General Mills Wins Motion to Dismiss High Fructose Corn Syrup Class Action
As consumer fraud claims go, the high fructose corn syrup ("HFCS") claims really are scraping the bottom of the barrel. Some activists and class action lawyers attempt to blame HFCS for the so-called "obesity epidemic," but even the activist group the Center for Science in the Public Interest has counseled that this is an "urban myth" and that "[t]here isn't a shred of evidence that HFCS is any more harmful (or healthier) than sugar."
That is why it was so satisfying to see a federal court recently use the recent U.S. Supreme Court decision in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) to dismiss (without prejudice) an HFCS class action brought under California's Unfair Competition Law, False Advertising Act, and Consumer Legal Remedies Act. See Wright v. General Mills, Inc., Civ. A. No. 08cv1532 L(NLS), Slip op. (S.D. Cal. Sept. 30, 2009).
In Wright, plaintiffs alleged that the defendant had defrauded the public by using the term "100% Natural" on its Nature Valley crunchy granola bars and chewy trail mix bars at a time in the past when they had contained HFCS. Applying Iqbal, the court held that the following allegation from the complaint was too conclusory and speculative to meet the Rule 8 pleading standard:
As a direct result of its misleading, deceptive, untrue advertising and its unlawful, unfair and fraudulent business practices related to the "100% Natural" products listed above, Defendant caused Plaintiff and other members of the class to purchase, purchase more of, or pay more for, these Nature Valley products.
Slip op. at 8. The plaintiff failed to plead facts supporting the elements of her statutory claims and, to the extent that she alleged fraud, failed to meet the requirements of Federal Rule of Civil Procedure 9(b) that she aver "'the who, what, when, where, and how' of the misconduct charged." Slip op. at 9. The court, however, gave plaintiff leave to replead.
The court also held that plaintiff's claim for injunctive relief failed because the defendant already had stopped using HFCS in its Nature Valley products and there were no facts pled indicating that a recurrence of the use of HFCS was likely. Slip op. at 8. Again, plaintiff was given leave to replead.
Interestingly, the defendant's use of the term "natural" was perfectly consistent with federal law. As the court noted, "[t]he FDA follows a policy of not taking enforcement action charging that a product labeled as 'natural' is misbranded, as long as the product has no 'added color, synthetic substances, and flavors.'" Slip op at 5 (citation omitted). HFCS is not synthetic, of course. Rather, it is made from corn.
Nevertheless, the court denied the defendant's motion to dismiss based on federal preemption. In doing so, the court relied, in large part, on the savings clause in the Nutrition Labeling and Education Act of 1990: "Congress stated that '[t]he [NLEA] shall not be construed to preempt any provision of State law, unless such provision is expressly preempted under section 403A of the Federal Food, Drug, and Cosmetic Act.'" Slip op. at 3 (citation omitted). The court reasoned that the inclusion of this clause negated any intention to occupy the field of food labeling. Id. at 4. The court also rejected the defendant's conflict preemption argument, finding no conflict where the FDA has deferred taking action to specifically define the term "natural." Id. The defendant also had asserted the defense of primary jurisdiction, asking the court to stay proceedings pending action by the FDA. But the court concluded that the issue did not meet the criteria for invoking this prudential doctrine.
Although the court in Wright gave plaintiffs another bite at the apple, it remains to be seen whether they can truthfully plead their statutory and fraud claims with the specificity required by Iqbal.
