Monday, September 16, 2013

Health and nutrition claims for the under-2 set draw lawsuit

Bruton v. Gerber Products Co., No. 12–CV–02412–LHK, 2013 WL 4833413 (N.D. Cal. Sept. 6, 2013)

Bruton alleged that she bought a number of specified Gerber products for her under-2 child, including some from its 2nd Foods group, Yogurt Blends, and Graduates.  She allegedly read and relied on the labels and Gerber’s website, which made unlawful/deceptive claims of three kinds: (a) nutrient content claims, such as “Excellent Source,” “Good Source,” “As Healthy As Fresh,” and “No Added Sugar,” (b) “natural” claims, and (c) sugar-related claims. 

She alleged that Gerber made nutrient content claims on virtually all of its products, even though the FDA authorizes nutrient content claims on foods for adults that aren’t permitted for children under 2 because of their different nutritional needs.  See 21 C.F.R. § 101.13(b)(3) (“Except for claims regarding [certain] vitamins and minerals ... no nutrient content claims may be made on food intended specifically for use by infants and children less than 2 years of age unless the claim is specifically provided for” by particular regulations).  This allegedly made all Gerber products for under-2 children misbranded if they claimed to be an “Excellent Source” of Iron, Vitamin A, and Vitamin C, or a “Good Source” of Calcium, Iron, Zinc, and Vitamins A, D, and E, “among other things.”  “As Healthy As Fresh” and “No Added Sugar” products were also allegedly misbranded because federal regulations don’t allow a “healthy” claim for products intended for children under 2.

Bruton also alleged that the “100% natural” products contained artificial ingredients or ingredients not normally expected to be in food.  And she alleged that many “No Added Sugar” products had disqualifying levels of calories and thus couldn’t be so labeled without an FDA-mandated disclosure.

The court first dismissed Nestlé USA as a defendant, though Bruton might be able to replead that Nestlé USA, for example, operated and controlled the website, so amendment might not be futile.

Gerber argued preemption: Bruton couldn’t seek to enforce labeling rules different from FDA regulations, nor could she enforce labeling rules identical to the FDA regulations because private litigants are barred from suing to enforce FDA regulations.  The first is true, but the second is not.  The NLEA explicitly says it shall not be construed to preempt any state law unless it’s expressly preempted.  California, through its Sherman Law, expressly adopted federal labeling requirements as its own.  Thus, Bruton was not suing to enforce the FDCA, but rather to enforce California’s identical legal requirements. Pom Wonderful LLC v. Coca–Cola Co., 679 F.3d 1170 (9th Cir. 2012), was no barrier, though it didn’t let Lanham Act plaintiffs sue to enforce FDCA regulations or bring a suit that would require interpreting those regulations.  Pom Wonderful wasn’t a state law case and didn’t deal with the presumption that Congress didn’t intend to supplant state law.  Cases about heavily regulated Class III medical devices weren’t on point; food labeling law is different, and not as rigorous, as the premarketing review required for such devices, and the NLEA doesn’t indicate any preemptive intent beyond express preemption, not implicated here.

A little conceptual juggling is required here: Bruton’s claims were that Gerber violated California rules identical to the federal rules, but she wasn’t suing because the conduct violates the FDCA, “but rather because Defendants’ conduct allegedly violates California’s Sherman Law, which could have imposed the exact same regulations even if the FDCA was never passed” (emphasis added).  Misbranded food is a traditional area of state regulation, after all.

A similar fate awaited Gerber’s primary jurisdiction argument.  “[O]nly those claims raising issues of first impression or particular complexity are appropriately dismissed or stayed based on primary jurisdiction.”  The issues here were neither novel nor especially complex, according to Gerber’s own argument that “there is no label element Plaintiff challenges that FDA regulation or policy does not address.” The case was far less about science than about misleadingness, which courts decide every day.

Next, of course, was standing.  Gerber argued that Bruton’s alleged injury was only a legal construct, and that even if there had been noncompliance with FDA rules, she suffered no cognizable harm.  But she alleged that she paid a premium based on the mislabeling.  This was enough to confer Article III standing at the pleading stage (except for the claims that failed for other reasons).  She alleged that she read the labels before purchase, didn’t know the nutritional claims were untrue, and relied on them to choose Gerber’s products over others.  She alleged that her reliance was reasonable because consumers understand that nutritional information on labels is heavily regulated; she also alleged that “[c]onsumers often do not look beyond the nutrient content claims and health claims made on the front of the food product packaging, and are less likely to check the Nutrition Facts panels contained on the back of packaging where front-of-packaging nutrient content claims are present.”  That sufficed.  (However, she did fail to allege plausible claims based on the “all natural” labels, given that the products she obtained were in fact made with 100% natural fruit, as advertised. She couldn’t plausibly allege economic injury or causation, and thus couldn’t show standing based on “all natural.”)

