People of the State of California v. The Kroger Co

Case Number

24CV03007

Case Type

Hearing Date / Time

Wed, 03/26/2025 - 10:00

Nature of Proceedings

(1) Demurrer of Defendant to First Amended Complaint (2) Motion of Defendant to Strike Portions of Complaint

Tentative Ruling

For Plaintiff People of the State of California: John T. Savrnoch, Morgan S. Lucas,

Christopher B. Dalbey, Office of the Santa Barbara County District Attorney; Erik

Nasarenko, Andrew J. Reid, Office of the Ventura County District Attorney

                                   

For Defendant The Kroger Co.: Jacob M. Harper, James H. Moon, Daniel H. Leigh,

Davis Wright Tremaine LLP

Emails: danielleigh@dwt.com; jamesmoon@dwt.com; jacobharper@dwt.com;

mlucas@countyofsb.org; cdalbey@countyofsb.org; andrew.reid@ventura.org;     

RULING

(1) For the reasons set forth herein, the demurrer of defendant The Kroger Co. is sustained, with leave to amend, as to the second, fourth, sixth, eighth, and tenth causes of action of plaintiff’s first amended complaint and is overruled as the fifth cause of action.

(2) For the reasons set forth herein, the motion of defendant The Kroger Co. to strike portions of the first amended complaint is denied.

(3) Plaintiff the People of the State of California shall file and serve their second amended complaint on or before April 10, 2025.

Background

As alleged in plaintiff’s first amended complaint (FAC):

Defendant The Kroger Co. (Kroger) operates retail grocery stores in Santa Barbara and Ventura Counties, and throughout California, including under the “Ralph’s,” Foods Co,” and “Food 4 Less” names. (FAC, ¶¶ 8, 9.)

Kroger sells, or has sold, at least five varieties of low-calorie bread items under the “Carbmaster” generic brand name, including, Carbmaster Wheat Bread, Carbmaster White Bread, Carbmaster Multi-Seed Bread, Carbmaster Hamburger Buns, and Carbmaster Hotdog Buns. (FAC, ¶ 15.)

The packaging of these bread products contains caloric content information on the consumer-facing side and on the FDA Nutrition Facts panel (FDA panel) on the back of the packaging. (FAC, ¶¶ 16, 17.)

For some bread products, Kroger falsely represented the caloric content on both the consumer-facing side and also on the FDA panel. (FAC, ¶ 17.) This practice occurred from November 1, 2018, and continued until an uncertain date when Kroger corrected the caloric information on the FDA panel. (FAC, ¶¶ 17, 18.)

For some bread products, Kroger advertised false caloric information on the consumer-facing side of the packaging (e.g., that a slice of bread contained 30 calories) while the FDA panel stated a substantially greater caloric count (e.g., that the same slice of bread contained 50 calories). (FAC, ¶¶ 19-24.)

Bread products with misleading consumer-facing calorie count information have been displayed showing only the misleading caloric information and next to competitors’ bread products with higher, but accurate caloric information. (FAC, ¶¶ 25-26.)

As of December 5, 2023, plaintiff People of the State of California (People or plaintiff) informed Kroger that at least one Carbmaster product was still being advertised inaccurately in Kroger’s physical stores. (FAC, ¶ 29.) At the time of filing of the complaint, Kroger continued to market at least one Carbmaster product on its website with incorrect caloric information shown on the packaging. (FAC, ¶ 30.)

On May 29, 2024, the People filed their original complaint in this action.

On July 1, 2024, Kroger filed its notice of removal to federal court. On October 9, the federal court issued it order of remand, which was filed in this court on October 18.

