Federal Court Allows “Natural” Suit to Proceed Against Arizona Beverage
A federal court in California has denied a motion to dismiss putative class claims that Arizona Beverage Co. deceptively labels its products as “100% Natural,” “All Natural,” or “Natural,” despite using high-fructose corn syrup as an ingredient. Hitt v. Arizona Beverage Co., LLC, No. 08-809 (S.D. Cal., order entered February 4, 2009). The complaint also alleges that those beverages with fruit in the name are deceptively labeled because they “do not contain any substantial amount of the fruit named on the label.” The defendants sought to dismiss claims that they violated consumer fraud statutes by contending that they are expressly and impliedly preempted under federal law.
The court summarily ruled that the plaintiff’s claims were not expressly preempted because they do not fall within any of the express preemption provisions of the Nutritional Labeling and Education Act. The court also ruled that the claims were not impliedly preempted because (i) the Food and Drug Administration has not occupied the field of beverage labeling, marketing and promotion; and (ii) the plaintiff’s claims do not stand as an obstacle to accomplishing federal objectives. According to the court, “Plaintiff’s All Natural Claims do not stand as an obstacle to accomplishing Congress’s objectives of uniformity and consistency in regulating beverage labeling because there are no federal requirements regarding the term ‘natural’ to be given preemptive effect.”
The defendants also argued that the lawsuit should be dismissed for failure to state a claim, asserting that “no reasonable consumer, concerned about his/her health, after examining a company’s website (which depicts the products and their ingredients) would be able to convince a fact finder that they were deceived in this case.” The plaintiff countered that she should have the opportunity to present evidence, such as consumer surveys, showing that the defendants’ labeling and promotion are likely to deceive reasonable consumers. The court agreed with the plaintiff and compared the case to Williams v. Gerber, 523 F.3d 934 (9th Cir. 2008), in which the court “recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for decision on demurrer.” The court found the plaintiff’s claims similar to those in Gerber and decided that the parties should have the opportunity to submit evidence to demonstrate whether consumers would find the labeling deceptive.
