Hadley v. Kellogg Sales Co.
| Decision Date | 10 August 2017 |
| Docket Number | Case No. 16–CV–04955–LHK |
| Citation | 273 F.Supp.3d 1052 |
| Court | U.S. District Court — Northern District of California |
| Parties | Stephen HADLEY, Plaintiff, v. KELLOGG SALES COMPANY, Defendant. |
Melanie Rae Persinger, Trevor Matthew Flynn, Jack Fitzgerald, The Law Office of Jack Fitzgerald, San Diego, CA, for Plaintiff
Kenneth Kiyul Lee, Alexander Michael Smith, Kate Tainsky Spelman, Jenner & Block LLP, Los Angeles, CA, Dean N. Panos, Jenner And Block LLP, Chicago, IL, for Defendant
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS
Re: Dkt. No. 63
Plaintiff Stephen Hadley ("Plaintiff") brings the instant suit against Defendant Kellogg Sales Company ("Defendant") for allegedly misleading statements on Defendant's food product packaging. Before the Court is Defendant's Motion to Dismiss Second Amended Complaint. ECF No. 63 ("Mot."). Having considered the parties' briefing, the relevant law, and the record in this case, the Court GRANTS in part and DENIES in part Defendant's Motion to Dismiss.
Defendant is a "multi-billion dollar food company that manufactures, markets, and sells a wide variety of cereals and bars, among other foods." ECF No. 27, Second Amended Complaint ("SAC") ¶ 108. Defendant is allegedly "the world's leading producer of cereal." Id. Defendant allegedly has "positioned itself in the market as a purportedly 'healthy' brand of processed food, by using various labeling statements to suggest its foods, especially its cereals and bars, are healthy choices." Id. ¶ 112.
Plaintiff "has been a frequent cereal eater for many years." Id. ¶ 249. Over the past several years, Plaintiff has purchased Defendant's breakfast cereals and cereal bars. Id. ¶ 250–51. During that time period, Plaintiff allegedly "tried to choose healthy options, and has been willing to pay more for cereals he believes are healthy." Id. ¶ 249.
This case concerns statements on the packaging for breakfast cereals and cereal bars sold by Defendant that allegedly indicate that Defendant's products are healthy when excess added sugar allegedly causes those products to be unhealthy. Plaintiff alleges that eight of Defendant's product lines are sold with misleading packaging. See SAC ¶¶ 120–23. Those product lines are (1) Kellogg's Raisin Bran, (2) Kellogg's Frosted Mini–Wheats, (3) Kellogg's Smart Start—Original Antioxidants, (4) Kellogg's Crunchy Nut, (5) Nutri–Grain Cereal Bars, (6) Nutri–grain Soft–Baked Breakfast Bars, (7) Nutri–Grain Oat & Harvest Bars, and (8) Nutri–Grain Harvest Hearty Breakfast Bars. Id. Some of these product lines have multiple variants such that there are 29 products total that Plaintiff alleges are being sold with packaging that is misleading. Id.
In general, Defendant's products are alleged to contain 9 to 16 grams of total sugar per serving and are 18% to 40% added sugar by calorie. See id. App. 1. The SAC alleges that the consumption of added sugar can have significant health impacts on individuals. Specifically, the SAC alleges that people in the United States consume excess added sugar, that people can become addicted to added sugar, and that excess added sugar consumption is linked to metabolic syndrome
, type 2 diabetes, cardiovascular disease, liver disease, obesity, inflammation, high cholesterol, hypertension, Alzheimer's disease, and some cancers. SAC ¶¶ 9–107. This link allegedly has been shown in multiple studies where the subjects of the study consumed 35 to 75 grams of added sugar (the amount of sugar in 1 to 2 cans of soda) per day. Id.
Moreover, the FAC alleges that the American Heart Association ("AHA") has found that a person is "safe" to consume up to 5% of his or her daily calories in added sugar, which amounts to approximately 25 grams of added sugar on a 2000 calorie diet. Id. ¶ 26. On the other hand, the United States Food and Drug Administration ("FDA") has concluded that the Daily Recommended Value ("DRV") of added sugars is 10% of a person's daily calories, or approximately 50 grams of added sugar. Based on these values, Plaintiff alleges that Defendant's products are unhealthy because they contain a higher percentage of added sugar (18%–40% of total calories per serving) than the daily "safe" percentage of added sugar recommended by the AHA or the DRV recommended by the FDA.
