Proskauer on Advertising Law
Proskauer on Advertising Law

Organic Baby Food for Thought: Second Circuit Holds that OFPA Certified Organic Product Labels Cannot Be Challenged as Misleading Under State Law

The Second Circuit recently affirmed the dismissal of a class action asserting state law claims that a manufacturer falsely advertised its baby formula as organic.  In doing so, the appellate court agreed with the district court’s finding that the claims were preempted by a federal law called the Organic Foods Production Act (“OFPA”).  Marentette v. Abbott Labs., 886 F.3d 112 (2d Cir. 2018).

A group of parents who purchased baby formula sued Abbott under state law for allegedly marketing its baby formula as organic even though it supposedly did not qualify as such under state law as plaintiffs construed it.  However, the OFPA has its own process for determining whether products can be labeled as organic, and the baby product at issue had already been certified as organic pursuant to the OFPA’s statutory scheme.  Thus, the district court found plaintiffs’ claims to be preempted.

In affirming the district court’s ruling that plaintiffs’ state law claims “posed an obstacle to Congress’s objectives in enacting the OFPA,” the Second Circuit elaborated that there was simply no way to rule in plaintiffs’ favor without contradicting the certification decision by an accredited certifying agent acting pursuant to the OFPA’s terms.  Thus, the Second Circuit found a direct conflict between plaintiffs’ construction of state law and the structure and purpose of the OFPA.

The Second Circuit noted that an OFPA-compliant certification of a product as organic does not automatically preclude all false advertising lawsuits addressing an advertiser’s touting its product as organic.  Citing a decision by the Eighth Circuit, the Court of Appeals acknowledged that a suit claiming that an advertiser materially misrepresented to the accredited certifying agent the facts related to the ingredients and/or manufacturing process that led to the agent’s certification of a product as organic would not be preempted by the OFPA.  However, where as here, a plaintiff’s state law claim is premised on a different determination of what is “organic” than the OFPA provides, the state law claim is preempted.

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Want to talk advertising? We welcome your questions, ideas, and thoughts on our posts. Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

Ninth Circuit Finds Grounds to Dismiss Iced Coffee False Advertising Suit

Recently, the Ninth Circuit affirmed a district court’s dismissal of a putative class action claiming that Starbucks deceived its customers by under-filling the liquids in its iced drinks and adding ice to make the cups appear full. Forouzesh v. Starbucks Corp. The Ninth Circuit held that “no reasonable consumer would think (for example) that a 12-ounce ‘iced’ drink, such as iced coffee or iced tea, contains 12 ounces of coffee or tea and no ice.” Continue Reading

Snack Bar Class Action is KIND-ly Stayed Pending USDA Regulation on Bioengineered Food

Earlier this month, Judge William H. Pauley III in the Southern District of New York stayed a lawsuit against the snack bar maker KIND LLC, styled as a class action, alleging that KIND falsely marketed its products as “all natural” and “non-GMO.”  In re KIND LLC “Healthy & All Natural” Litigation, 2018 WL 1156009 (S.D.N.Y. Mar. 2, 2018).  The case, which has unfolded against a backdrop of increasing regulatory activity by the USDA, will remain on hold pending the USDA’s establishment of a national disclosure standard for bioengineered food.  The disclosure standard is due to be released by July 29, 2018.

The lawsuit began in 2015, with Plaintiffs’ original complaint claiming that KIND deceptively marketed certain products as “healthy,” “all natural,” and “non-GMO” in violation of New York and other state laws.  After Plaintiffs voluntarily dismissed their “healthy” claims, Judge Pauley in 2016 stayed litigation of Plaintiffs’ challenge to KIND’s “all natural” advertising in light of ongoing FDA rulemaking regarding the use of “natural” labeling.  Judge Pauley also dismissed without prejudice Plaintiff’s challenge to KIND’s “non-GMO” advertising claim as insufficiently pled, prompting Plaintiffs to file an amended complaint that re-alleged its arguments as to why the stayed “natural” advertising claim was false and sought to cure the deficiencies of its challenge to KIND’s “non-GMO” advertising.

