It is hard to imagine a better market for low-carb products than California. But sellers of low-carb products in California, if they are not careful, could run afoul of the state’s strict consumer protection laws.
California’s consumer protection laws allow “any” person to bring a lawsuit challenging a business practice as unlawful, unfair, or fraudulent, or alleging that a business’s advertising is either false or likely to mislead the general public. In effect, California’s consumer protection laws give any California citizen the right to bring a lawsuit against a business as if that person were the head of FDA (Rockville, MD) or the Federal Trade Commission (Washington, DC).
It is surprisingly easy to bring a lawsuit under California’s consumer protection laws. The plaintiff need not have bought the product, and need not demonstrate that the business practice or advertising ever injured someone. At the same time, the remedies can be draconian. The plaintiff can ask a court to order that the business change the advertising at issue, stop selling the product, or even refund all money received as a result of the unfair practice or advertising for a period going back four years or more.
These are some ways manufacturers could and have run afoul of California’s consumer protection laws:
Labeling products in ways that characterize carb counts as “low”: FDA regulations do not allow manufacturers to describe a food’s carbohydrate count with words like “low” or “fewer.” A private plaintiff suing under California’s consumer protection laws could enforce the FDA regulations by asserting that a food manufacturer is guilty of “unlawful” business practices by using such words.
Labeling products with net carbohydrates instead of total carbohydrates: GNC (Pittsburgh), Rexall Sundown (Boca Raton, FL), and others are now defending a class action consumer lawsuit in California alleging that defendants labeled products or sold products with labels that disclosed the net carbohydrate count of the product, but not the total carbohydrate count. The lawsuit alleges that this labeling is not only unlawful as a violation of FDA regulations, but is also misleading to the general public.
Suggesting that products are “low carb” when the carbohydrate count is comparable to other products: Recently FDA alleged that a candy company was misbranding its candies by suggesting they were low carb, because the candies had carbohydrate counts within the range of comparable products that had not been labeled to suggest they were low carb.
Suggesting that a product is low carb, and thus helps a consumer to lose weight, while increasing the fat and calorie content of the product: Some manufacturers have offered versions of their products that are lower in carbohydrates—thus suggesting that the product could assist with a consumer’s weight-loss goals—but that actually have increased fat and calorie counts. It is possible that a plaintiff could challenge this marketing strategy as false or fraudulent advertising, on the theory that such labeling is inclined to make a consumer think the low-carb product is healthier, or could help them to lose weight, when this might not be so.
Before rushing a new low-carb product to the California market, or aggressively promoting a new low-carb product, manufacturers and sellers of “low-carb” products should consider these and other issues. Consumer litigation is a reality in California, albeit an unpleasant one. Instead of successfully capitalizing on a hot trend, a seller of low-carb products could be risking a “bet the company” lawsuit.
Michael Mallow is a partner in the Los Angeles office of Kirkpatrick & Lockhart LLP and Matt Ball is an associate in the firm’s San Francisco office. For more information, call 310/552-5000 or visit the firm’s Web site, www.kl.com.