by Steve Gardner
On Friday the 13th, the Ninth Circuit issued an opinion roundly rejecting almost every defense food companies use to try to avoid getting to the truth of the matter, in Reid v. Johnson & Johnson.
The summary by court staff sets up the facts well:
McNeil declared on Benecol’s label that the product contained “No Trans Fat” because the amount of trans fat in Benecol was so insignificant that it was authorized under the Food and Drug Administration’s regulations to make that statement. McNeil also contended that Benecol satisfied the standards set forth in a 2003 FDA letter that authorized its plant stanol esters statements, and was entitled to preemptive effect.
In a veritable treatise on food law, the Court held that:
1. Under California law, plaintiffs establish standing to sue if they relied on a misstatement and either paid more than they would have or bought it and would not otherwise have done so. The Court quoted the Supreme Court’s POM opinion language that “A consumer who is hoodwinked into purchasing a disappointing product may well have an injury-in-fact cognizable under Article III. . . .” (For more on the POM decision, see Brian Wolfman's post.)
2. The Court also addressed the district court’s rejection of Reid’s standing based on a finding that Reid had not alleged that the statements might deceive a reasonable consumer. The Court correctly help that the reasonable consumer standard was not relevant to the question of the named Plaintiff’s standing.
3. The district court held that the claims were not likely to deceive a reasonable consumer, because the back of the label said that Benecol had “partially hydrogenated vegetable oil.” The Court reiterated its holding in the Gerber opinion that “We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception.” (For more on Gerber, see Brian Wolfman's post.) The Court added that “there is no reason to believe that consumers understand that partially hydrogenated vegetable oil contains trans fat."
4. The Court found that there was no applicable preemption, and provided an excellent and detailed analysis of the state of preemption under the Food, Drug, and Cosmetic Act.
5. In reaching its determination, the Court refused to consider FDA’s informal statement that it would “consider exercising enforcement discretion” as to whether to enforce an existing regulation on disease-prevention claim for plant stanol esters, holding that, far from the level of appropriate deference to an agency action that fell short of a formal rulemaking, the FDA’s decision maybe to exercise enforcement direction at some time in the future was such “equivocal language” that one could not conclude a clear intent by FDA.
6. As to this point, the Court expressed its concern that “allowing the FDA effectively to authorize health claims by way of statements of its enforcement policy could place those authorizations beyond judicial review.”
7. The Court also rejected the claim of primary jurisdiction, because FDA had not shown any intent to act on anything relevant to this case.
One last note, in passing, is that the Ninth Circuit referred to the POM decision several times, thus effectively sounding the death knell for defense arguments that the POM decision was limited strictly to Lanham Act cases and did not have anything to do with consumer claims.
I’ve noted how defense firms love to quote from a few district court decisions that go against plaintiffs in the food area, but then try like the dickens to avoid any effect of the (until today) most relevant discussion of food law, the Gerber case.
Now they also have to pretend this opinion doesn’t exist, and have to construct new theories to avoid the application of POM, to boot.