William H. Orrick, United States District Judge.
Plaintiffs Debbie Krommenhock and Stephen Hadley bring this putative class action on behalf of a class of California consumers who purchased "high-sugar" cereal products manufactured by defendant Post Foods, LLC ("Post"). According to plaintiffs, those products' labels contain health and wellness claims that are false and misleading due to the cereals' high added sugar content. Under plaintiffs' sprawling theories, Post's labels violate various California consumer protection statutes because the cereal labels' falsely and misleadingly suggest the cereals are healthy but they are not because consumption of excessive amounts of added sugar can cause adverse health conditions. Post moves to dismiss, arguing that plaintiffs' claims are preempted by federal law, none of the challenged labeling claims are illegal, no reasonable consumer could be misled by the alleged health and wellness claims, and plaintiffs lack standing to pursue many of their legal theories. Preemption does not apply to most of plaintiffs' claims. Post's motion is granted in part and denied in part as outlined below.
The Federal Food, Drug, and Cosmetic Act ("FDCA") was enacted in 1938 and prohibits the misbranding of food. The Food and Drug Administration ("FDA")
In early 2012, the FDA initiated its rule-making process to amend regulations governing nutrition labeling of conventional food products. In May 2016, the FDA issued a final rule which, among other things, revised food labeling requirements regarding "added sugars." The provisions relevant here require manufacturers to include on the Nutrition Facts Panel ("Panel") "the gram amount of `added sugars' in a serving of a product, establishing a Daily Reference Value (DRV), and requiring the percent Daily Value (DV) declaration for added sugars." 81 Fed. Reg. 33,741, at 33,744. Additionally, the final rule requires the Nutrition Facts Panel to change "Sugars" to "Total Sugars" and requires that "Includes `X'g Added Sugars" be indented and declared directly below "Total Sugars" on the label. 81 Fed. Reg. 33,741, at 33,744. The final rule became effective on July 26, 2016, and sets a compliance date of July 26, 2018,
The final rule establishes a DRV of 10 percent of total calories from added sugar, despite the American Heart Association's recommendation that the maximum amount be 5 percent.
Post is the third largest cereal manufacturer in the United States, and produces, markets, and sells the 44 cereal products at issue in this case.
As background for their allegations, plaintiffs cite to numerous scientific studies and medical publications to show that excess sugar intake is associated with various adverse health conditions and diseases including metabolic syndrome, type 2 diabetes, cardiovascular disease, liver disease, and obesity. FAC ¶¶ 40-109. When purchasing Post's high-sugar cereals, plaintiffs read and relied on Post's deceptive labeling claims suggesting that its cereals were healthy, and as a result, plaintiffs' suffered monetary damages and "bodily injury in the form of increased risk of CHD, stroke, and other morbidity." FAC ¶¶ 347, 355, 376, 384. One of the main sources of support plaintiffs rely on is the American Heart Association's recommendation of a DRV of 5 percent total calories from added sugar. FAC ¶ 26. According to the AHA Scientific Statement, sugar in excess of this amount is not safe and impacts the health of the liver among other organs. Id. ¶¶ 26-30.
Plaintiffs allege that Post makes a number of deceptive and misleading claims on its cereal labels that are deceptive and misleading because of the high level of sugar in those products. The claims, according to plaintiffs, either directly state or "strongly suggest" health benefits from consuming the cereal products.
Plaintiffs challenge the use of the terms "healthy," "nutritious," or "wholesome" on 28 of the products. FAC ¶ 221. Plaintiffs argue that use of these terms is false or highly misleading because consumption of these high sugar cereals is "decidedly unhealthy" and the consequence of consumptions are increased risk for chronic diseases. Id. ¶ 222.
Plaintiffs challenge the use of terms that suggest Post cereals help promote digestive health on two flavors of Post Great Grains Digestive Blend. FAC ¶¶ 229-233. Plaintiffs argue that the statements are misleading because the high level of sugar content in those cereals increase the risk of chronic disease (which substantially harms both the digestive system and overall human health). Id. ¶¶ 231-233.
Plaintiffs also challenge the use of terms disclosing protein and fiber, particularly in connection with suggestions regarding improved metabolic function, because those statements convey that the products — two flavors of Post Great Grains Protein Blend and Bran Flakes cereal — will promote weight loss when, given their sugar content, they promote weight gain. FAC ¶¶ 234-239.
Plaintiffs challenge the use of language that while not expressly claiming to be healthy, nutritious or wholesome, imply the same thing through suggestion. FAC ¶ 240. The challenged phrases include use of: "grain," "fiber," and "real" (e.g., "real bananas"). Id. ¶ 241.
Plaintiffs challenge the use of the trade organization "Whole Grains Council" stamp on the Post cereal packages. FAC ¶¶ 244-249. Under the organization's requirements, the stamp can only be used on foods containing 8g or more of fiber. Plaintiffs allege that the use of the stamp is deceptive because it implies "independent verification" that the cereals at issue are "healthy" when the added sugar makes them unhealthy. Id. ¶ 249.
Plaintiffs challenge Post's practice of making representations about the amount of protein a serving contains on its packaging, when those representations are based on use of milk with the cereal. FAC ¶ 252. Plaintiffs note the representation often comes with a disclaimer, but argue the disclaimer is not effective because it is the larger font "Xg PROTEIN" that catches consumers' eyes and not the disclaimer in smaller font that the protein amount is based on use of milk. Id. Plaintiffs argue that when viewed on the package as a whole, the representation misleadingly suggests the cereals make a "more significant contribution" to a nutritious meal than they do. Id. ¶ 251. It is deceptive according to plaintiffs because given the high amount of sugar, its consumption is likely to increase the risk of chronic disease. Id. ¶ 252.
