United States: Staying Natural: Hain Label Dispute Must Wait For Ninth Circuit Decisions

Last Updated: November 23 2015
Article by Daniel Werb

A district judge in the Northern District of California pressed pause on a mislabeling suit involving "natural" claims pending the outcome of two Ninth Circuit appeals.

Astiana v. The Hain Celestial Group, Inc., et al., No. 11-cv-06342 (PJH) (N.D. Cal.) is a putative class action in which the consumer plaintiffs alleged that Hain misleadingly labeled cosmetic products as "All Natural" or "Pure Natural" despite the fact that the products contain synthetic or artificial chemical ingredients.

Back in November 2012, the district court found that plaintiffs' claims were barred by the primary jurisdiction doctrine and dismissed the case. The Ninth Circuit reversed, holding: (1) Astiana's claims were not expressly preempted by the Food, Drug, and Cosmetics Act; and (2) although the primary jurisdiction doctrine applied—meaning the FDA should determine the meaning of "natural" in the first instance—the proper course of action was to stay rather than dismiss the case.

While the appeal was pending, plaintiffs wrote the FDA stating that the case had been referred by the district court for the FDA's determination of the meaning of "natural" in this context. Defendants, upon learning of this informal communication, informed the FDA that no such judicial referral took place and the FDA was therefore not obligated to respond to plaintiffs' letter. In March 2013, the FDA responded by declining to make a determination regarding use of the term "natural" in cosmetic labeling. The FDA indicated it would do so only after a notice-and-comment process. (In an interesting development, the FDA published a notice earlier this month that it is seeking public comment on use of the term "natural" on food labeling.)

On remand, the district court found that despite the "questionable"—dare we say, unnatural?—manner in which the issue had been brought before the FDA, the agency had nevertheless expressed its lack of interest in the subject matter of the litigation and therefore a formal referral to the agency would be futile. But the court found that a stay was still appropriate because of two pending appeals before the Ninth Circuit: Jones v. ConAgra Foods, Inc., 14-16327 (9th Cir. filed July 14, 2014), and Brazil v. Dole Packaged Foods, LLC, No. 14-17480 (9th Cir. filed Dec. 17, 2014).

As we previously reported, in Jones v. ConAgra Foods, Inc., the district court denied certification of putative classes alleging that ConAgra deceptively labeled its Hunt's tomato products, PAM cooking spray products, and Swiss Miss hot cocoa products with various "natural" claims (e.g., "100% natural", "natural source of antioxidants") that were not supported by the actual product ingredients. The court found that the class failed the ascertainability requirement because its members could not be identified through objective evidence, such as receipts. The court found several other class requirements lacking, noting superiority problems and issues with the damages model.

In Brazil v. Dole Packaged Foods, the plaintiff alleged that several of Dole's product labels were false and misleading because of "All Natural" statements including on the product packaging. The district court decertified the damages class in Dole finding that the damages model (a regression analysis) failed to control for variables affecting price.

The court in Hain found that the issues relating to class certification and damages in Jones and Brazil will apply to its decision and therefore stayed the case until the Ninth Circuit issues rulings in those matters. As of November 20, 2015, these appeals are fully briefed, but oral argument has not been scheduled.

The Hain matter is one of a growing list of cases in the Northern District of California that is stayed pending the outcome of Jones and Brazil. The Ninth Circuit's decisions will undoubtedly have a substantial impact on false labeling class actions going forward. Naturally, we will continue to cover these developments as they unfold.

Staying Natural: Hain Label Dispute Must Wait for Ninth Circuit Decisions

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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