Class Action Rejected Per Primary Jurisdiction Defense

A California federal court recently rejected a putative class action alleging meal replacement bars sold in General Nutrition Centers Inc. stores somehow defrauded customers into thinking they were healthy because they were labeled with the term “zero impact.”  See Gabe Watkins v. Vital Pharmaceuticals, et al., No. 2:12-cv-09374 (C.D. Cal. 2013).  Readers may be interested in the discussion of primary jurisdiction.

On September 25, 2012, Plaintiff filed a Class Action Complaint in the Superior Court of California
for Los Angeles County. Plaintiff alleged that Defendants falsely labeled the Bars in violation of the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq., and the Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750, et seq.  Defendants removed the action to federal court, asserting federal subject matter jurisdiction in reliance on the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2).

Plaintiff asserted that while Vital and GNC marketed and advertised the Bars as 'ZERO IMPACT,' the Bars have an impact on consumers' carbohydrate, sugar and overall caloric intake, and to claim otherwise was "false and misleading."  However, the back of the wrapper features nutritional facts, an ingredient list, and a marketing statement, which notes that the low Dextrose Equivalent sugars contained in the Bars have less impact on blood sugar and glycemic index than most whole grain carbohydrates.  Plaintiff responded that the location and type size of the nutritional information and marketing statement allegedly made it too difficult to see and read.

Defendant moved to dismiss, arguing that the court should defer the question of whether the "ZERO IMPACT" label is misleading, to the Food and Drug Administration under the doctrine of primary jurisdiction.  Primary jurisdiction is a doctrine specifically applicable to claims properly cognizable in court that contain some issue within the special competence of an administrative agency.  Reiter v. Cooper, 507 U.S. 258, 268 (1993). While it is not to intended to secure expert advice for the courts from regulatory agencies every time a court is presented with an issue conceivably within the agency's ambit, it is a doctrine used by the courts to allocate initial decision-making responsibility between agencies and courts where such jurisdictional overlaps and potential for conflicts exist.  Syntek Semiconductor Co., Ltd. v. Microchip Tech. Inc., 307 F.3d 775, 780 (9th Cir. 2002). Typically, there are four factors present in cases where the doctrine properly is invoked: (1) the need to resolve an issue that (2) has been placed within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory scheme that (4) requires expertise or uniformity in administration. See United States v. Gen. Dynamics Corp., 828 F.2d 1356, 1362 (9th Cir. 1987). The doctrine is often most applicable where a claim requires resolution of an issue of first impression or of a particularly complicated issue that Congress has committed to a regulatory agency.

Here, the court concluded that the relevant factors weighed in favor of dismissing plaintiff's claims in deference to the FDA's primary jurisdiction.

Defendants contended that the FDA has primary jurisdiction over how a manufacturer may name
and label its food products and that the resolution of plaintiff's UCL and CLRA claims would clearly invade the FDA's primary jurisdiction. Indeed, Congress has granted the FDA regulatory authority over false and misleading food labeling as part of the Food, Drug, and Cosmetic Act. The primary jurisdiction doctrine was applicable in this case because the FDA has yet to consider the nutritional import of the claim "ZERO IMPACT" or in what context the claim might possibly mislead consumers about a product's nutritional content.

Plaintiff's claims centered on the argument that the nature of the marketing claim "ZERO IMPACT," combined with its location on the wrapper and larger type size, somehow created the impression that the Bars have no dietary impact at all.  But could not direct the court to any FDA rule, regulation, or guidance document discussing how the claim "ZERO IMPACT" or even the word "impact" can or should be used to describe a food product's nutritional content. Nor is there any evidence of the FDA bringing an enforcement action against anyone regarding the "ZERO IMPACT" claim or the nutrient content on its label.  Without any guidance about the context in which the FDA would find the claim "ZERO IMPACT" to be permissible, any determination on whether the term is misleading risked undermining, through private litigation, the FDA's considered judgments.

The FDA has issued some regulations with regard to the word "zero," but these are designed to
make sure that foods with claims like "zero calorie," "zero sodium," and "zero fat" contain the type
and amount of nutrients that a reasonable consumer would expect. See 21 C.F.R. §§ 101.60-101.62. Without more, however, there is no reasoned way for a court to determine whether the FDA regulations associated with labeling items as "zero calorie" and "zero fat" could encompass a claim like "ZERO IMPACT."   Calories, sugar, and fat are specific nutritional elements, but "impact" may refer to the effect those elements have on the human body.

In the absence of any FDA rules or regulations (or even informal policy statements) regarding the
use of the word 'impact' on food labels, the court declined to make any independent determination on whether defendant's use was false or misleading.  The court  concluded it lacked the FDA's expertise in guarding against deception in the context of food labeling.  See Pom Wonderful, 679 F.3d at 1178, and so it deferred this issue to the FDA to consider administrative action regarding the use of the "ZERO IMPACT" claim.

 

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