• Sheehan & Associates, one of the most active Plaintiff’s firms in the food litigation space, has continued its pattern of filing aggressive lawsuits based on consumer deception claims that are untethered to any violation of FDA’s food labeling regulations. The firm, on behalf of proposed classes of consumers, alleged in a pair of complaints filed last month that consumers would not expect a “butter cracker” or a pudding “made with real milk” to contain vegetable oils.
  • One of the lawsuits, filed against Pepperidge Farm, Inc., alleges that “Golden Butter” crackers are misleadingly named because they contain vegetable oils (canola, sunflower, and/or soybean) when consumers would expect that a butter product is “all or predominantly made with butter.” The complaint discounts the possibility that a consumer would instead interpret a “butter cracker” to mean a “cracker made with butter,” but provides no evidence in support of this assertion. Further, it blithely claims (or at least strongly suggests) without support that consumers prefer butter to vegetable oils because butter is rich in nutrients like calcium, and Vitamin A and D, while vegetable oils are “highly processed artificial substitutes” and may contain trans-fat. We note that the “Golden Butter” crackers do not in fact contain trans-fat and that vegetable oils are generally considered to be healthier alternatives to butter, which is high in saturated fat. See e.g. USDA Dietary Guidelines 2020-25 at 102 (“Cooking with oils higher in polyunsaturated and monounsaturated fat (e.g., canola, corn, olive, peanut, safflower, soybean, and sunflower) instead of butter also can reduce intakes of saturated fat.”)
  • The second of the lawsuits was filed against Conagra Brands, Inc. and alleges that “Snack Pack Pudding Chocolate Fudge,” which is represented as “made with real milk,” is deceptively labeled because it contains nonfat milk and palm oil, which allegedly substitutes for the milk fat in whole milk. Plaintiff asserts that consumers will interpret “real milk” to mean “whole milk” in the “context of a pudding.” In support of this, Plaintiff offers only that whole milk makes pudding “thicker and taste better,” at least according to Cook’s Illustrated, although one wonders if Plaintiff is suggesting that the reasonable consumer standard is one that requires expertise in the making of pudding. Additionally, Plaintiff dismisses the “made with nonfat milk” disclosure that accompanies the “made with real milk” representation because it is allegedly too small for consumers to appreciate.
  • Without any allegation of a violation of FDA’s labeling guidelines or any other evidence suggesting that consumers would be deceived by the addition of oils, it appears unlikely that the complaints have pled enough to survive a motion to dismiss. However, Keller and Heckman will continue to monitor and report on these cases and other food class-action lawsuits.

Proposed New Regulatory Framework for Supplemented Foods in Canada

  • Prepackaged foods marketed in Canada as providing specific physiological or health effects, based on containing one or more added supplemental ingredients, e.g., vitamins, minerals, amino acids, caffeine, and herbal ingredients, are called “supplemented foods.”  Supplemented foods, including beverages with added minerals, caffeinated energy drinks, and snack bars with added vitamins, differ from fortified foods in that fortification involves adding nutrients like vitamin D for an established public health purpose (e.g., preventing rickets in children).  As Canada’s Food and Drug Regulations (FDR) currently have no specific provisions for supplemented foods, Health Canada, beginning in 2012, has issued temporary marketing authorization (TMA) letters for supplemented foods following case-by-case safety assessments.  TMA holders are required to generate and submit information on their products.
