Court presumes failure to comply w/FDA labeling rules to be misleading

Campbell v. Freshbev LLC, 322 F.Supp.3d 330 (E.D.N.Y. 2018)
Campbell bought several bottles of Freshbev juices at Whole
Foods, allegedly relying on misrepresentations (1) that the juices were
unpasteurized; (2) that the juices were cold-pressed; (3) that the juices were
fresh; and (4) that the Cranberry Apple juice had more cranberry juice than
apple juice.

Initially, the court declined to resolve at this stage
whether Bristol–Myers Squibb Co. v. Sup. Ct. of Cal., ––– U.S. ––––, 137 S.Ct.
1773 (2017), meant that federal courts, not just state courts, lacked personal
jurisdiction for claims by out-of-state plaintiffs against an out-of-state
defendant that had no connection to the forum state, or whether that even
applied to nationwide classes. Without a motion to certify a nationwide class,
the issue wasn’t squarely before the court.
The court found Campbell hadn’t shown standing for
injunctive relief, because he didn’t plead a willingness to buy the juice again
if he could be confident about the truth.
Freshbev argued that the challenged statements weren’t
materially misleading. Campbell’s first argument was that “unpasteurized” was
misleading because the juices were treated with high pressure processing (HPP),
which was allegedly equivalent to pasteurization.  Freshbev responded that FDA regulations treat
pasteurization and HPP as two separate treatments and allow “unpasteurized” on
HPP-treated juice. The FDA has issued nonbinding guidance on treating juice
safely, and a proposed rule (1998!) that allowed an “unpasteurized” label as
long as that was truthful and nonmisleading. The problem was that “unpasteurized”
might be misleading insofar as it didn’t distinguish between “a product that
may contain harmful pathogens that could result in serious disease and one that
is treated using a method (other than pasteurization) that is capable of
achieving a 5–log reduction in the target pathogen.”  Thus, additional information was required on
such a label. Here, two of the labels showed that the juices were treated with
pressure, providing the requisite additional information, and the claim was
preempted. One label didn’t, so the claim was unpreempted. [Freshbev submitted
a graphic that allegedly represented the full label and had pressure
information, but that couldn’t be considered on a motion to dismiss.]
Cold-pressed: Campbell alleged that this was misleading
because the juices were treated with HPP after being cold-pressed. It was
implausible that a reasonable consumer would think that nothing had been done
to the juice except cold-pressing, in the absence of an “only” or “exclusively”
or similar modifier.
Fresh:  21 C.F.R. §
101.95 governs use of the word “fresh” on a label.  Of course there’s no private right of action
under the FDCA and its regulations, but NY “forbids the misbranding of food ‘in
language largely identical to that found in the FDCA.’” And also, “if FDA
regulations provide that a claim on a product’s label is misleading, that is
evidence that a reasonable consumer might be misled by the packaging.”  21 C.F.R. § 101.95(a) states that “[t]he term
‘fresh’ [in labeling] in a manner that suggests or implies that the food is
unprocessed, means that the food is in its raw state and has not been frozen or
subjected to any form of thermal processing or any other form of
preservation….” Syllogistically, HPP is a form of preservation, and thus juice
products treated with HPP shouldn’t be advertised as “fresh.”
There’s an exception if “the term [fresh] does not suggest
or imply that a food is unprocessed or unpreserved.” The FDA’s example was
pasteurized whole milk, which consumers understand to “nearly always” be pasteurized;
by contrast, “fresh” cannot be used to describe pasteurized pasta sauce because
pasta sauce is not always pasteurized, so consumers would assume that “fresh”
sauce is unprocessed.  Because juice is
widely sold with and without processing, the exception didn’t apply here.  Freshbev argued that the labels’ disclosure
of “pressure” would avoid any consumer confusion, but “because the term ‘fresh’
is misleading in isolation, it is not clear as a matter of law that confusion
generated by the misuse of the term would be resolved by additional statements
elsewhere on the label.”
“Cranberry Apple”: Campbell argued that this was misleading
because the product had more apple juice than cranberry. Freshbev argued that
that the name of the product wasn’t plausibly read as a proportion claim, and
that any confusion could be resolved by reading the ingredients list.
21 C.F.R. § 102.33(b) states that names “must be in descending
order of predominance by volume unless the name specifically shows that the
juice with the represented flavor is used as a flavor (e.g., raspberry-flavored
apple and pear juice drink).”  Defendants’
label was a pretty clear violation of this rule without the “flavored” caveat. “Because
it violates FDA labeling requirements, a reasonable consumer may be misled into
believing that Cranberry Apple juice has more cranberry juice than apple.”
However, a common law fraud claim against the failure to put
an unpasteurized warning label on the bottles failed; the most plausible reason
Whole Foods failed to do so was not an intent to defraud, but an understanding
that HPP avoided the risk of untreated, unpasteurized juice.

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