Category Archives: Labeling

Campbell Seeks Dismissal of “Healthy” Labeling Lawsuit

Campbell Soup Company (“Campbell”) has moved to dismiss a putative class action lawsuit alleging that Campbell’s Chunky™ Healthy Request® Grilled Chicken & Sausage Gumbo Soup product is falsely and misleadingly advertised as “healthy” because it contains partially hydrogenated oils (PHO’s, i.e. artificial trans fats) that are harmful to human health.

In its motion, Campbell argues that the USDA’s review and pre-approval process for labels pre-empts the suit because that regulatory framework specifically looks at whether labels are false or misleading and includes “pervasive” regulations relating to “healthy” claims. Campbell contends that these regulations — as propounded pursuant to the Poultry Products Inspection Act and the Federal Meat Inspection Act — prohibit any consumer protection claims under state law.

Ultimately, the key question will be whether the Court accepts that the suit seeks to impose requirements on “approved labels” that add to, or differ from USDA’s requirements relating to “healthy” claims.   In some cases, courts have rejected preemption arguments on the grounds that the lawsuit seeks to help, rather than hinder, the federal objectives.  But Defendants may have an uphill claim to the extent the court agrees with Campbell that its labels fully comply with USDA regulations for “healthy” claims, which do not expressly prohibit the existence of trans fats.

 

Congress Passes GMO Labeling Bill, President Obama To Sign into Law

On July 14th, Congress passed a GMO labeling bill by a vote of 306-117 that would preempt Vermont’s mandatory labeling act that went into effect on July 1st.  The White House said President Obama will sign the bill into law.

Under the legislation, explicit labeling of GMO ingredients is voluntary and companies are allowed to instead use a computer-generated QR (quick response) code to identify GMO ingredients.  Consumers can scan the QR code with a smartphone which takes them to a website to find out if a product includes GMOs ingredients.  The Organic Trade Association, which has supported mandatory labeling, supported the bill because, among other things, it includes a provision allowing organic food companies to label their products as non-GMO.

Notably, the FDA has stated that if modified genes are removed in the manufacturing process ― which can happen with ingredients such as corn syrup and canola oil ― there is no requirement for notification under the law.  But the Agriculture Department, which would oversee GMO labeling under the law, apparently disagrees with that interpretation.  Accordingly, many believe the scope of ingredients requiring notification under the new law might ultimately be decided by courts.

Republicans and Congresspersons from rural states strongly supported the legislation. “The clock has run out, my producers need certainty and an interstate commerce nightmare will shortly ensure if we don’t pass this bill,” said Rep. Rodney Davis, R-Ill.

Welch’s Fruit Snacks Violate “Jelly Bean Rule” Alleges New Class Action Lawsuit

A class action lawsuit has been filed against Welch Foods, Inc. alleging that it is misrepresenting the fruit content and the nutritional and health qualities of its fruit snacks.  The case was filed on September 18, 2015 and is pending as case no. 1:15-cv-05405 in the U.S. District Court for the Eastern District of New York.

Specifically, plaintiffs allege that Welch deceived consumers by suggesting that Welch’s Fruit Snacks contain significant amounts of the fruits depicted in the marketing and on the labeling of the products, are nutritious and healthful to consume, and are more healthful than similar products.  In this regard, plaintiffs highlight that the product labels include the claim that the Fruit Snacks are “Made With REAL Fruit” and include images “of the characterizing fruit.”  Moreover, they allege that claims such as contains “100% Vitamin C,” “25% Vitamins A & E,” and “no preservatives” are representations that the Fruit Snacks are healthy.

But the products are not healthy, according to plaintiffs, because the products allegedly “contain only minimal amounts of the vibrantly depicted fruits, and are no more healthful than candy.”  Those depicted fruits, plaintiffs allege, “are not the predominant ingredient or even the most prominent fruit in the” Fruit Snacks which actually “contain significant amounts of sweeteners and added sugars, as well as artificial flavors and artificial colors.”

Notably, Plaintiff’s specifically alleged that the Fruit Snacks or misbranded under FDA regulations because Welch fails to display the true percentage of the fruits used in the product name on the front label in violation of 21 C.F.R. §102.5(b).  That provision requires a product to “include the percentage(s) of any characterizing ingredient(s) or component(s) when the proportion of such ingredient(s) or component(s) in the food has a material bearing on price or consumer acceptance or when the labeling or the appearance of the food may otherwise create an erroneous impression that such ingredient(s) or component(s) is present in an amount greater than is actually the case.”

