Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-00567/USCOURTS-cand-3_15-cv-00567-7/pdf.json

Nature of Suit Code: 245
Nature of Suit: Real Property Product Liability
Cause of Action: 28:1332 Diversity-Product Liability

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

VICTOR GUTTMANN, on behalf of

himself and all others similarly situated,

Plaintiff,

 v.

NISSIN FOODS (U.S.A.) COMPANY,

INC.,

Defendant. /

No. C 15-00567 WHA

ORDER GRANTING IN PART

AND DENYING IN PART

DEFENDANT’S MOTION 

TO DISMISS

INTRODUCTION

In this putative class action involving instant noodles, defendant manufacturer moves to

dismiss the complaint pursuant to Rules 12(b)(1) and 12(b)(6). For the reasons stated herein,

defendant’s motion is GRANTED IN PART AND DENIED IN PART.

STATEMENT

Our plaintiff, Victor Guttmann, seeks to eradicate artificial trans-fat from food. Since

2008, Guttmann has purchased and consumed a variety of instant noodle products manufactured

and sold by defendant Nissin Foods (U.S.A.) Company, Inc. Nissin’s noodle products contained

partially-hydrogenated oil, a food additive derived from low-cost oils. The manufacturing

process for partially-hydrogenated oils produces artificial trans-fat with a chemical structure

different from most naturally-occurring fat. The chemical properties of artificial trans-fat give

partially-hydrogenated oil a longer shelf life as compared to other additives derived from

low-cost oils (Amd. Compl. ¶¶ 10–15, 58).

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United States District Court

For the Northern District of California

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 In support of this motion, Nissin has requested judicial notice of the contents of the labels on the

products referenced but not thoroughly described in Guttman’s complaint. Documents that are appropriate for

judicial notice may be considered on a motion to dismiss if they are referred to in the complaint and the parties

do not dispute their authenticity. Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). The authenticity of the

product labels was established by Nissin’s vice president of marketing, and Guttmann does not dispute

authenticity (Chung Decl. ¶ 3). Guttmann’s complaint specifically alleges that he purchased the products to

which these labels were affixed within this jurisdiction (Amd. Compl. ¶ 2). Accordingly, the contents of the

product labels may be considered for the purpose of adjudicating this motion. 

2

Guttmann’s complaint cites numerous studies that purportedly link the consumption of

artificial trans-fat to increased risk of certain medical conditions such as cardiovascular heart

disease, diabetes, breast, prostate, and colorectal cancer, Alzheimer’s disease, and organ damage. 

In particular, the complaint alleges “[t]here is ‘no safe level’ of artificial trans fat intake” and

“any incremental increase in trans fat increases risk of [cardiovascular heart disease]” (id. ¶¶

16–56). The use of partially-hydrogenated oils is not required by law, and while this motion

was pending, the Food and Drug Administration issued a final determination that partiallyhydrogenated oils are no longer “generally recognized as safe.” 80 Fed. Reg. 34650 (June 17,

2015). Pursuant to that determination, manufacturers have three years to remove partiallyhydrogenated oils from their products.

Although all of Nissin’s noodle products contained partially-hydrogenated oils (and

listed those oils among the ingredients of those products), the nutrition-facts panel on each of the

product labels included the indication “Trans Fat: 0g.” Additionally, five of those products

included icons on the front of the product labels that described the product as containing

“0g Trans Fat” (Def.’s Request for Judicial Notice, Exhs. 1–13).1

 

FDA regulations do not require trans-fat content to be declared in the nutrition-facts

panel on a product label; however, “[i]f the serving contains less than 0.5 gram[s of trans-fat],

the content, when declared, shall be expressed as zero.” 21 C.F.R. 101.9(c)(2)(ii).

Guttmann claims that he relied on the “0g Trans Fat” icon when purchasing the five

products so labeled, because he was seeking products “that did not negatively affect blood

cholesterol levels or the health of his cardiovascular system, and products made with natural,

healthy ingredients.” He also claims he assumed that all of Nissin’s noodle products were safe

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to consume. Guttmann’s complaint also includes a list of several products similar to Nissin’s

noodles that do not contain artificial trans-fat (Amd. Compl. ¶¶ 3, 76–84; Appendix B).

This is not Guttmann’s first foray into litigation regarding artificial trans-fat. Guttmann

has filed three prior lawsuits regarding artificial trans-fat and food labeling. Chacanaca v. The

Quaker Oats Company, No. 10-0502 (N.D. Cal.) (Judge Richard Seeborg); Eileen Peviani, et al.

v. Hostess Brands, Inc., No. 10-02303 (C.D. Cal.) (Judge Consuelo Marshall); Guttmann v. Ole

Mexican Foods, Inc., No. 14-04845 (N.D. Cal.) (Judge Haywood Gilliam).

