Cross-posted at WLF’s Forbes.com contributor page
For the past two years, plaintiffs’ lawyers have nourished The Legal Pulse with a steady diet of all-natural lawsuits. And by that we mean class actions alleging that the use of “natural” or “all natural” on a food product label is false or misleading under state law (normally, California law). Other than the occasional decision to put a lawsuit on hold so the Food & Drug Administration (FDA) can provide a formal definition for “natural” (which it has yet to do), these claims have mostly survived defendants’ efforts to dismiss them.
However, with four courts issuing decisions favorable to defendants in the past three months, these “all natural” claims may have become less appetizing.
Claims Rejected at Motion to Dismiss Stage. In order to prevail on claims that defendants’ use of “natural” violated California law, plaintiffs must prove that “reasonable consumers” relied on the claim and were deceived by it. Whether a business practice is deceptive normally presents a question of fact for a jury. But under California case law, judges in some instances can determine that as a matter of law, consumers are unlikely to be deceived. One area where judges have taken such action at the motion to dismiss stage is product packaging claims.
We’ve previously discussed Northern District of California Judge Koh’s opinion in Kane v. Chobani, the first of two recent rulings to dismiss a “natural” claim. Judge Koh ruled that because yogurt labels clearly disclosed the use of fruit or vegetable juice concentrate, the plaintiffs could not plausibly have been misled by Chobani’s “all natural” representation.
On October 25, Judge Walter of the Central District of California dismissed with prejudice claims that the “all natural” representation on 13 Buitoni brand products were deceptive because they contained “unnatural” ingredients like xantham gum and soy lecithin (Pelayo v. Nestlé USA). His analysis was quite a bit more extensive than Judge Koh’s in Chobani. He first examined whether Pelayo “offer[ed] an objective or plausible definition of the phrase ‘All Natural’.” The Webster’s Dictionary definition—”produced or existing in nature”—clearly “does not apply,” Judge Walter wrote. As stated cleverly in Nestlé’s brief (and repeated by the judge), consumers knew that “Buitoni pastas are not springing fully-formed from Ravioli trees and Tortellini bushes.”
Pelayo also pointed to FDA’s 1991 informal policy document on “natural,” which Judge Walter properly stated “does not establish a legal requirement.” The plaintiff finally resorted to semantic games, arguing that none of the ingredients in a “natural” product can be “artificial” or “synthetic” as defined by FDA in rules regarding, respectively, flavor additives and organic products. Judge Walter responded that neither set of rules applied because none of the suspect ingredients in Buitoni products were added for flavor, nor did Buitoni seek organic status for its products.
In the second part of his analysis, Judge Walter asked whether “the use of the term ‘All Natural’ is [ ] deceptive in context.” The relevant context, he stated, was the package label. “All Natural” appeared immediately above the ingredient list. Thus, “to the extent there is any ambiguity . . . it is clarified by the detailed information contained in the ingredient list.” The judge cited to Judge Koh’s reasoning in Kane v. Chobani on that point.
Claims Rejected at Class Certification Stage. In two other cases where the presiding judge (Marilyn Huff of the Southern District of California) was previously unwilling to grant defendants’ motions to dismiss “all natural” deceptive labeling claims, she refused to certify broad classes to pursue such claims. Judge Huff issued class certification opinions in both cases on the same day, July 30.
One involved a frequent litigant in product labeling class actions, Skye Astiana, who sued Kashi Company for representing that 91 different products were “All Natural” (Astiana v. Kashi Company). The threshold question Judge Huff had to consider for an “All Natural” class: did common issues predominate over individual ones? Astiana argued that Kashi’s “All Natural” statements had materially misled each member of the class, and that such materiality creates an inference that each plaintiff similarly relied upon that statement when purchasing Kashi products. Judge Huff did not agree.
The problem, as Judge Huff saw it, was very similar to the pivotal point in Pelayo v. Nestlé USA: what are “natural” food products? More specifically in Astiana, was there “any kind of uniform definition among class members” of “natural”? The judge noted that of the 13 ingredients Astiana challenged as “unnatural,” 10 are allowed in certified organic goods, and consumers, “including named plaintiffs often equate ‘natural’ with ‘organic.’” Judge Huff added that “even the named plaintiffs disagree about the definition of ‘All Natural.’”
A direct correlation certainly exists between what one thinks “natural” means and the materiality of the alleged falsehood of “All Natural.” And if the court must determine varying levels of materiality from plaintiff to plaintiff, commonality is lacking. Thus the class could not be certified.
In the second July 30 opinion involving “All Natural” representations, Thurston v. Bear Naked, Judge Huff utilized reasoning identical to that in Astiana to reject broad class certification. The only notable additional factor in Bear Naked was that “Bear Naked includes ingredient lists in the nutrition facts, and states on the labels of several of the challenged products that the products include processed ingredients.”
Takeaways. Defendants faced with false or misleading food labeling class actions should find these opinions quite encouraging, particularly those dismissing the claims. In all four cases, the judges were willing to make a determination on reasonable reliance and consumer deception, issues which some previous courts have reserved for trial. Judge Walter deserves additional applause for declaring “enough!” and dismissing the “all natural” claims with prejudice. We hope more judges follow his lead.
We must also note the delectable irony in these decisions. One can fairly presume that a major reason plaintiffs’ lawyers (the “Food Court bar” perhaps?) targeted “natural” product representations to begin with was that no federal or state regulator had defined the term or issued regulations on its use. A gap existed that could be exploited using California’s flexible consumer fraud laws. Defendants’ preemption arguments would fail because FDA had no binding policy. But in these four cases, the very lack of a uniform definition or standard was the lawyers’ undoing.