Antitrust Law Daily Wrap Up, ADVERTISING—9th Cir.: 7-Eleven may be liable for mislabeling food, (Jun 8, 2016)
Law Firms Mentioned:Arnold & Porter LLP | Pratt & Associates
Organizations Mentioned:7 Eleven, Inc. | 7-Eleven, Inc. | Arnold & Porter, LLP
By Jody Coultas, J.D.
A California district court erred in holding that a 7-Eleven customer failed to adequately allege California consumer protection law claims against the franchisor for misbranding and mislabeling its food products, according to the U.S. Court of Appeals in San Francisco (Bishop v. 7-Eleven, Inc., June 7, 2016, Per Curiam).
The purchaser alleged that 7-Eleven mislabeled its 7-Select potato chips, 7-Select Ice Cream, 7-Select Cheese Jalapenos, Fresh to Go Parfait, and "misbranded food products." 7-Eleven allegedly failed to comply with state and federal regulations by misstating the nutrient contents and nutritional values, using "all natural," and "fresh" claims, failing to disclose the presence of artificial colors and flavors, and using allegedly "slack filled" containers.
Because the claims did not meet the heightened pleading standard of Federal Rule of Civil Procedure 9(b), the district court dismissed the purchaser’s California consumer protection law claims. The purchaser failed to specify the particular products that violated particular labeling requirements, the allegedly unlawful representations that were on the products, and the particular statements the purchaser allegedly relied on when making his purchases.
On appeal, the Ninth Circuit found that the purchaser adequately alleged reliance on 7-Eleven’s potato chips’ packaging representations, and that he would not have purchased the chips had 7-Eleven included on the front of the package the "See nutrition information for fat content" disclosure required by the U.S. Food and Drug Administration. Statements that are not technically false, but have a tendency to mislead consumers because the statements fail to disclose or direct the consumer’s attention to other relevant information, are actionable.
The case is No. 14-15986.
Attorneys: Ben F. Gore (Pratt & Associates) for Scott Bishop. James Speyer (Arnold & Porter LLP) for 7-Eleven, Inc.
Companies: 7-Eleven, Inc.
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