Brown v. Van's International Foods, Inc.

Background

Molly Brown filed a proposed class action against Van's International Foods, Inc., which the opinion also calls Sara Lee. Brown alleged that packaging for certain frozen waffles and pancakes advertised specific amounts of protein per serving, including a front-label statement such as “10g PLANT-BASED protein.” She claimed the statements were misleading because the products' wheat- and oat-based protein was not fully digestible and because the Nutrition Facts panel omitted a digestibility-adjusted protein figure.

Brown asserted claims under California's Unfair Competition Law, Consumers Legal Remedies Act, and false-advertising statute, as well as claims for common-law fraud, deceit, or misrepresentation and unjust enrichment. Van's moved to dismiss and separately moved to stay the case pending the Ninth Circuit's appeal in a similar food-labeling case.

Rulings on Brown's labeling theories

Brown advanced two principal theories. First, she argued that a front-label protein claim was inherently misleading when calculated without adjusting for digestibility. The court held that the Food, Drug, and Cosmetic Act and related federal regulations permit protein-content claims to be calculated using the nitrogen method, which does not adjust for digestibility. Because Brown's state-law theory would impose a labeling requirement different from federal requirements, the court held that it was expressly preempted. The claims based on this theory were dismissed without leave to amend; the court also described this result as dismissal with prejudice.

Second, Brown argued that the front-label protein claim was misleading because Van's did not include the digestibility-adjusted protein amount, expressed as a percentage of daily value, in the Nutrition Facts panel. The court found that this theory was not expressly preempted because it alleged a violation of federal labeling requirements adopted or used as a basis for California-law claims. The court also rejected Van's argument that this theory was impliedly preempted under the Supreme Court's decision in Buckman. However, the court held that Brown had not alleged that she saw or relied on the Nutrition Facts panel or that the omitted information affected her purchasing decision. The claims based on this theory—including the claims under the Unfair Competition Law, Consumers Legal Remedies Act, false-advertising statute, common-law fraud, and unjust enrichment—were dismissed with leave to amend.

During the hearing, Brown raised a third theory that the front-label protein claim violated 21 C.F.R. § 101.13(n). The court did not decide that theory in the order. Instead, it reserved consideration for later briefing and granted Brown leave to include allegations about it in an amended complaint if appropriate.

Standing and pleading rulings

The court held that Brown adequately alleged an injury for constitutional standing because she claimed she paid more for the products than she otherwise would have paid, or would not have bought them, because of the front-label protein claim. The court also held that she adequately alleged a future risk of harm sufficient to seek injunctive relief, based on her allegations that she wanted to buy the products again but could not rely on their labeling unless they were no longer misleading.

The court separately held that Brown's common-law fraud claim did not satisfy Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particular detail, including what was misleading and how the plaintiff relied on it. That claim was dismissed with leave to amend because Brown did not allege that she saw and relied on the missing digestibility-adjusted figure.

The court rejected Van's challenge to Brown's requests for restitution and unjust enrichment as equitable monetary remedies. At the pleading stage, the court held, Brown could seek those remedies in the alternative to legal damages after alleging that legal remedies were inadequate.

Motion to stay and disposition

The court denied Van's request to stay all proceedings while the Ninth Circuit considered the similar appeal. Although that appeal might affect the court's preemption analysis, the court found that Brown identified possible prejudice from delay and that Van's burden to show a clear hardship or inequity was not met. The court concluded that the possible efficiency from waiting for the appeal did not outweigh the prejudice to Brown.

The court therefore granted Van's motion to dismiss and denied its motion to stay. The claims based on the no-digestibility-adjustment theory were dismissed without leave to amend. The claims based on the omitted Nutrition Facts information were dismissed with leave to amend, and Brown was given 30 days from the order's filing to amend her complaint.