Opinion
A128458
11-14-2011
MARIA JONES, Plaintiff and Appellant, v. DINEEQUITY, INC., Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County Super. Ct. No. RG 08391858)
In an era marked by obesity, the Federal Government through the enactment of the Nutrition Labeling and Education Act of 1990 (NLEA) (21 U.S.C. § 343 et seq. requires certain nutritional labeling on foods to provide information to promote good eating habits. In 2008, California enacted a mandatory menu labeling law for restaurant chains (Health & Saf. Code, § 114094). Well before California's mandatory menu labeling law, the Applebee's restaurant chain began posting nutritional information on its menus. Plaintiff Maria Jones sued defendant DineEquity, Inc., parent company of Applebee's International, Inc., alleging Applebee's information was inaccurate and seeking relief under California consumers' rights statutes. The trial court found the information satisfied the standard under applicable federal law and regulations, which preempted the California law on which plaintiff relied. We agree with the trial court and affirm.
I. FACTS & PROCEDURAL BACKGROUND
In 2004, Applebee's entered into a partnership with Weight Watchers for the use of the latter's trademark with regard to certain menu items advertised as healthy menu choices, presumably with less fat and fewer calories than regular menu items. On its "Weight Watchers menu," Applebee's listed the grams of fat, grams of fiber, calories, and Weight Watchers points for these items. According to defendant, a news agency tested various menu items in May 2008 and found discrepancies. According to plaintiff, laboratory testing showed the calorie count and fat content of certain items was considerably higher than the numbers posted on the menu.
Plaintiff refers to a Weight Watchers menu. This appears to be a section of the regular Applebee's menu.
On June 10, 2008, plaintiff filed a complaint on behalf of a putative class of California residents who ordered food items from Applebee's Weight Watchers menu. She alleged that testing by independent laboratories had shown discrepancies between the actual and the posted nutritional information. Plaintiff sought restitution and injunctive and other relief under the Consumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.), the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.), and the False Advertising Law (FAL) (Bus. & Prof. Code, § 17500 et seq.).
Defendant filed two motions for judgment on the pleadings. The first involved federal preemption. Defendant argued plaintiff's state-law claims were preempted by the NLEA. As we shall explain below, defendant argued the posted nutrition information constituted "nutrient content claims" governed by the NLEA and was subject to a "reasonable basis" standard rather than analytical testing. The trial court agreed, finding that the NLEA preempted plaintiff's claims. The court further found that the various items of menu information were "nutrient content claims" within the meaning of subdivision (r) of section 343, and that such claims were governed by a "reasonable basis" standard under the applicable regulation. (21 C.F.R. § 101.13(q)(5)(ii) (2011).) The court granted plaintiff leave to amend her complaint to allege noncompliance with the federal "reasonable basis" standard.
We will subsequently refer to 21 U.S.C. § 343 as section 343 or § 343.
The second motion for judgment on the pleadings concerned standing. Defendant argued plaintiff had no standing to bring her claims because she had not alleged any loss of money or property. The trial court agreed with defendant in regard to the UCL and FAL claims, but found plaintiff had alleged sufficient injury to bring a claim under the CLRA.
On April 30, 2009, plaintiff filed her first amended complaint, again on behalf of a putative class of California residents who ordered food items from Applebee's Weight Watchers menu. Plaintiff alleged that independent testing showed the Weight Watchers menu items, or at least some of them, had higher actual calories and fat levels than posted on Applebee's menu. Plaintiff specifically referred to two menu items, including the Tortilla Chicken Melt, described as "Tender chipotle-roasted chicken, reduced fat mozzarella and cheddar cheeses, broccoli, mushrooms, carrots, corn, red peppers and red onions, all grilled within a wheat tortilla and topped with non-fat cilantro ranch dressing. Served with a side of tomato salsa." Plaintiff alleged that testing showed the dish contained 21.4 grams of fat rather than the posted 13 grams. Plaintiff included a brief, general allegation that defendant lacked a reasonable basis for the menu postings. Plaintiff sought specific relief under the CLRA only, alleging the menu discrepancies amounted to unfair or deceptive practices and unfair competition in violation of Civil Code section 1770, subdivision (a)(5), (7) and (9). Plaintiff sought injunctive relief and other equitable relief including restitution and disgorgement of profits.
On September 25, 2009, defendant filed a Motion for a Determination of No Merit (No Merit Motion) under the CLRA. (Civ. Code, § 1781, subd. (c)(3).) A no-merit determination by a trial court in a CLRA action is functionally equivalent to a summary judgment leading to dismissal. (See Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474-1475.)
