Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Mott’s not liable for “No Sugar Added” applesauce labeling, (Jan 31, 2014)

By Jody Coultas, J.D.

A purchaser failed to state, for the most part, claims that Mott’s LLP mislabeled its apple juice and applesauce products as containing no sugar, the federal district court in San Francisco has held (Rahman v. Mott’s LLP, January 29, 2014, Illston, S.).

When deciding to purchase Mott’s Original 100% Apple Juice and Mott’s Natural Applesauce, the purchasers allegedly relied on the products’ “No Sugar Added” labeling. The purchaser alleged that he would not have purchased the products if they did not contain the “No Sugar Added” labels. The purchaser alleged that Mott’s mislabeled its products in violation of California’s Sherman Law and FDA regulations. The claims included a number of other products that the purchaser did not buy (the Class Products).

The Sherman Law incorporates all food labeling regulations and any amendments to those regulations adopted pursuant to the Food, Drug, and Cosmetic Act of 1938 (FDCA) as the food labeling regulations of California.

Mott’s sufficiently complied with the FDCA’s regulations regarding products containing concentrated fruit juice, according to the court. The FDCA states that the terms “no added sugar,” “without added sugar,” or “no sugar added” may be used only if the product does not contain an ingredient containing added sugars such as jam, jelly, or concentrated fruit juice. The purchaser alleged that the Class Products failed to comply with the relevant FDCA regulations because the products contained concentrated fruit juice as an ingredient. Mott’s countered that six of its products did not contain concentrated fruit juice as an ingredient, and the other products did not use concentrated fruit juice as a sweetener.

The purchaser’s interpretation of the regulations would result in the term “No Sugar Added” never being used if the product contained any amount of concentrated fruit juice. This application was contrary to FDA’s position to allow concentrated fruit juice to be used in certain circumstances, the court found. The purchaser did not present facts showing that the inclusion of concentrated fruit juice as an ingredient in the products was for the purpose of increasing the sugar content of the finished product.

The purchaser failed to present sufficient facts that the Class Products failed to comply with FDCA regulations In order to use the term “No Sugar Added,” the FDCA requires that the product bear a statement that the food is not “low calorie” or “calorie reduced” unless the food meets the requirements for a “low” or “reduced calorie” food. The purchaser alleged that the Class Products failed to comply with FDCA regulations because the products did not state on their labels that the product was not “low calorie” or “calorie reduced.” A food qualifies as reduced calorie if it contains at least 25 percent fewer calories per reference amount than similar food that is either the manufacturer’s regular product, any other manufacturer’s product, or the appropriate representative value for that type of food. The purchaser failed to allege that the Class Products could not qualify as “reduced calorie” when referenced against Mott’s regular products or the appropriate representative values for those types of food.

Mott’s 100% Apple Juice label violated the FDCA regulation regarding substitute product, according to the court. The purchaser argued that the Class Products violated the FDCA because none of the products resemble and substitute for foods that normally contain added sugar. In order to use the term “No Sugar Added,” the FDCA requires that the food that the product resembles and for which it substitutes normally contains added sugars. There was sufficient evidence that the food that the 100% Apple Juice resembled—and for which it substituted—did not normally contain added sugar. However, the purchaser failed to sufficiently allege that Mott’s sauce products did not comply with the regulation because there were no allegations that other brands of apple sauce generally did not contain added sugar.

Mott’s motion to dismiss the purchaser’s California Unfair Competition Law (UCL) unlawful prong claim regarding the 100% Apple Juice product was denied by the court. Because the court found that the Apple Juice violated the FDCA regulation substitute products, the unlawful prong was satisfied. Mott’s argument that the claims failed to satisfy the reasonable consumer test was rejected because the test did not apply to unlawful prong claims.

The court dismissed the California False Advertising Law (FAL), Consumers Legal Remedies Act (CLRA), and UCL fraudulent prong claims. False advertising claims under these laws are governed by the reasonable consumer standard. Under the reasonable consumer standard, a plaintiff must show that members of the public are likely to be deceived. The purchaser alleged that the “No Sugar Added” labeling was likely to mislead the consuming public into believing that the Class Products were healthier and contained less sugar than comparable products. However, the labeling does not draw comparisons between the product and other products and the purchaser failed to explain why reasonable consumers would be likely to draw product comparison conclusions based on the labeling at issue. The purchaser also failed to allege the “comparable products.”

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 StateUnfairTradePractices CaliforniaNews