Labeling Litigation
Since the early 2000s, litigation stemming from food labeling has grown to record proportions. California, which leads the nation in food labeling cases, continues as the primary jurisdiction for the majority of the filings. This has caused some people use the term “food court” when referring to the U.S. District Court for the Northern District of California. Over 30 food-associated companies have been sued in that jurisdiction alone. California is followed by New York & New Jersey, Florida, Missouri and Illinois as leading the nation in food labeling lawsuits.
Who’s in Charge?
The Food and Drug Administration (FDA) is responsible for ensuring proper labeling for all food items except meat, poultry and liquid eggs. The FDA jurisdiction over food labeling comes from the Food, Drug, and Cosmetic Act (FDCA) and the Nutrition Labeling and Education Act of 1990 (NLEA). The FTC and the FDA share jurisdiction for the regulation of the advertising and labeling of foods.
Does the FDA have any power over food labeling litigation?
The FDA does not have any inherent enforcement powers to deter companies from false labeling. The primary enforcement measure is the issuance of a “warning letter” notifying a manufacturer of a misleading claim.
What type litigation is being filed?
The litigation generally falls into two categories: Misleading labeling and labeling containing false statements. The first type involves labeling by the food companies that is legal contains statements that are misleading in the way they are used. Examples include the use of terms such as “all natural” and “nutritious.” The second type is based on labeling that purportedly contains a false statement of fact usually involving calories or fat content.
The most common challenges to food labeling fall under the “consumer fraud” umbrella in a class action. These claims arise under the widely varying consumer fraud, unfair trade practices, or unfair competition laws enacted by individual states. These laws typically prohibit deceptive or misleading trade practices in connection with the sale or advertisement of consumer goods. California has laws in this area of the law that make the state particularly attractive for consumers.
What are the Defenses?
There are several defenses that companies can raise when they are sued for labeling violations. Included among the defenses are the following:
- Preemption – One of the primary defenses to a false labeling claim filed under state law is that the claim is preempted by federal laws and regulations, such as the Federal Meat Inspection Act (FMIA); the Poultry Products Inspection Act (PPIA); the Federal Food, Drug, and Cosmetic
- Standing – Defendants have argued that the named plaintiff in a class action cannot bring the suit because he or she either did not purchase the product or did not rely on the label when purchasing the product.
- Damages – It may be difficult for plaintiffs to prove that they were actually harmed by a “misleading” claim on a food label. The absence of quantifiable damages could harm a plaintiff’s claim.
- FDA Evaluation – Defendants can argue for a stay or dismissal of suit while the FDA is evaluating a specific label issue. In fact, The U.S. Court of Appeals for the Ninth Circuit (California) issued a decision on March 24, 2016 that may place an indefinite hold on a large number of class-action lawsuits filed against food manufacturers whose products allegedly bear misleading labels.
Although the Ninth Circuit decision to stay proceedings technically applies only to Kane v. Chobani, LLC, No. 14-15670, it’s likely to result in similar stays being issued in similar lawsuits pending in courts within the Ninth Circuit. It’s all predicated on the FDA addressing the issue of the meaning of the word “natural” on a food label.
The plaintiffs in Kane argued that that Chobani’s yogurt labeling was false and misleading by using the term “all natural” because the yogurt contained evaporated cane juice. The Ninth Circuit noted that the FDA was currently addressing the term “natural” in food labeling for products containing evaporated cane juice. The panel vacated and remanded the case with instructions for the trial court to stay the action pending resolution of the terminology issue by the FDA.
Consulting with an attorney experienced and skilled in litigation might help
Please contact Paul Steinhofer at McKenna Storer for questions about this blog and other complex litigation matters.