Troy Backus v. General Mills, Inc. et al

Filing 33

ORDER by Judge Thelton E. Henderson granting in part and denying in part 8 Motion to Dismiss; granting 22 Motion to Stay. (tehlc1, COURT STAFF) (Filed on 8/18/2015).

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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TROY BACKUS,
Plaintiff,

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v.

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GENERAL MILLS, INC., et al.,
Defendants.

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Case No. 15-cv-01964-TEH
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS’
MOTION TO DISMISS AND
GRANTING DEFENDANTS’
MOTION TO STAY CASE

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This matter came before the Court on August 17, 2015 for a hearing on Defendants

United States District Court
Northern District of California

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General Mills, Inc.’s and General Mills Sales, Inc.’s (collectively “General Mills’”)

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motions to dismiss the Complaint for lack of subject matter jurisdiction and failure to state

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a claim (Docket No. 8) and to dismiss or stay the case under the primary jurisdiction

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doctrine (Docket No. 22).1 After carefully considering the arguments of the parties at the

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hearing and in the papers submitted, the Court hereby GRANTS IN PART and DENIES

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IN PART General Mills’ motion to dismiss, and GRANTS General Mills’ motion to stay

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the case under the primary jurisdiction doctrine, for the reasons set forth below.

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BACKGROUND
Plaintiff Troy Backus (“Backus”) brings this putative class action to challenge

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Defendant General Mills’ practice of selling baking mixes that include trans fats in the

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form of partially hydrogenated vegetable oils (“PHOs”). Compl. ¶ 7 (Docket No. 1).

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Backus alleges that “Defendants manufacture, distribute, and sell a variety of baking mix

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products (collectively “the Trans Baking Mixes” or “TF Baking Mixes”) containing

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partially hydrogenated oil . . . .” Id. ¶ 4. He alleges that he purchased General Mills

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The two motions are respectively referred to herein as the Rule 12 Motion and the
Primary Jurisdiction Motion.

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baking mixes “approximately 20 times a year over the past four years” and that he

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“repeatedly purchased and consumed” the mixes since 2008. Id. ¶¶ 5, 62, 83. The

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presence of partially hydrogenated oils is indicated on the ingredient list of various

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General Mills baking mixes. Ex. A to Request for Judicial Notice (Docket No. 9-1).2

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Backus cites dozens of medical publications in his Complaint, and alleges that

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“There is ‘no safe level’ of artificial trans fat intake,” and that “Artificial trans fat damages

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vital organs, including the heart, by causing chronic systemic inflammation, where the

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immune system becomes persistently overactive, damages cells, and causes organ

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dysfunction.” Compl. ¶¶ 11-60. He alleges that “Plaintiff suffered physical injury when
he repeatedly consumed Defendants’ Trans Fat Baking Mixes, because consuming

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United States District Court
Northern District of California

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artificial trans fat in any quantity inflames and damages vital organs . . . .” Id. ¶ 78.
Backus also repeatedly alleges that any consumption of trans fats increases the risk

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of contracting various diseases. E.g., id. ¶ 17 (“any incremental increase in trans fatty acid

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intake increases the risk of [coronary heart disease].”); id. ¶ 34 (“Eating trans fats increases

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your risk of developing heart disease.”); id. ¶ 78 (“consuming artificial trans fat in any

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quantity . . . increases the risk of heart disease, diabetes, cancer, and death.”).
Backus alleges that “there are safe, low-cost, and commercially acceptable

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alternatives to artificial trans fat, including those used in competing brands,” but

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“Defendants unfairly elect not to use those substitutes in the Trans Fat Baking Mixes in

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order to increase profit.” Id. ¶ 6. He alleges that he “lost money as a result of Defendants’

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conduct because he purchased products that were detrimental to his health and were

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unfairly offered for sale in violation of California law,” because “[h]ad Defendants not

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violated the law, Plaintiff would not have been able to purchase the Trans Fat Baking

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Mixes.” Id. ¶ 77.
Backus seeks to represent a class defined as “All persons who purchased in the

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United States, on or after January 1, 2008 (the “Class Period”), for household or personal

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The Court GRANTS General Mills’ request for judicial notice of the baking mix label.
Brazil v. Dole Food Co., Inc., 935 F. Supp. 2d 947, 963 n.4 (N.D. Cal. 2013).
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use, boxed baking mix products manufactured or distributed by Defendants containing

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partially hydrogenated oil.” Id. ¶ 83.

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On November 8, 2013, the federal Food and Drug Administration (“FDA”)
“tentatively determined” that PHOs are not “generally recognized as safe” (“GRAS”), a

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term of art referring to a food product that can be sold without premarket approval. 78

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Fed. Reg. 67169-01, 67170 (Nov. 8, 2013). The FDA noted that PHOs had previously

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been treated as GRAS by the food industry, although the FDA was not aware of any

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formal sanction or approval of PHOs granted by either it or by the United States

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Department of Agriculture (“USDA”). Id. at 67171. The FDA requested comments from

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the public on various questions, including whether the FDA should “finalize its tentative

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United States District Court
Northern District of California

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determination that PHOs are no longer GRAS,” whether there are “data to support other

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possible approaches to addressing the use of PHOs in food, such as by setting a

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specification for trans fat levels in food,” and, should the FDA finalize its determination,

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what compliance date would “be adequate for producers to reformulate any products as

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necessary and that would minimize market disruption.” Id. at 67174.

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On June 17 of this year, the FDA “made a final determination that there is no longer

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a consensus among qualified experts that partially hydrogenated oils . . . are generally

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recognized as safe (GRAS) for any use in human food.” 80 Fed. Reg. 34650 (June 17,

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2015). The FDA set a date for compliance with its determination on June 18, 2018. Id. at

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34651. The FDA “encourage[d] submission of scientific evidence as part of food additive

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petitions” to determine whether PHOs could be used in small amounts, and set the

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compliance date in 2018 “to allow time for such petitions and their review.” Id. at 34653.

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The Grocery Manufacturers Association, an industry group of which General Mills

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is a member, submitted a petition to the FDA to list PHOs as a food additive on June 11,

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2015. Ex. 4 to Sipos Decl. at 1 (Docket No. 26-1); see also General Mills’ Civic

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Involvement Report, Calendar Year 2015, available at http://tinyurl.com/o3qvoy4

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(indicating that General Mills is a member of the Grocery Manufacturers Association).3

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LEGAL STANDARD
I.

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Standing
“If the court determines at any time that it lacks subject-matter jurisdiction, the

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court must dismiss the action.” Fed. R. Civ. P. 12(h)(3). A party may raise this defense by

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filing a motion under Rule 12(b)(1). “A party invoking federal jurisdiction has the burden

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of establishing that it has satisfied the ‘case-or-controversy’ requirement of Article III of
the Constitution [and] standing is a ‘core component’ of that requirement.” Lujan v.

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United States District Court
Northern District of California

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Defenders of Wildlife, 504 U.S. 555, 560 (1992). “To satisfy Article III’s case or

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controversy requirement, [a plaintiff] needs to show that he has suffered an injury in fact,

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that the injury is traceable to the challenged action of [the defendant], and that the injury

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can be redressed by a favorable decision.” Fortyune v. Am. Multi-Cinema, Inc., 364 F.3d

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1075, 1081 (9th Cir. 2004). In ruling on a motion to dismiss for want of standing, the

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court must accept as true all material allegations of the complaint and construe the

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complaint in favor of the complaining party. Lema v. Courtyard Marriott Merced, 873 F.

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Supp. 2d 1264, 1267 (E.D. Cal. 2012) (citing Warth v. Seldin, 422 U.S. 490, 501-02

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(1975)).

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II.

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Rule 12(b)(6) requires a court to dismiss a complaint when a plaintiff’s allegations

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Motion to Dismiss

fail “to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). To

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The Court overrules Backus’s evidentiary objection to the letter (Docket No. 28) and
takes judicial notice of the fact that the Grocery Manufacturers Association has submitted
a food petition request regarding PHOs to the FDA, because this fact can readily be
determined from a source whose accuracy cannot reasonably be questioned. Fed. R. Evid.
201; see also GMA Petitions FDA to Approve Low-Level Uses of Partially Hydrogenated
Oils, available at http://www.gmaonline.org/news-events/newsroom/gma-petitions-fda-toapprove-low-level-uses-of-partially-hydrogenated-oils.
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survive a motion to dismiss under Rule 12(b)(6), a complaint must include “enough facts

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to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550

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U.S. 544, 570 (2007). Plausibility does not equate to probability, but it requires “more

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than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S.

