FILED MAY 1'I 2012 CLASS ACTION AND REPRESENTATIVE ACTION COMPLAINT FOR DAMAGES, EQUITABLE AND INJUNCTIVE RELIEF JURY TRIAL DEMANDED

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1 l Ben F. Pierce Gore (SBN 1) PRATT & ASSOCIATES 101 S. Bascom Avenue, Suite 0 Campbell, CA 00 Telephone: (0) -0 Fax: (0) -0 pgore@prattattomeys.com Attorneysfor Plaintiff FILED MAY 1'I 1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA, NATALIA BRUTON, individually and on behalf ofall others similarly situated, v. Plaintiff, GERBER PRODUCTS COMPANY, NESTLE HOLDINGS, INC., and NESTLE U.S.A., INC. Defendants. SAN JOSE DIVISION CLASS ACTION AND REPRESENTATIVE ACTION COMPLAINT FOR DAMAGES, EQUITABLE AND INJUNCTIVE RELIEF JURY TRIAL DEMANDED

2 A -~ I, Plaintiff Natalia Bruton ("Plaintiff'), through her undersigned attorneys, brings this lawsuit against Gerber Products Company ("Gerber"), Nestle Holdings, Inc. ("Nestle Holdings"), and Nestle U.S.A., Inc. ("Nestle U.S.A.") (collectively referred to herein as "Defendants" or "Nestle") as to her own acts upon personal knowledge, and as to all other matters upon information and belief. In order to remedy the harm arising from Defendants' illegal conduct, which has resulted in unjust profits, Plaintiff brings this action on behalf of a national class of "all persons in the United States who purchased any of Defendants' food products intended specifically for use by infants and children less than years of age as identified in Exhibit A within the last four years" and alternatively, a state subclass of "all persons in the state of California who purchased any of Defendants' food products intended specifically for use by infants and children less than years of age as identified in Exhibit A within the last four years." The products at issue are hereinafter referred to as "Misbranded Food Products." INTRODUCTION 1. Every day, millions of Americans purchase and consume packaged foods. Identical federal and California laws require truthful, accurate information on the labels of packaged foods. This case is about companies that flout those laws. The laws, however, are clear: misbranded foods cannot legally be manufactured, held, advertised, distributed, or sold. Misbranded foods are worthless as a matter of law, and purchasers of misbranded foods are entitled to a refund of their purchase price.. If a manufacturer is going to make a claim on a food label or on its website, which is an extension of the label, the label must meet certain legal requirements that help consumers make informed choices and ensure that they are not misled. Defendants have made, and continue to make, false and deceptive claims in violation of federal and California laws that govern the types of representations that can be made on food labels. These laws recognize that reasonable consumers are likely to choose products claiming to have a health or nutritional benefit over otherwise similar food products that do not claim such benefits. More importantly, these laws recognize that the failure to disclose the presence of risk-increasing nutrients is deceptive because

3 A., ~ it conveys to consumers the net impression that a food makes only positive contributions to a diet, or does not contain any nutrients at levels that raise the risk of diet-related disease or healthrelated condition.. Identical federal and California laws regulate the content of labels on packaged food. The requirements of the federal Food, Drug & Cosmetic Act ("FDCA") were adopted by the California legislature in the Sherman Food Drug & Cosmetic Law (the "Sherman Law"). California Health & Safety Code, et seq. Under FDCA section 0(a), food is "misbranded" if "its labeling is false or misleading in any particular," or if it does not contain certain information on its label or in its labeling. 1 U.S.C. (a). Under the FDCA, the term "false" has its usual meaning of "untruthful," while the term "misleading" is a term of art. Misbranding reaches not only false claims, but also those claims that might be technically true, but still misleading. If any single representation in the labeling is misleading, the entire food is misbranded, and no other statement in the labeling can cure a misleading statement. "Misleading" is judged in reference to "the ignorant, the unthinking and the credulous who, when making a purchase, do not stop to analyze." United States v. El-O-Pathic Pharmacy, 1 F.d, ( th Cir. ). Under the FDCA, it is not necessary to prove that anyone was actually misled.. Nestle claims to be the world's leading nutrition, health and wellness company, and has pursued a "Nutrition, Health, and Wellness strategy" based in part on their "assessment that increasing nutritional awareness and the desire for improved health and wellness from food will increasingly drive consumer choice." Pursuant to this strategy, Nestle states that they would "renovate products for nutrition and health considerations" which would lead to "value" including "brand awareness and recognition; consumer loyalty, long-term enhanced growth, market share and profitability." Defendants' key to achieving this strategy is to convince consumers that they can use Nestle Products as part of a healthy and enjoyable diet. As made clear in the Nestle Annual Report, "[e]ach of our product categories, from Chocolate to Baby Food, has a specific

4 i strategy to ensure that it can be the nutrition leader in its space," and "Nestle's Food and Beverage business has... the know-how... to bring nutrition, health and wellness arguments to all food and beverage categories." See Nestle Annual Report at 1,.. Recognizing that "[t]he success of the Nestle Group depends on its ability... to offer high-quality products that appeal to the consumer preferences," id. at p., Defendants have repositioned their food products as healthy, nutritious, and natural by making false and deceptive claims in violation of federal and California laws that govern the types of representations that can be made on food labels. Defendants' reasons for doing so were driven by their pecuniary interests.. Through its Gerber brand, Defendants employ a similar strategy with respect to food products intended to be consumed by infants and children under two years of age. More specifically, Defendants employ their strategy in the way the food is marketed to the parents of those young children.. Gerber claims to be "the world's most trusted name in baby food." nutritionldefault.aspx. Gerber offers more than 10 products in 0 countries, with labeling in languages. Nestle purchased the Gerber brand in 0 for $. billion in cash. Gerber reportedly controls approximately between 0 and 0 percent of the baby food market in the United States.. Through its Gerber brand, Defendants package and sell such products as puree baby food, snacks, yogurts, side dishes, and beverages for infants and children under two years of age. Gerber organizes its products by "stages" as follows: Birth+, Supported Sitter, Sitter, Crawler, Toddler, and Preschooler. According to Gerber's website, a "supported sitter" is to months old; a "sitter" is to months old; a "crawler" is to months old; and a "toddler" is 1 months old. Therefore, all Gerber product categories other than "Preschooler" describe children under two years old. It cannot be disputed that the Misbranded Food Products are food intended specifically for use by infants and children less than years of age.

