Paschoal v. Plum, PBC

Background

Plaintiffs Rafael Paschoal, Lisa Chong, and Adina Ringler alleged that they bought Plum Organics baby-food pouches in California after being misled by statements on the packaging. They alleged that the products were intended for children under two and that statements such as “3g Protein,” “4g Fiber,” “200mg Omega-3 ALA from Chia,” “Good Source of Vit. C,” and “Nutrient-Dense Blend” were unlawful nutrient-content claims. Their claims arose under California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law, as well as common-law fraud, deceit or misrepresentation, and unjust enrichment.

The complaint alleged that Campbell Soup Company acquired the Plum Organics brand in 2013 and that Sun-Maid Growers of California acquired it in 2021. Plaintiffs alleged that the challenged statements caused them to pay a premium for the products or buy products they otherwise would not have purchased.

Rule 12(b)(6) Standard

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. Claims involving fraud also must satisfy Rule 9(b), which requires specific details about the alleged misconduct, including who made the statements, what was said, when and where it was said, and why it was false or misleading.

Proper Defendants

Campbell and Sun-Maid argued that they were not proper defendants because the complaint did not explain their involvement beyond alleging that they were parent companies or had acquired the Plum Organics brand. The court held that the complaint did not specify either company’s role in producing or marketing the products. The court also refused to consider new allegations raised in opposition to the motions because those allegations were not in the complaint.

The court granted Campbell’s motion on this ground and dismissed all claims against Campbell with leave to amend. It also granted Sun-Maid and Plum’s motion on this ground and dismissed all claims against Sun-Maid with leave to amend. The court did not dismiss claims against Plum on this ground.

Standing

Plum argued that the plaintiffs lacked standing, meaning they had not alleged the concrete injury required to pursue the case. For damages, Plum argued that the plaintiffs did not dispute that some statements—such as “3g Protein” and “4g Fiber”—were truthful. For an injunction, Plum argued that the plaintiffs had not shown a sufficient likelihood of future harm.

The court rejected both arguments. It held that the allegations that plaintiffs paid a premium or would not have bought the products because of the challenged representations plausibly alleged economic injury. It also held that the plaintiffs adequately alleged a future injury because they continued to want baby and toddler food and would likely buy the products again if the allegedly unlawful and misleading labels were removed. The court therefore denied Plum’s motion to dismiss to the extent it was based on lack of standing.

Primary Jurisdiction

Plum asked the court to dismiss or stay the case under the primary jurisdiction doctrine, which can allow an administrative agency to address an issue within the agency’s special expertise before the court proceeds. The court declined to apply the doctrine because courts are equipped to decide whether food labeling is misleading and the allegations did not present technical or scientific issues requiring the Food and Drug Administration’s expertise. The court denied the motion on this ground.

Nutrient-Content Claims

Plum argued that the challenged statements were not nutrient-content claims or, alternatively, that they were permitted under the food-labeling regulations. The court held that statements such as “3g Protein” and “4g Fiber” were express nutrient-content claims because they directly stated the amount of a nutrient. It also held that statements such as “Nutrient-Dense Blend” and the statement about exposure to key nutrients could be implied nutrient-content claims because they suggested that the product’s nutrient content might help maintain healthy dietary practices.

The court further held that plaintiffs plausibly alleged that the claims were not permitted on products intended for children under two. Although a regulation allows some statements about the amount or percentage of a nutrient when they do not characterize the nutrient level and are not misleading, the court concluded that this provision did not create an exception to the separate rule restricting nutrient-content claims on food intended for infants and children under two. The court therefore denied Plum’s motion to dismiss for failure to state a claim.

Disposition

The court granted Campbell Soup Company’s motion to dismiss with leave to amend. It granted in part and denied in part Sun-Maid Growers of California and Plum, PBC’s motion to dismiss. Sun-Maid was dismissed with leave to amend. The court denied the requests to dismiss based on lack of standing, primary jurisdiction, and failure to state a claim. Any amended complaint was due within 28 days of the order. The court also set a telephonic case-management conference and directed the parties to submit a joint case-management statement.