Initiative 522 Forwarded to the Washington State Legislature
After reviewing the voter petitions filed in support of Initiative 522 (I-522), the Washington Secretary of State’s Election Division announced last Friday that the measure received enough signatures and has been certified. The official certification was signed by Secretary of State Kim Wyman.
I-522, also known as “The People’s Right to Know Genetically Engineered Food Act,” concerns the labeling of genetically engineered foods. Similar to Proposition 37 that was recently rejected by California, I-522 would require most raw agricultural commodities, processed foods, seeds and seed stocks, if produced through genetic engineering, to be labeled as such when offered for retail sale.
Now that initiative has been certified, it will be forwarded to the Legislature. Legislators have three options on an initiative sent their way: (1) pass it into law as is; (2) take no action, resulting in it going to the November ballot for a public vote; or (3) send it and a legislative alternative to the ballot and let voters decide which, if either, they support. Lawmakers commonly take the second approach and pass the initiative along to the public for a vote.
Final updates for I-522 can be seen here.
Another GMO Labeling Iniative on the Horizon, This Time in Washington
Last week on January 3, 2013, sponsors of Initiative 522 (I-522), a measure that would require the labeling of certain genetically engineered foods, filed their petitions with the Washington Secretary of State’s Office for review.
The filing of I-522 comes in the wake of Proposition 37, a similar initiative that was ultimately rejected by California voters in November 2012. If enacted, I-522 would require that any food offered for retail sale in Washington that is, or may have been, entirely or partly produced with genetic engineering to be labeled as follows:
- In the case of a raw agricultural commodity, the package offered for retail sale must clearly and conspicuously display the words “genetically engineered” on the front of the package, or where such a commodity is not separately packaged or labeled, the label appearing on the retail store shelf or bin where such a commodity is displayed for sale must display the words “genetically engineered;”
- In the case of any processed food, the front of the package of such food must clearly and conspicuously bear the words “partially produced with genetic engineering” or “may be partially produced with genetic engineering;” and
- In the case of any seed or seed stock, the seed or seed stock container, sales receipt or any other reference to identification, ownership, or possession, must state clearly and conspicuously that the seed is “genetically engineered” or “produced with genetic engineering.”
USDA Launches New Online Tool for Faster Label Review
The U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) is the primary agency charged with regulating the nation’s supply of meat, poultry, and egg products. Besides ensuring the safety and wholesomeness of those products, FSIS is also charged with the important function of reviewing the accuracy of all meat, poultry, and egg product labels.
Specifically, the Labeling and Program Delivery Division (LPDD) serves as the agency’s expert group on label review. The LPDD Staff examines all labels and labeling, including all forms of product identification, claims, net weight, species identification and nutrition related to meat, poultry, and egg products.
Continue Reading...FSIS Final Rule Imposes New Labeling Requirements for Meat and Poultry Products
A new U.S. Department of Agriculture Food Safety and Inspection (FSIS) rule, which was originally announced in a Federal Register notice published on December 29, 2010, will require nutrition labeling on the major cuts of single-ingredient, raw meat and poultry products and ground or chopped meat and poultry products unless one of several exemptions applies. This FSIS Final Rule recently went into effect in March 2012. Originally, the rule was to take effect on January 1 of this year; however, USDA officials delayed the effective date to allow the industry sufficient time to comply with the requirements.
The rule amends the Federal meat and poultry products inspection regulations, which previously required nutrition labels only on meat and poultry with added ingredients, such as marinade or stuffing. Under the new rule, packages of ground or chopped meat and poultry will be required to feature nutrition facts panels on their labels. In addition, whole, raw cuts of meat and poultry must now have nutrition facts panels either on their package labels or available for consumers at the point-of-purchase.
According to a press release from the FSIS:
The nutrition facts panels will include the number of calories and the grams of total fat and saturated fat a product contains. Additionally, any product that lists a lean percentage statement, such as “76% lean," on its label also will list its fat percentage, making it easier for consumers to understand the amounts of lean protein and fat in their purchase. The panels should provide consumers with sufficient information at the store to assess the nutrient content of the major cuts, enabling them to select meat and poultry products that fit into a healthy diet that meets their family’s or their individual needs.
Since the final rule was published, FSIS has posted the final point-of-purchase materials and examples of nutrition facts panels for ground or chopped products on its website. In addition, the Agency has conducted many other education and outreach activities to assist retailers and Federal establishments in complying with the requirements of the final rule, such as posting a PowerPoint presentation that gives an overview of the requirements of the final rule, presenting information at meetings, and responding to questions from industry stakeholders about the regulations through askFSIS at http://askfsis.custhelp.com/.
According to Undersecretary for Food Safety Dr. Elisabeth Hagen, the new FSIS requirements will allow consumers to make more informed choices about the food they purchase without having a significant effect on their wallets. It is estimated that implementation of these labeling requirements will add less than a half penny a pound to the cost of ground meat and poultry.
Members of Congress Send Letter to FDA in Support of GMO Labeling
Recently, on March 12, 2012, 55 Members of Congress sent a letter to the U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg calling on the agency to require the labeling of genetically engineered (GE) foods.
According to a press release from the nonprofit organization Center for Food Safety:
The bicameral, bipartisan letter led by Senator Barbara Boxer (D-CA) and Congressman Peter DeFazio (D-OR) was written in support of a legal petition filed by the Center for Food Safety (CFS) on behalf of the Just Label It campaign and its nearly 400 partner organizations and businesses; many health, consumer, environmental, and farming organizations, as well as food companies, are also signatories. Since CFS filed the labeling petition in October 2011, the public has submitted over 850,000 comments in support of labeling.