5 " With the recent increase in children's disease and illness caused by poor nutrition and excessive consumption of fats and sugars, including conditions such as diabetes and obesity, parents are increasingly aware of the need to provide healthy food for their children. To make healthy food choices for their children, parents rely on nutritional information on food product labels. Indeed, Plaintiff Bruton relies on the representations made on product labeling to make choices about what food to purchase for her child.. Intending to profit from parents' increasing desire to purchase healthy food for their children, Defendants misbrand their baby food products by, among other things, making nutrient content claims that are strictly prohibited by the Food and Drug Administration ("FDA"), and by misleading purchasers into believing that their products are healthier because there is "no sugar added" and/or healthier because they are made from "all natural" ingredients, in order to induce parents into purchasing their products. 1. Defendants have utilized a number of specific unlawful, improper, unauthorized, misleading, and false claims on their products' labeling and on their websites. A chart listing a significant number of Defendants' unlawful nutrient content claims is attached hereto as Exhibit A. Some of these claims include: a. One or more of the following claims regarding Gerber nd Foods baby foods, including Fruits, Vegetables, and Spoonable Smoothies, all of which are intended specifically for use by infants and children less than two years of age: 1. "As Healthy As Fresh". "Supports Healthy Growth & Development" iii. "Excellent Source ofvitamin A" IV. "Excellent Source ofvitamin C" v. "No Added Sugar" VI. VB. Vlll. "No Added Refined Sugar" "Made with 0% Natural Fruit" ''Made with 0% Natural Vegetables"

6 ..." b. Claims that Gerber's Yogurt Blends Snack, marketed for a "sitter" who would be under two years old, is "A Good Source of Calcium and Vitamins A, D & E" and "Nutrition for Healthy Growth & Natural Immune Support." c. Claims that its Graduates for Toddlers Fruit Strips, marketed for a "toddler" who would be under two years old, is an "Excellent Source ofvitamin C" and "Supports Healthy Growth & Development." d. Claims that its GRADUATES PUFFS, which are marketed for a "crawler" who would be under two years old, are "a great way to make every bite count by providing Vitamin E, Iron and Zinc" and specifies that the Puffs have "Iron for Healthy Brain Development" and "Vitamin E and Zinc for Natural immune Support." e. Claims that its GRADUATES WAGON WHEELS, which are intended specifically for use by infants and children less than years ofage, are "a Good Source of Iron, Zinc, & Vitamin E" for infants. f. Claims about its GRADUATES LIL' CRUNCHIES, which are intended specifically for use by infants and children less than years of age, including: 1. "Good Source ofvitamin E, Iron & Zinc". "0% less sodium than the leading cheese snack" lll. "Supports Healthy Growth & Development." 1. Gerber's website goes even further. For instance, Gerber describes its Graduates for Toddlers Animal Crackers as a "Good source of Vitamin E, Iron, Zinc & Calcium" and goes on to specify "Iron for healthy brain development," "Vitamin E and Zinc for natural immune support," and "Calcium for healthy bones and teeth." snacks/toddlers animal crackers cinnamon graham.a. This action targets the continued sale of Defendants' Misbranded Food Products. Defendants are manufacturing, distributing, packaging, labeling, marketing, advertising, and/or selling food products in violation of state and federal laws and regulations designed to: (1) prevent the manufacture and sale of misbranded food products; () ensure the truthful and

7 r. 1 accurate labeling of food products; and () prevent unfair and deceptive sales, advertising, and business practices.. Consumers rely on food labeling claims with the understanding that nutritional information on product packaging is highly regulated and, therefore, should be trustworthy.. Consumers often do not look beyond the nutrient content claims and health claims made on the front of the food product packaging, and are less likely to check the Nutrition Facts panels contained on the back of packaging where front-of-packaging nutrient content claims are present. Understanding this, companies increasingly make misleading front-of-package nutrition claims intended to indicate that a product is a healthy choice, when that product may in fact have loapoor overall nutritional profile.. While the FDA established strict rules regarding the meaning of certain nutrient 1 content claims, and when and how such claims may be made, these rules typically do not apply to 1 food products intended to be consumed by children under the age of two years. Instead, with a few exceptions which are not applicable to the products at issue, food manufacturers are prohibited from making any nutrient content claims with respect to food products intended to be consumed by children under two years old. This is because the nutritional needs of toddlers and infants are markedly different from those of adults. While a product that is low in fat may be a healthy choice for adults, for example, health experts advise against restricting fat in young 1 children's diets because they need the calories and nutrients fat provides to grow and properly develop. Thus, nutrient content claims that may be helpful in making healthy choices with 1 respect to products intended to be consumed by adults could in fact be misleading and harmful with respect to products intended to be consumed by infants and children under two years ofage.. Defendants have made, and continue to make, unlawful, false, and deceptive claims on their Misbranded Food Products in violation of federal and California laws that govern the types of representations that can be made on food labels. In particular, Defendants have violated nutrient content labeling regulations and misbranding laws mandated by federal and California law, along with a number of other food labeling and misbranding laws mandated by

8 federal and California law including those prohibiting false or misleading label claims. These violations render these products "misbranded." Under federal and California law, Defendants' Misbranded Food Products cannot legally be manufactured, advertised, distributed, held, or sold. 1. Defendants' false and misleading labeling practices stem from their global marketing strategy. Thus, the violations and misrepresentations are similar across product labels and product lines.. As described herein, Defendants continue to misbrand their baby food products despite the fact that the FDA has warned them that their products are misbranded. 1. Plaintiff seeks injunctive relief and to recover damages on her own behalf and on behalf of a national class and a California subclass based on Defendants' violations of California's Unfair Competition Law (Cal. Bus. & Prof. Code 0, et seq.]; California's False Advertising Law (Cal. Bus. & Prof. Code 00, et seq.]; California's Consumers Legal Remedies Act [Cal. Civ. Code 0, et seq.]; California's Beverly-Song Act [Cal. Civ. Code 0, et seq.]; the Magnuson-Moss Act [ U.S.C. 01, et seq.], breach of warranty, and unjust enrichment. PARTIES. Plaintiff Natalia Bruton is a resident of Los Gatos, California, who purchased Gerber Food Products in California during the four () years prior to the filing of this Complaint (the "Class Period").. Defendants Gerber Products Company ("Gerber") is a privately held Michigan corporation with its principal place of business in Fremont, Michigan. Gerber is one of the leading producers ofretail food products sold in California and nationwide.. Gerber is owned, managed, and controlled by Defendants Nestle Holdings, Inc. ("Nestle Holdings"), a privately held Delaware corporation with its principal place ofbusiness in Glendale, California.. Defendants Nestle USA, Inc. ("Nestle USA") is a privately held Delaware corporation with its corporate headquarters and principal place of business in Glendale,

