Shaeffer v. Califia Farms, LLC ( 2020 )

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) 113 Cal.App.4th 1351, 1360 (Consumer Advocates).) This
case presents the question: Where a product label accurately
states that the product has “no sugar added,” is a reasonable
consumer likely to view that statement as a representation that
competing products do have sugar added, which, if untrue,
renders the product label at issue deceptive? We conclude that
the answer is “no,” and do so as a matter of law. Because the
allegations underlying plaintiff’s remaining claims are also
deficient, we affirm the trial court’s order sustaining a demurrer
without leave to amend.
FACTS AND PROCEDURAL BACKGROUND
I. Facts1
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.)
2
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 “other, 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 the
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 label’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
2 The trial court sustained a demurrer to plaintiff’s original
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.
3
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 is 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”
4
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 added” 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
because (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 reduced’”
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.
5
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) Was 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) 1 Cal.5th 994, 1010; Lee v. Hanley (2015) 61 Cal.4th 1225,
1230.) To properly state a cause of action, and as pertinent here,
the operative complaint must sufficiently allege (1) “every
element of [that] cause of action” and (2) the plaintiff’s standing
to sue. (Rossberg v. Bank of America, N.A. (2013) 219
Cal.App.4th 1481, 1490-1491; Peterson v. Cellco Partnership
(2008) 164 Cal.App.4th 1583, 1589.) In undertaking this review,
“[w]e must take [the operative complaint’s] allegations . . . as
true” (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th
1185, 1191 (Aryeh)), but may “not assume the truth of [any
alleged] contentions, deductions or conclusions of law” because
“appellate courts must independently decide questions of law”
(City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865;
Gutierrez v. Carmax Auto Superstores California (2018) 19
Cal.App.5th 1234, 1242 (Gutierrez)). “The second question
‘requires us to decide whether “‘there is a reasonable possibility
that the defect [in the operative complaint] can be cured by
amendment.’”’” (Schep, at p. 1335, quoting McClain v. Sav-On
Drugs (2017) 9 Cal.App.5th 684, 695, affirmed, 6 Cal.5th 951(2019).)
6
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 as 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) 20 Cal.4th 163, 180
(Cel-Tech).) Each is its own independent ground for liability
under the Unfair Competition Law (Aryeh, supra, 55 Cal.4th at p.
1196 [noting independent “prong[s]”), but their unifying and
underlying purpose “is to protect both consumers and competitors
by promoting fair competition in commercial markets for goods
and services” (Kasky, supra, 27 Cal.4th at p. 949).
(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,” the plaintiff must “‘show that “members
of the public are likely to be deceived.”’” (Kasky, supra, 27
Cal.4th at p. 951, quoting Committee on Children’s Television,
Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211 (Committee
on Children’s Television), superseded by statute on other grounds
as stated in Branick v. Downey Savings & Loan Assn. (2006) 39
Cal.4th 235, 242; In re Tobacco II Cases (2009) 46 Cal.4th 298,
312 (Tobacco II).) An advertisement or promotional practice is
likely to deceive if it includes assertions that are (1) untrue, or (2)
“‘true[, but] are either actually misleading or which [have] the
capacity, likelihood or tendency to deceive or confuse the public.’
[Citation].” (Kasky, at p. 951; Leoni v. State Bar (1985) 39 Cal.3d
7
609, 626 (Leoni).) By focusing on whether “members of the
public” are likely to be deceived, the Unfair Competition Law
views the challenged ad or promotional practice through the eyes
of the “reasonable consumer”—that is, the “ordinary consumer
acting reasonably under the circumstances”—unless the
advertisement or practice is “aimed at a particularly susceptible
audience.” (Lavie v. Proctor & Gamble Co. (2003) 105
Cal.App.4th 496, 506-507, 512 (Lavie); Freeman v. Time, Inc. (9th
Cir. 1995) 68 F.3d 285, 289; see also Lavie, at p. 504 [rejecting a
“‘least sophisticated consumer standard’”].) This focus on the
“reasonable consumer”—rather than any particular consumer—
means that an ad or practice may be “fraudulent” even without
any “‘individualized proof of deception, reliance and injury.’
[Citation].” (Tobacco II, at p. 326; see also id. at p. 320.)
(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, 55 Cal.4th at p. 1196; Rose
v. Bank of America, N.A. (2013) 57 Cal.4th 390, 394.)
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, 27 Cal.4th at p. 950; Committee on
Children’s Television, supra, 35 Cal.3d at p. 210; Tobacco II,
supra, 46 Cal.4th at p. 312, fn. 8), the plaintiff’s burden under
these provisions is the same: To prevail on a claim under the
8
false advertising law, she must show that “‘“members of the
public are likely to be deceived.’” [Citation]” (Kasky, at p. 951)
and must do so as adjudged through the eyes of “the reasonable
consumer” (Consumer Advocates, supra, 113 Cal.App.4th at p.
1360).
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 advertised” (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) 195 Cal.App.4th 1295,
1304 (Hill).) An actionable “representation” may be (1) an
affirmative representation, or (2) an omission “if the omitted fact
is ([a]) ‘contrary to a [material] representation actually made by
the defendant’ or ([b]) is ‘a fact the defendant was obliged to
disclose.’” (Gutierrez, supra, 19 Cal.App.5th at p. 1258, quoting
Daugherty v. American Honda Motor Co., Inc. (2006) 144
Cal.App.4th 824, 835.)
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 establishes 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
9
CLRA violation “that is the gravamen of [her] claim.” (Kwikset
Corp. v. Superior Court (2011) 51 Cal.4th 310, 322, 326 (Kwikset);
Veera v. Banana Republic, LLC (2016) 6 Cal.App.5th 907, 916
[“the standing requirements of the CLRA are essentially identical
to those of the [Unfair Competition Law] and the [false
advertising law]”]; Hinojos v. Kohl’s Corp. (9th Cir. 2013) 718
F.3d 1098, 1108 [same].) To prove the second element of
causation, the plaintiff must show that she “actual[ly] reli[ed]” on
the “allegedly deceptive or misleading statement” and that it
“was an immediate cause” of her injury. (Kwikset, at pp. 326-
327.) Because, as noted above, a particular statement may be
“fraudulent” to a “reasonable consumer” without “‘individualized
proof of deception, reliance, and injury,’” the showing of actual
reliance necessary to establish a plaintiff’s standing is different
and, more to the point, more demanding. (Tobacco II, supra, 46
Cal.4th at p. 326; see also id. at p. 306 [“standing requirements
are applicable only to the [plaintiff-]class representatives”].)
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, supra, 51 Cal.4th at p. 328.) However, and as noted
above, only those statements on a label that are “likely to
10
deceive” a “reasonable consumer” are actionable under the Unfair
Competition Law, the false advertising law and the CLRA.
(Kasky, supra, 27 Cal.4th at p. 951; Consumer Advocates, supra,
113 Cal.App.4th at p. 1360.)
At one end of the spectrum are statements a business
affirmatively makes about its product on its label that are
untrue. (Leoni, supra, 39 Cal.3d at 626.) Such affirmative
misrepresentations are, by definition, “fraudulent” and “false.”
Thus, a label stating that a lock was “Made in [the] U.S.A.” when
it was not is actionable. (E.g., Kwikset, supra, 51 Cal.4th at pp.
327-330.)
Next along the spectrum are statements a business
affirmatively makes about its product on its product’s label that
are “literally 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) 971 F.2d 6, 13 (Abbott
Laboratories) [“statements which, while literally true or
ambiguous, convey a false impression or are misleading in
context, as demonstrated by actual consumer confusion” are
actionable].) However, an implied representation is actionable
only if a reasonable consumer is likely to infer that
representation from the label’s affirmative content. Thus, a label
on a “Fruit Juice Snacks” package depicting “images of fruits
such as oranges, peaches, strawberries, and cherries” but actually
containing only “white grape juice from concentrate,” while
technically true because the snacks do contain the juice of a fruit,
is nonetheless actionable because a reasonable consumer would
be likely to infer from the label that the snacks contain the fruits
prominently depicted on the label. (Williams v. Gerber Prod. Co.
11
(9th Cir. 2008) 552 F.3d 934, 936, 939; see also Gutierrez, supra,
19 Cal.App.5th at pp. 1240, 1258-1260 [statement that a used car
had “passed a rigorous 125-Point Quality Inspection” and listing
all 125 points but omitting an outstanding recall for one of the
car’s components; actionable].) Conversely, a brand label for “The
Gap” and “Banana Republic” affixed to clothing sold by these
clothiers in their discount stores does not imply that these
clothing items had at one time been available for sale in the
clothiers’ full-price, retail stores, and hence does not imply that
these clothes are of the same quality, because a reasonable
consumer is not likely to draw that inference. (Rubenstein,
supra, 14 Cal.App.5th at pp. 874, 876-877.)
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) 59 Cal.4th 277, 294 (Hartford) [discussing this example].)
Such statements, if disparaging, can be actionable by a
competitor in a claim for trade disparagement (id., at pp. 284,
291, 294) and, if untrue, by consumers under the Unfair
Competition Law, false advertising law and the CLRA.
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
12
may be “fraudulent” (and hence actionable) if it is “deceptive and
misleading in its implications” (Wahl, supra, 39 Cal.App.2d Supp.
at p. 773; Abbott Laboratories, supra, 971 F.2d at p. 13), whether
a truthful statement about one’s own product is actionable turns
on whether a reasonable consumer is (1) likely to infer from such
a statement that the very same statement is untrue as to
comparable, competing products, (2) likely to infer that the
product at issue is consequently superior to its competition, and
(3) likely to be deceived if the statement is true as to the
comparable, competing products?
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 for litigation.” (Hartford,
supra, 59 Cal.4th at p. 299.) Third, the weight of other authority
has come to the same conclusion. A water bottle label with a
green waterdrop may suggest “‘something to do with the
environment,’” but does not imply that it is “environmentally
superior to that of the competition” and thus does not constitute a
“fraudulent” statement under the Unfair Competition Law, the
false advertising law, or the CLRA. (Hill, supra, 195 Cal.App.4th
at pp. 1298, 1300-1301, 1307.) An example vividly makes our
point: Assume that a new airline runs an ad with a tagline, “No
Hijackers Allowed.” Is a reasonable consumer likely to infer that
other airlines do allow hijackers and that the new airline is
consequently the safer choice? We think the answer to this
question is “no.”
13
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 Cuties 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)
2015 U.S. Dist. LEXIS 23542, at *10-*11 (Major) [reaching same
conclusion]; but see, Gina Park v. Knudsen & Sons, Inc. (C.D.
Cal. 2015) 2015 U.S. Dist. LEXIS 189227, *24 -*25 (Park)
[coming to opposite conclusion].)
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 question of fact” (Chapman v. Skype Inc. (2013) 220
Cal.App.4th 217, 226 (Chapman); Gregory v. Albertson’s Inc.
(2002) 104 Cal.App.4th 845, 857), that issue may be resolved on
demurrer if “the facts alleged fail as a matter of law to show” that
a “reasonable consumer would be misled” (Hill, supra, 195
Cal.App.4th at p. 1301; Rubenstein, supra, 14 Cal.App.5th at p.
877; Chapman, at pp. 226-227). Here, they do.
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
14
conclusion, not a factual allegation; as such, it is neither binding
nor “controlling.” (Gutierrez, supra, 19 Cal.App.5th at p. 1242).
Third, she urges that a conclusion in her favor is dictated
by Brady v. Bayer Corp. (2018) 26 Cal.App.5th 1156 (Brady).
Brady held that a complaint alleging that the label on a vitamin
bottle entitled “One A Day” was likely to deceive a reasonable
consumer because the recommended dosage was two vitamins a
day was sufficient to withstand a demurrer. (Id. at pp. 1165-
1173.) Because the label in Brady involved a deceptive statement
about the product itself, Brady falls squarely on the actionable
part of the spectrum described above.
2. Is the “No Sugar Added” language unlawful?
Federal regulations specify that the “term ‘no sugar added’
may be used” on a label only if the product meets five
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,” among 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.”
15
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 sugars.” 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) 85 Cal.App.4th 1179, 1214 [“Interpretation of a statute or
regulation is . . . an issue of law for the court.”]), and plaintiff’s
allegation on this legal question is entitled to no weight
(Gutierrez, supra, 19 Cal.App.5th at p. 1242).
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) 307 F.3d 1214, 1219 [“the
plain meaning of a regulation governs . . .”].) The regulation
itself refers to foods that “substitute” for the product, and a
product generally does not substitute only for itself. This reading
is confirmed by the pertinent introductory regulation that defines
a “‘substitute food’” as “one that may be used interchangeably
with another food that it resembles” because “it is
organoleptically, physically, and functionally (including shelf life)
similar to” that food. (21 C.F.R. § 101.13(d), italics added; see id.§ 101.60(a)(2) [requiring that labels accord “with the general
requirements for nutrient content” in section 101.13].) The
16
regulation’s focus on foods “similar” to the product—rather than
“identical” to it—further supports our construction.
Second, defining the “food” that a product “resembles and
for which 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) 68 Cal.2d 18, 26 [a “court cannot rewrite
. . . regulations”].)
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
3 Because we reject the rationale of these cases, we have no
occasion to consider the agency letter in this case, and deny
Califia’s request that we take judicial notice of that letter.
17
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) 2014 U.S. Dist. LEXIS 11767, *17 & fn. 5; Saghian v.
Sun-Maid Growers of Cal. (C.D. Cal. 2017) 2017 U.S. Dist. LEXIS
221951, *10.) All of these decisions are merely persuasive
authority (Rohr Aircraft Corp. v. County of San Diego (1959) 51
Cal.2d 759, 764 [“[T]he decisions of the lower federal courts on
federal questions are merely persuasive.”], reversed on other
grounds in Rohr Aircraft Corp. v. County of San Diego (1960) 362
U.S. 628), and we do not find them persuasive because they do
not confront—let alone refute—the rationale we have set forth
above.
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
18
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 calorie’ 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 sufficient.
(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
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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,” plaintiff’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, supra, 2015 U.S. Dist. LEXIS, at *13
[reaching same conclusion].)
Plaintiff offers three arguments to the contrary.
First, she asserts that “‘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,46 Cal.4th at p. 327, quoting Engalla v. Permanente Medical
20
Group, Inc. (1997) 15 Cal.4th 951, 976-977), and that the
omission of the “not ‘low calorie’ or ‘calorie reduced’” statement
from the Cuties Juice label is material as a matter of law because
its inclusion is (sometimes) mandated by the federal regulation.
We reject this assertion. Even if we accept that this presumption
regarding materiality of misrepresentations or omissions (which
bear more on deceptiveness) is relevant to a claim based on
unlawfulness and even if we assume that it applies to a plaintiff
as well as class members, the presumption has been rebutted by
plaintiff’s affirmative allegations that she actually relied on other
reasons in deciding whether to buy Cuties Juice.
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, supra, 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
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court’s order sustaining the demurrer. (See Bains v. Moores
(2009) 172 Cal.App.4th 445, 478 [in reviewing a demurrer, we
examine the trial court’s “‘result for error, and not its legal
reasoning’ [Citation]”].)
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) 49 Cal.App.4th 345, 349;
T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145,
162.) The onus is on the plaintiff to articulate the “specifi[c]
ways” to cure the identified defect, and absent such an
articulation, a trial or appellate court may grant leave to amend
“only if a potentially effective amendment [is] both apparent and
consistent with the plaintiff’s theory of the case.” (CAMSI IV v.
Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1542
(CAMSI).)
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
court 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, supra,
230 Cal.App.3d at p. 1542.) Plaintiff’s deception-based
allegations are deficient as a matter of law. And her
unlawfulness allegations are deficient either as a matter of law or
because she does not have standing based on the reasons she has
affirmatively alleged for buying Cuties Juice. She has elected not
22
to amend her complaint to cure the latter defect twice before, and
we view that decision, as well as her current decision not to
articulate any possible amendment, as precluding a finding that
further possible amendments are apparent and consistent with
her theory of the case. (Accord, Otworth v. Southern Pac.
Transportation Co. (1985) 166 Cal.App.3d 452, 457 [“When a
plaintiff elects not to amend the complaint, it is presumed that
the complaint states as strong a case as is possible.”].)
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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
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