California Trial Court Cuts Plaintiffs’ Bait in Tuna Misbranding Suit

by Michelle Gillette and Josh Thomas Foust

The Unfair Competition Law (UCL) is one of the (many) unique features of California’s legal landscape that complicate doing business in the state. Not only does the UCL allow plaintiffs to bring class actions based on purportedly fraudulent or “unfair” practices, it also enables these private “attorneys general” to challenge allegedly “unlawful” conduct, which can include violations of anything from federal statutes and regulations to local ordinances. Put simply, the statute “‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices”—meaning that any infraction, no matter how technical, could conceivably be the predicate for a consumer class action.

As California’s Supreme Court explained in the seminal cases of Cel-Tech Communications v. Los Angeles Cellular Telephone Co. (1999) and Korea Supply Co. v. Lockheed Martin Corp. (2003), the UCL’s “broad scope” is balanced by the fact that “its remedies are limited.” Damages are not available; instead, “plaintiffs are generally limited to injunctive relief and restitution”—that is, to the return of money they paid as a result of the practice at issue. But when individual restitution awards are aggregated across a class of all affected consumers in the most populous state in the country, the result is that companies are exposed to potentially staggering liability for even minor violations. The question of how courts understand “unlawfulness” under the UCL is thus of critical importance to companies doing business in California.

Against this backdrop, the recent decision by one California trial court in Garrett v. Bumble Bee Foods LLC is instructive. On March 30, 2017, the Honorable Peter Kirwan of the Superior Court for Santa Clara County concluded the bench trial in Garrett by finding that Bumble Bee Foods had not committed any “unlawful” conduct in labeling its tuna an “excellent source” of omega-3 fatty acids. Judge Kirwan’s decision offers a clarifying look into how at least one state court views the UCL’s “unlawfulness” prong—especially in the context of rules and guidance from the Food and Drug Administration (FDA).

Background to the Decision

The case centered on Bumble Bee’s decision to label its albacore tuna products as “excellent sources” of omega-3 fatty acids. The company had begun using this language in 2008 after a competitor in its industry, Ocean Nutrition, submitted a notice to FDA explaining its position that it had sufficient substantiation to make this nutrient content claim on its own products. Under Section 403(r) of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 343(r), FDA had 120 days to take action if it disagreed with the company. The agency never did so, and Ocean Nutrition’s “excellent source” claim was thus “deemed permissible” as of April 9, 2006.

In November 2007, however, FDA published an Advance Notice of Proposed Rulemaking that, if adopted, would have “effectively prohibit[ed] nutrient content claims” concerning omega-3 fatty acids like EPA and DHA. The agency specifically repudiated the Ocean Nutrition precedent and instructed that “any nutrient content claim pertaining to EPA or DHA . . . made on the label or labeling of a food renders that food misbranded under section 403(r).”
As Judge Kirwan later found at trial, “[w]hile the 2007 proposed rule was not final, it was clear from this publication that the FDA considered labels with nutrient content claims about EPA and DHA to be misbranded pursuant to section 403(r).” Nevertheless, Bumble Bee’s marketing department continued using the “excellent source” language from 2008 through 2014 against the objections of the company’s in-house compliance specialist. It was only after FDA promulgated the final rule in April 2014 that Bumble Bee discontinued the label claim. The company never received a warning letter or other notice from FDA during the intervening period.

On April 25, 2014, plaintiffs Patrick Garrett, Jeff Mains, and Linda Eustace filed suit against Bumble Bee in Santa Clara County Superior Court on behalf of themselves and a putative class of California consumers. The plaintiffs challenged not only the “excellent source” claim but also Bumble Bee’s use on its labels of the American Heart Association’s heart check logo, which Bumble Bee had paid for the right to use. The use of this logo was unlawful and deceptive, they argued, because the company did not disclose to consumers that it was a “paid endorsement.” After the court denied class certification, the plaintiffs’ UCL claims proceeded to trial before Judge Kirwan.

