Food

No Love from FDA

False Advertising, FDA, Food, , ,

**FDA Warns Bakery it Cannot Label “Love” As An Ingredient **                                                                                                                                                                                                                         

By: Brent E. Johnson                                                                                                                                                                                          

A warning letter published by the Food & Drug Administration and issued to Massachusetts-based Nashoba Brook Bakery highlights that FDA has little tolerance for eccentricity when it comes to labelling compliance.  According to the letter, Nashoba sold granola with labeling that said that one of the ingredients was “love.”  Charming as that may be, FDA was not impressed,  writing that “Ingredients required to be declared on the label or labeling of food must be listed by their common or usual name . . . ‘Love’ is not a common or usual name of an ingredient, and is considered to be intervening material because it is not part of the common or usual name of the ingredient.”  It is not clear whether FDA was inspired by 2016 research that found that study participants rated identical food as superior in taste and flavor if they were told it was lovingly prepared using a family-favorite recipe.  We’ll see if there are any repercussions to the bakery from the FDA Love Letter – other than the free publicity it garnered.

For those who follow our blog, you’ll recall we have written in the past about KIND®, who was also on the receiving end of a not so kind letter asking the company to remove any mention of  “healthy” from its packaging and website.  Notably, later in 2016, the FDA had a change of heart – on April 22, 2016 emailing Kind  informing the company that it could return to its “healthy” language – as long as the use of “healthy” is in relation to its “corporate philosophy,” and not a “nutrient claim” (the latter being the statutory predicate under 21 C.F.R. § 101.65).  Unfortunately for Kind, the 2015 letter prompted a suite of lawsuits.  A number were filed in California: Kaufer v. Kind LLC., No. 2:15-cv-02878 (C.D. Cal), Galvez v. Kind LLC., No. 2:15-cv-03082 (C.D. Cal); Illinois and New York: Cavanagh v. Kind, LLC., 1:15-cv-03699-WHP (S.D.N.Y.), Short et al v. Kind LLC, 1:15-cv-02214 (E.D.N.Y).  Ultimately, a multi-district panel assigned the case to the Southern District of New York (In Re: Kind LLC “Healthy” and “All Natural” Litigation, 1:15-md-02645-WHP).  The cases in large part were voluntarily withdrawn after FDA sent its April 22, 2016 “change of heart” email.

That said, plaintiffs in the MDL case also made claims that Kind Bars are not “All Natural.”  The Court stayed the “All Natural” component of the action pending FDA’s consideration of the term under the primary jurisdiction doctrine.  Dkt. No. 83 (see also our previous post on primary jurisdiction “all natural cases.”)  Plaintiffs have recently sought to lift the stay, arguing that FDA is taking too long.  Dkt. No. 109.  Plaintiffs have also amended their “All Natural” claims to encompass the additional question of whether Kind’s “Non-GMO” statements comport with state GMO laws.  Kind responded by arguing that such state law claims are preempted by the National Bioengineered Food Disclosure Standard, Pub. L. 114-216 (“National GMO Standard”) (7 U.S.C. § 1639i).  Dkt. No. 101.  The Court has heard oral argument on the GMO preemption issue and the lifting of the stay, but is yet to rule on either.

 

Splitting Hairs Over Milk

Beverage, Consumer Class Action, False Advertising, Food, , , ,

** Class Actions Dismissed (and Stayed) on Question of Who Can Call Their Product Milk **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

By: Brent E. Johnson                                                                                                                                                                                                                                                                                                                                                                                                                                             

As anyone who has watched “Meet the Parents” knows, “milk” has traditionally been applied to mammalian products.  Recently, however, the term has been expanded to describe a wide range of non-dairy products such as liquids partially derived from almonds, oats, soy, rice, and cashews.  Can these products rightly be called “milk”?  Plaintiffs’ attorneys in California have decided to put that question to the test.  In Kelley v. WWF Operating Co., No. 1:17-CV-117-LJO-BAM, (E.D. Cal), plaintiffs based their suit on Food and Drug Administration (FDA) regulations dealing with “imitation” foods – defined by FDA as a food which “act[s] . . . [a]s a substitute for and resembles another food but is nutritionally inferior to that food.”  21 C.F.R. § 101.3 (e)(1).  Under these regulations, an imitation food must be clearly labelled (in a type of uniform size and prominence to the name of the food imitated) with the word “imitation.”  21 C.F.R. § 101.3 (e).  Otherwise, the product is “misbranded” under  section 403(c) of the Food, Drug, and Cosmetic Act.  In Kelly, plaintiffs alleged that WWF’s Silk Almond Milk beverages should have been labelled with the “imitation” nomenclature because they are not “milk”  and (in some respects) are nutritionally inferior.

Defendant responded with a motion to dismiss, arguing that no reasonable customer would be misled by the use of the term “almond milk” on its products because the consuming public knows exactly what it is getting – what Merriam-Webster Dictionary defines as “a food product produced from seeds or fruit that resembles and is used similarly to cow’s milk.”

The Kelly case follows a broader, and as yet unresolved, public debate on this definition.  Indeed, there’s a war over the definition of milk.  Both the House and Senate are currently contemplating versions of the Defending Against Imitations and Replacements of Yogurt, Milk and Cheese to Promote Regular Intake of Dairy Everyday (DAIRY PRIDE) Act (H.R.778 House Version) (S.130 Senate Version).  The bills are sponsored by senators and congressmen from dairy rich states (Sen. Tammy Baldwin (D-WI) and Rep. Peter Welch (D-VT)). The House bill included five original co-sponsors: Rep. Michael Simpson (R-ID); Rep. Sean Duffy (R-WI); Rep. Joe Courtney (D-CT); Rep. David Valadao (R-CA); and Rep. Suzan DelBene (D-WA).  If enacted, the bills would amend the Food, Drug, and Cosmetic Act to prohibit the sale of any food using the market name of a dairy product that is not the milk of a hooved animal, is not derived from such milk or does not contain such milk as a primary ingredient.  As supporters of the bills have observed (summed up by a quote from the Holstein Association USA): “After milking animals for 40 years I’ve never been able to milk an almond.”

FDA has not stepped into the fray  even though  it has been petitioned to do so.  In March 2017, FDA received a Citizen Petition from the Good Food Institute requesting it promulgate “regulations clarifying how foods may be named by reference to the names of other foods” and specifically requesting, among other things, that FDA issue regulations that would permit plant-based beverages to be called “milk.”  On the other side, the National Milk Producers Federation (NMPF) wrote in a letter addressed to the FDA and sent on August 29th that the application of dairy-related terms like “milk” to market plant-based beverages creates consumer confusion in the marketplace.

