Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Consumer’s misleading labeling and packaging claims against Mott’s can proceed, (Apr 9, 2014)

By Linda O’Brien, J.D., LL.M.

In a putative class action against a food product manufacturer for alleged use of misleading labels and packages of apple juice products, a consumer sufficiently pleaded facts to support his claims regarding apple juice products with the label “No Sugar Added” under California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA), the federal district court in San Francisco has decided (Rahman v. Mott’s LLP, April 8, 2014, Illston, S.).

Mott’s LLP is a food product manufacturer of primarily apple-based products, including products with the statement “No Sugar Added” on their labels and/or packaging. Mohammed Rahman purchased Mott’s 100% apple juice which contained the statement “No Sugar Added” on the label. Rahman filed a proposed class action suit against Mott’s, alleging that the use of the statement on Mott’s 100% apple juice did not comply with the Food and Drug Administration (FDA) regulations. Rahman also alleged that the labeling and packaging was misleading, deceptive, and unfair in violation of the UCL, FAL, and CLRA. Mott’s motion to dismiss the complaint was granted in part. Rahman filed an amended complaint and Mott’s moved to dismiss the amended complaint.

UCL, FAL, and CLRA. The court determined that Rahman adequately plead fraudulent business practice claims under the FAL, CLRA, and fraudulent prongs of the UCL. Under the “reasonable consumer” test, the plaintiff must show that consumers are likely to be deceived by the representations. Rahman alleged with specificity that, while shopping, he observed that the label of a competing apple juice did not contain a “No Sugar Added” statement. The difference between the labels caused him to believe that Mott’s juice contained less sugar and was healthier than the competitor’s juice. He also identified several competing juice products that did not make the “No Sugar Added” claim and had approximately the same amount of sugar and calories per ounce as Mott’s apple juice. The allegations were sufficient to explain how the labeling was misleading to a reasonable consumer, in the court’s view.

Additionally, Rahman adequately pleaded economic injury and damages as a result of his purchase to establish standing under the UCL and FAL, according to the court. A consumer who relies on a product label and challenges a misrepresentation contained therein satisfies the standing requirement by alleging that he would not have bought the product but for the misrepresentation. Rahman alleged that he would not have purchased as much of the product as he did but for the misrepresentations. Since he entered into more transactions and spent more money than he would have absent the misrepresentations, the extra money paid was sufficient economic injury, the court concluded.

The case is No. CV 13-3482 SI.

Attorneys: Jordan L. Lurie (Capstone Law APC) for Mohammed Rahman. Kevin Marshall Sadler (Baker Botts LLP) for Mott’s LLP.

Companies: Mott’s LLP

Cases: Advertising CaliforniaNews