U.S. Court of Appeals for the Ninth Circuit, Shana Becerra, v. Dr Pepper/Seven Up, Inc., Docket No. 18-16721

California Consumer Fraud

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Labeling

Packaging

Reasonable Consumer Test

Unfair Competition

California Law

The panel affirmed the district court’s dismissal of plaintiff’s third amended complaint alleging that Dr Pepper/Seven Up, Inc. violated various California consumer-fraud laws by branding Diet Dr Pepper using the word “diet.”

The panel held that the allegations in the complaint failed to sufficiently allege that reasonable consumers read the word “diet” in a soft drink’s brand name to promise weight loss, healthy weight management, or other health benefits. The panel held that diet soft drinks are common in the marketplace and the prevalent understanding of the term in that context is that the “diet” version of a soft drink has fewer calories than its “regular” counterpart. Just because some consumers may unreasonably interpret the term differently does not render the use of “diet” in a soda’s brand name false or deceptive. Accordingly, because plaintiff had not sufficiently alleged that Diet Dr Pepper’s labeling was false or misleading, dismissal was proper.

The second amended complaint raised five causes of action: (1) violations of the California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq.; (2) violations of the California Consumers Legal Remedies Act, Cal. Civ. Code §§ 1750 et seq.; (3) violations of the California Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq.; (4) breach of express warranty in violation of Cal. Com. Code § 2313(1); and (5) breach of the implied warranty of merchantability in violation of Cal. Com. Code § 2314.

Becerra’s claims under the California consumer- protection statutes are governed by the “reasonable consumer” test. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). Under this standard, Becerra must “show that members of the public are likely to be deceived.” Id.; see also Bank of West v. Superior Court, 833 P.2d 545, 553 (Cal. 1992). This requires 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.” Lavie v. Procter & Gamble Co., 129 Cal. Rptr. 2d 486, 495 (Cal. Ct. App. 2003); see id. at 492 (rejecting a “least sophisticated consumer” standard). Rather, 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.” Id.

When considering the term in its proper context, no reasonable consumer would assume that Diet Dr Pepper’s use of the term “diet” promises weight loss or management. In context, the use of “diet” in a soft drink’s brand name is understood as a relative claim about the calorie content of that soft drink compared to the same brand’s “regular” (full- caloric) option. See Geffner, 928 F.3d at 200 (“the ‘diet’ label refers specifically to the drink’s low calorie content; it does not convey a more general weight loss promise” (footnote omitted)). And considering “diet” as a proper noun—as in Diet Dr Pepper—does not further Becerra’s argument. In common usage, consumers know that Diet Dr Pepper is a different product from Dr Pepper—different not only in name, but in packaging and, importantly, taste.

Becerra argues that, regardless of the common understanding of the word, dismissal was still improper because she alleged a plausible misunderstanding of the word. But we have previously affirmed dismissal of claims based on similar unreasonable assumptions. In Ebner, the plaintiff claimed that a net-weight statement on packaging for a lip balm was deceptive because the design of the dispenser left twenty-five percent of the product inaccessible. 838 F.3d at 961. We held that similar dispensers were “commonplace in the market,” such that a reasonable consumer “understands the general mechanics of these dispenser tubes and further understands that some product may be left in the tube” even when pushed all the way up. Id. at 965. “A rational consumer would not simply assume that the tube contains no further product” when he or she could see the remaining product in the tube. Id. at 966. And even if some consumers would make that assumption, the packaging was not deceptive just because some consumers could unreasonably misunderstand the product. Id.

(…) As the Second Circuit pointed out when considering a nearly identical complaint, “the use of physically fit and attractive models using and enjoying advertised products is so ubiquitous that it cannot be reasonably understood to convey any specific meaning at all.” Geffner, 928 F.3d at 200.

Counsel for Defendant-Appellee:

Evan A. Young (argued), Baker Botts L.L.P., Austin, Texas; Van H. Beckwith, Baker Botts L.L.P., Dallas, Texas; Ariel D. House, Baker Botts L.L.P., San Francisco, California; for Defendant-Appellee.

(U.S. Court of Appeals for the Ninth Circuit, December 30, 2019, Shana Becerra, v. Dr Pepper/Seven Up, Inc., Docket No. 18-16721, For Publication)