Fraud claims against Diet Dr. Pepper dismissed under reasonable consumer test

Fraud claims against Diet Dr. Pepper dismissed under reasonable consumer test

On Dec. 30, the 9th U.S. Circuit Court of Appeals affirmed the dismissal of consumer fraud claims alleging that the use of the word "diet" in Diet Dr. Pepper was fraudulent and misleading to consumers in Becerra v. Dr. Pepper/Seven Up, Inc., 2019 DJDAR 12144.

The plaintiff, Shana Becerra, alleged that the use of the word "diet" in Dr. Pepper/Seven Up's Diet Dr. Pepper product falsely led consumers to believe that there were health benefits associated with the product. The court held that the common understanding of "diet" related to the calorie content of the product, and that a reasonable consumer would not believe that the word "diet" was a claim about the health benefits of the product.

Specifically, Becerra alleged that the word "diet" misled consumers in violation of California's False Advertising Law, the California Consumers Legal Remedies Act, and the California Unfair Competition Law. She also alleged breaches of express warranty and implied warranty of merchantability. Becerra claimed that consumers had an expectation that Diet Dr. Pepper would have health benefits and would contribute to a healthy diet based on Dr. Pepper's advertisements showing fit people drinking soda, and because of a blog post by the American Beverage Association including diet soda as part of a healthy diet. She also pointed to scientific studies showing that aspartame in diet soda causes weight gain.

In dismissing the case, the district court said no reasonable consumer would believe that the word "diet" in a soft drink's brand name promises weight loss or healthy weight management. The 9th Circuit reviewed the dismissal de novo and applied the heightened pleading standard of Federal Rule of Civil Procedure 9(b), which requires that claims state with particularity the circumstances constituting fraud or mistake. The court ultimately upheld the dismissal of the complaint.

The 9th Circuit noted that Becerra's consumer-fraud claims centered on two primary allegations: First, the word "diet" in Diet Dr Pepper's brand name promises that the product will assist in weight loss or healthy weight management; and second, that promise is false because aspartame causes weight gain. The court held that Becerra needed to establish both allegations to make her claim, and that she had failed to establish the first allegation. It therefore did not consider whether aspartame causes weight gain in its analysis.

In describing the applicable reasonable consumer test, the 9th Circuit found that it required more than a "mere possibility" that Diet Dr Pepper's label "might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner." Instead, the reasonable consumer standard requires a probability "that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled." (Quoting Lavie v. Procter & Gamble Co., 129 Cal. Rptr. 2d 486, 492 (Cal. Ct. App. 2003) (emphasis added)).

Ultimately, the court held that no reasonable consumer would assume that the use of the word "diet" in Diet Dr Pepper promised weight loss or weight management. Rather, the court found that diet soft drinks were common in the marketplace and the prevalent understanding of the term in that context was simply that the "diet" version of a soft drink has fewer calories than the "regular" version of that drink. The fact that some consumers may unreasonably interpret the term differently and have expectations about the soda contributing to weight management did not render the use of "diet" in a soda's brand name false or deceptive.

The Diet Dr. Pepper case occurred in the context of several cases filed against soda manufacturers in California and New York under each state's consumer fraud protection laws. These cases included claims against the Coca-Cola Company brought by the same plaintiff in California related to the use of the word "diet" in the Diet Coke brand. The 9th Circuit dismissed the Coca-Cola claims on jurisdictional grounds in an unpublished memorandum opinion decided on Dec. 23 (Becerra v. The Coca-Cola Company, 18-15365). Additionally, the 2nd Circuit affirmed the dismissal of several cases similar to the Diet Dr. Pepper claims that were filed under New York's consumer-fraud laws, including claims against Coca-Cola, Snapple and Pepsi. Those cases were filed in 2017 by plaintiffs who claimed the diet soda products caused them weight gain.

The 9th Circuit and the 2nd Circuit's clear rulings on this line of cases set a precedent that the reasonable consumer's understanding of the term "diet" in the context of the beverage industry is related to calories rather than the overall effect of the product on a healthy diet. 