Who Needs TwIqbal?

by Dechert LLP

Don’t misunderstand us.  TwIqbal’s great.  It’s left a lot of badly pleaded carnage in its wake over the last five years.  But at times it makes sense to mix things up, to give the bench players a chance.  Take standing for instance.  Standing arguments don't make it into motions to dismiss all that often, at least not in products class action cases.  But when it makes legal and tactical sense, standing can be effective.  The defendant in Young v. Johnson & Johnson, 2012 U.S. Dist. LEXIS 55192 (D.N.J. Apr. 19, 2012), thought it was a good fit for its motion to dismiss, so it put standing in the starting line-up.  And, like so often happens, the bench player came through.  The court dismissed the complaint. 
Young was a putative class action.  The plaintiff claimed that a J&J subsidiary was able to charge a premium price for its margarine substitute, Benecol Spread, through misrepresentation.  Id. at *1.  The alleged misrepresentations included promotional claims that Benecol was a heart healthy choice, contained no trans fatty acids and could reduce cholesterol through ingredients such as plant stanol esters.  Id. at *1-2.  The plaintiff asserted that these product claims were misleading principally because Benecol did in fact contain unhealthy levels of trans fatty acids and partially hydrogenated oils.  Id. at *6-7.
The court’s standing inquiry focused on injury-in-fact, which is often determinative in a standing analysis.  Id. at *6.  Where was the injury?  Certainly, the plaintiff did not allege that he had suffered any unhealthy outcome from using the product.  Id. at *6-7.  But worse, he couldn’t meaningfully allege that he got anything less than what the defendant promoted. 
Sure, the product contained a small amount of trans fat, but less than 0.5 grams per serving.  FDA regulations require such low levels to “be expressed as zero.”  Id. at *8.  “Zero trans fat” means “no trans fact,” which is exactly what the defendant promoted.  And the defendant’s packaging wasn’t coy about any of this (the court considered the language of the packaging because the plaintiff referenced it in his complaint).  Benecol’s packaging contains a disclaimer about trans fats and partially hydrogenated oils that reads like a legal argument you’d expect to see on a motion to dismiss:
"A small amount of partially hydrogenated oils are used in Benecol Spreads . . . As a result, Benecol Spreads contain an extremely low level of trans fat.  The FDA allows foods containing less than 0.5 grams of trans fat/serving to be labeled 0 grams trans fat, since this is considered an insignificant amount."
Id. at *9.  Benecol’s ingredient list also says, flat out, that it contains partially hydrogenated oil.  Id.  As to the cholesterol-reducing claims regarding plant stanol esters, the FDA authorized that too.  FDA regulations state that “scientific evidence establishes that including plant stanol esters in the diet helps to lower blood-total and LDL cholesterol levels.”  Id. at *8 n.2.
In other words, the plaintiff suffered no injury.  He got what he paid for:
"[B]eyond relying on his own subjective belief as to the unhealthy nature of even small amounts of trans fats, [plaintiff] does not set forth allegations as to how he paid a premium for Benecol or received a product that did not deliver the advertised benefits. . . . [Plaintiff’s allegations] are insufficient to establish injury-in-fact, particularly in light of Plaintiff's failure to allege any adverse health consequences, the consistency of Defendant's claims with relevant FDA regulations, and the disclosures made on Benecol's packaging indicating the presence of small amounts of partially hydrogenated oils and trans fats."
Id. at *10-11.  So there was no injury and, for plaintiff, no standing.
We should note that standing did not stand alone.  Plaintiff’s claims were also preempted.  The Federal Food, Drug and Cosmetic Act (“FDCA”), as amended by the Nutrition Labeling and Education Act (“NLEA”), governs food nutritional labeling.  And the NLEA has an express preemption clause.  States can’t impose a nutritional labeling requirement “that is not identical to the requirement” imposed by the FDCA.  Id. at *13.  And since plaintiff’s claims sought to do just that, the court held that they were preempted.  Id. at *13-14. 
So the bench player – standing – got the job done – with a little help from preemption. 
By the way, if you’re wondering whether TwIqbal could also have won the day, well . . . it could have.  The court said as much in a footnote at the end of its opinion: “[T]he Court notes that Defendant's argument that Plaintiff's complaint is subject to dismissal for failure to sufficiently plead the requisite elements of his claims appears to have merit.”  Id. at *18 n.8.  But that’s for another day.  For now, let’s let standing have its moment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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