Sweet Victory In ‘Nutritional Drink’ Labeling Suit

In a sweet win for food-and-beverage defendants, the Eastern District of California dismissed, with prejudice, a putative class action challenging the labeling of Carnation Breakfast Essentials Nutritional Drink products in Eric Testori v. Nestle Health Science US Holdings Inc. The plaintiff alleged that defendant misled consumers by marketing the product as a “nutritional drink” and emphasizing “10g protein” on the product’s front label, while failing to disclose with equal prominence that the product’s first two ingredients were water and sugar and that it contained 11 grams of sugar per serving. According to the plaintiff, those front-label statements created the misleading impression that the product was a balanced, healthful breakfast option, even though it was allegedly a sweetened beverage “primarily made of water and sugar.”

The court rejected that theory at the pleadings stage. First, the court held that all of the plaintiff’s state-law claims were preempted because the case turned on allegedly misleading “health” and “nutritional” messages arising from the product’s sugar content. The court emphasized that the Food and Drug Administration (FDA) has not treated sugar as a disqualifying nutrient in this context, and it adopted the view that state-law claims premised solely on the theory that high sugar content makes health or implied nutrient-content claims misleading are preempted. Relying heavily on the Ninth Circuit’s decision in Clark v. Perfect Bar, the court reasoned that allowing a California misbranding claim based on sugar-level content would indirectly impose a sugar-labeling requirement different from federal law.

The court also found the complaint independently deficient under the reasonable consumer standard. The front label identified specific nutrients, including “10g protein,” “21 vitamins + minerals,” “3x vitamin vs. milk,” and “2x calcium vs. Greek Yogurt,” but it did not make an overall claim that the product was “healthy” or part of a “balanced” diet. The court concluded that the plaintiff had not plausibly alleged that an ordinary consumer would view “Breakfast Essentials” or “Nutritional Drink” as an unambiguous representation that the product was nutritionally balanced or low in sugar. Because the front label did not mention sugar and the back label disclosed the amount of added sugar, the court held that a reasonable consumer would not be misled into believing that the product contained low amounts of added sugar.

The decision is a useful reminder that “health halo” complaints may be susceptible to early challenge based on (1) federal preemption and (2) plausible deception. Where a plaintiff’s theory is that disclosed sugar content undermines otherwise accurate nutrient or nutrition-related statements, courts may treat the claim as an impermissible attempt to impose state-law labeling obligations beyond federal requirements. And under the Ninth Circuit’s recent packaging cases, plaintiffs must plausibly allege that the front label is unambiguously deceptive before they can prevent courts from considering clarifying information elsewhere on the package.

For food and beverage manufacturers, the key takeaway is straightforward: accurate nutrient statements, clear Nutrition Facts disclosures, and the absence of an unambiguous front-label promise can be powerful tools to minimize litigation risk. Here, those tools helped the beverage manufacturer defendant secure dismissal of California Consumers Legal Remedies Act, False Advertising Law, Unfair Competition Law, fraud, and unjust enrichment claims with prejudice.

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