Hohenberg v. Ferrero USA, Inc

Filing 30

MOTION to Dismiss Consolidated Complaint by Ferrero USA, Inc. (Attachments: # 1 Memo of Points and Authorities, # 2 Declaration Declaration of Amir Steinhart, # 3 Exhibit A - Nutella Product Label, # 4 Exhibit B-1 "About Nutella", # 5 Exhibit B-2 "Nutella Ingredients", # 6 Exhibit B-3 "Nutella Nutrition Facts", # 7 Exhibit B-4 "Nutella and Nutrition", # 8 Exhibit B-5 "Nutella Tips for Moms", # 9 Exhibit B-6 "Nutella Build Your Own Breakfast", # 10 Exhibit B-7 "Nutella Resources", # 11 Exhibit C Appendix F to FDA Food Labeling Guide, # 12 Proof of Service)(Bish, Dale) (ag).

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KEITH E. EGGLETON, State Bar No. 159842
COLLEEN BAL, State Bar No. 167637
DALE R. BISH, State Bar No. 235390
AMIR STEINHART, State Bar No. 275037
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
Telephone: [phone]
Facsimile: [phone]

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Attorneys for Defendant
FERRERO U.S.A, INC.

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UNITED STATES DISTRICT COURT
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FOR THE SOUTHERN DISTRICT OF CALIFORNIA
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In re FERRERO LITIGATION

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CASE NO.: 11 CV 0205 H (CAB)
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
DEFENDANT FERRERO U.S.A.,
INC.’S MOTION TO DISMISS
CONSOLIDATED COMPLAINT
Date: June 13, 2011
Time: 10:30 a.m.
Before: Hon. Marilyn L. Huff

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TABLE OF CONTENTS

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Page

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INTRODUCTION...........................................................................................................................1

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FACTUAL ALLEGATIONS..........................................................................................................3

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A.

Advertising for Nutella®.........................................................................................3

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B.

The Nutella® Product Label, Website and Television Advertisements .................4

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C.

Plaintiffs’ Allegations .............................................................................................5

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ARGUMENT ..................................................................................................................................7

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I.

PLAINTIFFS’ CLAIMS DIRECTED TO THE LABEL AND WEBSITE ARE
PREEMPTED BY FEDERAL LAW ..................................................................................7

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A.

The Food Drug and Cosmetic Act Extensively Regulates Statements
Regarding Food Items And State Law Claims Seeking Inconsistent Relief
Are Preempted.........................................................................................................7

B.

Plaintiffs’ Claims Are Expressly Preempted to the Extent They Rely Upon
Statements Regarding Certain Contents of Nutella®..............................................9

C.

Plaintiffs’ Claims Are Expressly Preempted to the Extent They Rely Upon
Alleged Inadequate Disclosure of Artificial Flavoring Ingredient........................12

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II.
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THE COMPLAINT FAILS TO STATE A CLAIM UNDER THE UCL, FAL OR
CLRA BECAUSE THE CHALLENGED STATEMENTS ARE NOT LIKELY TO
DECEIVE A REASONABLE CONSUMER ...................................................................13

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A.

The Affirmative Statements Challenged in the Complaint Are Not Likely to
Deceive a Reasonable Consumer ..........................................................................14

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1.

The Nutella® Product Label Is Not Deceptive .........................................14

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2.

The Website Statements Challenged in the Complaint Are Not
Actionable .................................................................................................16

3.

The Television Advertisements Challenged In the Complaint Are
Not Deceptive............................................................................................18

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B.

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III.

The Alleged “Omissions” Are Not Contrary to an Affirmative
Representation or an Omission of Material Fact that Ferrero Was Obligated
to Disclose .............................................................................................................19

THE COMPLAINT FAILS TO STATE A CLAIM FOR “UNFAIR” OR
“UNLAWFUL” CONDUCT UNDER THE UCL ............................................................20

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A.

The Complaint Does Not State a Claim Under the “Unlawful” Prong of the
UCL.......................................................................................................................20

B.

The Complaint Does Not State a Claim Under the “Unfair” Prong of the
UCL.......................................................................................................................21

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IV.

THE COMPLAINT DOES NOT STATE A CLAIM UNDER THE CLRA....................23

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V.

THE COMPLAINT DOES NOT STATE A CLAIM FOR BREACH OF
WARRANTY, EITHER EXPRESS OR IMPLIED..........................................................23

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CONCLUSION .............................................................................................................................25
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TABLE OF AUTHORITIES

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Page(s)

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CASES

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Am. Suzuki Motor Corp. v. Superior Court, 37 Cal. App. 4th 1291 (1995)..................................24

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Anunziato v. eMachines, Inc., 402 F. Supp. 2d 1133 (C.D. Cal. 2005) ........................................17

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Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) .......................................................................................7

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Bank of the West v. Superior Court, 833 P.2d 545 (Cal. 1992) ....................................................20

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Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .....................................................................7, 23

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Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544 (2007).........................................23

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Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009)..................................................................25

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Blakemore v. Superior Court, 129 Cal. App. 4th 36 (2005) .........................................................20

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Brockey v. Moore, 107 Cal. App. 4th 86 (2003) ...........................................................................14

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Carter v. Novartis Consumer Health, Inc., 582 F. Supp. 2d 1271
(C.D. Cal. 2008) ................................................................................................................11

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Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 939 (S.D. Cal. 2007)........................................16
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Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co.,
20 Cal. 4th 163 (1999).................................................................................................22, 23

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Chacanaca v. Quaker Oats Co., – F. Supp. 2d –, 2010 WL 4055954
(N.D. Cal. Oct. 14, 2007) ........................................................................................9, 11, 13

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Corley v. Rosewood Care Ctr., Inc., 388 F.3d 990 (7th Cir. 2004) ..............................................17
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Cruz v. PacifiCare Health Sys., Inc., 30 Cal. 4th 303 (2003) .......................................................20
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Epstein v. Wash. Energy Co., 83 F.3d 1136 (9th Cir. 1996) ...........................................................7
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Ford v. Hotwire, Inc., No. 07-CV-1312, 2007 WL 6235779
(S.D. Cal. Nov. 19, 2007)......................................................................................21, 22, 23

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Ford v. Hotwire, Inc., No. 07-CV-1312, 2008 WL 5874305
(S.D. Cal. Feb 25, 2008)........................................................................................14, 21, 23

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Fraker v. KFC Corp., No. 06-CV-01284-JM, 2007 WL 1296571
(S.D. Cal. Apr. 30, 2007) ...........................................................................................passim

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Freeman v. Time, Inc., 68 F.3d 285 (9th Cir. 1995) .....................................................................14

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Gibbons v. Ogden, 22 U.S. 1 (1824) ...............................................................................................7

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Haskell v. Time, Inc., 857 F. Supp. 1392 (E.D. Cal. 1994)...............................................14, 16, 17
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Hitt v. Ariz. Beverage Co., No. 08cv809, 2009 WL 449190
(S.D. Cal. Feb. 4, 2009).....................................................................................................20

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In re Tobacco II Cases, 207 P.3d 20 (Cal. 2009)..........................................................................16
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Jepson, Inc. v. Makita Corp., 34 F.3d 1321 (7th Cir. 1994) .........................................................17
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Johns v. Bayer Corp., No. 09CV1935, 2010 WL 476688
(S.D. Cal. Feb. 9, 2010).....................................................................................................16

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Kramer v. Intuit Inc., 121 Cal. App. 4th 574 (2004).....................................................................23

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Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496 (2003) ...................................................14

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Lee v. City of Los Angeles, 250 F.3d 668 (9th Cir. 2001) ...............................................................2

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Lozano v. AT & T Wireless Servs., Inc., 504 F.3d 718 (9th Cir. 2007).........................................21

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Marder v. Lopez, 450 F.3d 445 (9th Cir. 2006) ..............................................................................2

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Maryland v. Louisiana, 451 U.S. 725 (1981)..................................................................................7

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McKinnis v. Kellogg USA, No. CV 07-2611, 2007 WL 4766060
(C.D. Cal. Sept. 19, 2007) .................................................................................................24

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McKinniss v. Gen. Mills, Inc., No. CV 07-2521, 2007 WL 4762172
(C.D. Cal. Sept. 18, 2007) .................................................................................................24

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McKinniss v. Sunny Delight Beverages Co., No. CV 07-02034,
2007 WL 4766525 (C.D. Cal. Sept. 4, 2007)....................................................................24

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Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804 (1986) ......................................................8
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Mills v. Giant of Md., LLC, 441 F. Supp. 2d 104 (D.D.C. 2006), aff’d,
508 F.3d 11 (D.C. Cir. 2007) ..............................................................................................8

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Navarro v. Block, 250 F.3d 729 (9th Cir. 2001) .............................................................................7

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Newcal Indus., Inc. v. IKON Office Solution, 513 F.3d 1038 (9th Cir. 2008),
cert. denied, Ikon Office Solutions, Inc. v. New-cal Indus.,
129 S. Ct. 2788 (2009) ..........................................................................................14, 15, 16

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Peviani v. Hostess Brands, Inc., – F. Supp. 2d –, 2010 WL 4553510
(C.D. Cal. Nov. 3, 2010) ...................................................................................................13

