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Private Surgeon General Class Action Defender

Proposition 65 Hot Button Issue: Caramel Coloring in Soft Drinks

Posted in False Advertising Claims

Beverage companies PepsiCo and Goya face a spate of class action lawsuits relating to the caramel coloring in their soda drinks.  In January, Consumer Reports, an independent product testing organization, released a report detailing its investigation of the amount of 4-methylimidazole (“4-MEI”), an impurity created during the manufacturing of caramel coloring, in various soft drinks, including Sprite, Dr. Pepper, 365 Everyday Value Dr. Snap, Brisk Iced Tea, A&W Root Beer, Pepsi, Diet Pepsi, Pepsi One and Malta Goya.  Since the report issued, Pepsi and Goya have been hit with a number of class action lawsuits alleging that 4-MEI is a carcinogen, and that Pepsi failed to warn consumers that its drinks contained excessive amounts of the chemical, which can expose consumers to substantial health risks.  

Specifically, the complaints allege that under California’s Proposition 65, products with more than 29 micrograms of 4-MEI must carry a health-warning label.  They cite Consumer Reports’ testing of various Pepsi and Goya soft drinks as finding that the drinks contained amounts of 4-MEI per can that exceed the Proposition 65 level, including Pepsi One at an average of 43.5 micrograms of 4-MEI per can and Malta Goya with an average of 316.2 micrograms per serving. 

Most of the complaints bring claims under California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act, although some also allege intentional and negligent misrepresentation.  The plaintiffs contend that they would not have purchased the soft drinks had they known the level of 4-MEI present, and seek relief ranging from an injunction preventing the sale of the beverages in California to unspecified damages.

Now that the Food and Drug Administration has announced that it plans to investigate 4-MEI, Pepsi and Goya could face even more suits.

The new wave of caramel coloring cases include Cortina v. PepsiCo Inc., Case No 3:14-cv-00168 (Jan. 23, 2014), and Cortina v. Goya Foods Inc., Case No. 3:14-cv-00169 (Jan. 23, 2014), in the Southern District of California; and Granados v. PepsiCo, Inc., 3:14-cv-01316 (Mar. 21, 2014), Ibuski v. PepsiCo, Inc., 4:14-cv-01724 (Mar. 18, 2014), Ree v. PepsiCo, Inc., 3:14-cv-01192 (Mar. 13, 2014), Hall v. PepsiCo, Inc., 3:14-cv-01099 (Mar. 7, 2014), Aourout v. PepsiCo, Inc., No. 3:14-01289 (Feb. 20, 2014), Langley v. PepsiCo, Inc., 3:14-cv-00478 (Feb. 14, 2014), and Sciortino v. PepsiCo, Inc., No. 3:14-cv-00478 (Jan. 31, 2014), in the Northern District of California.

Pom Wonderful Brings Food Labeling Dispute To The U.S. Supreme Court: When Are Claims Based On Allegedly Improper Product Labeling Barred By The Food, Drug, And Cosmetic Act?

Posted in False Advertising Claims, Misbranding

A long-standing false advertising dispute between beverage companies Pom Wonderful and Coca-Cola has reached the United States Supreme Court and carries far-reaching implications for other food labeling litigation. On January 10, 2014, the Supreme Court granted certiorari in Pom Wonderful LLC v. The Coca-Cola Co., 679 F.3d 1170 (9th Cir. 2012). See Pom Wonderful LLC v. The Coca-Cola Co., 1345 S. Ct. 895 (2014). The Court will review the Ninth Circuit Court of Appeals’ ruling that Pom’s Lanham Act false advertising claims against Coca-Cola were broadly precluded by the Food and Drug Administration’s (FDA) juice labeling regulations. The scope of preclusion and preemption by the Food, Drug and Cosmetic Act (FDCA) is an often contested issue, and the anticipated ruling by the Supreme Court has food companies and plaintiffs’ attorneys following this case closely.

Click here to read more. Article originally published in the March 2014 issue of Mealey’s California Section 17200 Report.

 

FDA to Revisit “Evaporated Cane Juice” Draft Guidance

Posted in False Advertising Claims, Misbranding, Primary Jurisdiction

Earlier this month, the FDA announced that it would reopen the comment period on its draft guidance for the industry concerning use of the term “evaporated cane juice” (ECJ).  Draft Guidance for Industry on Ingredients Declared as Evaporated Cane Juice; Reopening of Comment Period; Request for Comments, Data, and Information, 79 Fed. Reg. 12,507 (Mar. 5, 2014).

Back in 2009, the FDA issued draft guidance suggesting that the term “evaporated cane juice” should not be used on food labels to declare the presence of sweeteners derived from sugar cane syrup because such sweeteners did not fit the definition of “juice” as defined in 21 C.F.R. 120.1(a).  Draft Guidance for Industry: Ingredients Declared as Evaporated Cane Juice; Availability, 74 Fed. Reg. 51, 610 (Oct. 7, 2009).

The FDA explained it is now reopening the comment period to “better understand” evaporated cane juice, how it is manufactured and how it compares to other sweeteners derived from sugar cane.

The announcement states that, after review of the received comments, the FDA “intend[s] to revise the draft guidance, if appropriate, and issue it in final form, in accordance with FDA’s good guidance practice regulations in 21 CFR 10.115.”

The FDA’s move may help defendants bolster their arguments that plaintiffs’ ECJ claims are either preempted or fall under the primary jurisdiction doctrine.