On December 16, 2024, the People filed their FAC. The FAC asserts 10 causes of action: (1) false advertising (outside of FDA panel), violation of Business and Professions Code section 17500; (2) false advertising (within FDA panel), violation of Business and Professions Code section 17500; (3) unfair competition (false advertising outside of FDA panel), violation of Business and Professions Code section 17200; (4) unfair competition (false advertising within FDA panel), violation of Business and Professions Code section 17200; (5) unfair competition (false advertising by enticement outside of FDA panel), violation of Business and Professions Code section 17200; (6) unfair competition (false advertising by enticement within FDA panel), violation of Business and Professions Code section 17200; (7) unfair competition (misbranded food outside of FDA panel), violation of Business and Professions Code section 17200 and Health and Safety Code section 110660; (8) unfair competition (misbranded food within FDA panel), violation of Business and Professions Code section 17200 and Health and Safety Code section 110660; (9) unfair competition (untrue or misleading advertising outside of FDA panel), violation of Business and Professions Code section 17200; and (10) unfair competition (untrue or misleading advertising within FDA panel), violation of Business and Professions Code section 17200.

On January 15, 2025, Kroger filed its demurrer to the second, fourth, fifth, sixth, eighth, and tenth causes of action of the FAC. Kroger concurrently filed a motion to strike portions of the FAC seeking injunctive relief.

The demurrer and motion to strike are both opposed by the People.

Analysis

(1) Demurrer

“ ‘The rules by which the sufficiency of a complaint is tested against a general demurrer are well settled. We not only treat the demurrer as admitting all material facts properly pleaded, but also ‘give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.’ ” (Zhang v. Superior Court (2013) 57 Cal.4th 364, 370, internal quotation marks and citations omitted.)

            (A) Federal Preemption and Pleading Specificity

Kroger argues that the second, fourth, sixth, and eighth causes of action are all preempted by federal law. The second, fourth, sixth, and eighth causes of action are each based upon alleged false statements made within the FDA panel. The People argue that these causes of action are not preempted because they are do not conflict with federal law.

The Federal Food, Drug, and Cosmetic Act (FDCA, 21 U.S.C. § 301 et seq.) authorizes the adoption of regulations, including, food labeling. One such regulation requires caloric counts on food labels:

“Nutrition information relating to food shall be provided for all products intended for human consumption and offered for sale unless an exemption is provided for the product in paragraph (j) of this section.

            “(1)      When food is in package form, the required nutrition labeling information shall appear on the label in the format specified in this section.” (21 C.F.R. § 101.9(a)(1) (2025).)

“The declaration of nutrition information on the label and in labeling of a food shall contain information about the level of the following nutrients, except for those nutrients whose inclusion, and the declaration of amounts, is voluntary as set forth in this paragraph. No nutrients or food components other than those listed in this paragraph as either mandatory or voluntary may be included within the nutrition label. Except as provided for in paragraphs (f) or (j) of this section, nutrient information shall be presented using the nutrient names specified and in the following order in the formats specified in paragraphs (d) or (e) of this section.

            “(1)      ‘Calories, total,’ ‘Total calories,’ or ‘Calories’: A statement of the caloric content per serving, expressed to the nearest 5–calorie increment up to and including 50 calories, and 10–calorie increment above 50 calories, except that amounts less than 5 calories may be expressed as zero. Energy content per serving may also be expressed in kilojoule units, added in parentheses immediately following the statement of the caloric content.

                        “(i)       Caloric content may be calculated by the following methods. Where either specific or general food factors are used, the factors shall be applied to the actual amount (i.e., before rounding) of food components (e.g., fat, carbohydrate, protein, or ingredients with specific food factors) present per serving.

