Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Consumer stated deceptive labeling claims against Mars, (Jun 12, 2014)

By Jody Coultas, J.D.

Mars, Inc. was denied dismissal of a consumer’s California consumer protection law claims alleging that Mars mislabeled its chocolate products, the federal district court in San Jose has held (Gustavson v. Mars, Inc., June 10, 2014, Koh, L.).

Mars allegedly mislabeled its M&M Chocolate Candy, Twix Cookie Bar, Dove Bar—Dark Chocolate, Dove Bar—Milk Chocolate, and Snickers Bar by making misleading “nutrient content claims” regarding flavanols, by making misleading calorie claims, and by failing to identify the ingredient “polyglycerol polyricinoleic acid” (PGPR) by its common name. Specifically, Mars advertised its Dove Dark Chocolate Bar as a natural source of cocoa flavanols. The calorie statements on the front of the product labels were not accompanied by a disclosure statement directing consumers to consult the full nutrition information on the back of the package for information regarding the levels of fat and saturated fat.

Express preemption. The consumer’s California law claims were not expressly preempted because the claims would not impose labeling requirements beyond those imposed by federal law, according to the court. Mars argued that the flavanol and calorie claims were expressly preempted by the Nutritional Labeling and Education Act of 1990 (NLEA), amending the Food, Drug, and Cosmetic Act (FDCA), which prohibits the misbranding of food in interstate commerce and sets forth conditions under which food is considered “misbranded.” Under the FDCA, any statement on a food product label is a “nutrient content claim” if the statement expressly or impliedly characterizes the level of a nutrient required by the FDCA to be listed on a nutrition label.

Mars argued that the statement “natural source of cocoa flavanols” merely notified consumers that flavanols were naturally present in the chocolate, and did not characterize the level at which the flavanols were found. However, the “natural source” language did characterize the level of flavanols in the chocolate bar. Stating that a food product is a “source” of a nutrient indicates that the nutrient is present, and implies that the nutrient is present in substantial quantities. The consumer presented sufficient evidence that the FDA considered the word “source” alone to characterize the level of nutrients in a product. Most courts in the District have found that claims challenging “source of” or similar statements about antioxidants are not preempted because such statements are regulated nutrient content claims. Therefore, the court declined to dismiss the flavanol claims.

The court also declined to dismiss the calorie content claims. The consumer alleged that the products contained sufficiently high levels of fat and/or saturated fat to trigger an FDA requirement that a product label include the disclosure, “[s]ee nutrition information for __ content,” and that Mars’ failure to include the disclosure adjacent to the calorie statements on the front of the product packaging violated FDA regulations. Mars argued that no such disclosure was required based on another section of the regulations. However, the two cited regulations were cumulative and one section did not relieve manufacturers from complying with the other section. Also, the allegations that FDA regulations prohibited Mars from listing a percent daily value for calories were at least plausible and not expressly preempted.

Primary jurisdiction. The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency. The doctrine is properly invoked when a claim requires resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency.

The court denied Mars’ motion to dismiss the claims on the basis of the primary jurisdiction doctrine. Mars argued that the doctrine applied because front-of-pack calorie-related labeling was an issue of first impression currently being reviewed by the FDA. However, the FDA’s regulatory process was not sufficiently concrete or advanced to warrant dismissal of the calorie claims. It was unclear what changes the FDA might make to the labeling requirements. Also, the FDA had already spoken as to at least one of the reasons why the product labels were allegedly misleading and the case did not raise highly technical issues uniquely within the FDA’s expertise.

The case is No. 13-CV-04537.

Attorneys: J. Price Coleman (Coleman Law Firm) for Phyllis Gustavson. Stephen David Raber (Williams & Connolly LLP) for Mars, Inc. and Mars Chocolate North America, LLC.

Companies: Mars, Inc.; Mars Chocolate North America, LLC

Cases: Advertising CaliforniaNews