“All natural” food labeling litigation: would a rose by any other name really still smell as sweet? - Lexology

“All natural” food labeling litigation: would a rose by any other name really still smell as sweet? - Lexology

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  January 20 2014
  
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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:

From a food science perspective, it is difficult to define a food
product that is ‘natural’ because the food has probably been processed
and is no longer the product of the earth. That said, FDA has not
developed a definition for use of the term natural or its derivatives.
However, the agency has not objected to the use of the term if the food
does not contain added color, artificial flavors, or synthetic
substances.

Put simply, neither the FDA nor the USDA have adopted regulations
which specifically define what “all natural” means. So, from a
regulatory standpoint, it is every producer for himself.  No one may
rely on the fact that their product labeling comports with federal
regulations and is, therefore, immune from state law based claims. That
said, a study recently released by the Shelton Group found
that consumers most want to see “100 percent natural” or “all natural”
on their food choice labels. According to Rachel Saks, co-founder of the
Brooklyn-based nutrition consulting company tABLE health,
for her health-conscious clients, natural “means whatever they want it
to mean.” As a result, food companies very much want to utilize the “all
natural” label on their products.

This is a problem, right? Everyone wants to buy foods that are “all natural” but no onereally knows
what that means, so naturally (excuse the pun) we end up with disputes
(we call it “litigation”) as to what an “all natural” product means. And
let’s be blunt, litigation isn’t really the best way to decide the
definition of a food labeling term.

Neither the FDA nor the USDA have rules defining what “natural”
means, but they’ve given us some hints.  The FDA is cool with “all
natural” claims regarding food that doesn’t contain “added color,
artificial flavors, or synthetic substances.” The USDA doesn’t
object to “all natural” claims with respect to meat and poultry
labeling so long as the product contains “no artificial ingredient or
added color and is only minimally processed. Minimal processing means
that the product was processed in a manner that does not fundamentally
alter the product.” The Food, Drug, and Cosmetic Act prohibits
labeling that is false or misleading, but does not go into any more
detail on how to determine what is false or misleading.

So here we are. Foods are labeled “all natural” with no regulatory
definition as to what that means. Consumers bring class action lawsuits
alleging violations of state consumer protection laws if the products
contain ingredients that are artificial, synthetic, bioengineered,
highly processed or “unnatural” for other reasons. The organic industry
has a legitimate reason to worry that “certified organic” not be watered
down by “all natural” labeling claims. Conventional agriculture is
reasonably concerned with state law initiatives that would require
identification of  ”GMO” or “non-GMO” component ingredients. Wow, what a
mess. Along with the courts and others, we will try to sort this out
and identify what the issues really are and how they are likely to be
resolved.

Food labeling & litigation: What’s in store for 2014?

Food labeling & litigation: What’s in store for 2014? Nutrition Facts,
GMOs, natural claims, trans fats, GE salmon, whole grain statements

By Elaine Watson+, 10-Dec-2013

What might give the food and beverage
industry's regulatory affairs teams sleepless nights in 2014? From more
evaporated cane juice lawsuits to proposed changes to the Nutrition
Facts panel, stay up to date with this FoodNavigator-USA gallery…

http://www.foodnavigator-usa.com/Regulation/Food-labeling-litigation-What-s-in-store-for-2014-Nutrition-Facts-GMOs-natural-claims-trans-fats-GE-salmon-whole-grain-statements

Food and Beverage Labeling and Marketing Litigation Continues to Play out in the Courts and Legislatures | Skadden

Food and Beverage Labeling and Marketing Litigation Continues to Play out in the Courts and Legislatures | Skadden

January 16, 2014 | *Skadden's 2014 Insights - Global Litigation

Lauren E. Aguiar, Anthony J. Dreyer, Xiyin Tang, Michael M. Powell

The food and beverage industry has experienced a recent spate of
consumer class actions attacking various aspects of the labeling and
marketing of products. Advertising and marketing claims by manufacturers
that a product is “All Natural” have been an especially frequent
target, with plaintiffs pointing to the inclusion of synthetic
ingredients or genetically modified organisms (GMOs) or the processing
of the product as grounds for suit. Many of these cases have been filed
in California, where state laws are viewed as favorable to plaintiffs,
although cases are pending throughout the country.

Consumers have contended that “All Natural” claims are false,
misleading or deceptive under states’ applicable consumer fraud
statutes, but several such claims have been stymied by plaintiffs’
inability to explain what, exactly, “All Natural” means. In the absence
of an established, uniform legal definition, courts are sending mixed
signals through conflicting rulings that will require careful
consideration by industry participants seeking to avoid or minimize
litigation risk.

