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Private Surgeon General Class Action Defender

FDCA Express Preemption Victory in Benecol Misbranding Class Action

By Maya Ingram and Claudia Maria Vetesi on Posted in False Advertising Claims, Misbranding, Preemption

A recent Third Circuit case brings good news for defendants making express preemption arguments under the Food, Drug and Cosmetic Act (FDCA) in misbranding class actions. Last week, the court affirmed the dismissal of a putative class action holding that Johnson & Johnson’s representations of the trans fat content and cholesterol-lowering capabilities of its Benecol® products were expressly preempted by the FDCA, as amended by the Nutrition Labeling and Education Act (NLEA). Young v. Johnson & Johnson, Case No. 12-2475, slip op. (3d Cir. May 9, 2013).

Background and District Court Ruling
Johnson & Johnson (J&J) manufacturers Benecol® butter substitute products (Benecol). The labels for the products state that Benecol contains “NO TRANS FAT,” and the “Nutrition Facts” box notes the “Amount/Serving” of “Trans Fat” as “0g.” The labels also made claims about the products’ ability to lower cholesterol, such as “Proven to Reduce Cholesterol.”

The plaintiff filed suit against J&J, alleging that the trans fat and cholesterol statements were false and misleading because Benecol contained small amounts of trans fats, which could be detrimental to heart health. Plaintiff also claimed that he paid a premium for these products in reliance on the purported false and misleading claims. J&J filed a motion to dismiss the claims arguing that plaintiff lacked standing for failure to adequately plead an injury-in-fact and his claims were expressly preempted by the FDCA.  The District Court agreed and dismissed the case.

“NO TRANS FAT” Claim Preempted
Plaintiff argued on appeal that although FDA regulations authorize Benecol to claim “0g Trans Fat Per Serving,” the regulations do not expressly permit a claim of “NO TRANS FAT” for the product as a whole. The Third Circuit rejected this argument, noting that the “FDA has long recognized this potential for a discrepancy” and has issued regulations that “authorize nutrient content claims based on per serving amounts, even if those claims are not entirely accurate on a per product basis.” As such, plaintiff sought to impose state law requirements that were not identical to the FDCA, and his “NO TRANS FAT” claim was expressly preempted.

Cholesterol Claims Preempted
Plaintiff also contended on appeal that his claims were not preempted because he sought to impose state law requirements that were identical to federal regulations prohibiting false and misleading health claims. The Court of Appeals disagreed, holding that J&J was permitted to make heart health claims regarding Benecol based on the product’s plant stanol esters content because those claims are authorized by FDA regulations (21 C.F.R. §§ 101.14 and 101.83).

Plaintiff argued that the “Proven to Reduce Cholesterol” claim was false and misleading because this statement was expressed in reference to the product as a whole, which contains harmful trans fats, and not in reference to the product’s plant stanol esters content. The Court rejected this argument, noting that FDA regulations specifically authorize these cholesterol claims based solely on the product’s plant stanol ester content.

Conclusion
The Young decision is strong support for express preemption arguments under the FDCA, particularly for cases involving trans fat and other nutrient content and health claims. Even though the Third Circuit stated that the decision is “non-precedential,” it is nonetheless persuasive authority for how courts should analyze claims in similar cases.

Defining “Natural”: The National Organic Program Offers Guidance That May Impact Organic and Nonorganic Food Producers Alike

By Natalie Naugle on Posted in Organic

The USDA’s National Organic Program (“NOP”) recently issued draft guidance (here,  here, and here) that organic and nonorganic food manufacturers alike should be aware of. In addressing what is required to certify a product as “organic,” the NOP has offered its own definition of “natural” (or “nonsynthetic”), which is “a substance that is derived from mineral, plant, or animal matter and does not undergo a synthetic process as defined [in the Act] (7 U.S.C. 6502(21)).” In turn, the NOP defines “synthetic” as “a substance that is formulated or manufactured by a chemical process or by a process that chemically changes a substance extracted from naturally occurring plant, animal, or mineral sources, except that such term shall not apply to substances created by naturally occurring biological processes.” (See Draft Guidance § 6.1.)

