The “All Natural” class action litigation in California has continued into 2012, as expected. The claims in California are being filed under California’s consumer-friendly unfair competition law (or UCL), which is codified in sections 17200 and 17500 of the California Business & Professions Code, and the Consumer Legal Remedies Act (CLRA).
Given the costs and risks associated with UCL and CLRA class actions, many companies are getting pro-active and are carefully analyzing their labels. The challenge for such companies, however, is that these lawsuits are not limited to labels that contain the words “All Natural.” They fall into several broad categories.
First, there has been litigation over products that are marketed as being healthy but contain allegedly unhealthy ingredients, such as trans fat, saturated fat, high-fructose corn syrup or sugar. Consumer protection class actions may also arise like a claim for a defective product– where an otherwise healthy product experiences a manufacturing, packaging or storage deviation that takes its ingredients outside of the representations made on the label and subjects the manufacturer to litigation over “deceptive labeling” practices.
Second, there has been litigation over products that claim to be “All Natural” or “100% Natural” that allegedly contain GMOs or other synthetic or artificial ingredients. The types of ingredients that have been challenged by plaintiffs include:
ascorbic acid (vitamin C)
beta-carotene (vitamin A)
calcium pantothenate (vitamin B5)
folic acid (a B vitamin)
soy proteins (from hexane)
Of course, many of these ingredients are used frequently in products and there is no evidence that they are harmful. But given the California Supreme Court’s recent finding that “labels matter” (as opposed to product quality), plaintiffs are seizing on the opportunity to claim that something that has been processed or contains any “artificial” ingredient cannot possibly be “All Natural.”
Third, there has been litigation over claims about the quality of ingredients, such as “100% Pure” claims on orange juice or coconut water labels.
Finally, there has been litigation over products that have unsubstantiated health benefit claims, such as “proven to reduce cholesterol,” “supports digestion, . . . metabolism, . . .[and] liver function,” “supports immunity,” “reduces risk of chronic diseases,” “promotes healthy joints,” or otherwise.
In the current environment (with the lack of guidance from FDA and various court rulings that have struck down motions to dismiss), companies cannot afford to ignore the risk of litigation. The important thing for companies to take away from the morphing UCL class action litigation in California is that a cursory review of product labels is no longer enough to help ensure loss prevention. The product, whether labeled “All Natural” or not, should be reviewed carefully as the litigation theories in California broaden. Indeed, as noted above, many of the class action lawsuits in California involve claims other than “All Natural.” Companies should conduct an intensive review of product ingredients (and consider testing) to ensure compliance with labeling regulations and to assess whether the ingredients and labeling claims are likely to result in unwanted attraction from the plaintiffs’ bar.