Who Needs TwIqbal?: Round II

To contact us Click HERE
The following is a guest post by Mollie Benedict and Amanda Villalobos, both of Tucker Ellis, about a recent dismissal they won of one of those all-too-common California "consumer protection" strike suits where nobody's really injured.  They get all the credit for the win, and all the blame for this post.

*************

In an April 27, 2012 post, “Who Needs TwIqbal?”,  John Sullivan examined a putative classaction in New Jersey federal court, Young v. Johnson & Johnson.  Sullivancredited the defendant for putting a standing argument (usually a bench player)into the starting line-up  in the case,and both standing and federal preemption came through in the clutch:  The court dismissed Plaintiff’s claims thathe had been misled by representations on the labels of the margarine substituteBenecol Spread, finding both that (1) Plaintiff lacked standing because he hadnot alleged any injury and (2) his claims were preempted because he sought toimpose labeling requirements that were not identical to those imposed by theFederal Food, Drug and Cosmetic Act (FDCA) as amended by the Nutrition Labelingand Education Act (NLEA).

Reid v. Johnson & Johnson, 2012 U.S. Dist. Lexis 133408(S.D. Cal. Sept, 17, 2012) is a west coast rematch – another putative classaction involving Benecol spread, this time in federal court in San Diego.  As in Young, Plaintiff alleged that thedefendants made misleading claims regarding Benecol’s trans fat content and thecholesterol-lowering benefits of Benecol’s key ingredient, plant stanolesters.  Plaintiff claimed he purchasedthe product in reliance on these alleged misrepresentations, asserting causesof action under California’s consumer protection statutes, the UnfairCompetition Law, the False Advertising Law, and the Consumer Legal Remedies Act.Defendants again brought standing off the bench to leadoff, arguing that Plaintiff lacked standing because he suffered no injury infact and, more significantly, because no reasonable consumer was likely to bedeceived by Benecol’s label claims, a standing requirement under all threeconsumer protection statutes.  Althoughthe court found that Plaintiff had adequately pleaded an injury in fact becausehe alleged that he “paid more for Benecol, and would have been willing to payless, or nothing at all, if he had not been misled by the representations andpractices”... [Editorial note:  This proves that California is even more extreme than New Jersey]...it also found that Plaintiff “has not set forth alleged factsshowing that Benecol’s statements may deceive a reasonable consumer.”  Score another win for standing.But preemption, still waiting on deck, again came to theplate to hog some of the glory.  Asmentioned in Sullivan’s Young post, the NLEA contains a broad expresspreemption provision prohibiting states from establishing labeling requirementsthat are not identical to federal regulations.The court concluded that because Benecol’s claims regardingplant stanol esters and their cholesterol-reducing properties were permitted byfederal law, Plaintiff’s claims were preempted. The court based its preemption analysis on an enforcement discretionletter issued by FDA in 2003.  The letteradvised that, based on new scientific evidence, the agency would relax thecontent requirements for products eligible to bear the plant stanol esterhealth claim codified in 21 C.F.R. §101.83. While Benecol’s label conformed to the requirements of the 2003 letter,Plaintiff contended the letter did not constitute a final agency action and didnot have the force and effect of federal law, so Benecol should be required to,but did not, conform to 21 C.F.R. § 101.83.The court disagreed, finding that “[t]he [2003] letterreflects the FDA’s position” and that “Plaintiff’s plant [stanol] esters claimessentially … seeks to impose a different, outdated interim rule requirementfor  Defendants from that set forth inthe 2003 FDA Letter….”  Id. at*21-22.[Editorial note:  The FDA letter in Reid was not a warning letter, which are different]The court also found that Plaintiff’s trans fat claims werebarred by preemption. According to Plaintiff, Benecol’s “No Trans Fat” and “NoTrans Fatty Acids” statements constituted unauthorized nutrient content claimseven though the FDA permits the statements “0g trans fat” or “0 grams transfat” to appear on food labels.  Thecourt, relying on the doctrine of common sense, disagreed with Plaintiff andnoted that an attempt to distinguish the statements “No Trans Fat” and “0 gramstrans fat” was unreasonable because the two terms are functionallyequivalent. 

Defendants also argued that Plaintiff’s claims should bedismissed based on primary jurisdiction and its closely related cousin,judicial abstention.  While the courtfound application of primary jurisdiction to be inappropriate in this case, itdeclined to rule on the issue of judicial abstention, leaving open thepossibility that it too may have been a basis to bar Plaintiff’s claims.