Case Information
*1 Filed 2/6/20
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
MICHELLE SHAEFFER, B291085 Plaintiff and Appellant, (Los Angeles County Super. Ct. No. BC654207) v.
CALIFIA FARMS, LLC,
Defendant and
Respondent. APPEAL from a judgment of the Superior Court of Los Angeles County, Ann I. Jones, Judge. Affirmed.
Capstone Law, Ryan H. Wu, and Robert K. Friedl for Plaintiff and Appellant.
Sheppard Mullin Richter & Hampton, and Sascha Henry for Defendant and Respondent.
* * * * * *
California’s Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.), false advertising law (
id.
, § 17500 et seq.), and
Consumer Legal Remedies Act (CLRA) (Civ. Code, § 1770 et seq.),
among other things, prohibit advertisements — including product
labels — with statements that are “‘“ likely to . . . deceive ”’”
“‘“ members of the public. ”’” (
Kasky v. Nike, Inc.
(2002) 27 Cal.4th
939, 951 (
Kasky
);
Consumer Advocates v. Echostar Satellite Corp.
(2003)
FACTS AND PROCEDURAL BACKGROUND I. Facts [1]
Califia Farms, LLC (Califia) manufactures and distributes a “100% Tangerine Juice” known as “Cuties Juice.” The front label of the juice’s bottle depicts a smiling tangerine coming out of its peel. Above the tangerine, the label prominently displays the word “Cuties”; below the tangerine and on three lines of 1 We draw the facts set forth below from the allegations in the operative, second amended complaint, which we assume to be true for purposes of evaluating the demurrer on appeal before us now. ( Coker v. JPMorgan Chase Bank, N.A. (2016) 62 Cal.4th 667, 671.)
increasing smaller text, the label reads “100% Tangerine Juice,” “ No Sugar Added,” and “Never From Concentrate.”
Michelle Shaeffer (plaintiff) bought a bottle of Cuties Juice in a supermarket in Merced, California. She selected Cuties Juice because “her children enjoy eating fresh tangerines ” and she did so over “oth er , similar tangerine juices” because its label “stated ‘No Sugar Added’” and because “she is diabetic . ” II. Procedural Background
A. The operative complaint Plaintiff brought suit in March 2017.
In the operative, second amended complaint, [2] plaintiff alleges that the label on the Cuties Juice violates the Unfair Competition Law (Bus. & Prof., § 17200 et seq.), the false advertising law ( id. , § 17500 et seq.), and the CLRA (Civ. Code, § 1770 et seq.). She seeks to certify a class of “all persons in t he United States who purchased one or more containers of Cuties 100% Tangerine Juice with the phrase ‘No Sugar Added’ on its label or outer packaging.”
Plaintiff alleges that the Cuties Juice label is fraudulent. Despite the “literal[] tru[th]” of the l ab el’s statement that Cuties Juice has “No Sugar Added,” plaintiff alleges it is nevertheless fraudulent because it is “likely to deceive reasonable consumers in its implications . ” ( Italics added.) In particular, plaintiff alleges that the “No Sugar Added” statement on the Cuties Juice The trial court sustained a demurrer to plaintiff’s original 2 complaint, and the parties stipulated that she could file a second amended complaint to supersede the first amended complaint. The original complaint did not name Califia as a defendant; plaintiff substituted Califia for a fictitiously named defendant, and then dismissed the originally named defendants.
label implies that (1) “competing brands” do “ contain added sugar[] ,” such that Cuties Juice “contain[s] less sugar than competing brands that did not have sugar-content claims on their front labels, ” and (2) Cuties Juice i s therefore “different and healthier than . . . competing brands of tangerine juice. ” Because the competing brands do not contain added sugar, plaintiff goes on to allege, the Cuties Juice label constitutes (1) a “fraudulent” business practice under the Unfair Competition Law, (2) an “untrue or misleading” advertisement under the false advertising law, and (3) an “unfair method [] of competition” under the CLRA because the label misrepresents the “characteristics” of Cuties Juice (under subdivision (a)(5) of Civil Code section 1770), misrepresents its “particular standard” or “quality” (under subdivision (a)(7)), and “advertise[s]” the Juice “with the intent not to sell it as advertised” (under subdivision (a)(9)).