In Kelly, the Court was not troubled by FDA’s inaction.  It found that, because FDA was “poised” to consider the question raised by this suit (although it has never said as much), it was “on their radar,” and therefore FDA should have the opportunity to decide the question, itself.  Under the Primary Jurisdiction Doctrine – which we have blogged about in the past – the Court stayed the matter indefinitely.  Kelley v. WWF Operating Co., No. 1:17-CV-117-LJO-BAM, 2017 WL 2445836, at *6 (E.D. Cal. June 6, 2017).

In a similar case filed against Blue Diamond in California state court but transferred to the U.S. District Court for the Central District, the defendant was successful on its motion to dismiss.  Painter v. Blue Diamond Growers, No. 1:17-CV-02235-SVW-AJW, (C.D. Cal. May 24, 2017).  In that case, Judge Wilson held that it was completely implausible that there was consumer confusion.  Judge Wilson held that “Almond milk” accurately describes defendant’s product.  See Ang v. Whitewave Foods Co., No. 13-CV-1953, 2013 WL 6492353, at *3 (N.D. Cal. Dec. 10, 2013) (finding as a matter of law that no reasonable consumer would confuse soymilk or almond milk for dairy milk); Gilson v. Trader Joe’s Co., No. 13-CV-01333-WHO, 2013 WL 5513711, at *7 (N.D. Cal. Oct. 4, 20 13) (finding at the pleading stage that no reasonable consumer would believe that a product labeled Organic Soy Milk, including the explicit statement that it is “LACTOSE & DAIRY FREE”, has the same qualities as cow’s milk).  Quoting from the Ang court, Judge Wilson reasoned that a reasonable consumer knows veggie bacon does not contain pork, that flourless chocolate cake does not contain flour, and that e-books are not made out of paper.  Judge Wilson also held that plaintiff’s case would create a de facto labelling standard using state law that was stricter than the FDCA requirement and, therefore the case was preempted.  See also Gilson v. Trader Joe’s Co., No. 13-CV-01333-VC, 2015 WL 9121232, at *2 (N.D. Cal. Dec. 1, 20 15) (finding state law claims against the use of the term “soymilk” preempted by the FDCA).

Plaintiffs in the Painter case have appealed to the Ninth Circuit.  Painter v. Blue Diamond Growers, No. 17-55901 (9th. Cir. June 26, 2017).  We’ll keep you updated on the progress of the case.

FYI on ECJ

Consumer Class Action, False Advertising, Food, , , ,

** In the Wake of FDA’s Guidance, Evaporated Cane Juice Cases Continue . . . .   **                                                                                                                                                                                                                                                                          

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

 By: Brent E. Johnson         

                                                                                                                                                                                                                                                                                                                                              As we have blogged about in the past the Food and Drug Administration (FDA) issued guidance in 2016 that it is false or misleading to describe sweeteners made from sugar cane as “evaporated cane juice” (ECJ). Guidance for Industry: Ingredients Declared as Evaporated Cane Juice.

It is common knowledge that cane sugar is made by processing sugar cane – crushing the cane to extract the juice, evaporating that juice, and crystalizing the syrup that remains.  To make white sugar, the crystals undergo additional crystallization to strip out molasses.  The primary difference between standard white sugar and the product known as ECJ is that the latter skips the second crystallization process.  ECJ is sold as a standalone product (e.g., in health food stores) and since the early 2000’s has been introduced as a white sugar substitute in products such as yogurt and lemonade.

The plaintiffs’ bar alleges that ECJ is identical to refined sugar from a nutrient and caloric standpoint and, therefore, food labelling using the term ECJ misleads health-conscious consumers into thinking it is a better sweetener option (or not sugar at all).  Defendants respond that ECJ is precisely what it says — the evaporated juice from the cane of the sugar plant — and is therefore a wholly accurate term to describe a type of sweetener that is made from sugar cane but undergoes less processing than white sugar.  See e.g., Morgan v Wallaby Yogurt Company, No. CV 13-0296-CW, 2013 WL 11231160 (N.D. Cal, April 8, 2013) (Mot. to Dismiss).

FDA regulations are implicated in this controversy because they prohibit the use of an ingredient name that is not the “common or usual name” of the food.  21 CFR 101.3 (b) & (d).  The common or usual name of a food or ingredient can be established by common usage or by regulation.  In the case of “sugar,” FDA regulations establish that sucrose obtained by crystallizing sugar cane or sugar beet juice that has been extracted by pressing or diffusion, then clarified and evaporated, is commonly and usually called “sugar.”  21 CFR 101.4(b)(20).  The question for the FDA in 2016 when it was considering its ECJ Guidelines, therefore, was whether ECJ fits under this definition and therefore should be identified by the common or usual name – sugar.  This question was complicated by FDA’s heavy regulation of the term “juice,” which is also defined in the federal register.  21 CFR 101.30.

On October 7, 2009, FDA first stepped into the ECJ fray, publishing a draft guidance entitled “Guidance for Industry: Ingredients Declared as Evaporated Cane Juice” (74 FR 51610) to advise the relevant industries of FDA’s view that sweeteners derived from sugar cane syrup should not be declared on food labels as “evaporated cane juice” because that term falsely suggests the sweetener is akin to fruit juice. On March 5, 2014, FDA reopened the comment period for the draft guidance seeking further comments, data, and information (79 FR 12507).  On May 25, 2016, FDA updated this guidance (81 FR 33538), superseding the 2009 version, but not changing its position that it is false or misleading to describe sweeteners made from sugar cane as ECJ.  FDA reasoned that the term “cane juice”— as opposed to cane syrup or cane sugar—calls to mind vegetable or fruit juice, see 21 CFR 120.1(a), which the FDA said is misleading as sugar cane is not typically eaten as a fruit or vegetable.  As such, the FDA concluded that the term “evaporated cane juice” fails to disclose that the ingredient’s “basic nature” is sugar. 2016 Guidance, Section III.  As support, FDA cited the Codex Alimentarius Commission — a source for international food standards sponsored by the World Health Organization and the United Nations.  FDA therefore advised that “‘evaporated cane juice’ is not the common name of any type of sweetener and should be declared on food labels as ‘sugar,’ preceded by one or more truthful, non-misleading descriptors if the manufacturer so chooses.” 2016 Guidance, Section III.