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Pike v. Bruce Church, Inc., 397 U.S. 137 (1970)..........................................................................22
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Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) ........................................................................9, 11
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Scripps Clinic v. Superior Court, 108 Cal. App. 4th 917 (2003)............................................21, 22
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Smith v. State Farm Mut. Auto. Ins. Co., 93 Cal. App. 4th 700 (2001) ........................................21
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Sugawara v. Pepsico, Inc., No. 2:08-cv-01335, 2009 WL 1439115
(E.D. Cal. May 21, 2009) ..................................................................................................25
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Werberl ex rel. v. Pepsico, Inc., No. C 09-04456, 2010 WL 2673860
(N.D. Cal. July 2, 2010) ....................................................................................................24

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Williams v. Gerber Prods. Co., 552 F.3d 934 (9th Cir. 2008) ...............................................passim
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Yumul v. Smart Balance, Inc., No. CV 10-00927, 2011 WL 1045555
(C.D. Cal. Mar. 14, 2011) .................................................................................................12

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STATUTES

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21 U.S.C. § 301 ...............................................................................................................................8

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21 U.S.C. § 321 ...............................................................................................................................8

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21 U.S.C. § 337 ...............................................................................................................................8

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21 U.S.C. § 343 et seq............................................................................................................passim

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21 U.S.C. § 371 ...............................................................................................................................8

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Cal. Bus. & Prof. Code § 17204....................................................................................................16

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Cal. Civ. Code § 1750 ...................................................................................................................23

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Cal. Civ. Code § 1770 et seq.........................................................................................................23

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Cal. Com. Code § 2313(1) ............................................................................................................24

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Cal. Com. Code § 2314(2) ............................................................................................................25

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Cal. Health & Safety Code § 110660 ............................................................................................20

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Cal. Health & Safety Code § 110670 ............................................................................................21

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RULES

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21 C.F.R. § 101 .............................................................................................................................20

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21 C.F.R. §§ 101.1-101.95 .....................................................................................................passim

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58 Fed. Reg. 2478 ...............................................................................................................6, 10, 11

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59 Fed. Reg. 24232 .......................................................................................................................11

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63 Fed. Reg. 20,486 ......................................................................................................................13

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68 Fed. Reg. 41434 .......................................................................................................................10

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Fed. R. Civ. P. 12(b)(6) ..........................................................................................................passim

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MISCELLANEOUS

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18 Williston on Contracts § 52:76 (4th ed. 2009) .........................................................................25

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H.R. Rep. No. 101-538 (1990) ........................................................................................................8
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U.S. Const. art. VI, cl. 2 ..................................................................................................................7

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INTRODUCTION

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This is a purported consumer class action against Ferrero U.S.A., Inc. (“Ferrero”),

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concerning Ferrero’s advertising for its Nutella® hazelnut spread (“Nutella®”). Plaintiffs are

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two California residents who claim to represent a class of every United States consumer who has

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purchased Nutella® since January 2000. Plaintiffs allege that Ferrero’s product label, website

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and television advertising for Nutella® are deceptive because the statements suggest that

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Nutella® may be spread on a bread product and consumed with fruit and dairy products as part of

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a balanced breakfast, including by children, while supposedly not adequately disclosing the sugar

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and fat content of Nutella® or the health risks associated with over-consumption of sugar and fat.

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Plaintiffs allege state law claims for unfair competition, false advertising and violation of the

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Consumer Legal Remedies Act, as well as breach of warranty claims.

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Nutella® Product Label. All but one of plaintiffs’ claims concerning the Nutella®

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product label are preempted under federal law. Plaintiffs allege that statements on the label that

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(i) Nutella® is made with hazelnuts, skim milk and cocoa, and (ii) Nutella® has no artificial

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colors or preservatives, are deceptive because they fail to alert consumers to the sugar and fat

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content of Nutella® and that Nutella® contains an artificial flavoring. But the Nutella® label

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complies with the detailed Food and Drug Administration (“FDA”) requirements governing

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these disclosures. Plaintiffs’ claims are therefore preempted because they seek to hold Ferrero

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liable under state law for failing to include additional disclosures that are inconsistent with

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federal law.

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The only remaining statement on the Nutella® label at issue is “An example of a tasty yet

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balanced breakfast: a glass of skim milk, orange juice and Nutella® on whole wheat bread”

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presented in conjunction with an image of the same. According to plaintiffs, this statement is

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deceptive because it “falsely suggest[s] that Nutella® is the key element that makes the depicted

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breakfast ‘balanced’ or nutritious when in fact it is the other food items . . . that provide the

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nutrients and healthy qualities.” ¶ 77.1 Plaintiffs’ claim fails for at least two reasons. First, the

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false statement claimed by plaintiffs is a straw man. The label does not suggest that Nutella® is

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the “key element” in a balanced breakfast, as plaintiffs allege. To the contrary, the label’s

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depiction of Nutella® spread on bread and served with fruit and dairy products makes plain that

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it can be consumed with a combination of other foods to form part of a balanced breakfast.

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Second, the statement is not actionable because it is not a quantifiable claim about the product

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and does not mischaracterize any specific or absolute characteristics of Nutella®. And indeed,

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this Court has previously held that similar statements concerning a “balanced” diet are mere

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puffery. Fraker v. KFC Corp., No. 06-CV-01284-JM, 2007 WL 1296571, at *3 (S.D. Cal. Apr.

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30, 2007) (granting motion to dismiss).

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The Website. Since neither plaintiff alleges that she ever viewed or relied upon the

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website, neither has standing to pursue claims for statements appearing on the website. The

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website statements are not actionable for the additional reasons that (1) many are preempted, and

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(2) they are not likely to deceive a reasonable consumer, in any event.

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The Television Advertising. The television advertising is not actionable because it is not

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likely to deceive a reasonable consumer. Even if the television advertising is not formally

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covered by the preemption doctrine, many of the statements at issue (e.g., that Nutella® does not

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have artificial colors or preservatives, that it contains hazelnuts, skim milk and cocoa) are nearly

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identical to statements on the label that are governed by, and comply with, federal law. Since the

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FDA has already determined that these types of statements are not false or misleading when

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placed on a product label, they can hardly be said to be so when found in television advertising.

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All paragraph citations (“¶ _”) are to plaintiffs’ Master Consolidated Complaint (Dkt No. 14)
(“Complaint”) and all exhibit (“Ex.”) citations are to the Declaration of Amir Steinhart
(“Steinhart Decl.”) filed herewith. On a motion to dismiss, a court may consider evidence on
which the complaint “necessarily relies” as well as matters of public record without converting
the motion into one for summary judgment. See Marder v. Lopez, 450 F.3d 445, 448 (9th Cir.
2006); Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). Therefore Ferrero
respectfully requests the Court consider Steinhart Decl., Exs. A (the Nutella label) and B (pages
from the NutellaUSA.com website), which are materials referenced in and quoted by the
Complaint, as well as Steinhart Decl., Ex. C, which is a matter of public record.

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Warranty Claims. Finally, plaintiffs’ claims for breach of express and implied warranty

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also fail. Plaintiffs do not allege any facts demonstrating that Nutella® is anything other than as

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advertised or that it is unfit for human consumption.

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Ferrero respectfully requests that the Court dismiss the Complaint in its entirety.

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FACTUAL ALLEGATIONS

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A. Advertising for Nutella®

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Nutella® is a “hazelnut spread” made from sugar, palm oil, hazelnuts, cocoa, skim milk

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and an artificial flavor called Vanillin. ¶ 77; Ex. A. In Europe and around the world, Nutella®

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has long been used as a breakfast condiment, spread on bread products like toast or waffles.

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Over the last several years, Nutella® has gained popularity in the United States. ¶ 17.
Given the numerous scientific studies which support the growing recognition of how

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important eating breakfast is to performance, mood and overall diet (see, e.g., ¶ 82), Ferrero’s

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recent advertising and marketing emphasize that Nutella® can be used to help moms encourage

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kids to eat a balanced breakfast. ¶¶ 78, 91-93. For instance, the Nutella® label provides as “[a]n

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example of a tasty yet balanced breakfast” when Nutella® is spread on whole wheat toast and

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eaten with fruit, a glass of skim milk and a glass of orange juice. ¶ 77. Similarly, the Nutella®

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website states that parents can “[c]reate a meal of whole wheat toast or a whole-grain toaster

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waffle with Nutella® hazelnut spread, a small bowl of sliced strawberries and a glass of 1% milk

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for a good mix of morning nutrients.” ¶ 82. Ferrero never suggests that Nutella® alone

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constitutes a balanced breakfast. It always depicts Nutella® spread on a bread product and eaten

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with fruit or fruit juice and a dairy product. See, e.g., ¶¶ 77-79.

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Although Plaintiffs allege that Ferrero claims Nutella® is “the key element that makes the

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depicted breakfast ‘balanced’ or nutritious” (¶ 77), Ferrero’s actual statements, including those

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cited in the Complaint, demonstrate that is not a sustainable allegation. Ferrero emphasizes that

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Nutella® should be eaten in “moderation” (¶ 82 (“When used in moderation with complementary

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foods, Nutella® can form a part of a balanced meal.”)); that the great taste of Nutella® can

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encourage kids to eat whole grains that they otherwise might not (id. (“With the unique taste of

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Nutella®, kids may think they are eating a treat for breakfast while moms are helping nourish
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their children with whole grains.”)); and that a balanced breakfast requires a combination of

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foods (id. (“Be sure to include sources of whole grains, protein, fat and nutrient-boosting fruits or

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vegetables as part of the breakfast plan.”)).

