Food Law
| Jurisdiction | California,United States |
| Author | By Christopher Van Gundy and Maria Jhai |
| Citation | Vol. 2016 |
| Publication year | 2016 |
By Christopher Van Gundy and Maria Jhai
Over the past few years, food litigation in California has been surging, and 2016 was no different. The filing of food law cases continues unabated. Most cases involve allegations of consumer deception. Some claims in this area seem to have run their course, such as challenges to food products containing partially hydrogenated oils, while others appear to be burgeoning, such as slack-fill claims. Although no major food case has gone to trial, food law continues to develop into a distinct area as dispositive motions are resolved and reported by the courts. As the cases discussed in this article demonstrate, a successful food law practice requires not only substantive expertise, but also experience in class action litigation and familiarity with the food industry itself.
Gallagher v. Chipotle Mexican Grill, Inc. (N.D.Cal., Feb. 5, 2016, No. 15-cv-03952) 2016 WL 454083
Plaintiff, Colleen Gallagher ("Gallagher"), brought suit on behalf of a nationwide class against Chipotle's Mexican Grill ("Chipotle") regarding Chipotle's advertising and in-store signs stating that its food is prepared using "only non-GMO ingredients."
The district court dismissed the action without prejudice for lack of statutory standing under California's False Advertising Law (FAL), Unfair Competition Law (UCL), and Consumer Legal Remedies Act (CLRA). The court determined that Gallagher adequately pled reliance by identifying "the specific representation made by Defendant that induced her to purchase its products (i.e., that Defendant uses 'only non-GMO ingredients')."1 But the court held that she failed to adequately plead resulting economic injury, because the complaint did not specify which Chipotle products she had purchased, or plausibly plead that all Chipotle products contain GMOs. "Thus," the court concluded, "it is not clear that Plaintiff purchased any products that, by her definition, are 'made with ingredients containing GMOs.'"2 Gallagher's failure to identify the specific products purchased also defeated her standing as a class representative because there were "no allegations in the complaint that could plausibly suggest that all of Defendant's food and beverage products—i.e., both the allegedly GMO products and the concededly non-GMO products—are 'substantially similar' for purposes of class representative standing."3
The court dismissed the complaint with leave to amend, but offered "guidance" regarding other potential bases for dismissal should Gallagher file an amended complaint. The court observed that under the complaint as pled, Gallagher lacked standing to seek injunctive relief because she failed to allege facts showing a "real and immediate threat" of future injury.4 Plaintiff alleged that she would not have purchased the products had she known about the alleged misrepresentations, and she did not allege that she intends to purchase the products in the future.
The court further suggested that the complaint warranted dismissal because its allegations could support the conclusion that, as a matter of law, no reasonable consumer would likely be deceived by Chipotle's advertising. First, the court found that Gallagher had not alleged that any of the ingredients used by Chipotle fell within the complaint's definition of "GMO." The complaint defined GMO as "any organism whose genetic material has been altered using . . . genetic engineering techniques."5 However, Gallagher alleged that Chipotle sold meat and dairy products that had been fed genetically modified substances, and did not allege that the meat and dairy products themselves had been genetically modified. The court rejected as implausible Gallagher's contention that the reasonable consumer "would interpret 'non-GMO ingredients' to mean meat and dairy ingredients" from animals that had merely consumed GMO ingredients.6
Second, the court found it implausible that a reasonable consumer would be misled by Chipotle's "non-GMO" statements because, as Gallagher pled, Chipotle defined its usage of the term on its website by disclosing "that it sells soft drinks that contain GMOs and that it uses meat and dairy products derived from animals that consumed genetically modified food."7
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Finally, the court observed that Gallagher recognized in her complaint "that an entirely different term—'organic'—is used to describe meat and dairy products sourced from animals that did not consume genetically modified feed," but Gallagher did not allege that Chipotle represented its ingredients as "organic" or explain why a reasonable consumer would interpret "non-GMO" to mean the same thing as organic.8
Balser v. The Hain Celestial Grp., Inc. (9th Cir., Feb. 22, 2016, No. 14-55074) 640 Fed.Appx.694
Plaintiffs, Alessandra Balser and Ruth Kresha, filed a putative class action against The Hain Celestial Group Inc. ("Hain"), for its use of the terms "natural" and "100% vegetarian" on 30 products in its Alba Botanicals line. Central District of California Judge Manuel Real dismissed the complaint with prejudice, finding that plaintiffs did not satisfy Federal Rule of Civil Procedure 9(b)'s pleading requirements with respect to deception, reliance, or injury. The Ninth Circuit reversed.