9 California. It is owned by Defendants Nestle Holdings and is located in the same principle place ofbusiness as Nestle Holdings.. Defendants are the leading producers of retail baby food products, including the products described herein.. Defendants sell their Misbranded Food Products to consumers through grocery stores and other retail stores throughout the United States and California.. California law applies to all claims set forth in this Complaint because Plaintiff lives in California and purchased Gerber products here. Also, Nestle Holdings and Nestle U.S.A. are California entities with their principal place of business in California. All of the misconduct alleged herein was contrived in, implemented in, and has a shared nexus with California. The formulation and execution of the unlawful practices alleged herein occurred in, or emanated from, California. Accordingly, California has significant contacts and/or a significant aggregation of contacts with the claims asserted by Plaintiff and all Class members. JURISDICTION AND VENUE. This Court has original jurisdiction over this action under U.S.C. 1(d) because this is a class action in which: (1) there are over 0 members in the proposed class; () members of the proposed class have a different citizenship from Defendants; and () the claims ofthe proposed class members exceed $,000,000 in the aggregate. 0. The Court has jurisdiction over the federal claim alleged herein pursuant to U.S.c., because it arises under the laws ofthe United States. 1. The Court has jurisdiction over the California claims alleged herein pursuant to U.S.C. 1, because they form part of the same case or controversy under Article III of the United States Constitution.. Alternatively, the Court has jurisdiction over all claims alleged herein pursuant to U.S.c. 1, because the matter in controversy exceeds the sum or value of $,000, and is between citizens of different states.. The Court has personal jurisdiction over Defendants because a substantial portion

10 of the wrongdoing alleged in this Complaint occurred in California, Defendants is authorized to do business in California, has sufficient minimum contacts with California, and otherwise intentionally avails itself of the markets in California through the promotion, marketing and sale of merchandise, sufficient to render the exercise of jurisdiction by this Court permissible under traditional notions of fair play and substantial justice. Further, Defendants' conduct in misbranding its food products originated from and was approved at Nestle headquarters in California.. Because a substantial part of the events or omissions giving rise to these claims occurred in this District and because the Court has personal jurisdiction over Defendants, venue is proper in this Court pursuant to U.S.C. (a) and (b). FACTUAL ALLEGATIONS A. Identical California and Federal Laws Reeulate Food Labeling. Food manufacturers are required to comply with identical federal and state laws and regulations that govern the labeling of food products. First and foremost among these is the FDCA and its labeling regulations, including those set forth in 1 C.F.R. 1.. Pursuant to the Sherman Law, California has expressly adopted the federal labeling requirements as its own and indicated that "[a]ll food labeling regulations and any amendments to those regulations adopted pursuant to the federal act, in effect on January 1, 1, or adopted on or after that date shall be the food regulations of this state." California Health & Safety Code 10.. In addition to its blanket adoption of federal labeling requirements, California has also enacted a number of laws and regulations that adopt and incorporate specific enumerated federal food laws and regulations. For example, food products are misbranded under California Health & Safety Code 0 if their labeling is false and misleading in one or more particulars; they are misbranded under California Health & Safety Code if their labeling fails to conform to the requirements for nutrient labeling set forth in 1 U.S.C. (q) and regulations adopted thereto; they are misbranded under California Health & Safety Code

11 if their labeling fails to confonn with the requirements for nutrient content and health claims set forth in 1 U.S.C. (r) and regulations adopted thereto; they are misbranded under California Health & Safety Code 0 if words, statements, and other infonnation required by the Shennan Law to appear on their labeling are either missing or not sufficiently conspicuous; they are misbranded under California Health & Safety Code if they are represented as having special dietary uses but fail to bear labeling that adequately infonns consumers of their value for that use; and they are misbranded under California Health & Safety Code 0 if they contain artificial flavoring, artificial coloring, and chemical preservatives but fail to adequately disclose that fact on their labeling. B. FDA Enforcement History. In recent years, the FDA has become increasingly concerned that food manufacturers were disregarding food-labeling regulations. To address this concern, the FDA elected to take steps to infonn the food industry of its concerns and to place the industry on notice that food labeling compliance was an area of enforcement priority.. In October 0, the FDA issued a "Guidance For Industry: Letter Regarding Point Of Purchase Food Labeling ("0 FOP Guidance"), to address its concerns about frontof-package labels. The 0 FOP Guidance advised the food industry: FDA's research has found that with FOP labeling, people are less likely to check the Nutrition Facts label on the infonnation panel of foods (usually, the back or side of the package). It is thus essential that both the criteria and symbols used in front-ofpackage and shelf-labeling systems be nutritionally sound, welldesigned to help consumers make infonned and healthy food choices, and not be false or misleading. The agency is currently analyzing FOP labels that appear to be misleading. The agency is also looking for symbols that either expressly or by implication are nutrient content claims. We are assessing the criteria established by food manufacturers for such symbols and comparing them to our regulatory criteria. It is important to note that nutrition-related FOP and shelf labeling, while currently voluntary, is subject to the provisions of the Federal Food, Drug, and Cosmetic Act that prohibit false or misleading claims and restrict nutrient content claims to those defined in FDA regulations. Therefore, FOP and shelf labeling that

