Hadley v. Kellogg Sales Co.

273 F. Supp. 3d 1052
District Court, N.D. California·Decided August 10, 2017·No. Case No. 16-CV-04955-LHK·Published·Cited by 55 cases

Opinion

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS

Re: Dkt. No. 63

LUCY H. KOH, United States District Judge

Plaintiff Stephen Hadley (“Plaintiff”) brings the instant suit against Defendant Kellogg Sales Company (“Defendant”) for allegedly misleading statements on Defendant’s food product packaging. Before the Court is Defendant’s Motion to Dismiss Second Amended Complaint. ECF No. 63 (“Mot.”). Having considered the parties’ briefing, the relevant law, and the record in this case, the Court GRANTS in part and DENIES in part Defendant’s Motion to Dismiss.

[1059]*1059I. BACKGROUND

A. Factual Background

Defendant is a “multi-billion dollar food company that manufactures, markets,- and sells a wide variety of cereals and bars, among other foods.” ECF No. 27, Second Amended Complaint (“SAC”) ¶ 108. Defendant is allegedly “the world’s leading producer of cereal.” Id. Defendant allegedly has “positioned itself in the market as a purportedly ‘healthy1 brand of processed food, by using various labeling statements to suggest its foods, especially its cereals and bars, are healthy choices.” Id. ¶ 112.

Plaintiff “has been a frequent cereal eater for many years.” Id. ¶ 249... Over the past several years, Plaintiff has purchased Defendant’s breakfast cereals and cereal bars. Id. ¶ 250-51. During that time period, Plaintiff allegedly “tried to choose healthy options, and has been willing to pay more for cereals he believes are healthy.” Id. ¶ 249.

This case concerns statements on the packaging for breakfast cereals and cereal bars sold by Defendant that- allegedly indicate that Defendant’s products are healthy when excess added sugar allegedly causes those products to be unhealthy. Plaintiff alleges that eight of Defendant’s product lines are sold with misleading packaging. See SAC ¶¶ 120-23. Those product lines are (1) Kellogg’s Raisin Bran, (2) Kellogg’s Frosted Mini-Wheats, (3) Kellogg’s Smart Start—Original Antioxidants, (4) Kellogg’s Crunchy Nut, (5) Nutri-Grain Cereal Bars, (6) Nutri-grain Soft-Baked Breakfast Bars, (7) Nutri-Grain Oat & Harvest Bars, and (8) Nutri-Grain Harvest Hearty Breakfast Bars. Id. Some of these product lines have multiple variants such that there are 29 products total that Plaintiff alleges are being sold with packaging that is misleading. Id.

In .general, Defendant’s products are alleged to contain 9 to 16 grams of total sugar per serving and are. 18% to 40% added sugar by calorie. See id. App. 1. The SAC alleges that the consumption of added sugar can have significant health impacts on individuals. Specifically, the SAC alleges that people in the United States consume excess added sugar, that people can become addicted to added sugar, and that excess added sugar consumption is linked to metabolic syndrome, type 2 diabetes, cardiovascular disease, liver disease, obesity, inflammation, high cholesterol, hypertension, Alzheimer’s disease, and some cancers. SAC ¶¶ 9-107. This link allegedly has been shown in multiple studies where the subjects of the study consumed 35 to 75- grams of added sugar (the amount of sugar in 1 to 2 cans of soda) per day. Id.-

Moreover, the FAC alleges that the American Heart Association (“AHA”) has found that a person is “safe” to consume up to 5% of his or her daily calories in added sugar, which amounts to approximately 25 grams of added sugar on a 2000 calorie diet. Id, ¶26. On the other hand, the United States Food and Drug Administration (“FDA”) has concluded that the Daily Recommended Value (“DRV”) of added sugars is 10% of a person’s- daily calories, or approximately 50 grams of added sugar. Based on these values, Plaintiff alleges that Defendant’s products aré unhealthy because they contain a higher percentage of added sugar (18%-40% of total calories per serving) than the daily “safe” percentage of added sugar recommended by the AHA or the DRV recommended by the FDA,

Plaintiff alleges that the packaging for Defendant’s products contains multiple statements touting the health and wellness benefits of consuming Defendant’s products that are misleading. First, Plaintiff challenges Defendant’s use of statements that use the terms “healthy,” “nutritious,” or “wholesome.” SAC ¶ 186-89. Plaintiff alleges that these statements assert that [1060]*1060Defendant’s products are healthy when they are in fact not healthy because of the presence of added sugar. 7⅛¶ 189.

Second, Plaintiff alleges that the use of phrases that describe the benefits of “whole grain,” and “fiber” content of Defendant’s products imply that the products are healthy when the amount of added sugar in Defendant’s products cause them to be unhealthy. Id. ¶ 208-09.

Third, Plaintiff alleges that Defendant’s use of the statement “No High Fructose Corn Syrup” is misleading because the added sugar, and the particular mix of fructose and glucose in Defendant’s products, have the same detrimental health effects as high fructose’ corn syrup. Id. ¶ 210-14.

Fourth, Plaintiff alleges that a number of statements such as “lightly sweetened” imply that Defendant’s products are lower in sugar, when they actually are composed of 18% to 40% added sugar. Id. ¶ 215-19.

Finally, Plaintiff alleges that a number of statements imply that Defendant’s products provide benefits, but are misleading because Defendant fails to indicate the health effects of the added sugar in Defendant’s products. For example, Defendant’s products contain statements like “help[s] keep you full and focused all morning”; “Keeps ‘em full. Keeps 'em focused”; “A balanced breakfast not only kick-starts the metabolism, it sets us up to do our best”; and “BREAKFAST BRAINPOWER.” Id. ¶ 196-206.

As an example of a product with many of these statements, Plaintiff alleges that Raisin Bran contains the following “health and wellness” statements:

a. HEART HEALTHY
b. Kellogg’s Heart Healthy Selection
c. GREAT TASTE THAT DOES
YOUR HEART GOOD
d. HEART HEALTHY / Whole grains can help support a healthy lifestyle.
e. + HEART HEALTH + / Kellogg’s Raisin Bran / With crispy bran flakes made from whole grain wheat, all three varieties of Kellogg’s Raisin Bran are good sources of fiber.
f. Start with a healthy Spoonful
g. Invest in your health invest in yourself
h. FIBER / Fiber, like bran fiber, plays a very important part in your digestive health and overall well-being.
i. BREAKFAST BRAINPOWER

Id. ¶ 128. In contrast, some products only have a single challenged statement. For example, on the packaging for Nutri-Grain Cereal Bars—Strawberry Greek Yogurt, Plaintiff only challenges the statement “Wholesome Fiber.” Id.

B. Procedural History

On August 29, 2016, Plaintiff filed a complaint. ECF No. 1. On October 31, 2016, Defendant filed a motion to dismiss. ECF No. 22. In lieu of filing a response, on November 14, 2016, Plaintiff filed a First Amended Complaint (“FAC”). ECF No. 27.

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Hadley v. Kellogg Sales Co., 273 F. Supp. 3d 1052 (N.D. Cal. 2017).

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