Bear in mind that FDA guidance is not binding on courts and, in and of itself, does not create a private right of action.  21 U.S.C. § 337(a) (“[A]ll such proceedings for the enforcement, or to restrain violations, of [the FDCA] shall be by and in the name of the United States”); see POM Wonderful LLC v. Coca-Cola Co., 573 U.S. ___ (2014); Buckman Co. v. Pls.’ Legal Comm., 531 U.S. 341, 349 n.4 (2001); Turek v. Gen. Mills, Inc., 662 F.3d 423, 426 (7th Cir. 2011); see also Smith v. U.S. Dep’t of Agric., 888 F. Supp. 2d 945, 955 (S.D. Iowa 2012) (holding that there is no private right of action under USDA statute).  In false advertising cases, the governing test is what consumers, themselves, think – not what FDA thinks.  For example, in Mason v. Coca-Cola Co., plaintiffs alleged that “Diet Coke Plus” was misleading because the word “Plus” implied the product was “healthy” under FDA regulations.  774 F. Supp. 2d 699 (D.N.J. 2011).  The court begged to differ: “At its core, the complaint is an attempt to capitalize on an apparent and somewhat arcane violation of FDA food labeling regulations . . .  not every regulatory violation amounts to an act of consumer fraud . . . . It is simply not plausible that consumers would be aware of [the] FDA regulations [plaintiff relies on].”  Id. at 705 n.4; see also Polk v. KV Pharm. Co., No. 4:09-CV-00588 SNLJ, 2011 WL 6257466, at *7 (E.D. Mo. Dec. 15, 2011);  In re Frito-Lay N. Am., Inc. All Natural Litig., No. 12-MD-2413 RRM RLM, 2013 WL 4647512, at *15 (E.D.N.Y. Aug. 29, 2013) (“[T]he Court [cannot] conclude that a reasonable consumer, or any consumer, is aware of and understands the various federal agencies’ views on the term natural.”)  That said, while FDA’s guidance is not alone dispositive – it certainly lends weight to the question of what a consumer’s state of mind would be with respect to the question of false and misleading labelling.

In the interim between FDA opening up public comment in 2014 on the ECJ question and its release of the 2016 guidance, many cases on this issue were stayed awaiting the outcome of FDA’s deliberations (based on the primary jurisdiction doctrine).  Saubers v. Kashi Co., 39 F. Supp. 3d 1108 (S.D. Cal. 2014) (primary jurisdiction invoked with respect to “evaporated cane juice” labels) (collecting cases) see, e.g., Gitson, et al. v. Clover-Stornetta Farms, Inc., Case No. 3:13-cv-01517-EDL (N.D. Cal. Jan. 7, 2016); Swearingen v. Amazon Preservation Partners, Inc., Case No. 13-cv-04402-WHO (N.D. Cal. Jan. 11, 2016).  With that guidance published, the stayed suits are now set to proceed.  And, as to be expected, many new cases have been filed over ECJ labeling.  Notably, complaints have been filed far away from the traditional “food court” in the Northern District of California.  For example, more than a dozen ECJ cases have recently been filed in St. Louis – the targeted defendants include manufacturers of Pacqui Corn Chips (Dominique Morrison v. Amplify Snack Brands Inc., No. 4:17-cv-00816-RWS (E.D. Mo.) and Bakery on Main Granola (Callanan v. Garden of Light, Inc., No. 4:17-cv-01377 (E.D. Mo.)

Where are courts landing on the ECJ question?

In Swearingen v. Santa Cruz Natural, Inc., No. 13-cv-04291 (N.D. Cal.), a complaint was filed on September 16, 2013, stating that plaintiffs were health-conscious consumers who wish to avoid “added sugars” and who, after noting that “sugar” was not listed as an ingredient, were misled when they purchased Santa Cruz Lemonade Soda, Orange Mango Soda, Raspberry Lemonade Soda, and Ginger Ale Soda which contained ECJ.  On July 1, 2014, the matter was stayed by Judge Illston pursuant to the primary jurisdiction doctrine.  The stay was lifted in June 2016 following a status conference noting the FDA’s final guidance on ECJ – and thereafter supplemental briefing on Santa Cruz’s motion to dismiss was considered.  The Court issued its order on August 17, 2016 (2016 WL 4382544), refusing to dismiss under Rule 12, noting the following:

  • Products not purchased. Santa Cruz argued that plaintiffs had not claimed to have personally purchased every single beverage referred to in the complaint and therefore lacked standing as to those products.  Judge Illston, however, sided with those courts that have concluded that an actual purchase is not required to establish injury-in-fact under Article III, but rather, that when “plaintiffs seek to proceed as representatives of a class . . . ‘the critical inquiry seems to be whether there is sufficient similarity between the products purchased and not purchased.”  2016 WL 4382544 at *8 (quoting Astiana v. Dreyer’s Grand Ice Cream, Inc., 2012 WL 2990766, at *11 (N.D. Cal. July 20, 2012). Because all of the fruit beverages at issue were of the same type of food product, Judge Illston concluded the plaintiffs had standing for all of them.
  • Ingredient Lists. Santa Cruz also argued that plaintiffs could not meet the “reasonable consumer” test of the California consumer protection statutes because it was implausible that a consumer would read the mandatory Nutrition Facts label immediately adjacent to the impugned ingredient list – which clearly identified the product as having 29 grams of sugar — and conclude that it did not contain added sugar.  Judge Illston noted that she had “some reservations as to whether a reasonable consumer would be misled as regarding added sugars in the Lemonade Soda and Ginger Ale Soda” – whose 35 grams and 32 grams of sugar, respectively, were unlikely to occur naturally in ginger root or lemon juice.  She found that the other sodas were closer calls (a reasonable consumer might conclude that the 29 grams of sugar in the Orange Mango Soda, for example, occurred naturally in the orange juice and mango puree listed as ingredients).  Nonetheless, she concluded the question of whether a reasonable consumer would have been misled was a question better decided by a jury and on that basis could not be dismissed under Rule 12.

The matter was thereafter voluntarily withdrawn on May 5, 2017, prior to certification.  One can reasonably assume the withdrawal was the result of settlement – but because the settlement was pre-certification pursuant to Federal Rule 23(e) and was not a class action resolution — no notice or court oversight was required.

In a similar case involving Steaz flavored ice teas, Swearingen v. Healthy Beverage, LLC, No. 13-CV-04385-EMC (N.D. Cal.), the complaint was filed on September 20, 2013, and followed the same allegations of the Santa Cruz case.  On June 11, 2014, Judge Chen stayed the matter pursuant to the primary jurisdiction doctrine.  The stay was lifted on July 22, 2016, and on October 31, 2016, Healthy Beverage moved to dismiss.  The Court ruled on the motion on May 2, 2017, finding for the defendant.

Website Disclosure.  Judge Chen found (in some respects) the opposite of Judge Illston in the Santa Cruz case on this issue of whether disclosure of the sugar content in the product negates whatever confusion may arise from  ECJ labelling.  Healthy Beverage argued that, because it stated on its website [but not on its packaging] that “cane juice is natural sugar,” and plaintiffs’ counsel acknowledged that the plaintiffs “may have looked” at the website,  , plaintiffs could not have been under any illusions that ECJ is anything but sugar.  Plaintiffs’ counsel at the motion hearing answered that plaintiffs “did not focus” on that information on the website.  Judge Chen did not consider this qualification sufficient,, finding that whether or not the plaintiffs “focused” on Healthy Beverage’s disclosure, they conceded that they read it and, therefore, reliance on the packagaging’s ECJ label was not reasonable.

