In 1925, Merck Pharmaceuticals sent a letter to Morris Fishbein, chairman of the Journal of the American Medical Association. The letter said, "We have been recently startled by the unexplainable demand on the part of our customers for Sodium Borate C. P. Powder.
It's been almost a hundred years since Merck sent that letter-responding to demand created by a charlatan with no formal medical training whose license to practice had been revoked in several states, but who had his own radio station and was making a fortune peddling unfounded remedies to unsuspecting citizens with little or no access to doctors. Since then, Americans have learned to resist such hucksterism and rely not only upon their personal physicians and organizations like the AMA, but upon pharmaceutical companies whose closely regulated research, production, and merchandising have taken the place of expertise the average citizen is unable to develop.
So when consumers find a reputable company offering them vitamins-a company with 75 years of brand recognition, now owned by an international pharmaceutical company respected all over the world-they can be expected to adhere to that company's advice. And when that company suggests, as it has with its products since 1949, that one vitamin pill a day is sufficient, it cannot then rely upon individual consumers reading the small-indeed miniscule-print on the back of its label to learn that instead of ONE A DAY, they should be taking two.
Much has changed since 1925 but we find nothing to suggest the public does not still expect that kind of responsible entrepreneurism from Merck-now a division of respondent Bayer-as well as the rest of the industry we entrust daily not just with goods and services but with our lives. So in this case we conclude Bayer has failed to appreciate the degree to which their trade name One a Day has inspired reliance in consumers, and we hold an action alleging they violated California's Consumer Legal Remedies Act (CLRA, Civ. Code § 1770 ), Unfair Competition Law (UCL, Bus. & Prof. Code, § 17200 ) and express warranty law ( Com. Code, § 2313 ) should have survived demurrer.
FACTS
Bayer AG (Bayer; the "AG" stands for Aktiengesellsschalft
The initial complaint was filed as a class action in March 2016, followed by an amended complaint in April, followed by a demurrer in May. The trial court, relying on the unpublished Howard v. Bayer Corp. decision mentioned above, involving these very facts-the supposedly misleading packaging of Bayer's One A Day gummies-sustained Bayer's demurrer without leave to amend.
While we cannot provide photos large enough to enable the reader to make it out, the line above the words "Supplement Facts" (the listing of vitamins and minerals provided by each gummie) says-in the smallest lettering on the bottle, an ocular challenge even when the bottle is full-sized and held in good light-"Directions : Adults and children 4 years of age and above. Chew two gummies daily." The issue before us is whether that language is enough to overcome the prominent and arguably advisory brand name of the product. We think not.
DISCUSSION
Our problem with Bayer's position is twofold. It seems to us to suffer from infirmities both factual and legal. The factual infirmity is that it requires us to accept the proposition that consumers do not rely on the expertise of One A Day when they buy vitamins.
And for all we know, that's absolutely true-except for the one tablet part. Presumably the One A Day formula represents the collective experimentation and wisdom of a host of medical professionals-doctors, pharmacologists, biochemists-who have concluded that certain levels of the substances in these formulas are the optimum levels for most of us. We have no reason to doubt the accuracy of One A Day's research or the formulations based on it. And it appears the consumers of California have concluded that One A Day is a company they can trust: You don't hang around for 75 years if people don't buy your product.
But now Bayer wants us to conclude that trust is not part of One A Day's success. They argue that modern consumers carefully read and analyze the formulations of the vitamins on the market and make their choices based upon their own expertise. They tell us-and the federal judges who accepted their arguments in Howard and Bayer -that consumers "look for the nutritional values" on the label and choose the supplements they buy based on comparison of those nutritional values. Instead of relying upon lifelong experience that One A Day is a trustworthy company that has been studying and analyzing our health needs for decades and has much more knowledge about those things than laypeople, Bayer says consumers look at the label and decide just how much selenium, biotin, pantothenic acid and zinc they need and then make their purchase after comparing those values with the labels on the vitamin bottles.
That's a stretch.