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B. The Nutella® Product Label, Website and Television Advertisements

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Plaintiffs’ Complaint takes issue with (1) the Nutella® product label, (2) the Nutella®

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website, and (3) three television advertisements for Nutella®.
Nutella® Product Label. Like most food products, the Nutella® product label comprises

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a back and a front label. The back label contains the FDA-regulated “Nutritional Facts Panel”

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that lists product-specific information (serving size, calories, and nutrient information) and the

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product ingredients, which appear in capitalized letters consistent with FDA regulations. Ex. A.

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Plaintiffs do not allege that the factual information contained in the Nutrition Facts Panel or in

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the ingredients on the back label is false or deceptive. In addition to factual information about

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Nutella®, the back label states, “Start your day with Nutella® spread . . . An example of a tasty

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yet balanced breakfast: a glass of skim milk, orange juice and Nutella® on whole wheat bread,”

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along with an image of whole wheat toast (with Nutella®), three pieces of fruit, a glass of orange

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juice, and a glass of milk. Ex. A.

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The front label contains the FDA-required “Statement of Identity” (i.e., “Hazelnut Spread

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with Skim Milk & Cocoa”) underneath an image of bread with Nutella®, a glass of milk, two

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hazelnuts and a flower. Id. The side of the front label states “The original hazelnut spread,”

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“Made with over 50 Hazelnuts per Jar,” “Contains No Artificial Colors” and “Contains No

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Artificial Preservatives.” Id. Plaintiffs do not allege that Nutella® contains fewer than 50

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hazelnuts or that it contains artificial colors or preservatives.

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The Nutella® website. The back label identifies the web address for the Nutella®

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website, found at www.nutellausa.com. Ex. A. The Nutella® website contains many pages of

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information about the product, including a list of its ingredients and a copy of the back label

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Nutritional Facts Panel (Exs. B-2 and B-3, respectively); questions and answers from children’s

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nutrition expert and registered dietician Connie Evers that emphasize the importance of breakfast

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and discuss how to use Nutella® as part of a balanced breakfast (Ex. B-5); a “breakfast builder”
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that allows comparison of the serving size, calories and nutrients of a variety of breakfast options

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(with or without Nutella®) (Ex. B-6); and links to a variety of health and nutrition resources,

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including the International Food Information Center, the U.S. Department of Agriculture, and the

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American Dietetic Associations. Ex. B-7.

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Television Advertising. Plaintiffs allege that three television advertisements for Nutella®

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contain false or deceptive statements about the product, including images of a happy, healthy

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family; statements like “made with simple quality ingredients, like hazelnuts, skim milk, and a

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hint of cocoa”; and the identification of Nutella® as “a delicious hazelnut spread.” ¶¶ 91-93.

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C. Plaintiffs’ Allegations

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Plaintiffs allege that Ferrero’s “multi-faceted marketing campaign focusing on the

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‘nutritional’ value of Nutella® as a breakfast food” is false and misleading “because Nutella

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contains high levels of saturated fats, sugar, oil, artificial flavoring and other objectionable

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ingredients.” ¶ 99. In particular, they allege that Nutella® contains “dangerous” levels of

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saturated fat (3.5 grams per serving), sugar (21 grams per serving) and other “objectionable”

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ingredients. ¶¶ 35-43, 99.

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Saturated fat is a naturally occurring nutrient. According to the Recommended Daily

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Values (“RDV”) as published by the FDA, adults and children four years and older should

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include approximately 20 grams of saturated fats in a typical 2,000 calorie daily diet.2 A full

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serving of Nutella® contains 3.5 grams of saturated fat, i.e., 18% of the recommended daily

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amount. Ex. A. The American Heart Association recommends slightly lower saturated fat

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intake than the FDA (i.e., 7 percent of one’s total daily calories). ¶ 36.

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Sugar is another naturally occurring nutrient. No daily reference value has been

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established. As explained by the FDA, “[T]he public health community has not identified a

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dietary level above which consumption of sugars has been demonstrated to increase the risk of a

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See 21 C.F.R. § 101.9(c)(9); Ex. C (Guidance for Industry: A Food Labeling Guide, Appendix
F: Calculate the Percent Daily Value for the Appropriate Nutrients (Oct. 2009), available at
http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/
FoodLabelingNutrition/FoodLabelingGuide/ucm064928.htm.).

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disease. Thus, the agency finds there is no sound basis on which to establish the requested [DV]

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for sugars.” Food Labeling: General Requirements for Health Claims for Food, 58 Fed. Reg.

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2478, 2491 (Jan. 6, 1993) (to be codified at 21 C.F.R. pts. 20 & 21).

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Plaintiffs do not specify what other ingredients in Nutella® are “objectionable” to them,

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but at points in their complaint they characterize cocoa as “unhealthy” compared to the “more

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healthy” hazelnut. ¶ 81. Plaintiffs also allege that prior to August 2008 Nutella® contained

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“partially hydrogenated vegetable oil,” which in turn contains artificial trans fat. ¶¶ 69-70.

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However, neither plaintiff alleges that she purchased Nutella® prior to 2009. See ¶¶ 26, 29.

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Finally, plaintiffs complain that Nutella® contains vanillin, an artificial flavor. ¶ 79.

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In a nutshell, plaintiffs allege that Ferrero misleadingly emphasizes certain ingredients

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(i.e., hazelnuts and skim milk), characteristics (“no artificial colors”) and possible uses for

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Nutella® (i.e., spread on toast at breakfast) while not giving the amounts of saturated fat, sugar

13

and artificial flavoring equal prominence. ¶ 99. Plaintiffs further allege it is false and

14

misleading to describe a “tasty yet balanced breakfast” consisting of skim milk, juice, and whole

15

wheat toast when Nutella® supposedly does not add any nutrients to such a meal. ¶¶ 28, 77, 100,

16

102, 146. And they allege that it is false and misleading to depict healthy children eating

17

Nutella® when over-consumption of fats and sugar can lead to health problems. ¶¶ 78, 90.

18

Plaintiffs portray themselves as “reasonably diligent” mothers who were “searching for

19

healthy foods” for their families. ¶¶ 27, 115. Plaintiffs each allege that they inspected and rely

20

on the product labeling of the products they purchase for their families. ¶¶ 26-30. The label for

21

Nutella® clearly discloses the amounts of fat and sugar contained in each serving through the

22

FDA-required Nutritional Facts Panel, and its ingredient list identifies palm oil and sugar as the

23

first two ingredients. Ex. A. Despite their “reasonably diligent” inquiries into the products they

24

were purchasing (including an inspection of the product labels), plaintiffs allege they were

25

deceived into purchasing Nutella® and were unaware that it contained high levels of saturated fat

26

and sugar. ¶¶ 115, 117. Plaintiffs allege that they were unable to appreciate the “grave health

27

consequences of consuming products like Nutella®” and continued to purchase it for several

28

years despite the “global outcry” against the nutrients described in their complaint. ¶ 71.
FERRERO U.S.A., INC.’S MEMO
ISO MOTION TO DISMISS

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1

Plaintiffs do not describe the “reasonably diligent” steps they took to familiarize themselves with

2

the effects of consuming fats and sugars, the amount of those nutrients that they would find

3

acceptable in their daily diets (or at any particular meal), or whether those amounts differ from

4

the recommended daily values set by the FDA.

5

ARGUMENT

6

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal

7

sufficiency of the claims asserted in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th

8

Cir. 2001). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need

9

detailed factual allegations, a plaintiff's obligation to provide the ‘grounds’ of his ‘entitle[ment]

10

to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of

11

a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration

12

in original) (citation omitted). A complaint does not “suffice if it tenders ‘naked assertion[s]

13

devoid of further factual enhancement.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)

14

(alteration in original) (citation omitted). “Factual allegations must be enough to raise a right to

15

relief above the speculative level.” Twombly, 550 U.S. at 555. “[C]onclusory allegations of law

16

and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a

17

claim.” Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996).

18

I.

PLAINTIFFS’ CLAIMS DIRECTED TO THE LABEL AND WEBSITE ARE
PREEMPTED BY FEDERAL LAW

19
20

The Supremacy Clause establishes federal law as the “supreme Law of the Land,” and

21

any state law in conflict with federal law is “without effect.” U.S. Const. art. VI, cl. 2; see

22

Maryland v. Louisiana, 451 U.S. 725, 746 (1981). Additionally, state laws that “interfere with,

23

or are contrary to the laws of Congress” are invalid. Gibbons v. Ogden, 22 U.S. 1, 211 (1824).

24

Here, plaintiffs’ claims based on the label and website are barred by express preemption.

