htm I
updated Sept. 20, 20.l2).
185
Council Regulation 1924/2006,2006 O.J. (L 404) 9, 14. The Commission has progressed by
conducting consultations with stakeholders to establish nutrient profiles. Nutrien! Profiles, EUROPEAN
CoMN4'N, http://ec.europa.eu/food/food/labellingnutrition/claims/nutjrofiles_en.htm
Sept. 1,2009).
(last
updated
A COMPREHENSIVE STRATECY
64t
and rejected claims and house them in a publically available database, This process
would be labor and resource intensive up front but would result in the agency having
greater control over food labels in the long run. This will reduce the need to
constantly police food labels and rectif inconsistencies in enforcement.
The guidelines for FDA approval of claims should include a requirement that all
statements and claims have a scientific basis and not be misleading. The FDCA
guides the FDA in determining whether a product meets the definition of
misbranding due to misleading labeling or advertising by directing the FDA "take
into account" the questionable statements, designs, and words, among other things,
but also the extent to which the label "fails to reveal facts material in the light of
such representations or material with respect to consequences which may result from
the use of the articles."r86 The defìnition of misbranding due to misleading labeling
thus requires a holistic view of the product and the range of representations made on
the packaging. This underutilized requirement should be elevated in import and
translate into a comprehensive requirement which restricts health and nutritionrelated claims on otherwise unhealthy products.
The positive representation on the front ofpackaging has been found to increase
consumers' perception of health and likelihood to purchase some of the least healthy
products in a food category,l87 This is a clear indication that consumers are being
misled by the claims. A method to address the misleading nature of claims on
unhealthy food is to divide a product into its claim and its properties. For example, if
a consumer chooses an orange flavored drink based on a Vitamin C nutrient content
claim, but that is composed of high fructose corn syrup and water, and fortified with
Vitamin C, the consumer might be getting a benefit from the fortification, but also a
larger health detriment from drinking the remainder of the product. There is a strong
argument that the health-related claim misrepresents the product as a whole and
"fails to reveal" the negative health consequences of consuming the product
notwithstanding the Vitamin C fortification. Products that are unhealthy in total
should no longer be permitted to bear claims touting a singular positive nutrient.
The United States should furthcr follow the EU's lead and establish nutrient
profiles which would permit or prohibit foods from being able to carry claims,rE8 and
extend this to health, nutrient content and structure/frinction claims. Consumers
seeking a singular positive nutrient can consult the Nutrition Facts Panel and
ingredient list. A method for the FDA to accomplish this would be to revise the
disqualifoing nutrient list and include disqualifiers for trans fat and added sugar.
This list should be applied to all claims. For example, orange juice would still be
able to tout its vitamin C content but the fortified orange flavored drink would not.
Studies are necessary to determine the best method to accomplish factually accurate,
clear labels that do not mislead consumers about the health benefits of products. The
18ó
2l U.S.C. g 321(n) (2012) ("If an article is alleged to be misbranded because the labeling or
advertising is misleading, then in determining whether the labeling or advertising is misleading there
shall be taken into account (among other things) not only representations made or suggested by
statement, word, design, device, or any combination thereof, but also the extent to which the labeling
or advertising fails to reveal facts material in the light ofsuch representations or material with respect
to consequences which may result lrom the use of the articles to which the labeling or advertising
relates under the conditions of use prescribed in the labeling or advertising thereol or under such
conditions ofuse as are customary or usual.").
r87
.S¿e Jennifer L. Harris et al., supra note I 8, at I 4. Health representations also create a health
hato, which leads to over-consumption of the products carrying such claims. Brian Wansink, How Do
Front and Back Package Labels InJluence Beliefs About Heallh Cloins?,37 J. CoNSUMER AFF.305,
3r3-15 (2003).
r88
Council Regulation 192412006,2006 O.J. (L 404) 9, 14.
642
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO,4 2OI3
FDA's fortification policy should be re-evaluated in this process to determine if
fonification has health benefits for otherwise unhealthy highly processed products
and permit or restrict such claims accordingly.
Revised labeling regulations should result
in a
more fair and efficient
marketplace: one where consumers are not misled about a product's healthfulness
and thus purchase products based on their true nutritional value.
C, THe FIRST AMENDMENT
In addition to its lack of authority, the agency has been hesitant to restrict claims
based on First Amendment considerations.lse Howeve., the government would be
well within its authority to create a database of pre-approved claims and restrict
manufacturers' ability to claim health benefits to foods meeting an overall
nutritional profile.
The Supreme Court has expressed its preference for transparency in commercial
transactions in order to support informed consumer decision-making.''o Food labels
lel The foundation
are protected as commercial speech under the First Amendment.
of the commercial speech doctrine lies in the understanding that an "advertiser seeks
to disseminate information about a specific product or service that he himself
provides and presumably knows more about than anyone else" in order to increase
profits.le2 Therefore, the Court has explained that the government may "require that
a commerçial message appear in such a form, or include such additional information,
warnings, and disclaimers as are necessary to prevent its being deceptive."le3
The Supreme Court created an intermediate test in Central Hudson Gas &
Electric Corporation v. Public Service Commission to determine if government
restrictions on commercial speech are valid,lea but such restrictions rarely pass the
full test. However, the flrrst prong of the test dictates that false, deceptive, and
misleading speech is not protected by the First Amendment and may be restricted.re5
The labeling issues of concern here are false, deceptive, and misleading claims and
practices. Under the commercial speech doctrine, the government may restrict such
le6
speech or require that it be presented in a non-deceptive manner.
r8e
teo
See Llsa SHAMES ET AL., supra note 9, at 62.
See, e.g,, Virginia State Bd. of Pharmacy v.
Virginia Citizens Consumer Council, 425 U.S.
748,765 (1976) ("lt is a matter of public interest that Iprivate economic] decisions, in the aggregate,
be intelligent and well inflormed. To this end, the free flow of commercial information is
indi spen sable.").
rer
Rubin v. Coors Brewing Co., 514 U.S. 476, 4i8 (1995) (invalidating Section 5(eX2) of the
Federal Alcohol Administration Act, which prohibited beer labels from displaying alcohol content,
because
it was
"inconsistent with the protections granted
to
commercial speech by the First
Amendment . . .").
te2
te)
Virginia State Bd. of Pharmacy,425 U.S. at772 n.24.
Id.
rea
S¿¿ Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 55'Ì,562-63
(1980) ("The Constilution therefore accords a lesser protection to commercial speech than to other
constitutionally guaranteed expression. The protection available for particular commercial expression
turns on the nature both of the expression and ol the govemmental interests served by its
regu lation.").
tes
Id.at576.; In re R.M.J,,455 U.S. 191,203 (1982).
te6
See In re R.M.J.,455 U.S. at 203 ("[W]hen the particular content or method of the advertising
suggeststhatitisinherentlymisleading...theStatesmayimposeappropriaterestrictions....[T]he
Court in Eafes suggested that the remedy in the first instance is not necessarily a prohibition but
preferably a requirement of disclaimers of explanation.") (citing Bates v. State Bar of Arizona, 433
u.s. 350, 31s (t977)).
A COMPREHENSIVE STRATEGY
643
Under the revised regulatory regime and consistent with the Fírst Amendment,
factually accurate claims that do not mislead consumers would be permitted.
Conversely, health-related claims on otherwise unhealthy products have proven to be
misleading in studies. In developing revised regulation, Congress should direct the
FDA to convene the lnstitute of Medicine to conduct additional studies to fully
develop research-based restrictions. Thereafter, claims not based on this scientihc
evidence, and claims on otherwise unhealthy products as determined by an objective
scientific criteria, would not be authorized. The revised approach would additionally
address and restrict basic false practices such as conventional foods being
mislabeled as dietary supplements and product identity names that misrepresent the
contents of the product. Finally, the FDA could define confusing terms used on
packaging, such as the descriptor'natural' based on scientific data; this is within its
regulatory authority
to prevent deception and misleadiñg
representations and
supports First Amendment goals.
Under the revised system, if a manufacturer seeks to proffer a new claim that
has only the potential to mislead, the FDA could not restrict it but can require
revised wording, the addition of a disclaimer, or both.reT The FDA may also require
factual disclosures on product labeling to ensure the representations on the front of
the package do not misrepresent the contents as whole.re8 The Supreme Court has
sustained the government's ability to require factual commercial disclosures for this
purpose.'ee Consumer studies would be necessary to support this rulemaking and
would inform the FDA which types of claims are informative and which claims are
misleading.
D, INcnenseD
RESoURCES THROUCH REGISTRATION FEES
Given that frnancial resources would be required to carry out a regulatory
overhaul, a registration fee structure should be implemented to fund increased
agency activity. Congress has granted the FDA the authority to collect user fees in a
variety of other,contexts to allow the agency to "fulfill its mission of p_rotecting the
publió health and accelerating innovation'i in the industry assessed.zo0 None are
assessed for the specific purpose of enforcing food labeling regulations. The FDA
explained that the ability to collect user fees in other areas under its domain have
been pivotal to its ability to support safety, effectively review such products, and
achieve timely and enhanced pre-market review.2ot For example, in the area of
te1
Id.
v. Eddy, 249 U.S. 427,431 (1919) (stating that commercial
entities have "no constitutional right to sell goods without giving to the purchaser fair information of
what it is that is being sold"); Cl Zatdercr v. Office of Disciplinary Counsel, 471 U.S. 626,628
't8 See Corn Products Refining Co.
(r
e8s).
te Zauderer,4T I U.S. at 65 I ("IW]e hold that an advertiser's rights are adequately protected as
long as disclosure requirements are reasonably related to the State's interest in preventing deception
of consumers."); see also Milavetz v. United States, 559 U.S. 229, 249-50 (2010) (citing Zauderer,
471 U.S, at 65 I ).
200
(Jser
Fees,
U.S.
FooD
&
AND
DRUc
ADMIN.,
http://www,fda.gov/Forlndustry/UserFees/default.htm (last updated June 17, 2013) (The user fees
include: Animal Drug User Fee Act, Animal Generic Drug User Fee Act, Biosimilar User Fee Act,
Color Certification, Exports Certificate, Family Smoking Prevention and Tobacco Control Act, Food
Safety Modernization Act, Freedom of [nformation Act Fees, Generic Drug User Fee Act,
Mammography Quality Standards Act, Medical Device User Fee and Modemization Act, Prescription
Drug User Fee Act, Tobacco Product Fees.).
20t
President's Fiscal Year 2013 Budget Requestfor the FDA: Hearing Beþre the Subcomm. On
Agric., Rural Develop,, Food & Drug Admin., and Related Agencies o! the H. Comm' on
644
AMERICAN JOURNAL OF LAW &
MEDICINE
VOL. 39 NO.4 2OI3
prescription drugs, the FDA was "understaffed, unpredictable, and slow," so
patients' access to new medicines in the United States "lagged behind other
countries."2o2 Congress enacted the Prescription Drug User Fee Act, providing the
FDA with a stable, consistent source of funding through user fees, which
"revolutionized the drug approval process."203
In the context of food, under the Public Health Security and
Bioterrorism
of 2002, food facilities are required to register with
the FDA and re-register every two years under the FSMA, but under neither act are
they required to pay a user fee upon registration.2oo Und"t the FSMA, fees are
assessed for "non-compliance materially related to a food safety requirement."205
Therefore, the fee provisions only apply to those facilities subject to reinspection, to
cover reinspection costs, and, for those who do not comply with recall orders, to
cover the costs of recall activity.'ou Und". the FSMA, it is possible for a fee to be
assessed in the context of misbranded food if the food label lacked the required
disclosure related to food allergens and the food facility was thus subject to
reinspection or failed to follow a recall order.207 This singular source of fees based
on one type of misbranding leaves all remaining mislabeling issues unfunded.208
Historically, Congress has augmented the FDA's authority accompanied with
user fees to carry out its increased responsibilities. In 2009, Congress expanded the
agency's authority over tobacco by passing the Family Smoking Prevention and
Tobacco Control Act and funded this mandate though user fees assessed on
manufacturers and importers of tobacco products.2oe The Tobacco Control Act
prohibits misbranding, which includes false or misleading labeling and advertising
for tobacco products, and provides the FDA with the authority to enforce violations
of the Act.2lo The fees appropriated under the Act fund the costs associated with
FDA's enforcement activity. 2l I
Preparedness and Response Act
Appropr¡al¡ons,
Admin.).
202
ll2th
tot
ld.
Id.
'@
2r c.F,R. $
20s
Cong. (2012) (statement of Margaret
A.
Hamburg, Comm'r, Food
&
Drug
1.23 l(d) (20 l3).
Guìdancefor lndusrry: lmplementation of the Fee Provisions of Section 107 of the FDA Food
Solèty
U.S.
Modernization Act,
FooD
&
DRUG
ADMIN,,
http://www. fda.gov/Food/CuidanceRegulation/CuidanceDocumentsRegulatorylnformation/FoodDe[en
se/ucm274l76.htm (last updated Aug. 16, 201 3).
20ó
2l U.S.C, g 379j-3 l(a) (2012); see a/so Food Salety Modemization Act Reinspection Fee
Rates, 77 Fed. Reg. 45,636, 45,638 (Aug. I, 2012).
77 Fed. Reg. at 45,637-38.
'o'
208
The only other food-related user fee is assessed on color additives. Entities seeking to use
color additives for food, drugs, devices and cosmetics must obtain batch certification (unless they are
exempt)fromthe FDA.2l U,S.C,$379e(a)(2012). Theagencywill onlyadmitacoloradditivetothe
listing subject to certification upon payment ofa fee, determined according to the weight ofthe batch.
Id. $ 379e(e); see also 2l C.F.R $ 80.10(a), (b) (2013); Listing of Color Additives Subjecr to
U.S.
Certifrcat¡on,
FooD
&
DRUG
ADMIN.,
http:i/www.lda.gov/Forlndustry/ColorAdditives/CuidanceComplianceRegulatorylnformation/ColorAd
ditiveLi stingRegu lations/Listi ngofCol orAdd i ti vesSubj ecttoCerti fication/defau lt.htm (last updated
May 19, 2009).
2m
Family Smoking Prevention and Tobacco Control Act of2009, Pub L. No. I I l -31, $ 919, 123
Stat. 1776, 1826 (codifìed as amended at 2l U.S.C. $ 387s (2012)).
2ro
2l u,s.c. g 387c(aXl), (7).
'" /d $ 387s(c)(2)(A) (including the manufacrure, distribution, and marketing of tobacco
products); Overview of the Family Smoking Prevention and Tobacco Control Act: Consumer Fact
Shee.,
U.S.
FooD
&
DRUG
ADMIN.,
http://www.fda.gov/tobaccoproducts/guidancecomplianceregulatoryinformationlucm246l29.htm (last
updated
Apr.30,2013).
A COMPREHENSIVE STRATEGY
The FDA
will need increased
645
resources to undertake new regulatory activities
outlined in this paper. Owners, operators, and agents of a facility engaged in the
manufacturing, processing, packing, or holding of food for consumption in the
United States are required to register with the FDA.2I2 Upon registration, each
registrant must list the applicable
they are
responsible.2'3 Congress should enac
ar to that
mandated under the Tobacco
is
in
Control
food that
interstate commerce. The goal would be to capture large
manufacfurers who produce the majority of packaged food consumed in the United
States, and not burden small local producers. Further, facilities exempt from
registration under the Bioterrorism Act include those that should not be assessed a
registration fee: farms, retail and nonprofit food establishments, restaurants, fishing
vessels and USDA regulated facilities that produce meat, poultry, and eggs.2rs The
fees appropriated would be available for the costs associated with FDA regulation of
food products.2ló This will support the FDA in fulfilling "its mission of protecting
the public health"2rT in the food labeling context by creating a clear and factually
distributed
accurate information environment.
E. Crvrr-
MoNetenv
PENALTI ES
Congress should grant the FDA the authority to issue civil monetary penalties
for non-compliance of the revised regulations restricting misleading clai ms on food
packaging. Congress and the Supreme Court have discussed the concept behind
granting federal agencies the authority to issue civil monetary hnes,2rB Specifically,
when Congress enacted the Federal Civil Penalties Inflation Adjustment Act of
1990,2re it explained that "the power of Federal agencies to impose civil monetary
penalties for violations of Federal law and regulations plays an important role in
detening violations and furthering the policy goals embodied in such laws and
regulations."22o The very purpose of the Act is to further the dual goals of
"maintain[ing] the detenent effect of civil monetary penalties and promot[ing]
compliance with the law."22l Likewise, the Supreme Court has "recognized . . . that
2r2
2rr
2l c.F.R. $ t.225.
/d, lrequiring registrants to list applicable food product categories as identified in 2l C.F.R.
$ I 70.3); s¿e 2 I C.F.R. $ I 70.3(n) (listing 43 general food categor¡es that group specific related foods
together, including the following: baked goods; non-alcoholic beverages, including soft drinks; frozen
dairy desserts; snack foods, including chips, pretzels; and soft candy).
2r'21 u.s.c. g 387s(c)(2)(A).
2'5
2l c.F.R, g t.226.
216
Calculation of these fees would need to consider whether the manufacturers would pass the
cost on to consumers. Consumer access to whole foods and differing ¡esponses to potential increased
prices stemm¡ng from the fee provision due to socio-economic variation is beyond the scope ofthis
paper. For a relevant discussion of strategies to address this point, see Jennifer L. Pomeranz, A
Conditional Funding Slrategy lo Address the Modern Food Environment: From Public Health
Prevention to State and Local Preemprion,40 DUKE FoRUM FoR L. & Soc. CHANcE 39,4l-44 (2013).
2t1
See (Jser Fees, supro note 200.
2r8
28 U.S.C. g 24ól (2006); see Friends of the Earth, Inc. v. Laidlaw Env. Servs,, lnc., 528 U.S.
t67, 169-72 (2000).
2re
28 u.s.c. g 246t.
"o Id. g 2ailQ)@)(l) (requiring federal agencies ro issue regulations to adjust their civil
monetary penalties upward due to inflation).
"t Id. ç 2a6lQ)þ)(2); see also Federal Civil Penalties Inflation Adjustment, 69 Fed. Reg.
43,299,43,299 (July 20, 200a) (ln responding to a comment requesting higher penalties in the context
of violations of regulations regarding drugs, the FDA noted that the FCPIAA did not authorize
646
AMERICAN JOURNAL OF LAW &
MEDICINE VOL. 39 NO. 4 2OI3
'all civit penalties have some deterrent effect."'22z In the environmental context, the
Court explained that Congress' grant of civil penalties promoted immediate
compliance and deterred future violations.223
Penalties should also minimize enforcement errors because the threat of
detection resulting in a penalty alone has been found to garner compliance.22a The
same cannot be said of Warning Letters.22s Penalties additionally provide an
expressive function by reminding companies to veriff compliance and reassuring
compl i ers that non-compliance
i
s penalized.226
An optimal penalty covers the cost of enforcement and serves as a proper
deterrent notwithstanding the benefits of noncompliance.22l Economic and legal
scholars posit that when an enforcement agency has limited resources, the amount of
the penalty should be increased to minimize enforcement costs without sacrificing
deterrence,22s This woutd be a necessary consideration if Congress does not increase
funding for the FDA to address labeling through the user fee provisions discussed
above, Regardless, Congress should permit the recovery of civil fines for violations
of the misbranding regulations.
F, SurøunRv
Congress should revise the FDA's authority over food labeling claims to require
preauthorization for claims. The FDA would work with stakeholders to create the
claims database and work with food companies on pre-market compliance. Pursuant
to this process, the FDA must have access to substantiation documents when a
manufacturer seeks to introduce a novel claim. The goal of the proposed regulations
would be to clariff permissible claims and restrict impermissible claims. This will
create a transparent regulatory regime for both manufacturers and consumers.
Subsequent to this, a deterrence-based system is warranted and Congress should
provide the FDA with the authority to issue civil monetary penalties for noncompliance of the revised food labeling standards. This will clarifu the FDA's
expectations of companies so it is clear when a penalty will be issued. Finally,
Congress should provide the FDA the resources to carry out the new directives
through registration fees paid by the regulated industry,
V. CONCLUSION
The FDA is severely underfunded and lacks significant authority necessary to
address questionable food labeling practices utilized today, Congress should
overhaul the regulatory requirements for manufacturers to make health- and
nutrition-related claims by creating a pre-approval process for all claims and house
them in a database accessible to the population at large. Claims that are not based on
scientific evidence or that misrepresent the healthfulness of a product as a whole
increases in penalties greater than ten percent, even though "higher civil monetary penalties might be
a better deterrent.").
222
Friends of the Earth,528 U.S. at 185.
,r, Id.
224
Polinsky & Shavell, supra noÍe l3l, at 60-62,
"t Ela¡ne Vy'atson, supra nole l4l (quoting a lawyer stating that some manufacture¡s believe the
worst thing that can happen from an "improper labeling claim is that they would receive a warning
letter [sic] and then they would fix it and move on").
226
Gunningham eT al., supro note I 64, at 295.
2'7
Crumley, supro note I 64, at 383-84; Rechtschaffen, supra note 152, at I 188.
228Polinsky&Shavell, supranolel3l
,at72;Rechtschaffen, supranore152,al 1215.
A COMPREHENSIVE STRATEGY
647
should no longer be permitted on food products, Violations of the revised labeling
requirements should garner civil monetary penalties to deter violations. The goal of
this regulatory overhaul is to eliminate questionable claims from product packaging
to support a fair and efficient marketplace. Congress should fr¡nd the FDA's revised
authority through registration fees required of all food manufacturers and importers
subject to the agency's authority. Through this regulatory overhaul, the FDA can
achieve its mission in the area of food labeling-something now left to voluntary
compliance and inefñcient and costly litigation.
J
o
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVI MINUTES. GENERAL
CV 09-6295 AHM
(CWx)
HAYDEE STUART
Present: The Honorable
V.
CADBURY ADAMS USA, LLC
February 3,2010
ET AI.
A. HOV/ARD MATZ, U.S.DISTRICT JUDGE
Not Reported
Stephen Montes
Court Reporter /
Deputy Clerk
Attorneys NOT Present for Plaintiffs:
Proceedings
Date
Recorder
Tape No.
Attorneys NOT Present for Defendants:
IN CHAMBERS (No Proceedings Held)
On September 2, 2009 Plaintiff Haydee Stuart ("Plaintiff') filed a First Amended
Complaint against Cadbury Adams USA LLC ("Cadbury" or "Defendant") alleging the
following claims for relief: (1) violation of California's Unfair Competition Law
("UCL"), Cal. Bus. & Prof. Code $$ 17200, et seq.; (2) violation of California's False
Advertising Law ("FAL"), Cal. Bus. & Prof. Code $$ 17500 et seq.; (3) violation of the
California Consumer Legal Remedies Act ("CLRA"),Cal. Civ. Code $ 1750, et seq.; and
(4) fraud. Plaintiff alleges that Cadbury's representations that its "Trident White"
chewing gum is clinically shown to whiten teeth are misleading. FAC IT 3 1, 49.
r.
LEGAL STANDARD ON A 12(bX6) MOTION TO DISMISS
On a motion to dismiss pursuant to Rule 12(bX6) of the Federal Rules of Civil
Procedure for failure to state a claim, the allegations of the complaint must be accepted
as true and are to be construed in the light most favorable to the nonmovingparty. Wyler
Summit P'ship v. Turner Broad. Sys., únc.,135 F.3d 658, 661 (9th Cir. 1998). A Rule
12(bX6) motion tests the legal sufficiency of the claims asserted in the complaint. Thus,
if the complaint states a claim under any legal theory, even if the plaintiff erroneously
relies on a different legal theory, the complaint should not be dismissed. Haddock v. Bd.
of Dental Examiners, 777 F .2d 462, 464 (9th Cir. 1985).
Federal Rule of Civil Procedure 8(a)(2) requires
cv-90 (06/04)
CIVIL MINUTES - GENERAL
Page
I of9
o
LTNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVI
CY 09-6295 AHM
MINUTES - GENERAL
(CWx)
Date
HAYDEE STUART V. CADBURY ADAMS USA, LLC
Et
February 3,2010
A1.
only "a short and plain statement of the claim showing that the
pleader is entitled to relief," in order to "give the defendant fair
notice of what the . . . claim is and the grounds upon which it
rests[.]" . . . While a complaint attacked by a Rule 12(bX6)
motion to dismiss does not need detailed factual allegations . .
., a plaintiff s obligation to provide the "grounds" of his
"entitle[ment] to relief'requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do . . . . Factual allegations must be
enough to raise a right to relief above the speculative level . . . .
Belt Atlantic corp. v. Twombly,l2T s.
omitted).
ct.
1955, 1964-65 (2007) (internal citations
U.S.
"Two working principles underlie . . . Twombly." Ashcroft v. Iqbal
true all -,
129 S. Ct. 1937,1949 (2009). "First, the tenet that a court must accept as allegations contained in a complaint is inapplicable to legal conclusions. Threadbare
recitals of elements of a cause of action, supported by mere conclusory statements, do
not suffice . . . Second, only a complaint that states a plausible claim for relief survives
motion to dismiss." Id. at 1949-50. "A claim has facial plausibility when the plaintiff
a
pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. . . . The plausibility standard is not akin
to a 'probability requirement,' but it asks for more than a sheer possibility that defendant
has acted unlawfully)' Id. at 1949. "Determining whether a complaint states a plausible
claim for relief . . . [is] a context-specific task that requires the reviewing court to draw
on its judicial experience and common sense." Id. at 1950.
"Generally, a district court may not consider any material beyond the pleadings in
ruling on a Rule 12(bX6) motion. . . . However, material which is properly submitted as
part of the complaint may be considered" on a motion to dismiss. Hal Roach Studios,
Inc. v. Richard Feiner & Co.,896 F.2d 1542,1555 n.19 (9th Cir. 1990) (citations
omitted). Documents whose contents are alleged in a complaint and whose authenticity
cv-90 (06/04)
crytL
GENERAL
Page2
of9
o
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES. GENERAL
CV 09-6295 AHM
(CWx)
Date
February 3,2010
HAYDEE STUART V. CADBURY ADAMS USA, LLC Et AI.
no party questions, but which are not physically attached to the pleading, may be
considéreã in ruling on a Rule 12(bX6) motion to dismiss without converting the motion
to dismiss into amotion for summaryjudgment. Leev. City of Los Angeles,25O F.3d
668, 689 (9th Cir. 2001). If the documents are not physically attached to the complaint,
they may be considered if their "authenticity . . . is not contested" and "the plaintiffls
complaint necessarily relies" on them. Parrino v. FHP, Inc.,146 F.3d 699,705-06 (9th
Cir.lggs). Furthernore, under Fed. R. Evid. 201, a court may take judicial notice of
"matters of public record." Mack v. South Bay Beer Distribs.,798 F.2d 1279, 1282 (gth
Cir. 1986), abrogated on other grounds by Astoria Fed. Sav. & Loan Ass'n v. Solimino,
501 U.S. I04 (lgg|). "The district court will not accept as true pleading allegations that
are contradicted by facts that can be judicially noticed or by other allegations or exhibits
attached to or incorporated in the pleading." 5C Wright & Miller, Fed. Prac. & Pro. $
1363 (3ded.2004).
Where a motion to dismiss is granted, adistrict court should provide leave to
amend unless it is clear that the complaint could not be saved by any amendment.
Manzarekv. St. Paul Fire &Marine Ins. Co.,519 F.3d 1025,1031 (9th Cir.2008)
(citation omitted).
il.
THE CRLA, FAL, AND UCL AND THE "REASONABLE CONSUMER''
STANDARI)
California's Unfair Competition Law ("UCL") prohibits any "unlawful, unfair or
fraudulent business act or practice." Cal. Bus. and Prof. Code $ 17200. California's
False Advertising Law ("FAL") prohibits any "unfair, deceptive, untrue, or misleading
advertising." Cal. Bus. and Prof. Code $ 17500. Finally, California's Consumer Legal
Remedies Act ("CLRA") prohibits "unfair methods of competition and unfair or
deceptive acts or practices." Cal. Civ. Code $ 1770. Claims of deceptive advertising or
practices under these statutes are governed by the "reasonable consumer test." See
Williams v. Gerber Products Co,,552 F.3d 934,938 (9th Cir. 2008). A plaintiff alleging
that she has been misled need not plead "the exact language of every deceptive
statement; it is sufficient for [the] plaintiff to describe a scheme to mislead customers,
cv-90 (0ó/04)
CIVIL MINUTES - GENERAL
Page 3
of9
o
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVI
MINUTES. GENERAL
Date
CY 09-629s AHM (Cwx)
HAYDEE STUART
V.
CADBURY ADAMS USA, LLC
February 3,2070
Ct AI.
and allege that each misrepresentation to each customer conforTns to that scheme."
Committee on Children's Television, Inc. v. General Foods Corp., 35 Cal.3 d 197,
212-213 (19S3). Allegations of deceptive advertising"may be based on representations
to the public which are untrue, and "'also those which may be accurate on some level,
but wiil nonetheless tend to mislead or deceive . . . A perfectly true statement couched in
such a manner that it is likely to mislead or deceive the consumer, such as by failure to
disclose other relevant information, is actionable under" ' the UCL." McKell v'
Washington Mutual, Inc.,I42 Cal. App. 4th I45l,I47l (2006).
In cases under the CLRA, FAL, and UCL, "California courts . . . have recognized
that whether a business practice is deceptive will usually be a question of fact not
appropriate for decision on demurrer." Williams v. Gerber,552 F.3d 934,938-39 (9th
Cir. 2008), citing Linear Technology Corp. v. Applied Materials, Inc.,152 Cal. App. 4th
115, 134-35 (2007) ("Whether a practice is deceptive, fraudulent, or unfair is generally a
question of fact which requires consideration and weighing of evidence from both sides
and which usually cannot be made on demurrer.").
Despite the fact-specific inquiry of claims for deceptive or unfair practices, courts
have granted dismissal when the plaintiff has failed to allege sufficient facts to enable a
fact-finder to conclude that a reasonable consumer would be deceived. In Freeman v.
Time Inc., 68 F.3d at 285 (9th Cir. 1995), the Ninth Circuit upheld the dismissal of a
claim that an advertising mailer deceptively suggested that the plaintiff had won a
million dollar sweepstakes. The court held that the advertisement itself-which stated
multiple times that the plaintiff would win the pnze only if he had a winning
sweepstakes number-precluded the plaintiff from proving that a reasonable consumer
was likely to be deceived. Id. at289.
cv-90 (06/04)
CIVIL MINUTES - GENERAL
Page 4 of 9
o
TINITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES. GENERAL
CV 09-6295 AHM
(CVix)
Date
February 3,2010
HAYDEE STUART V. CADBURY ADAMS USA, LLC Et AI.
ilI.
DISCUSSION
A.
Ptaintiff s Theory of how Cadbury's Representations Deceive
Consumers
Plaintiff alleges that Cadbury's advertising claim that its "Trident White" chewing
gum is "clinically shown to whiten teeth" is misleading. FAC n 49. Plaintiff alleges that
Defendants "do not have competent and reliable scientific evidence to support the
'whitening' claims claims [sic] about Trident White." FAC 1152. Central to Plaintiff s
allegations is her contention that "extrinsic stain removal" and "whitening" are two
different things. FAC flfl 6-10; 21,31-40;48-62. Plaintiff alleges that "Trident White
does not affect intrinsic tooth discoloration or otherwise 'whiten' teeth as she
understood." FAC ll2l. According to the FAC, Cadbury's "whitening" claims about
Trident white are misleading because consumers have the impression that "[t]eeth
'whitening' involves the remediation of intrinsic tooth discoloration, not simply
removing daily food and beverage staining." FAC 1T 54. Plaintiff alleges that in
marketing Trident White, Cadbury makes "separate and distinct substantiation claims
that Trident White whitens teeth and removes stains," and that"a reasonable consumer . .
. is deceived by the separate and conjunctive representations on Trident White
packaging, internet and television advertisements that proclaim that Trident White
separately and both 'whitens teeth' and 'removes stains."'FAC TI 56, 58.
Plaintiff also alleges that Cadbury has attempted to mislead the public into
believing that Trident White "separately and both 'whitens teeth' and 'removes stains' by
making "separate and conjunctive representations" to that effect. FAC T 58. According
to this argument, by making "separate and conjunctive representations" thal Trident
White both "whitens teeth" and "removes stains," Cadbury is misleading consumers into
believing that Trident White has whitening capabilities beyond stain removal.
cv-eo (06/04)
CIVIL MINUTES - GENERAL
Page 5
of9
o
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CWIL MINUTES - GENERAL
CV 09-6295 AHM
(CWx)
HAYDEE STUART V. CADBURY ADAMS USA, LLC
Date
Et
February 3,2010
A1.
Accepting Plaintiff s allegations as true, Plaintiff fails to state any
cognizable UCL, FAL, or CLRA claim
Without intending to disparage the Plaintiff s apparent dismay, the allegations in
the FAC invite the question "Are you kidding me?" The allegations of consumer
deception deff common sense and are contradicted by the actual advertising claims made
by Cadbury.
Plaintiff herself points out that "there are many causes of tooth discoloration,"
including the "consumption of staining substances." FAC "lT 38. The lqbal standard
recognizes that "[d]etermining whether a complaint states a plausible claim for relief . . .
[is] a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense." Id. at 1950. Given that the removal of stains will
necessarily cause a surface to look whiter, Cadbury's representations that Trident White
does both is not misleading.
Moreover, Cadbury's marketing claims, by which Plaintiff alleges to have been
deceived (and which Plaintiff has attached to her FAC), make clear that Trident White
makes teeth whiter by reducing stains, For example, Cadbury's website includes the
following statements:
How exactly does Trident White@ work?
Trident White@ is made with a proprietary whitening technology. Clinical
studies have shown that chewing two pieces of Trident White@ gum four
times a day for four weeks can result in stain reduction when used in
combination with your daily oral care regimen. A clinical study has also
shown that chewing Trident'White@ gum prevents surface stains from
forming.
rß*{€
cv-90 (06/04)
CIVIL MINUTES - GENERAL
Page 6 of 9
o
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES. GENERAL
CV 09-6295 AHM
(CWx)
Date
February 3,2010
HAYDEE STUART v. CADBURY ADAMS USA, LLC et aI.
How long will it take to
results from chewing Trident White@?
Chewing two pieces of Trident White@ gum four times a day can result in
stain reduction in as little as four weeks.
see
FAC Exh. 4.
In the FAC, Plaintiff cites the American Dental Association's lack of mention of
chewing gum as an acceptable "whitening method" to support her argument that stain
removal does not equate with whitening and that Cadbury does not have a reasonable
basis to make such a claim. FAC T 18. Yet, as Cadburypoints out, the ADA specifically
defines extrinsic tooth stain removal as a form of whitening. See Defendant's Request
for Judicial notice, Exh. 1 (print out of ADA web page entitled "ADA Positions and
Statements: ADA Statement on the Safety and Effectiveness of Tooth Whitening
Products").
Notably, Plaintiff does not allege that Cadbury's claim that Trident White is
clinically proven to assist in stain removal is deceptive or misleading.t Although she
'The FAC contains one vague allegation regarding Cadbury's claim that Trident
White is clinically proven to assist in stain removal. In paragraph 62 Plaintiff alleges:
"In sum, Defendants do not have the requisite evidence to support their claims that
Trident White is clinically proven to remove stains and whiten teeth.'l FAC n 62.
