The first quarter of 2023 witnessed significant litigation and regulatory developments that will undoubtedly affect members of the chain of commerce in the food and beverage industry. Specifically, putative class actions alleging food and beverage manufacturers have mislabeled their products as “all natural” are on the rise. In addition, there has been an uptick in contamination claims, particularly those alleging PFAS and heavy metal contamination in food products and packaging. Finally, regulators and legislators are sparring over plant-based alternative dairy labeling in balancing competing interests of traditional dairy manufacturers, alternative dairy manufacturers, and claimed consumer confusion, which may have substantial impacts on the information that can appear on such product’s labeling.
1. “All-Natural” Labeling Lawsuits Surge
Food and beverage companies have been hit with an onslaught of consumer fraud lawsuits alleging the words “all natural” on their labeling are misleading based on various alleged “additives” or “preservatives” contained in their products. A putative class action was recently filed against Snapple Beverage Corp. in the Southern District of New York, alleging the words “all natural” on Snapple’s fruit beverages are misleading because the drinks purportedly contain “chemical preservatives and added coloring.”
Snapple is not alone among beverage companies being accused of mislabeling products as all-natural. In fact, recent class action filings against AriZona Beverages and Capri Sun maker Kraft Heinz allege the term “natural” on their labels is misleading when the beverages purportedly include synthetic ingredients. The AriZona class action, filed in California federal court, claims the drinks contain “added coloring, ascorbic acid [ie, vitamin C], high fructose corn syrup, malic acid, and erythritol.” In a lawsuit pending in the Eastern District of New York, Kraft Heinz faces allegations its Capri Sun product is advertised as having no artificial colors, flavors, or preservatives when it contains citric acid, which the lawsuit claims is a preservative.
Critically, recent dismissals of similar cases by the Southern District of New York illustrates the evidentiary flaws—and often conclusory nature of the claims—inherent in many of these lawsuits. Specifically, a federal court judge dismissed a pair of suits against beverage manufacturers Kraft Heinz and Coca-Cola. In Hoffman v. Kraft Heinz Food Co., No. 22-CV-397 (KMK), 2023 WL 1824795 (S.D.N.Y. Feb. 7, 2023), plaintiff claimed that the company’s “all natural” labeling of Mango Peach MiO was deceptive because the beverage purportedly contained DL-malic acid (the artificial form of malic acid). The court expressly held that plaintiff could not put forward evidence the malic acid in the beverage was in fact artificial or synthetic in the absence of concrete product testing or other factual support. On the same day, the same judge dismissed plaintiff’s claim that Fanta’s “piña colada flavored” soda falsely claimed the beverage contains “100% Natural Flavors.” Hawkins v. Coca-Cola Co., No. 21-CV-8788 (KMK), 2023 WL 1821944 (S.D.N.Y. Feb. 7, 2023)
Moreover, a federal judge in New York recently dismissed an amended class action lawsuit accusing Wegmans Food Markets of falsely advertising that its Wegmans Gluten Free Vanilla Cake Mix is “all-natural”. Santiful v. Wegmans Food Mkts., Inc., No. 20-cv-2933, 2023 WL 2457801, at *4 (S.D.N.Y. Mar. 10, 2023).
The continuous filing of lawsuits alleging products are not, in fact, “all natural” demonstrate the importance of manufacturers ensuring that the ingredient statement conforms to the manufacturing process and incorporates any changes over time. Careful cataloging and record-keeping may help provide defenses to “all natural” labeling claims where it enables a manufacturer to provide clear evidence of ingredients, manufacturing process and labeling claims. Moreover, the FDA expressly preempts manufacturers from having to disclose “[i]ncidental additives that are present in a food at insignificant levels and do not have any technical or functional effect in that food”. 21 C.F.R. § 101.100(a)(3)(iii).
2. PFAS and Heavy Metal Contamination Lawsuits
PFAS Alleged in a Variety of Food and Beverage Products
Claims of food and beverage contamination with per- and polyfluoroalkyl substances (“PFAS”), a category of synthetic chemicals often called “forever chemicals,” are also continuing to surge; the claims against manufacturers generally include allegations both that the chemicals—which some plaintiffs claim were detected after testing of the products and/or packaging—are unsafe or hazardous, and that a manufacturer’s purported failure to disclose the presence of these chemicals constitutes misleading labeling.
A lawsuit filed in the Eastern District of New York alleges that Kerrygold’s label, which calls the product “Pure Irish Butter,” is misleading because the product and/or its packaging was found to be contaminated with PFAS. The lawsuit also claims reasonable consumers would not buy the product if the synthetic chemicals were identified on the label. Similar class action claims are pending against Kraft in the Northern District of Illinois after testing allegedly revealed the presence of PFAS in Capri Sun’s strawberry-kiwi beverage, against McDonalds in the same venue after testing allegedly revealed that the restaurant’s packaging contained PFAS, and against Coca-Cola and Simply Orange in the Southern District of New York after testing allegedly revealed the presence of PFAS in its Simply Tropical drink.
