Norman v. Gerber Products Company

Background

Faith Norman alleged that she purchased Gerber Good Start Soy 2 Powder Infant & Toddler Formula in 2021 and relied on Gerber’s “Non GMO” labeling. She challenged the labeling of that and other products, which displayed an image stating “NOT MADE WITH GENETICALLY [ENGINEERED]” and, on at least some products, the statement “NON GMO Not Made With Genetically Engineered Ingredients.” Norman alleged that the products contained ingredients derived from genetically modified crops or food sources, ingredients produced through biotechnology, or ingredients from animals raised on genetically modified feed.

Norman asserted nine causes of action: violations of California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act; breach of express warranty; breach of the implied warranty of merchantability; unjust enrichment or restitution; negligent misrepresentation; fraud; and fraudulent misrepresentation. Gerber moved to dismiss the First Amended Complaint under Federal Rule of Civil Procedure 12(b)(1), which concerns subject-matter jurisdiction and standing, and Rule 12(b)(6), which concerns whether the complaint states a legally sufficient claim. The court also applied Rule 9(b), which requires fraud-based allegations to describe the alleged misconduct with particularity.

Standing and equitable relief

The court granted the motion to dismiss Norman’s claim for equitable restitution because she did not allege specific facts showing that money damages were inadequate or incomplete. Her allegation that she “may” lack an adequate legal remedy if damages were less than restitution was conditional and insufficient. The court granted leave to amend because she might be able to plead the required facts. The court noted that Norman’s unjust-enrichment claim also sought equitable restitution and treated that request the same way.

The court denied the motion as to prospective injunctive relief. Norman alleged that she wanted to continue buying Gerber’s products but was deterred because she could not determine whether their labeling was truthful. The court found that monetary damages would not necessarily remedy that alleged future harm.

The court also denied Gerber’s argument that Norman lacked standing to challenge products she did not purchase. Norman alleged that the products were substantially similar because Gerber manufactured them at its factories in Cincinnati, Ohio; they carried the same Non GMO Claim; and the alleged misleading effect was the same. The court held that alleged differences among the products could be addressed at class certification or summary judgment, but did not defeat standing at the pleading stage.

Failure to state a claim

The court denied Gerber’s Rule 9(b) argument. Norman identified the challenged representations, the products and packaging, the retail stores where she purchased the product, and the reasons she alleged the representations were false. The court concluded that these allegations supplied the required who, what, when, where, and how of the alleged misconduct.

The court divided the challenged ingredients into three categories: ingredients allegedly derived from genetically modified crops or food sources; ingredients allegedly genetically engineered in a laboratory through biotechnology; and ingredients allegedly sourced from animals raised on genetically modified feed. The court granted the motion to dismiss claims based on Category 2 ingredients because Norman defined genetic modification as involving a transfer of genes but did not allege that those ingredients underwent that process. The court granted Norman leave to amend those claims.

The court denied the motion to dismiss claims based on Category 3 ingredients. Norman’s theory was not that animals became genetically modified by eating genetically modified feed or that their byproducts became genetically modified. Instead, she alleged that reasonable consumers would understand “non-GMO” to exclude animal products from animals whose diets included genetically modified or engineered feed. The court found that theory adequately pleaded at this stage.

The court also denied Gerber’s argument that no reasonable consumer could be deceived. Norman alleged that reasonable consumers could understand the Non GMO Claim to mean that the products contained no genetically modified ingredients, were not sourced from genetically modified organisms, and did not contain animal products from animals fed genetically modified feed. She also alleged that Gerber’s image had similarities to the Non-GMO Project’s seal and that the rear-label statement and ingredient lists did not clearly dispel the alleged confusion. The court concluded that the alleged deception presented a factual question and was plausibly pleaded.

Because the court found that Norman plausibly alleged deception, it denied the motion to dismiss her California Unfair Competition Law claim under the statute’s fraudulent-practice theory. It also denied the motion to dismiss her breach-of-warranty claim, which Gerber challenged on the ground that the Non GMO Claim was not false or misleading.

Disposition

Judge Jeffrey White granted, in part, and denied, in part, Gerber’s motion to dismiss, with leave to amend. Norman could file an amended complaint by January 27, 2023. Gerber was required to answer or otherwise respond by February 17, 2023, and the court set an initial case-management conference for March 17, 2023.