Suits by consumers in three states who challenge General Mills' claim that Cheerios can lower cholesterol and cut the risk of cancer, were consolidated Wednesday in federal court in New Jersey.
The Judicial Panel on Multidistrict Litigation ordered four cases -- three from California and one from New York -- transferred to U.S. District Judge Peter Sheridan in Newark, who is presiding over a similar suit. New Jersey was the venue of choice for General Mills, while plaintiffs lawyers wanted to remain in their home states.
In shifting the cases to New Jersey, the panel cited Sheridan's handling of the New Jersey case, Myers v. General Mills Inc., 2:09-cv-2413, before him since May, saying he had "the time and experience to steer this litigation on a prudent course." It did not provide more specifics why Sheridan was chosen.
The suits, which are putative class actions, peg the amount in controversy as more than $5 million and the class at greater than 100 members.
The litigation was prompted by a May 5 Food and Drug Administration letter to General Mills that said the claims on boxes of Cheerios Toasted Whole Grain Oat Cereal violate the Food, Drug and Cosmetic Act.
The plaintiffs cite General Mills' claims that Cheerios "can lower your cholesterol 4 percent in 6 weeks" and has been "clinically proven to lower cholesterol." Also cited are claims that Cheerios can reduce the risk of cancer of the stomach and colon.
They also cite a March 18, 2009, conference call between General Mills Chief Executive Officer Ken Powell and investors, in which he said the campaign touting Cheerios' health benefits increased all the company's cereal sales by 13 percent that quarter.
In its letter to the Golden Valley, Minn.-based company, the FDA said it permits advertising claims linking high-fiber foods to health benefits, but Cheerios' claims do not comply with agency regulations.
The agency said such claims must state that diets high in fiber-containing grain products, fruits and vegetables may reduce the risk of some cancers. But Cheerios' claims make no such reference to fruits, vegetables and fiber content, and do not allow the public to understand the significance of the claim in the context of total daily diet, the FDA said.
In addition, FDA regulations allow claims about foods reducing the risk of heart disease if the statement is linked to another explaining that the risk is reduced through a reduction in overall and "bad" low-density lipoprotein cholesterol. Cheerios made those claims on its box but in separate spots, rather than linking the concepts, the FDA said.
The FDA also said it authorized advertising claims that "diets rich in whole grain foods and other plant foods may reduce the risk of certain cancers." But Cheerios' claim does not mention "other plant foods" and, by referring to cancers of the stomach and colon improperly, suggests a greater degree of risk reduction for the two cancers, the FDA said.
The company disputes the assertion that Cheerios has to abide by the drug-approval protocol and it issued this statement shortly after the FDA sent its letter:
Cheerios' soluble fiber heart health claim has been FDA-approved for 12 years, and Cheerios' "lower your cholesterol 4 percent in 6 weeks" message has been featured on the box for more than two years. The science is not in question. The scientific body of evidence supporting the heart health claim was the basis for FDA's approval of the claim, and the clinical study supporting Cheerios' cholesterol-lowering benefit is very strong. The FDA is interested in how the Cheerios cholesterol-lowering information is presented on the Cheerios package and website. We are in dialog with FDA, and we look forward to reaching a resolution.
The Myers suit was filed on behalf of two Hudson County residents by Heninger Garrison Davis of Birmingham, Ala., with Ward & Olivo of Summit serving as local counsel. It charges General Mills with violations of the New Jersey Consumer Fraud statute, negligent misrepresentation, intentional misrepresentation and unjust enrichment. It seeks a refund, damages, treble damages, attorneys' fees and costs. The cases from California and New York make similar claims but cite their own states' laws.
The company's attorney in the Myers case, Gail Lees of Gibson Dunn & Crutcher in Washington, D.C., declines to comment on the litigation. But she says the FDA did not challenge the veracity of General Mills' statements about Cheerios' ability to reduce cholesterol. At issue is the "technical, regulatory question" of whether the claims should be prohibited because General Mills did not go through the FDA's drug-approval process. Lees adds that General Mills is "addressing the regulatory issues with the FDA at the administrative level."
Sheridan is likely to hold a scheduling meeting and then set a schedule for discovery, says Gayle Douglas of Heninger Garrison. In the New Jersey case, General Mills was given a stay until resolution of the JPML petition but its answer is now due on Oct. 29.