The Organic Food Production Act vests authority in the NOP to establish a “National List of Allowed and Prohibited Substances” (“National List”) with regard to “organic” or “made with organic…” products. To determine whether a substance is allowed or prohibited, it must first be determined whether the substance is “natural (nonsynthetic)” or “synthetic.” How these terms are defined is thus critical to determining whether a substance is included on the National List, and where on the National List it should be placed.

As a result, the National Organic Standards Board (“NOSB”) (the NOP’s advisory board) has focused a great deal of time and energy over the years on determining what qualifies as “natural” and what does not. These efforts recently led the NOSB to issue the above-cited draft guidance, which is intended to implement and clarify previous recommendations and existing practices of the NOSB. In addition to offering their own definitions of “natural” and “synthetic” in the “organic” context, the NOP’s guidance includes a “Decision Tree for Classification of Materials as Synthetic or [Natural] Nonsynthetic.” This draft guidance (and any resulting final guidance) should therefore be carefully reviewed by organic and nonorganic food producers alike—especially those who make “natural” claims on their labels.

Comments on the draft guidance are due by June 3, 2013. Yet to be seen is whether the NOP will address some apparent confusion in the draft guidance (for example, why certain minerals are classified as synthetic simply because they undergo a chemical change caused by heating the mineral) or the existence of the FDA’s and the Food Safety and Inspection Service’s “natural” policies.

“All Natural” Suit Against AriZona Iced Tea: Class Decertified and Suit Tossed

By Claudia Maria Vetesi and Rebekah Kaufman on Posted in False Advertising Claims, Misbranding

In the world of food misbranding class actions, few cases have yet made it to the merits stage.  Companies defending against these claims should accordingly take note of AriZona Iced Tea’s recent win in Ries v. AriZona Beverages USA LLC, No. 3:10-cv-01139-RS, Docket Entry 195 (N.D. Cal. Mar. 28, 2013).

Challenging HFCS and Citric Acid as “Natural”

The plaintiffs in the AriZona case challenged the defendants’ advertising, marketing, selling, and distribution of AriZona Iced Tea drinks labeled “All Natural,” “100% Natural,” and “Natural” because they contained high fructose corn syrup (HFCS) and citric acid.  The plaintiffs’ UCL, CLRA, and false advertising claims survived a motion to dismiss and a California class was certified for purposes of injunctive and declaratory relief.  See our prior post here.  After the close of discovery, the defendants filed a motion to decertify the class and renewed a previous motion for summary judgment arguing that the plaintiffs failed to prove that HFCS and citric acid are not natural.  This time the Court agreed.

Plaintiffs’ Evidence:  “United States Patent law” Related to Processing HFCS

First, the Court found that the plaintiffs failed to produce any evidence that HFCS and citric acid are artificial.  Instead, the plaintiffs requested that the Court take judicial notice of “United States Patent law” and rule that HFCS is not natural because there are patents related to the process of producing it.  The Court rejected this argument out of hand, stating that “United States Patent law” is not a proper subject of judicial notice.  Moreover, the plaintiffs cited “no legal authority supporting their contention that if the process to produce an ingredient is patented, that fact, in and of itself, automatically renders it artificial.”

Plaintiffs’ Failure to Prosecute Their Case with Diligence

Second, the Court chided the plaintiffs for failing to prosecute their case, stating that the attorneys’ efforts did not “begin to approach diligence.”  In particular, the plaintiffs failed to identify experts who could support their natural claims within case deadlines.

No Evidence of “Premium” Paid for AriZona Icea Tea

Third, the Court found that the plaintiffs failed to produce “a scintilla of evidence” to support their claims for restitution or disgorgement under the UCL or FAL.  The Court had previously ruled that even if the beverages the plaintiffs purchased were not all natural, those beverages still had some market value.  The measure of restitution “must be based in evidence establishing the difference between the value of an AriZona Iced Tea billed as all-natural and the value of a comparable beverage not marketed or sold at a premium due to such claims.”

Defendants’ Evidence Showing HFCS and Citric Acid Are Natural

Finally, in addition to deficiencies in the plaintiffs’ evidence, the defendants produced evidence to show that HFCS and citric acid are, in fact, natural.  The evidence consisted of an expert report, declarations from HFCS suppliers reflecting that the HFCS that the defendants supply accords with the FDA natural policy, and a certificate of the natural status of defendants’ citric acid from one of their citric acid suppliers.

