People of the State of California v. The Kroger Co.

Case Number

24CV03007

Case Type

Hearing Date / Time

Wed, 07/09/2025 - 10:00

Nature of Proceedings

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

Tentative Ruling

Note: **The CMC will be heard at 10:00 am along with the motion, so that counsel does not have to appear at both 8:30 and 10:00 am.**     

ATTORNEYS

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

 

RULING

The demurrer of Defendant The Kroger Co. to the Second Amended Complaint is overruled in its entirety. Defendant The Kroger Co. shall file and serve its answer on or before July 29, 2025.

Background

As alleged in Plaintiff’s second amended complaint (SAC):

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. (SAC, ¶¶ 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. (SAC, ¶ 15, capitalizations altered.)

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

For some bread products, Kroger falsely represented the caloric content on both the consumer-facing side and also on the FDA panel. (SAC, ¶ 17.) This practice occurred from November 1, 2018, and continued until sometime between April 15, 2021 and January 19, 2022 when Kroger corrected the caloric information on the FDA panel. (SAC, ¶¶ 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). (SAC, ¶¶ 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. (SAC, ¶ 27.)

On 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. (SAC, ¶ 30.) At the time of filing of the initial complaint in this action, Kroger continued to market at least one Carbmaster product on its website with incorrect caloric information shown on the packaging. (SAC, ¶ 31.)

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.

The People filed their first amended complaint (FAC) on December 16, 2024. The FAC included 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 which is part of the Sherman Food, Drug, and Cosmetic Law (Health & Saf. Code, § 109875 et seq.) (Sherman Law); (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.

The Court sustained Kroger’s the demurrer to the FAC in part, granting the People leave to amend with respect to the second, fourth, sixth, eighth, and tenth causes of action. In doing so, the Court stated that “[r]easonable 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).” (Minute Order, dated March 26, 2025.) The Court found that the allegations underlying the FDA panel claims were “entirely generic, simply asserting that the caloric content stated on the FDA panel was false.” (Ibid.) The Court also found that in order to correct this deficiency, Plaintiff must allege “at least one incident for which federal preemption is not shown on the face of the complaint.” (Ibid.)

The People filed their SAC on April 9, 2025, asserting the same ten causes of action as were set forth in the FAC. The SAC also contains new allegations, set forth in paragraph 18, in response to the Court’s March 26, 2025 order.

Kroger filed its demurrer to the second, fourth, sixth, eighth, and tenth causes of action of the SAC on May 13, 2025.

Plaintiff has filed a substantive opposition to the demurrer.  

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.)

(2)       The SAC’s New Allegations

As set forth above, the Court sustained Kroger’s demurrer to the FAC on the basis that the “FAC failed to allege . . . FDA panel claims with the reasonable particularity required of a statutory cause of action,” and noted that “[r]easonable 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).” (Minute Order, dated March 26, 2025.)

The People now allege two examples concerning the manner in which Kroger falsely represented the caloric content of Carbmaster products on both the consumer-facing portions of packaging and on the FDA Panel. They are set forth in a new paragraph (¶ 18) which states:

“For example, on the front packaging and on the FDA Nutrition Facts panel, Defendant advertised that its Carbmaster Wheat Bread contained only 30 calories. In reality, Carbmaster Wheat Bread contained 50 calories. In another instance, Defendant advertised on the front packaging and the FDA Nutrition Facts panel that its Carbmaster Hamburger Buns contained only 50 calories, when the buns actually contained 100 calories.” (SAC, ¶ 18, capitalizations altered.)

(3) The SAC Sufficiently Alleges Incidents of False Labeling Which Are Not Preempted.