In February 2015, Guttmann commenced this action against Nissin and seeks to represent

two nation-wide classes, the particulars of which are not yet in play (Amd. Compl. ¶ 85).

Guttmann’s complaint alleges eight claims for relief: (1) the unfair prong of the California

Unfair Competition Law, California Business & Professions Code Sections 17200, et seq., (2)

nuisance under California Civil Code Sections 3749, et seq., (3) breach of the implied warranty

of merchantability, (4) the unlawful prong of the California Unfair Competition Law, (5) the

fraudulent prong of the California Unfair Competition Law, (6) the California False Advertising

Law, California Business & Professions Code Sections 17500, et seq., (7) California Consumer

Legal Remedies Act, California Civil Code Sections 1750, et seq., and (8) breach of the express

warranty that the noodles contained 0g trans-fat. Guttmann seeks, among other things,

restitution, disgorgement, punitive damages, injunctive relief, and attorney’s fees. 

Nissin now moves to dismiss Guttmann’s complaint pursuant to Rules 12(b)(1) and

12(b)(6). This order follows full briefing and oral argument.

ANALYSIS

1. GUTTMANN’S MISLABELING CLAIMS.

With respect to the labels, which pertain to claims four through eight, federal law provides

an extensive scheme governing labels on food products.

“Nutrient-content claims,” which are statements about the nutrient contents of a food

product outside of the nutrition-facts panel, are governed by Section 343(r) of Title 21 of the

United States Code. The FDA has promulgated regulations regarding nutrient-content claims. 

21 C.F.R. 101.13. An “express” nutrient-content claim, which does not implicitly characterize

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the level of the nutrient in the food, may be included on a product label, provided “it is not

false or misleading in any respect.” Id. at 101.13(i)(3). States are expressly preempted from

establishing requirements for food labeling that are inconsistent with those requirements. 

21 U.S.C. 343-1(a)(1)(5). 

On the other hand, “nutrition facts,” which are statements about nutrient contents in the

nutrition-facts panel, are governed by Section 343(q) of Title 21 of the United States Code. The

FDA has also promulgated regulations regarding nutrition facts. 21 C.F.R. 101.9. Specifically,

as noted above, regulation requires the use of a “rounded value” for nutrition facts relating to

trans-fat content: “If the serving contains less than 0.5 gram[s of trans-fat], the content, when

declared, shall be expressed as zero.” 21 C.F.R. 101.9(c)(2)(ii).

Guttmann’s complaint alleges five California state-law claims based on Nissin’s use of the

“0g Trans Fat” icon on the front of Nissin’s product labels. Guttmann argues that his claims

based on Nissin’s labels are not preempted by federal regulation because the “0g Trans Fat”

nutrient-content claim is misleading.

This precise issue was addressed in Chacanaca v. Quaker Oats Co., 752 F. Supp. 2d 1111

(N.D. Cal. 2010) (Judge Richard Seeborg), one of Guttmann’s prior challenges to the use of

artificial trans-fat in food products. There, Judge Seeborg looked to FDA comments on a

separate regulatory provision regarding “reference” claims, which are nutrient-content claims

that compare the contents of one product to those of another. The FDA had been asked to

resolve a dispute as to whether reference claims were required to use “rounded” values or

“unrounded” values and determined, “because there is no nutritional difference between rounded

and unrounded values of a nutrient in a food, the agency does not see a need to specify which

value should be used in determining whether or not a food qualifies to make a nutrient content

claim.” 58 Fed. Reg. 44020-01 at 44024 (Aug. 18, 1993). Judge Seeborg reasoned that if the

FDA had decided there was “no nutritional difference” between the rounded and unrounded

values in the context of reference claims, use of the unrounded value could not be misleading

when used as an express nutrient-content claim. Because that label was not misleading, any

state-law claim based on that label would establish requirements that were inconsistent with

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343(r) and its regulations. Such claims were expressly preempted by Section 343-1(a)(5). So

too here.

Our court of appeals reached the same conclusion in an unpublished decision, Carrea v.

Dreyer’s Grand Ice Cream, Inc., 475 F. Appx. 113, 115 (9th Cir. 2012). The FDA had

addressed concerns that discrepancies between a nutrient-content claim on a product label and

a statement in the nutrition-facts panel would be confusing to consumers. The FDA adjusted its

requirements for product labels to avoid such discrepancies. 58 Fed. Reg. 44020, 44024–25

(Aug 18, 1993). To permit state-law claims based on a “0g Trans Fat” nutrient-content claim

while the FDA required trans-fat to be declared as zero in the nutrition-facts panel would compel

such a discrepancy, which would impose a burden relating to product labeling not identical to the

requirements of federal law, which was expressly preempted. Carrea, 475 F. Appx. at 115–16.

