Prescott v. Abbott Laboratories

Filing 42

ORDER granting in part 29 Motion to Dismiss. Signed by Judge P. Casey Pitts on 6/5/2024. (nmc, COURT USER) (Filed on 6/5/2024)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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STEVEN PRESCOTT, et al.,

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Plaintiffs,

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ORDER GRANTING IN PART
MOTION TO DISMISS

v.

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ABBOTT LABORATORIES,

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Re: Dkt. No. 29

Defendant.

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United States District Court
Northern District of California

Case No. 23-cv-04348-PCP

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In this putative consumer fraud class action, plaintiffs challenge the labeling of defendant

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Abbott Laboratories’s Glucerna line of powders and shakes, which are marketed as scientifically

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designed for people with diabetes to help manage blood sugar. Plaintiffs allege that because the

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products contain sucralose and other additives, the products do not provide the promised health

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benefits. For the reasons set forth in more detail below, Abbott’s motion to dismiss these claims is

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denied except as to plaintiffs’ claims for injunctive relief.

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I.

Background

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The following facts from the complaint are taken as true in resolving this motion.

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Abbott sells a line of “Glucerna” branded shakes and powders that are marketed to

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diabetic, prediabetic, and health-conscious consumers for personal consumption. These products

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are represented to be specifically formulated for people with diabetes. As the example below

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illustrates, the front labels on Glucerna products state that the products are made “to help manage

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blood sugar,” are the “#1 doctor recommended brand,” and are “scientifically designed for people

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with diabetes.” In addition, the side label (on the shakes at least) states that the beverages are

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“designed to help minimize blood sugar spikes in people with diabetes compared to high glycemic

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carbohydrates.”

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United States District Court
Northern District of California

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Complaint, Dkt. No. 24, at 10 (“Exhibit 3: Glucerna Protein Smart Shakes”) (red labels added).
Diabetes is characterized by high blood sugar that results from inability to produce insulin

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(a hormone that allows sugar to be removed from blood and is used by cells in the pancreas). Type

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2 diabetes (the most common form) results from pancreatic cells that are resistant to insulin,

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usually as a result of diet and lifestyle. All treatments for diabetes generally aim to manage blood

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sugar levels. Although medications are available, people with type 2 diabetes generally manage

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the disease through diet and exercise, seeking foods that can help manage their blood sugar.

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Online and in stores, Glucerna shakes and powders are placed with health and nutritional

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supplements near diabetes diagnostic equipment and blood glucose tests. One retailer specifically

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categorizes Glucerna products as “Diabetes Management” on its website.
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United States District Court
Northern District of California

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Glucerna shakes and powders are made with sucralose, an artificial sweetener. Some of the

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products also contain carrageenan and maltodextrin. According to the plaintiffs, although

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sucralose is approved by the FDA as a general-purpose food sweetener, more recent scientific

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studies have identified potential health risks associated with sucralose and other Glucerna

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ingredients. For example, studies have suggested that sucralose is associated with obesity, type 2

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diabetes (as well as its precursor condition, metabolic syndrome), hypertension, and

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cardiovascular disease; that sucralose can deregulate blood sugar by disrupting the gut microbiome

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and killing pancreatic cells that release insulin; and that sucralose can cause cells to become

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resistant to insulin, which can lead to type 2 diabetes or obesity. In addition, several organizations,

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including the World Health Organization, have advised against consuming sucralose and other

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artificial sweeteners. Plaintiffs also cite similar scientific findings for maltodextrin and

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carrageenan.

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Plaintiffs allege that they were misled by the Glucerna labels. They say they understood

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the claim that Glucerna is the “#1 doctor recommended brand” and is “scientifically designed for

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people with diabetes” to mean that Glucerna products “aid in managing blood sugar generally”

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and are “scientifically capable of the treatment of diabetes or other health conditions.” They also

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say they understood these claims to mean that Glucerna products are “uniquely healthy.” Plaintiffs

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assert that they understood “scientifically designed for people with diabetes” to mean that

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Glucerna products “have some mechanism of action that provides a therapeutic benefit regarding

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diabetes/prediabetes and blood sugar regulation generally.” Plaintiffs assert that the claims on the

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Glucerna labels are false and deceptive because the products do not provide the advertised

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benefits. They also assert that they relied on the identified claims in deciding to purchase Glucerna

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products, that they would not have purchased the products at the listed prices (which plaintiffs

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argue included an unjustified premium) if they had known the labels were false or misleading, and

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that they lack an adequate remedy at law to address the harm they suffered.