While some courts have already dismissed ECJ “misbranding” claims on these bases (see our post on Hood v. Wholesoy), the trend did not catch on.  The new announcement has the potential to revive the argument that this issue remains firmly within the FDA’s decision-making realm.

However, the FDA makes clear that it is only reopening the comment period, and may or may not make revisions or issue final guidance.  Accordingly, at least one court has hesitated to weigh in at this stage, explaining that “[i]t remains unclear when or if the FDA will conclusively resolve this issue.”  Order, Morgan v. Wallaby Yogurt Co., Inc., No. 13-cv-00296-WHO (N.D. Cal. Mar. 13, 2014), ECF No. 49 at 6 n.2 (“Lacking definitive guidance, this case will proceed apace.”). 

Counsel representing clients defending ECJ claims should stay tuned.

Like a Zombie, Mandatory Genetically Engineered Food Labeling Proposal Resuscitated in California

Posted in GMO, Misbranding

The specter of California requiring genetically engineered food labels is being revived in the form of State Senate Bill 1381, which is being promoted as a “simpler, cleaner version” of Proposition 37, the voter initiative that California’s voters rejected at the polls just over a year ago. But “simpler, cleaner” does not necessarily mean “better.”

Read our client alert to learn more about SB 1381.

Judge Koh Tosses Restitution and Disgorgement Claims in Bumble Bee Class Action

Posted in False Advertising Claims, Misbranding

In one of the first summary judgment rulings in the onslaught of food mislabeling and misbranding class actions, Judge Lucy Koh of the Northern District of California tossed the plaintiff’s restitution and disgorgement claims.  Her exclusion of the plaintiff’s monetary relief claims is a welcome limitation on class action damages.

Background: On January 2, 2014, Judge Koh granted in part and denied in part Bumble Bee’s Motion for Summary Judgment in a class action lawsuit alleging that Bumble Bee made a variety of unlawful, false, and misleading statements about its products, both on its products’ labels and its websites.  See Ogden v. Bumble Bee Foods, LLC, Case No. 5-01828 LHK (N.D. Cal. Jan. 2, 2014). 

Among other claims, the plaintiff asserted causes of action for violations of California’s Unfair Competition Law (UCL) and False Advertising Law (FAL) and for a violation of the California Consumers Legal Remedies Act (CLRA).  She sought injunctive relief as well as damages, restitution, or disgorgement. 

While finding that the plaintiff had statutory standing to pursue two of her four product claims and upholding her claim for injunctive relief, the court rejected the plaintiff’s request for restitution and disgorgement. 

Statutory Standing: The court first concluded that the plaintiff established a genuine issue of material fact as to whether she possessed statutory standing (i.e., suffered a loss of money or property) to pursue claims that Bumble Bee’s statements about its products’ omega-3 content, as well as its front-of-package disclosures, violated state law.  Id. at 23.  The court also found, however, that the plaintiff lacked statutory standing with regard to other nutrient content and health and drug claims, as information regarding these claims appeared on Bumble Bee’s nutrition labels and website, and the plaintiff had admitted that she read neither.  Id. at 22-23.  Most importantly, the court limited its holding to whether the plaintiff possessed statutory standing to pursue her claims—it did not rule on the claims’ substantive merits.

Restitution: The court next held that the plaintiff failed to adequately prove her restitution claim.  Id. at 27.  Although she presented sufficient evidence of the total amount of money she spent on Bumble Bee products, the plaintiff failed to present evidence of the difference in value between what she spent and what she received.  Id. at 27.  Indeed, the court stated that:

“[The plaintiff] has not provided evidence of the price of any comparable products that do not make the allegedly unlawful label statements, nor has she offered any other evidence regarding the size of the price premium she paid for Bumble Bee’s product due to the allegedly unlawful label statements.”

Id. at 27-28.  The court also rejected the plaintiff’s attempt to rely on the declaration of her expert witness, Dr. Oral Capps, as evidence of restitution, as Dr. Capps merely stated that he could provide an estimate of damages, but failed to make actual calculations.  Id. at 28.  In light of the plaintiff’s failure to present substantial evidence to support an award of restitution, the court granted Bumble’s Bee’s Motion for Summary Judgment on this ground.  Id.

Disgorgement: The court also rejected the plaintiff’s claim for disgorgement.  Noting that disgorgement under the UCL and FAL is restitutionary in nature, the court found that the plaintiff’s failure to provide evidence of an appropriate amount of restitution similarly barred her disgorgement claim.  Id. at 28-29.  The court therefore granted Bumble Bee’s Motion for Summary Judgment on this ground as well.  Id. at 29.

Injunctive Relief: Finally, the court concluded that the plaintiff could pursue her claim for injunctive relief.  Although Bumble Bee argued that, because it was currently revising its allegedly misbranded labels, there would be no future violations, the court found that Bumble Bee had not produced evidence of when the label changes would occur or what the new labels would say.  Id. at 29.  The court thus determined that Bumble Bee had not established that there was no genuine issue of material fact with respect to plaintiff’s entitlement to injunctive relief, and thus the court denied that Bumble Bee’s motion for summary judgment on this ground was warranted.  Id. at 29-30.

Takeaway: Overall, Judge Koh’s summary judgment order is a victory for class action defendants.  Her rulings on the plaintiff’s claims for restitution and disgorgement demonstrate that, without concrete proof of a premium paid for allegedly mislabeled products, it is likely that at best only injunctive relief will stand.