Plaintiff alleges that the Cuties Juice label is also “unlawful” under the Unfair Competition Law because it does not comply with two of the five prerequisites that must be satisfied before a label may state “ no sugar added ” under a federal labeling regulation (21 C.F.R. § 101.60(c)(2)). In particular, plaintiff alleges that the Cuties Juice label did not comply with the federal regulation because (1) “the [product] that [Cuties Juice] resembles and for which it substitutes”—that is, “100% tangerine juice”— does not “normally contain added sugars,” and (2) the label does not also “bear[] a statement that it is not ‘low calorie’ or ‘calorie reduced’” and does not “direct[] consumers’ attention to the [product’s] nutrition panel.”
B. Califia’s demurrer
Califia demurred to the second amended complaint on the ground that (1) the Cuties Juice label was not “fraudulent” *5 because no reasonable consumer was likely to be deceived by the “No Sugar Added” language, (2) plaintiff did not adequately allege a violation of the CLRA, and (3) plaintiff lacked standing.
After briefing and a hearing, the trial court issued a five- page ruling sustaining the demurrer without leave to amend. The court ruled that the inclusion of “No Sugar Added” on the Cuties Juice label was not “fraudulent” or a misrepresentation. Analogizing this case to Rubenstein v. The Gap, Inc. (2017) 14 Cal.App.5th 870 ( Rubenstein ), the court reasoned that “[t]he ‘No Sugar Added’ statement on the Cuties Juice makes no representation other than the truthful fact that Cuties juice has no sugar ad ded” and that the representations plaintiff alleges are implied by the “ No Sugar Added ” statement are “nowhere to be found on the label” and “unreasonabl [e]. ” The court further ruled that the Cuties Juice label did not violate the federal regulation becau se (1) the product Cuties Juice “resembles” and “substitutes for” is “all fruit juices,” some of which “normally contain added sugars, ” and (2) plaintiff “cannot show that she relied on” the label’s failure to “include . . . ‘low calorie’ or ‘calorie red uc ed’” because her purchase decision had nothing to do with calorie content. The court finally ruled that plaintiff lacked standing to pursue any of her claims because she “cannot allege detrimental reliance” on the “No Sugar Added” verbiage on the label because her decision to buy Cuties Juice rested instead on her “ own unreasonable inference from the ‘No Sugar Added’ statement that . . . Cuties [J]uice was healthier than competing brands of tangerine juice.”
Following the entry of judgment dismissing the case, plaintiff filed this timely appeal.
DISCUSSION
Plaintiff argues that the trial court erred in sustaining
Califia’s demurrer without leave to amend. In reviewing this
argument, we ask two questions: (1) Was the demurrer properly
sustained; and (2) W as leave to amend properly denied? “The
first question requires us to independently ‘““ determine whether
the [operative] complaint states facts sufficient to constitute a
cause of action.’”’”’ (
Schep v. Capital One, N.A.
(2017) 12
Cal.App.5th 1331, 1335 (
Schep
), quoting
Centinela Freeman
Emergency Medical Associates v. Health Net of California, Inc.
(2016)
I. Was the Demurrer Properly Sustained?
A. Applicable law
1.
Causes of action and their elements
a. Unfair Competition Law
As its name suggests, California’s Unfair Competition Law
bars “unfair competition” and defines the term a s a “business act
or practice” that is (1) “fraudulent,” (2) “unlawful,” or (3) “unfair.”
(Bus. & Prof. Code, § 17200;
Cel-Tech Communications, Inc. v.
Los Angeles Cellular Telephone Co.