The letter comes as the most recent move in the longstanding and familiar debate over whether the U.S. should require labeling of GE foods. For years, proponents of labeling have emphasized that consumers have a right to know what is in their food and have expressed concern over the potential unintended consequences of consuming GE food products. On the other hand, opponents have maintained that the expense and difficulty of labeling GE food products would be prohibitive.
Continue Reading...UCL Class Actions in California Expand Beyond "All Natural" Claims
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:
alkalized cocoa
ascorbic acid (vitamin C)
beta-carotene (vitamin A)
calcium pantothenate (vitamin B5)
cyanocobalamin
dutch cocoa
folic acid (a B vitamin)
glycerine
GMOs
inulin
niacinamide
potassium carbonate
pyridoxine hydrochloride
riboflavin
sodium benzoate
sodium citrate
soy proteins (from hexane)
xanthan gum
zinc oxide
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.
For more information on this topic, contact Melissa Jones and Tom Woods in the litigation department of the firm’s Sacramento office.
"All Natural" Class Action Litigation in California: What's in Store for 2012?
California litigators Tom Woods and Melissa Jones have prepared a Litigation Legal Alert on "All Natural" class action litigation in California and what to expect in 2012.
The Alert, which is linked above, provides background information regarding "All Natural" class action litigation in California. It also discusses why the authors believe that class action litigation in this area will persist in 2012. Finally, the Alert concludes with suggestions for companies that have litigation risks regarding "All Natural" claims associated with their products.
Here's a Pop Quiz
You can't Google this and you can't refer to anything but your own common sense:
Is the following statement true or false?
The regular consumption of significant amounts of water can reduce the risk of development of dehydration and of concomitant decrease of performance.
I'll be back with the "answer" tomorrow.
No Slow Down to Class Action Lawsuits in California Regarding Food Labeling and Marketing
By California litigators Tom Woods and Melissa Jones
Consumer class action plaintiffs remain very active in California, with cases continuing to be filed against food manufacturers and suppliers regarding alleged misleading labeling and marketing claims. Just this week, plaintiffs filed a class action lawsuit against Trader Joe’s alleging that it falsely advertised and sold cookies and apple juice as “All-Natural” even though the products contained synthetic ingredients. In the past few months alone, several other large companies have been sued over allegedly false “All Natural” claims in lawsuits involving ice cream, juice, granolas, energy bars, and cereal. In the same time period, other class actions have been filed in California regarding the marketing of products that are made from genetically modified plants and grains, such as cooking oil.
These actions are most commonly brought under California’s unfair competition law (referred to as the “UCL” or § 17200 of the California Business and Professions Code). The problem for companies sued under California’s UCL is that it is difficult to get claims dismissed at an early stage. Lawsuits frequently survive the pleading stage because claims are evaluated from a subjective, and not objective, standard. Cases are allowed to proceed even though only one plaintiff establishes standing to sue by showing they actually relied on a company’s statement. Finally, preemption defenses are frequently inapplicable.
Companies should get proactive in light of this litigation trend, which isn’t going away, and examine their labels to minimize the risk of litigation. Those that have been sued should consider creative ways to address these class actions by developing and preserving constitutional challenges. Despite recent California cases making it easier for plaintiffs to maintain their lawsuits at an early stage, aggressive discovery may prevent plaintiffs from certifying the proposed class.
SULFUR DIOXIDE LISTED AS A PROP 65 CHEMICAL
Sulfur dioxide was recently added as a Proposition 65 chemical that could require warnings to consumers and employees as a chemical that may cause reproductive effects. The listing of sulfur dioxide will be particularly troublesome because sulfur dioxide is used as a fumigant and preservative on a number of fruits, including grapes and in related food products, such as wine. Please see our recent blog entitled, "Sulfur Dioxide Added to Prop 65 Could Have Broad Range of Impacts" and California Grape and Fruit Tree League comments for additional information.
A Sticky Situation: Packaging and Placement of Syrup Raises Issues
In a letter to leading supermarket chains, Vermont Representative Peter Welch took issue with the packaging and shelf placement of the “All Natural Syrup” line of table syrup produced by Log Cabin.
The primary issues raised in Rep. Welch’s letter related to potential customer confusion due to the similar packaging and frequently close shelf placement of the Log Cabin “All Natural Syrup” line and maple syrups from Vermont producers. Below are pictures of a “Vermont Pure Maple Syrup” package and the Log Cabin package. We at the Food Liability Law Blog would love to hear from readers what you think – Is the Log Cabin Package misleading or confusing? Is it problematic for the two products to sit on the same supermarket shelf? What does the wording “All Natural” on the Log Cabin package convey to you?
RAISED RIGHT Trademark Blocks BRASSTOWN BEEF Logo
Note: The following post is authored by guest blogger Anne Glazer.
The Trademark Trial and Appeal Board (“TTAB”) recently affirmed a USPTO refusal to register the following mark for use with beef:
The TTAB said the BRASSTOWN BEEF logo is likely to cause confusion in relation to the word mark RAISED RIGHT, which was already registered for use with poultry, meat and game. It didn’t help that the words “RAISED RIGHT” appear across the top of the BRASSTOWN BEEF logo.
This is yet another case that shows the importance of doing careful trademark clearance work before adopting a new mark or trying to register it.
Thanks to The TTABlog® for reporting this decision. In re Ridgefield Farm LLC, Serial No. 77758560 (February 25, 2011) [not precedential].
Prop 65 Targets Cooked Food, Coffee and Vitamin Supplements
This blog entry was originally written by Lee Smith from the California Environmental Law Blog.
