Trends in Food Litigation. Ronald Y. Rothstein

Transcription

1 Trends in Food Litigation Ronald Y. Rothstein

2 Where Do These Lawsuits Come From? Investigative Journalism FTC Consent Judgments NAD Rulings FDA Warning Letters State Attorneys General Hire FDA Consultant - Find Technical Violation of Regulations or Invent Theory Lawsuits 2014 Winston & Strawn LLP 2

3 Who is Behind the Litigation? Law Offices of Howard W. Rubinstein, P.A. Reese Richman LLP Law Offices of Janet Lindner Spielberg Braun Law Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C Winston & Strawn LLP 3

4 Who is Behind the Litigation? Many of the same lawyers who were involved in securities, asbestos, and tobacco litigation are now focusing their energy on food, beverage, and nutritional supplement products. Lawyers from Suits Against Big Tobacco Target Food Makers, New York Times (August 18, 2012) Business model is based on large attorney s fee awards through class-wide settlements in favorable forum Winston & Strawn LLP 4

5 GMO Claims Typically challenged indirectly, based on the use of the word natural 2014 Winston & Strawn LLP 5

6 GMO Claims Hurdles to these claims: Plaintiffs cannot easily attack the mere presence of GMOs in food products, as there is currently no federal law or regulation requiring the disclosure of genetically engineered ingredients See Barnes v. Campbell Soup Company, 2013 WL (N.D. Cal. July 25, 2013) Although there is no duty to disclose genetically modified ingredients, plaintiffs allege that labeling products containing GMOs as natural, all natural, or 100% natural is misleading See, e.g., Bohac v. General Mills, Inc., No. 12 cv (N.D. Cal.): Plaintiffs allege that the 100% natural, all natural, and natural claims on General Mills Nature Valley products are deceptive and misleading because of the presence of GMOs, which they claim are unnatural by definition 2014 Winston & Strawn LLP 6

7 Other All Natural Claims Common plaintiffs argument: All natural claim is misleading if product contains preservatives (e.g. sodium benzoate, disodium dihydrogen pyrophosphate), artificial or synthetic ingredients (e.g. artificial sweeteners sucralose and ace-k), or added colors (e.g. beetroot juice, juice concentrate) Winston & Strawn LLP 7

8 All Natural Claims Ries v. Arizona Beverages USA LLC, 2013 WL (N.D.Cal. Mar. 28, 2013): Class action challenging AriZona Iced Tea beverages labeled all natural, 100% natural, and natural but containing high fructose corn syrup (HFCS) and citric acid. Under California law, plaintiff must prove that members of the public acting reasonably are likely to be deceived. Court held that plaintiffs argument that HFCS is artificial because it cannot be grown in a garden or field, it cannot be plucked from a tree, and it cannot be found in the oceans or seas of this planet was unsupported rhetoric Plaintiffs also failed offer evidence sufficient to demonstrate that it is probable that a significant portion of the consuming public could be confused by the all natural labeling Plaintiffs failed to introduce any evidence to support the amount of restitution to which they may be entitled Winston & Strawn LLP 8

9 Trans Fat Claims 2014 Winston & Strawn LLP 9

10 Trans Fat Claims Common plaintiffs arguments: No Trans Fat is misleading because it implies the product is healthy. 21 U.S.C. 343(a) (a food is misbranded if its labeling is false or misleading in any particular ) No Trans Fat -- unaccompanied by a disclaimer to See nutrition information -- implies that the food contains fat, saturated fat, cholesterol, and sodium at amounts within the guidelines of 21 C.F.R (h)(1) Winston & Strawn LLP 10

11 Trans Fat Claims Recent example: Simpson v. California Pizza Kitchen Inc.: Class action lawsuit against California Pizza Kitchen and Nestle, alleging there is no safe level of artificial trans fat intake, and that consumption of trans fat increases the likelihood of developing certain diseases and health conditions Dismissed in October 2013 for lack of standing (Simpson v. California Pizza Kitchen, Inc., 2013 WL (S.D. Cal. Oct. 1, 2013)) Did not demonstrate substantial increased risk of harm Also did not show economic injury because purchases were not made based on false or misleading information trans fat was disclosed on the label 2014 Winston & Strawn LLP 11

12 Evaporated Cane Juice Claims 2014 Winston & Strawn LLP 12

13 Evaporated Cane Juice Claims Common plaintiffs argument: Evaporated cane juice is not the common or usual name of any type of sweetener, including dried cane syrup or sugar. Accordingly, it is misleading to include the term in the nutrition panel Winston & Strawn LLP 13

14 Evaporated Cane Juice Claims Common defense arguments: Primary jurisdiction: It is within the primary jurisdiction of the FDA to determine whether evaporated cane juice is a common or usual name that may be listed in the nutrition panel. This defense failed in Werdebaugh v. Blue Diamond Growers, 2013 WL (N.D. Cal. Oct. 2, 2013): The court held that the FDA had already spoken on the issue of evaporated cane juice in the form of a 2009 Guidance. Additionally, the court held that this is not a particularly complicated issue that Congress has committed to a regulatory agency. Lack of standing: lack of reliance This defense succeeded in Kane v. Chobani, Inc., 2013 WL (N.D. Cal. Sept 19, 2013): The court held that plaintiffs contention that they believed ECJ was not a form of sugar was implausible absent a contention regarding what else they thought it was. The plaintiffs claim was dismissed without prejudice Winston & Strawn LLP 14

