Food Court Report: "Artificial Flavors" and "Chemical Preservatives": "Natural" Litigation By Another Name?
Over the last several years, the food industry has become well acquainted with the litigation risks attendant to "natural" marketing claims. However, as the "natural" litigation landscape settles, plaintiffs' attorneys may be re-adjusting their sights on "no artificial . . . . " marketing claims.
The many purported class action lawsuits filed in California federal courts involving allegedly deceptive food marketing claims have not abated, even with the future of "natural" false advertising litigation on hold. In Kane v. Chobani, LLC, Case No. 14-15670 (9th Cir. Mar. 24, 2016), for example, purported class representatives challenged Chobani yogurt products as deceptive based on "natural" claims and description of the added sugar as "evaporated cane juice ("ECJ")." Citing to the "primary jurisdiction" doctrine, the Ninth Circuit in an unpublished Memorandum decision in that case stayed the litigation pending FDA review of comments for a definition of ECJ and "natural" (FDA final guidance for ECJ just issued May 25, 2016).
FDA review of "natural" could take many more months or years, and any FDA decision to issue guidance on "natural" is hardly certain, but the "Food Court" grinds on. In In re Coca-Cola Products Marketing and Sales Practices Litigation (II), Case No. 14-md-02555-JSW (N.D. Cal. May 19, 2016) ("In re Coca-Cola II"), consolidated from several federal courts and now pending before U.S. District Judge Jeffrey S. White in Oakland, California, the Court granted in part and denied in part The Coca-Cola Company's ("TCCC") motion for partial summary judgment. The false advertising allegations by the purported class representative plaintiffs focus on the use of phosphoric acid as an alleged artificial flavor and chemical preservative, but no "natural" claims were involved.
In In re Coca-Cola II, the plaintiffs claim that TCCC's soda products marketing claims are false or misleading in three respects: 1) that although phosphoric acid is disclosed on the ingredients list, TCCC failed to disclose its use as an artificial flavoring and chemical preservative; 2) that the phrase "no artificial flavors, no preservatives added, since 1886" was an affirmative misrepresentation due to the presence of phosphoric acid; and 3) that use of the term "original formula" was allegedly false because "the composition of Coca-Cola has repeatedly changed over time." TCCC moved for partial summary judgment as to each claim based on plaintiffs' alleged failure to adduce evidence of actual reliance on the challenged marketing claims. In reaching a decision (not for citation), the Court reviewed relevant deposition testimony of each of the purported class representatives.
The Court first ruled that purported class representatives must show actual reliance under the California consumer protection statutes sued upon. The Court granted TCCC's motion as to the "original formula" claims since the plaintiffs testified in depositions that they did not notice the "original formula" claims when purchasing product. However, the Court let stand plaintiffs' two other claims based on their exposure to the "no artificial flavors, no preservatives" marketing claims even though several had not read the ingredient list or it was not clear whether they had done so (phosphoric acid was listed).
In denying partial summary judgment as to the two remaining claims, the Court determined that there was a factual dispute as to whether the ingredient list was misleading. Even though several plaintiffs could not remember reading the ingredient list, it was the presence of phosphoric acid that created the factual dispute as to whether the "no artificial flavors, no chemical preservatives" marketing claim relied upon by plaintiffs was deceptive. The Court explained that phosphoric acid was not identified as an artificial flavor or chemical preservative on the product label, and noted that some plaintiffs testified that they did not know what phosphoric acid was.
Thus, this case illustrates that litigation claims involving alleged deception as to artificial ingredients ("not natural") can proceed despite the current stay by courts on litigation involving "natural" food marketing claims. Although some food companies may have concluded that use of the term "natural" could be an invitation to litigate, avoiding use of that term may not be enough. Regardless of the merits of plaintiffs' claims in In re Coca-Cola II, another takeaway of this case is that a comprehensive risk management review of food marketing claims should involve all such claims taken as a whole, including potentially misleading omissions.