Date: Jul 29, 2015
Last month we wrote about FDA's determination that trans fat will no longer be generally recognized as safe ("GRAS") and that the agency's decision could open the door for consumers wishing to attack food products containing trans fat.1 Perhaps in a sign of things to come, the "Food Court" (Federal District Court in Northern California) recently denied a motion to dismiss a lawsuit that targets several instant noodle products manufactured by Nissin Foods ("Nissin") as violating California law because they are made with trans fat and allegedly pose a risk to public health. While the court dismissed various mislabeling claims as preempted by federal law, it allowed a cause of action under Section 17200 of California's Unfair Competition Law ("UCL"), as well as a breach of implied warranty of merchantability claim, to survive based on allegations that trans fats are not safe for consumption.
In Guttman v. Nissin Foods (U.S.A.) Co., Inc., Case No. 3:15-cv-00567 (N.D. Cal.), the named plaintiff, Victor Guttman, filed a putative nationwide class action making extensive allegations that trans fats are linked to numerous health risks, including cardiovascular heart disease, diabetes, cancer, Alzheimer's disease, and cognitive decline in diabetics.2 Citing various studies, plaintiff maintained that there is "no safe level" for trans fat intake and that Nissin failed to use safe and commercially available substitutes. In seeking both monetary and injunctive relief, Guttman challenged Nissin's products based on two theories of liability: (i) Nissin's labels are misleading because the company included a "0g Trans Fat" icon on the front of the instant noodle packaging when the instant noodles actually contain minute amounts of the substance3; and (ii) Nissin is selling an unsafe product.4
The court dismissed the mislabeling claims as preempted by federal law. Under the Food, Drug and Cosmetic Act ("FDCA"), state labeling requirements are expressly preempted where they are inconsistent with nutrient content standards set by FDA and are not otherwise misleading.5 FDA regulations also explicitly require that the nutrition facts panel must indicate the amount of trans fat to be zero where a serving contains less than 0.5 grams.6 In other words, the manufacturer must "round" downward in those circumstances. That was the case here. The nutrition facts panel for the instant noodles reported an amount of zero grams. Given that the instant noodles contained small amounts of trans fat, however, Guttman argued that the "0g Trans Fat" icon was misleading and therefore not preempted. The court adopted a different approach. Citing to prior FDA statements, the court noted that: (i) there is no nutritional difference between rounded and unrounded values; and (ii) discrepancies between the nutrient content claim and the nutrient facts panel would be confusing to consumers. Accordingly, the court held that the "0g Trans Fat" icon was not misleading, as there is no nutritional difference between zero grams and something less than 0.5 grams of trans fat, and that state law should not be allowed to contradict statements that are permitted by FDA in the nutrient facts panel.
Nissin did not fare as well on the unsafe product claims. As to Guttman's cause of action under the "unfair" prong of Section 17200, Nissin argued that it should be dismissed because there is a safe harbor from such claims where the alleged conduct is otherwise lawful. The company maintained that FDA permits the use of trans fat as GRAS in instant noodles.7 The court disagreed. It found that only certain trans fats not found in Nissin's products had been designated GRAS by FDA. As to the trans fat in the instant noodles, it was not until last month that FDA addressed those substances in any manner and, when it did, the agency determined that no trans fats are GRAS. As a result, the court concluded that there was no safe harbor where FDA had not expressly permitted the use of trans fats contained in Nissin's products. The court then applied a "balancing test" under Section 17200, finding that Guttman had adequately pled an "unfair" business practice where, on the one hand, serious harm to the public was alleged, while on the other, there is only limited utility to Nissin in using trans fat where such additive is less expensive than viable alternatives. Finally, the court held that Guttman had plausibly alleged that foods containing trans fats are not fit for human consumption and therefore the breach of implied warranty of merchantability claim would stand.8
Absent reversal or case law to the contrary, we expect this decision to serve as a template for consumers challenging trans fat and other food additives not designated GRAS.
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1 Final Determination Regarding Partially Hydrogenated Oils, 80 Fed. Reg. 34,650 (June 17, 2015) (Trans fats are contained in partially hydrogenated oils ("PHOs"); under the FDA's rule, food manufacturers will have three years to phase out PHOs or submit a food additive petition to FDA).
2 First Amended Complaint, Dkt. No. 32.
3 Guttman's mislabeling claims were filed under the "fraudulent" and "unlawful" prongs of Section 17200, the False Advertising Law, and the Consumer Legal Remedies Act, as well as for breach of express warranty.
4 Guttman's unsafe claims are based on the "unfair" prong of Section 17200, breach of implied warranty of merchantability, and public nuisance.
5 21 U.S.C. § 343-1.
6 21 C.F.R. § 101.9(c)(2)(ii).
7 Def.'s Mot. To Dismiss Pl.'s First Amended Complaint Pursuant to Rules 12(b)(1) and 12(b)(6), Dkt. No. 38.