[00:00:03] Speaker 05: Thank you, Your Honors. [00:00:04] Speaker 05: Good morning. [00:00:04] Speaker 05: My name is Ben Gubernick, appearing for Plaintiff Appellant Karen Collier. [00:00:09] Speaker 05: I'll reserve five minutes for rebuttal. [00:00:10] Speaker 00: I'll watch. [00:00:11] Speaker 00: I don't know if that podium is one that raises or not, but either way, I'll just tell you I'm having trouble hearing you, so if you could keep your voice up. [00:00:17] Speaker 05: Okay, I'll do my best, Judge, and please let me know if... [00:00:20] Speaker 05: if I'm falling short of that. [00:00:22] Speaker 05: Okay, so what I'd like to start with here is the briefing talks a lot about McGinnity and Whiteside and this whole issue of ambiguity, but this actually is a lot simpler than that because [00:00:34] Speaker 05: The misrepresentations that issue in this case are not ambiguous at all. [00:00:39] Speaker 05: Chocolate banana means chocolate and banana. [00:00:41] Speaker 05: That's how any reasonable person would read that. [00:00:45] Speaker 05: And the elephant in the room here is how much work the post-positive adjective flavor does. [00:00:53] Speaker 05: It's like saying, oh, this person said president, but they meant president-elect. [00:00:59] Speaker 01: Not really, because there's a picture [00:01:02] Speaker 01: on the package. [00:01:04] Speaker 01: And so the representation to a person would be that whatever is pictured on the package would be in there. [00:01:12] Speaker 01: So that's the argument. [00:01:15] Speaker 01: Right. [00:01:15] Speaker 04: So we're starting with this. [00:01:17] Speaker 01: But then you have someone who's kind of what we call a niche consumer. [00:01:24] Speaker 01: And so a person who [00:01:26] Speaker 01: buys these products and is familiar with the jargon and how it's labeled, wouldn't presumably know that there's not going to be a whole piece of fruit in there. [00:01:40] Speaker 01: So could you help me through that dichotomy? [00:01:44] Speaker 05: Yes. [00:01:44] Speaker 05: Actually, I think this is something that tripped the district court up as well. [00:01:47] Speaker 05: We've never alleged that there are supposed to be whole slices of banana or fresh banana or even dried banana in the cereal. [00:01:55] Speaker 01: What are you alleging should be there? [00:01:58] Speaker 05: It should be there as an ingredient. [00:01:59] Speaker 05: You can have it as a puree. [00:02:00] Speaker 05: You can have it as juice. [00:02:01] Speaker 05: You can mix it into the batter where the squares come from. [00:02:04] Speaker 01: But somewhere there should be some presence of banana. [00:02:07] Speaker 01: That's what you're saying. [00:02:08] Speaker 05: Exactly. [00:02:09] Speaker 05: There's got to be some banana in some amount of some kind. [00:02:13] Speaker 05: No one expects to pick up that. [00:02:15] Speaker 00: But this is all about the Manuka honey case. [00:02:17] Speaker 00: This takes us back to the Manuka honey case. [00:02:19] Speaker 00: So I think Judge Robinson and I seem to have the same question. [00:02:22] Speaker 00: So this is a keto brand, whatever, specialty cereal. [00:02:25] Speaker 00: And I think what the district court was reasoning was anybody who's really interested in buying keto brand cereal or snack would be the kind of consumer looking for a niche product who would be expected to know, hey, [00:02:42] Speaker 00: If it says zero sugar, that can't be consistent with bananas being in there or chocolate being in there. [00:02:49] Speaker 00: I am summarizing not very well. [00:02:50] Speaker 00: The district court was much more eloquent. [00:02:52] Speaker 00: What's wrong with that reasoning? [00:02:56] Speaker 05: The problem with that is, well, I mean, a few things. [00:02:59] Speaker 05: First off, I would disagree if this is we're talking about a niche specialty product. [00:03:03] Speaker 05: This stuff sold everywhere. [00:03:05] Speaker 01: Well, but not to everyone. [00:03:06] Speaker 01: That's the point. [00:03:08] Speaker 05: Well, but even, I'm sorry. [00:03:09] Speaker 00: But it is a threshold question. [00:03:10] Speaker 00: And I've thought about that, because I'm trying to remember how many jars of honey are on the shelf in the supermarket. [00:03:15] Speaker 00: There's aisles of snacks and cereal. [00:03:19] Speaker 00: So in that way, I agree. [00:03:21] Speaker 00: There's a whole lot more of it. [00:03:24] Speaker 00: But what else should we consider to decide if we're in niche product land? [00:03:30] Speaker 05: Well, I think we look at the rest of the stuff on the bag, right? [00:03:33] Speaker 05: I mean, what are the contextual clues there? [00:03:37] Speaker 05: We have the words keto-friendly. [00:03:39] Speaker 05: I don't know what that means. [00:03:41] Speaker 05: And really, that could mean just about anything, if you think about it. [00:03:44] Speaker 01: And these are... But you think someone who's serious about the keto diet would know what that means? [00:03:51] Speaker 05: Well, and that goes to really the essence of what the district court got wrong here, is we compile assumption on top of assumption about what the millions of people who buy this cereal know about the process of making cereal and know about keto diets. [00:04:07] Speaker 01: The same thing was true in the Manuka honey case. [00:04:09] Speaker 01: At some point, our president says if you are advertising to a group of people who are extremely knowledgeable about this product, [00:04:20] Speaker 