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Plaintiffs assert five claims under California consumer fraud statutes and common law on

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behalf of putative nationwide and California classes of people who purchased Glucerna products

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for purposes other than resale. Abbott has moved to dismiss the operative amended complaint.
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Legal Standard
Under Rule 8, a complaint must include a “short and plain statement of the claim showing

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that the pleader is entitled to relief” with allegations that are “simple, concise, and direct.” Rule

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9(b) sets a higher standard for certain claims: A party “alleging fraud or mistake … must state

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with particularity the circumstances constituting fraud or mistake,” although “[m]alice, intent,

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knowledge, and other conditions of a person's mind may be alleged generally.” The pleading must

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be “specific enough to give defendants notice of the particular misconduct ... so that they can

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defend against the charge and not just deny that they have done anything wrong.” Vess v. Ciba-

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Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003).

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United States District Court
Northern District of California

II.

Rule 12(b)(6) governs dismissal for “failure to state a claim upon which relief can be

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granted.” A complaint must “plausibly suggest” that the plaintiff is entitled to relief, meaning the

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pleaded “factual content … allows the court to draw the reasonable inference that the defendant is

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liable.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 681 (2009). The Court must “accept all factual

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allegations in the complaint as true and construe the pleadings in the light most favorable to the

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nonmoving party.” Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1029–30 (9th Cir. 2009).

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There are two exceptions to the general rule that “courts may not consider material outside the

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pleadings when assessing the sufficiency of a complaint.” Khoja v. Orexigen Therapeutics, Inc., 899

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F.3d 988, 998 (9th Cir. 2018). First, Federal Rule of Evidence 201 permits judicial notice of “a fact

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that is not subject to reasonable dispute” because the fact is “generally known” or “can be accurately

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and readily determined from sources whose accuracy cannot reasonably be questioned.” Second, the

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doctrine of incorporation by reference permits a court to treat an extrinsic document as if it were part

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of the complaint if the pleading “refers extensively to the document” or if “the document forms the

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basis” of a claim. Khoja, 899 F.3d at 1002. This can be proper “when assessing the sufficiency of a

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claim requires that the document at issue be reviewed,” but is not warranted when “the document

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merely creates a defense to the well-ple[aded] allegations.” Id.

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Analysis

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A.

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Plaintiffs assert claims under California’s Consumer Legal Remedies Act (CLRA), False

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United States District Court
Northern District of California

III.

Statutory Claims

Advertising Law (FAL), and Unfair Competition Law (UCL).
The FAL broadly prohibits knowingly or negligently making “untrue or misleading”

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statements in conjunction with the intentional sale of goods or services. Cal. Bus. & Prof. Code

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§ 17500. The UCL similarly prohibits “unfair, deceptive, untrue or misleading advertising,” as

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well as any other “unlawful, unfair or fraudulent business act or practice.” Id. § 17200. The UCL

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also specifically incorporates the FAL, meaning that “any violation of the [FAL] necessarily

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violates the UCL.” Kasky v. Nike, Inc., 27 Cal. 4th 939, 950 (2002) (cleaned up). Finally, the

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CLRA prohibits a wide range of “unfair methods of competition and unfair or deceptive acts or

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practices,” including: “Representing that goods .. have … characteristics …, uses, [or] benefits…

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that they do not have”; “Representing that goods . are of a particular standard, quality, or grade …

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if they are of another”; and “Advertising goods or services with intent not to sell them as

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advertised.” Cal. Civ. Code § 1770(a)(5), (a)(7), (a)(9). As its name suggests, the CLRA

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authorizes consumers to bring an action for damages and injunctive relief, provided they comply

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with certain notice requirements when seeking damages. Id. §§ 1780, 1782.

