9/24/2015
Advertising and Labeling Trends and the Next “Natural”
9/24/2015 | Food Advertising & Litigation
Conference| 11:00 am
• Amy Norris, Chief Legal Counsel, Clif Bar & Company
• Bruce Silverglade, Partner, Olsson Frank Weeda Terman
Matz PC
• Ronald Rothstein, Partner, Winston & Strawn LLP
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Class Action Food Litigation –
The Current Landscape
Last 5 years
• Hundreds of class action lawsuits
• Nation‐wide with concentration in New York and California
Claims include
• False advertising
• Unfair business practices and unfair competition
• Miscellaneous consumer remedies
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Class Action Food Litigation‐
The Current Landscape
“Natural” a central claim
Many large settlements • Kashi
• CA $5 million
• FL $4 million
• Naked Juice ‐ $9 million
• Ghiradelli Chocolate ‐ $5.25 million
Media and Consumer Watchdog Groups
• Draw analogy between food and tobacco 3
Auditing and Risk Assessment –
Preparing for the Next Natural
• FDA Warning Letters – Harbinger of litigation
• Consumer Watchdog Groups May Motivate FDA to Act
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Auditing and Risk Assessment –
Preparing for the Next Natural
FDA Warning Letters
• Dozens in 2014 and 2015 alleging
• Mislabeling
• Misbranding
• False and misleading packaging
• Patterns Emerge
• Technical Violations
• Nutrient Content Claims
• Health Claims
Recurring FDA Themes
Technical Violations
• Nutrition Facts
• Absence of required facts
• Nutrients with no DV, e.g. omega 3
• Missing delineating lines
• Ingredient declarations
• Order of ingredients
• Undeclared sub‐ingredients
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Recurring FDA Themes
Nutrient Content Claims
• Healthy •
Definition for most consumer packaged foods
–
–
–
Low in fat and saturated fat < 60 mg cholesterol ≥ 10% of the RDI of one or more of the following nutrients:
» Vitamin A or C, calcium, iron, protein or fiber
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Recurring FDA Themes
• Healthy Claims
• Too Much Saturated Fat
–
–
–
–
–
–
–
Just Mayo
Kind Bars
Minerva Dairy Ilios Greek Yogurt
Bragg Healthy Vinaigrette
True Bliss Dark Chocolate Covered Coconut
Sunsweet Growers dark Chocolate Plum Sweets
Premier Organics Artisans Coconut Butter
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Recurring FDA Themes
• Incorrect Quantity of Nutrients
– Wonder Natural Foods Better ‘N Peanut Butter and Ilios Greek Yogurt » <10% RDI of required nutrients
– Kind Bars – “antioxidant rich”, but <20% RDI of antioxidants C, E and beta carotene – Laughing Giraffe Snackaroons – “high in fiber”, but <20% RDI of fiber present
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Recurring FDA Themes
• Incomplete Comparative Claims
• Failure to Identify Reference Food – Bageladies – Xg less sugar
– Better ‘N Peanut Butter – X fewer calories, Xg less fat
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Recurring FDA Themes
• Failure to Differentiate –
–
–
Kind “+” line – must be 25% difference than reference food
Raymond Hadley ‐ New Hope Mills Gluten Free Chia Pancake & Waffle Mix
» More calcium than 2% milk – must be ≥10% more calcium than milk
» More fiber and calcium than flax seed – must be ≥10% more fiber and calcium than flax seed Minerva Dairy All Natural Ilios Greek Yogurt Butter
» Less fat than butter – must be ≥25% less fat than butter
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Recurring FDA Themes
Unauthorized Health Claims
• Just Mayo
• Your heart matters … cholesterol free … product can reduce risk of heart disease
• Smart Balance Blended Butter
• Helps block cholesterol
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Recurring FDA Themes
• Post Great Grain Digestive Blend
• By consuming at least 48 grams of whole grains each day, you can reduce the risk of chronic diseases…
• Gerber Good Start Gentle Infant Formula
• 1st and ONLY Routine Formula TO REDUCE RISK OF DEVELOPING ALLERGIES
Marketing Opportunity or Litigation Risk
• Synonyms for Natural
•
•
•
•
Wholesome
Real
Whole
Nutritious
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Marketing Opportunity or Litigation Risk
• Superfoods
• Featured in Flavor Names and Vignettes – Coca Cola Pomegranate Blueberry Juice Blend
– Plum Organics Quinoa, Leeks and Chicken, and Kale, Apple and Greek Yogurt
• Implying single ingredient benefits to multi‐ingredient food
– New Hope Mills Gluten Free Chia Pancake & Waffle Mix –
“Chia Facts”
Marketing Opportunity or Litigation Risk
• Navigating the intersection of technical regulatory compliance and claims of misleading advertising – Beech Nut Added Percentages
• Free of Claims
• Creating a Policy
– Potential cross‐contamination
– 3rd party certifiers
» GFCO
» Non‐GMO Verification Project
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Marketing Opportunity or Litigation Risk
– Establishing limits
» Some standards exist, e.g. gluten
• Duty to Warn and Disclaim
• Technical disclaimers
– Attendant to nutrient content claims
» >13 g total fat, >4 g saturated fat, 60 mg cholesterol, or 480 mg sodium
Marketing Opportunity or Litigation Risk
• Optional disclaimers and warnings
– Is there an obligation?
