Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Ill.: State law claims that protein powder product was deceptively label preempted by NLEA, (Jun 18, 2015)

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

A pharmacy company’s motion to dismiss state law claims that it deceptively labeled a protein powder product that it sold was granted by the federal district court in Chicago (Gubala v. CVS Pharmacy, Inc., June 16, 2015, Durkin, T.).

Background. Derek Gubala purchased a CVS Pharmacy, Inc. (CVS) protein powder product that was labeled as “Whey Protein Powder.” The product label contained, among other things, the following statements: “Whey Protein Powder”; “Vanilla”; “Naturally & Artificially Flavored Drink Mix”; and “26 grams of high quality protein per serving.” Gubala alleged that he was deceived by the phrases “Whey Protein Powder” and “26 grams of high quality protein per serving” into believing that the 26 grams of protein were purely whey protein. Gubala alleged that, because of the “protein-spiking” process used by CVS in connection with the product, the product only contain 21.8 grams of whey protein.

Gubala brought four claims under state law against CVS: (1) a violation of various state consumer fraud acts on behalf of a multi-state class; (2) a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA); (3) unjust enrichment based on misrepresentation on the product’s label of the nature and quality of the product; and (4) breach of express warranty.

CVS, in support of its motion to dismiss Gubala’s claims, argued that: (1) Gubala’s claims were preempted by the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 343-1(a), as amended by the National Labeling and Education Act (NLEA), 21 U.S.C. § 341, et seq.; (2) Gubala’s complaint should be stayed under the primary jurisdiction doctrine; (3) CVS was protected by the IFCA’s safe-harbor provisions specifically authorized by federal regulations; (4) Gubala failed to allege facts plausibly showing that the product label deceived consumers regarding the whey protein content; and (5) Gubala’s allegations failed to state unjust enrichment and breach of express warranty claims.

Consumer Fraud Claims. CVS argued that Gubala’s claims were expressly preempted by the NLEA because, through the NLEA amendments, the FDCA expressly preempts any food labeling “requirements” that are not identical to those in sections 343(q)or 343(r). The court agreed. It noted that the NLEA requirements imposed on the labeling of the protein content concerned stating the total protein amount for each serving and how that protein amount was calculated. It then noted that Gubala did not allege that the protein grams per serving appearing on the product’s nutrition label was misleading or that CVS must calculated that figure using a different method. Instead he claimed that he was deceived by the product labeling into believing that the 26 grams of protein were derived solely from whey protein. The court determined that to remedy this allegedly deceptive labeling would require CVS to specifically identify each source of protein in the product and that the NLEA does not include such a requirement.

In further support of preemption of Gubala’s claims, the court noted that the FDA specifically considered and rejected a proposal to enforce stricter requirements for labeling products as “high” in protein or as “sources” of protein. The court also noted the dismissal of a substantially similar claim in Turk v. Gen. Mills, Inc., 754 F. Supp.2d 956 (2010). Gubala argued that his case was different than Turek, and, therefore, should not be preempted, because his claims only concerned the front of the label, not the nutrition label. The court disagreed because it found no support for the position that preemption is limited to the nutrition facts label.

The court acknowledged that Gubala’s claim, that it was misleading to use the name “Whey Protein Powder” to describe a product that was “adulterated with substantial amounts of free form amino acids and non-protein ingredients”, might not be preempted because the FDCA has recognized that the labeling of a food that contains two or more ingredients may be misleading by the designation of such food in the labeling by a name that includes or suggests the name of some, but not all ingredients. However, the court determined that the product label was not misleading because “Vanilla” and “Naturally & Artificially Flavored Drink Mix” appeared on the label below the name “Whey Protein Powder.”

Breach of Express Warranty. Gubala contended that “through its advertising, labeling, marketing, and packaging”, CVS purported to “create an express warranty that the Product contained ‘26 Grams of high quality protein per serving.’” The court disagreed because “assertions to customers that their products are of high quality . .. are viewed as ‘puffing,’ rather than as express warranty.” Pressalite Corp. v. Matsushita Elec. Corp. of Am., 2003 WL 1811530 (2003).

Unjust Enrichment. Gubala’s unjust enrichment claim relied on the assertion that the product labeling was somehow misleading or deceptive or contained false statements. However, an unjust enrichment claim cannot stand where facts underlying the claim are the same fraudulent omissions and misrepresentations that support a “largely preempted and otherwise . . .insufficiently pleaded” IFCA claim. Cleary v. Philip Morris Inc., 656 F.3d 511 (2011). The court determined that, since Gubala’s IFCA claims were preempted or failed to state a claim, his unjust enrichment claim also fails.

The case is No. 14 C 9039.

Attorneys: Sharon S. Almonrode (The Miller Law Firm, PC) for Derek Gubala.

Companies: CVS Pharmacy, Inc.

Cases: Advertising StateUnfairTradePractices IllinoisNews