On December 10, 2014, the Judicial Panel on Multidistrict Litigation granted the parties' request to centralize nine actions pending across the country in the Western District of Texas—Whole Foods' home state.  According to the plaintiffs, Whole Foods misrepresented the sugar content on the nutritional labels of its Whole Foods Market 365 Everyday Value Plain Greek Yogurt (Yogurt). The plaintiffs' claims rely on a July 17, 2014, Consumer Reports investigation into the sugar content of the Yogurt that concluded that it contained an average of 11.4g of sugar per serving, rather than the 2g per serving listed on the Yogurt's nutritional label:

The claimed amount of sugar is much lower than that of competitors, which generally range between 5 and 10 grams of sugar per serving, and is a big draw for consumers who look to limit their sugar intake. Additionally, low sugar is generally considered healthier, and the low sugar characteristics of a food product command a premium in the marketplace. As a result of the false representation, Defendants were able to sell the Yogurt at a higher price than they would have had they labeled the sugar content accurately.

Plaintiffs allege that Whole Foods should have known that their too sweet profits resulted from the mislabeled Yogurt. According to the plaintiffs, the media reported that 27 competitors' labels correctly noted their sugar content and Whole Foods should have tested and relabeled:

Even a cursory review of the Yogurt compared to competitors should have revealed to the nutrition experts working for Defendants that something was wrong.

What do the lawyers want? Two things:  1) "repayment of Whole Food's ill-gotten gains" and 2) big legal fees to fatten up plaintiffs' counsel's wallets.

Aside from whether Whole Foods had adequate procedures to ensure that its Yogurt product formulation matched its product labeling, the food industry should take note of two issues in this case:  1) foods with added sugar and sweeteners are under assault; and 2) federal labeling requirements expose the food industry to the same risks that drug and medical device manufacturers have been fighting for decades.

Added Sugars: Sugar Content is the New Evil

Under federal regulations, sugar is generally recognized as safe or—in the acronym laden Food and Drug Administration (FDA) parlance–GRAS (21 CFR 184.1854). Despite being GRAS, added sugars are under attack on a number of fronts. The Affordable Care Act, whose provisions are spearheaded by the Surgeon General in its National Prevention Strategy, is leading the charge. FDA held a Public Meeting on Food Nutrition Facts labeling in June 2014 largely attributing a myriad of health concerns to a lack of labeling information.    Further adding to the food fight, FDA has been bombarded with as many as 18 petitions including the "Petition to Ensure the Safe Use of 'Added Sugars" by the Center for Science in the Public Interest, submitted to the FDA in February 2013. These petitions seek to attribute many of society's health woes to sugar consumption and added sugars particularly.  Sugar has undergone additional attacks at the state level including the high-profile controversy surrounding the ban on 20oz beverages in NYC.  As a result of all this attention, FDA's proposed changes to the Nutrition Facts labels includes modifications for added sugars.

Yogurt – First Things First: Is It Greek and Is It Yogurt?

Food litigation and yogurt itself have not been strangers to the courtroom. In Taradejna v. General Mills, the court resolved the issue that plagued Socrates: must Greek yogurt be both made in Greece and actually be yogurt. In Kane v Chobani 2013 U.S. Dist. LEXIS 134385 ND Cal. 2013), the court dismissed a class action complaint where the court was exasperated by plaintiffs' claim that they did not know evaporated cane juice was a sweetener. In Janney v. General Mills  3:12-cv-3919 (ND Cal. Mar. 26, 2014), we learned that it doesn't take much for a food class action to survive a motion to dismiss where there is a colorable claim that the product's "Natural" label is not "merely puffery." In Janney, General Mills relented agreeing, among other things, to stop using the term Natural on a number of products. In Brazil v. Dole 12-cv-01831 (ND Cal. Dec. 8, 2014) plaintiff failed to prove consumers were misled by the term "Natural" and the court granted summary judgment for the defendant. As with most cases involving labeling claims for FDA regulated products, once the claims survive early dismissal, Themis (the Greek goddess of Justice) comes face-to-face with Plutus, the Greek god of wealth, to make a business decision on whether a just result is worth the costs of protracted litigation.

The Crux of the Issue

FDA regulates the content of food labels and the Food Drug and Cosmetic Act (FDCA) is a strict liability statute under which the sale of "misbranded" products is prohibited.  The term manufacturer is broadly defined under the FDCA and state law, and food manufacturers are required to list ingredients and "substantiate" the contents of their labels.  The term "substantiation" is a term of art under the FDCA, and federal and state regulators have broad discretion in deciding, after the fact, what level of scientific evidence is sufficient. (see eg. 21 CFR §101.11(c)(6)).

As the food industry wrestles with its rapid advancement into the intersection of Food Law and class action and tort lawyers, it will be confounded by the same issues that have confounded drug and medical device defense lawyers for decades. But, unlike drugs and medical devices where FDA strictly controls labeling, demanding conformance to highly regulated product formulation and design requirements, food labeling is largely in the control of the purveyor. While the FDCA generally governs labeling, state laws often "parallel" the federal laws and the general principles of federal preemption that serve to bar consumer fraud and tort claims in the drug and device arena are more challenging for the food industry.

Ultimately, the burgeoning food litigation cases reveal that the food industry has become a ripe target for plaintiffs' lawyers and supplier indemnification may not provide the comfort it did before the recent onslaught of federal regulations governing the food industry.

What's Next?

Perhaps food delivery devices will end up being regulated as medical devices. After all, when behavior modification and eating less didn't lead to thinner Americans, we blamed the labels and the lawyers got plumper. The real culprit, however, may be the fork. Everyone knows that a four-pronged fork delivers 30% more calories per forkful than a three-pronged fork, 100% more than a two-pronged fork and a whopping 300% more calories than a chopstick.

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