01: then the analysis changes. [00:04:23] Speaker 01: And so that's kind of my concern. [00:04:26] Speaker 01: Was the advertisement to a group of people who are extremely knowledgeable about this product? [00:04:32] Speaker 05: Sure, and I think that's really where Whiteside is useful, because Whiteside talks about this idea that this niche specialty product concept should be used extremely sparingly. [00:04:45] Speaker 05: It shouldn't be applied to mass market everyday items like this. [00:04:49] Speaker 05: I mean, look, there are millions of people buying this. [00:04:52] Speaker 05: It's alleged in the complaint that at the time of filing, they'd sold something like 10 or 11 million bags of it. [00:04:57] Speaker 00: I have a twist on this, right up the same alley as Judge Rollinson. [00:05:02] Speaker 00: If a consumer were really knowledgeable, because they're really counting every gram of whatever, then what do we do about people who are trying to follow a very strict keto diet, recognizing that zero grams of something under these rules doesn't really mean zero. [00:05:19] Speaker 00: Zero calories doesn't have to mean zero calories. [00:05:21] Speaker 00: the FDA has a safe harbor provision that allows a non-zero number to be reported out as zero, and that's compliant. [00:05:29] Speaker 00: So I don't know where we would draw the line about just how savvy are our savvy shoppers. [00:05:34] Speaker 05: Correct. [00:05:34] Speaker 05: And actually, I would like to talk about that issue, because it seems to me the only contextual clue on the bag that really indicates this might not have banana in it is that it says zero gram sugar. [00:05:44] Speaker 05: As Your Honor pointed out, you're allowed to have less than 0.5 grams of sugar. [00:05:49] Speaker 05: in it and still call it zero-gram sugar. [00:05:51] Speaker 05: And people encounter this all the time. [00:05:53] Speaker 05: When you buy a food that says zero-grams trans fat, people know just by its plain wording. [00:05:58] Speaker 05: That doesn't mean there is absolutely zero. [00:06:00] Speaker 05: It just means it's some number under one gram. [00:06:03] Speaker 05: So the point is, a reasonable consumer would see chocolate banana. [00:06:08] Speaker 05: They'd see it next to these other keto-friendly cereals. [00:06:12] Speaker 05: This is a crowded space with lots of competing products. [00:06:15] Speaker 05: This isn't one manuka honey among 50. [00:06:19] Speaker 05: And they would say, OK, this is the only one that doesn't have the word flavored on the front. [00:06:24] Speaker 05: They would think that they are buying something fundamentally different than what's in these other products, just as a matter of language. [00:06:30] Speaker 00: Wait a minute. [00:06:32] Speaker 00: Hold on. [00:06:32] Speaker 00: Sorry. [00:06:32] Speaker 00: Is the absence of the word flavor? [00:06:34] Speaker 00: What's going to tip them off? [00:06:36] Speaker 00: Do that again. [00:06:36] Speaker 05: It's the absence of the word flavor. [00:06:37] Speaker 05: And this is what I meant by president versus president-elect. [00:06:41] Speaker 05: These do not mean the same thing. [00:06:42] Speaker 05: And you add the word flavor to the end of it. [00:06:44] Speaker 00: I'm not sure the president analogy is working. [00:06:47] Speaker 00: Try another one. [00:06:48] Speaker 00: Try another one. [00:06:49] Speaker 05: Or the point is, I guess the point I'm making is these mean fundamentally different things. [00:06:54] Speaker 05: If you say the word banana, it's a actual fruit. [00:06:58] Speaker 05: If you say the word banana flavor, you're describing what this thing tastes like. [00:07:03] Speaker 00: Your point is that this package says banana and chocolate, and doesn't say banana flavor. [00:07:08] Speaker 00: Is that your point? [00:07:09] Speaker 00: Exactly. [00:07:09] Speaker 00: OK, thank you. [00:07:10] Speaker 03: And to the extent it has banana flavor in it, that would be buried in the artificial flavor, natural flavor on the back of the ingredient that does not, anywhere, disclose banana. [00:07:24] Speaker 05: Right, exactly, so that you would have to look at the ingredient list and say, nope, we've been tricked. [00:07:29] Speaker 05: On the front, it says chocolate banana. [00:07:31] Speaker 05: Then you look at the back in the ingredient list, and buried in there is that it's actually just banana flavor, no banana. [00:07:36] Speaker 05: If there was any banana in this product, there would not be an issue. [00:07:40] Speaker 05: If the word flavored was on the front of this package, as the FDCA and Sherman-Lombi application required, there would not be an issue. [00:07:47] Speaker 03: Would that, I guess, [00:07:50] Speaker 03: Something that's not clear to me at least is if the natural flavors contain banana derivatives, is that in dispute or does everyone, are you pleading that no, there's just no banana? [00:08:07] Speaker 05: So you're right. [00:08:08] Speaker 05: So I guess there are two answers on that. [00:08:10] Speaker 05: One, the complaint doesn't allege how this particular batch of natural flavors that they use was created. [00:08:18] Speaker 05: And the truth is, who knows? [00:08:20] Speaker 05: And Catalina Crunch probably doesn't even know what's in there. [00:08:23] Speaker 00: Because some flavor is an essence of actual banana, right? [00:08:27] Speaker 00: That's how they get there in some circumstances. [00:08:29] Speaker 00: That's the definition. [00:08:29] Speaker 00: I