In addition, Plaintiff’s assert that the Fruit Snacks violate the FDA’s Fortification Policy (known as the “jelly bean rule”) which provides that the FDA “does not encourage indiscriminate addition of nutrients to foods, nor does it consider it appropriate to fortify . . . sugars; or snack foods such as candies . . . .”  21 C.F.R. §104.20(a).   In this regard, Plaintiffs further allege that if Welch “had not … fortified the Fruit Snacks with vitamins A, C, and E, they could not claim that these sugary snacks were a nutritious, vitamin-rich food.”

In response to the Complaint’s allegations, Promotion in Motion, which makes the snacks under license for Welch Foods,  issued the following statement: “It is a fact that fruit, whether in the form of juices or more recently purees, has always been the first ingredient in Welch’s Fruit Snacks.  Our labeling is truthful and gives consumers the information they need to make informed decisions.  For nearly 15 years, we have been proud to bring consumers snacks made with the highest quality ingredients, that consistently meet and even exceed quality standards and FDA regulation.”

This case underscores the continuing risks associated with marketing products that include real fruit (including fruit juices) but also added sugar and other ingredients.  Food companies naturally want to include imagery highlighting the fruit flavors associated with a product and highlight that the products include real fruit.  And fortification can help make a product more healthy and attractive to consumers.  On the other hand, plaintiff’s attorneys are quick to attack such marketing as detailed above.  This case also has echoes of the  class action over Coca-Cola’s Vitaminwater which settled last year, where the central allegation was that the product’s name and labeling were misleading because many of the flavors contained negligible amounts of fruit juice and were predominantly made up of water and sugar.

My Comments on the Blue Diamond “Almond Milk” Class Action Suit.

Blue Diamond Growers has been targeted in a class action lawsuit alleging that its “almond milk” products mislead consumers because they only contain 2% almond milk.  I provided some thoughts on this case to FoodNavigator-USA, which can be found here.

Ghirardelli Settles “White Chocolate” Labeling Suit for $5.25 Million

White-Chips

Ghirardelli Chocolate Co. has agreed to pay approximately $5.25 million to resolve a putative class action that accused the company of improperly advertising certain products as containing “white chocolate” when they failed to contain cocoa butter, which is required for “white chocolate” or “white chocolate flavor” under FDA regulations.  A motion for preliminary approval of the proposed class settlement was filed on August 20th, with the settlement also providing that Ghirardelli make certain changes to its labeling.

Notably, the front labels for all of the targeted products, listed below, include the company name, Ghirardelli Chocolate, as shown in the above image:

a. Ghirardelli® Chocolate – Premium Baking Chips- Classic White,
b. Ghirardelli® Chocolate – White Chocolate Flavored Confectionary Coating Wafers,
c. Ghirardelli® Chocolate – Sweet Ground White Chocolate Flavor,
d. Ghirardelli® Chocolate – Premium Hot Beverage- White Mocha, and
e. Ghirardelli® Chocolate – Frappe Classico – Classic White

However, none of these products are specifically identified as “white chocolate,” in contrast to many other Ghirardelli products that include real coca butter.  Plaintiffs nevertheless argued that, for a variety of reasons, the labels were inconsistent with FDA regulations and that labels are misleading because consumers would reasonably believe that the products include “white chocolate.”

For example, the packaging of the [Classic White Baking Chips] prominently uses the term”chocolate” in the company name “Ghirardelli® Chocolate.”  It refers to the product as “Classic White” to deceptively mislead consumers into believing that it is classic white chocolate.  It states that the product is “Premium” leading consumers to incorrectly believe that, unlike its competitors, the product is a premium white chocolate chip product.  It then goes on to deceptively state [on the reverse]: “The luxuriously deep flavor and smooth texture of Ghirardelli Premium Baking Chocolate delivers the ultimate chocolate indulgence.”  But because there is no chocolate or white chocolate in Defendants’ chips, the product cannot deliver a “deep chocolate flavor or texture” or the “ultimate chocolate indulgence.”  The label further says [on the reverse] that the product contains the “Finest grind for smoothest texture and easiest melting” but in fact, unlike real white chocolate, the product is not “ground” from cocoa beans.

Per Law360, Ghirardelli stands behind the accuracy of its labeling and marketing but “opted to settle the suit to avoid the ‘expense and distractions’ of litigating what it believes to be ‘nuisance allegations.'”

