Health Law Daily Nutrition bar maker prevails against false advertising claims
Thursday, March 19, 2020

Nutrition bar maker prevails against false advertising claims

By George Basharis, J.D.

Federal law preempted proposed class action claiming that ONE Brands, LLC misrepresented the sugar content of its nutrition bars.

The federal district court in New York dismissed with prejudice a class action filed against the maker of ONE nutrition bars by a New York consumer and a class of unidentified out-of-state plaintiffs because it determined that an amended complaint would not overcome federal preemption and other pleading deficiencies. The federal Food, Drug and Cosmetic Act (FDC Act) preempted claims that the branding and labeling of ONE Brands nutrition bars were false and misleading. The court also determined that the advertised sugar content printed on the labels of the ONE bars could not mislead reasonable consumers given the clarifying language on the back panel of the bars’ packaging, and that no amount of amending could establish claims for breach of implied or express warranties or unjust enrichment (Melendez v. One Brands, LLC, March 16, 2020, Amon, C.).

The front wrapper labels of nutrition bars sold by ONE Brands contain the brand name "ONE," which refers to the bars’ one gram of sugar. According to the class lawsuit, the labels are false and misleading because an independent laboratory determined that ONE bars actually contains 5.2 grams of sugar, not the advertised one gram of sugar (the False Theory). In addition, the class asserts that the labeling of ONE bars is misleading because the labels gave the false impression that the nutrition bars are low in calories and carbohydrates (the Misleading Theory). The complaint also argues that use of the word "ONE" in the branding of ONE bars to represent sugar content is false and misleading (the Brand Theory). The complaint claims violations of state false and deceptive act or practices laws, breach of express and implied warranties, and unjust enrichment.

Standing. As a preliminary matter, the court determined that the unnamed out-of-state class plaintiffs did not have standing to assert claims against ONE Brands. The court noted that to have standing to sue as a class representative, a plaintiff must be a member of the injured class. The unidentified John and Jane Doe plaintiffs in the complaint could not satisfy this standing requirement, the court ruled.

Federal preemption. The FDC Act preempts state claims that impose requirements regarding food labeling that are "not identical to" those imposed by the Act. Under that standard, the FDC Act preempted the class’ claims based on the False Theory and the Brand Theory, the court reasoned. The FDA has prescribed a specific methodology for testing whether a nutrient-content statement made on a label is false. The class’ testing of ONE bars for actual sugar content did not satisfy the FDA’s nutrient-content testing requirement and consequently the FDC Act preempted claims based on the False Theory.

Analyzing the class’ Brand Theory, the court noted that use of "ONE" to refer to the sugar content of ONE bars was an "express nutrient-content statement." However, the FDA has not enacted any regulations that govern the approval process of brand names that incorporate express nutrient-content statement. Consequently, claims premised on the "ONE" brand would impose state-law requirements that are not imposed by federal law and therefore the FDC Act also preempted claims based on the Brand Theory.

False advertising. The class asserted claims under state false advertising and deceptive acts or practices laws based on the Misleading Theory. To state a claim under these laws, a plaintiff must allege in part a materially misleading statement, the court said. The class argued that the claim of a single gram of sugar on the front label of ONE bars was misleading because the label would mislead a reasonable consumer to believe that ONE bars were lower in carbohydrates and calories than they actually were. However, the court determined that any potential ambiguity created by the front label regarding the carbohydrate and caloric contents of ONE bars "was readily clarified" by the back panel of the bars’ packaging, which listed the amount of carbohydrates and calories in each bar.

Breach of warranty and unjust enrichment. The class plaintiff did not give timely notice to ONE Brands of its alleged breach of warranty, an essential element for a claim of breach of express warranty, the court noted. Further, a claim for breach of implied warranty requires privity of contract and the class plaintiff could not establish privity of contract with ONE Brands because he purchased the ONE bars from third-party retailers. Finally, the court dismissed the claims for unjust enrichment because they were duplicative of other tort claims.

The case is No. 18-CV-06650 (CBA) (SJB).

Attorneys: Spencer I. Sheehan (Sheehan & Associates, PC) for Jose Melendez. Benjamin M. Mundel (Sidley Austin LLP) for One Brands, LLC.

Companies: One Brands, LLC

MainStory: TopStory CaseDecisions FDCActNews AdvertisingNews FoodNews FoodSafetyNews FoodStandardsNews LabelingNews

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