looked this up. [00:08:30] Speaker 00: That's the definition, right? [00:08:31] Speaker 05: Correct. [00:08:32] Speaker 05: Somewhere down the line, there was something that resembled [00:08:36] Speaker 05: a subcomponent of banana that got a bunch of emulsifiers and solvents added and distilled. [00:08:41] Speaker 00: So it might be that there was some. [00:08:43] Speaker 00: But not necessarily. [00:08:47] Speaker 05: Is it theoretically possible that by natural flavors, they actually mean that there's actual banana in there? [00:08:53] Speaker 05: I mean, it would contradict what they have on the ingredient label. [00:08:55] Speaker 05: But sure, if it turns out that there's actually banana in the chocolate banana cereal, then it's not a misleading statement. [00:08:59] Speaker 00: Council, I don't think you're answering the question. [00:09:01] Speaker 00: But maybe it's because I didn't ask it very well. [00:09:03] Speaker 00: I think that, to follow up on Judge Johnstone's point, [00:09:06] Speaker 00: When something says, let's say chocolate flavor or coffee flavored, that a manufacturer can do that if the flavoring, the flavoring can sometimes contain sort of essence of actual coffee bean, right? [00:09:22] Speaker 00: But it wouldn't necessarily have to. [00:09:25] Speaker 00: Is that right? [00:09:26] Speaker 05: That's correct. [00:09:27] Speaker 05: If you get that taste or that flavor from something else as your base that you're adding all this stuff to, then you're an artificial flavor. [00:09:35] Speaker 00: Which makes the phrase natural flavor entirely counterintuitive, by the way. [00:09:39] Speaker 05: I think actually the complaint cites a few news articles that make this point. [00:09:44] Speaker 05: This is why they're undesirable to consumers. [00:09:46] Speaker 05: I mean, it's not even really clear what you're getting with these, but it's not banana in any form. [00:09:50] Speaker 00: Circling back to Judge Johnstone's question, can we tell from banana, if it said banana flavor, we wouldn't necessarily know if there's any [00:09:56] Speaker 00: banana in there? [00:09:58] Speaker 05: I think it would be enough to say that we would know it is not banana in the way any consumer understands banana. [00:10:08] Speaker 00: OK, so this package doesn't say flavor. [00:10:10] Speaker 00: It just says banana. [00:10:11] Speaker 05: It just says banana. [00:10:11] Speaker 05: That's the problem here. [00:10:13] Speaker 05: If it said banana flavor, it wouldn't be a false statement. [00:10:15] Speaker 05: It would be a true statement. [00:10:16] Speaker 03: What are the limiting principles? [00:10:18] Speaker 03: So here's the donut, hypothetical. [00:10:22] Speaker 03: It's not a hypothetical. [00:10:23] Speaker 03: It's on the label. [00:10:25] Speaker 03: Does it do we have to test it apple cider doughnuts do we have to test it for apple does it have to have? [00:10:31] Speaker 05: Fermented apple juice or does it have to be converted into doughnuts and then rolled out into crispy squares There's a couple things we want to say that doughnuts not it not an ingredient But for the apple which is really the more important thing I mean there are actually cases in the circuit that have dealt with doughnuts that have been like blueberry doughnuts that don't have blueberry in them that are just [00:10:49] Speaker 05: have something that simulates their presence. [00:10:52] Speaker 05: So to comply there, you need some sort of apple something. [00:10:57] Speaker 05: It can be puree. [00:10:58] Speaker 05: It can be apple cider. [00:10:59] Speaker 05: It can be a piece of apple. [00:11:00] Speaker 05: It's got to have something that's recognizable. [00:11:01] Speaker 03: And we're just asking that because I think your theory, we'd have to come up with a rule here to help distinguish the donut case or even the apple cider case from the apple case. [00:11:11] Speaker 03: And how are you drawing that line? [00:11:12] Speaker 03: Let's now just take the more plausible apple cider line. [00:11:16] Speaker 05: Right, I don't think the court needs to make a new rule here. [00:11:20] Speaker 05: I think the FDCA, the rule they have in place that's incorporated by the Sherman law works extremely well for this. [00:11:28] Speaker 05: entirely predictable. [00:11:29] Speaker 05: It's what we've been using in grocery stores for 50 years. [00:11:33] Speaker 05: And it's what all of Catalina Crunch's competitors follow. [00:11:37] Speaker 05: And there's no problem. [00:11:38] Speaker 05: They've just decided we're going to experiment with not using this simple rule. [00:11:43] Speaker 05: We're just going to leave the word flavored off, fundamentally change the meaning of that noun. [00:11:50] Speaker 03: What would be the compliant labeling, in your view, of the apple cider donut? [00:11:54] Speaker 05: Apple, it could be apple cider donut flavored, apple cider, apple cider flavored. [00:12:00] Speaker 05: You just have to have something on there. [00:12:03] Speaker 05: Let's forget the cereal. [00:12:05] Speaker 05: If someone's selling apple cider donuts that don't have the word flavored at the end, I think under this circuit's precedent that would actually be misleading. [00:12:15] Speaker 05: Yeah, I think you could use, like, apple cider flavored donut would be the formulation for that. [00:12:20] Speaker 05: So they just have to have the word flavor in there. [00:12:22] Speaker 05: Or it could even be an asterisk, like this court pointed to in Whiteside. [00:12:26] Speaker 