Take Away

This case has larger ramifications for companies defending against “all natural” claims.  This case is about much more than the plaintiffs’ failure to prosecute their case and come forward with scientific evidence showing the iced tea is not “all natural.”  The decision shows real skepticism toward these types of lawsuits, which is a trend we’ve started to see in which courts are requiring plaintiffs to come forward with more than just junk science in support of their attack on “all natural” claims.

A Dismissal That’s Sweeter Than Honey

By William Tarantino on Posted in Preemption

A recent case from the Central District of California brings good news to defendants making preemption arguments under the Nutrition Labeling and Education Act (NLEA) in private surgeon general cases. Cardona v. Target Corporation, et al., No. 2:12-cv-01148-GHK-SP, Docket Entry 48 (C.D. Cal. Mar. 20, 2013). While defendants have had mixed success with preemption, especially in California, this decision leaves no question about whether federal requirements for the use of a food’s “common or usual name” on labels displace separate state standards. In Cardona v. Target, plaintiff Bertha Cardona claimed that the “Pure Honey” she purchased from Target included no pollen, and was therefore not truly “honey.” Plaintiff admittedly based her complaint on a biased November 2011 Food Safey News article claiming that honey without pollen isn’t honey at all. Seeking to impose her own standards for honey, Cardona filed a putative class action complaint alleging 11 causes of action, including claims under California’s Unfair Competition Law and Consumers Legal Remedies Act.

Cardona claimed that California Department of Food and Agriculture code prohibited the removal of pollen from honey, and that the sale in California of honey without pollen as “honey” was misleading and deceptive. In dismissing Cardona’s case with prejudice, the court examined the provisions of the NLEA and its regulations in careful detail. Defendants Target and Honeytree (represented by MoFo litigators Dave McDowell and Purvi Patel) argued that there was no reasonable dispute whether their product was honey, and that any requirement to call honey something other than honey on the label would render the food misbranded under federal law. Defendants further argued that where there is no federal standard of identity, as is the case for honey, under the NLEA honey must be labeled with its “common or usual name” (which is “honey”). See NLEA Sections 343-1(a)(3) and 343(i)(1). Thus, the California requirements cited by Cardona were preempted by Section 343-1(a) of the NLEA, which prohibits any state standard that is not “identical” to the federal requirement.

The court agreed. Citing the legislative history and the NLEA’s goal to “further uniformity to reduce consumer confusion,” the court concluded that the federal common-name labeling requirement applies in this case, and that honey must be called honey, irrespective of pollen content. The court rejected Cardona’s argument that California could issue separate standards of identity that govern labeling where the FDA had not established a federal standard of identity. In its final blow to Cardona’s case, the court rejected the argument that use of the word “pure” in describing the honey was independently actionable, finding that Cardona’s entire case was based on the same theory — namely, that the honey she allegedly bought was neither pure nor truly “honey” because it contained no pollen. On that basis, and because Cardona could not plausibly allege the addition of any ingredient that would render the use of the term “pure” misleading, the court concluded that the word “pure” did not provide a separate basis for Cardona’s claims.

 

Comcast Corp. v. Behrend: Courts Must Assess Merits of Plaintiffs’ Damages Evidence at Class Certification

By Rebekah Kaufman and Jacob Harper on Posted in Class Certification

Yesterday, in Comcast Corp. v. Behrend, 569 U.S. __ (2013), the Supreme Court answered a looming class certification question left open by Wal-Mart Stores, Inc. v. Dukes, 564 U.S. __ (2011): whether a putative class action plaintiff must offer credible evidence of damages applicable on a class-wide basis before the district court can certify a class under Federal Rule of Civil Procedure 23(b)(3).  In a 5-4 opinion, the Court answered yes. The decision promises to have particularly significant implications in putative antitrust, employment, and consumer protection class actions, where plaintiffs traditionally rely on simplified assumptions and modeling at the class certification stage to persuade courts that proof of class-wide damages would be possible.  The Behrend decision confirms that defendants in such cases should not overlook potential flaws in putative class plaintiffs’ damages theories at the outset of the case.  Read More