Consumer Fraud Class Claim Over Dietary Supplements Dismissed

A federal court in Illinois recently ruled that a plaintiff in a putative class action failed to state a claim in his suit challenging the marketing of two dietary supplements. See Padilla v. Costco Wholesale Corp., No. 11-C-7686 (N.D. Ill.,  1/16/13).

Plaintiff  alleged a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), 815 ILCS 505/2. He alleged that defendant distributed and marketed the Kirkland Signature™ line of dietary supplements in stores and on-line. These products included  Glucosamine with MSM products, and the Glucosamine/Chondroitin line of products.  Plaintiff asserted he purchased a bottle of Glucosamine with MSM.  And he alleged that that there was no competent and reliable scientific evidence that taking glucosamine either with chondroitin sulfate, or with MSM, results in the body metabolizing it into something that builds or nourishes cartilage or provides joint mobility or joint cushioning.  He asserted that clinical studies have found that glucosamine, chondroitin sulfate, and MSM are not effective.  Thus, he was allegedly deceived by defendant's representations regarding the products, and he would not have purchased Glucosamine with MSM had he known the truth.

Defendant moved to dismiss the (latest) complaint..  The court noted that a complaint must allege enough facts to state a claim to relief that is plausible on its face to survive a motion to dismiss. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 547 (2007).  For a claim to have facial plausibility, a plaintiff must plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Typically, the amount of factual allegations required to state a plausible claim for relief depends on the complexity of the legal theory alleged. See Limestone Dev. Corp. v. Vill. of Lemont, 520 F.3d 797, 803 (7th Cir. 2008).

The court concluded the Padilla failed to state an ICFA claim as to Glucosamine Chondroitin because Padilla did not actually purchase Glucosamine Chondroitin. Plaintiff proposed to pursue claims on behalf of himself and putative class members who purchased either Glucosamine with MSM and/or Glucosamine with Chondroitin.  To bring an ICFA claim, a plaintiff must either allege it was a consumer of the defendant or allege a close nexus with Illinois consumers. Padilla purchased a bottle of Glucosamine with MSM, according to the complaint, but never alleged he purchased of the Glucosamine/Chondroitin. Because Padilla did not purchase Glucosamine Chondroitin, Padilla had not sustained any actual damage from alleged representations about it.

As to Padilla’s ICFA claim based on Glucosamine with MSM, the clinical studies cited by plaintiff were insufficient to state a claim that the product representations were false or misleading. Although Padilla cited to clinical studies supposedly showing the dietary supplements were ineffective for the treatment of osteoarthritis, he failed to make a connection between the studies and the actual representations on the label.  The Glucosamine with MSM product label did not claim to be effective for the treatment of osteoarthritis. Thus, clinical studies regarding the ineffectiveness of glucosamine or chondroitin in the treatment of osteoarthritis did not have any bearing on the truthfulness of the actual representations made.  

The court thus dismissed with prejudice the claims over the Glucosamine/Chondroitin supplement, and the MSM claim were dismissed with leave to amend. 



 

House Hearing on Food Marketing to Kids -- Seller Beware

Two subcommittees of the House Energy and Commerce Committee, the Subcommittee on Commerce, Manufacturing, and Trade and the Subcommittee on Health, held a joint hearing last week on the issue of “Food Marketing: Can ‘Voluntary’ Government Restrictions Improve Children’s Health?”

Speakers came from the CDC, the U.S. Department of Agriculture, the FTC, Campbell Soup Company, and the Association of National Advertisers.

The background of the hearing is that the 2009 Consolidated Appropriations Act contained report language forming an Interagency Working Group (IWG), comprised of the Federal Trade Commission, the Department of Health and Human Services, and the Department of Agriculture. The IWG was tasked with conducting a study and issuing a report to Congress concerning standards for marketing food to children.  Instead of conducting the prescribed study or providing a report to Congress, the IWG issued a document entitled “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts.”

The document presented a a sweeping set of “voluntary” principles for marketing foods to kids,  based on nutritional standards that exceed and conflict with those of other government programs. They also reflect a tenuous grasp of science, lacking evidence, critics say, showing that childhood obesity is related to advertising of food that doesn’t comply with the proposed principles.  The guidelines are so restrictive that many healthy foods, like low-fat yogurts, whole wheat bread, and 2% milk could not be marketed to those 17 and under. Even non-sweetened cereals would not meet the IWG guidelines.  According to one analysis, 88 out of the 100 most advertised foods and drinks would be in violation of these standards.

Regardless of whether a child sees a commercial for an item, the ultimate purchasing decision rests with the parent who purchases the groceries – and those groceries carry nutrition labels that every parent can read.  Of course, this is the nanny state rearing its head again. And there are serious issues of infringement of constitutionally protected commercial speech.