05: They have to have some contextual clues on here to alert people that what they're buying here does not contain this product. [00:12:32] Speaker 05: So I've gone a bit over the time I wanted to use here. [00:12:34] Speaker 05: So I'll reserve for the rest. [00:12:35] Speaker 01: All right, thank you. [00:12:42] Speaker 02: Please the court. [00:12:43] Speaker 02: My name is Matthew Orr, representing Catalina Snacks. [00:12:47] Speaker 02: Your honor, you've touched on, I think, the correct analysis. [00:12:50] Speaker 02: And this case is a Trader Joe's Moore case. [00:12:54] Speaker 02: This is not necessarily a Whitesides or a McGinnity case. [00:12:58] Speaker 02: And I think what we really have to look at is [00:13:00] Speaker 02: We talk about the reasonable consumer standard, but I think we have to really take a close look at what that really means. [00:13:07] Speaker 02: And what that reasonable consumer standard is, is the requirement that it's probable that a significant portion of the general consuming public or of targeted consumers acting reasonably in the circumstances could be misled. [00:13:22] Speaker 02: So what that requires is two things. [00:13:23] Speaker 02: Number one, to identify the targeted consumer, and number two, to identify the circumstances in which the claim is made. [00:13:32] Speaker 02: And here, the targeted consumers are consumers who are looking for a ketogenic breakfast cereal. [00:13:38] Speaker 03: Well, on that, ketogenic. [00:13:43] Speaker 03: actually refers to originally a therapy, a high fat, low sugar therapy, as I understood it, for epilepsy. [00:13:54] Speaker 03: As it's understood now on the average shelves, I mean, there's [00:13:59] Speaker 03: This is not, and I don't think a reasonable consumer could see this and expect that it would have those ketogenic effects. [00:14:07] Speaker 03: Keto has become a health fad. [00:14:09] Speaker 03: Correct. [00:14:09] Speaker 03: And this cereal is quite a ways removed from having any therapeutic effects where that word keto comes from. [00:14:15] Speaker 03: So what are we supposed to do? [00:14:17] Speaker 03: You know, manuka honey, there's, right, it's a place. [00:14:20] Speaker 03: It's a thing. [00:14:20] Speaker 03: It's a thing that still exists. [00:14:22] Speaker 03: When a manufacturer [00:14:26] Speaker 03: uses that as kind of a fad rather than a statement of particular therapeutic benefits, how are we supposed to say that the reasonable consumer should include all of that in their consideration of the labels? [00:14:41] Speaker 02: Yeah, I think I think it goes to the targeted group and the targeted group are people who are consumers of breakfast cereal who are interested in low carbohydrate or low sugar. [00:14:50] Speaker 03: Well, maybe they're interested in kind of healthy. [00:14:52] Speaker 03: I mean, you know, this will show up in health food aisles, healthy eating. [00:14:56] Speaker 03: Maybe they're interested in bananas. [00:15:00] Speaker 02: Well, I mean, generally, I think the ketogenic consumer would be looking for products that have low glycemic index type foods. [00:15:09] Speaker 02: But I think we don't necessarily need to go there, your honor, with this. [00:15:13] Speaker 02: What we have here is a product and a consuming market that is looking for zero sugar or low sugar foods. [00:15:19] Speaker 02: And that's what the product is. [00:15:21] Speaker 02: So whether the target audience is consumers who are interested in low carbohydrate and low sugar foods, [00:15:30] Speaker 02: The product, the circumstances in which this product is placed on the market, you've got to look at the product as a whole. [00:15:38] Speaker 02: And here we have a product that is marketed as keto-friendly, zero sugar, and we have a product that has a picture of the cereal on the front, which is [00:15:50] Speaker 02: Cereal that is uniform in appearance It's uniform consistency. [00:15:56] Speaker 03: Do you think that that does the? [00:15:59] Speaker 03: Claim have to depend on there being real bananas like chunks of banana in there. [00:16:03] Speaker 03: Have we ever said that? [00:16:05] Speaker 02: No, that's not not necessarily but that's what the plaintiff argued it at the lower court level and I'm not assessed to be in the ingredient somewhere and [00:16:12] Speaker 02: Correct, I think that's right. [00:16:14] Speaker 02: And it's not here. [00:16:16] Speaker 02: Well, I don't, sorry, can you say your question? [00:16:19] Speaker 03: I guess the standard, you're not suggesting that the only way that the reasonable consumer would assume that there are actual chunks of banana in there. [00:16:26] Speaker 02: No, no, I think that what the reasonable consumer standard here is, is the reasonable consumer would expect that this is a flavor, that this is not, that these products would not have. [00:16:38] Speaker 00: Right, and so how do you get there? [00:16:40] Speaker 00: Because it's advertised as no sugar? [00:16:42] Speaker 02: Correct. [00:16:43] Speaker 02: Zero sugar. [00:16:44] Speaker 02: And here we have, sorry? [00:16:45] Speaker 02: What about the mint? [00:16:47] Speaker 02: Well, it's mint chocolate, Your Honor, is what the ingredient is, or what the flavor is. [00:16:52] Speaker 03: And so I think... Is it hyphenated? [00:16:54] Speaker 03: I can't recall. [00:16:55] Speaker 02: It's not hyphenated, but it's a mint chocolate product. [00:16:58] Speaker 03: Why, how's that distinguishable from chocolate banana and banana being