Wednesday, May 16, 2012

This fruit snack is neither fruity nor snacky

Lam v. General Mills, Inc., --- F. Supp. 2d ----, 2012 WL 1656731 (N.D. Cal.)

Lam brought a putative class action against General Mills based on allegedly misleading claims about the healthfulness of its fruit snacks such as Fruit Roll-Ups and Fruit by the Foot.  The court granted in part and denied in part GM’s motion to dismiss.  The products “resemble fruit leather” and the packages identify the products as “fruit flavored snack[s]”; the strawberry version says it’s “strawberry natural flavored.”  The side panel says “made with real fruit.”  The ingredients: Pears from Concentrate, Corn Syrup, Dried Corn Syrup, Sugar, Partially Hydrogenated Cottonseed Oil, Citric Acid, Acetylated Monoglycerides, Fruit Pectin, Dextrose, Malic Acid, Vitamin C (ascorbic acid), Natural Flavor, Color (red 40, yellows 5 & 6, blue 1).

Lam alleged that GM failed to properly disclose that the Fruit Snacks contained partially hydrogenated oil/trans fats.  In addition, the snacks have no significant amounts of real fruit, and “made with real fruit” allegedly deceptively describes the ingredients, since “pears from concentrate” isn’t the fruit indicated by the product name.  Strawberry-flavored Roll-Ups contain no strawberries.  Lam also objected to the terms “fruit flavored snacks,” “naturally flavored,” and “gluten free.”  She brought the usual California statutory law and warranty claims.

To the extent the complaint didn’t identify specific products but only targeted “similar” products, the court dismissed the complaint with leave to amend.

GM argued that the claims were preempted by the Nutrition Labeling and Education Act to the extent they are predicated on the “fruit flavored” and “naturally flavored” terms; Lam responded that claims of falsity/misleadingness in violation of the regulations were not preempted. 

The FDCA requires foods with artificial flavoring to be properly labeled, and the FDA has promulgated comprehensive regulations relating to such labeling.  The NLEA then preempted certain regulations that weren’t identical to various FDCA standards, including the relevant labeling requirements.  GM argued that “fruit flavored” and “naturally flavored” were expressly permitted by the regulations, which allow manufacturers to identify the “characterizing flavor” of a food in this way when the food doesn’t contain enough of the actual ingredient to justify a claim that it’s made with that ingredient.  Thus, it is possible under the regulations to label a product as “natural strawberry flavored” even if it has no strawberries. The court found the logic “troubling,” but no matter, as the regulations controlled.

Lam argued that she was seeking to enforce the FDCA’s ban on failure to disclose the presence of artificial flavors, and that “fruit flavored” and “naturally flavored” were false and misleading because the Fruit Snacks were flavored with “unnatural, non-fruit ingredients.”  These claims failed because the crux of her claim was that the labeling was deceptive because the ingredients, not the flavors, were unnatural.  But a product can be labeled “fruit flavored” or “naturally flavored” even if it doesn’t have fruit or natural ingredients, so long as it “contains natural flavor” which is “derived from” the “characterizing food ingredient.”  So her claims were preempted.

How about “gluten free” and “made with real fruit”?   “Gluten free” couldn’t support Lam’s claims, since the statement was objectively true and couldn’t be taken to convey anything other than gluten-related claims.  “Made with real fruit,” by contrast, could be misleading in the context of a product that is actually made with trans fats, is about half sugar, and has pears from concentrate instead of the fruit indicated by the product name.  This, along with the depiction of “imitation fruit leather” on the package could deceive consumers into thinking that the Fruit Snacks were healthful, natural, pressed-and-dried fruit products, “when, in fact, they are an amalgamation of artificial, non-fruit ingredients.”

GM argued that the statement was objectively true and that a reasonable consumer wouldn’t expect that certain fruits were present in a particular quantity or that a specific fruit was present. The court disagreed.  “A reasonable consumer might make certain assumptions about the type and quantity of fruit in the Fruit Snacks based on the statement ‘made with real fruit,’ along with other statements prominently featured on the products' packaging.”  Given the size and color of “made with real fruit” and the size of the word “strawberry,” which appeared multiple times on the package, a reasonable consumer might believe the product was made with real strawberries, not pears from concentrate.  Likewise, the names “Fruit Roll–Ups” and “Fruit by the Foot,” “along with the fanciful depiction of the products, which resemble fruit leather, may lead to further confusion about the Fruit Snacks' ingredients. After seeing these prominent aspects of the packaging, a reasonable consumer might be surprised to learn that a substantial portion of each serving of the Fruit Snacks consists of partially hydrogenated oil and sugars.”  The ingredient panel discloses the truth, but that’s not sufficient, especially at the pleading stage.  As the Ninth Circuit has ruled, “We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception.”

However, Lam failed to state a claim for breach of express or implied warranty.  There was no affirmative statement that the Fruit Snacks were healthful.

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