But as problematic as that factual depiction is, we must stretch much further to adopt Bayer's legal position. We must conclude that consumers do that as a matter of law .
This case has arrived here via sustained demurrer. To affirm the court below, we would have to conclude that even if plaintiff's allegations are true, there is no cause of action. ( Beacon Residential Community Assn. v. Skidmore, Owings, & Merrill LLP (2014)
We have been unable to reach that point. Not all reasonable vitamin buyers can be said to be alike as a matter of law. Some consumers would scoff at what they might consider the paltry daily dosage recommendations of One A Day; they might believe they need much higher amounts.
"Whether a practice is deceptive, fraudulent, or unfair is generally a question of fact which requires 'consideration and weighing of evidence from both sides' and which usually cannot be made on demurrer." (Quoting McKell v. Washington Mutual, Inc. (2006)
Committee on Children's Television,Inc. v. General Foods Corp. (1983)
A. Precedent Bearing on the UCL and CRLA Claims
The case law involving misleading product labels is varied, with decisions covering most points of the compass. The case law is further complicated by the fact that some kinds of products are subject to special legislation or regulation, including federal preemption. (See e.g., Bronco Wine Co. v. Jolly (2004)
Moreover, special state legislation about a product important to California's economy may sometimes affect a court's analysis of a misbranding claim. (See Bronco Wine Company v. Jolly (2005)
This complicates our analysis, but doesn't change it. Our canvassing of the relevant case law involving CRLA and UCL claims focused on allegedly misleading labels (including allegedly misleading brand names) reveals four discrete themes which aid the analysis of any misleading label claim. None of them supports respondents.
1. Common Sense
We will begin with a theme that, almost by definition, favors defendant product makers: If a claim of misleading labeling runs counter to ordinary common sense or the obvious nature of the product, the claim is fit for disposition at the demurrer stage of the litigation.
Common sense also carried the day in Hill v. Roll Internat. Corp. (2011)
2. Literal Truth/Literal Falsity
Literal truth can sometimes protect a product manufacturer from a mislabeling claim, but it is no guarantee. The crackers in the Red case were indeed "made with real vegetables" but that promise, while true, meant nothing in context. The court left little doubt that had the promise of a cognizable amount of vegetable nutrition made any sense in connection with crackers, the outcome of the case might well have been different despite the literal accuracy of the claim.
Another example of a true statement that doesn't mean much-so no reasonable consumer would in fact be misled-is a conditionally but literally true statement of the if-pigs-had-wings variety. Such a statement defeated a UCL claim in Freeman, supra ,
that was not "hidden or unreadably small"].)
But there is no protection for literal falseness. We note that even as plastic a term as "natural" could not excuse the uses of high fructose corn syrup, high maltose corn syrup or maltodextrin in five named granola bars in Janney , supra ,
And in a battle between detergent colossi, Clorox Co. v. Proctor & Gamble Commer. Co. (1st Cir. 2000)
Literal falsity was also the key to this court's majority opinion in Benson v. Kwikset Corp. (2007)
3. The Front-Back Dichotomy
A third theme in the case law is the degree to which qualifiers in the packaging can ameliorate any tendency of the label to mislead. Five cases nicely illustrate the fact that sometimes what is said on the back of a package makes a difference. This strikes closer to home, but turns out not to help respondents.
The first is an especially perceptive decision of the Ninth Circuit (applying California consumer law) in Williams v. Gerber Prods. Co. (9th Cir. 2008)
In Williams , the court held the fact the back side of the product disclosed that concentrated white grape juice was the only juice in the product could
Another front-back case with the same approach as Williams involved a marketer's effort to call a product "organic" on the front while qualifying the word on the back: Brown v. Hain Celestial Group, Inc. (N.D.Cal. 2012)
Specifically, in Brown Organic a brand of cosmetic products used the word "organic" in the brand name "Jason and Avalon Organics." However, the products were not even "predominately" made from organic ingredients. ( Brown Organic, supra ,
Simpson involved a challenge to the packaging of "Challenge Butter," on the basis that the Challenge brand's "spreadable butter" contained olive oil, canola oil, or both, in seeming contradiction to federal and state laws that do not allow "butter" to contain olive or canola oil. (See Simpson, supra , 219 Cal.App.4th at pp. 1359, 1362-1364,
Gitson involved the supposedly misleading use of the word "milk" in a product description "soy milk."