  • On June 25, 2021, Health Canada announced the pending publication of proposed amendments to the FDR that would create a regulatory framework for supplemented foods that resembles a similar approach used in New Zealand.  A supplemental ingredient included in a newly created List of Permitted Supplemental Ingredients would be exempt from the prohibition under Canada’s Food and Drugs Act (FDA) on the sale of food that contains poisonous or harmful substances or that are adulterated, provided the supplemental ingredient is added according to the conditions set out in a new List of Permitted Supplemented Food Categories, including the use of a cautionary statement on the label of the product in some cases.  When a supplemented food is required to be labelled with a list of cautionary statements, the proposed regulations would also require the product to carry a supplemented food caution identifier (SFCI) on the label.  The new regulatory framework for supplemented foods would eliminate the reporting requirements that are currently required under the TMA process.  Other proposed amendments to the FDR include:
    • A submission process for requesting changes to the List of Permitted Supplemented Food Categories or the List of Permitted Supplemental Ingredients;
    • A Supplemented Food Facts table (SFFt) that would replace the Nutrition Facts table (NFt) on the label of prepackaged products;
    • New provisions allowing the use of supplemental ingredients in standardized foods under the proscribed conditions of use when the standard would not otherwise permit such use;
    • Clarification that when a supplemented food is used as an ingredient in the manufacturing of another supplemented food, the supplemental ingredient in the first food is also a supplemental ingredient in the second food and subject to the same conditions of use in the List of Permitted Supplemental Ingredients;
    • A prohibition on the sale of a prepackaged product containing an assortment of supplemented foods and regular foods of the same type;
    • An exclusion of certain food categories from ever being supplemented foods due to the higher level of risk associated with them, or because they are subject to other regulatory provisions in the FDR;
    • Different or additional labelling requirements in some cases to help consumers distinguish supplemented foods from regular food, better understand their associated risks, and make more informed decisions related to consuming these supplemented foods; and
    • Controversial proposed restrictions on representations for supplemental ingredients that trigger cautionary statements which could potentially limit industry’s ability to communicate the intended benefit of the supplemental ingredient being added to a product and the physiological function it provides to consumers.
  • Existing supplemented foods on the market with TMAs would be provided a transition period of 3 years to come into compliance with the proposed regulations once they come into force.  Additionally, Health Canada would continue to accept TMA applications up until the coming into force date of the new regulations and would continue to process these applications following the coming into force date.  Comments on the proposed new regulations for supplemented food are due by August 25, 2021.

 

  • The Access to Nutrition Initiative released their 2021 Breast-Milk Substitutes and Complementary Foods Marketing Index, updating industry on their assessment of major baby food companies’ compliance with the International Code of Marketing of Breast-milk Substitutes.
  • The report notes that compliance with the Code has improved in recent years but suggests that marketers of infant formulas still fall well short of global health policy standards.  Using the Initiative’s scoring system that evaluates company policies, internal systems, and marketing practices, the report concludes that while one company has a compliance score of 68%, most others are below 50% compliant with the Code. According to the report, some companies’ inconsistent implementation in different product lines and in different countries compounded with inconsistent government policies across countries creates a major gap that it suggests should be addressed to improve breastfeeding rates worldwide.
  • By way of background, the World Health Organization (WHO) developed the International Code of Marketing of Breast-milk Substitutes for member countries to recommend reviews of sales promotion activities on baby foods and introduce restrictions on accompanying marketing claims through advertising regulation where necessary. In particular, the initiative seeks to restrict claims made by infant formula manufacturers that promote formula as a better or healthier alternative to breastfeeding. In the U.S., while FDA closely regulates infant formula (and has issued guidance on labeling and structure/function claims for formula), it has not implemented any regulations suggested in the Code.
  • Prairie Wolf Spirits announced on June 21, 2021, that it is recalling all lots of Prairie Wolf Distillery hand sanitizer in two sizes (16.9 ounce and 20 ounce) due to their resemblance to consumer level water bottles.
  • The company’s announcement states that the product’s intended use is for topical use but that the product’s likeness to water bottles poses a risk of ingestion.
  • The recalled hand sanitizer products were distributed to selected customers and consumers nationwide via the manufacturer’s website, limited retail sales, and corporate donations.
  • The recall does not affect other Prairie Wolf Spirits hand sanitizer products, and as of publishing, Prairie Wolf Spirits has not received any reports of adverse reactions related to this recall.
  • Prairie Wolf Spirits, Inc. is an Oklahoma-based craft spirit distillery that produces a range of spirits, including vodka and gin, that use similar branding to their line of hand sanitizer.
  • On July 1, the California State Senate will hold a hearing on Assembly Bill (AB) 535, which establishes guidelines on when the olive oil industry can use the term “California” on product labeling and marketing. The bill would prohibit any reference to California or any other representation on the principal display panel (PDP) of any container of olive oil, including the terms “California olive oil,” “California olives,” or similar-type phrases, unless 100% of the olives used to produce the oil were actually grown in California.
