Reid v. Johnson & Johnson

• Decision Date: 17 September 2012
• Docket Number: Civil No. 11cv1310 L (BLM)
• Court: U.S. District Court — Southern District of California
• Parties: ROBERT REID, on behalf of himself and all others similarly situated, Plaintiff, v. JOHNSON & JOHNSON and McNEIL NUTRITIONALS, LLC, Defendants.

ROBERT REID, on behalf of himself and all others similarly situated, Plaintiff,

v.JOHNSON & JOHNSON and McNEIL NUTRITIONALS, LLC, Defendants.

Civil No. 11cv1310 L (BLM)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

DATED: September 17, 2012

ORDER GRANTING IN PART

DEFENDANTS' MOTION TO

DISMISS AND DENYING MOTION

TO STRIKE [doc. #111 andDENYING PLAINTIFF's REQUEST

FOR JUDICIAL NOTICE [doc. #17]

Robert Reid ("Plaintiff") brings this class action against Johnson & Johnson and McNeil Nutritionals, LLC, ("Defendants"). Defendants move to dismiss, or in the alternative, to strike portions of the complaint. The Court has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2) (The Class Action Fairness Act).

I. BACKGROUND

Johnson & Johnson manufactures and sells Benecol Spread and Benecol Light Spread ("Benecol"). (Compl. ¶ 2 [Doc. 1].) Benecol is a margarine-like, vegetable-oil-based spread sold in eight-ounce tubs with the following labels: "Proven to Reduce Cholesterol"; "No Trans Fat"; "No Trans Fatty Acids"; and "Each serving contains .85 g of Plant Stanol Esters." (Id. ¶ 2; Ex. A; Ex. B; Ex. C.)

Plaintiff initially purchased Benecol about four years prior to filing the complaint and hasmade several purchases until about five months before he filed this complaint on June 14, 2011. (Id. ¶ 113.) Plaintiff alleges that in spite of Benecol's expensive price, he purchased it in reliance of its representations that (1) plant stanol esters may reduce the risk for coronary heart disease; (2) Benecol is proven to reduce cholesterol; and (3) Benecol contains no trans fat or trans fatty acids. (Id. ¶ 114.)

First, Plaintiff alleges that Benecol's health claims concerning plant stanol esters are false and that it is therefore misbranded for the following reasons: (1) Benecol does not contain sufficient plant stanol esters per serving; (2) Benecol does not contain the minimum amount of vitamin A required prior to any nutrient addition; and (3) Benecol's label contains an inaccurate level of recommended consumption of plant stanol esters pursuant to federal law. (Id. ¶¶ 78, 82, 85-86.)

Second, Plaintiff alleges that Benecol's claim that it is "Proven to Reduce Cholesterol" is false and misleading because no studies support the claim that Benecol - as formulated - effectively reduces blood cholesterol. (Id. ¶ 94.) Plaintiff, however, concedes that studies have shown that plant stanol esters, in certain forms, may reduce LDL cholesterol. (Id. ¶ 94.) Additionally, Plaintiff alleges that the claim "Proven to Reduce Cholesterol" renders Benecol an improperly-marked drug because it portrays Benecol as a product made to affect the structure or function of the body by "reduc[ing] 'bad' (LDL) cholesterol" and "reduc[ing] total cholesterol." (Id. ¶ 102.)

Third, Plaintiff alleges that Benecol is misbranded due to its "no trans fat" and "no trans fatty acids" labels. (Id. ¶¶ 108-11.) While the Food and Drug Administration ("FDA") permits the use of defined nutrient content claims, the FDA has not yet defined "no trans fat" and "no trans fatty acids." Plaintiff also asserts that these claims are false because Benecol actually contains small amounts of artificial trans fatty acids. (Id. ¶ 112.)

In addition to the above allegations, Plaintiff cites numerous scientific studies that describe the role of cholesterol in heart disease and the health hazards that artificial trans fat may cause, such as increasing the risk of cardiovascular heart disease and causing type 2 diabetes and cancer. (Id. ¶¶ 17-66).

Plaintiff asserts four causes of action against Defendants: (1) unlawful business practices in violation of the California Unfair Competition Law ("UCL"); (2) unfair and fraudulent business practices in violation of the UCL; (3) violations of the California False Advertising Law ("FAL"); and (4) violations of the Consumer Legal Remedies Act ("CLRA").

II. DISCUSSION

In their Motion to Dismiss, Defendants contend that Plaintiff's claims are barred under three theories: (1) preemption by the FDA's Nutrition Labeling and Education Act ("NLEA"); (2) primary jurisdiction; and (3) judicial abstention. Defendants also argue that Plaintiff lacks standing to sue under the UCL and FAL because his complaint does not adequately plead reliance. In the alternative, Defendants move to strike certain portions of the complaint. Plaintiff opposes and requests that the Court take judicial notice of sixteen exhibits.