However, the preceding paragraphs set forth Plaintiffls theory that by stating that Trident
IVhite is clinically shown to "whiten teeth" and "remove stains," reasonable consumers
are deceived into believing that Trident White will "whiten teeth" in the way that
Plaintiff understands the concept (i.e. "intrinsic" whitening) in addition to removing
extrinsic stains. Thus, Plaintiff s entire theory of deception rests on Cadbury's making
two "conjunctive" claims regarding Trident White's "whitening" properties. Consistent
with these factual assertions, paragraph 62 is simply alleging that consumers are misled
cv-90
(06/04)
cIvIL
MINUTES - GENERAL
Page 7 of 9
o
L]-NITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES. GENERAL
CV 09-6295 AHM
(CWx)
HAYDEE STUART V. CADBURY ADAMS USA, LLC
Date
February 3,2010
Et AI
"did not experience whitened teeth (or anything close thereto) as a result
of using Trident White," FAC Í124,' Plaintiff makes clear throughout the FAC that she
understood "whitening" to mean "intrinsic stain removal." 1d..ffi 52-59. She alleges,
for example, that the injury she suffered was that she would "not have purchased Trident
White if she had known that the advertising as described herein was false-specifically
that Trident White does not affect intrinsic tooth discoloration or otherwise 'whiten
teeth' as she understood." Id. IT 21 ,67 (emphasis added). Thus, her entire theory of
deception and harm is based on her position that "whitening," as understood by
consumers, refers only to "intrinsic" whitening and not "extrinsic" whitening.
states that she
As the foregoing analysis shows, even accepting all of Plaintiff s allegations as
true, she has not stated a claimthat a reasonable consumer would be deceived or misled
by Cadbury's representation that Trident White is clinically shown to "whiten teeth."
Common sense, as well as the Trident White advertising itself precludes Plaintiff from
proceeding on the basis of the implausible (see lqbal, supra) notion that areasonable
consumer would conclude that Trident'White's 'whitening" claims refer only to
"intrinsic" whitening. Moreover, Cadbury does not even claim that Trident White is
clinically proven to assist in "intrinsic" whitening. As such, Plaintiff has not stated a
claim under the UCL, FAL, or CLRA.
Because Plaintiff cannot prevail under Rule 8 pleading standards, it is not
necessary to determine whether her fraud claims meet Rule 9(b)'s heightened pleading
by Cadbury's claims that Trident White is clinically shown to assist in both intrinsic
whitening and extrinsic stain removal-not one or the other.
Plaintiff, in her Opposition, mischaracterizes this allegation as stating that
"Trident White did not (i) remove any stains from Plaintiffs teeth, (ii) prevent stains
from occurring on Plaintiff s teeth and/or (iii) whiten her teeth in any way." Opp'n. at
4:14-16. Clearly, this is not what is stated in the FAC, and it is entirely unsupported by
'z
the factual alle
cv-g0
in the rest of the FAC.
CIVIL MINUTES - GENERAL
Page 8
of9
o
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES. GENERAL
CV 09-6295 AHM
(CWx)
Date
February 3,2010
HAYDEE STUART v. CADBURY ADAMS USA, LLC Et AI.
requrrements.
V.
CONCLUSION
For the foregoing reasons, the Court GRANTS Defendant's Motion to Dismiss.3
Standard principles of pleading practice ordinarily would entitle Plaintiff to one more try
at framing a viable complaint, and the Court will grant her that leave . . . with this
proviso: if any amended complaint fails to pass the figurative "smell fes¡"- i.e., it reeks
of silly, hair-splitting contortions that clearly make the claim implausible under
Iqbat-the Court will entertain a Rule 11 motion. (Any such amendment should be frled
by not later than February 16,2010.)
No hearing is necessary. Fed. R. Civ. P. 78;L. R. 7-15.
This Order is not intended for publication or for inclusion in the databases of
Westlaw or LEXIS.
Initials of Preparer
3
Docket No. 12
cv-90 (06/04)
CIVIL
GENERAL
Page 9 of 9
FEEDING FRENZY:
NAVIGATING THE ONSLAUGHT OF FOOD LABELING LITIGATION'
Food labeling litigation is exploding. In recent years, virtually every aspect of food
product labeling
-
from representations about "all natural" ingredients, to health benefit claims,
to the content of nutrient and calorie listings
-
has come under
fire. Food manufacturers
are
facing heightened scrutiny from government regulators, who are initiating increasing numbers of
enforcement actions. At the same time, consumer groups and plaintiffs' attorneys are filing new
food labeling lawsuits (primarily class actions) at unprecedented levels. In some jurisdictions
particularly in California
-
-
barely a day goes by without a new filing or a new ruling in a case
based upon allegedly false or misleading food marketing claims.
The Stíll-Evolving Regulatory Landscape
Food companies trying to navigate this new wave of litigation face a challenging course,
for several reasons. First, food labeling cases are being decided against
a backdrop
ofan
unsettled and still incomplete regulatory framework. Litigation often tends to focus in areas
where there is little or no statutory or regulatory guidance about what types of advertising and
marketing claims can and cannot be made. For example, there are no Food and Drug
Administration (FDA) regulations that specifically define "natural" or "all natural"
as those terms
are used in food product marketing. The FDA has consistently declined to engage in formal
rulemaking to define the terms, citing "'resource limitations and other agency priorities."'2
'
2
By Paul S, Chan,
Los Angeles
Lawyer Magazine (publication pending).
Hin v. Ariz. Beverage Co., LLC,200g,No. 08cv809 V/QH (POR), WL 44glg0, at*4 (S. D.
Cal., Feb, 4,2009). The FDA's informal guidance on the term "natural" is that it means "'nothing
(footnote continued)
Plaintiffs and consumer groups have stampeded into this regulatory void, filing a spate of
"natural" and "all natural" food labeling lawsuits involving a wide array of products ranging
from yogurt to pasta.3 These cases are based upon allegations that, notwithstanding their
"natural" or "all natural" labels, the products contain ingredients that are synthetic or not
naturally occurring in organic foods. In the absence of clear statutory or regulatory def,rnitions
for the terms, many courts have concluded that "natural" and "all natural" lawsuits are not
preempted by statute or regulations, and have allowed such actions to move forward (provided
the plaintiff can satisfy the normal requirements of pleading and proof).
New Legøl Theoríes
Second, food labeling lawsuits are increasingly based upon false advertising theories
of
liability, and are no longer confined to claims involving actual product defects or health and
safety risks to consumers. Recent lawsuits based upon foods developed through use of
genetically modified organisms (GMOs) are a prime example. The FDA does not require a
separate labeling regime for food developed using biotechnology, nor does the FDA require that
manufacturers make any special disclosures for foods that are the product of genetic
engineering.a That is so because both the FDA and the weight of scientihc studies have
artificial or synthetic has been included in, or has been added to, a food that would not normally
be expected in the food."' 58 Fed. Reg.2302,2407.
3
lnc.,973 F. Supp. 2dll20 (1.{.D. Cal. Feb. 20,2014) (yogurt);
Pelayov. Nestle USA, lnc.,989F. Supp.2d973 (C.D.Cal. Oct.25,2013) (pasta); Janneyv.
Gen. Mills,944F. Supp. 2d806 G\f.D. Cal. May 10,2013) (granolabars); Rojas v. Gen. Mills,
No. 12-cv-05099-V/HO,2013 WL 5568389 (1.{.D. Cal. Oct. 9,2013) (same); Bohac v. Gen.
Mills,No. 12-cv-05280-WHO,2014 WL 1266848 OI.D. Cal. March 26,2014) (same).
a The FDA has chosen to regulate food based upon the "objective characteristics of the food
and the intended use of the food," regardless of "the method by which fthe food] is developed."
Statement of Policy: Foods Derived From New Plant Varieties, 57 Fed. Pte1.22,984 (May 29,
See, e,g., Kane v. Chobani,
te92).
2
concluded that such foods do not pose any "different or greater safety concem than foods
developed by traditional plant breeding."s
Nevertheless, in recent years there has been a proliferation of lawsuits based upon the
inclusion of GMOs in food products. Plaintiffs in these cases do not necessarily contend that
such ingredients raise actual safety or health risks for consumers. Instead, the theory is that the
product labels touting such foods as "natural" or "all natural" are false, because the labels either
ignore or do not call out the presence of GMOs. Under this "consumer's right-to-know" theory,
whether there are safety or health risks associated is irrelevant; consumers are "harmed" because
they paid to purchase a product believing it is "all natural," when they (allegedly) would not have
paid the same (or any) price had they known the products contains GMOs. These types of food
labeling lawsuits therefore mirror traditional consumer class actions involving product purchases
based upon false or misleading advertising claims, where the alleged harm is wholly economic.
Moreover, false advertising plaintiffs are no longer confined to consumers or consumer
rights groups. In the recent POM lhnderful v. Coca-Colø decision, the United States Supreme
Court held that in cerlain circumstances, food companies themselves have standing to sue
competitor food companies for engaging in false or misleading product labeling under the
Lanham
Act. Specifically,
the Supreme Court held that a business allegedly injured by a
competitor's false or misleading advertising (including through product labeling) can sue under
the Lanham Act, even if the competitor's labels were authorizedby the FDA or otherwise
complied with the Food Drug and Cosmetics Act (FDCA). The Court effectively held that
t
57 Fed. Reg. 22,984,22,ggL The FDA has expressly declined "to make a determination ...
regarding whether and under what circumstances food products containing ingredients produced
using genetically engineered ingredients may or may not be labeled'natural"'. Skadden, Arps,
Slate, Meagher & Flom LLP, Food and Beverage Labeling and Marketing Litigation Continues
to Play Out in the Courts and Legislatures, 2014 WL 59462.
J
regulatory approval provided the floor, but not the ceiling, with respect to what can be said in
food product marketing claims.6 It is still uncertain whether this ruling will materially increase
the volume of new false labeling lawsuits. V/hat is clear is that food companies launching new
marketing campaigns must now be prepared for potential labeling litigation initiated by their
o'wn corporate competitors, not just individual consumers or consumer groups.
Changíng Consumer Expectatíons ønd The New Medíø
Finally, a growing consumer, academic and media focus on "all things food-related" has
both simplified and accelerated the process of identiÛring potential food labeling cases and
litigants. In today's increasingly health-conscious society, depending on the city or
neighborhood, the range of food consumers may include not just vegetarians but vegans, paleos,
locavores, raw foodies, and more. Increasing numbers of these conscientious consumers expect
"full disclosure," or at least something
close to precision, from their food product labels.
Meanwhile, in law schools, food law is one of the most popular new areas of legal teaching and
scholarship, with a primary focus on the need for increased regulation and the limitations of the
existing food labeling regime,T This scrutiny of food products and their labeling claims has only
been amplified by the advent of new media. There are now numerous websites and blogs
devoted to the subjects of food safety, ingredients and labeling. These new media serve as easy
and instantaneous vehicles for communication and coordination between the plaintiffs' bar,
public interest groups and consumers
cases and
6
7
-
and fertile ground for the identification of potential new
plaintifß.
POM l4ronderful LLC v. Coca-Cola Co.,
134 S. Ct. 2228 (2014).
Elaine McArdle, Thought For Food,65 Harv. L. Bull., 23,23-27 (2014) (discussing food law
and its new found importance in legal scholarship).
4
Against this backdrop, it is unlikely that the number or frequency of food labeling
lawsuits will relent in the foreseeable future. What strategies and defenses are available to
companies attempting to mitigate the risks of or defend against these lawsuits?
C h alle n g in g Imp løus íb le
Pleødíngs
The first line of defense for a company responding to a food labeling lawsuit is to
challenge the reasonableness, or the plausibility, of the theory of liability set forth in the
complaint. Food companies have had measured success attacking false labeling cases at the
pleading stage based upon failure to satisfy this plausibility standard.
Under the pleading requirements applicable to federal court complaints, plaintiffs
pursuing false or misleading food labeling claims must set forth factual allegations suff,rcient to
give rise to at least a "plausible" entitlement to relief. Such complaints must set forth "enough
facts to state a claim for relief that is plausible on its face,"8 meaning factual content suff,rcient to
allow "the court to draw [the] reasonable inference that [the] defendant is liable for [the]
misconduct alleged,"e
A number of early food labeling complaints were dismissed
because they did not set
forth
facts that supported an objectively reasonable theory of recovery. For example, courts dismissed
lawsuits alleging that Froot Loops and Cap'n Crunch Berries cereals were mislabeled because the
products did not, in fact, contain fruit or berries.l0 But most cases do not tum on whether it is
plausible to believe that "Froot Loops" contain fruit. Plaintiffs'theories of recovery have
8
e
BeU
Atlantic Corp. v. Twombly, 550 U.S, 544,570 (2008).
Ashcroftv. Iqbal,129 s. ct. t937,1249 (2009).
t0
lVerbelv. Pepsico,1nc.,No. C09-04456 S84,2010 WL2673860,at*3 (N,D. Cal.July2,
2010); Videtto v. Kellogg USl, No. 08-cv-01-324-MCE-DAD, 2009 WL 1439086 at *2 (E.D.
May 21,2009).
5
become increasingly sophisticated, and as a result, recent pleading challenges based on the
plausibility standard have generated decidedly more mixed results.
A series of decisions by California federal district courts involving "all natural" labeling
claims, all issued in late 2013 and early 2074, illustrate the significant disparities (and
inconsistency) in outcomes. In two of the cases, the courts ruled the pleadings failed to satisfy
the plausibility threshold. In Kane v. Chobani, a federal judge in the Northern District
of
California dismissed an action based upon "all natural" yogurt labeling. Plaintiff alleged this
label was misleading, because the product was artif,rcially colored with fruit and juice
concentrate. The court rejected the allegations because plaintiff failed to plausibly allege how
Chobani'sprocessingofthejuicesrenderedthem"unnatural."ll Similarly,inPelayovNestle,a
federal court in the Central District of Califomia dismissed a lawsuit based upon "all natural"
marketing claims for a pasta product, in part because the product's ingredient list clearly set forth
its ingredients, such that no reasonable consumer could be confused by use of the "all natural"
labeling on the product.r2
But in numerous other labeling cases involving very similar if not identical theories of
liability, different California federal courts rejected motions to dismiss based upon the
same
implausibility arguments. In Surzyn v. Diamond Foods Inc.,t3 a different court in the Central
District of California rejected Diamond's argument that its tortilla chips' "All Natural" labeling
would not deceive consumers because other information on the products packaging would
eliminate any customer confusion. Declining to follow Peloyo, the court found that it was not
I
I
t2
Kane v. Chobani, Inc,, 973 F. Supp. 2d Il20 (N.D. Cal. Feb. 20,2014).
Pehyo v, Nestle (JSA, Inc., No. 13-5213-JFW, 2013 V/L 5764644 x 1 (C.D. CaL Oct,25,
2013).
r3 Surzyn v. Diamond Foods, 2014WL2514320,
6
Of.D. Cal. May 28,2014).
"implausible" that consumers would be misled or confused by the "All Natural" label on the
packaging of food containing synthetic ingredients, notwithstanding that the synthetic
ingredients were disclosed on the ingredient list.ra A court in the Northern District of Califomia
also refused to dismiss three separate class actions involving the labeling of General
Mills
granola bars as 'I00yo natural," notwithstanding that they contained GMOs. The court found
that the plaintiffs had plausibly alleged that the labeling was false and misleading, because it
could lead consumers to believe the products contained only natural ingredients and not GMOs,
and therefore went beyond mere
puffery.ls And in In
Re;
Hain Celestial Seasonings Products
Consumer Litigqtion, yet another court in the Central District of California denied a motion to
dismiss a complaint based upon the " 100 percent natural" labeling of a tea product that contained
traces of pesticides, also finding that the label was not mere puffery.l6
These disparate results illustrate the limitations (and uncertainty) of pleading challenges
based upon the implausibility standard. The defense should certainly be asserted
if it
is
available. But as more and more courts find that false and misleading labeling claims state
"plausible" theories of relief, early dismissals of these cases are by no means assured.
Challenges Based on Preemption and Primary Jurisdiction
Depending on the particular advertising claim and food product at issue, defendants may
also be able to dismiss or stay false labeling lawsuits by asserting a federal preemption defense.
t4 Surzyn v. Diamond Foods, 2014WL2514320.
rs
Rojas v. Gen.
t6
In Re; Hain Celestial Seasonings
Mills, Inc.,2013 WL 5568389 *1 (N.D. Cal. Oct. 9,2013); Bohqc v. Gen.
Mills,.Inc,, No, I2-cv-05280-V/HO, 2014WL 1266848 at *5 (Ì.tr.D. Cal. March 26,2014).
Prod. Consumer Litig., No. 13-cv-01757 (C.D. Cal. Nov.
06,20t3).
7
Under the federal preemption doctrine, state laws are displaced or preempted with respect
to subjects matters governed exclusively by federal laws or regulations. In the food labeling
context, the preemption defense has largely focused on the 1990 Nutrition Labeling and
Education Act (the NLEA), which amended the Food Drug and Cosmetics Act (FDCA) and
which prohibits the "misbranding of foods."r7 The NLEA prohibits state regulations that are not
"identical" with its or the FDCA's requirements.ls
The NLEA, however, specifically regulates only certain aspects of food product labeling.
Thus, whether the preemption doctrine provides a viable defense depends entirely on the
specifics of the labeling claim alleged to be false and misleading
-
and in some cases, where on
the packaging the challenged claim is physically located.
For example, food labeling regulations distinguish between "principal display panels"
-
information like photographs, logos and general marketing terms like "all-natural" and
"wholesome" that tend to appear on the front of food packaging
-
and the nutritional labeling, or
nutrient content claims, that tend to appear on the back of food packaging.tn Ar a general matter,
the nutritional content claims that occur on the "back of the label" are more closely regulated
than information that appears on the "front of the label." Thus, whether the preemption defense
will
succeed in a particular case may depend on whether the challenged marketing statement is
considered to be a general, "front of the label"-type claim about the product (like "all natural" or
t7 21 u.s.c. g 3ol et seq.
r8 21 u.s.c. g 3a3-1(a).
re
See 2I C.F.R. $$101.1; 101.3, 101.13-.18 (front panel); td. $$ 101.2;101.4, 101.9, 101.12
(back panel).
8
"wholesome"-type marketing claims), which are less likely to be preempted20, or a "nutrient
content claim" (for example, about the specific calorie or fat content of the product), which is
more likely to be preempted.2r
The federal preemption defense may also succeed in subject areas where the FDA is
actively engaging in ongoing rule-making to define or regulate a particular product or ingredient.
'Within the first half of 201 4, for example, a number of cases targeting manufacturers' practice of
listing "evaporated cane juice" instead of sugar on their product labels were stayed or dismissed,
because the FDA was engaged in active rule-making about the term "evaporated cane juice."22
during the same time period.
However, a food labeling lawsuit will not be found to be preempted simply because it
involves a product or an ingredient that is or has been the general subject ofa federal regulation
or statute. The particular federal statute or regulation at issue must be analyzed closely to
determine whether enforcement of state law claims or regulations would be inconsistent with the
federal regulatory scheme.23
C lass C ertíJicatío
n D efens es
Because more and more food labeling cases are surviving pleading challenges, the
primary battleground in food labeling litigation today is at the class certification stage. Although
20 Garrisonv.
Whole Foods Mkt. Inc,, No. 13-cv-05222-VC,2014WL2451290 at *3 (N.D.
Cal. June 2,2014); Garrison v, Whole Foods Mkt. Cal. Inc.,l4-cv-00334 VC * I (N.D. Cal. June
24,2014).
2t
Chqcanaca v. Quaker Oats Co,,752F. Supp. 2d
I1l1 (N.D. Cal. Oct., 14,2010).
22
Reese v. Odwalla, Inc.,No. 13-CV-947 YGR,2014WL 1244940 at*2 (N.D. Cal. March
25,2014); Swearingenv. Yucatan Foods, LP,, No. C 13-3544 RS,2014 WL2115790 af *1
(N.D. Cal. May 20,2014); Gitson v. Clover Stornetta Farms, No. 13-cv-01517(EDL), WL
2638203 at * 1 (N.D. Cal. June 9,2014).
23 See, Brown v. Hain Celestial Grp,, Inc., 913 F. Supp. 2d 881
Cal. Dec. 22,2012).
Of.D.
9
of
some classes have been certified,2a food companies have still been successful in the majority
cases
in defeating class certification.2s
One of the most effective means to defeat class certification is to attack the viability of
the plaintiffs' theory of damages. A number of courts have refused to certify classes (or have
decertified classes) because plaintiffs have failed to prove a causal link between the alleged
misconduct and the alleged damages. For example, in the In Re POM Wonderful LLC Marketing
& Sales Practice Litigation, id., afederal district judge in the Central District of California
decertified a class action against POM Wonderful, the maker of pomegranate juice, based upon
the United States Supreme Court's reasoning in Comcqst Corp. v. Bahrend, which requires that
in determining whether class certification is appropriate, plaintiffs must be able to show that the
damages stem from the defendants' actions that created the legal liability.26 The
POM
llonderful court discussed the myriad factors that might affect a consumer's decision to buy
bottle ofjuice
and concluded
-
such as price, taste, nutritional information, or the effect of a television ad
a
-
it was impossible to determine whether or to what extent a particular health claim
made by POM Wonderful (which did not actually appear on the label of the product) was the
cause of the purchase. Accordingly, the Court found that plaintiffs had not established that the
claims of the class representatives would be "typical" of other class members, or that the
24
See, e,g.,Brazilv. Dole FoodCo. hnc.,935 F. Supp.2dg47 (N.D. Cal. March 25,2013);
Pevianiv. Natural Balance, [nc.,774 F. Supp.2d1066 (S.D. Cal. Feb.24,20II);\ï/erdebaughv.
Blue Diqmond Growers, No. I2-cv-02724-LHK, 2013 V/L 5487236 (N.D. Cal. Oct. 2,2013).
2s
In Re; Pom l|/onderfut LLC Mktg.and
Sales Practices Litig.,2014WL I225I84
(C.D. Cal. March 25,2014); Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013); Leyva v.
Medline Indus. Inc.,716 F. 3d 510 (9th Cir. 2013); Astiana v. Ben & Jeruy's Homemade Inc.,
No. C 10-4387 PJH,2011 WL 2111796 (N.D. Cal. May 26,2011);Calderav. J.M. Smucker Co.,
See, e.g.,
No. CV 124936-GHK, 2013 WL 6981893 (C.D. Cal. Oct. 4,2013).
26 Comcast Corp.
v. Behrend,133 S. Ct. 1426 (2013).
10
"defendant's action that created the legal liability" would be "common" to the class.
Certification was therefore not warranted under the class action requirements set forth in Rule 23
of the Federal Rules of Civil Procedure.
Class certification motions have also been defeated in cases where plaintifß are unable to
calculate damages because the consumer has received at least some benefit from the product. In
a class
action hled against the J. M. Smucker Company, based upon its labeling claims touting
its product as healthy (although it contained hydrogenated oils and corn syrup), a different
federal judge in the Central District of California denied class certification because damages
could not be accurately determined for the class.27 The Court ruled that because class members
likely received some benefits from their food purchases, they were not entitled to full refunds of
their purchase price. Moreover, because plaintifß failed to present evidence on the difference
between the true value of Smucker's products and the market price, damages could not be
accurately determined.
28
Similar reasoning was applied in the POM Wonderful case. There, the motion to
decertify the class was granted, in part, because plaintiffs could not articulate a viable period of
damages. One theory, the "full refund model," sought recovery of the full purchase price paid
for the products. However, the POM Wonderful court noted that that model did not take into
account the benefits plaintifß received from purchasing the product
thirst, and other nutritional benefits
-
even
-
such as quenching their
if it were the case that the claimed health benefit
representations were not true. Plaintiffs alternatively alleged a "price premium model" of
damages, comparing the price of POM's products to those of other refrigerated juices, and
27 Cadera
v. J.M. Smucker Co, , No, CV-4936-GHK
Apr. 15,2014).
28 Id.,2or3 wL 14774oo at *
4.
11
(VBKx),2014 WL 1477400 (C.D. Cal.
sought the difference. The court also rejected that damages model, because it determined that
unlike other markets, the market for refrigerated juices was not necessarily an "efficient" market,
meaning that price differentials between the POM products and other products were attributable
to factors other than challenged health benefit claims, and it was impossible to determine how
much,
if any, of the price premium was related to the benef,rt claims. As noted by the court,
"rather than draw any link between [POM's] actions and the price difference between the four-
juice average benchmark price and the average [POM] prices, the [Price Premium model] simply
calculates what the price difference was,"2e
Finally, courts may refuse to certify food labeling classes because the class is not readily
ascertainable. Again, the POM Wonderful decision illustrates the principle. The court noted that
there were millions of potential consumers who purchased the product at issue, but none of them
were likely to have kept records of their purchases, and there was no way to distinguish between
purchasers who bought the product based upon the challenged health claims and those who
bought the products for other reasons. Accordingly, because the class was not "ascertainable,"
the motion for decertification was granted.30
These recent decisions illustrate the considerable hurdles that still confront
plaintifß
seeking to certify classes in food labeling litigation. Food companies should focus on whether
plaintiffs have truly satisfied their requirements to articulate
a
viable damages, and identify a
literally ascertainable class, in seeking to avoid class certification.
2e In Re: Pom [4/onderíut LLC Mktg. and Sales Practices Litig.,2014WL 1225184 at*5-6.
30 Id. See also, Astianav. Ben & Jerry's Homemade, \nc.,2011 V/L 2111796.
t2
The Road Aheød
There is no indication that the surge in food labeling lawsuits will be waning any time
soon. Food companies will always have an incentive to develop aggressive and effective
marketing and advertising claims
-
because such claims move product off the shelves, And so
long as labeling regulations and statutory definitions fail to keep pace with consumers' (and food
industry competitors') expectations about what should and should not be disclosed on food
labels, food labeling law
will continue to be made through the courts. Food companies still
possess a number of potentially viable defenses to labeling lawsuits, both at the pleading stage
and in opposing class certification. Defendants have had particular success challenging
plaintiffs'theories of damages. But unless and until the courts develop a suffrcient and
consistent body of case law delineating precisely what types of food marketing claims are and
are not actionable, food companies should expect what looks to be a steady diet of food labeling
litigation.
3114942.1
13
LTNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVL MINUTES - GENERAL
(ANx)
Case No.
SACV 13-1757 AG
Title
TATIANA VON SI-OMSKI
Date
et al. v. THE
June 10,2014
I-IAIN CELESTIAL GROUP,
INC.
ANDREV/ J. GUILFORD
Present: The
Honorable
Not Present
Lisa Bred¿rhl
Deputy
Clerk
Attorneys Present f-or
Proceedings:
Court Reporter /
Plaintifß:
Recorder
Tape No.
Attomeys Present f'or Defendants:
[IN CHAMBERSI ORDER DENYING MOTION TO
DISMISS
In these consolidated putative class actions, Plaintiffs Tatiana Von Slomski and Sylvia
Trevino sue Defendant The Hain Celestial Group, Inc., alleging that Defendant falsely
markets its teas as "1000/o Natural." (Consolidated Class Action Complaint
("Complaint"), Dkt. No. 26.) Defèndant has filed a Motion to Dismiss Consolidated Class
Action Complaint ("Motion"). (Motion, Dkt. No, 27.)
After considering the parties' arguments, the Court DENIES the Motion
BACKGROUND
The fbllowing facts are taken primarily lrorn the Plaintiffs' Complaint, whose allegations
the Court accepts as true for the purposes of a motion to disrniss. See Skilstaf, Inc., v. CVS
Oaremark Corp.,669 F.3d 1005, 1014 (9th Cir.2012).
Defèndant distributes teas under the brand Celestial Seasonings, (Compl. fl 1.) Ten of
these teas-sleepytime Ilerbal Tea, Sleepytin-re Kids Goodnight Grape, Green Tea Peach
CIVI I, MÍNI,JI'IIS . GT)NEfìAt,
Page I of 12
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GBNERAL
(ANx)
Date
June 10,2014
Case No
SACV 13-1757 AG
Title
TATIANA VON SLOMSKI et al. v. TI-IE HAIN CELESTIAL. GROUP,
INC.
Blossom, Gleen Tea Raspbeny Gardens, Authentic Green Tea, Antioxidant Max Dragon
F-ruit, Green'fea Honey Lemon Ginseng, Antioxidant Max Blackberry Pomegranate,
Antioxidant Max Blood Orange, and English Breakfast Black KCr"rp-are at issue in this
lawsuit. (/d )
Defendant advertises the teas as "1000/o Natural," including by placing a"I00%o Natural
Teas" logo on the outer packaging of its teas. (ld.]n 19-21,) But, allegedly. each of the
teas "has been fbund to contain significant levels of one or more" chernical insecticides,
fungicides, and herbicides, which the Complaint relers to as "contarninants." (1d
llT 1l-12.) According to the Complaint, these pesticides are "man-made chernical[s]" that
are "not naturally occurring." (1¿i. I 1 1.)
PlaintilTs are consumers of Defendant's teas. (Id.1lT 7-8.) PlaintifTs were "willing to pay
fbr the Products because of the representations that they were 'I00o/o Natural' and would
not have purchased the Products, would not have paid for the Products, or would have
purchased alternative products in the absence of the representatiotts, or with the
knowledge that the Products contained Contaminants'" (1d.)
In their Cornplaint, PlaintifÏs allege f'our clairns: 1) California Unfàir Competition Law
("1JCL"), Cal. Ilus. & Prof. Code $ 17200 2) False Advertising Law ("IìAL"), Cal. Bus
& Prof'. Code g 17500: 3) Breach of Expless Warranty; 4) Violation of the Consumer
Legal Remedies Act ("CLRA"), Cal Civ. Code $ 1750.
PRELIMINARY MATTERS
To support their arguments, both parties request that the Court take judicial notice of
various documents.'Ihe Coul grants these requests, which are unopposed.
ctvl l, NIINLì]'ll,S
- GIIN l-ìll^
Page 2 o1'
12
l,
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVI
AG
MINUTES . GENERAL
(ANx)
Date
June I 0,2014
Case No.
SACV
Tirle
TATIANA VON SLOMSKI et al, v. TI'IE IIAIN CEI-ESTIAI. GROUP,
13-17 57
INC.
LEGAL STANDARI)
A court should grant a motion to dismiss under Federal Rule of Civil Procedure 12(bX6)
rvhen, "accepting all factual allegations in the complaint as true and construing them in
the light most favorable to the nonmoving party," a complaint fàils to state a claim upon
which relief can be granted. Skilstaf Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014
(9tlr Cir. 2012);.çes F'ed. R. Civ. P. 12(lrx6). "fD]etailed factual allegations" aren't
required, Ashcroft v. Iqbal,556 U.S. 662,678 (2009) (internal quotation marks omitted),
But there must be "suflicient allegations of underlying facts to give f'ail notice and to
enable tlie opposing party to defend itself effectively . . . [and] plausibly suggest an
entitlement to relief, such that it is not unfair to require the opposing party to be subjectecl
to the expense of discovery and continued litigation." Starr v. Bcrccr, 652 F .3d 1202, 1216
(9th Cir. 2011). A court should not accept "threadbare recitals of a cause of action's
elements, supported by mere conclusory statements," Iqbal,556 U.S' at 678.
Fraud claims must meet the heightened pleading standard of Federal Rnle of Civil
Procedure 9(b), which requires enor"rgh specificity to give a defèndant notice of the
particular misconduct to be able to defend against the charge, Bly-Magee v. California,
236F.3d 1014, 1019 (9th Cir. 2001) (internal citations omitted). To satisfy this specifìcity
requirement, "the who, what, when, where, and how" of tl-re misconduct must be alleged.
Cooper v. Pickett.,137 F-.3d 616,627 (9th Cir. 1997). Thus, fàctual allegations must
incìude "the time, place, ar-rd specific content of the false representations as well as the
identities of the parties to the misrepresentations." Stuartz v. KPMG LLP,416 F.3d 756,
764 (9th Cir. 2007). Wrere the allegations in support of a claim lail to satisly the
heightenecl pleacling requirements of l{ule 9(b), the claim is subiect to dismissal. Vess v.
Ciba-Geigy Ctorp. USA,317 F,3d 7097 , I 107 (9th Cir, 2003),
ANALYSIS
Def'endant moves to dismiss lbr lailure to state a claim, ior lack ol'standing, and under the
CMl,
N-llNLil'ES - GUNllflAL
Pagc .3 ol' 12
UNITED STATES DISTRICT COURT
CENTRAL DISTzuCT OF CALIFORNIA
CIVI
MINUTES - GENERAL
(ANx)
Date
June 10, 2014
Case No.
SACV 13-1757 AG
Title
TATIANA VON SLOMSKI et al. v. TI{E HAIN CELESTIAL GROUP,
INC.
plimary.jurisdiction doctrine. The Court considers each set of arguments in turn,
1.
FAILURE TO STATE A CLAIM
l.l
Whether Teas Contain Pesticides
Plaintifïìs' key factual allegation is that the teas contain unnatural pestìcides. Defèndant
argues that PlaintilÏi have not sulficiently alleged this fact. The Court disagrees.
Plaintiffs allege that each of the teas contains "significant levels" of ntan-trade, chernical
pesticides, and Plaintifls provicle a list with specifìc descriptions of over twenty of the
pesticides present in the teas. (Cornpl. tÌ I 1.) Plaintiffs allege that Eulofins, "a highly
regarded, accredited, and independent testing lab," published test results finding these
pesticides in the teas. (Id.) These allegations, which the Court must accept as true in
deciding a motion to dismiss. are suffìciently detailecl "to give fair notice and to enable
the opposing party to defèncl itself efIèctively . . , [and] plausibly suggest an entitlement
to relief ." Slcrm, 652 F.3d at 1216.
Defendant's argurnents to the contrary are not convincing. Defendant essentially asks the
Court to disbelieve Plaintifli' allegation that the teas contain pesticide residues, arguing
that defìciencics in the evidence underlying that allegation make the allegation
implausible. For example, Delèndant argues that "the complaint is virtually devoid of any
details about the purported testing of the teas," fàiling to answer such questions as "How
many boxes of tea were tested for each variety?" and "How were the boxes hanclled prior
to testir-rg?" (Motion at 7-8.) But at the pleading stage, Plaintiffi are only required to
allege lacts suggesting an entitlement to relief, not allege in detail all evidence supporting
those facts. The strength of this evidence is an issue for the flactfinder. Viewing the
allegations in the light most favorable to Plaintifïs, the Court concludes that it is plausible
that the teas contain pesticides.
clrv I t,
tvt
tJ'l'lls - G I)N
Page4ol'12
IN
BllitL
L]NITED STATES DISTRICT COURT
CENTRAL DISTzuCT OF CALIFORNIA
CIVIL MINUTBS - GENERAL
(ANx)
Date
June 10,2074
Case No
SACV 13-1757 AG
Title
TATIANA VON SLOMSKI et al, v. TFIE FIAIN CELESTIAI- GROUP,
INC.
Defendant also repeatedly asserts that the study was published by "an admittedly biased
short-seller that adrnits that it issued the report in hopes of clriving dowu Hain Celestial's
stock price." (See, e.g., Motion at 7.) For reasons the Court has just articulated, bias might
weaken the evidentiary value of the stucly, but it does not sufÏciently support dismissal at
the pleading stage,
Next, l)efendant argues that the Complaint alleges only that pesticide lesidues were found
on clry tea leaves, not in the blewecl tea that consumers actually drink. Btrt taking the
Complaint's allegation that dry leaves contain residues as tlue, it is reasonable to infer
that the brewed tea cclntains traces of pesticides as well. On a motion to dismiss, the Coutl
is reqtrired to make these kìnds of inferences in Plaintiffls favor . See Skilstcr/. 669 F.3d at
1014. The Court can consider any evidence of Defèndant's to the cclntlary on slìlnmary
judgment or at trial.
