A federal court in California recently granted in part and denied in part the Hershey Co.’s motion to dismiss putative class claims alleging that the chocolate maker violates consumer fraud laws by making unlawful nutrient content, “healthy” and antioxidant claims on product labels; failing to comply with chocolate product standards of identity or to use common names for ingredients; making unlawful sugar-free claims; and using improper serving sizes. Khasin v. The Hershey Co., No. 5:12-CV-01862 EJD (U.S. Dist. Ct., N.D. Cal., San Jose Div., order entered November 9, 2012).
Because the plaintiff’s claims were based on parallel state laws that “mirror” relevant sections of the Food, Drug, and Cosmetic Act (FDCA) and the Nutrition Labeling and Education Act, the court determined that they were not preempted. In this regard, the court noted, “complying with the demand requested by Plaintiff in this cause of action would not require that Defendant undertake food labeling or representation different from the provisions of the FDCA or the rules and regulations promulgated by the [Food and Drug Administration].” The court also determined that the named plaintiff has Article III standing because he alleges that “he would not have purchased the products but for Defendants’ allegedly misleading conduct [and] did not receive the full value for his purchases because he did not obtain the products as advertised and described by the labeling.” The court also determined that the plaintiff adequately pleaded fraud or misrepresentation.
Agreeing with the defendant, the court dismissed breach of warranty claims brought under the California Song-Beverly Consumer Warranty Act, because the products at issue “fall under the definition of the exempted ‘consumables.’” The court also dismissed breach of warranty claims filed under the federal Magnuson-Moss Warranty Act because it “cannot hear such claims brought as part of a class action if ‘the number of named plaintiffs is less than one hundred.’” The court rejected the defendants’ contention that the plaintiff’s unjust enrichment claim was not cognizable under California law.