Gerber argued that a reasonable consumer wouldn’t be familiar with the FDA’s policy and regulations, and thus wouldn’t rely on the allegedly misbranded labels, whether a practice is deceptive is generally a fact question not appropriate for resolution on the pleadings.  And Bruton alleged exactly what was supposed to be false or misleading about the “good source,” “excellent source,” “As Healthy As Fresh,” and sugar-related claims, they satisfied Rule 9(b).

What about products Bruton didn’t buy and websites she didn’t see?  Courts are split on this for putative class actions.  Here, Bruton’s claims involved many different products, some specific to what she allegedly bought and some “so broad that they are practically unidentifiable,” e.g., listing just “examples” of products that made “Good Source” and “Excellent Source” claims.  The court couldn’t determine whether all the products she sought to include in the complaint were substantially similar to the products she did buy. The court granted Gerber’s motion to dismiss claims for products she didn’t buy, but with leave to amend to specify the exact nutrient content claims at issue for each product category and product flavor.

Also, Bruton alleged that she read Gerber’s website, but didn’t allege that she saw any of the alleged misrepresentations at the website.  She didn’t have standing to assert claims based on ads and websites she didn’t personally view.

Gerber also argued that Bruton couldn’t show any violation of FDA regulations, and that its statements were truthful commercial speech protected by the First Amendment (note that this throws the constitutionality of the FDA’s entire scheme into doubt!).  A First Amendment defense, however, was inappropriate for a motion to dismiss under Rule 12(b)(6).  As to the rest, Bruton sufficiently stated a claim (except for the “100% Natural” labeling).

Bruton argued that the regulations banned nutrient content claims unless there was an established daily RDI or unless the claims were specifically allowed in the regulations for foods intended for children under 2.  Gerber argued that “good source” and “excellent source” were simply statements that described the percentage of a nutrient in a food relative to an RDI, thus falling within the exception.  “Good source” means 10-19% of the RDI, and “excellent source” means 20% or more.

Bruton responded by citing a 2010 warning letter in which the FDA stated that Gerber Graduates Fruit Puffs were misbranded because “[t]he labeling for these products includes nutrient content claim [sic ] such as ‘good source of iron, zinc, and vitamin E for infants and toddlers,” which is not permitted for foods intended specifically for infants and children under age 2.  Notably, the regulation on “excellent source” and “good source” allowed those claims, except for “meal products” and “main dish products”—and the products Bruton bought might be meal products or main dish products.

Bruton also argued that “As Healthy As Fresh” (a Gerber trademark) was an unauthorized nutrient content claim. The regulations define when “healthy” claims are permitted, but don’t allow them for products specifically intended for children under 2, something also mentioned in the 2010 warning letter.  Gerber’s argument that “As Healthy As Fresh” was just “a dietary guidance statement that conveys the important message that processed vegetables and fruits are as healthy for a child, or anyone for that matter, as fresh vegetables and fruits” and at most, “non-actionable opinion or puffery,” was not responsive.  Unlike ordinary puffery cases, “the products at issue here are covered by federal regulations which impose specific labeling requirements and which appear to assume that consumers in fact do rely on health-related claims on labels.”  The NLEA was passed in response to widespread unfounded health claims. There was therefore at least a fact issue about the misleadingness of “healthy.”

Similarly, Bruton alleged that “No Added Sugar” or “No Added Refined Sugar” claims weren’t allowed on food products intended for children under two years of age, and that the products contained “disqualifying levels of calories that prohibit the claim from being made absent a mandated disclosure statement warning of the higher caloric level of the products.”  Gerber didn’t dispute the first, but argued that no disclaimer was required for foods designed for young children, and that some of the products were low calorie foods because they were under 40 calories.  Plus, Gerber argued that no disclaimer was required because children under 2 aren’t an age population for which the FDA recommends calorie restrictions.

Bruton contested the calorie counts, and argued that this was a factual dispute. The court agreed.

As noted above, though, the “100% Natural” claims failed.  Bruton alleged that the challenged products used citric acid, ascorbic acid, and other ingredients that are not “natural.” Gerber argued that its claim was “Made with 100% natural fruit,” which was truthful, and that those acids were acceptable preservatives.  Bruton responded that reasonable consumers wouldn’t read the ingredient list to contradict an explicit label claim.  But that didn’t address the point that the claim wasn’t “100% natural,” but rather “Made with 100% Natural Fruit.”  The court wasn’t convinced that the latter claim plausibly implied that the entire product was free of synthetic ingredients, though it granted leave to amend.

Bruton’s Magnuson-Moss Warranty Act claim failed because the alleged misbranding didn’t constitute warranties, but were rather product descriptions.  And the state Song-Beverly Consumer Warranty Act doesn’t cover consumables.

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