“No reasonable consumer would be misled by PepsiCo’s ‘all natural’ Claims” — Judge Dismisses Class Action Suit Over SoBe Lifewater Drink

Food companies received some good news regarding the recent onslaught of “all natural” class action litigation.  A federal judge has dismissed with prejudice the Complaint against PepsiCo and its subsidiary South Beach Beverage Co. (“SoBe”) over the claim that the SoBe Lifewater beverage is deceptively labeled as “all natural.”   See complete ruling here.

The complaint — filed by the same law firm as the Jamba Juice class action suit —  asserted claims under California’s consumer protection laws (of course) alleging that (1) the “all natural” label is potentially deceptive because SoBe Lifewater contains ingredients that are “synthetic or created via chemical processing”; specifically,  ascorbic acid, cyanocobalamin, calcium pantothenate, niacinamide, pyrioxine hydrochloride, and xanthan gum; (2) the names of various fruits are used to describe the different flavors of Lifewater even though Lifewater does not contain any actual fruit or fruit juice, which is likely to deceive consumers into “believing that Defendants’ SoBe Beverages are, indeed, ‘All Natural’”; and (3) the use of the common vitamin name (e.g., B12) on the labels is misleading because the vitamins added to Lifewater are synthetic or created via chemical processing. 

The court ruled that the plaintiffs’ claims relating to the second and third points were both preempted.  Specifically, “FDA regulations explicitly permit manufacturers to use the name and images of a fruit on a product’s packaging to describe the characterizing flavor of the product even where the product does not contain any of that fruit, or contains no fruit at all.”   Likewise, 21 C.F.R.  § 101.9(c)(8)(v) recognizes that “Vitamin C” and “Ascorbic acid” are “synonym[s]” that may be used in the alternative in a product’s nutritional information labeling.

Significantly, the Court concluded that “Plaintiff cannot avoid preemption of these claims by arguing that his claim relates solely to Defendants’ ‘all natural’ representations and that he included his fruit name and vitamin name claims only as support for his ‘all natural’ claim” because that would “would effectively allow Plaintiff to avoid preemption of those claims, and would undermine the purpose of the federal labeling standards which includes avoiding a patchwork of different state standards.”

As for the “all natural” claim, the Court noted that “once the preempted statements regarding fruit names and vitamin labeling are removed, this claim is based on a single out-of-context phrase found in one component of Lifewater’s label”  — “all natural with vitamins.”   The court declined to consider the “all naturual” claim “in a vacuum” and concluded that “no reasonable consumer would read the ‘all natural’ language as modifying the ‘with vitamins’ language and believe that the added vitamins are … ‘all natural vitamins.'”  

The court further held that, “to the extent there is any ambiguity, it is clarified by the detailed information contained in the ingredient list, which explains the exact contents of Lifewater.”   This last point is notable because of precedent holding that misleading front-of-package labeling will not be excused or “cured” by disclosures on the FDA-mandated ingredient list.  Here, however, the relevant claim was, at worst, ambiguous and it was therefore appropriate to consider the impact of the ingredient list on a reasonable consumer.  On this score, the court cited Williams v. Gerber for the proposition that “reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging.”  552 F.3d 934, 939-40 (9th Cir. 2008).  

Although this ruling is relatively fact specific, it underscores that compliance with FDA labeling regulations can provide a safe harbor, of sorts, against various class pursued by class action attorneys.  More importantly, it takes the strong but very sound position that the ingredient list can dispel any ambiguities created by FOP claims.  

Note that this ruling is similar in to the ruling three weeks ago on another motion to dismiss in which a district court dismissed numerous claims on preemption grounds but held that General Mills must defend its “made with real fruit” claim for Fruit Roll-Ups.

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