Finally, Defendant argues that the allegations f'ail to meet Rule 9(b)'s particularity
lequirement, assefiing that Plaintiff-s "did not conduct any independent factual
investigation." (Motion at 10.) But Rule 9(b)'s particular-ity requirement is not a test of
the indepenclence of a plaintiff's fäctual investigation. Rather, Rule 9(b) requires
allegations of the "the who, what, when, where, and how" of the misconduct. Cooper v.
Pickett,l3T F.3d 616,627 (9th Cir. 1997). Def'endant has not explained how the
allegations of the Cornplaint fail to meet that test.
The Court conclucles that, fbr the purposes of a motion to dismiss, the Cornplaint
suffìciently alleges that the teas contain pesticides.
1,2
Whether the Public Would Be Dcceivcd by "100u Natural"
Defendant argues that the UCt,, FAI-., and CLRA claims should be dismissed because
Plaintiff.s haven't plausibly alleged that a reasonable consumer would likely be deceived
by the *100yo Natural" label. The "reasonable consumer test" applies to claims brought
under UCL, þ-AL , or CLIìA. Ilill v. Iloll Int'l Corp.,128 Cal. Rptr. 3d 109, 1 16 (Cal,
Cl\/l l,
lvl
lNtj'l'lrlS - GÍl'NllllAl,
Page5ol l2
UNITED STATES DISTRICT COURT
CENTRAL DISTzuCT OF CALIFORNIA
CIVI
MINUTBS . GENERAL
(ANx)
Case No.
SACV 13-1757 AG
Title
TATIANA VON SI.OMSKI
Date
et al. v. TFIE
June 10, 2014
LIAIN CELESTIAL GROUP,
INC.
App. 201 1). The question under the reasonable consumer test is whether an advertisement
is "likely to deceive" a reasonable consumet. Lavie t¡. Procler & Gamble Co.,l05 Cal.
App, 4th 496, 508 (2003). This determination "will usually be a question of fact not
appropriate fbl decision on demurrer." Williants v. Gerber Products Co.,552I",3c1 934,
939 (9th Cir. 2008) (noting that it is "the rare situation" when dismissing these claims on
the pleadings is appropriate).
This case is not one of the lare ones where the Court can fìnd, based on the pleadings, that
the labeling is r"rnlikely to deceive a reasonable consumer. Plaintiffs allege that the teas
are labeled as "1000/o Natr;ral." (Compl. T 25.) They allege that the teas are not "l00yo
Natural" because the teas contain pesticides consisting of "man-made chemicals" that are
"not natura\." (Id. TT I 1 , 26-28.) And Plaintifïi allege that they purchased the teas
because of the "l00yo Natural" label, but would not have purchased thern if they knew
they contained unnatural pesticides. (1d. II 7-8.) T'aking these allegations as true, and
drawing all reasonable infèrences in f-avor of Plaintiff's, the Complaint adequately alleges
that the product label is likely to deceive a reasonable consumer. C./. Parker v. .1.M.
Smucker Co.,2013 WL 4516156, at *6 (N.D. Cal, Aug. 23,2013) (concluding that
whether an "All Natural" label would mislead reasonable consumers could not be
resolved on a motion to dismiss).
In arguing otherwise, Def'endant contends that Plaintifl's have not ofIèred a definition of
"natural." But it is clear that, under the allegations of the Complaint, a food product is not
"100o/o Natural" in the minds of consumers if the product contains unnatural chemicals.
The Court doesn't see wþ PlaintifÏìs need to allege a more specific definition.
Defendant also algues that it is implausible that a reasonable consumer would be misled.
Del-endant argues that unless a product is labeled "organic," reasonable consumers would
undelstand that the product may contain traces of pesticides. It rnay be that the evidence
will support that theory. But, based on the allegations, it strikes the Cotul as plausible that
tlre evidence will fàvor Plaintiffs, See \taru,652 F.3d at 1216-17 ("Rule 8(a) simply calls
for enougll fact to raise a reasonable expectation that discovery will reveal evidence to
ClVll, llllNUl'liS - GflNlìll¡\1,
Page 6
ol l2
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
(ANx)
Case No.
SACV 13-1757 AG
Title
TATIANA VON SLOMSKI
Date
et al. v. TFIE FIAIN
June 10, 2014
CELESTIAL GROUP,
INC.
slrpport the allegations." (citing Tu,ombly,5 50 U. S. aT 556) (internal qr,rotation marks
omitted).). Defendant has not shown that it is implausible that reasonable consuÍìers
would perceive "l00o/o Natural" products as pesticide-free.
1.3
Puffery
Def-endant argues that all of PlaintifTs' claims fail because the "1000/o Natural" label is
puffery. "Generalized, vague and unspecific assertions" are "mere 'puffety' upon which a
reasonable consumer coulcl not rely." Glen Holly Entertainment, Inc. v. Tektronix Inc.,
343 F.3d i000, l0l5 (9tli Cir. 2003), While "misdescriptions of specif,rc or absolute
characteristics of a product are actionable," "[a]dvertising which merely states in general
terirìs that one product is superior is not actionable." Cook, Perkiss & Liehe, Inc. v. N.
Cali/òrnia Collection Serv. Inc.,91 1 F.2d 242, 246 (9th Cir. 1990).
Based on the allegations in the Cornplaint, the Court cannot conclude that "1000/o
Natural" is puffery, Defendant argues that the phrase is puffery because it is not capable
of being proved fàlse. But under Plaintifl-s'theory, if the product contains even traces of
any man-made chemicals, then the product is not entirely natural. [f that is what
consumers understand the phrase to mean, then " 100% Natural" can be proven fàlse with
evidence of tl-rose chemicals. See Bohac v. Gen. Mills, Inc.,2014 WL 1266848,atx4
(N.D. Cal. Mar. 26,2014) (concluding, based on the allegations,Íhat a reasonable
consumer would interpret "All Natural" representations as "specific factual claims upon
which he or she could rely"). At this stage, the Court declines to hold that" l000/o Natural"
is non-actionable puffery.
1.4
Conclusion
The Court concludes that Plaintiffi have stated claims under Rules 12(bX6) and 9(b).
2.
STANDING
CIVII,
MINTJT'T]S - GfIN¡],IIAI,
Page 7
ol l2
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENBRAL
Case No.
SACV 13-1757 AG
(ANx)
Date
June 10, 2014
TATIANA VON SI.OMSKI et al. v. TIIE FIAIN CELESTIAL GROUP,
Title
INC.
l)efendant argues that Plaintifli lack standirig to pursue tlieir claims or, at the least, their
standing is limited, 'l'he Court addresses each of these arguments,
2,1
Article
III Injury Requircment
Defendant argì,ìes that Plaintiffì lack standing for failing to allege injury in fact, To satisfy
Article III's standing requiremeff, one of the things a plaintitlmust show is that the
plaintiff has suffered an "injury in fact" that is "concrete and particularized" and "actual
or imminent." Lujan v. Defenders of Wildlife,504 U.S. 555, 560-61 (1992) (internal
quotation marks omitted). "At the pleading stage, general factual allegations of injury
resulting fiom the defendant's conduct may suffìce, fbr on a motion to dismiss we
presume that general allegations embrace those specif,rc facts that are necessaly to support
the claim," Id. at 561 (internal quotation marks and alteration omitted). This standard
front Lujan rather than the general standards for assessing a failure to state a claim under
Tv,omhly and lqbal, apply to determining standing at the pleading stage. Moya v. Centex
Corp., 658 F.3d 1060, 1068 (9th Cir. 201 l) ("Twombly and Iqbal are ill-suited to
application in the constitutional standing context . . . .").
Here, Plaintiflì have alleged economic injury, which is sufficient fbl constitutional
star-rding. See Maya v. Clentex Corp., 658 F.3d 1060, 1069 (9th Cir. 2011) (holding that
allegations that plaintiffi paid more for their homes than the homes were worth because
defer-rdants failed to make disclosures required by law were sufficient for standing).
IllaintifÏs have alleged that they were "willing to pay f'or the Produots because of the
representations that they were '100o/o Natural' and would not have purchased the
Prclducts, would not have paid fbr the Products, or would have purchased altemative
products in the absence of the representations, or r,vith the knowledge that the Ploducts
contained Contaminants," (Compl. I'll 7-8.) 'l'hese allegations are enough to support
standing under a theory of economic injury. See Jou v. Kimberly-Clark Corp., 2013 V/L
6491158, at *3 (N.D. Cal. Dec. 70,2013) (concluding that allegations that plaintifÏs paid
a premium fol a product because of misrepresentations was sufficient f-or economic
iniury)
ClVl l,
tYtl I
Nt
l'l'fls - GnN tlll,\1,
Page 8
of
12
UNITED STATES DISTRICT COURT
CE,NTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
(ANx)
Date
Jure
Case No.
SACV 13-1757 AG
Title
TATIANA VON SLOMSKI et al. v. TIIE FIAIN CELESTIAL GROUP,
10, 2014
INC.
In arguing that injury is lacking, Defènclant relies on Wallace v. ConAgra Þ-oods, Inc.,
747 F.3d 1025 (8th Cir,2014). But that case is disthguishable. In Wallace, plaintiffs
alleged that they paid a premium for hot dogs labeled as kosher, but that Defèndant sold
some packages of hot dogs that were not kosher, Id. at 1030. The Court held that it was
speculative whether the plaintifTìs pulchasecl any non-koshel hot dogs, as the plaintiffi did
not allege that "all or even most" of the packages were not kosher. Id.Ifere, however,
Plaintifls broadly allege that the teas contain pesticides, rather than merely alleging that
some of the packages contain pesticides. (Søe Cornpl. I l.)
In assessing standing on a motion to dismiss, the Court must "presume that fthese]
general allegations embrace those specific facts that ale necessary to support the claim."
Lujan,504 U.S, aT 56L Plaintifïs' allegations are sufficient for standing.
2,2
Other Teas
PlaintitTs seek to replesent a class of'consuÍrers who purchased ten diffèrent types of
Defendant's teas, which all allegedly contain the same "100o/o Natural" label and all
allegedly contain pesticides, (Compl. 1H l-3.) Defendant argues that Plaintifïs only have
star-rding to bling claims fbr the same teas that Plaintiffs purchased-Sleepytime Herbal
Tea and Green Tea-and that Plaintifß lack standing to challenge the othel eight valieties
of tea. Plaintiffs respond that the issue is one of class certification, not one of standing.
Courts have gone both ways on this issue. For example, in Mle.ineclqt v. Olympus Imaging
America Inc., fhe court helcl that a named plaintifT did not have standing to sue fbr defècts
in the Stylus 850 camera, even though the Stylus 850 had the same underlying defect as
the Stylus 1030 camera that plaintifïdid own. 2011 WL 1497096, at *4 (E.D. Cal. 2011).
ln Donc¡hue v. Apple, Inc.,the court disagreed with the analysis in Mle.jnecl9,, concluding
instead that whether plaintifTs could represent purchasers of difièrent iPhone models with
the same defect was a class certiflrcation question. 871 F. Supp. 2d913,922 (N.D. Cal.
20r2): see also Constance Sim,v v. Kia Motors'America, Inc,,SACY 13-1791 AG
CIVII, MINUl'¡]S - GÍ)NEIIAI,
Page 9 ol' 12
LINITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES . GENERAL
(ANx)
Date
Case No
SACV 13-1757 AG
Title
TATIANA VON SLOMSKI et al. v. TFIE I-lAlN CELESTIAI, GROUP,
June 10, 2014
INC.
(DFMx), Dkt. No. 48,
aI"
7-8 (C.D. Cal. filed Mar. 31,2014).
In the circumstances of this case, the issue stril<es the Court as one better dealt with at the
class certificatior-r stage. It may be that cliffèrences between the tea varieties and their
labels are material and substantial enough that Plaintiffì cannot represent consumers of all
of thenr. But these are questions of adequ acy, typicality, or predclminance of common
issues, issues better resolved at the class certification stage, See Donohue,STl F. Supp. at
922.
'Ihe Court declines to lirnit PlaintifÍ-s' class allegations at this tirne.
2.3
Representations onDefendant's'Website
The Complaint alleges that, in addition to the labels on the teas, Defendant's website also
Íbatures representations that the teas are natural. (Compl. n22.) Delèndant argues that
Plaintiffi "lack standing to pursue claims related to statements on Hain Celestial's
website because they do not claim to have lelied upon , . . these statements." (Motion at
13.) The Court agrees that Plaintiffì haven't alleged that they relied on the representations
on the website. But that doesn't result in the dismissal of any claims. Plaintiffs adequately
allege reliance on the representations on the product label and have standing to pursue
their clairns based on those representations.
3.
PRIMARY JURISDICTION DOCTRINE
Defendant argues that, in the alternative, the Court should dismiss the case under the
"primary jurisdiction doctrine" to permit the FDA to consider Plaintiffs' claims. Plaintiffs
oppose referring their clairns to the FDA under this doctrine.
"The primary jurisdiction doctrine 'is a prr"rdential doctrine urder which courts may,
under appropriate circumstances, determine that the initial decisionmaking lesponsibility
ctvil,
tv{rNuIll,s - G0Nllfl^1,
Page
l0oll2
UNITED STATES DISTRICT COURT
CENTRAL DISTzuCT OF CALIFORNIA
CIVIL MINUTES - GENERAL
(ANx)
Date
Case No.
SACV 13-1757 AG
Title
TATIANA VON SLOMSKI et al. v. TIIE I-IAIN CELESTIAI. GROUP,
June 10,2014
INC.
should be perforrned by the relevant agency rather than the courts."' Davel Comntc'ns,
Inc., tt. Qwesl Corp.,460 þ-,3d I075,1086 (9th Cir. 2006) (quoting Syntek Semiconductor
Cc¡. v. Microchip Tech. (nc,,307 F.3d 775,780 (9th Cir. 2002)). "The doctrine is
applicable whenever the enfbrcement of a claim subject to a specifìc regulatory scheme
requires resolution of issues that are 'within the special competence of an administrative
body." Id. (inferrnl quotations omìtted). If a district court determines that the doctline
applies, it "refers" the issue to the relevant agency, which "means that the court either
stays proceedings or dismisses the oase without prejudice, so that the parties may seek an
adnrinistrative ruling," Cl.arkv. Time Warner Cahle,523 F.3d I ll0, ll l5 (9th Cir. 2008),
Under the circumstances of these case, the Court declines to dismiss the case under the
primary jurisdiction doctrine. On January 6,2014, the FDA declined several refenals
from othel district courts considering sirnilar issues. (Seø fDA Letter, Dkt. No. 3l Ex. l.)
In those cases, the distlict courts were considering whether labels like "Natural" and
"l00yo Natural" were misleading when the products contained coln glown fiom
genetically modified seeds. (Id. at 1.) The agency noted that it had competing pliorities,
and that "even if [it] were to ernbark on a public plocess to define 'natural' in the context
of f'ood labeling, there is no assurance that [it] would revoke, amend, or add to the current
policy, or develop any defìnition at all." (Id, at 2,) Given the FDA's lack of interest in
providing further guidance on the use of the woLd "natural" in food labeling. staying or
disnrissing the case to permit the FDA to so would likely be futile. Janney v. Mills,944 F.
Supp, 2d 806,815 (N.D. Cal. 2013) (declining to apply the plimary.julisdiction doctrine
because tlie FDA has "repeatedly declinfed] to promulgate regulations governing the use
of 'natural' as it applies to food products," so staying or dismissing the case to permit
FDA action would "likely prove futile").
The Court DENIE,S the request to dismiss the case under the primary jurisdiction
doctrine.
DISPOSITION
CIVII, NIINTJ]'8S - GTINI]RAI,
Pagellofl2
LINITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVI
MINUTES . GENERAL
(ANx)
Date
Case No.
SACV l3-I757 AG
Title
TATIANA VON SLOMSKI et al. v. THE IIAIN CELESTIAL GROUP,
June 10, 2014
INC.
The Court DENIES the Motion to Dismiss. The Court reaches this results after reviewing
all arguments in the parties' papers. Any arguments not specifically addressed were either
unpersuasive, not adequately developed, or not necessary to reach given the Court's
holdings.
0
Initials of
Preparer
CIVII- MINI,I'I'ES - GIìNìITIAI,
Page
lJ of
I
2
lmb
Case5:l-2-cv-O1831-LHK DocumentL42 Filed05/30/1-4 Pagel- of 36
I
2
a
J
4
5
6
7
UN II'Þ]D S1'A1'ES D tS'I'RIC-[' COU
8
9
NORTHERN DISl'RIC'f OI.' CAI,IF-ORN IA
l0
SAN JOSE DIVISION
(!
'E
:.oL
ll
(J \J
t2
CI-lAD IIRAZIL, inclividually and on behalf of
all others sirnilarly situatecl,
-o
ü),
l3
t4
,t) À
c)_
Ðo
ADE
Ë
!z-
É
Fì
)
)
)
Plaintif[
(L
¿Jv
R'I
)
V,
)
)
)
DOLE PACKACED FOODS, LLC,
15
Clase
No.: l2-CV-0 I 83 I -L.t lK
ORDITR GRANTING IN
PARI'ANI)
DENYING IN PART BRAZIL'S
MOTION FOR CLASS
CERTIFICATION
)
)
Defendant.
)
)
l6
(.)
-.C
o
tJ-
17
Bettrre the Court is PlaintifTChad Brazil's ("Brazil") Motion fbl Class Certifìcation. ECl"
l8
No.96 ("Mot."). Dole Packaged Foocls, LLC's ("Dole") opposes the Motion, ECF No.
l9
("Opp."), and Brazil repliecl,
tr,ClF
No.
ll7
104-4
("Reply"). Ilaving considered the subuissions of the
20
paltics. the relevant law, the record in this case, and the arguments atthe May29,2014 hearing. the
2l
Court hereby GRANI'S lN PAR'| and DENllls lN PAR'f fJrazil's Motion fbr Class Certifìcation.l
22
23
24
25
26
27
28
| 'l'he
Court also GRAN'l'S the parlies'respective motions to seal..Se¿ ECF Nos. 104 (Dole's
Adn-rinistrative Motion to Seal its Opposition to Motìon for Class Certification), 116 (Brazil's
Administrative Motion to Seal its Reply in Support of its Motion for Class Cerlification). The
sealing requests are narrowly tailored to confidential business information, and are thus sealable
an<l Kctntokane v. City & Countlt o./'Honolulu, 447 F .3d I172, l17B
(9thCir.2006).,seealsoPhillipsexrel.Estate.sq/'ßyrdv.Gen.MotorsCorp.,307F.3d 1206.
l2l0-ll(9thCir.2002)(recluiringa"particularizecl showing,"sr.tchthat"specificprejudiceor
lrarm will result" if the information is disclosed);Beckntern Indus., Inc. t,. Int'l Ins. Co.,966F.2cl
470.476 (9th Cir'. 1992) ("Broad allegations of harnr, unsubstantiated by specitìc exanrples of
arliculated reasoning" will not su1lìce).
under Civ. L. R. 79-5
I
Case
No.: l2-CV-0
183
l-LtlK
ORDER GRANTING IN PART AND DENYING IN PART PI,AINTIF'F'S MOTION FOR CI,ASS
CERTIFICAl'ION
Case5:12-cv-01831--LHK Documentl-42 Filed05/30/14 Page2 of 36
I
I.
BACKGROUND
2
A.
J
Defèndants are "leading producers of retailf'ood products" who selltheir products "through
Factual Background
4
grocery and other retail stores throughout the United States." hlCl'- No. 60, Second Amended
5
Complaint("SAC")fl
6
corporation with its principalplace of business in Westlake Village, California. SAC
7
Brazil alleges that "[alltof the misconduct alleged fin the SACI was contrived irr, implemented in,
8
ancl has a shared nexus with Califìrrnia." SAC
9
aboutthe nutritionalcontentof f-ood and seeksto maintain a healthy diet." SACTT 15, 193. From
18. Def.endant Dole Packaged F'oods,
fl
l.l.C,
is a California limited
liability
TI l6-17'
19. Brazil is a Calif'ornia consumer who "cares
l0
April 2008 to the present, Brazil has spent over $25.00 on Defendant's fbod prodtlcts, which
il
contends are "misbrandecl" in violation of fèderal and state law. SAC
Òu
L
l2
alleges that he purchased the following eight fbod prodLrcts:
cJv
l3
Signature Blends-Mixed Belries (12 oz. Bag); (2) Dole Frozen Wildly Nutritiotrs Signature
14
Blends-Mixed Fruit (l2oz. bag); (3) Dole Frozen Blueberries (l2oz. bag); (a) Dole Frozen
ì: c)
C/D E
t5
Bl¡eberries (3 oz. plastic cups); (5) Dole Mixed Irruit in 100% FrLrit Jrrice (4 oz. cups); (6) Dole
o;
l6
Fruit Smoothie Shakers-strawberry Banana (4 oz); (7) Dole Mixed Fruit in Chen'y Gel (4.3 oz.
l7
plastic cups); (8) Dole Tropical lrruit in Light Syrup
l8
\2.Brazil
19
alleges claims based on thirty additional products that Brazil did not purchase, bttt which are,
20
Bra2il claims, substantially similar to those that he did, in that they
2l
representations . . . as the Purchased Products and (ii) violate the sanre regttlations of the Shernran
22
froodDrug&Cosr¡etict,aw,Californial{ealth&Saf'ctyCode$
23
Brazil refers to this group of products as the "substantially Similar Products." SAC
.s
È-o!
ê(g
È
(_)
û,
,âÀ
ê)-
Ëa)
'-=
&
(l)
TI5,
he
193. Specifically, Brazil
Dole Frozetr Wildly Nutritious
Passion Frtrit Juice (15.25 oz. can). SAC
L
o
t!
refers to these products collectively as the "Purchased Products."
"(i)
Id.The SAC also
make the same label
109875, elset1."
SACIT3-4.
I3.
24
Brazjlalleges that Defèndants makc llurneì'oLls representations concorning theil products on
25
the products' labels that are unlawfi¡1. as well as fàlse and misleading, under fèderal ancl Calif-ol'nia
26
law. SAC
27
are "all natural," SAC
28
llf
8-14. Specifically, Brazil challenges Defèndants' claims that certain of their products
I
30 (identifying which of the Purchased Products make AllNatural
2
-Ll-lK
ORDER GRANTING IN PART AND DENYING IN PART PI,AINTIFF'S MOTION FOR CI,ASS
CERl'If.'ICATION
Case
No,: l2-CV-0
I 83 I
Case5:12-cv-01-831--LHK Documentl-42 Filed05/30/1-4 Page3 of 36
:-o!
make
All Natural Claims).
Clairns);
2
According to Ilrazil, regulations issued by the I'-ood and Drug Adrlinistlation (FDA) dictate that
3
l)efèndants may not claim that a product is "all natural," if it contains "unnatural ingredients such
4
as added
5
(setting forth the circumstances undcrivhich added colors and artitìcial flavors must be disclosed
6
on apackage's label). Detèndants'products are mislabeled, Brazil alleges, beoausethey contain
7
ingreclients that preclude the use ofthe term "natural." SAC
8
Frozen Wildly NutritioL¡s Signature
9
Fruit' even
l0
.s
tl20l (identifying which of the Substantially Sirnilar Products
I
color, [or] synthetic and artificial substances." SAC
l3l; see al,so 2l C.F.R. $ l0 L22
\37-39
Blends-Mixed Fruit unlawfully
thoLrgh this product contains the
see also
fl
125 (label on Dole
"uses the phrase
'All
Natural
following artifìcial ingredients: ascorbic acid, citric
acid. malic acid and added flavors").
ll
Brazil now seeks class certitìcation as to only ten products asserted in the SAC (referred to
(l) Tropical Fruit
(can), (2) Mixed FrLrit (cup), (3) Diced
^cd
12
herein as the "identifìed products"):
!! q,
e)
-O
13
Peaches, (4) Diced Apples, (5) Diced Pears, (6) Mandarin Oranges, (7) Pineapple Tidbits, (8) Red
t4
Grapefruit Sunrise, (9)'fropìcal Fluit (cup), (10) Mixed Fruit (bag). Blazilcontends that allten of
15
these products contain the label statement
t6
because all ten products contain both ascorbic acid (commonly knowll as
t7
acid, allegedly synthetic ingredients.
l8
B. Procedural Background
19
Brazil filecl an Original Complaint against DeÍèndants on April 11,2012. ECF No. l.
ú),
râ L)
c)_
ii
(nio.¡
E()
o
l!
"AllNatural Fruit," which Brazil alleges is rlisleading
Vitarlin C) and citric
20
Defendants liled a Motion to Dismiss on July 2,2012. ECF No. 16. Rather than responding to
2l
Defenclants' Motion to Dismiss. Brazil filed a Þ-irst Amended Complaint on July 23,2012. ECF
22
No.25.'l'he Courtthen denied Defbndants'Motion to Dismiss the OriginalComplaint
23
ECF No. 28.
as
lroot.
On August 13.2012, l)efendants filed a Motion to Dismiss the F'irst Amended Complaint
24
25
or, in the Alternative, Motion to Strike, ECF No. 29, r,vhich the Court glanted in part ancl denied in
26
part on March 25,2013,
27
filed the SAC on April 12. 20 I 3. ECF No. 60. ìn response to the SAC, Defendants fìled a Motion
28
llcF No.59.'l'he Court granted
leave to amend, and, accordingly, Brazil
3
No.: l2-CV-0 I 83 l-Ll IK
ORDER CRANTING IN PART AND DENYING IN PART PI,AINTìFF'S MOTION FOR CI,ASS
Case
CEIì'f IF'ICA'TION
Case5:12-cv-01-831--LHK Docunrentl-42 Filed05/30/14 Page4 of 36
1
to Dismiss and Motion to Strike on April 29,2013. ECF No.62.'fhe Court granted in part and
2
'l'he parties also
denied in part Dole's Motion to l)ismiss the SAC on Septemb er 23,201 3.
3
stipulated to the dismissalof the Dole l'-rozen Blueberries (3 oz. plastic ctrps) product and all
4
Smoothìe Shakers products (Mixed llerry, Peach Mango, Strarvberry, or Strawbel'ty fìanana
5
f'lavors) after
6
ECF No, 88. In addition, the stipLrlation dismissed Defendant Dole Food Company. Ino. fiom the
7
case.Id.Brazil fileclthe instant motion fbr class certification on January 31,2014, ECF No. 96
8
("Mot."), Dole fìled its opposition on March 6,2014, ECF No. 104-4 ("Opp'n"), and Brazil filecl
9
reply on March 27,2014, ECF No. I l7 ("Reply"). Dole also filed separate motions to strike the
l0
.E
Ê-oL
llraziltestified at his deposition that he had never purchased any of those products'
Declarations of Julie Caswell arrd Edward Scarbrough. ECF Nos. I I
II.
il
a
l-l n.2
LEGAL STANDARD
Federal Rute of
Civil
Procedure 23, which governs class certifìcation, has tu,o sets
of
^c6
OU
L
l2
¡()
l3
clistinct requirements that Plaintifß ntust meet before the Court may certily a class. Plaintiffì rnust
t4
meet
(JU
U)'
ØÀ
o_
(nsr
ô):
Ð2,
'-trc)
-.-
allof the requirements of Rule 23(a) and rnust satisly at least
one of the prongs of Rule 23(b).
Under Rule 23(a), the Court may certify a class only where "(1) the class is so llumerous
l5
16
that joindel of all n-rembers is impracticable; (2) there are questions of law or fact common to the
17
class; (3) the claims or defenses of the representative parties are typical of the claims or defenses ol'
IB
the class; and (4) the representative parties
l9
class." Fed. R. Civ. P. 23(a). Courts referto these four requirements, which must be satisfied to
20
maintain a class action, as "uumerosity, commonality. typicality and adeqttacy of representation,"
2l
Mazzatt. Am. Hondo Motor Co,,666 F.3d 581,588 (9th Cir. 2012).l"ufther, courts have inrplied an
22
additional requirement under Rule 23(a): that the class to be certified be ascertainable. See Mttrcu,ç
23
tt.
24
Corp.,274 F.R.D.666,671-72 (N.D. Cal. 201 l),
L
o
lJ-
will fairly
and adequately protect the inlelests ol'the
IIMI4/ oJ'North Anterica, LLC, 687 1".3d 583, 592-93 (3d Cir. 2012); Hewera v. LCS þ'in. Servs.
25
26
2
27
28
The court does not rely in this order on the declarations of Julie Caswell or Edr,vard Scarbrough,
DENIED AS MOOT. ^S¿e ECF No. I I I (Motion
to Strike Caswell Decl.); Dkt. No. I l2 (Motion to Strike Scarbrotrgl, Decl.)'
so Dole's motions to stiil(e those deolarations are
Case
No.: l2-CV-0
I 83 I
-Llll(
ORDER GRANTING IN PART AND DENYINC IN PART PLAINTIFF'S MOTION FOR CI-ASS
CER'III.lCA'IION
CaseS:12-cv-01-831-LHK Docunrentl42 Filed05/30/L4 Page5 of 36
In addition to meeting the requirernents of Rule 23(a), the Court must also find that
I
'=
AftI
ù L(-)
proof'one of the three subsections of Rule 23(b).
2
Ptaintitf-s have satisfied "through evidentiary
3
C)ontc:ast
4
class when Plaintifl's make a showing that there ivould be a risk of substantial prejudice or
5
inconsistent adjudications if there wele separate adjudications. F'ed. R. Civ. P, 23(bXl). The Court
6
can certify a Rule 23(b)(2) class if "the party opposing the class has acted or refused to act on
7
grounds that apply generally to the class, so that fìnal injunctive relief or corresponding declaratory
I
relief is appropriate respecting the class
9
can certify a Rule 23(bX3) class if the Court f'ìncls that "questions of law or fbct colrmon to class
Corp. v. Behrencl, 133 S. Ct. 1426, 1432 (2013), 'I'he Court aan certify a Rule 23(bXl)
as a
whole." Fed. R. Civ. P. 23(b)(2). Finally, the Court
r0
members preclonrinate over any questions atTecting only indiviclual members, and that a class
l1
action is superior to other available methods fbr fairly and eft-rciently ad.iLrdicating the
t2
controversy." Fed. R. Civ, P. 23(bX3) (ernphasis added).
"[A.l court's class-certification analysis must be 'rigorous' and may 'entail some overlap
13
!.=
tt) ,
l4
with the merits of the plaintills underlying claim."' Amgen Inc. v, Conn. ReÍ. Plans andTrust
l5
Fund.s,
t6
2551 (2011)); sec olso Mazza.666 F.3d at 588 ("'Before celtifying a class, the trial couft must
17
conduct a'rigorous analysis' to determine rvhether the party seeking ceftification has met the
l8
prerequisites of,Rule 23."'(quotingZin,sery. Acct(fix Research In,sÍ., [nc..253 F.3d I180, I186,
19
amended by 273 F.3d 1266
20
engage in fi'ee-ranging merits iriquilies at the certification stage,"
2t
"Merits questions may be consiclered to the extent-but ouly to the extent-that they are relevant
22
to determining whether the Rule 23 plerequisites f-or class certifìcation are satisfied." Icl. at 1195.
23
Within the fiamervork of Rule 23, the Court ultimately has broad discretion over whether to certif
24
a class.
Øl)
o_
ìi o-¡
U)EF
,2,
qc)
)È
tJ-
25
13
3 S. Ct. 1 I 84. 1194 (2013) (quoting Wal-Mart Store.s', Inc. v. Dukes,
13
I
S. Ct. 2541,
(9ú Cir. 2001)). Neverlheless, "Rule 23 grants courts no license to
Amgen,l33
S. Ct.
at 1194-95.
Zinser,253 F'.3d at 1 186.
III.
DISCUSSION
26
lìaving ori_einall-v alleged clainrs rvith respectto 38 proclucts and T label statetrents itl thc
27
SAC, Urazil norv seeks class celtitìcatiou onl¡, as to l0 products and only the "All Natural Ëruit"
28
5
Case No.: l2-CV-0 t83 1-LI ll<
ORDER GRANTING IN PART AND DENYING IN PART PI,AINTIFF'S MOTION FOR CI,ASS
CERTII.-ICATION
Case5:l-2-cv-01831-LHK Documentl-42 Filed05/30i
,=
þ-o
â(t
ULJ
CJU
rc)
U)'
o)À
O_
c.¡
ìi
(hE
?o
t2a
tr()
-_c
L
o
ll.
14
Page6 of 36
l4;Mot.ati:9-l2.Doleclaimsthattlrazil hasabanclotledhisclainsas
I
label sratemcnt.SACIll4,
2
to the other pr.oclucts ancl label statenrents iclentifìccl in the SAC f'ol rvhich Brazìlcloes not ulove f'or
a
-)
class
4
respon{ to Do[e's request to clismiss thcsc clainls rvith ¡rrejtrdice. F]razilcoulcl have tnoved to
5
c.er.tify a broacler class that includes atl thc Dole prodlrcts and labe I statetuertts identified in the
6
SAC, but chose nclt to. The CoLrrt therefbre fìncls that Brazil has abandoned the clailrs fòr n'hich he
7
clicl not seek c,lass certifìc,ation. See,Ienkins't:.
8
Cir.2005) (plaintifïabanclonecltrvo cl¿rims
9
rrrotion fbr
ce
rtifìcation. Dole thus asks thc Court to dìsmiss these claims i,vith prejudice' llrazil does not
su
('outtl),of'Riverside,398 tl.3cl 1093. 1095 n.4 (9th
b-v not
laising thelll in oppositiolr to the Count,v''s
tntlrary .i Lrdgrnerrt).
l0
Moreover. Brazil previously askecl the Cclurt to sevel'the case. a rec¡ttest the Cottl't denied
ll
on September26,20l3. EtlF No.84 at 5:3-7. Dismissal rvithoLrt prejuclice as aclvocated by Brazil
l2
rv¡¡lcl ef'tbctively nrootthe Court's plevious denial of Brazil's rec¡uestto sever the case. Ilthe
l3
Courl clismissecl rvithout pLejuclice. Brazilcoutd tile artotltet'case alleging the clisrnìssecl causes
t4
action. Thel'el'ore. the Cloult disr¡isses alIclaims l'or which Brazildoes ltot seeli class cerlilÌcaLion
l5
with prejuclice..le.nkitt,s, 398 F.3d at 1095 n.4: see ctl,to tr[cCctt'lhy v. Klcintlie.rtst.lll Í:.2d 1406,
l6
l4l2(D.Ct.Clir, l9B4)(holclingthat"lflundarnental 1àinress,asu,ell astheordellyadmittistl'a1ion
t7
ol'juslice requiles that clelèndants haied into cor.u't not remain indefìnitel¡' uncertain
18
beclrock litigation lact ol'1he number of indivicluals or parties to whom they may ullimately be held
19
liable fbr n.ìo¡ey clamages" and that Rule 23(c)(l) "fosterfs] lhe ìnterests ol'jrrclicial el'fìcieucy, as
20
well as the ìntel.ests of'the pallieS, b¡r s11sc,r-,.aging courts to proceed to the mel'its o1'a c.otttrovel's,\/
2l
as soon as pt'acticablc").
¿rs
o1'
lo the
Dole attacl<s fJrazil's ability to satisfy several of the clements required f'or class
22
¿-)
certification. Consequently, the Court will address each element lecluired fbr class certification in
24
turn.
25
A. Ascertainability
26
"As
27
a threshold matter, and apart
from the explicit requirements of Rule 23(a), the party
seeking class certification rxust demonstrate that an identifìable and ascertaitlable class exists."
28
6
No.: l2-CV-0 t83 l-Ll ll(
ORDER GRANTING IN PART AND DENYING IN PAR'| PI,AIN'IIFF''S MOTION FOR CLASS
CERl'IF ICA'I'ION
Case
Case5:12-cv-O1-831--LHK Documentl-42 Filed05/30/14 PageT of 36
No. 12-2907,2014 WL,580696 (N.D. Cal. Feb.
