Snack Food Labeled ‘All Natural’ Is Likely To Deceive, Judge Concludes

by Tara Arick on April 5, 2013 · 0 comments

in Product Liability

- From LexisNexis® Mealey’s™ Daily Legal News.

While the lack of a hyphen in the term “all natural” could lead to multiple interpretations, a reasonable consumer would conclude the product contain exclusively “all natural” ingredients, a California federal judge held April 1 in partially granting a motion for dismissal (Markus Wilson and Doug Campen, et al. v. Frito-Lay North America Inc. and Pepsico Inc., No. 12-1586, N.D. Calif.).

U.S. Judge Samuel Conti of the Northern District of California said defendants cannot rely upon back-of-the-package disclosures to overcome misleading front-of-the-package statements.

Under this standard, defendant Frito-Lay North America Inc.’s defense to plaintiffs’ “all natural” claims fail, Judge Conti said.

Frito-Lay’s use of “all natural” without a hyphen could mean the product contains some all-natural ingredients; it could also mean the product contains exclusively natural ingredients, Judge Conti said.

However, a reasonable consumer would expect a product labeled “all natural” to contain exclusively natural ingredients, Judge Conti said. The inclusion of the term “made with” is not dispositive, Judge Conti said.

Health Claims

Markus Wilson and Doug Campen filed suit in the District Court, claiming that Frito-Lay and Pepsico Inc. misrepresented several of their products. The plaintiffs claim that the defendants advertised their products as “all natural” when they contained artificial or unnatural ingredients, including flavoring, coloring or preservatives. The plaintiffs also challenged claims involving MSG content, low-sodium claims and trans fat claims.

Wilson challenged representations appearing on Lay’s Classic Potato Chips. Campen challenged representations on Lay’s Classic Potato Chips, Lay’s Honey Barbeque Potato Chips, Lay’s Kettle Cooked Mesquite BBQ Potato Chips, Cheetos Puffs and Fritos Original Corn Chips.

The plaintiffs brought claims under the unfair competition law (UCL), Business and Professions Code Section 17200, et seq., false advertising law (FAL), Business and Professions Code Section 17500, et seq., and California’s Consumer Legal Remedies Act, California Civil Code Section 1750, et seq. (CLRA) and sought restitution.

Sounds In Fraud

Judge Conti first dismissed the claims against Pepsico with leave to amend, saying the plaintiffs had not shown why, as the parent company of Frito-Lay, it should be liable for Frito-Lay’s conduct. A late request for judicial notice of a Pepsico website directing consumers to Frito-Lay’s website constitutes an impermissible attempt to amend the pleadings, Judge Conti said. “The court decline to allow this practice,” Judge Conti said.

Next, Judge Conti said many of the plaintiffs’ claims fail to meet the heightened pleading requirements for allegations sounding in fraud under Federal Rule of Civil Procedure 9(b).

“Plaintiffs allege that defendants made false and misleading statements about a variety of their products, but at no point in their 53-page, 252-paragraph [first amended complaint] do plaintiffs provide details about those products, or about the advertisements and websites they frequently quote to support their claims,” Judge Conti said. Plaintiffs may amend their complaint in an effort to comply with Rule 9(b), Judge Conti said.

Website Claims

Next, Judge Conti said representations made on the Frito-Lay website do not constitute labeling under the Food, Drug and Cosmetics Act. While the products point consumers to the website, the labels do not suggest the site will provide further information to consumers on the challenged products’ details, Judge Conti said.

Judge Conti then rejected Frito-Lay’s argument that the “0 grams trans fat” claims were preempted. The plaintiffs claim that while the product complies with the labeling requirements for “0 grams trans fat,” it lacks notice that the product contains high levels of total fat, Judge Conti said. This labeling requirement complies with federal law and does not impose a more strict standard, the judge said.

Nor are the “no MSG” allegations preempted, Judge Conti said. Manufacturers are forbidden from labeling a product containing ingredients that contain MSG as containing “no MSG,” Judge Conti said.

MSG, Trans Fat

The plaintiffs also have a claim under the UCL, FAL and CLRA for products labeled as containing “no MSG” but that contain ingredients including MSG, Judge Conti said.

Judge Conti also allowed the plaintiffs’ “trans fat” claims under the UCL, FAL and CLRA to proceed, finding that the representations are not fully compliant with federal law. However, the plaintiffs’ “low sodium” and “healthy” claims rely on website representations and are dismissed, Judge Conti said.

Christopher Chorba of Gibson, Dunn & Crutcher in Los Angeles, Jenna Musselman Yott of its San Francisco office and Andrew Santo Tolumello of its Washington, D.C., office represent Frito-Lay and Pepsico. Ben F. Peirce Gore of Pratt & Associates in San Jose, Calif., Dewitt Marshall Lovelace Sr. of Lovelace Law Firm in Miramar Beach, Fla., and David Malcolm McMullan Jr. of Don Barrett in Lexington, Miss., represent the plaintiffs.

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