» Sugar ‐ CA and NY proposals regarding sugar content of soda and sports drinks
» Caffeine ‐ CSPI proposal regarding caffeine content
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9/24/2015
Advertising and Labeling Trends and the Next “Natural”
9/24/2015 | Food Advertising & Litigation
Conference| 11:00 am
Ronald Rothstein
Partner Winston & Strawn LLP
rrothste@Winston.com
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Finding the Next Natural
• Based on a survey conducted of the cases filed in the
past 12 months, I found the following trends:
Structure Function Claims
“Made” Claims
Ingredient Claims
GMO Free
Health Claims © 2013 Winston & Strawn LLP
Ideas for Lawsuits
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Environmentally or Ecologically Friendly
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Handmade, Hand Bottled, Craft Made, Small Batch
• Claims against makers of alcohol have
become popular.
• Suits against Maker’s Mark, Jim Beam,
Tito’s Vodka, Templeton Rye, WhistlePig,
Tincup, Angel’s Envy, Breckenridge
Bourbon, and MillerCoors challenge label
statements such as Handmade, Hand
Bottled, Craft Made, Small Batch, and the
like.
© 2013 Winston & Strawn LLP
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Made From Scratch/In‐Store
• In December 2014, Whole Foods Inc.,
Wegmans Food Markets Inc. and Acme
Markets Inc. were sued in separate class
actions in New Jersey that allege the three
supermarket chains violate the state's
consumer fraud law by falsely marketing
their breads as freshly made and made instore.
• The suits allege:
–Each of the named plaintiffs say they relied
upon Whole Foods, Wegmans and Acme
Market's assertions that the bread they made
© 2013 Winston & Strawn LLP
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9/24/2015
Made In The USA
• In March 2015, Anheuser-Busch Cos. Was
hit with a proposed class action lawsuit in
California state court accusing it of
misleading consumers by labeling its
Busch beer as a Product of the U.S.A.
when in fact the beer is made with
imported hops.
© 2013 Winston & Strawn LLP
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Made In The USA
• Complying with the "Made in USA"
labeling standards is increasingly difficult:
–
The FTC requires a product to be "all or virtually all" made in the
United States to be labeled "Made in USA," and "all or virtually all"
means that all significant parts and processing that go into the
product must be of U.S. origin (i.e., the product may only contain a
negligible amount of foreign content).
– The California standard is even stricter in that it requires that 100
percent of the materials used to make the product be U.S. made. As
a result, a product sold in California may require a different label than
the one used in the rest of the country. Given the very high standard
applicable to unqualified U.S.-origin claims, the use of qualified U.S.origin claims (e.g., "Made in USA of U.S. and imported parts") is
sometimes more appropriate and is worth considering.
© 2013 Winston & Strawn LLP
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GMO Free
• In August 2015, Chipotle Mexican Grill Inc.
was sued in California class action for
allegedly falsely stating that its menu is
free of genetically modified organisms in
order to attract business from healthconscious consumers who believe GMOs
are unhealthy.
• The plaintiff claims:
–that she ate at Chipotle because of her
reliance on the casual Mexican chain’s longrunning “Food With Integrity” ad campaign, as
well as an April 2015 announcement by
© 2013 Winston & Strawn LLP
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GMO Free
• The complaint alleges:
–Chipotle still serves meat, poultry and dairy
products, including cheese and sour cream,
from animals that consumed GMO soy and
corn feed, as well as sodas containing syrup
from genetically modified corn, after telling its
customers that all of its ingredients are nonGMO.
• The complaint concedes:
–that Chipotle posted a disclaimer on its
website explaining that some of its soft drinks
contain GMO corn syrup and that its meat and
dairy products come from animals raised on
© 2013 Winston & Strawn LLP
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Structure Function Claims
• Structure Function claims:
–describe the role of a nutrient or functional
component in affecting or maintaining normal
body structure or function or general wellbeing.
–cannot describe or imply that a nutrient or
functional component affects a disease or
health-related condition via diagnoses, cure,
mitigation, treatment, or prevention (a claim
doing this is an unauthorized drug claim).
–can be used on FDA-regulated conventional
foods and dietary supplements.
are not pre approved by FDA but the
© 2013 Winston & Strawn LLP
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Structure Function Claims
• In November 2014, The Coca-Cola Co.
was hit with a class action lawsuit in
California federal court alleging that the
labeling on its Minute Maid Pomegranate
Blueberry 100% Fruit Juice Blend falsely
claims that the juice boosts brain power.