I
sethavani,sh v. ZonePer/ëct Nuftition co.,
2
2014). A class is ascertainable if the class is def,rned with "objective criteria" and
3
"administratively feasible to determine whether a particular individual is a member of the class."
4
See Wolphv. Acer Anterica Ctrtrp., No.09-1314,2012 Wl.993531, at
5
2012) (certitying a class where "the identity ancl contact inf-ormation f'or a significant portion
6
these individLlals can be obtained from the warranty registration infbrmation and through Acer's
7
custorner service databases");see also Iloßtetterv. Chase Í{onte Finance, ZZC, No. 10-01313,
8
20lI WL 1225900,af *14 (N.D.
I
recorcls should be suffìcient to determine the class metnbership status of any given inclividual.");
Cal. Mar.3l,20l
l) (cerlifying
*l-2
if it
13,
is
(N.D. Cal.Mar.23,
of
class where "defendants' business
l0
Xavier v. Philip Morri.s USA htc.,787 F. Supp. 2d 1075, 1089 (N.D. Cal.201l ) (denying the
lt
ascertainability of a class that srnoked cigarettes for "at least twenty years"); TieÍst,vorÍhv. Sears,
ù9
Acü
l2
Roebuck& Co.,No.09-288,2013 WL 1303100, at *3-4 (N.D. Cal. Mar.28,2013) (clenying
c)e
l3
certification where "asceltaining class membership would require unmanageable inclividualized
l4
inquiry").
(É
.E
:.o!
-()
taL
ØÀ
o_
ì: E
(.,
.ID
F
Ê()
Brazilhas precisely defined the class based on objective criteria: purchase of the iclentilÌed
l5
l6
Dole fi'uit products within the class period. The class definition "simply identifies purchaset's of
t7
Defendant's products that included the allegeclly material misrepresentations." A,sÍictnav, Kashi
l8
Co..29l F.R.D. 493,500 (S.D. Cal. 2013) (finding a class of customers who purchased Kashi
l9
products labeled as containing "Nothing
20
rejecting algument that because "Defenclant does not have records of consumer purchases, and
2t
potentialclass urembers will likely lack ploof of their purchases, . . , the Couft will have no
22
feasible rnechanisnr f'or identifying class nrembers"). Likewise, "[b]ecause the alleged
23
misrepresentations appeared on the actual packages of the products purchased, there is no concet'n
24
that the class includes individuals who were not exposed to the nrisrepresentation ."
25
Circuit, "this is enough to satisfy Rule 23(a)'s irnplied ascertainability requirement." Forcellali
26
H),land':s,1nc., No. 12-1983,2014 WL 1410264, at *5 (C.D. Cal. Apr. 9,2014) (certifl,ing class
27
consllÍìers who pr"rrchased "Defèndants' children's colcl or flu ploducts within a prescribed time
L
o
l!
28
Artificial" during the class period to be ascertainable
7
No.: l2-CV-0 I 83 l-Lt lK
ORDEIì GRANTINC IN PART AND DENYING TN PART PLAINTIFF''S MOTION FOR CLASS
Case
CERT 1T.ICA]'ION
Id,ln
and
the Ninth
r,.
of
case5:l_2-cv-O1831-LHK Documentl-42 Filed05/30/1-4 PageS of 36
1
*7-9 (C'D'
frame"); see al;;o McCraty v. The Elctfions Co., LLC, No. l3-242 ,2014 WL 1779243, at
2
Cal. Jan. l3,2Ol4) (class asceltainable where "the class defìnition clearly define[d]the
3
characteristics of a class member by providing a description of the allegedly ofïe nding prodtrct and
4
the eligible datcs of purchase"); Gttido v. L'Oreal, USA, Inc.,
5
* I 8 (C.D. Cal. July I , 20
6
the class [was] whether a cortsurner purohased a product after a partioular clate").
No. I I -1067,2013 WL 3353857'
at
l3) (f,rnding class asceftainable where "the requirement for rnernbelship in
Dole makes two arguments that the proposed class is not asceftailrable. First, Dole argues
7
allof Dole's
ingredierit sLrppliers use only naturalprooesses to obtairl ascorbic aoid and citric
8
that
9
acid. The parties agree that there are tlvo ways to make ascorbic
¿tcicl and
citric acid: chemical
l0
synthesisandtènnentation.ECFNo. 104-lS,MontvilleDecl.flfÌ5,9.BecauseDole'slabelsdonot
il
iclentify which method was used to create the ascorbic acid and citric aoid in its proclucts, Dole
(J\J
L
t2
contends that ascertainability is lacking,
cJe
r()
u)t
l3
þ.oL
,tÀ
14
made using two clifferent processes. Rather, it is cleat lì'om Dole's olvtt evicletlce that Dole uses
15
si¡rilal processes to produce allof its ascorbic acid and citric
l6
President of Quality
17
the citric ancl ascorbic acid used by Dole is macle in a similar way." ECF No. 104-13, Farag Decl.
l8
tl I l. Moreover. Dole submits ceftifications frorn two of Dole's suppliers stating that they
l9
f-ermentation to produce their ascorbic and
20
Ex. A-8. Dole also submits a certification from a third supplier, wliich states in full: "We hereby
2t
certify that our product citric acid anhyclrous is natural." ECl" No. 104- 16. While this thircl
22
certificatioll is adnrittedly ambiguous, [)ole's own explanation that all of the citric and ascorbic
23
acid used by Dole is made in a similar way is suflicient to clefoat Dole's ascertainability argument.
24
'l'hus.
25
and no ascertainability problenr exists.l
26
3
é)_
çID
'l
The class does not lack asceltainability just because ascorbic acid and citric acid can be
¿rcid.
Dr. Hany Farag, l)ole's Vice
E
1-
-.c
& Regulatory Affairs, states in his declaration that he is "confident that all of'
t-
o
t!
27
28
citric acid.
See ECF
No. 104-14-
altof Dole's custolrcrs receiveclascorbic acid and citlic acid that
ttse only
104- 15, Farag Decl.
was nrade in a
siuilar rval'.
Dole's citation to Astianav. Ben & Jeny's Homentade, Inc.,20l4 WL 60097 (N.D. Cal. Jan.'7,
2014), is unavailin g. ln A,sÍiana, the defèndant sourced its accused cocoa from as many as 15
diff.eient suppliers,-Evidence indicated that the suppliels used cliflèrent ingredients in their
manulacturing processes, with some using synthetic ingredients and others using non-synthetic
8
Case
No.: l2-CV-0
I 83 I
-Ll-ll<
ORDER GRANTING IN PART AND DENYING IN PAR'I- PLAINTIFF'S MOTION FOR CI,ASS
CERl]FICAl'ION
Case5:12-cv-01-831-LHK Docunrentl-42 Filed05/30/14 Page9 of 36
Second, Dole contends that the proposed class is not ascertainable because no company
I
2
records exist to identify purchasers or which products they bought. Opp'n at 6. Dole's concern is
J
that class members
4
largely on Sethavani,sh,20l4 Wt. 580696, at *5, which found persuasive the'Ihircl Circuit's
5
reasoning in Carrera v. Bqter Corp..727 F.3d 300 (3d Cir,20l 3). ìn Ceruera, the 'l'hird Circuit
6
found that a pLrtative class of purchasers of the defendant's diet supplernent was not asceftainable
7
because there was
8
members. Carrera,727 F.3d at 308-09. The Third Circuit rejected
9
af'fidavits submitted by putative class nrembers because this plocess deprived the defendant of the
will
not have actualploof that they belong in the class. Dole bases its argutnent
insutlcient evidence to shor.v that retailer lecords
coLrld be used
to iclentify class
plaintifls proposal to use
l0
opportunity to challenge class membership. Id. at309. Additionally, the Third Circuit held that
e.oL
lt
"there is a significant likelihood their recovery will be diluted by fraudLrlent or inaccurate claitns,"
o_Q
l2
and that absent class members could then argue that they are not bound by
a)a
13
named plaintiff did rrot adequately represent thern. Id.
.s
OqJ
L
U),
q)o
o_
ì:o
u)sI
a
judgment because the
at3l0.
"Vy'hile lCarerual may now be the law in the Third Circuit. it is not currently the law in the
t4
15
Ninth Circuit." McCrary,2014 WL 1779243, at *8. "ln this Circuit, it is enough that the class
xo
rzÉo
'-ì
16
delÌnition describes a set ol'common characteristics sufficient to allow a prospective plaintiff to
-.c
t7
identify himself or herself as having
u-
l8
quotationmarksolnitted); .çeealsoAstianq,2gl F.R.D.at500("Aslongastheclassdehnitionis
l9
sufficiently definite to iclentify putative class members, the challenges entailed in the
20
administration of this class are not so burdensome as to defeat certification." (internal quotation
2t
marks and alteration omitted)).
a
right to recover based on the description." Id, (iriternal
Where courts have denied class certifìcation because the proposed class was tlot
22
¿)
ascertainable, identification of class mernbers posed far greater difficulties than it is likely to pose
24
in this case. Sce, e.g.,Xavier,787 F. Supp.2d at 1090 (proposed class unascertainable whel'e class
25
definition included persons who had smoked a certain number of Marlboro cigarettes potentially
26
over a period of decades because (1) manufàcturer lacked data on individual smokers, (2) plaintiff's
27
irrgredients, Id. af *3. Here, Dole afÏirmatively asserts that all of its suppliers
lèrmentatiorl process l'or obtaining ascorbic acid and citric acid.
28
Ltse
only the
9
Case
No.: l2-CV-01
83 I
-Lt ll<
ORDER GRANTING IN PART AND DENYING IN PART PI,AINT]FF'S MO'IION FOR CLASS
CER]'IF'ICA'1'ION
Case5:l-2-cv-Q1-831--LHK Documentl-42 Filed05/30/1-4 Page10 of 36
I
merely ofÏèred broad demographic data on smoking, (3) smoking habits were likely to change over
2
such a long time period, and (4) asking individual class members to subtnit affrdavits attesting to
3
their belief that they had srnoked 146,000 Marlbolo cigarettes asked too much of potential class
4
members' mcmories), ln Aslictna v. Ben & Jeny',s Homemade, Inc., Judge llamilton f'ound
5
unascertainable a plaintiff's proposed class of those who had purchased Ben
6
that contained alkalized cocoa processed with a synthetic ingredient, No. l0-4387,2014 WL
7
60097, at *3 (N,D. Cal. Jan.7,2014).In Ben
8
fifteen suppliers had used a synthetic ingredient, and the plaintiff could provide no method of
9
iclentifying which consllrrrers had purchased ice cream fiom that supplier. Icl.The proposed class in
&,lerry
& Jerry's ice cream
's, however, only one of the defendant's
l0
this case is rJistingLrishable. LJnlike in Ben &,Ierry's, here allpurchasers of the iclentifìecl Dole
t'
il
products are included in the class clefinition, and all identified Dole products borethe same alleged
â(€
l2
nrisstatements. The class period here is also far shofter than in Xavier, and irrviting plaintiffs to
13
submit affidavits attesting to their belief that they have purchased one of a list of Dole ÍÌuit
l4
products in the past several years is much likelier to elicit reliable affidavits than asking potential
15
class members to recall whethel they had srnoked 146,000 of a certain cigarette over the course
l6
several decades. See Xavier,787 F. Supp,2d at 1090
17
cigarettes' is categorically different from swearing'l have been to Paris, France,'ol''l am Jervish,'
l8
or
,=
!.o
(-) \J
G
a)a
çt) ,
Ø)
o_
ìi
(hs
a.¡
?2,
tr()
'-l -c
("swearing'l
of
smokecl 146,000 Marlboro
L
l!
eveu'l was within
ten tniles o1'the toxic explosion on the day it happened."').
Put sirnply, in the Ninth Circuit "[t]here is no requirement that the identìty of the class
19
20
members . . . be known at the time of certification." Ries, 287 F.R,D. at 535 (alteration in original),
2l
Rather, "parameters f'or mcmbelship in the class [must be] set by objective criteria," such that it is
22
"aclministratively feasible to determine whether a particular individual is a member of the class,"
23
Wolph,2012Wl.gg3531. at *l-2.4 Because Brazil's proposed class is suf'fìciently defìnite to
24
identify putative class rnembers, the Court frnds the proposed class sufficiently asceftainable.
25
26
a
27
28
Four.jtrdges dissented from the Third Circuit's denial of rehearing ep þ1nc inCarrera.That
disseni'agiees with this lower burden of ascertainability, particularly in light ofthe fàct that the
ascertainábility requirernent is rooted in common law and is not compelled by the text of Rule 23
l0
Case No.: l2-CV-0 I 83 1-Llll(
ORDER GRANTING IN PART AND DENYING IN PART PI-AINTIFF'S MOTION FOR CI,ASS
CERl'II.'ICATION
Case5:l-2-cv-O1831--LHK Documentl42 Filed05/30/14 PageJ.l- of 36
B.
I
Dole challenges Ë|razil's ability to satisfy the four requirements for class certification under
2
a
J
Rule 23(a) Requircments
Rule 23(a), and the Court addresses each in turn
l.
4
Dole does not contest numerosity, Ilecause Dole has sold, at minimum, thousancls of units
5
l0l-3,ExhibitN.l2ll2ll3SpaleDepo.Tr,
6
ofeachproductatissueinthislitigation,ECFNo.
7
166:2- 14, joinder of all class members is "impracticable." Fed. R. Civ. P. 23(a)(1);,Iordanv.
8
Oounty of Los Angele.s, 669 F .2d
9
810 (1e82).
2.
l0
'=
Numerosify
I3
I I , l3
l9 (gth Cir'. 1982), vacated on other grounds,459 U,S.
Commonality
L
il
â(€
t2
the same
l3
provìsion of law." Dukes,
t4
and "[t]hat comlnon contention . . . must be of such a nature that it is capable of classwide
15
resohttion-which means thal determination of its truth or lalsity will resolve an issue that
t6
centralto the validity of each one of the claims in one stroke."1¿l. Commonality is satisfied by "the
t7
existence of shared legal issues with divergent f-actual predicates" or a "corrmon core of salient
l8
facts conpled with disparate legalremeclíes within the class." Hanlonv. Chrysler Corp.,l50 F.3d
I9
l0l l, l0l9-20 (gth Cir,
20
rule. Id. Rather, in deciding wl-rether plaintiffs shale a common question with the prospective class,
2l
the named plaintifß must share at least one question of fact or
22
Roclriguez v. Haye,s',591 F.3d 1105, 1122 (gthCir.2010) (citation omitted); see Mazza,666 F-.3d at
23
589 ("fC]ornmonality only requires a single significant question of law or fact."),
(J
L'/
!c!
cJe
(â,
,tÀ
q)_
ìJ
q.)
"Commonality requires the plaintifïto demonstrate that the class members 'have sufïered
injury,"'which "does not mean merely that they have all suff'ered
13
I
a violation of the sarne
S. Ct. at 2551 . The "claims must depend on a common contention"
is
UDE
0).:
EA
E0)
'-l
-.c
L
ø
1998).
All
questions of fàct and law need not be common to satisfu the
la,uv
with the prospective class.
24
Dole contends that llrazil's class claims f'ailthe commonality requirenrent under Rule
25
23(a)(2). Dole fìrst argues that materiality varies from consumer to consumer, and thus is not
a
26
comlroll question. 'fhe law is to the contrary. Brazil's UCL, FAI-, and CLRA claims depend
ort
27
whetlrcrthe Iabels at issue are unlawful, unfair, deceptive, or misleadingtoreasonaóle consumers.
28
lt
Case
No.: l2-CV-0183
l-LtÌK
ORDER GRANTINC IN PART AND DENYING IN PART PL,AINTIFF'S MOTION FOR CLASS
CEIì'f II.ICATION
caseS:1-2-cv-01831-LHK Documentl-42 Filed05/30/14 Page12 of 36
I
See
Cel-|'ech Conun., Inc. v. Lo,s Angeles Cell.ttlqr T'el. Oo.,20 Cal.4th 163,180 (1999) (noting
2
that the UCL prohibits conduct that is unfair, deceptive, or unlawfìrl). A plaintifTcan establish that
J
this
a misrepresentatiou is nraterial and thus violative of the consumer protection laws at issue in
4
case by sliorving that "a reasonable man would attach importance to its existence or nonexistence
5
in determining his choice of action in thetransaction in question."
6
Cases,
7
fàct urrless the fàct misrepresented is so obviously unimpoftant that the jury coLrld not reasonably
8
find that a reasonable man would have been influenoed by it"). Whether Dole's label staternents
9
constitute nraterial misrepresentations does not depend on the sub.ieotive motivations of individual
I
8l
Inre Steroid Hrtrntr¡ne Prod.
Cal. App. 4th 145, 157 (20 | 0) (noting also that "materiality is generally a question
of
of motivations that compelled each class member to purchase
10
pur.chasers, and the particLrlar mix
il
the proclucts in the fìrst place is irrelevant. See Ries,287 F.R.D. af 537 ("fVlariation among class
l2
members in their lnotivation for purchasing the product, the fàctLral oircumstanoes behind their
13
purchase, or the price that they paid does not defeat the relatively
t4
establish commonality."); see also Mazza. 666 F.3d at 589 (noting plaintiff bears "limited burden"
l5
to demonstrate single colnmon question of law or fact); Hanlon, 150 F.3d at
o):
l6
Litigation,2TS F.R.D. 552, 558 (S.D. Cal. 2011) (finding commonality where claims were based
trc)
Èì
--C
17
on "co¡nmon advertising campaign"). Materiality is thelefore a question common to the class, the
l8
resolution o1'which
t9
stroke." Duke,s,l3l S, CT.al2545. Because "an infèrence of reliance arises
20
representation was made to persons whose acts thereafter were consistent with leliance upon the
2t
representation,"' should Brazil prevaiI in proving that Dole's label misstatements were material, he
22
will
23
v. Super. Cl., 18 Cal, 3d. 355, 363 (|976); see ctlso
24
(200e),
:-oF
â(t
(J \J
L
CJV
ro
ah,
ØÀ
ê)ji
(ns
ts
c.¡
PZ
o
f!
"will
'niinimal' showing required to
l0l
9-22; In re Ferrert¡
resolve an issue that is centralto the validity of each of the claims in one
if a matelial
false
have established a presumption of reliance as to the entire class as well. Occidental Lancl, Inc.
ln re Tobacco II
Cases, 46 Cal, 4lh 298, 326-28
Second, and relatedly, Dole argues that the allegedly deceptive labeling statements are not
25
26
specifically regulated and, therefore, are not matedal under Ku,iksel.5l Cal. 4tl't af 329.
27
Specifìcatly, l)efenclant contencls that the only prohibitions that might bear on the label statements
28
t2
Case
No.: l2-CV-0
I 83
l-LI-lK
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR CLASS
CEIIl'IFICA'|ION
Case5:12-cv-O1831-LHK Documentl-42 Filed05/30i1-4 Page13 of 36
I
at issue are "non-binding I'-DA policy statements," Opp'n at 8. At this stage, the Court need not
2
decide whether the label statements at issue are material as a matter of law. Rather, the Court only
3
need find that rnateliality of the label staternents is a question colnmon to the class.
4
I.'inally. Dole argues that thc "AllNatural" label statements are not susceptible to common
5
proofbecause"AllNatural"hasnoconlmondefinition.DolereliesonA:sliunet,29l F'.R,D.at507-
6
09, in whioh the court denieclclass certifìcation of a broad class in fàvor of ceftifying a narrower
7
class because the courl fbund that
8
A.sÍiana itself relies on In re Vioxx Class Cases,l80 Cal. App. 4th
I
court found that "if the issue of mateliality or reliance is a matter that would vary fi'our consulner to
"All Natural"
had no cornmon nreaning as to the broad class.
ll6,l29
(2009). ht Vioxx,the
l0
collsutïìer. the issue is not sub.ject to common proof, and the action is properly not certifìed as a
!-o
il
cf
o-Q
12
1013, 1022-23 (9th Cir. 201
l3
members, the issue of reliance 'would vary from consumer to consumer' and the class should not
t4
be certified.").
l5
drug Vioxx, the court determined that "the decision to prescribe Vioxx is an individualdecision
16
made by a physiciarr in reliance on many different factot's, which vary lrom patient to patient." ft/.
17
at 133. Additionally, there was evidence that "some patients would rather assume the known risk of
IB
taking Vioxx in exchange for pain rellef, thereby mandating arr individual inquiry into patient
19
desires." Id. (internal quotation marks omitted). In that context. even though materiality is an
20
obj ective stanclard, the individualized nature
2t
a question common to the class.
.s
L)U
.(Ê
-O
U),
û¿
o_
ìi
(âs
c-¡
?.2,
E()
ass action
." Vioxx,l80 Cal, App. 4th at 129 see also Slearns v. Ticketntaster Cor¡t.,655
l) ("lf tlie misrepresentation
ln Vioxx, which
F.3d
or omission is not tnaterialas to all class
was based on allegecl misrepresentations regarding the pain
lelief
L
o
IL
of prescribìng a drug precluded nrateriality from being
Sirnilarly, cases consistent with Vioxx generally concern representations that differ f'or each
22
Co..l78 Cal. App,
z-t
proposed class member. For example, in Kaldenbach v. lulut. of'Omaha Life Ins.
24
4th 830, 846-47 (2009), the court denied class certificatiorr because the def.endant, which sold
25
insurance policies, made different statements and presentations to each custotneL. As such, no set
26
of statements was comlron to the class. See al,vo Fairbanks v. Fartners Netv World Li/ë Ins. Co,,
27
197 Cal. App. 4th 544, 562-65 (20 I 1) (discussing and lbllowing Kaldenbach). Another example is
28
13
No.: l2-CV-01 831-LIII<
ORDER GRANTINC IN PART AND DENYìNG
Case
CERl'IFICA'I'ION
TN PART
PI,AINT]FF''S MOTION FOR CLASS
Case5:L2-cv-O1-B3l--LHK Documentl-42 Filed05/30/14 Pagel-4 of 36
I
In re Ya,ymin& Yaz (Dro,spirenone) Mktg., Sales Practices & Products Liab. Litig., No.09-2100,
2
Z0l2Wl,,86504I,af*20(S.D. lll.Mar. 13,2012),whichfollowedVioxxandheldthat"[b]ecause
J
YAZ is a prescription medication, the question of unifbrmity mtrst consider lepresentations made
4
to each putative class member ancl her prescribing physiciart." Id,
Unlike Vic¡xx, this case presents specifìc alleged tnisrepresentatiolls conllnon to the class:
5
6
Dole's "AllNatural" label statements. Dole did not nrake individLlalized representations tcl
7
proposed class members, nor did prclposed class meml¡ers likely rely on the advice of a doctor or
8
any other professional. Theretbre, the objective inquiry into whether "a reasollatrle consunrer
9
would attach importance" to Dole's label statements is a questiott common to the class. I[ino.io's
l0
.É
e-oL
v.
Kohl's Corp,^ 718 F.3d 1098, 1107 (gth Cir.20l3).
il
Likewise, Astiana itself, upon which Dole explicitly relies, is distinguishable. The plaintitïs
^(c
UIJ
l2
in Astiana sought certification of a much broader class than Brazil seel<s here. In Astiana,
CJV
l3
"Plai¡tiffs challengefd] over 90 difïerent
t4
and difÈrent advertising campaigns, and which consequently inspire[d] different calculations in the
15
mincls of prospective customers," Asliana,291 F,R.D. at 508. No such problem exists here.
16
only challenges 10 proclucts labeled "AllNatural Fruit" based only on their inclusion of ascorbic
ÞÉL
l7
acid and citric acid. Dole does not assert that differences in its products' labels cause prospective
t!
IB
consumers to understand the representations differently. The court in Astiana was also concerned
19
that proposed class members' unclerstanding of
20
alleged to be unnattral.Id. Here, Dole does not contend that proposed class rnembers'
2l
inter.pretation of
22
Astiana court granted class ceftification of a narrower class of "Kashi products containing calciutlt
23
pantothenate, pyridoxine hydrochloride, and/or hexane-processed soy ingredients but labeled
24
Natural."' Id. a1509.l'he defìnition of "All Natural" was sufïìciently comtnon for those three
25
ingredients such that the narrower class cletìnition raised questions sufíiciently common to the class
26
to pass Rule 23(a)(2)'s commonality requirement. Similarly here, Brazil's proposed class
27
challenges l0 products based on only two ingredients. Whether the label statement "AIlNatural
at) \
u)À
O-
ìi c¡
(^E
F
PZ,
Éc)
o
28
prodr,rcts labeled
'All Natural,' with different
"AllNatural" may differ
Brazil
based on the ingredient
"AllNatural Fruit" diffèrs between ascorbic acid and citric acid. [n the encl, the
14
No.: l2-CV-0 I 83 1-Llll(
ORDER CRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR CI,ASS
CERTII.-]CA'fION
Case
ingredients
'All
Case5:l-2-cv-O1831--LHK Documentl42 Filed05/30i14 Pagel-5 of 36
I
ì.'ruit" is rnaterial is a question comlÌlon to the class.s
3.
2
Typicality
Under Rule 23(a)(3) the representative party must have clainrs or defènses that are "typical
3
4
of the claims or def'enses of the class." Fed. R. Civ. P. 23(a)(3). 'l'ypicality is satisfìed "when each
5
class member's claim arises from the sanle course of events. and each class member makes similar
6
legal arguments to prove the defendants' liability." Rodriguez,59l F.3d at I 124 (citations ornitted).
7
This requirement is "permissive and requires only that the representative's claims are reasonably
8
co-extensive with those of the absent class mernbers;they need not be substantially identical."
I
FIanlon,l50 F.3d af 1020. Reasonably coextensive claims with absent class menrbers will satisfy
l0
the typicality requirement, but the class must be limited to "those f-airly encompassed by the named
l-
il
plaintifls claims." Dukes at l3 |
Òo
L
â(€
t2
putative class representative is sutrject to unique defenses which threaten to become the f-ocus of
c)e
l3
the litigation." Hanlon,976 F.2d at 508 (citations omitted). "The purpose of the typicality
(!
ra,
S. Ct. at 2550. "[C]lass
certification is inappropriate where a
Ø¿
o¡i a)
t4
requirement is to assure thatthe interest of the nameclrept'esentative aligns with the interests of the
l5
class."
o-:
t6
E()
Ì-ì -C
17
products he did not purchase, The Court is rrot persuacled. Brazil alleges that he purchased three
l8
the ten products for wliich Brazil seeks to certify a class: Tropical Irruit
19
and Mixed Fru¡it
20
definition have "AllNatural Fruit" label statemenls and contain ascorbic acid and citric acid.
2l
Ë|razil's legaltheory is identical t'or all claims: Brazil alleges that Dole's placement of its "All
22
Natural Fruit" statement on the identified products was unlarvful or misleading because the
23
identified products contain ascorbic acicl and citric acid,,See Mot. at 1. Therefore, "othermembers
24
have the sarìle or similar
1¿l.
UDE
l!
Dole argues that Brazil's claims are atypicalbecause the class includes buyers of seven
-
bag. See SAC
Ill
- can, Mixed
Fruit
of
- cups.
125. 153, 176. AII products included in the proposed class
injuly, . , . the action is based on conduct which is not unique to the
25
26
27
28
5
Dole nrakes the same argument that individual class members may interpret "All Natural Fl'Ltit"
differently under the Rule23(b)(3) predominance inquiry. Iror the same reasons as stated above,
the Court finds that common questions preclorninate despite the possibility that class nrembers may
have varying definitions of "AllNatural Fruil."
5
No.: l2-CV-01 83 I -LllK
ORDER CRANTING IN PART AND DENYING tN PART PLAINTIFF'S MOTION FOR CI,ASS
CERl'tI.ICATION
Case
CaseS:l-2-cv-O1831--LHK Documentl-42 Filed05/30/l-4 Page1,6 of 36
and. . , other class members have been injured by the salne course of concluct."
I
namecl ptaintiffs,
2
Hanon,976V'.2d at 508,
Furthermore, the Court has already addressed at length the issue of whether Brazil has "the
I
J
injury"
as class members that bought other products in the context
of starrdiltg on
4
same or sirnilar
5
Dole's Motion to Disrniss the SAC.
6
dismiss. the Court held that when "a plaintiff clairns that he was misled by the improper use of the
7
term 'all natural' on Dole Mixed Fruit in Cherry Gel, SAC n 162, the injury he suffers as a result of
I
that misrepresentation is not meaningfilly ctistinguishable fiom the iniury sul'fèred by an individual
9
w¡o is mislecl by the use of the term 'all natural' on Dole Mixecl Fruit in Black Cherry or Peach
." Icl.
^Sse
ECF'No. 76, af 12-14, In its order on Dole's motion to
Although both of the products the Couft used as examples are excluded
l0
Gel, SAC
:-ot-
ll
fì.om the proposed class defìnition, the point remains the same. The in.iuly Brazil allegedly sLlfIèred
o_Q
t2
from Dole's allegedty unlawfil or deceptive label staterlrents on the three products Brazil
13
purchasecl is not meaningfully distinguishable l'rom the injury other class members sulfered fiom
14
purchasing the other three identified products, which have identical label statelnents and identical
ì:o
15
allegeclly unnatural ingredients.
o:
Éo
tsr
16
,s
OqJ
L
ue
!()
at) ,
11
201
aÍ. 13,
ØL)
q)-
C)S
-.c
Dole bases its typicality challenge on Judge Davila's decision in Major v. Ocean Spralt
l7
Cranberyies, Inc..5il2-CV-03067 EJD,2013 WL 2558125,at*4 (N.D. Cal. Jtrne 10.2013).
l8
However, the Major case involved unique l'acts that justifìed the court's finding that typicality was
l9
lacking in that case. ìn Majrn,, the proposed class was "broad and indefinite," as it "would [have]
20
include[d] any of Deflendant's products represented to contain no artificialcolors, flavors or
2t
preservatives but which contained aftificial colors, flavors or preservatives." Icl.'I'he plaintitïin
22
Ma.jor attempted to include entire ploduct lines based on a single purchase, and the plaintiff
23
"fäil[ed] to link any of those products to any alleged misblanding issuo" related to the plaintiff
24
purchase. 1d.F'urthermore,the Maiorcourtobserved"thatthclabelsandnutritionclaimsoneach
25
of Defendant's products may be unique to that product itself." Icl.l'he plaintiff purchased a
26
pomegranate blueberry drink and atleged misrepresentations based on label language making
27
specific claims about blr"reberries. Yet the plaintifTsought to certify a class that would include
L
o
lJ-
28
t6
No.: l2-CV-01 83 l-LllK
ORDER CRANTING IN PART AND DENYING IN PART PLAINT]FF'S MOTION FOR CI,ASS
Case
CERTII.'ICA'IION
s
CaseS:12-cv-01831-LHK Documentl42 Filed05/30/14 Page17 of 36
I
products having label statements making no claims about blueberries. As the Mcrjor courl
2
explained, "[t]he evidence needed to prove Plaintiff s claim that the Diet Sparkling Pomegranate
3
Illueberry drink cortained false or misleading labeling is not probative of the claims of unnatred
4
class menrbers who purchased products within
5
blueberries." Id,
the'Sparkling' line that dicinot contain
In the instant oase, all proclucts included in the proposed class defìnition, including the
6
7
product Brazil purchased, have "AllNatural Fruit" label statements and contain ascot'bic acid and
I
citric acicl. Thel'efore, rather than raising the problems encountered in Major, this case is much
9
more similar to the multiple cases in this Circuit in which courts have fbund the typicality
l0
requirement rnet, even when the representative plaintiff did not purchase every identified product.
il
See, e.g., Astiana,2g
Q9
â(d
12
BeverageCo.,268 F.R,D.365,377-78 (N.D.Cal.20l0).TheCourtthLrsfìndsthatBrazil'sclaims
CJ9
-O
a),
l3
are typical of tlie proposed class.
14
4,
l
F.R.D. at 502-03; Ries,287 F.R.D. at 539-40; Ohavez v. Blue SIE Natural
Adequacy of Representation
Ø l-)
c)_
ìi
U)F
F
c.¡
Ó).Y
tztro)
Rule 23(a)(4) permits class certification only if the "representative parties
l5
will fairly
and
t6
adequately protect the interests of the class." Fed. R. Civ. P. 23(a)Ø).In the Ninth Circtrit, to test
17
the adeqr"racy of a class representative, courts asktwo questions:
l8
their counsel have any conflicts of interest with other class members; and (2) will the named
19
plaintiffs and their counsel prosecute the action vigorously on behalf of the class?" Slaton,327
20
F.3d at 957 (citing Hønlon.l50 F.3d at 1020).
"(l)
do the named plairitilfs and
Ê
t!
l)ole does not dispute that Brazil and his counsel will fairly and adequately protectthe
2l
22
interests of the class. 'fhe Court finds that Braz-il has no conflicts of interest with other class
23
members. In addition, the Court holds that Brazil
24
previously served as a class representative for another class that was certified. See Brazilv. Dell
25
1nc., No. 07-01700 RMW, 2010 WL 5387831 (N.D. Cal. Dec, 21,2010). Finally, the Court agrees
26
with Brazil that plaintiff's counsel are well qualifìed for appointment as class counsel by virtue of
27
their experience with other similar cases. 1'he adequacy requirement is satisfied,
28
will vigorously
prosecute this action, as he has
l7
Casc
No.; I 2-CV-0
I 83 I
-Lt'll<
ORDER GRANTING IN PART AND DENYING fN PART PI.AINTIFF'S MOTION FOR CI-ASS
CER'I'IIIICATION
case5:12-cv-O1831_-LHK Documentl42 Filed05/30/1-4 Pagel-8 of 36
I
C. Rule 23(bX2) Requirements
2
'fo certify
a (b)(2) class, the Court must find that "the party opposing the class has acted or
J
a
refgsed to act on grounds that apply generally to the class, so that final injunctive relief or
4
corresponding declaratory relief is appropriate respectingthe class as awhole." þ'ed. R. Civ. P.
5
23(b)(2). Ordinarily, it f'ollows that there is no need "to undeftake a case-specific inquiry into
6
whether class issues must predorninate or whether class ¿tction is the sLrperior nrethoclof
7
adjuclicating the clispute" uncler the other subsections of Rule 23(b), Duke.s,
8
Ratlrer, "fp]redominance and superiority are self-evident." Id. "Class certifìcation under Rule
9
23(b)(2) isappropriateonlylvheretheprirnaryreliefsoughtisdeclaratoryoriniunctive."
13
I
S. Ct. at 2558.
Ellis,657
Inst., \nc.,253 F.3d 1180, I 195 (9th Cir,200l)). This
l0
F.3d ar 986 (quoringZinserv. AccuJìx
c
!.o
ll
case exemptifies the l<ind of action that may be appropriate fbr certifìcation under Rule 23(b)(2), at
âÑ
l2
least insofar as Brazil requests injunctive relief prohibiting defèndants
l3
allegedly
14
be satisfied with "indivisible" equitable relief that benefìts allclass membel's at once, as the Rule
l5
suggests.
,9
(J L'
Re,s.
fiotr
engaging in their
L
(JU
:.=
ah\
Øs)
o_
ì:o
u)s
HO
fz,
Éo
'- -.c
L
o
I
unlawlil or deceptive labeling plactices.