Plaintiffs challenge Post's use of the phrases "no high fructose corn syrup" ("HFCS") or "natural wildflower honey" on its cereal labels, arguing that Post is attempting to leverage consumers' aversion to HFCS by deceptively suggesting its cereals are healthier because there is no HFCS or honey is used, when added sugar in any form causes an increased risk of chronic health conditions. FAC ¶¶ 253-257. Plaintiffs allege this strategy is meant to confuse consumers and make them believe that some forms of sugar are healthier than others. Id. ¶ 256.
In order to "capitalize" on consumers' preference for fresh or less processed foods, plaintiffs assert that Post affirmatively misrepresents that several of its products are fresh and less processed. FAC ¶¶ 258-263. Plaintiffs focus on seven of Post's products that tout "less processed nutrition" and argue that those statements are false or highly misleading because some contain blueberries that are sweetened with added sugar and all contain "highly-processed" added sugars, and that the statements falsely suggest the cereals are healthy food options which is untrue because of the added sugar content. Id. ¶¶ 259-263.
More generally, plaintiffs allege that Post's omission of material information regarding the added sugar content and the dangers of high sugar consumption makes the use of the "health" claims illegal under California law. Plaintiffs identify four product claims specifically: (i) Post Great Grains Digestive Blend: Vanilla Graham is "sweetened with a hint of vanilla flavor," suggesting that the product is low in both added sugar and "bad" forms of sugar; (ii) Honey Bunches of Oats Cereal contains just "a Touch of Honey!" is false and misleading, where the products contain as much as 12g of sugar per serving; (iii) Post Honey Bunches of Oats — With Real Peaches is a "LIGHTLY SWEETENED CEREAL," despite that more than 25 percent of the cereal by weight is sugar, and that 26.7 percent of the product's calories come from its added sugar; and (iv) Post Shredded Wheat Lightly Frosted is only "lightly frosted" — or sweetened — despite that it contains 12g of sugar, which is more than 20 percent of the product's weight, and accounts for nearly 25 percent of its calories. FAC ¶¶ 266-269. Plaintiffs assert that these statements misleadingly imply low sugar content, when the content is actually high. Id. ¶ 270.
Plaintiffs also allege Post's label statements violate the federal FDCA (as implemented under various FDA regulations), and therefore, violate the California Sherman Law, Cal. Health & Safety Code § 109875 et seq.
Plaintiffs argue that by their failure to disclose material facts regarding the added sugar levels — specifically the high levels of added sugar and the adverse health consequents from consumption of sugar — all of the complained of "health and wellness" statements identified above are "false and misleading" under 21 U.S.C. § 343(a) and the parallel California provision, Cal. Health & Safety Code § 110660, which prohibit any label that is "false or misleading in any particular." FAC ¶¶ 294-297.
Plaintiffs contend that specific claims are impermissible "health claims" regulated under the NLEA, 21 C.F.R. §§ 101.14(a)(1), 101.14(e). The challenged "health claims" are:
FAC ¶¶ 204(i), 299(a)-(b), (n)-(o).
Plaintiffs allege that the metabolism and weight claims made for the Great Grain and Bran Flakes products are "disease or health-related conditions" that do not comply with 21 C.F.R. § 101.14. Id. ¶¶ 300-302. The statements regarding the heart disease and cancers on the Shredded Wheat-Lightly Frosted label allegedly violate 21 C.F.R. § 101.77(c)(2)(D). Id. ¶ 305.
Plaintiffs also assert that Post is making nutrient claims — claims which expressly or implicitly characterize the level of a nutrient required to be listed in the "nutrient box label" by the FDA. Plaintiffs challenge the following:
Plaintiffs also contend that Post has made a number of "deceptive" statements regarding these products on its website, which consumers are invited to "visit" by language on the side of the cereal boxes. Plaintiffs identify website statements of "nourishing goodness" and a listing of Post's "values" as including "goodness," "no HFCS," "nutritious," and "whole grains" as a source of vitamins and nutrients, and "digestive health." FAC ¶¶ 310-318. Plaintiffs allege that these statements — both alone and in combination — mislead consumers into believing that Post's cereals are healthy and contain only a "moderate" amount of sugar. Id. ¶ 317. Plaintiffs also complain about specific health, wellness, and nutrition statements made for Alpha-Bits, Golden Crisp, Great Grains, Honey Bunches of Oats, Honeycomb, Bran Flakes, Raisin Bran, Post Selects, Shredded Wheat, and Waffle Crisp cereals on product-specific pages of Post's website. Id. ¶ 319. Similarly, plaintiffs complain about statements made in two press releases regarding the Great Grains products and their impact on metabolism and digestion. FAC ¶¶ 320-322.
Plaintiffs also allege that Post knows or reasonably should know that consumers may eat more than one serving of cereal at a time, further impacting their health risk. Id. ¶¶ 328-334.
Based on all of these allegations, plaintiffs assert that Post violated:
Post moves to dismiss the FAC for five main reasons: (1) plaintiffs' claims are preempted by federal law; (2) Post's cereal products do not contain any labeling statements that violate federal or state law; (3) plaintiffs fail to state a claim for relief under the UCL, FAL, or CLRA; (4) Post did not breach any express or implied warranty; and (5) plaintiffs lack standing to seek injunctive relief, bring claims for unpurchased products, and challenge Post's advertising statements directed at children. Mot. 1. In the alternative, Post requests that I stay this case under the doctrine of primary jurisdiction. Mot. 29-30.
A motion to dismiss is proper under Federal Rule of Civil Procedure 12(b)(6) where the pleadings fail to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). The court must "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The complaint "does not need detailed factual allegations," but instead only needs enough factual allegations "to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "However, conclusory allegations and unwarranted inferences are insufficient to defeat a motion to dismiss." Oklevueha Native Am. Church of Haw., Inc. v. Holder,
Post argues that plaintiffs' claims should be dismissed with prejudice because they are preempted by federal law on the bases of express and conflict preemption. "Express preemption exists when a statute explicitly addresses preemption." Reid v. Johnson & Johnson, 780 F.3d 952, 959 (9th Cir. 2015). Conflict preemption occurs when it would be "impossible for a private party to comply with both state and federal requirements," English v. Gen. Elec. Co., 496 U.S. 72, 79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990), or where the state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 S.Ct. 581 (1941).