Reese v. Odwalla, Inc., No. 13-CV-00947-YGR (N.D. Cal.) followed the same path as the previous two cases – a Complaint filed in 2013, stayed in 2014, and revived in 2016 after FDA released its ECJ guidance.  The product is Coca-Cola’s Odwalla brand smoothies and juices labelled with ECJ.  On October 10, 2016, a motion to dismiss was filed by Odwalla that the Court ruled on in February of 2017:

Premption:  The crux of Odwalla’s motion to dismiss was express federal preemption.  Odwalla argued that, where the FDCA provides that “no State . . . may directly or indirectly establish under any authority . . . any requirement for a food . . . that is not identical to such standard of [the FDCA]” (21 U.S.C. § 343-1(a)(1)) and the FDA’s guidance on the use of the term ECJ only became final in August 2016, there were no laws prohibiting the use of ECJ prior to the issuance of the 2016 Final Guidance.  Thus, the retroactive imposition of such prohibition would amount to an imposition of non-identical labeling requirements and would therefore be preempted (citing to Wilson v. Frito-Lay N. Am., Inc., 961 F. Supp. 2d 1134, 1146 (N.D. Cal. 2013) (finding that retroactive application of FDA’s clarification of an ambiguous regulation would offend due process); Peterson v. ConAgra Foods, Inc., No. 13-CV-3158-L, 2014 WL 3741853, at *4 (S.D. Cal. July 29, 2014) (finding that federal law preempted state claims based on labels prior to FDA’s clarification of labeling requirements).  Judge Rogers rejected this argument, noting that neither the 2009 Draft Guidance nor the 2016 Final Guidance announced a new policy or departure from previously established law.  Judge Rogers reasoned that FDA merely confirmed that ECJ fits the definition of sucrose under the regulations, and, therefore, needs to be labeled as “sugar.”  Thus, the Court found that the State law claims did not contradict Federal law and were not preempted.  This same preemption argument was also rejected in Swearingen v. Late July Snacks LLC, No. 13-CV-04324-EMC, 2017 WL 1806483, at *8 (N.D. Cal. May 5, 2017).

 

Healthy Conscious

Consumer Class Action, FDA, Food, , , , ,

** FDA Updating Requirements for “Healthy” Claims on Food Labeling **

 

By: Brent E. Johnson

One of the trending areas we have blogged about last year was “healthy” claims in food labelling becoming the new “all natural” target; see Hunter v. Nature’s Way Prod., LLC, No. 16CV532-WQH-BLM, 2016 WL 4262188, at *1 (S.D. Cal. Aug. 12, 2016) (Coconut Oil); Campbell v. Campbell Soup Co., No 3:16-cv-01005 (S.D. Cal. August 8, 2016) (Dkt 18) (Healthy Request® canned soups); Lanovaz v. Twinings N. Am., Inc., No. 5:12-CV-02646-RMW (N.D. Cal. September 6, 2016) (Twinings bagged tea).  It is a lucrative area for the plaintiff’s bar.  James Boswell et al. v. Costco Wholesale Corp., No. 8:16-cv-00278 (C.D. Cal) (recent $750,000 coconut oil settlement based on “healthy” labeling).

In many respects this trend was kicked off in 2015 by the Food & Drug Administration (FDA) who issued the KIND® company a not so kind letter asking the company, pursuant to 21 U.S.C. § 343(r)(1)(A) to remove any mention of the term “healthy” from its packaging and website.  See our prior blog post.  The basis for the FDA’s action is that the term “healthy” has specifically defined meanings under 21 CFR 101.65(d)(2) which includes objective measures such as saturated fat content (must be > 1 g) (see 21 CFR 101.62(c)(2)).  Later in 2016 the FDA seemingly had a change of heart – emailing Kind and stating that the company can return the “healthy” language – as long use “healthy” is used in relation to its “corporate philosophy,” not as a nutrient claim.

Notably, this sparked a wider public health debate about the meaning of “healthy” and whether the focus, for example on the type of fat rather than the total amount of fat consumed, should be reconsidered in light of evolving science on the topic.  In September 2016 the FDA issued a guidance document (Guidance for Industry: Use of the Term “Healthy” in the Labeling of Human Food Products) stating that FDA does not intend to enforce the regulatory requirements for products that use the term healthy if the food is not low in total fat, but has a fat profile makeup of predominantly mono and polyunsaturated fats.

The FDA also requested public comment on the “Use of the Term “Healthy” in the Labeling of Human Food Products” – which comment period ended this week. Comments poured in from consumers and industry stakeholders, reaching 1,100 before the period closed on April 26, 2017. The FDA has not provided a timeline as to when revisions to the definition of “healthy” might occur following these public comments – and it is not clear if President Donald Trump’s January executive order, requiring that two regulations be nixed for every new rule that is passed, will hinder the FDA’s ability to issue a rulemaking on the term “healthy” in the near future.  It is also not clear whether the FDA will combine the rulemaking with its current musing of use of the term “natural” – as the terms are sometimes used synonymously.  Industry groups (and the defense bar) are hopeful though that some clarity will come sooner rather than later.

Sugar in Missouri

Consumer Class Action, False Advertising, Food, , , , , ,

** Do we have a new “sue-me” State for Food and Class Litigators? **

By: Brent E. Johnson

As we blogged about in the past the Food and Drug Administration (FDA) issued guidance in 2016 that it is false or misleading to describe sweeteners made from sugar cane as “evaporated cane juice” (ECJ). Guidance for Industry: Ingredients Declared as Evaporated Cane Juice.  As anticipated this has opened the way forward for cases against companies using the ECJ term, including of course those cases where the matter had been stayed under the primary jurisdiction doctrine.  Much of this ECJ litigation continues to be focused in state and federal courts in California.

