A federal court in New York has denied in part and granted in part the motion to dismiss filed by the defendants to consumer-fraud litigation claiming that their Smart Balance® Fat-Free milk products with added Omega-3s are misbranded because they contain 1 gram of fat from the Omega-3 oil blend ingredient. Koenig v. Boulder Brands, Inc., No. 13-1186 (U.S. Dist. Ct., S.D.N.Y., order entered January 31, 2014). The court determined that the state law- based claims were not preempted by federal food labeling laws, whether the claims involve the application of milk regulations as argued by the plaintiffs or combination product requirements as argued by the defendants.

Among other things, the court refused to find the defendants’“combination products” preemption theory tenable because (i) it was based on FDA compli- ance policy guides, “which constitute advisory opinions”; (ii) the defendants failed to cite any FDA policy or regulations directly addressing the milk products at issue or any guidance involving fat-free claims for a “combination product”; (iii) the guidance that the defendants cited—bottled water, peas and carrots, and jellies—have no bearing on Smart Balance; and (iv) reliance on the Filled Milk Act of 1923, which established the standard of identity for milk, is unconvincing given that it may no longer be good law and it focused on issues unrelated to the claims in this case.

The court also found most of the claims sufficiently pleaded. It ruled, however that breach of express warranty was not sufficiently pleaded because the plaintiffs must establish privity, but failed to specify where or from whom they purchased the defendants’ products. The plaintiffs will be allowed to amend this claim. Dismissed as duplicative of the other causes of action was the plaintiffs’ claim for unjust enrichment, and the court shortened the time of the putative class period under relevant statutes of limitation. The court ordered the parties to appear for a February 20, 2014, status conference.