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Fernandez v. Atkins Nutritionals, Inc.

United States District Court, S.D. California

May 9, 2018

CHERYL FERNANDEZ, individually and on behalf of all others similarly situated, Plaintiff,
v.
ATKINS NUTRITIONALS, INC., and DOES 1-10, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS [ECF NO. 31]

          HON. GONZALO P. CURIEL, UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant Atkins Nutritionals, Inc.'s (“Atkins”) motion to dismiss aspects of Plaintiff Cheryl Fernandez's First Amended Complaint (the “FAC”). (ECF No. 31.) The motion is fully briefed. (See ECF No. 35 (Plaintiff's Response in Opposition); ECF No. 36 (Atkins's Reply).) For the reasons set forth below, the Court concludes that federal law preempts Plaintiffs' claims to the extent they challenge the statements on Atkins's labels that (1) set forth an amount of “net carbs, ” and (2) explain how Atkins calculates “net carbs.” The Court also concludes that federal law does not preempt the statements on Atkins's labels that explain why Atkins has chosen its formula for calculating net carbs. As a result, the Court GRANTS in part and DENIES in part Defendant's motion to dismiss.

         I. Background

         In this putative class action, Fernandez claims that Atkins misleads purchasers of its snack products by including on its labels statements about the “net carbs” content of a particular product.

         Dr. Robert Atkins formed Atkins “to promote the sale of books and food items related to the ‘Atkins Diet, ' a low to no carbohydrate diet.” (FAC, ECF No. 30, at ¶ 13.) In 1999, Dr. Atkins published a book stating that “the most popular artificial sweeteners that American manufacturers use to replace conventional sugars, ” such as “sorbitol, mannitol, and other hexitols [i.e., sugar alcohols]” “were not approved for use in the Atkins Diet.” (Id. ¶ 14.) In a book published in 2002, Dr. Atkins revised this statement by indicating that “certain sugar alcohols such as maltitol do not affect blood sugar and are acceptable” for the diet. (Id. ¶ 15.) Fernandez suggests that Dr. Atkins altered this conclusion to accommodate sales of Atkins's “growing line of food products that included sugar alcohols.” (Id. ¶ 16.)

         Atkins's website defines net carbs as “the total carbohydrate content of the food minus the fiber content and sugar alcohols.” (Id. ¶ 17.) The website states that net carbs “reflects the grams of carbohydrate th[at] significantly impact your blood sugar level and therefore are the only carbs you need to count when you do Atkins”; that “the grams of carbohydrate in fiber, glycerine, and sugar alcohols don't break down and convert to blood sugar and need not be counted”; that net carbs “represents the number of grams of total carbohydrate minus those that do not impact blood sugar”; and that Atkins's net carb calculation is based on “science.” (Id. ¶¶ 17-19.)

         On the labels of its snack products, Atkins includes a calculation of the net carbs contained in that particular product. For example, the label on Atkins's “Chocolate Candies” states that it contains “1g Net Carb.” (Id. ¶ 22.) For purposes of this ruling, the Court will refer to this statement in the format of “g Net Carb” as a “net carbs claim.” Atkins reaches this net carb amount by subtracting the grams of carbohydrates attributable to dietary fiber (4g in the Chocolate Candies) and sugar alcohols (14g) from the total grams of carbohydrates (19g). (Id. ¶¶ 23-24.) Another statement on the back of the product label indicates how Atkins calculates the net carbs claim on the front of the label. In the Chocolate Candies example, the box states: “10g total carbs - 4g fiber - 14g sugar alcohols = 1g Atkins Net Carbs*.” (Id. ¶ 26.) For purposes of this ruling, the Court will refer to this statement-the statement of how Atkins calculates net carbs claims-as the “formula statement.” The asterisk next to “Carbs” leads a reader of the label to the following statement: “Counting Carbs? Atkins Net Carb Count assists you in tracking carbs that impact blood sugar. Fiber and sugar alcohols should be subtracted from the total carbs since they minimally impact blood sugar.” (Id.) For purposes of this ruling, the Court will refer to this statement as the “explanation statement, ” as it explains why Atkins has chosen its formula for calculating net carbs.

         Fernandez contends that these label statements are fraudulent, misleading, and omit material facts because (1) sugar alcohols, contrary to the statement on the label, do impact blood sugar; (2) the labels “conflict[] with the diet espoused by Dr. Atkins” in his 2002 book, in which Dr. Atkins stated that calculating net carbs should be calculated by subtracting only grams of fiber from the total grams of carbohydrates; and (3) Atkins's statements elsewhere that a product contains “only” a certain amount of net carbs creates a perception that the product is low in carbs. (Id. ¶¶ 28-29, 51, 52.)

