PC Food Litigation Index: November 2018

Each month we will be sharing the PC Food Litigation Index, a summary of latest class action filings in the food and beverage industry. This data is compiled by Perkins Coie based on a review of dockets from courts nationwide.

November saw a high number of new class action complaints advancing familiar challenges to the “all natural” claims affixed to pasta, ice cream, potato chips and other products. Due to the lack of regulatory guidance around use of the word “natural” on food products, that term continues to be a target for plaintiffs’ suits.

For example, in Rodriguez v. Coolhaus, Inc., the plaintiff claims that several of the defendant’s ice cream products are falsely labeled as “all natural” because they contain allegedly unnatural ingredients like soy lecithin and stabilizers that use dextrose and guar gum.

The popular ingredient malic acid remains at the center of many new “natural” cases. In Lepaine v. UTZ Quality Foods LLC, the plaintiff argues that the defendant’s salt and vinegar potato chips are falsely labeled as flavored only with natural ingredients, because they contain malic acid. Similarly, the plaintiff in Augustine v. Talking Rain takes issue with the “natural” labels on juice products that contain the ingredient. Juice and beverage products are often implicated in these malic acid “natural” suits. Another case filed this month, Anderson v. Outernational Brands Inc., contains substantively similar allegations about a beverage product that is labeled “all natural” and “no artificial color or flavors,” yet contains malic acid.

Plaintiffs are increasingly citing health-related claims on food products as false or misleading, unsupported by scientific evidence. As food manufacturers angle for more health-conscious consumers, their products’ labels are coming under increased scrutiny. For example, coconut oil products have been a frequent target, challenged for labels that describe them as healthy—or at least healthier than other cooking oils such as vegetable oil.

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Notable Ruling: What’s In Your Water?

In its recent ruling in Weiss v. Trader Joe’s Company, the Central District of California faced the question of whether certain statements on product labels promoting high-alkalinity water were false and misleading or simply puffery. Among these statements were claims that the water is “ionized to achieve the perfect balance.” Plaintiff Dana Weiss argued that the claims found on the actual product, together with advertising statements made in the defendant’s “Fearless Flyer” marketing brochure, amount to unfair competition and false advertising because no scientific evidence exists supporting the claimed health benefits of drinking water with high alkalinity. Despite the absence of specific health-related promises, Weiss argued, simply noting the water’s alkalinity content on the label implies a health claim. Trader Joe’s Company moved to dismiss, contending that such claims are no more than puffery, and such claims would not deceive or mislead a reasonable consumer into believing that the product offers unsubstantiated health benefits.

Though the court hinted that Weiss’s claims would fail as lack-of-substantiation claims (impermissible as private causes of action under California law), it nevertheless proceeded to analyze them under the reasonable consumer test. The court found that the statements and symbols on the label—a plus sign, the words “refresh” and “hydrate,” and a simple definition of alkalinity—would not deceive a reasonable consumer. The court also rejected Weiss’s argument that the statement “water and then some” gives rise to “a contextual inference that Alkaline Water of Trader Joe’s provides more health benefits and better hydration than normal water.” Even assuming the statement “water and then some” was more than mere puffery, the court concluded that a reasonable consumer would read the “and then some” language as referring to either the electrolytes added to the water or to the product’s elevated pH level. The court thus dismissed each of Weiss’s claims. The court did, however, grant Weiss leave to amend one of the claims in the complaint (a claim implicating a statement of the water’s pH level), concluding that it may be possible for Weiss to plead the falseness of that statement with the requisite particularity.

Notable Ruling: Alien Tort Statute Focus in Aiding and Abetting

On Tuesday, October 23, 2018, the Ninth Circuit Court of Appeals issued an important opinion reviving a decade-old Alien Tort Claims Act (ATS) suit based on alleged aiding and abetting slave labor in cocoa farms on the Ivory Coast. Doe 1 v. Nestle, et al., No. 17-55435, 2018 WL 5260852 (9th Cir. Oct. 23, 2018). In doing so, the Court ruled that even if the ATS applied only to domestic conduct, the facts alleged in the case could be used, if properly plead, to support an ATS suit against domestic corporations. This lawsuit was initiated over a decade ago by former child slaves who were kidnapped and forced to work on cocoa farms. The complaint alleges that defendants, large food manufacturers, purchasers, processors, and retailers of cocoa beans, provided financial support and technical farming aid despite allegedly knowing that the farmers with which the defendants had exclusive buyer/seller relationships were utilizing child slave labor in violation of the law of nations.