This case highlights the dangers of including regulated terms in a company name/trademark and the need to scrutinize marketing language across product lines.  In this regard, in evaluating the risk of a lawsuit, the question is not whether you believe that reasonable consumers are misled by a label, but whether a colorable argument exists that consumers might be misled (thus creating the risk of a colorable lawsuit).  

Courts Continue Staying or Dismissing Evaporated Cane Juice Cases on Primary Jurisdiction Grounds

Numerous labeling class action suits were spawned by the FDA’s 2009 draft guidance advising that, in the FDA’s view,  “the term ‘evaporated cane juice’ is not the common or usual name of any type of sweetener, including dried cane syrup.”   Plaintiffs generally cite this draft guidance, and FDA warning letters citing the guidance, as indicating the FDA’s view that “evaporated cane juice” (ECJ) is false and misleading and violates regulations that ensure labeling with common ingredient names.  But on March 4, 2014, the FDA reopened the comment period on this guidance and announced its intent, following review of the comments, to “revise the draft guidance” and “if appropriate, … issue it in final form.”

Not surprisingly, this announcement prompted defendants in these class action suits to assert the primary jurisdiction doctrine as a basis for dismissing or staying the lawsuits.  This doctrine was recently asserted in the context of natural claims with varying success until the FDA dispelled any notion that it might define “natural” in the near future or in the context.

This time, the courts have been very receptive to the argument.  To date, the following putative class actions over evaporated cane juice (“ECJ”) have been stayed or dismissing without prejudice in light of the FDA’s pronouncement:

  • Gitson v. Clover Stornetta Farms, No. 13-cv-01517, 2014 WL 2638203 (N.D. Cal. Jun. 9, 2014) (yogurt);
  • Swearingen v. Late July Snacks LLC, No. 13-cv-4324, 2014 WL 2215878 (N.D. Cal. May 29, 2014) (crackers and chips);
  • Swearingen v. Yucatan Foods, L.P., No. 13-cv-3544, 2014 WL 2115790 (N.D. Cal. May 20, 2014) (guacamole);
  • Avila v. Redwood Hill Farm & Creamery, Inc., No. 5:13-cv-00335, 2014 WL 2090045 (N.D. Cal. May 19, 2014) (yogurt);
  • Swearingen v. Attune Foods, Inc., No. C 13–4541 SBA, 2014 Wl 2094016 (N.D. Cal. May 19, 2014) (cereal and probiotic bars);
  • Figy v. Lifeway Foods, Inc., No. 13-cv-04828, 2014 WL 1779251 (N.D. Cal. May 5, 2014) (kefir);
  • Figy v. Amy’s Kitchen, Inc., No. 13-cv-03816, 2014 WL 1379915 (N.D. Cal. Apr. 9, 2014) (variety of food products).

And just recently, over the past 7 days, two additional cases have followed the exact same reasoning on this issue:

  • Gitson v. Trader Joe’s Company, No. 13-cv-01333 (N.D. Cal. Aug. 8, 2014): Staying case and observing that, “b]ecause the FDA appears to be actively considering the lawfulness of the use of the term ‘evaporated cane juice’ on food labels, it makes sense to stay the plaintiffs’ evaporated cane juice claims to see if the agency does, in fact, issue final guidance on the issue.  Several other courts in this district have done the same.”  
  • Saubers et al. v. Kashi Co., No. 3:13-cv-00899 (S.D. Cal. Aug. 11, 2014): Dismissing case without prejudice and stating that “[a]llowing the FDA to resolve this matter in the first instance would permit the court to benefit from the agency’s technical expertise and would also provide for uniformity in administration of the agency’s food labeling requirements.”

The agreement by the courts on this issue is not surprising given the strong reliance placed by plaintiffs on the FDA draft guidance and associated warning letters regarding ECJ.  Such reliance is necessary because ECJ is simply a listed ingredient on the nutrition facts label and that label also includes the total sugars in the product.  These claims thus differ from most other labeling class actions because they generally do not encompass allegedly misleading statements on the front of the product that tend to make irrelevant the nutrition facts label on the back of the product. See Williams v. Gerber Products Co., 552 F.3d 934, 939 (9th Cir. 2008) (“reasonable consumers should [not] be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list[]”).

The Supreme Court’s Lesson on Labeling – My Article for Food Processing Magazine

I have written an article for Food Processing magazine regarding the Supreme Court’s decision in POM Wonderful v. Coca-Cola.  It is available on-line here.