separate? [00:17:02] Speaker 03: Sorry? [00:17:02] Speaker 03: You're saying mint chocolate. [00:17:04] Speaker 03: As I understand it, it contains chocolate, but it doesn't contain mint. [00:17:08] Speaker 02: Well, it contains cocoa, I think, Your Honor, and that satisfies the ingredient requirement. [00:17:13] Speaker 02: But I think when you're talking about these products as a whole, and plaintiff has identified apple cider donut, has also identified honey graham, and the question is, would a reasonable consumer understand [00:17:25] Speaker 02: a product that has honey and has apple cider and donuts, would a consumer expect those ingredients to be in this product? [00:17:34] Speaker 00: Can we back up? [00:17:36] Speaker 00: Because I think your decision tree, you started right at the top to say, this is a Trader Joe's case, a Manuka honey case. [00:17:42] Speaker 00: And I'm not so sure it is. [00:17:43] Speaker 00: But I'd like to know why you think it is. [00:17:45] Speaker 00: You've been mentioning the targeted consumer, not just a reasonable consumer, but a targeted one. [00:17:50] Speaker 00: So that puts us into niche land, Trader Joe's. [00:17:54] Speaker 00: But this is a product that would be, you know, there's an entire, maybe one or two aisles of cereals in grocery stores, for example. [00:18:02] Speaker 00: And I think the allegation that makes this a niche product is that it is, I think there's two. [00:18:07] Speaker 00: One is that it's a bit more expensive, apparently, than the average cereal. [00:18:10] Speaker 00: And the other is that it says keto-friendly. [00:18:12] Speaker 00: Are there other factors that I'm missing that you think put you in this category? [00:18:16] Speaker 02: Sure, Your Honor. [00:18:17] Speaker 02: I think the zero sugar is the primary one as well. [00:18:19] Speaker 00: OK. [00:18:20] Speaker 00: So if that's it, then what about that? [00:18:22] Speaker 00: That was the district court's reasoning. [00:18:23] Speaker 00: She said if the targeted consumer who knows about keto would recognize someone who's really looking at these labels, and some people do and some people don't, but the people who do would recognize that you can't have [00:18:33] Speaker 00: Zero sugar was the court's reasoning and banana Correct or chocolate. [00:18:39] Speaker 00: So what about the fact that someone who's really looking at labels knows that there's actually a safe harbor and Products can can be labeled properly labeled. [00:18:48] Speaker 00: No sugar when they have some sugar [00:18:50] Speaker 02: I think it goes to what the reasonable consumer or that targeted consumer would understand. [00:18:54] Speaker 02: I don't think there's any allegation that a consumer looking for cereal, even if they have a, adopting a ketogenic lifestyle, would have an in-depth understanding of that. [00:19:04] Speaker 02: I think when they see zero sugar, [00:19:06] Speaker 02: They assume that there's no sugar in the product. [00:19:08] Speaker 00: I'm just not sure that you can have it both ways. [00:19:09] Speaker 00: That's what I'm struggling with. [00:19:11] Speaker 00: So either there's people like me who are clueless about labels and looking at keto. [00:19:16] Speaker 00: And I mean, really, I'm pretty careless about it. [00:19:18] Speaker 00: And there's other folks who are very careful about their diet. [00:19:21] Speaker 00: And for those people, if that's what we're talking about, to put you in Trader Joe's land, the niche market, it seems to me, I don't know how you can have it both ways, that they would know some of the inside scoop and not [00:19:33] Speaker 02: Yeah, and let me back up. [00:19:35] Speaker 02: I think this Trader Joe's has applicability here in terms of potentially a niche market, but I don't think it's required. [00:19:41] Speaker 02: I don't think a niche market is required to affirm the lower court's holding. [00:19:45] Speaker 00: I appreciate that, but before you go there, I just want to get your best shot at whether we should be in the niche market target, niche market category of case law, which is Trader Joe's. [00:19:56] Speaker 00: And your best argument is that it says keto, that it's priced higher, and that it says zero sugar. [00:20:04] Speaker 00: Or did I miss anything? [00:20:06] Speaker 02: Correct. [00:20:06] Speaker 02: I think that's right, Your Honor. [00:20:07] Speaker 00: OK. [00:20:07] Speaker 00: And then what's your best response to this concern that I have about if somebody really understands the inside scoop, they know that zero doesn't necessarily mean zero within the appropriate application of the FDA labeling rules? [00:20:20] Speaker 02: I think they would understand that. [00:20:22] Speaker 02: Sir closer as a cereal product that's labeled apple cider donut for example or chocolate banana would probably be above the Variance there in terms of the half well it gets your ingredients Several of these cereals contain monk fruit extract monk fruit Does contain carbohydrates it contains a disclosable? [00:20:46] Speaker 03: It contains a non-disclosable amount of calories, but that's a fruit. [00:20:53] Speaker 03: So if it was just there, it had trace amounts of banana. [00:20:57] Speaker 03: Why wouldn't a reasonable keto consumer think that, well, maybe just a touch of sweetness, a touch of flavor brought from it, but not enough to take it out of keto land? [00:21:07] Speaker 02: Well, because I think when you look at the packaging as a whole and the product as a whole, in terms of the product lines as