Labeling, Advertising Food as “Healthy” Could Violate California Law

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

Advertising Nutella® hazelnut spread as a “tasty yet balanced breakfast” was not mere puffery, and purchasers satisfied the reasonable consumer test under California consumer protection statutes in a suit against the food manufacturer Ferrero U.S.A., Inc., the federal district court in San Diego has ruled.

In a class action complaint, the purchasers alleged that Ferrero misleadingly labeled and advertised Nutella as healthy and beneficial to children, when in fact it contained dangerous levels of fat and sugar.

The purchasers’ complaint provided detailed lists of the challenged representations, the sections of the Consumers Legal Remedies Act (CLRA) that Ferrero allegedly violated, and a statement of how each section was violated. The purchasers stated a claim of unlawful conduct under the Unfair Competition Law (UCL) based on alleged violations of the False Advertising Law and the CLRA. The purchasers stated a claim of unfair conduct under the UCL by alleging that the misleading labeling of Nutella was immoral, unscrupulous, and offensive to public policy, and that the utility of the advertising and labeling was outweighed by the harm suffered by the purchasers.

Preemption

Federal law preempted an allegation that Ferrero deceptively omitted from its Nutella labeling the fact that it contained artificial flavoring, the court held. Food labeling was governed by the federal Food, Drug, and Cosmetic Act, as amended by the Nutrition Labeling and Education Act. Because Nutella’s label stated the fact that it contained vanillin, an artificial flavor, the label complied with the federal disclosure requirements, the court said.

Ferrero did not argue that the purchasers’ allegations regarding statements from its television advertisements were preempted.

Standing to Challenge Website Statements

The purchasers lacked standing to challenge statements on the Nutella website because, according to the purchasers’ allegations, they did not actually rely on the website statements before making their purchases, the court decided. The purchasers alleged that they only relied on representations from Nutella’s label and television advertisements in purchasing the product, and they admitted in their briefing that they had not visited the website.

The purchasers argued that they did not have to rely on individual website misrepresentations because the representations were part of a long-term, multifaceted advertising campaign, but the purchasers did not allege this in their complaint, the court noted. The purchasers were given 30 days to cure deficiencies in the complaint.

The June 30, 2011 opinion, In re Ferrero Litigation, 11-CV-205 H (CAB), will be reported at CCH Advertising Law Guide ¶ 64,349.