The Industry Acrylamide Coalition (Coalition) filed suit against the State of California Office of Environmental Health Hazard Assessment (OEHHA), the agency that manages and revised the Prop 65 list to include 4-metheylimidazole (4-MEI), as a carcinogen. 4-MEI is often found in cooked foods. The Coalition argues that the third party report on which the listing was based, from the National Toxicity Program (NTP), is insufficient to support a valid Prop 65 listing. The complaint, which was filed in Sacramento, alleges that OEHHA failed to consider the entire file of evidence before making its decision. The Coalition’s complaint also indicates that 4-MEI is created during normal cooking of food and ingredients and cannot easily be removed. The Coalition includes the American Beverage Association, the California League of Food Processors, and the Grocery Manufacturers Association of USA.
Acrylamide – In Your Coffee?
In a similar manner, the National Coffee Association is coordinating the joint defense of a number of coffee roasters and retailers with respect to a 60-day notice served on 40 roasters. The chemical at issue is acrylamide, which is formed when certain proteins are heated. Original scrutiny for this chemical concentrated on potato products such as french fries, but apparently the same chemical reaction occurs in coffee when it is roasted. In addition, other beverages that also contain caffeine, such as soft and energy drinks, have also received 60-day notices.
Dietary Supplements and Prop. 65
A dietary supplement company has been ordered to pay 2.65 million as part of a joint settlement with district attorneys in California. This is one of the larger suits filed and settled by a public enforcement entity, other than the California Attorney General. People v. Irwin Naturals, Inc., Orange County Superior Court, Case No. 30-2011-00445453.
Irwin Naturals was alleged to have made false and misleading representations with respect to the marketing and sales of its products. The products were advertised as having Hoodia Gordonii, an alleged appetite suppressant; however, lab results found that the chemical was not present and triggered a mislabeling suit. Additionally, the suit alleged that many of the products also exceeded the Prop. 65 level of proposed Maximum Allowable Dose Level (“MADL”) of .5 micrograms/dA1. Most of the indicated products were green tea products, sold without the Prop. 65 warning as required.
As part of the settlement, 1.95M in penalties were paid to help enforce state consumer protection laws, $100,000 in restitution, and $600,000 in set aside for investigation costs. Reportedly, prosecutors felt that this prosecution was necessary in part because the FDA does not regulate dietary supplements.
Why CSPI's Loyalty Card Suit Has No Merit and Does Not Promote Food Safety
Following the playbook it has followed in the past with sodium and other issues, the Center for Science in the Public Interest (CSPI) has filed yet another complaint of very questionable legal merit to promote a policy agenda. This time CSPI seeks to compel all retailers to use loyalty cards as a recall alert system.
Some retailers use their loyalty card systems to alert customers of product recalls. Other retailers do not. Retailers who don't use loyalty cards as a recall alert system may have a variety of legitimate reasons why they don't or can't create the technology that CSPI wants a court to order retailers to implement. For example, some may lack the technological ability, have privacy agreements with customers that do not allow loyalty cards to be used as a recall alert system, or have other legitimate privacy concerns.
Like CSPI's sodium litigation, this complaint has serious flaws. It seeks broad certification of a "nationwide class" of customers who bought recalled products and whom the retailer "did not advise that they had bought Recalled Products." Even supposing that the claims had some legal merit, few "common issues of fact and law" are apparent. State law varies on the type of consumer fraud claims asserted. Some putative class members surely did get notice of the recall (through means other than loyalty cards).
On the merits, the claims are problematic because we suspect that many (and perhaps most) jurisdictions do not recognize a retailer’s affirmative duty to create some technology to alert customers of manufacturers’ recalls. The complaint utterly fails to acknowledge that retailers employ mechanisms other than loyalty cards to assure customers are aware of recalls.
On its face, a claim for breach of the warranty of merchantability is completely incongruent with a request that the court order retailers to employ new technologies. And, a loyalty card is not a good subject to the warranty of merchantability.
What might be most shameful about CSPI's complaint is its conflict with the Food Safety Modernization Act (FSMA), which CSPI purports to support. Section 211 of the FSMA modifies the Reportable Food Registry to enhance consumer notification of Class I recalls by grocery stores. FDA is tasked to, "[n]ot more than 1 year after the date of enactment of the [FSMA,] . . . develop and publish a list of acceptable conspicuous locations and manners" for grocery stores to notify customers of Class I recalls. CSPI (as well as anyone else) will have the opportunity to submit comments to FDA as part of the rule-making process.
Even if CSPI were somehow successful in its litigation, the outcome of the litigation may be supplanted or even in direct conflict with the FDA's rulemaking and the FSMA. Litigation is rarely a productive, efficient or useful way to create industry regulation. Litigation in the wake of legislation creating the actual policy that CSPI seeks to promote seems utterly wasteful and counterproductive.
Strategies to Defeat Putative Class Claims Challenging Labeling and Marketing of Food Products
April 8, 2011 – Scott Rickman from Del Monte, Lara White from Adams and Reese, and I will be talking at the Defense Research Institute (DRI) food law break-out. This event is held in conjunction with the DRI annual product liability conference in New Orleans.
Click here for the complete manuscript that we’ve prepared to accompany our presentation. The manuscript summarizes some of the most significant and recent rulings concerning putative class claims arising from labeling and marketing of food products. The manuscript also offers suggestions on possible strategies to defeat these claims.
The type of claims discussed involves small-dollar state law “fraud” claims aggregated over millions of products sold. The common fact pattern is this: plaintiffs challenge the labeling or marketing of a food product, alleging that consumers would not have purchased the product or paid the price they did had they known the “truth” behind the representations made. Often, the plaintiffs’ strategy is to achieve class certification and then leverage the threat of a judgment into a settlement that involves a handsome payment of attorneys’ fees.