That said, plaintiffs are also filing in other venues.  Missouri for one is becoming increasingly well-known as a plaintiff-friendly jurisdiction following full throated verdicts in product liability cases, such as the $70 million talcum powder case.  And food labeling suits are increasingly being filed as well in this new “sue me” State (in particular, St. Louis City – the 22nd Judicial Circuit, has been called one of “worst places in the nation for a corporation to be sued” and “the new hot spot for litigation tourists.”)  In a recent win for the Plaintiff’s bar with respect to food litigation and labeling claims, a Missouri state court of appeals recently issued an opinion rejecting defenses successful in sister courts. In Murphy v. Stonewall Kitchen, LLC, 503 S.W.3d 308, 310 (Mo. Ct. App. 2016) brought under the Missouri Merchandising Practices Act (MMPA) the plaintiff (and putative class representative) alleged Stonewall Kitchen misrepresented that its cupcake mix was “all natural” when it contained leavening agent sodium acid pyrophosphate (SAPP).  The trial court, relying on the  decision in Kelly v. Cape Cod Potato Chip Co., 81 F.Supp.3d 754 (W.D. Mo. 2015), granted the motion reasoning that because the ingredient label clearly disclosed the presence of SAPP, it was not plausible that a consumer would believe the “all natural” representation on the product including the SAPP.  The Court of Appeals reversed, expressly rejecting the ingredient list defense.

Since Murphy, at least 16 cases have recently been filed in St. Louis on the topic of evaporated cane juice alone.  The targeted defendants include manufacturers of Pacqui Corn Chips (Dominique Morrison v. Amplify Snack Brands Inc., No. 4:17-cv-00816-RWS (E.D. Mo.), Jelly Belly jelly beans(Jason Allen v. Jelly Belly Candy Company, No. 4:17-cv-00588 (E.D. Mo.), and Bakery on Main granola (Callanan v. Garden of Light, Inc., No. 4:17-cv-01377 (E.D. Mo.).  The cases do appear connected, many having the same plaintiff’s counsel.  It is likely too early to call St. Louis the new “food court” – we’ll monitor it throughout the year though to see if it is a “flash in the pan” or not.

How Not To Advertise Your Supplement

False Advertising, Food, FTC, , ,

** FTC Claims Major Scalp in Fake News Case **      

By: Brent E. Johnson                                                                                                                                                    

The recent political season has contributed new words to our lexicon — “alternative facts” (Thanks, Kellyanne!) and “fake news.”  While these terms may sound novel to us, the Federal Trade Commission has long taken action to curb such practices in commercial advertising under its mandate to enforce prohibitions on unfair or deceptive acts or practices (15 U.S.C. § 45(a)) and specifically false advertisements for food, drugs, devices, services, or cosmetics (15 U.S.C. § 52).

Recently, the FTC obtained a $29+ million personal judgment (ouch!) against a Tampa Bay businessman based on advertising the FTC claimed lacked scientific substantiation and misled consumers by using a fake news site and article.  Fed. Trade Comm’n v. NPB Advert., Inc., No. 8:14-CV-1155-T-23TGW, 2016 WL 6493923, at *9 (M.D. Fla. Nov. 2, 2016).  The case centered around one Nicholas Congleton, who — inspired by a clip from The Dr. Oz Show discussing a clinical study of the weight loss effects of green coffee extract (the Vinson Study) — founded Pure Green Coffee.  The business was largely operated online, relying on search engine and other digital advertisements (click bait) to the tune of $9.5 million.  This advertising investment proved to be money well spent.  From 2012 to 2014, Pure Green Coffee generated gross receipts just shy of $34 million.

Much of Pure Green Coffee’s advertising practices are standard grist for the FTC mill – inadequate substantiation for efficacy claims, unsupported establishment claims, and customer testimonials.  Pure Green Coffee promised consumers fabulous results – twenty-eight pounds in nine weeks or ten pounds and one-to-two inches of belly-fat in a month.  Although Mr. Congleton admitted in his deposition that he had no scientific basis for Pure Green Coffee’s weight loss claims, in opposition to the FTC’s motion for summary judgment he cited to “news articles, blog entries, and manufacturers’ brochures” (non-starters) as well as nine studies – chief among them, the Vinson Study Dr. Oz discussed on TV.  Unfortunately, most of the studies either did not involve green coffee extract or weight loss.  The Vinson Study was debunked by the FTC’s expert on several bases – but primarily because Dr. Vinson, himself, withdrew it.

The FTC based its argument that Pure Green Coffee made establishment claims in its ads in part on a photo —  a man wearing a white doctor’s coat and stethoscope holding a pill.   The Court found that this image implied that a physician or scientist had established Pure Green Coffee’s efficacy.   As for testimonials, Pure Green Coffee’s online ads committed the cardinal sin – they did not disclose that the participants were compensated.

Which brings us to fake news.  Pure Green Coffee purchased the domain “dailyconsumeralert.org” and loaded the page with a spoof banner for “Women’s Health Journal,” a list of several health- or fitness-related categories, and a fake article by a non-existent columnist that offered a purportedly unbiased test of the efficacy of green coffee extract that Mr. Congleton copied and pasted from another website.  The online ad also employed the ever popular “AS SEEN ON” advertising device next to the logos of CBS, ABC, MSNBC, and CNN – creating the impression that these networks reported favorably on Pure Green Coffee.  The court found that the webpage appeared as a bona fide news outlet and thus misled consumers — despite Mr. Congleton placing the word, “Advertorial” at the top.

Mr. Congleton’s case was not a particularly difficult one for the FTC.  But it nevertheless presents a cautionary tale to supplement sellers.  First, the more specific the claim, the closer the FTC will scrutinize the substantiation.  Depending on the nature of the claim the F.T.C. will require the study to include randomized clinical trials, human as opposed to animal proxy trials, and will take a hard look at the methodology and controls in the testing.  Second, images of folks in white coats or hospital scrubs in supplement ads are sure to grab the FTC’s attention.  Third, paid endorsers must be identified as such.  And finally, supplement makers must guard against intentionally or inadvertently creating fake news.

On this last point, it is critical that supplement companies (and any company engaged in internet marketing for that matter) familiarize themselves with the FTC’s December 2015 Native Advertising Guidelines.  These guidelines were developed to advise businesses on how to advertise online without running afoul of the FTC’s prohibition of fake news.  While a business might believe its online advertisement clearly appears as such when a consumer views it and, therefore, is not deceptive, the FTC’s position is that “advertisers cannot use ‘deceptive door openers’ to induce consumers to view advertising content.  Thus, advertisers are responsible for ensuring that native ads are identifiable as advertising before consumers arrive at the main advertising page.”  (Emphasis added.)  This is no easy task — as shown by the Guidelines, themselves — which contain 17 different examples of online advertisements and how each should be treated.  Suffice it to say, native advertising is a hot button issue for the FTC, and enforcement actions against businesses who ignore the Agency’s guidelines are a growth industry for advertising defense lawyers.