12 is used in a manner that is false or misleading misbrands the products it accompanies. Similarly, a food that bears FOP or shelf labeling with a nutrient content claim that does not comply with the regulatory criteria for the claim as defined in Title 1 Code of Federal Regulations (CFR) 1.1 and Subpart D of Part 1 is misbranded. We will consider enforcement actions against clear violations ofthese established labeling requirements Accurate food labeling information can assist consumers in making healthy nutritional choices. FDA intends to monitor and evaluate the various FOP labeling systems and their effect on consumers' food choices and perceptions. FDA recommends that manufacturers and distributors of food products that include FOP labeling ensure that the label statements are consistent with FDA laws and regulations. FDA will proceed with enforcement action against products that bear FOP labeling that are explicit or implied nutrient content claims and that are not consistent with current nutrient content claim requirements. FDA will also proceed with enforcement action where such FOP labeling or labeling systems are used in a manner that is false or misleading. 0. The 0 FOP Guidance recommended that "manufacturers and distributors of food products that include FOP labeling ensure that the label statements are consistent with FDA law and regulations" and specifically advised the food industry that it would "proceed with enforcement action where such FOP labeling or labeling systems are used in a manner that is false or misleading." 1. Defendants had actual knowledge ofthe 0 FOP Guidance.. Despite the issuance of the 0 FOP Guidance, Defendants did not remove the unlawful and misleading food labeling claims from their Misbranded Food Products.. On March,, the FDA issued an "Open Letter to Industry from [FDA Commissioner] Dr. Hamburg" ("Open Letter"). The Open Letter reiterated the FDA's concern regarding false and misleading labeling by food manufacturers. In pertinent part, the letter stated: In the early 10s, the Food and Drug Administration (FDA) and the food industry worked together to create a uniform national system of nutrition labeling, which includes the now-iconic Nutrition Facts panel on most food packages. Our citizens appreciate that effort, and many use this nutrition information to make food choices. Today, ready access to reliable information about the calorie and nutrient content of food is even more important, given the prevalence of obesity and diet-related diseases in the United States. This need

13 is highlighted by the announcement recently by the First Lady of a coordinated national campaign to reduce the incidence of obesity among our citizens, particularly our children. With that in mind, I have made improving the scientific accuracy and usefulness of food labeling one of my priorities as Commissioner of Food and Drugs. The latest focus in this area, of course, is on information provided on the principal display panel of food packages and commonly referred to as "front-of-pack" labeling. The use of front-of-pack nutrition symbols and other claims has grown tremendously in recent years, and it is clear to me as a working mother that such information can be helpful to busy shoppers who are often pressed for time in making their food selections... As we move forward in those areas, I must note, however, that there is one area in which more progress is needed. As you will recall, we recently expressed concern, in a "Dear Industry" letter, about the number and variety of label claims that may not help consumers distinguish healthy food choices from less healthy ones and, indeed, may be false or misleading. At that time, we urged food manufacturers to examine their product labels in the context of the provisions of the Federal Food, Drug, and Cosmetic Act that prohibit false or misleading claims and restrict nutrient content claims to those defined in FDA regulations. As a result, some manufacturers have revised their labels to bring them into line with the goals of the Nutrition Labeling and Education Act of 10. Unfortunately, however, we continue to see products marketed with labeling that violates established labeling standards. To address these concerns, FDA is notifying a number ofmanufacturers that their labels are in violation ofthe law and subject to legal proceedings to remove misbranded products from the marketplace. While the warning letters that convey our regulatory intentions do not attempt to cover all products with violative labels, they do cover a range of concerns about how false or misleading labels can undermine the intention of Congress to provide consumers with labeling information that enables consumers to make informed and healthy food choices. For example: Nutrient content claims that FDA has authorized for use on foods for adults are not permitted on foods for children under two. Such claims are highly inappropriate when they appear on food for infants and toddlers because it is well known that the nutritional needs ofthe very young are different than those of adults. These examples and others that are cited in our warning letters are not indicative of the labeling practices of the food industry as a whole. In my conversations with industry leaders, I sense a strong desire within the industry for a level playing field and a commitment to producing safe, healthy products. That reinforces my belief that FDA should provide as clear and consistent guidance as possible about food labeling claims and nutrition information in general, and specifically about how the growing use of front-of-pack calorie

14 and nutrient infonnation can best help consumers construct healthy diets. I will close with the hope that these warning letters will give food manufacturers further clarification about what is expected of them as they review their current labeling. I am confident that our past cooperative efforts on nutrition infonnation and claims in food labeling will continue as we jointly develop a practical, science-based front-of-pack regime that we can all use to help consumers choose healthier foods and healthier diets.. Defendants continued to utilize unlawful food labeling claims despite the express guidance ofthe FDA in the Open Letter.. In addition to its guidance to industry in general, the FDA sent warning letters to specific companies regarding specific violations, including such a letter to Nestle. See Exhibit B. In the February, letter, the FDA specifically infonned Nestle as follows: The products in your Gerber Graduates Fruit Puffs line are misbranded within the meaning of section 0(r)(1)(A) of the Act [1 US.c. (r)(1)(a)] because their labeling includes unauthorized nutrient content claims. Except for claims regarding the percentage of a vitamin or mineral for which there is an established Reference Daily Intake (RDI), a nutrient content claim may not be made for a food intended specifically for use by infants and children less than years of age unless the claims is [sic] specifically provided for in parts 1,, or of FDA regulations. 1 CFR 1. 1(b)(). Your Graduates Fruit Puffs products are specifically intended for infants and children under age. For example, the labeling indicates that the products are designed for the "crawler" stage of a child's life. The labeling for these products includes nutrient content claims such as "good source of iron, zinc, and vitamin E for infants and toddlers." The circumstances under which "good source" claims are pennitted are defined in 1 CFR 1.. That regulation does not allow such claims for foods intended specifically for infants and children under. Your nd Foods Carrots product is misbranded within the meaning of section 0(r)(l)(A) of the Act [1 US.C. (r)(1)(a)] because its labeling includes unauthorized nutrient content claims. This product is also intended specifically for infants and children under the age of two. For example, its labeling states that the product is appropriate for a "sitter," and sitting is a developmental milestone that generally occurs by the age of one. The nd Foods Carrots product label bears the nutrient content claim "healthy" as part of the statement "As Healthy as Fresh," and nutrient content