(1999)
(i) “Fraudulent” business act or practice
To prevail on a claim under the fraudulent prong of the
Unfair Competition Law “based on false advertising or
promotional practices,” th e plaintiff must “‘ show that “ members
of the public are likely to be deceived. ”’” (
Kasky
, 27
Cal.4th at p. 951, quoting
Committee on Children’s Television,
Inc. v. General Foods Corp.
(1983)
(ii) “Unlawful” business act or practice To prevail on a claim under the unlawful prong of the
Unfair Competition Law, the plaintiff must show that a
challenged advertisement or practice violates any federal or
California “statute or regulation.” (
Gutierrez
,
supra
, 19
Cal.App.5th at p. 1265;
Ayreh
,
supra
,
b. False advertising law
Also as its name suggests, California’s false advertising law
bars “any advertising device . . . which is untrue or misleading.”
(Bus. & Prof. Code, § 17500.) Because this law and the
fraudulent prong of the Unfair Competition Law substantively
overlap (
Kasky
,
supra
,
c. CLRA
The CLRA defines 27 “unfair methods of competition and
unfair or deceptive acts or practices.” (Civ. Code, § 1770.) As
pertinent here , they include (1) “[r]epresenting that goods . . . have . . . characteristics [or] . . . benefits . . . that they do not
have” (
id.
, subd. (a)(5)), (2) “[r]epresenting that goods . . . are of a
particular standard, quality, or grade . . . if they are of another”
(
id.
, subd. (a)(7)), and (3) “[a]dvertising goods . . . with intent not
to sell them as advertis ed” (
id.
, subd. (a)(9)). The CLRA also
views representations through the eyes of “the reasonable
consumer.” (
Consumer Advocates
,
supra
, 113 Cal.App.4th at p.
1360;
Hill v. Roll Internat. Corp.
(2011)
2.
Standing
A person has standing to bring a claim under the Unfair
Competition Law, the false advertising law, or the CLRA only if
she e stablishes that (1) she “has suffered” “economic injury” or
“damage,” and (2) this injury or damage “was the result of, i.e.,
caused by
,” the unfair business practice, false advertising or the
*10
CLRA violation “that is the gravamen of [her] claim.” (
Kwikset
Corp. v. Superior Court
(2011)
B. Analysis
Due to the substantial overlap among plaintiff’s claims under the Unfair Competition Law, the false advertising law and the CLRA, the propriety of the trial court’s order sustaining the demurrer in this case ends up turning on three questions: (1) Is the “No Sugar Added” language on the Cuties Juice label likely to deceive the reasonable consumer?; (2) Is Califia’s use of the “No Sugar Added” language unlawful?; and (3) Does plaintiff allege facts sufficient to grant her standing to bring these claims?
1. Is the “No Sugar Added” language on the Cuties Juice label likely to deceive the reasonable consumer?
As our Supreme Court has observed, “labels matter.”
(
Kwikset
,
At one end of the spectrum are statements a business
affirmatively makes about its product on its label that are
untrue. (
Leoni
,
supra
,
Next along the spectrum are statements a business
affirmatively makes about its product on its product’s label that
are “litera lly true, [but] nevertheless deceptive and misleading
in
[their] implications
.” (
People v. Wahl
(1940) 39 Cal.App.2d Supp.
771, 773 (
Wahl
), italics added;
Abbott Laboratories v. Mead
Johnson & Co.
(7th Cir. 1992)
Further down the spectrum are statements a business
affirmatively makes — not about its product — but about
comparable, competing products that are false and that imply
that the product at issue is superior to its competition. This
would apply, for example, if the Cuties Juice label had stated
“
The Only One with
No Sugar Added” because it would have
affirmatively and effectively stated that all other tangerine juices
added sugar and that the Cuties Juice was the superior, healthier
choice. (
Hartford Casualty Ins. Co. v. Swift Distribution, Inc.
