Wilson v. Frito-Lay North America, Inc.
961 F. Supp. 2d 1134
N.D. Cal.2013Background
- Frito-Lay manufactures snack products (e.g., Lay's, Cheetos, Fritos). Plaintiffs Wilson and Campen bought certain Frito‑Lay products during a class period and challenge labeling statements ("All Natural," "0 Grams Trans Fat," "No MSG") as misleading under California consumer-protection statutes (UCL, FAL, CLRA) and the Sherman Food, Drug, and Cosmetic Act (adopting federal FDCA/NLEA rules).
- Plaintiffs' Second Amended Complaint (SAC) added 85 "Non‑Purchased Products" they allege are similarly mislabeled; they also alleged claims based on content on Frito‑Lay websites referenced on some packaging.
- Court previously dismissed some claims and allowed amendment to address non-purchased products and website-labeling theory; breach of warranty and restitution claims were not re‑pled.
- Defendant moved to dismiss the SAC under Rules 8, 9(b), and 12(b)(6), arguing lack of standing for non‑purchased products, that website language is not "labeling," that certain theories are preempted or fail for lack of reliance or injury, and that California law should not be applied to out‑of‑state purchases.
- The court granted in part and denied in part: it dismissed with prejudice claims based on non‑purchased products, website‑based claims, UCL unlawfulness claims premised solely on misbranding (for lack of reliance), pre‑2012 "No MSG" claims (for lack of fair notice), and all claims based on purchases outside California; it allowed claims based on "All Natural" and "0 Grams Trans Fat" statements to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for Non‑Purchased Products | Non‑purchased items are "substantially similar" to purchased products (same product types, same maker, similar ingredients/labels) so plaintiffs may assert class claims. | Plaintiffs failed to plead that they bought or saw labels for the 85 Non‑Purchased Products or that those products are substantially similar; lists and attached labels are conclusory. | Dismissed with prejudice: Plaintiffs did not plead sufficient facts to show substantial similarity or standing for non‑purchased products. |
| Whether website content constitutes "labeling" under FDCA | Website language supplements product labels (website address appears on packaging), so site statements are "labeling" and actionable. | Site references are minor (listed with address), not presented as accompanying ingredient/nutrition info; no allegation plaintiffs viewed the site; FDA letters are not binding here. | Dismissed with prejudice: Website language is not shown to "accompany" the products as labeling and plaintiffs never alleged they saw/relied on the website. |
| UCL "misbranding theory" (unlawfulness prong without reliance) | A violation of FDCA/Sherman Act labeling rules alone makes a product unlawful and establishes a UCL unlawfulness claim without pleading reliance. | UCL requires plaintiffs to plead injury and reliance; unlawfulness alone is insufficient to establish Article III and UCL standing for consumer monetary harms. | Dismissed with prejudice as to UCL unlawfulness claims based solely on misbranding laws; UCL survives to the extent it is grounded in FAL/CLRA and deception-based theories where reliance/injury is pled. |
| "No MSG" claims premised on pre‑Nov. 19, 2012 law | FDA had long held that ingredients that are sources of free glutamates render "No MSG" misleading; earlier FDA materials and warning letters show policy pre‑dating 2012. | The FDA's November 19, 2012 clarification resolved prior ambiguity; retroactive application would violate due process; pre‑2012 guidance/warning letters did not give fair notice. | Dismissed with prejudice for claims predating the FDA's November 19, 2012 guidance: plaintiffs lacked fair notice and the claims are precluded. |
| Claims on behalf of non‑California purchases (nationwide class) | Class certification should resolve choice‑of‑law and class scope later; named Calif. plaintiffs can represent out‑of‑state purchasers. | California consumer statutes presumptively do not apply extraterritorially; pleadings lack facts tying out‑of‑state purchases or injuries to California. | Dismissed with prejudice: SAC fails to plausibly allege that out‑of‑state purchases were subject to California law or connected to California‑based conduct. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard: courts accept well‑pleaded factual allegations and disregard legal conclusions)
- Bell Atlantic v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)
- Kordel v. United States, 335 U.S. 345 (U.S. 1948) (materials that "supplement or explain" a product may be "labeling")
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (UCL standing requires injury and reliance)
- United States v. AMC Entm't, Inc., 549 F.3d 760 (9th Cir. 2008) (agency clarification applied retroactively raises due process concerns)
- Vess v. Ciba‑Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (fraud‑based claims must satisfy Rule 9(b))
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) requires particularity for fraud‑rooted consumer claims)