1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 IAN MCCAUSLAND, et al., Case No. 23-cv-04526-PCP

8 Plaintiffs,

ORDER GRANTING MOTION TO

9 v. DISMISS IN PART

10 PEPSICO, INC., Re: Dkt. No. 18 Defendant. 11

12 13 In this lawsuit, plaintiffs Ian McCausland, Carlo Garcia, and Michael Zurl allege that 14 PepsiCo, Inc. deceptively advertises that its Gatorade Protein Bars promote consumers’ fitness, 15 health, athleticism, and well-being when they in fact contain high levels of total and added sugars 16 that render such claims misleading. Plaintiffs further contend that Gatorade’s labeling of the bars 17 as “Protein Bars” is deceptive or misleading because, in truth, the bars’ primary ingredient is 18 sugar. 19 PepsiCo now moves to dismiss plaintiffs’ complaint under Rules 12(b)(1) and 12(b)(6). 20 For the following reasons, PepsiCo’s motion is granted in part and denied in part. 21 Background 22 Plaintiff Ian Mccausland is a self-proclaimed fitness enthusiast and resident of San Jose, 23 California who purchased Gatorade Protein Bars in California and on Amazon.com in 2022 and 24 2023. Compl. ¶¶ 20–22.1 Plaintiff Michael Zurl is a self-proclaimed fitness enthusiast and resident 25 of Remsenburg, New York who purchased Gatorade Protein Bars in New York and on 26 Amazon.com in 2020, 2021, and 2022. Id. ¶¶ 31–33. Plaintiff Carlo Garcia is a self-proclaimed 27 f1i tness enthusiast and resident of Sanger, California who purchased Gatorade Protein Bars in C2 alifornia and on Amazon.com in 2020. Id. ¶¶ 42–44. 3 Each plaintiff alleges that the label on the Gatorade Protein Bars he bought “touted claims o4f and/or equivalent to ‘PROTEIN BAR’ in large, bolded letters, ‘20 g of Protein,’ and contained l5o gos for the NFL, NBA, WNBA, and MLB sports leagues, and the side labels in oversized bolded a6n d capitalized letters, stated ‘PROTEIN TO HELP MUSCLES REBUILD.’” Compl. ¶¶ 23, 34, 475 . Relying on those statements, similar claims on the Amazon.com landing page for the product, a8n d trust in the Gatorade brand, each plaintiff “believed that consuming Gatorade Protein Bars w9 ould be a clear benefit to his muscles and athleticism” and not “a Product with excessive total a1nd/or added sugars.” Id. ¶¶ 24–26, 35–37, 46–48. No plaintiff was familiar with “how many 0 grams of sugar are in a teaspoon,” “what limits on added sugar daily intake the health authorities r1ecommend,” or the negative health consequences of regularly consuming high-sugar protein bars. 1 Id. ¶¶ 27, 39, 49. 1 Plaintiffs allege that “PepsiCo’s Gatorade Protein Bar marketing is deceptive, misleading, 2 and unlawful, because both individually and collectively the health halo marketing claims, i1ncluding the Product name, imply that the Product is a fitness enhancer and/or healthful Product 3 that promotes athleticism and well-being when, in fact, it contains high levels of total and added s1ugars.” Compl. ¶ 54. According to plaintiffs, “marketing the inclusion of protein as a nutrient in 4 products appeals to consumers and exponentially increases sales,” leading consumers to “1mistakenly perceive that adding more protein to their diet is important to health and well-being.” 5 Id. ¶¶ 56–57. They contend that PepsiCo “capitalizes on this fraudulent advertising trend—with i1ntensive and misleading marketing about the purported benefits of protein and/or the advantages 6 of consuming its protein-fortified Product to enhance general fitness, athleticism and impliedly, o1verall well-being and/or health—all notwithstanding its high sugar content.” Id. ¶ 58. 7 Plaintiffs allege that sugar, not protein, is the Gatorade Protein Bar’s primary c1haracterizing ingredient. Consequently, they contend that PepsiCo’s use of the word “protein” in 8 the product’s name and its claims highlighting the protein content and promoting its effect on o1f the product, including on Amazon.com, similarly “trumpets the Product’s protein content and t2h e purported scientific substantiation for the Product’s health benefits (including enhanced a3t hleticism and overall well-being),” in claims including “‘Backed by Science,’ ‘Gatorade Sports S4 cience Institute,’ and ‘Used by the Pros,’ along with logos for and claims of use by the NFL, M5 BL, NBA, and MNBA.” Id. ¶ 61. Similarly, they allege that PepsiCo’s reference to science and s6p ecifically the Gatorade Sports Science Institute (e.g., “Formulated and tested at the Gatorade S7 ports Science Institute”) works to deceive consumers into thinking that the institute’s work is a8i med at promoting health and athletic performance. See id. ¶¶ 62–64. 9 Plaintiffs allege that a “single serving of the Product—one Gatorade Protein Bar—exceeds t1he daily, health-based limits for added sugars recommended by the AHA for women and youth, 0 and approaches it for men.” Compl. ¶ 87. Plaintiffs contend that consumers are unaware of this f1act because PepsiCo fails to clearly state the percentage of recommended daily limit 1 (Recommended Daily Value or %DV) of sugar for the Product the way it does for fat and sodium. I1d. ¶ 64. PepsiCo also does not state “by way of teaspoons the added sugars content” on the 2 principal display pane (PDP). According to plaintiffs, “[a]verage consumers, as is the case with t1he Plaintiffs, who trust Gatorade and its marketing, are not sufficiently nutritionally literate, or 3 sophisticated scientifically, to comprehend that the amount of added sugars in the Product is high a1nd/or excessive, and/or to understand that the leading health authorities advise against the 4 consumption of added sugars at such levels given links to disease—particularly when presented w1ith Gatorade/PepsiCo’s health halo marketing about protein levels and the Product overall.” Id. 5 ¶ 68. Plaintiffs allege that PepsiCo’s deceptive marketing occurs in the wake of widespread and h1igh rates of obesity, diabetes, and cardiovascular disease correlated with the consumption of 6 processed foods and excessive amounts of added sugars, often hidden or unrecognized, across the c1ountry. By contrast, according to plaintiffs, there is little evidence of protein deficiency among 7 Americans. See id. ¶¶ 70–84. 