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662, 678 (2009) (citation omitted). “A claim has facial plausibility when the plaintiff

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pleads factual content that allows the court to draw the reasonable inference that the

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defendant is liable for the misconduct alleged.” Id.
In ruling on a motion to dismiss, a court must “accept all material allegations of fact

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as true and construe the complaint in a light most favorable to the non-moving party.”
Vasquez v. Los Angeles Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007). Courts are not,

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Northern District of California

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however, “bound to accept as true a legal conclusion couched as a factual allegation.”

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Iqbal, 556 U.S. at 678. “Dismissal can be based on the lack of a cognizable legal theory or

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the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v.

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Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990).

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III.

Primary Jurisdiction
“The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a

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complaint without prejudice pending the resolution of an issue within the special

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competence of an administrative agency.” Clark v. Time Warner Cable, 523 F.3d 1110,

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1114 (9th Cir. 2008). The doctrine “is to be used only if a claim ‘requires resolution of an

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issue of first impression, or of a particularly complicated issue that Congress has

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committed to a regulatory agency.” Id. at 1114 (citation omitted). The doctrine “is

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committed to the sound discretion of the court when ‘protection of the integrity of a

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regulatory scheme dictates preliminary resort to the agency which administers the

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scheme.’” Syntek Semiconductor Co. v. Microchip Tech. Inc., 307 F.3d 775, 781 (9th Cir.

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2002) (citation omitted). Courts consider the following non-exhaustive factors in deciding

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whether the doctrine of primary jurisdiction applies: “(1) the need to resolve an issue that

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(2) has been placed by Congress within the jurisdiction of an administrative body having
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regulatory authority (3) pursuant to a statute that subjects an industry or activity to a

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comprehensive regulatory authority that (4) requires expertise or uniformity in

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administration.” Id.

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DISCUSSION
I.

Backus Has Standing to Bring His Claims

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In its Rule 12 motion, General Mills first argues that the Complaint must be

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dismissed because Backus lacks standing to bring his claims. Specifically, General Mills

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argues that Backus has not pled a cognizable “injury in fact” that is sufficient for Article

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United States District Court
Northern District of California

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III standing in this case. Rule 12 Mot. at 7.
Backus argues that he has standing in this case in three ways: first, that

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consumption of trans fats caused inflammation in and other damage to his organs; second,

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that he suffered an economic injury in purchasing the products; and third, that consuming

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trans fats caused an increased risk of certain diseases. As discussed below, the first two

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injuries are sufficient for standing in this case, but his third argument fails.

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a. Backus has standing because he alleges an immediate physical injury
Backus’s first theory of standing is that he has already suffered a physical injury

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from consuming trans fats in General Mills baking mixes. Rule 12 Opp’n at 5 (Docket No.

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12). A physical injury is a traditionally recognized injury giving rise to Article III

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standing. See Frissell v. Rizzo, 597 F.2d 840, 845 (3d. Cir. 1979) (“The definitional

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problem is, of course, minimal when a plaintiff alleges a substantial past physical or

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financial injury of a traditional sort.”), abrogated in part on other grounds as recognized by

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Amato v. Wiletnz, 952 F.2d 742, 750 n.8 (3d. Cir. 1991).

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In order to confer standing, an injury must be “(a) ‘concrete and particularized’; and

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(b) ‘actual or imminent,’ not ‘conjectural’ or ‘hypothetical.’” Preminger v. Peake, 552

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F.3d 757, 763 (9th Cir. 2008) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560

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(1992)). “The injury may be minimal . . . ‘an identifiable trifle’ is sufficient to establish
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standing.” Preminger, 552 F.3d at 763 (quoting Council of Ins. Agents & Brokers v.

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Molasky-Arman, 522 F.3d 925, 932 (9th Cir. 2008)).

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The Ninth Circuit has found allegations of physical injuries to be sufficient where

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the alleged injuries included “watering eyes and burning noses.” See Covington v.

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Jefferson Cnty., 358 F.3d 626, 638 (9th Cir. 2004). It must be noted, however, that in

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Covington, a case about exposure to pollution from a neighboring landfill, the complaint

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alleged several additional injuries which the court also found to be sufficient, including the

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risks of “fires, of excessive animals, insects and other scavengers attracted to uncovered

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garbage, and of groundwater contamination . . . [and] threats to the aesthetic and

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recreational enjoyment of their property . . . .” Id.

United States District Court
Northern District of California

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Here, Backus alleges that he purchased General Mills baking mixes “approximately

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20 times a year over the past four years” and that he “repeatedly purchased and consumed”

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the mixes since 2008. Compl. ¶¶ 5, 62, 83. Citing medical publications, he alleges that

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“There is ‘no safe level’ of artificial trans fat intake,” and that “Artificial trans fat damages

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vital organs, including the heart, by causing chronic systemic inflammation, where the

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immune system becomes persistently overactive, damages cells, and causes organ

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dysfunction.” Id. ¶¶ 16, 60. He also alleges that “Plaintiff suffered physical injury when

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he repeatedly consumed Defendants’ Trans Fat Baking Mixes, because consuming

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artificial trans fat in any quantity inflames and damages vital organs . . . .” Id. ¶ 78.

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General Mills argues that these assertions are too speculative to confer standing.

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Rule 12 Mot. at 9. But, as quoted directly above, Backus alleges that he suffered a

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physical injury by consuming trans fats which inflame and damage vital organs in any

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amount. While Backus could have drafted his Complaint more clearly, for example by

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alleging that “Consuming the Trans Fat Baking Mixes inflamed and otherwise damaged

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Plaintiff’s vital organs,” that is the logical equivalent of what he actually did plead.

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Accepting all material allegations as true and construing the Complaint in the light

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most favorable to Backus, his alleged physical injuries are sufficient to confer standing

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here. Although Backus’s alleged organ inflammation may appear insignificant, courts
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have repeatedly held that an identifiable trifle is sufficient to confer standing. The

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inflammation of one’s organs is identifiable, concrete, and actual. General Mills’ motion

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to dismiss for lack of standing is therefore DENIED.

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b. Backus also has standing because he alleges a sufficient economic injury
Backus also alleges that he suffered an economic injury by purchasing baking mixes
that contained trans fats. Rule 12 Opp’n at 8-9. In addition to providing an alternative

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source of standing under Article III, Backus is required to plead an economic injury for his

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UCL claims, which can only be brought by “a person who has suffered injury in fact and

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has lost money or property as a result of the unfair competition.” Cal. Bus. & Prof. Code

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United States District Court
Northern District of California

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§ 17204. The injury of lost money or property that is required for a UCL claim is also

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sufficient for Article III standing. Rubio v. Capital One Bank, 613 F.3d 1195, 1204 (9th

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Cir. 2010).

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In Kwikset Corporation v. Superior Court, 51 Cal. 4th 310 (2011), the California

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Supreme Court explained that “[t]here are innumerable ways in which economic injury

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from unfair competition may be shown,” including where “[a] plaintiff may (1) surrender

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in a transaction more, or acquire in a transaction less, than he or she otherwise would have

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. . . .” Id. at 323. In Kwikset, a case about lock sets that were falsely labeled as “Made in

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the U.S.A.,” the California Supreme Court found that the plaintiffs had sufficiently alleged

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an economic injury by alleging that they “would not have bought the product but for the

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misrepresentation,” because “the consumer (allegedly) was made to part with more money

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than he or she otherwise would have been willing to expend.” Id. at 330.

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Plausible allegations that a plaintiff purchased a defective or unsafe product are

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sufficient to make out an economic injury. In re Mattel, Inc., Toy Lead Paint Prods.

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Liability Litig., 588 F. Supp. 2d 1111, 1117 (C.D. Cal. 2008) (toys with lead paint); see

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also Cole v. General Motors Corp., 484 F.3d 717, 723 (5th Cir. 2007) (airbags); Keilholtz

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v. Lennox Hearth Products Inc., 268 F.R.D. 330, 336 (N.D. Cal. 2010) (fireplaces). In In

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re Mattel, a case about toys with lead paint that were subject to recalls, the court held that
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the plaintiffs “properly allege damages for the purchase price of the toys that allegedly

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were defective and not fit for their represented use. Plaintiffs’ claim is straightforward—

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they allege that they purchased toys that were unsafe and unusable and should get their

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money back.” 588 F. Supp. 2d at 1117. Rejecting the defendants’ argument that the

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plaintiffs had not plausibly alleged that the products were defective, the court explained

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that, “Given the extensive allegations in the complaint concerning government-ordered

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safety recalls for all of the accused products, the Court finds ample pleading of the

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defectiveness of the toys.” Id. n.8.