25

A. The Food Drug and Cosmetic Act Extensively Regulates Statements Regarding
Food Items And State Law Claims Seeking Inconsistent Relief Are Preempted

26
27
28

Ferrero, like all food manufacturers, is subject to extensive regulatory requirements under
federal law. The Food, Drug, and Cosmetic Act (“FDCA”) established the FDA to ensure that
FERRERO U.S.A., INC.’S MEMO
ISO MOTION TO DISMISS

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1

foods are “safe, wholesome, sanitary, and properly labeled.” 21 U.S.C. § 343 et seq. In 1990,

2

Congress amended the FDCA by enacting the Nutrition Labeling and Education Act (the

3

“NLEA”), codified as amended at 21 U.S.C. §§ 301, 321, 337, 343, 371 to “clarify and to

4

strengthen the [FDA’s] legal authority to require nutrition labeling on foods, and to establish the

5

circumstances under which claims may be made about the nutrients in foods.” H.R. Rep. No.

6

101-538, at 7 (1990). Pursuant to this statutory scheme, the FDA has issued extensive food

7

labeling regulations that are relevant here. See 21 C.F.R. §§ 101.1-101.95.

8
9

Among other things, the FDCA and its implementing regulations prohibit food
manufacturers from “misbranding” products. A product is considered “misbranded” if “its

10

labeling is false or misleading in any particular” (21 U.S.C. § 343(a)) or does not comply with

11

specific instances identified in the FDCA. See id. § 343(b)-(y). The FDCA now includes a

12

broad express preemption provision that prevents any state from directly or indirectly regulating

13

food-labeling claims in a way that is not “identical” to federal requirements to further the

14

congressional goal of establishing national uniformity in labeling. Id. § 343-1; see Mills v. Giant

15

of Md., LLC, 441 F. Supp. 2d 104, 106-09 (D.D.C. 2006) (noting breadth of preemption clause),

16

aff’d, 508 F.3d 11 (D.C. Cir. 2007). Moreover, there is no private right of action under the

17

FDCA. See, e.g., Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 810 (1986).

18

As amended by the NLEA, the FDCA expressly preempts, among other things, any state

19

law “requirement” for the labeling of food with respect to statements made under 21 U.S.C. §§

20

343(r)(1) or 343(k) that is not “identical” to the federal requirements. Section 343(r)(1) governs

21

statements about a food that expressly or by implication characterizes the level of any nutrient in

22

the food. Id. § 343(r)(1). To avoid confusion, FDA regulations distinguish between three

23

different kinds of claims described in Section 343(r)(1):

24
25
26
27
28



“Express nutrient content claims” describe the amount of a nutrient in a food, e.g.,
“No trans-fat,” “Low in sodium” or “100 calories.” 21 C.F.R. § 101.13(b)(1).



“Implied nutrient content claims” suggest “that [a] food, because of its nutrient
content, may be useful in maintaining healthy dietary practices and is made in
association with an explicit claim or statement about a nutrient.” Id. §§
101.13(b)(2)(ii), 101.65(d). The FDA and case law recognize that the word
“healthy” and its derivatives (i.e., healthful) are properly treated as implied
nutrient claims. 21 C.F.R. § 101.65(d).

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ISO MOTION TO DISMISS

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11 CV 0205 H

1



“Health claims” characterize “the relationship of any substance to a disease or
health-related condition.” Id. § 101.14(a).

2
3

Although different regulations apply to each category of claim, any state law that

4

purports to establish non-identical requirements is expressly preempted under Section 343(r).

5

State laws, common law duties and judge made rules, all fall within the scope of prohibited

6

inconsistent “requirements.” Riegel v. Medtronic, Inc., 552 U.S. 312, 323-24 (2008); Chacanaca

7

v. Quaker Oats Co., – F. Supp. 2d –, 2010 WL 4055954, at *5 (N.D. Cal. Oct. 14, 2007).

8

B. Plaintiffs’ Claims Are Expressly Preempted to the Extent They Rely Upon
Statements Regarding Certain Contents of Nutella®

9
10

Plaintiffs allege that Ferrero touts certain ingredients of Nutella® in its marketing, which

11

suggest that the product is healthy, but that other of its ingredients (namely sugar and palm oil)

12

allegedly render it unhealthy. See, e.g., ¶¶ 24, 28, 40, 42-43, 46, 70, 74, 79. For example, the

13

label for Nutella® contains the following statements: “Hazelnut Spread with Skim Milk &

14

Cocoa,” and “Made with over 50 Hazelnuts per Jar.” Ex. A. These are nutrient content claims

15

under the federal regulatory scheme. See ¶¶ 132(b)-(c).

16

Although plaintiffs do not dispute the truth of these statements, they contend these

17

nutrient content claims are misleading because Ferrero did not disclose that Nutella® “is

18

comprised primarily of sugar and oil.” See ¶¶ 97, 99. In other words, plaintiffs seek to impose

19

on Ferrero’s labeling a requirement that it disclose what plaintiffs deem to be the unhealthy

20

ingredients in Nutella® together with any statements about other healthy ingredients. But federal

21

law does not require such disclosures.

22

Congress and the FDA, not plaintiffs, have already defined the circumstances in which a

23

nutrient content claim triggers additional disclosure requirements (and have specified what those

24

disclosures should be) as well as the circumstances in which a food manufacturer must refrain

25

from making “health claims” or calling its product “healthy.” When it enacted the NLEA,

26

Congress gave the FDA authority to identify nutrients that – at certain levels – require specific

27

language drawing the consumer’s attention to the nutrient at that level in connection with any

28

nutrient content claim, and to prohibit any health claim from being made. See 21 U.S.C.
FERRERO U.S.A., INC.’S MEMO
ISO MOTION TO DISMISS

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1

§§ 343(r)(2)(B), 343(r)(3)(A)(ii). To date, the FDA has determined that certain levels of only

2

four nutrients (total fat, saturated fat, cholesterol, and sodium) qualify as such “disqualifying

3

nutrients.” 21 C.F.R. §§ 101.13(h)(1), 101.14(a)(4). If the product contains higher levels of

4

these nutrients, then the food manufacturer must refrain from making health claims (id. § 101.14)

5

or describing the product as “healthy” (21 C.F.R. § 101.65(d)(2)(i)) and, if the label contains a

6

nutrient content claim (either express or implied), then the label must contain a specific

7

disclosure set forth in the regulation (21 C.F.R. § 101.13(h)(1)). But those requirements do not

8

apply here because Nutella® does not contain the triggering levels of those nutrients.

9

Total Fat & Saturated Fat. The FDA determined that food with 13 or more grams of fat,

10

or 4 or more grams of saturated fat, per serving meets the threshold levels of “disqualifying

11

nutrients” for purposes of nutrient content and health claims. See id.3 Plaintiffs concede that

12

Nutella® does not contain fat or saturated fat in an amount at or in excess of these disqualifying

13

levels. ¶ 75. Therefore, the presence of saturated fat in Nutella® does not prevent Ferrero from

14

“touting” other ingredients in the product (i.e., making a nutrient content claim) and any claim

15

under state law premised on the “dangerous” levels of saturated fat in Nutella® is expressly

16

preempted by the FDA’s decision to set the disqualifying level of saturated fat above the amount

17

contained in Nutella®.

18

Sugar. The FDA declined to find sugar to be a potentially “disqualifying nutrient” at all.

19

During its notice and comment period, the FDA received several comments proposing that sugar

20

be included as a “disqualifying nutrient.” See 58 Fed. Reg. at 2491. After considering those

21

submissions, the FDA declined to list sugar as a disqualifying nutrient for the same reasons FDA

22

did not establish a percent Recommended Daily Value for sugars (i.e., that “the public health

23

community has not identified a dietary level above which consumption of sugars has been

24
25
26
27
28

3

For trans fat, the FDA declined to set disqualifying levels and instead expressed an intent to
“continue to evaluate the evolving science and, when the science has evolved to a point where
the agency believes it can proceed with scientifically-based definitions and levels for these
claims, it will proceed to do so through a new rulemaking.” 68 Fed. Reg. 41434, 41465.

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1

demonstrated to increase the risk of a disease”). Id.4 Therefore, the presence of sugar in

2

Nutella® (in any amount) does not prevent Ferrero from “touting” other ingredients in the

3

product and any claim under state law premised on allegedly high levels of sugar is expressly

4

preempted by the FDA’s decision to not recognize sugar as a “disqualifying nutrient.”

5

Because Nutella® does not contain a “disqualifying” amount of total fat or saturated fat

6

per serving, and because sugar is not a “disqualifying nutrient,” federal law is clear: nutrient

7

content claims on the Nutella® label do not trigger any additional disclosure requirements. Any

8

order concluding otherwise (i.e., requiring Ferrero to make additional disclosures concerning the

9

saturated fat and sugar content of Nutella®) based on state law would impose labeling

10

requirements that are not identical to the federal requirements. As explained by the Northern

11

District of California, “[e]ssentially, plaintiffs’ claim asks this Court to ascribe disqualifying

12

status to [certain nutrients] where the [FDA] has at least so far declined to do so.” Chacacana,

13

2010 WL 4055954, at *8.5 Accordingly, plaintiffs’ state law claims premised on the notion that

14

the saturated fat and sugar content of Nutella® make Ferrero’s representations on its label

15

regarding Nutella®’s hazelnut, skim milk and cocoa content misleading are preempted. See

16

Chacanaca, 2010 WL 4055954, at *7-8 (finding preempted state law claims alleging that

17

statements that granola bar contained whole grain oats and no high fructose corn syrup were

18

misleading because they suggested bars were healthy despite fact that they also contained

19

hydrogenated vegetable oil, where manufacturer did not violate disqualifying nutrient

20
21
22
4

24

The FDA was also not persuaded “that it is necessary to include a ‘low calorie’ or ‘low sugar’
criterion in the definition of ‘healthy’ for the claim to be useful and not misleading to consumers.
The information provided in the comments did not show that consumers expect ‘healthy’ to be a
claim about the caloric content of the food.” 59 Fed. Reg. 24232, 24244.

