Kellogg’s un-FDAMA-approved health claim was “unlawful” under UCL

Hadley v. Kellogg Sales Co., 2019 WL 3804661, No.
16-CV-04955-LHK (N.D. Cal. Aug. 13, 2019)
An important reminder that California’s UCL makes “unlawful”
conduct a violation even without separate consumer deception (although consumer
belief may be important for damages causation). 
Hadley won partial summary judgment on UCL claims against certain Kellogg
advertising that its cereal products supported heart health.  First, the court had previously ruled that preemption
hadn’t been shown to apply to the labeling statements “Heart Healthy” or “+
Heart Health +” and declined to revisit the matter now.  (Among other things, Kellogg filed an answer
to the operative amended complaint 149 days late without seeking leave to do so.
Discovery had closed and the plaintiff had made a number of strategic decisions
about what claims to pursue, and “Kellogg effectively asks the Court to reward
Kellogg for not citing this regulation in three years of litigation in six
versions of Kellogg’s preemption defense. In this Court’s []view, rewarding
Kellogg for effectively sandbagging Plaintiff would be clearly erroneous and a
manifest injustice.” FWIW, the court didn’t like the “unwieldy” number of
products/claims challenged by the plaintiff either.)
Kellogg did succeed in avoiding punitive damages under the
CLRA, which allows them upon “clear and convincing evidence that the defendant
has been guilty of oppression, fraud, or malice.” Hadley’s theory was that
“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, encouraging Class Members to consume its products, putting
their health at risk in pursuit of profit.” But the FDA has taken the position
that “inadequate evidence exists to support the direct contribution of added
sugars to obesity or heart disease.” Hadley’s own expert admitted that he couldn’t
find one study that finds that cereal consumption increases the risk of
coronary heart disease, diabetes, or obesity. There wasn’t a triable issue of
whether Kellogg met the high standard for punitive damages here.
Hadley sought summary judgment on the argument that two
statements: (1) “+ Heart Health + / Kellogg’s Raisin Bran / With crispy bran
flakes made from whole grain wheat, all three varieties of Kellogg’s Raisin
Bran are good sources of fiber” and (2) “Heart Healthy / Whole grains can help
support a healthy lifestyle” were unlawful under the UCL. The UCL borrows other
statutes and regulations for unlawfulness. Federal regulations (which have been
adopted as California law) govern health claims on food, defining a health
claim as “any claim made on the label or in the labeling of a food…that
expressly or by implication,…characterizes the relationship of any substance
to a disease or health-related condition.” The regulations specify that “[n]o
expressed or implied health claim may be made on the label or in the labeling
for a food,” unless “[t]he claim is specifically provided for …”; the linking
of “[d]ietary fiber and cardiovascular disease” is specifically listed as an
unauthorized claim.
Statement 1 (+ Heart Health +/good source of fiber): Kellogg
argued that this was two separate claims, each “expressly authorized by the FDA
regulations” and that they weren’t required to be separated by any given distance.  Hadley responded that there is a separation
requirement because the regulations bar making a direct link between
cardiovascular health and fiber. The regs expressly prohibit health claims
associating dietary fiber with heart disease and don’t contain an exception for
“when the reference to dietary fiber, considered alone, is an otherwise
authorized nutrient content claim.”  The
court agreed.
Statement 2: “Heart Healthy / Whole grains can help support
a healthy lifestyle.”  This statement
links whole grains and cardiovascular disease and was not specifically
authorized by any regulation, in violation of the statutory/regulatory scheme.
Kellogg conceded that “the FDA has not promulgated a formal regulation
authorizing food manufacturers to associate consumption of whole grains with
cardiovascular disease” but argued that Statement 2 should be considered
authorized because it was similar to two claims that the FDA approved via the
streamlined process outlined in the Food & Drug Administration
Modernization Act of 1997 (FDAMA).
The court disagreed. The FDAMA “provides an alternative
avenue for obtaining approval of health claims that are not specifically
authorized by FDA regulations,” where (i) “a scientific body” must have
published an “authoritative statement” “about the relationship between a
nutrient and a disease or health-related condition;” (ii) a manufacturer, “at
least 120 days” before using a health claim, submits to the FDA “the exact
words used in the claim,” as well as support for its validity; (iii) “the claim
and the food must be in compliance” with other requirements; and (iv) the claim
must be “stated in a manner so that the claim is an accurate representation of
the authoritative statement,” and “so that the claim enables the public to
comprehend the information provided in the claim and to understand the relative
significance of such information in the context of a total daily diet.”
Under FDAMA, General Mills in 1999 submitted the statement:
“[d]iets rich in whole grain foods and other plant foods and low in total fat,
saturated fat, and cholesterol, may help reduce the risk of heart disease and
certain cancers.” Kraft in 2003 submitted: “[d]iets rich in whole grain foods
and other plant foods, and low in saturated fat and cholesterol, may help
reduce the risk of heart disease.” By explicit statutory language, FDAMA
requires submission of the “exact words” to be used; Statement 2 didn’t contain
these exact words.  (And this case is
why: preauthorization would be almost meaningless if the manufacturer could
just get in the general target area and claim that it got close enough to be
deemed authorized.)  It was not enough to
argue that, when “read alongside the FDA-compliant disclaimer language,” the
“message is substantively identical to an approved FDAMA claim.” (An asterisk
referred to fine print: “[w]hile many factors affect heart disease, diets low
in saturated fats and cholesterol may reduce the risk of heart disease.”)  Even assuming that it was ok to look to the
fine print, that still wasn’t the exact words. Indeed, the asterisked statement
“may reduce the risk of heart disease” was different from “may help
reduce the risk of heart disease”; the former was simply not an approved
statement, implicating the requirement that the manufacturer must submit “a
balanced representation of the scientific literature relating to the
relationship between a nutrient and a disease or health-related condition to
which the claim refers.” Relatedly, Kellogg failed to cite any authority that it
could rely on a FDAMA claim submitted by different manufacturers regarding
different products and different product claims.
Kellogg argued that, regardless, there was no evidence that
its statements were “likely to deceive reasonable consumers or that Kellogg
acted with deceptive intent.” That’s not the law. The Ninth Circuit has
explicitly held that the “FDA regulations include no requirement that the
public be likely to experience deception,” and thus, the “reasonable consumer
test” is not an element of a violation of FDA regulations. (Of course, reliance
will also be an issue in assessing damages, so the reasonable consumer is not
gone from the case.)
The court also denied Kellogg’s motion to strike the
testimony of Bruce Silverman about consumer behavior and the challenged claims because
he didn’t conduct a consumer survey. But his opinion could be based on his “many
years of marketing experience and his review of Kellogg’s own internal consumer
research and other documents.” In California state law cases, “surveys and
expert testimony regarding consumer expectations are not required.”  Kellogg’s competing expert did do a survey,
and that would also come in because the surveys were relevant to assessing
materiality. Surveys are “typically ‘adequate evidence’ of whether consumers
were deceived or injured by an advertisement.”

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