October 30, 2013
Authored by: James Smith
Food labeling class actions continue to plague food manufacturers and retailers, with the Northern District of California being the favored forum for these claims. Indeed, in The New Lawsuit Ecosystem: Trends, Targets and Players (Oct. 2013), the U.S. Chamber Institute for Legal Reform identified food labeling class actions brought by plaintiffs, public interest groups, and attorneys general as one of the primary emerging liability threats facing American businesses. One of the favorite allegations of such claims centers on the use of “all natural” or similar words on food labels. Very often, a plaintiff alleges that a product contains ingredients from genetically modified soybean or corn, so the product allegedly cannot be considered “natural.” With California’s liberal consumer protection laws, these claims often survive motions to dismiss, with courts reasoning that plaintiffs adequately plead that reasonable consumers will read “all natural” labels and conclude that the product does not contain genetically modified or other allegedly unnatural ingredients. E.g., Parker v. J.M. Smucker Co., No. C 13-0690 SC (N.D. Cal. Aug. 23, 2013) (denying motion to dismiss claims that vegetable oils were not “all natural”).
Though not from the Northern District of California, another recent federal court decision from that state offers some hope to defendants in these actions. In Pelayo v. Nestle USA, Inc., No. CV 13-5213-JFW (AJWx) (C.D. Cal. Oct. 25, 2013), the court dismissed an “all natural” labeling action. That plaintiff alleged that a number of pasta products should not bear the “all natural” label because they contain synthetic xanthan gum and soy lecithin. Thus, according to that plaintiff, the labels would be reasonably likely to deceive the public under California consumer protection laws.
In dismissing the claims, that court seized on an issue that truly affects all of these “all natural” claims. That is, the plaintiff “fail[ed] to offer an objective or plausible definition of the phrase ‘All Natural,’ and the use of the term ‘All Natural’ is not deceptive in context.” [Slip Op. at 4] Notions that “natural” means only something existing in nature surely could not apply as any consumer would realize that pasta is a manufactured product; the reasonable consumer does not believe that pasta grows in fields or is ranched from livestock.
The court also rejected that plaintiff’s effort to rely on the definition of “organic” to bolster her claims. Unlike “natural,” the word “organic” has a specific definition in the Code of Federal Regulations. Moreover, the court concluded that “it is implausible that a reasonable consumer would believe ingredients allowed in a product labeled ‘organic,’ such as the Challenged Ingredients, would not be allowed in a product labeled ‘all natural’.” [Slip Op. at 5]
Finally, the court noted that the products bear the “all natural” label on the front and back of the packages, and that the label on the back appears immediately above the list of ingredients. Thus, the ingredient list clarifies any supposed ambiguity regarding the definition of “all natural” by identifying the challenged ingredients. In such a circumstance, a reasonable consumer would not be misled by “all natural” appearing on the label.
Pelayo highlights a weakness of these “all natural” claims. That is, there is no widely-recognized definition of that phrase. It should be impossible to allege or prove that the mythical reasonable consumer will be misled by a phrase that does not have a uniform or even generally-recognized definition. This is particularly true when ingredient labels identify the product’s contents. Unfortunately, many defendants in the Northern District of California, in particular, could not obtain dismissal of such “all natural” claims against them. Thus, those cases must progress to discovery and possibly summary judgment in order to make the points that the Pelayo court raised. That is, there is no common understanding of the phrase “all natural,” so it is impossible to establish that the phrase misleads reasonable consumers. Indeed, it is possible that consumers may interpret “all natural” in a manner that favors defendants. It should be a plaintiff’s burden to prove what “all natural” means to reasonable consumers, likely though statistically significant and reliable consumer survey research. Going through the discovery process to reach that stage and summary judgment is expensive and a distraction to defendants, of course. In the interim, however, defendants may use the Pelayo court’s reasoning to attack such “all natural” claims at the motion to dismiss stage.