Recently, we’ve seen a trend toward legal action for labeling and/or marketing claims of products in the “natural” area and those touting health benefits. In many of these cases, preemption has not been successful to knock out claims in their entirety. State law varies considerably, and this can often work to the advantage of a food company. When that doesn’t work and when a jurisdiction doesn’t require an individualized showing of causation or reliance, here’s an alternative strategy to dismiss claims at an early stage:
- In states where plaintiffs need not show individualized reliance/causation, they may still have to demonstrate that an objectively reasonable consumer would have been damaged by the marketing/advertising campaign.
- The Supreme Court in Iqbal/Twombly said that a court must disregard conclusory allegations and scrutinize the complaint’s factual allegations to determine whether it nudges the alleged wrong-doing “across the line from conceivable to plausible.” The complaint must have meat on its bones. In the case of a consumer fraud class complaint, the plaintiffs’ counsel, to survive a motion to dismiss, must include references to evidence or other substantiation for the claim such as consumer surveys or perhaps a government finding.
- Without a strong factual basis as to how an “objectively reasonable consumer” might behave, consumer fraud/unfair trade practices putative class claims concerning the marketing of a food product may be in jeopardy.
Dannon Forced to Open Wallet and Change Advertising (Again)
Note: The following is posted by David Pacheco from the Essential Nutrition Law Blog.
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The multinational food company Dannon agreed to a 45 million dollar class action settlement earlier this year based on consumer complaints about advertising claims regarding the health benefits of its probiotic line of dairy products. Now the company has entered into a $21 million dollar settlement with the attorneys general from 39 states. The L.A. Times reports that this is the largest-ever multistate attorney general consumer protection settlement with a food producer. The attorneys general alleged that Dannon made deceptive and unlawful claims in advertising which were not substantiated by competent and reliable scientific evidence at the time the claims were made. According to the allegations, the majority of scientific studies showed improvement in intestinal transit time when an individual consumed three servings of the probiotic products per day for two weeks, and did not support Dannon's advertised claims that one serving per day for two weeks improved digestive health. In addition, the attorneys general alleged that Dannon could not substantiate claims regarding improved immunity against the flu and common cold.
Between this and the March settlement, Dannon has now agreed to pay $66 million as restitution for the misleading health claims, which comes out to about 1.3% of Dannon reported $5 billion in worldwide net sales of the probiotic line in 2009. This latest settlement should remind companies to keep state governments on the list of watchful eyes monitoring health claims related to food and supplement products.
What Happens if Food Safety Bill Becomes Law (or Doesn't)?
We're nearly down to the wire on whether the 111th Congress will send S.510, the food safety bill, to the President for signature into law. I'm told it could happen by the weekend.
No matter what happens in Congress, food law is changing and changing faster than it ever has. The ABA Food Supplements Subcommittee and Products Liability Committee of the Section of Litigation is organizing a day-long CLE February 17 at Coke world headquarters in Atlanta. I'll be co-moderating a panel titled, "What’s New? The Impact of Federal Statutory and Regulatory Reforms on the Food Industry and in Upcoming Litigation." If you want to know what will happen at the FDA (and other agencies) when food safety legislation passes (or doesn’t), you should be at this CLE.
Aside from statutory and regulatory reform, other panel discussions will discuss consumer class actions against food companies, the evolving science of food safety, labeling of biologic active foods, and predictions from top in-house counsel.
For those in the industry and serving the industry the conference is a great value (registration as low as $120). Register here. Hope to see you there.
Front of Package Labeling Claims Survive Motion to Dismiss
A recent decision held that Front of Package (”FOP”) labeling claims may not (yet) be subject to federal preemption. The decision in a putative class action, Chacanaca v. The Quaker Oats Company, involves what has become a common fact pattern: The FDA says an issue is complex and subject to industry guidance and possibly rule-making (for example, use of the terms “natural,” “wholesome,” and “smart choices”), while a court says the issue may not be complex and may be perfectly within the expertise of the judiciary and jury system.
Federal District Court Judge Richard Seeborg of the Northern District of California dismissed plaintiffs’ state law claims targeting the “0 grams trans fat,” “good source,” “made with whole grain oats,” and “no high fructose corn syrup” declarations on preemption grounds. Yet, insofar as Quaker Oats "seeks a favorable judgment at this juncture on all state claims that focus on the term 'wholesome'; on images of children, nuts, or oats; or the 'smart choices made easy' language or decal," the court denied the motion to dismiss.
The plaintiffs’ challenges to Quaker Oats’ use of the term ”wholesome” and images of the children seem targeted exactly at the claims that were preempted: the trans-fat issue. The court concedes that the FDA has recently indicated its intent to explore rule-making in the area of FOP labeling claims and that the FDA already “has extensively regulated food labeling in the context of a labyrinthine regulatory scheme.” “Nonetheless,” according to the court, ”plaintiffs advance a relatively straightforward claim: they assert that defendant has violated FDA regulations and marketed a product that could mislead a reasonable consumer. As courts faced with state-law challenges in the food labeling arena have reasoned, this is a question ’courts are well-equipped to handle.’”
Are the plaintiffs’ claims really that straightforward? How is a court "well-equipped" to determine the meaning of ”wholesome,” ”natural,” or other FOP claims? Is a court able to fully consider comments and information from all corners of the food manufacturing world? Isn’t this really in the wheelhouse of the regulators (or possibly the legislators)? Can the food business in the United States function effectively with individual courts and states determining their own common law (or even statutory) rules for product labeling?