                                    “(A)     Using specific Atwater factors (i.e., the Atwater method) given in table 13, USDA Handbook No. 74 (slightly revised, 1973),

                                    “(B)     Using the general factors of 4, 4, and 9 calories per gram for protein, total carbohydrate, and total fat, respectively, as described in USDA Handbook No. 74 (slightly revised, 1973) pp. 9–11;

                                    “(C)     Using the general factors of 4, 4, and 9 calories per gram for protein, total carbohydrate (less the amount of non-digestible carbohydrates and sugar alcohols), and total fat, respectively, as described in USDA Handbook No. 74 (slightly revised, 1973) pp. 9–11. A general factor of 2 calories per gram for soluble non-digestible carbohydrates shall be used. The general factors for caloric value of sugar alcohols provided in paragraph (c)(1)(i)(F) of this section shall be used;

                                    “(D)     Using data for specific food factors for particular foods or ingredients approved by the Food and Drug Administration (FDA) and provided in parts 172 or 184 of this chapter, or by other means, as appropriate;

                                    “(E)     Using bomb calorimetry data subtracting 1.25 calories per gram protein to correct for incomplete digestibility, as described in USDA Handbook No. 74 (slightly revised, 1973) p. 10; or

                                    “(F)     Using the following general factors for caloric value of sugar alcohols: Isomalt—2.0 calories per gram, lactitol—2.0 calories per gram, xylitol—2.4 calories per gram, maltitol—2.1 calories per gram, sorbitol—2.6 calories per gram, hydrogenated starch hydrolysates—3.0 calories per gram, mannitol—1.6 calories per gram, and erythritol—0 calories per gram.” (21 C.F.R. § 101.9(c)(1)(i) (2025).)

“A food with a label declaration of calories … shall be deemed to be misbranded under section 403(a) of the act if the nutrient content of the composite is greater than 20 percent in excess of the value for that nutrient declared on the label. Provided, That no regulatory action will be based on a determination of a nutrient value that falls above this level by a factor less than the variability generally recognized for the analytical method used in that food at the level involved.” (21 C.F.R. § 101.9(g)(5) (2025).)

The FDCA includes an express preemption provision by which, with exceptions not relevant here, “no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce” any requirement for food labeling of the type set forth in the FDCA “that is not identical to the requirement” in the FDCA. (21 U.S.C. § 343-1(a).)

Federal preemption under the FDCA is discussed in Farm Raised Salmon Cases (2008) 42 Cal.4th 1077 (Salmon Cases). In Salmon Cases, the plaintiffs filed a class action alleging that certain grocery stores violated state law by selling artificially colored farmed salmon without disclosing to their customers the use of color additives. (Id. at pp. 1082-1083.) The plaintiffs asserted claims, among others, under the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.), and the false advertising law (FAL) (Bus. & Prof. Code, § 17500 et seq.). (Id. at p. 1084.)

The laws alleged to be violated under the “unlawful” prong of the UCL claim included provisions of the state Sherman Food, Drug, and Cosmetic Law (Sherman Law) (Health & Saf. Code, § 109875 et seq.). (Ibid.) The trial court sustained the defendants’ demurrer on grounds including that the FDCA preempted the plaintiffs’ state law claims. (Ibid.) The Court of Appeal affirmed the trial court’s finding of preemption. (Id. at p. 1085.)

On review in the California Supreme Court, the Salmon Cases court explained the applicable principles of preemption:

“As we have previously explained, ‘[t]he basic rules of preemption are not in dispute: Under the supremacy clause of the United States Constitution (art. VI, cl. 2), Congress has the power to preempt state law concerning matters that lie within the authority of Congress. [Citation.] In determining whether federal law preempts state law, a court’s task is to discern congressional intent. [Citation.] Congress’s express intent in this regard will be found when Congress explicitly states that it is preempting state authority. [Citation.] Congress’s implied intent to preempt is found (i) when it is clear that Congress intended, by comprehensive legislation, to occupy the entire field of regulation, leaving no room for the states to supplement federal law [citation]; (ii) when compliance with both federal and state regulations is an impossibility [citation]; or (iii) when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” [Citations.]’ [Citations.] It is well established that the party who asserts that a state law is preempted bears the burden of so demonstrating.” (Salmon Cases, supra, 42 Cal.4th at pp. 1087–1088.)