(2014)
And at the far end of the spectrum are statements a
business affirmatively and truthfully makes about its product
and which do not on their face mention or otherwise reference its
competing products at all. Because, as noted above, a statement
*13
may be “fraudulent” (and hence actionable) if it is “deceptive and
misleading in its implications” (
Wahl
, 39 Cal.App.2d Supp.
at p. 773;
Abbott Laboratories
,
supra
,
We hold that such statements are not actionable as a
matter of law, and do so for three reasons. First, a reasonable
consumer is unlikely to make the series of inferential leaps
outlined above. Second, we are hesitant to adopt a theory upon
which “almost any advertisement [truthfully] extolling” a
product’s attributes “would be fodder f or litigation.” (
Hartford
,
supra
,
The allegations in this case fall on this far end of the
spectrum and, for that reason, are not actionable as a matter of
law. That is because plaintiff alleges that Califia’s inclusion of
“No Sugar Added” on the C uties Juice label implies that
“competing brands” “
do
contain added sugar,” that Cuties Juice is
“different and healthier than [these] competing brands of
tangerine juice” and that consumers are likely to be deceived
because not all of those competing brands contain added sugar.
Because, as noted above, a reasonable consumer is not likely to
engage in these inferential leaps, we conclude that the “No Sugar
Added” label on Cuties Juice is not actionable as a matter of law.
(Accord,
Major v. Ocean Spray Cranberries, Inc.
(N.D. Cal. 2015)
Plaintiff offers three arguments against this conclusion.
First, she argues that whether a label’s content is likely to
deceive is a factual question that cannot be decided on demurrer.
Although “whether consumers are likely to be deceived is”
typically “ a questio n of fact” (
Chapman v. Skype Inc.
(2013) 220
Cal.App.4th 217, 226 (
Chapman
);
Gregory v. Albertson’s Inc.
(2002)
Second, she asserts that we must accept as true her
allegation that the “No Sugar Added” statement “is likely to
deceive reasonable consumers . . .” However, this is a legal
*15
conclusion, not a factual allegation; as such, it is neither binding
nor “controlling . ” (
Gutierrez
,
Third, she urges that a conclusion in her favor is dictated
by
Brady v. Bayer Corp.
(2018)
2. Is the “No Sug ar Added” language unlawful? Federal regulations specify that the “term ‘no sugar added’ may be used” on a label only if the product meets f ive prerequisites. (21 C.F.R. § 101.60(c)(2).) Plaintiff alleges that the Cuties Juice label violates these regulations because Cuties Juice does not meet two of the five prerequisites. Because noncompliance with this regulation would render the Cuties Juice label unlawful under both federal and California law (Health & Saf. Code, §§ 110760, 110100, subd. (a)), we must examine whether plaintiff has sufficiently alleged noncompliance with these two prerequisites.
a. Comparability to food Cuties Juice
“resembles”
Under the federal regulation, the words “no sugar added”
“may be used [on a food label] only if,” amo ng other things, “[t]he
food it resembles and for which it substitutes normally contains
added sugars.” (21 C.F.R. § 101.60(c)(2)(iv).) Plaintiff alleges
that Cuties Juice does not satisfy this prerequisite because “[t]he
food that Cuties Juices resembles and substitutes for is 100%
tangerine juice,” which “does not normally contain added sugars.”
*16
The trial court came to a contrary conclusion, ruling that Cuties
Juice resembles and substitutes for “all fruit juices,” many of
which “normally contain added su gars.” We are therefore
confronted with the following question: Is it appropriate under
this regulation to define the food a product “resembles and for
which it substitutes” solely as food that is
identical
to the
product? This is a legal question subject to our independent
review (
Spanish Speaking Citizens’ Foundation, Inc. v . Low
(2000)
We conclude that a “food” that a product “resembles and for which it substitutes” may not be defined solely as the food identical to the product itself. We reach this conclusion for two reasons.
First and foremost, the plain language of the pertinent
regulations so dictate. (
Wards Cove Packing Corp. v. Nat ’ l
Marine Fisheries Serv.
