Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Snack purchasers state claims against P&G and Kellogg, (Dec 12, 2013)

By Jody Coultas, J.D.

Consumers of Kellogg Company’s and Procter & Gamble Company’s snack products stated, in part, California Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA) claims against P&G for allegedly mislabeling the products, the federal district court in San Jose has held (Samet v. Procter & Gamble Company, December 10, 2013, Grewal, P.).

The consumers purchased Kellogg’s Pringles snack chips, MorningStar Farms Hickory BBQ Riblets, and Fruity Snacks Mixed Berry, allegedly due to deceptive and false labeling and advertising of the products’ ingredients and nutritional value.

The court previously dismissed the claims under the FAL for the use of fruit vignettes and “made with Real Fruit,” and the consumer protection claims targeting the use of “0g Trans Fat,” “healthy,” and “wholesome” to describe Pringles, the claims targeting the description of Fruity Snacks as “fortified,” and all the “evaporated cane juice claims.”

Trans fat claims. The consumers alleged that the Pringles labels were unlawful because they were marked “0g Trans Fat” but did not disclose that the products contained deleterious ingredients at levels deemed by regulators to pose a risk of a diet related disease or health condition. P&G argued that the consumers failed to allege reliance and deception for an unlawful claim under the UCL, did not suffer an economic injury, and the claims were preempted by federal law. The allegations sufficiently alleged reliance and deception, as well as an economic injury for paying a higher price for Pringles.

The court also denied the motion to dismiss the FAL claim based on the 0g trans fat claims. To state a cause of action under the FAL, the consumers were required to show that reasonable members of the public were likely to be deceived. The consumers alleged that the 0g Trans Fat label without the required disclosure lead them to believe that Pringles were a healthier alternative to other potato snacks. Although the court was skeptical that any reasonable consumer could be misled by the representations, the Ninth Circuit has made it clear that such questions are issues of fact and inappropriate for resolution on a motion to dismiss.

However, the court granted P&G’s motion to dismiss the claim to the extent that the labels of the “reduced fat” Pringles and 100 calorie packs demonstrated that those products had insufficient fat content to require the disclosure in question.

Healthy and wholesome claims. All causes of action related to the “healthy” and “wholesome” labeling claims were dismissed with prejudice by the court. The consumers did not include screenshots, or copies of labels, that included these statements. Also, the consumers failed to allege any facts indicating that P&G referred consumers to its website for nutritional information, such that it could be considered a label. Because the consumers were already given leave to amend their complaint and failed to address the court’s most basic concerns, further amendments would be futile.

MorningStar products. Kelloggs’ motion to dismiss the FAL causes of action against MorningStar products was denied, according to the court. The consumers alleged they were misled as to the nutritional content of several Kellogg’s MorningStar products by the ingredient label “evaporated cane juice.” Specifically, consumers were allegedly led to believe that the product contained no added sugar and only those sugars naturally occurring in the food. Because the motion to dismiss was based on the reasonableness of this assumption, the court denied the motion to dismiss.

Fruity Snacks. The court held that the claims based on P&G’s fruity snacks were preempted and no further amendment could cure this defect.

The case is No. 5:12-cv-01891-PSG.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Sarah Samet. Brian G. Selden (Jones Day) for Procter & Gamble Co.

Companies: Procter & Gamble Company; Kellogg Company

Cases: Advertising CaliforniaNews