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However, where the complaint does not plausibly allege that a product is unsafe,
courts will find that its purchase did not constitute an economic injury. Birdsong v. Apple,

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United States District Court
Northern District of California

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Inc., 590 F.3d 955, 961 (9th Cir. 2009) (headphones did not plausibly have defect creating

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inherent risk of ear injury). For example, in Boysen v. Walgreen Co., No. 11-cv-6262 SI,

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2012 WL 2953069 (N.D. Cal. July 19, 2012), the court considered a case about whether a

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distributor failed to adequately disclose the presence of lead and arsenic in its apple and

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grape juices. Id. at *1. The plaintiffs in that case alleged that they had suffered an

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economic injury, because if they had known that the products contained lead, they would

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not have purchased them. Id. at *4. The court found that this was not a sufficient

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economic injury, because the amount of lead in the products was within a range that the

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FDA had found to be safe, so the plaintiffs could not plausibly allege that they had spent

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money on an unsafe product. Id. at *5.

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Similarly, in Herrington v. Johnson & Johnson Consumer Companies, Inc., No. 09-

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cv-1597 CW, 2010 WL 3448531 (N.D. Cal. Sept. 1, 2010), a case involving allegedly

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carcinogenic baby bath products, the court found that the plaintiffs’ allegation that the bath

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products were potentially carcinogenic was not sufficient to allege that they were defective

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or unfit for use, such that the plaintiffs had not received the benefit of their bargain. Id. at

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*4. The court noted that the “Plaintiffs do not allege that the levels of the substances in

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Defendants’ products were unsafe,” so they could not reasonably claim an economic injury

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from purchasing a dangerous product. Id. at *5.
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In Simpson v. California Pizza Kitchen, Inc., 989 F. Supp. 2d 1015, 1022 (S.D. Cal.

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2013), another case about trans fats, the court found that, even though the plaintiff had

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alleged that she spent money on allegedly dangerous frozen pizzas, she consumed the food

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and therefore received the benefit of her bargain. 989 F. Supp. 2d at 1022 (“Consumption

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is the purpose for which one purchases frozen foods. Thus, Plaintiff received the benefit

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of her bargain from the purchase of the Contested Pizzas.”). The court in Simpson also

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noted that the presence of trans fats in the pizzas was readily apparent from the label, so

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the plaintiff could not claim that she was misled into purchasing the food. Id. at 1022-23.
Here, Backus alleges that he repeatedly purchased General Mills baking mixes, as

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much as 20 times per year for the last four years. Compl. ¶ 62. He alleges that he “lost

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United States District Court
Northern District of California

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money as a result of Defendants’ conduct because he purchased products that were

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detrimental to his health and were unfairly offered for sale in violation of California law,”

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because “[h]ad Defendants not violated the law, Plaintiff would not have been able to

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purchase the Trans Fat Baking Mixes.” Id. ¶ 77.
Backus has alleged a sufficient economic injury for standing under both Article III

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and the UCL. Unlike the plaintiffs in Boysen and Herrington, Backus has actually alleged

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that the trans fat baking mixes at issue here caused him immediate physical injury, and

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were unsafe because of the level of trans fat in them. It is true that the presence of PHOs

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was present on the products’ labels, and apart from their trans fats, there are no allegations

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that the baking mixes did not function properly. However, Backus alleges that the sale of

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the baking mixes is actually illegal, and that he would not have even been able to spend

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money on them if General Mills had complied with California law. The purchase of such

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an allegedly unsafe and illegal product is sufficient to confer standing for an economic

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injury under Article III and the UCL.

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c. Backus has not alleged a sufficient increased risk of future injury
Even though Backus has sufficiently alleged that he suffered an actual physical

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injury and economic injury that gives him standing in this case, his allegations of an

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increased risk of future injury would not be sufficient if taken alone.

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The Supreme Court has made clear that a plaintiff can only base standing on the

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risk of a future injury if such injury is “certainly impending.” Clapper v. Amnesty Int’l

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USA, 133 S.Ct. 1138, 1147 (2013). In Clapper, attorneys and human rights organizations

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argued that they had standing to challenge the federal government’s warrantless

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wiretapping of phone calls to foreign parties, because there was an “objectively reasonable
likelihood” that their phone calls would be intercepted. Id. The Supreme Court rejected

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United States District Court
Northern District of California

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that argument, and held that the probability of injury was too speculative to confer

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standing, since the plaintiffs’ actual injury would require what the Court considered to be a

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“highly attenuated chain of possibilities,” including the Government’s decision to target

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foreign individuals with whom they communicate and the plaintiffs’ participation on a call

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that actually gets intercepted. Id. at 1148. However, the Court recognized that its “cases

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do not uniformly require plaintiffs to demonstrate that it is literally certain that the harms

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they identify will come about,” and that, “[i]n some instances, [it has] found standing

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based on a ‘substantial risk’ that the harm will occur.” Id. at 1150 n.5.

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Before Clapper, the Ninth Circuit used a lower standard to evaluate standing in

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cases involving a risk of future injury. In Covington, a case about pollution from a landfill,

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the Ninth Circuit held that the standing inquiry depended on whether the defendants’

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actions caused “reasonable concern” of injury to the neighboring plaintiffs. 358 F.3d at

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639. And in Hall v. Norton, 266 F.3d 969 (9th Cir. 2001), a case about pollution from real

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estate developments, the court held that “evidence of a credible threat to the plaintiff’s

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physical well-being from airborne pollutants falls well within the range of injuries to

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cognizable interests that may confer standing.” Id. at 976; see also Central Delta Water

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Agency v. United States, 306 F.3d 938, 950 (9th Cir. 2002) (“a credible threat of harm is

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sufficient to constitute actual injury for standing purposes . . . .”). However, both of these
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standards have been abrogated by Clapper’s “certainly impending” and “substantial risk”

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standards.
In increased risk of injury cases involving products liability, courts generally

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require a plaintiff to allege “(i) a substantially increased risk of harm and (ii) a substantial

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probability of harm with that increase taken into account.” Herrington, 2010 WL

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3448531, at *3 (quoting Public Citizen v. Nat’l Hwy. & Traffic Safety Admin., 489 F.3d

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1279, 1295 (D.C. Cir. 2007)). Although Herrington was a pre-Clapper case, its use of a

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“substantial probability” standard parallels Clapper’s “substantial risk” standard. In

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Herrington, a case involving allegedly carcinogenic baby bath products, the plaintiffs had

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pled that “scientists believe there is no safe level of exposure to a carcinogen,” and that the

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United States District Court
Northern District of California

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bath products were “probable human carcinogens.” 2010 WL 3448531, at *3. However,

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the court noted that “Plaintiffs do not allege that [the products] are in fact carcinogenic for

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humans. Nor do they plead that the amounts of the substances in Defendants’ products

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have caused harm or create a credible or substantial risk of harm.” Id. The court noted

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that the FDA had found that the same chemicals could be used safely in cosmetics

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products. Id. at n.2. Ultimately, the court found the alleged risk of harm to be “too

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speculative.” Id. at *4.

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In another trans fat case very similar to this one, where the plaintiff alleged that she

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had standing because of the increased risk of disease caused by consuming trans fats, the

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court rejected the argument and dismissed for lack of standing. Simpson, 989 F. Supp. 2d

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at 1022. Applying the two-pronged “substantial risk” test from Herrington, the court

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found that, “While Plaintiff does present significant evidence of the harmful effects of

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prolonged consumption of [trans fats], she does not allege facts tending to show that such

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isolated instances of [trans fat] consumption are sufficient to cause the enumerated harmful

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effects.” Id. The court continued, “Thus, based on the allegations in the FAC, this Court

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is not convinced that consuming [trans fats] five times over the period of a year represents

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a substantial increased risk of harm, much less that the probability of that harm is

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substantial.” Id. However, the court did not discuss any allegations of present physical

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injuries in that case, but only an increased risk of future harm. See id.
Here, if the Court were to only consider Backus’s allegations of future risk, he

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would not have alleged a sufficient injury to confer standing. Backus repeatedly alleges

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that any consumption of trans fats increases the risk of contracting various diseases. E.g.,

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Compl. ¶ 17 (“any incremental increase in trans fatty acid intake increases the risk of

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[coronary heart disease].”); id. ¶ 34 (“Eating trans fats increases your risk of developing

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heart disease.”); id. ¶ 78 (“consuming artificial trans fat in any quantity . . . increases the

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risk of heart disease, diabetes, cancer, and death.”). However, nowhere does Backus allege
that the amount of trans fats that he consumed after purchasing the baking mixes

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United States District Court
Northern District of California

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approximately 20 times per year over the past four years was sufficient to substantially

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increase his risk of the above diseases, or that, after such increased risk, the probability of

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contracting the diseases was substantial. The failure to allege a substantially increased risk

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based on the amounts he consumed would be fatal to his Complaint, if increased risk of

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harm were his only alleged injury.