  • AB 535 would also prohibit labeling a container of olive oil with claims or representations that the olives were grown in a specific region of California, unless 85% of the olive oil, by weight, was produced from olives grown in that specific region.
  • The bill was introduced on February 10, 2021 by CA Assemblymember Cecilia M. Aguiar-Curry, and is a reintroduction bill of last year’s AB 2074 which was tabled in order to prioritize COVID-19 emergency-related legislation. AB 535 passed the Assembly on May 17, 2021 and ordered to the Senate. A Senate hearing was originally scheduled for June 17, but was postponed until July 1.
  • In a press release, Assemblymember Aguiar-Curry stated that the bill “protects Californian olive growers and manufacturers from being undercut in the market by oils that benefit from using the ‘California’ name to mislead consumers about what they’re buying.” However, Michael Fox, CEO of California Olive Ranch, believes AB 535 is an attempt to go after the company’s “Global Blend” extra virgin olive oil series, which is sold under the California Olive Branch brand but combines extra virgin olive oils from California and other growing regions in South America and Europe. Michael Fox stated that “[a]s it is currently written, AB 535 criminalizes the selling of olive oil with truthful and accurate brand names containing geographical terms and establishes a concerning precedent for regulating businesses with geographic names and trademarks in other food and agriculture industries.”
  • Keller and Heckman will continue to monitor the progress of AB 535 and provide updates to our readers.
  • On June 10, 2021, a class-action lawsuit was filed against Inventure Foods, Inc., which manufactures and sells its “Onion Ring Snacks” under the TGI Fridays brand name, for allegedly deceiving consumers by advertising the snacks as onion rings when they contain only de minimis amounts of real onion.
  • The complaint alleges that the product (as disclosed by the ingredient list) primarily consists of corn meal and contains onion only in the form of trace amounts of onion powder (onion powder is the third-most predominant ingredient). Interestingly, the complaint does not allege a violation of FDA’s food labeling regulations. Instead, the complaint acknowledges that the product is labeled as “naturally and artificially flavored,” but alleges that the disclosure on the front package is too small to be easily seen by consumers and, in any case, “fails to tell consumers the Product substitutes onion powder for real onions.”
  • The lawsuit is another in a string of recent lawsuits filed by Sheehan & Associates, P.C., which claim consumers are deceived by the labeling of products whose flavors are largely derived from ingredients other than the ingredient in question (e.g., onion), even in the absence of a clear FDA labeling violation (see also Kashi Strawberry bar and Tostito lawsuits).  Although compliance with FDA’s labeling regulations does not foreclose the possibility that a court could find a reasonable consumer has been deceived, it should in theory present a more difficult case for the plaintiff. Keller and Heckman will continue to monitor and report on these cases.
  •  On June 14, 2021, the U.S. District Court for the Northern District of California dismissed without prejudice (subscription to Law360 required) the first amended complaint in a consumer class action lawsuit against Trader Joe’s over the claim ‘Vanilla Flavored With Other Natural Flavors’ on the product label of the grocery chain’s Vanilla Almond Clusters cereal that the plaintiff alleged derived most of its vanilla flavor from vanillin and ethyl vanillin rather than vanilla bean.
  • The Court decided in favor of Trader Joe’s on the key issues that (1) Plaintiff’s state law claims are preempted because the label complies with the Food and Drug Administration’s (FDA) regulations defining when flavors can be described as “natural” and when they must be labeled “artificial,” and (2) Plaintiff has not plausibly alleged that a reasonable consumer would likely be misled by their labeling because no facts were alleged to support that a reasonable consumer could interpret the cereal’s label to mean that the flavor is derived exclusively from the vanilla plant.  In keeping with the decisions in numerous other cases, the Court found that use of “Vanilla Flavored” alone does not require a product so-labeled to be flavored exclusively with vanilla and with respect to “With Other Natural Flavors,” specifically found that vanillin is not automatically considered an artificial flavoring under FDA’s regulations as it may be either artificial or natural, depending upon its derivation.  With respect to ethyl vanillin, which the Plaintiff alleged was detected in the cereal at a concentration of 6.53 parts per billion by gas chromatography-mass spectrometry analysis, the Court objected to the lack of a control condition in the testing and the absence of information on whether “such an infinitesimal amount is material or significant.”  Thus, finding that the first amended complaint, as drafted, does not plausibly allege that a reasonable consumer would be deceived by the product label representations, the Court ruled that the Plaintiff’s statutory claims fail as a matter of law.