15 Antioxidant Claims 2014 Winston & Strawn LLP 15

16 Antioxidant Claims Common plaintiffs arguments: Rich in antioxidants is an implicit representation that the product contains 20% or more of the RDI. To label a product that falls short of that threshold as rich in antioxidants is misleading. Trazo v. Nestle USA, Inc., 2013 WL (N.D. Cal. 2013): Plaintiffs claimed that Nestle s Dark Chocolate Raisinets and Dark Chocolate Toll House Morsels contained deceptive antioxidants claims. Court held that plaintiffs claim was preempted: The products were advertised as a source of antioxidants, rather than a good source, and the use of source is not covered by the regulations Winston & Strawn LLP 16

17 Health Benefit Claims 2014 Winston & Strawn LLP 17

18 Health Benefit Claims Common plaintiffs arguments: The food is misbranded because it contains a level of an ingredient that disqualifies the use of a health claim on the label (e.g., more than 13 grams of fat). Health benefit claim implies the food is intended for use in the treatment or prevention of disease Winston & Strawn LLP 18

19 Health Benefit Claims Common defense arguments: prior substantiation Johns v. Bayer Corp., 2013 WL (S.D. Cal. Apr. 10, 2013): Plaintiffs alleged that Bayer s advertising for two of its One-A- Day vitamin products was false and misleading, because the claims that the products supported prostate health and may reduce the risk of prostate cancer were not adequately substantiated with scientific evidence. Court found that there is no private right of action based on unsubstantiated advertising The court also noted that plaintiffs bear the burden of proving the falsity of the advertising claims. The court held that the plaintiffs did not meet this burden, because they failed to offer affirmative scientific evidence proving that the ingredients in the products did not provide the advertised benefits Winston & Strawn LLP 19

20 Preemption: Pending Supreme Court Case POM Wonderful LLC v. The Coca Cola Co., No (U.S.) Unfair Competition Law and Lanham Act case over the labeling of Coca Cola s Pomegranate Blueberry juice, which contains about 99.4% apple and grape juices, 0.3% pomegranate juice, 0.2% blueberry juice, and 0.1% raspberry juice. Pom: The pomegranate blueberry name is a false or misleading description of the product in violation of the Lanham Act. Coca Cola: The naming and labeling of juice products is regulated by the FDA, and therefore, Pom s Lanham Act claims are preempted Winston & Strawn LLP 20

21 Preemption: Pending Supreme Court Case Pom Wonderful v. Coca-Cola (cont.) Ninth Circuit: Pom s claims are preempted. Court agreed with Coca-Cola s argument that FDA regulations address how a manufacturer may name and label juice products Court also noted that other courts have held that a plaintiff cannot sue under the Lanham Act to enforce the FDCA, because it would undermine Congress s policy of not creating a private right of action under the FDCA Held: Lanham Act claim preempted Court explained that it was primarily guided by Congress s decision to entrust matters of juice beverage labeling to the FDA[.] 2014 Winston & Strawn LLP 21

22 Preemption: Pending Supreme Court Case Pom Wonderful v. Coca-Cola (cont.) Other federal courts have reached different conclusions on whether the Ninth s Circuit s decision extends to state law false advertising claims, or is limited to Lanham Act claims. Supreme Court has granted cert on the issue of whether the FDA s regulation of juice-beverage labeling preempts Lanham Act claims. Open questions: How broad will the Supreme Court s decision be? Will it extend to state law claims or be limited to Lanham Act claims? 2014 Winston & Strawn LLP 22

23 Class Certification: Ascertainability The Third Circuit recently vacated class certification orders in two cases because the plaintiffs hadn t met their burden of proving that class members were ascertainable: Carrera v. Bayer Corp., 2013 WL (3d Cir. Aug. 21, 2013): The district court certified a class of all persons who purchased a WeightSmart multivitamin in Florida. Problem: how to identify class members The Third Circuit rejected the plaintiff s proposal to identify class members from the records of third-party retailers, because there was no proof that those retailers had such records. The court also rejected the proposal of accepting affidavits from wouldbe class members. The court held the proposal does not address a core concern of ascertainability: that a defendant must be able to challenge class membership. The court again emphasized due process concerns Winston & Strawn LLP 23

24 Class Certification: Ascertainability Some California courts have also denied class certification on the basis of ascertainability. Hernandez v. Chipotle Mexican Grill, 2013 WL (C.D. Cal. Dec. 2, 2013): Plaintiffs alleged false advertising based on in-store menus advertising defendant s use of naturally raised meat. The court held that self-identification is not sufficient to ascertain class membership. The court held: The claims would require the claimants to list every time they ate at Chipotle, the date... the specific location... and the specific item purchased. The Court is confident that very few people will be able to provide that information. People will either (1) lie, (2) attempt to fill out the claim form as best they can but be unable to do so accurately, or, most likely, (3) not bother. Money would be given out basically at random to people who may or may not actually be entitled to restitution. This is unfair both to legitimate class members and to Chipotle Winston & Strawn LLP 24

25 Class Certification: Ascertainability But not all courts have followed this trend. See, e.g., Astiana v. Kashi Co., 291 F.R.D. 493 (S.D. Cal. July 30, 2013): The district court certified a class of California consumers who had purchased cereal and snack products labeled all natural or containing nothing artificial, but which allegedly contained artificial or synthetic ingredients. The court rejected defendant s argument that there was no feasible mechanism for identifying class members because Defendant does not have records of consumer purchases, and potential class members will likely lack proof of their purchases. The court held: There is no requirement that the identity of the class members... be known at the time of certification. The court noted, If class actions could be defeated because membership was difficult to ascertain at the class certification stage, there would be no such thing as a consumer class action Winston & Strawn LLP 25

26 Questions? 2014 Winston & Strawn LLP 26

27 Ronald Y. Rothstein Partner, Winston & Strawn LLP (312)