In what seems to be an ever-expanding zone of liability for false advertising claims on food products, the Ninth Circuit ruled this week that “external facts” – aka what a competitor does or does not put on their labels – can make the labels of another product misleading by implication.
In Bruton v. Gerber, plaintiff Natalia Bruton alleged that labels on Gerber baby food products advertising nutrient and sugar content were impermissible under FDA regulations (thereby creating a UCL unlawful advertising claim). Bruton’s theory of deception was a combination of two factors: 1) presence of “attractive label” claims such as “Supports Health Growth & Development” or “As Healthy As Fresh” violate strict FDA regulations regarding health content and 2) the lack of similar claims on competitors’ products (in compliance with FDA regulations) made Gerber products appear superior.
The district court, among other holdings, dismissed UCL claims because there was no genuine dispute of material fact regarding deception. The court held that Bruton’s evidence of consumer deception – FDA warning letters and her own testimony that she was deceived – did not establish that a reasonable consumer was likely to be deceived by the representations.
Overturning the lower court’s dismissal of these claims, the Ninth Circuit held that a viable claim of consumer deception was alleged because “when the maker of one product complies with a ban on attractive label claims, and its competitor does not do so, the normal assumptions no longer, and consumers will possibly be left deceived.” The Court also determined that simply the labels themselves were enough to create a triable issue of fact because, when comparing the labels to other products, a reasonable jury could conclude that Gerber’s labels were deceptive.
The major takeaway from this decision is that so-called “attractive labels” cannot only subject a manufacturer to strict scrutiny from the FDA (and penalties, etc.), but can also give rise to actions for liability for false advertising. Even though the statements may be true (even if not strictly compliant with tight restrictions from the FDA), the fact that other FDA-compliant products do not have such statements means the product quality could be unnecessarily inflated in the eyes of the consumer.
Bottom line: false advertising liability is not only based on what is on your product’s label, but can now depend on the absence of similar statements on other labels.