The United States Supreme Court, in Jesner v. Arab Bank, ––– U.S. ––––, 138 S.Ct. 1386, 1407, 200 L.Ed.2d 612 (2018), ruled that the ATS, which gives District Courts “original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States,” is not extraterritorial and applies only to domestic conduct. Invoking this doctrine, defendants urged the Ninth Circuit to focus on the location where the principal offense or injury occurred, rather than the location where the aiding and abetting allegedly occurred. The Ninth Circuit disagreed, finding (1) that the focus of the ATS can be on conduct that constitutes aiding and abetting another’s violation of the law of nations, and (2) that aiding and abetting in and of itself can constitute a tort committed in violation of the law of nations. The Court stated that defendants’ alleged provision of spending money from the United States to Ivory Coast farmers to maintain buyer/seller relationships was “outside the ordinary business contract” and was done for the purpose of receiving cocoa at a price that could not be obtained without employing child slave labor, which the Court likened to “kickbacks.” Furthermore, the Court noted that defendants sent representatives to regularly inspect operations in the Ivory Coast and “report back” to headquarters in the United States. Thus, these actions were “both specific and domestic.”

In sum, the Court reversed and remanded, allowing plaintiffs to amend their complaint to remove foreign corporations and to specifically allege what conduct is attributable to which domestic defendants. The court also permitted the plaintiffs to re-allege their aiding and abetting claims in accordance with recent precedent Jesner and RJR Nabisco, Inc. v. European Community, ––– U.S. ––––, 136 S.Ct. 2090, 195 L.Ed.2d 476 (2016).

PC Food Litigation Index: October 2018

Each month we will be sharing the PC Food Litigation Index, a summary of latest class action filings in the food and beverage industry. This data is compiled by Perkins Coie based on a review of dockets from courts nationwide.

October 2018 filings continued an upward trend exceeding 2017’s pace.  As in the later months of 2017, October 2018 filings focused on false labeling, slack-fill, and all-natural. Both slack-fill claims filed this month pertained to products in opaque bags—Justin’s mini peanut butter cups and Harvest Snap snack products. Natural claims targeted La Croix sparkling water, Hershey fruit-flavored chocolate, and maple syrup.

White chocolate and pasta sauce were popular targets also. Plaintiffs in Ruiz v. Living Intentions LLC and Rafael v. Starbucks Corp. sued in New York over products that allegedly do not contain white chocolate as defined by the FDA. Plaintiffs in Illinois and California, (Kubilius v. Barilla America, Inc. and Flolo v. Cucina & Amore Inc.) sued claiming that that the defendants’ pasta sauces, which are advertised as containing no preservatives, actually contain citric acid—a chemical both plaintiffs allege constitutes a preservative. Mr. C.K. Lee of the Lee Litigation Group represents all four sets of plaintiffs in the white chocolate cases and the pasta sauce cases.

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Industry Insights: The New Nutrition Facts Panel

The Food and Drug Administration (FDA) is implementing changes to the Nutrition Facts Panel for food and beverage labels. Manufacturers are required to comply with the new requirements by January 1, 2020, although manufacturers with less than $10 million in annual food sales have an additional year, until January 1, 2021. Key changes include the following:

  • Serving sizes are being changed to reflect the amounts typically consumed. In addition, larger packages may now be considered a single serving.
  • The amount of added sugars must be stated in addition to total sugar.
  • The nutrients that must be listed will now include Vitamin D and Potassium, replacing Vitamins A and C.
  • Calories from fat will no longer be required.
  • Daily values for certain nutrients have changed based on updated science.
  • The format and look of the NFP is being changed to draw attention to certain information, such as calories and serving size.

 Learn more about these changes here

Industry Insights: Fit for Fido? The Rise Of ‘Natural’ Pet Food Claims

Sixty-eight percent of households in the United States — or approximately 85 million families — own a pet, according to the 2017 to 2018 National Pet Owners Survey conducted by the American Pet Products Association. Because most pet owners treat their pets as members of the family, it is no surprise then that what they feed their pets is as important to them as what they feed their family. As consumers shift toward “organic,” “natural” and “clean” foods for themselves and their families, they are also making similar purchasing decisions when it comes to pet food. These “premium” pet foods come at a premium price, however — and consumers expect to receive a premium product.