The Arguments at Trial

At the bench trial, the plaintiffs argued that Bumble Bee’s “excellent source” claim was “unlawful” because it was inconsistent with the FDA’s 2007 guidance. “Specifically, Plaintiffs argued that since the FDA did not have an established daily value (DV) or recommended daily intake (RDI) for Omega 3, Bumble Bee’s nutrient content claim that its Albacore Tuna in Water was an ‘excellent source’ of Omega 3 was in violation of the requirements of the [FDCA] and the regulations set forth by the FDA.” In addition, they argued that “Bumble Bee’s use of the AHA heart check logo violated 21 C.F.R. Section 1.21 as it failed to reveal a material fact on the label of a food product, i.e. that the logo was a paid endorsement.” Among other evidence, the plaintiffs presented at trial the testimony of a former director of FDA’s Office of Food Labeling, who opined that the “excellent source” claim was inconsistent with FDA regulations because the agency had never set a DV or RDI for omega-3 acids.

In opposition, Bumble Bee stressed the fact that FDA had established at least an implied labeling standard for the entire industry by taking no action against Ocean Nutrition’s notice that it intended to use the same language. Because Bumble Bee had the same degree of scientific substantiation for essentially the same nutrient content claim, it argued, its labels complied with FDA standards. A company official also testified that its tuna products had had to meet specific requirements to qualify for the heart check logo, and that the payment of an administrative fee to the AHA did not itself guarantee that the company could use the logo.

The Court’s Decision

In finding for Bumble Bee, Judge Kirwan held that its “excellent source” claim was not unlawful because the FDA’s 2007 Notice of Proposed Rulemaking was not controlling “law” before April 2014 even though the proposed rule accurately reflected the agency’s position at the time “that the FDA considered labels with nutrient content claims about EPA and DHA to be misbranded” in violation of the FDCA. As the court explained, “the ‘proposed’ regulation was not finalized and adopted until 2014. The fact that Bumble Bee engaged in conduct that was proscribed by a ‘proposed’ rule does not make it unlawful or illegal.” Nor was it unlawful for the company to use the heart check logo without disclosing it as a paid endorsement, the court held, as the plaintiffs had failed to prove that the AHA allowed Bumble Bee to use the logo as a quid pro quo for payment.

The court also rejected the claim that Bumble Bee’s labeling was “unfair” within the meaning of the UCL. As Judge Kirwan explained, the statute’s “unfairness” prong requires proving that the practice at issue is “immoral, unethical, oppressive, unscrupulous and causes injury to consumers which outweighs its benefits.” The court found nothing “unscrupulous” in Bumble Bee’s decision to make the claim “in the absence of a finalized rule” even over the protests of its in-house compliance specialist. Judge Kirwan also emphasized the fact that the company only started using the language “after the Ocean Nutrition nutrient content claim was permitted by the FDA”: in his view, it would be “inherently unfair” to “allow one company to sell its products using a claim permitted by the FDA” while barring “another company/competitor from using the same claim when the information in the authoritative statement applies to both company products.”


The Garrett decision is an encouraging precedent for companies in an unsettled area of the law: is a business practice “unlawful” if a federal agency like FDA makes clear that it considers such conduct non-compliant even if it has not yet completed the long, involved process of promulgating a binding rule or bringing an enforcement action? This is a familiar debate in UCL cases: in attempting to apply the statute’s flexible, expansive definition of “unlawful,” federal and state courts alike must grapple with how much weight to give informal agency statements, like FDA warning letters, notices of proposed rulemaking, and FDA Guidance.

Garrett is notable, then, in that it supports the position that a business practice is not necessarily “unlawful” under the UCL simply because it is inconsistent with agency guidance that has not yet been formalized. Equally important was the court’s recognition of the unfairness that would result from asymmetric enforcement: that is, allowing private plaintiffs to hold one company to a legal standard that the agency itself has not sought to enforce against other competitors in its industry. While the Garrett decision has limited precedential value unless and until ratified by the Court of Appeal, the arguments that won the day for Bumble Bee should prove influential in other UCL cases going forward.