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Krommenhock v. Post Foods, LLC

United States District Court, N.D. California

June 1, 2017

DEBBIE KROMMENHOCK, et al., Plaintiffs,
POST FOODS, LLC, Defendant.

          ORDER ON MOTION TO DISMISS Re: Dkt. No. 44

          William H. Orrick United States District Judge


         Plaintiffs Debbie Krommenhock and Stephen Hadley bring this putative class action on behalf of a class of California consumers who purchased “high-sugar” cereal products manufactured by defendant Post Foods, LLC (“Post”). According to plaintiffs, those products' labels contain health and wellness claims that are false and misleading due to the cereals' high added sugar content. Under plaintiffs' sprawling theories, Post's labels violate various California consumer protection statutes because the cereal labels' falsely and misleadingly suggest the cereals are healthy but they are not because consumption of excessive amounts of added sugar can cause adverse health conditions. Post moves to dismiss, arguing that plaintiffs' claims are preempted by federal law, none of the challenged labeling claims are illegal, no reasonable consumer could be misled by the alleged health and wellness claims, and plaintiffs lack standing to pursue many of their legal theories. Preemption does not apply to most of plaintiffs' claims. Post's motion is granted in part and denied in part as outlined below.



         A. Food Product Labeling

         The Federal Food, Drug, and Cosmetic Act (“FDCA”) was enacted in 1938 and prohibits the misbranding of food. The Food and Drug Administration (“FDA”) enforces the FDCA and develops regulations governing the labeling of food products. Congress amended the FDCA in 1990 through the passage of the Nutritional Labeling and Education Act (“NLEA”). The purpose of the NLEA was to “‘clarify and to strengthen [FDA's] authority to require nutrition labeling on foods, and to establish the circumstances under which claims may be made about the nutrients in foods.'” Nat'l Council for Improved Health v. Shalala, 122 F.3d 878, 880 (11th Cir.1997) (quoting H.R.Rep. No. 101-538, at 7 (1990), reprinted in 1990 U.S.C.C.A.N. 3336, 3337). The various subsections of 21 U.S.C. § 343 set forth the conditions under which food is deemed “misbranded.” In general, food is misbranded under 21 U.S.C. § 343(a)(1) if “its labeling is false or misleading in any particular.” The Sherman Law expressly incorporates the FDCA (as amended by NLEA) as California's own law. Cal. Health & Safety Code § 110100.

         B. Food and Drug Administration Rulemaking on Added Sugar

         In early 2012, the FDA initiated its rule-making process to amend regulations governing nutrition labeling of conventional food products. In May 2016, the FDA issued a final rule which, among other things, revised food labeling requirements regarding “added sugars.” The provisions relevant here require manufacturers to include on the Nutrition Facts Panel (“Panel”) “the gram amount of ‘added sugars' in a serving of a product, establishing a Daily Reference Value (DRV), and requiring the percent Daily Value (DV) declaration for added sugars.” 81 Fed. Reg. 33, 741, at 33, 744. Additionally, the final rule requires the Nutrition Facts Panel to change “Sugars” to “Total Sugars” and requires that “Includes ‘X'g Added Sugars” be indented and declared directly below “Total Sugars” on the label. 81 Fed. Reg. 33, 741, at 33, 744. The final rule became effective on July 26, 2016, and sets a compliance date of July 26, 2018, [1] to allow manufacturers a two-year window “to analyze products and to review, update, change, and print labels.” 81 Fed. Reg. 33, 741, at 33, 967.

         The final rule establishes a DRV of 10 percent of total calories from added sugar, despite the American Heart Association's recommendation that the maximum amount be 5 percent.[2] 81 Fed. Reg. 33, 741, at 33, 849. Responding to the AHA's recommendation, the FDA stated “[w]e disagree that the DRV for added sugars should be lower than 10 percent of calories or that there is adequate evidence at this time to set a DRV for added sugars of less than 5 percent calories, ” and noted that the 10 percent figure “is more realistic considering current consumption of added sugars in the United States.” 81 Fed. Reg. 33, 741, at 33, 849. The FDA also declined to convey that the DRV of 10 percent “is a maximum rather than a recommended amount, ” noting that “such language would not be appropriate because we do not require this information for other nutrients with DRVs.” 81 Fed. Reg. 33, 741, at 33, 829.