Significantly, recent dismissals of some of these suits indicate that at least some courts may look skeptically upon plaintiffs’ claims that a manufacturer’s failure to disclose the presence of PFAS in a product or its packaging constitutes deceptive labeling. In Richburg v. Conagra Brands, Inc., 22-CV-2420 (N.D. Ill. 2022) and Ruiz v. Conagra Brands, Inc. 22-CV-2420 (N.D. Ill. 2022), the Northern District of Illinois dismissed consolidated cases where plaintiffs claimed that: (1) alleged PFAS contamination in the packaging of Orville Redenbacher popcorn purportedly infiltrated the product; because the product’s packaging stated that it contained “only real ingredients,” plaintiff argued that the omission of PFAS as an “ingredient” in the popcorn was deceptive. The court rejected this theory, and premised its holding on the fact that no reasonable consumer would expect PFAS, a claimed contaminant, to be listed as an “ingredient” on the product’s packaging. The court further referred to an FDA regulation that specifically exempts “[s]ubstances migrating into food from equipment or packaging” from inclusion in ingredient lists in support of the contention that the manufacturer’s failure to disclose PFAS as a product “ingredient” was not deceptive. 21 CFR § 101.100(a)(3)(iii).
The above lawsuits illustrate the importance of manufacturers’ staying abreast of developments in state-specific legislation and regulation to ensure their products and packaging comply with newly
enacted requirements. Additionally, where appropriate, manufacturers may consider deploying strategies such as voluntary recalls, issuance of consumer safety alerts, and/or independent testing of their own products under certain circumstances. We recommend consultation with counsel prior to undertaking any of these actions, which may all have significant implications impacting current and potential litigation and discoverable evidence.
Consumer Reports Spurs Lawsuits Over Heavy Metals in Chocolate
A December 2022 report by Consumer Reports alleging the presence of lead and cadmium in chocolates has led to class-action lawsuits against chocolate makers. The report noted some degree of lead and cadmium was present in 28 chocolate bars tested. Of particular note, in the Southern District of New York, a contamination suit has been filed against Hu Products, which claims its chocolate is “organic” and “better for you” despite the claimed presence of lead. Godiva, Lindt, and Trader Joe’s have all faced similar lawsuits.
Manufacturers in such lawsuits, however, are not without defenses, particularly where expert reports and/or testing can demonstrate that any purported “contamination” of their products refers only to trace levels of claimed contaminants unlikely to present health risks to a consumer. As discussed above, consultation with counsel is always recommended prior to engaging experts to protect privileged and/or confidential information and bolster litigation defenses.
3. Tensions in Food and Beverage Labeling
Plant-Based Alternative Dairy Labeling
In February of 2023, the US Food and Drug Administration (“FDA”) issued draft guidance for comment that would allow plant-based alternative milks (ie, nut-based milks, soy milk, oat milk, rice milk, coconut milk or hemp milk) to be called by dairy names. Integral to the draft guidance is the notion that the names of certain plant-based milks are established lingo as a result of frequent usage. In fact, the FDA cited numerous studies showing the vast majority of consumers understand plant-based alternative dairy products do not, in fact, contain animal milk. Significantly, the FDA also included a proposed recommendation that plant-based alternative dairy products labeled with the term milk in their names and that have a nutrient composition different than cow’s milk include a “voluntary nutrient statement” demonstrating how the alternative dairy product compares with milk.
In an effort to thwart this proposed guidance, in March of 2023, a bill called the DAIRY PRIDE Act was introduced in the Senate and would require “non-dairy products made from nuts, seeds, plants, and algae to no longer be mislabeled with dairy terms such as milk, yogurt or cheese.” In fact, the bill specifically states it will “nullify any guidance that is not consistent with dairy standards of identity.”
These developments represent the tension between regulators and legislators as to appropriate labeling of alternative dairy products in terms of both preventing consumer confusion and providing necessary nutritional information. Harris Beach’s Mass Torts and Industry-Wide Litigation attorneys, along with our Food and Beverage attorneys, are tracking progress in alternative dairy labeling context and will provide further updates to guide manufacturers as developments occur.
Harris Beach Food and Beverage Counseling and Litigation Experience
Harris Beach routinely helps clients who manufacture and distribute food and beverage products to develop product labels and packaging, create marketing and advertising materials, institute record-keeping practices to comply with all legal and regulatory developments, assess potential litigation risks, initiate recalls and issue safety alerts where appropriate, and defend litigation and/or regulatory agency actions. We work closely with experts to conduct product testing, ensure accuracy of labeling, and bolster defenses in potential and/or actual litigation involving contamination claims.
If you have any questions about the information in this Legal Alert or other related matters, please contact attorney Abbie Eliasberg Fuchs, leader of the Mass Torts and Industry-Wide Litigation Industry Team at (212) 313-5408 and firstname.lastname@example.org, attorney Jaime L. Regan at (212) 912-3506 and email@example.com, Judi Abbott Curry at (212) 313-5404 and firstname.lastname@example.org, or the Harris Beach attorney with whom you most frequently work.
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as Washington D.C., New Haven, Connecticut and Newark, New Jersey.