25

5

23

26
27
28

In addition to plaintiffs’ state statutory claims, their claims for breach of warranty also are
subject to preemption. See Riegel, 552 U.S. at 320, 330 (finding state law claims seeking to
impose requirements different from FDA regulations preempted without distinguishing implied
warranty claims from other preempted common-law claims); Carter v. Novartis Consumer
Health, Inc., 582 F. Supp. 2d 1271, 1285-86 (C.D. Cal. 2008) (breach of implied and express
warranty claims preempted where claims based upon statements permitted by FDA regulations).

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ISO MOTION TO DISMISS

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11 CV 0205 H

1

regulations).6 Federal preemption applies equally to nutrient content claims on the Nutella®

2

website. Although Ferrero does not concede that every aspect of its website is subject to FDA

3

regulations, the FDA has taken the position that claims covered by 21 U.S.C. § 343(r) that appear

4

on a product’s website fall within the definition of labeling, where the website address appears

5

on the product label, as it does here.7 Thus, to the extent plaintiffs’ state law claims rely upon

6

statements on the Nutella® website, namely, “hazelnut spread that contains quality ingredients

7

such as skim milk and a hint of cocoa,” “Hazelnuts have a flavorful combination of oils, vitamins

8

and protein. Like other varieties of nuts, hazelnuts contain antioxidant compounds that protect

9

your body overall,” “[s]kim milk is high in protein, vitamins and has less fat than whole milk,”

10

and “[o]ver 50 hazelnuts per 13 oz. Jar,” they are preempted. ¶¶ 79-81.

11

C. Plaintiffs’ Claims Are Expressly Preempted to the Extent They Rely Upon
Alleged Inadequate Disclosure of Artificial Flavoring Ingredient

12
13

Plaintiffs’ claims also are preempted to the extent they are based upon alleged inadequate

14

disclosure that Nutella® contains vanillin, an artificial flavoring. See ¶ 79. The statements

15

“contains no artificial colors” and “contains no artificial preservatives” appear on the product

16

label. Ex. A. The website similarly states: “contains no artificial colors or preservatives.” ¶ 79.

17

Plaintiffs claim these statements are deceptive because they are not accompanied by a statement

18

that Nutella® contains the artificial flavoring vanillin.

19

As with nutrient content claims, the FDCA and its implementing regulations set forth

20

how a food manufacturer must disclose any artificial flavoring. Specifically, 21 U.S.C. § 343(k)

21

deems a food misbranded if “it bears or contains any artificial flavoring, artificial coloring, or

22

chemical preservative, unless it bears labeling stating that fact.” The FDA regulations further

23
24

6

26

Accord Yumul v. Smart Balance, Inc., No. CV 10-00927, 2011 WL 1045555, at *8-12 (C.D.
Cal. Mar. 14, 2011) (finding preempted state law claims arising from allegations that Smart
Balance’s statements that Nucoa Real Margarine is “Cholesterol Free” and “healthy” were false
and misleading due to trans fat content where manufacturer complied with FDA requirements for
nutrient content claims).

27

7

25

28

See FDA Warning Letter to General Mills (May 5, 2009), available at:
http://www.fda.gov/iceci/enforcementactions/warningletters/ucm162943.htm.

FERRERO U.S.A., INC.’S MEMO
ISO MOTION TO DISMISS

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11 CV 0205 H

1

mandate that “[a] statement of artificial flavoring, artificial coloring, or chemical preservative

2

shall be placed on the food or on its container or wrapper, or on any two or all three of these, as

3

may be necessary to render such statement likely to be read by the ordinary person under

4

customary conditions of purchase and use of such food.” 21 C.F.R. § 101.22(c). Both the

5

product label and Ferrero’s website disclose that Nutella® contains artificial flavoring. Exs. A,

6

B-2. Plaintiffs do not, and cannot, allege that Ferrero’s labeling violates these requirements. See

7

¶ 132 (listing several other purported C.F.R. violations); 21 C.F.R. §§ 101.4(g), 101.22(h) (“The

8

label of a food to which flavor is added shall declare the flavor in the statement of ingredients . . .

9

.”); 63 Fed. Reg. 20,486, 20,491 (Apr. 24, 1998) (“likely to be read and understood by the

10

ordinary individual” requirement met by placing disclosure in label information panel).

11

Because Ferrero already complies with the federal requirements for disclosure that

12

Nutella® contains artificial flavoring, plaintiffs’ claims are preempted to the extent they seek to

13

hold Ferrero liable under state law for not having additional disclosures wherever Ferrero states

14

(accurately) that Nutella® does not contain any artificial colors or preservatives. Plaintiffs’

15

claims based on the absence of such additional disclosures seek to have this court impose a “non-

16

identical requirement,” something Congress has expressly prohibited. See, e.g., Peviani v.

17

Hostess Brands, Inc., – F. Supp. 2d –, 2010 WL 4553510, at *6 (C.D. Cal. Nov. 3, 2010)

18

(finding preempted state law claims based on statement “0 Grams of Trans Fat” despite partially

19

hydrogenated oil content, where defendant’s statement complied with FDA regulations);

20

Chacanaca, 2010 WL 4055954, at *8 (finding preempted state law claims based on “good source

21

of” statements where defendant’s statements complied with FDA requirements).

22

Because plaintiffs are challenging a number of statements that are regulated by the FDA,

23

and subject to express preemption under federal law, their state law claims based on those

24

statements should be dismissed as a matter of law.

25

II.

26

THE COMPLAINT FAILS TO STATE A CLAIM UNDER THE UCL, FAL OR
CLRA BECAUSE THE CHALLENGED STATEMENTS ARE NOT LIKELY TO
DECEIVE A REASONABLE CONSUMER

27

To state a false advertising claim under the UCL, FAL, or CLRA, plaintiffs must identify

28

a statement that is likely to deceive the public. Williams v. Gerber Prods. Co., 552 F.3d 934,
FERRERO U.S.A., INC.’S MEMO
ISO MOTION TO DISMISS

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1

938 (9th Cir. 2008); Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 507 (2003);

2

Freeman v. Time, Inc., 68 F.3d 285, 289-90 (9th Cir. 1995) (affirming dismissal where plaintiff

3

failed to show that public was likely to be deceived). Courts apply a “reasonable person”

4

standard to determine whether a statement, viewed in context, is “likely to . . . deceive[ ]” the

5

public. Freeman, 68 F.3d at 289; Lavie, 105 Cal. App. 4th at 504-05. “A claim may be

6

dismissed pursuant to Rule 12(b)(6) if no reasonable consumer would be deceived or misled.”

7

Ford v. Hotwire, Inc., No. 07-CV-1312, 2008 WL 5874305, at *3 (S.D. Cal. Feb 25, 2008);

8

Haskell v. Time, Inc., 857 F. Supp. 1392, 1398-99 (E.D. Cal. 1994) (“[I]f the alleged

9

misrepresentation, in context, is such that no reasonable consumer could be misled, then the

10
11

allegation may also be dismissed as a matter of law.”).
A. The Affirmative Statements Challenged in the Complaint Are Not Likely to
Deceive a Reasonable Consumer

12
13

None of the statements challenged by plaintiffs are capable of misleading “an appreciable

14

number of reasonably prudent purchasers exercising ordinary care.” Brockey v. Moore, 107 Cal.

15

App. 4th 86, 99 (2003). In fact, some of the statements represent general, subjective claims

16

which are non-actionable statements under the law. Newcal Indus., Inc. v. IKON Office Solution,

17

513 F.3d 1038, 1053 (9th Cir. 2008) (“[A] statement that is quantifiable, that makes a claim as to

18

the ‘specific or absolute characteristics of a product,’ may be an actionable statement of fact

19

while a general, subjective claim about a product is non-actionable puffery.”) (citation omitted),

20

cert. denied, Ikon Office Solutions, Inc. v. New-cal Indus., 129 S. Ct. 2788 (2009).

21

1.

The Nutella® Product Label Is Not Deceptive

22

As discussed above, most of the statements on the label (concerning the fact that

23

Nutella® is made with hazelnuts, skim milk and cocoa) are subject to preemption because they

24

are nutrient content claims that are governed by, and comply with, federal law.

