Do You Know What’s In Your Water?

April 18, 2019

In a 2017 consolidated action, plaintiffs in 9 states brought a complaint against Nestlé for fraudulently marketing its premium bottled water, Poland Spring Water, as “100% Natural Spring Water” in order to charge a premium price.  They argue that the Maine “Poland Spring” ran dry 50 years ago, and that none of the eight sites Nestlé currently uses for water for its “Poland Spring” product are genuine springs as defined by the Food and Drug Administration, thus they are fraudulently misleading the public in order to command a higher price:

To consumers, ‘spring water’ from a naturally occurring spring signifies purity and high quality and commands a premium price compared to Defendant’s non-spring drinking water products or filtered tap water.  To illicitly capture that premium, Defendant, since it began selling the Poland Spring brand in 1993, has bottled common groundwater and illegally mislabeled it as ‘100% Natural Spring Water.’” (Complaint, 3.)

In the original action, Patane v. Nestle Waters North America, Inc, 314 F.Supp.3d 375 (D.C. Conn. 2018), the complaint centered around the definition of “spring water” promulgated by the Food and Drug Administration as a standard of identity under the federal Food, Drug and Cosmetic Act (FDCA), 21 USC 337. Specifically, the counts claim consumer fraud and violation of trade practice statutes in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.

Nestlé filed a motion to dismiss under FRCP 12(b).  Judge Jeffrey Meyer, in the District Court of Connecticut, held that while the Court does have jurisdiction and the action is not precluded by a previous settlement Nestle had entered into, the plaintiffs claims are all preempted by federal law.

In order to be preempted by federal law, Congress has to have intended to preempt a state law; this can be done expressly or implicitly, but must be “clear and manifest.”  The FDCA does expressly preempt states from being able to impose standards of identity that are different from that set by the DFCA.  The Supreme Court has also found that the FDCA has impliedly preempted private action for enforcement; The FDCA “leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance” (Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001)).  This and further decisions in the Second and Sixth Circuits make clear that a private citizen cannot bring suit to enforce FDA standards, to bring a state law claim based solely on violation of the FDCA, because the alternative would provide an “end-run… by suing to enforce the FDCA under the guise of a state law claim for relief.”

Based on the plaintiff’s claims and statements, the Court found that all claims in this case are preempted by the FDCA and granted Nestlé’s motion to dismiss without prejudice to plaintiff’s filing amended complaints that would survive the FDCA preemption.

The upshot is that only a narrow range of state law claims involving mislabeling of “spring water” may escape preemption by the FDCA. In order to survive preemption, a state law claim must rely on an independent state law duty that parallels or mirrors the FDCA’s requirement for “spring water,” but must not solely and exclusively rely on violations of the FDCA’s own requirements.

 (Patane, 314 F.Supp.3d at 385-368).

Plaintiffs filed again in Patane et al v. Nestlé  Waters North AmericaDocket 3:17-cv-01381, in which they specifically stated their causes of action as state fraud claims, violation of state Unfair Trade Practices Acts (CT, MA, RI, NH), Consumer Protection Act (NH) and New York General Business laws.  Nestlé again brought a motion to dismiss.  However, in this case, the Court held that the amended complaint added specific state law provisions of action for unfair trade practices that would not be preempted by the FDCA for almost every state.  The only part of the complaint that was dismissed was the Vermont claim there is not a specifically applicable statute under Vermont law.

The court also held that common law fraud claims can also be brought in these states because they are predicated on the state law standards for “spring water” rather than attempting to enforce the standards of the FDA.

The order granting dismissal as to the Vermont claims but denying as to the rest of the state claims did identify some undecided elements that remain for Nestlé.  Defendant had moved to dismiss under the “safe harbor” protections afforded by FDA determination of compliance.  This consideration, as an affirmative defense, can only be decided on a motion to dismiss if it is “based on facts appearing on the face of the complaint.” In this case, however, the argument requires facts that need further development regarding what actions have been taken by the FDA, so the judge dismissed the safe harbor defense argument without prejudice to allow Nestlé to renew that defense after discovery.  Likewise, the judge delayed consideration of Defendant’s argument that the claim has to be evaluated under the Uniform Commercial Code rather than common law in Connecticut, because it was not procedurally valid to consider in this motion to dismiss.

At this point, the case continues into discovery, and an opportunity for the plaintiffs to continue to focus on what they claim are deceptive marketing tactics and consumer fraud techniques, making it a case to keep our eyes on going forward.

Image Source: REUTERS/Darren Staples

Not a Westlaw subscriber? Sign-up for a free trial today.