         Post is the third largest cereal manufacturer in the United States, and produces, markets, and sells the 44 cereal products at issue in this case.[3] FAC ¶¶ 110, 118. Plaintiffs Debbie Krommenhock and Stephen Hadley are California residents and consumers of Post's cereal products.[4] FAC ¶¶ 4-5, 335, 356. Plaintiffs allege that Post falsely and misleadingly labels its high-sugar cereals[5] with health and wellness statements which “suggest its cereals are healthy food choices” when in fact these cereals contain high amounts of added sugar, “such that their regular consumption is likely to contribute to excess added sugar consumption and, thereby, increased risk for and contraction of chronic disease.” FAC ¶¶ 114, 116. Plaintiffs allege that Post employs its “longtime practice of intentionally and strategically marketing high-sugar cereals with health and wellness claims that both deceptively suggest the products are healthy, and deceptively omit the dangers of consuming the products” to “artificially and fraudulently inflate” the price and market demand for its high-sugar cereals. FAC ¶ 323, 378.

         As background for their allegations, plaintiffs cite to numerous scientific studies and medical publications to show that excess sugar intake is associated with various adverse health conditions and diseases including metabolic syndrome, type 2 diabetes, cardiovascular disease, liver disease, and obesity. FAC ¶¶ 40-109. When purchasing Post's high-sugar cereals, plaintiffs read and relied on Post's deceptive labeling claims suggesting that its cereals were healthy, and as a result, plaintiffs' suffered monetary damages and “bodily injury in the form of increased risk of CHD, stroke, and other morbidity.” FAC ¶¶ 347, 355, 376, 384. One of the main sources of support plaintiffs rely on is the American Heart Association's recommendation of a DRV of 5 percent total calories from added sugar. FAC ¶ 26. According to the AHA Scientific Statement, sugar in excess of this amount is not safe and impacts the health of the liver among other organs. Id. ¶¶ 26-30.

         After laying out allegations regarding the dangers of consumption of high amounts of sugar and identifying the challenged marketing claims for each of the 44 products, plaintiffs assert Post violates California law in numerous ways as described below.

         A. Health and Wellness Claims that are Deceptive in Light of the High Sugar Content

         Plaintiffs allege that Post makes a number of deceptive and misleading claims on its cereal labels that are deceptive and misleading because of the high level of sugar in those products. The claims, according to plaintiffs, either directly state or “strongly suggest” health benefits from consuming the cereal products.

         1. “Healthy, ” “Nutritious, ” or “Wholesome”

         Plaintiffs challenge the use of the terms “healthy, ” “nutritious, ” or “wholesome” on 28 of the products. FAC ¶ 221. Plaintiffs argue that use of these terms is false or highly misleading because consumption of these high sugar cereals is “decidedly unhealthy” and the consequence of consumptions are increased risk for chronic diseases. Id. ¶ 222.[6]

         2. Promote Bodily Health, Prevention of Disease or Weight Loss

         Plaintiffs challenge the use of terms that suggest Post cereals help promote digestive health on two flavors of Post Great Grains Digestive Blend. FAC ¶¶ 229-233. Plaintiffs argue that the statements are misleading because the high level of sugar content in those cereals increase the risk of chronic disease (which substantially harms both the digestive system and overall human health). Id. ¶¶ 231-233.

         Plaintiffs also challenge the use of terms disclosing protein and fiber, particularly in connection with suggestions regarding improved metabolic function, because those statements convey that the products - two flavors of Post Great Grains Protein Blend and Bran Flakes cereal - will promote weight loss when, given their sugar content, they promote weight gain. FAC ¶¶ 234-239.

         3. Whole Grain, Fiber, and “Real” Ingredients

         Plaintiffs challenge the use of language that while not expressly claiming to be healthy, nutritious or wholesome, imply the same thing through suggestion. FAC ¶ 240. The challenged phrases include use of: “grain, ” “fiber, ” and “real” (e.g., “real bananas”). Id. ¶ 241.[7]

         4. Whole Grains Council Stamp

         Plaintiffs challenge the use of the trade organization “Whole Grains Council” stamp on the Post cereal packages. FAC ¶¶ 244-249. Under the organization's requirements, the stamp can only be used on foods containing 8g or more of fiber. Plaintiffs allege that the use of the stamp is deceptive because it implies “independent verification” that the cereals at issue are “healthy” when the added sugar makes them unhealthy. Id. ¶ 249.

