There is a Calvin and Hobbes cartoon where Calvin's dad is at the grocery store trying to decide which type of potato chips to buy between "original," "lite," "less fat," "less salt" and various combinations of the terms. The punch line is "Frankly, my life was plenty complicated before the potato chips."
Food labels are in some ways now more complicated than ever. Walking down a grocery store aisle, you will see "all natural," "antibiotic free," "healthy" and a myriad of other terms that characterize the food being marketed. Let's call these little additions "selling words." What are selling words? They are words that are put on a package because somebody decided consumers will be more likely to buy the product if they see the selling words.
The people who come up with selling words are smart. They do studies and look at data. They spend a lot of time figuring out what drives consumer decision making. I'm a consumer. When I go to the grocery store, I am more likely to buy products that say things like "all natural," "healthy," and "no artificial flavors." But, selling words are tricky from a legal perspective. Many of these kinds of claims on food labels and packaging are neither expressly mandated nor prohibited by the current federal food labeling regulatory scheme, and sometimes consumers (or at least attorneys) disagree on whether the selling words match up with the actual content of the food. As a result, the use of selling words on product packaging has become a target of litigation.
This article is Part I of a two-part series of blog posts addressing litigation surrounding food labeling and advertising. This part provides broad context for this kind of litigation, first by explaining the food labeling regulatory scheme and general food labeling litigation trends. Part I also discusses the primary categories of plaintiffs and the legal means they use to bring these actions. Part II of this series (coming soon) addresses consumer class action suits in greater detail, giving specific examples of the selling words that generate the most legal controversy.
Food Labeling Regulatory Scheme: There are two categories of actions that could be the subject of potential class action litigation: (1) food labeling, and (2) food advertising. Each is discussed in turn.
When it comes to labeling, the FDA primarily regulates most foods and nonalcoholic beverages under the Federal Food, Drug, and Cosmetic Act (FDCA) and the Nutrition Labeling and Education Act of 1990 (NLEA). The USDA, through its Food Safety and Inspection Service (FSIS), regulates labeling of meat, poultry, and liquid egg products under the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA). That jurisdiction extends to nearly all products that contain meat or poultry, except those containing 3 percent or less raw or 2 percent or less cooked meat or poultry. Practically, for example, this means that labeling of a frozen cheese pizza is subject to FDA jurisdiction, but if pepperoni or sausage is added to the pizza, labeling jurisdiction then transfers to the USDA.
Food advertising, on the other hand, is subject to FTC jurisdiction. The FTC’s authority extends to all advertising, which includes advertising on labels, regardless of whether the food is regulated by the FDA or USDA. Information on a manufacturer’s website may be subject to both FDA/USDA and FTC jurisdiction because “under certain circumstances, information about FDA-regulated products that is disseminated over the Internet by, or on behalf of, a regulated company can meet the definition of labeling.” FDA Letter to Washington Legal Foundation, Nov. 1, 2001. The FTC is empowered to prohibit (1) unfair or deceptive acts or practices, and (2) in the case of food products, “any false advertisement” that is “misleading in a material respect.” See 15 U.S.C. §§ 45, 52, 55. Generally, the FTC requires manufacturers to have a reasonable basis for all objective claims about the food (express and implied) that reasonable consumers understand from advertisements. Generally, the FTC has attempted to harmonize its standards with the FDA’s standards with respect to nutritional and health claims; therefore, it usually does not take action regarding nutrient content and health claims if they comply with the NLEA.
Food Labeling Litigation Trends: Since 2011, consumer advocacy groups and plaintiffs have filed more than 150 food labeling class action lawsuits against food and beverage companies. According to a recent study, the number of these consumer protection class actions brought in federal court climbed from 19 cases in 2008 to more than 102 in 2012. The biggest targets: “Natural” and “all natural,” followed by ingredient quality claims (e.g. “100% pure”) and “healthy” claims. These are discussed in more detail in Part II of this series.
