United States: It's Not Easy To "Act Naturally"

Last Updated: September 4 2013
Article by Leonard L. Gordon

Ringo Starr and Buck Owens told us all we have to do is "Act Naturally."  For marketers of food products that seemingly simple admonition remains a challenge, as a recent decision involving "All Natural" claims made by Frito-Lay illustrates.  For those new to the blog, you may want to take a look at prior posts involving natural claims.

Frito Lay marketed its chip and dip products as made with All Natural ingredients using images like the following on product labels:

Plaintiffs sued Frito-Lay claiming that the All Natural claims were false because the Frito Lay products all contained genetically modified corn or products derived therefrom.  Plaintiffs brought putative class actions alleging violations of the Magnuson Moss Act, the consumer protection and warranty statutes of Florida, New York and California, and under state common law for intentional misrepresentation.  Multiple cases were consolidated in the Eastern District of New York before Judge Roslynn Mauskopf.  On July 29, 2013, Judge Mauskopf granted in part and denied in part Frito-Lay's motion to dismiss.  The court's ruling highlights the myriad of issues implicated by natural claims. 

The court rejected Frito-Lay's arguments that the plaintiffs' claims were barred by the doctrines of primary jurisdiction and pre-emption.  Regarding primary jurisdiction, the court found that the FDA's informal policy and policy statements regarding the use of the word natural in food labeling was insufficient to find that the FDA had primary jurisdiction displacing plaintiffs' state law claims.  Similarly, regarding Frito-Lay's argument that the state law claims constituted "obstacle pre-emption" of the FDA's regulatory scheme, the court found that the FDA's non-binding guidance on what was permissible regarding natural claims was not threatened by allowing plaintiffs to pursue their state law claims.  The court also rejected Frito-Lay's efforts to use the FDA regulatory scheme to steer plaintiffs' claims into "safe harbor" exemptions under the state consumer protection statutes. 

The court also rejected Frito-Lay's argument that no reasonable consumer would interpret the All Natural claim to mean the product was free of genetically modified corn.  Instead, the court agreed with plaintiffs that what a reasonable consumer might believe was a question of fact not suitable for decision on a motion to dismiss.  The court rejected Frito-Lay's argument that federal, state, and industry guidance regarding the use of the term natural for foods containing genetically modified corn would not as a matter of law mean a consumer would interpret the claim in that way.  The court also rejected Frito-Lay's reliance on cases where courts found as a matter of law that a reasonable consumer would not interpret ads for Cap'n Crunch with Crunchberries and Fruit Loops as implying that the products were made with real fruit, finding the claims in those cases to border on fantasy. [Wait a minute, you mean Crunchberries aren't real fruit??]  The court also rejected at the motion to dismiss state Frito-Lay's effort to limit its All Natural Claim to claims of no preservatives, no MSG, and no artificial flavors as shown on the product packaging. 

There was some good news for Frito Lay.  The court found that the All Natural claim did not constitute a warranty for purposes of the Magnusson Moss Act, and that the claims under New York, Florida, and California law could only brought on behalf of people that purchased products in those states.  As a result of these rulings, the plaintiffs' efforts to bring a nationwide class action seem doomed.  The court also dismissed common law claims for intentional misrepresentation finding that plaintiffs had failed to plead with the requisite specificity that Frito-Lay intended to defraud consumers and rejecting plaintiffs' argument that a profit motive in itself was sufficient to demonstrate an intent to defraud.  The court dismissed the Florida and New York state law warranty claims based on plaintiffs' failure to provide the requisite timely notice of a possible breach of warranty.  

As we have noted previously, the absence of federal guidance on what constitutes a natural food product leaves marketers subject to the whims of case by case analysis frequently focused on a subjective judgment of how a reasonable consumer might interpret a particular claim.  Frito-Lay's efforts to use the existing FDA guidance to shield itself from a class action failed.  This confused state of affairs makes one crave some comfort food.  Please pass the corn chips.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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