As people become more health conscious and healthy food and beverage choices become more abundant, so do fraud and consumer protection lawsuits questioning just how "natural" the product really is. The buzz words "all natural" have become a key selling point for many food manufacturers and a sticking point for several of them as well, as consumers have begun to file suit, arguing that the product label has misrepresented the true composition of product ingredients and their touted health benefits. While most of these lawsuits are class actions filed in California and New Jersey, both of which have favorable consumer protection statutes, courts across the country are beginning to see a host of suits claiming as false or misleading product that has been labeled, marketed or otherwise promoted as "natural."
More specifically, plaintiffs argue that the manufacturer's labeling or marketing of certain products as "natural" is a misrepresentation that misleads the consumer into believing the product does not contain unnatural ingredients, such as genetically modified organisms (GMOs), trans fat, artificial preservatives or other items that do not occur in "nature." The causes of action seen most often include deceptive trade practices, fraud and breach of express warranties. Alleged damages stem from the premium price some manufacturers charge for a "natural" product.
Many might argue the U.S. Food and Drug Administration (FDA) has done a poor job of defining "natural," giving plaintiffs more leeway in bringing this new plethora of labeling lawsuits. Moreover, the FDA has maintained that genetically engineered foods may be marketed without labeling, taking the position that genetically engineered foods are not materially different from any other foods. The lack of parameters in federal guidelines has made it more difficult to claim the blanket protection of federal preemption. Thus, state law governs liability in most cases, and plaintiffs are looking to file suit in states that currently offer the most favorable outcome.
Some states have tried to beef up consumer protection laws to better define the scope of when a manufacturer may be liable for mislabeling genetically modified food, including California, Connecticut, Vermont and New Mexico. California's Proposition 37 (also known as the California Right to Know Genetically Engineered Food Act), which was rejected by the state's voters late last year, would have restricted the use of terms such as "natural," "naturally made," "naturally grown" and "all natural" in labeling and advertising of genetically engineered foods. Opponents of the bill voiced strong dissent over worry that courts might interpret the legislation to apply to processed foods as well, and would in the least, lead to frivolous labeling lawsuits being filed. Even though California voters rejected the ballot initiative, the margin was slim (53 percent voting no), and manufacturers can expect to see similar initiatives being pushed again in California and beyond. In fact, just recently, the Washington certified an initiative to require the labeling of genetically modified food, which, if it can get through the state legislature this term, could be placed on a ballot for the state's voters to decide later this fall.
Even without additional consumer protection laws that may be forthcoming, lawsuits already abound over "natural" terms used to promote various food and beverage products, particularly if the product contains genetically engineered ingredients. The reach of "all natural" labeling lawsuits is not limited to the food industry, and soon we may see similar allegations in other product arenas. The concept could extend well into a wide range of beauty products, including creams, lotions, shampoos, and many other face and body products. Consider the following recently filed complaints:
- (D. Colo.) - class action complaint alleging Pepperidge Farm "mistakenly or misleadingly represented that its Cheddar Goldfish crackers . . . are 'Natural,' when in fact, they are not, because they contain Genetically Modified Organisms ('GMOs') in the form of soy and/or soy derivatives";
- (D. N.J.) - class action complaint alleging Johnson & Johnson advertised its Aveeno Baby Wash and Shampoo and Baby Calming Comfort Bath "natural oat formula" products as all-natural when they include several synthetic chemicals;
- (N. D. Cal.) - class action complaint alleging General Mills Inc.'s Green Giant 100 percent Natural Valley Fresh Steamers frozen vegetables are not, in fact, 100 percent natural; and
- (N.D. Cal.) - class action complaint alleging AriZona Beverage Co. misrepresented its iced tea as all-natural because it contained high fructose corn syrup (HFCS) and citric acid.
Other examples include a suit against General Mills Inc. alleging its Nature Valley granola bars are not 100 percent natural because they contain GMOs. Similar allegations have been made against Campbell Soup Inc. based on its use of GMOs in various soups. Food giant ConAgra Foods is fighting lawsuits alleging deceptive and misleading labeling because their PAM cooking spray, Wesson cooking oil, Hunt's canned tomatoes and Swiss Miss cocoa are labeled "100% Natural," even though they allegedly contained petrochemicals, synthetic chemicals and artificial ingredients.
Just in the past few weeks, General Mills agreed to pay $8.5 million to settle a California class action accusing the company of misleading consumers with its Yoplait YoPlus probiotic yogurt, which has been marketed to promote digestive health with its "prebiotic" and probiotic culture ingredients. The plaintiffs in that case claimed the damages could have reached $35 million "based on one viable measure of relief."
The point here is simple: Those defending food and beverage manufacturers better make room on their workload plates, as high-dollar lawsuits involving "natural" labeling seem to be on the rise. Manufacturers should go on the offensive and collaborate with their marketing team to avoid or minimize label-based litigation to the extent possible by examining ingredients that may be considered "unnatural," making sure their labeling accurately describes the contents of the product, and evaluating whether the use of "natural" on promotional materials is worth the potential legal exposure and associated costs. Moreover, until the FDA and state legislatures better define the responsibilities and prohibitions in using "natural" labeling, those defending these manufacturers should look to procedural tools to hamper this new surge of litigation, such as removal under the Class Action Fairness Act, attacking class certification and filing 12(b)(6) motions based on poorly drafted pleadings.
In the foreseeable future, anyone hungry for more food-labeling lawsuits should be well satisfied.