1 Plaintiffs allege that they would not have purchased the bars, would have purchased fewer 8 bars, or would have paid a lower price for the bars had they understand the nutritional character of m1 arketing.” Id. ¶¶ 28–29, 39–40, 50–51. Each plaintiff alleges that he would “consider purchasing t2h e Product again were it marketed in a non-misleading and lawful manner such that he could trust t3h e marketing claims.” Id. ¶¶ 30, 41, 52. 4 In their complaint, plaintiffs allege that PepsiCo’s conduct violates multiple federal and s5t ate statutory provisions, official policies, and regulations targeting deceptive marketing. New Y6 ork and California both prohibit deceptive business practices and false advertising and i7n corporate parallel federal principles or provisions into their consumer protection statutes. Compl. ¶8¶ 88–89. In New York, this includes its General Business Law Sections 349 and 350. In C9 alifornia, this includes its Unfair Competition Law, California Business and Professions Code §1 17200 et seq. (“UCL”); its Consumer Legal Remedies Act, California Civil Code § 1750 et seq. 0 (“CLRA”); and its False Advertising Law, California Business and Professions Code § 17500 (1“FAL”). Id. ¶ 89. 1 In support of their claims, plaintiffs also point to several provisions of federal law. Section 3143 of the federal Food, Drug, and Cosmetic Act (“FDCA”) provides that food is “misbranded … 2 (a) if (1) its labeling is false or misleading in any particular.” 21 U.S.C. § 343(a). In contravention o1f this provision, according to plaintiffs, “PepsiCo’s marketing misleads consumers about the true 3 qualities and characteristics of Gatorade Protein Bars.” Compl. ¶¶ 90–91. 21 C.F.R. § 102.5 s1eparately requires that foods be named after their characterizing ingredients. It specifically 4 provides that “[t]he common or usual name of a food shall include a statement of the presence … o1f any characterizing ingredient(s) or component(s) … when the presence … of such ingredient(s) 5 or component(s) in the food has a material bearing on price or consumer acceptance.” 21 C.F.R. §1 102.5(c)(1). Under this standard, plaintiffs allege that the characterizing ingredient in Gatorade 6 Protein Bars is sugar, not protein. Compl. ¶ 92. The regulations further require that the principal d1isplay panel of a product “bear as one of its principal features a statement of the identity of the 7 commodity.” 21 C.F.R. § 101.3(a). Accordingly, plaintiffs allege that “sugar—more so than p1rotein—needs to be conspicuously referenced in the Product name on the PDP.” Compl. ¶ 94. 8 This is because, according to plaintiffs, “Gatorade Protein Bars have 30% more sugar by weight 1 Plaintiffs also allege that PepsiCo “runs afoul of the FDA’s policy against random f2o rtification of foods,” known as the Jelly Bean Rule. Compl. ¶¶ 97–99. 21 C.F.R. § 104.20(a) r3e cognizes that such fortification, including of sugars, “could result in deceptive or misleading c4l aims for certain foods.” According to plaintiffs, PepsiCo “egregiously” violates this policy with r5e spect to the Gatorade Protein Bars. Compl. ¶ 99. 6 Finally, plaintiffs note that the “FDA Draft Policy on Dietary Guidance Statements s7i milarly seeks to prevent deceptive marketing of junk foods by limiting foods that use dietary g8u idance statements about protein (and other nutrients) in their marketing to those foods that have f9e wer than 10% DV, or 5 grams, or added sugars[, while] Gatorade Protein Bars have 28 g1rams of added sugars.” Compl. ¶ 100 (emphasis in original). Plaintiffs argue that this draft 0 policy “evinces the FDA’s own expert thinking on consumer fraud and consumer susceptibility to f1raud when foods high in added sugars … are fortified with nutrients and then packaged and 1 marketed as healthy and/or nutritious and/or good-for-you foods—precisely as PepsiCo’s does w1ith Gatorade Protein Bars.” Id. ¶ 102. 2 PepsiCo moves to dismiss plaintiffs’ claims pursuant to Rule 12(b)(1) and Rule 12(b)(6). P1epsiCo first seeks to dismiss plaintiffs’ complaint in its entirety on the ground that plaintiffs’ 3 claims are preempted by the FDCA. Second, PepsiCo seeks to dismiss all of plaintiffs’ claims on t1he ground that plaintiffs do not plausibly allege that PepsiCo’s labeling and marketing of the 4 Gatorade Protein Bars is likely to deceive a reasonable consumer, as is required to state a claim for r1elief under California’s UCL, FAL, and CLRA and under New York’s General Business Law. 5 Third, PepsiCo argues that plaintiffs fail to state a claim under either the “unlawful” or “unfair” p1rongs of California’s UCL. Fourth, PepsiCo argues that plaintiffs’ request for equitable 6 restitution fails because plaintiffs do not allege that they lack an adequate remedy at law. Finally, P1epsiCo argues that plaintiffs lack Article III standing to seek injunctive relief. 