FTC Green Guides, Sustainability & Third Party Certification
Our previous blog entry discusses last week's release of the Federal Trade Commission's ("FTC") revised, proposed "Green Guides" generally, discussing how the FTC is focused on "deception" and is not taking a radical departure from the 1998 version (the last version) of the Green Guides. But under the new Guides what are the consequences of the FTC's position on sustainability and third-party certification, especially as it relates to food products? The bottom line is that marketers of sustainable food products should re-evaluate (1) what sustainability claims are made and (2) the benefits of proper third-party certification.
The FTC, in its commentary to the revised, proposed Green Guides, reports that it "is unable to provide specific advice on sustainable as an environmental marketing claim. Unlike other claims we tested, the term contains no cue alerting consumers that it refers to the environment."
Yet the FTC acknowledges that sellers of food (and non-food) products are using the term “sustainable,” and consumer awareness of sustainability issues is growing rapidly. The FTC seems to be leaving itself room for action against marketers of "sustainable" products if it’s clear that consumers are meant to believe that “sustainable” is an environmental marketing claim. And, as discussed in our previous entry, marketers need to be wary of compliance with not only the FTC but also state consumer protection laws, which often reach further than federal law on the marketing of food products.
FTC has also chosen for the first time to address in the Green Guides what it calls "Certifications and Seals of Approval." FTC makes clear that "It is deceptive to misrepresent, directly or by implication, that a product, package, or service has been endorsed or certified by an independent third-party." And, even
"third-party certification does not eliminate a marketer’s obligation to ensure that it has
substantiation for all claims reasonably communicated by the certification."
Food manufacturers and retailers who use a seal or logo to designate sustainability should evaluate whether the seal or logo could be read by the FTC, a consumer or a plaintiff’s lawyer to imply third-party certification or endorsement. In other words, if independent third-party certification isn't used, you should ask yourself the following questions:
- Is it clear to anybody reading your label (FTC, consumers, plaintiffs, bar, etc.) that the claim is only your claim and not a third-party claim?
- Do you have substantiation (i.e., science) to back up any claims of environmental sustainability (whether yours or a third party’s)?
If you as a food manufacturer or seller can't answer both questions affirmatively, your marketing may be a liability. The SC Johnson Company, for example, is the subject of a consumer class action alleging that the company's own "greenlist" certification program was deceptive. Often, the realistic choice may be a) not to market the product as environmentally sustainable or b) to switch to a substantiated third-party certification.
For food, your best choice may be Food Alliance certification, which is now the most comprehensive certification for sustainable food and the gold standard.*
*In the interests of full disclosure, I serve on the non-profit Board of Directors for Food Alliance and am a staunch advocate of the organization.
Peeled, Inc. Seeks Injunction, Damages in Trademark Infringement Suit Against Peeled Fruit LLC
Originally posted on the Essential Nutrition Law Blog by Jonathan Stagg
Peeled, Inc. (“Peeled”) www.peeledsnacks.com, a company specializing in healthy, natural snack foods including dried fruits and dry roasted nuts, recently filed a trademark infringement suit in the United States District Court for the Southern District of New York against Peeled Fruit LLC (“Peeled Fruit”) www.simplypeeled.com. Peeled Fruit sells frozen soft-serve fruit, with fresh fruit toppings. Peeled alleges that Peeled Fruit is attempting to cash in on the brand awareness and goodwill associated with Peeled’s marks.
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Peeled began marketing its products under the marks “Peeled,” “Peeled Fruit,” and “Peeled Snacks” as early as 2004. Since that time, Peeled’s marks have received extensive coverage in television and print media, including receiving a coveted spot on Oprah’s O List as one of Oprah’s favorite afternoon snacks, and receiving the 2008 “Best of Food” award from Health Magazine. Peeled registered the mark “PEELED SNACKS” on January 10, 2006 with the United States Patent and Trademark Office..jpg)
Peeled alleges that Peeled Fruit not only knew about Peeled’s use of the marks, Peeled Fruit “adopted the trademarks with the intent to trade and capitalize on the goodwill generated by Peeled, Inc.’s extensive and widespread use of its trademarks, as well as its extensive sales, advertising and consumer acceptance and recognition.” Peeled argues that the similarities between the products sold by both companies make the shared use of the marks likely to cause confusion, mistake and deception among consumers.What's in a Name? - Trade Organizations Push for HFCS Flexibility
The Corn Refiners Association (the “CRA”), a trade organization representing the US corn refining industry, recently petitioned the Food and Drug Administration (the “FDA”) to allow the term “corn sugar” as an alternative label declaration for high fructose corn syrup (“HFCS”). The the FDA’s decision on whether to approve the renaming is expected to take up to two years.
The CRA is advocating the renaming, stressing that HFCS, despite the name, is not actually high in fructose. There are three different types of HFCS one that is 55 percent fructose and 42 percent glucose (HFCS 55, most commonly found in soft drinks) - one that is 42 percent fructose and 58 percent glucose (HFCS 42, usually used in food products), and one used for specialty applications that is 90 percent fructose and 10 percent glucose (HFCS 90, typically used to blend with HFCS 42 to make HFCS 55). Buttressing the CRA’s claim is an American Dietetic Association study that also reached the conclusion that HFCS contains proportions of fructose and glucose that are similar to sugar.