25

Plaintiffs’ only remaining claim that the label is deceptive is because of the statement on

26

the back label “[a]n example of a tasty yet balanced breakfast: a glass of skim milk, orange juice

27

and Nutella® on whole wheat bread,” in conjunction with the depiction of “fruit, a glass of

28

orange juice, a glass of milk, a slice of bread covered in Nutella®, and jar of Nutella®.” ¶¶ 24,
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ISO MOTION TO DISMISS

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11 CV 0205 H

1

77. Plaintiffs claim this statement and the accompanying image are deceptive because they

2

“suggest Nutella® is the key element that makes the depicted breakfast ‘balanced’ or nutritious

3

when in fact it is the other food items such as milk, juice, fruit, and bread that provide the

4

nutrients and healthy qualities that Nutella® is touting.” ¶ 77. The claim fails for at least two

5

reasons.

6

First, this Court can review the label on a motion to dismiss and determine that it does not

7

suggest to a reasonable consumer that Nutella® is the “key element” of a balanced breakfast.

8

The label expressly shows in words and pictures that Nutella® should be consumed with a

9

variety of other foods. Any reasonable consumer – and certainly one exercising ordinary care –

10

would appreciate the nutritional benefits associated with whole wheat bread, fruit, skim milk and

11

orange juice. Conversely, it would defy common sense for any consumer to conclude the

12

“hazelnut spread” is the “key element” of the breakfast given the depiction and description of the

13

proposed elements. That is particularly so when the challenged statement and image are literally

14

surrounded by the Nutrition Facts Panel (which states the serving size, calorie, fat and protein

15

content, among other things) and the list of ingredients in Nutella®.

16

Second, this Court has held that phrases like “tasty yet balanced breakfast” do not

17

“describe (or misdescribe) any specific or absolute characteristic” of the product and are

18

therefore non-actionable. Fraker, 2007 WL 1296571, at *1 (sustaining motion to dismiss

19

involving statements such as “[KFC] can fit into a balanced eating plan,” and “[y]ou can enjoy

20

‘fast food’ as part of a sensible balanced diet”) (emphasis added) (internal quotation marks and

21

citation omitted); Newcal, 513 F.3d at 1053; see also Williams, 552 F.3d at 939 & n.3

22

(acknowledging the word “‘nutritious,’ were it standing on its own, could arguably constitute

23

puffery, since nutritiousness can be difficult to measure concretely.”) (citation omitted).

24

Rather than making specific, factual assertions about Nutella®, the “tasty but balanced

25

breakfast” statement stands for Ferrero’s unremarkable view that consumers can spread Nutella®

26

on whole wheat bread to improve its taste while ensuring they receive a mix of nutrients at

27

breakfast when taken with other nutritional elements such as fruit and skim milk. If plaintiffs

28

mean to suggest that no meal can possibly be considered “balanced” if it contains 3.5 grams of
FERRERO U.S.A., INC.’S MEMO
ISO MOTION TO DISMISS

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11 CV 0205 H

1

saturated fat (i.e., 18% of the FDA’s daily recommended allowance) or 21 grams of sugar, they

2

are wrong and, at most, that point of view would constitute these individuals’ own opinions. But

3

California’s consumer protection laws do not exist to enforce idiosyncrasies or divergent

4

opinions about the optimal amount of saturated fat and sugar that should be consumed at

5

breakfast. Because “tasty yet balanced” does not describe any “specific or absolute

6

characteristic” about Nutella®, it is a non-actionable statement properly dismissed on a Rule

7

12(b)(6) motion. Newcal, 513 F.3d at 1053; Haskell, 857 F. Supp. at 1399-1400.

8

2.

The Website Statements Challenged in the Complaint Are Not
Actionable

9
Plaintiffs next challenge various statements made on the Nutella® website, including (1)
10
“contains quality ingredients such as skim milk and a hint of cocoa,” (Ex. B-1) (2) statements
11
about the hazelnuts, cocoa and milk that are in the product, (id.) (3) the views and “Tips for
12
Moms” from nutritionist, Connie Evers, (Exs. B-4 and B-5) (4) and statements regarding the
13
glycemic index of Nutella®. See ¶¶ 79-89. Neither plaintiff alleges that she visited the Nutella®
14

website or saw any of these statements before deciding to purchase Nutella®. 8 Therefore,

15
neither plaintiff has standing under the UCL nor CLRA to pursue claims based on statements
16
that appear on the Nutella® website. In re Tobacco II Cases, 207 P.3d 20, 40-41 (Cal. 2009) (a
17
UCL plaintiff “must plead and prove actual reliance to satisfy the standing requirement of
18
[California Business & Professions Code] section 17204.”). Thus, to the extent plaintiffs’ claims
19
are based on statements that appear on the Nutella® website, they must be dismissed on this
20
ground alone. See, e.g., Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 939, 947 (S.D. Cal.
21
2007) (dismissing CLRA claim where complaint “[did] not allege that false statements or claims
22
had anything to do with her decision to purchase”); Johns v. Bayer Corp., No. 09CV1935, 2010
23
WL 476688, at *4 (S.D. Cal. Feb. 9, 2010) (where plaintiff alleged reliance on product label
24
only, he lacked standing to pursue claims based on radio, television, or internet advertisements”).
25
26
27
28

8

Plaintiff Hohenberg alleges reliance on the Nutella label (¶ 27) while Plaintiff Rude-Barbato
alleges reliance on television advertisements (¶ 29) and the product label (¶ 31).

FERRERO U.S.A., INC.’S MEMO
ISO MOTION TO DISMISS

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11 CV 0205 H

1

Additionally, the statements made on the Nutella® website are not actionable because

2

they are not likely to deceive any reasonable consumer. First, Nutella® is made from ingredients

3

such as cocoa and skim milk, and there is nothing deceptive about telling consumers what is in

4

the product. To the extent plaintiffs take issue with the words “quality” or “simple,” these are

5

examples of non-actionable statements indicating subjective assertions of superiority. Fraker,

6

2007 WL 1296571, at *3; Anunziato v. eMachines, Inc., 402 F. Supp. 2d 1133, 1140 (C.D. Cal.

7

2005) (holding that “quality” and ‘high quality,’ are statements consisting of non-actionable

8

puffery); Corley v. Rosewood Care Ctr., Inc., 388 F.3d 990, 1008 (7th Cir. 2004) (“[t]he phrase

9

“high quality” is highly subjective); Jepson, Inc. v. Makita Corp., 34 F.3d 1321, 1330 (7th Cir.

10
11

1994) (labels like “poor quality” are inherently subjective expressions).
Plaintiffs next challenge the “advice from Connie Evers, M.S., R.D” and her “Tips for

12

Moms,” including her opinion that “[w]hen used in moderation with complementary foods,

13

Nutella can form part of a balanced meal.” ¶¶ 82-83. When taken in context – as they must

14

under California law (Haskell v. Time, Inc., 857 F. Supp. at 1398) – Ms. Evers is emphasizing

15

the “tasty” characteristics of the product (¶ 84 (“[t]he best breakfast is the one that will be

16

eaten!” and “help moms win the daily ‘battle at breakfast’”)) while recommending that mothers

17

nourish their children with whole grains, fresh fruit, a cup of yogurt, 1% milk, and/or juice. ¶¶

18

84-85; Exs. B-4 and B-5. Ms. Evers plainly describes her definition of a “balanced breakfast,”

19

i.e., “[a] balanced breakfast should provide the proper balance of protein, carbohydrates from

20

whole grains, fat and the nutrients provided by either a serving of fruit or vegetables” and offers

21

several suggestions of food combinations that would meet her criteria. ¶ 86; Ex. B-5. There is

22

nothing false or deceptive about Ms. Evers’ views or advice.

23

Finally, plaintiffs allege that the website’s description of the glycemic index for Nutella®

24

is false. On its website, Ferrero explains that “Nutella has a glycemic index of 33 which means it

25

is a low GI food” and that “[t]wo slices of high fiber white bread with 20 grams of Nutella also

26

has a low GI (GI = 47), and it provides around 14% of a person’s daily energy (kilojoule) and

27

sugar needs.” ¶ 89. Plaintiffs do not contend that either of these metrics is false. Rather,

28

plaintiffs take issue with the use of the word “low.” By providing the consumer with actual data,
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however, Ferrero ensures that consumers can decide for themselves whether the GI of Nutella®

2

is “high,” “low” or something else – depending on their own viewpoint and preferences.

3

Of course, neither plaintiff alleges that she relied on Ms. Evers’ views, the information

4

about the GI Index of Nutella®, or anything else on the website in deciding to purchase Nutella®

5

and therefore lack standing to challenge those statements. Accordingly, any claims based on the

6

website should be dismissed.

7

3.

The Television Advertisements Challenged In the Complaint Are Not
Deceptive

8
9

Plaintiffs challenge three television ads that emphasize the “tasty” aspects of Nutella®.

10

See ¶ 91 (“That’s why I love Nutella®, a delicious hazelnut spread that’s perfect on multigrain

11

toast and even whole wheat waffles.”); ¶ 92 (“Like Nutella®, a delicious hazelnut spread that’s

12

perfect on multigrain toast, even whole grain waffles, for a breakfast that my kids love, and I feel

13

good about serving.”); ¶ 93 (“Nutella®, a delicious hazelnut spread that I use to get my kids to

14

eat healthy foods.”).

