Labeling taboos 'natural' and 'healthy' drive evolving litigation
Over the last few years, lawsuits filed against food and beverage companies for alleged mislabeling have grown in number and tackle a range of issues. As these lawsuits multiply, they have evolved and now include labeling allegations beyond whether products are harmful.
According to Ted Craig, a class action defender and chair of GrayRobinson class action team, the rash of food product labeling lawsuits of late are a natural outgrowth of a common form of consumer lawsuit, which dealt with harmful food product issues.
Lawsuits, which generally entail food products that contain ingredients other than what they represent on their labels, even if those ingredients aren’t harmful presents "a different gray area," says Craig, particularly in respect to the damages claimed by the consumer class.
"It would behoove every food manufacturer in the U.S. to reexamine its compliance programs and reexamine its labeling across the board," Craig said. "Obviously there’s an expenditure inherent in that, but we now see what the risks are in not doing that.''
The 'natural' taboo
Products labeled as "natural" and "all-natural" have been highly scrutinized over the last few years for not technically containing solely naturally-occurring ingredients.
In December, a federal judge in California threw out a lawsuit that said Dole Food Comapny, Inc.'s "natural" label on packaged fruit mixes were misleading because the products contained citric acid and ascorbic acid. The judge ruled that there was not enough evidence to prove that the label could mislead consumers.
In November, General Mills, Inc. was not as fortunate. The company ended up settling a lawsuit filed by the Center for Science in the Public Interest, which contested use of the phrase "all-natural" on some Nature Valley products.
A similar battle is being fought over MillerCoors' use of the phrase "craft beer" appearing on the company’s Blue Moon label. The San Diego-based plaintiff says that Blue Moon does not fit the Brewers Association’s definition of a craft brewery, therefore Blue Moon allegedly deceives consumers into thinking the brand is independently brewed and hand-crafted.
Also, and perhaps the plaintiff’s biggest issue, the alleged deception leads to consumers paying up to 50% more for Blue Moon than other MillerCoors products. Craft beer tends to command a higher price.
"Even if you’re MillerCoors, and you’re looking at this craft beer nonsense, this is gonna cost them, I would argue, over a million dollars in defense costs," Craig said. "Could you take that same million dollars and apply that to your front-end compliance and avoid some of these types of lawsuits? Maybe. But I think it’s money well spent.”
The not-so-Kind evolution of food product mislabeling lawsuits
One of the most recent examples is Kind LLC’s snack bars and the Food and Drug Administration’s issue with the products’ "healthy" label. In a warning letter to the company, the FDA requested the company work on this timely, Bloomberg reported.
The issue deals with the saturated fat content of the snack bars, which amounts to more than the one gram allowed by FDA regulations to be labeled as "healthy." In a statement, Kind explained that it is the nuts, a key ingredient in many of the snack bars, that contain the saturated fat, and scientific evidence shows that nuts are nutritious and healthy.
"We are also working closely with the FDA to reach alignment on how we can use 'healthy' on our packaging," Joe Cohen, SVP of communications at Kind, told Food Dive. "The regulatory definition of 'healthy' is complex, as it regulates use of the term as a nutrient content claim but does not regulate more general use of the term, and distinguishing between the two can be challenging."
Just days after the FDA sent the warning letter, a false ad class action lawsuit against Kind was filed in California federal court. Since, two separate class action suits have been filed against the company, all three within 10 days after the letter made headlines.
Plaintiffs' main grievance is that they were allegedly misled into buying products that were labeled as "healthy" but were not healthy by the FDA’s standards, though none have claimed that they were harmed by the product.
"The question is, what are the damages to each class member?" Craig asked. "Here I would argue there’s no provable answer in a lawsuit with respect to what the harm is to each consumer. There are so many different factors that go into purchasing decisions, and I think unlike in a lawsuit where the product is allegedly harmful, when you’re in a lawsuit where the product just doesn’t meet some type of expectation unrelated to harmfulness, there’s a whole range of possible values of that product to each different consumer."
Kind, however, has seen positive reactions from consumers as well. "We’re having a very open dialogue with our consumers to answer any questions they have and to explain the facts," Cohen said. "We're making it clear that this relates to regulatory terminology, and that our bars are wholesome and nutritious. We’ve received a great deal of public support from our consumers as well as from individuals within the medical and nutritionist communities, and many experts have spoken up to endorse and recommend our snacks and discuss the benefits of eating nuts and nutritious fats."
Kind is just one of many food companies to face labeling warnings and class action lawsuits, particularly when it comes to health concerns. What's clear is these lawsuits will continue as consumers voice concerns. Companies will need to consider these worries or face class action litigation .