While the CRA’s stated objective in pursuing the alternative label declaration for HFCS is achieving greater clarity for consumers, this change may also yield economic benefits for companies that use HFCS in their products. According to a recent report by market research organization Mintel, a majority of consumers surveyed claim to avoid products in which HFCS is listed as one of the first ingredients. This preference is strongest among more affluent and better educated consumers. HFCS has faced significant levels of negative publicity in recent years, reaching a crescendo with the 2004 publication of a study in the American Journal of Clinical Nutrition highlighting the parallel between obesity and the rise in high fructose corn syrup consumption, and hypothesizing that the two could be related. The study’s authors have since said they were wrong in their speculation, and the American Medical Association has concluded that HFCS “does not appear to contribute more to obesity than other caloric sweeteners”, but as the results of consumer surveys and sales data indicate, the backlash against HFCS has continued. There is precedent for this type of rebranding, as in November of 2009 Ajinomoto rebranded its aspartame sweetener as “AminoSweet” based on many of the same issues at play in the current discussion of HFCS.
Variations of Organic Labeling
By Guest Blogger Elaine Albrich
This post also appears on the Alcoholic Beverages Law Blog
Figuring out what information must be on your wine label can be tedious. Adding terms like "organic" or "sustainably-grown" can be even more challenging. Extra steps are required for adding organic certifications or claims to a wine label, although the regulation of such claims under the Alcohol and Tobacco Trade Bureau ("TTB") Certification/Exemption of Label/Bottle Approval (COLA) process has been made more clear with the Memorandum of Understanding between the TTB and the USDA concerning organic labeling and adverting. The MOU clarifies and delineates the enforcement responsibilities of each agency with respect to labeling and advertising of alcohol beverages produced under the Organic Foods Production Act of 1990 (OFPA).
The USDA has authority over domestic and imported agricultural products to be sold, labeled, or represented, as organically produced. Under OFPA, the USDA has established the National Organic Program (NOP). Agricultural products that are sold or labeled as organically produced must be produced and handled in accordance with NOP. Any use of the term "organic" on a wine label or in adverting of wine must comply with the USDA's NOP regulations. Now, with the adoption of the MOU, it is clear that TTB has the regulatory authority to determine whether proposed labels are consistent with NOP.
The Advertising Labeling and Formulation Division (ALFD) of the TTB has guidance for organic labeling applicants. The guidelines provide a step-by-step process of what is required to obtain label approval, including the need for proof of USDA-accredited certifying agent (ACA) preview, a certification statement, a sulfite statement, an ingredient statement, the USDA seal, and so on. The guidelines also contain an organic label quick reference sheet that explains the requirements for the various organic claims, like "100 percent organic," "organic," or "made with organic (specify ingredient)." Additional TTB guidelines on variations of "organic" labeling are available at www.ttb.gov/pdf/wine.pdf.
For fun, I looked at four different bottles of wine that made some claims for "green production." The first was a NSA Organic, USDA certified wine from the Columbia Valley. The bottle was blazed with the "organic" nature of the wine, from the foil marked with "NSA Organic" to the "certified organic vineyard" on the "back" label. The USDA Organic stamp was also featured. Comparatively, an Oregon pinot from Eola-Amity Hills was simply marked with a small "made with organic grapes" statement and certified organic by Oregon Tilth. Then there was another wine from Columbia Valley that, while not having any "organic" claim, was described as a "wine of sustainable and environmentally friendly farming." Finally, the fourth was an Austrian wine certified "Demeter," a biodynamics certification. However, notably many wines that are known to value biodynamic or sustainable farming practices do not make such claims on their labels. Recognizably, this allows for more flexibility and avoids the extra steps of having to prove organic label claims.
Regulatory Compliance Alone Is Not Enough: Understanding and Mitigating Consumer Fraud Claims
Click on the image below to view the slide-deck from the presentation that I recently gave with Scott Rickman from Del Monte at ACI’s summit on Food Safety and Regulatory Compliance in Chicago. The ACI summit was a nice introduction to food regulation byFDA, USDA, FTC, EPA and DHS. Our presentation was intended to start from the premise that the job of a food lawyer (whether inside or outside counsel) does not end at ensuring regulatory compliance. Products that are regulatory-compliant may still be subject to putative class claims.
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Please feel free to contact me if you have any trouble finding the cases or other references in the slide-deck.
AMA Calls for More Accurate Fat Labeling Rules
At its recent annual meeting, the American Medical Association (“AMA”) agreed to urge the Food and Drug Administration (“FDA”) to adopt more accurate labeling standards regarding trans fats and saturated fats used in food products.
Current FDA rules allow nutrition labels to list saturated and trans fats as zero, so long as the product contains less than 0.5 grams of fat per serving. However, the AMA claims that this is misleading to consumers, who could potentially consume more than a quarter of the American Heart Association’s recommended limit of two grams of trans fat per day in a single serving, unaware that the product contains trans fats.
The AMA’s position that consumers are being misled by current FDA rules does have some support in the marketplace. In a consumer survey conducted by market researchers Greenfield Online, 72 percent of U.S. respondents said they read nutrition labels and fact panels in an effort to make healthy purchasing decisions when shopping, and 61 percent said they considered zero grams of trans fat per serving to be the most important heart health related claim for a product.
Five Tips for "Green" Advertising
By Guest Blogger David Pacheco
This post also appears on the Essential Nutrition Law Blog
Yesterday, Stoel Rives' Salt Lake City office hosted a seminar on Advertising Law with Catherine Lake, Josh Gigger, and myself presenting. As part of the seminar, I offered some tips on avoiding legal problems when advertising the environmental friendliness of your goods or services. Here is a summary of those tips:
Continue Reading...Court Cuts Back Claims In Great Pomegranate Dispute
By Guest Blogger Jay Eckhardt
In a dispute over product labeling and marketing, the Coca-Cola Company avoids liability as a result of its careful compliance with FDA rules. (Also, see Rick's post from last week, regarding Coca-Cola's victory in a dispute over its original formula label found on Coke® Classic.) But pomegranate champion POM Wonderful can still pursue a Lanham Act deceptive advertising claim against the company.