See
Dukes,603 F,3cl a|571. Those requests can
t6
Dole argues that the Court should not certily a Rule 23(b)(2) class because Brazil's
l7
monetary damages are not "incìdental to the injunctive or declaratoly relief," as reqttired by Dukes.
l8
Dukes.l3l S. Ct. al2557. However, Dukes dealt with
l9
monetary relief under Rule 23(b)(2) in adclition to an injunction. Id.The Supreme C'.out1 itt Dukes
20
lreld that the proposed RLrle 23(b)(2) class could not be certified because the
2t
f'or equitable monetary relief under the Rnle 23(6)(2) class were not incidental to the inj unctive
22
relief sought. Icl.In contrast, here Ilrazil's monetary class clainrs will proceed under [ìule 23(bX3).
23
which includes strict predominance and superiority requirernents f'or class certifìcation. and which
24
has notice and opt-out requirernetrts designed to fäcilitate the award
25
individual class menrbers.
26
granted for the purposes of declaratoly and injunctive relief, but clenied to the extent Brazil seeks
27
monetary damages, which are more properly brought under Rule 23(bX3). See Ries,287 F.R.D. at
28
S'¿e
a proposecl class that sought equitable
plaintifß' large claims
of tnonetary damages to
id.at2559. 'l'heretbre, certifìcation of the Rule 23(b)(2) class is
l8
No.: l2-CV-0183 l-LI lK
ORDER GRANTING IN PART AND DENYING IN PART PT,AINTIFF'S MOTION FOR CI,ASS
CER'TII'ICATION
Case
Case5:1-2-cv-01831-LHK Documentl-42 Filed05/30i14 Page19 of 36
I
540-42,later decertúì.ed on adequacy g,round,s', Rrc.s v. Arizona Beverages USA LLC, No. l0-01139
2
RS,20l3 WL 1287416, at *8 (N.D. Cal, Mar. 28,2013) (certifying
3
similar case only f'or the purposes of declaratory and injunctive relief).
a Rule 23(b)(2) class in a
Dole also asserts that Brazil no longer has standing because he "stoppecl buying Dole
4
5
products six months ago." Opp'n at24. As this Court lecently addressed, "[s]everalcourts in this
6
district have held in similar cases that to establish standing, a plaintifTnrust allege that he intends to
7
purchase tfre products at issue in tlie futLrre." Werdebaugh v. Blue Diqmond Grov,er.c,
8
2724-LHK,20l4 WL 2191901 , at *9 (N.D. Cal, li{.ay 23,2014) (quotations and citations ornitted).
9
ln Werdebaugh,the Court declined to certify an injunctive
No. l2-CV-
class beoause the Plaintiff clid not
l0
supply any testimony tlrat he would purchase any of the identified products in the futLlre. Here,
il
however, Brazil has testifìed that, while he "ceftainly would be more skeptical of what is stateclon
AcÚ
l2
packaged items," he would still be willing to buy a Dole prodLrct now. ECF No, I 06-
u9
.!o
t3
Ex.
t4
loyafty to Dole. Id.("Q. Okay. So now would you still have brand loyalty to Dole? A. I would say
l5
that probably, yeah."). The Courttherefore finds that Brazil continues to have standingto assert his
t6
23(b)(2) class claims. Accordingly. the Court certifies an injunctive class under 23(b)(2).
.e
:.oL
ù()
.(Ê
(4,
q)_,)
l,
l,
Vetesi Decl.
at174:17-175:6.Brazilalsoacknowledgedinhisdepositionthathecontinuestohavebrand
ah
ji
(n.Ec)
t-
to
t7
D. Rule
l8
For a class action to be certifìed under Rule 23(b)(3), the class representative must show
23(bX3) Requirements
L
o
lJ-
19
tlrat "the questions of law or lact common to the members of the class predotninctle over any
20
questions affecting only individual members and that a class action is,superior to other available
2l
methods f'or the fäir and efficient adjudication of the controversy." Fecl. R. Civ. P. 23(bX3)
22
(emphases adclect).
23
24
1.
l'he Court fìrst
addresses predominance bef'ore
tulning to superiority.
Predominancc
Í)razil seeks to certify a nationwide class alleging California state law claims. Under Rule
25
23(bX3), Brazil must show "that the questions of law or fact colnmon to class menrbers
26
predominate over any questions affècting only individual tnembers." Fed. R. Civ. P. 23(bX3).
27
28
t9
Case No.: l2-CV-01 83 l-LI lK
ORDER GRANTING IN PART AND DENYìNG IN PART PI,AINTIFF'S MOTION FOR CI,ASS
CERl'1FICA]'ION
Case5:12-cv-O1831--LHK Documentl42 Filed05/30/14 Page20 of 36
"'l'he Rule 23(bX3) predominance inquiry" is meant to "tes[t] whether proposed classes are
I
2
suffrciently cohcsive to warrant adjudication by representation." Antchent Protls., Inr:. v. Ilind.sor',
3
521 LJ.S.59l,623(1997).'l-heNinthCircuithasheldthat"thereisclearjustifìcationftrrhandling
4
the dispute on a representative rather than an individual basis"
5
signifìcant aspect of the case and they can be resolved fbr allmembers of the class itl a single
6
ad.f
7
Rule 23(b)(3), the district court must conduct a rigorous analysis to determine whether the class
8
representatives have satisfìed both the predominance and superiority requirements..lee Zin'ser,253
9
F.3datll86.
.!
Q9
.rO
U),
u)À
é)_
jio.¡
(ns
F
OJ -Y
þ2,
Êc)
Fr=
o
þ-
a
udication . . . ." FIunlon,l50 F.3d at l022.lnrurling on a motion for class cerlifìcation based on
Dole raises three types of predorninance arguffìents.'fhe first-that the terll "All Natural"
l0
È-olo.q
if "comlrol.t questions present
ll
has no col"nlrìon
t2
This argLrrnent fàils to detèat Brazil's slrowing that common questions predominate, as required by
t3
Rule 23(b)(3), l'or the same reasons set lbrlh above regarding commonality under Rule 23(a)(2).
t4
Theref'ore, fol the reasons stated in the commonality section above, the Court concludes that
15
common questions
l6
reliance. The Court need not decide whether the nrisrepresentations were in fact material. The
l7
CouÍ merely
rneaning-is iclenticalto Dole's contnrclnality argunlent regarding the same term,
will
predominate on all liability questions, inclLrding issues of materiality and
conclr-rdes that these
liability questions are common to allclass melnbers.
The Court fì¡cuses its discussion in this section on Dole's Lemaining predominance
l8
l9
contentions. The Clourt fìrst discusses choice-of-law issues involved in certifying a nationwide
20
class before turning to Dole's predominance challenges to Brazil's proposed damages models,
a.
2t
Nationwide Class Allegations
Dole argues that were the Court to certify the proposed class under Rule 23(bX3),
22
23
individual issues would predominate as the Court would be obliged to apply the laws of 50
24
clifTerent states. Opp'n at 25.'l'he Court agrees, and concludes that because the proposed
25
nationwide class fails the predorninance requirement under Rule 23(b)(3), certif,rcation of stlch a
26
class woulcl be itnproper.
27
28
20
No.: l2-CV-01831-LI ll<
ORDER GRANTING IN PART AND DENYING IN PART PI-AINTIFF'S MOTION FOR CI,ASS
Case
CERTIt.-ICATION
Case5:12-cv-O1-831-LHK Documentl-42 Filed05/30/1-4 Page21 of 36
In a CAFA divelsity action, this Court applies Calif'ornia's choice of law rules. Sce Klaxon
I
2
Co,v.StentorElec.Mfg.C.to.,3l3U.S.487,496 (1941); Bruno,280F,R.D.at538n,7."Under
3
California's choice of law rules. the class action proponent bears the initial burden to show that
4
Calit-ornia has signifìcant contact or significant aggregation of contacts to the claims of each class
5
rrerÌìber." Mazza,666 F.3d at 589, "Once the class action proponent makes this showing, the
6
burden shifts to the other sicle to demonstrate that f'oreign law, rather than Calif'ornia law, should
7
apply to class claims." Id. at 590.
8
"[C]onduct by a def-endant withiri a state that is related to a plaintitls alleged iniuries and
9
not'slight and casual'establishes a'significanTaggrega|ion of contacts, creating state interests."'
is
l0
AT&T Mohility LLC v. A(J Oprronics Cor¡t.,707 F.3d I106, I I l3 (9th Cir.20l3) (citations
e.o
t1
omitted). Dole does not dispute that California has sufficient contacts, and the Court in its latest
eg
12
rnotion to dismiss order assumed that Brazil had met this basic constitutional requirenrent.
13
Moreover, Califoniia has a constitutionally sul'ficient agglegation of contacts to the claims of each
t4
putative class member in this case because Dole's corporate headquarters and a significant portion
l5
of the proposed class lnembers are located in California. See Mozza,666 F.3clat 590. Accorclingly,
l6
the Court finds that Brazil has met his initial burden. "California has a constitutionally signif-rcant
t7
aggregation of contacts to the claims of each putative class member in this case," and application
l8
of California law here poses no constitutional concerns. Mazza,666 F.3d at 591 , see als'o
l9
CloÍhesrigger, Inc:. v. GTE
20
California law was constitutionally permissible where def-endant's principal offices were in
2t
California and the allegedly flaudulent misrepresentations emanated from Califbnia); In re
22
Charle,y Schypab Corp. Sec. Litig.,264l--,R.D.531,538 (N.D, Cal.2009) (location ofthe
23
def.endant's headquarters is also a relevant fäctor in signifìcant contact or aggregation of contacts
24
analyses),
,9
L
e)9
È(j
.t) ,
.hÀ
q)_
ji c)
(nt
1'
EC)
'-3
L
o
r
Cnrp.,l9l
Cal. App. 3d 605 (1987) (conclttcling application
of
Because the Court is satisfied that Calif-ornia has sufficient contacts with the proposecl class
25
26
claims, the burden is on Dole to show "that foreign law, rather than Califbrnia law, should apply."
27
Mazza,666 F,3d at 590. Calif'ornia law may be applied on a class wide basis only if "the interests
28
2t
Clase
No.: l2-CV-0
I 83 I
-LHt(
ORDER CRANTING IN PART AND DENYING IN PART PI,AINT]FF'S MOTION FOR CT,ASS
CERl'II.'ICAlION
Case5:12-cv-Ol-831-LHK Documentl42 Filed05/30/1-4 Page22 of 36
I
of other.states are not ftrund to outweigh Califbrnia's interest in having its law applied." Id,
2
(quoting Wa,sh. Mut. Bank, FA v. Stperior Court,24 Cal. 4fh 906,921 (2001)). 'l-o deterrnine
J
whether the interests of other states outweigh Calif'ornia's interest. courts administer the following
4
three-step government interest test. l'he court must first determine whethcrthe law of the other
5
states is rnaterially diffèrent from California law. Mazzu,666 F.3d at 590. Second,
6
difTèrences, the court determines whether the other state has an interest in having its law applied.
7
Itl. at 591-92. Thirci, if another state has an interest, the coutt determines which state's interest
8
woufd be most irnpaired if its polioy were subordinated to the law of another staÍe.Id. at 593. In
9
Mcrzza,the Ninth Circuit vacated a district court's certifìcation of a nationwide class basecl on the
(J
L,)
e)u
È()
(Ò,
here-the IJCL, FAL, and CLRA' Id' a|594'
l0
same California consumer proteotion laws at issue
l1
The fàcts and claims here closely parallel those in Aúazza. and consequently so does the Court's
t2
arralysis.
.s
È.ol-
if there are
Dole has met its burden on the first step of CalifoLnia's choice-of-laiv analysis, as Braz\l
l3
l4
brings claims under the same California consurner plotection statutes as the plaintiffs in Mazza: the
sb
ú)E
15
UCL, FAL, and CLRA. This case presents the same material differences between California's
c):
Éo
tsr
l6
consumer protection regime and that of other states that dissuaded the Ninth Circuit fiom applying
t7
Calil'ornialawtootherstates, seeMazza,666F.3dat5gl,including: (l)inluryrequirements,(2)
l8
deception requirements, (3) scienter, (4) reliance, (5) pre-fi1ing notice requirelnents. (6) statutes
t9
limitation, (7) restrictions on consumer protection class actions, and (8) remedies.
Øl
o-
-C
L
I
l!
ol
20
As for the seconcl step, the Court fìnds that the other 49 states each have an interest in
2t
applying their own law. As the Ninth Circuit explained in lu[azzao "each foreign state has an interest
22
in applying its law to transactions within its borders," which means that
23
applieclto [a nationwide class], f-oreign states'would be irnpaired in their ability to calibrate liability
24
to foster comltlerce." 666 F .3d at 593. 'l'his reflects the "principle of fbderalism that each State may
25
make its own reasoned judgment about what conduct is pelnritted or proscribecl within its borders."
26
ItÌ. ar.591(quoting State Farm Mut. AuÍo. Ins. Co. v. Campbell, 538 U,S. 408,422 (2003)).
"if Califbrlria law werc
27
28
22
Case
No,: l2-CV-0
I 83
l-Ll
ll<
ORDER GRANTING IN PART AND DENYINC IN PART PLAINTIFF'S MOTION FOR CI-ASS
CERTII.'ICATION
CaseS:12-cv-O1-831-LHK Documentl-42 Filed05/30/14 Page23 of 36
I
[-lere, the purported nationwide class here consists of members fi'om 50 states: Brazil
2
alleges that consumers fì'onr each of the 50 states were subjected to misleading and unlawfil
J
representations on which they relied in purchasing Dole frr"rit products. Dole denies that its
4
products are misleading or unlar,vful. Given the parties'respective positions, all 50 states have an
5
interest in having their own laws applied to the consurner transactions that took place within their
6
boldels. Gianinov.Alacer,846F.Supp.2d. 1096, 1102(C.D.Cal.20l2).Each statehas"an
7
interest in being able to delineate the applopriate standard of liability and the scope of recovery
8
based on its understanding of the balance between the interests of inclividLlals and oorporate entities
I
operating within its territory," Frezzev. Google 1nc., No. 12-237,2013
l0
.s
çL
:.o
UIJ
a)e
Èo
tt) ,
q)À
(ns
oJ
r.Z,
t()
1736788, at *7 (N.D.
Cal. Apr.22,2013).
ll
At the final step, where the states have conf'licting policies, the Court rnust deter¡nine which
if its policy was subordinated to the policy of the other
t2
state's interest would be more impaired
13
state.
14
weigh the conflicting state interests to determine which conflicting state law manifests the "better"
15
or "wofthier" social policy. ft/. (citing McCann v. Foster Wheeler LLC, 48 Cal.4th 68, 97 (201 0)).
l6
Rather, "the Court ntust recognizethe inrpoftance of federalism and every state's right to protect its
t7
consurners and promote those businesses within its borders." Gianino,846 F. Supp.2d. at 1103,
l8
Here, lor the reasons stated below. fbr purchases made outside California, the Court fincls that other
19
states' interests would be more impaired by applying California law than would Califolnia's
20
interests by applying other states' laws.
o_
ì:
V/L
,See
Mazza,666 F.3d at 593-94. This last step of the analysis does not permit the Court to
L
o
It
2t
California undoubtedly has a signifìcant interest in applying its own consumer protection
22
laws to transactions within Califbmia. Dole is headquartet'ed in Westlake Village, Califbmia, sells
23
many products in this state, and likely made the corporate decisions regarding packaging, labeling,
24
and marketing of Dole products in California. I-lowever, Califomia's interest in applying its law to
25
nonresidents who purchased l)ole products in other states is tnore attenuated. .þe Edgcu^ v. MIT'E
26
Corp.,457 U.S. 624, 644 (1982).
27
28
23
Case No,: l2-CV-01 83 l-Ll-lK
ORDER GRANTING IN PART AND DENYING IN PART PI,AINTIFF'S MOTION FOR CLASS
CERT'IF'ìC]A]'ION
CaseS:12-cv-O1831-LHK Documentl42 Filed05/30/14 Page24
Calif'ornia courts reoognize that the predominant interest in "regulatitlg or affectítrg conduct
I
2
within its borders" lies with the state which is "the place of the wrong." Hernandez v. Burger,102
J
t
Cal, App. 3d 795,801-02 (1980). 'l'he place of the wrong is the geographic locatiorl where the
4
mislepresentations were communicated to the consumer. See McC'ann,48 Cal. 4th aT.94 n.12. For
5
nonresident consLullers of Dole products, the place of the wrollg is not Califbrnia, but rather the
6
state in which each consurner resides. See Mazza,666 F.3d at593-94
7
f'oL
8
clainrants and their reliance thereon in purchasing vehicles-took plaoe irl the various foreign
9
states, not in California.").
liability
as to the
("[T]lie
last events necessary
fbreign class members-communication of the advertisements to the
Dole's liability acclued when Brazil and class ntembers purohased Dole titrit products
t0
'=
o1 36
il
containing the allegedly deceptive and nrisleading label statetnents, Thus "the place of the wroltg"
t2
in this case is the point of purchase by each class member-in other words, in each of the 50 states
l3
Each state has an interest in "protecting their consumers lrom in-state injuries caused by a
t4
California corporation doing business within their borders and in delineating the scope of recovery
ì:oE
15
fbr the consumers under their own laws." Gianino, 346 F. Supp. 2d at I103. Plaintifl has identilied
o;
tro
tsl
16
l'to countervailing Calil'ornia interest that outweighs the other states' interest in effecting their
l7
policy choices, and the Ninth Circuit has held that under such circumstances, "California's interest
18
in applying its law to residents of t-oreign states is attenuated." Mazza,666 F.3d at594.
þ-o
QY
C.] U
-o
çt) ,
úrÀ
cJ_
C/D
-.c
a
l!
Accordingly, the Court concludes that each other state would be inipaired in its ability to
l9
20
protect consumers rvithin its borders if Clalifornia law were to be applied to all claims of the
2t
natio¡widc class. Each nonresident class rrember's claims should be governed by and decided
22
under the consumer protection laws of the states in which the various class members reside and in
23
which the transactions took place. lJecause adjudication of the nationwide claims will require
24
application of the laws of 50 states, common questions of law would not predominate f.or the
25
proposed nationwide class, as is required by Rule 23(bX3). Significantly difTerent legal issues
26
arise ogt of the claims of class members ft'om the various states, and these difi'ercnt legalissr'res
27
28
24
Case
No,: I 2-CV-0
t 83
l-Llll(
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR CLASS
CERTII-ICATION
will
Case5:l-2-cv-01831--LHK Documentl-42 Filed05/30/14 Page25 of 36
I
eclipse any common issues of law that exist. Certification of the nationwide class under California
2
law theref'ore would be irnproper.
3
ln his reply,Braz.il alternatively requests certification of a California-only class. Reply at
4
15. If the class is comprised entirely of Califtrrnia consumers, only California law need be applied.
5
I.-or such a class,
6
proper if all other requirements for class certification are met. Accordingly, the Court narrows the
7
proposed class to exclusively California consLnners.
8
9
comlÌon issues woulclpredominate ovel' indiviclual ones. Certifìcation would
b.
Damages under the UCL,
A Plaintiffthat
be
FAL' and CLRA
seeks certification under Rule 23(bX3) must present a damages model that
liability
af 1433 (rejecting class certification
l0
is consistent with its
ll
where darnages rnodel accounted for fbur possible theories of antitrust injury when district court
(J L/
t2
had limited case to single theory of antitrust impaot). Plaintiffls damages "model purporting to
ov
-o
(t)
l3
serve as evidence of damages in this class action must lrìeasure only those damages attribrrtable to
t4
[the defendant's conduct].
l5
establish that damages are susceptible of measurement across the entire class fol'purposes of Rule
t6
23(bX3)," Id, (lnlernal citations ancl quotations omitted).
case. See Comcasl, 133 S. Ct.
(Ë
l-
L
,
Ø l-)
c)_
c.¡
ii
ADE
Ð.4_
Éo
ì-r -c
o
lL
t7
If
the model does not even attempt to do that, it cannot possibly
Cr¡mcast has been interpleted as "reiterat[ing.] afundamental focus of the Rule 23 analysis:
of
l8
The damages must be capable of detennination by tracing the damages to the plaintiffs theory
l9
liability, So long
20
darnage calculations for individual class mernbers do not defeat certification.'^ Lindell v, Synthe.s
21
U,Sl,No. ll-02053,2014WL841738.at*14 (E.D.Cal.Mar.4,2014), AccordingtotheNinth
22
Circuit, "plaintiffs must be able to show that their damages stemmed from the defendant's actions
23
that created the legal liability." Leyvav. Medline [ndu,s., ]nc.,716 F.3d 510, 514 (gth Cir. 2013).
as the damages can be detennined and attributed
to a plaintiffs theory of liability.
24
Here, the Couft fìrst considers what damages are recoverable as a result of l)ole's alleged
25
mislabeling and then assesses whether Brazil has preseuted a damages model capable of isolating
26
those damages.
27
28
25
CaseNo.: l2-CV-0 183 l-LLll<
ORDER GRANTING IN PART AND DENYING IN PART PI,AINTIFF'S MOTION F'OR CI-ASS
CER'fIF-ICAl'ION
caseS:1-2-cv-Ol_831-LHK Documentl-42 Filed05/30/1-4 Page26 of 36
The UCl,, FAl, and CLRA authorize a tlial court to grant restitution to private litìgants
I
2
assertingclainrsunderthosestatutes. Colgant¡.LeathenttrtnToolGrp., Inc.,l35Cal.App'4th663,
J
694 (2006). Restitutionary
4
by returning to the plaintiff funds in rvhich he or she has an ownership interest." Korea Sup¡tly Co'
5
v. Lockheetl
6
Filtration Products Co.,23 Cal.4tl't 163, 177 (2000)'
relief is an equitable remedy, and its purpose is "to restoLethe status quo
Martin Corp.,29 Cal.4th I 134,ll49 (2003);
:see
ulso Cortez v, Purolatttr
Air
The proper measure of restitution in a mislabeling case is the amount necessary to
7
I
conrpensate the purchaser f-or the diffèrence between a product as labeled and the procluct as
9
received. Colgan,135 Cal. App.4th at700 (re.jecting restitutionary award tbr proclucts "Made in
l0
U.S.A." where expert "did not attempt to quantify either the dollar value of the consumer impact or
þ-ot-
lt
tlie advantage realized by [the defèndantl"). This calculation contemplates the productiorr of
â(€
t2
evidence that attaches a clollar value to the "consulner impact or advantage" caused by the Llnlawfttl
c)e
Èo
U),
l3
business practices. ft/. Restitution can then be determined by taking the difference between the
t4
market price actually paid by consumers and the true rnarket price that reflects the impact o1'the
ii c)
(nE
15
unlawful,unfair,orl'raudulentbusinesspractices.
iz
t6
60097,
t7
insufficient proof of damages), Accordingly . Brazil must present a damages methodology that can
IB
clelermine the price premium attributable to Dole's use of the
Cü
ULJ
L
u) -¿
qJ-
ìrÉo
-.c
aT
See,e,g,,Ben&,Ierry'sHr¡ntentade,20l4WL
*12_13 (rejecting class certifìcation f-or "all natural" ice cream labels based in part on
l-
fJ-
Brazil's damages expert, Dr. Oral Capps, presents three damages models:
19
20
"AllNatural Fruit" label statements.
(l) a Full Refuncl
Model, (2) a Price Premiuu'r Model, and (3) a Regression Model. The Court acldresses each in turn.
i.
21
Full Refund Motlel
Dr. Capps fìrst proposes refunding the entire purchase or "register" price of the challenged
22
23
product. Declal'ation of OralCapps ("Capps Decl."), ECF'No. l0l-9,'1hl l0-12,'l'his is not the
24
proper measut'e of darnages. As discussed above, "[t]he difference between what the plaintifTpaicl
25
and the value of what the plaintifTreceived is a proper measure of
26
App. 4th aL l3l; see olso We.rclebaugh,2014 WL 219 I 901, at *22; Ogden v. Bumble Bee
27
l,l,C, No. 12-01828,2014 Wl- 27527, at *13 (N,D, Cat. Jan.2,2014) ("[A] claim for restitution
28
restitution." Vioxx, 180 Cal'
26
Case
No.: l2-CV-0
183 I -LIll<
ORDER GRANTINC IN PART AND DENYINC IN PART PT,AINTIFF'S MOTION FOR CI,ASS
CERTIF]C]A1'ION
þ-oocls,
Case5:l-2-cv-O1-831-LHK Documentl-42 Filed05/30/l-4 Page27 of 36
I
requires that Ogden also present evidence of the difl'erence in value between what she spent and
2
what she received."), Dr. Capps's fùll refind model is detrcient because it is based on the
3
assumption that consumers receive no benefit whatsoever fì'orn pulchasing the identified products,
4
['his cannot be the case, as collsunlel's received benefits in the f-orm of calories, nutrition, vitarlins,
No. 10-2199,2014 Wl' 1225184, at *3 (C.D. Cal.
5
and mirrerals. See In re POM Wontle(:u\1,1.C,
6
Mar.25,2014) (rejecting a fill refund model because consumers benefìted fiom consumption of
7
the def-enclant's products), Class members may not "r'etain solne unexpected boon, yet obtain the
8
windtall of a fill retind and profìt from a restitutionary award." /d. Because the California
I
consumer protection statutes upon which Brazil brought this case authclrize the recovery only
of
l0
whatever price premium is attributable to Dole's use of the allegedly nrisleading label statements,
¡-
ll
Dr. Capps' Full Retind Model is inconsistent with Plaintiff s liability case and must be rejected.ó
o.q
t2
()u
l3
.s
QY
Ø,
i¡.
Price Premium Model
Dr. Capps next proposes a Price Premium Model. Capps Decl. flfl 13-17 . Under this
!.:
ØÀ
q)_
ìi
(nE
:io
o.¡
É0)
'-l -.c
a
q-
t4
approach, Dr. Capps compares the price of the identified Dole products to the price of allegedly
l5
comparable products that do not have the
l6
price difference as restitution for Dole's alleged misrepresentat¡ons. Icl, n 14'
"AllNatural" label statemenls
and calculates the entire
t7
Ijowever, the Price Premiurn Model runs aloul of Cantcast. Dr, Capps has no way of
l8
linkirrg the price diflèrence, if any. to the allegedly unlawful or deceptive label statements ol'
l9
controlling lor other reasons why allegedly cornparable products may have different prices.
20
"Rather than answer the critical question why that price difference exist[s], ot'to what extent it [is]
2t
the result of [Dole's] actions, [Dr. Capps] instead assumed that 100% of that price difference [is]
22
attributable to [Dole's] alleged misreprcsentations." POM,20l4 WL 1225184, af *5.
lJrazil's deposition testinrony also casts cloubt on the Price Premium Model. Brazil himself
z_')
24
attributes factors other than the allegedly deceptive label statements, such as brand name, to the
25
allegedly higherpricesof the identified Doleproducts. BCF No. 106-1. Vetesi Decl. Ex, A, Brazil
26
u
27
28
Dr. Capps also proposes an identical disgorgement model. This is lejected for the same reasons as
the Full Refund Model. See Ogden,2014WIr27527, at +13; Werdebaugh,2014 WL 2191901, at
*22, n.9.
27
Case
No.: l2-CV-0
I 83 I
-Ll-lK
ORDER GRANTING IN PART AND DENYING IN PART PI-AINT]FF'S MOTION FOR CI,ASS
CER'I'I}.'ICATION
Case5:l-2-cv-O1-831-LHK Documentl-42 Filed05/30/14 Page28 of 36
I
Dep. at 218:6-10 ("Q. Okay. So you don't believe that you paid a premium based on the language
2
that you circled earlier today? A. Do I think they chalgecl me more because it was all natural,
)
clon't believe that that was the case."); id, at217:12-218:6
4
more f'or a named brand . . . than I would ftrr a generic brancl."). Brazil also acknowledges that he
5
has brand loyalty to Dole, that he
6
misrepresentations, and that, f'or hirn, price was not an impoftant factor. Id. at 174:17-175:6; id' af
7
216:16-23.
("it
I
is my expectation that I rvould pay
still may buy l)ole products even after discovering the alleged
Fgrthernrore, there is additional evidence in the record that, to the extent that there is any
8
9
price diftèrence between the identified Dole products arid allegedly comparable products, the price
l0
cliffèrence can be explained by tbctors othertlian tlie alleged label misrepresentations. For example.
il
Dole's Vice Presiclent of Marketing, David Spare. testifìes that "[w]hile private label prodLrcts are
^d
U\J
12
competitors, Dole does not consicler them to be comparable prodLrcts because Dole uses top quality
cJe
Èo
U)\
l3
fruit and has high specifications for fruit attributes, such
t4
fruittexture, and the color of the fiuit. The private labelproducts, by contrast, emphasize low price
l5
over q¡ality." ECF No. 104-6, Spare Decl. fl 5. In addition. comparing a specific Dole procluct to
16
an allegedly comparable Salèway Kitchen product,
l7
Mandarin Oranges product is packed in water, while Dole's Mandarin Oranges are packed in 100%
l8
.itrice."
19
of water or syrup." Id. n7
.s
þ-o!
q)À
o_
ìi a,¡
U)E
o.¡ -Y
?zÉc)
Fl=
as the number
of broken fiuit pieces, the
Mr. Spare states that "the Safeway Kitchen
L
o
f!
Id.n6, This dif'ference is signifrcant
because
"Ii.lt is more expensive. , . to
use jr-rice instead
.
The Price Premium Model's ínability to account lor any differences between the identified
20
2t
l)ole products and Dr, Capps' chosen comparable products, or for any fäctors that may cause
22
consumers to pref'er the identified Dole products over other identical products-such as brand
23
loyalty or quality difÍèrences between brand and generic products-renders the Price Plemium
24
Model insufficient under Conrca,r/. As Judge Dean Pregerson sLlmmarized in tbe I'OM case, "the
25
Price Premium model simply calculates what the price difference [is],'l-his damages 'model' cloes
26
not corrporT wilh Contca,s/'s requirement that class-wide damages be tied to a legal theory, nor can
27
this court conductthe requirecl'rigorous analysis' where thcre is nothing of substance to analyze."
28
28
No.: l2-CV-0183 1-LI-IK
ORDER GRANTING IN PART AND DENYING IN PART PI.AINTIFF'S MOTION FOR CI,ASS
Case
CER'TIT'ICATION
Case5:12-cv-O1831-LHK Documentl-42 Filed05/30/l-4 Page29 of 36
I
POM,2014 WL, 1225184, at *5. Thereftrre, because the Price Premium Model does not ofTèr
2
class-wide measure of darnages that is tied to the proper legaltheory. the Price Pretnium Model
3
does not comply with the predominance requirement of Rule 23(bX3). Comcast, 133 S. Ct, af 1430
iii.
4
a
Regression Model
Dr. Capps' final proposed damages model is an "econometric or legression analysis." ("the
5
fl lS. "Regression analysis involvesthe relationship
6
Regression Model"), Capps Decl.
7
variable to be explained, known as the'dependent variable,' such as the quantity demanded of
8
particular good or the price of a particular good, and additional variables that are thought to
I
produce or to be associated with the dependent variable, known as the 'explanatory' or
between a
a
l0
'independent' variables. . . . Regression analysis may be useful in determining whether aparticular
ll
efïect is present as well as in measuling the magnitude of a particular effect." fd.n 19. Dr, Capps
â(d
t2
explains:
cJv
-o
(4,
l3
associated with sales, the dependent variable in the regression analyses, namely price of tlie
l4
ploduct, plices of competing and complementary products, income, advertising, seasonality, and
t5
regional differences. , . . By controlling forthese factors ancl consiclering differences in sales of,
16
Dole fruit products before and after the labeling of the language 'All Natural Fruit,' a quantitative
17
measure of damages in this litigation may be provided."
IB
proposes to determine Dole's gains from its alleged misrepresentations by examining sales of the
l9
identified products befbre and alter Dole placed the alleged misrepresentations on its product
20
labels, using regression analysis to control for other variables that could otherwise explain changes
2T
in l)ole's sales.
.s
l-
L)U
at s)
é)_
ìl
(ns
o.¡
ts
rztro
"lt
is well documentecl in the econornics literature that commonly recognized factors are
Id,n20.ln
other words, Dr. Capps
L
o
g-
As outlined above, Comcast requires that "any model supporting a plaintiffls damages case
22
23
must be consistent with its liability case." Coruca.st, 133 S. Cl. at 1433 (quotation omitted). More
24
specifically , Conrca,st states that the plaintiff's damages "ntodel purporting to serve as evidence
25
damages in this class action must measure only those danrages attributable to [the defbndant's
26
conduct]." Id. "Ca\culafions need not be exact," id., and courts within this district have interpreted
27
Contcct,st as
28
"not articutat[ing] any requirement that
a damage
calculation be pelfbrmed at the class
29
No.: l2-CV-01831 -LI ll(
ORDER GRANTING IN PART AND DENYING IN PART PI,AINTIFF'S MOTION FOR CLASS
CERl'I T. ICAl'ION
Case
of
Case5:l-2-cv-O1-B3l--LHK Documentl42 Filed05/30/14 Page30 of 36
I
certification stage." In re Cathode Ray Tube (CRT) AnÍitrust Lilig., MDL No. 1917,2013 WL
2
5429718,at*22 (N.D. Cal. June 20, 2013),reporl ondrecontmendation adopted, MDL No, 1917,
J
2013 Wt.539l 159 (N.D, Cal. Sept. 24,2013). Nevertheless, the plaintifïmust provide enough
4
detait fbr the court to determine that the
5
case," (lotncast,l33 S. Ct. at I 433;see also Chavez, 268 I'-,R.D. af 379 ("At class certification,
6
plaintifTrrust present a likely method tbl cletermining class damages, though it is not necessary to
7
show that his method
will work with certainty
damages lnodel is "consistent with its
liability
at this tirne." (internal quotation marks omitted)¡.
The CoLll't tìncls that Dr. Capps' Regression Model sufTciently ties danlages to Dole's
8
()
plaintifls
alleged liability under Contcast. Dr. Capps' Regressiolt Model isolates the effèct of the alleged
l0
misrepresentation by controlling for all other fàctors that may afTèct the price of Dole's fruit cups
ll
and the volume of Dole's sales. For example, ancl signifìcantly, the Regression Model compares
l2
data on identical Dole products: the product before the label statement was introduced, and tlie
13
same product after its label included the alleged misrepresetrtation. .See Capps Decl. flfl 20,21 ' Th\s
t4
distinguishes the Regression Model from the clamages model rejected in POM,2014 WL 1225184,
ìi o.¡
(hE
t5
at *5. and the Price Premium Model found insufficient here, because the Regression Model ensures
xo
l6
that factors like brand loyalty and procluct quality remain constant. The Regression Moclel also
tsl -c
L
t7
controls for variables such as Dole's aclvertising expenditures, the prices of cornpeting and
l8
complementaly products, the disposable incorne of consumers, ancl population,
l9
as Comca,st contemplates, Dr. Capps' Regression Model traces damages to Dole's alleged
20
by accounting for several factors other than
2t
in price or sales.
(d
o_Q
uv
L
()e
t),
ØÀ
ots
Ë,2
f!
tl-re
Id.n2l. Therefore,
liability
alleged rlisbrandirrg that rnight influence changes
Dole cites trvo previons cases in which Dr. Capps' proposed metlroclologies were rejected.
22
WI. 27527, at * l3; Kottaras v, Whole Food,v Markets, |nc.,287 F'.R.D. 16,25
¿J
See Ogden,2014
24
(D.D.C. 2010). l-lowever, both cases are distinguishable'
h't Ogden, this Court found sumrnary judgrnent proper
25
with respect to plaintifïs' damages
26
claims because rather than calculating darnages, Dr. Capps had only "stated that he could provide
27
such an estimate and offered a generaldescription of several methods he rnight use to do so."