16

However, it is important to distinguish between the immediate physical injuries that

17

Backus alleges, which are sufficient to confer standing as discussed above, and the alleged

18

probabilistic future injuries, which are not. Backus alleges both that consuming any

19

amount of trans fats inflames and damages vital organs, and that it increases the risk of

20

coronary heart disease, diabetes and cancer. The former claim is sufficient for standing

21

because it alleges a present injury, even if the alleged injury may be minimal. The latter

22

claim fails, because Backus did not allege that the amounts he consumed caused a

23

substantial increase in the risk of contracting the diseases.

24
25
26

II.

Backus Has Failed to State Two of His Claims for Relief
Backus brings claims under the “unlawful” and “unfair” prongs of the UCL, the

27

public nuisance law, and the implied warranty of merchantability. He has plausibly stated

28

claims for just the first two of these causes of action.
13

1

“Dismissal can be based on the lack of a cognizable legal theory or the absence of

2

sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police

3

Dept., 901 F.2d 696, 699 (9th Cir. 1990).

4

As discussed below, Backus has sufficiently identified the products at issue in this

5

case, and he has met the UCL’s requirement of alleging that he was injured “as a result of”

6

General Mills’ conduct. Backus has stated claims for violations of the “unfair” and

7

“unlawful” prongs of the UCL, and therefore these claims are not dismissed. However, he

8

has failed to state claims for public nuisance or for breach of the implied warranty of

9

merchantability, and these claims are therefore dismissed.

10

United States District Court
Northern District of California

11
12

a. Backus has sufficiently identified the products at issue
General Mills’ first argument for dismissing the Complaint is that Backus has failed

13

to sufficiently identify which of its baking mixes he purchased. Rule 12 Mot. at 10-11.

14

General Mills’ argues that, due to this omission, the Complaint does not comply with

15

Federal Rule of Civil Procedure 8, because General Mills has not been given sufficient

16

notice to defend against the Complaint.

17

Rule 8 states that a complaint “must contain . . . a short and plan statement of the

18

claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Under this

19

Rule, a complaint “must contain sufficient allegations of underlying facts to give fair

20

notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652

21

F.3d 1202, 1216 (9th Cir. 2011).

22

Relatedly, under the class action mechanism, a named plaintiff may properly

23

include allegations in his complaint involving products that he did not purchase, so long as

24

those products are substantially similar to the products that allegedly caused his own

25

injuries. Miller v. Ghirardelli Chocolate Co., 912 F. Supp. 2d 861, 869 (N.D. Cal. 2012)

26

(collecting cases). The degree of similarity required depends on the nature of the claims

27

being litigated; for example, for claims regarding the ingredients of products, the products

28

must actually include substantially similar ingredients, but “[w]here product composition
14

1

is less important, the cases turn on whether the alleged misrepresentations are sufficiently

2

similar across product lines.” See id.

3

Applying this rule in a case about the alleged mislabeling of evaporated cane juice

4

in yogurt, the court found that, where the plaintiffs had specifically alleged purchases of

5

certain flavors of yogurt based on the misrepresentations, but included claims involving

6

additional flavors without additional factual allegations, that the plaintiffs had not pled the

7

substantial similarity required to include those products in their complaint. Kane v.

8

Chobani, Inc., No. 12-cv-2425 LHK, 2013 WL 5289253, at *10-11 (N.D. Cal. Sept. 19,

9

2013). However, the court recognized that the plaintiffs “may be able to amend the
complaint to address these deficiencies,” and so it dismissed the claims regarding those

11
United States District Court
Northern District of California

10

products without prejudice. Id. at 11.

12

On the other hand, in a case about mislabeled ingredients in ice cream, the court

13

found that the plaintiffs had sufficiently alleged substantial similarity where they were

14

complaining about “the same kind of food products (i.e., ice cream) as well as the same

15

labels for all of the products—i.e., ‘All Natural Flavors’ for the Dreyer’s/Edy’s products

16

and ‘All Natural Ice Cream’ for the Haagen–Dazs products.” Astiana v. Dreyer’s Grand

17

Ice Cream, Inc., No. 11-cv-2910 EMC, 2012 WL 2990766, at *13 (N.D. Cal. July 20,

18

2012). The court also held that “any concerns of [the defendant] and/or the Court about

19

material differences are better addressed at the class certification stage rather than at the

20

12(b)(6) stage.” Id.

21

Here, Backus alleges that “Defendants manufacture, distribute, and sell a variety of

22

baking mix products (collectively “the Trans Baking Mixes” or “TF Baking Mixes”)

23

containing partially hydrogenated oil . . . .” Compl. ¶ 4. He alleges that “Plaintiff Troy

24

Backus repeatedly purchased and consumed the Trans Fat Baking Mixes during the Class

25

Period defined herein.” Id. ¶ 5. He seeks to represent a class defined as “All persons who

26

purchased in the United States, on or after January 1, 2008 (the “Class Period”), for

27

household or personal use, boxed baking mix products manufactured or distributed by

28

Defendants containing partially hydrogenated oil.” Id. ¶ 83.
15

1

Backus is not bringing a misrepresentation claim. See id. ¶¶ 92-123. His

2

allegations go to whether it was lawful for General Mills to use trans fats in its baking

3

mixes in any amount. E.g., id. ¶ 101. General Mills has sufficient notice of both the

4

products at issue (all of its baking mixes that included trans fat that were sold since

5

January of 2008) and the nature of the claims (selling products with trans fat violated the

6

UCL and the implied warranty of merchantability, and was a public nuisance). The

7

products at issue are sufficiently similar for the pleading stage, because, by definition, all

8

of them contained trans fats. Id. ¶ 83.

9

General Mills argues that Backus’s failure to identify the products jeopardizes his
ability to represent a class. Rule 12 Mot. at 10. However, arguments about class

11
United States District Court
Northern District of California

10

certification are premature so long as the defendant has been given fair notice of the

12

products at issue, which General Mills has here. See Astiana, 2012 WL 2990766, at *13.

13

General Mills also argues that, if Backus were to identify precisely which baking

14

mixes he purchased, some of those mixes may turn out to be non-General Mills products,

15

allowing it to prepare a more effective defense. Rule 12 Mot. at 11. However, General

16

Mills does not dispute the fact that it sold baking mixes with trans fats. Whether Backus

17

also purchased other companies’ baking mixes is irrelevant to the question of whether he

18

has sufficiently pled a claim against General Mills, so long as Backus alleges that he

19

purchased General Mills’ baking mixes, which he does.

20

Backus’s allegations that he repeatedly purchased General Mills’ trans fat baking

21

mixes, and his class definition including the purchasers of all such mixes since 2008, gives

22

General Mills fair notice to understand the nature of the claims and to prepare its defense.

23

The Complaint is sufficient under Rule 8.

24
25
26

b. The UCL does not have a heightened standing requirement in this case
As discussed above, the UCL allows claims to be brought by “a person who has

27

suffered injury in fact and has lost money or property as a result of the unfair competition.”

28

Cal. Bus. & Prof. Code § 17204. General Mills next argues that this imposes a
16

1

“heightened” standing requirement to bring a claim under the UCL. Rule 12 Mot. at 12-

2

13.

3

In fraud or misrepresentation cases, the “as a result of” requirement of the UCL

4

requires a plaintiff to allege that the defendant’s misrepresentation was the “immediate

5

cause” of plaintiff’s injury. Wilson v. Frito-Lay N. Am., Inc., 961 F. Supp. 2d 1134, 1145

6

(N.D. Cal. 2013); see also Cullen v. Netflix, Inc., No. 11-cv-1199 EJD, 2013 WL 140103,

7

at *4 (N.D. Cal. Jan. 10, 2013) (“Because Plaintiff’s claims ‘sound in fraud’ he must plead

8

with particularity ‘actual reliance’ on the allegedly deceptive, fraudulent, or misleading

9

statements.”).
However, as the California Supreme Court has made clear, the UCL’s standing

11
United States District Court
Northern District of California

10

limitations are intended “to eliminate standing for those who have not engaged in any

12

business dealings with would-be defendants . . . while preserving for actual victims of

13

deception and other acts of unfair competition the ability to sue and enjoin such practices.”

14

Kwikset, 51 Cal. 4th at 317 (2011). Accordingly, courts “need not torture the language of

15

the UCL . . . to conclude that harm in fact will meet the ‘as a result of’ requirement.”

16

Anunziato v. eMachines, Inc., 402 F. Supp. 2d 1133, 1138 (C.D. Cal. 2005). Allegations

17

that a consumer was actually harmed by a business dealing with a defendant are therefore

18

generally sufficient in cases not involving fraud or misrepresentation. See id.

19

Here, General Mills argues that Backus cannot satisfy the “heightened” standing

20

requirement because he cannot show that he suffered an injury as a result of General Mills’

21

conduct. Rule 12 Mot. at 13. However, as discussed above, Backus sufficiently alleged

22

that he suffered immediate physical injury by consuming General Mills’ baking mixes in

23

the form of inflamed organs and economic injury by spending money on an illegal product.

