Court Orders Partial Dismissal of False Ad Claims Against Food Companies

A federal court in California has dismissed in part and granted in part allegations in a second amended, putative class complaint filed against three food and beverage companies for alleged violations of state consumer fraud laws in the labeling claims on a plethora of products including chewing gum, juices, cookies, crackers, granola, stuffing, and cheese. Ivie v. Kraft Foods Global, Inc., No. 12-2554 (N.D. Cal., San Jose Div., order entered June 28, 2013). Information about a previous ruling in the case appears in Issue 473 of this Update.

The court dismissed with prejudice (i) the plaintiff’s claim that a “natural flavors” label on Crystal Light® is misleading because the product contains artificial flavors; the court found that the two specific ingredients alleged to be “artificial” flavors are artificial ingredients and nothing in the Food and Drug Administration regulations suggests that potassium citrate and sodium citrate are flavors; and (ii) the majority of the claims for products not purchased by the plaintiff and lacking sufficiently similar packaging and labels to those she did purchase. The court will allow the plaintiff to amend her complaint as to allegations involving “excellent source,” “healthy” and “wholesome” on the companies’ Websites, finding the claims insufficiently pleaded.

The court denied the motion to dismiss as to nutrient content claims on
a Planters Nut-rition product and Kraft Mexican Style Four Cheese blend.
According to the court, the plaintiff sought to impose state law requirements
identical to federal regulations, so they were not preempted. The court also
determined that they were not precluded under the primary jurisdiction
doctrine, stating “plaintiff’s case does not require this court to determine
difficult issues of first impression better left to the FDA’s [Food and Drug
Administration’s] expertise, but instead only requires the application of
well-understood FDA regulations directly on point.”

The court rejected the defendants’ argument that the claims should be
dismissed “because the labels, even if in technical violation of FDA regulations,
are unlikely to deceive a reasonable consumer, and plaintiff therefore has
no standing. According to the defendants, because plaintiff could not have
known about the FDA’s regulations regarding the font size and placement
of the disclosure statements, she could not have relied on or been deceived
by the alleged violations.” The court found that she had satisfied the state
consumer fraud law standing requirements: she essentially alleged that
“because the defendants’ labels did not comply with state and federal
requirements regarding the font-size and placement of the disclosure
statement, she could not see or did not understand the disclosures, and
therefore was misled by the unlawful packaging and purchased the product
based thereon. . . . and suffered economic injury because she purchased a
product she otherwise would not have.”