In recent years, issues and questions related to the honesty and propriety of food labels using the term “natural” have made their way to our legal system. Food manufacturers recognize the growing trend of consumers demanding “natural” products and, as a result, have identified products as “natural” for marketing reasons. The problem occurs at the nexus of how consumers and food manufacturers define “natural,” and consumer expectations regarding whether something is indeed “natural.” This consumer frustration has led to numerous class action false labeling lawsuits because while there is no legal definition of “natural,” the word certainly comes with implications in the food industry.
Based on thousands of consumer comments provided to the U.S. Food and Drug Administration (FDA) over the last year, it is evident that consumers believe this word is misleading when used on products that contain trace amounts of pesticides, artificial food coloring and other “unnatural” ingredients, such as Genetically Modified Organisms (GMOs). As a result, food manufacturers like J.M. Smucker, Chobani, Kraft Foods, Kind, Chipotle and other major companies have found themselves embroiled in litigation. In November 2015, the FDA finally announced that it would be taking public comments regarding whether it should define the term “natural,” what might be a suitable definition for that term and how it should determine the proper use of the term on food labels. Although the FDA received over 7,600 comments during the comment period (which ended in May 2016), the FDA has not yet acted, and additional lawsuits regarding use of the word “natural” have been stayed or otherwise put on hold.
Litigating What “Natural” Means
While the food industry and consumers await the FDA’s response to the public comments regarding the use of the term “natural,” the courts have also taken a “wait-and-see” approach. In March 2017, a federal judge in Puerto Rico stayed a false labeling lawsuit over artificially colored cheese brought against Kraft Foods Group, Inc., stating that she is pausing the case until the FDA provides guidance on the use of the term “natural.” She has joined a number of other judges across the country who, over the last year, have stayed similar alleged false labeling class action lawsuits involving the use of the term “natural.”
In Kane v. Chobani, LLC, since the FDA opened its comment period, the Ninth Circuit recognized the primary jurisdiction doctrine as the basis for staying proceedings involving litigation over the term “natural.” The primary jurisdiction doctrine grants courts the discretion to stay proceedings pending the resolution of an issue in an administrative agency — such as the FDA. The goal is to provide a uniform and equal outcome to similar cases. In Kane, the plaintiffs alleged that Chobani deceptively and unlawfully used the term “evaporated cane juice” to describe its yogurt’s added sugar ingredient. The Ninth Circuit remanded the action to the district court with instructions to enter a stay, reasoning that the term “natural” “implicated technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch.” The Court argued that such a stay would lead to more efficiency and conserve judicial resources. Many other courts have followed suit.
Courts in New York have given deference to the FDA and have also invoked the primary jurisdiction doctrine. In Forsher v. J.M. Smucker Co., plaintiffs sued over use of the word “natural” with certain peanut butter spreads, claiming that the labeling was false and violated various California and Ohio consumer protection statutes because some of the products contained sugar manufactured from GMOs. The Court granted the defendant’s motion to stay the litigation under the primary jurisdiction doctrine to permit the FDA to complete its regulatory review of the word “natural.” In In re Kind LLC “Healthy and All Natural Litigation,” the plaintiffs claimed that the “all natural” Kind products contain synthetic, chemically synthesized and highly processed ingredients. The court granted a motion to stay the litigation brought by the defendant in light of the FDA’s opening of the public comment period.
At least one court has refused to grant a stay (Morales v. Kraft Food Grp., Inc.). In that case, the court issued a decision that was based on deference to the FDA’s statement that “all color additives regardless of source” are not natural and opined that a clarification of the term “natural” would not impact the case as it related to “color additives.” However, this ruling was the exception, and not the rule, within the last year of litigation involving “natural” labeling claims.
What Do Consumers Want?
If there is anything that the 7,600-plus comments provided to the FDA reveal, it is the level of consumer frustration and distrust that exists over food labeling. While some of the comments were posted by individuals from the food industry, the majority of them were from consumers. The overwhelming position was that consumers simply wanted to know what they were purchasing, and for the labels to accurately tell them as much. Some consumers value foods that are GMO-free, while other consumers value cost effective products. However, most (if not all) consumers agree that they value transparency in labeling. Consumers want to make informed decisions about their purchases — and the comments indicate that the majority of consumers feel deceived by the “natural” labels. Many consumers cited the Webster dictionary as a reference to how they define that word, which is “existing in or caused by nature; not made or caused by human kind,” and argued that there should be no discrepancy in the ordinary definition and the definition in relation to food labels.
When and Where Do We Go Next?
Both consumers and the food industry have been waiting for the FDA to make its next move. The majority of the courts that have granted litigation stays have done so for an indefinite period of time since the FDA has not yet announced when it will provide the much anticipated direction, if at all, regarding how it will define the term “natural” for food product labeling. Courts have indicated that if the matter remains pending for too long without any movement towards a resolution from the FDA, they may lift the stay and resume litigation. In Kane, the Ninth Circuit noted, albeit in a footnote, that the duration of the stay remains within the sound discretion of the district court, stating that “If future events render the FDA’s apparently imminent resolution of the ‘evaporated cane juice’ and ‘natural’ issues illusory, such events should inform the district court’s exercise for its discretion.”
There is no way to predict when the FDA will issue an opinion or statement regarding the term “natural.” However, we are coming close to one year since the public comments period closed and an increasing number of courts seem to believe that the FDA’s guidance is imminent. In the meantime, some food companies are shifting away from the “natural” label altogether. While none of the lawsuits have yet been adjudicated on their merits, some companies have chosen to settle out of court. In 2014, Trader Joe’s settled a multimillion dollar false labeling lawsuit related to the word “natural” and agreed to stop using the phrases “all natural” and “100% natural” on their products. Although Trader Joe’s is not alone in its decision to settle a case outside of court (the In re Hain Celestial case resulted in a multi-million dollar settlement in 2010), few others have been willing to settle in the recent years since courts have been freely granting litigation stays pending the FDA’s next move.
Although the FDA is not a rulemaking agency, it does issue guidance documents. For example, in September 2016, it published a Guidance Document related to the “Use of the Term ‘Healthy’ in the Labeling of Human Food Products.” However, the FDA makes it very clear that its guidance documents “do not establish legally enforceable responsibilities. Instead, guidances describe [FDA’s] current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited.” Thus, it is not only the “when,” but the “how” of “what” the FDA does in response to the public comments related to “natural” labeling that will impact the many lawsuits currently stayed. Not many courts seem currently inclined to lift the stay, and so ... we wait.
About the Authors
Christopher M. McDonald is a partner and an experienced litigator who focuses his practice on food law related issues, product liability and general liability matters that involve personal injury and wrongful death claims.
Ani Adjemian is a senior counsel who, as part of her general liability practice, defends product manufacturers, distributors and suppliers in complex product liability and food related cases.
About Walsworth
Walsworth was founded in 1989 with a commitment to establish a law firm focused on working collaboratively with clients to meet their unique objectives. Since then, the firm of over 80 attorneys with offices in Orange, Los Angeles and San Francisco, is known for excellence in litigation and transactional matters. We are equally distinct in our longstanding commitment to diversity, which is recognized through our certification as a Women’s Business Enterprise (WBE) by the Women’s Business Enterprise National Council (WBENC) and by the California Public Utilities Commission, and we are proud to be the largest certified WBE law firm in the United States. Walsworth is also a National Association of Minority and Women Owned Law Firms (NAMWOLF) member, the largest in California and third largest nationwide. For more information, visit www.wfbm.com.