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The UCL, FAL, and CLRA “prohibit not only advertising which is false, but also

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advertising which, although true, is either actually misleading or which has a capacity, likelihood

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or tendency to deceive or confuse the public.” Kasky, 27 Cal. 4th at 951. Plaintiffs’ claims under

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all three statutes “are governed by the ‘reasonable consumer’ standard.” McGinity v. Procter &

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Gamble Co., 69 F.4th 1093, 1097 (9th Cir. 2023). To ultimately prevail under the reasonable

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consumer standard, plaintiffs must show not just the “mere possibility that the label might

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conceivably be misunderstood by … consumers viewing it in an unreasonable manner,” but “a

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probability that a significant portion of the general consuming public or of targeted consumers,

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acting reasonably in the circumstances, could be misled.” McGinity, 69 F.4th at 1097. Whether an

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ad is deceptive is a “question of fact” that is “not appropriate” for resolution at the pleading stage

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except in “rare situation[s].” Williams v. Gerber Prods. Co., 552 F.3d 934, 938–39 (9th Cir. 2008).
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On a motion to dismiss, the question is whether a plaintiff “could plausibly prove that a reasonable

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consumer would be deceived.” Id. at 940. Only if “no reasonable consumer” could plausibly be

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misled based on the allegations in the complaint can reasonable-consumer-test claims be

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dismissed at the pleading stage as a matter of law. Becerra v. Dr Pepper/Seven Up, Inc., 945 F.3d

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1225, 1229 (9th Cir. 2019). Plaintiffs do not dispute that their FAL, UCL, and CLRA claims must

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meet the Rule 9(b) pleading standard.

United States District Court
Northern District of California

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With these standards in mind, the Court considers the factual allegations in the complaint

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to determine whether they suggest that plaintiffs could plausibly prove that a reasonable consumer

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would be deceived or misled by the labels on Glucerna products—labels which state that the

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products are the “#1 doctor recommended brand,” are “scientifically designed for people with

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diabetes,” and are formulated “to help manage blood sugar.”

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Plaintiffs’ claims raise three questions: First, what might reasonable consumers interpret

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Glucerna labels to suggest about how the products work? Second, what do the products actually

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do? And third, is there any disparity between what the labels could be understood to promise and

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what the products actually do, such that the labels are false, misleading, confusing, or deceptive?

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Plaintiffs’ answers are, first, that Glucerna’s labels suggest that the products are suitable for

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diabetics and can help generally manage blood sugar; second, that Glucerna products in fact

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contain ingredients that can deregulate blood sugar and pose other health harms to diabetics; and

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third, that this disparity between Glucerna products’ promised and actual effects renders the labels

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misleading. At this stage, the Court must determine whether these assertions are plausibly pleaded.

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With respect to the first question—how reasonable consumers might interpret Glucerna

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labels—the scope of the labels’ claims is important because it determines the baseline against

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which the products’ actual effects must be measured. Plaintiffs argue that the labels’ claims are

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broad: They allege that they understood the labels to represent that Glucerna products “are healthy

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sugar-alternative drinks and powders that are suitable for, or can aid in, the management of blood

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sugar generally and for those with diabetes specifically.” Compl. ¶ 10. They claim that the labels

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suggest that Glucerna products “are over-the-counter aids to help manage diabetes and blood sugar

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generally” and “can be used to regulate, achieve, and manage normal and healthy blood sugar
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Northern District of California

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levels.” Compl. ¶ 67 (cleaned up). Abbott counters that the Glucerna labels suggest that the

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products’ benefits are more limited: The drinks are intended as a “snack or meal replacement”

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formulated “to help minimize blood sugar spikes in people with diabetes compared to high

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glycemic carbohydrates.” Compl. Ex. 1 & ¶ 63. In other words, Glucerna products will manage

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short-term blood sugar changes only as compared to food with high glycemic carbohydrates.

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The reasonable consumer standard assumes that consumers read labels in context. If a

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“front label is ambiguous, the ambiguity can be resolved by reference to the back label.”

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McGinity, 69 F.4th at 1099. Consumers are also expected to draw “contextual inferences regarding

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the product itself and its packaging.” Moore v. Trader Joe’s Co., 4 F.4th 874, 882 (9th Cir. 2021).