In granting the motion to dismiss, Judge Real first found that the plaintiffs' proposed definition of "natural" to mean "existing in or produced by nature; not artificial" was "implausible" as applied to the Alba Botanicals line because "shampoos and lotions do not exist in nature, there are no shampoo trees, cosmetics are manufactured."9 The district court similarly rejected the plaintiffs' contention that "100% vegetarian" means "from vegetable matter" rather than "the more common understanding" used by defendants: "without animal products."10 The court further found that the defendant "actively defines what its use of natural means so that no reasonable consumer could be deceived" by stating on its website that "100% natural.. .means we don't use parabens, sulfates or phthal-ates."11 Finding that amendment would be futile, Judge Real dismissed the complaint with prejudice.
The Ninth Circuit reversed in a short unpublished decision. The court first determined that the pleadings were sufficiently particular to satisfy rule 9(b). Plaintiffs' allegations regarding the terms "natural" and "100% vegetarian" were "sufficient [to] plausibly allege a reasonable consumer's understanding of the term 'natural' as used on Hain's packaging."12 Assuming without deciding that rule 9(b) requires specific allegations of reliance, the court held that plaintiffs had plausibly alleged reliance by claiming that they (a) viewed the "natural" claim on Hain's products, and (b) would not have paid a premium for the products but for that claim. The court also found sufficient allegations of harm. "Allegations that one paid more than one otherwise would have because of a misrepresentation sufficiently allege economic injury."13
Second, the court rejected the district court's determination that no reasonable consumer could be misled by the statements that the products were "natural" and "100% vegetarian," holding that the statements "could be taken as a claim that no synthetic chemicals were in the products."14 The court rejected the district court's determination that statements on Hain's website rendered it implausible that a reasonable consumer could be misled. In so holding, the court applied and extended its holding in Williams v. Gerber Prods. Co. (9th Cir. 2008) 552 F.3d 934, 939-40 that disclosures in an ingredient list do not correct, as a matter of law, misrepresentations on a product's label. Applying Williams here, the court held product information disclosed "on a website also cannot override as a matter of law any misimpressions created by the label."15
Finally, the court reversed the decision of the district court that effectively denied plaintiffs' motion for precertification discovery. "[I]n light of recent case law regarding the need to establish a sufficient factual record at the class certification stage," the district court's failure to consider the request for precertifi-cation discovery before considering the certification motion was an abuse of discretion.16
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Hawkins v. The Kroger Co. (S.D.Cal., Mar. 17, 2016, No. 15-cv-2320) ECF No. 19
Plaintiff, Shavonda Hawkins ("Hawkins"), filed a putative class action against The Kroger Company ("Kroger") on behalf of purchasers of Kroger Bread Crumbs that allegedly contain partially hydrogenated oils ("PHOs"). Hawkins alleged that Kroger violated nine California state laws, including California's Unfair Competition Law, claiming that Kroger adds PHOs to its breadcrumbs and PHOs are linked to cardiovascular disease, diabetes, cancer, Alzheimer's disease and accelerated memory damage and cognitive decline, and that Kroger misleadingly and unlawfully advertises Kroger Bread Crumbs as containing "0g Trans Fat" on the front of the label when the products do contain trans fat.
The district court held that Hawkins' claims failed "for two different reasons." First, citing Carrea v. Dreyer's Grand Ice Cream, Inc. (9th Cir. 2012) 475 Fed.Appx. 113, the court found that Hawkins' "0g Trans Fat" claims were preempted. Noting that Hawkins did not dispute that Kroger Bread Crumbs contain less than .5g trans fat, the court found that the "0g Trans Fat" statement on the label complied with federal law mandating that "'[i]f the serving contains less than 0.5 gram[s], the content, when declared, shall be expressed as zero,' 21 C.F.R. §101.9(c)(2) (ii)."17 Hawkins' state-law claim was therefore preempted. In so holding, the court rejected Hawkins' invitation to...
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