A federal court in California has dismissed on preemption and standing grounds a number of state-law claims against The Quaker Oats Co. in a lawsuit alleging that the company falsely advertises its Chewy Bars® as containing “0 grams trans fat” when the ingredient list labeling includes hydrogenated vegetable oil. Chacanaca v. The Quaker Oats Co., No. 10-0502 (U.S. Dist. Ct., N.D. Cal., San Jose Div., decided October 14, 2010). So ruling, the court lifted a discovery stay order and scheduled a case management conference for December 16, 2010.
The defendant sought judgment on the pleadings at the outset of the action, arguing that “the doctrines of express preemption, primary jurisdiction, and Article III standing warrant immediate dismissal of the entire case.” The court agreed to dismiss all state-law deception claims involving the “0 grams trans fat” statement, the “good source” of calcium and fiber statements and a statement that the product contains whole grain oats but lacks high-fructose corn syrup. According to the court, as pleaded, these claims “seek to impose a requirement in addition to what is mandated by federal statutes and regulations and therefore fail on preemption grounds.” Because the plaintiffs had not pleaded they were competitors of Quaker Oats, the court also found that they lacked standing to bring an unfair competition claim under the Lanham Act.
The court will allow the plaintiffs to pursue claims pertaining to “the term ‘wholesome,’ the ‘smart choices made easy’ declaration [appearing on a decal], and depictions of oats, nuts, and children.” The court determined that “[n]either the decal nor the children are appropriately categorized as nutrient content claims, and defendant’s contention that the [Nutrition Labeling and Education Act] preempts the charge that they are misleading is without support. The NLEA does not regulate ‘front of the box’ symbols such as the smart choices decal or the photographs.” Because the Food and Drug Administration had not “developed even an informal policy governing or defining the word ‘wholesome,’” the court also found that plaintiffs were not preempted from litigating whether this statement was misleading.
The court rejected the defendant’s contention that the decal, “wholesome” language and depictions should be left to agency consideration under the primary jurisdiction doctrine, finding that “whether or not the ‘smart choices made easy’ decal, the photographs of oats, nuts, and children in soccer uniforms, or the term ‘wholesome’ are misleading—do not entail technical questions or require agency expertise.” Also rejected were defendant’s arguments that the plaintiffs did not establish injury in fact because they had not alleged any health-related ailment from their consumption of snacks with trans fats, the product statements were non-actionable puffery, or that the plaintiffs failed to plead their claims with sufficient particularity.
Among the claims that survived the motion for judgment on the pleadings is that the “smart choices program itself is ‘deceitful,’ and is a product of an ‘industry-funded initiative created by a coalition of market giants.’” The plaintiffs allege that the decal is “‘nutritionally suspect’ and is designed to make ‘highly processed foods appear as healthful as unprocessed foods.’”