A three-judge panel returned mixed-news on Friday, September 30, for sellers of food labeled as “natural.” A putative class action lawsuit against Dole Packaged Foods for deceptively labeling their fruit containing synthetic citric and ascorbic acid as “All Natural Fruit” had been dismissed in favor of Dole on summary judgment by the United States District Court for the Northern District of California. The District Court had also decertified the class action.
On appeal, a panel of the Ninth Circuit determined that a jury could find that a reasonable consumer would see Dole’s description as misleading. This was based on the plaintiff’s testimony that he was deceived; an informal policy of the FDA defining “natural” to mean nothing artificial or synthetic had been included; and FDA warning letters previously sent to various food sellers for describing food as “natural” while containing synthetic citric acid. Accordingly, the panel found it was error for the District Court to grant summary judgment to Dole.
However, the panel affirmed the District Court’s decertification of the class action. The correct measure of damages in this circumstance would be the “price premium” of the labels, that is, the additional price paid in misunderstanding the fruit to contain no artificial or synthetic ingredients. Yet, the plaintiff presented no evidence as to how this premium could be calculated with proof in common to a class of consumers. Presumably, individualized evidence would have to be presented to demonstrate how much reliance a consumer placed on the “natural” labeling, and what this description would be worth to them. The plaintiff’s individual claim may proceed, but only pursuit of injunctive relief would be allowed on behalf of a class of consumers.
This reversal by a Federal Circuit Court adds to the pileup of differing views in the “all natural” labeling space, which is sure to continue until the FDA and USDA provide certainty.