(9th Cir. 2002)
Second, defining the “food” that a product “resembles and
for whic h it substitutes” as solely the identical foodstuff also
renders the remaining prerequisites superfluous. That is
because, for any product that meets the threshold requirement of
having no sugar added, the identical foodstuff will
also
have no
sugar added and hence will not “normally contain[] added
sugars.” (21 C.F.R. § 101.60(c)(2)(iv).) As a result, this
prerequisite will
never
be met and will by itself preclude use of
the term “No Sugar Added,” effectively rendering the remaining
prerequisites superfluous. We decline to rewrite the regulation to
excise four of its five requirements. (E.g.,
Vogel v. County of Los
Angeles
(1967)
We recognize that several federal district courts have taken
different approaches to this question. Some cases have reached
the same conclusion we do, but via a different rationale by
reasoning that the “No Sugar Added” regulation is ambiguous
and that an agency letter has resolved that ambiguity by
declaring that the “substitute” food for “juices with no added
sugar” are “juices with added sugar, fruit -flavored soft drinks
sweetened with sugar, or other sugar- sweetened beverages.”
(
Wilson v. Odwalla, Inc.
(C.D. Cal. 2018) 2018 U.S. Dist. LEXIS
137456, *7-*12;
Perez v. Kroger Co.
(C.D. Cal. 2018) 336 F. Supp.
3d 1137, 1139-1145.)
[3]
Other cases have reached a contrary
Because we reject the rationale of these cases, we have no
3
occasion to consider the agency letter in this case, and deny
Califia’s request that we take judicial notice of that letter.
*18
conclusion, ruling that “the food” that a product “resembles and
for which it substitutes” is the identical food. (
Park
,
supra
, 2015
U.S. Dist. LEXIS 189227, *21-*22;
Rahman v. Mott’s LLP
(N.D.
Cal. 2014)
We are also not persuaded by the passage from the federal regulation’s legislative history set forth in the operative complaint. That passage explains that the purpose of the “No Sugar Added” regulation was to “present consumers with information that allows them to differentiate between similar foods that would normally be expected to contain added sugars.” (58 Fed.Reg. 2302, 2327 (Jan. 6, 1993).) This does not require comparison to identical foods, particularly given its reference to “ similar foods.”
Because the sole food that plaintiff alleges substitutes for Cuties Juice is “100% tangerine juice,” and because we conclude that the “food” that the product “resembles and for which it substitutes” may not solely be the identical food, plaintiff has failed to allege that Cuties Juice does not satisfy this prerequisite. At this point, we need not decide whether the relevant “food” for comparison is all tangerine juices or instead, as the trial court cited, “all fruit juices.” What matters is that *19 there is no allegation that either of these broader universes of foods does not “normally contain added sugars.”
b. Failure to state that Cuties Juice is not a
“ low calorie ” or “ calorie reduced ” food
Under the federal regulation, the words “no sugar added” “may be used [on a food label] only if,” among other things, “[t]he product bears a statement [(1)] that the food is not ‘low ca lo rie’ or ‘calorie reduced’ (unless the food meets the requirements for a ‘low’ or ‘reduced calorie’ food) and [(2)] that directs consumers’ attention to the nutrition panel for further information on sugar and calorie content.” (21 C.F.R. § 101.60(c)(2)( v).)
Plaintiff alleges that the Cuties Juice label does not contain either of these additional statements and that this violates the regulation because “Cuties Juice does not meet the requirements for a ‘low’ or ‘reduced’ calorie food . ” However, this allegation is insufficient to state a claim that the Cuties Juice label is unlawful under the Unfair Competition Law for two reasons. First, we harbor some doubt that plaintiff’s “‘ [t]hreadbare recital[] of th[is] element[] of [her] cause of action ’” is su fficient. ( Trazo v. Nestlé USA, Inc. (N.D. Cal. 2013) 2013 U.S. Dist. LEXIS 113534, *28-*29 [sustaining demurrer, in part, based on language identical to that used by plaintiff].) Second, even if we deem plaintiff’s allegation to be sufficient, plaintiff does not have standing to bring a claim based on the omission of this language because, as discussed next, she has not alleged that her decision to purchase the Cuties Juice had anything to do with its calorie content.