KIND moved to dismiss the amended complaint, arguing that Plaintiffs’ challenge to KIND’s “non-GMO” statement was preempted by the USDA’s statutory mandate to formulate a national disclosure standard pertaining to bioengineered food.  However, the court found that the only agency-level guidance on the issue corroborated the view that food manufacturers may voluntarily label their foods as non-GMO “as long as such information is truthful and not misleading.”  Since Plaintiffs merely sought remedies under state laws against untrue and misleading representations, the court held Plaintiffs’ claims were not preempted.

The court did, however, grant KIND’s motion in the alternative to stay Plaintiffs’ challenge to the “non-GMO” advertising claim pending the USDA’s establishment of the disclosure standard.  The court reasoned that the danger of a ruling inconsistent with the eventual guidelines was substantial, since the guidelines might explain whether ingredients from genetically modified crops could be considered “non-GMO.”  The risk of delay, on the other hand, was minimized by the fact that the USDA standard must be released by July 29.

In addition, the court denied Plaintiffs’ motion to immediately lift the stay on their challenge to KIND’s “all natural” advertising statement.  Plaintiffs argued that FDA rulemaking on the subject had stalled, with no apparent activity since the close of the notice and comment period in May 2016.  The court acknowledged the “glacial pace” and uncertain timeline of agency action, but to avoid piecemeal litigation, it continued the stay on the challenge to the “all natural” advertising claim so it could be litigated simultaneously with the “non-GMO” challenge.

Watch this space for further developments.

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Want to talk advertising?  We welcome your questions, ideas, and thoughts on our posts.  Email or call us at lweinstein@proskauer.com /212-969-3240 or akaplan@proskauer.com /212-969-3671.  We are editors of Proskauer on Advertising Law and partners in Proskauer’s False Advertising & Trademark practice.

No Meat on the Bones: Proposed Vegetarian Class Action against Buffalo Wild Wings Failed to Plead Actual Injury

Recently, a federal district court judge in the Southern District of New York dismissed claims asserted under New York General Business Law § 349 on behalf of a putative class of vegetarian customers of Buffalo Wild Wings. The court’s decision found that although the plaintiff had standing to bring her claims, her allegations did not point to an “actual injury” sufficient to state a claim under section 349. Plaintiff has appealed. Continue Reading

No More Baby Talk: Class Certification Denied in Gerber False Advertising Suit

The Northern District of California recently denied class certification to a plaintiff who alleged that Gerber Products misbranded nutritional claims about baby food products in violation of state and federal labeling laws.  Bruton v. Gerber Products Co. et al.  The plaintiff had previously moved to certify a damages and an injunctive relief class in 2014.  However, the court found that neither proposed class was ascertainable and denied class certification.  In July 2017, the Ninth Circuit reversed and remanded.  On remand, Judge Lucy Koh found that (i) plaintiff lacked Article III standing to assert a claim for injunctive relief and (ii) plaintiff’s proposed damages theories failed to satisfy Rule 23(b)(3)’s predominance requirement. Continue Reading

Class Certification Denied in Juice Dispute

Recently, a New Jersey federal district court judge refused to certify a class of consumers claiming an orange juice product was mislabeled as “pasteurized.”  In re: Tropicana Orange Juice Marketing and Sales Practices Litigation. According to plaintiffs, Tropicana’s “Pure Premium” orange juice contained added natural flavoring in violation of FDA pasteurization standards.  The court denied the class certification motion because plaintiffs failed to prove that common issues predominated under Rule 23(b)(3) of the Federal Rules of Civil Procedure.  Since multiple named plaintiffs testified that they did not even see the word “pasteurized” on the product label, much less rely on it, class certification was put out to pasture. Continue Reading

New York Federal Court Latest to Dismiss Outlet Pricing Class Action

Last month, Judge Valerie Caproni of the Southern District of New York dismissed with prejudice a putative deceptive pricing class action filed against Burberry.  This is the first decision within the Second Circuit to determine whether shoppers claiming to have been victimized by discount price advertising in outlet stores have suffered actual injury for purposes of Article III standing.

During the past few years, there has been a virtual explosion of consumer class action lawsuits asserting claims against retailers for allegedly fraudulent outlet store price discount advertising.  The crux of these claims is that the retailer, through the use of “Was,” “MSRP,” “Compare at” or similar terms on price tags or in store signage, usually at outlet stores, has misled shoppers into believing they are getting a bargain, when they are not.  The lawsuits generally do not claim the items purchased were not worth the price paid for them. Continue Reading

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