Defendant argued plaintiff's CLRA claims lacked merit because Applebee's processes for determining the posted nutrition information—or "nutrient content claims"—along with the steps Applebee's took in its restaurants to ensure consistent food preparation methods satisfied the federal "reasonable basis" standard.
After plaintiff's opposition, defendant's reply, and a hearing, the trial court reviewed the declarations and other evidentiary material and granted the No Merit Motion. Having previously found that plaintiff's state law claims were preempted by the NLEA, the trial court found that defendant had a reasonable basis for its nutrient content claims under applicable federal law.
II. FEDERAL STATUTORY & REGULATORY SCHEME
Our explanation of the pertinent provisions of the NLEA and applicable regulations is aided by the concise discussion in New York State Restaurant v. New York City Bd. (2nd Cir. 2009) 556 F.3d 114 (NYSR).
Congress enacted the NLEA in 1990 as an addition to the 1938 Federal Food, Drug, and Cosmetic Act, which "generally prohibits misbranding of food." (NYSR, supra, 556 F.3d at p. 118.) Congress intended the NLEA " 'to clarify and to strengthen the Food and Drug Administration's legal authority to require nutrition labeling on foods, and to establish the circumstances under which claims may be made about nutrients in foods.' [Citation.]" (NYSR, supra, at p. 118.)
We are here concerned with four provisions of the NLEA: section 343, subdivision (q) (section 343(q)) and section 343, subdivision (r) (section 343(r)) and their respective preemption provisions, section 343-1, subdivision (a)(4) (section 343-1(a)(4)) and section 343-1, subdivision (a)(5) (section 343-1(a)(5)).
Section 343(q), entitled "[n]utrition information," mandates nutrition labels on packaged foods and requires that the labels contain certain specified information. (Section 343(q)(1); see NYSR, supra, 556 F.3d at p. 118.) "The general public is well-acquainted with this provision through the 'Nutrition Facts' panel on packaged foods that informs buyers of . . . 'the total number of calories' per serving, along with the quantities of various nutrients contained in the foods. [Citation.]" (NYSR, supra, at p. 118.)
During the timeframe pertinent to this litigation, section 343(q) specifically exempted restaurants from its mandatory labeling requirements. (Section 343(q)(5)(A)(i); see NYSR, supra, 556 F.3d at p. 118.)
In 2010, Congress amended section 343(q) to impose a mandatory labeling requirement on chain restaurants with 20 or more locations operating under the same name. (Pub.L. No. 111-148, § 4205 (Mar. 28, 2010), 124 Stat. 573 [adding section 343(q)(5)(H)(i)].) Our ensuing discussion and analysis, as well as the discussion in NYSR, is based on the law as it existed prior to the amendment.
Section 343(r), entitled "[n]utritional levels and health-related claims," involves "voluntary information, that is, those claims that a food purveyor may choose to add to its product label about the nutrient content . . . or health benefits . . . of its product. [Citation.]" (NYSR, supra, 556 F.3d at p. 119, original italics.) The Food and Drug Administration (FDA) defines "nutrient content claims" made under section 343(r) as "any direct statement about the level (or range) of a nutrient in the food, e.g., 'low sodium' or 'contains 100 calories.' " (21 C.F.R. § 101.13(b)(1) (2011).) Section 343(r) prohibits voluntary "nutrient content claims" that either expressly or impliedly characterize nutrient levels in food unless the claims use terms defined in FDA regulations. (§ 343(r)(1)(A) & (2)(A)(i).)
A nutritional label statement required by section 343(q) is not a nutrient content claim under section 343(r). (§ 343(r)(1).) Section 343(r), however, does not exempt restaurants. (NYSR, supra, 556 F.3d at p. 120.) "Thus, when a restaurant chooses to 'characterize[ ] the level of any nutrient which is of the type required by [Section 343(q)] to be in the label or labeling of the food,' [§ 343(r)(1)(A)], it must conform to Section 343(r)'s requirements." (NYSR, supra, at p. 120.)
Under FDA regulations, restaurants making "nutrient content claims" are subject to the "reasonable basis" standard. "[I]n lieu of analytical testing," restaurants may show they have a "reasonable basis" for making the claim. (21 C.F.R. § 101.13(q)(5)(ii) (2011).) We discuss this further below.
Section 343-1(a)(4), the preemption section relating to section 343(q), preempts any state or local "requirement for nutrition labeling of food that is not identical to the requirement of section 343(q) . . ." except a requirement for nutrition labeling of food which is exempt from section 343(q) by the exception for restaurant food. (NYSR, supra, 556 F.3d at p. 120.) Thus, section 343(q) neither regulates restaurant food labeling nor preempts state and local measures that do so. (NYSR, supra, at p. 120.)
