Are you at risk of a class action lawsuit? Perkins Coie outlines key areas of vulnerability for food & beverage brands – FoodNavigator-USA.com

In an analysis of 2019 filings (Food Litigation 2019: Year in Review), Perkins Coie said 2019 saw a record number of filings against the food and beverage industry, with New York overtaking California as the favored jurisdiction for the plaintiffs bar.

Plaintiffs lawyers continue to target the industry, relying on new theories and claims, and spurred on by some plaintiff-friendly rulings that have allowed classes to proceed to certification based on damages models once considered flawed or incomplete.

So what are plaintiff's attorneys looking at when they scan supermarket shelves?

One new area of vulnerability is vanilla labeling - on everything from ice cream to almondmilk and basked goods - with a surge of filings in 2019, mostly from prolific plaintiffs attorney Spencer Sheehan in New York, alleging that brands representations regarding vanilla are false or misleading, said Perkins Coie.

"While several of the vanilla cases have been voluntarily dismissed, the vast majority of these cases continue to work their way through the courts. The coming year will reveal how courts wrestle with motions to dismiss on these claims."

Sheehans latest case, filed in February 2020 (Civello v Conopco Inc 1: 20-cv-01173) takes issue with Breyers Delights vanilla bean ice cream labels: Though the flavor is represented as being derived from vanilla and vanilla beans, the vanilla taste and flavor is not provided exclusively by vanilla and vanilla beans.

While all natural cases were down on the previous year, natural claims remain fertile ground for plaintiffs attorneys, said Perkins Coie.

Complaints spanned everything from pesticide residues to malic acid and ascorbic acid in 2019, although some courts are staying such caseson primary jurisdiction grounds because the FDA has said its looking into this issue (although it hasnt said much since 2015).

Lawsuits over health maintenance claims were also down in 2019, although healthy fats were a focus in several cases, with plaintiffs challenging health and wellness claims on coconut products, which are high in saturated fat.

Seven animal welfare cases were filed in 2019, up from five in 2018, said Perkins Coie. Some challenged dolphin safe labels while others queried claims about the treatment of animals or related environmental practices.

Notably, cheese makerTillamookwas accused of misleading shoppers with bucolic images of cows grazing on local small farms when most of its milk allegedly came from industrial-scale factory farms; while Ben & Jerryswas hit with a similar suit hinging upon whether reasonable consumers would assume thatall of the milk in its ice cream comes from happy cows raised on farms that participate in itsCaring Dairyprogram.

The most high-profile litigation in this field targeted high-protein milk brand Fairlife, which was hit with a series of lawsuits over alleged animal abuse at its flagship dairy farm in Indiana.

(Fairlife is not being sued for animal cruelty, but for false advertising, in that consumers paid a premium for products in reliance on packaging claims that Fairlife provided 'extraordinary care' for its dairy cows, "but that these claims were false and they consequently suffered economic loss.")

At least eight new multifunction ingredient cases were filed in 2019, focusing on malic acid and citric acid, which can serve multiple technical functions in foods and beverages.

For example, if malic acid which is typically made from petrochemicals - is being used to simulate, resemble, or reinforce a products characterizing flavor [as well as being used, as say, an acidulant], then the claim no artificial flavors is false, argue plaintiffs. Similarly, if synthetic citric acid is serving as a preservative [as well as to add a sour taste], this would render a no artificial preservatives claim false or misleading.

Ocean Spray settled one such case on a class-wide basis for $5.4m. However, a similar case vs Kraft Heinz was dismissed, a rare early victory for a defendant in these challenging cases, noted Perkins Coie.

While more food companiesare pressuring farmers to stop using glyphosate as a desiccant to dry crops such as oats, courts remain skeptical of class actions challenging trace residues of the herbicide in foods and beverages, said Perkins Coie.

Cases vs General Mills, Quaker Oats and Floridas Natural Growers - or example - have all been tossed on the grounds that reasonable consumers would not be surprised to find trace levels of pesticides well below government thresholds in some foods.

While class action lawsuits over CBD have thus far focused on dietary supplement makers (alleging that CBD is an illegal dietary ingredient and challenging dosage claims on pack),Perkins Coie expects additional class action lawsuits in this space, especially as the regulatory environment continues to develop.