The court applied these principles to the facts of that case:

“The words of section 343–1 clearly and unmistakably evince Congress’s intent to authorize states to establish laws that are ‘identical to’ federal law. [Citations.] That is precisely what California did in enacting the Sherman Law. The Sherman Law provision prohibiting misbranding with regard to the use of color additives [citation] is identical to section 343(k), the parallel federal requirement specifically listed in section 343–1 as one of the federal statutes covered by the express preemption provision. Additionally, the Sherman Law incorporates all of the food labeling regulations promulgated by the FDA [citation], including those having to do with the use of astaxanthin and canthaxanthin in the feeding of farmed salmon [citation]. Accordingly, the state requirements at issue here are explicitly permitted by section 343–1.” (Salmon Cases, supra, 42 Cal.4th at p. 1090.)

“Accordingly, in light of the plain statutory language of section 343–1, and the high court’s construction of similar preemption language, we conclude that Congress intended to allow states to establish their own requirements so long as they are identical to those contained in section 343(k), which California has done in the form of the Sherman Law. We further conclude that nothing in the text of section 343–1 or its legislative history supports the assertion that Congress intended to limit the scope of remedies states might choose to provide for the violations of those state laws.” (Salmon Cases, supra, 42 Cal.4th at pp. 1094–1095.)

Kroger argues that the FDCA prescribes six methods for calculating caloric content for the FDA panel and that FDCA regulations do not dictate which of these methods is to be used for particular foods. (Demurrer, at p. 12; see 21 C.F.R. § 101.9(c) (2025).) According to Kroger, to avoid preemption, a plaintiff must plead that the allegedly inaccurate calorie count on a food’s packaging deviates from all six methods of calorie calculation and undercounts the calories by over 20 percent based on the prescribed calculation methods, citing federal district court cases. (Demurrer, at p. 12.) The People argue that pleading under California law does not require that degree of specificity.

California pleading standards are different from federal pleading standards in a number of regards. “The federal cases since the adoption of the federal rules are not helpful on the pleading questions in an action brought in a state court in California, because federal cases use ‘notice pleading,’ whereas California uses ‘fact pleading.’” (Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 250.) This court applies California pleading standards.

It is significant here that Kroger does not argue that under the facts alleged by the People the claims asserted by the People are preempted as a matter of law. Instead, Kroger concedes that state law claims are preempted “to the extent that they do not impose identical requirements” to federal law. (Demurrer, at p. 11.) Kroger does not argue that California imposes different requirements, not identical to the requirements of federal law. Instead, Kroger argues that the facts are not alleged with sufficient specificity to determine whether the allegedly misleading calorie counts fail to comply with the requirements of federal law under each of the six tests. (Demurrer, at pp. 12-13.) By failing to allege this level of specificity, Kroger argues, the People have not alleged violations of state law that are not preempted by federal law.

As noted in the Salmon Cases, there is a strong presumption against preemption and the burden of establishing preemption is on the party asserting that state law is preempted. (Salmon Cases, supra, 42 Cal.4th at p. 1088.) “That presumption applies not only to the existence, but also to the extent, of federal preemption.” (Brown v. Mortensen (2011) 51 Cal.4th 1052, 1064.) Because the lack of preemption is not an element of any cause of action, in order to be addressed by demurrer, the preemption must appear on the face of the complaint. (See Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482 [“a demurrer challenges defects on the face of the complaint”].) Moreover, to be addressed by demurrer, the cause of action must be shown conclusively to barred by the preemption defense. (See CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 635 [“A demurrer based on an affirmative defense cannot properly be sustained where the action might be barred by the defense, but is not necessarily barred.”].)

Unfortunately, the preemption arguments of the parties get lost in the broader issue raised by Kroger of the level of specificity required to state claims where the “misleading advertising” is “within FDA panel” in the causes of action subject to this demurrer. The People satisfy their pleading requirements vis-à-vis preemption by sufficiently alleging at least one incident for which federal preemption is not shown on the face of the complaint. In this case, that means alleging liability under state law that is based upon identical requirements in federal labeling law to the standards of California pleading.