As sales of “premium” pet food have increased in recent years, so has the number of consumer class actions filed against pet food manufacturers, specifically those involving claims that marketing and labeling pet foods as “natural” is false and misleading when they contain artificial ingredients, synthetic ingredients, chemicals, heavy metals and/or toxins. Bisphenol A, or BPA, lead and arsenic are among the most commonly alleged “unnatural” chemicals contained in pet food.

Pet food manufacturers argue that these lawsuits challenge truthful and accurate labeling by purporting to impose a standard of absolute purity for trace levels of “unnatural” contaminants. Manufacturers contend that trace levels of any alleged contaminants in their products do not exceed any maximum permissible levels for pet food as established by the U.S. Food and Drug Administration, U.S. Environmental Protection Agency or other regulatory agency, and that their products are safe for pet consumption. Still, these class actions allege that the “natural” label is misleading and that manufacturers are required to disclose the presence and levels of the alleged contaminants contained in their pet food products.

Read the full article on Law360 here.

PC Food Litigation Index: September 2018

Each month we will be sharing the PC Food Litigation Index, a summary of latest class action filings in the food and beverage industry. This data is compiled by Perkins Coie based on a review of dockets from courts nationwide.

September filing activity included several cases challenging the marketing and labeling claims attached to beverage products, with well-known brands like Coca-Cola and Arizona Beverages in plaintiffs lawyers’ sights. Nelson v. Coca-Cola is among the latest in a long string of consumer suits that take issue with “natural” or “all natural” food and beverage labels. The plaintiff in the case contends that a reasonable consumer would take the “natural” label on Hansen’s Natural Sodas to mean that the beverages are “free of any artificial or synthetic ingredients.” She alleges that she would not have purchased the products if she had known that they contain such ingredients. A similar lawsuit, Froio v. Ocean Spray Cranberries, contests the labeling claims on several of the defendant’s juice beverage products, which represent that the products contain no artificial colors or flavors. The plaintiffs alleges that these claims, bolstered by “pictures of water, fields, and fruits pertaining to the specific fruit juice blend in question,” are misleading, because the products do in fact contain artificial ingredients.

Challenges to health-related labeling claims were also particularly high this month, the Neville v. Arizona Beverages case representing this trend. In this case, the plaintiff argues that nutrition facts panel misleads consumers, setting out the sugar and calorie counts for a single serving, even though the standard can actually contains two servings. In another beverage case, Levin v. Stremicks Heritage Foods, the plaintiff argues that while the defendant’s labels “convey to the consumer that these are healthy, natural beverages, brimming with healthful fruit juices,” they are in fact primarily water and high fructose corn syrup. Further, the plaintiff argues that the “excellent source of vitamin C” claim is false, as the “excess sugar” contained in the products “interferes with the body’s metabolism of vitamins.”

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Industry Insights: The Rise of Natural Pet Food Claims

On August 1, plaintiff and putative class representative Markeith Parks sued celebrity chef Rachael Ray’s dog food brand Nutrish® alleging that the products are falsely labeled and marketed as “natural.” The complaint states that Nutrish® contains the chemical glyphosate, which Parks alleges is “unnatural.”[1]

Given Rachael Ray’s national fame, this case has caught the attention of multiple media outlets and legal powerhouses with experience in similar claims. Perkins Coie’s food litigation team conducted research into the number of “natural” pet food claims filed nationwide since 2013. Results can be found in the bar chart below.

“Natural” Pet Food Claims Filed Since 2013

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Back to School: Food Litigation Trends Webinar

With summer drawing to an end and the kids going back to school, it’s time to check in on the latest food litigation trends. Please join Perkins Coie on Tuesday, September 18 at 1:00 PM ET/12:00 PM CT/10:00 AM PT for a review of the key developments and trends in food litigation. This 60-minute webcast reflects our active monitoring of food litigation filings in jurisdictions nationwide and will include an analysis of the key legal developments in cases involving claims challenging the labeling, composition, and regulatory compliance of food and beverage manufacturers.

Please register here.

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