The Court finds that the People have now sufficiently alleged incidents of false labeling for which preemption is not shown. Specifically, the People now allege in paragraph 18 of the SAC that “on the front packaging and on the FDA Nutrition Facts panel, Defendant advertised that its Carbmaster Wheat Bread contained only 30 calories” whereas in reality “ Carbmaster Wheat Bread contained 50 calories.” The People also allege that “[i]n another instance, Defendant advertised on the front packaging and the FDA Nutrition Facts panel that its Carbmaster Hamburger Buns contained only 50 calories, when the buns actually contained 100 calories.” (SAC, ¶ 18, capitalizations altered.)

Kroger, meanwhile, fails to meet its burden of demonstrating that the People’s claims are preempted despite the new allegations in the SAC. (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1089, fn. 2.) The analysis of a preemption question must take into account the strong presumption against preemption. (Ibid.) The presumption applies to the existence as well as the scope of preemption. (Ibid.) The Court in Farm Raised Salmon Cases concluded that this presumption applied with particular force in that case because laws regulating the proper marketing of food, including the prevention of deceptive sales practices, are within the states’ historic police powers. (Ibid.)

Kroger argues that the second and fourth causes of action under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) (UCL) and False Advertising Law (FAL) (§ 17500, et seq.) are preempted because they seek to impose standards that differ from federal law. (Demurrer, p. 13.) Here, Kroger argues that “[t]o prove a FAL claim based on false advertising or promotional practices, ‘it is necessary only to show that members of the public are likely to be deceived.’ [citation] ‘This is determined by considering a reasonable consumer who is neither the most vigilant and suspicious of advertising claims nor the most unwary and unsophisticated, but instead is ‘the ordinary consumer within the target population.’ [Citation].” (Ibid.)  Thus, Kroger reasons, these claims are “inconsistent with federal standards, because a reasonable consumer may be deceived even by a calorie count in an FDA Panel that meets all of the above-described federal requirements.” (Ibid.)

Kroger argues that the tenth cause of action, brought under the UCL’s “unfair” prong, is preempted because determining whether a business practice is unfair involves “ ‘weigh[ing] the utility of the Defendant’s conduct against the gravity of the harm to the alleged victim,’ ” a standard not found in the Federal Food, Drug, and Cosmetic Act (FDCA) or FDA regulations with respect to caloric content labeling in FDA panels. (Demurrer, p. 14, citation omitted.)

Kroger’s arguments miss the mark. For one thing, the People have alleged that the calorie count in the FDA panel was falsely represented. (SAC, ¶¶ 17, 18.) Further the UCL and FAL are not preempted by the FDCA as long as the People use them to enforce the same labeling standards applied by the FDCA as they do here. (Farm Raised Salmon Cases, supra, 42 Cal.4th at 1094-95.) The People have sufficiently alleged that Kroger inaccurately advertised the caloric content on its products in violation of the UCL and FAL in a manner which is consistent with the FDCA’s requirement for accurate caloric information within the FDA panel. The demurrer to the second, fourth and tenth causes of action is therefore overruled.

Kroger’s argument with respect to the sixth cause of action is equally unavailing. Here, Kroger argues that this claim is based on alleged violation of Business & Professions Code section 12024.6 “under which ‘[n]o 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.’ ” (Demurrer, p. 13.) According to Kroger, “[t]his claim is inconsistent with federal standards, because a consumer may be ‘entice[d]’ by a product that meets all of the above-described federal requirements.” (Id., at p. 14.) Again, the People have alleged that the calorie count in the FDA panel was falsely represented. This cause of action is not preempted just because a violation of section 12024.6 could, in some instance, be found in the absence of a FDCA violation. The demurrer to the sixth cause of action is therefore overruled.

With respect to the eighth cause of action, Koger argues that the People fail to plead facts necessary to sustain a non-preempted Sherman Law claim. (Demurrer, p. 15.) This argument fails because, as shown above, the People have alleged that Kroger misrepresented the true calorie count in the FDA panel, and the manner in which it did so. (SAC, ¶ 18.) This is sufficient for purposes of California’s pleading standards. Accordingly, the demurrer to the eighth cause of action is also overruled.