Ryan v. The Good Fat Co. Ltd.

Background

Paul Ryan and other plaintiffs challenged the labeling and advertising of The Good Fat Co. Ltd.’s Love Good Fats bars. They alleged that the phrase “Love Good Fats” and the absence of a fat-content disclosure violated the federal Food, Drug, and Cosmetic Act and its implementing regulations. They also brought claims under California’s Unfair Competition Law and False Advertising Law.

“Love Good Fats” claims

The court held that “Love Good Fats” was not a nutrient-content claim. A nutrient-content claim expressly or implicitly characterizes the level of a nutrient. The phrase suggested something about the quality of the bars’ fats, but it did not state or imply that fat was present or absent in a particular amount. The phrase also was not paired with an explicit statement about a nutrient in the way required for an implied nutrient-content claim.

Because the phrase was not a nutrient-content claim, the regulatory limits on using “healthy” and related terms did not apply. The court also stated that “good” was not a related term under the regulation. The claims based on “Love Good Fats” were dismissed without leave to amend because the problem was legal, not factual. The court did not decide whether the phrase could otherwise support a claim under California law.

Fat-disclosure claim

The parties agreed that the bars exceeded the regulatory thresholds for fat and saturated fat and that the labels did not include the statement “See nutrition information for fat content.” They disagreed about when that disclosure is required.

The court rejected Good Fat’s position that a disclosure is required only when the label makes a nutrient-content claim about the same nutrient. The court held that the regulation requires a disclosure when a product makes any nutrient-content claim, provided the product exceeds the applicable threshold. The plaintiffs alleged that the bars exceeded the fat and saturated-fat thresholds while making nutrient-content claims about protein, carbohydrates, and sugar. The court therefore held that they stated a claim under the “unlawful” prong of California’s Unfair Competition Law.

False-advertising claims

The plaintiffs alleged that Good Fat’s advertising called the bars healthy even though their high saturated-fat content made them unhealthy. The court rejected Good Fat’s argument that this was merely an improper claim that the advertising lacked substantiation. Because the plaintiffs affirmatively alleged why the bars were unhealthy and cited scientific authorities concerning saturated fat, cholesterol, and cardiovascular disease, the false-advertising claims could proceed.

Standing and class-related challenges

The court denied Good Fat’s other challenges. It held that the named plaintiffs had standing to pursue a class action covering all eight flavors because the flavors were sufficiently similar. The court found that challenges to proposed multi-state and nationwide classes were premature. It also held that the plaintiffs had standing to seek injunctive relief.

Disposition and next steps

The motion to dismiss was granted in part and denied in part. An answer was due within 14 days of the order. The court also set a case-management statement deadline of April 28 and reset the case-management conference for May 5 at 10 a.m. by videoconference.