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.

all natural large.jpg.560x0_q80_crop-smartIn Kane v. Chobani, LLC, No. 14-15670, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit vacated the trial court’s dismissal of a lawsuit alleging that Chobani deceptively and unlawfully used the terms “natural” and “evaporated cane juice” to describe its yogurt.  The class action lawsuit, filed in 2012 on behalf of people who purchased Chobani Greek yogurt, alleged that the products labeled as “all natural” actually contained artificial ingredients, artificial colors, and contained added sugar under the guise of “evaporated cane juice.”

The U.S. District Court for the Northern District of California dismissed the plaintiffs’ case in February 2014, explaining that the plaintiffs had not set forth sufficient factual allegations to recover against Chobani for using the allegedly misleading food labels.[1]  Observing that the U.S. Food and Drug Administration (“FDA”) had indicated its intent to issue guidance on the terms “natural” and “evaporated cane juice,” the Ninth Circuit reversed course and vacated the dismissal.  However, the Ninth Circuit remanded with an instruction that the case be stayed indefinitely, explaining that the labeled terms “implicate[] technical and policy questions” that were better decided by the FDA than the judicial system.  By resurrecting the plaintiffs’ claims while awaiting FDA guidance, the Ninth Circuit re-opened the door for consumers to bring expensive, open-ended, and uncertain lawsuits against companies that use allegedly “misleading” words.  These types of suits will continue to proliferate, with varying results, unless and until the FDA issues the guidance the courts are seeking.  Here’s hoping that happens…sooner rather than later.

[1] Kane v. Chobani, Inc., 973 F. Supp. 2d 1120 (N.D. Cal. 2014).

Tlawsuithis is Part II in our series on Food Labeling litigation.  Part I gave general context to food labeling and advertising litigation and discussed some general trends with these claims, focusing on consumer claims such as false advertising, consumer protection, and unfair trade practices.  To review:  consumers bring class actions that allege, through some legal claim, the use of a labeling term misleads consumers.  Remember the term “selling words” that we explained in Part I?  This part summarizes the most hotly contested kinds of selling words and gives examples of class actions brought by consumers against the companies who used them.  The selling words that are the biggest targets of this kind of litigation: (1) “Natural” and “all natural”; (2) “Healthy” claims; and (3) Food mislabeling claims about ingredient quality (like “100% pure”).  Let’s jump in! Continue Reading “Selling Words” and Food Labels: the New Tobacco Litigation, Part II

FOOD BASICS© 1998 PhotoSpinwww.powerphotos.comMy colleagues on the Alcohol and  Beverage team posted today on Husch Blackwell’s Food & Agribusiness blog regarding new regulations that will impact craft brewers.  Because of the overlap of issues we’ve previously blogged about, I thought it was of equal interest to this blog’s readers.  Enjoy!

By:  James Mathis and Jonathan Allen

New regulations from the Food and Drug Administration (FDA) regarding nutritional information labeling are generating concern within the beer industry that the cost of compliance might be damaging and cost prohibitive for the industry.

Effective December 1, 2016, the FDA will require disclosure of nutritional information for regular menu items, including alcohol beverages, appearing on menus for larger restaurant and brew pub chains.

The Affordable Care Act (ACA) amended the Federal Food, Drug, and Cosmetic Act (FDCA) to require disclosure of caloric counts for standard menu items at restaurant and brew pub chains with 20 or more locations nationwide.  Craft brewers have expressed concern that the cost of the nutritional testing could make it difficult to compete with larger brewers, particularly with respect to seasonal or smaller batch beers.  Originally set to go in effect in 2015, the FDA extended the time to comply with the regulation from December 1, 2015 to December 1, 2016, in large part to accommodate the concerns of the craft beer industry.  (For more on the extension, see our previous post here.)

The beer industry could elect to fight the FDA’s regulatory power to weigh in on matters traditionally left to the Alcohol and Tobacco Tax and Trade Bureau (TTB).  The FDA has authority over labeling of all “food,” which by definition includes certain alcoholic beverages.  Since the end of prohibition, however, the TTB and its predecessor agencies have generally exercised authority to regulate all things alcohol, including product labeling, to the exclusion of the FDA’s jurisdiction.

The two agencies’ regulatory authority over alcohol beverages has been contested often.  While the FDA and TTB have fought about their regulatory overlap at times, they have also worked together (for example, on “gluten-free” labeling issues).  Even in the era of cooperation, however, the FDA’s proposed labeling regulations may spark another dispute between the agencies, and provide leverage that the craft beer industry could use to fight the regulation.

The Husch Blackwell Alcohol and Beverage team will continue to monitor these and other regulatory issues and can assist with all compliance-related issues.