15 claims such as "Excellent Source...of Vitamin A" and "No Added Sugar." These circumstances under which such claims are permitted are defined in 1 CFR 1.(d), 1 CFR 1.(b), and 1 CFR 1.0(c). However, these regulations do not allow the claim for products specifically intended for children under two years of age. The above violations are not meant to be an all-inclusive list of deficiencies in your products or their labeling. It is your responsibility to ensure that your firm and all of your products are in compliance with the laws and regulations enforced by FDA. You should take prompt action to correct the violations. Failure to promptly correct these violations may result in regulatory actions without further notice, such as seizure and/or injunction.. Despite this warning letter as well as an earlier one to Nestle U.S.A. dated December, 0 (Exhibit C), Defendants did not change the labels on their Misbranded Food Products that contained the labeling claims that were in violation. Defendants also ignored the numerous warning letters the FDA sent to other companies for similar violations and posted on the FDA website as guidance for food manufacturers.. Defendants also ignored the FDA's Guidance for Industry, A Food Labeling Guide, which details the FDA's guidance on how to make food labeling claims.. Despite the FDA's numerous warnings to industry, Defendants have continued to sell products bearing unlawful food labeling claims without meeting the requirements to make them. Defendants' Misbranded Food Products continue to run afoul of FDA guidance as well as federal and California law, as Defendants continue to utilize unlawful claims on the labels oftheir Misbranded Food Products.. Plaintiff did not know, and had no reason to know, that the Defendants' Misbranded Food Products were misbranded and bore food labeling claims despite failing to meet the requirements to make those food labeling claims. c. Defendants' Food Products Are Misbranded 0. Pursuant to Section 0 of the FDCA, a claim that characterizes the level of a nutrient in a food is a "nutrient content claim" that must be made in accordance with the

16 regulations that authorize the use of such claims. 1 U.S.C. (r)(1 )(A). California expressly adopted the requirements of1 U.S.C. (r) in 0 ofthe Sherman Law. 1. Nutrient content claims are claims about specific nutrients contained in a product. They are typically made on food packaging in a font large enough to be read by the average consumer. Because consumers rely upon these claims when making purchasing decisions, the regulations govern what claims can be made in order to prevent misleading claims.. Section 0 (r)(l)(a) of the FDCA governs the use of expressed and implied nutrient content claims on labels of food products that are intended for sale for human consumption.. 1 C.F.R. 1.1 provides the general requirements for nutrient content claims, which California has expressly adopted. California Health & Safety Code 10.. An "expressed nutrient content claim" is defined as any direct statement about the level (or range) of a nutrient in the food (e.g., "low sodium" or "contains 0 calories"). See 1 C.F.R. 1.1(b)(1).. An "implied nutrient content claim" is defined as any claim that: (i) describes the food or an ingredient therein in a manner that suggests that a nutrient is absent or present in a certain amount (e.g., "high in oat bran"); or (ii) suggests that the food, because of its nutrient content, may be useful in maintaining healthy dietary practices and is made in association with an explicit claim or statement about a nutrient (e.g., "healthy, contains grams (g) of fat"). 1 C.F.R. 1.1(b)()(i-ii).. 1 C.F.R. 1.1(b)() limits nutrient claims that may be made on "food intended specifically for use by infants and children less than years of age" to claims regarding vitamins and minerals "that describe the percentage of a vitamin or mineral in the food, including foods intended specifically for use by infants and children less than years of age, in relation to a Reference Daily Intake (RDI)." Except for those claims describing a percentage in relation to the RDI, "no nutrient content claims may be made on food intended specifically for use by infants and children less than years of age."

17 Misbranded products cannot be legally sold under California Law. See Cal. Health and Safety Code 0. Misbranded products cannot be legally sold under Federal Law. See 1 U.S.C. 1,. 1. Defendants Make Unlawful Nutrient Content Claims on Products Intended for Children.. FDA regulations authorize the use of a limited number of defined nutrient content claims. In addition, FDA's regulations authorize the use of only certain synonyms for these defined terms. If a nutrient content claim or its synonym is not included in the food labeling regulations, it cannot be used on a label. Only those claims, or their synonyms, that are specifically defined in the regulations may be used. All other claims are prohibited. 1 CFR 1.1(b).. Only approved nutrient content claims will be permitted on the food label, and all other nutrient content claims will misbrand a food. It should thus be clear which type of claim is prohibited and which permitted. Food manufacturers are on notice that the use of an unapproved nutrient content claim is prohibited conduct. FR 0. In addition, 1 USC (r)() prohibits using unauthorized undefined terms, and it declares foods that do so to be misbranded. 0. Despite the clear directive, as described herein, prohibiting Defendants from making nutrient content claims on food intended specifically for use by infants and children less than two years of age, Defendants make such claims on virtually all oftheir Gerber food products intended for use by such infants and children. See Exhibit "A." a. "Excellent Source" and "Good Source" - As described herein, and in Exhibit A, Gerber food products which are intended for use by infants and children less than two years of age claim to be an "Excellent Source" of Iron, Vitamin A, and Vitamin C, among others, and also claim to be a "Good Source" of calcium, iron, zinc, and Vitamins A, D, and E, among others. All such Gerber products are misbranded within the meaning offdca 0(r)(1)(A) and 1 U.S.C. (r)(1)(a) because their labeling includes unauthorized nutrient content claims. Except for claims regarding the percentage of a vitamin or mineral for which there is an established Reference Daily Intake (RDI), a nutrient content claim may not be made for a food intended

18 specifically for use by infants and children less than two years of age unless the claims are specifically provided for in parts 1,, or of FDA regulations. 1 CFR 1.1(b)(). The circumstances under which "good source" claims are permitted are defined in 1 CFR 1., and that regulation does not allow such claims for foods intended specifically for infants and children under two years of age. b. "As Healthy As Fresh" - As described herein, and in Exhibit A, Gerber food products which are intended for use by infants and children less than two years of age claim to be "As Healthy As Fresh." All such products are misbranded within the meaning of section FDCA 0(r)(1)(A) and 1 U.S.C. (r)(l)(a) because the labeling includes unauthorized nutrient content claims. Specifically, these products bear the nutrient content claim "healthy" as part of the statement "As Healthy as Fresh." The circumstances under which such claims are permitted are defined in 1 CFR 1.(d). However, these regulations do not allow the claim for products specifically intended for children under two years of age. c. "No Added Sugar" - As described herein, and in Exhibit A, Gerber food products which are intended for use by infants and children less than two years of age claim to have "No Added Sugar" or "No Added Refined Sugar." Such nutrient content claims may not be made on food products intended for children under two. See 1 CFR 1.1(b)() (prohibiting all nutrient content claims on products intended for children under two, except as specifically provided for elsewhere); 1 CFR 1.0(c)() (allowing "No Added Sugar" claims only with respect to dietary supplements or vitamins intended for children under two). All such products are misbranded within the meaning of section FDCA 0(r)(I)(A) and 1 U.S.C. (r)(l)(a) because the labeling includes unauthorized nutrient content claims. The circumstances under which such claims are permitted are defined in 1 CFR 1.0(c). These regulations do not allow the claim for products specifically intended for children under two years of age. 1. Defendants make unauthorized nutrient content claims barred by NLEA (1 CFR 1. 1(b)()), which prohibits most nutrient content claims in connection with foods specifically intended for use by infants and children less than two years of age.

