Court presumes failure to comply w/FDA labeling rules to be misleading

Campbell v. Freshbev LLC, 322 F.Supp.3d 330 (E.D.N.Y. 2018)

Campbell bought several bottles of Freshbev juices at Whole Foods, allegedly relying on misrepresentations (1) that the juices were unpasteurized; (2) that the juices were cold-pressed; (3) that the juices were fresh; and (4) that the Cranberry Apple juice had more cranberry juice than apple juice.

Initially, the court declined to resolve at this stage whether Bristol–Myers Squibb Co. v. Sup. Ct. of Cal., ––– U.S. ––––, 137 S.Ct. 1773 (2017), meant that federal courts, not just state courts, lacked personal jurisdiction for claims by out-of-state plaintiffs against an out-of-state defendant that had no connection to the forum state, or whether that even applied to nationwide classes. Without a motion to certify a nationwide class, the issue wasn’t squarely before the court.

The court found Campbell hadn’t shown standing for injunctive relief, because he didn’t plead a willingness to buy the juice again if he could be confident about the truth.

Freshbev argued that the challenged statements weren’t materially misleading. Campbell’s first argument was that “unpasteurized” was misleading because the juices were treated with high pressure processing (HPP), which was allegedly equivalent to pasteurization.  Freshbev responded that FDA regulations treat pasteurization and HPP as two separate treatments and allow “unpasteurized” on HPP-treated juice. The FDA has issued nonbinding guidance on treating juice safely, and a proposed rule (1998!) that allowed an “unpasteurized” label as long as that was truthful and nonmisleading. The problem was that “unpasteurized” might be misleading insofar as it didn’t distinguish between “a product that may contain harmful pathogens that could result in serious disease and one that is treated using a method (other than pasteurization) that is capable of achieving a 5–log reduction in the target pathogen.”  Thus, additional information was required on such a label. Here, two of the labels showed that the juices were treated with pressure, providing the requisite additional information, and the claim was preempted. One label didn’t, so the claim was unpreempted. [Freshbev submitted a graphic that allegedly represented the full label and had pressure information, but that couldn’t be considered on a motion to dismiss.]

Cold-pressed: Campbell alleged that this was misleading because the juices were treated with HPP after being cold-pressed. It was implausible that a reasonable consumer would think that nothing had been done to the juice except cold-pressing, in the absence of an “only” or “exclusively” or similar modifier.

Fresh:  21 C.F.R. § 101.95 governs use of the word “fresh” on a label.  Of course there’s no private right of action under the FDCA and its regulations, but NY “forbids the misbranding of food ‘in language largely identical to that found in the FDCA.’” And also, “if FDA regulations provide that a claim on a product’s label is misleading, that is evidence that a reasonable consumer might be misled by the packaging.”  21 C.F.R. § 101.95(a) states that “[t]he term ‘fresh’ [in labeling] in a manner that suggests or implies that the food is unprocessed, means that the food is in its raw state and has not been frozen or subjected to any form of thermal processing or any other form of preservation....” Syllogistically, HPP is a form of preservation, and thus juice products treated with HPP shouldn’t be advertised as “fresh.”

There’s an exception if “the term [fresh] does not suggest or imply that a food is unprocessed or unpreserved.” The FDA’s example was pasteurized whole milk, which consumers understand to “nearly always” be pasteurized; by contrast, “fresh” cannot be used to describe pasteurized pasta sauce because pasta sauce is not always pasteurized, so consumers would assume that “fresh” sauce is unprocessed.  Because juice is widely sold with and without processing, the exception didn’t apply here.  Freshbev argued that the labels’ disclosure of “pressure” would avoid any consumer confusion, but “because the term ‘fresh’ is misleading in isolation, it is not clear as a matter of law that confusion generated by the misuse of the term would be resolved by additional statements elsewhere on the label.”

“Cranberry Apple”: Campbell argued that this was misleading because the product had more apple juice than cranberry. Freshbev argued that that the name of the product wasn’t plausibly read as a proportion claim, and that any confusion could be resolved by reading the ingredients list.

21 C.F.R. § 102.33(b) states that names “must be in descending order of predominance by volume unless the name specifically shows that the juice with the represented flavor is used as a flavor (e.g., raspberry-flavored apple and pear juice drink).”  Defendants’ label was a pretty clear violation of this rule without the “flavored” caveat. “Because it violates FDA labeling requirements, a reasonable consumer may be misled into believing that Cranberry Apple juice has more cranberry juice than apple.”

However, a common law fraud claim against the failure to put an unpasteurized warning label on the bottles failed; the most plausible reason Whole Foods failed to do so was not an intent to defraud, but an understanding that HPP avoided the risk of untreated, unpasteurized juice.