24

This is sufficient to meet the “as a result” of standard under the UCL in this case.

25

General Mills also argues that Backus has not met the UCL’s standing requirement

26

because he has not alleged that General Mills made any misleading statements or violated

27

any labeling regulations. Id. However, this is simply not a misrepresentation case; the

28

allegedly unfair business conduct here was the distribution of baking mixes with trans fats.
17

1

See Compl. ¶¶ 92-123. Because Backus is not arguing that General Mills violated any

2

labeling regulations, but instead is arguing that the distribution of the mixes was by itself

3

an unfair business practice, it is beside the point that Backus did not include

4

misrepresentation allegations in his Complaint. As discussed below, Backus has plausibly

5

stated claims for relief under the UCL even though he does not allege any

6

misrepresentation.

7

Backus’s claims do not sound in fraud, and the UCL does not carry a heightened

8

standard for standing in this case. Backus’s allegations regarding his immediate physical

9

and economic injuries are sufficient to confer standing for his UCL claims.

10

United States District Court
Northern District of California

11
12

c. Backus has plausibly alleged an “unlawful” UCL claim
The UCL prohibits “unfair competition,” which is defined as “any unlawful, unfair

13

or fraudulent business act or practice and unfair, deceptive, untrue or misleading

14

advertising.” Cal. Bus. & Prof. Code § 17200. Under the “unlawful” prong, “The UCL

15

‘borrows violations of other laws and treats them as unlawful practices that the unfair

16

competition law makes independently actionable.’” Wilson v. Hewlett-Packard Co., 668

17

F.3d 1136, 1140 (quoting Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th.

18

163, 180 (1999)).

19

Backus argues that the sale of the baking mixes was unlawful under both federal

20

and state laws. Although his federal authorities do not support his claim, he has plausibly

21

stated a claim that selling the baking mixes was unlawful under state law.

22
23
24

i. Selling the baking mixes was not unlawful under federal law
Backus bases his federal law claims on the Food, Drug and Cosmetics Act

25

(“FDCA”) and the regulations of the Food and Drug Administration (“FDA”). The FDCA

26

deems a food adulterated “if it bears or contains [] any food additive that is unsafe . . . .”

27

21 U.S.C. § 342(a)(2)(C). Moreover, the FDA must grant pre-market approval to all food

28

additives. Id. § 348(a). However, the FDCA explicitly exempts from the definition of
18

1

“food additive” foods that are “generally recognized . . . as having been adequately shown

2

through scientific procedures (or, in the case of a substance used in food prior to January 1,

3

1958, through either scientific procedures or experience based on common use in food) to

4

be safe . . . .” Id. § 321(s). This status is referred to as “Generally Recognized as Safe” or

5

“GRAS.” 21 C.F.R. § 170.30.

6

“General recognition of safety through experience based on common use in food

7

prior to January 1, 1958, may be determined without the quantity or quality of scientific

8

procedures required for approval of a food additive regulation.” Id. §170.30(c)(1).

9

Although the FDA maintains a list of foods that it has explicitly determined to be GRAS,
the listed foods “do not include all substances that are generally recognized as safe for

11
United States District Court
Northern District of California

10

their intended use in food.” Id. § 170.30(d). “Because of the large number of substances

12

the intended use of which results or may reasonably be expected to result, directly or

13

indirectly, in their becoming a component or otherwise affecting the characteristics of

14

food, it is impracticable to list all such substances that are GRAS.” Id.
The partially hydrogenated vegetable oils at issue in this litigation are not listed

15
16

among the foods that FDA has specifically determined to be GRAS. See 21 C.F.R. Part

17

184.4 However, the FDA has noted that “PHOs . . . have been considered GRAS (through

18

a GRAS self-determination) by the food industry for use in food at levels consistent with

19

good manufacturing practice based on a history of use prior to 1958.” 78 Fed. Reg. 67169-

20

01, 67171 (Nov. 8, 2013).
On June 17 of this year, the FDA “made a final determination that there is no longer

21
22

a consensus among qualified experts that partially hydrogenated oils . . . are generally

23

recognized as safe (GRAS) for any use in human food.” 80 Fed. Reg. 34650 (June 17,

24

2015). The FDA determined that “PHOs are no longer GRAS by applying the GRAS

25

standard to current scientific evidence and the views of qualified experts about the safety

26

of PHOs.” Id. at 34657.

27
4

28

Some other partially hydrogenated oils, including those from menhaden and rapeseed, are
listed as GRAS in limited amounts. E.g., 21 C.F.R. §§ 184.1472, 184.1555.
19

1

The FDA set a date for compliance with its determination three years out, on June

2

18, 2018. Id. at 34651. The FDA “encourage[d] submission of scientific evidence as part

3

of food additive petitions” to determine whether PHOs could be used in small amounts,

4

and set the compliance date in 2018 “to allow time for such petitions and their review.” Id.

5

at 34653. The FDA found that “[t]he compliance date will have the additional benefit of

6

minimizing market disruptions by providing industry sufficient time to identify suitable

7

replacement ingredients for PHOs, to exhaust existing product inventories, and to

8

reformulate and modify labeling of affected products.” Id. at 34669.
Here, Backus has not stated a plausible claim that the sale of trans fat baking mixes

10

was unlawful under federal law. Although the FDA never formally listed PHOs as GRAS,

11
United States District Court
Northern District of California

9

it acknowledged that the food industry treated them as GRAS for decades. Multiple

12

statements in the FDA’s final order imply that PHOs were considered GRAS until the

13

order revoked that status, including statements such as “there is no longer a consensus,”

14

and “PHOs are no longer GRAS.” While these statements fall short of explicitly

15

recognizing that PHOs were once GRAS, they nonetheless strongly indicate that the FDA

16

treated PHOs as GRAS before publishing its order.

17

The FDA’s decision to set a compliance date in 2018 is further evidence that PHOs

18

are not currently unlawful under federal law. The FDA set the date three years out in order

19

to allow the industry to deplete its current product inventories, and to petition the FDA for

20

a determination that PHOs could be used as a food additive in small amounts. FDA’s

21

decision not to prohibit the sale of products containing PHOs until 2018 indicates that it

22

was not and is not unlawful under federal law to sell them before that time.

23

Both parties in this case overstate their arguments regarding the FDA’s

24

determination. Backus argues that PHOs have not been GRAS for a long time due to a

25

growing body of scientific research; while this argument parallels the FDA’s reasoning in

26

its order, it ignores the FDA’s recognition that it was changing the industry’s

27

determination and its decision to set a compliance date in 2018. On the other hand,

28

General Mills argues that “Prior to the June 17 Order, the FDA had permitted the use of
20

1

PHOs and considered them GRAS for decades based on their consistent and common

2

usage.” Primary Jurisdiction Mot. at 3. However, it does not appear that the FDA ever

3

formally recognized PHOs as GRAS; it merely acknowledged the industry’s determination

4

and has now permitted the industry to keep using PHOs until 2018.

5

Even though General Mills overstates its argument, it nonetheless has the better

6

view here. Backus has not plausibly alleged that the baking mixes were unlawful under

7

federal law, because they were widely treated as GRAS, at least by industry, until very

8

recently, and the FDA has permitted their continued use until 2018. Federal law, therefore,

9

cannot serve as the basis for his “unlawful” UCL claim.

10

United States District Court
Northern District of California

11
12
13
14

ii. Selling the baking mixes may have been unlawful under state law
Although Backus does not allege a plausible “unlawful” UCL claim based on
federal law, he plausibly states a claim under state law.
California’s Sherman Act prohibits the sale of adulterated food. Cal. Health &

15

Safety Code § 110620. There are multiple definitions of what makes a food adulterated,

16

ranging from the broad to the very specific. Food is “adulterated if it bears or contains any

17

poisonous or deleterious substance that may render it injurious to [the] health of man . . . .”

18

Id. § 110545. Food is also “adulterated if it is, bears, or contains any food additive that is

19

unsafe . . . .” Id. § 110555.

20

In the Sherman Act, California adopted all of the federal food additive regulations

21

in effect as of November 23, 1970. Id. § 110085. California also adopts new federal food

22

regulations 30 days after the federal regulation takes effect. Id. § 110115.