well, apple cider donut, I think they would recognize that that most likely is going to raise it above the... Well, no, I'm talking about two fruits, the banana and the monk fruit. [00:21:22] Speaker 03: The monk fruit has much less carbs, but it does have some. [00:21:27] Speaker 03: It would be entirely consistent with zero grams to have a little bit of fruit at the end of that ingredient label, would it not? [00:21:35] Speaker 02: I'm not sure if it would be entirely consistent. [00:21:36] Speaker 02: It would be possible, theoretically, or chemically possible, I suppose. [00:21:41] Speaker 03: Well, you've done it with the fruit in your plants, right? [00:21:44] Speaker 03: There is monk fruit in it. [00:21:45] Speaker 02: Correct. [00:21:45] Speaker 02: And here, again, it does have natural flavor. [00:21:48] Speaker 02: And there's no allegation that that natural flavor does not include or is derived from some of these ingredient components. [00:21:56] Speaker 02: And so what we have here is a situation where plaintiff has not made any allegation that there's not, the natural flavors are not derived from [00:22:06] Speaker 02: certain of these ingredients. [00:22:08] Speaker 02: The plaintiff has simply alleged that he was misled because he believed that there was those ingredients. [00:22:14] Speaker 03: As a pleading matter, I had this question also for your friend, but so as a pleading matter, why can they not come back and say, well, that's an affirmative defense for you to establish? [00:22:24] Speaker 03: Well, that natural flavor actually contains banana, but you're not disclosing banana in the natural flavor. [00:22:30] Speaker 02: I think it's a basic pleading element that you have to overcome a reasonable consumer standard. [00:22:36] Speaker 02: And if they've alleged that there's, they've not alleged that there's no banana or any of those ingredients in the product. [00:22:44] Speaker 02: But I think also, again, I think while this is, while a targeted consumer is certainly relevant but not necessary, in the same way I think that we do get into white side here, which is the back of the label. [00:22:58] Speaker 02: And I think we get there because the same issues and the same circumstances and fact pattern that leads a reasonable consumer to understand that these characterizing flavor statements or flavors and not ingredients creates an ambiguity, creates an ambiguity in the label. [00:23:18] Speaker 00: Because, OK, you think a reasonable consumer knows that she needs to look at the back label to get more information because what? [00:23:26] Speaker 00: Correct. [00:23:27] Speaker 00: What is it on the front label that tells her that? [00:23:29] Speaker 02: The zero gram, well, I think there's a fundamental incompatibility with zero sugar. [00:23:33] Speaker 00: Between zero and, sorry, between zero sugar and banana? [00:23:36] Speaker 02: Correct. [00:23:36] Speaker 02: Okay. [00:23:37] Speaker 02: Correct. [00:23:37] Speaker 02: And I think there's a, there's a, the issue there, and Whitesides said, well, if there's an ambiguity and requires additional information or causes the consumer to say, hey, how is this being done? [00:23:48] Speaker 02: then they're then tasked with going to the back of the label. [00:23:51] Speaker 02: And this is consistent with the FDA guidelines. [00:23:54] Speaker 02: We submitted the FDA guidelines, which is a guideline to consumers to identify and tell consumers where to look for flavoring versus ingredients. [00:24:02] Speaker 02: And it's not surprising that the FDA said, well, you look for ingredients in the ingredient panel. [00:24:07] Speaker 02: And that's where you look for ingredients. [00:24:09] Speaker 02: And if you have a statement on the front of a label such as maple or maple flavored or artificial maple, you're not necessarily going to get maple in that product, but you need to look at the back of the label. [00:24:19] Speaker 02: And that's where you'll see natural flavorings and see the lack of [00:24:23] Speaker 02: a certain ingredient or component of the product. [00:24:25] Speaker 02: And that's consistent with the regulations as well. [00:24:28] Speaker 02: If you look at 101.21, we talked about that in the motion in our briefing, which is kind of a decision tree, as you might consider. [00:24:40] Speaker 02: And that's basically if the product is one that's basically as long as the characterizing flavor [00:24:48] Speaker 02: is not supplied by an artificial flavor or reinforced by an artificial flavor, you don't need to use the word flavor. [00:24:54] Speaker 02: So Appellant mentioned and said that we've violated these FDA regulations, but the FDA regulations don't require the word flavored when you're using a characterizing ingredient, unless it's a type of food in which you'd commonly expect [00:25:10] Speaker 02: that ingredient to be present. [00:25:12] Speaker 02: So the FDA regulation, as we cite in our papers, used the strawberry shortcake as an example. [00:25:19] Speaker 02: In that type of a product, a consumer would understand strawberry shortcake is commonly understood to include strawberries. [00:25:26] Speaker 02: I don't think that that's the case with dried ketogenic cereals or cereals in general. [00:25:31] Speaker 00: I didn't think the strawberry shortcase example helped you because this isn't a, what was it, a McGinty nature fusion or something? [00:25:39] Speaker 00: It's a meaningful phrase, meaningless phrase, right? [00:25:42] Speaker 00: As opposed to here, it seemed