SAN DIEGO (CN) — Walmart will have to face claims that its fish oil supplement is falsely labeled, and is actually made from fish waste that was chemically transformed using industrial solvents and ethanol, after a federal judge in San Diego struck down the company’s motion to dismiss the lawsuit.
Edison Corpuz, who claims he bought Walmart’s Spring Valley 100 mg Fish Oil dietary supplement multiple times over a three-year period, filed the class action last year in the Southern District of California, accusing the retail behemoth of unfair competition, false advertising and breach of express warranty, and asking for restitution based on unjust enrichment.
In addition to defending the contents of its supplements, Walmart had argued that the plaintiffs' claims under state law were preempted by the Federal Food, Drug and Cosmetic Act of 1983 and Nutrition Labeling and Education Act of 1990.
U.S. District Judge Ruth Bermudez Montenegro disagreed.
“The court takes note of defendant’s contention that the dictionary definition, among other considerations, qualify the product as fish oil. However, the Court declines to make such a determination at this juncture,” the Biden appointee wrote Thursday in the 19-page order.
“In accepting all factual allegations in the complaint as true and construing the pleadings in the light most favorable to plaintiff, the nonmoving party, the Court concludes Plaintiff’s claims are not expressly preempted by the FDCA.”
The lawsuit against Walmart would still proceed whether or not the FDCA regulations existed, Bermudez Montenegro goes on to write, so state law claims are not barred by federal legislation.
Walmart claims its supplements contain omega-3 fatty acids that naturally occur in fish, including eicosapentaenoic acid and docosahexaenoic acid.
But the plaintiffs say that in reality, the supplements don’t contain a single milligram of omega-3s found in fish oil — because they are not fish oil, but rather a solution concocted from a process called trans-esterification, where industrial solvents and ethanol are used to make unmarketable fish waste into their supplements.
That process, the plaintiffs say, eliminates the omega-3s from the fish oil and turns them into fatty acid ethyl esters, a completely different product, and not what customers expect to be taking home when they buy a bottle of supplements labeled as fish oil.
Walmart argued that the chemical process it uses to make its supplements are just a processing step that has no effect on the product. Because of that, the company said the fish oil label is accurate, because it's extracted from fish and labeling the supplements as fatty acid ethyl ester wouldn’t mean anything to reasonable consumers.
California uses the “reasonable consumer” as a benchmark for violations of its unfair competition law, which bans false advertising, and other consumer protection measures. Walmart argued that such a customer wouldn’t be misled by their labeling of their supplements, because a reasonable consumer doesn’t define fish oil based on the product’s chemical bonds, and that consumers should are expected to know basic facts about fish oil anyway before buying a supplement.
Bermudez Montenegro said the court can’t rule on that matter in a motion to dismiss. It can however determine the plaintiffs have standing to bring the lawsuit, because the plaintiffs believed that the supplements contained real fish oil, and the plaintiffs lost money by purchasing the supplements.
“In light of the foregoing allegations, and as discussed in detail supra, the court finds the complaint contains plausibly alleges that defendant has engaged 'deceptive practices associated with the advertising, labeling and sale of [the product].’ Thus, the complaint sufficiently states a claim under the ‘unfair”’ prong of the [unfair competition law],” Bermudez Montenegro wrote.
The judge also found the plaintiffs had stated sufficient facts to seek relief and breach of warranty.
Attorneys for Corpuz and for Walmart Inc. did not immediately respond to requests for comment.
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