19 Nutrient content claims on products intended to be consumed by children under two are barred because the nutritional needs of children are very different from those of adults, and thus such nutritional claims on infant and toddler food can be highly misleading.. In the above-quoted February, letter from the FDA to Kurt Schmidt of Nestle, and copied to Mark Shipley, Plant Manager at Gerber Products Company, the FDA specifically found that Defendants' Gerber Graduates Fruit Puffs products were misbranded in that they are intended to be consumed by children under two and make the prohibited nutrient content claims described herein. See Exhibit B. The FDA specifically wrote that the Puffs were misbranded because their labels claimed to be "good source of iron, zinc, and vitamin E for infants and toddlers." Gerber removed these specific claims for "good source" from their Puffs' label after receiving this warning letter. Nevertheless, Gerber continues today to make specific "good source" and "excellent source" claims on most of their other baby food products despite the FDA's warning that this was a violation on the Puffs label. Despite the FDA warning, Gerber also continues to make the improper claims about their Puffs on their website. apple cinnamon. aspx.. Defendants' nd Food Carrots is another Gerber product that IS intended specifically for infants and children under the age of two. Defendants' labeling states that this product is appropriate for a "Sitter," and sitting is a developmental milestone that generally occurs by the age of one. According to Gerber's own website, a "sitter" is a child to months old. Defendants' nd Foods Carrots product is misbranded within the meaning ofnlea section (1 U.S.C. (r)(1)(a» because its labeling includes unauthorized nutrient content claims. The nd Foods Carrots product label bears the nutrient content claim "healthy" as part of the statement "As Healthy as Fresh," and nutrient content claims such as "Excellent Source of Vitamin A" and "No Added Refined Sugar." The circumstances under which such claims are permitted are defined in 1 CFR 1.(d), 1 CFR 1.(b), and 1 CFR 1.0(c). These regulations, however, do not allow any claim of this type to be made on the label of products specifically intended for children under two years ofage.

20 In the February, I 0 letter from the FDA to Kurt Schmidt, the FDA specifically found that Defendants' nd Foods Carrots product is misbranded in that it is intended to be consumed by children under two and makes the prohibited nutrient content claims set forth above. See Exhibit B attached hereto. This was not the first such FDA warning letter Defendants had received as they continued to engage it the unlawful labeling practices at issue here despite receiving an earlier FDA warning letter on December,0. See Exhibit C attached hereto.. Defendants nevertheless continue to misbrand their baby food with this and other similar claims in violation ofthe law.. Despite the FDA's warning that the phrase "As Healthy as Fresh" caused its carrots product to be misbranded, Gerber continues to use "As Healthy as Fresh" on many of its baby food labels. It also improperly uses a similar claim that a product "Supports Healthy Growth & Development.". Many of Defendants' products intended for infants and children under two also contain a marketing logo using the phrase ''NUTRI PROTECT" which typically shows small blocks in the arms ofa child, labeled with iron, zinc, or a vitamin such as Vitamin E.. In using those symbols, Defendants are either expressly or by implication making nutrient content claims, which are prohibited as described herein. 0. The violations identified by the FDA in its letter to Nestle were not a comprehensive compilation of Defendants' violations of NLEA, but were instead merely representative examples. Many of Defendants' other products continue to be misbranded in that they include other similar nutrient content claims on products intended to be consumed by children under two. For examples, during the class period, Defendants' label on Graduates for Toddlers Banana Cookies product states that it is a "Good Source of Vitamin E, Iron, Zinc & Calcium." Similarly, the "Graduates For Toddlers Fruit Strips Real Fruit Bars" claim to be an "Excellent Source ofvitamin C;" the "Graduates IiI' Crunchies" com snack claims to be a "Good Source of Vitamin E, Iron, & Zinc;" the Graduates Arrowroot Cookies claim to be a "Good Source of Vitamin E, Zinc, & Calcium;" the Graduates "lil' biscuits" claim to be a "Good Source

21 of Calcium, Iron & Vitamin E & Zinc;" and the "Graduates For Toddlers Animal Crackers" claim to be a "Good Source of Vitamin E, Iron, Zinc and Calcium." Id. Each of Defendants' Gerber nd Foods products also claim to be an "Excellent Source" of various vitamins and to be "As Healthy As Fresh." These are just some examples. 1. The circumstances under which such claims are permitted are defined in 1 CFR 1.(d) and 1 CFR 1.(c). These regulations, however, do not allow such a claim for products specifically intended for children under two years of age. Defendants' products listed above are therefore misbranded.. Defendants have also made the same unlawful claims on their websites and in their advertising in violation of federal and California laws.. Because of these improper nutrient content claims, Plaintiff purchased these products and paid a premium for them. The nutrient content claims regulations discussed herein are intended to ensure that consumers are not misled as to the actual or relative levels ofnutrients in food products. Defendants have violated these referenced regulations. Therefore, Defendants' Misbranded Food Products are misbranded as a matter of federal and California law and cannot be sold or held because they are legally worthless.. Defendants' Unlawful "Natural" Claims. The NLEA and California's Sherman Law prohibit food manufacturers from using labels that contain the terms "natural" when they contain artificial ingredients and flavorings, artificial coloring, and chemical preservatives.. While the FDA has declined to adopt a specific definition of the term "natural," in its rule-making and warning letters to manufacturers, the FDA has repeatedly stated its policy to prohibit pursuant to 1 U.S.c. the use of the term "natural" in connection with any product that (a) contains added color, regardless of whether the color comes from a natural or artificial source or (b) contains synthetic substances or flavors that would not normally be expected to be in the food. For example, the FDA has indicated in warning letters that adding citric acid to a product will cause any claim that the product is "all natural" or "0% natural" to be false and