Section 343-1(a)(5) is the preemption provision pertinent to section 343(r). It preempts state or local governments from imposing any requirement on nutrient content claims "in the label or labeling of food that is not identical to the requirement of section [343(r)] . . ." with an exception not applicable here, which we will discuss further below. (NYSR, supra, 556 F.3d at p. 120.) Thus, state and local governments "are preempted from adopting nutrient claim laws as defined by Section 343(r)." (NYSR, supra, at p. 120.)
In sum: "Though appearing complex, this scheme is simple when it comes to restaurant food—the NLEA does not regulate nutrition information labeling on restaurant food, and states and localities are free to adopt their own rules. The NLEA, however, does generally regulate nutrition content claims on restaurant foods, and states and localities may only adopt rules that are identical to those provided in the NLEA." (NYSR, supra, 556 F.3d at p. 120, original italics.) The extent of the preemption is thus specified.
III. DISCUSSION
A.
The trial court ruled the NLEA preempted plaintiff's claims. Agreeing with NYSR, supra, 556 F.3d at pages 130-131, the trial court found that the various items of menu information were "nutrient content claims" within the meaning of subdivision (r) of section 343 because they were voluntary, and that such claims were governed by a "reasonable basis" standard under the applicable federal regulation, Title 21 Code of Federal Regulations part 101.13(q)(5)(ii) (2011). Plaintiff challenges the trial court's preemption finding on several grounds, which we discuss in turn.
First, plaintiff argues the text of section 343(r)'s preemption provision, section 343-1(a)(5), does not apply to restaurants. This argument requires us to discuss the exemption to the provision referred to above, but did not spell out, to reduce the thickness of the statutory citations in Section II of this opinion.
Section 343-1(a)(5) preempts state or local governments from imposing any requirement on nutrient content claims "in the label or labeling of food that is not identical to the requirement of section [343(r)], except a requirement respecting a claim made in the label or labeling of food which is exempt under section [343(r)(5)(B)]."
Section 343(r)(5)(B) provides: "Subclauses (iii) through (v) of subparagraph (2)(A) and subparagraph (2)(B) do not apply to food which is served in restaurants or other establishments in which food is served for immediate human consumption or which is sold for sale or use in such establishments."
Plaintiff insists, at times in strained semantic arguments, this preemption exemption applies to restaurants en toto. It does not because subclauses (iii), (iv), and (v) of subparagraph (2)(A) apply to claims regarding levels of cholesterol and saturated fat, and certain claims regarding dietary fiber that have nothing to do with this case. Likewise, subparagraph (2)(B) applies to claims regarding nutrient levels that the government has determined can increase risk of disease. This also does not apply to this case because by its plain text, section 343-1(a)(5) does not exempt from preemption the nutrient content claims at issue here.
Second, plaintiff argues that only section 343(q), which does not preempt state laws, applies to Applebee's menu disclosures because it—unlike section 343(r)—specifically mentions calories and levels of fat. Plaintiff presumably argues section 343(r) does not apply here because it does not specifically mention those items. Plaintiff misses the point because the distinction between the two subdivisions is not one of specific descriptive language—rather, it is the distinction between mandatory and voluntary disclosures.
Furthermore, a nutrient content claim may involve a specific amount of, for instance, calories. As noted above, the FDA defines "nutrient content claims" made under section 343(r) as "any direct statement about the level (or range) of a nutrient in the food, e.g., 'low sodium' or 'contains 100 calories.' " (21 C.F.R. § 101.13(b)(1) (2011).) And, as NYSR observed, "when a restaurant chooses to 'characterize[ ] the level of any nutrient which is of the type required by [Section 343(q)] to be in the label or labeling of the food,' [§ 343(r)(1)(A)], it must conform to Section 343(r)'s requirements." (NYSR, supra, 556 F.3d at p. 120.)
Third, plaintiff relies on the last sentence of section 343(r)(1), which provides as pertinent here: "A statement of the type required by [section 343(q)] that appears as part of the nutrition information required or permitted by [that section] is not a claim which is subject to this paragraph [i.e., section 343(r)]. . . ." Plaintiff seems to contend that because Applebee's disclosures are "of the type" required by section 343(q)—i.e., fat and calorie disclosures—they are not governed by section 343(r). This contention suffers from the same misconception as the preceding argument about the relationship between the two subdivisions, i.e., the distinction between mandatory and voluntary.