The Nutrition Labeling and Education Act amended the Food Drug and Cosmetic Act in 1990 to "establish[] uniform food labeling requirements, including the familiar and ubiquitous Nutrition Facts Panel found on most food packages." Lilly v. ConAgra Foods, Inc., 743 F.3d 662, 664 (9th Cir. 2014). NLEA contains an express preemption provision, providing "that no state may `directly or indirectly establish... any requirement for the labeling of food that is not identical' to the federal requirements." Id. at 664-65 (quoting 21 U.S.C. § 343-1(a)(5)). "Section 343-1(a)(4) expressly preempts any state or local `requirement for nutrition labeling of food that is not identical to the requirement of section 343(q)'" while § 343-1(a)(5) "preempts state or local governments from imposing any requirement on nutrient content claims made by a food purveyor `in the label or labeling of food that is not identical to the requirement of section 343(r).'" Chacanaca v. Quaker Oats Co., 752 F.Supp.2d 1111, 1118 (N.D. Cal. 2010).
"The phrase `not identical to' means `that the State requirement directly or indirectly imposes obligations or contains provisions concerning the composition or labeling of food that are not imposed by or contained in the applicable federal regulation or differ from those specifically imposed by or contained in the applicable federal regulation.'" Lilly v. ConAgra Foods, Inc., 743 F.3d at 664 (quoting 21 C.F.R. § 100.1(c)(4)) (internal brackets and ellipses omitted). "NLEA also provides, however, that it does not preempt any state law unless the law is `expressly preempted,'" and (as relevant here) "[t]he NLEA does not preempt state law-based causes of action that are identical to the federal labeling requirements." Reid v. Johnson & Johnson, 780 F.3d 952, 959 (9th Cir. 2015). In other words, "preemption only occurs where application of state laws would impose more or inconsistent burdens on manufacturers than the burdens imposed by the FDCA. If a lawsuit asserts that a manufacturer has violated the FDCA (as amended by NLEA) and does not seek to impose additional or contrary burdens to those imposed under the FDCA, the claims raised under state law are not preempted." Gallagher v. Bayer AG, No. 14-CV-04601-WHO, 2015 WL 1056480, at *4 (N.D. Cal. Mar. 10, 2015) (collecting cases).
California expressly incorporates the provisions of the FDCA (as amended by NLEA) in the Sherman Law. Cal. Health
Where a plaintiff challenges a labeling statement that has been approved by the FDA under the FDCA, however, such a claim may be preempted. See Pratt v. Whole Foods Mkt. California, Inc., No. 5:12-CV-05652-EJD, 2014 WL 1324288, at *5 (N.D. Cal. Mar. 31, 2014) ("Courts in this district have generally found express preemption under the FDCA only when: (1) the FDA requirements with respect to a particular food label or package are clear; and (2) the product label or package at issue is in compliance with that policy, such that plaintiff necessarily seeks to enforce requirements in excess of what the FDCA, NLEA, and the implementing regulations require.").
"The FDA has promulgated regulations regarding three specific kinds of claims: express nutrient content claims; implied nutrient content claims; and health claims." Chacanaca v. Quaker Oats Co., 752 F.Supp.2d 1111, 1117 (N.D. Cal. 2010) (citing 21 C.F.R. §§ 101.13, 101.14). An express nutrient content claim is a direct statement about the level or range of the nutrient in the food, such as "low sodium" or "contains 100 calories." 21 C.F.R. § 101.13(b)(1). A food product label may include an express nutrient claim provided that it "does not in any way implicitly characterize the level of the nutrient in the food and it is not false or misleading in any respect (e.g., `100 calories' or `5 grams of fat'), in which case no disclaimer is required." 21 C.F.R. § 101.13(i)(3).
An implied nutrient content claim "[d]escribes the food or an ingredient therein in a manner that suggests that a nutrient is absent or present in a certain amount (e.g., `high in oat bran')" and might also suggest that the food is compatible with a healthy or nutritional diet because of its nutrient content. 21 C.F.R. § 101.13(b)(2)(i)-(ii).
A health claim is an express or implied labeling statement that "characterizes the relationship of any substance to a disease or health-related condition." Section 101.14(e) provides in relevant part that health claims are prohibited on food labels "unless: (1) The claim is specifically provided for in subpart E of this part; and (2) The claim conforms to all general provisions of this section as well as to all specific provisions in the appropriate section of subpart E of this part; ..." 21 C.F.R. § 101.14(e).
"Under the FDA regulations, the general rule is that `nutrient content claims' are not permitted on food labels," subject to certain exceptions. Reid v. Johnson & Johnson, 780 F.3d 952, 959 (9th Cir. 2015); see 21 C.F.R. § 101.13(b) (nutrient content claims may "not be made on the label or in labeling of foods unless the claim is made in accordance with this regulation and with the applicable regulations in subpart D of this part ..."). Among the nutrient claims authorized by the FDA are "statements about the amount or percentage of a nutrient that are consistent with the labeling regulations (e.g., `less than 3 g of fat per
FDA regulations also require food packaging to include the Nutrition Facts Panel, where companies disclose information about the presence of certain nutrients in the food product. Id. § 101.9(c). For purposes of FDA regulations, the required claims made inside the Panel do not constitute "nutrient content claims" even though the label plainly contains information about nutrient content. Id. § 101.13(c). However, "a requirement to state certain facts in the nutrition label is not a license to make that statement elsewhere on the product." Reid, 780 F.3d at 960.
Post argues that plaintiffs' claims are expressly preempted because plaintiffs seek to impose three labeling requirements that are not identical to those recently promulgated by the FDA in its final rule on added sugar. Mot. 8-11. According to Post, the "non-identical" requirements sought by plaintiffs are: (1) prohibiting labeling statements on Post's cereals that suggest the products are "healthy"; (2) requiring disclosure of the added sugar content (as opposed to disclosure of the total sugar content) on Post's cereals prior to the effective date of the FDA regulation; and (3) requiring a disclosure statement on Post cereal labels warning of the alleged dangers of consuming added sugars. Mot. 8.