22 r misleading, and the product will be deemed misbranded. The Defendants ignored these warning letters and other forms of FDA guidance indicating their natural claims were improper.. Under California law, "Any food is misbranded ifit bears or contains any artificial flavoring, artificial coloring, or chemical preservative, unless its labeling states that fact." Gerber's product names and descriptions and its false and misleading "0% natural" claims fail to disclose the presence of artificial components and preservatives.. Defendants misleadingly tout their products as being "made with 0% natural" ingredients when they contain artificial ingredients or added ingredients not normally expected to be in the food. For example, the labels on Defendants' "GRADUATES Grabbers Squeezable Fruit" contain the statement on the front of the package that the products are "Made with 0% Natural Fruit." This statement misleads consumers into believing that no artificial or synthetic flavors or ingredients are added to the products, when in fact they are made with ingredients that are not natural and not naturally expected to be present in the food. The Banana Blueberry flavor contains, for instance, citric acid, ascorbic acid, and alpha tocopheryl acetate. See Nutritional Info at snack banana blueberry.aspx. Other Gerber products have similar problems. For example, the labels on Defendants' "GERBER NatureSelect 1ST FOODS Fruits," "GERBER NatureSelect ND FOODS Fruits," and "GERBER NatureSelect RD FOODS Fruits" also contain the statement on the front of the package that the products are "Made with 0% Natural Fruit." The list of ingredients on the "1 ST FOODS Fruits - Bananas" product includes, however, citric acid, ascorbic acid, choline bitartrate, and alpha tocopheryl acetate. The list of ingredients of the "ND FOODS Fruits - Peaches" product includes white grape juice concentrate and ascorbic acid. The list of ingredients on the "RD FOODS Fruits - Banana Strawberry" product includes apple juice concentrate, grape juice concentrate (color), citric acid, and ascorbic acid.. These are merely examples of Gerber's misleading "0% natural" labels and are not meant to be a complete list.

23 0. A reasonable consumer would expect that when Defendants label their products as being made with 0% natural ingredients, the product's ingredients are "natural" as defined by the federal government and its agencies. A reasonable consumer would also expect products bearing such labels are made with natural ingredients under the common use of the word "natural." A reasonable consumer would understand that "natural" products do not contain synthetic ingredients or ingredients not normally expected to be in the food. 1. Gerber's natural claims have been criticized by the National Advertising Division of the Council of Better Business, which concluded that Gerber's claims that its products provided "natural" immune support or that they are made from "0% natural fruit" - were improper and unsupportable because the products contain artificial ingredients.. Defendants' products in this respect are misbranded under federal and California 1 law. 1. Defendants' Unlawful Sugar-Related Claims. Defendants also claim that several of their products, such as their Gerber nd Foods products contain "No Added Refined Sugar" or contain "No Added Sugar." Many of the Defendants' products that are labeled with a "No Added Sugar" or similar sugar-related nutrient 1 content claim contain disqualifying levels of calories that prohibit the claim from being made absent a mandated disclosure statement warning of the higher caloric level of the products and 1 thus violate 1 CFR 1.0(c)().. Federal and California regulations regulate such sugar claims as a particular type 1 of nutrient content claim. Specifically, 1 C.F.R. 1.0 contains special requirements for nutrient claims that use the terms "no sugar added." Pursuant to the Sherman Law, California has expressly adopted the federal labeling requirements of1 C.F.R. 1.0 as its own. California Health & Safety Code C.F.R. 1.0(c)() provides in pertinent part: () The terms "no added sugar," "without added sugar," or "no sugar added" may be used only if:

24 (i) No amount of sugars, as defined in 1 01.( c )()(ii), or any other ingredient that contains sugars that functionally substitute for added sugars is added during processing or packaging; and (ii) The product does not contain an ingredient containing added sugars such as jam, jelly, or concentrated fruit juice; and (iii) The sugars content has not been increased above the amount present in the ingredients by some means such as the use of enzymes, except where the intended functional effect of the process is not to increase the sugars content of a food, and a functionally insignificant increase in sugars results; and (iv) The food that it resembles and for which it substitutes nonnally contains added sugars; and (v) The product bears a statement that the food is not "low calorie" or "calorie reduced" (unless the food meets the requirements for a "low" or "reduced calorie" food) and that directs consumers' attention to the nutrition panel for further infonnation on sugar and calorie content.. 1 C.F.R. 1.0(b)() provides that: The tenns "low-calorie," "few calories," "contains a small amount of calories," "low source of calories," or "low in calories" may be used on the label or in labeling of foods, except meal products as defined in 1.1(1) and main dish products as defined in (m), provided that: (i)(a) The food has a reference amount customarily consumed greater than 0 grams (g) or greater than tablespoons and does not provide more than 0 calories per reference amount customarily consumed; or (B) The food has a reference amount customarily consumed of 0 g or less or tablespoons or less and does not provide more than 0 calories per reference amount customarily consumed and, except for sugar substitutes, per 0 g...(ii) If a food meets these conditions without the benefit of special processing, alteration, fonnulation, or refonnulation to vary the caloric content, it is labeled to clearly refer to all foods of its type and not merely to the particular brand to which the label attaches (e.g., "celery, a low-calorie food").. Some of Defendants' products identified in Exhibit A are not low-calorie andlor not suitable for weight control as some contain more than the 0 calories per reference amount customarily consumed; or for foods with a reference amount customarily consumed of 0 g or less or tablespoons or less and does not provide more than 0 calories per reference amount customarily consumed and per 0 grams, which is the maximum amount allowed under 1 C.F.R (b )().. Notwithstanding the fact that 1 C.F.R. 1.0(c)() bars the use of the tenns

