Juxtaposition of claims about protein amounts and sources plausibly creates falsity

Hi-Tech Pharmaceuticals, Inc. v. HBS Int’l Corp., — F.3d
—-, 2018 WL 6314282 , No. 17-13884 (11th Cir. Dec. 4, 2018)
Hi-Tech sued HBS, alleging that the label of its
protein-powder supplement HexaPro misled customers about the quantity and
quality of protein in each serving, in violation of the Georgia Uniform
Deceptive Trade Practices Act and the Lanham Act.  The district court dismissed the Georgia
claims on FDCA preemption grounds and found that it wasn’t plausible that the
label was misleading. The court of appeals affirmed the first conclusion, but
reversed the second, and declined to find that the FDCA precluded Lanham Act
claims here.
The front of the label identifies the product as an
“Ultra-Premium 6-Protein Blend” with “25 G[rams] Protein Per Serving,” and it
touts the product’s “6 Ultra-High Quality Proteins” and “5 Amino Acid Blend
with BCAAs [Branch-Chain Amino Acids].” The left side repeated “an
Ultra-Premium, Ultra-Satisfying Blend of 6 High-Quality Proteins” and
identified those six whole-protein sources, stating that the product “is also
fortified with 5 Amino Acids to enhance recovery.” The right side features the
nutrition-facts table, which states that HexaPro contains 25 grams of protein
per serving, and the list of ingredients. This side also has a table labeled
“Amino Acid Profile” whose heading indicates that HexaPro contains 44 grams of
amino acids per serving, while the table itemizes only 25 grams.