But a legitimate concern to our readers is that while these guidelines are labeled as voluntary, what happens when a litigious group sues a food manufacturer because it showed a commercial advertising a new kind of chocolate treat or drink that does not comply?  Our readers are surely familiar with example of courts allowing plaintiff experts to note "voluntary" or "recommended" guidelines.

Class Action Claims Against Labeling of Snack Food Preempted

Last week, a federal district court held that federal food labeling law does preempt state law claims attacking the use of phrases such as “0 Grams of Trans Fat” on snack food packaging. See Peviani v. Hostess Brands Inc., No. 2:10-cv-02303 (C.D. Cal., 11/3/10).

 In this putative class action, plaintiffs alleged that the defendant used misleading and deceptive statements to market the "Hostess 100 Calorie Packs" baked goods. In particular, plaintiffs alleged that the label noting "0 Grams of Trans Fat" was inconsistent with the products containing partially hydrogenated oils (PVHO).  Plaintiffs alleged that PVHO is linked to various health problems, and therefore is supposedly a "dangerous trans fat."

Plaintiffs alleged they purchased the 100 Calorie Pack foods relying on the no trans fat claim.  They asserted false advertising under the Lanham Act, violations of the California Unfair Competition Law, the California False Advertising Law, and the Consumer Legal Remedies Act. The two classes proposed were a restitution and damages nationwide class of those that purchased the foods, and an injunctive relief class of those who commonly purchase such foods.

Defendants filed a motion to dismiss, arguing that the claims were preempted by federal law.  The  court noted that the FDCA sets forth a comprehensive federal scheme for the regulation of food. In 1990, Congress passed the Nutrition Labeling and Education Act, 21 U.S.C. 341, which clarified FDA's authority to require and regulate nutrition labeling on food.  Two provisions directly apply to use of phrases like "0 Grams of Trans Fat."  One provision requires the labeling in the Nutrition Facts Panel to include the amount of saturated fat and total fat in each serving; and this regulation requires that if a serving contains less than 0.5 grams of trans fat, the amount "shall be expressed as zero."  Second, a regulation permits certain nutrient claims outside the Facts Panel about the level or range of a nutrient in the food, such as sodium, or calories or fat.  The NLEA permits such a statement as long as it is not false or misleading. 21 U.S.C. §§ 343(q) and (r).

The court noted that laws regulating the proper marketing of food are within the states' historic police powers, and thus subject to a presumption against preemption.  Nevertheless, consumer protection laws, such as those invoked here, are nonetheless preempted if they seek to impose requirements (through their use in litigation) that contravene the provisions of the federal law.  The NLEA contains an express preemption clause relating to any requirement  in state law that is not identical to the federal provisions.  But the court noted that implied preemption can accompany express preemption, as the essential inquiry always remains the substance and scope of Congress' intent to displace state law.

Plaintiffs alleged that the trans fat label outside of the Nutrition Facts Panel was an express nutrient content claim, and was false and misleading.  But the court noted that the FDA has declined to promulgate any regulation as to whether actual values must be used in labeling or rounded values may be used. In fact, the FDA has said that the difference between actual and rounded values are nutritionally insignificant, and thus either value relays the same basic information.  Here, since the phrase "0 grams of Trans Fat" is not false or misleading when used in the Nutrition Facts Panel, defendant's use of the exact same phrase elsewhere on the product label cannot be found false or misleading. If 0 and less than 0.5 grams mean, nutritionally, the same thing in the important Panel section, use of the exact same claim could not be misleading elsewhere on the label.

In essence, plaintiffs were trying, under state law, to enjoin on the label the use of the very phrase that federal law permits on another part of the label.  Plaintiffs' claims failed because they would impose a state law obligation for trans-fat disclosure that is not required by federal law.  (The plaintiffs' federal claim, for false advertising under the Lanham Act, failed for lack of standing,.)

The decision echoed Chacanaca v. Quaker Oats Co.,  No. 5:10-cv-00502 (N.D. Cal., Oct. 14, 2010), which dismissed similar claims over the phrase “0 Grams Trans Fat” on preemption grounds.

These types of claims illustrate the lengths to which plaintiffs are going to attack the food and beverage industries.  No one was sick from the snacks, which were labeled in exact accordance with explicit federal requirements.  Yet, a multi-count claim is brought in state court, with the legal theory that, in essence, federally approved language in one part of a food label is false and misleading under state law when it appears in another part of the same label. This is not about helping consumers.  How could it benefit consumers and clarify the information they have to make their own free and individual purchase decisions (with all the factors that go into what we decide to buy and eat) if the FDA-approved language in the Nutrient Facts Panel is allowed to be called false and misleading by a state court jury in California?