Monday, January 25, 2021

surveys/expert evidence of deception still not required in consumer protection claims

Hawkins v. Kroger Co., 2021 WL 210843, No. 15cv2320 JM (AHG) (S.D. Cal. Jan. 11, 2021)

Hawkins sued, with the usual California claims, because Kroger breadcrumbs said “0g Trans Fat Per Serving”  on the front and the nutrition label said “Trans Fat 0g”; the breadcrumbs included partially hydrogenated vegetable oil (PHO), which meant that they contained “trace amounts” of trans fat.

The use of PHO in food products was legal during the class period: the FDA allowed producers until June 18, 2018 to remove PHO after it was removed from the “generally regarded as safe” classification.

So the use of PHO was not unlawful, but was it unfair? During the class period, there was no public policy against it, and the FDA declined to prohibit its use then, weighing against unfairness. But the degree of harm associated with PHO was a material and genuinely disputed fact. “[D]espite the legality of the use of trans fat during the class period, reasonable jurors could disagree as to whether the danger of trans fat to human health was sufficient to render its use ‘immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers,’” so the court declined to grant Kroger summary judgment on UCL unfairness.

Labeling claims: The court rejected Kroger’s argument that a reasonable consumer would understand the breadcrumbs contained trans fat because the ingredient list included PHO. Not only are reasonable consumers not required to look beyond misleading representations on the front of the box, but here it was not clear that typical consumers understood that PHO necessarily meant trans fat. Moreover, no reasonable juror could find that interpreting “0g Trans Fat” to mean “no” trans fat was unreasonably “sweeping.” [The FDA did require rounding down for amounts under .5g, in contradiction to what reasonable consumers would think. As the court explains, the cases have therefore held that, “although the FDA mandates the disclosure of ‘0g Trans Fat’ on the nutrition label when the product contains less than 0.5 grams of trans fat, it does not mandate or allow for the product to be labeled ‘0g Trans Fat’ elsewhere.”]

The court also rejected an attempt to impose a survey/expert evidence requirement for determining reasonable consumer expectations in California consumer protection cases. Here in particular, “it is not clear what else the claim ‘0g Trans Fat’ would lead a reasonable consumer to believe other than the product contains no trans fat.” Certainly Kroger wasn’t entitled to avoid a trial.

Hawkins also got summary judgment on the argument that “0g Trans Fat” violated 21 C.F.R. § 101.62(a)(1)-(2), “[a] claim about the level of fat .... in a food may only be made on the label .... if ... (1) [t]he claim uses one of the terms defined in this section [or] (2) [t]he claim is made in accordance with the general requirements for nutrient content claims in § 101.13.” Section 101.13 then provides “the label or labeling of a product may contain a statement about the amount or percentage of a nutrient if .... [t]he statement does not in any way implicitly characterize the level of the nutrient in the food and it is not false or misleading in any respect (e.g., ‘100 calories’ or ‘5 grams of fat’)[.]” Previous cases have held that this provision doesn’t “authorize” a “No Trans Fat” claim on the label. Though this was in a preemption context, the logic held here: “No Trans Fat” outside of the nutrition facts panel was misleading, given that the conceded use of PHO and thus of “some” trans fat content was actual evidence the “0g Trans Fat” label was false or misleading. Thus, Hawkins established a predicate for her “unlawful” UCL claim.

However, even if Hawkins didn’t have to show that a reasonable consumer would be deceived, there was a genuine dispute of material fact on reliance/causation, so she didn’t win summary judgment on the entire claim.

Kroger’s statute of limitations defense also failed because Hawkins wasn’t required to look beyond the front of the box.

Also, the “0g Trans Fat” label was “too specific to be puffery.”

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