25 . 1 "no added sugar" on foods that are not low-calorie unless they bear a disclaimer referring to the nutrient facts table, Defendants have touted their non low-calorie products as containing "no added sugar" or "no added refined sugar" and have chosen to omit the mandated disclaimer statement. that states that:. In doing so, Defendants have ignored the language of 1 C.F.R. 1.0(c)(I) Consumers may reasonably be expected to regard terms that represent that the food contains no sugars or sweeteners e.g., "sugar free," or "no sugar," as indicating a product which is low in calories or significantly reduced in calories. 0. Because consumers may reasonably be expected to regard terms that represent that the food contains "no added sugar" or sweeteners as indicating a product which is low in calories or significantly reduced in calories, consumers are misled when foods that are not low-calorie as a matter of law are falsely represented, through the unlawful use of phrases like "no added sugar" that they are not allowed to bear due to their high calorific levels and absence of mandated disclaimer or disclosure statements. 1. The labeling for Defendants' products violate California law and federal law. For these reasons, Defendants' "no added sugar" claims at issue in this Complaint are misleading and in violation of 1 C.F.R. 1.0(c)() and California law, and the products at issue are misbranded as a matter of law. worthless. Misbranded products cannot be legally sold and are legally. Defendants have also made the same illegal claims on their websites and advertising in violation offederal and California law.. The Defendants are in violation despite numerous enforcement actions and warning letters pertaining to several other companies addressing the type of misleading sugarrelated nutrient content claims described herein.. Plaintiff did not know, and had no reason to know, that Defendants' Misbranded Food Products were misbranded, and bore nutrient content claims despite failing to meet the requirements to make those nutrient content claims.

26 Defendants' products in this respect are misbranded under federal and California law. D. Defendants Have Violated California Law. Defendants have manufactured, advertised, distributed, and sold products that are misbranded under California law. Misbranded products cannot be legally manufactured, advertised, distributed, sold or held, and are legally worthless as a matter of law.. Defendants have violated California Health & Safety Code and 10 which make it unlawful to disseminate false or misleading food advertisements that include statements on products and product packaging or labeling or any other medium used to directly or indirectly induce the purchase ofa food product.. Defendants have violated California Health & Safety Code 1 which makes it unlawful to manufacture, sell, deliver, hold, or offer to sell any misbranded food.. Defendants have violated California Health & Safety Code 1 which makes it unlawful to deliver or proffer for delivery any food that has been falsely advertised. 0. Defendants have violated California Health & Safety Code 0 because their food products are misbranded in one or more ways, as follows: a. They are misbranded under California Health & Safety Code because their labeling fails to conform to the requirements for nutrient labeling set forth in 1 U.S.C. (q) and the regulations adopted thereto; b. They are misbranded under California Health & Safety Code 0 because their labeling fails to conform with the requirements for nutrient content and health claims set forth in 1 U.S.C. (r) and the regulations adopted thereto; and c. They are misbranded under California Health & Safety Code 0 because words, statements, and other information required by the Sherman Law to appear on their labeling either are missing or not sufficiently conspicuous.

27 Defendants have violated California Health & Safety Code 0 which makes it unlawful for any person to manufacture, sell, deliver, hold, or offer for sale any food that is misbranded.. Defendants have violated California Health & Safety Code which makes it unlawful for any person to misbrand any food.. Defendants have violated California Health & Safety Code 0 which makes it unlawful for any person to receive in commerce any food that is misbranded or to deliver or proffer for delivery any such food.. Defendants have violated the standard set by 1 C.F.R. 1., which has been incorporated by reference in the Sherman Law, by failing to include on their product labels the nutritional information required by law.. Defendants have violated the standards set by 1 CFR 1.1, 1., and 1., which have been adopted by reference in the Sherman Law, by including unauthorized nutrient content claims on their products.. Defendants' labeling, advertising, and marketing as alleged herein is false and misleading and designed to increase sales of the products at issue. Defendants' misrepresentations are part of an extensive labeling, advertising and marketing campaign, and a reasonable person would attach importance to Defendants' representations in determining whether to purchase the products at issue. A reasonable person would attach importance to whether Defendants' products were legally salable and capable of legal possession and to Defendants' representations about these issues in determining whether to purchase the products at issue. Plaintiff would not have purchased the Defendants' Misbranded Food Products had she known they were not capable of being legally sold or held. E. Plaintiff Purchased Defendants' Misbranded Food Products. Plaintiff is concerned about the nutritional content of the food she purchased for her child's consumption, and seeks to ensure that her child maintains a healthy diet.

28 Plaintiff purchased many of Defendants' food products intended for children under two at various times within the past four () years.. Plaintiff purchased Defendants' Misbranded Food Products at issue in this Complaint, including Gerber baby food, on occasions during the Class Period. 1. Plaintiff purchased Defendants' Misbranded Food Products, including but not limited to the following: Gerber Nature Select nd Foods Fruit - Banana Plum Grape Start Your Child on a (oulse to Healthv Nutrition

29 :fi.. ~ ~ Gerber Nature Select nd Foods Fruit - Apples and Cherries

30 Gerber Nature Select nd Foods Vegetables - Carrots "';.; ",-~: ~~ ~,~,; c J! =: c'::: o :;;.e.. "" :1 -, II (fit I~

31 II:: -.. =: ::'::: Q= 'Da: ~s -., 0::1: ""0 "" _1'0 =GI!! ""= -- r..,., - -> >...

32 1 1 Gerber Yogurt Blends Snack 1 1 ~

33 1 1 _...--_.

34 Graduates Lit' Crunchies - Mild Cheddar

35 ~-----, --

36 N N N N N N N N N ~ ~ ~ ~ ~ W N - 0 ~ ~ ~ ~ ~ ~ W N - 0 ~ ~ ~ ~ ~ ~ W N N~tr~tion Fat Serving SIze: p)f=~:;; Servings Per Contaii;<:,!:.. ' Per~ - talories Ca!on~ Total Fat Saturated Fat Trans Fat Cholesterol JOdi. Potassium Total~bohydnde Dietary Fiber Sugars - Protein lnfants 1)-1 ~ i~~ e

37 Graduates Fruit Puffs - Peach

38

39 1 1 1

40

41

42

43 Plaintiff read the labels on Defendants' products, including labels with nutrient content claims before purchasing them.. Defendants' labeling claims were a material factor in Plaintiff's decisions to purchase Defendants' products. Based on Defendants' claims, Plaintiff believed that the products were a better and healthier choice than other available products.. Plaintiff relied on Defendants' package labeling. 1. At point of sale, Plaintiff did not know, and had no reason to know, that Defendants' products were misbranded as set forth herein, and would not have bought the products had she known the truth about them. 1. At point of sale, Plaintiff did not know, and had no reason to know, that Defendants' nutrient content claims on the products' labels were unlawful as set forth herein, and would not have bought the products had she known the truth about them.