Plaintiffs' FAC challenges numerous labeling statements that either expressly or impliedly suggest that Post cereals are healthy, contending that these statements are deceptive and misleading in light of the products' high added sugar content. Post asserts that all of the claims are preempted in light of the FDA's recent rulemaking setting a recommended level of added sugar consumption at 10 percent of calories and imposing requirements for disclosure of added sugars in the Nutrient Fact Panel effective in 2018. The analysis of whether preemption bars plaintiffs' claims "turns on whether the challenged statements are authorized by the FDA's regulations or other pronouncements of similar legal effect." Reid, 780 F.3d at 959.
Post's argument hinges in large part on the plaintiffs' reliance on the AHA's Scientific Statement that added sugars should be limited to 5 percent of the DRV. Post notes that the FDA specifically considered and rejected setting the recommended DRV at 5 percent in light of the scientific evidence before the FDA, and instead settled on the recommended 10 percent of calories "considering current consumption of added sugars in the United States." 81 Fed. Reg. 33,741, at 33,849.
That plaintiffs rely in part (and not exclusively) on the AHA 5 percent recommendation to provide a plausible scientific basis for their allegations that consuming excess amounts of added sugars creates significant health risks does not mean those claims are preempted because the FDA chose not to set its DRV at 5 percent considering current consumption patterns
Plaintiffs' claims that defendant's use of health and wellness claims on its labels make those labels false and misleading because consumption of levels of added sugar in defendant's products is unhealthy are not preempted claims.
Post also argues that plaintiffs' claims are preempted because the relief (in part) that plaintiffs seek for the false and misleading health and wellness claims on their cereal labels is the disclosure of exactly how much added sugar is in the cereals, a proposition that the FDA expressly considered and mandated does not have to occur before 2018. It is true that when reviewing the FAC there are instances where plaintiffs want to require Post to add the amount of added sugar to its labels. See, e.g., FAC ¶ 264. In their Opposition, plaintiffs back away from any such direct demand and clarify that they are not seeking an "injunction" or otherwise seeking to force Post to disclose the amount of added sugars in advance of the FDA's requirement. Oppo. 16.
Instead, when read closely, plaintiffs' claims regarding Post's failure to disclose added sugar is allegedly actionable under California's consumer protection statutes only because Post makes the other unregulated claims regarding health and wellness that according to plaintiffs falsely convey the health benefits of the cereals. It is that false conveyance of health benefits that, according to plaintiffs, triggers the obligation to disclose the high levels of added sugar. I agree with Post that any claim premised solely on the failure of Post to disclose the amount of added sugar in the products on their labels would tread directly on the FDA's new rule and its determination that such disclosure is not required until 2018 for a manufacturer of Post's size.
Relatedly, Post challenges the claims in the FAC that Post had a "duty to warn" consumers about the dangers of consuming excess amounts of added sugar like those in its cereals. FAC ¶¶ 289-292. Post points out that the FDA in its rulemaking proceedings rejected calls to revise its proposed rule to mandate specific suggested warning labels regarding added sugars because the specific proposed "statements are not consistent with our review of the evidence ..., and we do not require warning labels or disclaimers for other nutrients on the label. Furthermore, some added sugars can be included as part of a healthy dietary pattern." 81 FR 33742-01 at 33,829.
The FDA's failure to "revise its rule" to adopt the label warnings suggested by a few commentators, however, does not mean that a "failure to warn" type of claim suggested by plaintiffs is expressly preempted, absent evidence that consideration of this type of affirmative warning was the focus of the FDA's rulemaking. It appears that the FDA's focus was updating the Nutrition Facts Panel to disclose added sugars and include a DRV.
Relatedly, Post challenges plaintiffs' reliance on statements as part of their 21 U.S.C. § 343(a) argument (that when read in context with other portions of the label and in light of the added sugar content of the products, Post's label is false or misleading) that Post contends are nutrient content claims expressly permitted by the FDA. See Mot 13-15 (challenging use of (1) "healthy way" on Honeycomb, FAC ¶ 216(c); (2) "good source" of fiber claim on Great Grains Blueberry Morning, FAC ¶ 132(f); (3) identification of a specific gram serving of fiber on Raisin Bran, FAC ¶ 206(e); (4) "10g or more" whole grains per serving on Honey Bunches of Oats — with Almonds, FAC ¶ 165; (5) "no high fructose corn syrup" on Bran Flakes, FAC ¶ 207; and (6) "antioxidant" on Great Grains Cranberry Almond Crunch, FAC ¶ 207).
Plaintiffs cannot rely on FDA-approved nutrient claims as part of the basis for their § 343(a) false and misleading claim. But the crux of plaintiffs' theory is that Post is using statements implying a product is healthy when it is not, given the
Plaintiffs claim they avoid the Chacanaca problem because they "challenge labeling statements that are either not regulated nutrient content or health claims, or are claims that violate the regulations, so this argument is misplaced." Oppo. 11 n. 6. The only "stand-alone" FDA-regulated nutrient or health content claims challenged by plaintiffs that violate the regulations are identified in paragraphs 298 through 309 of the FAC.
As to the former, I will address the examples identified by defendant in its Motion in turn.
With respect to the challenge to the Whole Grains Council Stamp itself, plaintiffs argue that they do not challenge the statements within the stamp disclosing actual per serving grams of whole grains, but the use of the Stamp itself because "it implies independent verification that the cereals are healthy" despite the fact the Council is an industry trade group and the added sugar makes the cereals unhealthy. Oppo. 18; FAC ¶¶ 244-249. Post responds that the use of the Stamp itself cannot be considered apart from the disclosure within the stamp of the grams of whole grains per serving (implying dietary fiber). Reply 9 n.6.
