Soup Labels Touting “Less Sodium” Could Cause Ascertainable Loss

This posting was written by William Zale, Editor of CCH Advertising Law Guide.

In a class action complaint, consumers stated claims under the New Jersey Consumer Fraud Act (CFA) by alleging that labels for Campbell’s 25% Less Sodium Tomato Soup and 30% Less Sodium Healthy Request Soup were misleading and caused the consumers to buy the higher-priced less sodium soups even though the sodium content of those soups was equal or nearly equal to that of Campbell’s regular tomato soup, the federal district court in Camden, New Jersey has ruled.

Campbell’s contention that the labels were accurate comparisons to the old formulation of regular tomato soup relied on facts outside the scope of a motion to dismiss, the court noted. In addition, even if the labels were literally true, this did not mean they could not be misleading to the average consumer, the court added.

Campbell also contended unsuccessfully that using a misrepresentation to cause a consumer to purchase a product does not cause an ascertainable loss under the CFA.

Benefit-of-the-Bargain Theory

The New Jersey Supreme Court had repeatedly and explicitly endorsed a benefit-of-the-bargain theory under the CFA that required nothing more than that the consumer was misled into buying a product that was ultimately worth less to the consumer than the product promised.

A reasonable reading of the complaint was that the soup paid for was identical, for the consumers’ purposes, to soup that allegedly was 20 to 80 cents cheaper, according to the court. A reasonable fact-finder could therefore conclude that the reasonably calculated value to consumers of the item actually received was 20 to 80 cents less than the value of the item promised. That was a sufficient allegation of ascertainable loss under New Jersey law, the court held.

Preemption

The federal Food, Drug, and Cosmetic Act (FDCA) did not preempt the CFA claims. The FDCA, as amended by the Nutrition Labeling and Education Act, provided that a state may not impose any requirement respecting any claims of nutritional content on labels “that is not identical to the requirement” imposed by the Act.

The state law claims that the labels were misleading were not preempted because they mirrored the federal requirements. However, claims that the labels omitted material information regarding sodium were preempted by the FDCA because the consumers sought to impose a labeling requirement for the nutrient content that was inconsistent with the Food and Drug Administration’s nutritional labeling regulations, the court determined.

The opinion in Smajlaj v. Cambpell Soup. Co. is reported at CCH Advertising Law Guide ¶64,238.