A wave of new litigation has struck the food industry, with one group of plaintiffs’ attorneys behind the surge. In more than 25 putative class action complaints, this group of attorneys seeks to supplant the role of the Food and Drug Administration (FDA) in enforcing the Food Drug and Cosmetic Act (FDCA), its implementing regulations and FDA policy on front-of-package labeling. The complaints hinge on alleged technical violations of these statutes, regulations and policies, such as failing to include a required disclosure on the front of a package or stating that a product contains antioxidants without identifying the antioxidant. The complaints allege that the supposed violation of these statutes, regulations or policies renders the products “misbranded,” and the plaintiffs seek class-wide recovery of the full purchase price of the products.
Interestingly, the FDCA anticipates such private actions based on violations of the FDCA and its implementing regulations, and expressly prohibits them. However, to date, this has not stopped these cases from advancing, due to state food laws that adopt the FDCA and its implementing regulations. While the complaints attempt to latch onto these underlying state laws to save their claims from early dismissal, it is apparent from nearly all of the complaints that the claims are based squarely on federal law, as evidenced by heavy citation to FDA Warning Letters, FDA front-of-package labeling guidance and other federal sources.
While most of these complaints have thus far made it past the pleading stage, they will face much greater hurdles at summary judgment, where evidence of damages will take center stage. This is where the “misbranding” allegations diverge from the realm of any typical false advertising suit. When these plaintiffs complain that a product is “misbranded,” they are not complaining that the products are different than advertised. Rather, the plaintiffs will have to support a claim that even where a product as advertised is precisely what is delivered, there can still be damages. Plaintiffs allege that a “misbranded” product is “worthless” as a matter of law, but no court has so held. In fact, a federal court in California recently held that plaintiffs are not entitled to a full refund of their purchase price under California’s consumer protection statutes; they are entitled only to the difference between what they paid and the value of what they received.
How can food companies decrease the chances of being targeted in these suits? First, ensure that all labeling goes through a strict regulatory review, because while the FDA may not always take enforcement action, at least for now consumer class actions are purporting to privately enforce federal food-labeling laws and policies. Nonetheless, regulatory review is only a piece of the equation for lowering the risk of litigation. Another crucial piece is evaluating advertising and labeling for vulnerability to more typical false or misleading advertising consumer claims. In this area, unregulated product descriptions, such as “natural” and “wholesome,” have been susceptible to attack, as well as descriptions of products’ health benefits. A thorough labeling and advertising review will take into account regulated and unregulated product claims, under FDCA and FDA regulations and also the various state consumer protection laws.