There is no evidence that the Stamp itself has been approved by the FDA (although the FDA has determined that use of "symbols" can sometimes constitute nutrient content claims). Mot. 15 n. 7. Moreover,
The only preempted "health and wellness" claims are nutrient content claims that have been expressly permitted by the FDA. Plaintiffs cannot rely on nutrient content claims that are permitted by the FDA as part of their effort to characterize Post's cereal labels as false and misleading in light of the cereals' added sugar content.
Post also argues that the challenged claims are conflict preempted in light of the FDA's recent rulemaking proceedings and final rule on added sugar. Mot. 11. Plaintiffs respond that conflict preemption does not bar the challenged claims based on Post's voluntary health and wellness statements because their claims "cannot possibly" present an obstacle to the achievement of Congress' objectives; rather, "requiring Post to disclose additional material information when affirmatively misrepresenting its cereals are healthy furthers the objectives of the [FDA's] added sugar rulemaking." Oppo. 21. As noted above, plaintiffs have disclaimed any intent to impose affirmative labeling requirements on Post that are inconsistent with those of the FDA. They merely seek to hold Post liable for its false and misleading health and wellness claims in light of the products' added sugar; an area that has not been subject to federal rulemaking.
As noted above, plaintiffs also challenge a number of "stand-alone" health and nutrient claims that both sides agree are regulated by the FDA. I will address each set of these claims in turn.
Health claims regulated by the FDA are those which "expressly or by implication... characterize[] the relationship of any substance to a disease or health-related condition." 21 C.F.R. § 101.14(a)(1). Such claims must be "complete, truthful, and not misleading." Id. § 101.14(d)(2)(iii). Most health claims based on the benefits of consuming a particular nutrient substance
The stand-alone health claims alleged by plaintiffs are found in paragraphs 299-305 of the FAC. Post first argues that the challenged health claims relating to heart disease at paragraph 299 c.-n. are impermissible, as the FDA allows claims that draw a connection between whole grains and the risk of heart disease.
Plaintiffs challenge the following metabolism and weight claims:
These claims are made on the labels of Post's Great Grains Protein Blend: Honey, Oats & Seeds, Great Grains Protein Blend: Cinnamon Hazelnut, and on Bran Flakes, and allegedly violate 21 C.F.R. § 101.14. FAC ¶¶ 299(a)-(b), 299(o), 300-301.
Plaintiffs argue that these statements are health claims because metabolism and weight are "disease or health-related conditions" under 21 C.F.R. § 101.14(a)(5), which defines "disease or health-related conditions" to include "a state of health leading to such dysfunctioning (e.g., hypertension)." According to plaintiffs, comments about metabolism and its connection to weight maintenance are "states of health" leading to obesity among other morbidity. Oppo. 12-13. Because these claims are not expressly approved by the FDA — linking consumption of fiber and whole grains to better functioning metabolism and weight maintenance — they are impermissible. Id. at 13. Post responds that these statements are not health claims at all because "[n]either `metabolism,' the internal chemical process that occurs within every human body regardless of health, nor `weight management,' the conceptual idea of managing one's weight to a certain level, involve `damage' or `dysfunction,' and neither `lead[] to the disease or health-related condition of obesity.'" Reply 8. However, if these are not expressly regulated
Plaintiffs also challenge the following:
This claim is made on the label of Shredded Wheat — Lightly Frosted. FAC ¶ 299(n).
Plaintiffs do not identify the regulation this statement allegedly violates, either in the FAC or in their Opposition. In its Motion, Post argues that under 21 C.F.R. § 101.81, "drawing a relationship between whole grains and the risk of diabetes is permitted by FDA as what is known as a `permissible qualified health claim.'" In support, Post relies upon an FDA guidance letter, where the FDA determined that there was "very limited credible scientific evidence for a qualified health claim for whole grains and type 2 diabetes" but allowed one manufacturer to use the following claim: "Whole grains may reduce the risk of type 2 diabetes, although the FDA has concluded that there is very limited scientific evidence for this claim." Garganta Decl., Ex. 7. Post argues that under the Food and Drug Administration Modernization Act of 1997, at 21 U.S.C. § 343(r)(2)(G), a health claim may be made "for which the Secretary has not promulgated a regulation" if that claim is based on an "authoritative statement" of "a scientific body of the U.S. government with responsibility for public health protection or nutrition research" and points back to the FDA guidance letter. Mot. 16-17.
The challenged statement Post uses is very different from the statement approved in the FDA guidance letter, and contains none of the required qualifying language. In Reply, Post characterizes this as only a "technical" violation, and considering that plaintiffs do not specifically allege that they saw this claim, it is "legally insufficient to maintain Plaintiffs' claims." Reply 12. This claim is thin but plausible and at this juncture I will allow it to remain. See Reid, 780 F.3d at 965 (rejecting preemption of state law labelling claim based on FDA guidance letter containing only "tentative and non-committal terms" and committing FDA only "to consider the exercise of enforcement discretion").
A nutrient content claim is a claim on a food product that "expressly or implicitly characterizes the level of a nutrient" of the type required to be disclosed under 21 C.F.R. §§ 101.9 or 101.36. See also 21 C.F.R. § 101.13(b). Only those nutrient claims (or their synonyms) that are specifically defined in the FDA regulations may be used on a label; all other claims are prohibited. See 21 C.F.R. § 101.13(b).
Plaintiffs allege that each time Post uses the phrase "no high fructose corn syrup" it does so in violation of 21 C.F.R. § 101.13(e), which regulates how manufacturers can claim the absence of a nutrient. FAC ¶ 307. Plaintiffs allege the following statements, made on a variety of Post's cereals, are impermissible:
FAC ¶¶ 161, 163, 165, 169, 172, 186, 188, 190, 192, 200, 204, 206, 208, 212, 214, 218, 319(g).