7 LEGAL STANDARDS 1 A complaint that fails to establish a federal court’s subject matter jurisdiction may be 8 dismissed pursuant to Rule 12(b)(1). An attack on jurisdiction “can be either facial, confining the c1o mplaint.” Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). A f2a cial attack accepts the truth of the plaintiff’s allegations but asserts they are “insufficient on their f3a ce to invoke federal jurisdiction;” such an attack is resolved by the district court as it would r4e solve a motion to dismiss under Rule 12(b)(6). Safe Air for Everyone v. Meyer, 373 F.3d 1035, 150 39 (9th Cir. 2004). By contrast, a factual Rule 12(b)(1) motion can attack “the substance of a c6o mplaint’s jurisdictional allegations despite their formal sufficiency, and in doing so rely on a7f fidavits or any other evidence properly brought before the court.” St. Clair v. City of Chico, 880 F8 .2d 199, 201 (9th Cir. 1989). 9 Under Rule 12(b)(6), the Court must “accept all factual allegations in the complaint as true a1nd construe the pleadings in the light most favorable” to the non-moving party. Rowe v. Educ. 0 Credit Mgmt. Corp., 559 F.3d 1028, 1029–30 (9th Cir. 2009). The pleadings must nonetheless a1llege facts that would allow the Court “to draw the reasonable inference that the defendant is 1 liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Legal conclusions “1can provide the complaint’s framework,” but the Court will not assume they are correct unless 2 adequately “supported by factual allegations.” Id. at 679. 1 ANALYSIS 3 I. PepsiCo’s Request for Judicial Notice Is Granted. 1 PepsiCo requests this Court take judicial notice of the complete packaging and labels for 4 Gatorade Protein Bars. See Dkt. Nos. 19 & 20. Because these materials are discussed extensively i1n the Complaint and central to plaintiffs’ claims, the Court grants PepsiCo’s request. See Marder 5 v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (“A court may consider evidence on which the c1omplaint ‘necessarily relies’ if: (1) the complaint refers to the document; (2) the document is 6 central to the plaintiff’s claim; and (3) no party questions the authenticity of the copy attached to t1he 12(b)(6) motion.”). 7 II. PepsiCo’s Motion To Dismiss Is Granted in Part and Denied in Part. 1 A. Plaintiffs’ Claims Are Not Entirely Preempted. 8 The Supremacy Clause grants Congress the power to preempt state law. See Crosby v. p1r eemption, state law must yield to a congressional Act in at least two circumstances.” Id. First, s2t ate law must yield “[w]hen Congress intends federal law to ‘occupy the field.’” Id. Second, “3s tate law is naturally preempted to the extent of any conflict with a federal statute.” Id. Courts “4w ill find preemption where it is impossible for a private party to comply with both state and f5e deral law” and “where under the circumstances of a particular case, the challenged state law s6t ands as an obstacle to the accomplishment and execution of the full purposes and objectives of C7 ongress.” Id. at 372–73 (cleaned up). “What is a sufficient obstacle is a matter of judgment, to be i8n formed by examining the federal statute as a whole and identifying its purpose and intended e9f fects.” Id. at 373. 1 The purpose of the FDCA is to “protect the health and safety of the public at large.” POM 0 Wonderful LLC v. Coca-Cola Co., 573 U.S. 102, 108 (2014). To that end, the FDCA prohibits the “1adulteration or misbranding of any food, drug, device, tobacco product, or cosmetic in interstate 1 commerce.” 21 U.S.C. § 331(b). The Nutritional Labeling and Education Act (NLEA) amended t1he FDCA to “establish uniform food labeling requirements, including the familiar and ubiquitous 2 Nutrition Facts Panel found on most food packages.” Reid v. Johnson & Johnson, 780 F.3d 952, 9159 (9th Cir. 2015) (cleaned up). Following this amendment, the FDCA “expressly preempts all 3 state statutes and law that ‘directly or indirectly establish any requirement for the labeling of food t1hat is not identical to the federal requirements’ set forth by statute and Food and Drug 4 Administration (FDA) regulations.” Nacarino v. Kashi Co., 77 F.4th 1201, 1204 (9th Cir. 2023); s1ee 21 U.S.C. § 343-1(a)(3) (“Except as provided in subsection (b), no State or political 5 subdivision of a State may directly or indirectly establish under any authority or continue in effect a1s to any food in interstate commerce … any requirement for the labeling of food of the type 6 required by section 343(b), 343(d), 343(f), 343(h), 343(i)(1), or 343(k) of this title that is not i1dentical to the requirement of such section … ”). 7 PepsiCo seeks to dismiss plaintiffs’ claims on the grounds that they are expressly p1reempted by the FDCA. PepsiCo first argues that plaintiffs’ claims “would impose requirements 8 for labeling sugar content that differ from the requirements of federal law.” Dkt. No. 18, at 14. s1u gar in a serving,” on the nutrition label for Gatorade Protein Bars. 21 C.F.R. § 101.9(c)(6)(ii). T2 he label must also include the “amount (in grams)” of added sugars underneath total sugar. Id. §3 101.9(c)(6)(iii). The Gatorade Protein Bars comply with those requirements, and PepsiCo argues t4h at plaintiffs are seeking to “hold PepisCo liable under state law for labeling sugar content in the w5 ay that federal law requires.” Dkt. No. 18, at 14. 