Simply put, nutrient content claims can be quantitative. The FDA regulation governing nutrient content claims provides: "Information that is required or permitted . . . to be declared in nutrition labeling, and that appears as part of the nutrition label, is not a nutrient content claim and is not subject to the requirements of . . . section [343(r)]. If such information is declared elsewhere on the label or in labeling, it is a nutrient content claim and is subject to the requirements for nutrient content claims." (21 C.F.R. § 101.13(c) (2011).) This regulation "unequivocally provides that quantitative statements can be claims" and "reflects the FDA's view that a quantitative statement as to a nutrient amount, 100 calories for example, is not a claim when such a statement appears in the nutrient panel required by Section 343(q), but is one when it does not." (NYSR, supra, 556 F.3d at pp. 125, 126, original italics.)
Fourth, plaintiff argues the trial court erred by adopting the mandatory-voluntary distinction. We need not belabor this point. Plaintiff seems to claim the NYSR court said it did not agree with that distinction as made by the federal district court under review. Plaintiff misreads the opinion. The NYSR court was disagreeing with the plaintiff's interpretation of the district court's ruling because it added an additional element to the mandatory-voluntary test. (NYSR, supra, 556 F.3d at pp. 127-128.)
Fifth, plaintiff argues that the CLRA, UCL and FAL are general consumer protection laws and are not preempted by the NLEA because they do not impose labeling "requirements," and thus fall outside the federal statutory scope. Plaintiff relies on Bates v. Dow Agrosciences LLC (2005) 544 U.S. 431 (Bates),a case that actually supports defendant's position.
Bates involved a federal labeling requirement for pesticides. (Bates, supra, 544 U.S. at pp. 437-439.) The plaintiffs sued the pesticide manufacturer for crop damage on various theories, including fraud. (Id. at pp. 434-435.) The United States Supreme Court indicated the state-law fraud claim could be considered a preempted labeling requirement. If "the element of falsity in Texas' common-law definition of fraud imposed a broader obligation than [the federal law's] requirement that labels not contain 'false or misleading statements,' that state-law cause of action would be pre-empted . . . to the extent of that difference." (Id. at p. 453.)
Here, plaintiff is suing under regulatory state laws proscribing deceptive practices. The gravamen of her claim is that the menu labels are not precisely accurate as shown by lab testing, and are thus deceptive. This imposes a broader obligation on defendant's food labeling than the federal "reasonable basis" standard, by seeking to enforce a more exacting standard of compliance. Thus, her state law claims are preempted under the Bates, supra, 544 U.S. 431 rationale to the extent they exceed the federal standard.
Plaintiff unavailingly relies on language from Bates involving the plaintiffs' express warranty claim that is distinguishable because the court found it did not impose a labeling requirement. (Bates, supra, 544 U.S. at pp. 444-445.)
Plaintiff quotes a passage from Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 498499, to the effect federal preemption statutes are not meant to preempt state and local requirements of general applicability. The quotation is not from the language of the United States Supreme Court, but from an FDA regulation regarding medical devices. (21 C.F.R. § 808.1(d)(1) (2011).)
For the first time in her reply brief, plaintiff adds an additional issue related to Bates, supra, 544 U.S. 431. She claims the consumer protection statutes at issue are immune from preemption because they require a lesser showing than commonlaw fraud. Issues raised for the first time in the reply brief will not be considered. (Scott v. CIBA Vision Corp. (1995) 38 Cal.App.4th 307, 322.) In any case, they are without merit in the context of this case.
Finally, plaintiff invokes the strong presumption against federal preemption, particularly in cases involving the historic police powers of the states—including those powers implemented by the CLRA and the UCL. (See Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1087-1088.) But the presumption is inapplicable when Congress has shown its clear and manifest purpose to preempt. (Id. at p. 1088.) As the NYSR court held, the NLEA is expressly clear on its intent to preempt state laws: "as it pertains to restaurants, the NLEA does not preempt [state and local governments] from adopting [their] own requirements for nutrition information labeling . . . but it does generally preempt [them] from adopting different rules for nutrient content claims [citing section 343-1(a)(5)]." (NYSR, supra, 556 F.3d at p. 123, original italics.) States may only adopt rules for nutrient content that are identical to those provided in the NLEA. (See also Shepard v. DineEquity, Inc. (D.Kan.) 2009 U.S. Dist. Lexis 97245.)
B.
Given the preemption of plaintiff's state-law claims, the remaining question is whether defendant had a "reasonable basis" for its nutrient content claims under applicable federal law. The trial court found that it did, and we agree for the following reasons.