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Whether a reasonable consumer would interpret the labels as plaintiffs or as Abbott

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suggest is ultimately a factual question. At the pleading stage, the Court must take plaintiffs’

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factual assertions as true and draw every reasonable inference in their favor. Abbott’s main

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argument for its narrower interpretation is that there is an explanation on the side label that

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Glucerna products are “[d]esigned to help minimize blood sugar spikes in people with diabetes

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compared to high glycemic carbohydrates.” A symbol next to the “help manage blood sugar”

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claim on the front label refers consumers to this side-label clarification. But even assuming

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consumers read this clarification, the Court cannot conclude at this stage that a reasonable

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consumer would necessarily understand the side-label clarification to limit the scope of the front

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label’s blood sugar claims in the way that Abbott suggests. And regardless of the scope of the

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front-label “helps manage blood sugar” claims, plaintiffs have also plausibly alleged that the other

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claims on the front label—that Glucerna products are recommended by doctors and scientifically

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designed for diabetics—make more sweeping representations about how the products work.

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The Ninth Circuit cases on which Abbott relies do not suggest a different result. Both

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McGinity and Moore involved potentially ambiguous front-label representations about a product’s

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ingredients—ambiguities that could be easily cleared up by looking at the ingredients list on the

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back. Here, by contrast, plaintiffs allege that they understood the front labels to be making claims

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about the overall health effects of Glucerna products, not just the specific ingredients they contain.

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This is not the sort of ambiguity that can be definitively resolved by reference to a back label.
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Accordingly, plaintiffs have plausibly alleged that a reasonable consumer might

United States District Court
Northern District of California

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understand Glucerna labels in full context to claim that the products can help manage blood sugar

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and diabetes generally, not just in comparison to foods with high glycemic carbohydrates.

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The second question is what Glucerna shakes and powders actually do. Glucerna products

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are made with sucralose and other additives, including maltodextrin and carrageenan. The parties

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do not dispute the actual contents of Glucerna products, and plaintiffs recognize that these

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ingredients (and the others) are disclosed in the labels’ ingredients list.1 Instead, this dispute

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centers on whether sucralose or the other additives cause health harms that contradict the labels’

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claims. Plaintiffs cite several scientific studies that they claim show that sucralose can deregulate

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blood sugar and worsen or even cause diabetes, among other harms. Abbott counters that sucralose

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is safe, not only in its view but also in the FDA’s. Abbott disagrees with plaintiffs’ interpretation

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of the scientific literature, arguing that plaintiffs’ “lay interpretation” of the science requires a

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series of inferences to suggest that sucralose negatively affects blood sugar management.
This is again a factual dispute. Abbott asks the Court to incorporate by reference the full

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studies that plaintiffs cite. This request is granted. The complaint refers extensively to these

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studies, which are central to plaintiffs’ claims. Even incorporating these studies, though, the Court

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cannot substitute its own interpretation of the studies for the allegations in the complaint. Abbott

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argues that plaintiffs have layered their own inferences on top of the cited studies, which Abbott

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claims do not establish a causal link between sucralose and long-term health effects. Maybe so.

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But even if plaintiffs’ allegations go beyond the cited studies, at this stage the allegations must be

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taken as true. (If the allegations directly contradicted the cited studies plaintiffs’ allegations might

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fairly be deemed implausible, but that is not the case here.) Plaintiffs allege that the additives in

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Glucerna products cause a range of health harms, including blood sugar spikes, metabolic

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syndrome, and even type 2 diabetes. They cite studies that are plausibly consistent with these

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At Abbott’s request, the Court takes judicial notice of the fact that Abbott’s webpage for each of
its Glucerna products includes an ingredients list. See, e.g., perma.cc/7GX9-FPTU. Although the
Court cannot conclude from these websites alone that identical ingredients lists in fact appeared on
Glucerna products’ physical labels, the parties agree that the labels did include such a list.
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claims, even if the studies do not definitively reach those conclusions. At this stage the Court must

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assume plaintiffs are correct.

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Northern District of California

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Abbott also argues that plaintiffs do not specifically allege that they ever consumed the

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products they purchased, nor do they identify how the products impacted their blood sugar or

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otherwise affected their health. But such allegations are not required. If Glucerna products’ labels

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are misleading, plaintiffs can be harmed simply by having a purchased a product that was not what

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it purported to be. Here, the complaint asserts that each named plaintiff either has or is worried

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about developing diabetes, that each plaintiff purchased a Glucerna product and believed the

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product would either be suitable for people with diabetes or could help prevent diabetes, and that

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the purchased products did not work as promised. While plaintiffs could also certainly be harmed

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if they actually experienced harmful health effects, they need not have actually suffered health

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harms in order to plead that the labels were misleading with respect to the alleged effects.