         As for her allegations that sugar alcohols do impact blood sugar levels, Fernandez asserts that “the authoritative scientific research on sugar alcohols” supports her position. (Id. ¶ 31.) The FAC refers to statements by the Diabetes Teaching Center at the University of California, San Francisco (“[D]on't be fooled - sugar alcohols are still a form of carbohydrate, and they still affect your blood sugar levels, if not as dramatically.”); Dr. Regina Castro of the Mayo Clinic (sugar alcohols “can increase your blood sugar level”); and Dr. Thomas Wolever (“Some people may believe that products sweetened with sugar alcohols allow for more variety in food choices . . . . [but] there is no evidence that sugar alcohol-sweetened products have any benefit on long-term glycemic control in people with diabetes.”; “Food labels of products containing sugar alcohols can be confusing . . . . [I]ndividuals who use product labels to count carb[s] could potentially overestimate the amount of insulin to use for a carbohydrate load.”; “It's a big misconception to say maltitol does not raise blood sugar.”). (Id. ¶¶ 32-34, 47- 48.) According to Dr. Wolever, 50 to 75 percent of maltitol-a sugar alcohol used by Atkins-is absorbed into the body. (Id. ¶ 38.) Because maltitol has an “energy value” only 25% less than an ordinary carbohydrate, the absorption rate indicated by Dr. Wolever means that the “total carbohydrate energy consumer per gram of maltitol is actually between 38 to 56 percent of the carbohydrate value of table sugar or ordinary carbohydrates.” (Id. ¶¶ 37, 38.) Using this calculation, the net carbs value of the Chocolate Candies, according to Fernandez, would be between 6.32 and 8.84 grams, as opposed to the 1 gram indicated on the label. (Id. ¶ 40.) According to the Diabetes Teaching Center, net carbs should be calculated by subtracting half of the grams of sugar alcohol, rather than all grams of sugar alcohol. (Id. ¶ 41.)

         While the Food and Drug Administration (“FDA”) has not regulated or defined the phrase “net carb, ” it has indicated in its warning letters that it has been concerned that the term “may be misleading to consumers.” (Id. ¶ 44.) In 2001, the FDA admonished a company for not including maltitol as a carbohydrate in its food label. (Id. ¶ 45.) Canada's FDA counterpart has found the term “net carbs” to be “not acceptable due to lack of scientific consensus on . . . definition and [its] potential to mislead consumers.” (Id. ¶ 46.) In 2004, Atkins announced that it would no longer use the term net carbs on its food label because it considered the term imprecise. (Id. ¶ 49.) Atkins, however, reneged on that announcement; it continues to include net carbs claims on its labels. (Id. ¶ 50.)

         The FAC asserts four causes of action: (1) violation of the California Unfair Competition Law (“UCL”), California Business & Professions Code §§ 17200 et seq.; (2) violation of the California False Advertising Law (“FAL”), California Business & Professions Code §§ 17500 et seq.; (3) breach of an express warranty in violation of California Commercial Code § 2313; and (4) breach of the implied warranty of merchantability in violation of California Commercial Code § 2314.

         II. Legal Standard

         A Rule 12(b)(6) motion attacks the complaint as containing insufficient factual allegations to state a claim for relief. “To survive a motion to dismiss [under Rule 12(b)(6)], a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While “detailed factual allegations” are unnecessary, the complaint must allege more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Iqbal, 556 U.S. at 678. “In sum, for a complaint to survive a motion to dismiss, the non-conclusory ‘factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009).

         III. Discussion

         Atkins's motion is separated into two arguments: (1) Fernandez's state law claims are preempted to the extent that they attack the net carbs claims and the formula statements, and (2) Fernandez's state law claims are preempted to the extent that they attack the explanation statements. (See ECF No. 31-1 at 4-8.) As Fernandez notes in her opposition, nothing in Atkins's motion challenges the claims regarding Atkins's use of the word “only” on its labels (i.e., “Only g Net Carbs”). (See ECF No. 35 at 10 n.1.) As a result, the pending motion to dismiss does not seek dismissal of the entire complaint. For the reasons explained below, the Court agrees with Atkins that its net carbs claims and formula statements comply with federal regulations; as a result, federal law preempted Fernandez's state law claims challenging the net carbs claims and formula statements. The Court also concludes, ...


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