Court Interpretations

Although the term “All Natural” is not defined by the U.S. Food and
Drug Administration, the U.S. Department of Agriculture has issued draft
guidance on the subject. In the absence of an FDA definition, courts
often have reached conflicting conclusions regarding what constitutes an
“All Natural” product and whether a legal challenge should proceed. For
example:

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  In Pelayo v. Nestle USA, the U.S. District Court for the
  Central District of California dismissed a proposed consumer class
  action on the grounds that the plaintiff failed to offer an objective or
  plausible definition of “All Natural.”
• 
  However, in Astiana v. Kashi Company, the U.S. District Court
  for the Southern District of California refused to grant the
  defendant’s motion to dismiss and certified two classes of consumers who
  purchased Kashi products labeled “All Natural” or “Nothing Artificial”
  on the basis that certain of the challenged ingredients either were
  synthetic or were not permitted in organic foods.

As the Kashi decision suggests, in the absence of a uniform
definition courts may look to USDA standards for organic foods to
determine whether an ingredient is natural. The court in Kashi noted that consumers often equate natural with “organic” — or hold organic to a higher standard. For example, in Thurston v. Bear Naked, another decision from the Southern District of California, the court
refused to certify a class of consumers who sought to challenge certain
ingredients in granola products labeled “All Natural,” explaining that
those ingredients are permitted in organic foods.


Genetically Modified Organisms. The inclusion of GMO
ingredients in foods also has been litigation fodder for consumer
plaintiffs. The lack of a definition of “All Natural” sometimes provides
plaintiffs free rein to attack the processing of a food or beverage
product without specifying how the processing converts natural
ingredients into an unnatural product.


For example, the U.S. District Court for the Northern District of California recently rejected a motion to dismiss in Parker v. J.M. Smucker Co.
The plaintiff alleged that the defendant’s labeling of various Crisco
cooking oils as “All Natural” misled consumers because of the chemical
processing the oils had undergone. The court deemed the plaintiff’s
allegation that this processing results in the oils no longer
“retain[ing] the chemical composition occurring in nature” sufficient to
withstand the motion to dismiss, despite defendant’s argument that
merely describing the processing didn’t explain how the oils had been
“chemically altered.” On the other hand, the court in Pelayo
dismissed a challenge to an “All Natural” labeling claim involving the
defendant’s processed pastas, commenting that consumers of the pasta
certainly must have understood that it was not “springing fully-formed
from Ravioli trees and Tortellini bushes.”


Looking to the FDA to weigh in on GMOs as a defense strategy has not
proven successful. In early January, the FDA informed courts overseeing
the class actions against three major food manufacturers that the agency
was declining “to make a determination … regarding whether and under
what circumstances food products containing ingredients produced using
genetically engineered ingredients may or may not be labeled
“‘natural.’” Indeed, the U.S. District Court for the Eastern District of
New York recently rejected a motion to dismiss in In re Frito-Lay North America, Inc. All Natural Litigation.

The case is a purported class action in which the plaintiffs alleged
violation of state and federal laws based on the manufacturer labeling
SunChips and Tostitos “All Natural,” despite the fact that GMO corn is
an ingredient. The plaintiffs argued that “unnaturalness” is a defining
characteristic of GMOs, and the court allowed the case to proceed,
refusing the defendant’s request for a stay to obtain guidance on the
question from the FDA.


Raw Foods. Another emerging labeling controversy
involves one of the latest trends in nutrition: raw foods. A group of
plaintiffs championing the “raw foodist” movement recently brought suit
against a juice manufacturer in the U.S. District Court for the Southern
District of New York, alleging that the high-pressure processing (HPP)
with which the defendant’s BluePrint Juice and BluePrint Cleanse
products are treated destroys “vital” enzymes and nutrients. The
plaintiffs claim that the defendant’s “100% raw” and “never-heated”
labels mislead consumers, who pay nearly $10 for a single bottle of
juice. Little guiding precedent or regulation exists concerning how a
product subject to HPP may be labeled or characterized; it is unclear
whether the court in that case will allow the suit to proceed. The
increasing popularity of HPP among food manufacturers marketing to
health-conscious consumers indicates that this issue could present a new
wave of litigation.

Regulatory Developments

The absence of FDA guidance arguably gives courts wide latitude to
decide cases involving “All Natural” claims. Some courts have stayed
class actions pending FDA comment, but others have refused to do so
based on the FDA’s 2010 statement that natural labeling is low on the
agency’s list of priorities. The recent FDA letter makes it clear that
the agency has no intention of issuing such guidance in the near future.
With no imminent solution at the federal level, legislation has been
proposed in various states, like Proposition 37 in California and
Initiative 522 in Washington, that would disallow labeling genetically
modified food as natural and/or require that genetically modified food
be labeled as such. While the California and Washington proposals
recently failed to pass, similar labeling legislation in Vermont and
Connecticut has the potential to change the landscape for food and
beverage labeling in coming years; the Vermont proposal is awaiting
state senate approval in January 2014, and the Connecticut proposal
passed but requires a three-part “trigger” (including that four other
states must enact similar legislation).

