Brown v. NATURES PATH FOODS, INC.

Background

Molly Brown, Parsa Miller, and Lauren Morgan, described in the opinion as California consumers, filed a proposed class action against Nature’s Path Foods, Inc. They alleged that they were deceived into buying Nature’s Path breakfast and snack products because of statements on the products’ packaging about protein content.

The complaint asserted five California state-law causes of action: violations of the Consumers Legal Remedies Act, false advertising, common-law fraud, deceit and/or misrepresentation, unlawful, unfair, and fraudulent trade practices under California’s Unfair Competition Law, and unjust enrichment.

The plaintiffs challenged three labeling practices. First, their front-label claim alleged that the products advertised specific amounts of protein per serving even though amino-acid testing showed lower amounts, and that the products used lower-quality proteins that provided less digestible or usable protein. Second, their side-label claim alleged that the nutrition facts panels omitted the percent-daily-value protein figure required by Food and Drug Administration regulations. Third, their added-ingredient-disclaimer claim alleged that the products did not prominently display the type and quantity of ingredients users needed to add, or the required preparation method.

Nature’s Path’s Arguments

Nature’s Path moved to dismiss under Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 9(b). It argued that the plaintiffs lacked standing to bring the side-label claim and to seek injunctive relief, that federal food-labeling requirements preempted the state-law claims, and that the complaint did not plausibly or sufficiently specifically allege the claims.

Standing

The court dismissed the side-label claims because the complaint alleged that the plaintiffs relied on the protein statements on the front of the packages, but did not allege facts supporting an inference that they relied on the absence of the percent-daily-value figure in the nutrition facts panels. The court stated that the side-label theory was not necessarily factually impossible, but the plaintiffs had not plausibly alleged that they themselves were deceived by the omission. The dismissal was with leave to amend.

The court rejected Nature’s Path’s challenge to standing for injunctive relief. The complaint alleged that the plaintiffs continued to want to buy Nature’s Path products, would likely buy them again if they could rely on the products’ protein representations, and regularly visited stores selling those products. The court found that these allegations plausibly showed a future threat of harm because the plaintiffs would be unable to rely on the products’ labels and therefore would not purchase the products although they wanted to do so. The court denied the motion to dismiss the claims for injunctive relief.

Federal Preemption

The court held that only the front-label claims were potentially expressly preempted by the federal Food, Drug, and Cosmetic Act. The plaintiffs’ front-label theory sought to challenge the protein amounts because they were not adjusted for digestibility and were not supported by amino-acid content testing.

The court explained that federal regulations permit protein content to be calculated using the nitrogen method and do not require front-label protein claims to use digestibility adjustments or amino-acid testing. Because the plaintiffs’ state-law theory would impose requirements that the federal regulations do not impose, the court held that the front-label claims were preempted. It granted the motion as to those claims and dismissed them without leave to amend because the defect was in the legal theory rather than the factual allegations.

Pleading Sufficiency

The court denied dismissal of the added-ingredient-disclaimer claim under Rule 8. The complaint alleged that the required disclaimers appeared in very small, barely legible type. Because the applicable regulation concerned how prominently the disclaimers were displayed, and prominence was a factual question, the court found the claim adequately pleaded at that stage.

The court also denied dismissal of that claim under Rule 9(b), which requires fraud-based allegations to identify the circumstances of the alleged misconduct with particularity. The court found that the complaint identified who allegedly made the misrepresentation, what was misrepresented, when and where consumers encountered the labels, and how the labels allegedly misled consumers. The court also held that the complaint sufficiently alleged Nature’s Path’s knowledge and intent because Rule 9(b) permits those mental states to be alleged generally.

Disposition

The court granted in part and denied in part Nature’s Path’s motion to dismiss. It dismissed the front-label claims without leave to amend and the side-label claim with leave to amend. The plaintiffs could file an amended complaint within 21 days. The added-ingredient-disclaimer claim remained pending, and the court also denied the motion to dismiss the claims for injunctive relief.