Juxtaposition of claims about protein amounts and sources plausibly creates falsity

Hi-Tech Pharmaceuticals, Inc. v. HBS Int’l Corp., --- F.3d ----, 2018 WL 6314282 , No. 17-13884 (11^th Cir. Dec. 4, 2018)

Hi-Tech sued HBS, alleging that the label of its protein-powder supplement HexaPro misled customers about the quantity and quality of protein in each serving, in violation of the Georgia Uniform Deceptive Trade Practices Act and the Lanham Act.  The district court dismissed the Georgia claims on FDCA preemption grounds and found that it wasn’t plausible that the label was misleading. The court of appeals affirmed the first conclusion, but reversed the second, and declined to find that the FDCA precluded Lanham Act claims here.

The front of the label identifies the product as an “Ultra-Premium 6-Protein Blend” with “25 G[rams] Protein Per Serving,” and it touts the product’s “6 Ultra-High Quality Proteins” and “5 Amino Acid Blend with BCAAs [Branch-Chain Amino Acids].” The left side repeated “an Ultra-Premium, Ultra-Satisfying Blend of 6 High-Quality Proteins” and identified those six whole-protein sources, stating that the product “is also fortified with 5 Amino Acids to enhance recovery.” The right side features the nutrition-facts table, which states that HexaPro contains 25 grams of protein per serving, and the list of ingredients. This side also has a table labeled “Amino Acid Profile” whose heading indicates that HexaPro contains 44 grams of amino acids per serving, while the table itemizes only 25 grams.

Hi-Tech alleged three kinds of deception.  First, HexaPro contains free-form amino acids and other non-protein ingredients as well as whole proteins; an analysis that excludes these “spiking agents” and counts only “total bonded amino acids”—which alone are molecularly complete proteins—allegedly yields an “actual protein content” of “17.914 grams per serving,” not 25 grams per serving. However, the applicable FDA regulation permits “[p]rotein content [to] be calculated on the basis of the factor 6.25 times the nitrogen content of the food,” even if not all of a product’s nitrogen content derives from whole-protein sources.

Second, Hi-Tech argued that the label and in particular the use of “Ultra-Premium 6-Protein Blend” suggests that the product’s entire stated protein content derives from the whole-protein sources identified on the left side of the panel. Third, Hi-Tech alleged that the front of the label was misleading about both the quantity and the source of the product’s protein content: the proximity of “Ultra-Premium 6-Protein Blend” to the phrase “25 G Protein Per Serving” misled consumers into believing that HexaPro “contains 25 grams of the ‘Ultra-Premium 6-Protein Blend’-type protein per serving,” but it has only roughly 18 grams from those sources.  The district court rejected these claims because HexaPro’s label “provides a detailed breakdown of all ... ingredients, including the mix of amino acids.”

Georgia law: The FDCA expressly preempts state laws that “directly or indirectly establish ... any requirement for nutrition labeling of food that is not identical to the requirement of section 343(q) of this title, except [for sales of food at some restaurants], or ... any requirement respecting any claim of the type described in section 343(r)(1) of this title made in the label or labeling of food that is not identical to the requirement of section 343(r) of this title.” In turn, section 343(q) regulates “nutrition information” that must be disclosed about certain nutrients in food products, including the “total protein contained in each serving size or other unit of measure.”  Section 343(r) governs all other statements about nutrient content that “expressly or by implication” “characterize[ ] the level of any nutrient.”  

Hi-Tech’s state-law claim was therefore preempted. Federal regulation expressly allows “[p]rotein content [to] be calculated on the basis of the factor 6.25 times the nitrogen content of the food,” and Hi-Tech didn’t dispute that HexaPro’s labeling complied with this regulation. Alleged misleadingness about the nature, source, and quality of the whole proteins, free-form amino acids, and other ingredients that make up HexaPro’s advertised 25 grams of protein per serving would have to be fixed by changing the advertised amount of protein or itemizing each source’s contribution, but the FDCA and its regs don’t require that. “[T]o avoid preemption, Hi-Tech’s state-law claim must be identical, not merely consistent, with federal requirements. To the extent that the Georgia Uniform Deceptive Trade Practices Act would require changes to HexaPro’s labeling, it would ‘directly or indirectly establish’ requirements that are ‘not identical to’ federal requirements.”