The decision in Reid v. Johnson & Johnson, 780 F.3d 952, 962–963 (9th Cir. 2015), is not

to the contrary. There, the product label at issue included a nutrient-content claim of “No Trans

Fat.” The state-law claims based on that nutrient-content claim were not preempted by federal

law because the FDA had issued two warning letters to manufacturers stating that “No Trans

Fat” and “trans fat-free” were both “unauthorized nutrient-content claims.” No such letter has

been issued regarding “0g Trans Fat.” Reid does not control.

Accordingly, Guttmann’s fourth through eighth claims, namely, for violations of the

fraudulent and unlawful prongs of the Unfair Competition Law, the False Advertising Law, the

Consumer Legal Remedies Act, and for breach of express warranty, are DISMISSED. Leave to

amend will not be allowed due to futility.

2. GUTTMANN’S USE CLAIMS.

Apart from the mislabeling claims (held preempted above), Guttmann alleges that Nissin

violated California law by including such a poisonous ingredient as artificial trans-fat in its

noodles. This goes to use, not labeling, and is not preempted.

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A. Guttmann’s Claim Under the Unfair Competition Law, Unfair Prong.

Guttmann argues that Nissin’s use of artificial trans-fat in its noodle products constitutes

an unfair business practice under California’s Unfair Competition Law. Nissin contends that

Guttmann’s claim is preempted by federal law.

No decision has addressed whether the lawful use of a dangerous substance in a food

product can constitute an unfair business practice within the context of the Unfair Competition

Law. While California appellate courts are not completely settled on what constitutes an

“unfair” business practice, unfairness is generally determined by either the “balancing test” or

the “tethering test.” See Lozano v. AT & T Wireless Services, Inc., 504 F.3d 718, 736 (9th Cir.

2007). Unfairness under the balancing test “involves balancing the harm to the consumer against

the utility of the defendant’s practice.” Id. at 735. Under the tethering test, “unfairness must be

tethered to some legislatively declared policy or proof of some actual or threatened impact on

competition.” Ibid. (citing Cel-Tech Communications v. Los Angeles Cellular Telephone Co.,

20 Cal. 4th 163, 186–87 (1999)). “[A] practice may be deemed unfair even if not specifically

proscribed by some other law.” Cel-Tech, 20 Cal. 4th at 180. 

Here, Guttmann has plausibly alleged that Nissin’s conduct violates the Unfair

Competition Law under the balancing test. His complaint alleges in great detail the serious harm

artificial trans-fat poses to public health, including that it causes “inflammation and damage to

vital organs and an increased risk of heart disease, diabetes, cancer, and death.” He further

alleges that the only utility in the use of partially-hydrogenated oils, as opposed to oils that do

not contain artificial trans-fat, is that partially-hydrogenated oils are less expensive (Amd.

Compl. ¶¶ 71, 81, Appendix B). Accordingly, Guttmann has stated a claim under the unfair

prong of the Unfair Competition Law.

Nissin argues that Guttmann’s claim is preempted by federal law.

[A] plaintiff may not bring an action under the unfair competition law

if some other provision bars it. That other provision must actually bar

it, however, and not merely fail to allow it. In other words, courts

may not use the unfair competition law to condemn actions the

Legislature permits. Conversely, the Legislature’s mere failure to

prohibit an activity does not prevent a court from finding it unfair. 

Plaintiffs may not “plead around” a “safe harbor,” but the safety must

be more than the absence of danger.

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Cel-Tech, 20 Cal. 4th at 182. Until recently, certain partially-hydrogenated oils, namely

low euric acid rapeseed oil and menhaden oil, were expressly designated “generally recognized

as safe” by the FDA. See 21 C.F.R. 184.1555(c)(2), 184.1472(b). Nissin uses soybean oil and

cottonseed oil and does not argue that those regulations directly apply (Def.’s Request for

Judicial Notice, Exhs. 1–13). The FDA declined to prohibit or expressly permit the use of other

partially-hydrogenated oils and artificial trans-fat, until June 17, when it determined that no form

of partially-hydrogenated oil was “generally recognized as safe.” 80 Fed. Reg. 34650 (June 17,

2015). The FDA’s prior declination to issue a regulation pertaining to all artificial trans-fats did

not establish a safe harbor protecting use of that ingredient from the reach of California law. In

fact, the California legislature has prohibited the use of artificial trans-fat in restaurants, although

that statute does not apply to packaged goods. See Cal. Health & Safety Code § 114377. 

Guttmann has stated a plausible claim under the unfair prong of the Unfair Competition

Law, and Nissin has failed to show that claim is preempted by federal law. Accordingly,

Nission’s motion to dismiss that claim is DENIED. 