6 Plaintiffs respond that the remedy they seek would not require labeling in contravention of o7r otherwise not identical to federal requirements but could include, for example, PepsiCo “8r eformulating its Product to reduce the added sugar.” Dkt. No. 21, at 12. In support, plaintiffs cite t9o this Court’s decision Krommenhock v. Post Foods, LLC, in which the plaintiffs alleged that the d1efendant “cannot continue to use … voluntary health and wellness statements because they are 0 misleading in light of the added sugar content,” 255 F. Supp. 3d 938, 951 (N.D. Cal. 2017). The C1ourt concluded that by “[t]reating plaintiffs’ claims as akin to an omissions by material 1 misstatement claim, plaintiffs are not arguing that Post must disclose the added sugar content.” Id. C1onsequently, the Court held that those claims were not preempted. Id. Similarly, plaintiffs here 2 allege that they “make no allegation that the excess sugar content in the Product must be labeled a1nd/or consumers warned about the high sugar content as an independent matter.” Dkt. No. 21, at 3 12. Plaintiffs instead claim that PepsiCo’s omission of the Daily Value of sugar while including t1hat value for fat and sodium “works to enhance the deception created by the other marketing 4 claims.” Id. at 11–12. 1 PepsiCo is correct in part. As PepsiCo argues, plaintiffs’ claims are preempted to the 5 extent that they seek to impose labeling requirements that are not identical to the requirements of f1ederal law. Accordingly, plaintiffs cannot pursue any claim that PepsiCo’s failure to label the 6 amount of sugar and added sugar in teaspoons (rather than the grams required by the FDA) or to i1nclude a Daily Value for sugar itself constitutes deceptive or misleading advertising in violation 7 of California or New York law. See, e.g., Krommenhock, 255 F. Supp. 3d at 954. Although that o1mission cannot serve as the substantive basis for any of plaintiffs’ claims, it remains relevant, as 8 in Krommenhock, to determining what a reasonable consumer might understand about the bars’ l1i ght thereof. 2 PepsiCo separately argues that plaintiffs’ claims require the Court to treat sugar as a “3d isqualifying nutrient” even though federal law does not. 21 C.F.R. § 101.14(a)(4) prohibits a p4r oduct from making an express or implied health claim if it contains certain “disqualifying” l5e vels of “total fat, saturated fat, cholesterol, or sodium.” Those regulations further require p6r oducts bearing claims such as “low sodium” or “contains 100 calories” to include a disclosure “7i mmediately adjacent” to the claim if the product contains certain levels of fat, saturated fat, c8h olesterol, or sodium. 21 C.F.R. §§ 101.13(b), (h). Those regulations do not require such a d9i sclosure for sugar content. See id. 1 PepsiCo argues that the “FDA has expressly determined … that there is ‘no sound basis ‘to 0 ‘limit health claims on foods on the basis of added sugars’” while plaintiffs seek to do just that u1sing state law. Dkt. No. 18, at 15 (citing Food & Drug Admin., Food Labeling: General 1 Requirements for Health Claims for Food, 58 Fed. Reg. 2478, 2491 (Jan. 6, 1993)). In support of i1ts position, PepsiCo relies heavily on an unpublished Ninth Circuit decision, Clark v. Perfect Bar, 2 LLC, 816 Fed. App’x 141, 143 (9th Cir. 2020). Dkt. No. 22, at 8 (“Most noticeably, Plaintiffs g1loss over the Ninth Circuit’s squarely on-point decision in Clark. … Clark ends the preemption 3 inquiry.”). In that case, the Ninth Circuit affirmed the district court’s dismissal of the plaintiffs’ c1laims, holding that “[a]llowing a claim of misbranding under California law based on misleading 4 sugar level content would ‘indirectly establish’ a sugar labeling requirement ‘that is not identical t1o the federal requirements,’ a result foreclosed by our precedent.” Clark, 816 Fed. App’x at 143 5 (citing Hawkins v. Kroger Co, 906 F.3d 763, 770 (9th Cir. 2018)). To the extent plaintiffs here s1imilarly seek to “ascribe disqualifying status” to sugar, PepsiCo argues, those claims are 6 preempted. Dkt. No. 18, at 15–16. 1 Plaintiffs respond that the challenged marketing and advertising statements by PepsiCo do 7 not involve the kind of health or nutrient-content claims that would support preemption on the t1heory that the claims are permissible under federal law absent the FDA’s classification of sugar as 8 a disqualifying nutrient. See Dkt. No. 21, at 12–13. Plaintiffs assert that they allege only that u1n lawful based on its affirmative claims—voluntary claims that are subject to FDCA’s prohibition o2n deceptive labeling.” Id. at 11. These purportedly voluntary claims include PepsiCo’s failure to r3e ference sugar, the product’s primary characterizing ingredient, in the product name, see Compl. ¶4 59; its labeling claims including that the bars contain “PROTEIN TO HELP MUSCLES R5 EBUILD” and “replenish and rebuild muscles,” see Compl. ¶ 60; its use of imagery related to a6t hleticism and professional athletes, see Compl. ¶ 61; and its use of statements like “Backed by S7 cience” and “Used by the Pros,” see Compl. ¶ 61. 8 Again, PepsiCo is correct in part. Plaintiffs’ claims are preempted to the extent that they c9h allenge health or nutrient-content claims that are permissible under federal law. Because the F1DA has determined that sugar is not a disqualifying ingredient, its presence in the bars does not 0 preclude PepsiCo from including express or implied health claims in the bars’ labeling. Likewise, P1epsiCo is allowed to include nutrient-content claims with its bars so long as those claims are 1 consistent with federal regulations. 