And Shaker , another cereal box case, turned on the importance of proper disclosure on the front of the box. The front of the box showed a bowl of fresh blueberries, strawberries, a spoon and milk, with the words "strawberries shown as serving suggestion" in all capital letters. ( Shaker, supra , at p. *5,
4. Brand Names Misleading in Themselves
And finally, the cases most clearly analogous to ours: Any number of cases have held that brand names by themselves can be misleading in the context of the product being marketed.
The Brown Organic case discussed ante , appears to fall into this category. The court there took one look at the "Jason and Avalon Organics" brand name, compared it with the distinctly non-organic ingredients, and ruled for the plaintiffs.
Next consider the "Brown Auto Stabilizer Company," the subject of a federal trade commission case. (See In the Matter of Brown Auto Stabili zer Co., et al. 1972 FTC LEXIS 91 (Brown Stabilizer ).) The company advertised something called a "dynamic absorber," which was supposed to dampen the side sway of a car. The problem was, the product didn't do anything to "stabilize" a car. It had no effect on side sway. An administrative law judge ruled that the company's advertising claims plus "the use of the word 'Stabilizer' " in the "corporate and trade name" to describe the absorber was misleading. (Id . at pp. 10-11, 18-19.) The judge ordered the company to cease using the word "Stabilizer" even as "part of the corporate or trade name" to refer to the "device." (Ibid. ) The Federal Trade Commission upheld the administrative law judge's order that the advertisements and the brand name were false and deceptive. (Id . at pp. 36-37.)
In Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharms. Co. (3d Cir. 2002)
The trade name "Ricelyte" was held misleading by the Seventh Circuit in Abbott Laboratories v. Mead Johnson & Co. (7th Cir. 1992)
And buyers of an energy drink were class-action plaintiffs in In re 5-hour ENERGY Marketing and Sales Practices Litigation (C.D. Cal. 2014)
So where does all this lead us-other than to eyestrain and fatigue? It leads us to conclude that all four themes that emerge from the case law uniformly point to the same result in this case: allowing Brady's claim to proceed beyond the pleading stage.
Here's how we break it down: 1. Common sense : Bayer's One A Day gummies cannot be said, as a simple application of common sense, to indicate that two gummies a day are required. Indeed, common sense flows in the other direction: If the label prominently displays the words "One A Day" there is an implication that the daily intake should be one per day. 2. Literal truth : In the context of its gummie product, the One A Day brand name is literally false. A consumer seeking to get the "one a day" amount of vitamins associated with the brand's capsules will not take one a day . 4. Nature of the brand name: "One A Day," when it comes to gummies, is explicitly misleading. Even judges can do enough math to know two does not equal one.
But the most damaging of these themes to Bayer's position in our case is 3, the front-back problem . The front of the product makes no attempt to warn the consumer that a one-a-day jar of gummies is in fact full of two-a-day products. One must look at the back of the jar, in small print in the upper right hand corner, to receive the direction to "Chew : two gummies daily," making a "Serving Size" is indeed two gummies. And unlike the billboard, sunburst-backed brand name print, that information is printed in nano-type.
Bayer tries to turn the "serving size" fine print on the back into a virtue by asserting that of course the customer must look at the back because "The only place to learn about the serving size, the vitamins, or the amount of vitamins is on the back." We are unpersuaded. That might be the case if this product were called Gazorninplat Gummies or Every Day Gummies. But it is most decidedly not the case here. The front label fairly shouts that one per day will be sufficient.
