Food Industry Litigation and Regulatory Highlights, July – September 2021 – Ad Law Access

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If the summer slide and the start of school kept you too busy to follow what’s going on in the food scene, we hear you!  Catch up on key developments below in this issue of our Food Industry Litigation and Regulatory Highlights.

The Courts Were Kind to the Food Industry This Summer

This summer brought a series of class action victories to the food industry, including a trio of decisions from the Second and Ninth Circuits, both long-time hot beds for false advertising class actions, as well as four dismissals from the Southern District of New York.

At the appellate level, the Second Circuit affirmed the dismissal of a putative class action challenging Starbucks’ claim that its drinks are the “best coffee for you” and that its coffee is “watched over … from the farm to you,” despite the use of pesticides to kill roaches at certain retail locations.  The Court ruled that the challenged claims were not specific enough to misrepresent a quality or characteristic of Starbucks’ coffee, and that no reasonable consumer would interpret them to suggest anything about the use of pesticides in Starbucks’ stores.

The Ninth Circuit decertified a class of consumers claiming that Coca-Cola falsely labels its drinks as having no artificial flavors when they contain phosphoric acid, ruling that consumers lacked standing to pursue injunctive relief.  According to the Court, the plaintiffs’ claims that they “would consider purchasing” Coke in the future if certain disclosures were included or if the product’s labels were truthful were insufficient to show an actual or imminent threat of future harm.

Finally, the Ninth Circuit affirmed the dismissal of claims involving Trader Joe’s “100% New Zealand Manuka Honey.”  The Court relied on the FDA’s Honey Guidelines, which permit honey to be labeled with the name of a plant or blossom if the producer has reason to believe the designated plant or blossom is the “chief floral source” of the honey.  Thus, because plaintiffs’ own testing revealed that the product consists of between 57.3% and 62.6% honey derived from Manuka flower, the product’s “chief floral source” is the Manuka flower and reasonable consumers would not be deceived by the label.   The Court further held that consumers would not interpret the label in the manner suggested by the plaintiff because of:  (1) the impossibility of making a honey that is 100% derived from one floral source; (2) the lower cost of Trader Joe’s Manuka honey ($13.99) as compared to more concentrated blends (which sell for more than $266); and (3) the “rating” system displayed on the back label of the product, which should have informed a reasonable consumer’s interpretation of the challenged claim.

The Southern District of New York, another popular jurisdiction for food claims and class actions more generally, dismissed four food class actions over the summer.  Two S.D.N.Y. judges dismissed similar allegations that the vanilla flavoring in certain products (Mars Dove’s vanilla ice cream bars and Aldi, Inc.’s vanilla almond milk) was not derived exclusively or even predominantly from vanilla beans or vanilla extract.  See Garadi v. Mars Wrigley Confectionery US, LLC; Parham v. Aldi, Inc. These Courts joined dozens of others that have dismissed similar claims, finding that no reasonable consumer would construe the challenged labels to make any claims about the source of the vanilla flavor, and that the labels simply alert consumers that the products taste like vanilla.

The S.D.N.Y. also dismissed a putative class action filed against The Coca-Cola Company, alleging that its Gold Peak® “Slightly Sweet” tea leads consumers to believe the beverage was low in sugar and calories when, in fact, sugar is the second most predominant ingredient.  The Court analogized “Slightly Sweet” to “Just a Tad Sweet,” which the Eastern District of California previously found to be a “blatant form of puffery.”  The Court also found that the sugar content was accurately reflected in the Nutrition Facts Panel and therefore could not mislead a reasonable consumer.

A fourth judge in the S.D.N.Y. dismissed claims that Wise’s “Cheddar & Sour Cream Flavored” chips should have been labeled as “artificially flavored” due to the presence of diacetyl, which bolsters the product’s aroma.  The Court found that the label does not imply that the chips’ flavor is derived entirely from cheddar and sour cream, nor does the label indicate that the chips are flavored with only natural ingredients.  The Court also found that any confusion on the label is dispelled by the back of the package which explains that the chips contain cheddar, sour cream, and artificial flavoring.  Finally, the Court rejected the plaintiff’s claim to the extent it was based on an alleged failure to comply with FDA regulations, ruling that it was “well established that ‘acts cannot be re-characterized as ‘deceptive’ simply on the grounds that they violate another statute or regulation (like the identified FDA regulations) which does not allow for private enforcement.  This last ruling is significant, as the plaintiffs’ bar routinely alleges technical violations of FDA regulations in an attempt to establish deception or falsity.

It’s not all good news, though, and the courts declined to dismiss a number of other food complaints, including claims that (1) Celsius Holdings’ sparkling water were deceptively marketed as containing “real” juice when, in fact, they were allegedly flavored with “natural flavor;” and (2) Cooper Cane’s wines were made in Oregon when, in fact, the wine was allegedly bottled in California.

New Food Filing Trends:  Is Chocolate the New Vanilla?

This summer brought the filing of at least six new class actions challenging various label representations involving chocolate and fudge:  Karlinski v. Costco Wholesale Corp. (“chocolate almond dipped” ice cream bars); Rice v. Dreyer’s Grand Ice Cream Inc. (ice cream bars “dipped in rich milk chocolate); Cashman v. Ferrara Candy Company (Keebler Fudge Stripe cookies); Bartosiake v. Bimbo Bakeries USA Inc. (Entenmann’s chocolate fudge iced cake); Lederman v. The Hershey Company (hot fudge topping); Huston v. Conagra Brands, Inc. (Duncan Hines Chewy Fudge Brownie Mix).  These cases all allege that the products’ ingredients are comprised partially or primarily of vegetable oils instead of the dairy ingredients that consumers expect in real chocolate or fudge.

In addition to new “natural” and “place of origin” filings, a significant trend is also beginning to form with respect to health and nutrient claims, including sugar content (Cleveland v. Campbell Soup Co., Alabama state court, and Andrade-Heymsfield v. NextFoods Inc., Southern District of California), Vitamin C (Wagner v. Molson Coors Beverage Co., Northern District of California; Marek v. Molsen Coors Beverage Co., Northern District of California), and protein content (Brown v. Natures Path Foods, Inc., Northern District of California, and Brown v. The J.M. Smucker Co., Northern District of California; Paschoal v. Campbell Soup Co., Northern District of California; Nacarino v. Kashi Co., Northern District of California).

Links from Law360 (subsc. req’d.)

National Advertising Division

Sustainability and humane animal treatment claims were front and center before NAD in two cases.

Safe Catch, Inc. (Pouched and Canned Tuna) Case No. 6911.  NAD determined that certain mercury testing claims made by Safe Catch, Inc., a manufacturer of pouched and canned tuna, were substantiated, including claims that every tuna used to make Safe Catch tuna is tested for mercury, claims that its tuna has the “lowest mercury” and “lowest mercury limit” of any brand and use of the name “Safe Catch”.  NAD also considered the claim “100% Sustainably Caught Wild Tuna”.

In support of its claim, the advertiser explained that 100% of the tuna it purchases are caught using sustainable methods based on factors considered relevant to the standards set by the Monterey Bay Aquarium Seafood Watch (“Seafood  Watch”), the  Marine  Stewardship  Council,  the  National Oceanic & Atmospheric Administration Fisheries Office of Sustainable Fishing, and Greenpeace.  In addition, Safe Catch albacore tuna are purchased from a Marine Stewardship Counsel-certified sustainable seafood fishery,…

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