Alert: Ries v. Arizona Beverages

Date: Apr 12, 2013

Is high fructose corn syrup not "natural?" The federal court in San Francisco recently said that a pair of plaintiffs had failed to prove it was not. The Court, which is commonly referred to as "the food court" because of the number of food labeling challenges it has been dealing with, granted judgment in favor of Arizona Beverages USA ("Arizona") on claims that it had improperly labeled its AriZona Iced Tea as "All Natural," "100% Natural," and "Natural" despite the inclusion of high fructose corn syrup (HFCS) and citric acid.[1] While the Order may not finally resolve the question of whether HFCS is not natural, it establishes a high burden of proof for plaintiffs and provides some evidence that natural claims are not false or misleading simply because the product contains HFCS.

Arizona moved for summary judgment after discovery. In private-plaintiff cases alleging food labeling is false or misleading, plaintiff must affirmatively prove that the label is in fact false or misleading; the seller is not and cannot be required to prove that the label is true or accurate. Arizona argued that plaintiffs failed to meet their burden of showing both that HFCS and citric acid are not ‘natural,' and that plaintiffs are entitled to some amount as restitution. The Court agreed.

During discovery, Plaintiffs failed to identify any evidence or expert testimony to support their claims that HFCS and citric acid are not natural. Instead, plaintiffs asked the Court to take judicial notice of U.S. patent documents issued for the process of producing HFCS. Plaintiffs then insisted that HFCS cannot be natural if it is produced by a patentable process. The court summarily dismissed this reasoning: "[t]his is merely an extension of [plaintiffs'] rhetoric that HFCS is artificial because it cannot be grown in a garden or field, it cannot be plucked from a tree, and it cannot be found in the oceans or seas of this planet… rhetoric is no substitute for evidence." Order 7:23-27 (internal citation omitted).[2]

Plaintiffs' failure to show that HFCS and citric acid are not natural required them to backpedal. Plaintiffs were forced to claim in the alternative that even if the advertising was not false, it was nonetheless deceptive or confusing to consumers in violation of California law. For this, Plaintiffs relied heavily on testimony from Arizona's brewer, suggesting that consumers did not fully appreciate what ‘100% natural' meant. The Court, however, dismissed the testimony as "ambiguous at best." The Court noted that "anecdotal evidence alone is insufficient to prove that the public is likely to be misled. Thus, to prevail, plaintiff must demonstrate by extrinsic evidence, such as consumer survey evidence, that the challenged statements tend to mislead consumers." Since Plaintiffs had offered no other evidence that consumers were mislead, their alternative argument was rejected as well.

As for damages, the Court found that plaintiffs failed to meet their burden under both In re Google AdWords Litig., 2012 WL 28068 at *15 (N.D. Cal. Jan. 5, 2012) ("there must be evidence that supports the amount of restitution necessary to restore to the plaintiff ‘any money…which may have been acquired by means of such unfair competition.") and In re Vioxx Class Cases, 180 Cal. App. 4th 116, 131 (2010) ("The difference between what the plaintiff paid and the value of what the plaintiff received is a proper measure of restitution.").

The Northern District continues to develop its own precedent as it becomes the go-to court for food labeling class actions. While the courthouse remains open to plaintiffs asserting well supported claims, as Ries shows, the court will not hesitate to dispense with matters where plaintiffs fail to proffer sufficient evidence to establish the alleged falsity of the labeling claims as well as the amount of restitution they seek.

[1] Ries, et al. v. Arizona Beverages USA LLC, et al., No. 3:10-cv-001139-DS (N.D. Cal. Nov. 27, 2012), March 28, 2013 Order.

[2] The Court did not address the evidence offered in support of plaintiff's claim that citric acid is artificial other than noting the defendants are entitled to summary judgment because "Plaintiffs have not introduced any evidence showing that HFCS or citric acid are artificial…" Order 6:24-25 (italic emphasis in original).