The food and beverage industry is faced with an onslaught of consumer fraud class actions targeting everything from the use of the terms “all natural,” “healthy,” and “organic,” to the amount of slack-fill in particular packages.1 Litigation regarding the representations made on food labels dramatically increased in recent years and all signs indicate that the trend will continue.
Litigation targeting products that claim to be “all natural” exploded in large part due to the failure of the US Food and Drug Administration (FDA) to define the term “natural.” The lack of regulations created sufficient ambiguity such that plaintiffs were able to withstand early motions to dismiss and reach the merits of the claim and class certification.2 Although plaintiffs managed to withstand early dispositive motions, cases were slow to achieve success beyond class certification. Many of those cases that were still active came to a screeching halt, however, when the FDA announced its intent to initiate rulemaking procedures to define the term natural. For plaintiffs, the perceived luxury ride into the realm of consumer fraud class actions may turn out to be nothing more than a lemon.
In light of the stalemate in the “natural” labeling arena, plaintiffs appear to be adapting their strategies in an attempt to turn their legal lemons into lemonade. Instead of focusing on whether the inclusion of preservatives runs contrary to an “all natural” label, plaintiffs are targeting “no preservatives” labels themselves. While these claims are not entirely new, they were initially brought as a subset of “natural” food labeling litigation. Plaintiffs have pivoted away from allegations related to natural labels (i.e., products with artificial preservatives could not be natural) and are now focused on the “no preservatives” label itself.
Plaintiffs are targeting numerous products that are represented as preservative free, including pasta sauce, pickled cucumbers, fruit juice, and more. The suits allege that the inclusion of certain ingredients, which can function as a preservative, render the “preservative free” label false and misleading. The primary culprit to date is citric acid, but other cases allege that sodium citrate and ascorbic acid are also preservatives that render a “no preservatives” label as misleading.
In these cases, plaintiffs rely heavily on FDA guidance specifically defining citric acid as a preservative, and therefore allege that the inclusion of citric acid in a product with a “no preservatives” label is false and misleading. The central question in these lawsuits is whether a product that includes an ingredient that is capable of being used as a preservative, but is not being used as a preservative in that particular product, can appropriately be labeled as “preservative free” or having “no preservatives.” Food scientists, product manufacturers, and even some plaintiffs readily acknowledge that citric acid can be used as a flavoring agent. Citric acid can impart a tart flavor in candies, an acidic flavor in products such as barbeque chips, or a citrus flavor in other products.
The majority of citric acid cases have been voluntarily dismissed quickly after being filed. One of the only courts to address the merits of citric acid litigation is the Eastern District of Pennsylvania, which dismissed plaintiff’s complaint due to a failure to adequately plead that the manufacturer’s statement was materially misleading because the plaintiff did not plead that a reasonable consumer would define an ingredient as a preservative, regardless of what function it served in the product. This dismissal, however, may be only a pyrrhic victory because the court dismissed the complaint on a pleading technicality. The order will likely serve as guide to plaintiffs on how to adequately plead citric acid claims.
Citric acid cases are still in their infancy, and the ultimate success of these claims remains to be seen. However, to avoid these claims, manufacturers should evaluate how important a “no preservatives” label is to the sale of certain products. If such representations make little difference to bottom-line sales, then manufacturers should consider removing these labels from their products to avoid the time and expense of litigation. However, given trends in consumer preferences for organic, clean, and healthy products, there may be a strong business reason for ensuring products are marketed as preservative-free. The cost benefit analysis will vary across manufacturers in the food and beverage industry, and indeed may vary across product lines for a single manufacturer. Whatever manufacturers choose to do in the absence of regulatory guidance, it remains to be seen how fruitful citric litigation claims will be and whether plaintiffs will be successful in turning legal lemons into lemonade.
1 For more analysis on slack-fill litigation, see our legal alert, available at https://us.eversheds-sutherland.com/NewsCommentary/Legal-Alerts/195637/Legal-Alert-Plaintiffs-Have-Come-Up-Empty-on-Class-Action-Slack-Fill-Litigation-But-Are-Expected-to-Pick-It-Up-in-2017 and a recent article featured in the Complex Litigation edition of the New York Law Journal on May 22, 2017.
2 For analysis regarding natural label litigation, see our legal alert, available at https://us.eversheds-sutherland.com/NewsCommentary/Legal-Alerts/193654/Legal-AlertGoing-Au-Naturel-New-York-Federal-Judges-Recent-Decision-Represents-the-Increasing-Class-Action-Litigation-Risks-of-Natural-Product-Labels
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