General Mills sells “Nature Valley” granola bars and chewy trail mix bars. They were sold as “100% Natural” even though they contained “non-natural or artificial” ingredients such as high fructose corn syrup (HFCS). Plaintiff alleged that consumers understand “natural” to mean that a product isn’t highly processed or chemically altered and is thus superior, commanding a premium price. Because HFCS doesn’t exist in nature, plaintiff alleged that “100% Natural” was false and misleading under California consumer protection law.
The court first rejected defendant’s various preemption arguments. The Nutrition Labeling and Education Act has an express preemption provision covering specific topics relating to food labeling, and stating that the NLEA should not be construed to preempt state law unless there’s express preemption under the FDCA. Unsurprisingly, the court rejected General Mills’ field preemption argument: the express preemption provision permitting state regulations identical to federal law, plus the savings clause, demonstrated that state regulation could coexist with federal. So too with conflict regulation: the FDA has declined to regulate the term “natural,” holding that it doesn’t need specific definition, and the state law claims therefore stood as no obstacle to congressional objectives of uniformity and consistency in food labeling.
Finally, the court rejected General Mills’ primary jurisdiction argument: the meaning of “natural” was not peculiarly within the competence of the FDA. Though the FDA has addressed the use of the term, its policy is “unrestrictive”—it doesn’t take enforcement action as long as the product at issue has no added color, synthetic substances, or flavors. Determining the meaning of the term doesn’t require technical expertise within the specific competence of the FDA nor is it a particularly complicated issue outside of the court’s ability to decide.
The complaint, however, failed under Rule 12(b)(6). Under Twombly and Iqbal, the pleading standard has undergone “a somewhat dramatic change,” and “the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” The court found the complaint contained little more than conclusory and speculative allegations; for example, to show economic damage plaintiff simply alleged that she and the proposed class bought, bought more of, or paid more for Nature Valley products based on the misrepresentations. Likewise, it was insufficient to allege that members of the public were likely to have been deceived and to have made purchases because they believed that a “100% Natural” product wouldn’t have HFCS. Similarly, because Rule 9(b)’s particularity requirement applied to the state-law fraud-based claims (CLRA and UCL), the complaint also failed to state the who, what, when, where and how with sufficient specificity.
The court therefore dismissed the complaint without prejudice.
It will be interesting to see if courts apply Iqbal to ordinary trademark claims. If alleging "that she and the proposed class bought, bought more of, or paid more for Nature Valley products based on the misrepresentations" is insufficient, aren't almost all the allegations of harm in trademark complaints?
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