Top Trends In Food And Beverage Class Actions

Law360

Publication
October 24, 2019

For most Americans, grocery shopping is a weekly ritual, but consumers often spend little time researching the items that eventually reach their shopping carts. Instead, brand loyalty and product labeling are primary drivers of food and beverage sales.

Enter class action litigation, a process seemingly tailor-made for consumers who later feel they received less than they bargained for. Couple this with state consumer protection statutes containing attractive attorney’s fees provisions, and it is no wonder class action lawyers have been scouring supermarket shelves for potential claims.

While consumer product labeling cases are filed with increased frequency, certain varieties have been more well received by the courts than others. As case law has matured, so too have the players.

Food and beverage manufacturers — many of whom consider false advertising litigation a cost of doing business — have learned what not to say about products. By and large, sophisticated companies take U.S. Food and Drug Administration requirements seriously, and know better than to make statements that could knowingly mislead consumers, or worse, be harmful to people’s health.

Plaintiffs lawyers have also altered their strategies to conform to case trends. With manufacturers becoming more cognizant and courts increasingly skeptical of lawyer-driven claims that struggle to meet reasonable consumer standards, plaintiffs have sought new ground in formulating claims. Below are the top trends in class action food and beverage litigation that are likely to persist in 2020 and beyond.

The Dying Breed: Slack Fill and Other “Stupid Consumer” Litigation

Federal courts have demonstrated a lack of patience for product labeling claims that seem to defy basic common sense. The Diet Coke false advertising case — in which a plaintiff alleged that she believed Diet Coke could help her lose weight because it was labeled “diet” — is the poster child for claims that leave judges incredulous.

As Judge William Alsup of the U.S. District Court for the Northern District of California observed in his order dismissing the case against The Coca-Cola Co. last year, reasonable consumers “understand that advertising will feature healthy and attractive consumers enjoying the subject products and will not star the unhealthy and unfit.” [1] Similarly silly claims, like a case concerning Post Consumer Brands LLC's Honey Bunches of Oats in the U.S. District Court for the District of Massachusetts, have met with the same fate in 2019. [2]

2019 has also signaled the likely end of another less-than-credible wave of cases: slack-fill claims. In those (notoriously American) claims, plaintiffs cry foul because the empty space in their bag of potato chips or box of Milk Duds means they did not get as many bites for their buck as expected. Courts almost routinely reject these claims, finding that plaintiffs failed to substantiate that the empty space in the product was nonfunctional. [3]

Simply put, the courts’ collective patience for allegations that fall into the “are you serious?” bucket has run thin. Plaintiffs lawyers appear to be getting the message, and are less inclined to file cases that have difficulty passing the so-called reasonable consumer test. As U.S. District Judge Deborah Batts succinctly put it, cases of this nature “[attribute] to consumers a level of stupidity that the Court cannot countenance.” [4]

Glyphosate Cases Likely to Subside Following Bellwether Ruling

Monsanto Co. faced considerable heat this year related to the allegedly cancer-causing glyphosate contained in Roundup weed killer. After a jury in the Superior Court of the State of California awarded a California couple $2 billion last May (later reduced by the court to $86.7 million), cases alleging that food products contained undisclosed amounts of glyphosate started to crop up.

However, Judge Robert Scola’s dismissal of a case against General Mills Inc. related to alleged glyphosate in Cheerios, Doss et al. v. General Mills Inc., in the U.S. District Court for the Southern District of Florida, should quell any expectations that a surge of glyphosate litigation is forthcoming, especially in Florida. The court ruled that the plaintiff had failed to sufficiently allege standing where she had suffered no actual injury and could not establish that the purchased cereal was harmful.

Earlier this year, a glyphosate case against Rachel Ray’s Nutrish dog food, brought in the U.S. District Court for the Southern District of New York, was also dismissed. [5] The court found that no reasonable consumer could believe that the “presence of negligible amounts” of the chemical could be material.

Aside from the standing hurdle, the clear undercurrent of these rulings is that a product’s potential exposure to trace amounts of chemicals used in the farming and manufacturing process is a bridge too far on the issue of causation and injury on a class-wide basis.

The New Darling of the Plaintiffs Bar: Synthetic Ingredients

In light of the difficult-to-meet reasonable consumer standard that plaintiffs have faced in misrepresentation cases, plaintiffs are turning their attention to finer details. The best example of this is the recent rise in synthetic ingredient litigation.

Claims of this nature allege that representations such as “natural,” “no preservatives” or “no artificial flavors” are misleading when the product contains a synthetic form of a product ingredient — no matter how minor. Many cases involving synthetic forms of malic acid, for example, survived dismissal this year, and a malic acid case against Ocean Spray Cranberries Inc. was recently certified in the U.S. District Court for the Southern District of California. [6] Products containing other acid ingredients — such as ascorbic and citric acids — are similarly potential targets.