15

Plaintiffs allege these ads are deceptive because they portray mothers feeding Nutella® to

16

happy, healthy children (¶ 90); state (truthfully) that Nutella® does not have any artificial colors

17

or preservatives (¶ 94); and tout the “simple” and “wholesome” ingredients in Nutella®. ¶¶ 93,

18

95 (“Every jar has wholesome, quality ingredients, like hazelnuts, skim milk, and a hint of

19

delicious cocoa.”). None of these statements is likely to deceive a reasonable consumer. First,

20

there is nothing “deceptive” about using “happy, healthy children” in television advertisements.

21

Second, plaintiffs do not and cannot allege that Nutella® contains artificial colors or

22

preservatives. Third, there is nothing deceptive about characterizing hazelnuts and skim milk as

23

“wholesome, quality” ingredients. Indeed, plaintiffs themselves allege that hazelnuts are

24

“healthy” (¶ 81) and there is no allegation that skim milk is otherwise.

25

Because plaintiffs have not alleged any affirmative statement that is likely to deceive a

26

reasonable consumer, the Ninth’s Circuit decision in Williams v. Gerber Products Co. is

27

distinguishable. In Gerber, the product was called “fruit juice snack,” and its label described the

28

snack as being made with “fruit juice and other all natural ingredients” – a claim that the court
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stated “appears to be false” – along with pictures of real fruit. 552 F.3d at 939. Here, there is no

2

“apparently false” statement – such as “sugar free” or “no saturated fat” – and the images on the

3

label accurately represent the product’s content: Nutella® is made from real hazelnuts, skim

4

milk and cocoa (the front label image) and the picture of fruits, juice, and whole wheat bread on

5

the back label is expressly provided as a suggested breakfast – not the implied ingredients.

6

Plaintiffs do not allege otherwise. Therefore, plaintiffs have failed to state a claim that a

7

reasonable consumer would be deceived by any of the affirmative statements or images

8

challenged in the complaint.

9

B. The Alleged “Omissions” Are Not Contrary to an Affirmative Representation or
an Omission of Material Fact that Ferrero Was Obligated to Disclose

10
11

Plaintiffs’ theory of falsity by omission fails as well. Plaintiffs allege that Ferrero fails to

12

inform consumers that “Nutella® contains high levels of saturated fats, sugar, oil, artificial

13

flavoring and other objectionable ingredients . . . , which harm the heart by raising blood

14

cholesterol and blood sugar levels.” ¶ 99.

15

But that theory cannot survive, even at the pleading stage, because the ingredients in

16

Nutella® are plainly listed on the product for all consumers to see: SUGAR, PALM OIL,

17

HAZELNUTS, COCOA, SKIM MILK, REDUCED MINERALS WHEY (MILK), LECITHIN

18

AS EMULSIFER (SOY), VANILLIN: AN ARTIFICIAL FLAVOR.9 Ex. A. Moreover, the

19

product label provides consumers with the nutrients of the product, including Saturated Fats

20

(3.5g), Sugar (21g), Calories (200), in the FDA-required Nutrition Facts Panel for each 2

21

tablespoon serving. Plaintiffs do not allege that the list of ingredients is wrong, that an

22

ingredient is missing, or that the “Nutrition Facts” of the product are actually higher than listed.

23

To the extent plaintiffs are suggesting that Ferrero had an obligation to go even further

24

and describe the possible health effects of any ingredient, i.e., alleged “harm [to] the heart by

25

raising blood cholesterol and blood sugar levels” ( ¶ 99), they are wrong. In establishing national

26
9

27
28

Plaintiffs erroneously contend that “Ferrero further deceptively omits that Nutella contains
artificial flavoring.” ¶ 97. In fact, the product label and list of ingredients on the website both
expressly list “Vanillin: An Artificial Flavor” as required by FDA regulations. Exs. A and B-2.

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uniform labeling standards, Congress and the FDA determined that food labels must objectively

2

list ingredients and specific nutritional levels. 21 U.S.C. § 343(g); 21 C.F.R. § 101 et seq.); Hitt

3

v. Ariz. Beverage Co., No. 08cv809, 2009 WL 449190, at *5 (S.D. Cal. Feb. 4, 2009) (discussing

4

the FDCA in the context of “Congress’s objectives of uniformity and consistency in regulating

5

beverage labeling.”). As explained previously, the FDA requires specific disclosures in some

6

circumstances, but only where the product contains certain levels of “disqualifying nutrients” –

7

levels that are not present here (see supra at pp. 10-11) and nothing in those regulations suggests

8

that food manufacturers must go even further and describe the possible health effects of those

9

ingredients – and for good reason. Many health effects are speculative and vary considerably

10

based on the individual consumer’s diet, activity levels and other aspects of their life.

11

III.

THE COMPLAINT FAILS TO STATE A CLAIM FOR “UNFAIR” OR
“UNLAWFUL” CONDUCT UNDER THE UCL

12
13

The UCL has three “prongs”; it can be violated by conduct that is “fraudulent,” “unfair,”

14

or “unlawful.” See generally Cruz v. PacifiCare Health Sys., Inc., 30 Cal. 4th 303, 315 (2003);

15

Blakemore v. Superior Court, 129 Cal. App. 4th 36, 43 (2005). Plaintiffs’ claims for violations

16

of the “fraudulent” prong (¶ 146) are discussed above, since the test for a violation under this

17

prong is whether members of the public are likely to be deceived. See supra Section II-A; see

18

also Bank of the West v. Superior Court, 833 P.2d 545, 553-54 (Cal. 1992). The following

19

demonstrates that plaintiffs have also failed to plead violations of the “unfair” and “unlawful”

20

prongs, and therefore their Section 17200 claims should be dismissed completely.

21

A. The Complaint Does Not State a Claim Under the “Unlawful” Prong of the UCL

22

Plaintiffs allege that Ferrero’s conduct is unlawful because it runs afoul of the FDCA and

23

its implementing regulations (¶ 132), California’s Food, Drug, and Cosmetic Law (“Sherman

24

Act”) (¶ 133), the CLRA and FAL (¶ 135). Plaintiffs have not stated a claim under any of these

25

laws and, therefore, have failed to state a claim under the “unlawful prong” of the UCL.

26

The FDCA and Sherman Act both prohibit the sale of “misbranded” food, i.e., product

27

labels that are “false or misleading in any particular” (21 U.S.C. § 343(a); Cal. Health & Safety

28

Code § 110660) or making non-compliant nutrient or health claims (21 U.S.C. § 343(r); Cal.
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Health & Safety Code § 110670). Plaintiffs do not allege (because they cannot) that the

2

Nutrition Facts Panel or Ingredients are incorrect and, as discussed in Section I-B, the complaint

3

does not identify any other statement on the label that is “false or misleading.” For example, the

4

front label states “Made with over 50 Hazelnuts per Jar.” Plaintiffs do not allege that Nutella®

5

contains fewer than 50 hazelnuts. The front label further states “Contains No Artificial Colors”

6

and “Contains No Artificial Preservatives.” Plaintiffs do not allege that Nutella® does, in fact,

7

contain artificial colors or preservatives. Finally, the front label states “Hazelnut Spread with

8

Skim Milk & Cocoa.” Plaintiffs do not allege that Nutella® is not a hazelnut spread or that it

9

does not contain skim milk and cocoa. In sum, the Nutella® label complies with all FDCA and

10
11

Sherman Act requirements, and plaintiffs have pleaded no facts to the contrary.
Nor have plaintiffs stated a violation of the CLRA or FAL. As discussed above, the

12

complaint fails to state a viable claim under those statutes because no reasonable consumer is

13

likely to be deceived and, therefore, the complaint fails to state a claim for unlawful conduct.

14

Ford v. Hotwire, Inc., No. 07-CV-1312, 2007 WL 6235779, at *4 (S.D. Cal. Nov. 19, 2007).

15

B. The Complaint Does Not State a Claim Under the “Unfair” Prong of the UCL

16

Plaintiff alleges that Ferrero’s conduct constitutes an “unfair” business practice under the

17

UCL. See ¶ 142. California courts are split as to the appropriate test for determining whether a

18

practice is “unfair” in the context of a consumer action. Lozano v. AT & T Wireless Servs., Inc.,

19

504 F.3d 718, 735-36 (9th Cir. 2007) (acknowledging state of flux in the law); Ford v. Hotwire,

20

Inc., 2008 WL 5874305, at *4-5. One line of appellate decisions defines “unfair” as any conduct

21

that is immoral, unethical, unscrupulous, or substantially injurious to consumers, and requires the

22

court to weigh the utility of the defendant’s conduct against the gravity of the harm to the alleged

23

victim. Smith v. State Farm Mut. Auto. Ins. Co., 93 Cal. App. 4th 700, 718-19 (2001). The other

24

line holds that the public policy which is a predicate to a consumer unfair competition action

25

under the “unfair” prong of the UCL must be tethered to specific constitutional, statutory, or

26

regulatory provisions. Scripps Clinic v. Superior Court, 108 Cal. App. 4th 917, 939 (2003).