California pleading of these claims is specific in one dimension and broad in another. On the one hand, “A plaintiff alleging unfair business practices under these statutes must state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619, italics added.) On the other hand, to plead a fraudulent business act or practice based upon deceptive statements, “a plaintiff need not plead the exact language of every deceptive statement; it is sufficient for plaintiff to describe a scheme to mislead customers, and allege that each misrepresentation to each customer conforms to that scheme.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212-213 & fn. 12.)

The FAC fails to allege these FDA panel claims with the reasonable particularity required of a statutory cause of action. The FAC generally alleges that from November 1, 2018, to some later uncertain date, Kroger falsely represented the caloric content on both the consumer-facing portions of the packaging and on the FDA panel. (FAC, ¶¶ 17, 18, 39, 53, 66, 80, 92.) These allegations are entirely generic, simply asserting that the caloric content stated on the FDA panel was false. Reasonable particularity requires the pleading of at least one example of a violation coming within the applicable cause of action (i.e., a particular product offered for sale with particular misrepresentations in the FDA panel and how those specific misrepresentations are false). That level of specificity is missing from the FAC. The court notes, however, that as to a reasonably particular incident the People need only plead the ultimate facts of the misrepresentation (i.e., the text of the misrepresentation) and falsity (i.e., the true facts), but need not plead in California the evidentiary detail argued by Kroger, whether or not such evidentiary detail may be required under federal procedural law.

The court will therefore sustain the demurrer to the second, fourth, sixth, eighth, and tenth causes of action, with leave to amend, to permit more particularized pleading.

            (B) Enticement

Kroger separately argues that the fifth and sixth causes of action fail because they are predicated on a violation of Business and Professions Code section 12024.6, which Kroger asserts is inapplicable.

“No person, firm, corporation, or association shall advertise, solicit, or represent by any means, a product for sale or purchase if it is intended to entice a consumer into a transaction different from that originally represented.” (Bus. & Prof. Code, § 12024.6.)

In support of its argument that section 12024.6 is inapplicable, Kroger cites Pitney-Bowes, Inc. v. State of California (1980) 108 Cal.App.3d 307 (Pitney-Bowes). In Pitney-Bowes, the plaintiff sold, among other things, specialized scales designed and used for computing transportation and delivery charges for letters, packages, parcels, and other items. (Id. at p. 309.) In 1975, the State of California took the position that these scales were subject to the weights and measures statutes in Business and Professions Code section 12001 et seq. (Id. at pp. 309-310.) The plaintiff sought declaratory relief that these statutes were inapplicable. (Id. at p. 310.) The trial court agreed and found for the plaintiff that the statutes were inapplicable. (Ibid.)

On appeal in Pitney-Bowes, the court stated:

“ ‘ “Statutes must be given a reasonable and common sense construction in accordance with the apparent purpose and intention of the lawmakers—one that is practical rather than technical, and that will lead to a wise policy rather than to mischief or absurdity.” [Citation.] “[I]n construing a statute the courts may consider the consequences that might flow from a particular interpretation. They will construe the statute with a view to promoting rather than to defeating its general purpose and the policy behind it.” [Citation.] …’ [Citation.]

“Applying the above fundamental rules of statutory construction, we conclude: (1) That the California Legislature at the time of drafting and enacting the scale regulatory and licensing scheme contained in section 12001 et seq. was fully aware of the widespread use of weighing devices by the large ‘service’ industry for the purpose of computing ‘postage’ and ‘freight’ charges for transportation and delivery of letters, packages, parcels and other items; (2) that the state Legislature in clear and unambiguous terms in the statute said what it meant to say; and (3) that its intended primary purpose for enacting the statute was to regulate only those weighing devices used in determining the cost of tangible goods (‘commodities’) ‘for sale, hire or reward’ and that the regulations were not intended to apply to scales specially designed and used for computing charges for the ‘service’ of transporting and delivering letters, parcels, packages, or other items.