******

The use of “All Natural” labels already is fraught with difficulty, and
as manufacturers develop new methods of processing foods and
ingredients, this issue will become even more complex. In the coming
year, attention likely will be focused on the FDA and state legislatures
to see whether and how they weigh in on labeling; but in the meantime,
manufacturers must make important decisions about how to market their
products. Some companies are opting to remove, or refrain from the use
of, the “All Natural” label, while others are stepping up their
health-conscious labeling to appeal to certain consumers’ increasing
interest in what are perceived to be healthier ingredients. In addition,
the impact and effect of FDA guidance — or lack thereof — will garner
more attention given the Supreme Court’s recent grant of certiorari in POM Wonderful, LLC v. The Coca-Cola Co., a case that involves the interplay between false advertising claims, the FDA, and the Food, Drug, and Cosmetic Act.

________________________

*This article appeared in the firm's sixth annual edition of Insights on January 16, 2014.

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Class Actions Challenging Use Of 'Natural' On Food Labels Begin To Founder - Forbes

Class Actions Challenging Use Of 'Natural' On Food Labels Begin To Founder - Forbes

Glenn G. Lammi

For the past two years, plaintiffs’ lawyers have nourished Washington
Legal Foundation commentators here at Forbes.com with a steady diet of
all-natural lawsuits. And by that we mean class actions alleging that
the use of “natural” or “all natural” on a food product label is false
or misleading under state law (normally, California law). Other than the
occasional decision to put a lawsuit on hold so
the Food & Drug Administration (FDA) can provide a formal
definition for “natural” (which it has yet to do), these claims have
mostly survived defendants’ efforts to dismiss them.


However, with four courts issuing decisions favorable to defendants
in the past three months, these “all natural” claims may have become
less appetizing.


Claims Rejected at Motion to Dismiss Stage. In order
to prevail on claims that defendants’ use of “natural” violated
California law, plaintiffs must prove that “reasonable consumers” relied
on the claim and were deceived by it. Whether a business practice is
deceptive normally presents a question of fact for a jury. But under
California case law, judges in some instances can determine that as a
matter of law, consumers are unlikely to be deceived. One area where
judges have taken such action at the motion to dismiss stage is product
packaging claims.


We’ve previously discussed Northern District of California Judge Koh’s opinion in Kane v. Chobani,
the first of two recent rulings to dismiss a “natural” claim. Judge Koh
ruled that because yogurt labels clearly disclosed the use of fruit or
vegetable juice concentrate, the plaintiffs could not plausibly have
been misled by Chobani’s “all natural” representation.


On October 25, Judge Walter of the Central District of California dismissed with prejudice
claims that the “all natural” representation on 13 Buitoni brand
products were deceptive because they contained “unnatural” ingredients
like xantham gum and soy lecithin (Pelayo v. Nestlé USA). His analysis was quite a bit more extensive than Judge Koh’s in Chobani. He first examined whether Pelayo “offer[ed] an objective or plausible definition of the phrase ‘All Natural’.” The Webster’s Dictionary
definition—”produced or existing in nature”—clearly “does not apply,”
Judge Walter wrote. As stated cleverly in Nestlé’s brief (and repeated
by the judge), consumers knew that “Buitoni pastas are not springing
fully-formed from Ravioli trees and Tortellini bushes.”


Pelayo also pointed to FDA’s 1991 informal policy document on
“natural,” which Judge Walter properly stated “does not establish a
legal requirement.” The plaintiff finally resorted to semantic games,
arguing that none of the ingredients in a “natural” product can be
“artificial” or “synthetic” as defined by FDA in rules regarding,
respectively, flavor additives and organic products. Judge Walter
responded that neither set of rules applied because none of the suspect
ingredients in Buitoni products were added for flavor, nor did Buitoni
seek organic status for its products.


In the second part of his analysis, Judge Walter asked whether “the use of the term ‘All Natural’ is [ ] deceptive in context.”
The relevant context, he stated, was the package label. “All Natural”
appeared immediately above the ingredient list. Thus, “to the extent
there is any ambiguity . . . it is clarified by the detailed information
contained in the ingredient list.” The judge cited to Judge Koh’s
reasoning in Kane v. Chobani on that point.


Claims Rejected at Class Certification Stage. In two other cases where the presiding judge (Marilyn Huff of the Southern District of California) was previously unwilling to grant defendants’ motions to dismiss
“all natural” deceptive labeling claims, she refused to certify broad
classes to pursue such claims. Judge Huff issued class certification
opinions in both cases on the same day, July 30.