A. Standing Under the UCL, FAL, and CLRA

"The California Supreme Court has recognized that [the UCL, FAL, and CLRA] prohibit not only advertising which is false, but also advertising which, although true, is either actually misleading or which has a capacity, likelihood, or tendency to deceive or confuse the public." Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). As a threshold matter, a plaintiff must allege that the allegedly false and misleading statements were "likely to deceive a reasonable consumer." Consumer Advocates v. EchoStar Satellite Corp., 113 Cal. App. 4th 1351, 1361-62 (2003). A "reasonable consumer" is an ordinary consumer who acts reasonably in light of all the circumstances. See Freeman v. Time, Inc. 68 F.3d 285, 289 (9th Cir. 1995). In addition, a plaintiff must plead that he actually relied on the alleged misrepresentation. See In re Tobacco II Cases, 46 Cal.4th 298 (2009); Chacanaca v. Quaker Oats Co., 752 F.Supp.2d 1111, 1124-25 (N.D. Cal.2010). "California courts . . . have recognized that whether a business practice is deceptive will usually be a question of fact not appropriate for a decision on [a motion to dismiss]." Williams v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008).

California's UCL prohibits "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising." CAL. BUS. & PROF. CODE § 17200. "Any violation of the false advertising law" also violates the UCL. Williams, 552 F.3d at 938(internal citations omitted). In a UCL claim, "a plaintiff suffers 'injury in fact' for the purposes of standing when he or she has: "(1) expended money due to the defendant's acts of unfair competition; (2) lost money or property; or (3) been denied money to which he or she has a cognizable claim." Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111, 1125 (2010).

California's FAL also prohibits "unfair or fraudulent business acts or practices and unfair, deceptive, untrue or misleading advertising." CAL. BUS. & PROF. CODE § 17500. For FAL claims, "courts in California require that plaintiffs demonstrate the purchase of products as a result of deceptive advertising." Chacanaca, 752 F. Supp. 2d at 1125.

The CLRA prohibits "unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer." CAL. CIV. CODE § 1770(a). The CLRA requires actual reliance by the plaintiff for standing purposes. See CAL. CIV. CODE § 1780(a); Buckland v. Threshold Enters., Ltd., 155 Cal. App. 4th 798, 810 (2007), disapproved of on other grounds by Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310 (2011) ("[P]laintiffs asserting CLRA claims sounding in fraud must establish that they actually relied on the relevant representations or omissions.").

1. Legal Standard Under Rule 9(b)

Federal Rule of Civil Procedure 8(a) typically governs pleading requirements and requires that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a). However, a claim sounding in fraud is subject to Rule 9(b)'s heightened pleading requirement that plaintiff "state with particularity the circumstances constituting fraud." FED. R. CIV. P. 9(b). "It is established law, in this circuit and elsewhere, that Rule 9(b)'s particularity requirement applies to state-law causes of action." Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103 (9th Cir. 2009). Thus, all three state law claims are required to be pleaded with particularity because Plaintiff alleges that Defendants engaged in fraudulent labeling on their product. Kearns v. Ford Motor Co., 567 F.3d 1120, 1124-25 (9th Cir. 2009). Rule 9(b) requires that allegations of fraud be "specific enough to give defendants notice of the particular misconduct . . . so that they can defend against the charge and not justdeny that they have done anything wrong." Vess, 317 F.3d at 1106 (internal citations omitted). To satisfy Rule 9(b), Plaintiff must state the requisite "who, what, when, where, and how" of the misconduct he alleges. See Kearns, 567 F.3d at 1124 (internal citations omitted).

1. Rule 9(b)'s Requirements and Establishing Injury.

Plaintiff identifies Johnson & Johnson as the manufacturer and seller of Benecol and McNeil Nutritionals, LLC, as a wholly-owned subsidiary of Johnson & Johnson. In his complaint, plaintiff alleges Benecol does not contain the minimum requirement of plant stanol esters per serving necessary to make an FDA-approved health claim; Benecol's "Proven to Reduce Cholesterol" claim is misleading because the amount of trans fat it contains would negate its purported health claims; and because Benecol contains artificial trans fat, its "No Trans Fat" and "No Trans Fatty Acids" claims are false.

According to Plaintiff, for over a decade, Johnson & Johnson labeled Benecol with a plant stanol ester health claim, claimed that Benecol is "Proven to Reduce Cholesterol," and claimed that it contains "No Trans Fat" or "No Trans Fatty Acids." Plaintiff asserts that he began purchasing Benecol about four years ago because of the purportedly misleading statements appearing on Benecol's containers, website, print advertisements, and television commercials. Further, Plaintiff alleges that he sought a product that was generally healthy and did not contain toxic ingredients, and purchased Benecol instead of competing products because he believed its...