Likewise, lawsuits are being filed with increased frequency challenging “Made with Real” statements. The Northern District of California recently certified a class against Keurig Dr. Pepper Inc. alleging the “Made From Real Ginger” statement on a ginger ale product was false. [7] That case and others have emboldened plaintiffs to explore other “Made with Real” claims.

This year, ice cream and milk companies have been targeted for their use of references to vanilla on their products. According to claims filed in the U.S. District Court for the Eastern District of New York, if the vanilla flavoring used is not actually sourced from a vanilla bean, it is not natural and thus misleading. [8]

Claims related to items containing chocolate flavoring are not far behind. Post Foods LLC, maker of Cocoa Pebbles, was sued this year in the Eastern District of New York over its use of the term “real cocoa” notwithstanding its disclosure of “cocoa (processed with alkali)” in the ingredients list. [9] A case was also filed in the same court against The Hershey Co., related to the white chocolate used in Reese’s peanut butter cups. [10]

Manufacturers should expect more of the same into next year, and general counsel should request that comprehensive research be conducted into the science behind ingredient lists as a preemptive measure.

Green Product Claims Likely to Take Root


As consumers become increasingly environmentally conscious, products are catering to those ideals in marketing phraseology and imagery. This phenomenon has a catchphrase: greenwashing. The use of buzzwords like “pesticide free,” “sustainably harvested” and “fair trade certified” are now commonplace. But these references can be vague, creating confusion about which products are truly green.

For example, representing a product as environmentally friendly because animals are treated well may be alleged to be inaccurate if the manufacturing process involves excessive greenhouse gas emissions or water pollution. Likewise, a representation that a product’s packaging is biodegradable or made of recycled materials might be found misleading if the claim cannot be backed up with scientific tests.

Plaintiffs attorneys have picked up on the issue, as have regulators and consumer advocacy groups. Ben & Jerry’s Homemade Inc. was recently sued in the District of Columbia Superior Court for its “caring dairy” marketing aimed at conveying their commitment to animal welfare standards. [11] According to the complaint, the company sourced ingredients from operations that have contributed to water pollution in Vermont.

The court denied a motion from Ben & Jerry’s to dismiss earlier this year, finding a reasonable consumer “could plausibly interpret Ben & Jerry’s labeling and marketing as affirmatively (and inaccurately) communicating that the company’s ice cream products are sourced exclusively from Caring Dairies and/or other humane sources.” [12]

Given the survival of these cases, particularly against high profile defendants like Ben & Jerry’s, the trend is likely to pick up in 2020.

Country of Origin Claims: The Jury Is Still Out

Creative plaintiff attorneys also look to product origin information to construct false advertising claims. In recent years, courts are viewing these claims with increasing skepticism, finding consumers understand that product imagery and slogans do not always equate to ingredient origin information.

Two recent cases out of the Southern District of Florida prove the point. Last year, the court denied class certification in a case against All Market Inc., maker of Vita Coco coconut water, asserting that the phrase “born in Brazil” mislead consumers to believe that the product came exclusively from Brazil, notwithstanding the legally compliant country of origin statement. [13] The court found the class was not ascertainable and dismissed the case.

Similarly, Lorenzo v. MillerCoors LLC, a case against Coors related to the slogan “born in the Rockies,” was dismissed . As the judge noted during the hearing on the motion to dismiss, “There is no reasonable person, I think, that would say that they were deceived or that somehow they received a product for which they are not entitled because it says we are born in the Rockies.” While that case has been remanded to the district court by the U.S. Court of Appeals for the Eleventh Circuit for a reasoned dismissal opinion, the sentiment was clear: The court was not impressed by the country of origin theory.

In certain circumstances, origin claims carry more weight. The state of Hawaii, for example, recently passed a law prohibiting use of the term “Made in Hawaii” on products unless they were processed entirely in Hawaii. [14] Plaintiffs lawyers almost immediately attempted to leverage the law.

But the U.S. District Court for the District of Hawaii dismissed one such claim in 2019 related to potato chips labeled as “Hawaiian kettle style.” [15] It remains to be seen if similar claims will follow, and whether other states will pass comparable legislation to protect their products, such as Kentucky bourbon or Maine lobster.

Alternative Meats: A New Market Segment

Also capitalizing on the increasingly health and environmentally conscious era, companies producing plant-based food products are positioning themselves as the future of protein. Beyond Meat became the first plant-based product company to go public in May 2019. Its stock skyrocketed to become the highest performing first-day public offering in nearly two decades.