Bayer feels the reasonable consumer will be so motivated to ascertain the precise amounts of vitamins that of course he or she will scrutinize the back. We don't think such a conclusion can be made as a matter of law at the pleading stage. Nothing in law or logic suggests consumers will take such a belt and suspenders approach, and Bayer's argument runs counter to an important insight from the Williams opinion: You cannot take away in the back fine print what you gave on the front in large conspicuous print. The ingredient list must confirm the expectations raised on the front, not contradict them.
Nor can Bayer claim the compliance with literal truth that protected the manufacturers in Red , Freeman , Rooney , and Romero . It is simply specious to assert that One A Day carries any literal truth here, and no wishful recharacterization of the brand name as "one portion a day" or "one serving a day" can fix that. Indeed, the use of the procrustean concept of "serving size" to disguise the amount needed strikes us as similar to the use of the word "natural" in Janney : stretched beyond what the rest of the product explicitly or impliedly offers.
Finally, the cases where an implied promise was qualified by additional language on the package, Simpson (butter) and Gitson (soy milk) involve prominent language on the front, or front and top of the product, not fine print on the back. The insightful Williams case is more similar to our facts than either of those.
In fine, "these laws prohibit 'not only advertising which is false, but also advertising which[,] although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.' ( Leoni v. State Bar (1985)
C. Howard and Goldman
If we were writing on a clean slate, we might end this opinion here. But there are two federal district court decisions which reached the opposite result. We now explain why we respectfully decline to follow their lead.
The Goldman court said substantially the same thing: "Here, it is implausible that a reasonable consumer would look at only the front portion of a label that wraps around a round container of multivitamins, and conclude from the combination of 'One A Day®' (a 70-year-old brand name) and the statement '70 Gummies' that the bottle contains 70 days' worth of multivitamins. Consumers buy multivitamins precisely to obtain an aggregate amount of vitamins, and it is implausible that a purchaser would not look at the label to see what vitamins are included and in what quantity. A reasonable consumer would not purchase multivitamins before determining what vitamins were in the formulation, and that information is clearly listed on the remainder of the One A Day® VitaCraves® label, along with the information that the serving size is '2 gummies' and the number of 'Servings per Container' is 35." ( Goldman, supra ,
We could hardly disagree more.
In California (and apparently in Arkansas as well
The distinction was later underscored by the same federal court in National Nutritional Foods Assoc. v. Mathews (2d Cir. 1977)
The National Nutritional cases each recognize what should be common sense in any event, namely that the market among reasonable consumers of vitamins is not monolithic. Not every vitamin-buyer is a health-conscious consumer preoccupied with exact dosages. Some are people with only a vague sense that they "need vitamins." Others fully understand what they perceive to be a need, but choose to trust a time-tested provider. Reasonable consumers will vary. Bayer itself targets a variety of submarkets among
So we cannot declare at the pleading stage that all reasonable consumers of vitamins are the label-scrutinizers the Howard and Goldman courts assume, if only because of the role the idea of an "RDA" or "recommended daily allowance" plays in vitamin purchases. The idea of the RDA for specific nutrients was developed about 1941, from a study conducted by a private organization, the National Academy of Sciences, with a view toward nutritional issues that could affect national defense.
The very idea of One A Day, as both National Nutritional I and II intimated, is that most ordinary consumers can obtain their RDA with one simple unit. We think it clear that the One A Day brand of capsules was developed in the aftermath of World War II to take advantage of that idea of simplicity and completeness, and grew into the "70-year-old brand name" (Goldman's phrase) we deal with today.
Moreover, it also seems safe to say that Bayer does not target its vitamin-enhanced gummies toward the sort of consumer who treats vitamins
Finally we must go back to the packaging before us. There is nothing on the front of the bottle of gummies to suggest anything other than that one gummie supplies a sufficient amount of vitamins to cover a person's RDA. The front does not say anything like, for example: "One A Day Brand Gummies: Get your classic one a day by chewing just two gummies."
D. Breach of Warranty Claim
Brady's warranty claim is predicated on section 2313 of the Commercial Code, quoted in full in the margin.
