Lesh v. D's Naturals, LLC

Background

Carol Lesh filed a proposed class action alleging that DS Naturals, LLC’s No Cow Protein Bars falsely advertised their protein content. She alleged that the bars used rice and pea proteins that were not fully digestible and that a bar advertised as containing 22 grams of protein contained approximately 13 grams in a form humans could use.

Lesh asserted claims under California’s Unfair Competition Law, Consumers Legal Remedies Act, and False Advertising Law, as well as claims for fraud, deceit or misrepresentation, and unjust enrichment. She challenged the labels in three ways: the front-label protein statement allegedly was inaccurate because it used the nitrogen method rather than a digestibility-based calculation; the nutrition facts panel allegedly omitted the corrected protein amount as a percentage of daily value; and the front-label statement allegedly was misleading because the nutrition facts panel omitted that percentage.

Court’s analysis

The court applied the standard for a motion to dismiss for failure to state a claim. It also considered whether Lesh had standing, meaning a sufficient legal connection to pursue particular claims or relief.

For the nutrition facts panel claims, the court found that Lesh alleged reliance on the front label but did not allege that she reviewed or relied on the nutrition facts panel when buying the products. The court therefore granted the motion on that basis and dismissed those claims for lack of standing, with leave to amend.

The court rejected the challenge to standing for injunctive relief. Lesh alleged that she wanted to buy the products in the future if they were properly labeled, but could not rely on the current labels. The court found those allegations sufficient at the motion-to-dismiss stage to show a possible future injury.

The court held that federal food-labeling rules expressly preempted Lesh’s front-label claims to the extent they required the protein statement to use a digestibility-based calculation rather than the nitrogen method. The court therefore granted the motion to dismiss those claims as preempted. In its conclusion, the court dismissed the front-label claims without leave to amend.

The court did not find the hybrid claims preempted. It concluded that federal regulations could require a manufacturer emphasizing protein content outside the nutrition facts panel to include information about protein quality in the panel. The court therefore denied the motion as to the hybrid claims.

The court also rejected the argument that the allegations failed the reasonable-consumer test, which asks whether a significant portion of ordinary consumers could be misled. The court found that Lesh plausibly alleged that the labels could cause consumers to believe that the advertised protein amount represented protein in a usable form and could conceal that the products contained lower-quality protein.

Disposition

The court granted in part and denied in part DS Naturals, LLC’s motion to dismiss. It dismissed the nutrition facts panel claims for lack of standing with leave to amend, dismissed the front-label claims as preempted under federal food-labeling rules without leave to amend, and denied the motion as to the hybrid claims. Lesh could file an amended complaint within 21 days. The court also set a telephonic case-management conference.