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That leaves the third question: whether Glucerna products’ labels are false, deceptive,

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misleading, or confusing in light of the way the products are alleged to work. At this stage the

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answer is simple. Plaintiffs plausibly allege that a reasonable consumer would understand

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Glucerna’s labels to suggest that the shakes and powders can help manage blood sugar and

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diabetes generally. Plaintiffs also allege that the sucralose and other ingredients in Glucerna

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products lead to negative health effects (including that sucralose can lead to blood sugar spikes

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and insulin resistance syndrome), at least some of which seem to directly contradict these claims.

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Plaintiffs have therefore plausibly asserted that a reasonable consumer could be deceived by the

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labels on Glucerna products. This is sufficient to state a claim under the UCL, FAL, and CLRA.

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Abbott also challenges plaintiffs’ claims for injunctive relief. Plaintiffs allege that they

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would like to and intend to purchase Glucerna products again in the future if they can be sure the

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products will provide the promised benefits. Abbott argues that plaintiffs have not established that

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they need an injunction to prevent future harm because they can easily determine based on the

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ingredients list whether Glucerna has been reformulated without the ingredients at issue here.

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“[A] previously deceived consumer may have standing to seek an injunction against false
advertising or labeling, even though the consumer now knows or suspects that the advertising was
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false at the time of the original purchase,” because knowing “that the advertisement or label was

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false in the past does not equate to knowledge that it will remain false in the future.” Davidson v.

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Kimberly-Clark Corp., 889 F.3d 956, 969–70 (9th Cir. 2018). The Ninth Circuit has suggested two

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kinds of future harm that could warrant injunctions in product labeling cases: first, that consumers

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will be unable to rely on the product’s labeling in the future and therefore will not purchase the

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product even if they would like to, and second, that consumers will reasonably but wrongly

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assume that the product has been improved and will therefore purchase the product again in the

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future, suffering the same injury as before. Id.

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Northern District of California

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In this case, however, plaintiffs’ allegations do not suggest that they face a risk of either of

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these forms of future harm. Plaintiffs’ allegations are all premised on specific ingredients in

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Glucerna products. Plaintiffs clearly know that these ingredients are currently included in

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Glucerna products, and the complaint demonstrates that plaintiffs are now aware of the alleged

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health risks that are associated with those ingredients. This is therefore not the kind of labeling

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case where plaintiffs must rely in the future on the manufacturer’s ongoing representations about

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the product. Instead, they can simply check the ingredients list do determine whether Glucerna

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continues to include sucralose and the other ingredients at issue. For this reason, Plaintiffs have

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failed to allege any “real and immediate threat of repeated injury” that can be prevented only

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through an injunction. See Davidson, 889 F.3d at 967. They therefore lack standing to pursue this

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form of relief.

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Abbott’s motion to dismiss the claims for an injunction under the CLRA and UCL is

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therefore granted with leave to amend. Abbott’s motion to dismiss the CLRA, FAL, and UCL

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claims is otherwise denied.

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B.

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Abbott argues that plaintiffs’ warranty breach claim should be analyzed under the same

Common Law Claims

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reasonable consumer standard as the statutory claims and dismissed for the same reasons. Abbott

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also argues that the unjust enrichment claim is merely derivative of the statutory claims and should

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be dismissed for identical reasons. Because the Court has rejected Abbott’s arguments against the

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statutory claims, its motion to dismiss the common law claims on the same basis is also denied.
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IV.

Conclusion
For the reasons set forth above, Abbott’s motion to dismiss is granted as to the claims for

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injunctive relief but otherwise denied. Any amended complaint will be due June 27, 2024. If

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plaintiffs do not file an amended complaint, Abbott’s response will be due July 11, 2024.

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IT IS SO ORDERED.
Dated: June 5, 2024

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P. Casey Pitts
United States District Judge

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United States District Court
Northern District of California

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