B. Guttmann’s Claim for Breach Implied Warranty of Merchantibility.

In every contract for the sale of goods there is an implied warranty of merchantability that

the goods are “fit for the ordinary purposes for which such goods are sold.” Cal. Com. Code

§ 2314(2)(c). Guttmann argues that because Nissin’s noodles contained artificial trans-fat, they

were “not fit for human consumption,” which is the ordinary purpose for which a food product is

sold (Amd. Compl. ¶ 111). No decision has addressed whether the use of a dangerous food

additive can render a product “not fit for human consumption” for the purposes of the implied

warranty of fitness under California law. 

Nissin argues that Guttmann has not alleged the kind of injury that generally gives rise to a

claim for breach of the implied warranty of merchantability, but that goes to standing, which this

order does not address. For the purposes of Rule 12(b)(6), Guttmann’s complaint has plausibly

alleged that foods containing artificial trans-fat are not fit for human consumption, due to the

myriad medical conditions to which they are linked. 

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Nissin’s best authority on point, Hoyte v. Yum! Brands, Inc., 489 F. Supp. 2d 24, 28

(D.D.C. 2007) (Judge James Robertson), reached a similar conclusion. That decision did not

reach the question of whether the inclusion of artificial trans-fat in a food product could

constitute a breach of the implied warranty of fitness because the plaintiff therein had failed to

allege an injury. This order does not reach that issue.

Guttmann has adequately pled that Nissin’s noodles were not fit for human consumption,

so Nissin’s motion to dismiss that claim under Rule 12(b)(6) is DENIED.

C. Guttmann’s Public Nuisance Claim.

“Anything which is injurious to health . . . so as to interfere with the comfortable

enjoyment of life or property” constitutes a nuisance under Section 3479 of the California Civil

Code. A private person may maintain an action for public nuisance if the conduct at issue is

“specially injurious to himself,” but not otherwise. Such a special injury must be “of a character

different in kind — not merely in degree — from that suffered by the general public.” Institoris

v. City of Los Angeles, 210 Cal. App. 3d 10, 20 (1989). 

Guttmann argues that Nissin’s use of artificial trans-fat in its noodle products interfered

with the public’s “right to a safe food supply” and that he has suffered a special injury in the

form of alleged health risks associated with consumption of those noodles. No decision applying

California law has found that interference with the general public’s right to a safe food supply by

selling products with unhealthy ingredients constituted a public nuisance. The only injuries to

the general public alleged herein are the risk of harm due to the consumption of artificial transfats and the cost of purchasing Nissin’s noodle products. Guttmann has not alleged that he has

suffered an injury different in kind from those injuries. 

Guttmann cites Birke v. Oakwood Worldwide, 169 Cal. App. 4th 1540, 1550 (2009), for the

contention that an injury “to the health and comfort of an individual[] is in its nature special and

peculiar and does not cause a damage which can properly be said to be common or public.” 

Guttmann admits, however, that the injury contemplated in that decision was the aggravation of

the plaintiff’s asthma due to the alleged nuisance of second-hand smoke, which was a special

injury as compared to the general public’s increased risk of lung cancer. Similarly, in Ileto v.

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Glock, Inc., 349 F.3d 1191 (9th Cir. 2003), Guttmann’s other authority on point, the plaintiffs

had suffered mental trauma and physical injuries as direct victims of gun violence. The plaintiffs

were permitted to bring a nuisance claim based on the defendant’s alleged recklessness in the

distribution and sale of firearms, because their injury was different in kind from the injury of

danger and fear suffered by the general public.

There is no allegation that Guttmann suffered a specific personal injury that is different in

kind from the increased risk of harm allegedly suffered by all consumers of Nissin’s noodles. 

Accordingly, Guttmann’s public nuisance claim is DISMISSED.

3. STANDING.

Nissin has also argued that Guttmann lacks standing under Article III and the Unfair

Competition Law. The Court has ordered limited discovery as to the dates and quantities of

Nissin’s noodles that Guttmann purchased and consumed, the extent to which he was aware that

FDA regulation required trans-fat content less than 0.5 grams per serving to be declared as zero

in the nutrition-facts panel, and the extent to which he has been medically diagnosed with any of

the conditions that the complaint alleges are caused by the consumption of artificial trans-fat

(Dkt. No. 50). That issue will be held in abeyance pending the results of that limited discovery.

CONCLUSION

For the reasons stated above, defendant’s motion to dismiss is GRANTED IN PART AND

DENIED IN PART. Guttmann’s claims for violation of the unfair prong of the Unfair Competition

Law and breach of the implied warranty of merchantability survive; all other claims are

dismissed without leave to amend.

IT IS SO ORDERED.

Dated: July 15, 2015. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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