Health Law Daily Court denies Kellogg’s seventh attempt to raise preemption in cereal lawsuit
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Wednesday, August 14, 2019

Court denies Kellogg’s seventh attempt to raise preemption in cereal lawsuit

By Jeffrey H. Brochin, J.D.

Court previously struck the labeling preemption defense with prejudice, and that ruling became the law of the case.

A federal district court in California has denied the motion of Kellogg’s Sales Company (Kellogg’s) for partial summary judgment based on preemption after having rejected the cereal company’s preemption argument six previous times. The defense was deemed deficient due to the fact that Kellogg’s preemption defense was general and vague and failed to specify which claims were preempted, what regulations applied, or how the claims complied with those regulations. However, the court granted Kellogg’s motion for summary judgment as to the consumer’s motion for punitive damages, finding that the consumer failed to satisfy the high threshold for proving fraud by the company (Hadley v. Kellogg’s Sales CompanyAugust 13, 2019, Koh, L.).

Alleged excess added sugar. A California consumer of Kellogg’s cereal and nutrition bar products filed suit against the food manufacturer alleging that the company sold 29 products with packaging that was misleading because the labeling indicated that the products were "Heart Healthy" despite the presence of excess added sugar which allegedly caused those products to be unhealthy. The consumer was a frequent cereal eater for many years, and over the past several years he purchased the company’s breakfast cereals and cereal bars in the course of trying to choose healthy options; and, he was willing to pay more for cereals which he believed to be healthy. The company moved for summary judgment, which, for the reasons cited below, the court granted in part and denied in part.

Six bites at the apple. Kellogg’s motion for partial summary judgment was based on the two arguments that: (1) any claims arising out of the labeling statements "Heart Healthy" or "Heart Health" were preempted by federal law; and (2) that the consumer was not entitled to punitive damages in connection with his claim under the California Consumers Legal Remedies Act (CLRA). The court did not mince words while reciting the procedural history of the case, and chided Kellogg’s for yet again raising the preemption defense which the court had previously dismissed with prejudice.

On October 31, 2016, Kellogg moved to dismiss the original complaint, citing federal regulatory preemption. However, their argument was very general and vague and failed to specify what regulations applied or how the claims complied with those regulations. Essentially, the preemption argument simply stated that claims based on nutrient claims, such as "Heart Healthy," and other health claims were expressly preempted. After the consumer filed his First Amended Complaint on November 14, 2016, Kellogg’s responded with the same argument; and, the scenario was repeated with the Second Amended Complaint (see Some ‘healthy’ labeling on sugary cereal not mere puffery, August 16, 2017). Finally, the court memorialized its ruling on March 7, 2018 that the preemption defense was dismissed with prejudice.

Law of the case doctrine. Notwithstanding the foregoing history of the case, Kellogg’s persisted in raising the preemption defense in its instant motion for summary judgment, arguing that the court should consider Kellogg’s newly cited regulation, 21 C.F.R. § 101.75, because the court did not consider that regulation in its March 7, 2018 order. The court rejected that this latest proffering of the preemption defense—notwithstanding Kellogg’s less vague citation to the FDA regulation—on the basis that its prior ruling had become the law of the case, and Kellogg’s motion for summary judgment based on preemption was therefore again denied.

Consumer’s bid for punitive damages. The court noted that the CLRA allows punitive damages upon the presentation of clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. The consumer argued that he was entitled to punitive damages based on Kellogg’s purported fraud or malice because Kellogg knew long before consumers of the dangers of added sugar consumption, knew consumers were ignorant of those dangers, and intentionally obscured those dangers, misleading consumers through both affirmative misrepresentations and deceptive omissions.

The court considered the FDA’s position that inadequate evidence exists to support the direct contribution of added sugars to obesity or heart disease, as well as testimony that the majority of the studies of sugar consumption concluded that excess energy intake—meaning caloric intake—rather than added sugar, is responsible for obesity and chronic disease. Furthermore, one of the consumer’s experts acknowledged that he could not find one study that found that cereal consumption increases the risk of coronary heart disease, diabetes, or obesity, and he admitted that his view on the dangers of consuming added sugar to heart health (referring to heart disease) was a minority view. Accordingly, the court found that the consumer failed to meet the high threshold of alleging fraud by Kellogg’s, and the court granted Kellogg’s motion for partial summary judgment on punitive damages.

The case is No.: 5:16-cv-04955-LHK.

Attorneys: Melanie Rae Persinger (The Law Office of Jack Fitzgerald, PC) for Stephen Hadley. Alexander Michael Smith (Jenner & Block LLP) for Kellogg Sales Co.

Companies: Kellogg Sales Co.

MainStory: TopStory CaseDecisions FDCActNews AdvertisingNews FoodNews FoodSafetyNews FoodStandardsNews LabelingNews CaliforniaNews

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