         5. Protein Claims Based on Use of Milk

         Plaintiffs challenge Post's practice of making representations about the amount of protein a serving contains on its packaging, when those representations are based on use of milk with the cereal. FAC ¶ 252. Plaintiffs note the representation often comes with a disclaimer, but argue the disclaimer is not effective because it is the larger font “Xg PROTEIN” that catches consumers' eyes and not the disclaimer in smaller font that the protein amount is based on use of milk. Id. Plaintiffs argue that when viewed on the package as a whole, the representation misleadingly suggests the cereals make a “more significant contribution” to a nutritious meal than they do. Id. ¶ 251. It is deceptive according to plaintiffs because given the high amount of sugar, its consumption is likely to increase the risk of chronic disease. Id. ¶ 252.

         6. No High Fructose Corn Syrup or use of Honey

         Plaintiffs challenge Post's use of the phrases “no high fructose corn syrup” (“HFCS”) or “natural wildflower honey” on its cereal labels, arguing that Post is attempting to leverage consumers' aversion to HFCS by deceptively suggesting its cereals are healthier because there is no HFCS or honey is used, when added sugar in any form causes an increased risk of chronic health conditions. FAC ¶¶ 253-257. Plaintiffs allege this strategy is meant to confuse consumers and make them believe that some forms of sugar are healthier than others. Id. ¶ 256.

         7. Simple, Whole Foods, Less Processed

         In order to “capitalize” on consumers' preference for fresh or less processed foods, plaintiffs assert that Post affirmatively misrepresents that several of its products are fresh and less processed. FAC ¶¶ 258-263. Plaintiffs focus on seven of Post's products that tout “less processed nutrition” and argue that those statements are false or highly misleading because some contain blueberries that are sweetened with added sugar and all contain “highly-processed” added sugars, and that the statements falsely suggest the cereals are healthy food options which is untrue because of the added sugar content. Id. ¶¶ 259-263.

         8. Omit and Downplay Sugar Content

         More generally, plaintiffs allege that Post's omission of material information regarding the added sugar content and the dangers of high sugar consumption makes the use of the “health” claims illegal under California law. Plaintiffs identify four product claims specifically: (i) Post Great Grains Digestive Blend: Vanilla Graham is “sweetened with a hint of vanilla flavor, ” suggesting that the product is low in both added sugar and “bad” forms of sugar; (ii) Honey Bunches of Oats Cereal contains just “a Touch of Honey!” is false and misleading, where the products contain as much as 12g of sugar per serving; (iii) Post Honey Bunches of Oats - With Real Peaches is a “LIGHTLY SWEETENED CEREAL, ” despite that more than 25 percent of the cereal by weight is sugar, and that 26.7 percent of the product's calories come from its added sugar; and (iv) Post Shredded Wheat Lightly Frosted is only “lightly frosted”-or sweetened- despite that it contains 12g of sugar, which is more than 20 percent of the product's weight, and accounts for nearly 25 percent of its calories. FAC ¶¶ 266-269. Plaintiffs assert that these statements misleadingly imply low sugar content, when the content is actually high. Id. ¶ 270.[8]

         B. Violations of FDA Regulations

         Plaintiffs also allege Post's label statements violate the federal FDCA (as implemented under various FDA regulations), and therefore, violate the California Sherman Law, Cal. Health & Safety Code § 109875 et seq.

         1. False and Misleading

         Plaintiffs argue that by their failure to disclose material facts regarding the added sugar levels - specifically the high levels of added sugar and the adverse health consequents from consumption of sugar - all of the complained of “health and wellness” statements identified above are “false and misleading” under 21 U.S.C. § 343(a) and the parallel California provision, Cal. Health & Safety Code § 110660, which prohibit any label that is “false or misleading in any particular.” FAC ¶¶ 294-297.

