How Food Processors Can Avoid 'Natural' Disasters

With no federal guidance on how a product can be labeled as natural, how can companies compete while minimizing potential liability? There is no "one-size" answer, but several low-cost, effective solutions can help mitigate the risk.

By Noah Hagey, Matthew Borden and Rebecca Cross

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In the past six months, there have been several similar putative class actions filed against makers of nutrition bars and granola, including Balance Bar Co., Zoneperfect Nutrition Co., Kashi Co. and Bear Naked Inc. These suits claim these products are falsely labeled as "all natural," based a laundry list of common plant-derived additives and preservatives, such as a pineapple enzyme, grape seed extract, chicory root fiber and beta-carotene.

In another recent line of cases, putative class actions have been filed against several manufacturers, including ConAgra Foods and Frito-Lay, for marketing their products as natural when they are made from genetically modified corn and soybeans.  This novel claim may portend a new wave of litigation since more than 80 percent of U.S. corn and soybeans are genetically modified, and these two crops are the most common ingredients in food products, either by themselves or in the form or derivatives such as corn starch.

These cases are simply examples of ones being filed. Absent a sea change in the law, many more will come, as lawyers increasingly perceive the "natural" arena as a fertile one in light of favorable precedent.

The best way to minimize risk is to follow several simple, relatively low-cost protocols:

  • Perform periodic independent labeling review by legal counsel to ensure attorney-client privilege protection.
  • Obtain annual verifications and certifications by suppliers to ensure that ingredients conform to label specifications.
  • Consider adopting alternatives to "all natural."

While materiality of any alleged label misrepresentation may still provide a guidepost, in the current environment companies need to weigh the marketing benefits of using the term "natural" against the costs of being a bright red target.


References

1. On September 2, 2011, Whole Foods pulled reality star Bethany Frankel’s Skinny Girl margarita mix off shelves after learning the “all natural” drink mix contained the preservative sodium benzoate. The next day, $5 million putative class actions were filed against Skinny Girl Cocktails, LLC in Florida (Greene v. Skinny Girl Cocktails, LLC et al., Case No. 0:11-CV-61965 (S.D. Fla. 2011)) and California (Von Kaenel v. Skinny Girl Cocktails, LLC et al., Case No. LACV11-7305 (C.D. Cal. 2011)).
2. 75 Fed. Reg. 22602-01 (April 29, 2010); Open Letter to Industry from FDA Commissioner Dr. Hamburg (March 3, 2010), available at http://www.fda.gov/food/labelingnutrition/ucm202726.htm.
3. Letter from the FDA to Antonio Zamora (December 15, 2005), available at http://www.fda.gov/ohrms/dockets/dockets/04p0009/04p-0009-pdn0001-vol1.pdf.
4. 56 Fed. Reg. 60,321, 60,466 (Nov. 27, 1991).
5. See, e.g., Holk v. Snapple Beverage Corp., 575 F.3d 329 (3d Cir 2009).
6. See, e.g., Williams v. Gerber Products Co., 552 F.3d 934, 939 (9th Cir. 2008) (“We disagree with the district court that reasonable consumers should be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box. The ingredient list on the side of the box appears to comply with FDA regulations and certainly serves some purpose. We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception.”)
7. See In re Tobacco II Cases, 46 Cal. 4th 298 (2009); Kwikset Corp. v. Superior Court, No. S171845 (Jan. 27, 2011).
8. See, e.g., Astina v. Dryers Grand Ice Cream, Inc., Case No. C11-02910 (N.D. Cal 2011).
9. See, e.g., Bates v. Kashi Co. et al., Case No. 11CV1967 (S.D. Cal. 2011).
10. Scarpelli et al. v. Conagra Foods, Inc., Case No. 2:11-CV-04038 (Dist. of NJ 2011); Virr v. Conagra Foods Inc., Case No. 3:11 cv 4607 (N.D. Cal. 2011). Gengo v. Frito-Lay North America, Inc., Case No. CV1110322 (C.D. Cal. 2011); Zuro v. Frito-Lay North America, Inc., Case No. 11CV6672 (N.D. Cal. 2011)

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