Food Court Report: How You Say It Makes a Difference - California False Advertising Claims Attacking "No Trans Fat" Labeling Gain Traction as Ninth Circuit Rejects Preemption Arguments

The United States Court of Appeals for the Ninth Circuit held, in relevant part, that a consumer states a valid claim for false advertising when a company claims "No Trans Fats" for a product which has less than 0.5 grams of trans fats per serving (but more than 0 grams) even though Food and Drug Administration (FDA) regulations require the product's nutritional label declare 0 grams trans fats per serving. Robert Reid sued Johnson and Johnson (J&J) for claiming "No Trans Fat" and "No Trans Fatty Acids" on the outside label of its butter and margarine substitute, Benecol, in alleged violation of California's Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumer Legal Remedies Act (CLRA). Reid asserted that the claims were not authorized by FDA and were false. We focus on the Ninth Circuit's ruling that overturned the lower court's holding that the Benecol trans fats claims complied with FDA regulations and thus were preempted by the federal law. The case is Reid v. Johnson & Johnson, Case No. 12-56726 (9th Cir. Mar. 13, 2015).

In finding preemption, the District Court had relied on the Court of Appeals decision in Carrea v. Dreyer's Grand Ice Cream which found that a challenge to a "0g Trans Fat" statement, located on the front of the product's packaging, was expressly preempted by the Federal Food, Drug, and Cosmetic Act. Carrea v. Dreyer's Grand Ice Cream, 475 Fed Appx. 113 (9th Cir. 2012). With no discussion of Carrea, the same Court of Appeals found that there was no express preemption of the "No Trans Fats" claim on Benecol because FDA had not authorized a "No Trans Fats" claim. The court cited two FDA warning letters as indicating that FDA prohibited claims such as "no trans fat" and "trans fat free" but allowed truthful statements on a product's label that specified the amount of trans fat per serving. Although warning letters are the agency's informal and preliminary enforcement actions, the court gave deference to them as the agency's interpretation since FDA creates the regulations. In addition, the court considered that the FDA promulgated regulations expressly allowing "no fat" and "no saturated fat" claims while deciding not to authorize similar "no trans fat" claims in concluding that the claim violated the FDA's prohibition of false or misleading nutrient content claims. The Court rejected J&J's argument that the "No Trans Fats" claim was synonymous with the FDA regulations requiring that the nutrition label contain a "0 grams of trans fat per serving" statement.

The Reid decision fails to acknowledge that it conflicts with a decision from the United States Court of Appeals for the Third Circuit finding that the "no trans fat claim" on Benecol was not misleading because the FDA regulations authorized similar claims for products with minimal amounts of calories or sodium on a per product basis. Young v. Johnson & Johnson, Case No. 12-2475 (3d Cir. May 31, 2013). In fact, the Reid court did not discuss the Young decision which was not binding on it.

The wording of a claim is controlling. According to the court, while the regulations required a "0g trans fat" claim on the nutrition label, a nutrient content claim that the product contained "no trans fats", when in fact there were some, was found not to be authorized.