Alert: Ninth Circuit Opens A Door For All Natural Class Claims

All Natural Litigation, Certification, False Advertising, FDA, Food, Individualized Damages, Injunctive Relief, , , , , , ,

** Appeal Court Panel Holds That Genuine Dispute Remained As To Whether All Natural Claims Would Survive Reasonable Consumer Test **

By: Brent E. Johnson                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        hires-2Judge Lucy H. Koh gave all natural class defendants cause for celebration back in 2014 when she closed the door on a putative class representative’s claim that Dole’s fruit juices and fruit cups were wrongfully labelled as “All Natural.”  Brazil v. Dole Packaged Foods, LLC, No. 12-CV-01831-LHK, 2014 WL 6901867 (N.D. Cal. Dec. 8, 2014).  Last week, however, the Ninth Circuit re-opened that door slightly – at least enough for the plaintiffs’ bar to try to squeeze their feet in.

Mr. Brazil alleged in his 2012 Complaint that Dole’s fruit cups and fruit juices were falsely labelled as “All Natural” because they contained citric acid (i.e. vitamin C) and ascorbic acid (used to prevent discoloring).  Dole successfully argued on summary judgment that Plaintiff had failed to show that a significant portion of the consuming public or of targeted consumers, acting reasonably under the circumstances, would be misled by its labeling.  Id. at *4, citing Lavie v. Procter & Gamble Co., 105 Cal.App. 4th 496, 507 (2003).  Plaintiff’s own opinion about the added Vitamin C and absorbic acid was not enough.  Id.  Neither was his rationale that a reasonable consumer could be misled by virtue of a label that violated FDA guidance on the topic (the FDA is not a reasonable consumer and vice versa, Judge Koh reasoned).  Further, in a prior ruling, Judge Koh decertified Plaintiff’s main damages class because Plaintiff’s damages model (or lack thereof) failed the threshold test of Comcast Corp. v. Behrend, 569 U.S. ___ (2013), i.e., that damages could be adequately calculated with proof common to the class.  Brazil appealed both the summary judgment and decertification decisions.

The Ninth Circuit affirmed in part and reversed in part.  Brazil v. Dole Packaged Foods, LLC, No. 14-17480, 2016 WL 5539863, at *1 (9th Cir. Sept. 30, 2016).

The good news is that the Ninth Circuit agreed with Judge Koh’s decertification of the damages class – and by so doing signaling that the Circuit will continue adhering to the Comcast principle that Plaintiffs have the burden of demonstrating a viable class-wide basis of calculating damages.  It held that the lower court correctly limited damages to the difference between the prices customers paid and the value of the fruit they bought—in other words, the “price premium.”  2016 WL 5539863, at *2 – 3, citing In re Vioxx Class Cases, 103 Cal. Rptr. 3d 83, 96 (Cal. Ct. App. 2009).  The Ninth Circuit reiterated that under the price premium theory, a plaintiff cannot be awarded a full refund unless the product she purchased was worthless – which in this case – the fruit was not.  Id. citing In re Tobacco Cases II, 192 Cal. Rptr. 3d 881, 895 (Cal. Ct. App. 2015).  Because Mr. Brazil did not (and presumably could not) explain how this premium could be calculated across a common class, the motion to decertify was rightly decided.  Id. at *3.

The bad news is that the Appeals Court rejected the lower court’s reasoning that bare allegations of an individual’s claims of deception were insufficient to show the reasonable consumer would be equally deceived.  Troublingly, the court used the FDA’s informal policy statement (see Janney v. Mills, 944 F. Supp. 2d 806, 812 (N.D. Cal. 2013) (citing 58 Fed. Reg. 2302–01)) on the issue as determinative of the reasonable consumer standard.  As one commentator has noted, this converts informal guidance into binding authority.

With the damages class gone, the Ninth Circuit remanded the case for a determination of Plaintiff’s injunctive relief class.  That may be a pyrrhic victory in the end.  As we have blogged in the past, a plaintiff who is aware of the supposed deception is not in a position, as Pete Townshend penned, to be fooled again.

The New Naturals

All Natural Litigation, Consumer Class Action, FDA, Food, , , , , , ,

** Where are Class Action Claims Against Consumer Food and Personal Product Companies Trending in 2016?**

By: Brent E. Johnson

 

PrintWe have blogged in the past about some of the “usual suspects” in the consumer class action line-up – particularly for food, beverage, cosmetics and related industries – for example, the “all-natural” case – the “evaporated cane juice” case – and the “handmade” or “craft beer” case.   Trends come and go – as Plaintiffs run out of companies to sue and as companies change their labeling and advertising in response to the litigation risks.

Which begs the question:  Where are the current litigation trends leading?  We have surveyed recent filings to identify some of the tropes and traps that plaintiffs lawyers are currently focusing on:

As we have discussed in the past, the attractiveness of the all-natural class claim lies in the gaps between FDA guidance and labeling law and the vagaries of the reasonable consumer standard.  That gap may be closing with the FDA taking comments and perhaps looking to expand its policy on “natural” foods.  As the term “Natural” loses some of its vagueness, the term “healthy” appears to be taking its place – particularly in so far as the term has the required “eye of the beholder” quality necessary to support class action claims (although in some respects the term “healthy” is regulated see e.g.,  21 CFR 101.65(d)(2)) .  For example in  Kaufman v. CVS Caremark Corp., No. 16-1199, 2016 WL 4608131, at *1 (1st Cir. Sept. 6, 2016) (reversing district court dismissal on Rule 12), CVS Pharmacy, Inc. was sued for its Vitamin E dietary supplement because its label touts the product as supporting “heart health.”  Plaintiff argues that this is misleading because the medical literature does not support a link between consuming vitamin E and cardiovascular health.  Kaufman v. CVS Caremark Corp., No. CV 14-216-ML, 2016 WL 347324, at *1 (D.R.I. Dkt. No. 1 at 7) (and in some studies cited by Plaintiff – Vitamin E dosage increases the rate of heart failure).  In Hunter v. Nature’s Way Prod., LLC, No. 16CV532-WQH-BLM, 2016 WL 4262188, at *1 (S.D. Cal. Aug. 12, 2016) (denying motion to dismiss), Plaintiff alleges that Nature’s Way’s coconut oil is advertised with various health claims (such as its “Variety of Healthy Uses”, “ideal for exercise & weight loss programs”, “fuel a[] healthy lifestyle”), but according to Plaintiff, coconut oil products are not “healthy” . . . “but rather their consumption causes increased risk of CHD, stroke, and other morbidity.” (Dkt. No. 1-5 Compl. at ¶ 118).  In Campbell v. Campbell Soup Co., No 3:16-cv-01005 (S.D. Cal. August 8, 2016) (Dkt 18) (Def. Mot. to Dismiss), Campbell’s Soup Co is defending against Plaintiff’s claims that its Healthy Request® soups are not “healthy” because they contains partially hydrogenated oil (PHO).  Notably, Campbell’s soups are somewhat unique from other food labelling cases because they contain more than 2% meat or poultry and therefore are USDA regulated (see 21 U.S.C. § 451, et seq.) and their labelling is pre-approved (see 21 U.S.C. § 457; accord 21 U.S.C. § 607).  Campbell’s has doubled-down on that argument – moving for Rule 11 sanctions.  No 3:16-cv-01005 (S.D. Cal. August 29, 2016) (Dkt 18).  In Lanovaz v. Twinings N. Am., Inc., No. 5:12-CV-02646-RMW (N.D. Cal. September 6, 2016) (dismissing remaining claims), Twinings successfully defended against claims that the labeling of its tea as a “healthy tea drinking experience” and having “antioxidant” benefits were misleading.  In particular Plaintiff claimed that Twinings’ health benefits could not be substantiated and  were contrary to FDA regulations.  No. 5:12-CV-02646-RMW (N.D. Cal. Dkt. Nos. 1, 24).  It appears that “Healthy” is the new “Natural.”