28
30
Case
No.: l2-CV-0183 l -Ll-lK
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR CL,ASS
CERTIFICATION
Case5:12-cv-O1-831--LHK Documentl-42 Filed05/30/l-4 Page3l of 36
I
Ogden,2014 WL 27527 , at * 13. The Court concluded that Dr. Capps' "descriptiotr of methodology
of
2
[was] not evidence of the proper amount of restitution in [that] case." Id. The Court's grant
3
summary judgrnent to the defendants in Ogden was based on the fact that discovery had closed and
4
the
5
restitution to which she [was] entitled. nor frequested] furlher discovery" on the issue.
plaintiff had neither "explain[ed] her fäilule to provide any evidence of the actualamount of
1¿l,
Here, Dole argues that the Court sliould deny class certificatiorr because Dr. Capps has not
6
7
yet run his regressions. Opp'n af 17-Ig.Brazil counters that Dole has not provided the necessary
8
discovery t'or Dr. Capps to finish his analysis. As an initial matter, Ogclen is distinguishable
9
because discovery has
yetto close in this case.
Se¿
ECFNo. 78,at2 (setting
f-act arrd expert
t0
discovery cLrt-otß of July 10,2014). Furthenrìole, Dole did not produce the discovery necessary
l-'
il
fbr Dr. Capps' arralysis betbre class certific¿ìtion was briefed between Janttary 31,2014 and March
âcd
t2
27,2014. Dole's statements in the parties' March 7,2014 Discovery Dispute Joint Report #l
¿)v
!()
at) ,
13
("DDJR #1") to Magistrate Judge Lloyd are revealing. As Dole stated in that filing:
.g
(-)
Ù.(Ê
úrÒ
()-
j:
(t)
é)
c)
=
,:
5-c
f!
l4
The issue is timing, Producing sensitive t'inancial data and docunrents before a class
has been certified is premature, as this information pertains solely to damages,
Plaintiff efïectively admits as much, because he filed his motion fbr class
certificatioli without such information, so it cannot have been relevant to class
issues. That motion for class ceftification is set for hearing on April 17 ,2014.
t5
l6
That said, giverr the other impending dates (e.g., expert discovery cutoff), Dole
offered to þroduce non-privileged fìnancial data and documents after the April 17,
2014 class'certification hearin[. This would provide Plaintiff with adequate time to
review and analyze the documents prior to the .lune 13,2014 Opening Expert
Report deadline. Plaintiff declined that offer'
17
t8
19
20
ECF No. I13, at 2.7 Id. at 3, Dole cannot use clarnages cliscovery as both a sword and a shield. In its
2t
DDJR #1, Dole claims that it need not produce discovery relevant to damages beftrre class
22
cerlification because the discovery is not relevant to class certifìcation. Yet, Dole opposes class
23
certification on the basis that Dr, Capps has not performed his regression analysis. According to
24
Brazil, Dr. Cìapps cannot perform his regression analysis withoutthe discovery Dole lefirsed to
25
26
27
28
t Dole also
contested the relevance of producin gThe2004-2007 labels lor the iderrtified proclucts,
which Brazil contencls are relevant to Dr. Capps' damages calculation. Magistrate Jrrdge Lloyd
found that as to the labels. "even given the relatívely low threshold for relevance at the discovery
stage, Brazil fbil[ed] to rnake an adequate showing" because his assertiolls of t'elevance\À/ere
"entirely conclusory." ECF No. 123, at 3.
3l
Case
No.: l2-CV-0
I 83
l-LI IK
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR CLASS
CERl'lFICAT'ION
Case5:12-cv-O1831--LHK DocumentL42 Filed05/30/l-4 Page32 of 36
produce. On
2
April 7. 2014, af\er class cerlifìcation had been firlly brief'ed. Consequently, tlre Court cannot credit
3
Dole's arguments that Dr. Capps' analysis is insufficient under Oonrca.sl when Dole itself
4
contributed to l)r. Capps' failure to complete his regression analysis. Nor can the Court accept
5
Dole's contention \l'taTComcasl requires Dr. Capps to complete his regressior, analysis when Dole
6
argued the opposite to Magistrate Judge Lloyd.
Astothe KottarctscasecitedbyDole,thecourtinKottaras rejectedDr.Capps'proposed
7
.s
lr
^CÚ
Òu
ÈC:
c)v
È()
U)'
ú)À
o_
ji o.¡
çID E
Ë,2
trc)
Fl
-C
Aprit l,2OI4, Magistrate Judge t-loyd compelled the production of such discovely by
I
I
method of showing "monetary loss attributable to the anti-competitive aspect of the merger
9
between" twg supermarket chains. 28
I
F.R.D . aT22. The court initially noted that the
plaintifï was
l0
not requirecltg "ot-fer evidence as to the amount of clamages at [the class certificationl stage;" but
ll
rather she only neecled to "show that the tbct of darnage fcould] be proven using common
l2
evidence."
1¿l.
Subjecting Dr. Capps' proposed regression analysis to "rigorous analysis," the Kottara,s
13
l4
courl rejected the proposed model because: (1) while it may have been sufficient to calculate what
15
losses consulners sufferecl as a result of the n-ìerger. the model failed
l6
benefits custorìers may have received thereby"; and (2) the pl'oposecl model was "not sufficiently
17
developed to meet Plaintiffs burden of showing that common questions predominate over
18
individual ones, as required by Rule 23(bX3)." Id. at24,26.The cottrt quoted a case fì'om this
t9
district for the proposition that courts are "increasingly skeptical of plaintiffs'experts who of'fer
20
only generalized and theoretical opinions that a particular methodology rnay serve this purpose
2l
without also submitting a functioning model that is tailored to rnarket fàcts in the case a|hand." Icl.
22
af 27-27 (citing
23
Cat. 200B)).
"to take into account any
f-
o
L
In re Graphics Prr¡ce,s,sing Units AntiÍt^ust Liligation,253 F,R.D. 478, 492 (N.D.
24
For reasons already discussed, Kottaras is distinguishable. Dr. Capps' regression would
25
control for other f'actors (such as price, seasonality, and regional diffèrences) that could explain
26
changes in Dole 's sales figures that may otherwise erroneously be attributed to Dole's label
27
statements. Moreover, the Regtession Model compares clata on identical Dole prodr,rcts-the
28
32
No.: l2-CV-01 83 l-LLlK
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR CLASS
Case
CER'TIF-ICATION
Case5:l-2-cv-O1-831--LHK Documentl-42 Filed05/30/14 Page33 of 36
I
product before the label statement was introduced, and the same product after its label includcd the
2
alleged nrisrepresentation. See Capps Decl. !f!l 20,27. Dr. Capps' proposed model in Kottara,s
J
accounted for the adverse price irnpacts of a supelmarket merger but completely
4
measurement of the benefits of such a merger.
5
regression model here contenrplates fàctors other than the alleged misbranding that might influence
6
market price, including "expenditures associated with the advertisirrg and promotion" of the
7
products at issue, prices of complementary products, disposable personal income of consumers,
I
and population, Capps Decl. fl
onr
itted any
Kr¡lÍaras,28l F.R.D. at23-24. By contrast, the
2l.
Dole attacì<s the methodological rigor of the Regressiorr Model on only one basis. Dole
9
l0
argues that the Regression Model raises i¡rdividual issues because, according to Dole, the model
e-ol-
tl
rvillbe unable to account for price differences
o-Q
ULJ
L
l2
which tfrey are sold, or the availability of discounts. Opp'n ar22.Because of tliese variatiotts, Dole
13
contends, different consumers allegedly suffered different amounts of damages. However, Dole
l4
does not explain how these regional price dill'erences would impact the actual treasttre of damages
t5
iri the Regression Model: price changes within regions that correspond to the introduction and/or
t6
removal of the allegedly misleading label statements. For example, if a Dole fruit cup costs $4.00
17
in San Francisco and $3.00 in Sacramento, this $1.00 unit disparity does not necessarily influence
l8
how the price would change as a result of amending the product's label to claim that the liuit ctrp is
19
"AllNatural." lf both prices
20
both suflered the same amount in damages, $0.10. Even if the price increase is proportional, the
2l
price change will still result in largely similar damages to both purchasers: if prices increase by
22
5o/o,tl-te purchaser
23
Sacramento $0.15. Regardless, damages can be tied to the liability theory and calculated on a
24
classwide basis.
.E
o9
:,=
U),
based on the nature and locatioll of the outlet in
tt l)
q)-
sb
(t) E
rz,
trc)
'r -.c
L
o
tr
increase by $0.10, purchasers in San Francisco and Sacramento have
in San Francisco will pay $0.20 more per fruit cup. and the purchaser in
25
Fufthermore, to the extent that Dole objects to regior,al plice disparities, artd not differences
26
in price changes, Dr. Capps' Regression Model controls tbr any such regional diffbrences to ensure
27
that the resulting damages figures only cover the benefit Dole received from its label statements,
28
33
No.: l2-CV-0 t 83 1-LI-lK
ORDER CRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION
Case
CERl'II.-ICAT'ION
I.-OR CI-ASS
Case5:12-cv-Ol-B3l--LHK Documentl-42 Filed05/30/14 Page34 of 36
I
Capps Decl. 'tl 27 . Comca,st establishes tl, at "[c]alcu lations need not be exact, but at the class-
2
certification stage (as at trial), any model supporting a plaintifTs damages case must be consistent
J
with its liability case.'t Comcasf ,133 S. Ct. at 1433 (citation and quotation omitted). Dr. Capps'
4
Regression Moclel comports with this requirernent. Even if there are regional difïerences as Dole
5
contends, tlre Regression Model is sufTiciently precise vnder Comcast and the model's ability to
6
control f-or other fàctors that could atfect Dole's sales ensures that Dr. Capps' damages figures are
7
tied only to Dole's liability. Therefore, because Brazil has advanced a damages methodology that is
8
capable of "tracing the danrages to the
9
tlrat clLrestiorls comtîot1 to the class predominate. Lindell,20l4 V/L 841738, at*14.
plaintifls theory of liability," Brazil has successfilly shown
Accordingly, because Brazil's proposed damages niodel provides a lreans of showirrg
t0
È-olo.q
ll
damages on a classwide basis through comnlon proof, the Court concludes that Brazil has satisf-red
12
the Rule 23(bX3) requirernent that common issues predominate over individual ones.
uv
13
QY
u)
2.
t<
ú)À
ql-
Superiority
A class action brought under Rule 23(bX3) must
t4
be "superior to other available methods tbr
ì: c)
(hs
15
tbirly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(bX3). To make this
ê) .:
?z:
l6
cletermination the Court considers:
t7
prosecution ordefense of separate actions; (2) the extent and nature of any litigation concerningthe
l8
controversy already begun by or against class members; (3) the clesirability or undesirability
t9
concentrating the litigation of the claims in the particular forum; and (4) the likely difficulties in
20
managing a class actioti. Fed. R. Civ. P. 23(bX3XA)-(D).
tro
È'l
-c
(l)
the class rnembers' interests in individually controlling the
L
t!
-f
2t
he superiority requirement tests whether "classwicle litigation of common issues
litigation costs
ancl promote greater
recluce
23
1227
24
issues to establish his or her right to recover
25
F.3d at I 192.
, 1234 (9th Cir. 1996). "If each class mernber
has
to litigate numerolls and substantial separate
individually
a class
actiott is not superior," Zinser,253
Dole does not dispute that a class action is superior to other available methods for the fair
26
28
will
efÏciency." Vctlentim¡ v. Cctrter-Wallace, Inc.,97 F.3d
22
27
of
and efTicient adjudication of this controveÍsy.l{ere, the value of each individualclaim is likely
34
No.: I 2-CV-01 83 1-Ll-ll<
ORDER GRANTING IN PART AND DENYìNG IN PART PI,AINTIFF'S MOTION FOR CI-ASS
CERl'tFICA'I'ION
Case
Case5:12-cv-01-B3l--LHK Documentl42 Filed05/30/14 Page35 of 36
I
srnall, such that the only plactical way f'or this case to proceed is as a class action. Moreover,
2
neither party has raised any issues related to efïciency, and the Court fìnds that this dispute is more
3
efficiently resolved as a class action. Accorclingly, the supeliority requirement to certifu a Rule
4
23(bX3) class is rnet.
5
IV.
For the f-oregoing reasons, the Court GRANTS
6
7
.s
tË.o
QLJ
(È
c.)v
o_
ì:
(hsIc)
o).Y
rzl-l -c
o
l!
Class Certification.
The CoLrrt therefore CERTIFIES the following class under Rule 23(b)(2):
"All
persons in
theUnitedStateswho,fromApril ll,2003,untilthedateofnotice,purchasedaDolefruitproduct
'All Natural Fruit'
but which contained citric acid and
l0
bearing the front panel label statement
ll
ascorbic acid. Exclucled trom the class are
t2
governnrental entities, and (3) the CoLrrt to which this case is assigned and its stafï."
l3
The Court also CE,RTIFIES the lollowing class under Rule 23(b)(3):
çh,
ØL)
Plaintitls Motion fbr
Brazilhas satisfied the requilernents of Rules 23(a), 23(b)(2), and 23(bX3).
I
9
CONCLUSION
(l)
Dole and its subsidiaries and affìliates, (2)
"All
persons in
t4
California who, lÌom April I l, 2008, until the date of notice, purchased a Dole fruit product
l5
bearirrg the front panel label statement
t6
ascorbic acid. Excluded from the class are
17
governmental entities, (3) the Court to which this case is assigned and its
l8
who lnake atirnely election to be excluded flornthe Class." The CouTI DENIES Plaintiffs Motion
19
for Class Certification of a nationwide 23(bX3) class.
Dole and its subsidiaries and afliliates, (2)
stafl
and (4)
All
persons
&
Associates, Charles Barrett, P.C., and Barrett Law Group, P.A, as class counsel.
The Court DISMISSES with prejudíce the Dole products and label staternents identifìed in
22
23
(l)
The Court APPOINTS Plaintiff Chad Brazil as the class representative, and Pratt
20
2t
'All Natural Fruit' but which contained citric acid and
the SAC for which Braz.il did not move for class ceftif,rcation.
Within l4 days of the date of this Order, Brazil shall
24
f,rle an amended cornplaint that
25
amends the class defìnitions to comport with the Couft's ceftified class defìnitions, and cleletes the
26
dismissed Dole products and label statements. Plaintifl.s may not lnake any other substantive
27
change to the complaint, unless Detèndant stipulates to the change.
28
35
Case
No.: I 2-CV-0
183
l-LHI(
ORDER GRANTING IN PART AND DENY]NG IN PART PT,AINTIFF'S MOTION FOR CLASS
cER'f il.-lcAl'toN
Case5:l-2-cv-O1-831-LHK Documentl-42 Filed05/30/1-4 Page36 of 36
I
IT IS SO ORDERED.
2
J
Dated: May 30,2014
LUCY H. K
United States District Judge
4
5
6
7
I
9
l0
d
e-o!
t1
o-Q
l2
oe
13
(J L'
FC)
.a ,1
t4
.tÀ
oìi
c.¡
l5
AD.C
o.:
trc)
l6
l7
!r
o
ft
l8
19
20
2l
22
23
24
25
26
27
28
36
1-LFll(
ORDER GRANTING IN PART AND DENYING IN PART PT,AINTIFF'S MOTION FOR CI.ASS
CERTIFICATION
Case
No.: l2-CV-0
183
Case4:12-cv-03919-PJH Document56 Filed05/l-0/1-3 Pagel of
1-6
1
2
UNITED STATES DISTRICT COURT
3
NORTHERN DISTRICT OF CALIFORNIA
4
5
6
JUDITH JANNEY, et al.,
I
9
10
o
ORDER GRANTING MOTION TO
DISMISS IN PART AND DENYING
IT IN PART
V.
GENERAL MILLS,
Defendant.
I
¡-
o
*.
No. C 12-3919 PJH
Plaintiffs,
7
11
.g
C
o
o
E6
a
o
0
'E
12
Defendant's motion to dismiss the first amended complaint came on for hearing
13
before this court on May 1,2013. Plaintiffs appeared by their counsel Stephen Gardner,
14
and defendant appeared by its counsel Charles C. Sipos and David T. Biderman. Having
15
read the parties' papers and carefully considered their arguments and the relevant legal
*,
Ø zEo
16
authority, the court hereby GRANTS the motion in part and DENIES it in part.
o
17
I
o
o
+.
(ú
ït
Ëo
tr
Ð
O
.ø
o
Eo
Ë
o
LL
BACKGROUND
18
ln this proposed class action, plaintiffs allege that the product packaging and
19
advertising of certain Nature Valley@ products manufactured and sold by defendant
20
General Mills is deceptive because the products, which contain the sweeteners high
21
fructose corn syrup ("HFCS'), high maltose corn syrup ("HMCS'), and/or maltodextrin and
22
rice maltodextrin ("Maltodextrin"), are labeled "natural."1 Plaintiffs claim that these
23
substances are "highly processed" and are therefore not "natural."
24
ln the first amended complaint ("FAC"), plaintiffs assert four causes of action
-
a
25
claim under the California Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code
26
$ 1750(a)(5), (a)(7); a claim of unfair competition under California Business & Professions
27
28
1 This includes the use of the phrases "100o/o Natural," "All Natural," and "Natural" on
the product label or in its marketing.
Case4:12-cv-03919-PJH Document56 Filed05/1-0/1-3 Page2 of L6
1
Code S 17200 ("UCL"); a claim of false advertising under California Business & Professions
2
Code S 17500 ("FAL"); and a claim of unjust enrichment.
3
4
artificial or synthetic ingredients and that consist entirely of ingredients that are only
5
minimally processed, Plaintiffs assert, however, that General Mills deceptively uses the
6
term "natural" to describe products "containing ingredients that have been fundamentally
7
altered from their natural state and cannot be considered 'minimally processed,"' and that
I
I
the use of "natural" to describe such products "creates customer confusion and is
10
ttsa
t-
+¡Ë
O*
oÈ
vr2
oõ
{-l c
deceptive." FAC fl3.
Plaintiffs contend that the term "natural" is "pervasive and prominent on the
11
packaging and advertising" of Nature Valley@ products, and that General Mills "reinforces"
12
the image of its products as all-natural on the Nature Valley@ website, and through social
13
media accounts on Twitter, Facebook, Flickr, and YouTube. FAC fl
14
assert, the name Nature Valley@ itself "directly conjures up images of naturalness," FAC
15
o
oË
*re
oã
'-o
Plaintiffs allege that the term "natural" applies only to products that contain no
4.
lndeed, plaintiffs
U'
(ÚE
;,
c
16
fl 5. For example, they claim that the Nature Valley@ website, which "features images of
forests, mountains, and seaside landscapes," links Nature Valley@ with "the concept of
g8
17
natural." FAC
18
"natural," General Mills "seeks to capitalize on consumers' preference for all-natural foods
19
and the association between such foods and a wholesome way of life." FAC fl 27.
+ti
tt:
c
l
20
11
23. They contend that by representing that Nature Valley@ products are
Plaintiffs assert that they bought certain varieties of Nature Valley@ Chewy Trail Mix
21
Granola Bars, Sweet & Salty Nut Granola Bars, and Granola Thins, relying on the claims
22
that they are "natural." Plaintiffs were "attracted to these products because they prefer to
23
consume all-natural foods for reasons of health, safety, and environmental preservation[,]"
24
and they "believe that all-natural foods contain only ingredients that occur in nature or are
25
minimally processed, and they would not include HFCS, HMCS, and Maltodextrin among
26
such ingredients." As a result, the Nature Valley@ Chewy Trail Mix Granola Bars, Sweet &
27
Salty Nut Granola Bars, and Granola Thins, with their "deceptive 'Natural' claims," have no
28
value to them. FAC
f 47. They contend that they stopped buying the Nature Valley@
2
Case4:l-2-cv-03919-PJH Document56 Filed05/10/1-3 Page3 of L6
1
products when they discovered they were not "all natural." FAC
3
Civil Procedure 12(hX3) and 12(bX6), arguing that the court lacks subject matter
4
jurisdiction over the case, and that plaintiffs have failed to plead fraud with particularity.
DISCUSSION
5
þ
A.
oã
{-l
:
liã
Legal Standard
A motion to dismiss under Federal Rule of Civil Procedure 12(bX6) tests for the legal
7
or
51,57.
General Mills now seeks an order dismissing the FAC pursuant to Federal Rules of
2
o
o.E
+. "ä
tlî
8
sufficiency of the claims alleged in the complaint. lleto v. Glock. lnc., 349 F.3d 1191,
I
1
199-1200 (gth Cir. 2003). Review is limited to the contents of the complaint. Allarcom
fcl rr Gen lnstrument Corn 69 F,3d 381, 385 (9th Cir. 1995). To survive
10
Parr Telerrision l
11
a motion to dismiss for failure to state a claim, a complaint generally must satisfy only the
12
minimal notice pleading requirements of Federal Rule of Civil Procedure 8, which requires
13
that a complaint include a "short and plain statement of the claim showing that the pleader
14
is entitled to relief." Fed. R. Civ. P. 8(aX2).
.n2
OE
+..c
15
u,
16
factual allegations, need not be accepted. Ashcroft v. lqbal, 556 U.S. 662,678-7I (2009),
17
The allegations in the complaint "must be enough to raise a right to relief above the
18
speculative level." Bell Atlantic Coro. v. Twombly, 550 U.S. 544, 555 (2007) (citations and
19
quotations omitted). A motion to dismiss should be granted if the complaint does not
20
proffer enough facts to state a claim for relief that is plausible on its face, See id. at
21
558-59. A claim has facial plausibility when the plaintiff pleads factual content that allows
22
the court to draw the reasonable inference that the defendant is liable for the misconduct
23
alleged." lqbal, 556 U.S. at 678 (citation omitted).
túE
+a:
î,
E
tt:
g€
c
f
24
Nevertheless, however, legally conclusory statements, not supported by actual
ln addition, in actions alleging fraud, "the circumstances constituting fraud or mistake
25
shall be stated with particularity." Fed. R. Civ. P. 9(b). That is, Rule 9(b) requires that
26
falsity be pled with specificity, including an account of the "time, place, and specific content
27
of the false representations as well as the identities of the parties to the
28
misrepresentations." Swartz v. KPMG LLP, 476 F.3d 756,764 (9th Cir. 2007) (citations
3
Case4:12-cv-03919-PJH Document56 Filed05lLOl13 Page4 of
I
omitted); see also Neubronner v. Milken, 6 F.3d 666, 672 (9th Cir.1993).
Consequently, "[a]verments of fraud must be accompanied by 'the who, what, when,
2
3
where, and how'of the misconduct charged." Vess v. Ciba-Geigy Corp. USA, 317 F.3d
4
1097,1106 (gth Cir.2003) (quoting Cooperv. Pickett, 137 F.3d 616,627 (9th Cir.1997)).
5
Moreover, the plaintiff must do more than simply allege the neutral facts necessary to
6
identify the transaction; he must also explain why the disputed statement was untrue or
7
misleading at the time it was made. Yourish v. California Amplifier, 191 F.3d 983, 992-93
8
(9th Cir. 1ges).
9
B.
10
-,¡o
oË
+¡€
ot
'!- o
{-. b
.2 :o
oÈ
Ø2
ob
*.c
(ÚE
*ti
Ø;,E
tt:
o3
.Ë
tr
Ð
1-6
Defendant's Motion
General Mills makes two main arguments
-
that the claims should be dismissed
11
under the "primary jurisdiction doctrine," and that the claims fail to allege fraud with
12
particularity as required by Rule 9(b).
13
1.
14
Under the primary jurisdiction doctrine, courts may determine that the initial decision-
15
making responsibility should be made by the relevant federal agency rather than the courts.
16
Syntek Semiconductor v. Microchip Tech., 307 F.3d 778,780 (9th Cir. 2002); see also
17
Reiter v. Cooper, 507 U.S. 258, 268 (1993). General Mills contends that the court should
18
dismiss the entire action because any decision regarding the meaning and use of the label
19
"natural" should be made by the United States Food and Drug Administration ("FDA').
20
Dismissal under the primary jurisdiction doctrine
The primary jurisdiction doctrine is a prudential, rather than a jurisdictional, limitation,
21
as the court has discretion to retain jurisdiction (which it would not if the doctrine were
22
jurisdictional). See Reiter, 507 U.S. at 268-69; see also Davel Commc'ns. lnc. v. Qwest
23
Corp.,460 F.3d 1075,1091 (gth Cir.2006) (where primary jurisdiction lieswith an agency,
24
the court may stay the case pending administrative action or dismiss it without prejudice).
25
Application of the doctrine does not imply that the court lacks subject-matter jurisdiction,
26
but rather that the case "requires resolution of an issue of first impression, or of a
27
particularly complicated issue that Congress has committed to a regulatory agency."
28
Brown v, MCI WorldCom Network Servs.. lnc. ,277 F.3d 1166, 1172 (9th Cir. 2002); see
4
Case4:1-2-cv-03919-PJH DocumentS6 Filed05/1-0/l-3 PageS of 16
1
2
o
+.
considerwhetherthere is (1)a need to resolve an issue (2) that has been placed by
4
Congress within the jurisdiction of an administrative body having regulatory authority
5
(3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory
6
authority that (4) requires expertise or uniformity in administration. Clark v. Time Warner
7
Cable, 523 F.3d 1110,1114-15 (gth Cir. 2008); see also Syntek, 307 F.3d at781(relevant
I
factors are whether agency determination lies at the heart of task assigned to agency by
9
Congress; whether agency expertise is required to unravel intricate technical facts; whether
11
.Rt
ln determining whether to invoke the primary jurisdiction doctrine, courts generally
3
10
o
also Syntek, 307 F.3d at 780.
the agency determination would materially aid the court).
General Mills argues that the question whether food products are "natural" is best
c
12
left to the FDA's regulatory authority, and that application of the factors listed above
o oo
13
confirms that dismissal on primary jurisdiction grounds is proper here. General Mills
14
asserts that plaintiffs' claims expressly require the court to decide whether "natural" on food
15
labeling is false or misleading; that food labeling is an issue that Congress has placed
Ø zc
16
within the primary jurisdiction of the FDA; that food labels are indisputably subject to
o
17
comprehensive regulatory authority by the FDA (and that under that authority, the FDA has
18
adopted a "policy" for the use of "natural," which it enforces through administrative action);
19
and that the FDA's enforcement of its "natural" policy for food labeling is an issue that
20
requires the agency's expertise and uniformity in administration.
.rl
)
o
o
o
.E
.9
o
tt,
o
o)
t
(ú Ë
o
(¡)
ï,o
.Ë
c
f
L
21
"Natural" is not defined in the federal Food, Drug and Cosmetic Act, and,
22
notwithstanding repeated requests, the FDA has expressly declined to deflne "natural" in
23
any regulation orformal policystatement. ln 1991, the FDAsolicited comments on a
24
potential rule adopting a definition for the term "natural," noting that the use of "natural" on
25
food labels "is of considerable interest to consumers and industry." However, two years
26
later, the FDA concluded that while "the ambiguity surrounding the use of this term . .
27
could be abated" if the term were adequately defined, the agency would have to carefully
28
consider many facets of the issue if it undertook a rulemaking to define "natural," which it
5
.
Case4:L2-cv-03919-PJH DocumentS6 Filed0S/10/l-3 PageG of
1
was unwilling to do because of "resource limitations and other agency priorities." See 58
2
Fed. Reg.2302-01 at*2407 (Jan.6, 1993).
3
o
o
+J
o
*,
.9,
against Ben & Jerry's, an ice cream producer that labeled its products "all natural." The
5
FDA's response was that defining "natural" was "not among the FDA's current enforcement
6
priorities." ln 2006, the SugarAssociation petitioned the FDA to define "natural," and FDA
7
likewise declined to do
I
I
stays of pending litigation over the use of "natural" in beverages containing high-fructose
11
13
stated that it would "maintain its current policy . . . not to restrict the use of the term 'natural'
14
except for added color, synthetic substances, and flavors[;]" and that it would "maintain its
15
policy regarding the use of 'natural,' as meaning that nothing artificial or synthetic (including
16
all color additives regardless of source) has been included in, or has been added to, a food
17
that would not normally be expected to be in the food." 58 Fed. Reg. 2302-01 at "2407.
o
o
Ê
.9,
o
(¡)
C
When questions over the use of "natural" arise, the FDA occasionally refers to a
O
ID
f
declined to do so.
statement made in the January 6, 1993, guidance regarding labeling. At that time, the FDA
o
+,
IE o
{..
z
.Ë
corn syrup, in the hopes that FDA would formally define "natural." Nevertheless, the FDA
12
o
o
'tr
ïto
so. \n2010, a number of U,S. District Courts issued six-month
.(!
E
o
Ø
ln 2002, the Center for Science in the Public lnterest asked the FDA to take action
4
10
-,
1-6
c0)
t!o
18
With only this informal policy statement on which to rely as the definition for
19
"natural," the FDA has taken little action against companies for improperly using the term.
20
The FDA has issued a number of "Warning Letters" to companies who have used the term
21
"natural" in labels for food products that contain various preservatives. General Mills claims
22
that these letters show that the FDA routinely makes considered, expert judgments about
23
what products and food labels warrant administrative action for non-compliance with its
24
informal policy.
25
26
27
28
For example, in an August 16,2001Warning Letter to Oak Tree Farm Dairy, the
FDA stated:
The term "all natural" on the "OAKTREE ALL NATURAL LEMONADE" label is
inappropriate because the product contains potassium sorbate. Although. .
FDA has not established a regulatory definition for "natural," we discussed its
6
Case4:12-cv-03919-PJH DocumentS6 Filed05/1-0/13 PageTof16
4
use in the preamble to the food labeling final regulations (58 Federal Register
6, 1993, copy enclosed). FDA's policy regarding the use of
"natural," means nothing artifìcial or synthetic has been included in, or has
been added to, a food that would not normally be expected to be in the food.
The same comment applies to use of the terms "100 o/o NATURAL" and "ALL
NATURAL" on the "OAKTREE REAL BREWED ICED TEA" label because it
contains citric acid.
5
ln an August 29, 2001 Warning Letter to Hirzel Canning Company regarding its
1
2407 , January
2
3
6
canned tomato products, the FDA stated:
o
oË
+r€
12
[T]he Dei Fratelli@ "CHOPPED TOMATOES ONIONS & GARLIC" and
"GHOPPED MEXICAN TOMATOES & JALAPENOS' labels bear the term
"ALL NATURAL," but according to the ingredient statements, calcium chloride
and citric acid are added to the products. We have not established a
regulatory definition for the term "natural," however; we discussed its use in
the ream le [sic] to the food labeling final regulations (58 Federal Register
2407, Januáry 6, 1993). FDA's polìcy regarding the use [ofl "natural," means
that nothing artifìcial or synthetic as been included in, or as been added to, a
food that would not normally be expected to be in the food. Therefore, the
addition of calcium chloride and citric acid to these products preclude use of
the term "natural" to describe this product.
úr:
13
As yet another example, in a November 16, 2011 Warning Letter to Alexia Foods,
7
8
I
10
11
ot
'qÈ
)fr
Ø2
oÉ
túE
,Pi
U' ;,E
tt:
g8
tr
f
14
the FDA stated:
15
16
17
18
19
when "nothing aftificial or synthetic . . , has been included in, or has been
added to, a food that would not normally be expected to be in the food." [58
FR2302,2407, January 6, 19931.
es & Babv Portabella Mushrooms
pyrophosþhate, which is a synthetic
roducts contain this synthetic
ural" on this product label is false and
is misbranded under section a03(aX1)
20
21
22
of the Act.
23
25
We note that your Alexia brand products market a number of food products
with the "All Natural" statement on the label. We recommend that you review
all of your product labels to be consistent with our policy to avoid additional
misbranding of your food products.
26
ln Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170 (gth Cr.2012), the Ninth
24
27
Circuit commented (in a somewhat different context), "lf the FDA believes that more should
28
be done to prevent deception, or that [a manufacturer's] labels mislead consumers, it can
7
Case4:12-cv-0391-9-PJH Document56 Filed0S/l-0/13 PageB of
1-6
1
act." ld. at 1177. General Mills contends that the same reasoning is applicable here, and
2
asserts that as the Warning Letters demonstrate, the FDA does act to enforce its "policy."
3
General Mills argues that for the court to usurp the agency's role and decide for itself
4
whether any such action is appropriate "would risk undercutting the FDA's expert
5
judgments and authority." See id.
6
General Mills acknowledges that some courts have declined to apply the primary
7
jurisdiction doctrine to food labeling claims concerning the use of the term "natural"
I
because the FDA has not elevated its informal "policy" into a formal regulation. ln
9
particular, General Mills cites Lockwood v. Conagra Foods, lnc., 597 F.Supp. 2d 1028,
10
1035 (N.D. Ca|.2009) (declining to apply primary jurisdiction doctrine in false advertising
11
case concerning use of the term "natural" for food label); and Wright v. General Mills. lnc.,
12
2009 WL 3247148 at *4 (S.D. Cal. Sept. 30, 2009) (same). However, General Mills argues,
+.Ë
13
these decisions predate the Ninth Circuit's decision in Pom Wonderful, which held that
oÈ
14
deference to the agency is proper even if no formal regulation has been promulgated. See
ob
*rr
15
id., 679 F.3d at 1177).2
¡-
o
oË
+.e
or
.:.
O
Ul r,
cr2
túE
*r:
Ø1,t
16
Plaintiffs disagree with General Mills' assertion that the FDA has issued repeat and
tt:
of
Ë
17
consistent "guidance" on the subject of what is "natural" in food products, and contend that
f
18
in fact, the FDA has explicitly and repeatedly refused to define the term "natural," and that
19
current FDA guidance regarding the term is applicable only to added colors and flavors in
20
foods (citing 21 C.F.R. S 101 .22 - Food Labeling: Nutrition Content Claims). They contend
21
that the fact that the FDA has not promulgated a single regulation defining "natural" in the
22
context of food products
23
more than 20 years, as well as a number of specific requests that it do so
24
dismissal or stay under the primary jurisdiction doctrine would have no effect on the FDA's
25
position.
c
- notwithstanding
significant consumer and industry interest for
- means that a
26
' The court notes that not all courts since Pom Wonderful have fo und that the primary
jurisdiction doctrine supports dismissal of "natural" claims. See, e.9., Brazil v. Dole Food
28 Company, _ F.Supp. 2d _,2013 WL 1209955 (N,D. Cal. March ?5,2 013); Jones v. ConAgra Foóds-.lnc., F.Supp. 2d _,2012WL 6569393 (N.D. Cal. Dec. 17,2012).
27
8
Case4:12-cv-03919-PJH DocumentS6 Filed0S/l-0/13 Page9of 16
1
ln any event, plaintiffs argue, they are not asking the court to define "natLrral," but
2
rather to decide a question of state law
3
Valley@ pfoducts as "natural" could mislead reasonable consumers. Plaintiffs concede that
4
the FDA has extensively regulated food labeling, but argue that cases involving whether or
5
not food labels are misleading do not necessarily entail technical questions or require
6
agency expertise, and that for that reason the court in this case should not invoke the
7
pri mary j urisd
8
9
-
whether General Mills' marketing of its Nature
iction doctri ne.
