LeGrand v. Abbott Laboratories

Background

Condalisa LeGrand, a California resident, and Larissa Bates, a New York resident, sued Abbott Laboratories over the labeling and advertising of Ensure nutrition drinks. They alleged that Abbott marketed the products as balanced, nutritious, and healthy while adding as much as 22 grams of sugar per serving. The plaintiffs sought to represent a nationwide class and California and New York subclasses.

The complaint asserted claims under California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act; California express- and implied-warranty law; New York false-advertising and unfair-business-practices statutes; unjust enrichment; negligent misrepresentation; and intentional misrepresentation. Abbott moved to dismiss under Federal Rules of Civil Procedure 12(b)(2), for lack of personal jurisdiction, and 12(b)(6), for failure to state legally sufficient claims.

Personal jurisdiction over Bates’s claims

The court held that Bates had not shown personal jurisdiction over Abbott for her claims. The case was based on diversity jurisdiction under the Class Action Fairness Act, and Bates did not argue that her claims arose from or related to Abbott’s California activities. Relying on the connection required between a claim and the forum state, the court concluded that Abbott’s California contacts did not establish specific jurisdiction over Bates’s New York claims.

The court also declined to exercise pendent personal jurisdiction, which can sometimes allow a court to hear a claim lacking an independent jurisdictional basis when it shares operative facts with another claim. The court noted that courts generally do not exercise that form of jurisdiction in diversity cases. It therefore granted Abbott’s motion to dismiss Bates’s claims under Rule 12(b)(2). The court granted leave to amend if Bates had claims based on federal questions.

California false-advertising and consumer-protection claims

The court denied dismissal of LeGrand’s California false-advertising claims under the Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act, except to the extent described below. It found that LeGrand had statutory standing to challenge products she did not purchase because the products were sufficiently similar, shared prominent nutrition-related statements, and allegedly contained added sugar that formed the basis of the alleged deception.

The court held that federal food-labeling law preempted claims based on certain implied nutrient-content statements. These included “Complete, Balanced Meal Replacement” and specified health-related statements on Ensure Complete Nutrition Shake; “our most advanced nutritional product,” “All-in-One blend to support your health,” and related “All in One” statements on Ensure Enlive Advanced Nutrition Shake; and “Complete, Balanced Nutrition” on Ensure Compact Therapeutic Nutrition Shake. LeGrand could not rely on those statements to argue that the products were misleading because they suggested the products were healthy despite their added sugar.

The court found that other statements—including “nutrition shake,” “Complete, Balanced Nutrition for everyday health,” and “#1 Doctor Recommended”—could plausibly mislead a reasonable consumer when viewed in the context of the packaging and the alleged health effects of the products’ added sugar. The Nutrition Facts Panel’s disclosure of sugar content did not necessarily eliminate the alleged deception. The court also declined to treat the challenged health and nutrition statements as mere puffery at the motion-to-dismiss stage, and found that some literally true statements could still contribute to a misleading overall impression.

The court separately found that “Discover More at Ensure.Com” did not appear to contribute to the alleged misleading health-and-nutrition message. It also held that LeGrand adequately pleaded the details required for fraud-based claims, including who made the alleged misrepresentations, what the statements were, where and when they were made, and how they were misleading. The court found that the complaint plausibly alleged Abbott’s intent to induce reliance.

Warranty and other California claims

The court denied dismissal of LeGrand’s California express-warranty claim. It concluded that statements on a product label can constitute affirmations of fact or promises and that the allegations supporting the consumer-protection claims also sufficiently alleged a breach of express warranty.

The court also found the California implied-warranty claim sufficiently pleaded. It held that a plaintiff need not allege that a food product is unfit for consumption when the theory is that the product does not conform to promises or affirmations on its label. Because the express-warranty allegations were sufficient, and Abbott did not present another basis for dismissal, the court allowed the implied-warranty claim to proceed.

The court allowed LeGrand’s California unjust-enrichment claim to proceed, treating unjust enrichment as permissible either as an independent claim or as a claim for restitution. The court found sufficient the allegation that Abbott received and unjustly retained a benefit at LeGrand’s expense through the same alleged misrepresentations underlying the other claims.

Disposition

The court granted in part and denied in part Abbott’s motion to dismiss. It granted dismissal of the New York statutory, unjust-enrichment, negligent-misrepresentation, and intentional-misrepresentation claims. It granted in part dismissal of the California UCL, FAL, CLRA, express-warranty, implied-warranty, unjust-enrichment, negligent-misrepresentation, and intentional-misrepresentation claims to the extent they relied on the identified preempted nutrient-content statements or “Discover More at Ensure.Com.” It otherwise denied dismissal of those California claims and granted the plaintiffs leave to amend.