Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Claims over “100% Natural” labeling of granola bars containing GMOs proceed against General Mills, (Oct 11, 2013)

By Tobias J. Gillett, J.D., LL.M.

A purchaser of granola bars may proceed with putative class action claims under the California Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA), challenging General Mills’ use of the phrase “100% Natural” on the packaging of two of its Nature Valley granola bar varieties, the federal district court in San Francisco has ruled (Rojas v. General Mills, Inc., October 9, 2013, Orrick, W.). However, similar claims regarding the packaging of other Nature Valley granola bars and General Mills’ other advertising and website were dismissed as inadequately pled.

According to the purchaser’s complaint, General Mills produces Nature Valley granola bars in at least 30 different varieties. The products’ packaging, and General Mills’ website, allegedly claims that the granola bars are “100% Natural,” when they actually contain corn and soy ingredients derived from genetically modified organisms (GMOs). Although the Food and Drug Administration does not have a definition for the term “natural,” the complaint cited the FDA’s website, which “loosely defined” the term as “not contain[ing] added sugar, artificial flavors, or synthetic substances.” The complaint also cited the United States Department of Agriculture’s Food Safety and Inspection Service’s definition of a “natural” product as one that does not contain any artificial or synthetic ingredient, and does not contain any ingredient that is more than “minimally processed.” The complaint alleged that the “scientific description of how GMOs are produced” showed that they were not “minimally processed” or “all natural.” General Mills allegedly failed to disclose the fact that the bars contained GMOs in its related advertising.

The purchaser asserted claims for violations of the “unlawful,” “unfair,” and “fraudulent” prongs of the UCL; the FAL; and the CLRA, among other claims. General Mills moved to dismiss.

Primary jurisdiction. The court concluded that the primary jurisdiction doctrine did not require dismissal of the purchaser’s action. The court explained that the primary jurisdiction doctrine “is applicable whenever the enforcement of a claim subject to a specific regulatory scheme requires resolution of issues that are within the special competence of an administrative body,” and that courts invoke the doctrine where a case “requires resolution of an issue of first impression,” or where the issue is not “within the conventional experience of judges.”

Although food labeling was within the expertise of the FDA, the FDA had adopted a policy that it enforced regarding the use of the term “natural” on food labels, and had issued guidance on the proper use of the term and warning letters to manufacturers calling for corrective changes to labels. Therefore, there was no risk of “undercutting the FDA’s judgment and authority.” Moreover, courts were deciding whether a term was false or misleading was well within “the conventional experience of judges.” Further, “the FDA ha[d] signaled a relative lack of interest in devoting its limited resources to what it evidently considers a minor issue, or in establishing some uniformity in administration with regard to the use of ‘natural’ in food labels.”

Finally, the primary jurisdiction doctrine did not deprive the court of subject matter jurisdiction over the case. The court observed that the primary jurisdiction doctrine did not implicate the subject matter jurisdiction of the federal court, but rather was “a prudential doctrine under which courts may, under appropriate circumstances, determine that the initial decisionmaking responsibility should be performed by the relevant agency rather than the courts.”

Rule 9(b). The purchaser sufficiently stated his claims under the UCL, FLRA, and FAL with respect to the labeling of two of the granola bar varieties to satisfy the heightened pleading standard of Federal Rule of Civil Procedure 9(b). He “not only alleged the who, what, when, where, and how, but he attached images of the two products to the” complaint.

However, he did not sufficiently allege his claims with respect to the remaining granola bar varieties. He did not name any of those other varieties, and the court found that “[w]ithout at least identifying the unnamed products,” he could not “state a claim with regard to them.” In addition, his claims regarding General Mills’ advertising and website were also dismissed due to his failure to identify any of the advertising he saw and relied upon, other than the products’ packaging, or to allege “when he saw them, where he saw them, what he saw, or why and how they were misleading.” Although he referred to General Mills’ website, he did not allege that he ever visited it. Thus, his UCL, CLRA, and FAL claims were dismissed with leave to amend, except as to the packaging of Nature Valley Oats and Honey Crunchy Granola Bars and Nature Valley Dark Chocolate Peanut Butter Crunchy Granola Bars.

The case is No. 12-cv-05099-WHO.

Attorneys: Angela Valentina Arango-Chaffin (Chaffin Law Firm) for Gabriel Rojas. David T. Biderman (Perkins Coie LLP) for General Mills, Inc.

Companies: General Mills, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews