Failure to include adjusted protein percentage on protein-touting products can be misleading

Rausch v. Flatout, Inc., --- F.Supp.3d ----, 2023 WL 2401452, No. 22-cv-04157-VC (N.D. Cal. Mar. 8, 2023)

I love a good summary:

When a manufacturer advertises the amount of protein in a product on its package, the Food and Drug Administration requires the manufacturer to include additional information on that product’s nutrition facts panel: the manufacturer must provide the “percent daily value” for protein based not on the raw amount of protein in the product, but on the amount of protein that the human body will actually absorb. The question presented in this case is whether a manufacturer’s failure to include that percent daily value renders its other statements about protein quantity misleading—both within the meaning of the FDA’s regulations and state law. The answer is yes.

While “consumers often pick products based on their protein content, “not all protein is created equal.” Protein’s constituent parts are amino acids; a high-quality protein contains “all nine amino acids in the right proportions for protein synthesis.” Also, “most plant proteins are only 85% digestible, so 15% of the protein from a plant source will just pass through your body.” The FDA requires all products to include the grams of protein in a serving, without needing adjustment for amino acid content or digestibility (together “quality”). However, if there’s a “protein claim” anywhere else on the label, including both “Excellent source of protein!” or just “20g of protein,” the FDA requires the manufacturer to include the “corrected amount of protein per serving,” expressed as a percent of daily value. This is corrected amount is calculated by using a discount factor that accounts for the protein’s amino acid content and digestibility.

Flatout sells a variety of products, including flatbreads and pizza crusts. Several of these products allegedly advertise their protein content on the front of their labels, but they fail to include the quality-adjusted percent on their nutrition facts panels. Thus, a consumer would only absorb about half of the protein in Flatout’s Flatbread, but that isn’t disclosed.

Rausch sued for UCL unlawfulness and the usual California claims including UCL fraudulent claims. California’s Sherman Act incorporates the FDCA and regulations; Rausch alleged that the protein statements violated the FDA’s requirement that Flatout include the quality-adjusted figure and a more general FDA regulation that prohibits misleading “nutrient content claims.”

The second theory required a bit more unpacking because of Nacarino v. Kashi, 584 F. Supp. 3d 806 (N.D. Cal. 2022). There, like here, the label on Kashi’s cereal stated that the cereal had “11g” of protein, but that figure was not adjusted for the protein’s quality. But there were no allegations that Kashi failed to include the quality-adjusted percent on the cereal’s nutrition facts panel (and the Kashi requested judicial notice that it had done so). In that context, the court held that “making a statement about protein quantity on the front of the package—without including a disclaimer about protein quality also on the front of the package” didn’t violate the prohibition on misleading statements.

That wasn’t this situation, but Nacarino also said that requiring the use of the quality-adjusted percentage in the nutrition facts panel didn’t mean that statements of protein content would be misleading in the absence of that disclosure:

To hold otherwise would be to find that an FDA-approved protein measurement technique is inherently misleading. This is not a plausible interpretation of the regulations. A better reading is that the FDA recognizes that in situations where consumers are drawn to a product for its protein content—those situations in which a manufacturer is touting its product’s protein on its packaging—consumers deserve additional information in the Nutrition Facts label. This is not to remedy an otherwise misleading figure, but to supply protein-conscious consumers with information that gives them further assistance in deciding what to buy.

The court here disagreed:

The better reading of the FDA’s regulations is that prominently advertising a product’s protein quantity outside of the nutrition facts panel is misleading (within the meaning of the Food, Drug, and Cosmetic Act and the FDA’s regulations), if the manufacturer doesn’t include the quality-adjusted percent in the nutrition facts panel. As a matter of common sense, it’s reasonable to think that small text in the nutrition facts panel is less likely to mislead a consumer than text advertising the protein content on the front of a label. When a manufacturer chooses to emphasize a product’s protein content elsewhere on a label, the manufacturer is implicitly suggesting that the product is a good source of protein. In effect, it’s encouraging consumers to buy the product based off that feature. That’s not the case when the manufacturer includes the amount of protein in the nutrition facts panel (something manufacturers must do on all products). Thus, the FDA’s regulations are best understood as reflecting a determination that when a manufacturer emphasizes a product’s protein content, that statement is misleading without including information about the product’s protein quality on the nutrition facts panel.

Why didn’t the FDA require all manufacturers to disclose the quality-adjusted percent on all products Apparently it was, at least at the time, expensive to calculate a product’s precise amino acid score; the FDA decided not to impose those additional costs generally because Americans generally consume enough high-quality protein in their diets. But, it reasoned, "where a manufacturer decides to make a protein claim, the ‘the burden and expense’ of calculating the percent are ‘voluntarily assumed by the manufacturer.’” The court here concluded that FDA's decision to “spare most manufacturers from the expense of calculating the quality-adjusted percent does not mean that protein statements (made outside of the nutrition facts panel) can never be misleading.”

Flatout responded that the quality-adjusted percent was essentially meaningless, so it did nothing to remedy the potentially misleading statement of protein quantity, because “reasonable consumers” do not possess “the regulatory or mathematical skill” required to use the percent daily value to convert the “grams of protein stated on the label into digestible protein.”

True enough! But not helpful to Flatout:

The FDA is generally skeptical that consumers know exactly how much of any nutrient they should be consuming every day. That’s why the FDA thinks the percent daily value is helpful: it gives consumers a sense of how the food might fit into their broader nutritional needs….  That doesn’t require any complicated math, and that information puts the potentially misleading protein statement in context. The expectations created by statements like “excellent source of protein!” or “20g protein!” can be tempered by looking at the percent daily value.

Indeed, parsing the text, the court determined that the quality-adjusted percentage disclosure requirement was not promulgated under the general nutrition rules—then it would have to be on all nutrition labels—but under FDA’s authority to regulate misleading labels. Thus, “it’s not much of a leap to say that failure to follow the requirement renders a label misleading within the meaning of the FDA’s regulations.”

This all allowed Rausch’s theory of misleadingness to move forward. Rausch also plausibly alleged that she has no adequate remedy at law, so she may seek equitable relief at this stage in the litigation, and she had standing to challenge the products she did not purchase because they are “substantially similar” to the products she did purchase. But the conclusory allegation that Flatout’s conduct was “willful and malicious” didn’t support a claim for punitive damages; if discovery revealed information relevant to punitive damages, Rausch could seek leave to amend.