Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: False ad, deceptive practices claims involving Cheerios Protein proceed, (Aug 12, 2016)

By Michael Menzhuber, J.D., LL.M.

A motion to dismiss false advertising and deceptive practices claims against General Mills, which challenged the labeling of its Cheerio Protein products as misleading, was granted in part and denied in part by the federal district court in San Francisco. The court found that 21 U.S.C. § 343(a)(1), the catch-all prohibition against false or misleading advertising, applied and that it was possible that the plaintiffs could prove that a reasonable consumer would be deceived by the Cheerio Protein labels (Coe v. General Mills Inc., August 10, 2016, Henderson, T.).

Nancy Coe and two other plaintiffs filed a putative class action against General Mills, which alleged that the name "Cheerios Protein" was misleading because it implied that the product was essentially the same as Cheerios, only with added protein, and said nothing about added sugar. According to the plaintiff, Cheerios Protein contained only an additional .4 or .7 grams of protein per serving and an additional 15 to 16 grams of sugar, depending upon the flavor. The plaintiffs also challenged certain statements on the label and a "Fuel Up" advertisement as false or misleading. The challenged statements included, "a great start to your day," "start school day right," and "kick-start your day."

The plaintiffs sought relief under: (1) California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act; and (2) New York laws that prohibit deceptive acts or practices and false advertising. General Mills responded by filing a motion to dismiss.

Preemption. General Mills argued that the plaintiffs’ claims were expressly preempted by the federal Nutrition Labeling and Education Act (NLEA), which established uniform food labeling requirements and prohibited states from establishing any food labeling requirement that is not identical to these requirements. The plaintiffs contended that the labeling of Cheerios Protein violated both 21 C.F.R. § 101.18(b) and 21 C.F. R. § 102.5(c), as well as 21 U.S.C. § 343(a)(1), which provides that a food is misbranded if its labeling is false or misleading.

The court determined that the name of the product, "Cheerios Protein," was not regulated by 21 C.F.R. § 101.18(b) and that 21 C.F. R. § 102.5(c), did not apply because "Cheerios Protein" was not its common name. However, the court concluded that 21 U.S.C. § 343(a)(1), which provides that a food is misbranded if its "labeling is false or misleading in any particular," did apply because the challenged aspects of the label did not comply with any specific federal regulation.

Likelihood of deception. General Mills next argued that the plaintiffs’ claims should be dismissed because the Cheerio Protein labels were not likely to deceive a reasonable consumer. The court disagreed because it could not be said that, in construing the allegations in a light most favorable to the plaintiffs, that it would be impossible for them to prove that a reasonable consumer was likely to be deceived.

Implied claims. The court concluded that the implied claims of healthfulness on the label were misleading, rather than non-actionable puffery, because the added sugar in the Cheerios Protein products exceeded the amount recommended for children’s consumption and added sugar in processed foods has substantially contributed to a host of health problems. It did find, however, the "Fuel Up" claims to be too general to constitute an actionable statement.

Injunctive relief. Finally, the court determined that the plaintiffs lacked standing to seek injunctive relief because they did not allege anywhere in their complaint that they intended to purchase Cheerios Protein in the future.

The case is No. 15-cv-05112-THE.

Attorneys: Laurence D. King (Kaplan Fox & Kilsheimer LLP) for Nancy Coe. David T. Biderman (Perkins Coie LLP) for General Mills, Inc.

Companies: General Mills, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews