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Rosa Smajlaj, et al v. Campbell Soup Company & Campbell Sales Company

March 23, 2011

ROSA SMAJLAJ, ET AL., PLAINTIFFS,
v.
CAMPBELL SOUP COMPANY & CAMPBELL SALES COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Hon. Jerome B. Simandle

OPINION

SIMANDLE, District Judge:

I. INTRODUCTION

This putative class action is before the Court on Defendants' motion to dismiss the Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. [Docket Item 15.] Plaintiffs allege that they are consumers who were misled by the labels on cans of Campbell's less-sodium tomato soups, as well as Campbell's website and other marketing, into buying cans of the higher-priced less-sodium soups even though the sodium content of those soups was equal or nearly equal to that of Campbell's regular tomato soup. Defendants seek to dismiss the claims, arguing that claims based on nutritional labeling are preempted by the Federal Food, Drug, and Cosmetic Act (FDCA), maintaining that the soup labels and marketing information were not misleading as a matter of law, and contending that Plaintiffs received a product worth its price and therefore suffered no loss. The two principal issues are: whether Plaintiffs' claims are preempted because they would impose requirements on Defendants that are different from what the FDCA requires; and whether the allegations in the Amended Complaint are sufficient to plead an "ascertainable loss," as required for a claim under New Jersey's Consumer Fraud Act. As explained in today's Opinion, the Court finds that Plaintiffs' claims are not preempted because they do not impose requirements on Defendants that are not imposed by the FDCA. The Court also finds that Plaintiffs sufficiently plead claims under both the Consumer Fraud Act and New Jersey's common law of express warranties.

II. BACKGROUND

Plaintiffs are consumers of Campbell's tomato soups who claim they were misled by claims made with respect to Campbell's less-sodium tomato soups. They putatively represent a class defined as "[a]ll persons residing in the United States who purchased Campbell's 25% Less Sodium Tomato Soup and/or 30% Less Sodium Healthy Request Tomato Soup at anytime from September 1, 2009 to the present" as well as a New Jersey subclass defined as "[a]ll persons residing in the State of New Jersey who purchased Campbell's 25% Less Sodium Tomato Soup and/or 30% Less Sodium Healthy Request Tomato Soup at anytime from September 1, 2009 to the present." (Am. Compl. ¶¶ 40-41.) Plaintiffs allege that, during the class period, Campbell's regular tomato soup contained 480 mg of sodium per serving, which is the same amount of sodium that was contained in its 25% Less Sodium Tomato Soup, and only 2% more than the amount contained in the Healthy Request Soup. (Am. Compl. ¶¶ 18, 31.) During the class period, some labels on cans of both less-sodium soups displayed statements comparing their sodium content to "OUR REGULAR PRODUCT." (Am. Compl. ¶¶ 21, 30.) According to Plaintiffs, consumers who bought those soups were misled into thinking that "OUR REGULAR PRODUCT" referred to Campbell's regular tomato soup that contained 480 mg of sodium.*fn1

Additionally, during the class period, some of the cans of the 25% Less Sodium soup were labeled "25% LESS SODIUM THAN REGULAR CONDENSED SOUP," which Plaintiffs claim is misleading in the same way as the other labels. (Am. Compl. ¶ 23.) On the side of the label on the less-sodium cans comparing the sodium content to "REGULAR CONDENSED SOUP" is a picture of a can of the regular tomato soup, together with the large-font words "The famous taste . . . with less salt!" (Am. Compl. ¶ 23.) Underneath that picture and phrase is a small-font explanation that Campbell's regular tomato soup is healthy because it uses sea salt which allows them to use less sodium. The large-font front-facing claim on this version of the 25% less sodium label also contains a footnote, printed on the reverse side in fine print, which expands on the 25% comparison statement by saying, "This product contains 480 mg of sodium versus an average of 830 mg for our regular condensed soup." (Am. Compl. ¶ 23.)

Plaintiffs also identify other sources of allegedly misleading statements. They allege that Campbell's website was misleading because it displayed the 25% Less Sodium Tomato Soup together with the regular tomato soup, leading consumers to believe that the 25% Less Sodium Tomato Soup had 25% less sodium than the regular tomato soup. (Am. Compl. ¶ 27.) Plaintiff Velez alleges that she purchased cans of the 25% Less Sodium soup "after viewing misleading statements and representations on the labels of the cans and Campbell's website which led her to believe that the Campbell's 25% Less Sodium Tomato Soup had 25% less sodium than Campbell's regular tomato soup." (Am. Compl. ¶ 7.) Plaintiffs also allege that Campbell's marketing materials misleadingly implied that the alternative soups contained substantially less sodium than the regular tomato soup. (Am. Compl. ¶ 33.)

Although it concerns matters outside the pleadings and therefore, as explained further in today's Opinion, is irrelevant for this Rule 12(b)(6) dismissal motion, it is helpful to be aware of some additional facts alleged by Defendants in order to better understand their position. According to Defendants' counsel, in September 2009 Campbell had only recently released the version of the regular tomato soup with a sodium content of 480 mg. That reformulated regular soup replaced an older regular soup, which had 710 mg of sodium. Defendants represent that Campbell simultaneously released newly labeled versions of the alternative soup lines, such that the Healthy Request soup no longer made any comparison statements, and the 25% Less soup began to use the comparison to "REGULAR CONDENSED SOUP." They also claim that the comparisons to "OUR REGULAR PRODUCT" were not comparisons to a hodge podge of soups, but were accurate comparisons to the old formulation of the regular tomato soup.

Plaintiffs bring two claims against Campbell Soup Company and Campbell Sales Company based on Plaintiffs' allegations that they were misled into paying for more expensive soup even though it did not contain less sodium than the cheaper alternative which was identical for their purposes. The first is a claim under the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1, which prohibits among other things "misrepresentation . . . in connection with the sale or advertisement of any merchandise."

N.J. Stat. Ann. § 56:8-2, 56:8-1(c),(e). The second claim is a breach of express warranty claim, based on the labels' representations regarding the relative sodium contents of the soups. Plaintiffs also seek injunctive relief, which they mistakenly characterize as a cause of action.

The named Plaintiffs who remain in the case are four New Jersey residents: Diane Semon, Wendy Kates, Christine Velez, and Barbara Doster. A fifth named Plaintiff from New York, Rosa Smajlaj, voluntarily dismissed her claims. [Docket Item 17.] Although the remaining named Plaintiffs are citizens of the same state as Defendants, many members of the proposed class are citizens of other states, providing this Court jurisdiction under 28 U.S.C. § 1332(d)(2).

III. DISCUSSION

A. Standard

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a pleading that states a claim for relief need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Rule 8(a)(2), Fed. R. Civ. P. To the extent that Plaintiffs' claims sound in fraud or misrepresentation they "must state with particularity the circumstances constituting fraud." Rule 9(b), Fed. R. Civ. P.

In deciding Defendants' motion to dismiss, the Court must look to the face of the complaint and decide, taking all of the allegations of fact as true and construing them in a light most favorable to Plaintiffs, whether the Amended Complaint contains "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). A plaintiff is obligated to "provide the 'grounds' of his 'entitle[ment] to relief,'" which requires more than "labels and conclusions," but he is not required to lay out "detailed factual allegations," Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986), except to the extent required in this case by Rule 9(b), Fed. R. Civ. P. A complaint must contain facially plausible claims, that is, a plaintiff must "plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Twombly, 550 U.S. at 556.

Only the allegations in the Amended Complaint, matters of public record, orders, and exhibits attached to the Amended Complaint are taken into consideration. Chester County Intermediate Unit v. Pennsylvania Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). The Court will therefore consider, without objection, five cans of soups marked at oral argument, Exs. P-1 & 2 and Exs. D-1, 2 &3, since each label is referred to in the Amended Complaint.

However, the Court will not consider the representations made by Campbell about the existence of and timing of the release of the reformulated regular soup and the dates of the changed labels of the alternative soups. The Amended Complaint neither refers to nor relies upon this information. Indeed, the Amended Complaint does not even mention the changes that Defendants allege occurred. Consideration of these purported facts is not warranted by the content of the Amended Complaint.