Lanham Act: Initially, the court of appeals rejected the argument that Hi-Tech’s allegation about the true whole-protein content was “conclusory” because it didn’t explain HexaPro’s chemical composition; Twiqbal doesn’t require a plaintiff to provide evidence for its factual allegations.  Courts can disregard legal conclusions and “threadbare” recitals of the elements, but an allegation about how much protein is actually in a product isn’t a legal conclusion.  That’s “a specific assertion about physical and chemical fact that is either true or false, no matter what legal conclusions it may or may not support.”

Given that, the complaint plausibly alleged that the label was misleading. “Considering the label as a whole and taking its statements in context, we find it plausible that a reasonable consumer would be misled to believe that a serving of HexaPro contains 25 grams of protein derived from the ‘6-Protein Blend’ comprising the ‘6 High-Quality Proteins’ listed on the label.” Even an additional prominent statement that the product contained an amino acid blend wasn’t enough to avoid this conclusion. The allegation was not that consumers would be misled to believe that the only ingredient is the “Ultra-Premium 6-Protein Blend.” Rather, Hi-Tech argued that the label would induce a reasonable consumer to believe that the protein in HexaPro derives exclusively from the six-protein blend, and this was at least plausible. The label doesn’t indicate that the claimed 25 grams came from any other source than the whole-protein ingredients; other than in the 25-gram claim, it never used the word “protein” to refer to anything other than the whole-protein ingredients, and instead consistently treated “amino acids” as separate from and providing distinct nutritional benefits from “protein.” The “Amino Acid Profile” on the right side of the label listed 25 grams of amino acids, but provided no explanation of how this figure related either to the product’s 25 grams of protein per serving or the 44 grams of amino acids per serving advertised at the top of the table.

“Based on the total impression given by the label, it is plausible that only sophisticated consumers schooled in federal regulations or nutrition science would understand or even suspect that free-form amino acids or other non-protein ingredients form any part of HexaPro’s stated 25 grams of protein per serving.” While the FDA permits protein calculations based on free-form amino acids and other nitrogen-containing non-protein ingredients, Pom Wonderful established that the FDCA “does not generally bar claims of false advertising of food under the Lanham Act.”

HBS’s specific arguments for preclusion also failed. HBS argued that application of the Lanham Act would create “a genuinely irreconcilable conflict” with the federal regulation governing protein calculations because it couldn’t simultaneosuly disclose both 25 grams of protein to satisfy the requirements of the FDA and 18 grams to satisfy Hi-Tech. But that wasn’t the only way to cure the misrepresentation. “[I]t would suffice to clarify on the HexaPro label how much protein in each serving derives from the six-protein blend and how much derives from free-form amino acids and other non-protein ingredients”; there was no federal law against that.

HBS also argued that the Lanham Act claim would be barred barred “if determining the truth or falsity of the [challenged] statement would require a court to interpret FDA regulations, which is generally left to the FDA itself.” And HBS alleged that Hi-Tech was asking the court “to substitute its own judgment regarding the most appropriate way to measure protein for the FDA’s judgment.” But the conclusion didn’t follow from the premise. The no-interpretation rule involves claims trying to “circumvent the FDA’s exclusive enforcement authority by seeking to prove that [d]efendants violated the FDCA, when the FDA did not reach that conclusion.” Hi-Tech’s claim doesn’t require the court to question the FDA’s conclusion that protein content may be calculated on the basis of the factor 6.25 times the nitrogen content of the food. Instead, the question was whether the HexaPro label was misleading “in the context of the label’s failure to specify the sources of the nitrogen measured by the federal test.”