Plaintiff’s lawyers are also taking a close look at ingredients – to determine if touted anchor ingredients are prominent enough.  For example in Coe v. Gen. Mills, Inc., No. 15-CV-05112-TEH, 2016 WL 4208287, at *1 (N.D. Cal. Aug. 10, 2016) (Order denying Mot. to Dismiss), Plaintiffs argued (successfully at the pleading stage) that General Mills’ Cheerios Protein product labeling is misleading because it implies that the product is essentially the same as normal Cheerios but with added protein.  While Plaintiffs acknowledge that Cheerios Protein does have more protein than regular Cheerios (Plaintiffs calculate that 200 calories of Cheerios contains 6 grams of protein, whereas 200 grams of Cheerios Protein contains 6.4 or 6.7 grams of protein), they argue that this smidgen of an increase is so immaterial as to be misleading.  In another example, in Nazari v. Gen. Mills, Inc., No. 2:16-cv-02015 (E.D. Cal. Aug. 23, 2016), the Plaintiff sued Target with a proposed class action alleging the retailer’s up & up™ Green Aloe Vera Gel lacks traces of Aloe Vera.  Plaintiff alleges that while the product is labelled as an “aloe vera gel” with “pure aloe vera,” its laboratory testing (which it contends would have revealed acemannan, the key compound in aloe vera) could detect no active aloe ingredient.  In another example, in Torrent v. Thierry Oliver., No. 2:15-cv-02511 (C.D. Cal. Sept. 2, 2016) (denying motion to dismiss), Plaintiff survived dismissal on claims that Natierra brand Himalania Goji berries are misleadingly labeled because they are not berries from the Himalayan mountain region in China – which was inferred by the “Himalania” brand name.  In labelling, as in everything else, attention to detail counts.

We will update you on these trends as they progress.

Pokemon GMO

FDA, Federal Preemption, Food, Uncategorized,

** Update on the National Bioengineered Food Disclosure Standard Law **

By: Brent E. Johnson

closeup of a GMO UPC symbol on white

By a stroke of the pen, President Obama put to rest for all time (by “all time,” we mean a decade) the brouhaha over labeling foods containing GMO ingredients.  By signing the National Bioengineered Food Disclosure Standard law on July 29, 2016, the President and Congress proclaimed to the citizenry that GMO labeling is important — but not so important that the labels actually have to be seen.  How did we get to this point?  A brief history is in order.

When one of the editors of this blog watches Netflix with his English Bulldog, he is enjoying the companionship of a genetically modified organism (“GMO”).  Long before the first GMO food – the Flavr Savr tomato — hit grocery store shelves in 1994, humans were engineering crops and livestock the old fashioned way – selective breeding.  Modern GMOs, of course, differ from those derived from selective breeding.  They are developed on a molecular level – a specific gene from a donor organism that expresses a desirable trait is inserted into the genome of the target organism to give the latter that same trait.  While consumer organizations and environmental activists have sounded the tocsin (or toxin) over GMOs since the beginning of bio-engineering, the federal government – particularly the FDA – has not been alarmed.

Two years before Flavr Savr, the FDA published its “Statement of Policy:  Foods Derived from New Plant Varieties.”  In this document, the FDA reminded the public that a food additive must be approved prior to use unless it is “generally recognized as safe” (GRAS).  The FDA concluded that, while a plant gene inserted into another plant is an additive, generally that gene is GRAS.  “The agency is not aware of any information showing that foods derived by these new methods differ from other foods in any meaningful or uniform way, or that, as a class, foods developed from the new techniques present any different or greater safety concern than foods developed by traditional plant breeding.”  Based on that logic, the FDA’s regulations for plant GMOs are the same as those for traditional foods with the exception of a voluntary (“recommended”) consultation procedure with which developers of GMO-containing foods typically comply.  (Note that the USDA’s Animal and Plant Health Inspection Service plays a limited regulatory role with regard to GMOs that pose a risk to other plants or animals and the EPA regulates GMOs that are bio-engineered to produce a pesticide – for example, the infamous, but unblemished, Bt-corn.)

In the 1992 Policy, the FDA eschewed requiring food companies incorporating plant GMOs to label their products as such under the Federal Food, Drug, and Cosmetic Act because “the agency does not believe that the method of development of a new plaint variety (including recombinant DNA techniques) is normally material information within the meaning of 21 U.S.C. 321(n).”  The FDA has not deviated from this position in the past quarter decade.  The agency’s website has a page directed to consumers which rhetorically asks, “Are foods from GE plants safe to eat?”  The response is, “Yes.  Credible evidence has demonstrated that foods from the GE plant varieties marked to date are as safe as comparable, non-GE foods.”

The FDA’s refusal to mandate that food companies label their products containing GMOs does not mean that consumers who care about such things have been stymied.  In 1990, Congress enacted and George Herbert Walker Bush signed the Organic Foods Production Act, which required that the USDA develop national standards for organic products.  Ten years later, the USDA issued its final rule establishing the National Organic Program (NOP), which governs both fresh and processed food products, including crops and livestock.  The “USDA Organic” label means many things under the NOP — but one of them is no genetic engineering.  GMOs are prohibited in organic products as excluded methods of production.  7 CFR § 205.105.  Therefore, a consumer that doesn’t want to ingest a GMO need only look for the “USDA Organic” label.

The NOP was not enough for Vermont.  In 2014, Vermont enacted Act 120 – a manifesto against the federal government’s oversight of GMOs — that required labels on products containing genetically engineered ingredients.  “[F]ood offered for sale by a retailer after July 1, 2016 shall be labeled as produced entirely or in part from genetic engineering if it is a product:  (1) offered for retail sale in Vermont; and (2) entirely or partially produced with genetic engineering.”  Act 120, § 3043.  In addition, “a manufacturer of a food produced entirely or in part from genetic engineering shall not label the product on the package, in signage, or in advertising as ‘natural,’ ‘naturally made,’ ‘naturally grown,’ ‘all natural,’ or any words of similar import that would have a tendency to mislead a consumer.”  Id.