much closer to what Whiteside was talking about, which is an unambiguous statement, unadorned chocolate banana. [00:25:49] Speaker 02: Well, if you look at what Whitesides actually said. [00:25:51] Speaker 02: Right here. [00:25:55] Speaker 02: Yep. [00:25:56] Speaker 02: So what you look at is if a reasonable consumer would necessarily require more information before they could reasonably conclude that the front label was making a specific representation. [00:26:05] Speaker 02: So I think what you have to look at is the entire label of the front. [00:26:08] Speaker 02: And so you can't isolate, for example, apple cider donut or banana chocolate. [00:26:15] Speaker 02: What you look at is the entire front label and see if there's an unambiguous representation being made that planif is or that appellant is contending. [00:26:25] Speaker 02: And if you look at the label as a whole, the front label as a whole with a zero gram sugar, it's incompatible with a statement that the product includes donuts and apple cider. [00:26:35] Speaker 02: And it would necessarily require a consumer to look further. [00:26:40] Speaker 02: And they could look further to the back of the label. [00:26:42] Speaker 02: And that's what the FDA regulations and the guidance documents say. [00:26:45] Speaker 00: It comes awfully close to conflicting with McGinty, I think, came awfully close to conflicting with Gerber, with Williams versus Gerber, right, because of the images on the front label. [00:26:57] Speaker 00: And what you're telling me is you're not taking away that the images or the statements, you have both images and statements, chocolate, [00:27:05] Speaker 00: and banana, that those are Williams-like, but what you're saying is the consumer, reasonable consumer, needs to be reading the fine print on the front label and is charged with that knowledge. [00:27:18] Speaker 00: I think you're saying charged with that knowledge full stop. [00:27:21] Speaker 02: I don't think it's a fine print. [00:27:22] Speaker 02: I mean, the front label here prominently says keto-friendly, prominently says zero-gram sugar. [00:27:28] Speaker 00: I didn't mean for that to be loaded. [00:27:29] Speaker 00: I am trying to figure out what your argument is, because otherwise it comes awfully close to undermining Williams. [00:27:36] Speaker 02: Williams is consistent, I think, with McGinnity in a way. [00:27:39] Speaker 00: I think it's essentially saying you can't have something under— Well, Judge Gould didn't, which is why he authored Whiteside. [00:27:43] Speaker 00: It created confusion to talk about the front label being ambiguous without telling us what ambiguous meant, right? [00:27:49] Speaker 00: That was a problem. [00:27:51] Speaker 02: Well, ambiguous means that the consumer... Because lawyers can always come up with ambiguity, right? [00:27:57] Speaker 00: Right. [00:27:57] Speaker 02: But would the consumer necessarily require additional information? [00:28:00] Speaker 02: And so here, when you have a statement that says, apple cider donut, and you've got a zero gram sugar prominently displayed on the front of the label, is that something that would require the consumer to go further and say, hey, how are they doing this? [00:28:13] Speaker 02: Is this a situation where they're, you know, how are they actually coming up with this? [00:28:18] Speaker 02: And is there really these ingredients in the product? [00:28:20] Speaker 02: And so I think it wouldn't necessarily require them to go to the back label. [00:28:23] Speaker 02: And I think that the lower court got that right. [00:28:27] Speaker 02: And that's really the gist of the allegations here in the complaint. [00:28:31] Speaker 02: I think that the lower court absolutely got it right. [00:28:35] Speaker 00: I'm looking at the front label, right? [00:28:38] Speaker 02: Yeah. [00:28:38] Speaker 00: Catalina Crunch, which one do you want to talk about, the mint chocolate or the, I guess we've got all of them here. [00:28:44] Speaker 00: And we're talking about, it says Catalina Crunch, keto friendly, mint chocolate cereal, and then there's a stacked on the right side, zero gram sugar, very prominently, right? [00:28:57] Speaker 00: Right. [00:28:58] Speaker 00: Zero gram sugar, zero gram, I can't read it, but anyway, protein, I think. [00:29:03] Speaker 00: And what do the tiny words say on the left underneath the bowl and? [00:29:09] Speaker 02: That says serving suggestion your honor, so it's a that again. [00:29:13] Speaker 02: I think is a contextual clue and again I'm not saying that we're relying upon that in any meaningful sense But it's it's to signal to the to the consumer that that vignette does not represent what the cereal actually looks like so it does include I will say with respect to [00:29:30] Speaker 02: The honey-gram vignette, it includes raspberries and coconut, ingredients that clearly have nothing to do with the characterizing flavor. [00:29:40] Speaker 00: Could you go back to the first one, mint chocolate? [00:29:42] Speaker 00: There's another fine print and my law clerk will be upset with me for asking this because she's told me all this. [00:29:46] Speaker 00: But there's the language that's on a slope just under the bowl, and you've told me that's the part that says serving suggestion, which I would be able to see on my iPad if I could, because I can plug it in over here. [00:29:59] Speaker 00: But I don't know what the words are that are right under mint chocolate cereal. [00:30:02] Speaker 00: What do those