Impossible Foods is also performing well, partnering with Burger King Holdings Inc. on the well-received Impossible Whopper. Other fast food chains are also getting in on the act: Yum! Brands Inc.'s KFC announced plans to roll out alternative meat chicken. [16]

Not surprisingly, the traditional meat industry is less than thrilled, resulting in considerable attention from the meat lobby. A number of states have passed laws prohibiting the use of words like "burger" or “hot dog” to describe a product that is not made of actual meat. [17] The labeling problem also extends to the use of the term “milk” to describe plant-based milks, because as one observer put it, "nuts do not lactate."

Given the competitive plant-based protein segment, the food and beverage industry should expect a substantial uptick in litigation. Here, class action litigation centered on reasonable consumer standards may be the tip of the iceberg. Constitutional challenges to state legislation — based on assertions that the use of terms like “burger” or “milk” is protected First Amendment commercial speech — are already in the works. Lanham Act claims, filed by industry competitors asserting deceptive marketing, are to be expected as well.

While these trends are expected to continue, industry attorneys and insiders should keep a close eye on national and jurisdictional developments into 2020 for indications as to what litigation theories and strategies are proving effective.

 


 *This article was republished with permission from Law360.* 

[1] Becerra v. Coca-Cola Co. , No. C 17-05916 WHA, 2018 WL 1070823, at *4 (N.D. Cal. Feb. 27, 2018).

[2] See, e.g., Lima v. Post Consumer Brands LLC , No. 1:18-CV-12100-ADB, 2019 WL 3802885, at *7 (D. Mass. Aug. 13, 2019) (dismissing complaint alleging that the name “Honey Bunches of Oats” is misleading just because honey is not a primary ingredient in the cereal).

[3] See, e.g., Strumlauf v. Starbucks Corp. , No. 16-CV-01306-YGR, 2018 WL 306715, at *6 (N.D. Cal. Jan. 5, 2018) (“a reasonable consumer would not be misled into believing that foam does not count toward some portion of the volume of their [Starbucks] Latte”); Wurtzburger v. Kentucky Fried Chicken , No. 16-CV-08186 (NSR), 2017 WL 6416296, at *5 (S.D.N.Y. Dec. 13, 2017) (dismissing plaintiff’s complaint which “simply asserts that the bucket of chicken Plaintiff purchased could hold more chicken than the eight pieces Plaintiff bargained for”).

[4] Kommer v. Bayer Consumer Health , 252 F. Supp. 3d 304, 312 (S.D.N.Y. 2017), aff’d, 710 Fed. App’x 43 (2d Cir. 2018).

[5] See Parks v. Ainsworth Pet Nutrition LLC , 377 F. Supp. 3d 241, 244 (S.D.N.Y. 2019).

[6] Hilsley v. Ocean Spray Cranberries Inc. , No. 17-CV2335-GPC(MDD), 2018 WL 6300479 (S.D. Cal. Nov. 29, 2018) (granting in part motion to certify class); see also Hilsley v. Ocean Spray Cranberries Inc. , No. 17-CV2335-GPC(MDD), 2019 WL 3006465 (S.D. Cal. July 10, 2019) (denying motion to decertify class).

[7] Fitzhenry-Russell v. Dr. Pepper Snapple Grp. Inc. , 326 F.R.D. 592, 598 (N.D. Cal. 2018).

[8] See, e.g., Lugo v. Aldi, No. 19-cv-04861 (E.D.N.Y. Aug. 24, 2019); Garadi et al. v. Mars Wrigley Confectionery US LLC, No. 1:19-cv-03209 (E.D.N.Y. May 30, 2019).

[9] Copeland v. Post Consumer Brands LLC, No. 19-2488 (E.D.N.Y Apr. 29, 2019).

[10] Winston v. The Hershey Co., 19-cv-03735 (E.D.N.Y. June 26, 2019).

[11] Organic Consumers Ass’n v. Ben & Jerry’s Homemade Inc., No. 2018 CA 004850 B (D.C. Super. Ct. July 9, 2018).

[12] Id.

[13] Wasser v. All Mkt. Inc. , 329 F.R.D. 464, 467 (S.D. Fla. 2018).

[14] HRS § 486-119.

[15] Maeda v. Pinnacle Foods Inc. , 390 F. Supp. 3d 1231 (D. Haw. 2019).

[16] KFC partners with Beyond Meat to test plant-based nuggets, wings, available at https://www.cnbc.com/2019/08/26/reuters-america-update-1-kfc-partners-with-beyond-meat-to-test-plant-based-nuggets-wings.html (last visited Oct. 4, 2019).

[17] What Gets to Be a ‘Burger’? States Restrict Labels on Plant-Based Meat, available at https://www.npr.org/sections/thesalt/2019/07/23/744083270/what-gets-to-be-a-burger-states-restrict-labels-on-plant-based-meat (last visited Oct 3, 2019).

 


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