False labeling claims saw a slight uptick in 2019, spanning everything from probiotic bacteria in kombucha to disputes over real cocoa, artisan and homemade claims.

According to a review of Prop 65 notices filed with the California Office of Attorney General, plaintiffs served nearly 500 pre-litigation notices regarding food and beverage products in 2019, with a significant spike in the number involving acrylamide, lead, and cadmium, said Perkins Coie.

Multiple stateshave attempted to impose restrictions on labeling of meat-alternative products that would hinder manufacturers from using meat-like descriptions for their goods, while the REAL Meat Actwould provide similar restrictions at the federal level, noted Perkins Coie.

However, several state laws have faced legal challenges, with a lawsuit challenging one such law in Arkansas leading to a preliminary injunction banning the states enforcement of the law.

In Mississippi, meanwhile, the Plant Based Foods Association and Uptons Naturals filed a lawsuit challenging a similar law and the state has since revised said law to permit meaty terms on plant-based products as long as they're qualified by terms such as plant-based or vegan. The lawsuit was subsequently dismissed.

The coming year will see increased scrutiny of state and federal proposals to restrict labeling terms for meat alternative products.

Slack fillclass action filings slowed considerably in 2019, with defendants consistent wins at the federal level in 2018 appearing to have had an impact on filing trends, as courts continued to reject such cases at the motion to dismiss phase, said Perkins Coie.

In one such case over Glutino Gluten Free Pretzels, the court said the plaintiff had failed to sufficiently allege that the slack fill was non-functional (ie. that the empty space in the package did not serve a useful purpose, or was unavoidable due to the way the packaging is filled).

On a positive note for food & beverage brands, the reasonable consumer defense remains an important tool for defendants in class actions, said Perkins Coie, noting that judges had rejectedlawsuits challenging the use of the term diet on soda,concluding that no reasonable consumer would expect drinking Diet Coke, Diet Pepsi or Diet Dr Pepper would cause weight loss.

This application of 'common sense' was reflected in comments made byJudge Jay Bybee of the Court of Appeals for the Ninth Circuit last month:

Diet soft drinks are common in the marketplace and the prevalent understanding of the term in that context is that the diet version of a soft drink has fewer calories than its regular counterpart.

"Just because some consumers may unreasonably interpret the term differently does not render the use of diet in a sodas brand name false or deceptive. [Emphasis added by FoodNavigator-USA.]

The number of putative class actions filed vs dietary supplement makers spiked to 39 in 2019, a 44% increase over 2018, driven in part by a flurry of CBD related lawsuits and health misrepresentation claims, says Perkins Coie.

As supplements are increasingly sold via websites such as Amazon, plaintiffs have sought to hold these marketplaces liable as sellers or suppliers.

However, in a 2019 decision, the Ohio Court of Appeals affirmed summary judgment for Amazon in a case where a teen ingested a fatal dose of a dietary supplement (Stiner v. Amazon.com, Inc), concluding that Amazon was not a supplier of the product under Ohio law.

In this case, a third-party seller, not Amazon, listed the product for sale; a third-party seller, not Amazon, provided product information, storage, and shipping; and the transaction at all times identified the third-party seller, not Amazon, as the seller.

As another court put it, said Perkins Coie, Stiner is part ofan emerging consensus in the courts against construing marketplaces such as Amazon as a seller, distributor, or supplier, and therefore against holding them liable for products sold on their websites.

Several leading confectioners have been targeted by lawsuits asserting that their products should be accompanied by disclosures that they source cocoa beans from farms that may use child labor. However, a Massachusetts federal court dismissed duty to disclose cases against Hershey, Nestl and Mars in January 2019, finding that they had not engaged in any deceptive conduct and noting that the defendants websites did explain the potential supply chain issues plaintiffs raised, said Perkins Coie.

These cases are now on appeal to the First Circuit, it says: Hopefully the forthcoming opinion will provide some much-needed clarity on this topic.

Nestl and Cargill, meanwhile, have asked the Supreme Court to reconsider a Ninth Circuit decision holding that claims of forced labor on Ivory Coast cocoa farms fall within the scope of a statute granting US federal courts original jurisdiction over any civil action brought by a foreign national for a tort in violation of international law.

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Are you at risk of a class action lawsuit? Perkins Coie outlines key areas of vulnerability for food & beverage brands - FoodNavigator-USA.com