On Aug. 10, the Honorable Ruth Bermudez Montenegro of the Southern District of California denied Walmart’s motion to dismiss the complaint filed by plaintiff Edison Corpus last June. The suit accuses the retail giant of unfair competition, false advertising, breach of express warranty and unjust enrichment – prompting class members to demand restitution for the purchase of unwanted product.
“Accepting all factual allegations in the Complaint as true and construing the pleadings in the light most favorable to Plaintiff, the Court concludes Defendant’s Motion (Doc. 7) is DENIED,” the court ruled. “IT IS SO ORDERED.”
Motion to dismiss
In its motion to dismiss, Walmart countered that the complaint was preempted by the Federal Food, Drug, and Cosmetic Act (FDCA) of 1983 and the subsequent Nutritional Labeling and Education Act (NLEA) of 1990, which establishes that “state law cannot be employed to alter or vary the standards of identity for regulated supplements that are ‘not identical’ to the FDA’s standards.”
The logic is that the labeling of dietary supplements should not be debated in court or decided at the state level but rather be determined by the Food and Drug Administration (FDA) – the federal agency charged with administering the FDCA and therefore the labeling of dietary supplements.
The plaintiff argues that federal preemption does not apply because the trans-esterification process alters the nature of the product at the molecular level and because the defendant contradictorily argues that “there is no FDA regulation that establishes a ‘common or usual name’ for fish oil” while also asking the court to conclude that the common or unusual name of the product is fish oil.
Matt Orr, a partner at Amin Talati Wasserman LLP with extensive experience in consumer class actions in California, said that given the stage of the proceedings and the inferences the court is required to make in favor of the plaintiff, its ruling on express preemption is not surprising.
“The court very well may reach a different conclusion on preemption once the defendant is able to present additional facts and evidence it is able to develop in discovery,” he told NutraIngredients-USA.
Lab-synthesized fish waste devoid of omega-3s?
Regarding the plaintiff’s claim that the Spring Valley fish oil is lab-synthesized ethyl ester made from otherwise unmarketable fish waste mischaracterized as fish oil, Walmart replied that the chemical process used to make its supplements is just a processing step that does not alter its underlying nature.
As the Global Organization for EPA and DHA Omega-3 (GOED) explained, there is no quality difference between forms, and all are absorbed by the body to confer health benefits – whether natural triglyceride products (sometimes called 18:12 oil), ethyl ester products (which start as a natural triglyceride) or re-esterified triglyceride products (which undergo an additional processing step past ethyl ester). The issue is dosage.
“By esterifying the triglyceride oil, companies can offer higher amounts of EPA and DHA in a smaller dosage form, which meets current consumer demand for higher levels of omega-3s per pill,” Harry Rice, PhD, vice president of regulatory and scientific affairs at GOED, told NutraIngredients-USA. “The esterification process doesn't have any impact on the quality of the EPA and DHA contained in the final product.”
He added that fish oil used in omega-3 supplements does not come from “unmarketable fish waste” as the plaintiff alleges and that in some cases like salmon and tuna, the omega-3 oil is a value-added by-product of seafood production. In the case of anchovy oil, anchovies are harvested primarily for use as fish meal.
“It’s no secret — and a ‘positive’ when you consider the circular economy — that the fish oil industry uses the entire fish, including parts that would not be consumed otherwise,” he said.
The reasonable consumer
The plaintiff also contends that lab synthesized ethyl ester (labeled as EE) is not what a reasonable consumer expects when purchasing fish oil. Walmart says that calling the product fatty acid ethyl ester would not mean anything to reasonable consumers.
Under the ‘reasonable consumer’ standard, the plaintiff must demonstrate that an average person without any specific knowledge of the product in question would likely be deceived, Dr. Rice noted.
From his perspective, only someone with specific knowledge of oil manufacturing would understand the technical difference between an omega-3 ethyl ester and fish oil.
“[D]id consumers get what they paid for? The answer is unequivocally yes, as the consumer got what they purchased – EPA and DHA, the primary long-chain omega-3 fatty acids found in fish,” he said. “It is not correct that an ethyl ester product no longer contains EPA and DHA.”
Orr agreed that consumers are logically looking for ‘fish oils’ not ‘fatty acid ethyl esters’ when shopping the supplement aisle and are receiving supplemental EPA and DHA content derived from fish whether labeled as ‘fish oil,’ ‘omega-3 fatty acids’ or ‘fatty acid ethyl esters’.
“Given that fact, it is hard to see how consumers are harmed generally, or specifically, how the plaintiff will be able to demonstrate he received anything less than what he paid for in this case; namely, supplemental EPA and DHA,” he said.
The other five fatty acid ethyl ester cases
The Corpus v. Walmart suit is one of six recent class action complaints alleging that omega-3 fatty acid ethyl esters are not fish oils and therefore should not be labelled as fish oils. Three of these have already been dismissed: John Gatto v. International Vitamin Corporation, Thomas O'Leary v. The Stop & Shop Supermarket Company (settlement) and Baines v. Nature's Bounty. Still pending are Hernandez v. Mimi's Rock Corp. and Rodriguez v. Target Corporation.
“It appears that two others may be dismissed, leaving the case against Walmart, which happens to be the last one filed,” Dr. Rice said. “Given the similarity among the cases, there’s no reason to believe that the case against Walmart won’t be dismissed eventually.”
NutraIngredients-USA contacted Walmart for comment but did not receive a response prior to publication.
