By Guest Blogger Troy Hutchinson
In response to recent consumer complaints and state attorney general investigations that the use of the Smart Choices label is misleading and deceptive, food companies now face the threat of consumer class action litigation under state fraud and deceptive practices statutes.
Adding to the uproar, the Food and Drug Administration (FDA) announced that it will consider using its regulatory tools if front of pack nutrition labeling is not used in a common, credible way, it said in a letter to industry on October 20, 2009.
In a conference call with journalists, Margaret Hamburg of the FDA said that the FDA wants to work with industry, but that over time it “will take enforcement action for egregious examples.” Hamburg did not pinpoint specific products, but mentioned claims of “zero trans fats” on the front of packaging for products that have high levels of saturated fat, and said: “There are products that have got the Smart Choices check mark that are almost 50 percent sugar.”
At least one member of Congress has also weighed in on the issue. U.S. Rep. Rosa DeLauro announced that she is “very encouraged by FDA’s commitment to proceed with enforcement actions” against unauthorized claims. She went on to state that “[c]learly something is wrong when foods such as Froot Loops cereal, Cookie Crisp cereal, and Uncle Ben’s Instant Rice are designated as ‘healthy’ by these labeling systems.”
Responding to the FDA’s letter, president of the Grocery Manufacturers Association Pamela Bailey said in a statement that the organization is looking forward to working with the FDA “to determine what nutrition information is most useful in providing consumers with the tools they need to help them build a healthful diet.”
While companies who are using the Smart Choices program to promote legitimately healthy options should encourage FDA enforcement, that enforcement brings with it the risk of class action litigation. Whenever there are attorney general investigations or other regulatory enforcement action taken, class action litigation often follows. Food companies using the Smart Choices labeling should be strategizing on how best to defend these actions. Some private litigation may be preempted if the FDA has used its rule making authority. Where companies are legitimately using the Smart Choices label to promote healthier food options, those companies should encourage the FDA to use its rule making function to give clear rules on how companies can use the Smart Choices label.