Under 21 C.F.R. § 101.13(e)(1), a food may be labeled as "free" of or "low" in a nutrient only if that food has "been specially processed, altered, formulated, or reformulated so as to lower the amount of the nutrient in the food, remove the nutrient from the food, or not include the nutrient in the food, (e.g., `low sodium potato chips')." 21 C.F.R. § 101.13(e)(1). Foods that are normally low in or free of a nutrient may only make a statement that refers to all foods of that type, to avoid implying the food differs from other foods of the same type — for example, the claim "kale, a fat-free food" is permissible, while "fat-free kale" is not. See 21 C.F.R. § 101.13(e)(2).
Post argues that 21 C.F.R. § 101.13(e)(1) only applies to the terms "free" and "low" and therefore the challenged statements do not violate the regulation. The FDA recognizes that synonyms for "free" include "Zero", "No," "Without," "Trivial Source of," and "Dietarily Insignificant Source of." See Appendix A: Definitions of Nutrient Content Claims to the FDA's Guidance for Industry: A Food Labeling Guide http://www.fda.gov/downloads/Food/GuidanceRegulation/UCM265446.pdf.
Plaintiffs allege that Post violates 21 C.F.R. § 101.13(i)(3) when they advertise the amount of protein in a serving, where the grams of protein include contribution from milk, on three varieties of Great Grain cereals. FAC ¶ 308. Section 101.13(i)(3) provides that "the label or labeling of a product may contain a statement about the amount or percentage of a nutrient if ... [t]he statement does not in any way implicitly characterize the level of
Plaintiffs allege that the "Xg PROTEIN" statements are impermissible because they falsely and misleadingly suggest that the cereals make a more significant contribution to meeting the RDV of protein than they actually do. Oppo. 12. Post points out, as plaintiffs acknowledge, that immediately adjacent to the Xg Protein statements Post provides a disclaimer explaining that only some of the protein comes from the cereal itself and more comes from added milk. Mot. 18; FAC ¶ 250. Post argues, therefore, that the Xg Protein statements are permissible "as prepared" claims expressly allowed by the FDA.
These disclosures are "ineffective" according to plaintiffs, because "the eye naturally catches only the large `[] PROTEIN' representation." Oppo. 12 (relying on SAC ¶¶ 250, 308). However, as shown by Post's exhibits (Ohrt Decl., Exs. 5, 7, 14), the "with milk" disclosures not only immediately follow the Xg disclosure, they are approximately the same font size, color, and prominence as the "protein" disclosure. Given the undisputed way in which Post makes the protein with milk disclosures (and in absence of any argument that Post's actual use somehow disqualifies these statements from protection as "prepared as" claims permitted by the FDA), I conclude that there is nothing misleading about them.
Judge Koh reached a similar decision recently in Hadley v. Kellogg Sales Co., No. 16-CV-04955-LHK, 243 F.Supp.3d 1074, 2017 WL 1065293 (N.D. Cal. Mar. 21, 2017). She dismissed the allegations that the protein claims were misleading because "the symbols for cereal and milk are approximately the same size as the lettering indicating `9g Protein' and are located directly below the `9g Protein' amount in the same bordered area." Id. at 1101, at *17. Because "the information concerning the amount of protein originating from milk and cereal is located directly below the allegedly misleading statement ... [a] reasonable consumer viewing this infographic would conclude that the amount of protein represented comes from a combination of cereal and milk." Id.
The stand-alone claims based on disclosed protein content "as prepared" as DISMISSED with prejudice.
Post challenges plaintiffs' ability to state claims under the three consumer protection statutes at issue (the CLRA, FAL and UCL), arguing that (i) no reasonable consumer could plausibly have been misled by its labels' failure to disclose the amount of and alleged dangers of sugar and (ii) no reasonable consumer could plausibly have been misled because Post disclosed the total sugar content of its cereals in the Nutrition Facts Panel on each package of cereal.
The "reasonable consumer" standard governs misrepresentation and omission
Post argues that the essential allegations of plaintiffs' case — that Post marketed and intentionally conveyed that its cereal products are healthy when in fact they are not and in doing so misled consumers — are not plausible and Post's representations or omissions could not have misled a reasonable consumer.
Post argues first that the scientific studies relied on by plaintiffs to support their allegations regarding the dangers of sugar consumption are inapposite because many of them discuss products not in Post's cereals (e.g., high fructose corn syrup). Mot. at 19. However, plaintiffs argue that there are other studies which address forms of added sugar other than HFCS and also point to evidence that HFCS and other forms of added sugars create similar health risks. See, e.g., FAC ¶ 256. Unlike the case relied on by Post, Kardovich v. Pfizer, Inc., 97 F.Supp.3d 131, 138 (E.D.N.Y. 2015), there is no "mismatch" between plaintiffs' theory of harm and the scientific materials relied on. At this juncture, relevant studies supporting plaintiffs' theory (at least in part) have been alleged, and determining the full extent of that support is not appropriate on a motion to dismiss. See, e.g., Gallagher v. Bayer AG, No. 14-CV-04601-WHO, 2015 WL 1056480, at *9 (N.D. Cal. Mar. 10, 2015).
Post then argues that some of plaintiffs' studies and the FDA's new rule support Post, because those studies recognize that many features of Post's cereal — whole grains, added vitamins — provide significant nutritional benefits and even cereal that has added sugar "can be" part of "healthful dietary patterns." 81 FR at 33818, 33849.
Similarly, Post argues because it did not make any affirmative misrepresentations on its labels, consumers are expected to look at the Nutrition Fact Panel to answer their questions about products where the sugar content for all of the challenged products was disclosed. See, e.g., Workman v. Plum Inc., 141 F.Supp.3d 1032, 1036 (N.D. Cal. 2015), appeal dismissed (Mar. 14, 2016) (dismissing labelling claims where the "products at issue do not display any affirmative misrepresentations. They merely show pictures of featured ingredients contained in the puree pouch and fruit bars. No reasonable consumer would expect the size of the flavors pictured on the label to directly correlate with the predominance of the pictured ingredient in the puree blend."). Here, however, plaintiffs have alleged affirmative misrepresentations — either express or implied — that the challenged products are healthy, which they assert is false or misleading given the added sugar content.