3. Does plaintiff allege facts sufficient to grant her
standing?
As noted above, a plaintiff has standing to sue under the Unfair Competition Law, the false advertising law and the CLRA *20 only if she “actual[ly] reli[ed]” on whatever defect in a product label allegedly makes it actionable when making her decision to buy the product. ( Kwikset , supra , 51 Cal.4th at pp. 317, 326-327.) To satisfy this requirement, she must “truthfully allege” that “she would not have bought the product but for the” allegedly actionable misrepresentation or omission. ( Id. at pp. 317, 330.)
Because we have rejected plaintiff’s claims to the extent they rely on any deceptiveness in the Cuties Juice label, her sole viable theory for recovery is the alleged unlawfulness of that label — which, as described above, turns solely on the label’s failure to state that it is “not ‘low calorie’ or ‘calorie reduced.’” However, plaintiff has not alleged that her decision to buy Cuties Juice had anything to do with its calorie content. Instead, she alleges that her decision was based upon her children’s enjoyment of “eating fresh tangerines” and her concern about sugar content due to her diabetes. Indeed, in light of plaintiff’s further allegation that all “tangerine juice brands[] ha[ve] high [natural] sugar content,” plaint if f’s decision to buy Cuties Juice over other tangerine juices seems to have had nothing to do with calorie content at all. Because plaintiff has not “truthfully allege[d] ” that “she would not have bought the product but for” the omission of a statement about its calorie content, she lacks standing to pursue a claim based on the omission of that statement. (See Major , 2015 U.S. Dist. LEXIS, at *13 [reaching same conclusion].)
Plaintiff offers three arguments to the contrary.
First, she asserts th at “‘a presumption, or at least, an
inference of reliance arises whenever there is a showing that a
misrepresentation [or omission] is material’” (
Tobacco II
,
supra
,
Second, plaintiff contends that she can show reliance upon a particular omission as long as it was “a substantial factor[] in influencing [her] decision” to buy a product, and that she need not show it was “the sole or even the decisive” reason for the purchase. ( Tobacco II , 46 Cal.4th at pp. 326, 328.) While we accept this statement of the law, we reject its relevance to this case because plaintiff has not alleged that low calorie content is one of many reasons for her purchase; rather, she has alleged that her purchase was motivated only by two completely different reasons.
Lastly, plaintiff argues that we should infer that a statement regarding Cuties Juice’s calorie content would be material to her due to her diabetes. We reject this argument. Although a person diagnosed with diabetes would most certainly be concerned with a product’s sugar content, such a diagnosis does not imply a person’s concern with calorie content.
* * *
In light of this analysis, we have no occasion to address
plaintiff’s further attacks on the
reasoning
set forth in the trial
*22
court’s order sustaining the demu rrer. (See
Bains v. Moores
(2009)
II. Was Leave to Amend Properly Denied?
A plaintiff against whom a demurrer is sustained is
entitled to leave to amend the defective complaint if she can
“prov[e] a reasonable possibility that the defect can be cured by
amendment.” (
Silva v. Block
(1996)
The trial court did not abuse its discretion in denying
plaintiff leave to amend her complaint. Plaintiff proffered no
specific amendments to the trial court. She proffers none to this
c ourt beyond her blithe remark that “there could well be ways
that any defect in the present pleading could be corrected. ” This
is plainly insufficient to carry her burden. Nor do we perceive on
our own an “apparent” “potentially effective amendment” that is
“consistent with plaintiff’s theory of the case.” (
CAMSI
,
DISPOSITION
The judgment of dismissal is affirmed. Califia is entitled to its costs on appeal.
CERTIFIED FOR PUBLICATION. ______________________, J. HOFFSTADT We concur:
_________________________, P.J.
LUI
_________________________, J.
CHAVEZ
