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By Jeremy Heallen Law360, New York (April 13, 2012, 7:39 PM ET) — A California federal judge ruled Wednesday that a proposed class action against CytoSport Inc. accusing the creators of the Muscle Milk brand of misrepresenting the nutritional value of its ready-to-drink products and protein bars could proceed on one factual claim.
Ruling on CytoSport’s motion to dismiss, U.S. District Judge Claudia Wilken found that most of CytoSport’s statements the plaintiff had targeted were vague and did not amount to violations of the law. However, she found that one claim — that CytoSport promotes its 14-ounce Muscle Milk Ready-to-Drink product as a “nutritional shake” containing “healthy fats" — was specific enough to survive dismissal.
"[A] reasonable consumer would be likely to believe that the drink contains unsaturated, not saturated, fats,” the order said.
G. Charles Nierlic of Gibson Dunn & Crutcher LLP, who represents the company, said his client was pleased with the judge’s dismissal of nearly all the plaintiff’s claims.
"The court has now limited the case to one phrase used on the back of the bottle of one product," Nierlic said. "This limited claim cannot form the basis of a nationwide class action. In addition, we look forward to showing that the one phrase remaining at issue in this case is not misleading in any way."
The court ruled that lead plaintiff Claire Delacruz could file a second amended complaint to address the factual deficiencies within seven days. Plaintiff’s attorney Mark Pifko of Baron & Budd PC indicated Friday that Delacruz would be filing a second amended complaint imminently.
In a statement released after the ruling, Pifko described CytoSport as “preying on a community that wants to be healthy” and contributing to America’s obesity epidemic.
“You can’t just whip up a blend of saturated fat and fractionated oil and slap a ‘healthy’ label on it,” he said.
Delacruz’ suit alleges violations of California’s Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law, as well as fraud, negligent misrepresentation and unjust enrichment. Delacruz further argues CytoSport products “are equivalent to fat-laden junk food.”
“[A] standard-size container of CytoSport’s ‘Muscle Milk Ready-To-Drink (RTD)’ contains the same number of calories and almost as much total fat and saturated fat as a ‘Glazed Kreme Filling’ Krispy Kreme doughnut,” the complaint said.
The proposed class is defined as anyone who has purchased CytoSport’s Muscle Milk Ready-To-Drink or Muscle Milk Bars since July 18, 2007.
In addition to class certification, the plaintiff is seeking compensatory damages, disgorgement, punitive damages, an order directing CytoSport to engage in a corrective advertising campaign, and injunctive and declaratory relief.
This is not the first allegation of mislabeling leveled at CytoSport. In 2010, the U.S. Federal Trade Commission investigated CytoSport’s marketing of products under the brand names "Muscle Milk," "Monster Milk" and "Mighty Milk" without disclosing that they are water-based and actually contain no milk.
The FTC closed its investigation after CytoSport agreed to revise its labels, according to a closing letter posted on the agency’s website. The U.S. Food and Drug Administration issued a warning letter to CytoSport in June over the same incident. CytoSport has not yet received a closing letter from the FDA, according to the agency’s website.
Plaintiff is represented by Roland Tellis and Mark Pifko of Baron & Budd PC.
Defendant is represented by G. Charles Nierlich and Matthew L. Berde of Gibson Dunn & Crutcher LLP.
The case is Delacruz v. CytoSport Inc., case number 3:11-cv-03532, in the U.S. District Court for the Northern District of California.
–Editing by Jocelyn Allison and Elizabeth Bowen.