The claim here is more akin to the one in Williams v. Gerber Prod. Co., 552 F.3d 934 (9th Cir. 2008), where misrepresentations on the front of a package about its contents could have been dispelled by reviewing the Nutrition Facts Panel on the back. Because the "features" on the front of the package could deceive a reasonable consumer, that the actual ingredients were disclosed on the back in the Panel did not defeat the claim on a motion to dismiss. Id. at 939 (rejecting argument "that reasonable consumers should 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.").
Finally, Post contends that many of the statements at issue are mere non-actionable puffery. "Advertisements that amount to `mere puffery' are not actionable because no reasonable consumer relies on puffery. Factual representations, however, are actionable." Stickrath v. Globalstar, Inc., 527 F.Supp.2d 992, 998 (N.D. Cal. 2007) (citations omitted). The Court may determine as a matter of law whether a statement is puffery. Cook, Perkiss & Liehe, Inc. v. N. California Collection Serv. Inc., 911 F.2d 242, 245 (9th Cir. 1990) ("District courts often resolve whether a statement is puffery when considering a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and we can think of no sound reason why they should not do so."); see, e.g., Carrea v. Dreyer's Grand Ice Cream, Inc., 475 Fed.Appx. 113, 115 (9th Cir. 2012) ("original" and "classic" non-actionable); Viggiano
Of the allegedly misleading statements identified by plaintiffs, defendants contend the following are mere puffery: (i) "touch of honey" and similar statements; (ii) "goodness" and similar statements; (iii) "simple" statements and related statements. Defendants, however, only identify the actual specific statements they contend are puffery in a 77 page chart submitted by defense counsel. Gargana Decl., Ex. 6. Moreover, defendants appear to single out statements as non-actionable puffery when plaintiffs' claim is that those statements combined with others on the same package together express or convey the health claim. Courts have repeatedly emphasized that in order to assess whether a statement is mere puffery, it must be considered in the context of the whole label. See, e.g., Williams, 552 F.3d at 939 (acknowledging that standing on its own "nutritious" could be considered puffery, but where the "statement certainly contributes, however, to the deceptive context of the packaging as a whole" and "given the context of this statement" motion to dismiss denied); Coe v. Gen. Mills, Inc., No. 15-CV-05112-TEH, 2016 WL 4208287, at *5 (N.D. Cal. Aug. 10, 2016) (considering statements in context of other representations on the package and declining to dismiss "a great start to your day," "start your school day right," and "kick-start your day" as mere puffery); Jones v. Nutiva, Inc., No. 16-CV-00711-HSG, 2016 WL 5210935, at *7 (N.D. Cal. Sept. 22, 2016) ("considered in the context of Defendant's entire Virgin Coconut Oil label, this statement could `certainly contribute [] ... to the deceptive context of the package as a whole.'"); but see Salazar v. Honest Tea, Inc., 74 F.Supp.3d 1304, 1317 (E.D. Cal. 2014) (on their own, a "tad" and a "kiss" are "vague and non-specific terms that lack any clear, objective indication of their levels.").
The motion to dismiss is DENIED on this argument. However, if defendant moves to dismiss again following any amendment by plaintiffs, defendant may re-raise this argument, as long as it considers the challenged statements in the context of other related statements on the same labels to show why, in their full context, the statements are mere puffery.
Post argues plaintiffs' express warranty claim fails as a matter of law because plaintiffs have not plausibly alleged a breach, puffery claims cannot support an express warranty claim, and the products at issue disclose the amount of sugar they contain "clarifying" any otherwise applicable warranty promise.
A plaintiff asserting a breach of warranty claim must allege facts sufficient to show that (1) the seller's statements constitute an affirmation of fact or promise or a description of the goods; (2) the
Plaintiffs assert that 90 identified statements constitute "affirmations" of fact, promises or description of the cereals at issue, creating express warranties. Those statements include that the products support health digestion systems; promote healthy bones and teeth by helping the body to absorb calcium; contains "nutritious" nuts or berries, contain natural sweet raisins and dates; and are lightly frosted. FAC ¶ 412. Plaintiffs breach of warranty claims suffer from a number of deficiencies.
Defendants point out that for the vast majority of these statements, plaintiffs do not explain why or how Post breached a warranty as to those specific phrases (i.e., that Post did not deliver what was promised). In Opposition, plaintiffs do not address this issue head on, and instead characterize their express warranty claims as based on Post's claims that its products were "healthy" or "heart healthy" or "wholesome" and "nutritious." Oppo. 20-23. Plaintiffs, theory, apparently, is that some of these separate statements when read together with other statements create the warranty of a "healthy" product. However, plaintiffs cite no apposite cases supporting their attempt to stitch together multiple different representations on a package to form a basis for a breach of warranty claim.
In addition, plaintiffs failure to identify which products contain what warranties. This makes it impossible to identify the products that are at issue under this cause of action. Plaintiffs must identify what express warranties they are claiming as to each product.
The breach of warranty claim is dismissed with leave to amend. If plaintiffs choose to amend, they shall identify the exact representations that allegedly form a warranty for each product at issue.