say? [00:30:04] Speaker 02: I'd have to look at that, Your Honor. [00:30:06] Speaker 02: My recollection is it has something to do with not a low calorie food, and it does refer, I think, the consumer to the nutrition facts panel. [00:30:16] Speaker 02: So there is an asterisk in that representation that does direct the consumer to the back label. [00:30:23] Speaker 00: On Catalina Crunch chocolate banana, I don't see the same words underneath Catalina Crunch. [00:30:30] Speaker 00: The label otherwise looks the same, and I don't know if that's... I believe they're the same. [00:30:34] Speaker 00: If it's just too tiny in this particular block. [00:30:36] Speaker 00: Let me see if I can find it over here. [00:30:38] Speaker 03: I think it's in the lower left of the label. [00:30:43] Speaker 02: Yeah, I think they're all there. [00:30:44] Speaker 02: They're all similar. [00:30:45] Speaker 00: Now I'm looking at apple cider. [00:30:47] Speaker 00: Just a minute. [00:30:49] Speaker 00: Are you looking at the mint chocolate, honey graham? [00:30:53] Speaker 00: Trying to find the banana one. [00:30:54] Speaker 00: Here's the banana one. [00:30:58] Speaker 00: Is that where you want me to look on the lower left? [00:31:00] Speaker 02: Yes. [00:31:03] Speaker 00: All right. [00:31:05] Speaker 00: And you think that says not a low calorie cereal? [00:31:08] Speaker 02: I believe so, that it accompanies a zero gram sugar claim and also refers the consumer to the back panel, which in some respects... Especially refers the consumer to the back panel? [00:31:18] Speaker 02: I believe that the asterisk or there's a dagger that does refer to the nutrition facts panel, I think. [00:31:29] Speaker 03: For fat content. [00:31:31] Speaker 02: Correct. [00:31:35] Speaker 02: Your Honor, I've run out of time. [00:31:37] Speaker 03: And lunch approaches, but. [00:31:38] Speaker 00: We may have another question, so we'll just wait to see. [00:31:41] Speaker 00: Thank you, Judge Walton. [00:31:41] Speaker 00: I can see the for-fat content on the mint chocolate label, so thank you from your patience. [00:31:46] Speaker 00: Thank you, Your Honor. [00:31:47] Speaker 01: Thank you, Counsel. [00:31:53] Speaker 05: OK, so just a few things on this. [00:31:56] Speaker 05: The only real contextual clue that the defendant can point to here is this zero grams sugar thing. [00:32:02] Speaker 05: And I guess I just want to point out here, one, as Your Honor mentioned, that's not necessarily compatible with having some amount of banana in there. [00:32:08] Speaker 05: But also, more importantly, I have no idea if the vast majority of reasonable consumers who buy this stuff [00:32:18] Speaker 05: No, you can't have banana in a prod in a zero gram sugar product. [00:32:24] Speaker 05: I have no idea if that's true. [00:32:26] Speaker 05: And neither does the district or anybody else in this room. [00:32:29] Speaker 05: And that's the problem with this on a 12b6 motion. [00:32:32] Speaker 05: We can draw a whole bunch of inferences. [00:32:35] Speaker 05: and just speculate that into reality. [00:32:38] Speaker 05: But that's what a trial is for. [00:32:41] Speaker 05: That's what the case is designed to unpack and figure out the truth of. [00:32:47] Speaker 05: We can't just speculate here and just be like, oh, everyone knows what that means. [00:32:53] Speaker 05: I guess I'm not everyone. [00:32:56] Speaker 05: The other thing on this. [00:32:59] Speaker 05: is just for the guidelines on the FDA website or that web post thing, it's careful reading on that or close reading. [00:33:08] Speaker 05: It does not say you can admit the word flavor. [00:33:11] Speaker 05: It says you can use the word maple. [00:33:13] Speaker 05: It does not say, don't worry, the word flavor doesn't have to be there, which makes sense because their regulations say you need the word flavor in this situation. [00:33:23] Speaker 05: It's that simple. [00:33:24] Speaker 05: It's bright line. [00:33:27] Speaker 05: Another thing on this, I guess I would just point out just how much stuff there is on these bags that reinforces the core misrepresentation here. [00:33:36] Speaker 05: You've chocolate banana and then all over, you've got pictures of bananas, you've got a yellow bag, right? [00:33:42] Speaker 05: All of this stuff, and even the cereal is chocolate. [00:33:46] Speaker 05: The defense says, well, this cereal is uniform. [00:33:49] Speaker 05: It all looks the same. [00:33:50] Speaker 05: No, it doesn't. [00:33:51] Speaker 05: the different flavors of the cereal, the color changes depending on what variety you're buying. [00:33:57] Speaker 05: The implication for the consumer is you're buying something that actually contains these products. [00:34:02] Speaker 05: And chocolate banana, that is a chocolate-colored cereal. [00:34:05] Speaker 05: How is someone supposed to know it has chocolate but not banana? [00:34:12] Speaker 05: You look at that and figure, well, it appears to have chocolate in it. [00:34:15] Speaker 05: It probably is banana, too. [00:34:16] Speaker 05: If it's a chocolate and chocolate with banana flavoring or something, [00:34:20] Speaker 05: That's different, but that's not what we're dealing with here. [00:34:22] Speaker 05: So I would just ask the court to reverse and remand. [00:34:25] Speaker 05: Thank you. [00:34:26] Speaker 01: Thank you, counsel. [00:34:26] Speaker 01: Thank you to both counsel for your helpful arguments. [00:34:29] Speaker 01: The case just argued is submitted for a decision by the court.