23
24
25
26
27
28

Notably, in its final order on PHOs, the FDA stated the following with regard to the
preemptive effect of its order:
There is no statutory provision in the FD&C Act providing for
express preemption of any state or local law prohibiting or
limiting use of PHOs in food, including state or local
legislative requirements or common law duties. . . . We decline
to take a position regarding the potential for implied
preemptive effect of this order on any specific state or local
law; as such matters must be analyzed with respect to the
21

1
2
3
4

specific relationship between the state or local law and the
federal law. FDA believes, however, that state or local laws
that prohibit or limit use of PHOs in food are not likely to be in
conflict with federal law, or to frustrate federal objectives.
80 Fed. Reg. at 34655.
In one of the few district court cases to address the interplay between the FDA rules

5

and California’s Sherman Act on this issue, the court held that “TFAs are ‘generally

6

regarded as safe’” and “GRAS substances are exempt from food additive status for the

7

purpose of a food adulteration claim.” Simpson, 989 F. Supp. 2d at 1025-26 (citing 21

8

U.S.C. § 321(s)(4); Cal. Health & Safety Code § 109940). However, the Simpson court’s

9

holding on this point is unpersuasive, for two reasons. First, the cited provisions state that
a food is exempted if it is used with the “sanction or approval” of the FDA. 21 U.S.C.

11
United States District Court
Northern District of California

10

§ 321(s)(4); Cal. Health & Safety Code § 109940. But here, there is no evidence that such

12

formal sanction or approval was given to General Mills; instead, the industry self-

13

determined that PHOs were GRAS. 80 Fed. Reg. at 34655; 78 Fed. Reg. at 67171.

14

The second reason that the Simpson court’s holding is unpersuasive is that the

15

court’s assumption that PHOs are GRAS is no longer valid, because of the FDA’s final

16

determination. Regardless of whether a food that is GRAS can also be adulterated, the

17

FDA has determined that PHOs are not GRAS, and it is now plausible that they would be

18

found to be a “deleterious substance” that is “injurious to [the] health of man,” such that

19

their sale is prohibited by the Sherman Act.

20

Moreover, in a recent trans fat case in the Northern District, Guttmann v. Nissin

21

Foods (U.S.A.), Inc., No. 15-cv-567 WHA, 2015 WL 4309427 (N.D. Cal. July 15, 2015),

22

the court rejected the argument that the lack of federal restrictions on trans fat foods

23

somehow precluded parallel state law claims. Id. at *4. As the court in that case

24

explained, “The FDA’s prior declination to issue a regulation pertaining to all artificial

25

trans-fats did not establish a safe harbor protecting use of that ingredient from the reach of

26

California law.” Id.

27
28

Here, General Mills argues that its sale of the baking mixes was not unlawful under
state law because PHOs were GRAS at the federal level. Rule 12 Mot. at 18-19. This
22

1

argument fails, because, as both courts and the FDA have recognized, the FDA never

2

formally sanctioned PHOs and the regulations do not preempt state laws that

3

independently regulate the use of PHOs.

4

Backus has plausibly alleged that trans fats are an adulterated food under

5

California’s Sherman Act, because he plausibly alleges that they are injurious to health and

6

there does not appear to be an applicable statutory or regulatory provision that otherwise

7

exempts them from the Sherman Act. He has therefore plausibly alleged an “unlawful”

8

claim under the UCL, and this cause of action will not be dismissed.

9
10

d. Backus has plausibly alleged an “unfair” UCL claim

United States District Court
Northern District of California

11

“California appellate courts disagree on how to define an ‘unfair’ act or practice in

12

the context of a UCL consumer action.” Rubio v. Capital One Bank, 613 F.3d 1195, 1204

13

(9th Cir. 2010). Under the “FTC test,” which is based on section 5 of the federal Fair

14

Trade Commission Act, a plaintiff states a claim where the following criteria are met: “(1)

15

the consumer injury must be substantial; (2) the injury must not be outweighed by any

16

countervailing benefits to consumers or competition; and (3) it must be an injury that

17

consumers themselves could not reasonably have avoided.” Camacho v. Automobile Club

18

of S. Cal., 142 Cal. App. 4th 1394, 1403 (2006). Under the “balancing test,” a plaintiff

19

states a claim if he alleges that the harm to the public from the business practice is greater

20

than the utility of the practice. Rubio, 613 F.3d at 1205. And under the “public policy”

21

test, a plaintiff states a claim if he alleges that a practice “violates public policy as declared

22

by ‘specific constitutional, statutory or regulatory provisions.’” Id. (quoting Gregory v.

23

Albertson’s, Inc., 104 Cal. App. 4th 845, 854 (2002)).

24

Although California appellate courts may be in disagreement, the Ninth Circuit has

25

rejected the use of the FTC test in the consumer context, because the California Supreme

26

Court discussion regarding that test “clearly revolves around anti-competitive conduct,

27

rather than anti-consumer conduct.” Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718,

28

23

1

736 (9th Cir. 2007) (citing Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20

2

Cal. 4th 163, 186 (1999)).

3

Courts are reluctant to grant motions to dismiss “unfair” UCL claims under the

4

balancing test, because the test involves weighing evidence that is not yet properly before

5

the court. For example, in Peterson v. Mazda Motor of Am., Inc., 44 F. Supp. 3d 965 (C.D.

6

Cal. 2014), the court refused to dismiss an “unfair” UCL claim on a Rule 12(b)(6) motion,

7

where the plaintiff had alleged that a car manufacturer had sold vehicles with a defect that

8

resulted in “catastrophic engine failure” and “a safety risk for drivers and passengers,” and

9

where the automaker “ha[d] not made an argument about the utility of its conduct.” Id. at
973. Taking the allegations as true, the court found that the harm to consumers could

11
United States District Court
Northern District of California

10

plausibly outweigh the utility of the practice. Id.

12

Here, as already discussed, Backus alleges a long list of negative health effects

13

related to the consumption of trans fats, including the inflammation of the vital organs and

14

increased risks of heart disease, diabetes, cancer, and death. Compl. ¶¶ 15-60. He also

15

alleges that “there are safe, low-cost, and commercially acceptable alternatives to artificial

16

trans fat, including those used in competing brands,” but “Defendants unfairly elect not to

17

use those substitutes in the Trans Fat Baking Mixes in order to increase profit.” Id. ¶ 6.

18

General Mills’ only response regarding the utility of using trans fats is that “[trans

19

fats] are included in Baking Mixes because they are lawful food ingredients.” Rule 12

20

Reply at 11 (Docket No. 13). But this argument assumes the answer to the ultimate

21

question at issue in this litigation – whether trans fats are lawful ingredients. Moreover,

22

this is not an independent argument for the utility of the practice; whether an ingredient is

23

lawful has nothing to do with whether it is useful to include it in a baking mix. Unlawful

24

ingredients could still be useful, because they are cheap or delicious; lawful ingredients

25

could be useless, because they don’t help to bake a cake. Although a legislature or an

26

agency might consider an ingredient’s utility in deciding whether to proscribe it, the two

27

principles are nonetheless orthogonal absent an independent reason for them to be aligned.

28

24

1

Because Backus has alleged several harms related to trans fat use that could be

2

avoided in a cost-effective way, and because General Mills has not submitted a meritorious

3

argument regarding the utility of the practice, Backus has sufficiently alleged an “unfair”

4

UCL claim under the balancing test.

5

Backus has also alleged an “unfair” UCL claim under the public policy test. To
identify the public policy that using trans fats allegedly violates, Backus points to

7

California’s Sherman Law, which states that “It is unlawful for any person to manufacture,

8

sell, deliver, hold, or offer for sale any food that is adulterated.” Cal. Health & Safety

9

Code § 110620. Food is “adulterated if it bears or contains any poisonous or deleterious

10

substance that may render it injurious to [the] health of man . . . .” Id. § 110545. For the

11
United States District Court
Northern District of California

6

same reason that Backus sufficiently alleged that the sale of the baking mixes was

12

“unlawful” under the UCL, discussed in the preceding section, he has also sufficiently

13

alleged that their sale violated the Sherman Act’s public policy of prohibiting the sale of

14

adulterated food.

15

For these reasons, Backus’s “unfair” UCL claim will not be dismissed.

16
17
18

e. Backus has not plausibly alleged a public nuisance claim
In addition to his UCL claims, Backus alleges that General Mills’ sale of the baking

19

mixes constitutes a public nuisance under California law. In California, a public nuisance

20

is “Anything which is injurious to health . . . so as to interfere with the comfortable

21

enjoyment of life or property . . . which affects at the same time an entire community or

22

neighborhood, or any considerable number of persons.” Cal. Civ. Code §§ 3479-80. “A

23

private person may maintain an action for a public nuisance, if it is specially injurious to

24

himself, but not otherwise.” Cal. Civ. Code § 3493.