Plaintiff alleges that the packaging for Defendant's products contains multiple statements touting the health and wellness benefits of consuming Defendant's products that are misleading. First, Plaintiff challenges Defendant's use of statements that use the terms "healthy," "nutritious," or "wholesome." SAC ¶ 186–89. Plaintiff alleges that these statements assert that Defendant's products are healthy when they are in fact not healthy because of the presence of added sugar. Id. ¶ 189.
Second, Plaintiff alleges that the use of phrases that describe the benefits of "whole grain," and "fiber" content of Defendant's products imply that the products are healthy when the amount of added sugar in Defendant's products cause them to be unhealthy. Id. ¶ 208–09.
Third, Plaintiff alleges that Defendant's use of the statement "No High Fructose Corn Syrup" is misleading because the added sugar, and the particular mix of fructose and glucose in Defendant's products, have the same detrimental health effects as high fructose corn syrup. Id. ¶ 210–14.
Fourth, Plaintiff alleges that a number of statements such as "lightly sweetened" imply that Defendant's products are lower in sugar, when they actually are composed of 18% to 40% added sugar. Id. ¶ 215–19.
Finally, Plaintiff alleges that a number of statements imply that Defendant's products provide benefits, but are misleading because Defendant fails to indicate the health effects of the added sugar in Defendant's products. For example, Defendant's products contain statements like "help[s] keep you full and focused all morning"; ; "A balanced breakfast not only kick-starts the metabolism, it sets us up to do our best"; and "BREAKFAST BRAINPOWER." Id. ¶ 196–206.
As an example of a product with many of these statements, Plaintiff alleges that Raisin Bran contains the following "health and wellness" statements:
Id. ¶ 128. In contrast, some products only have a single challenged statement. For example, on the packaging for Nutri–Grain Cereal Bars—Strawberry Greek Yogurt, Plaintiff only challenges the statement "Wholesome Fiber." Id.
On August 29, 2016, Plaintiff filed a complaint. ECF No. 1. On October 31, 2016, Defendant filed a motion to dismiss. ECF No. 22. In lieu of filing a response, on November 14, 2016, Plaintiff filed a First Amended Complaint ("FAC"). ECF No. 27.
On December 8, 2016, Defendant filed a motion to dismiss the FAC. ECF No. 44. On January 5, 2017, Plaintiff filed an opposition, ECF No. 49, and on January 19, 2017, Defendant filed a reply, ECF No. 50. On March 21, 2017, the Court granted Defendant's motion to dismiss. ECF No. 56 ("Prior Order").
On April 5, 2017, Plaintiff filed the SAC. See SAC. The SAC alleged five causes of action including (1) violation of the California False Advertising Law ("FAL"), (2) violation of the California Consumers Legal Remedies Act ("CLRA"), (3) violation of the California Unfair Competition Law ("UCL") under the fraudulent, unfair, and unlawful prongs, (4) breach of express warranty, and (5) breach of the implied warranty of merchantability. Id.
On April 19, 2017, Defendant filed the instant motion to dismiss the SAC. See Mot. On May 3, 2017, Plaintiff filed an opposition, ECF No. 65 ("Opp'n"), and on May 10, 2017, Defendant filed a reply, ECF No. 66 ("Reply").
Defendant has requested judicial notice of 14 documents. ECF No. 64. The first nine of these are the exact same federal regulations and rulemaking documents and Congressional House reports for which the Court previously granted Defendant's request for judicial notice. See Prior Order at 7–9. Accordingly, as to those documents, Defendant's request is DENIED as moot.
Defendant also requests judicial notice of the following documents: (1) Rachel K. Johnson et al., Dietary Sugars Intake and Cardiovascular Health: A Scientific Statement From the American Heart Association (Sept. 15, 2009); (2) World Health Organization, Guideline: Sugars intake for adults and children (2015); (3) World Health Organization, WHO calls on countries to reduce sugars intake among adults and children (March 4, 2015); (4) Alice H. Lichtenstein et al., Diet and Lifestyle Recommendations Revision 2006: A Scientific Statement From the American Heart Association Nutrition Committee (July 4, 2006); and (5) Samuel S. Gidding et al., Dietary Recommendations for Children and Adolescents: A Guide for Practitioners, Consensus Statement from the American Heart Association (Sept. 27, 2005).
The Court may take judicial notice of matters that are either "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). "A district court ruling on a motion to dismiss may consider documents 'whose contents are alleged in a complaint [or whose contents are essential to a claim] and whose authenticity no party questions, but which are not physically attached to the [plaintiff's] pleading.' " Parrino v. FHP, Inc. ,...
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