1 For preemption to apply, however, “the defendant must establish that the challenged claim 2 is a nutrient-content or health claim and not a voluntary, unregulated claim.” Johnson-Jack v. H1ealth-Ade LLC, 587 F. Supp. 3d 957, 972 (N.D. Cal. 2022) (cleaned up). The FDA Food 3 Labeling Guide defines a “nutrient content claim” as “a claim on a food product that directly or by i1mplication characterizes the level of a nutrient in the food (e.g., ‘low fat,’ ‘high in oat bran,’ or 4 ‘contains less than 100 calories.’).” Food & Drug Admin., A Food Labeling Guide: Guidance for I1ndustry 72 (2013), https://www.fda.gov/regulatory-information/search-fda-guidance- 5 documents/guidance-industry-food-labeling-guide (citing 21 C.F.R. §§ 101.13(a), (b)).2 A “health c1laim” is “any claim made on the label or in labeling of a food … that expressly or by implication, 6 including ‘third party’ references, written statements (e.g., a brand name including a term such as ‘1heart’), symbols (e.g., a heart symbol), or vignettes, characterizes the relationship of any 7 substance to a disease or health-related condition.” 21 C.F.R. § 101.14(a)(1). “Implied health c1laims include those statements, symbols, vignettes, or other forms of communication that 8 s1u ggest, within the context in which they are presented, that a relationship exists between the p2r esence or level of a substance in the food and a disease or health-related condition.” Id. With l3i mited exception, the FDA defines a “disease or health-related condition” as “damage to an organ, p4a rt, structure, or system of the body such that it does not function properly (e.g., cardiovascular d5i sease), or a state of health leading to such dysfunctioning (e.g., hypertension).” 21 C.F.R. § 160 1.14(a)(5). The “FDA will promulgate regulations authorizing a health claim only when it d7e termines, based on the totality of publicly available scientific evidence … that there is s8i gnificant scientific agreement, among experts qualified by scientific training and experience to e9v aluate such claims, that the claim is supported by such evidence.” 21 C.F.R. § 101.14(c). A1ccordingly, “[g]eneral claims of health and wellness are not health claims.” McMorrow v. 0 Mondelez Int’l, Inc., No. 17-cv-02327-BAS-JLB, 2018 WL 3956022, at *7 (S.D. Cal. Aug 17, 21018)). 1 Although PepsiCo is correct that plaintiffs’ claims are preempted to the extent they c1hallenge health or protein-content claims that are consistent with federal regulations, PepsiCo’s 2 second preemption argument fails to dispose of this case because many of the statements that p1laintiffs claim constitute deceptive or misleading advertising cannot reasonably be construed as 3 health or nutrient-content claims. While “20G PROTEIN” is naturally read as a claim about the n1utrient-content of the bars and “PROTEIN TO HELP MUSCLES REBUILD” might constitute a 4 health claim or implied health claim, plaintiffs also rely upon statements like “‘Backed by S1cience,” and “Used by the Pros,” the bars’ use of the logos for and claims of use by the NFL, 5 MBL, NBA, and MNBA,” and PepsiCo’s claim that the bars were formulated and tested at the G1atorade Sports Science Institute. These statements do not involve health or nutrient-content 6 claims regulated by the FDA, so federal law does not preempt plaintiffs’ state law claims premised t1hereon.3 7 3 As plaintiffs correctly note, the Ninth Circuit’s non-precedential decision in Clark addressed 1 only claims of improper labeling and branding, not claims involving other alleged misrepresentations that are not subject to federal regulation. As this Court has previously noted, 8 “the weight of authority in th[is] district” supports the viability of a false advertising claim 1 Finally, PepsiCo argues that plaintiffs’ challenge to the name “Protein Bar” is inconsistent w2 ith and therefore preempted by federal law. According to PepsiCo, “Plaintiffs cannot force these p3r oducts to be labeled ‘candy bar’ or ‘dessert’ under state law” because “FDA regulations govern h4o w a food product is named, and Plaintiffs do not plausibly allege a violation of these r5e quirements.” Dkt. No. 18, at 16. To plausibly allege a violation of the FDA’s regulations, which a6r e located at 21 C.F.R. § 102.5, PepsiCo alleges that plaintiffs “must plausibly allege that the c7h allenged ingredient is in fact considered a characterizing ingredient of the product, and that c8o nsumers expect its presence or absence in the product.” Id.; see, e.g., Ross v. Sioux Honey Ass’n, C9 oop., No. C-12-1645 EMC, 2013 WL 146367, at *5 & 11–12 (N.D. Cal. Jan. 14, 2013) (1dismissing the plaintiff’s claims with prejudice because the plaintiff “cite[d] no authority 0 denoting pollen as a ‘characterizing component’ of honey”); Cardona v. Target Corp., No. CV 12- 11148-GHK (SPx), 2013 WL 1181963, at *10 (C.D. Cal. Mar. 20, 2013) (holding that the plaintiffs 1 failed to “plausibly allege a widespread consumer expectation” that the term “‘honey’ … means ‘1honey with pollen’”). In response to plaintiffs’ contention that the Products “have 30% more 2 sugar by weight than they do protein” and that sugar therefore is a characterizing ingredient of G1atorade Protein Bars, PepsiCo argues that plaintiffs have failed to allege that consumers expect 3 the term “protein bar” to mean low in sugar or cite any authority suggesting that an ingredient’s w1eight or proportion of total calories is what determines a characterizing ingredient. Dkt. No. 18, 4 at 17. 