“We, therefore, hold that the court below did not err in finding that the regulatory and licensing scheme contained in section 12001 et seq. is inapplicable to Pitney-Bowes’ scales and scale repairmen and in granting the declaratory and injunctive relief sought.” (Pitney-Bowes, Inc., supra, 108 Cal.App.3d at p. 314.)

Pitney-Bowes does not interpret section 12024.6. So, while Pitney-Bowes stands for the general proposition that specific weights and measures statutes apply to regulate weights and measures, Pitney-Bowes says nothing about the plain language of section 12024.6 which on its face applies to the incidents alleged here by the People.

It is important to note that section 12024.6 has broad language that is independent of weights and measures. Section 12024.6 was added in 1975 (and so was enacted and became effective while the different dispute in Pitney-Bowes was ongoing). (Stats. 1975, ch. 907, § 1, p. 2008.) The Legislative Counsel’s digest explains:

“Under existing law it is a misdemeanor for any person, firm, corporation or association, or any employee thereof, with intent to dispose of property to make or cause to be made in any newspaper or other publication, or any advertising device, any statement concerning such property, or concerning any circumstances or matter of fact connection with the proposed disposition thereof, which is untrue or misleading, and which is known or should be known to be untrue or misleading, or to make or cause to be made any such statement as part of a plan or scheme with intent not to sell such property so advertised. [¶] This bill in addition, would prohibit advertising, soliciting, or representing a product for sale or purchase if it is intended to entice a customer into a transaction different from that originally represented.” (Legis. Counsel’s Dig., Sen. Bill No. 949 (1975-1976 Reg. Sess.) 2 Stats. 1975, Summary Dig., p. 230.)

This legislative history suggests that section 12024.6 was not intended to be limited to false advertising relating to weights and measures of the type discussed in Pitney-Bowes. Given the plain meaning of section 12024.6, the absence of more detailed legislative history or judicial construction of section 12024.6, and the nature of this challenge to the pleadings, the court finds that section 12024.6 means what it says and therefore is a sufficient basis for stating a cause of action under the UCL predicated on a violation of section 12024.6.

Kroger’s demurrer to the fifth and sixth causes of action will be overruled on the grounds of inapplicability of section 12024.6.

(2) Motion to Strike

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436.) “Irrelevant matter” includes a “demand for judgment requesting relief not supported by the allegations of the complaint.” (Code Civ. Proc., § 431.10, subds. (b)(3), (c).) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)

Kroger moves to strike the requests in the FAC for an injunction on the grounds that the instances alleged have been corrected and there is no continuing wrongdoing alleged for which an injunction would be proper.

With respect to the motion to strike paragraphs within the second, fourth, sixth, eighth, and tenth causes of action (FAC, ¶¶ 40, 54-55, 70-71, 81-82, 93-94), the sustaining of the demurrer, discussed above, renders the motion in that respect moot. The motion will be denied to that extent on that ground.

As to the remainder, Kroger essentially argues with the truth of the allegations of the FAC regarding the misrepresentations rather than with the sufficiency of the pleadings. A motion to strike is based solely on the face of the pleadings and on judicially noticed matters. Moreover, there is no procedurally proper request for judicial notice before the court, so there is nothing for the court to consider by way of judicial notice. (See Cal. Rules of Court, rule 3.1113(l).) The FAC alleges that the conduct is, or was at the time of the filing of the initial complaint, ongoing. (E.g., FAC, ¶¶ 30, 36.) This is sufficient for pleading purposes. Whether or not the court would ultimately grant an injunction under equitable principles if the court found for the People on the merits, the allegations and prayer regarding the need for injunctive relief are sufficient and will be stricken as improper.

The motion to strike will therefore be denied.