  • We have reported on a variety of vanilla flavoring class action lawsuits, many of which have not survived the motion to dismiss stage.  The Court in this case did not speak to the claim by Trader Joe’s in its January 19, 2021 motion to dismiss (subscription to Law360 required) that this vanilla flavoring lawsuit is one of 110 filed by the plaintiff’s counsel, Spencer Sheehan, in 18 months.  A second amended complaint may be filed within 20 days of the order.

 

  • Designed By Nature announced June 14, 2021 that it is recalling its Goat’s Milk Powder, Cow’s Milk Powder, and Base Milk Powder formulas with an expiration date between May 1, 2021 and June 11, 2022 because they are deficient in several nutrients required for infant formula.  Furthermore, the products were not tested for the presence of Cronobacter.
  • The current product label indicates the product was “developed for all life stages.”  However, the company will be changing its labeling to make clear that the products are not intended to be used for infants 12 months and younger.
  • Products marketed as infant formula must meet certain minimum nutrient requirements, and manufacturers must notify FDA prior to marketing a new formula.  According to the recall notice, Designed by Nature’s formulas were not approved by FDA.
  • On June 8, 2021, Beech-Nut Nutrition Company issued a voluntary recall for one lot of its Beech-Nut Stage 1, Single Grain Rice Cereal (“Cereal”). The rice flour used for the Cereal was tested and confirmed as being below the FDA guidance level, set at a 100 ppb or 100 µg/kg, for inorganic arsenic. However, a routine sampling program by Alaska found that Cereal samples tested above the guidance level for naturally occurring inorganic arsenic set by the FDA in August 2020.
  • As some of our readers may remember, Beech-Nut was named in a congressional report by the U.S. House of Representatives subcommittee on Economic and Consumer Policy with relation to the levels of heavy metals—including arsenic, lead, cadmium, and mercury—found in baby foods. Since that report, Beech-Nut has been involved in two class-action lawsuits for allegedly misrepresenting Beech-Nut baby foods are “real food for babies” and failing to disclose the presence of dangerous levels of heavy metals. Most recently in April 2021, the DC Attorney General filed a lawsuit against Beech-Nut for “misleading parent-consumers about the health and safety of its products.” The New York Attorney General similarly announced an investigation into arsenic levels in infant rice cereal products and the advertising and promotion of such products.
  • In addition to voluntarily recalling the Cereal, Beech-Nut has decided to exit the market for infant rice cereal products, citing concern over the ability to consistently obtain rice flour well-below the FDA guidance level and Beech-Nut specifications for naturally occurring inorganic arsenic.
  • We have previously reported on proposed Senate legislation that would require country of origin labeling (COOL) for imported commodities sold online. On June 8, 2021, the Senate passed the United States Innovation and Competition Act of 2021 which included the proposed COOL requirements in Section 2510 of the Act.
  • The Act as passed by the Senate is virtually unchanged from the proposed legislation that we reported on. As a recap, the legislation would require that a wide variety of imported commodities sold online be accompanied by the following disclosures on the website “in a conspicuous place”:
    • The country of origin of the product, consistent with U.S. Customs and Borders Protection (CBP) marking requirements; and
    • The country of origin in which the seller is located (and, if applicable, the location of any parent corporation)
    • Further, the online disclosures for certain categories of goods already subject to existing specialized COOL requirements would also be required to comply with these existing requirements. Importantly, products covered by USDA’s Agricultural Marketing Service (AMS) COOL would have to comply AMS’s COOL requirements in the online disclosure.
  • The legislation would be enforced by the Federal Trade Commission (FTC), but would require that FTC and CBP sign a memorandum of understanding to provide for consistent implementation of the legislation. Having passed the Senate, the legislation now will move to the House of Representatives for consideration. We will continue to monitor and report on any developments.