1 Plaintiffs challenge PepsiCo’s characterization of their claims and clarify that they “never 5 claimed that PepsiCo is required to” label their protein bar as “candy bar” or “dessert.” Dkt. No. 211, at 11. They assert that the “real issue is whether FDA regulations insulate Gatorade Protein 6 Bar’s deceptive and misleading name, and nowhere does PepsiCo cite a single authority holding t1hat they do.” Id. at 16. Plaintiffs argue that “PepsiCo’s citation to 21 C.F.R. § 102.5 does not alter 7 the result” because PepsiCo does not “proffer as to why protein is a characterizing ingredient … w1hereas excess added sugar purportedly is not.” Id. at 16–17. 8 The parties’ disagreement about the application of the FDA’s “characterizing ingredient” 112 (b)(6) motion to dismiss. Unlike certain foods for which federal regulations provide a “standard i2d entity,” goods like protein bars are required by federal regulations to use a common or usual n3a me to “accurately identify or describe, in as simple and direct terms as possible, the basic nature o4f the food or its characterizing properties or ingredients.” 21 C.F.R. §§ 102.5(a), (d). 21 C.F.R. §5 102.5(c) requires that the common or usual name disclose “the presence or absence of any c6h aracterizing ingredient” if (1) that ingredient “has a material bearing on price or consumer a7c ceptance” and (2) “consumers may otherwise be misled about the presence or absence of the i8n gredient … in the food.” Both of these prongs involve deeply factual questions. At a later stage i9n these proceedings, PepsiCo may be able to establish as a factual matter that its labeling of the b1ars as “protein bars” satisfies these requirements and is therefore permissible under federal law, 0 such that plaintiffs’ challenge to the bars’ name is preempted. But on the present Rule 12(b)(6) m1 otion, in which the Court must accept plaintiffs’ allegations as true, draw all inferences in their 1 favor, and decline to resolve factual disputes, the Court cannot resolve that issue as a matter of l1aw. 2 Because none of PepsiCo’s federal preemption theories disposes of the entirety of one or m1 ore of plaintiffs’ state law claims, the Court denies PepsiCo’s motion to dismiss to the extent it 3 is premised on a federal preemption theory. The Court’s denial of PepsiCo’s motion is without p1rejudice to PepsiCo’s ability to reassert its preemption arguments at summary judgment or trial 4 should plaintiffs pursue a theory of liability that is inconsistent with the reasoning herein or the r1equirements of federal law or should PepsiCo be able to establish that the facts (as opposed to 5 plaintiffs’ allegations in the Complaint) support their arguments for preemption. 1 B. Plaintiffs Plausibly Allege Claims of Consumer Deception 6 PepsiCo separately argues that plaintiffs do not plausibly allege that reasonable consumers w1ould be deceived by PepsiCo’s labeling of Gatorade Protein Bars because the labels do not make 7 claims about healthiness or low sugar. Dkt. No. 18, at 18. 1 Under the reasonable consumer test, the plaintiff must “show that members of the public 8 are likely to be deceived.” Becerra v. Dr Pepper/Seven Up, Inc., 945 F.3d 1225, 1228 (9th Cir. m1 isunderstood by some few consumers viewing it in an unreasonable manner.” Id. (quoting Lavie v2. Procter & Gamble Co., 105 Cal. App. 4th 496 (2003)). “The California Supreme Court has r3e cognized that these laws prohibit not only advertising which is false, but also advertising which, a4l though true, is either actually misleading or which has a capacity, likelihood or tendency to d5e ceive or confuse the public.” Williams v. Gerber Prod. Co., 552 F.3d 934, 938 (9th Cir. 2008) (6c leaned up). Generally, “‘whether a reasonable consumer would be deceived’ is a question of f7a ct.” Johnson-Jack, 587 F. Supp. 3d at 964 (citation omitted). 8 PepsiCo argues that plaintiffs fail to allege that reasonable consumers would “misinterpret ‘9p rotein’ or any other challenged statement to mean ‘healthy’ or ‘low sugar.” Dkt. No. 18, at 18. P1epsiCo cites to a case in which the court dismissed claims where the plaintiffs sought to equate 0 the FITBAR energy bar with “healthy” or related terms. See Seljak v. Pervine Foods, LLC, No. 21 C1iv. 9561 (NRB), 2023 WL 2354976, at *1, 9, 14–15 (S.D.N.Y. Mar. 3, 2023) (holding that a 1 reasonable consumer would not believe that a product was healthy where it comes in flavors that s1ound like desserts despite “FIT” being in the name). PepsiCo argues that plaintiffs’ claims in this 2 case are “implausible for the same reasons.” Dkt. No. 18, at 19. According to PepsiCo, “truthful s1tatements about protein, athletic recovery, and rebuilding muscles do not mean healthy or low in 3 sugar,” and the label does in fact disclose the sugar content of the bars. Id. at 19–20. 