New UCL "fraudulent" prong and preemption decision: Simpson v. The Kroger Corp.
In Simpson v. The Kroger Corp., ___ Cal.App.4th ___ (Sept. 25, 2013), the Court of Appeal (Second Appellate District, Division Four) affirmed dismissal of plaintiff's UCL, FAL and CLRA claims, which asserted that the defendant, who makes Challenge butter, mislabeled its spreadable "butter" products. (The action also named the supermarket where the plaintiff purchased the products.) According to the complaint, the spread is not "butter" because it contains canola and/or olive oil (sounds like margarine to me, although later the opinion clarifies that this was not plaintiff's contention). Slip op. at 2-4, 8-9.
This is one of the challenged labels (no pun intended):
Id. at 22 (Appx. B).
First, the opinion addresses preemption, holding that the federal Food Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.) preempts the California Milk and Milk Products Act of 1947 (Food & Agr. Code §§ 32501 et seq.) (which appears to have a more narrow definition of "butter" than the federal Act) but not the California Sherman Food, Drug and Cosmetic Law (Health & Saf. Code§§ 109875 et seq.). Slip op. at 5-16.
Then, the opinion holds that regardless of the preemption analysis, the UCL, FAL and CLRA claims failed because "plaintiff has not, and as a matter of law cannot, allege that areasonable consumer would have been mislead [sic] by the labels here." Id. at 17. Of interest, the opinion confirms the substantive "likely to deceive" standard for these claims:
Although California “courts have held that reasonable reliance is not anelement of the claims under [the three statutory schemes alleged],” a plaintiffmust establish that consumers were likely to be deceived by the product. ([Yumul v. SmartBalance, Inc. (C.D. Cal. 2010) 733 F.Supp.2d 1117,] 1125; In re Vioxx Class Cases (2009)180 Cal.App.4th 116, 130 [to state a claim for deceptive advertising under theConsumer Legal Remedies Act, a plaintiff “need only establish that members ofthe public were likely to be deceived by the advertising.”]; Colgan v. Leatherman Tool Group, Inc. (2006)135 Cal.App.4th 663, 682 [to establish a false advertising claim, “a plaintiffneed only show that members of the public are likely to be deceived” under a“‘reasonable consumer’ standard”].)
....
.... The labels on the products here clearly informed any reasonable consumerthat the products contain both butter and canola or olive oil. This was plain on both the top and sidepanels of the tubs in which the products are sold. No reasonable person could purchase theseproducts believing that they had purchased a product containing onlybutter. The trial court did not abuseits discretion in denying leave to amend.
Id. at 18, 19.