Hadley v. Kellogg Sales Co.
243 F. Supp. 3d 1074
N.D. Cal.2017Background
- Plaintiff Stephen Hadley sues Kellogg Sales Co., alleging packaging statements (e.g., “Heart Healthy,” “Made with Real Fruit,” protein claims, “No High Fructose Corn Syrup”) mislead consumers because products contain unhealthy levels of added sugar (and, for a subset, trans fat).
- FAC challenges 53 product variants across 12 product lines and asserts claims under California False Advertising Law (FAL), Consumers Legal Remedies Act (CLRA), Unfair Competition Law (UCL) (fraudulent, unlawful, unfair prongs), breach of express warranty, and breach of implied warranty.
- Plaintiff pleaded total sugar amounts but largely failed to plead specific added-sugar amounts for each product; he relied on the theory that added sugar renders the health-related labeling misleading.
- Defendant moved to dismiss under Rules 8(a), 9(b), and 12(b)(6), and sought judicial notice of label images and federal rulemaking documents; Plaintiff’s judicial-notice requests for certain news articles were denied as to their substantive facts.
- The Court dismissed all challenged claims: many dismissals with leave to amend (notably added-sugar-based FAL/CLRA/UCL claims, some UCL unlawful/unfair theories, express and implied warranty claims, and injunctive-relief standing), but dismissed with prejudice those claims the FAC could not cure (e.g., "Made with Real Fruit" as misleading re: trans fat; certain FDA-technical claims previously identified and not cured).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether labeling (health/wellness statements) is false/misleading due to excessive added sugar | Kellogg's labels convey healthfulness; products contain excessive added sugar making those labels misleading | Plaintiff failed to plead specific added-sugar amounts per product and thus cannot show the labels are misleading; Rule 9(b) requires particularity | Dismissed for failure to plead added-sugar amounts and why amounts are unhealthy; leave to amend on added-sugar claims |
| Whether "Made with Real Fruit" is misleading given presence of partially hydrogenated oil (trans fat) | Statement highlights healthy attributes and thus is misleading when product contains trans fat | Statement is factually true and does not imply absence of trans fat; not deceptive as a matter of law | Dismissed with prejudice as non-misleading (amendment futile) |
| Whether alleged violations of FDA labeling regs (health claims, nutrient claims, intervening material, protein, “No HFCS”, §1.21 omissions) support an unlawful UCL claim | Labels violate various FDA rules (improper health/nutrient claims, formatting, omissions) and thus are predicate unlawful practices under UCL | Either no violation, or only bare/technical regulatory violations that do not mislead reasonable consumers | Mixed: court dismissed unlawful-prong theories. Some theories dismissed with leave to amend (health claims linking fiber to CVD, size-of-nutrient claims, §1.21 omission, “No HFCS”); certain claims dismissed with prejudice (intervening material, protein amount claim) where deficient and not cured |
| Standing for injunctive relief (future harm) | Plaintiff will consider future purchases if labeling / pricing changes; seeks injunction correcting labels | Plaintiff lacks a concrete likelihood of future injury and did not plausibly allege intent to repurchase under current labeling/pricing | Injunctive-relief request dismissed for lack of Article III standing; leave to amend to plead plausible future intent to purchase |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard governs Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading must include factual content showing plausibility)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (Rule 9(b) particularity for fraud-based consumer claims)
- In re Glenfed, Inc. Sec. Litig., 42 F.3d 1541 (plaintiff must plead what is false or misleading and why)
- Williams v. Gerber Prods. Co., 552 F.3d 934 (reasonable consumer test for food-label deception)
- Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163 (unfair-prong UCL must be tethered to legislatively-declared policy)