1 PepsiCo argues that the relevant context here further supports the conclusion that no 4 reasonable consumer would be misled. Dkt. No. 18, at 20. PepsiCo emphasizes that “this sports- r1elated context only underscores that Gatorade Protein Bars are sports protein bars aimed at 5 workout recovery” because reasonable consumers “know and expect that a product designed for a1thletic recovery contains carbohydrates in the form of sugar to aid in the recovery process.” Id. at 6 21. “In short,” PepsiCo concludes, “even if Plaintiffs had plausibly alleged that they m1 isunderstood the Products’ labeling, Plaintiffs’ own misunderstanding ‘does not make it so’ for 7 all consumers.” Id. (citation omitted). See, e.g., Becerra, 945 F.3d at 1231 (“Becerra has failed to s1ufficiently allege that reasonable consumers understand the word “diet” in Diet Dr Pepper’s 8 brand name to promise weight loss, healthy weight management, or other health benefits. m1 isleading and dismissal was therefore proper.”). 2 In response, plaintiffs emphasize that “the 12(b)(6) stage is ‘not the appropriate time to w3 eigh the competing harms and benefits from [defendant’s] products,’ how reasonable consumers p4e rceive them, nor the degree to which reasonable consumers understand or are familiar with the s5c ience surrounding them.” Dkt. No. 21, at 18 (citing Krommenhock, 2017 WL 2378029, at *19; M6 ilan, 2019 WL 3934918, at *2). Based on PepsiCo’s claims and advertising focused on the p7r otein content of the bars, claims regarding muscle-building and science, and emphasis on a8t hleticism adjacent to logos for professional sports team, plaintiffs argue that “it is readily p9l ausible that they may lead a reasonable consumer to believe the product is healthful, i.e., that it a1ssociates with overall physical wellness, enhanced athleticism and performance, and/or better 0 muscles and bodies—including with routine and prolonged use.” Id. at 19. Plaintiffs further plead t1hat health authorities affirmatively discourage consuming the amount of sugar contained in the 1 protein bars in a single product, and that consumers are surprised to find out how much added s1ugar the bars contain. Id. (citing Compl. ¶¶ 10–13, 70–87, 104–105, 108–111). Plaintiffs note 2 legal precedents purportedly supporting the reasonableness of their claims. See, e.g., Milan, 2019 W1 L 3934918, at *2 (concluding that “plaintiffs have stated a claim and, ‘given the opportunity, ... 3 could plausibly prove that a reasonable consumer would be deceived by’ the Clif bars” packaging t1hat misled consumers into thinking the bars are healthy despite substantial added sugar). 4 The Court agrees that plaintiffs have plausibly pleaded that reasonable consumers are l1ikely to be deceived by PepsiCo’s advertising, marketing, and labeling of Gatorade Protein Bars. 5 See, e.g., LeGrand v. Abbott Labs., 655 F. Supp. 3d 871, 892 (N.D. Cal. 2023) (finding it plausible “1that a reasonable consumer could be misled by product labeling indicating healthfulness when the 6 product contained harmful levels of added sugar” and “declin[ing] to hold that disclosure of sugar c1ontent on a label necessarily precludes a claim alleging advertising promoting a product as 7 healthy is misleading because of the harmful amounts of added sugar in the product”). Whether t1he reasonable consumer understands that a product aimed at athletic recovery contains 8 carbohydrates or the level of sugar contained in the Gatorade Protein Bars is a factual question not r1e asonable consumers, were not knowledgeable enough to properly interpret the sugar content l2i sted on the label, and were deceived given PepsiCo’s marketing campaign and self-proclaimed s3c ience-backed claims. Nothing more is required to avoid dismissal under Rule 12(b)(6). 4 C. Plaintiffs Plausibly State Claims Under the “Unlawful” and “Unfair” Prongs of the UCL. 5 The UCL prohibits any “unlawful, unfair, or fraudulent” business practice.” Cal Bus. & 6 Prof. Code § 17200. “By proscribing ‘any unlawful” business practice, ‘section 17200 ‘borrows’ 7 violations of other laws and treats them as unlawful practices’ that the unfair competition law 8 makes independently actionable.” Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 9 Cal. 4th 163, 180 (1999). “Although the unfair competition law’s scope is sweeping, it is not 1 unlimited. … If the Legislature has permitted certain conduct or considered a situation and 0 concluded no action should lie, courts may not override that determination. When specific 1 legislation provides a ‘safe harbor,’ plaintiffs may not use the general unfair competition law to 1 assault that harbor.” Id. at 182. 1 PepsiCo argues that plaintiffs cannot state a claim under either the “unlawful” or “unfair” 2 prongs of California’s UCL. (Plaintiffs are not pursuing a claim under the UCL’s “fraudulent” 1 prong.) PepsiCo first argues that plaintiffs’ allegations under the “unlawful” prong fail because 3 they have failed to plead a predicate violation. But for the reasons noted above, plaintiffs have 1 pleaded plausible violations of state law. They have also plausibly pleaded that PepsiCo’s conduct 4 may violate both 21 U.S.C. § 343 and 21 C.F.R. § 102.5. All of these theories are sufficient to 1 support a UCL claim under its “unlawful” prong. 5 PepsiCo separately argues that “plaintiffs do not and cannot allege an unavoidable 1 consumer injury that could give rise to an ‘unfair’ UCL claim.” Dkt. No. 18, at 22. This is so, 6 according to PepsiCo, because plaintiffs “could have reasonably avoided their purported injuries 1 simply by reading the labeling.” Id.; see, e.g., Bayol v. Zipcar, Inc., 78 F. Supp. 3d 1252, 1261 7 (N.D. Cal. 2015) (“Under the UCL, an act or practice is unfair if the consumer injury … is not an 1 injury consumers themselves could reasonably have avoided.”). But again, whether plaintiffs’ 8 injuries were avoidable presents a factual dispute not proper for resolution on a Rule 12(b)(6) m1 otion. Plaintiffs’ allegation that they were reasonably misled notwithstanding the label’s d2i sclosure of sugar content is sufficiently plausible to preclude dismissal on this ground. See, e.g., L3 eGrand, 655 F. Supp. 3d at 892. 