Hi-Tech alleged three kinds of deception.  First, HexaPro contains free-form amino acids
and other non-protein ingredients as well as whole proteins; an analysis that
excludes these “spiking agents” and counts only “total bonded amino
acids”—which alone are molecularly complete proteins—allegedly yields an
“actual protein content” of “17.914 grams per serving,” not 25 grams per
serving. However, the applicable FDA regulation permits “[p]rotein content [to]
be calculated on the basis of the factor 6.25 times the nitrogen content of the
food,” even if not all of a product’s nitrogen content derives from
whole-protein sources.
Second, Hi-Tech argued that the label and in particular the
use of “Ultra-Premium 6-Protein Blend” suggests that the product’s entire
stated protein content derives from the whole-protein sources identified on the
left side of the panel. Third, Hi-Tech alleged that the front of the label was
misleading about both the quantity and the source of the product’s protein
content: the proximity of “Ultra-Premium 6-Protein Blend” to the phrase “25 G
Protein Per Serving” misled consumers into believing that HexaPro “contains 25
grams of the ‘Ultra-Premium 6-Protein Blend’-type protein per serving,” but it
has only roughly 18 grams from those sources. 
The district court rejected these claims because HexaPro’s label
“provides a detailed breakdown of all … ingredients, including the mix of
amino acids.”
Georgia law: The FDCA expressly preempts state laws that
“directly or indirectly establish … any requirement for nutrition labeling of
food that is not identical to the requirement of section 343(q) of this title,
except [for sales of food at some restaurants], or … any requirement
respecting any claim of the type described in section 343(r)(1) of this title
made in the label or labeling of food that is not identical to the requirement
of section 343(r) of this title.” In turn, section 343(q) regulates “nutrition
information” that must be disclosed about certain nutrients in food products,
including the “total protein contained in each serving size or other unit of
measure.”  Section 343(r) governs all
other statements about nutrient content that “expressly or by implication”
“characterize[ ] the level of any nutrient.”  
Hi-Tech’s state-law claim was therefore preempted. Federal
regulation expressly allows “[p]rotein content [to] be calculated on the basis
of the factor 6.25 times the nitrogen content of the food,” and Hi-Tech didn’t
dispute that HexaPro’s labeling complied with this regulation. Alleged
misleadingness about the nature, source, and quality of the whole proteins,
free-form amino acids, and other ingredients that make up HexaPro’s advertised
25 grams of protein per serving would have to be fixed by changing the
advertised amount of protein or itemizing each source’s contribution, but the FDCA
and its regs don’t require that. “[T]o avoid preemption, Hi-Tech’s state-law
claim must be identical, not merely consistent, with federal requirements. To
the extent that the Georgia Uniform Deceptive Trade Practices Act would require
changes to HexaPro’s labeling, it would ‘directly or indirectly establish’ requirements
that are ‘not identical to’ federal requirements.”
Lanham Act: Initially, the court of appeals rejected the
argument that Hi-Tech’s allegation about the true whole-protein content was “conclusory”
because it didn’t explain HexaPro’s chemical composition; Twiqbal doesn’t require a plaintiff to provide evidence for its
factual allegations.  Courts can
disregard legal conclusions and “threadbare” recitals of the elements, but an allegation
about how much protein is actually in a product isn’t a legal conclusion.  That’s “a specific assertion about physical
and chemical fact that is either true or false, no matter what legal
conclusions it may or may not support.”
Given that, the complaint plausibly alleged that the label
was misleading. “Considering the label as a whole and taking its statements in
context, we find it plausible that a reasonable consumer would be misled to
believe that a serving of HexaPro contains 25 grams of protein derived from the
‘6-Protein Blend’ comprising the ‘6 High-Quality Proteins’ listed on the label.”
Even an additional prominent statement that the product contained an amino acid
blend wasn’t enough to avoid this conclusion. The allegation was not that
consumers would be misled to believe that the only ingredient is the “Ultra-Premium 6-Protein Blend.” Rather,
Hi-Tech argued that the label would induce a reasonable consumer to believe
that the protein in HexaPro derives
exclusively from the six-protein blend, and this was at least plausible. The
label doesn’t indicate that the claimed 25 grams came from any other source
than the whole-protein ingredients; other than in the 25-gram claim, it never
used the word “protein” to refer to anything other than the whole-protein
ingredients, and instead consistently treated “amino acids” as separate from
and providing distinct nutritional benefits from “protein.” The “Amino Acid
Profile” on the right side of the label listed 25 grams of amino acids, but
provided no explanation of how this figure related either to the product’s 25
grams of protein per serving or the 44 grams of amino acids per serving
advertised at the top of the table.
“Based on the total impression given by the label, it is
plausible that only sophisticated consumers schooled in federal regulations or
nutrition science would understand or even suspect that free-form amino acids
or other non-protein ingredients form any part of HexaPro’s stated 25 grams of
protein per serving.” While the FDA permits protein calculations based on
free-form amino acids and other nitrogen-containing non-protein ingredients, Pom Wonderful established that the FDCA “does
not generally bar claims of false advertising of food under the Lanham Act.”
HBS’s specific arguments for preclusion also failed. HBS
argued that application of the Lanham Act would create “a genuinely irreconcilable
conflict” with the federal regulation governing protein calculations because it
couldn’t simultaneosuly disclose both 25 grams of protein to satisfy the
requirements of the FDA and 18 grams to satisfy Hi-Tech. But that wasn’t the
only way to cure the misrepresentation. “[I]t would suffice to clarify on the
HexaPro label how much protein in each serving derives from the six-protein
blend and how much derives from free-form amino acids and other non-protein
ingredients”; there was no federal law against that.
HBS also argued that the Lanham Act claim would be barred
barred “if determining the truth or falsity of the [challenged] statement would
require a court to interpret FDA regulations, which is generally left to the
FDA itself.” And HBS alleged that Hi-Tech was asking the court “to substitute
its own judgment regarding the most appropriate way to measure protein for the
FDA’s judgment.” But the conclusion didn’t follow from the premise. The no-interpretation
rule involves claims trying to “circumvent the FDA’s exclusive enforcement
authority by seeking to prove that [d]efendants violated the FDCA, when the FDA
did not reach that conclusion.” Hi-Tech’s claim doesn’t require the court to
question the FDA’s conclusion that protein content may be calculated on the
basis of the factor 6.25 times the nitrogen content of the food. Instead, the
question was whether the HexaPro label was misleading “in the context of the
label’s failure to specify the sources of the nitrogen measured by the federal

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