Notable Ruling: Precedent-Setting Proposition 65 Pre-emption Decision Involving Breakfast Cereal

Last week, the California Court of Appeal held that a plaintiff’s suit seeking to require Proposition 65 acrylamide based cancer warnings on 59 popular breakfast cereals was pre-empted by federal nutrition policies aimed at encouraging Americans to consume more whole grains and by FDA letters stating that any warnings should be deferred given the uncertain science on the risks to humans of acrylamide in food. This conflict pre-emption ruling should help convince courts in other contexts that state warning requirements should defer to more carefully articulated federal policies.

Acrylamide, which forms in many foods during high-temperature cooking (e.g., frying, roasting, baking), has been a Proposition 65 listed substance since 1990, though its presence in food was not discovered until 2002. As the FDA has stated, there is much uncertainty if the levels of acrylamide in food pose any risk to humans. Continue Reading

PC Food Litigation Index: June 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.

Consumers continued to challenge the “all natural” labels on products that contain the popular ingredient xanthan gum, used as a stabilizer and emulsifier in thousands of common food products. A level of ambiguity survived the FDA’s aging guidance on natural, which requires that “nothing artificial or synthetic . . . has been included in, or has been added to, a food that would not normally be expected to be in that food.” Plaintiffs’ lawyers have argued that the fermentation process through which xanthan gum is manufactured is not natural, but synthetic. The ingredient is at the center of an increasing number of “natural” cases. In Grindel v. LarMar Foods, for example, the plaintiff argues that the defendant’s Garlic Expressions brand vinaigrette, which contains xanthan gum, misleads consumers with its “all natural” label. In attacking the salad dressing’s packaging as misleading, the plaintiff pointed not only to the words “all natural,” but “the overall format and appearance of the label.”

Slack-fill cases were also on the rise in June, beating projections with several new complaints targeting alleged underfilling in everything from ice cream “pints” to candy boxes and cake mix and risotto bags. In Kamal v. Eden Creamery, the plaintiff argues that Eden, the maker of the increasingly popular Halo Top brand, “routinely underfills its pint containers,” “short-changing” members of its “cult-like following.”

Several other false fact cases confronted labeling claims suggesting a product contains an ingredient that is absent from the product. One such case took Walmart to task for the label of its Strawberries & Cream Instant Oatmeal, which the plaintiff alleges includes not real strawberries, but rather “cheap pieces of colored apple, literally disguised to look like more expensive strawberries.” In a suit against the makers of Rx Bar, the plaintiff argues that the bars do not actually contain egg whites, as their label states, “because the foaming properties of egg whites would limit the ability to blend it with the other ingredients.” Instead, the product contains egg white protein powder.

Annual Filing Trends

Continue Reading

PC Food Litigation Index: May 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.

Through May the pace of consumer class action filings against food companies continued unabated, tracking last years filing rate leading to nearly 150 new cases annually. The mix of cases continued to duplicate last years, with some notable case filings discussed below.

The plaintiffs’ bar continued to mount challenges to the “all natural” labels on products that contain xanthan gum, the widely-used, FDA-approved binding and thickening agent commonly found in salad dressings, ice creams, and hosts of other popular foods. In Burton v. Cedarlane Natural Foods, the plaintiff alleged that the defendant’s use of the ingredient makes the “All Natural” labels on, for example, its enchiladas and omelets false and deceptive. In another similar xanthan gum action this month, the plaintiff objected to labeling pasta dishes such as stuffed shells and lasagna as “all natural” when they contain the ingredient.

The labeling representations of frozen dessert products were at the center of two cases this month, the first against Eden Creamery’s Halo Top brand, the second against Breyers. The plaintiff in the former argues that Halo Top’s branding evokes the color yellow, which is associated with butter and cream and therefore causes consumers to think of ice cream. Because Halo Top products are actually “light ice cream,” a distinct product category, the plaintiff argues that the labels are misleading. Somewhat similarly, the Breyers plaintiff alleges that the defendant’s Breyers Delights products are misleading labeled as “ice cream,” even though their ingredients are inconsistent with consumers’ expectations for ice cream.

Alleged lack of scientific evidence for certain health-related claims was again at issue in a Central District of California case against Pom Wonderful. The plaintiff argued that the defendant’s pomegranate juice is falsely labeled, giving consumers the impression that the beverage has medically-proven disease treatment benefits that have not been sufficiently demonstrated or scientifically vetted.

Annual Filing Trends

Continue Reading

Notable Ruling: Supply Chain Opinion for Mars

On Monday, June 4, 2018, the Ninth Circuit Court of Appeals issued an important opinion, Hodson v. Mars, Inc., holding that food manufacturers do not have any independent obligation under California consumer protection laws to disclose on their labels the possibility of alleged harmful labor practices occurring in the downstream supply chain of the manufacturer’s products. Affirming the district court’s dismissal of an action against Mars demanding such labeling, the Ninth Circuit confirmed that consumer protection laws do not impose this requirement, as California law limits such affirmative disclosures to circumstances where there is an “unreasonable safety hazard” associated with the product—a condition that was admittedly not present in the Mars case.

Plaintiff had appealed the district court’s dismissal of the action, asking the Ninth Circuit to adopt a more open-ended standard that would require affirmative disclosures concerning issues like supply chain practices, even where no “safety hazard” was present. In a unanimous decision, the Ninth Circuit affirmed, rejecting plaintiffs’ position and holding that California’s consumer protection laws do not require such disclosures. The panel also noted that the relevant information regarding slave and child labor is published on Mars’ website, in compliance with California’s Transparency in Supply Chains Act (CTSCA).