4 D. Plaintiffs Lack Article III Standing To Seek Injunctive Relief. 5 PepsiCo additionally argues that plaintiffs’ request for prospective injunctive relief under t6h e UCL and CLRA should be dismissed for lack of Article III standing because “Plaintiffs have n7o t alleged they face a ‘real and immediate’ threat of future harm that is likely to be redressed by t8h e requested in junctive relief.” Dkt. No. 18, at 24. PepsiCo notes that plaintiffs merely allege that t9h ey “would consider purchasing [Gatorade Protein Bars] again were [they] marked in a non- m1 isleading and unlawful manner such that [they] could trust the marketing claims.” Id. (quoting 0 Compl. ¶¶ 30, 41, 52). PepsiCo contends that, “[a]bsent a clear intention to buy Gatorade Protein B1ars in the future, or factual allegations that Plaintiffs will be deceived and cannot rely on the 1 labeling of Gatorade Protein Bars, Plaintiffs lack standing to seek injunctive relief.” Id. (citing G1raham v. Cent. Garden Pet Co., No. 22-cv-06507-JSC, 2023 Wl 2744391, at *4 (N.D. Cal. Mar. 2 30, 2023). 1 In response, plaintiffs argue that their allegation that they would “consider purchasing the 3 Product again” is sufficient and all that is needed to confer standing for injunctive relief. Dkt. No. 211, at 24; see Takahashi-Mendoza v. Coop. Regions of Organic Producer Pools, No. 22-CV- 4 05086-JST, 2023 WL 3856722, at *3 (N.D. Cal. May 19, 2023) (holding that the plaintiff had A1rticle III standing where she alleged that she “would consider purchasing Defendant’s milk again 5 if Defendant were to treat cows in a manner consistent with its advertising”); Coe v. General M1 ills, Inc., 2016 WL 4208287, at *6 (“[A] plaintiff must allege the intent to purchase a product in 6 the future in order to have standing to seek prospective injunctive relief”). 1 The Court agrees with PepsiCo that plaintiffs’ existing complaint fails to establish their 7 Article III standing to pursue claims for injunctive relief. Although “a previously deceived p1laintiff may have standing to seek injunctive relief” where she would consider purchasing a 8 product in the future if able to rely upon the defendant’s representations, Davidson v. Kimberly- m1 arketing, advertising, and labeling of Gatorade Protein Bars to determine whether they contain l2e vels of total or added sugar in amounts they deem unhealthy. They can instead find that i3n formation by reviewing the labels on the bars. Although the disclosure of sugar content therein m4 ight be insufficient to prevent a reasonable consumer from being deceived by PepsiCo’s a5d vertising and marketing campaign, as plaintiffs allege, see LeGrand, 655 F. Supp. 3d at 892, p6l aintiffs can no longer claim such ignorance after having filed this lawsuit. As sophisticated c7o nsumer litigants now aware of the relationship between the amounts of sugar disclosed on the b8a rs’ labels and their own health concerns, plaintiffs can avoid any future injury simply by r9e viewing the bars’ labels. 1 Because plaintiffs have not alleged a concrete threat of future harm, the Court grants, with 0 leave to amend, PepsiCo’s motion to dismiss plaintiffs’ requests for injunctive relief pursuant to R1ule 12(b)(1). 1 E. Plaintiffs Fail To Plead an Entitlement To Equitable Relief. 1 In addition to injunctive relief, plaintiffs “seek an order for the disgorgement and 2 restitution of all monies from the sale of Gatorade Protein Bars that were unjustly acquired.” C1ompl. ¶¶ 150, 158; see also id. ¶¶ 164, 168, 170. PepsiCo argues that this request for equitable 3 relief fails because plaintiffs do not allege that they lack an adequate remedy at law. PepsiCo f1urther claims that plaintiffs cannot possibly do so because they “seek money damages—a 4 quintessential remedy at law—for their CLRA and New York GBL claims based on the very same a1llegedly unlawful and misleading labeling.” Dkt. No. 18, at 23; see Sonner v. Premier Nutrition 5 Corp., 971 F.3d 834, 843–44 (9th Cir. 2020). 1 In response, plaintiffs argue that their request for equitable restitution should not be 6 dismissed because it is an alternative remedy that plaintiffs are entitled to pursue at the pleading s1tage. Dkt. No. 21, at 24; see Johnson-Jack, 587 F. Supp. 3d at 976 (holding that the “undersigned 7 follows the courts in this district that find no bar to the pursuit of alternative remedies at the p1leading stage and denies the motion to dismiss”) (collecting cases)). 8 Although Sonner may have limited applicability at the pleading stage (when it is unclear least requires that plaintiffs pursuing claims for equitable relief in federal court plead that their legal remedies are inadequate. Here, plaintiffs have not done so. Their claims for equitable monetary relief under the UCL and CLRA are therefore dismissed with leave to amend.

CONCLUSION

For the foregoing reasons, PepsiCo’s motion to dismiss is granted in part and denied in part. Any amended complaint shall be filed within 21 days of this order.

IT IS SO ORDERED.

Dated: August 14, 2024

P. Casey Pitts United States District Judge

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