One involved a frequent litigant
in product labeling class actions, Skye Astiana, who sued Kashi Company
for representing that 91 different products were “All Natural” (Astiana v. Kashi Company).
The threshold question Judge Huff had to consider for an “All Natural”
class: did common issues predominate over individual ones? Astiana
argued that Kashi’s “All Natural” statements had materially
misled each member of the class, and that such materiality creates an
inference that each plaintiff similarly relied upon that statement when
purchasing Kashi products. Judge Huff did not agree.

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"Natural" Labels - Food Companies Face Class Action Lawsuit

What’s natural, and what’s not? It may sound like a great topic for a philosophical debate, but in the view of companies like Campbell’s Soup, Trader Joe’s and Ben & Jerry’s, finding a way to portray that quintessential goodness is important. And – it can be a revenue changer.For many customers who like to eat canned soup, stock up on their favorite products or indulge in the latest frozen deserts, however, words like “natural,” or labels that boast the wholesomeness of their products need to have the ingredients to back up the claim.


Presently, all three companies are defendants in class action suits that allege they misrepresented the nature of the ingredients on their product labels.

Campbell’s Soup – Mmm, mmm … natural

The Campbell’s Soup Company is currently being sued  by Florida residents for misrepresenting the genetically modified (GMO) corn in its soup as “natural.” The suit, which was launched in 2012 by Mark Krzykwa, alleges that Campbell knowingly mislabeled ingredients that it knew were grown from genetically modified seeds. It strikes at the heart of an issue that has many consumers upset these days: their apparent lack of control over whether GMO ingredients are in their foods.
Earlier this year, Campbell’s attempted to have the suit thrown out of court,  saying that the Federal Drug Administration’s (FDA) approval of the new line of soups preempted the plaintiff’s claim.
However, U.S. District Court Judge William P. Dimitrouleas didn’t see it that way in his May 24 ruling.
“We do not even know whether, when reviewing the label for whether it was ‘misleading,’ the USDA even knew that the soup contained GMO corn, particularly as there is nothing on the soup label to so indicate.”
Judge Dimitrouleas also disagreed with Campbell’s argument that jurisdiction over this case belonged to the FDA.
The FDA, he said, “simply does not regulate those claims.” He pointed out that the federal agency has, on more than one occasion, refused to regulate how the word “natural” is to be interpreted, leaving the debate to the courts.
This is not the first time Campbell’s Soup has been hit with a consumer lawsuit. In 2010, four women sued Campbell’s for claiming that a brand of tomato soup it marketed was “low sodium.”  The plaintiffs alleged that the soup contained the same amount of sodium in it as Campbell’s regular tomato soup. The suit was settled in September 2011 for $1.05 million plus attorneys’ fees.
Campbell’s also settled a large class-action suit in 2003 that alleged that the company had artificially inflated its sales record through the use of “sham shipments.” Campbell’s denied the allegation and settled for $35 million plus an undisclosed payment from its insurance. The class-action suit comprised 10 security-fraud suits during or after 1999.

Ben & Jerry’s “All Natural” Ice Cream

New Jersey resident Colleen Tobin also took exception to the expression “all natural” and sued Ben and Jerry’s Ice Cream in 2012. Tobin cited a report she had read that stated the ice cream maker uses GMO ingredients, hydrogenated oils and other substances she says are less than “all natural.”
Ben and Jerry’s attempted to settle in August, but the settlement was rejected by the courts because of insufficient notice of a pending settlement. A new suit was filed in September 2012.
Just recently Ben & Jerry’s announced that they’d be phasing out use of GMOs.

Trader Joe’s evaporated cane juice

Trader Joe’s is being taken to court by California Bay Area residents Amy Gitson, Christine Vodicka and Deborah Ross, who say that the company’s use of “evaporated cane juice” on its own products is misleading because it makes the products appear to have healthier ingredients.
On their side is an FDA Guidance for Industry that was published in 2009, advising industries that “sweeteners derived from sugar cane syrup should not be listed in the ingredient declaration by names which suggest that the ingredients are juice, such as ‘evaporated cane juice’ … because they fail to reveal the basic nature of the food and its characterizing properties (i.e., that the ingredients are sugars or syrups) as required by 21 CFR 102.5.”
It will be interesting to see the outcome of each of these cases, which are only a few of the many suits in the courts for alleged mislabeling of ingredients in food products, especially in light of the growing efforts to overturn the Monsanto Protection Act.
If there is any message to be gained from these suits, it is that an increasing number of consumers feel that using language that suggests foods are “natural” and wholesome is no longer good enough. Without the FDA’s official stamp on the issue, however, it’s doubtful that the tendency to label food products by trendy and appealing-sounding names will die naturally any time soon.