         2. Impermissible Health Claims

         Plaintiffs contend that specific claims are impermissible “health claims” regulated under the NLEA, 21 C.F.R. §§ 101.14(a)(1), 101.14(e). The challenged “health claims” are:

• “Diets rich in fiber help keep you fuller longer which is important for weight management, ” “help you burn more calories, ” and “enhance your metabolism, ” because “protein generally requires about 25% more energy to digest” (as well as related statements suggesting eating the product will “increase your metabolism by 10%, ” or otherwise representing the product will promote weight loss) as touted in Great Grains Protein Blend: Honey, Oats & Seeds and Great Grains Protein Blend: Cinnamon Hazelnut;
• “Heart Health: Diets rich in whole grain foods and low in saturated fat and cholesterol may help reduce the risk of heart disease and certain cancers” in Shredded Wheat - Lightly Frosted.
• “FIBER TO HELP WITH WEIGHT MANAGEMENT, ” and “Experts recommend diets rich in fiber to help keep you satisfied while you exercise and cut calories to lose weight.”; in Bran Flakes.

FAC ¶¶ 204(i), 299(a)-(b), (n)-(o).[9]

         Plaintiffs allege that the metabolism and weight claims made for the Great Grain and Bran Flakes products are “disease or health-related conditions” that do not comply with 21 C.F.R. § 101.14. Id. ¶¶ 300-302. The statements regarding the heart disease and cancers on the Shredded Wheat- Lightly Frosted label allegedly violate 21 C.F.R. § 101.77(c)(2)(D). Id. ¶ 305.

         3. Unlawful Nutrient Claims

         Plaintiffs also assert that Post is making nutrient claims - claims which expressly or implicitly characterize the level of a nutrient required to be listed in the “nutrient box label” by the FDA. Plaintiffs challenge the following:

• “No high fructose corn syrup” as violating 21 C.F.R. § 101.13(e), which regulates the manner in which a manufacturer can claim the absence of nutrient.
• “Xg Protein” as violating 21 C.F.R. § 101.13(i)(3) where X includes protein from milk (as used in Post Great Grains Cranberry Almond Crunch; Post Great Grains Banana Nut Crunch; and Post Great Grains Protein Blend: Honey, Oats & Seeds);
• A “Delicious way to boost your daily intake of . . . natural antioxidants” in the Shredded Wheat - Lightly Frosted Label. FAC ¶ 204(i).[10]
• Font size/prominence as violating 21 C.R.F. § 101.13(f) because the nutrient claim is unduly prominent.[11]

         C. Deceptive Website & Misleading Public Statements

         Plaintiffs also contend that Post has made a number of “deceptive” statements regarding these products on its website, which consumers are invited to “visit” by language on the side of the cereal boxes. Plaintiffs identify website statements of “nourishing goodness” and a listing of Post's “values” as including “goodness, ” “no HFCS, ” “nutritious, ” and “whole grains” as a source of vitamins and nutrients, and “digestive health.” FAC ¶¶ 310-318. Plaintiffs allege that these statements - both alone and in combination - mislead consumers into believing that Post's cereals are healthy and contain only a “moderate” amount of sugar. Id. ¶ 317. Plaintiffs also complain about specific health, wellness, and nutrition statements made for Alpha-Bits, Golden Crisp, Great Grains, Honey Bunches of Oats, Honeycomb, Bran Flakes, Raisin Bran, Post Selects, Shredded Wheat, and Waffle Crisp cereals on product-specific pages of Post's website. Id. ¶ 319. Similarly, plaintiffs complain about statements made in two press releases regarding the Great Grains products and their impact on metabolism and digestion. FAC ¶¶ 320-322.[12]

         Plaintiffs also allege that Post knows or reasonably should know that consumers may eat more than one serving of cereal at a time, further impacting their health risk. Id. ¶¶ 328-334. Based on all of these allegations, plaintiffs assert that Post violated:

(i) California's False Advertising Law (“FAL, ” Cal. Bus. & Prof. Code § 17500) prohibiting untrue or misleading statements because the health and wellness claims were untrue and misleading in light of the products' sugar content;
(ii) California Consumer Legal Remedies Act (“CLRA, ” Cal. Civ. Code § 1750 et seq.) prohibiting deceptive practices in the sale of goods because: (a) Post represented the products to have qualities they did not have (§ 1770(a)(5)); (b) Post represented the goods were of a particular standard, quality, or grade and were not (§ 1770(a)(7)); (c) Post advertised goods with intent not to sell them as advertised (§ 1770(a)(9)); and (d) Post represented the products were supplied in accordance with representations about the products and were not (§ 1770(a)(16));
(iii) California's Unfair Competition Law (“UCL, ” Cal. Bus. & Prof. Code § 17200) prohibiting unlawful, unfair, or fraudulent business practices by: (a) fraudulently using the health and wellness claims on products containing high amounts of added sugar; (b) unfairly labeling products in an unethical and unscrupulous manner in violation of public policy; and (c) unlawfully labeling products in violation of the FAL, the CLRA, the FDCA, and the Sherman Law;
(iv) Breach of Express Warranty under California law based on 90 identified affirmations of fact and promises conveying that the products would be healthy and nutritious when they were not; and
(v) Breach of Implied Warranty under California law based on Post's acts and omissions in the sale, marketing and promotion of these high-sugared cereals.

