Miller v. Nature's Path Foods, Inc.

Background

Ian Miller brought a proposed class action against Nature’s Path Foods, Inc. He alleged that he bought several of the company’s cereals from retail stores in California after reading front-label statements that the cereals contained “5 grams of protein per serving.” Miller claimed that the statements were misleading because they did not disclose how much of that protein was nutritionally usable by the human body.

The opinion explains that protein quality depends on factors including essential amino acids and digestibility. Federal regulations use the Protein Digestibility Corrected Amino Acid Score, or PDCAAS, to calculate a quality-adjusted amount of protein. According to the complaint, when a manufacturer makes a protein claim outside the Nutrition Facts Panel, federal regulations require the package to state the corrected amount of protein as a percentage of the Daily Value. Miller alleged that Nature’s Path did not provide that information.

Miller asserted claims under California food-labeling and consumer-protection law, including the Sherman Food, Drug & Cosmetic Law, common-law fraud, deceit or misrepresentation, the California Unfair Competition Law, and unjust enrichment. Nature’s Path moved to dismiss the complaint and moved to strike the proposed nationwide class allegations.

Personal Jurisdiction

Nature’s Path argued that the court lacked personal jurisdiction over claims brought by unnamed class members who bought products outside California. The court rejected the company’s argument that registering an agent to receive service of process in California subjected it to general jurisdiction there. California does not require corporations to consent to general jurisdiction merely by designating an agent for service or registering to do business.

The court did not dismiss the out-of-state class members’ claims, however, because the challenge was premature. Under Ninth Circuit precedent, putative class members are treated as nonparties before class certification and become parties subject to dismissal only after certification. The court therefore denied the request to strike the nationwide class for lack of personal jurisdiction at this stage.

Standing

Nature’s Path argued that Miller had not alleged a concrete injury. The court disagreed, finding that his allegation that he spent money he otherwise would not have spent was a sufficient economic injury for constitutional standing.

The court also rejected the argument that Miller could not seek an injunction because he now knew about the alleged labeling problem. The court found that he plausibly alleged a continuing desire to buy the products in the future and that knowledge that a label was previously misleading does not necessarily eliminate the possibility of future harm.

The court declined to decide at the pleading stage whether Miller could represent people who bought different products. It treated that issue as concerning class-certification requirements such as typicality, adequacy, and commonality rather than standing.

Federal Preemption

Nature’s Path argued that the Food, Drug, and Cosmetic Act and its regulations preempted Miller’s state-law claims. The court disagreed. Miller was not alleging that the companies’ use of the nitrogen method to calculate total protein was independently misleading. Instead, he alleged that the labels were misleading because they omitted the quality-adjusted percentage required when the labels made the protein claims.

The court held that this theory was not expressly preempted because it sought requirements identical to those already imposed by federal regulations. It also held that the claims were not impliedly preempted under the rule against private enforcement of the federal statute. Miller sued under California’s Sherman Law, which independently adopts labeling requirements matching the federal requirements; his claims therefore did not depend solely on the federal statute.

Consumer-Protection Claims

For claims under California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act, the relevant question at this stage was whether a reasonable consumer could plausibly be misled. Nature’s Path argued that consumers would understand the cereal’s “5 grams of protein per serving” statement to refer only to total protein and would know that plant-based proteins might not all be usable by the body.

The court found Miller’s theory plausible. It reasoned that when a manufacturer emphasizes a product’s protein content, the statement may suggest that the product is a good source of protein. The court concluded that it was not clear from the pleadings that consumers would understand the difference between total protein and quality-adjusted protein, or that the cereal’s ingredient description would provide that understanding.

The court also found that Miller adequately alleged reliance. He claimed that he read and relied on the front-label protein statements, believed the stated protein would be usable by the human body, and would not have bought the products—or would have paid less—if the required percentage information had been disclosed.

Equitable and Unjust-Enrichment Claims

Nature’s Path argued that Miller’s equitable claims should be dismissed because he had not shown that legal remedies were inadequate. The court declined to dismiss those claims, explaining that at the pleading stage a plaintiff may allege that legal remedies are inadequate or plead equitable claims in the alternative on that basis. The court found that Miller had done so.

Nature’s Path also argued that unjust enrichment is not an independent cause of action under California law. The court acknowledged uncertainty in California case law but held that the Ninth Circuit has recognized unjust-enrichment claims through quasi-contract theories. It therefore rejected dismissal on the ground that an unjust-enrichment claim is categorically unavailable.

Motion to Strike Nationwide Class Allegations

Nature’s Path separately asked the court to strike Miller’s nationwide class allegations because Miller allegedly lacked standing under the laws of states where he had not lived or suffered an injury, and because California law might not apply nationwide.

The court declined to decide those issues on the pleadings. It held that nationwide class-standing questions should generally be addressed through the class-certification process after discovery. It also found that the choice-of-law analysis required to determine whether California law could apply to nationwide claims was too fact-dependent for this early stage.

Disposition

Judge Jon S. Tigar denied Nature’s Path’s motion to dismiss and denied its motion to strike. The opinion does not certify a class or decide the ultimate liability of Nature’s Path.