25

Under the requirement that a public nuisance be “specially injurious” to a plaintiff,

26

courts have recognized that “a plaintiff suing on this basis must show special injury to

27

himself of a character different in kind - not merely in degree - from that suffered by the

28

general public.” Institoris v. City of Los Angeles, 210 Cal. App. 3d 10, 20 (1989).
25

1

Multiple courts hearing trans fats challenges have found that the plaintiffs did not

2

suffer injuries that were different in kind from those to the public generally. In Guttmann,

3

the court explained that “No decision applying California law has found that interference

4

with the general public’s right to a safe food supply by selling products with unhealthy

5

ingredients constituted a public nuisance.” 2015 WL 4309427, at *5. The court noted that

6

“The only injuries to the general public alleged herein are the risk of harm due to the

7

consumption of artificial trans-fats and the cost of purchasing Nissin’s noodle products,”

8

and found that “Guttmann has not alleged that he has suffered an injury different in kind

9

from those injuries.” Id. Because of the futility of amendment, the court dismissed the

10

United States District Court
Northern District of California

11

claim with prejudice. See id. at *4-6.
In Simpson, the pizza case in the Southern District of California, the court found

12

that “[trans fats] are not uniquely harmful to Plaintiff, but rather constitute a general health

13

hazard to anyone who consumes them. All consumers who have purchased the Contested

14

Pizzas have ‘lost money’ by that act in the same manner that Plaintiff did.” 989 F. Supp.

15

2d at 1025.

16

Backus argues that his alleged injuries here are different in kind than that of the

17

general public, because his own injuries are “physical and emotional harm,” and “lost

18

money,” whereas the harm to the public is a violation of its “right to a safe food supply”

19

and its “interest in ensuring that only safe foods are allowed for sale.” Rule 12 Opp’n at

20

19. However, these injuries are not distinguishable from Backus’s own personal injury.

21

The public’s interest in a safe food supply is only a more generalized version of Backus’s

22

own personal interest in eating safe food.

23

The Court agrees with the reasoning of the other courts to consider this issue, and

24

finds that Backus has not alleged an injury that is different in kind from the injury to the

25

general public. Moreover, in accord with the reasoning of Guttmann, the Court finds that

26

amendment of this cause of action would be futile. Backus’s public nuisance claim is

27

therefore DISMISSED WITH PREJUDICE.

28

26

1

f. Backus has not plausibly alleged an implied warranty of merchantability claim

2

Backus’s final cause of action is for a violation of the implied warranty of

3

merchantability. In California, “a warranty that the goods shall be merchantable is implied

4

in a contract for their sale if the seller is a merchant with respect to goods of that kind.”

5

Cal. Com. Code § 2314(1). This includes a requirement that the goods “Are fit for the

6

ordinary purposes for which such goods are used.” Id. § 2314(2)(c). “To breach the

7

implied warranty of merchantability, a product must lack ‘even the most basic degree of

8

fitness for ordinary use.’” Guttmann v. Nissin Foods (U.S.A.), Inc., No. 15-cv-567 WHA,

9

Docket No. 59, at 4 (N.D. Cal. Aug. 14, 2015) (quoting Mocek v. Alfa Leisure, Inc., 114

10

Cal. App. 4th 402, 406 (2003)).
“When the buyer before entering into the contract has examined the goods or the

United States District Court
Northern District of California

11
12

sample or model as fully as he desired or has refused to examine the goods there is no

13

implied warranty with regard to defects which an examination ought in the circumstances

14

to have revealed to him.” Cal. Com. Code § 2316.

15

Courts in food cases have held that a label that discloses the presence of an

16

unhealthy ingredient precludes liability under the implied warranty of merchantability. In

17

Simpson, the court found that the pizzas’ label indicating the presence of PHOs precluded

18

the plaintiff’s claim under section 2316. 989 F. Supp. 2d at 1026-27. And in a very recent

19

opinion in Guttmann, the court dismissed a breach of the implied warranty of

20

merchantability claim under section 2316, where the plaintiff “could have easily

21

discovered that defect by reading the ingredients, which undisputedly listed partially-

22

hydrogenated oils.” Guttmann, Docket No. 59 at 4. The court in Guttmann did not

23

consider whether a “typical consumer” would understand the risks of trans fats, because

24

the plaintiff in that case admitted in a deposition that he did understand those risks. Id. at

25

4-5.

26

The FDA regulates how oils are labeled in foods, requiring that they “be declared

27

by [their] specific common or usual name” and “if partially hydrogenated, the name shall

28

include the term partially hydrogenated.” 21 C.F.R. § 101.4. Moreover, the National
27

1

Labeling and Education Act prohibits states from establishing food labeling requirements

2

that are not identical to those required by the FDA. 21 U.S.C. § 341-1(a)(3). “The phrase

3

‘not identical to’ means ‘that the State requirement directly or indirectly imposes

4

obligations or contains provisions concerning the composition or labeling of food that are

5

not imposed by or contained in the applicable federal regulation or differ from those

6

specifically imposed by or contained in the applicable federal regulation.’” Lilly v.

7

ConAgra Foods, Inc., 743 F.3d 662, 665 (9th Cir. 2014).

8
9

Here, Backus has not plausibly alleged that the baking mixes were unfit for even the
most basic degree of ordinary use. While the Complaint is full of citations to scientific
studies discussing the dangers of increased ingestion of PHOs, notably absent are any

11
United States District Court
Northern District of California

10

allegations of the amount of PHOs present in a serving of foods made from General Mills

12

baking mixes. See Compl. ¶¶ 1-123. Although the Court has found Backus’s alleged

13

immediate injuries to be sufficient for standing under Article III, where even an

14

identifiable trifle is sufficient, these allegations do not state a plausible claim that the

15

mixes were totally unfit for their intended use.

16

Additionally, as in Simpson and Guttmann, the presence of PHOs was clearly

17

indicated on the baking mixes’ labels. Ex. A to Request for Judicial Notice. A reasonable

18

inspection would therefore have alerted Backus to the presence of PHOs in the baking

19

mixes. The Court recognizes that there is arguably a question of fact as to whether Backus

20

could not reasonably be expected to understand the risks of partially hydrogenated

21

vegetable oils. However, such arguments go to the sufficiency of General Mills’ warning,

22

and as Backus admits in his opposition, “Plaintiff does not allege General Mills made any

23

misleading label statements, nor does he make any allegations regarding its labeling or

24

advertising.” Rule 12 Opp’n at 11 (internal quotation omitted). Backus is therefore

25

arguing that General Mills complied with all of its labeling obligations, while at the same

26

time arguing that the risks of PHOs were not sufficiently disclosed to him. This is a

27

backdoor challenge to the sufficiency of General Mills’ warning to Backus, which runs

28

headfirst into the National Labeling and Education Act’s express preemption of additional
28

1

food labeling requirements. 21 U.S.C. § 341-1(a)(3); see also Taylor AG Indus. v. Pure-

2

Gro, 54 F.3d 555, 563 (9th Cir. 1995) (“We hold that Appellants’ implied warranty claims

3

are preempted by FIFRA because the asserted implied warranties operate by state law to

4

impose labeling requirements indirectly.”).
Reid v. Johnson & Johnson, 780 F.3d 952 (9th Cir. 2015) is not to the contrary. In

5
6

Reid, the court held that California state law misrepresentation claims about a food

7

company advertisement that stated that certain products had “No Trans Fat,” when in fact

8

the products did contain trans fats, were not preempted by the National Labeling and

9

Education Act, because the advertisement was “an unauthorized nutrient content claim”
under the FDA’s regulations and was “misleading in at least one respect,” i.e., that the

11
United States District Court
Northern District of California

10

products claimed to have no trans fats when they did have some. Id. at 962. Here,

12

however, Backus is not arguing that General Mills’ labels were misleading; rather, his

13

implied warranty claim functionally challenges the sufficiency of General Mills’ labels.

14

This the National Labeling and Education Act does not let him do.
Backus has not stated a plausible claim under the implied warranty of

15
16

merchantability, because he has not plausibly alleged that the amounts of PHOs in General

17

Mills’ products rendered them totally unfit for their intended use. Moreover, General

18

Mills’ compliance with its labeling obligations, including its disclosure of the ingredient

19

about which Backus complains, defeats Backus’s claim for a violation of the implied

20

warranty of merchantability under section 2316 as a matter of law. As amendment would

21

be futile under this cause of action, Backus’s implied warranty of merchantability claim is

22

DISMISSED WITH PREJUDICE.

23
24

III.

Backus’s Remaining Claims Are Stayed Under the Primary Jurisdiction

25

Doctrine

26

General Mills also argues that Backus’s claims should be dismissed or stayed under

27

the primary jurisdiction doctrine. Primary Jurisdiction Mot. at 6-10. The primary

28

jurisdiction doctrine “is a prudential doctrine under which courts may, under appropriate
29

1

circumstances, determine that the initial decisionmaking responsibility should be

2

performed by the relevant agency rather than the courts.” Syntek Semiconductor Co., Ltd.