Courts have long held there is no private cause of action under the FDCA or similar statutes, Buckman Co. v. Plaintiff’s Legal Comm’n, 531 U.S. 341, 349 n.4 (2001), so private citizens cannot file suit alleging a food company’s products are misbranded or fail to comply with specific FDCA statutes or regulations. But private citizens have other mechanisms to bring suit for perceived mislabeling. Class actions in this area, alleging that use of the labeling term is misleading to consumers, are uniformly brought under state laws. Claims generally relate to false advertising, unfair trade practices, consumer protection, fraud and breach of warranty. Competitors, on the other hand, can bring claims under the federal Lanham Act. See POM Wonderful LLC v. Coca-Cola Co., in which label of Minute Maid Pomegranate Blueberry Flavored Blend of five juices was misleading because it contained 0.3% pomegranate juice and 99.4% apple juice, even though the label was FDCA compliant. In POM Wonderful, the Supreme Court held that “Competitors may bring Lanham Act claims like POM’s challenging food and beverage labels regulated by the FDCA,” thus creating another avenue of food label and advertisement litigation.
The Plaintiffs Who Bring Food Labeling Claims And How They Do It
There are two primary categories of plaintiffs in food labeling actions: consumers and competitors. Because of the complex food labeling regulatory scheme, each kind of plaintiff has its own way of bringing these claims, as different laws apply to different categories of plaintiffs. Read on to learn more about these plaintiffs and the methods they use to bring food labeling claims.
Consumer Class Action Claims
As discussed in the previous section, consumers can and do file class action lawsuits against various food corporations. To review, they can file suit under state law, alleging false advertising, unfair trade practices, consumer protection, fraud, and/or breach of warranty. Many of their grievances surround the same kinds of words or claims in food labeling and advertising: “natural” claims and “healthy” claims. And a third commonly litigated claim is food “mislabeling.” Because of the detail and vast amounts of litigation related to consumer class action lawsuits, we’ve dedicated the entire second part of this article series to explain and give examples of this kind of litigation--check back next week for that post!
Following the Supreme Court’s decision in POM Wonderful LLC v. The Coca-Cola Company, 134 S. Ct. 2228 (2014), it is clear that compliance with the FDA’s labeling requirements does not immunize the content of labels from false advertising challenges under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (2012).
In POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228 (2014), POM Wonderful LLC (“POM”) sued Coca-Cola under the Lanham Act. POM makes and sells pomegranate juices, including a pomegranate-blueberry juice blend. Coca-Cola also makes a juice blend that is described on the label as “pomegranate blueberry,” even though the blend contains only 0.3% pomegranate juice and 0.2% blueberry juice. On Coke's product, the words “pomegranate blueberry” are printed in all capital letters, but in much smaller print below those words are the phrases “flavored blend of 5 juices,” and “from concentrate with added ingredients and other natural flavors.” POM brought suit under the Lanham Act, claiming that Coca-Cola’s label tricked and deceived customers, all to POM’s injury as a competitor. POM alleged that the name, label, marketing, and advertising of Coca-Cola’s product was misleading consumers into believing that the juice consists mostly of pomegranate and blueberry juice, when it consists predominantly of less expensive apple and grape juices. POM complained that the confusion caused it to lose sales. As discussed above, the Court rejected Coca-Cola’s argument that it was immune from suit under the Lanham Act because its label complied with the FDA’s requirements. The case is currently set for trial in March, 2016.
Similarly, in Global Beverage Enters. Inc. v. Cytosport, Inc., Case No. 0:14-cv-60950 (S.D. Fla. April 23, 2014), the Plaintiff brought an action under the Lanham Act for alleged false advertising of defendant’s “Muscle Milk” products. Plaintiff alleged that because defendant’s products do not contain actual milk, the use of the term “milk” deceived consumers, and the defendant’s products unfairly benefit from the goodwill associated with milk products and other healthy beverages. Plaintiff further alleged that defendant’s marketing was misleading because defendant provided some “Muscle Milk” products in flavors traditionally associated with milk, such as “chocolate” and “chocolate malt,” and represented that its products were lactose free (thereby subtly implying that the product contains milk). The parties entered into a confidential settlement agreement in September 2014 and the court therefore dismissed the case.
Wrap it Up. Here are the takeaways so far:
(1) Food labeling litigation is not going away anytime soon;
(2) There are various categories of plaintiffs that can and do bring food labeling related claims;
(3) If a labeling claim doesn’t match up with the product ingredients, expect trouble; and
(4) Part II of this post will address consumer class action lawsuits against companies and the most commonly litigated selling words. Stay tuned!
U.S. Chamber Institute for Legal Reform, The New Lawsuit Ecosystem, pg. 89 (Oct. 2013), http://www.instituteforlegalreform.com/uploads/sites/1/The_New_Lawsuit_Ecosystem_pages_web.pdf