In a Nov 18 order, US District Judge Claudia Wilken said the settlement - in which CytoSport has denied any wrongdoing but agreed to create a $5.3m fund for anyone who bought Muscle Milk ready-to-drink beverages and bars in the US between July 18, 2007 and Dec 31, 2012 - was “fair, reasonable and adequate”.
Under the settlement, which is subject to final approval at a hearing set for May 15, 2014, CytoSport also agreed to donate $85,000 to the American Heart Association and stop using the phrase ‘Healthy, Sustained Energy’ on its products.
It also said it would stop using the term ‘Healthy Fats’ on ready-to-drink products unless they contain less than 0.5g of saturated fat/serving or include the phrase: ‘See nutrition information for saturated fat content’.
Plaintiff: Muscle Milk products are fat-laden junk food masquerading as nutritional products
Delacruz sued CytoSport on July 18, 2011 over alleged violations of California's consumer protection, unfair competition, and false advertising laws, and claimed it had misled consumers by presenting Muscle Milk products as nutritious when they were nutritionally equivalent to “fat-laden junk food”.
Delacruz claimed the ready-to-drink products were “loaded with as much, if not more, total fat and saturated fat as a doughnut” and as they did not qualify as a ‘low fat’ product under FDA rules, CytoSport was not permitted to describe them as ‘healthy’.
Her complaint was filed just over two weeks after the FDA sent a warning letter to CytoSport alleging that Muscle Milk products were misbranded – in part because they made nutrient content claims without adhering to the legal conditions of use.
To bear the nutrient content claim ‘healthy’, foods must have a total fat content of 3g or less per reference amount customarily consumed (RACC); 1g or less saturated fat per RACC; and no more than 15% of calories from saturated fat. However, chocolate Muscle Milk protein nutrition shakes contained more than 3g of fat per RACC while the chocolate peanut caramel bar contained more than 3g total fat and 1g saturated fat per RACC, noted the FDA.
CytoSport: Many healthy, nutritional products contain at least some… fat
CytoSport attempted to dismiss Delacruz’s suit, noting that “many healthy, nutritional products contain at least some… fat” and that her claims were in any case pre-empted and covered by the doctrine of primary jurisdiction.
However, in her order of June 26, 2012 on the plaintiff's second amended complaint, judge Wilken agreed with Delacruz that “a representation that a product is ‘healthy’ could reasonably lead a consumer to believe that certain unhealthy contents are absent" and said the FDA's expertise was "not necessary to determine whether the labels are misleading".
Commenting on the case in April 2012, Mark Pifko from law firm Baron and Budd – representing Delacruz – said: “You can’t just whip-up a blend of saturated fat and fractionated oil, and slap a ‘healthy’ label on it.”
Ultimately, although it admitted no wrongdoing or liability, and "vigorously denies" all of Delacruz's claims, CytoSport agreed to settle the case in March this year in order to avoid the costs and uncertainties associated with protracted litigation.
Improper nutrient content claims: If you get an FDA warning letter, civil litigation may follow?
Commenting on the case in April this year, law firm Manatt Phelps & Phillips LLP said: “Delacruz’s lawsuit was filed not long after the FDA sent CytoSport a warning letter, the effect of which would remind advertisers on the receiving end of an agency letter to brace themselves for consumer actions to follow.”
CytoSport did not respond to requests for comment, while Pifko said last night he was "pleased" with the settlement.
The case is Delacruz v. Cytosport, Inc 4:11-cv-03532.