3

v. Microchip Tech., Inc., 307 F.3d 775, 780 (9th Cir. 2002). The doctrine is useful where

4

“a claim is cognizable in federal court but requires resolution of an issue of first

5

impression, or of a particularly complicated issue that Congress has committed to a

6

regulatory agency.” Id. (quoting Brown v. MCI WorldCom Network Servs., Inc., 277 F.3d

7

1166, 1172 (9th Cir.2002)).

8

When deciding whether to apply the primary jurisdiction doctrine, courts generally

9

consider the following non-exclusive factors: “(1) the need to resolve an issue that (2) has
been placed by Congress within the jurisdiction of an administrative body having

11
United States District Court
Northern District of California

10

regulatory authority (3) pursuant to a statute that subjects an industry or activity to a

12

comprehensive regulatory authority that (4) requires expertise or uniformity in

13

administration.” Syntek, 307 F.3d at 781.

14

Here, consideration of the Syntek factors makes it clear that the question of whether

15

the amounts of trans fats that were present in General Mills’ baking mixes pose a

16

significant safety risk to society is both an important question of first impression, and a

17

complicated issue that has been committed to the FDA.

18

All four of the Syntek factors apply in this case. First, there is a need to resolve an

19

issue in this case, namely, whether the amounts of trans fats that were present in the baking

20

mixes created a risk to public health that was not outweighed by their utility, and whether

21

those amounts are dangerous enough to be considered an adulterated food. Indeed, this

22

remains an issue of first impression, as neither the courts nor the FDA have yet determined

23

whether PHOs are unsafe in the amount present in the baking mixes.

24

Second, although the FDA does not have jurisdiction over these state law claims,

25

Congress nonetheless granted the FDA authority to regulate food safety by requiring the

26

pre-market approval of food additives and exempting foods that are generally recognized

27

as safe. See 21 U.S.C. §§ 342, 348. If the FDA finds that small amounts of trans fats are

28

permissible as a food additive, this will significantly undermine Backus’s UCL claims.
30

1

Third, for the same reasons, it is clear that the FDCA subjects the food industry to

2

comprehensive regulation.

3

Fourth and finally, determinations of food ingredient safety require both specialized

4

expertise and uniformity in administration. Backus’s own Complaint includes dozens of

5

paragraphs discussing medical studies and their statistical results. Compl. ¶¶ 11-60.

6

Whether a body of evidence sufficiently demonstrates that a particular amount of a

7

chemical substance poses a serious public health risk is precisely the kind of expert

8

question that agencies are better suited to answer than courts or juries. Moreover, there is

9

a risk of conflicting judicial determinations for this question. The Simpson court has
refused to entertain claims regarding trans fats in pizzas, while cases remain pending in

11
United States District Court
Northern District of California

10

other courts. The pendency of these other trans fat cases creates the risk that various

12

courts will find similar amounts of trans fats to either be lawful or unlawful ingredients.

13

Both the food industry and consumers will benefit from the uniformity that comes with an

14

agency determination.

15

Additional factors support applying the primary jurisdiction doctrine here. The

16

FDA explicitly encouraged the food industry to submit petitions for review of trans fats as

17

a food additive, which General Mills has done, through its membership in the Grocery

18

Manufacturers Association. Ex. 4 to Sipos Decl. at 1. This is not a case where the FDA

19

has been silent on the question of whether it will resolve the issue; rather, the FDA set a

20

compliance date for its final order in June of 2018, in order for it to review food additive

21

petitions before that time. 80 Fed. Reg. at 34653.

22

Backus’s remaining arguments against applying the primary jurisdiction doctrine

23

are unpersuasive. Backus argues that the FDA has already resolved the question at issue

24

here by publishing its final order revoking the GRAS status of PHOs. Primary Jurisdiction

25

Opp’n at 9-10 (Docket No. 24). However, Backus conflates the notions of finding that

26

there is no longer consensus that something is safe, and actually finding that the thing is

27

unsafe. See 80 Fed. Reg. at 34653 (“[W]e need not determine that there is a consensus that

28

low level uses are unsafe to find that PHOs are not GRAS at low levels; we need only
31

1

determine that based on available scientific evidence there is not a consensus among

2

qualified experts that such uses are safe, as we do here.”). And while Backus

3

acknowledges that the FDA opened the door for food additive petitions, he argues that

4

such petitions face a “steeply uphill battle.” Primary Jurisdiction Opp’n at 14. Yet, the

5

FDA “acknowledge[d] that scientific knowledge advances and evolves over time[, and]

6

encourage[d] submission of scientific evidence as part of food additive petitions . . . .” 80

7

Fed. Reg. at 34653.

8
9

Backus also argues that the FDA’s jurisdiction is not “comprehensive,” and that the
particular issues of state law here are properly resolved by the federal courts sitting in
diversity. Primary Jurisdiction Opp’n at 11-12. Backus is splitting hairs here. While the

11
United States District Court
Northern District of California

10

FDA may not have jurisdiction to determine if General Mills’ sale of these baking mixes

12

violated California’s Unfair Competition Law, the elements and arguments of that claim

13

are firmly rooted in the FDA’s determinations regarding the safety of trans fats. Indeed,

14

Backus’s own briefing refers to FDA findings as evidence that the sale of trans fats is

15

“unlawful” or “unfair.” E.g., Rule 12 Opp’n at 14 (“[I]n the face of . . . the FDA’s plan to

16

ban partially hydrogenated oil . . . Defendants cannot seriously contend that Plaintiff’s

17

alleged injury is so implausible that his claim should be dismissed at the pleading stage.”);

18

id. at 18.

19

Backus also argues that the dangers of PHOs have been recognized by the Ninth

20

Circuit, precluding the application of the primary jurisdiction doctrine here. However,

21

Reid, the Ninth Circuit case on which he relies, was a case about misrepresentation, not the

22

safety of PHOs. 780 F.3d at 955. In that case, in finding that the primary jurisdiction

23

doctrine did not apply, the court noted that “there is no indication that the FDA is

24

contemplating authorizing ‘No Trans Fat’ statements,” and that “[t]he issue that this case

25

ultimately turns on is whether a reasonable consumer would be misled by McNeil’s

26

marketing, which the district courts have reasonably concluded they are competent to

27

address in similar cases.” Id. at 967. Here, however, the FDA has explicitly invited food

28

additive petitions for PHOs; the Grocery Manufacturers Association has submitted such a
32

1

petition; the FDA has indicated that it will rule on those petitions by 2018; and the case

2

ultimately turns on the safety of the ingredient, not whether a reasonable consumer would

3

be misled. Reid therefore does not support Backus’s argument. Neither do the district

4

court cases that Backus cites for this proposition, all of which involved misrepresentation

5

claims rather than use claims. See, e.g., Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d

6

1111 (N.D. Cal. 2010); Samet v. Procter & Gamble, No. 12-cv-1891 PSG, 2013 WL

7

3124647 (N.D. Cal. June 18, 2013).

8
9

Whether small amounts of trans fats can lawfully be used as a food additive is a
complicated question requiring agency expertise, and one that the FDA will be reviewing
before June of 2018. The Court finds that this question, which is central to Backus’s

11
United States District Court
Northern District of California

10

claims in this case, is therefore properly left to the FDA’s determination under the primary

12

jurisdiction doctrine.

13

However, the Court will not dismiss the case under the primary jurisdiction

14

doctrine. The Ninth Circuit very recently held that it is error to dismiss, rather than stay, a

15

case under the primary jurisdiction doctrine, where dismissal may cause a party to be

16

“unfairly disadvantaged” due to the potential application of the statute of limitations.

17

Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015). The statute of

18

limitations for Backus’s UCL claims is four years. Cal. Bus. & Prof. Code § 17208. The

19

Court will therefore stay Backus’s claim to avoid any potential prejudice from the

20

application of the statute of limitations.

21
22
23

CONCLUSION
For the reasons set forth above, the Court concludes that Backus has Article III

24

standing in this case, and he has stated claims under the “unlawful” and “unfair” prongs of

25

the UCL. However, he has not stated claims for public nuisance or breach of the implied

26

warranty of merchantability, and these claims are DISMISSED WITH PREJUDICE.

27

General Mills’ motion to dismiss for lack of subject matter jurisdiction and failure to state

28

a claim is therefore GRANTED IN PART and DENIED IN PART. Furthermore, General
33

1

Mills’ motion to dismiss or stay the case under the primary jurisdiction doctrine is

2

GRANTED, and further litigation in this case is hereby STAYED pending the FDA’s

3

determination of the food additive status of PHOs. No later than 14 days after the FDA’s

4

determination, the parties shall file a joint statement of no more than 15 pages setting forth

5

their respective positions on the effect of the FDA’s determination and recommending a

6

further schedule for litigation in this case.

7
8

IT IS SO ORDERED.

9
10

United States District Court
Northern District of California

11

Dated: 08/18/15

_____________________________________
THELTON E. HENDERSON
United States District Judge

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