coconut milk could mislead by claiming "no cholesterol" where it's too high fat for that label

Marshall v. Danone US, Inc., No. 19-cv-01332-RS, 2019 WL 4509045, -- F. Supp. 3d --- (N.D. Cal. Sept. 13, 2019)

Marshall brought a putative class action alleging false advertising (the usual California claims) against Silk coconut milk, which on its back lists substances that Silk does not contain, including, e.g., “dairy,” “gluten,” and “cholesterol,” with “cholesterol” in larger font than some of the other listed items. The symbol beside “cholesterol-free” is a heart allegedly intended to show it is “broken,” which is also crossed out with a line (allegedly indicating that, because the product is cholesterol-free, it will not be damaging to heart health).  The nutrition panel states that a serving of Silk contains 0 mg cholesterol, but 3 or more grams of saturated fat, depending on the specific variety of the product. However, under 21 C.F.R. § 101.62(d)(1), to bear the nutrient content claim “no cholesterol,” “cholesterol-free,” or similar claims, a food must, among other things, contain less than 2 grams of saturated fat per “Reference Amount Customarily Consumed.”

“While there is no direct private right of action under 21 C.F.R. § 101.62(d)(1), it is at a minimum relevant for determining what can plausibly be alleged to be deceptive under state law.”  Danone argued that consumers could only be confused if they knew about the regulation, saw the cholesterol-free statements, then didn’t see the nutrition panel.  Nope.  “What section 101.62 serves to show is that the FDA, which has expertise in, and responsibility for, determining what food labeling practices may mislead consumers, believes that consumers may understand ‘cholesterol-free’ to convey certain health benefits that in fact do not exist if the product contains saturated fats above a certain level. Whether the FDA is right or wrong on that point, or whether Danone may ultimately prevail on the merits for any number of reasons, there simply is no doubt that plaintiff has stated a plausible claim that the labels are misleading.”

Danone also argued that consumers generally understand excessive consumption of saturated fat may impact cholesterol and cardiovascular health. Nope.  “The FDA apparently believes consumers will draw unwarranted conclusions about health benefits of ‘cholesterol-free’ products despite that general understanding, and therefore prohibits use of the term on products with saturated fat levels exceeding 2 grams per serving.”  Nor was Danone successful in arguing that the alleged implication of healthiness was too vague.  “The precise conclusions consumers might draw are not critical, at least at this stage,” given the FDA’s conclusion.