The food industry went into an uproar over Vermont’s law because – given the realities of interstate commerce – companies would have to change their labeling nationwide to satisfy the demands of Vermont.  While manufacturers have had to bend to the legislative will of California from time to time (“Made in the USA”/Prop 65), it’s quite another thing to answer to Vermont.

Due, in part, to persistent lobbying, Congress enacted the Bioengineered Food Disclosure Standard law just in time to pre-empt Vermont’s organic labeling law from going into effect.  The law requires that the USDA “establish a national mandatory bioengineered food disclosure standard with respect to any bioengineered food and any food that may be bioengineered” by July 2018.  Therefore, GMO labeling will be required nationwide sometime after 2018.  But because Congress clearly believes that this law is a solution in search of a problem, the statute has a unique labeling provision that “require[s] that the form of a food disclosure under this section be a text, symbol, or electronic or digital link . . . with the disclosure option to be selected by the food manufacturer.”  What does this mean?  Simply put, food companies will have the option of either a product label with a bar code accompanied by the words, “scan here for more food information” or a toll-free telephone number with “call for more food information.”  In short, an actual GMO disclosure on the label is not required.  Consumers who care will roam supermarket aisles – smart phones in front of their faces – scanning bar codes to find their non-GMO groceries like Pokemon Go zombies looking for Poke Balls.

Sugar By Any Other Name Not Just As Sweet – Says FDA

False Advertising, FDA, Food, , , , , ,

** FDA concludes its study on “Evaporated Cane Juice” – issues guidance that it is a misleading description for mere Sugar **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

By: Brent E. Johnson                                                                                                                                                                                                      

Candy shop at local bazaar in Barcelona, Spain.

On May 25, 2016, the Food and Drug Administration (FDA) issued guidance that it is false or misleading to describe sweeteners made from sugar cane as “evaporated cane juice.” Guidance for Industry: Ingredients Declared as Evaporated Cane Juice.

The FDA promised guidance before the end of 2016 – so they under-promised and over-delivered.  The FDA’s guidance reasoned that the term “cane juice”— as opposed to cane syrup or cane sugar—calls to mind vegetable or fruit juice, see 21 CFR 120.1(a), which the FDA said is misleading as sugar cane is not typically eaten as a fruit or vegetable.  See U.S. Department of Agriculture, Center for Nutrition Policy and Promotion. “Added Sugars.”  As such, the FDA concluded that the term “evaporated cane juice” fails to disclose that the ingredient’s “basic nature” is sugar. Guidance, Section III.  As support, the FDA cited the Codex Alimentarius Commission — a source for international food standards sponsored by the World Health Organization and the United Nations — which defines “raw cane sugar” in the same way as “evaporated cane juice.” Codex 212-1999.1.  The FDA therefore advised that “‘evaporated cane juice’ is not the common name of any type of sweetener and should be declared on food labels as ‘sugar,’ preceded by one or more truthful, non-misleading descriptors if the manufacturer so chooses.” Guidance, Section III.  The FDA’s decision comes after a 2009 draft guidance advising against using the term “evaporated cane juice” and a host of lawsuits against food companies that ignored the guidance.  Draft Guidance for Industry: Ingredients Declared as Evaporated Cane Juice (2009).

The FDA’s decision does not bode well for pending cases on this point.  As we have blogged about recently, many evaporated cane juice lawsuits are currently stayed awaiting the outcome of the FDA’s guidance, see, e.g., Gitson, et al. v. Clover-Stornetta Farms, Inc., Case No. 3:13-cv-01517-EDL (N.D. Cal. Jan. 7, 2016); Swearingen v. Amazon Preservation Partners, Inc., Case No. 13-cv-04402-WHO (N.D. Cal. Jan. 11, 2016).  And some have been revived on appeal – just in time – see Kane v. Chobani, LLC, No. 14-15670, 2016 WL 1161782, at *1 (9th Cir. Mar. 24, 2016) (overturning 2014 order from Northern District of California dismissing case).  These suits (and others) are now set to proceed in the wake of the FDA’s guidance.  Bear in mind, the guidance is not binding on courts and, in of itself, does not create a private right of action.  21 U.S.C. § 337(a) (“[A]ll such proceedings for the enforcement, or to restrain violations, of [the FDCA] shall be by and in the name of the United States”); see POM Wonderful LLC v. Coca-Cola Co., 573 U.S. ___ (2014); Buckman Co. v. Pls.’ Legal Comm., 531 U.S. 341, 349 n.4 (2001); Turek v. Gen. Mills, Inc., 662 F.3d 423, 426 (7th Cir. 2011); see also Smith v. U.S. Dep’t of Agric., 888 F. Supp. 2d 945, 955 (S.D. Iowa 2012) (holding that there is no private right of action regarding USDA statute).

In most false advertising cases, the governing test is what consumers, themselves, think – not what the FDA does.  For example, in Mason v. Coca-Cola Co., plaintiffs alleged that “Diet Coke Plus” was misleading because the word “Plus” implied the product was “healthy” under FDA regulations.  774 F. Supp. 2d 699 (D.N.J. 2011).  The court begged to differ: “At its core, the complaint is an attempt to capitalize on an apparent and somewhat arcane violation of FDA food labeling regulations . . .  not every regulatory violation amounts to an act of consumer fraud . . . . It is simply not plausible that consumers would be aware of [the] FDA regulations [plaintiff relies on].”  Id. at 705 n.4; see also Polk v. KV Pharm. Co., No. 4:09-CV-00588 SNLJ, 2011 WL 6257466, at *7 (E.D. Mo. Dec. 15, 2011);  In re Frito-Lay N. Am., Inc. All Natural Litig., No. 12-MD-2413 RRM RLM, 2013 WL 4647512, at *15 (E.D.N.Y. Aug. 29, 2013) (“[T]he Court [cannot] conclude that a reasonable consumer, or any consumer, is aware of and understands the various federal agencies’ views on the term natural.”)  Defendants in evaporated cane juice cases often assert that “evaporated cane juice” is a more accurate term than sugar to describe a type of sweetener that is made from sugar cane but undergoes less processing than white sugar.  See e.g., Morgan v Wallaby Yogurt Company, No. CV 13-0296-CW, 2013 WL 11231160 (N.D. Cal, April 8, 2013) (Mot. to Dismiss).  Those issues aside, many commentators believe the guidance will spur settlements – and they may be right.  The guidance may also spur a round of label changes for those who have not already abandoned the controversial term.