27

Here, plaintiffs rely on the first line of cases, alleging that it is “immoral, unscrupulous

28

and offends public policy” for Ferrero to “place[ ] Nutella® into the stream of commerce with
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1

knowledge that, through the intended use of such products, individuals, including young

2

children, will be exposed to high and dangerous levels of saturated fat, trans fat, highly-refined

3

sugars, and other objectionable ingredients.” ¶¶ 142-43. Under their expansive interpretation of

4

“unfair,” plaintiffs are asking the Court to effectively prohibit the sale of any food that contains

5

3.5 grams of saturated fat, 21 grams of sugar, or any other ingredient that these plaintiffs find

6

“objectionable.” But Congress and the FDA have, after significant deliberation and study,

7

concluded that companies are allowed to put products “into the stream of commerce” that

8

contain 3.5 grams of saturated fat and 21 grams of sugar. See supra Section I. Thus, plaintiffs’

9

proposed test is untenable on its face, expressly preempted (for the reasons discussed above), and

10

prohibited by, among other things, the dormant commerce clause10 and the safe harbor

11

provisions of Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal. 4th

12

163, 182 (1999) (courts should not make illegal that which the Legislature or a regulatory agency

13

has expressly allowed).

14

With respect to the second line of California cases interpreting the “unfair prong,” the

15

complaint does not allege facts demonstrating a violation of any specific constitutional, statutory,

16

or regulatory provisions. Scripps Clinic, 108 Cal. App. 4th 917. On the contrary, Ferrero

17

complies with the expansive regulatory regime that governs food manufacturers and, again, the

18

“unfair” prong of the UCL cannot be used to make illegal conduct that is expressly permitted

19

under that regulatory framework. Cel-Tech, 20 Cal. 4th at 182. Because plaintiffs have failed to

20

state a claim under either standard of “unfair,” plaintiffs’ claims under the “unfair” prong of the

21

UCL should be dismissed. See Hotwire, 2007 WL 6235779, at *5.

22
23
24
10

25
26
27
28

Plaintiffs’ proposed test would Balkanize the distribution of food products in this country—
one set of rules in California that is prescribed by plaintiffs (prohibiting products that plaintiffs
believe contain “dangerous levels” of saturated fat and sugar) and another set of rules for the rest
of the United States (as prescribed by the FDA). That result is precisely what Congress and the
FDA sought to avoid by establishing national standards and a result that would disrupt interstate
commerce in a way that is “clearly excessive in relation to the putative local benefits.” Pike v.
Bruce Church, Inc., 397 U.S. 137, 142 (1970).

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IV.

THE COMPLAINT DOES NOT STATE A CLAIM UNDER THE CLRA

2

Plaintiff’s fourth cause of action alleges violations of California’s Consumers Legal

3

Remedies Act (Cal. Civ. Code § 1750 et seq.). ¶¶ 154-60. It should be dismissed for the reasons

4

set forth above, namely, no reasonable consumer is likely to be deceived by the challenged

5

statements. Hotwire, 2008 WL 5874305, at *5 (“The Court agrees for substantially the same

6

reasons discussed with the UCL and FAL. Plaintiff fails to state a claim as to the first three

7

subsections, namely California Civil Code § 1770(5), (9), and (14).”).

8

It should also be dismissed because the CLRA does not give consumers license to sue for

9

any practice that the consumer considers to be unfair. Unless a practice falls within one of the 23

10

practices set forth in Civil Code § 1770, it does not violate the CLRA. See Berryman v. Merit

11

Prop. Mgmt., Inc., 152 Cal. App. 4th 1544, 1557 (2007). Plaintiffs allege that Ferrero’s conduct

12

violates subsections (5), (7), (9), and (16) of the CLRA (¶ 156), but they do not adequately plead

13

any such violations.11 Because plaintiffs’ CLRA claims merely provide “labels and conclusions”

14

along with a bare statement of an entitlement to relief, they are properly dismissed. Twombly,

15

550 U.S. at 545, 555 n.3; Kramer v. Intuit Inc., 121 Cal. App. 4th 574, 581 (2004) (sustaining

16

demurrer where alleged misconduct did not violate one of the enumerated prongs).

17

V.

THE COMPLAINT DOES NOT STATE A CLAIM FOR BREACH OF
WARRANTY, EITHER EXPRESS OR IMPLIED

18
Plaintiffs allege that Ferrero’s representations regarding Nutella® are express warranties,
19
which Ferrero breached because Nutella® was “not an ‘example of a tasty yet balanced
20
breakfast,’ or healthy.” ¶ 164. But Ferrero never expressly represented as fact that Nutella® is
21
itself a “balanced breakfast” or “healthy.” See generally Exs. A, B. The statements allegedly
22
made to plaintiffs in connection with their purchases of the product were that a breakfast of fresh
23
24
25
26
27
28

11

Section 1770(a)(5) prohibits “[r]epresenting that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or quantities which they do not have.” Cal.
Civ. Code § 1770(a)(5). Section 1770(a)(7) prohibits representing that goods are of a particular
standard, quality, or grade if they are of another; Section 1770(a)(9) prohibits “[a]dvertising
goods or services with intent not to sell them as advertised”; and Section 1770(a)(16) prohibits
“[r]epresenting the subject of a transaction has been supplied in accordance with a previous
representation when it has not.” Cal. Civ. Code §§ 1770(a)(7), (a)(9), (16). Plaintiffs do not
allege conduct that would violate any of these subsections.

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fruits, whole wheat bread with Nutella®, a glass of milk and orange juice together make up a

2

balanced breakfast. Additionally, the statements Ferrero made about the contents of Nutella®

3

(such as that it contains hazelnuts and skim milk) are true, and plaintiffs do not contend to the

4

contrary.

5

Any inference plaintiffs drew regarding the healthfulness of Nutella® cannot support an

6

express warranty claim, which requires affirmative statements of verifiable fact, not idiosyncratic

7

understandings inferred by a consumer. See, e.g., Werberl ex rel. v. Pepsico, Inc., No. C 09-

8

04456, 2010 WL 2673860, at *5 (N.D. Cal. July 2, 2010) (inference that product derived

9

nutritional value from fruit could not support express warranty claim where claim was made

10

nowhere on product or in marketing materials). Similarly, to the extent plaintiffs intend to assert

11

an express warranty claim upon the representation that Nutella®, when eaten together with fresh

12

fruits, whole wheat bread, milk and orange juice is an example of a balanced breakfast, the claim

13

is barred because such statement is not an explicit guaranty that Nutella® itself is healthy. See

14

McKinniss v. Sunny Delight Beverages Co., No. CV 07-02034, 2007 WL 4766525, at *6 (C.D.

15

Cal. Sept. 4, 2007) (depictions of fruit on label not explicit warranty as to extent of fruit content);

16

McKinniss v. Gen. Mills, Inc., No. CV 07-2521, 2007 WL 4762172, at *5 (C.D. Cal. Sept. 18,

17

2007) (plaintiffs inference that product contained real fruit or fruit juice could not support

18

express warranty claim). Because plaintiffs have identified no false affirmation or fact or

19

promise that formed the basis of their bargain, their breach of warranty claim fails as a matter of

20

law. Cal. Com. Code § 2313(1); see, e.g., McKinnis v. Kellogg USA, No. CV 07-2611, 2007

21

WL 4766060, at *5 (C.D. Cal. Sept. 19, 2007); McKinniss, 2007 WL 4762172, at *5.

22

Plaintiffs similarly fail to state a claim under California law for breach of the implied

23

warranty of merchantability. This warranty “does not ‘impose a general requirement that goods

24

precisely fulfill the expectation of the buyer. Instead, it provides for a minimum level of

25

quality.’” Am. Suzuki Motor Corp. v. Superior Court, 37 Cal. App. 4th 1291, 1296 (1995)

26

(citations omitted). In the context of food products, courts determining whether such product is

27

“merchantable” consider whether the food is fit for human consumption – “the ordinary purpose[

28

] for which such goods are used,” and “[c]onform to the promises or affirmations of fact made on
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the container or label if any.” See Cal. Com. Code § 2314(2); 18 Williston on Contracts § 52:76

2

(4th ed. 2009) (equating “merchantable” quality with “fitness for human use or consumption”).

3

As explained in the discussion of express warranty, Nutella® conforms to all affirmations of fact

4

on its label. See Sugawara v. Pepsico, Inc., No. 2:08-cv-01335, 2009 WL 1439115, at *5 (E.D.

5

Cal. May 21, 2009) (no claim for breach of implied warranty of merchantability where plaintiffs

6

received what was described on product box). Although plaintiffs allege that fat and sugar have

7

been associated in certain health literature with increased risks of health conditions, they do not

8

assert that Nutella® is unfit for human consumption. They have therefore failed to state a claim

9

for breach of the implied warranty of merchantability. See Birdsong v. Apple, Inc., 590 F.3d

10

955, 958 (9th Cir. 2009) (fact that product had potential to cause harm did not render it

11

unmerchantable; affirming dismissal of claim).

12
13

CONCLUSION
Plaintiffs have not stated a claim upon which relief can be granted and, therefore, Ferrero

14

respectfully requests that the Master Consolidated Complaint be dismissed pursuant to Federal

15

Rule of Civil Procedure Rule 12(b)(6).

16
17

Dated: April 18, 2011

WILSON SONSINI GOODRICH & ROSATI
Professional Corporation

18
19

By: /s/ Dale R. Bish
Dale R. Bish
Attorneys for Defendant Ferrero U.S.A., Inc.

20
21
22
23
24
25
26
27
28
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