Bayer's argument is that any seeming warranty representations on the front can be (we quote from the respondent's brief) "contradicted by specific language on the same label." For this proposition, Bayer cites section 10215 of the Commercial Code, again quoted in full in the margin.
As far as we can tell, no published California opinion has construed section 10215 of the Commercial Code, and we think Bayer's interpretation to be a Kierkegaardian leap of advocacy. On its face Commercial Code section 10215 contemplates a situation where there are two or more warranties proffered, as distinct from a situation where there is one warranty on the front negated by a disclaimer on the back. The point of the statute is to set up a methodology of reconciliation; the statute incorporates the venerable principle of contract interpretation that specific language controls general language. ( Civ. Code, § 3534.) That isn't the case here, where the front of the label impliedly warrants enough gummies to last 100 days, but the back whittles that figure down to 50. We endorse the language from Novartis about necessary implications
Bayer's interpretation, in fact, contradicts what Dorman v. International Harvester Co. (1975)
We quote section 2316 of the Commercial Code in the margin as well.
In the case before us, the front of the bottle implies a warranty that its contents are fit to last 100 days. Under Commercial Code section 2316 and Dorman , any disclaimer had to be conspicuous. We don't think that the microscopic "Chew : Two Gummies daily" and "Serving Size: 2 gummies" on the back is sufficiently conspicuous to modify the implied warranty on the front. And we doubt that readers who peruse our reproductions on page 4 of our slip opinion will think so either. The "ONE A DAY" text on the front label is orders of magnitude larger than the fine print "two gummies" text on the back label. We think we must reverse as to Brady's warranty claim as well.
DISPOSITION
The judgment is reversed. Appellant shall recover his costs on appeal.
WE CONCUR:
O'LEARY, P.J.
ARONSON, J.
Notes
Pope Brock, Charlatan, Chapter 25 (2009).
According to Sabal Ltd. LP v. Deutsche Bank AG (W.D. Tex. 2016)
In 2017, another federal judge reached the same decision. That is the Goldman case, which relied upon and amplified Howard .
One a Day website home page.
See National Nutritional Foods Assoc. v. Food & Drug Administration (2d Cir. 1974)
Since many of these cases are decided in the federal courts, the rough equivalent is the Federal Rule of Civil Procedure rule (12)(b)(6) stage. (See 11601 Wilshire Associates v. Grebow (1998)
Another case that illustrates the wishful thinking strain in plaintiffs' claims is Freeman v. Time, Inc. (9th Cir. 1995)
Citing Health and Safety Code section 110839, the maker of Jason and Avalon's Organics asserted California law "permits products with less than 70% organic content to be 'sold as organic' if the organic content is identified only on the ingredient statement or information panel and in accordance with additional conditions." (Brown Organic, supra,
The court's handling of the issue could also have been placed in our "obvious common sense" category.
Though plaintiff's claims in regard to UCL, CLRA and unfair advertising were all dismissed, leave to amend was allowed. (Gitson, supra,
The other product packaging at issue in Gitson involved various flavors of yogurt in light of their being sweetened with "cane juice." (Gitson, supra,
Often these involve a challenge to a misleading name from a competitor as distinct from a consumer who claims to have been misled.
Amicus Brief of Attorney General, pages 15-16, quoting The Naming Group, Sugestive Names: Debunking the Myth that Descriptive = Easier (2011) p. 2 < http://bit.ly/2nNms4c> [as of May 15, 2017]."
Amicus Brief of Attorney General, page 16, quoting Watkins, Hello, My Name is Awesome: How to Create Brand Names that Stick (2014) at page 8.