At oral argument, Defendants maintained that the factual context of the labeling change and its timing may be considered by the Court under the Supreme Court's decision in Iqbal, because that case endorsed this Court's reliance on its "judicial experience and common sense," and in that case the Supreme Court relied on various facts about the terrorist attacks of September 11, 2001 including that "[t]he September 11 attacks were perpetrated by 19 Arab Muslim hijackers who counted themselves members in good standing of al Qaeda, an Islamic fundamentalist group." Iqbal, 129 S. Ct. at 1950-51. Assuming for the sake of argument that Iqbal was endorsing the Court's consideration of certain facts outside the pleadings, the Court is not persuaded that the existence and timing of Campbell's release of a newly formulated tomato soup is akin to the general knowledge that the September 11, 2001 hijackers were Arab Muslims. The various representations made by Defendants' counsel are not appropriately considered when examining the sufficiency of the Amended Complaint under Rule 12(b)(6).

B. Preemption

1. FDCA's preemption of non-identical nutritional labeling requirements The Federal Food, Drug, and Cosmetic Act (FDCA) empowers the Food and Drug Administration (FDA) to protect the public health by ensuring that "foods are safe, wholesome, sanitary, and properly labeled." 21 U.S.C. § 393(b)(2)(A). A food is not properly labeled if its labeling "is false or misleading in any particular." 21 U.S.C. § 343(a).

In 1990, Congress amended the FDCA by enacting the Nutrition Labeling and Education Act (NLEA), which altered, expanded, and clarified the labeling requirements of the FDCA. See 21 U.S.C. §§ 301, 321, 337, 343, 371. The 1990 amendments expressly preempt inconsistent state nutritional content labeling requirements. 21 U.S.C. § 343-1(a)(1)-(5). Under the preemption provision, a state may not impose any requirement respecting any claims of nutritional content on labels "that is not identical to the requirement" imposed by the Act. § 343-1(a)(5).*fn2

However, the purpose of the NLEA was not to preclude all state regulation of nutrition labeling, but instead to "prevent State and local governments from adopting inconsistent requirements with respect to the labeling of nutrients." H. Rep. No. 101-538 at 10, reprinted in 1990 U.S.C.C.A.N. 3336, 3337. State laws are not preempted so long as the requirements they impose on labeling are identical to the requirements of the FDCA. See § 343-1(a)(5) (prohibiting requirements that are not identical); 60 Fed. Reg. 57076-01, 57120 (Nov. 13, 1995) ("[I]f the State requirement is identical to the Federal law, there is no issue of preemption."); Vermont Pure Holdings, Ltd. v. Nestle Waters North America, Inc., No. Civ. A. 03-11465 DPW, 2006 WL 839486, at *5 (D. Mass. Mar. 28, 2006); Reyes v. Mcdonald's Corp., Nos. 06 C 1604, 06 C 2813, 2006 WL 3253579, at *6 (N.D. Ill. Nov. 8, 2006); Ackerman v. Coca-Cola Co., No. CV-09-0395 (JG)(RML), 2010 WL 2925955, at *6 (E.D.N.Y. July 21, 2010). When the state statute or cause of action would impose a requirement that is not the same as the federal requirement then it is preempted. See, e.g., Mills v. Giant of Maryland, LLC, 441 F. Supp. 2d 104, 108 (D.D.C. 2006) (finding that requirement of warning on milk products regarding lactose intolerance exceeds the requirements of the NLEA and is preempted); In re PepsiCo, Inc., Bottled Water Marketing and Sales Practices Litigation, 588 F. Supp. 2d 527, 536 (S.D.N.Y. 2008) (holding that requirement of disclosure that purified water was from tap water rather than other sources went beyond the requirements of disclosure set forth by the NLEA).

As explained below, because Plaintiffs' claims mirror the federal requirements, they are not preempted.*fn3

2. Requirements imposed by Plaintiffs' claims Section 343(r) of the FDCA defines when a food is improperly labeled because of information contained on its label regarding nutrition levels and health-related claims. § 343(r). Subsection 343(r)(1) applies to claims on labels about the level of certain nutrients, including sodium. Generally, nutrient-level claims constitute misbranding unless they follow the regulations promulgated by the FDA. § 343(r)(2)(A).

The FDA's regulations for claims about sodium levels permit the use of the term "less sodium" when "[t]he food contains at least 25 percent less sodium per reference amount customarily consumed than an appropriate reference food as described in § 101.13(j)(1)" and "[t]he identity of the reference food and the percent (or fraction) that the sodium differs from the labeled food are declared in immediate proximity to the most prominent such claim." 21 C.F.R. § 101.61(b)(6); ...


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