Court denies part of Atkins' bid to dismiss misleading labeling lawsuit

By Elizabeth Alt | Jun 16, 2018

The U.S. District Court for the Southern District of California offered a mixed ruling to a woman who claimed that low-carb diet company Atkins Nutritionals Inc. (Atkins) uses misleading statements regarding the net carbs on its snacks.

www.atkins.com

SAN DIEGO –The U.S. District Court for the Southern District of California offered a mixed ruling to a woman who claimed that low-carb diet company Atkins Nutritionals Inc. uses misleading statements regarding the net carbs on its snacks.

U.S. District Judge Gonzalo P. Curiel on May 9 wrote the order that denies in part Atkins' motions to dismiss claims that its labels are misleading. Curiel stated that the claims alleging Atkins' label explanations of the total net carbs in the snack and the explanation for how they calculate net carbs are preempted by federal law, but the state claims made challenging how Atkins arrived at its net carb formula are not preempted by federal law.

“The court agrees with Atkins that its net carbs claim and formula statements comply with federal regulations. … The court also concludes, however, that Atkins has failed to demonstrate that its explanation statements comply with federal regulations and as a result Atkins has not shown that federal law preempted Fernandez’s state law claims challenging Atkins’ explanation statements.”

Cheryl Fernandez filed the complaint on behalf of herself and others claiming that Atkins changed its formula for calculating the net carbs in foods to promote and “accommodate sales of Atkins’ growing line of food products that included sugar alcohols," noting that the 2002 Atkins book explicitly says that artificial sweeteners are not used in the Atkins diet. The lawsuit alleges violation of the California Unfair Competition Law, California Business & Professions Code, violation of the California False Advertising Law, California Business & Professions Code, breach of an express warranty in violation of California Commercial Code, and breach of implied warranty.

Fernandez argues that Atkins’ newer net carb formula states that sugar alcohol only affects blood sugar minimally is misleading because “there is scientific uncertainty as to whether or not sugar alcohols significantly impact blood sugar.” Fernandez includes statements from multiple doctors and the Diabetes Teaching Center at the University of California, San Francisco, which states, “net carbs should be calculated by subtracting half of the grams of sugar alcohol, rather than all grams of sugar alcohol.”

Curiel said in the ruling that the net carbs and formula for net carbs Atkins is using on its snack labels do not violate federal law and that “federal law preempts Fernandez’s state law claims challenging Atkins’ net carbs claims and formula statements.”

Curiel noted Fernandez’s claims that Atkins' net carb calculation is deceptive are not preempted by federal law, noting that in the motion to dismiss the case, “Atkins seems to contend that so long as it includes a formula statement, it can also include an explanation statement. … Atkins’s explanation statements are qualitative, not quantitative.”

U.S. District Court for the Southern District of California, case number 3:17-cv-01628-GPC-WVG

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