Cross-posted at Forbes.com’s WLF contributor site
We’ve commented previously on the class action litigation exploits of California consumer Skye Astiana and her efforts to save Americans from “unnatural” products. One of the cases in which Ms. Astiana is a lead plaintiff, Astiana v. Dreyer’s Grand Ice Cream, survived a motion to dismiss recently, a development which underscores the havoc such lawsuit-by-lawsuit regulation can wreak on food packaging and marketing.
The judge who authored the Astiana ruling sits on the U.S. District Court for the Northern District of California, or as we’d like to call it, The Food Court*.
Dreyer’s sells ice cream under the Dreyer’s, Edy’s, and Haagen-Dazs brands. The allegedly offending term on the package of some Dreyer’s and Edy’s products is “All Natural Flavors,” while the term in question on some Haagen-Dazs products is “All Natural Ice Cream.” Because ‘ used (gasp!) potassium carbonate rather than sodium carbonate to alkalize cocoa, any product labeled “natural” which contains such cocoa, according to the suit, is mislabeled. Dreyers argued that federal regulations permitted it to use such terms, but Judge Edward Chen disagreed, ruling that Astiana’s claims under the California §17200 law should proceed.
The lynchpin issue of the §17200 claims is how “reasonable consumers” would interpret “Natural Flavors” or “All Natural.” With respect to the Dreyer’s products, Astiana argued that consumers could believe that “flavors” were the same as “ingredients,” which would motivate natural-only shoppers to buy that ice cream. Judge Chen was “skeptical” of that “spin,” but found that the issue required more factual development. On the Haagen-Dazs products, Dreyer’s argued, among other points, that potassium-alkalized cocoa was common to ice cream, something the FDA-mandated label confirmed and disclosed. Chen found it unreasonable to expect that consumers would know such an alkalizing process was common, and that the food label can’t legally correct “misleading” package statements.
Outside of The Food Court, at least one California-based federal judge (in the Central District of CA) was willing to toss an “all natural” §17200 claim out at the motion to dismiss stage and did so in part because of what the mandated ingredient label said. Hairston v. South Beach Beverage is discussed further in another Legal Pulse post.
That two food class action rulings from the same federal circuit such as Astiana and Hairston could be at odds is not unusual, since judges even within The Food Court have issued contrasting decisions on similar issues. But therein lies the problem.
Businesses that sell products in a national market require clear guidance on such basic matters as what their packaging can say. Once a consumer protection suit like Astiana survives a dismissal motion or is certified as a class, few defendants will go to trial, and thus package labeling rules are set through settlement agreements.
Other companies, not wishing to be next on the plaintiffs’ bar hit parade, will feel compelled to alter their packaging either for the California market only, or (more likely) for the national market. Food packages in general could eventually become quite dumbed-down and plain, just like activists might want them. An unfortunate, and entirely anti-consumer, side effect is that product labeling will become much less informative.
Businesses and advocates for commercial speech can and should seek uniform definitions for terms like “natural” from federal regulators. Past efforts, however, have resulted only in toothless FDA “advisory” statements, and future attempts will take 2-3 years at a minimum.
In the meantime, “mislabeling” suits will expand and spread, becoming more than just a minor irritant to “Big Food.” And does anyone doubt that if such suits continue to succeed, it’s only a matter of time before state attorneys general get in on the action?
We hope that defendants vigorously oppose such labeling regulation-through-litigation, and that our elected leaders soon take notice and reclaim their constitutional law-making role.
*So named because it is an extremely popular jurisdiction for the filing of consumer class action lawsuits alleging misleading labeling on food and beverage products, a point on which two noted class action defense attorney concurred in a recent WLF Legal Opinion Letter.