Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Fla.: Wal-Mart customers proceed with state-law juice misbranding claims, (Apr 24, 2015)

By Greg Hammond, J.D.

Consumers of Great Value cranberry and pomegranate flavored juice could move forward with Florida Deceptive and Unfair Trade Practices Act (FDUTPA) claims against Wal-Mart Stores, Inc. for allegedly misleading juice labels. In mostly denying Wal-Mart’s motion to dismiss, the federal district court in Tallahassee determined that the state law claims were not preempted under the Nutrition Labeling and Education Act (Reynolds v. Wal-Mart Stores, Inc., April 23, 2015, Walker, M.).

Background. Consumers Ira Reynolds and Patricia Bell filed suit against Wal-Mart, alleging that the labeling for Great Value cranberry and pomegranate juice was misleading. Although the product is 100 percent juice, it is not 100 percent cranberry and pomegranate juice. The juice’s labeling, however, states “100% Cranberry Pomegranate,” followed by “Flavored Juice Blend” in a smaller font. Specifically, the consumers brought claims for violating the FDUTPA, breach of express warranty, breach of implied warranty, and unjust enrichment. Wal-Mart moved to dismiss the state-law claims, arguing primarily that they are preempted by federal law.

Standing. In its first argument, Wal-Mart asserted that the plaintiffs lacked standing to bring their Florida claims because they failed to allege a concrete and particularized injury in fact. The court disagreed, finding that the consumers alleged they paid more money based on the misleading juice label, which was sufficient to demonstrate economic injury-in-fact for Article III standing.

Preemption. The complaint alleges that the Great Value juice violates the Food, Drug, and Cosmetics Act (FDCA) and its regulations because the label does not display the “common or usual name of the food” and it is misbranded under § 343(i). The Nutrition Labeling and Education Act (NLEA) amended the FDCA to forbid state-law requirements that are of the type but not identical to only certain FDCA provisions.

Plaintiffs’ first theory of liability—that Wal-Mart’s juice is misbranded under the FDCA because it suggests that the product is entirely cranberry and pomegranate juice when it is not—is “in lockstep” with the Florida Food Safety Act, which adopted FDCA Sections 343(i) and (a)(1) in state law, the court stated. Further, a violation of the Florida Food Safety Act is actionable by a private party under the FDUTPA, according to the court. Because the NLEA does not preempt a state-law claim imposing an identical requirement, such as in the Florida Food Safety Act, the consumers could assert a parallel state-law claim for misbranding.

In addition, the court found that by the terms of the NLEA’s express preemption provision, the provision does not bar the enforcement of state laws imposing requirements of “that” type—including a state-law mirror of the requirement in § 343(a)(1), addressing false or misleading labels. Consequently, § 343-1(a), narrowly construed, does not prohibit the consumers from asserting a claim premised on a violation of § 343(a)(1).

In the instant case, the consumers premised their claims on § 343(a)(1), pointing to the “100%” representation on the juice’s label. Noting that the placement of the “100%” is close to “Cranberry Pomegranate” and in the same size type, the court found that the representation makes it likely a consumer would read them together as one statement indicating the product is entirely cranberry and pomegranate juice. This, according to the court, is arguably false or misleading, and such a claim would be outside the preemptive reach of the NLEA.

Sufficiency. The court found that the alleged facts in the consumers’ complaint demonstrated the presence of the elements of parallel claims, premised on purported violations of § 343(a) and (i). The motion to dismiss was therefore mostly denied. However, the court granted the motion in part to the extent the complaint might be construed to assert a broader theory concerning the labeling of juice, which would be a non-identical requirement under state law. Such a claim would be preempted.

The case number is 4:14cv381-MW/CAS.

Attorneys: Andre M. Mura (Center for Constitutional Litigation PC) for Ira Reynolds and Patricia Bell. Barry Richard (Greenberg Traurig) for Wal-Mart Stores Inc.

Companies: Wal-Mart Stores Inc.

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