Tuesday, July 10, 2012

alleged violation of FDA regs on "healthy" allows claim to survive

Delacruz v. Cytosport, Inc., 2012 WL 2563857 (N.D. Cal.)
Delacruz brought a putative class action based on Cytosport’s Muscle Milk drink and bars, with the usual California claims.  Previously, the court found that the “Healthy, Sustained Energy” claim on the drink label was not actionable because the term “healthy” was vague and Delacruz had not alleged that the drink contained unhealthy amounts of fat, saturated fat or calories from fat, based on any objective criteria. Nor was “25g protein FOR HEALTHY, SUSTAINED ENERGY” actionable because Plaintiff did not claim that the bars did not contain that amount of protein.  Also, the “0g Trans Fat” statement on the label was not misleading because Plaintiff had not alleged that the bars actually contained trans fats.
Delacruz amended her complaint, alleging that the prominent placement of “Healthy, Sustained Energy” in connection with the protein/0g trans fat claims were misleading because they drew consumers’ attention away from the products’ unhealthy ingredients, including fat, saturated fat, and added sugars.  “The central message of these claims is that the Products are not loaded with unhealthy fats and added sugars, and that consuming them provides a wide range of significant nutritional benefits.”  But that was allegedly false.  The back of one bottle calls Muscle Milk an “ideal blend” of “protein, healthy fats, good carbohydrates, and 20 vitamins and minerals to provide sustained energy, spur lean muscle growth and help provide recovery from tough days and tougher workouts.”  Similar allegedly misleading claims were on Cytosport’s website and in TV ads.  In fact, she alleged, the drink contains simple sugar fructose, which has been linked to various health problems, along with acesulfame potassium and sucralose, which have been identified by the Whole Foods market as “Unacceptable Ingredients for Food.”  
As for the bars, she alleged that the 73-gram bars were less healthy than similarly-sized 58.7-gram Snickers, because they contained “as many calories, as much sugar, and more grams of saturated fat and sodium than the candy.”  Citing studies, Delacruz alleged that the bars contained unhealthy ingredients such as fractionated palm kernel oil and partially hydrogenated palm oil, a trans fat.  In addition, she alleged that one flavor contained 13 grams of fat and 10 grams of saturated fat, despite its labeling claiming 10 grams of fat and 8 grams of saturated fat.
The complaint also alleged that Cytosport’s claims were false and misleading because of violations of FDA labeling regulations and identical California law: the 14-oz. drink and the bars exceeded the amount of fat allowed for “low fat” labeling, and the bars’ saturated fat also exceeded the amount allowed for “low in saturated fat.”  They also allegedly were therefore not allowed to use “healthy” or similar terms.  In addition, federal regulations bar unqualified nutrient content claims if products exceed specified levels of certain unhealthy substances.  Thus, Delacruz alleged that the bars’ label was misleading because it states “0g Trans Fat,” while the product contains more than four grams of saturated fat and its label omits the required disclosure statement, “See nutrition information for saturated fat content.”
Delacruz further alleged that Cytosport had spent over $100 million promoting the brand online, in print, on billboards, through paid professional endorsements, agreements with academic institutions, at tradeshows, sporting events, bodybuilding competitions, and through other media outlets.  She allegedly saw and relied on the misrepresentations on the website and in TV ads.
The court had already ruled that Delacruz alleged a cognizable misrepresentation in “healthy fats,” and didn’t revisit that.  Cytosport argued that she shouldn’t be allowed to add allegations relying on the FDCA and FDA regulations.  The court disagreed: there were no contradictions with earlier alleged facts and no new legal claims.  She was not judicially estopped even though she initially took the position that her claims didn’t rely on FDA regs.  Her allegations responded to the court’s earlier ruling that “certain words and phrases failed to support a claim for fraud or negligent misrepresentation because they were difficult to define and not clearly false.”  Because the FDA regulations might provide objective criteria to determine whether terms were misleading as used, and because there was no unfair surprise—Cytosport had already argued the primary jurisdiction doctrine, and Delacruz had already submitted an FDA warning letter based on the relevant regs the first time around—the court allowed the new allegations.
Cytosport argued that claims referring to FDA regulations were preempted because private enforcement undermines national uniformity.  But the FDCA expressly authorizes state laws “identical to” federal labeling requirements, and the California Supreme Court has held this to allow claims for negligent misrepresentation and UCL violations based on violations of the FDCA. Pom Wonderful, LLC v. Coca–Cola Co., 679 F.3d 1170 (9th Cir. 2012), wasn’t applicable; that case didn’t rule on preemption of state law claims, only preemption of Lanham Act claims.
Given the newly provided FDA regulations, the “Healthy, Sustained Energy” statement could be a misrepresentation, at least on a motion to dismiss, along with “25g PROTEIN for Healthy, Sustained Energy.”  The statements might imply that the products don’t contain an unhealthy amount of fat and saturated fat.  “Good carbohydrates” wasn’t actionable, because there were no objective criteria for determining that the added sweeteners and sugars are in fact not good carbohydrates. “Whole Foods is a commercial retailer that markets expensive, purportedly healthy, organic food, but Plaintiff has not alleged that its scientific expertise or review process qualify the company to identify objectively good or bad carbohydrates.”  Nor was “0g Trans Fat” actionable, even if it distracted consumers from unhealthy fat and saturated fat content; distraction is not misrepresentation.  The alleged misrepresentation on one flavor of bars wasn’t actionable because Delacruz based her claim not on misrepresentation of amounts of fat and saturated fat as such, but rather on the idea that the statements about fat and saturated fat content compounded the misleading nature of the product labeling. But she didn’t explain how the numbers indicated healthy amounts of the substances or somehow created a deceptive context for the “Healthy, Sustained Energy” statement.
Delacruz also adequately pled reliance by pleading that she saw and relied on the website and TV ads, though only as to what she actually saw; the allegations about the scope of the ads didn’t show a campaign with a scope as lengthy or pervasive as that in the Tobacco case.
Cytosport argued that the case should be dismissed or stayed based on the primary jurisdiction doctrine. The court disagreed: the FDA regulations might provide “criteria by which to judge whether certain nutrient content claims are misleading,” but those would be based on existing regs, so the FDA’s expertise wouldn’t be needed to resolve the misleadingness issue.

No comments:

Post a Comment