Plaintiffs allege that Post has breached the implied warranty of merchantability
Post argues that plaintiffs lack standing to sue for injunctive relief because they now know — as expressly disclosed in their FAC — that: (a) Post's cereals contain high sugar levels; (b) the dangers of added sugars; and (c) where to look on the label (Nutritional Fact Panel) to determine how much sugar is in a serving. Numerous judges in this District, including me, have concluded that where plaintiffs challenge food labels as false and misleading in light of the actual product ingredients, those plaintiffs may lack standing to seek injunctive relief where there is no likelihood that they will be deceived by the challenged conduct in the future. See, e.g., Morgan v. Wallaby Yogurt Co., No. 13-cv-00296-WHO, 2014 WL 1017879 at *6, 2014 U.S. Dist. LEXIS 34548 at *21 (N.D. Cal. Mar. 13, 2014) ("Here, I am limited to only granting damages since the plaintiffs now know what evaporated cane juice is and have unambiguously stated that they would not have purchased the product had they known it contained added sugar. They cannot plausibly allege that they would purchase the challenged products in the future if they were properly labeled."); Swearingen v. Santa Cruz Nat., Inc., No. 13-CV-04291-SI, 2016 WL 4382544, at *13 (N.D. Cal. Aug. 17, 2016) ("Plaintiffs' case is predicated on the premise that they would not have purchased the food products in question if they had known that ECJ was sugar. Given this, the Court has difficulty envisioning how plaintiffs could amend their complaint to allege plausibly that, now knowing the products to contain added sugar, they will purchase the products in the future.").
More recently, some judges in this District have found standing where a consumer would not be able to reasonably rely on a defendant's labeling in the future and also expressed an intent to purchase a future product if it were properly labelled. See, e.g., Lilly v. Jamba Juice Co., No. 13-CV-02998-JST, 2015 WL 1248027, at *4 (N.D. Cal. Mar. 18, 2015). Relatedly, I have found standing to seek injunctive relief in a labeling case where the veracity of the claims on the labels could not be easily or readily verified by looking to other information on the label or otherwise. See, e.g., Rushing v. Williams-Sonoma, Inc., No. 16-CV-01421-WHO, 2016 WL 4269787, at *10 (N.D. Cal. Aug. 15, 2016) ("where because of the nature of the product and the necessity of scientific testing to confirm the product is not as advertised, a consumer cannot easily assess the veracity of a defendant's representation when considering a future purchase. This distinguishes this case from other product labelling cases where plaintiffs now know, for example, that `evaporated cane juice' is
Here, plaintiffs expressly allege that they were both unaware of the dangers of sugar in general and high-sugar cereals in particular, were seeking products "that were healthy to consume, that is, whose consumption would not increase [the] risk of CHD, stroke, and other morbidity," and "would not have purchased Post cereals and granolas if [they] knew that [Post's] labeling claims were false and misleading in that the products were not as healthy as represented." FAC ¶¶ 344-355, 373-384. The thrust of plaintiffs' case therefore is that high-sugar cereals are dangerous, especially when over-consumed, and that Post should not be able to make claims that its products are "healthy" or "nutritious" at all or only able to do so when disclosing more prominently their "high sugar" levels.
As to their future intent, plaintiffs aver that they would be willing to purchase Post's cereals in the future if they were accurately described and the cereals were either (i) reformulated to reduce added sugar, or (ii) priced lower so they could be purchased as a treat. FAC ¶¶ 120-121. These reasons are not directly related to the injunctive relief they seek — to force defendant to stop using the health and wellness claims on products with excessive added sugar. Judge Koh found one of these reasons insufficient to allege standing to seek injunctive relief: "An injunction on Defendant's food labeling practices might prevent a plaintiff from consuming a mislabeled product, but the Court has no control over whether the price of a product will be changed to an `appropriate' level." Hadley v. Kellogg Sales Co., No. 16-CV-04955-LHK, 243 F.Supp.3d 1074, 1108, 2017 WL 1065293, at *23 (N.D. Cal. Mar. 21, 2017).
Plaintiffs' injunctive relief claim is DISMISSED with leave to amend, so that plaintiffs may attempt to plead an intent to purchase that is consistent with the injunctive relief sought in this action. See, e.g., Swearingen v. Santa Cruz Nat., Inc., No. 13-CV-04291-SI, 2016 WL 4382544, at *13 (N.D. Cal. Aug. 17, 2016) (granting leave to amend to allege facts supporting standing to seek injunctive relief in a sugar mislabeling case).
Post also challenges plaintiffs' standing to sue over products they did not purchase. As my prior opinions in food labeling cases have explained, plaintiffs have standing to sue over "unpurchased products" when the label statements challenged are very similar to the statements on the labels of the unpurchased products and there are no material differences between the products that would significantly alter the reasonable consumer analysis. See, e.g., Ang v. Bimbo Bakeries USA, Inc., No. 13-CV-01196-WHO, 2014 WL 1024182, at *8 (N.D. Cal. Mar. 13, 2014) ("the best approach is one which focuses on whether the type of claim and consumer injury is
While Post identifies a number of differences between the specific words used and their placement on various packages, Mot. 10, Post does not show that any of those differences are material, either to the analysis under the reasonable consumer standard or to the injuries allegedly suffered by plaintiffs. At this juncture, plaintiffs have standing to pursue claims based on the materially similar misleading statements found on the packages of the materially similar unpurchased products.
In the alternative to dismissal with prejudice, Post asks me to stay the case pending "completion" of the FDA's rulemaking regarding the use of "healthy" on food labels, which was announced on September 28, 2016. In its notice, the FDA explained it was opening a docket to receive information and comments on whether and how to amend the current guidelines (specifically) 21 C.F.R. § 101.65(d) which "establishes the parameters for use of the implied nutrient content claim `healthy' or related terms." 81 FR 66562, 66564.
The primary jurisdiction doctrine "allows courts to stay proceedings or to dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency." Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008). Application of the primary jurisdiction doctrine "is a matter of the court's discretion." Chacanaca v. Quaker Oats Co., 752 F.Supp.2d at 1124.
Here, the FDA has very recently opened the discussion over whether and how to revise a specific nutrient claim guideline for "healthy" claims. There is no evidence that final action (or any further clarification as to the scope of the FDA's review of the regulation at issue) is imminent. And it is unclear how much (if any) impact the FDA's action would have on the claims in this case. In that light, I cannot say that efficiencies would be served by staying this case under the primary jurisdiction doctrine. This case shall proceed.
Post's motion to dismiss is DENIED in part and GRANTED in part. It is denied on the basis of preemption, except that
FAC ¶ 110.