• The complaint identifies structure function
claims on the label:
–On the front of the juice’s package, the label
prominently says “Omega-3/DHA & 4 nutrients
to Support Brain & Body.”
–The back of the label also says "DHA is a key
© 2013 Winston & Strawn LLP
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Ingredient Claims ‐ Sugar
© 2013 Winston & Strawn LLP
• In August and
November 2014
Whole Foods Market
Inc. was hit with class
actions in
Massachusetts,
Pennsylvania and
Texas federal courts,
accusing the grocery
chain of falsely
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Ingredient Claims ‐ Sugar
• The complaint alleges that six recent tests
conducted by the Consumer Reports show
the product actually has 11.4 grams of
sugar per serving.
© 2013 Winston & Strawn LLP
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9/24/2015
Ingredient Claims
• In December 2014, a class action was
filed in Florida federal court against
healthy snack food maker LesserEvil LLC
for allegedly misleading consumers into
thinking that its Chia Crisps contain a
significant amount of sought-after chia
seeds when the product is actually made
primarily of black beans.
• The complaint alleges:
–chia seeds have recently become viewed as a
superfood because they are high in dietary
fiber, omega-3 fatty acids, protein, vitamins
© 2013 Winston & Strawn LLP
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Ingredient Claims
• In March 2015, a class action
was filed in Florida state court
against startup Hampton Creek
Inc. alleging it falsely
advertised and labeled Just
Mayo vegan spread, which is
made entirely of plant products,
as mayonnaise.
• The complaint alleges:
© 2013 Winston & Strawn LLP
–“Despite its name, Just Mayo does
not contain mayonnaise and is not
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Environmentally or Ecologically Friendly
© 2013 Winston & Strawn LLP
• In February 2015,
Chiquita Brands was hit
with a consumer class
action in California
federal court alleging its
buys nearly all of its
bananas from a supplier
that contaminates
drinking water despite
claiming that it requires
ecologically friendly
farming practices.
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Environmentally or Ecologically Friendly
• The complaint:
–States these practices run counter to
Chiquita’s stated promises to protect natural
ecosystems and to demand equally high
standards from suppliers, the suit claims.
Pages on Chiquita’s website are dedicated to
its sustainability and conservation efforts and
tout its commitment to barring the use of
chemical weed control, among other practices.
© 2013 Winston & Strawn LLP
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9/24/2015
Health Claims – FDA Scrutiny
• In April 2015, the Food and Drug
Administration warned Kind LLC that
several of its products are misbranded as
"healthy" and that the labeling falsely
claims some of the snacks are low-fat or
rich in antioxidants.
–Letter takes issue with Kind Fruit & Nut
Almond & Apricot, Kind Fruit & Nut Almond &
Coconut, Kind Plus Peanut Butter Dark
Chocolate + Protein, and Kind Plus Dark
Chocolate Cherry Cashew + Antioxidants
bars.
© 2013 Winston & Strawn LLP
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Health Claims – FDA Scrutiny
• FDA claims:
© 2013 Winston & Strawn LLP
–Kind's claims that the products
are "pretty much the nirvana of
healthful tastiness," when in fact
they contain more fat and
saturated fat than the definition of
"healthy" allows.
–"These amounts exceed 1g of
saturated fat per 40g RACC"
–"These amounts also exceed the
maximum of 15% of calories from
saturated fat in the 'low saturated
fat' definition Accordingly your
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Kind Bar Filings
Recently filed cases:
–Cavanagh v. Kind, LLC, filed May May 28,
2015 in Southern District of New York
–Jackson v. Kind LLC, filed May 15, 2015 in
Central District of California
–O'Brien v. Kind LLC, filed May 13, 2015 in
Southern District of New York
–House v. Kind LLC, filed May 11, 2015 in
Northern District of California
–Molina v. Kind LLC, filed May 6, 2015 in Middle
District of Florida
–Karnezis v. Kind LLC, filed April 27, 2015 in
© 2013 Winston & Strawn LLP
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Advertising and Labeling Trends and the Next “Natural”
Ron Rothstein
Partner, Winston & Strawn LLP
rrothstein@winston.com
(312) 558 - 74643124
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9/24/2015
WEBINAR
FDLI Food Advertising
Litigation
September 24, 2015 | Chicago, Illinois
The Interplay of FDA, FTC, State AG
Food Labeling and Advertising
Enforcement with
Class Action and Lanham Act Litigation
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1970’s
FTC
NAD
Lanham Act
© 2013 Winston & Strawn LLP
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1980’s – 1990’s
Lanham Act
© 2013 Winston & Strawn LLP
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Present
FTC (FDA)
Lanham Act
© 2013 Winston & Strawn LLP
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