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From Antitrust Law Daily, September 10, 2013

Claims that Gerber misrepresented nutrients, sugar content of products can proceed

By Anthony H. Nguyen, JD

Allegations that Gerber Products Co. misrepresented the nutrients and sugar content of its infant and toddler food and beverage products stated claims under the California Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, according to the federal district court in San Jose, California (Bruton v. Gerber Products Co., September 6, 2013, Koh, L.). A consumer’s claims were not preempted because they were brought under California law, which had adopted parallel requirements to federal law.

Background. Gerber Products Company and Nestle U.S.A., Inc. produce, package, and sell retail food products through the Gerber brand for consumption by infants and children under two years of age. Natalia Bruton alleged that Gerber’s products are misbranded because of “unlawful and deceptive misrepresentations” on products at Gerber’s websites, including: (a) nutrient content claims, such as “Excellent Source,” “Good Source,” “As Healthy As Fresh,” and “No Added Sugar”; (b) “natural” claims; and (c) sugar-related claims. Bruton asserted that, at the point of sale, she did not know or have reason to know that the products were misbranded and that she would not have bought the products if she had known more.

Bruton challenged Gerber’s use of “nutrient content claims,” which are claims about specific nutrients contained in a product that must be made in accordance with federal regulations at 21 U.S.C. sec. 343(r). Bruton alleged that Gerber and Nestle made nutrient content claims on virtually all of their Gerber food products, despite the fact that FDA authorizes nutrient content claims on foods for adults that are not permitted for children under age two due to differing nutritional needs. Bruton also asserted that Gerber was misleading in touting the Gerber products as “100% natural” when the products contained artificial ingredients or added ingredients not expected to be in food.

Finally, Bruton alleged that Gerber’s products labeled with a “No Added Sugar” or similar sugar-related nutrient content claim contained disqualifying levels of calories that violated 21 C.F.R. sec. 101.60(c)(2) and prohibited the claim from being made absent a mandated disclosure statement warning of the higher caloric level of the products.

Gerber and Nestle moved to dismiss Bruton’s complaint.

Preemption. Gerber contended that the Food, Drug, and Cosmetic Act expressly preempted all of Bruton’s claims because she sought to enforce labeling rules that were different from the FDA regulations. In addition, to the extent that Bruton sought to enforce labeling rules identical to FDA regulations, Gerber contended that those claims were impliedly preempted because there is no private right of action under the FDC Act for suing to enforce compliance with the federal regulations. The district court disagreed with both arguments, holding that Gerber did not overcome the presumption against preemption.

As both parties in the case asserted that Bruton’s claims fell within the scope of the FDA’s requirements, the court found that, for the purposes of the motion, the claims were not subject to express preemption. Additionally, Bruton did not dispute that under the FDC Act private litigants were expressly prohibited from suing to enforce compliance with federal regulations. However, she argued that implied preemption did not apply because she was not attempting to enforce the FDC Act, but rather to enforce California’s legal requirements which were identical to FDA regulations.

The court also found it significant that Congress has not set forth a “clear and manifest” statement that it intended state food labeling claims to be subject to implied preemption. The Nutritional Labeling and Education Act explicitly stated that the NLEA could not be construed to preempt a state law provision, unless the provision was expressly preempted. As the NLEA amended the FDC Act, the latter was not intended to impliedly preempt state-law food labeling claims.

Bruton noted that, because her claims were based on state laws that parallel the federal regulations, she was suing for conduct that also violated the FDC Act. Therefore, her claims were not expressly preempted. Second, Bruton contended that she was not suing because the conduct violated the FDC Act, but rather because the conduct violated California’s Sherman Law, which could have imposed the exact same regulations even if the FDC Act was never passed and which includes some provisions that are independent of the federal regulations that they mirror.

Primary jurisdiction. The court declined to invoke the doctrine of primary jurisdiction. Gerber argued that the court should dismiss the case because the FDA had the regulatory authority over food labeling and resolving the issue required the agency’s expertise and uniformity in administration. Although the matter involved issues within the jurisdiction of the FDA, the Ninth Circuit had made it clear that only claims raising issues of first impression or particular complexity were appropriately dismissed or stayed based on the doctrine. Bruton’s claims were not ones of first impression, nor did the claims appear to the court to raise highly technical issues uniquely within the FDA’s expertise. Instead, Bruton’s case appeared to be less about science than about whether a label was misleading.

Label claims. Bruton’s nutrient content and sugar claims were sufficiently pled as plausible claims for the purpose of surviving a motion to dismiss. In addition, the court agreed with Bruton that her claims raised a factual dispute not subject to resolution on a motion to dismiss.

However, the court found that Bruton’s “all natural claims” were not sufficient. Gerber argued that it did not make “100% Natural claims,” but that its labels stated products were made with “100% natural fruit.” Gerber further contended that the statement had to be read in context. The court agreed, finding that if Gerber had claimed its products were “100% natural” then Bruton’s allegations would be sufficient.

Instead, Bruton failed to explain why a label claiming that a product is “Made with 100% Natural Fruit” plausibly implied that the entire product—which contains ingredients other than fruit—is free of synthetic ingredients or ingredients not normally expected to be in food. Thus, Bruton failed to set forth why a reasonable consumer would find Defendants’ labels to be false and misleading. However, because Bruton might be able to cure the deficiencies in these allegations, the claims predicated on the “all natural” labeling were dismissed without prejudice.

Other claims. The court held that Bruton’s complaint lacked sufficient factual allegations from which it could infer more than a “sheer possibility” that Nestle had acted unlawfully. Only Gerber products were at issue in the case, and Bruton did not explain why Nestle should be held liable for Gerber’s misbranded products. The court granted the motion to dismiss Bruton’s claims against Nestle but with leave to amend.

In addition, the court dismissed with leave to amend several of Bruton’s claims for products that she did not purchase, because her allegations prevented the court from determining whether all the products she included in her complaint were substantially similar to the products that she did purchase.

The case number is 12-CV-02412-LHK.

Attorneys: Bryan Alexander Merryman (White & Case LLP) for Gerber Products Company.

Companies: Gerber Products Company; Nestle U.S.A., Inc.

MainStory: TopStory Advertising StateUnfairTradePractices CaliforniaNews

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