Continue Reading

Industry Insights: FDA Extends Deadline for Eliminating PHOs

The U.S. Food & Drug Administration determined in 2015 that Partially Hydrogenated Oils (PHOs) are not “Generally Recognized as Safe,” or GRAS. PHOs are the leading source of trans fats in the human diet.

In the nutrition industry, much is disputed, but the unhealthy nature of trans fats, a form of unsaturated fat, is not. Trans fats are fats that have a unique chemical structure; they contain double bonds on opposite sides, whereas other unsaturated fats have double bonds on the same side, and saturated fats lack any double bonds.


Continue Reading

Notable Ruling: Another Motion to Dismiss for Diet Soda

Just two and a half months after the Northern District of California ruled that a reasonable consumer would not be misled to believe “Diet Coke” aids in weight loss, a similar suit against Pepsi-Cola for its Diet Pepsi product has been dismissed (Manuel v. Pepsi-Cola Company). This is the fourth ruling in the past three months dismissing similar claims.

On Thursday, May 17, the Southern District of New York’s Judge Paul A. Engelmayer entered an order granting Pepsi’s motion to dismiss. The class alleged that Pepsi misrepresented its products with the label “diet,” a word that may signify to consumers that the product aids in weight loss. The Court held that nothing in Pepsi’s labeling or advertising claims suggested that the product would assist a consumer in weight loss or weight management. The Court referenced what a reasonable consumer would think – “diet does not stand in isolation,” it said. As such, the Court stated, reasonable consumers would realize that “diet” in the context of a soda means a lower caloric count and that lower caloric count does not mean weight loss.

Continue Reading

Industry Insights: The Ongoing Circuit Split Over Ascertainability

Over the past several years, there has been a deepening circuit split over a key issue in class action litigation: whether a class must be “ascertainable” before it can be certified. The principle involved is reasonably straightforward — before a court certifies a class, there should be some method to determine the actual class members.

The Circuit Courts of Appeal remain divided over this requirement’s applicability, however, and recent developments indicate that the Supreme Court is not yet ready to resolve the issue. But, as the decisions highlighted here indicate, in those circuits where the requirement still applies, it remains an important tool in defeating class certification. Therefore, so long as certification is denied on these grounds, the effect of the circuit split will continue to be felt — thus leaving open the possibility of renewed Supreme Court interest down the road.

The disparate approaches to ascertainability are exemplified in two decisions: Carrera v. Bayer from the Third Circuit, and more recently, Briseno v. Conagra from the Ninth Circuit.

Read the full article here.

PC Food Litigation Index: April 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.

In April, “natural” and its opposite, “artificial,” continued to be legally-contested territory in the food world. Malic acid has become a frequent target of plaintiffs’ lawyers who argue that because the ingredient can be in some instances deemed a manufactured flavoring agent, food products that contain it cannot fairly be labeled “no artificial flavors” Malic acid occurs naturally in many fruits but also can be manufactured through chemical reactions. Plaintiffs likewise continue to challenge “all natural” and “no artificial ingredients” labels on food products that contain xanthan gum, used in a wide range of foods as a thickening and stabilizing agent. Like malic acid, xanthan gum is an extraordinarily common, FDA-approved ingredient that has been in use for decades.

Despite hints from FDA Commissioner Scott Gottlieb that Agency guidance on the enduring “all natural” question is forthcoming, the Court opted to lift the stay of Tran v. Sioux Honey Association. The Court had previously stayed the action, awaiting “the outcome of FDA’s rule-making process regarding the permissible uses of the term natural in food labeling.” Responding to a direct request from the Court in a letter dated April 9th, the FDA declined to provide a determination as to “whether and in what circumstances honey containing glyphosate may or may not be labeled ‘pure’ or ‘100% Pure.’” The Court responded by lifting the stay, thus allowing the case to proceed.

A pair of similar suits contest the made with real fruit packaging of fruit bars, which the plaintiffs claim misleads consumers because of the process by which real fruit is added to the bars.

Annual Filing Trends

Continue Reading

Industry Insights: GMO Labeling Update

The USDA and the Agricultural Marketing Service (AMS) have set forth the National Bioengineered Food Disclosure Standard (“the Rule”) for labeling food products that have been genetically modified. The Rule requires food companies to disclose information about bioengineered food and food ingredient content by labeling such food as “BE” (bioengineered). According to its summary, the purposes of the Rule are to share information with consumers and to minimize implementation and compliance costs that would otherwise be passed on to consumers.

The USDA is proposing two lists:

  • highly adopted bioengineered crops (e.g. canola, field corn, cotton, soybeans and sugar beets); and
  • bioengineered crops that are not highly adopted (e.g. non-browning apples, sweet corn, papayas, potatoes and summer squash varieties).

Foods containing highly adopted crops would be required to be labeled as bioengineered. Otherwise, foods containing crops that are not highly adopted would be required to be labeled that they “may be bioengineered” or “may contain bioengineered ingredients.”

Continue Reading

Industry Insights: Doing Business in the Cannabis Industry

The cannabis industry is growing rapidly (by one estimate, the market for recreational cannabis was $9.2 billion in 2017, and is expected to grow as large as $47.3 billion by 2027). Many companies are seriously assessing the potential profit of indirect involvement in the industry by providing services to or investing in businesses that distribute, market, or otherwise sell cannabis. A significant consideration is whether the U.S. Department of Justice will enforce the federal drug laws, which ban marijuana, even in states where the substance is otherwise legal. This update, whose primary author is a former federal prosecutor who worked at the U.S. Department of Justice’s headquarters component in Washington, DC, assesses the status of the enforcement of federal drug law as to marijuana, and also offers due diligence factors that in-house counsel should consider before advising their companies regarding involvement in the cannabis industry.

Read the full article here.