The question is a close one, but on balance the court finds that the motion must be
DENIED, at least at this stage of the litigation. ln Pom Wonderful, the Ninth Circuit found
10
that when a plaintiff's cause of action requires a court to decide an issue committed to the
11
FDA's expertise, dismissal in deference to that agency is the proper result
12
formal regulation has been adopted. 1d.,679 F.3d at 1177. Thus, in Astiana v. Hain
13
Celestial,
14
on Pom Wonderful to dismiss on primary jurisdiction grounds a complaint that alleged that
o Ê0)
+,
o to
+,
z
U' Ê(¡)
15
the use of the word "natural" on cosmetic products was false and misleading, See id.,2012
16
WL 5873585 at *2.
o
17
o
o
'-6
o
() =G
C)
,o,
)
rn
ïto
Ë
c
f
o
o
'c
.9
o
c
LL
_
F.Supp.2d
_,2012WL
-
even if no
5873585 (N.D. Cal. Nov. 19,2012), this court relied
General Mills argues that these cases demonstrate that dismissal of the FAC on
18
primary jurisdiction grounds is proper under the Syntek factors. The court agrees that the
19
Syntek factors favor the resolution of this issue by the FDA. The question whether specific
20
food ingredients can be included in food products that are labeled "natural" implicates the
21
regulatory authority of the FDA
22
safety and food products labeling, among other things. See 21 U.S.C. S 343 (statute
23
implementing extensive regulatory regime for food labels for purposes of determining
24
whether food is misbranded). Enforcement of a policy regarding the labeling of food
25
products as "natural" requires application of the FDA's expertise and uniformity in
26
administration.
27
28
-
the agency charged by Congress with regulating food
It is true that the issuance of the informal "policy," or its citation by the FDA when it
chooses to do so, suggests that the FDA does have a position of sorts
I
- unlike the situation
Case4:12-cv-039L9-PJH Document56 Filed05/1-0/1-3 Page10 of 16
1
in Astiana, where the FDA had issued no guidance whatsoever, even informal policy
2
statements, regarding the use of the term "natural" on cosmetics packaging. Nevertheless,
3
in repeatedly declining to promulgate regulations governing the use of "natural" as it applies
4
to food products, the FDA has signaled a relative lack of interest in devoting its limited
5
resources to what it evidently considers a minor issue, or in establishing some "uniformity in
6
administration" with regard to the use of "rìatural" in food labels. Accordingly, any referral to
7
the FDA would likely prove futile. Thus, the court finds little reason to stay or dismiss the
8
case to allow the FDA the opportunity to take action, even if the other factors are present.
I
10
ùr
2,
Failure to state a claim
General Mills also argues that the FAC should be dismissed for failure to plead fraud
11
with particularity, as required by Rule 9(b). Wth regard to the five specifically identified
12
products (the "Named Products")
13
Granola Bars; Nature Valley@ Chewy Trail Mix Fruit & Nut Granola Bars; Nature Valley@
14
Sweet & Salty Nut Cashew Granola Bars; Nature Valley@ Dark Chocolate Granola Thins;
15
and Nature Valley@ Peanut Butter Granola Thins
16
for these products includes false representations that the products are "100% Natural" and
gf
17
'100o/o Delicious;" and that the granola bars are the "official granola bar" of the PGA Tour
f
18
and the U.S. ski team, General Mills argues that the FAC fails to comply with Rule 9(b)
19
because it does not allege which products each plaintiff purchased, or on which of the cited
20
statements each plaintiff relied.
o
oË
*r€
oä
*.h
.9È
oÈ
Ø2
oõ
+.c
õE
*ti
U' ;,E
tË
'Ë
21
-
Nature Valley@ Chewy Trail Mix Dark Chocolate & Nut
- and the allegations that the packaging
General Mills also contends that the FAC fails to allege particularized facts regarding
22
representations made in four sources of advertising apart from the product packaging
23
Nature Valley@ website, Flickr photostream, Facebook page, and YouTube channel; and
24
also fails to identify any misrepresentation with respect to products other than the five
25
"Named Products."
26
-
the
General Mills argues that the FAC does not allege facts showing that the four online
27
sources of advertising include any representations that any Nature Valley@ products are
28
"natural," or that any plaintiff relied on any representations in those sources. Rather,
10
Case4:12-cv-039L9-PJH Document56 Filed0S/1-0/13 PageL1ofL6
1
General Mills contends, the FAC vaguely asserts only that the four sources are "linked with
2
the concept of natural" because they feature, e.9., images of forests, mountains, and
3
seascapes; photographs of people in natural settings such as desefts, forests, lakes,
4
beaches or mountains; photographs of wildlife, plants, lakes, clouds; or videos of mountain
5
bikers riding on forest or desert trails and pausing to admire scenic vistas while snaking on
6
granola bars. See FAC
7
flf 23-26.
General Mills contends that in a deceptive advertising case, Rule 9(b) requires that
8
the plaintiff or plaintiffs identify specific advertisements and promotional materials; allege
I
when the plaintiff or plaintiffs were exposed to the materials; and explain how such
10
materials were false or misleading. General Mills argues that the FAC does not meet this
11
standard with regard to the online advertising, as it does not allege that plaintiffs relied on
12
specific materials (which also means that plaintiffs do not have standing to assert the UCL
13
claims); does not allege when plaintiffs were exposed to the materials, or that they were
lã
14
exposed to them at all; and does not even allege that the four online sources included any
ob
+.c
15
representations that Nature Valley@ products are "natural"
16
such as "photographs featuring people in natural settings," and "photographs of nature."
17
See, e.9., FAC
Ë
o
oË
+..9
oã
'!- o
-.x
oã
Ø2
(ÚE
*ti
u,
7,
tt:
gÊ
tr
f
18
- just that they include
images
lf[ 24,25
ln addition, General Mills asserts, while the FAC describes only the representations
19
regarding these five Named Products, plaintitfs also purport to bring their claims with
20
respect to unidentified Nature Valley@ products that are described as "natural" by General
21
Mills and "contain ingredients that have been fundamentally altered from their natural state
22
and cannot be considered minimally processed." FAC fl 2 n.3. Yet, General Mills argues,
23
the FAC does not identify any such "other" products or allege that plaintiffs purchased any
24
products other than the Named Products.
25
General Mills argues further that the FAC identifies only three ingredients it claims
-
- but acknowledges
26
are not "natural"
27
FAC's definition of "natural," not all Nature Valley@ products are deceptively described as
28
"natural." See, e.9., FAC fl 10 ("many" Nature Valley@ products contain highly processed
HFCS, HMCS, and Maltodextrin
11
that even under the
Case4:l-2-cv-03919-PJH DocumentS6 Filed05/1-0/l-3 Pagel-2 of 16
2
Maltodextrin appear in "certain varieties of' Nature Valley@ granola bars and granola thins);
3
FAC
4
them are not"); FAC fl 39 ("certain varieties" of granola bars are labeled "Natural" but
5
contain HFCS, HMCS, and Maltodextrin).
fl28 (General Mills represents Nature Valley@ products as "Natural," but "many of
ln opposition, plaintiffs asseft that claims under California's UCL or FAL do not
7
include fraud as an element, and therefore generally do not need to be pled with
I
I
particularity. Plaintiffs also contend that they are not relying on a unified fraudulent course
10
+r
11
o
oi
or2
.9þ
¡úE
Fi
Øî,
tt:
of conduct, and that for that reason they need only satisfy the notice pleading standards of
Rule 8.
Nevertheless, plaintiffs argue, if the court determines that some of the allegations in
12
the FAC are subject to Rule 9(b), those allegations are nonetheless sufficient to give
13
General Mills notice of the particular misconduct that is alleged to constitute the fraud
14
charged so that they can defend against
15
alleged a fraud claim, by alleging what is false and misleading about General Mills'
16
statements (products are "All Natural"), and why the statements are false (products contain
17
HFCS, HMCS, and Maltodextrin), and that this is enough to satisfy the Rule 9(b) pleading
18
requirements.
,9
ì;
-rU,ã
and
ingredients such as HFCS, HMCS, and Maltodextrin); FAC
6
oË
+j
ot
fl29 (HFCS, HMCS,
1
it.
Here, plaintiffs assert, they have adequately
Ê,
g8
c
f
19
As for whether the FAC adequately alleges plaintiffs' reliance on the allegedly
20
deceptive statements, plaintitfs argue that the "plain language" of the FAC and the
21
photographs reproduced in the FAC showing the fronts of the packaging of the Nature
22
Valley@ products and the Nature Valley@ website "allege the very statements lp]laintiffs
23
saw and relied on prior to purchasing those Products." They assert that the FAC says that
24
"all Products" labeled "100o/o Natural" that also contain non-natural ingredients are
25
"misleading" to plaintiffs and any other "reasonable consumers," and that this allegation is
26
sufficient to meet both Rule 8 and Rule 9(b).
27
28
The court finds that the motion must be GRANTED and DENIED in part. Claims that
sound in fraud are subject to Rule 9(b), Kearns v. Ford Motor Co., 567 F.3d 1120, 1125
12
Case4:12-cv-03919-PJH DocumentS6 Filed05/1-0/1-3 Pagel-3 of
1-6
-
1
(9th Cir. 2009), Claims that allege facts that necessarily constitute fraud
2
representation, knowledge of its falsity, intent to defraud, justifiable reliance, and damages
3
- must also satisfy Rule 9(b)'s pleading requirements
4
Vess, 317 F,3d at 1 105. That is, regardless of whether fraud is a necessary element of a
5
claim, where a plaintiff alleges a uniform fraudulent course of conduct, and relies on that
6
course of conduct as the basis for the claims, the complaint must meet the requirements of
7
Rule 9(b). ld. at 1 103. ln addition, where the claim is that the defendant made false
8
statements for financial gain, the complaint is grounded in fraud. Kearns, 567 F.3d a|1125.
a false
because they sound in fraud. See
I
The CLRA prohibits "unfair methods of competition and unfair or deceptive acts or
10
practices undertaken by any person in a transaction intended to result or which results in
11
the sale , . . of goods or services to any consumer." Cal. Civ. Code S 1770. The UCL
oË
*r.p
12
prohibits "unlawful, unfair or fraudulent business act[s] or practice[s]" and "unfair, deceptive,
'ïo
UË
13
untrue or misleading advertising." Cal. Bus. & Prof. Code S 17200. As a result, depending
14
on the facts alleged, the heightened pleading requirements of Rule 9(b) may apply to
15
claims arising under CLRA and UCL. See Kearns, 567 F.3d at1125.
L
o
(Jr
',ì..:È
lØ
Ø2
.Eþ
(ÚE
+.;
u, 1,E
t:
g8
c
Ð
16
Here, the FAC alleges that General Mills "deceptively describes certain products as
3.
17
being 'Natural'when, in fact, they are not." FAC fl
18
including conduct that is deceptive, unfair, misleading, unlawful, fraudulent, and untrue.
19
FAC fJ 1 n.1. The allegation that General Mills misrepresents its products as "natural" is
20
central to each of plaintiffs' claims. See, e.9., FAC
21
claim), f[84 (FAL claim), and fl 86 (unjust enrichment).
22
f
lt defines the term "deceptive" as
73-75 (CLRA claim),
I
80-81 (UCL
The basis of plaintiffs' claims is that General Mills has falsely represented that its
23
Nature Valley@ products are "All Natural" ot"100o/o Natural," despite knowing that they
24
contain processed sweeteners, and that plaintiffs bought the products because they
25
believed they were "natural." Moreover, just as in Kearns, 567 F,3d at1125, plaintiffs claim
26
that General Mills intentionally misrepresents its products for financial gain. FAC fl9.
27
Plaintiffs also assert that General Mills represents that its products are "natural" with
28
knowledge of falsity and with intent to induce reliance. See FAC flfi|27,39-58, 59-61.
13
Case4:12-cv-039L9-PJH Document56 Filed0SlLOlL3 Pagel-4 of 16
1
2
misrepresentations about a product's characteristics, those claims sound in fraud and Rule
3
9(b) applies. Morrison v. TriVita. 1nc.,2013 WL 1148070 at*5 (S.D. Cal. March 19, 2013);
4
Pirozzi v. Apple lnc.,
5
see also Kearns,567 F,3d at1127. Thus, because plaintiffs'claims are "grounded in"
6
fraud, they are subject to the strict pleading requirements of Rule 9(b).
7
I
I
L
When claims under the CLRA, UCL, and FAL are based on a manufacturer's alleged
_
F.Supp,2d _,2012WL 6652453 at.6 (N.D. Cal. Dec. 20,2012);
To the extent that the FAC alleges that the use of the terms "Natural" or "1007o
Natural" on the packaging or advertising for the five Named Products was deceptive
because those products contain HFCS, HMCS, and/or Maltodextrin as ingredients, the
10
court finds for purposes of this Rule 12(bX6) motion that the FAC alleges false
11
representations
o
-
one element of a claim of fraud
- as required under Rule 9(b).
oË
.tsB
12
ln addition, the FAC alleges that during the class period, plaintiff Judith Janney
':.o
13
purchased Nature Valley@ Chewy Trail Mix Dark Chocolate & Nut Granola Bars and Nature
14
Valley@ Peanut Butter Granola Thins; and that plaintiff Amy McKendrick purchased Nature
oã
15
Valley@ Chewy Trail Mix Fruit & Nut Granola Bars, Nature Valley@ Sweet & Salty Nut
U'
1,
16
Cashew Granola Bars, and Nature Valley@ Dark Chocolate and Peanut Butter Granola
g8
17
Thins. FAC flfl 16,17. Both plaintiffs are alleged to have purchased "certain varieties" of
18
Nature Valley@ Granola Bars and Granola Thins "relying on the claims that they are
19
"Natural."
oã
s'ti
oi,
oÈ
Ø2
*rc
(úË
fi
tt:
Ê
f
r
20
Elsewhere in the FAC, plaintiffs allege that General Mills represents that Nature
- or make money from -
21
Valley@ products are "natural" in order to "capitalize on"
22
customers' preference for "all-natural foods.' FAC fl 27. Thus, as to this limited portion of
23
the claims
24
that the pleading is sufficient to satisfy Rule 9(b), and the motion is DENIED on that basis.
25
-
the named plaintiffs' purchasing of the five Named Products
-
the court finds
However, the FAC does not plead fraud with particularity with regard to two areas
-
26
the online marketing sources (the Nature Valley@ website, Facebook, Flickr, YouTube, plus
27
presumably Twitter, which is pled in the FAC but which General Mills does not mention);
28
and the "unidentified products."
14
Case4:12-cv-0391-9-PJH DocumentS6 Filed05/10/l-3 Pagel-5 of
1
oË
+¡
()ã,9
+r:
o;
ì;
o2
ob
+rc
.úE
P:
Ø;,E
ln a deceptive advertising case, Rule 9(b) requires that the plaintiff(s) identify
2
specific advertisements and promotional materials; allege when the plaintiff(s)were
3
exposed to the materials; and explain how such materials were false or misleading. See
4
Von Koenig v. Snapple Beverage Corp. ,2011WL 43577 at *3 (E.D. Cal. Jan. 6, 2011); see
5
also Kearns, 567 F.3d a|1126 (claims dismissed where plaintiff failed to specify which
6
adveftisements or sales materials he saw or when he was exposed to them).
7
o
1-6
Plaintiffs' position appears to be that the presence of the term "100% Natural" on the
8
physical product labels is sufficient to support all of their claims, no matter how vaguely
I
articulated. However, they have not addressed the fact that the FAC fails to identify with
10
particularity (or at all) any misrepresentations made in the online sources. The FAC does
11
not specify what the exact false or misleading statements are, why the statements are
12
false or misleading, where exactly the statements are located, or which statements plaintiffs
13
relied on. Thus, to the extent that plaintiffs' claims rely on alleged representations made on
14
the Nature Valley@ website, Flickr photostream, Facebook page, and YouTube channel,
15
they must be dismissed for failure to allege fraud with particularity.3
16
As for the assertions regarding the "unidentified products"
-
the products other than
tt:
g8
17
the Named Products specifically identified in the FAC
c
f
18
purchased other types of products is immaterial to the allegations at issue or the court's
19
inquiry. The court disagrees, A plaintiff alleging that product labels or packaging contain
20
misrepresentations must make specific allegations regarding each product, and attaching
21
only a selection of labels will not suffice under Rule 9(b). See Ríes v. Hornell Brewing Co,,
22
2011 WL 1299286 at *4 (N.D. Cal. Apr. 4,2011); Von Koenig ,713 F. Supp. 2d at 1078.
23
- plaintiffs claim that whether they
ln order to plead fraud with particularity, plaintiffs must specify the exact misleading
24
statements, and to the extent that they are claiming that products they have not identified
25
were falsely designated or advertised, those claims are not plausible. Plaintiffs' vague
26
27
28
3
Moreover, the allegation that an "image of nature" can be viewed as deceptively
describing the ingredients in granola bars is entirely implausible, and therefore inadequate to
state a claim under any of the causes of action pled in the FAC - much less, to state a claim
for fraud,
15
Case4:12-cv-039L9-PJH Document56 Filed05lt}lLS Pagel-6 of 16
1
description of the products they contend are at issue (apart from the Named Products)
2
leaves General Mills (and the court) to guess which of its products (and which statements
3
about those products) General Mills will be required to defend in this case.
CONCLUSION
4
5
6
the primary jurisdiction doctrine is DENIED. The motion to dismiss the FAC for failure to
7
allege fraud with particularity is GRANTED in part and DENIED in part. The dismissal is
I
with leave to amend. Any amended complaint must be filed no later than June 7,2013.
9
Defendant's response to the third amended complaint shall be filed no later than 21 days
10
L
o
oË
+r€
oã
'!- o
gE
U,ã
oÈ
o2
ob
*,E
ln accordance with the foregoing, the motion to dismiss or stay the action based on
thereafter.
11
12
IT IS SO ORDERED.
13
Dated: May 10, 2013
PHYLLIS J. HAMILTON
United States District Judge
14
15
(ÚE
Pi
Ø;,E
tt:
o€
+a
'f
16
17
18
19
20
21
22
23
24
25
26
27
28
16
Case3:l-2-cv-03919-WHO DocumentT6 Filedl-0/l-0/1-3 Pagel of
9
I
2
J
4
I.INITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
JUDITH JANNEY, et'al.,
Case
7
No.
1
2-cv-031)
l9-Wl-lO
Plaintiffs,
8
ORDER DENYING MOTION TO STAY
v.
9
Re: Dkt. No. 66
GENERAL MILLS,
10
Defendant.
l1
l2
o,9
e(s
l3
INTRODUCTION
.9 c*
L)
i¡tto
t4
Plaintifß Judith Janney and Amy McKendrick bring this putative class action against
l¡()
U)'
15
defendant General Mills, Inc., asserting that the use of the term "Natural" on General Mills's
i:^
t6
"Nature Valley" products (the "products") is deceptive and misleading because of the presence of
EE
oo
t7
high fructose corn syrup ("HFCS"), high maltose corn syrup ("HMCS"), and maltodextrin.
l8
General Mills moves to stay the proceedings based on the argument that the United States Food
r9
and Drug Administration
20
judges, including one in this district, have stayed their cases pending a response to a referral to the
21
FDA the question of whether products with bioengineered ingredients may be labeled "natural."
22
General Mills also argues that the Court should exercise its inherent authority to stay this case.
z.)
After considering the parties' briefs and argument, and for the reasons below, General Mills's
24
Motion to Stay is DENIED.
gE
HL
iro
-z
25
("FDA")
has primary
jurisdiction over the term "natural" and two
BACKGROUND
26
The Complaint alleges the following:
27
Plaintiff Judith Janney "purchased Nature Valley Chewy Trail Mix Dark Chocolate & Nut
28
Granola Bars and Nature Valley Peanut Butter Granola Thins" repeatedly for two years or more,
Case3:12-cv-03919-WHO DocumentT6 Filedl-0/10/1-3 Page2 of 9
I
with her last purchase occurring in March 2012. Second Amended Compl. ("SAC") (Dkt. No. 59)
2
,1[T
J
a
Nut Granola Bars, Nature Valley Sweet & Salty Nut Cashew Granola Bars, and Nature Valley
4
Dark Chocolate and Peanut Butter Granola Thins," with her last purchase occurring in February or
5
March 2012. Id. Tll 17 & 50. They relied "on the claims that they are 'Natural.'" Id. tl 42. The
6
plaintifß "would not have bought the fproducts] if they had known that they were not in fact
7
natural products." Id.
16, 44
8.45. Plaintiff Amy McKendrick "purchased Nature Valley Chewy Trail Mix Fruit &
nn.
8
The products "contain the highly processed sugar substitute HFCS, HMCS, and the
9
texturizer Maltodextrin." Id. T 24. "HFCS and HMCS are sweeteners created from cornstarch, as
10
opposed to sugar (sucrose), which is produced from sugar cane or beets," and "[m]altodextrin is a
l1
texturizer used in processed foods and is created from starch as
l2
producing these ingredients "requires multiple processing steps in an industrial environment,
o,9
13
which transform starches into substances that are not found in nature, they cannot be described as
O-l
t4
'Natural."' Id. n27,
(!
t<c
J=
UE
€d
Øo
t-.¡ o
gü
Ch'
.3^
-oE
c)c)
Ðo
z
15
well." Id.nn26 &
27
.
Because
The "Natural" claim appears in varying forms on the fronts and backs of the products'
Id.llfl 35-41. Despite a letter from
t6
boxes, as well as on the granola bars' individual packaging.
l7
the plaintiffs to General
l8
practice of including HMCS and Maltodextrin in products with 'Natural' claims."t U. n St.
t9
"Plaintiffs were attracted to the fproducts] because they prefer to consume all-natural
Mills detailing their concerns, General Mills "has failed to change its
Id.n 42. Additionally,
20
foods for reasons of health, safety, and environmental preservation."
21
because
22
McKendrick purchases all natural products for her daughter because she finds that"an all-natural
23
diet seems to help alleviate her daughter's behavioral issues," such as attention deficit
24
hyperactivity disorder. Id.nn
25
contain only ingredients that occur in nature or are minimally processed," these products, "with
26
their deceptive 'Natural' claims, have no value to the Plaintiffs
ofher diabetic daughter, Janney "seeks out healthier food and food that is all natural," and
ß
8.
47
.
Because the plaintiffs "believe that all-natural foods
." Id, n 42.
27
28
I In 2010, General Mills claimed that it would phase out its use of HFCS in its products within a
year. The plaintiffs do not indicate if General Mills has, in fact, done this. SAC T 56.
2
Case3:12-cv-0391-9-WHO DocumentT6 Filedl-0/l-0/13 Page3 of
PROCEDURAL HISTORY
1
2
9
The plaintifß bring this putative class action on behalf of "allpersons in California who
J
bought the fproducts] that contained HFCS, HMCS, and Maltodextrin and were labeled 'Natural'
4
during the period beginning four years prior to the date the original complaint was filed until the
5
date of class certification." Id. fl
6
the California Consumers Legal Remedies Act, CaL. Cry. Coon $$ 1750 et seq.; (2) violation
7
the California Unfair Competition Law, Cel. Bus. & Pnor'. Coop $$ 17200 et seq.; (3) violation
8
of the California False Advertising Law, CnL. Bus. & PRor'. Cooe S$ 17500 et seq,; and (4) unjust
9
enrichment.
10
59. They bring the following
causes
of action: (l) violation of
of
On May 10,2013, the Honorable Phyllis Hamilton granted in part and denied in part
ll
General Mills's Motion to Dismiss the plaintifß' First Amended Complaint. Dkt. No. 56. In
12
considering the motion, Judge Hamilton refused to invoke the primary jurisdiction doctrine and
o,o
l3
cited the FDA's longstanding refusal to promulgate regulations governing the use of the term
.9u
r4
"natural" and its "relative lack of interest in devoting its limited resources to what it evidently
Ø,
gä
.:^
EE
(.) o
l5
considers a minor issue" in concluding that any referral to the FDA "would likely prove futile."
z
l8
I:C
Øo
t-¡ ()
l6
l7
On July 29,2013, the Court related this case with two others in this district: Bohac
v.
General Mills,Inc., No. l2-cv-5280, and Rojas v. General Mills, Inc., No. l2-cv-5099.
General
Mills again asks the Court to stay the case based on the primary jurisdiction
l9
doctrine and the court's inherent case-management authority. General Mills contends that a stay is
20
especially appropriate in light of the recent referral by
21
of whether products with bioengineered ingredients may be labeled "natural." See Cox v. Gruma
22
Corp., No. 12-cv-6502,2073 WL 3828800, at*2 (N.D. Cal. July 11,2013). General Mills also
23
notes that
24
FDA to the Cox referral. See Van Atta v. Gen. Mills,1nc., No. l2-cv-2815-MSK-MJW (D. Colo.
25
July 18, 2013).
a
a
judge in this district to the FDA the issue
judge in the District of Colorado stayed a similar case pending a response from the
26
27
28
a
-)
Case3:12-cv-0391-9-WHO DocumentT6
I.
J
63
THE PRIMARY JURISDICTION DOCTRINE DOES NOT APPLY.
Judges in this district have repeatedly declined invoking the primary jurisdiction doctrine
a
i-c
ã¡-
Page4 of 9
DISCUSSIOÑ
I
2
Filedl-0ltllt3
4
in cases asking whether the term "natural" as used on food labels is false or misleading, as the
5
judge previously assigned to this case did here, See Janney v. General Mills, No. 12-cv-3919-
6
PJH,2013 \M,1962360,at*7 (N.D. Cal. May 10, 2013) (Hamilton, J.); see also Kostav. Del
7
Monte Corp., No. 12-cv-1722-YGR,2013 WL 2147413, Q.{.D. Cal. May 15, 2013); Brazil v. Dole
8
Food Co., No. 12-cv-183I-LHK, 2013 WL 1209955, at *10 (N.D. Cal. March 25,2013); Ivie
9
Kraft Foods Global,Inc,, No. 72-cv-2554-RMW, 2013 WL 685372, at *7 (N.D. Cal. Feb. 25,
v,
l0
2013); Jones v. ConAgra Foods, lnc.,972 F. Supp. 2d 889, 898-99 (N.D, Cal. 2012) (Breyer, J.).
11
The Court frnds no reason to depart from their considered judgment.
"The [primary jurisdiction] doctrine is applicable whenever the enforcement of a claim
t2
13
subject to a specific regulatory scheme requires resolution of issues that are within the special
t4
competence of an administrative
t-t o
15
F.2d 1365,1370 (9th Cir. 1985) (quotation marks omitted). "The doctrine does not, however,
.B^
t6
require that all claims within an agency's purview be decided by the agency." Davel Commc'ns,
t7
Inc, v, Qwest Corp.,460 F.3d 1075, 1086 (9th Cir. 2006) (citation and quotation marks omitted).
l8
The Ninth Circuit has applied four non-exclusive factors identified in United States v. General
l9
Dynamics Corp.,828F.2d 1356 (9th Cir. 1987), to determine whether the doctrine applies.
20
"Under this test, the doctrine applies where there is '(1) the need to resolve an issue that (2) has
2l
been placed by Congress
22
authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive
23
regulatory scheme that (4) requires expertise or uniformity in administration."' Davel Commc'ns,
24
460 F.3d at 1 086 (quoting Gen. Dynamics Corp. , 828
_o€
Ð(Ë
o rì
!H
thÒ
Ø'i
gä
€E
C)c)
HLT
-z
:lo
within the jurisdiction of an administrative body having regulatory
F
.2d at 1362).
Invocation of the doctrine is appropriate where a case "requires resolution of an issue of
25
26
body." Farley Transp. Co. v. Santa Fe Trail Transp. Co.,778
first impression" or when the issue is not "within the conventional experience ofjudges." Brown
27
2
28
This section is substantially similar to the Discussion in the Court's Order Denying Motion to
Stay in Bohac v. General Mills, Inc., No. l2-cv-5280.
4
Case3:l-2-cv-0391-9-WHO DocumentT6 Filed10/L0/1-3 Page5 of
MCI IY'orldCom Network
Servs., Lnc.,277 F.3d
166,
9
lI72 (gth Cir.2002) (citing Nat'l
I
v.
2
Commc'ns Ass'n. v. AT&T Corp.,46 F.3d 220,222 (2dCir.1995)); see also Clarkv. Time lVarner
J
Cable, 523 F.3d 1110,
4
court determines that an otherwise cognizable claim implicates technical and policy questions that
5
should be addressed in the
6
industry rather than by the judicial branch") (emphasis added). A court may decline to hear a case
7
if it determines that the doctrine applies. Id. at 1088.
l4 (9th Cir.
first
2008) ("the doctrine is a 'prudential' one, under which a
instance by the agenay with regulatory authority over the relevant
While issues related to food labeling are undoubtedly within the expertise of the FDA, this
8
9
11
1
case does not involve a situation in which the Court should abstain from deciding the questions
it.
l0
before
1l
been addressed
12
1l 14. As General
t3
'natural' on food labels, one that it enforces through administrative action." Br. (Dkt. No. 66) at
t4
12. It quotes the FDA as stating that "natural" means "that nothing artificial or synthetic . . . has
15
been included in, or has been added to, a food that would not normally be expected to be in the
l6
food." Br. 9-10 (internal quotation marks omitted). Given the amount of attention that the FDA
17
has apparently directed towards the issue before the Court, "there is no such risk of undercutting
l8
the FDA's judgment and authority by virtue of making independent determinations on issues upon
l9
which there are no FDA rules or regulations (or even informal policy statements)
20
WL 1209955, at tl0 (citation and quotation marks omitted).
Deciding what "natural" means is not "an issue of first impression" or one that has not
"in the first instance" by the FDA. Brown,277 F.3d at ll72; Clark,523 F.3d at
Mills itself
concedes, "the FDA has adopted a policy for use
fofl the word
lic
õ,4
€(c
() rl
th
t-t
v),
c)
c)
gä
s'Ã
'oE
c)o
Éts
Ðo
'z
."'
Brazil,2013
Determining whether a term is false or misleading is within the province of the courts.
2l
22
"[A]llegations of deceptive labeling do not require the expertise of the FDA to be resolved in the
23
courts, as every day courts decide whether conduct is misleading." Jones,9l2F. Supp. 2d at 898-
24
99 (citations and intemal quotation marks omiued). This case primarily requires asking whether a
25
"reasonable consumer" would be misled by the challenged statements-what a "reasonable
26
consumer" thinks does not involve answering technical questions or scientific expertise.
27
Chacanaca v, Quaker Oats Co,,7 52 F. Supp. 2d I I I
28
a
l,
1
See
124 (N.D. Cal. 2010) ("plaintiffs advance
relatively straightforward claim: they assert that defendant has violated FDA regulations and
5
Case3:l-2-cv-03919-WHO DocumentT6 Filedl0/10/l-3 Page6 of 9
1
marketed a product that could mislead a reasonable consumer. As courts faced with state-law
2
challenges in the food labeling arena have reasoned, this is a question courts are well-equipped to
J
handle.") (citation and quotation marks omitted). Of course, the FDA's views are "relevant to the
4
issue of whether these labels could be deceptive or misleading to a reasonable consumeÍ," Ivie,
5
2013 WL 685372, at *12, but they are not the sole or dispositive factor. The questions to be
6
decided here are squarely within "the conventional experience
7
r172.
I
9
The General Dynamics factors do not help General
ofjudges." Brown,277 F .3d
Mills. "Without
at
question, the FDA has
extensively regulated food labeling in the context of a labyrinthine regulatory scheme."
. Supp. 2d at 1124. Answering the questions of whether the food labeling in
l0
Chacanaca, 7 52
11
question is false or misleading, however, does not require the FDA's expertise and "uniformity in
t2
administration" by the FDA does not weigh in favor of abstainin g. Davel Commc'ns, 460 F.3d at
13
1086. As Judge Hamilton's earlier Order in this case concluded, "the FDA has signaled a relative
t4
lack of interest in devoting its limited resources to what it evidently considers a minor issue, or in
t-t ()
chli
0.:)l:
15
establishing some 'uniformity in administration' with regard to the use of 'natural' in food
ü;H
-oE
oc)
t6
labels."3 Janney,2013
t7
inaction with respect to the term 'natural' implies that the FDA does not believe that the term
l8
'natural' requires' uniformity in administration. "').
(Ë
t-c
o,o
ì1¡
U
!(ü
O rl
Øo
ÉË
Ðoz
F
WL 1962360,at*7;
see also
The Ninth Circuit has made clear that not
t9
Jones,9l2F. Supp.2d at 898 ("The FDA's
"all claims within an agency's purview fmust]
be
20
decided by the agency." Davel Commc'ns,460 F.3d at 1086. Janney's "claims do not necessarily
2l
implicate primary jurisdiction, and the FDA has shown virtually no interest in regulating" the term
22
"natural." Cf. Chavez v. Nestle (JSA, únc,,511 Fed. App'x 606, 607 (9th Cir. 2013) (discussing
23
primary jurisdiction doctrine as applied to
24
this case is neither an issue of first impression for the FDA nor a particularly complicated issue
DHA). After considering
these factors, and because
25
3
26
27
28
General Mills argues that deferring to the FDA will not be futile this time because two cases
involving the term "natural" have now been stayed on primary jurisdiction grounds. Given the
litany of cases in this area over the years, however, the Court is skeptical that the FDA will
develop a policy regarding the term "natural" anytime soon, especially since it has considered the
matter for over two decades but still has not provided further guidance. See Lockwood v, Conagra
Foods, Inc., 597 F. Supp. 2d 1028, 1033 (N.D. Cal.2009) (Breyer, J.).
6
Case3:12-cv-03919-WHO DocumentT6 Filedl-0/10/1-3 PageT of
9
I
inappropriate for a court to address, the Court declines to invoke the primary jurisdiction doctrine
2
as many other courts addressing the same or
J
General
Mills
similar issues have declined to do.
argues that deciding this issue "without the FDA's input, would risk
4
usurping the FDA's interpretive authority and undermining, through private litigation, the FDA's
5
considered judgments." Br. 5 (quoting Cox v. Gruma Corp,, No, 12-cv-6502,2013 WL 3828800
6
(N.D. Cal. July I 1,2013) (internal quotation marks and brackets omitted). The Court notes that
7
the Cox referral involves "the question of whether and under what circumstances food products
8
containing ingredients produced using bioengineered seed may or may not be labeled 'Natural' or
9
'All Natural' or '100olo Natural."'
2013 WL 3828800, at*2 (emphasis added). In other words, the
l0
referral is limited to the issue of whether genetically modffied organisms are natural, which are not
l1
the same ingredients at issue here-the FDA is not being asked to broadly define the term
(!
t2
"natural." Thus, it is unclear why the Court must await the FDA's opinion on that question. In
ô,4
13
any event, as General Mills itself admits, "the FDA has adopted a policy for use [ofl the word
t4
'natural' on food labels, one that it enforces through administrative action." Br.12. As discussed
uo
Ø'E
l?ü
än
l5
above, the issues presented are not ones of first impression for the
EE
c)c)
l6
into uncharted waters. Deciding this case does not mean that the Court shows no deference to the
çtso
:-ì
17
agency; on the contrary, the views expressed by the agency thus far, even
-z
l8
be highly relevant to the Court's determinations. Thus, the Court would not
l9
FDA's interpretive authority and undermining, though private litigation, the FDA's considered
20
judgments" by hearing this case.
ì-c
5¡r
€(s
O rl
Lr.
ØÒ
2t
FDA-the Court is not wading
if informal, would likely
"risk usurping the
Astiana v, Hain Celestiql Group, Inc.,2012 WL 5873585 (N.D. Cal. Nov. 19,2012)-a
"natural" in cosmetics-is distinguishable from the facts at hand.
22
case about the use of the term
23
As one judge in this district explained, Astiana "is inapposite because, unlike cosmetics, the FDA
24
has provided informal policy guidance stating the minimum standards for using the term "nattxal"
25
with respect to food products . . . ." Kosta,2012 WL 5873585, at*9. Indeed, in declining to
26
invoke the primary jurisdiction doctrine in her order in this case, Judge Hamilton-the judge in
27
Astiana-explained that "the issuance of the informal 'policy' [concerning the term 'natural' with
28
regard to food], or its citation by the FDA when it chooses to do so, suggests that the FDA does
7
Case3:12-cv-03919-WHO DocumentT6 Filedl-0/10/1-3 PageB of 9
sorts-unlike the situation in Astiana, where the FDA had issued no guidance
1
have a position of
2
whatsoever, even informal policy statements, regarding the use of the term 'natural' on cosmetics
J
packaging." Janney,20l3 WL 1962360, at *7. Given the FDA's guidance on food labeling to
4
date, there is
5
II.