The applicable federal regulation provides, in pertinent part, as follows: "In lieu of analytical testing, compliance may be determined using a reasonable basis for concluding that the food that bears the claim meets the definition for the claim. This reasonable basis may derive from recognized data bases for raw and processed foods, recipes, and other means to compute nutrient levels in the foods or meals and may be used provided reasonable steps are taken to ensure that the method of preparation adheres to the factors on which the reasonable basis was determined (e.g., types and amounts of ingredients, cooking temperatures, etc.). Firms making claims on foods based on this reasonable basis criterion are required to provide to appropriate regulatory officials on request the specific information on which their determination is based and reasonable assurance of operational adherence to the preparation methods or other basis for the claim . . . ." (21 C.F.R. § 101.13(q)(5)(ii) (2011).)
As the trial court found, "Congress recognized that there are variations in the nutrient values for restaurant foods due to seasonal, regional, and supplier variations, as well as varied methods of food preparation." The compliance standard of "reasonable basis" was, accordingly, "intended to provide flexibility in how nutritional labeling requirements can be met in a restaurant setting." In addition to the regulation quoted above, another regulation provides that "[n]utrient levels may be determined by nutrient data bases, cookbooks, or analyses or by other reasonable bases that provide assurance that the food or meal meets the nutrient requirements for the claim." (21 C.F.R. § 101.10 (2011).) This flexibility gives a restaurant a wide range of options for determining the nutrient content of its food. The trial court correctly interpreted this regulation "to mean that restaurants can compute nutrient levels of its food by conducting analytical testing or instead by relying on recognized databases, recipes, and other means."
The trial court described Applebee's procedures for determining nutrient levels. At the outset of its discussion, the trial court correctly determined that the Weight Watcher Points values are, in fact, nutrient content claims because they are based on the amount of nutrients—calories, fat, and dietary fiber—in a particular menu item. Applebee's prepared 12 plate samples for each menu item according to prescribed preparation instructions and recipes. When there were multiple suppliers for a basic food item, Applebee's obtained 12 different samples of that item from each supplier, prepared 12 full plates using ingredients from each supplier, and scraped all 12 samples into a large plastic bag. This sampling was sent to private laboratories for testing to determine calorie, fat, and fiber content. These numbers were then entered into an online Weight Watchers Points calculator to determine the number of Weight Watchers Points for each menu item.
Applebee's then revised its approach by separating cooked from uncooked ingredients. For the former, Applebee's followed the 12-sample method just discussed. For the latter, Applebee's relied on the nutritional data provided by the suppliers or used databases such as the Genesis Database and the USDA National Nutrient Database for Standard Reference. Applebee's then entered the nutritional data into the Genesis database to determine the nutritional value, and then calculated the Weight Watchers Points.
The trial court found "[t]here is nothing in the record to suggest that Applebee's analysis is inaccurate or unreliable." The court further found: "Reliance on sources such as recipes or cookbooks that list the nutritional value of the ingredients, nutrient data bases, information provided by suppliers, and even food labels of individual ingredients can separately or combined serve as a reasonable basis for a nutrient claim. . . . [Applebee's] methodology for determining the nutritional content of its [m]enu [i]tems is reasonable under [the] NLEA as a matter of law."
The trial court then considered whether Applebee's had taken reasonable steps to ensure operational adherence to preparation methods, as required by Title 21 Code of Federal Regulations part 101.13(q)(5)(ii) (2011). The court found this requirement "does not require perfection, but reasonable assurances that a restaurant took steps to ensure consistency in its preparation method to adhere to its declared nutrient content claims."
Applebee's presented evidence of six key aspects of its effort to maintain preparation consistency, including detailed recipes, special measuring instruments for ingredients, supervised training programs, and regular audits or other monitoring efforts of its restaurants. The trial court found these methods were reasonable, and that plaintiff had presented no competent evidence to the contrary.
In conclusion, the trial court found that Applebee's complied with the NLEA by having a reasonable basis for its nutrient content claims and by taking reasonable steps to assure operational adherence. We cannot disturb this finding because it is supported by substantial evidence in the record. Therefore, the trial court correctly found, as a matter of law, that plaintiff's claims had no merit.
Our review of the court's determination of "reasonable basis" involves a mixed question of law and fact, with our giving deference to factual determinations made by the court as to what steps were carried out; we examine those factual determinations independently to determine if they satisfy the "reasonableness" required for compliance with the NELA.
In light of this conclusion, we need not reach the issue of plaintiff's standing.
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IV. DISPOSITION
The judgment of dismissal after the grant of the No Merit Motion is affirmed.
Marchiano, P.J. We concur:
Margulies, J.
Dondero, J.