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.
Ninth Circuit Approves California Ban on Slaughtering Nonambulatory Animals Against Preemption Challenge
Chief Judge Alex Kozinski of the Ninth Circuit Court of Appeals may be the best-known lower court judge in the United States. He has wide-ranging tastes and accomplishments. Nearly every lawyer has a favorite Judge Kozinski quote, such as the opening line in Mattel, Inc. v. MCA Records, Inc.: "If this were a sci-fi melodrama, it might be called Speech-Zilla meets Trademark Kong."
Today, Chief Judge Kozinski authored the opinion in National Meat Ass'n v. Brown, upholding California's statute rendering it illegal to slaughter non-ambulatory ("downer") animals against the claim the statute was preempted by the Federal Meat Inspection Act. The case specifically involved pigs, apparently because cattle in that condition must be labeled "U.S. Condemned" and disposed of outside the food supply.
The plaintiffs made two claims, one for express preemption and one for preemption by implication. The court was having none of it. With regard to express preemption, the statute expressly preempts state laws relating to "premises, facilities and operations." On the other hand, the statute expressly permitted state regulation of slaughterhouses. Two other circuit courts had reached the conclusion that regulating the kind of animal that may be slaughtered was not preempted. In his typical fashion, Chief Judge Kozinski said that the analysis in one case involving horse flesh "made horse sense." Then, in dealing with the district court's analysis about how a pig turns into pig meat no matter what its condition before slaughter, he wrote this one word rebuttal: "Hogwash."
In dealing with the implied preemption argument, the court concluded that it was physically possible to comply with both the FMIA and the California statute. Wrote Chief Judge Kozinski,
But these regulations don't require the slaughter of downer animals; no slaughterhouse operator would be fined by federal authorities if he gave nonambulatory animals medical care and put them up for adoption as pets.
And less flippantly:
Federal regulations require inspection if downer animals are to be slaughtered . . . . Whether they may be slaughtered is up to the states.
(emphasis original). The court similarly dismissed an argument that release of the animals to be euthanized would require permission from federal officials, because there was nothing in the record to suggest that this permission would not be routinely granted. Similarly, the claim that euthanized downer animals would need to be inspected by federal officials for disease was met with the fact that the California statute did not prohibit such inspection so long as the animals were not slaughtered for food.
One part of the California statute, Section 599f(e), which deals with the transportation of nonambultaory animals, was found to be preempted. This was because the federal statute expressly authorized certain means of moving downer animals that were prohibited under the California law. The court found, however, that no showing of irreparable harm had been demonstrated in the lower court, which was necessary to a preliminary injunction, and thus vacated the injunction in full, without prejudice to a later showing before the lower court of such irreparable harm on this one issue.
California Lawmakers Announce Proposed Food-Safety Reforms in Wake of Pistachio Recalls
As pistachio recalls continue to be announced in the wake of salmonella-tainted pistachios from Setton Farms, two California lawmakers this week announced legislation that is expected to strengthen food-safety standards in that state.
The bill to be introduced in the California State Assembly by Assembly Speaker Karen Bass and Assemblyman Mike Feuer is expected to require detailed safety plans from food processors, periodic testing of food at California food processing facilities, and requirements for food processors to report to state authorities any positive tests for a dangerous contaminant within 24 hours.
A video of Assemblyman Mike Feuer’s announcement is available below. Meanwhile, the FDA continues to update its list of recalled products.
When Is Labeling Misleading and Actionable Under State Law? Is There Any Clearly Understood Standard?
A recent Ninth Circuit case again raises serious questions as to whether there are any clearly defined legal standards as to when a food label is misleading and when it’s not. Manufacturers who are in compliance with federal standards for labeling may still be liable under state law.
In Williams v. Gerber, the Ninth Circuit, reversing the district court, reinstated a putative class action that alleged labeling on “fruit juice snacks” (1) constituted misrepresentation and breach of warranty under California common law and (2) violated California’s statutes on unfair competition and consumer law. The district court had granted a motion to dismiss under Rule 12(b)(6), finding that statements on the label “were not likely to deceive a reasonable consumer, particularly given that the ingredient list was printed on the side of the box.”
Here’s the label in question:
.jpg)
In particular, the appellate court did not approve that the product, made of white grape juice, featured photographs of a variety of fruit on the label. The court also found misleading the statement that the product was made with “fruit juice and other all natural ingredients.” The product contained in addition to all-natural ingredients some ingredients the Ninth Circuit believed may not be “all natural.” The court believed that the statement, though not untruthful, should have disclosed more information.
Troubling in the court’s decision is that full nutritional and ingredient information was printed in similar size print on the same label. Even the court acknowledged that “reasonable consumers expect that the ingredient list contains more detailed information about the product . . . .” As a practical matter, the only way manufacturers can mitigate against these types of putative class actions is to involve lawyers directly in the marketing and labeling process. Under the world imagined in the Williams case, legal training seems to be a prerequisite to understanding which labels may give rise to litigation and which may not.
California Menu Labeling Laws--Restaurants Beware of Asking What Your Customer Wants!
Yesterday, California became the first state in the Union to write into law menu labeling requirements. Like municipal ordinances recently enacted in New York City and Seattle, the California law requires certain “chain” restaurants to disclose nutritional information and calorie content information for certain items.
The law, to be phased in between 2009 and 2011, applies to restaurant chains with at least 20 locations that “offer for sale substantially the same menu items, or operates as a franchised outlet of a parent company . . . with the same name in the state that offer for sale substantially the same menu items.”
The new California law reads like a lawyer’s dream. Numerous exemptions are granted for certain grocery stores, “certified farmer’s markets” and others. Exemptions are also created to the exemptions. For example, “separately owned food facilities to which this section otherwise applies that are located in the grocery store” are not included in the “grocery store” exemption. To further add to the confusion, “grocery store” is defined to include convenience stores, though the law fails explain what that means. Does this mean that the law applies to a hamburger chain restaurant but not to the neighboring chain “convenience store” that sells the same hamburger but also a quart of milk? Does this make any sense? Won’t this statutue almost certainly generate significant litigation?
The labeling requirements apply to “standard menu items,” which are defined as “a food or beverage item offered for sale by a food facility through a menu, menu board, or display tag at least 180 days per calendar year . . . .” Yet a “standard menu item” does not include “a food item that is customized on a case-by-case basis in response to an unsolicited customer request.” What does "unsolicited customer request" mean? What about a sandwich shop that offers nearly infinite combinations of products? According to SUBWAY, “there are more than two million different sandwich combinations available" its menu.
Aside from being riddled with ambiguities, inconsistencies and impossible-to-interpret language, this blog has previously made the case that menu regulation should be the domain of uniform federal law and not inconsistent, piecemeal local ordinances. The California law is yet another argument in favor of federal preemption.
Section one of the California law cites national obesity statistics from the Centers for Disease Control and the federal Nutritional Labeling and Education Act of 1990. Nothing about this bill is specific to California. Because the law only applies to large restaurant chains, its impact is mostly on large national or regional companies. Ironically, the California legislature understood the problem of inconsistent regulation and chose to preempt all local and municipal regulation of restaurant menus. If menu regulation is an issue that needs regulation (and there are many good arguments why it does not), it should be taken up by Congress, the FDA and the USDA, not states or local municipalities.