Salmon_FishThe federal government’s omnibus spending bill which was unveiled on December 15th, includes language that requires the FDA to finalize guidelines for the labeling of genetically modified salmon. The bill also “prohibits the agency from introducing any food that contains genetically engineered salmon until it publishes its final labeling guidelines,” as reported by Lydia Wheeler in an article which appeared in The Hill. The restriction appears to be a response to a decision by the FDA last month to approve a genetically modified brand of salmon that has been engineered to grow to market size faster than its farm-raised counterparts.

Congress is expected to vote on the bill this Friday. Read more here.

Labeling GroupUnless you have been living under a rock, you know that a battle is brewing over labeling foods which contain genetically modified ingredients. According to a recent New York Times poll, 93% of American consumers favor labeling of some type for foods that contain genetically modified organisms (GMOs).  July 27, 2013 NYT Poll.  In 2012, California voters narrowly rejected a GMO labeling law. In 2013, Connecticut and Maine became the first states to pass bills requiring labels on all foods made from GMOs, but these laws don’t become effective until surrounding states pass similar legislation.  A total of twenty-six states considered some form of GMO labeling legislation in 2013. State Labeling Initiatives, CTR. FOR FOOD SAFETY. Continue Reading GMO Labeling: Current Standards and Policies

Minute Maid LabelOn April 21, 2014, the Supreme Court of the United States heard oral arguments in POM Wonderful LLC v. The Coca-Cola Company. This is perhaps the most interesting food labeling case to come along in, well . . . forever.  What is at issue here? The central question is whether a food product label which arguably complies with the Food and Drug Administration’s regulatory labeling requirements can, nonetheless, be misleading under another federal statute, the Lanham Act, which prohibits false or misleading advertisements. This is our second post in what is sure to be a mega-multiple post analysis of food labeling law.  The first post appears hereContinue Reading Food Labeling at SCOTUS: Can FDA Compliant Labels Still be Deceptive?

RockmelonsOn January 28, United States Magistrate Judge Michael Hegarty sentenced Eric and Ryan Jensen (no relation to our highly esteemed partner and blog contributor Marnie Jensen) to five years of probation, six months of home detention, 100 hours of community service, and $150,000 in restitution to each victim of the deadly 2011 listeria outbreak. The outbreak, which the USDA’s Food Safety and Inspection Service traced back to Jensen Farms, resulted in 33 deaths and sickened 147 people in 28 states. The brothers were charged with six counts of Introducing an Adulterated Food into Interstate Commerce in violation of 21 U.S.C. § 331. Although criminal charges are unusual in cases like this, the FDA argued that criminal prosecution was justified here due to the “special responsibility” that food processors bear to “ensure that the food they produce and sell is not dangerous to the public.” The situation is tragic, but there are some important lessons that we can learn from these events. Continue Reading Jensen Brothers Sentenced for Listeria Outbreak: Lessons for Producers and Inspectors

all natural

In 2012, a handful of lawsuits arose against food and beverage manufacturers attacking “all natural” claims on product packaging labels. In 2013, that trend exploded with new cases seemingly filed daily. Now, as we venture into 2014, what is on the horizon? This post is the first in a multi-part series that will examine the current food labeling litigation trends and the possible results from these consumer claims.

As organic producers, processors, and retailers know, “organic” product labeling is subject to a myriad of regulatory requirements under the USDA’s National Organic Program. So to start with, let’s recognize that “all natural” claims are a very different beast. As the FDA put it:
Continue Reading “All Natural” Food Labeling Litigation: Would a Rose by Any Other Name Really Still Smell as Sweet?

CattleBunkOn December 11, 2013, the FDA issued a long awaited guidance document on the appropriate use of antimicrobial drugs in the feed or drinking water of food producing animals.  Given that this issue has simmered since the 1970’s, it should not be surprising that there are differences of opinion regarding whether this guidance document is a significant step toward addressing antimicrobial use in food animals or whether it is simply a meaningless piece of paper.  This blog does not take a position on the scientific issues that underlie this debate.  Instead, lets look at the overall strategy taken by FDA.

For several decades, antimicrobial drugs were (and still are) commonly added to the feed or drinking water of food producing animals (e.g., poultry, cattle, and hogs) as growth promoters.  These drugs help the animals gain weight faster or use less food to gain weight.  However, some people in the public health arena believe that widespread use of antibiotics in animals contributes to the evolution of antibiotic resistant human pathogens.  This isn’t new. The FDA, industry, and the public have wrestled with this issue for years.  The new guidance document, identified as Guidance for Industry – #213, is the FDA’s attempt to resolve the issue to the satisfaction of all parties.  Judging by the reaction from some participants in the discussion, the FDA failed. (See here for an explanation of the criticisms leveled at the FDA proposal). But, is this a fair assessment?

Continue Reading FDA’s New Guidance Document for Antimicrobial Use in Food Producing Animals: Significant Step Forward or Side-Step?