Plaintiffs, bringing the usual California claims, alleged
that certain Nature Valley products were deceptively labeled “100% Natural,”
“All Natural,” and “Natural” despite containing high fructose corn syrup
(HFCS), high maltose corn syrup, and/or maltodextrin and rice
maltodextrin, which are allegedly unnatural due to the processing required to
create them. The term “natural” was allegedly pervasive and prominent on the
packaging and in the advertising for Nature Valley products, including in the
brand name and through “images of forests, mountains, and seaside landscapes.”
General Mills first argued that the case should be dismissed
under the primary jurisdiction doctrine, since decisions regarding the meaning
of “natural” should be made by the FDA.
Courts consider “whether there is (1) a need to resolve an issue (2)
that has been placed by Congress within the jurisdiction of an administrative
body having regulatory authority (3) pursuant to a statute that subjects an
industry or activity to a comprehensive regulatory authority that (4) requires
expertise or uniformity in administration.”
General Mills contended that food labeling was an issue placed within
the primary jurisdiction of the FDA, which exercised comprehensive regulatory
authority over labels, and that the FDA had adopted a policy for the use of
“natural,” enforced through administrative action.
“Natural” isn’t defined in the FDCA, and “notwithstanding
repeated requests, the FDA has expressly declined to define ‘natural’ in any
regulation or formal policy statement.” While it solicited comments on a
potential rule adopting a definition in 1991, in 1993 it declined to resolve
the acknowledged ambiguity surrounding the term because of resource limitations
and other agency priorities. In 2002,
the FDA again stated that defining “natural” wasn’t a priority; it declined
again in 2006. In 2010, a number of
district courts stayed pending litigation over HFCS in beverages in the hope of
a formal definition, to no avail.
The FDA occasionally refers to a 1993 statement that it would
“maintain its current policy ... not to restrict the use of the term ‘natural’
except for added color, synthetic substances, and flavors[;]” and that it would
“maintain its policy regarding the use of ‘natural,’ as meaning that nothing
artificial or synthetic (including all color additives regardless of source)
has been included in, or has been added to, a food that would not normally be
expected to be in the food.” Consistent
with the informality of this guidance, the FDA has taken few actions against
companies for improperly using the term—warning letters to companies that used
the term when their products contained various preservatives. General Mills
argued that the warning letters showed that the FDA routinely made “considered,
expert judgments about what products and food labels warrant administrative
action for non-compliance with its informal policy.” As in Pom Wonderful LLC v. Coca–Cola Co., 679
F.3d 1170 (9th Cir. 2012), General Mills argued, “[i]f the FDA believes that
more should be done to prevent deception, or that [a manufacturer's] labels
mislead consumers, it can act.” Courts
that have declined to apply the primary jurisdiction doctrine, General Mills
contended, mostly acted pre-Pom
(though not all such cases predated Pom).
The plaintiffs responded that the FDA explicitly and
repeatedly refused to define “natural,” and that its current guidance only
covered added colors and flavors in foods.
Despite significant consumer and industry interest for over two decades,
the FDA has declined to act; a dismissal or stay on primary jurisdiction
grounds wouldn’t cause any change.
Moreover, plaintiffs argued, they weren’t asking for a general
definition of “natural,” but rather they were seeking resolution of a question
of state law: whether General Mills’ marketing of its Nature Valley® products
as “natural” could mislead reasonable consumers. Misleadingness determinations
don’t necessarily entail technical questions or require agency expertise.
While the court found the question close, it denied the
motion. The relevant factors generally
favored the resolution of this issue by the FDA; enforcement of a policy
regarding the use of “natural” on food products required FDA expertise and
uniformity. And the informal policy was
an FDA position “of sorts.” But, “in
repeatedly declining to promulgate regulations governing the use of ‘natural’
as it applies to food products, the FDA has signaled a relative lack of
interest in devoting its limited resources to what it evidently considers a
minor issue, or in establishing some ‘uniformity in administration’ with regard
to the use of ‘natural’ in food labels.”
Because any referral to the FDA would likely prove futile, the court had
little reason to stay or dismiss the case to allow the FDA the chance to take
action, even if the other factors favored such a result.
General Mills also argued that the complaint failed to plead
fraud with particularity. The court agreed that Rule 9(b) applied, but found
the allegations sufficiently specific as to the packaging for the five products
specifically identified by the plaintiffs.
However, they weren’t sufficient to plead misrepresentations in
advertising apart from the product packaging (the Nature Valley website, Flickr
photostream, Facebook page, Twitter account, and YouTube channel), or as to
unidentified products; specific allegations for each product were required, and
attaching only a selection of labels was insufficient. Rule 9(b) required
plaintiffs to identify specific ads and promotional materials, allege when they
were exposed to them, and explain how they were false and misleading. Plaintiffs argued that “100% Natural” on the physical
product was enough, but they didn’t identify particular misrepresentations in
the online sources. And the allegation
that an “image of nature” could be viewed as deceptively describing the
ingredients in granola bars was entirely implausible, and therefore inadequate to
state a claim for anything.
Posts
No comments:
Post a Comment