6
little risk of improperly invading the FDA's primary jurisdiction by hearing this
case.
THE COURT DECLINES TO EXERCISE ITS DISCRETION TO STAY.
General Mills argues that the Court should exercise its inherent discretion to stay the case.
7
A district court has broad discretion to stay proceedings pending before it "to control the
8
disposition of the causes on its docket with economy of time and effort for
9
for litigants
."
itselt for counsel, and
Landis v. N. Am. Co.,299 U.S. 248, 254 (1936). The power to stay "calls for the
10
exercise ofjudgment, which must weigh competing interests and maintain an even balance." Id, aÍ
11
254-55. "Among these competing interests are the possible damage which may result from the
12
granting of a stay, the hardship or inequity which aparty may suffer in being required to go
13
forward, and the orderly course ofjustice measured in terms of the simplif,ing or complicating
l¡ØOç.
O rl
I4
issues, proof, and questions
t-t o
oa 'E
15
Hall, 300 F .2d 265, 269 (9th Cir. 1962).
l:
16
t-c
5L
o,9
OE
€d
g'ä
/a
€g
oc)
trt
:lo
-z
of law which could be expected to result from a stay." CMAX, Inc.
These factors do not weigh in favor of a stay. General
will not harm any party, but for the same
of
v.
Mills argues that a three-month stay
reason, any harm from proceeding
t7
is modest and
18
(primarily, the cost of beginning discovery) is also relatively modest. Outweighing that is the
t9
likelihood that the FDA will not respond to the referral in Cox in a meaningful way, given both the
20
FDA's history of how it has addressed this issue and the multiplicity of other issues that command
2t
the FDA's attention. Accordingly, the orderly course ofjustice
22
likely outcome is that in three months, either General Mills will return to seek a further stay from
23
the Court or three months of case development
24
Procedure 1 emphasizes the importance of the "just, speedy, and inexpensive determination
25
every action and proceeding," and a stay in this case is more likely to delay justice, slow the
26
resolution of the matter, and make this litigation more expensive in the long run than simply
27
moving forward with
28
initial discovery sought by the plaintiffs might be relevant regardless. Balancing the potential cost
it. No one knows
will
be harmed by a
stay: the
have been delayed. Federal Rule of
how the FDA
8
will
will respond, if it
Civil
of
responds at all, so the
Case3:l-2-cv-03919-WHO DocumentT6 Filed10/L0/L3 Page9of9
1
to General Mills of commencing discovery against the delay caused by a stay and the likelihood
2
that the FDA
J
Hamilton thoroughly discussed in her Order, the Court declines to exercise its discretion to stay
4
this case.
will not definitively
and timely resolve the question presented to it, as Judge
CONCLUSION
5
6
For the reasons above, General Mills's Motion to Stay is DENIED.
7
IT IS
8
SO ORDERED.
Dated: October 10,2013
9
10
WILLIAM H. ORRICK
United States District Judge
l1
t-c
CË
3.b
Ë(c
c) rl
j5tr
thO
t-t o
v)9
.9ü
¿dH
EÊ
c)G)
ÉE
z
12
13
l4
l5
t6
t7
18
t9
20
2l
22
23
24
25
26
27
28
9
Case3:l-2-cv-03919-WHO Document9T FiledO3l26lL4 Page1- ol L2
I
2
J
4
I.INITED STATES DISTRICT COURT
5
NORTHERN DISTRICT OF CALIFORNIA
6
JUDITH JANNEY, et al.,
Case
7
No.
I
2-cv-039 l9-\I,'l-lO
Plaintiffs,
I
ORDER ON MOTION FOR JUDGMENT
ON THE PLEADINGS
v.
9
GENERAL MILLS,
Re: Dkt. No. 85
10
Defendant.
11
Plaintiffs Judith Janney and Amy McKendrick bring this putative Califomia class action
t2
ãl-
o,o
UE
P(Ë
O rl
Øo
t-t o
(,
gü
ti
ll^
ù1 -
EE
o
c.)
,z
Mills, Inc., asserting that the terms "Natural" and"l00Yo Natural" on
13
against defendant General
t4
General
15
of the presence of high fructose corn syrup ("HFCS"), high maltose corn syrup ("HMCS"), and
t6
maltodextrin. Second Amended Complaint ("SAC") nn 1,24,36-4I. To resolve General Mills's
t7
motion for judgment on the pleadings under Federal Rule of civil Procedure l2(c), I must resolve
18
whether the plaintiffs' claims that they were deceived by the terms 'Natural" and "l00yo Natural"
t9
meets the "reasonable consumer" standard. Because the plaintiffs have plausibly alleged that
20
General
2l
issues
22
with respect to the unjust enrichment claim.
Mills's "Nature Valley" products (the "products") are deceptive and misleading
because
!¡<
Ðo
23
24
Mills's representations about its products
are factual and not merely puffery, on most
I DENY the motion to dismiss. For the reasons described later, I will GRANT the motion
FACTUAL BACKGROUND
Plaintiff Judith Janney "purchased Nature Valley Chewy Trail Mix Dark Chocolate & Nut
25
Granola Bars and Nature Valley Peanut Butter Granola Thins" repeatedly for two years or more,
26
with her last purchase occuring in March 2012. Second Amended Compl. ("SAC") (Dkt. No. 59)
27
tlT 16, 44 &.45. Plaintiff Amy McKendrick "purchased Nature Valley Chewy Trail
28
Nut Granola Bars, Nature Valley Sweet & Salty Nut Cashew Granola Bars, and Nature Valley
Mix Fruit &
Case3:1-2-cv-0391-9-WHO Document9T
I
Dark Chocolate and Peanut Butter Granola Thins," with her last purchase occurring in February or
2
March 2012. Id.nn 17 8.50. They relied "on the claims that they are 'Natural.'" Id. tl 42. The
J
a
plaintiffs "would not have bought the [products] if they had known that they were not in fact
4
natural products." Id.
(Ë
t-l o
gü
C.h 11
¡: /,ì
EE
c)c)
CE
Þo
z
nB.
The products "contain the highly processed sugar substitute HFCS, HMCS, and the
5
EÉ
õ,4
Ë(Ú
() rì
Øo
Filed}3l26ll4 Page2 ot 12
Id.n24. *HFCS and HMCS are sweeteners
6
texturizer Maltodextrin."
7
opposed to sugar (sucrose), which is produced from sugar cane or beets," and "[m]altodextrin is a
8
texturizer used in processed foods and is created from starch as well." Id.nn26 &,27
9
producing these ingredients "requires multiple processing steps in an industrial environment,
created from cornstarch, as
.
Because
t0
which transform starches into substances that are not found in nature, they cannot be described
ll
'Natural."' Id. n27,
t2
as
The "Natural" and"l00yo Natural" claim appears on the fronts and backs of the products'
13
boxes, as well as on the granola bars' individual packaging. Id. TT 35-41. Despite a letter from
14
the
l5
practice of including HMCS and Maltodextrin in products with 'Natural' claims." Id, n 58.
plaintifß to General Mills detailing their concerns, General Mills "has failed to change its
l6
"Plaintiffs were attracted to the [products] because they prefer to consume all-natural
Id.n 42. Additionally,
l7
foods for reasons of health, safety, and environmental preservation."
t8
because
l9
McKendrick purchases all natural products for her daughter because she finds that"an all-natural
20
diet seems to help alleviate her daughter's behavioral issues," such as attention deficit
21
hyperactivity disorder. Id.nn
22
contain only ingredients that occur in nature or are minimally processed," these products, "with
23
their deceptive 'Natural' claims, have no value to the Plaintiffs." Id.n 42.
24
ofher diabetic daughter, Janney "seeks out healthier food and food that is all natural," and
ß
&, 47
.
Because the
plaintifß "believe that all-natural foods
The plaintiffs bring this putative class action on behalf of "all persons in California who
25
bought the [products] that contained HFCS, HMCS, and Maltodextrin and were labeled 'Natural'
26
during the period beginning four years prior to the date the original complaint was filed until the
27
date of class certification." Id. fl
28
the California Consumer Legal Remedies Act ("CLRA"), CAL. Ctv. Coos $$ 1750 et seq.; (2)
59. They bring the following
causes of
action: (1) violation of
Case3:12-cv-03919-WHO Document9T Filed}3l26lt4 Page3 of
1-2
I
violation of the California Unfair Competition Law ("UCL"), CAL. Bus. & Pnor'. Coop $S 17200
2
et seq.; (3) violation of the California False Advertising
J
$$ 17500 et seq.; and (4) unjust enrichment.
Law ("FAL"), CAL. Bus. & Pnop. Coos
PROCEDURAL HISTORY
4
On May 10,2013, Judge Hamilton granted in part and denied in part General
5
Mills's
6
Motion to Dismiss the plaintifß' First Amended Complaint. On July 29,2013, the Court related
7
this case with two others in this district: Bohac v. General Mills, Inc., No. 12-cv-5280, and Rojas
8
v. General Mills, Inc., No. 12-cv-5099. The plaintiffs filed the Second Amended Complaint on
9
June27,2013. General Mills filed its motion for judgment on the pleadings on December
10
13,
2013, and I heard oral argument on March 19,2014.
l1
LEGAL STANDARI)
l2
A motion for judgment on the pleadings under Federal Rule of Civil Procedure l2(c)
LC
o,9
13
utilizes the same standard as motion to dismiss for failure to state a claim under Federal Rule
.9O
l4
Civil Procedure 12(b)(6). Either motion may be granted only when it is clear that "no relief could
15
be granted under any set of facts that could be proven consistent
16
v. Shull Chem. Co.,845F.2d802,810 (9th Cir. 1988) (citations omitted). Dismissal may be based
l7
on either the lack of a cognizable legal theory or absence of sufficient facts alleged under a
18
cognizable legal theory. Robertsonv. Dean Witter Reyrutlds, lnc.,749 F. 2d 530, 534 (9th. Cir.
t9
1984).
OE
€(B
ØÒ
t-¡ ()
v),
gü
s;5
€E
(.)c)
Ðo
'z
H!
20
of
with the allegations." McGlinchy
A complaint must allege facts to state a claim for relief that is plausible on its face.
,S¿¿
2l
Ashcroft v. Iqbal,556 U.S. 662,677 (2009). A claim has "facial plausibility" when the party
22
seeking relief "pleads factual content that allows the court to draw the reasonable inference that
23
the defendant is liable for the misconduct alleged."
24
well-pled facts in a complaint, conclusory allegations of law and unwarranted inferences will not
25
defeat an otherwise proper Rule 12(b)(6) motion. See Sprewell v, Golden State Warriors,266
26
F.3d 979,98S (9th Cir, 2001).
27
'entitlefment] to relief requires more than labels and conclusions, and a formulaic recitation of the
28
elements of a cause of action
Id. Although
the Court must accept as true the
"[A] plaintiffs obligation to provide the 'grounds' of his
will not do. Factual allegations must be enough to raise a right to
J
Case3:12-cv-0391-9-WHO Document9T Filed03/26/14 Page4 oÍ 12
1
relief above the speculative level." Bell Atl. Corp. v. Twombly,550 U.S. 544,555 (2007)
2
(citations and footnote omitted).
DISCUSSION
3
4
5
6
I.
THE PLAINTIF'F'S HAVE SUFFICIENTLY PLEADED THAT THEIR CLAIMS
MEET THE REASONABLE CONSUMER STANDARD
A. A Reasonable Consumer Could Plausibly
Natural" Labeling
7
General
Mills
Be Deceived By The Products' "100o/"
asserts that judgment should be entered on the SAC against plaintiffs
8
because their claims do not meet the "reasonable consumer" standard, which governs claims under
9
California's UCL, FAL, and CLRA. Freeman v. Time, Inc.,68 F.3d 285, 289 (9th Cir. 1995)
l0
("[T]he false or misleading advertising and unfair business practices claim must be evaluated from
l1
the vantage of a reasonable consumer." (citation omitted). Under the reasonable consumer
(g
l2
o,o
13
LC
5¡<
!cÚ
O r\
ØÒ
t-.1 ()
ØÈ
g;
.:j^
ËE
oc)
ctr
Ðo
'z
standard, a plaintiff must "show that 'members of the public are likely to be deceived."' Freemen,
68 F.3d at289 (quoting Bank
of
IMest v.
Superior Court,2 Cal.4th 1254,1267 (1992)),
14
"Advertisements that amount to 'mere' puffery are not actionable because no reasonable consumer
l5
relies on puffery. Factual representations, however, aÍe actionable." Sticlvath v. Globalstar, Inc.,
t6
l7
527 F. Supp. 2d 992,998 Qll.D. Cal. 2007) (citations omitted).
Whether a business practice is deceptive is generally a question of fact not amenable to
18
determination on a motion to dismiss. .Id. However, in certain situations a court may assess, as a
l9
20
2l
22
matter of law, the plausibility of alleged violations of the UCL, FAL, and CLRA. See, e.g.,
Werbel ex rel. v. Pepsico,1nc., No. 09-cv-04456 SBA, 2010 WL 2673860, at *3 (N.D. Cal. July 2,
2010) (plaintiff failed to establish that a reasonable consumer would likely be deceived into
believing that cereal named "Crunch Berries" derived nutritional value from fruit).
23
This is not the rare situation in which granting a motion to dismiss is appropriate. The
24
front of the Nature Valley products' packaging prominently displays the term "l00yo Natural" that
25
could lead a reasonable consumer to believe that the products contain only natural ingredients.
26
These words are reinforced by the word "Natural" on the products' boxes and individual wrappers.
27
Together, these representations could easily be interpreted by consumers as a claim that all of the
28
4
Case3:12-cv-039L9-WHO DocumentgT trlled03l26lL4 Page5of 12
1
ingredients in the products are natural, which appears to be false because they allegedly contain
2
the unnatural ingredients high fructose corn syrup, high maltose corn syrup, and maltodextrin.
J
Taking these allegations as true and construing them in the light most favorable to the plaintiffs,
4
the SAC adequately alleges that the representations on the products' labeling could plausibly
5
deceive a reasonable consumer.
6
Courts have found similar claims challenging the terms "all natural" and "natural" to be
7
suffrcient basis for a cause of action under California's consumer protection laws. S¿e Williams
8
Gerber Products Co.,552 F.3d 934, 939 (9th Cir. 2008) ("the statement that Fruit Juice Snacks
9
was made
v.
with 'fruit juice and other all natural ingredients' could easily be interpreted by
10
consumers as a claim that all the ingredients in the product were natural, which appears to be
1l
false."); Von Koenigv. Snapple Beverage Corp.,713 F. Supp. 2d 1066, 1080 ("plaintiffs allege
l2
that they were deceived by the labeling of defendant's drink products as
o,9
l3
they did not believe that the products would contain HFCS [high fructose corn syrup] . . . .
.9O
t4
plaintifß have stated a plausible claim that a reasonable consumer would be deceived by
15
defendant's labeling."); Jou v. Kimberly-Clark Corp.,13-03075 JSC, 2013 WL 6491158, at *5-8
l6
(N.D. Cal. Dec. 10, 2013) (fìnding that the words "pure & natural," could lead a reasonable
l7
consumer to believe that that the product is free of non-natural ingredients when it actually
18
contains polypropylene and sodium polyacrylate); Wilsonv.
l9
1586 SC, 2013
20
Plaintiffs have adequately pled that a reasonable consumer could interpret a bag of chips claiming
2l
to have been 'Made with ALL NATURAL Ingredients'to consist exclusively of natural
22
ingredients, contrary to the reality described in the nutrition box."); Astiana v. Ben & Jeny's
23
Homemade, 1nc., No. l0-cv-4387 PJH,2011 WL 2111796,at*3-4 (N.D. Cal. May26,2011)
24
(denying motion to dismiss similar claims regarding "all natural" bean dip that contains transfats);
25
Hitt v. Ariz. Beverage Co., LLC, No. 08--cv-809 WQH, 2009 WL 449190, at*6-7 (S.D. Cal. Feb.
26
4,2009) (denying defendant's motion to dismiss the plaintiff s UCL, FAL, and CLRA claims
27
where the plaintiff alleged that a reasonable consumer would fìnd the
28
defendant's drink products, which contained high fructose corn syrup, deceptive).
l-c
ãt-
UE
È(!
tho
l¡o
th*
o)r
¿iH
€Ë
oq)
'All Natural'
because
ÊL
z
WL 1320468, at*12-73 (N.D. Cal. Apr.
5
Frito-Lay N, Am.,Inc., No. l2-cv-
1, 2013)
("[T]he Court finds that
"All Natural" labeling
on the
Case3:l-2-cv-039L9-WHO Document9T Filed}3l26lt4 Page6 of 12
Accordingly, I cannot conclude as a matter of law in the context of a Rule l2(b)(6) motion
I
2
that no reasonable consumer would not be deceived by the "l00yo Natural" and "Natural"
J
representations on Nature Valley products' labels.
The Terms *l00yo Natural" and "All Natural" are Not Mere Puffery
4
B.
5
General Mills's primary contention is that a claim based on the words "Natural" or "100o/o
6
Natural" is not actionable because Janney and McKenrick and the plaintifß in two other related
7
cases in this district, Bohac v. General
8
.[nc.,
9
"depend[] on their own individual and idiosyncratic expectations for the products." Mtn.
Mills, Inc., No. 12-cv-5280, and Rojas v. General Mills,
No. l2-cv-5099, have "individualized
and subjective definitions of the term
'natural"'which
9.1
General Mills asks the Court to look beyond the four corners of the complaint and dismiss
10
11
it based on allegations made by other plaintiffs in other actions. This is not permitted. General
C!
12
Mills is limited to facts alleged in the complaint
o,o
l3
has not asked that I judicially notice the complaints in Rojas and Bohac.
() rl
t*.
È
ØO
t-l o
U)'
l4
Mills'
15
plaintiffs in related cases must assert the same theories of liability. To the extent General Mills
.S^
t6
relies on Astianav. Kashi,2013 WL 3943265, at *13 (S.D. Cal. Jul. 30, 2013), for the proposition
t7
that multiple plaintiffs' lack of a uniform definition of "natural" requires dismissal on a Rule
18
l2(bX6) motion, that argument is rejected since Astiana was decided on a class certification
19
motion based on evidence produced in that case beyond the pleadings. The only allegations at
20
issue here are those set forth by the
t-c
5l<
UE
€d
gE
ËE
()o
Request for Judicial
and to matters that may be
judicially noticed. It
,S¿e
Dkt. No. 86, General
Notice. More significantly, it cites no support for its assumption that
HL
z
2t
plaintifß in the SAC.
General Mills cites several cases in support of its argument that "subjective statements are
Mtn. 9 (citing Carrea v.
22
non-actionable under California's consumer protection laws."
ZJ
Dreyer'sGrandlceCream,Inc.,4T5 F.App'x 113, ll5 (9th Cir.2012) ("original"and"classic"
24
non-actionable); Edmundson v. The Procter & Gamble Co.,2013 WL 435434,
,See
at*l
(9th Cir.
25
I
26
27
28
The plaintiff in Bohac asserts that the use of the term "natural" on the products is misleading
because of the presence of GMOs as well as 11 other ingredients such as sodium bicarbonate, soy
lecithin, high fructose com syrup, and maltodextrin. Bohac Amended Class Action Complaint flfl
23-47. The plaintiff in Rojas exclusively targets GMOs and alleges that Nature valley products
are not "natural" because they contain ingredients that are GMO-based. Rojas Second Amended
Complaint TtÌ 12, 39,62-64.
6
Case3:1-2-cv-03919-WHO DocumentgT triled13l26l1,4 Page7 of 12
I
2013) ("patented blade coating for incredible comfoft" non-actionable"); Viggiano v. Hansen
2
Natural Corp., No. 12-cv-10747 MMM,2013 WL 2005430, at * Il n.42 (C.D. Cal. May 13, 2013)
J
("premium all-natural flavors" non-actionable); Elias v. Hewlett Packard Co., No. l2-cv-00421-
4
LHK,2013 WL 3187319, at *10 (N.D. Cal. Jun.2l, 2013) ("ultra-reliable" and "packed with
5
power," nonactionable); Fraker v. K-FC Corp.,2006 U.S. Dist. LEXIS 79049, at*9-11 (S.D. Cal.
6
Oct. 19, 2006) ("highest quality ingredients," "balanced diet plan," and"part of a sensible diet"
7
non-actionable
I
were the type of "generalized, vague, and unspecified assertions" that constitute "mere puffery"
9
and "upon which a reasonable consumer could not rcLy." Glen Holly Entertainment, Inc. v.
)). In each of these cases, the courts found
that the challenged misrepresentations
10
Tektronix hnc.,343 F.3d 1000, 1015 (9th Cir.2003). See, e.g., Viggiano,944F. Supp.2d at894
l1
("The term 'premium,' . . . is mere puffery; it has no concrete, discernable meaning in the diet
t2
soda context"); Cawea, 475 F.
13
interpret'Original Sundae Cone,' 'Original Vanilla,' and'Classic,' to implythat Drumstick is
.!cr
t^O
t-1 ()
ø) Lr
c)li
t4
more wholesome or nutritious than competing products . . . the presence
l5
ingredients alone does not plausibly imply that a product is more nutritious than other desserts. In
#n
t6
addition, no reasonable consumer is likely to think that 'Original Vanilla' refers to a natural
t7
ingredient....").
(c
App'x at I 15 ("It is implausible that a reasonable consumer would
lic
ô.9
€(Ú
c) rl
EE
oc)
cts
Ðo
'z
l8
of 'original' or 'classic'
The Court may determine as a matter of law whether a statement is puffery. Cook, Perkiss
t9
& Liehe, Inc. v. N. California Collection Serv. Inc.,9l I F.2d 242,245 (9th Cir. 1990) ("District
20
courts often resolve whether a statement is puffery when considering a motion to dismiss pursuant
2t
to Federal Rule of Civil Procedure 12(bX6) and we can think of no sound reason why they should
22
not do so."). Courts analyzing whether a statement constitutes puffery examine whether the
23
statements are general assertions that say nothing about the specifrc characteristics or components
24
of the products or whether they are specific factual assertions. "The common theme that seems to
25
run through cases considering puffery in a variety of contexts is that consumer reliance
26
induced by specific rather than general assertions. Advertising which merely states in general
27
terms that one product is superior is not actionable. However, misdescriptions of specifrc or
28
absolute characteristics of a product are actionable." Cook, Perkiss & Liehe,
7
will
be
Inc.,9l1 F.2d at246
Case3:l-2-cv-03919-WHO Document9T Filed03l26l14 Page8 of 12
I
(citing Smith-Victor Corp. v. Sylvania Elec. Products, (nc.,242F. Supp.302, 308-09 (N.D. Ill.
2
1965) (advertiser's statement that its lamps were "far brighter than any lamp ever before offered
3
for home movies" was ruled puffery. However, when the advertiser quantified numerically the
4
alleged superior brightness with statements such as "35,000 candle power and lO-hour life," the
5
court found a potential Lanham Act claim)).
6
Here, the alleged misrepresentations of "1000/o NATURAL" and "Natural" are not merely
7
general in nature. The statements convey the affirmative and specific factual representation that
8
the products are made entirely of natural ingredients. This is consistent with the plaintiffs' claim
9
that they read the label representations to mean that the products contain no artificial or synthetic
l0
ingredients. General Mills contends that its marketing is non-actionable puffery because "a
1l
reasonable consumer would be aware that Nature Valley granola bars are not 'found in nature' and
CÚ
t2
are processed in an industrial
õ,o
13
McKendrick's allegations, which assert that consumers would likely be misled in believing that
l4
"natural" means the products have no artificial or synthetic ingredients--not that granola bars "are
l5
fruits of the earth." Jou,2013 WL 6491158, at +8 (disimissing similar argument that "'reasonable
T6
consumers know' that the term 'natural' 'is not a literal description of the Products, since diapers
t7
and wipes do not spring directly from the ground or grow on
l8
several courts have found the terms
19
actionable statements when used in products that contain GMOs and highly processed ingredients.
20
It is plausible that
21
claims upon which he or she could rely.
ì-c
5¡-
Ð(€
C) rì
ØQ
l-l o
gü
C/)'i
s'-
EE
C)()
'z
environment." General Mills' misunderstands Janney's and
trees."'). As discussed above,
!¡<
Ðo
22
General
"all natural" and "natural" to
be potentially deceptive and
a reasonable consumer would interpret these statements as specific factual
Mills
also asserts that "Natural" is mere puffery because the Federal Trade
23
Commission ("FTC") has declined to provide "general guidance" on the use of that term. See 75
24
Fed. Reg. 63552 (2010). As the FTC explained,
25
"consumer perception evidence indicating how consumers understand the term 'natural."'
26
addition, the FTC noted that "natural may be used in numerous contexts and may convey different
27
meanings depending on that context."
28
puffery, the FTC statement goes on to explicitly warn marketers that the use of "natural" may be
it did not provide guidance because it lacked
Id. But far from
I
Id. ln
deeming "natural" mere non-actionable
Case3:12-cv-03919-WHO Document9T Filed}3l26lL4 Page9of 12
I
deceptive:
Marketers that are using terms such as natural must ensure that they can
substantiate whatever claims they are conveying to reasonable consumers. If
reasonable consumers could interpret a natural claim as representing that a product
contains no artificial ingredients, then the marketer must be able to substantiate that
fact. Similarly, if, in a given context, a natural claim is perceived by reasonable
consumers as a general environmental benefit claim or as a comparative claim (e.g.,
that the product is superior to a product with synthetic ingredients), then the
marketer must be able to substantiate that claim and all attendant reasonably
implied claims.
2
a
J
4
5
6
7
8
9
l0
11
cú
t2
õ,4
13
Lc
5|r
OE
Pd
() rl
v)o
t-t c)
gü
th
l/
s'ã
€E
oo
ÊE
,z
Id,
Defendant's reliance on Pelayo v. Nestle USA,
Inc.,20l3 WL 5764644 (C.D. Cal. Oct.25,
2013) is also unpersuasive. The plaintiff in Pelayo alleged that the term
"all natural" on Buitoni's
products was false and misleading because they contained at least two ingredients that were
unnatural. The court found that the plaintiff failed to state a claim under the UCL and CLRA
because she offered "several conflicting definitions" of the term
"natural." Id. at *4. As the court
explained:
t4
15
16
17
l8
t9
20
2l
22
23
24
25
26
27
28
Plaintiff offers the Webster's Dictionary definition of "natural," meaning
"produced or existing in nature" and "not artificial or manufactured." However,
even Plaintiff admits that this defrnition clearly does not apply to the Buitoni Pastas
because they are a product manufactured in mass, and the reasonable consumer is
aware that Buitoni Pastas are not "springing fully-formed from Ravioli trees and
Tortellini bushes."
The other definitions of "natural" offered by Plaintiff are equally
implausible. In another attempt to defrne "natural," Plaintiff alleges that none of the
ingredients in a "natural" product are "artifìcial" as that term is defined by the Food
and Drug Administration ("FDA"). See 21 C.F.R. $ 101.22(a)(1). With respect to
Buitoni Pastas, Plaintiff alleges that xanthan gum, soy lecithin, sodium citrate,
maltodextrin, sodium phosphate, disodium phosphates, and ferrous sulfate
(collectively, the "Challenged Ingredients") are "unnatural, aftificial and/or
synthetic ingredients." However, Plaintiff fails to allege that any of the Challenged
Ingredients in Buitoni Pastas arc "afüftcial" as defìned by the FDA. In addition, the
FDA defìnition of "artificial" applies only to flavor additives, and Plaintiff also
fails to allege that any of the Challenged Ingredients in Buitoni Pastas are present
in the product specifically as an added "flavor." Therefore, this definition of
"natural" is clearly not applicable in this case.
In her final failed attempt to offer a plausible defìnition, Plaintiff alleges
that none ofthe ingredients in a "natural" product are "synthetic" as that term is
defined by the National Organic Program ("NOP"), which regulates products
labeled as "organic." However, because Buitoni Pastas are not labeled as "organic,"
the definition of "synthetic" under the NOP does not apply
9
Case3:12-cv-0391"9-WHO Document9T Filed03l26lL4 Page10 of 12
1
2
l-c
=tr
ô.9
c) r\
ØÒ
t-¡ o
gt
CDL
s'Ã
EE
oc)
CE
Ðo
z
Id. at *4-5 (citations omitted).
In contrast, the plaintifß here have offered one defrnition of "natural." See SAC
I
3 ("The
J
term 'Natural' only applies to those products that contain no artificial or synthetic ingredients and
4
consist entirely of ingredients that are only minimally processed."); Opp. 2 (same). General Mills
5
does not assert that this definition of "natural" is inapplicable or contradicted by federal
6
regulation. Therefore, Pelayo is distinguishable on the facts. Furthermore, I decline to follow the
7
analysis ln Pelayo and find persuasive the decisions cited above where courts found the words "all
8
natural" and "natural" to be actionable. As one judge in this district who declined to follow
9
Pelayo wrote, Pelayo 's holding "is at odds with basic logic, contradicts the FTC statement on
10
which it relies, and appears in conflict with the holdings of many other courts, including the Ninth
ll
Circuit." Jou,2013 WL 6491158, at *8 (N.D. Cal. Dec.
t2
C. General Mills May Not Rely
10, 2013).
on the Products' Ingredient List to Correct Labeling
Misrepresentations
13
General Mills contends that the ingredients list on the product packaging clears up any
l4
possible misconception by identifying which ingredients in the products are not natural. Mtn.
l2-
15
16. Specifìcally, General Mills contends that"any ambiguity about what ingredients were in the
t6
products is dispelled by a review of the labels themselves." Mtn. 14.
t7
The Ninth Circuit has already rejected the argument that "reasonable consumers should be
18
expected to look beyond misleading representations on the front of the box to discover the truth
t9
from the ingredient list in small print on the side of the box." lliiliams,552 F.3d at 939-40 ("We
20
do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers
2t
and then rely on the ingredient list to correct those misinterpretations and provide a shield for
22
liability for the deception. lnstead, reasonable consumers expect that the ingredient list contains
23
more detailed information about the product that confirms other representations on the
24
packaging."). Judges in this district have applied Williams in rejecting the argument that the
25
"natural" representations on the front of the packaging must be viewed in combination with the
26
back of the packaging to resolve any "ambiguity." See Wilson,2013
WL 7320468, at*12-13
27
("the Court frnds that Plaintiffs have adequately pled that a reasonable consumer could interpret a
28
l0
Case3:12-cv-0391-9-WHO Document9T Filed03126lL4 Page11 of
1-2
ALL NATURAL Ingredients' to consist
1
bag of chips claiming to have been 'Made with
2
exclusively of natural ingredients, contrary to the reality described in the nutrition box. Even
J
though the nutrition box could resolve any ambiguity, the Court cannot conclude . . . that no
4
reasonable consumer would be deceived by the 'Made with
5
labels.") (citations omitted); Jou, 2073 WL 649 1 1 5 8, at * 8-9 ("Defendant cannot rely on
6
disclosures on the back or side panels of the packaging to contend that any misrepresentation on
7
the front of the packaging is excused."). As I have already explained, Janney and McKendrick
8
have alleged facts that plausibly suggest that a reasonable consumer would be misled into
9
believing that the terms "100%o NATURAL" and "all natural" mean that the products contain no
ALL NATURAL Ingredients'
10
non-natural ingredients. General Mills cannot rely on the ingredients list to cure that alleged
1l
misrepresentation.
Fufther, the other cases on which General Mills relies to distinguish l(illiams are
(ü
T2
o,9
13
inapposite. See Hairstonv. S. Beach Beverage Co., Inc.,72-cv-1429-JFW, 2012WL 1893818, at
14
*5 (C.D. Cal. May 18,2012), (f,rnding I(illiams distinguishable where the phrase "all naturalwith
L¡O
at) ,
()1i
15
vitamins" was consistent with the ingredient label, because label did "not simply state that it is 'all
IY^
16
natural' without elaboration or explanation. Instead, the 'all natural' language is immediately
l7
followed by the additional statement 'with vitamins' or 'with B vitamins."'); Gitson v. Trader
18
Joe's Co.,13-cv-01333-WHO, 2013 WL 5513711, at*6-7 Qrl.D. Cal' Oct. 4, 2013) (reasonable
19
consumer could not be misled that soy
20
label stated LACTOSE & DAIRY FREE on its front and back); Simpsonv. Kroger
2l
Cal. App. 4th 1352 (2013) (labels describing products as "butter" and "spreadable butter" not
22
misleading where top of product packaging clearly stated "WITH CANOLA OIL"); Kane
23
Chobani, Inc.,l2-cv-02425-LHK,2013
24
dismissed allegation that "all natural" statement was misleading because yogurts are colored
25
artificially using fruit or vegetablejuice concentrate because label discloses that defendant added
26
"fruit or vegetablejuice concentrate [for color ]").
t-c
P6
() rt
Øo
ù1 -
!E
o0)
z
27
28
milk offered the same qualities
as co\ry's
milk because the
Corp.,2l9
v.
WL 5289253, at* l0 (N.D. Cal. Sept. 19,2013) (court
In each of those cases, the challenged misrepresentations are explicitly disclaimed or
modifred by other words in the same general location on the label. The Nature Valley products'
11
Case3:12-cv-0391-9-WHO Document9T Filed03l26lL4 Paget2 oI t2
(d
r-c
5t<
o,o
e(g
()
r\
Øo
l-l c)
(t) ,
gt
.:^
EE
c)C)
I
labels, however, do not contain any language disclaiming or qualifying the "l00yo
2
and
a
J
natural. And, contrary to General Mills' assertion, I fail to
4
informs the consumer that the products include non-natural ingredients. At the pleading stage, I
5
will not conclude
6
the ingredients high fructose corn syrup, high maltose corn syrup, and maltodextrin are not
7
natural. The mere presence of these ingredients in the ingredients list does not clearly refute the
8
explicit message that reasonable consumers may take from the rest of the packaging: that the
9
products are made with only natural ingredients. Lam v. Gen. Mills, Inc., 859 F. Supp. 2d 1097,
NATURAL"
"all natural" misrepresentations. They do not indicate that some of the ingredients
as a matter
of law that
see
are not
how the ingredients list necessarily
a reasonable consumer should be expected
to know that
10
I 105 (N.D. CaL2012) (consumer is not required to look to ingredients list to determine true
11
contents of the product).
Accordingly, I DENY General Mills's motion to dismiss with respect to the plaintiffs'
12
13
UCL, CLRA, and FAL claims.
t4
II.
15
UNJUST ENRICHMENT
General
Mills
moves to dismiss the plaintiffs' Fourth Cause of Action for Unjust
t6
Enrichment. Mtn. 18 n.5. California does not recognize "unjust enrichment" as a separate cause
17
of action.
18
with prejudice.
See
Ang,2013 WL 5407039, at * 11 (citing cases). Therefore I DISMISS this claim
E¡<
Ðo
z
t9
20
CONCLUSION
General Mills's motion for judgment on the pleadings is DENIED as to the plaintiffs' First,
2l
Second, and Third Causes of Action for violations of the CLRA, UCL, and
22
GRANTED without leave to amend
23
General Mills shall answer the SAC within 20 days.
as
26
IT IS
SO ORDERED
Dated: March 26,2014
a
27
28
The motion is
to plaintiffs' Fourth Cause of Action for unjust enrichment.
24
25
FAL.
H. ORRICK
United States District Judge
12