         Post moves to dismiss the FAC for five main reasons: (1) plaintiffs' claims are preempted by federal law; (2) Post's cereal products do not contain any labeling statements that violate federal or state law; (3) plaintiffs fail to state a claim for relief under the UCL, FAL, or CLRA; (4) Post did not breach any express or implied warranty; and (5) plaintiffs lack standing to seek injunctive relief, bring claims for unpurchased products, and challenge Post's advertising statements directed at children. Mot. 1. In the alternative, Post requests that I stay this case under the doctrine of primary jurisdiction. Mot. 29-30.[13]


         A motion to dismiss is proper under Federal Rule of Civil Procedure 12(b)(6) where the pleadings fail to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). The court must “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The complaint “does not need detailed factual allegations, ” but instead only needs enough factual allegations “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “However, conclusory allegations and unwarranted inferences are insufficient to defeat a motion to dismiss.” Oklevueha Native Am. Church of Haw., Inc. v. Holder, 676 F.3d 829, 834 (9th Cir. 2012). If a motion to dismiss is granted, a court should normally grant leave to amend unless it determines that the pleading could not possibly be cured by allegations of other facts. Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990).


         I. PREEMPTION

         Post argues that plaintiffs' claims should be dismissed with prejudice because they are preempted by federal law on the bases of express and conflict preemption. “Express preemption exists when a statute explicitly addresses preemption.” Reid v. Johnson & Johnson, 780 F.3d 952, 959 (9th Cir. 2015). Conflict preemption occurs when it would be “impossible for a private party to comply with both state and federal requirements, ” English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990), or where the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52, 67 (1941).

         A. Preemption under the NLEA Generally

         The Nutrition Labeling and Education Act amended the Food Drug and Cosmetic Act in 1990 to “establish[] uniform food labeling requirements, including the familiar and ubiquitous Nutrition Facts Panel found on most food packages.” Lilly v. ConAgra Foods, Inc., 743 F.3d 662, 664 (9th Cir. 2014). NLEA contains an express preemption provision, providing “that no state may ‘directly or indirectly establish . . . any requirement for the labeling of food that is not identical' to the federal requirements.” Id. at 664-65 (quoting 21 U.S.C. § 343-1(a)(5)). “Section 343-1(a)(4) expressly preempts any state or local ‘requirement for nutrition labeling of food that is not identical to the requirement of section 343(q)'” while § 343-1(a)(5) “preempts state or local governments from imposing any requirement on nutrient content claims made by a food purveyor ‘in the label or labeling of food that is not identical to the requirement of section 343(r).'” Chacanaca v. Quaker Oats Co., 752 F.Supp.2d 1111, 1118 (N.D. Cal. 2010).

         “The phrase ‘not identical to' means ‘that the State requirement directly or indirectly imposes obligations or contains provisions concerning the composition or labeling of food that are not imposed by or contained in the applicable federal regulation or differ from those specifically imposed by or contained in the applicable federal regulation.'” Lilly v. ConAgra Foods, Inc., 743 F.3d at 664 (quoting 21 C.F.R. § 100.1(c)(4)) (internal brackets and ellipses omitted). “NLEA also provides, however, that it does not preempt any state law unless the law is ‘expressly preempted, '” and (as relevant here) “[t]he NLEA does not preempt state law-based causes of action that are identical to the federal labeling requirements.” Reid v. Johnson & Johnson, 780 F.3d 952, 959 (9th Cir. 2015). In other words, “preemption only occurs where application of state laws would impose more or inconsistent burdens on manufacturers than the burdens imposed by the FDCA. If a lawsuit asserts that a manufacturer has violated the FDCA (as ...

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