On May 5 the U.S. District Court for the Central District of California issued summary judgment orders that cut out two of POM's claims against Coca-Cola's "Minute Maid Enhanced Pomegranate Blueberry Flavored 100% Juice Blend." (Download a copy of the Central District of California's Order here.)
The court acknowledged that consumers have griped about the emphasis on pomegranate and blueberry in the Minute Maid product labeling and advertising. (See Ken's post about a consumer class action concerning Tropicana's pomegranate blueberry juice blend here.) Still, the court agreed with Coca-Cola that POM could not bring a Lanham Act claim challenging the product name, because the company complied with FDA labeling requirements. The Minute Maid product contains less than one-half of one percent (0.5%) pomegranate and blueberry juice, but the court determined that the name is compliant with FDA rules, which allow for product names that prominently cite ingredients that are less than prominent in volume. Because the label clearly notes that the juice is "flavored" with pomegranate and blueberry juice and that the juice is a "blend" of several juices, the court held that the name complies with applicable FDA regulations (21 C.F.R. §§ 102.33(c) and 101.22(i)(1)(i)).
A second claim raised by POM was thrown out by the court. POM sought restitution under California Business & Professions Code section 17200, which provides a cause of action for "Unfair Competition." The court dismissed this claim because "restitution" has been narrowly interpreted by the California Supreme Court, thus barring POM's claim for recovery of a "lost business opportunity." Among authorities cited for the decision to dismiss this claim, the court reported that POM's similar claims under California's Unfair Competition law, brought against Tropicana and Welch's, have recently been dismissed in separate actions.
A third claim survived Coca-Cola's summary judgment attack. POM may proceed under the Lanham Act to challenge the marketing and advertising for the "blueberry pomegranate" product. The court held that POM may attempt to prove at trial that advertising and marketing actually deceived customers, or that Coca-Cola willfully and intentionally misled customers with the marketing of its product.
As noted from the court's order, Coca-Cola is not the only target of POM's litigation strategy. Other juice makers, Tropicana and Welch's, have been the focus of POM's efforts to defend its niche. Ken reported on POM's challenge to Ocean Spray's pomegranate cranberry juice blend last August, when POM survived Ocean Spray's initial motion to dismiss all claims.
An inspired marketing campaign for POM's products, and its essential ingredient, helped build the pomegranate franchise. It's hard to say whether litigation against advertising and labeling practices of POM's pomegranate competitors will be effective. At the same time, there's no doubt that POM is well aware of the burdens of FDA labeling regulations – the company was one among 17 companies notified by the FDA last February that its product labeling and advertising did not pass muster. The FDA warned POM that its advertising was suspect, based on the health claims made on its web site about the benefits of pomegranate juice.
"Always Coca-Cola"? Who Knows?
On April 27, the U.S. District Court for the Southern District of Illinois dismissed the case of Kremers v. Coca-Cola Company. The case involved another of these ubiquitous claims where someone is suing saying they were fooled by labeling on a product. Unfortunately, the case was dismissed on grounds that indicate we might never really know the answer to the real gravamen to the plaintiffs’ complaint.
The claim involved the change, famous in product lore, from Coke to “new Coke” and then back to “Coca-Cola classic.” In 1985, Coca-Cola Company announced it was reformulating its flagship brand, renaming it “New Coke.” Two months later, having learned that brand loyalty may indeed trump blind taste tests, it relaunched its old formula as “Coca-Cola classic.” Eventually, New Coke was renamed “Coke II” and is, according to Coca-Cola Company itself, no longer available in the United States.
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The Kremers case involved what, at least on the can of Coke® I borrowed from my office, is a tiny legend at the bottom of the can, saying “Original Formula.” The claim was that the original formula” of Coca-Cola included sugar, not high fructose corn syrup, and therefore the phrase “Original Formula” was misleading, requiring, of course, the company to cough up damages to everyone who had been fooled by the phrase.
Unfortunately for the two named plaintiffs, fortunately for Coca-Cola Company and definitely unfortunately for anyone who wanted to find out the answer to the question of whether “Original Formula” could in fact be misleading, the two plaintiffs had different, but equally dispositive, flaws in their cases. Lead plaintiff Amanda Kremers couldn’t beat the five year Illinois statute of limitations for claims of unjust enrichment. She admitted in her deposition that she had first heard that high fructose corn syrup was in Coke® way back in the 1990s. Second named plaintiff Jason McCann admitted on deposition that he’d never read the words “Original Formula” on the can, which made it basically impossible for him to claim he was deceived. And both plaintiffs admitted to continuing to buy Coke® even after the case was brought, when they clearly could not have been deceived about the contents of the beverage, since they were already suing its manufacturer. 
The unanswered question in the case is interesting. As you can see, the type size for “Original Formula” is about the same as the type size for “High Fructose Corn Syrup” on the ingredients label. That would probably argue against anyone being reasonably misled by the one by somehow failing to look at the other.
More to the point, however, is that the history of Coca-Cola does not support the plaintiff’s case. The “formula” of Coca-Cola is proprietary and a trade secret (though how much of a secret is of course the subject of debate). Coca-Cola used to include real live cocaine, as opposed to completely decocainized coca leaves. According to Snopes, at some point in the 1920’s
glycerin was added as a preservative, cocaine was eliminated, caffeine was greatly reduced, and citric acid was replaced by phosphoric acid, to name the changes we know about.
