Food Court Follies: Yogurt Buyers’ Attempt to Milk “All Natural” Litigation Trend Rejected

yogurtAmong the hundreds of food-labeling class actions filed this decade, claims challenging a product’s “natural” or “all natural” declaration have stood out in number and notoriety. The latter characteristic is especially true about suits where a product is purportedly unnatural because an ingredient was “genetically modified.” A recent federal court decision reminds us that no matter how notable GMO-related claims are, or how convinced some are that their food contains GMOs and is thus not natural, a plaintiff still must plausibly allege such facts in her suit.

Polly Podpeskar, a Minnesota resident, brought suit against Dannon Company under her home state’s consumer-protection law in a New York federal court on behalf of a class of aggrieved yogurt buyers. The cows that produced the milk for Dannon, she claimed, had ingested cattle feed from genetically-modified grain crops, which in turn genetically modified the yogurt.  That modification, she argued, renders the product unnatural, and thus the “all natural” label statement misled her into a purchase she otherwise would not have made.

Dannon asked the U.S. District Court for the Southern District of New York to dismiss for failure to state a claim, or, alternatively, to stay the suit pending the Food and Drug Administration’s release of planned guidance on the meaning of “natural.”

The court in Podpeskar v. Dannon could have taken the easier way out—stay the suit under the doctrine of primary jurisdiction as some other courts faced with all-natural-based state-fraud suits have done. It instead ruled on the claims’ merits, deciding they were entirely speculative.

Rather than allege that Dannon knowingly used milk from cows fed with modified grains, the plaintiff merely “recit[ed] facts and statistics” about the use of GMOs in animal husbandry. Even if Ms. Podpeskar had offered more specific facts, the court explained, her belief that the presence of GMOs render the yogurt unnatural are “conclusory, based on her own feelings … and on a variety of surveys” on consumers’ opinions about GMOs. Also, the plaintiff did not allege “that a single ingredient in the yogurt is not natural.” In other words, cattle feed is not a yogurt ingredient. Finally, Dannon did not affirmatively represent that its yogurt was GMO-free.

Ms. Podpeskar’s complaint focused a great deal of attention on Dannon’s April 27, 2016 statement that it would “start” relying upon cows fed with modified feed “as soon as possible.” The statement did not support her suit, the court explained. Rather, by putting Ms. Podpeskar on notice that Dannon yogurt was not “wholly protected from GMO-influence,” it entirely undercut the claim that the yogurt label misled her.

This suit’s shoddy pleading, which wastes the court’s time and forces taxpayers and defendants to needlessly expend resources, is sadly not unique. The Podpeskar court cited approvingly to a ruling from the Northern District of California (a.k.a. the Food Court), Gallagher v. Chipotle Mexican Grill, which featured equally careless lawyering.

There, Ms. Gallagher claimed Chipotle’s representation that its products contained no GMOs misled her into purchasing “unspecified food and beverage[s]” from an “unspecified” restaurant location. Those items contain GMOs, she argued, because animals that provide the meat and dairy used in Chipotle’s burritos and tacos allegedly fed on modified cattle feed.

Because Ms. Gallagher failed to specify which products she purchased, the court reasoned, she could not plausibly plead injury in fact, and thus she lacked standing to sue. The court could (and should) have stopped there. But “[t]o better guide Plaintiff should she choose to file an amended complaint,” the court also pointed out other flaws in her claim.

As originally pled, the court counseled, Ms. Gallagher’s complaint did not successfully allege that Chipotle’s no-GMO pledge would mislead a reasonable consumer. Rather than assert that the animals or dairy Chipotle used were genetically modified, the complaint merely claimed that the animals consumed modified feed. Reasonable consumers would consider beef and cheese as ingredients in Chipotle’s products, not feed.

Instead of submitting a new complaint that honored the court’s guidance, Ms. Gallagher inexplicably filed an amended complaint that added six new class representatives and several new legal claims. Soon thereafter, Ms. Gallagher voluntarily dismissed her claims. The judge ordered the new parties and claims stricken from the suit because they were “well beyond the scope of the Court’s leave to amend.” He also threw a penalty flag on the illegal substitution of plaintiffs, chiding the attempt to “plead around” federal procedural rules, dismissing the suit, and ordering its file closed.

Regulatory policy matters such as the meaning of “natural” and the impact of cattle feed on a product’s GMO or non-GMO status should be made by federal legislators or regulators, not by plaintiffs’ lawyers and judges. As noted above, FDA is developing guidance on “natural.” Also, under the Safe and Accurate Food Labeling Act of 2016, food processors need not disclose whether their products contain ingredients derived from cattle that consumed genetically-modified grains. The U.S. Department of Agriculture is currently developing implementing regulations.

Judges should allow those regulatory proceedings to move forward, and avoid encouraging more lawsuits like Podpeskar and Gallagher. Definitive rulings that answer only the legal questions before the court—like Podpeskar and unlike Gallagher—are one way to achieve that.

Also published by Forbes.com on WLF’s contributor page.

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