The Howard court observed that while the reasonable consumer standard was "not a settled point of Arkansas law," the Arkansas Supreme Court would probably adopt such a standard. (Howard, supra ,
As expressed by one commentator: "A routine trip through the health section of a local retail store can be a pretty overwhelming experience. The wide variety of vitamins, minerals, herbs, and athletic performance products makes selecting a dietary supplement quite difficult. To put this difficulty into perspective, consider that Wal-Mart currently sells over 500 different dietary supplements, and specialty stores like GNC sell significantly more. Dietary supplements vary widely, and even common multivitamins now target specific groups of people by age, gender, physical conditions, and also activity level." (Richard E. Nowak, DSHEA'S Failure: Why A Proactive Approach to Dietary Supplement Regulation Is Needed to Effectively Protect Consumers (2010)
See Kelli K. Garcia, The Fat Fight: The Risks and Consequences of the Federal Government's Failing Public Health Campaign (2007)
See Herbert v. National Academy of Sciences (D.C. Cir. 1992)
See Lewis A. Grossman, Food, Drugs, and Droods: A Historical Consideration of Definitions and Categories in American Food and Drug Law (2008)
The "medicine" or "medicine-like" model appears to run counter to National Nutritional I which rejected the idea of requiring prescriptions for mega-doses of vitamins A and D on the theory that at high levels those vitamins have a "therapeutic" as distinct from "nutritional" value. Nutrilab, Inc. v. Schweiker (7th Cir. 1983)
Not only are two different kinds of sugars (glucose syrup and sucrose) listed as the most prominent ingredients, but each gummie-depending upon flavor-contains one of three kinds of artificial dye. That is not the sort of ingredient list that is likely to appeal to skeptical consumers scrutinizing labels in a health food market. These are mass-market products. They're gummies, for crying out loud.
We will not assume that the illegible little dot off to the bottom of "One A Day" on the label-the "®"-is sufficient, as a matter of law, to warn consumers that "One A Day" is only a brand name and conveys no descriptive content. Even sophisticated consumers who might recognize the trademark symbol as indicating a brand name qua brand name still might take the brand name as indicating a promise about the product's content. After all, that happened in the case of "Jason and Avalon Organics" in the Brown Organic case.
"(1) Express warranties by the seller are created as follows: [¶] (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. [¶] (b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description. [¶] (c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model. [¶] (2) It is not necessary to the creation of an express warranty that the seller use formal words such as 'warrant' or 'guarantee' or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty."
Apparently the bottle at issue in Goldman was smaller-only 70 gummies.
"Warranties, whether express or implied, must be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention of the parties determines which warranty is dominant. In ascertaining that intention the following rules apply: [¶] (1) Exact or technical specifications displace an inconsistent sample or model or general language of description. [¶] (2) A sample from an existing bulk displaces inconsistent general language of description. [¶] (3) Express warranties displace inconsistent implied warranties other than an implied warranty of fitness for a particular purpose."
Bayer also quotes this passage from McKinniss v. General Mills, Inc. (2007)
True enough-the fine print on the side disclosed the true contents of the box-but irrelevant for this case. In McKinniss it was unreasonable as a matter of law to believe, based on the front of the box, that the cereal contained actual fruit in the first place: "Plaintiffs' allegation that the cereal pieces themselves resemble fruit is not rational, let alone reasonable. The cereal pieces are brightly colored rings, which in no way resemble any currently known fruit. As a matter of law, no reasonable consumer would view them as depicting any fruit." (McKinniss, supra ,
"(1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of this division on parol or extrinsic evidence (Section 2202) negation or limitation is inoperative to the extent that such construction is unreasonable. [¶] (2) Subject to subdivision (3), to exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and in case of a writing must be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of fitness is sufficient if it states, for example, that 'There are no warranties which extend beyond the description on the face hereof.' [¶] (3) Notwithstanding subdivision (2) (a) Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like 'as is,' 'with all faults' or other language which in common understanding calls the buyer's attention to the exclusion of warranties and makes plain that there is no implied warranty; and [¶] (b) When the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him; and [¶] (c) An implied warranty can also be excluded or modified by course of dealing or course of performance or usage of trade. [¶] (4) Remedies for breach of warranty can be limited in accordance with the provisions of this division on liquidation or limitation of damages and on contractual modification of remedy (Sections 2718 and 2719)." (Italics added.)