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Gustavson v. Mars, Inc.

United States District Court, N.D. California, San Jose Division

June 10, 2014

PHYLLIS GUSTAVSON, individually and on behalf of all others similarly situated Plaintiff,
v.
MARS, INC. and MARS CHOCOLATE NORTH AMERICA, LLC, Defendants.

ORDER DENYING DEFENDANTS' MOTION TO DISMISS

LUCY H. KOH, District Judge.

Plaintiff Phyllis Gustavson ("Plaintiff" or "Gustavson") brings this putative class action against Defendants Mars, Inc. and Mars Chocolate North America, LLC (collectively, "Defendants" or "Mars"), alleging that Defendants' package labeling is "misbranded" because it is unlawful and misleading under federal and state law. Defendants move to dismiss Plaintiff's Complaint. ("Mot.") ECF No. 18. Plaintiff opposes, ("Opp'n") ECF No. 22, and Defendants replied, ("Reply") ECF No. 28.

Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument and hereby VACATES the Hearing scheduled for June 19, 2014. ECF No. 29. Having considered the submissions of the parties and the relevant law, the Court DENIES Defendants' motion to dismiss.

I. BACKGROUND

A. Factual Allegations

Mars Chocolate North America, LLC is one of the nation's leading producers of chocolate candy and other types of confectionary. ("Compl.") ECF No. 1 ¶ 13. Mars, Inc. is the parent company of Mars Chocolate North America, LLC. Id. Defendants sell their products to consumers through grocery and other retail stores throughout California and promote their products throughout California through their websites. Id. ¶ 25.

Plaintiff is a resident of California who "cares about the nutritional content of food and seeks to maintain a healthy diet." Id. ¶¶ 22, 191. Gustavson purchased more than $25.00 worth of Defendants' products between April 13, 2008 and the present. Id. ¶¶ 1, 22. Specifically, Plaintiff contends that she purchased the following food products: (1) M&M Chocolate Candy, 1.69 oz., (2) Twix Cookie Bar, 1.79 oz., (3) Dove Bar-Dark Chocolate, 3.3 oz., (4) Dove Bar-Milk Chocolate, 3.3 oz., and (5) Snickers Bar, 11.8 oz. Id. ¶ 2. Plaintiff contends that these products are "misbranded" in violation of federal and California law, and are deceptively packaged and labeled. Id. ¶¶ 6-7.

Plaintiff alleges that she read and relied on the claims on the labels of the products in making her purchasing decisions. Id. ¶ 143. Plaintiff further alleges that she relied on Defendants' package labeling, "based and justified the decision to purchase Defendants' products in substantial part on Defendants' package labeling, " and "would have foregone purchasing Defendants' products and bought other products readily available at a lower price." Id. ¶ 195. Plaintiff claims that she "did not know, and had no reason to know, that Defendants' products were misbranded" and states that she would not have purchased the products "had she known the truth about them." Id. ¶ 196.

The Complaint alleges that Defendants' mislead consumers: (1) by making unlawful and misleading "nutrient content claims" regarding flavanols, id. ¶¶ 57-71; (2) by making unlawful and misleading calorie claims, id. ¶¶ 72-124; and (3) by failing to identify the ingredient "polyglycerol polyricinoleic acid" ("PGPR") by its common name, id. ¶¶ 125-142. Defendants do not seek to dismiss Plaintiff's claim related to PGPR, see Mot. at 1 n.1, and thus the Court will not discuss this claim further for purposes of the instant Motion to Dismiss.

1. "Flavanol Claims"

Plaintiff alleges that Defendants' packaging for the 3.3 ounce dark chocolate Dove Bar includes statements that the chocolate bar is a "natural source of cocoa flavanols" and that the Defendants' COCOAPRO process "helps retain much of the naturally occurring cocoa flavanols" in cocoa beans. Id. ¶¶ 57, 60, 65. Plaintiff alleges that these statements are "nutrient content claims" that are subject to federal regulation under 21 U.S.C. § 343(r). Id. ¶ 59 (citing 21 C.F.R. §§ 101.13, 101.54 (identifying the requirements for making lawful nutrient content claims)).

According to Plaintiff, Defendants' flavanol statements are unlawful because under federal regulations, a nutrient content claim may only use particular terms defined in FDA regulations and the term "source" is not among these defined terms unless preceded by the modifier "good". Id. ¶ 63. Additionally, Plaintiff alleges that to the extent the term "source" is an acceptable synonym for an FDA-defined term, Defendants' statements are unlawful because a nutrient content claim may be made only where the food product contains some fixed percentage of the established daily value for the nutrient in question. Id. ¶¶ 58-60. Defendants' Dove chocolate bar cannot possibly contain adequate flavanols to meet these requirements, Plaintiff alleges, because the FDA has not established a recommended daily value for flavanols. Id. ¶¶ 65-66.

2. "Calorie Claims"

Plaintiff further alleges that all five of the Mars chocolate products she purchased make unlawful and misleading "calorie related nutrient content" claims on their labels. Id. ¶ 72. Plaintiff notes that the front labels on the products she purchased all make a claim about the number of calories contained in the product, as well as the percentage of one's "daily value" of calories the product supplies. See Def. Request for Judicial Notice ("Def. RJN"), ECF No. 19-4, Exs. A-E. The Complaint alleges that these calorie statements are unlawful and misleading nutrient content claims, because the statements are not accompanied by an FDA-mandated disclosure directing consumers to consult the full nutrition information panel (located on the back of the package) for further information regarding the levels of fat and saturated fat contained in the products. Compl. ¶¶ 74, 83-90. Plaintiff claims that Defendants' calorie statements are deceptive for the additional reason that the statements refer to a "daily value" for calories, when, in fact, the FDA has not established a daily value for calories. Id. ¶ 119. Finally, Plaintiff alleges that even if a daily value for calories did exist, Defendants' percentage statements would still be misleading because recent U.S. Dietary Guidelines recommend that individuals strictly limit the amount of calories they consume in the form of sugar and fat, both of which are present at high levels in Defendants' products. Id. ¶¶ 120-124.

Plaintiff alleges that by manufacturing, advertising, distributing, and selling misbranded products, Defendants have violated California Health & Safety Code Sections 109885, 110390, 110395, 110398, 110660, 110665, 110670, 110705, 110760, 110765, and 110770. See id. ¶¶ 173-183. In addition, Plaintiff asserts that Defendants have violated the standards set by 21 C.F.R. §§ 101.2, 101.3, 101.4, 101.9, 101.12, 101.13, 101.18, 101.22, 101.54, 101.60, 102.5, and 105.66, which have been adopted by reference into the Sherman Food, Drug, and Cosmetic Act ("Sherman Law"), Cal. Health & Safety Code §§ 109875 et seq. See Compl. ¶¶ 184-187. Consequently, Plaintiff's Complaint alleges the following causes of action: (1) violation of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 et seq., for unlawful, unfair, and fraudulent business acts and practices (claims 1, 2, and 3); (2) violation of California's False Advertising Law ...


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