By “Original Formula,” they quite clearly mean “not that New Coke stuff everyone complained about in 1985.” Coca-Cola Company itself admits they misunderstood their own customers then; they’re just reassuring them now.
Also according to Snopes, when New Coke was introduced in 1985, there was no sugar in Coke®. So focusing on the high fructose corn syrup, as opposed to the other changes, seems likely to be an attack on HFCS more than anything to do with being fooled by which Coca-Cola formula is in the can.
Of course, if you want Coke® with real sugar, it’s available from Mexico (Sugared Coke® is also available in the United States in some areas around Passover, because observant Ashkenazic Jews don't eat corn during the holiday).
I haven’t drunk Coke® in years, but this past winter we were visiting some Mayan ruins and on the way back had lunch in Bacalar, where we had a choice of beer, bottled water and Coke®. I chose the Coke® and after one sip I realized that this was the beverage I had grown up with. Yes, sugar in Coke® does, at least to these taste buds, make a difference. But I can also read a label.
Froot Loops Litigation: An Endless Loop for Kellogg's?
Just over forty years ago, Crosby, Stills, Nash & Young came out with their Déja Vu album. Attorneys at Kellogg USA are undoubtedly thinking, “We have all been here before.”
Froot Loops pre-dated Crosby, Stills, Nash & Young. I remember taking the Kellogg's factory tour in Battle Creek and being handed an individual-sized packet at the end of the tour, even before they hit the market. I was seven years old, but I knew they were cereal not fruit. Apparently, some other people think otherwise.
Ken has already blogged about the related, and dismissed, Crunchberry lawsuit. At the ABA Business Law Section Spring Meeting last weekend, my friend Teresa Harmon Wilton mentioned the Crunchberry case in her annual round-up of commercial law cases, and mentioned that the decision was based on the prior Froot Loops case. I looked down at my Blackberry, and that's when I realized there was an old Froot Loops case but I had just got notice of a new one.
Two old ones, actually.
In 2007, the United States District Court for the Central District of California dismissed a claim against Kellogg USA for violations of various California statutes and common law causes of action based on the claim that Froot Loops do not contain fruit.
In 2009, the United States District Court for the Eastern District of California dismissed a claim against Kellogg USA for violations of various California statutes and common law causes of action based on the claim that Froot Loops do not contain fruit.
On April 19, a complaint was filed in the United States District Court for the Northern District of California against Kellogg USA for violations of various California statutes and common law causes of action based on the claim that Froot Loops do not contain fruit.
There is clearly a pattern here. I would note that there is only one other federal court district in California, the Southern District in San Diego. Unless I missed a case there.
In the McKinniss case, the court dismissed claims for:
- Violation of the California Unfair Competition Law
- Violation of the California False Advertising Law
- Violation of the California Consumer Legal Remedies Act
- Negligent Misrepresentation
- Breach of Express Warranty
- Unjust Enrichment
In the Videtto case, the court dismissed claims for:
- Violation of the California Unfair Competition Law
- Violation of the California False Advertising Law
- Violation of the California Consumer Legal Remedies Act
- Intentional Misrepresentation
- Breach of Implied Warranties
In the Werbel complaint, plaintiff seeks damages for:
- Violation of the California Unfair Competition Law
- Violation of the California False Advertising Law
- Violation of the California Consumer Legal Remedies Act
- Intentional Misrepresentation
- Breach of Implied Warranties
Each complaint referenced a study by the Strategic Alliance for Healthy Food and Activity Environments that found that foods it claimed suggested the presence of fruit did not in fact contain fruit. The courts have so far not cared much for this study, which doesn’t in any way demonstrate that anyone could be misled by the actual advertising on the package.
Raise your hand if you’re surprised at the fact that the same attorneys brought all three cases. Under our justice system, a plaintiff is not bound by the decision of a court to which he or she was not a party. An attorney is held to a different standard under Rule 11 of the Federal Rules of Civil Procedure. It will be interesting to see if there is anything that comes from expecting the same conditions to lead to a different outcome.
Media Headlines and Food Labels Each Might Be Misleading (Film at 11)
A recent headline in the Huffington Post breathlessly importuned:
"Restaurant Food Has Up to 200% More Calories Than Advertised."
If you only read the headline, you might think this was some important information that might change your eating habits. If you read the article, you would discover a balanced set of conclusions from a fairly limited study.
First, the limitations. The study tested a total of 29 dishes at 10 chain restaurants, plus some frozen supermarket meals from nationally-distributed brands. That's hardly a study of "restaurant food" in general.
Now the facts from the actual article:
- The only item that came up at 200% over the published calorie count was Denny's "grits and butter." Denny's responded to the study by pointing out the serving size for its calorie count was a four-ounce serving and the one used in the study was a 9.5 ounce serving. So you can pretty much discount the headline already.
- The average variation in calorie counts was nowhere near 200%; it was 18%. Or, according to my calculation, 1111.11% overstated.
- The Food and Drug Administration permits a variation of 20%, so even with the Denny's grits and butter (which was, to repeat, apparently not an appropriate comparison), the food in the aggregate met the government standard.
- Reasonable minds--in the person of two professors of nutrition--can differ about whether the calorie numbers on restaurant menus should be relied on.
- Some of the variation can easily be explained by such simple things as the fact that a different amount of mayonnaise may come off the spatula on different sandwiches.
One thing I know is that the reporter, who in this case appears to have done a careful and balanced job, is not the headline writer, whose job is to grab attention. And grab attention the headline did. If you read the article, you learned a lot. If you only read the headline, you learned nothing and might have been misled.
For the record, when my name is on the byline, I wrote the headline, too.
