FDA Issues Further Nanotechnology Guidance

Late last month, the U.S. Food and Drug Administration issued one draft and three final guidance documents related to the use of nanotechnology in regulated products.

One final guidance addresses the agency’s overall approach for all products that it regulates, while the two additional final guidances and the new draft guidance provide specific guidance for the areas of foods, cosmetics and food for animals, respectively.

Readers may know from our earlier posts (and here and here) that nanotechnology is an emerging technology that allows scientists to create, explore and manipulate materials on a scale measured in nanometers—particles so small that they cannot be seen with a regular microscope. The technology has a broad range of potential applications, such as improving the packaging of food and altering the look and feel of cosmetics.

The three final guidance documents reflect the FDA’s current thinking on these issues after taking into account public comment received on the corresponding draft guidance documents previously issued (draft agency guidance in 2011; and draft cosmetics and foods guidances in 2012).

The FDA  continues to favor an approach to consider the specific characteristics of individual products. All four guidance documents encourage manufacturers to consult with the agency before taking their products to market. Consultations with the FDA early in the product development process may help to facilitate a mutual understanding about specific scientific and regulatory issues relevant to the nanotechnology product, and help address questions related to safety, effectiveness, public health impact and/or regulatory status of the product.

The guidance documents are:

Final Guidance for Industry: Considering Whether an FDA-Regulated Product Involves the Application of Nanotechnology

This guidance outlines overarching considerations for all FDA-regulated products, identifying points to consider when determining whether a product involves the use of nanotechnology. It is intended to help industry and others identify when they should consider potential implications for regulatory status, safety, effectiveness or public health impact that may arise with the application of nanotechnology in FDA-regulated products.

Final Guidance for Industry: Safety of Nanomaterials in Cosmetics

This guidance describes the FDA’s current thinking on the safety assessment of nanomaterials when used in cosmetic products and encourages manufacturers to consult with the FDA on test methods and data needed to support the substantiation of a product’s safety.

Final Guidance for Industry: Assessing the Effects of Significant Manufacturing Process Changes, Including Emerging Technologies, on the Safety and Regulatory Status of Food Ingredients and Food Contact Substances, Including Food Ingredients that are Color Additives

This guidance alerts manufacturers to the potential impact of any significant manufacturing process change, including changes involving nanotechnology, on the safety and regulatory status of food substances. This guidance also describes considerations for determining whether a significant manufacturing process change for a food substance already in the market affects the identity, safety, or regulatory status of the food substance, potentially warranting a regulatory submission to the FDA.

Draft Guidance for Industry: Use of Nanomaterials in Food for Animals

This draft guidance addresses issues related to the use of nanotechnology in food ingredients intended for use in food for animals. Public comments on this draft guidance are requested by September 10, 2014.

The FDA said it will continue to pursue ongoing scientific research and regulatory efforts and will consider new studies and data, as they become available, to determine any future actions. 

Yet Another Artificial "Natural" Class Action Shot Down in the Food Court

A federal court has found numerous issues precluding class certification of three proposed class actions challenging the labels of defendant's food products.  See Jones  v. ConAgra Foods, Inc., No. 12-01633 (N.D. Cal. 6/13/14).

This was a putative consumer class action about allegedly deceptive and misleading labels on three types of food products. The court acknowledged that the Northern District has seen a flood of such cases in recent years.  Plaintiffs have challenged, with limited degrees of success, marketing claims on everything from iced tea to nutrition bars. Plaintiffs here moved to certify three separate classes under Federal Rule of Civil Procedure 23(b)(2) and 23(b)(3)–one for each type of food product at issue. The complaint, as is typical, alleged (1) unlawful, unfair, and fraudulent business acts and practices in violation of California Business and Professions Code section 17200 (“UCL”), (2) misleading, deceptive, and untrue advertising in violation of California Business and Professions Code section 17500 (“FAL”), (3) violations of the Consumers Legal Remedies Act (“CLRA”), and (4) restitution based on unjust enrichment.  Also, as typical, the claims centered on marketing about "natural" - "100% Natural" and a "natural source" of antioxidants. 

Lengthy and comprehensive opinion. Let's focus on just some of the key arguments. Although there is no explicit ascertainability requirement in Rule 23, courts have routinely required plaintiffs to demonstrate ascertainability as part of Rule 23(a). See, e.g., Astiana v. Ben & Jerry’s Homemade, Inc., 2014 WL 60097, at *1 (N.D. Cal. Jan. 7, 2014) (“apart from the explicit requirements of Rule 23, the party seeking class certification must also demonstrate that an identifiable and ascertainable class exists.”). A class is not ascertainable unless membership can be established by means of objective, verifiable criteria. See Xavier v. Philip Morris USA, Inc., 787 F. Supp. 2d 1075, 1088-90 (N.D. Cal. 2011).  Without an objective, reliable way to ascertain class membership, the class quickly would become unmanageable, and the preclusive effect of final judgment would be easy to evade.  Id. at 1089.  While there are a few outliers, multiple courts have concluded that the ascertainability requirement cannot be met in the context of low-cost consumer purchases that customers would have no reliable way of remembering. See, e.g., In re POM Wonderful LLC, 2014 WL 1225184, at *6 (C.D. Cal. Mar. 25, 2014) (unascertainable because “[f]ew, if any, consumers are likely to have retained receipts during the class period” and “there is no way to reliably determine who purchased Defendant’s [juice] products or when they did so.”); Red v. Kraft Foods, Inc., 2012 WL 8019257, at *5 (C.D. Cal. Apr. 12, 2012) (finding unascertainable a proposed class of purchasers of various cracker and cookie products marketed as healthy despite including partially hydrogenated vegetable oil and other unhealthy ingredients); Hodes v. Van’s Int’l Foods, 2009 WL 2424214, at *4 (C.D. Cal. July 23, 2009).

Even assuming that all proposed class members would be honest, the court found it hard to imagine that they would be able to remember which particular products they purchased from 2008 to the present, and whether those products bore the challenged label statements. As defendant pointed out with the Hunt's class, there were “literally dozens of varieties with different can sizes, ingredients, and labeling over time” and “some Hunt’s cans included the challenged language, while others included no such language at all.”  The court also noted a concern that the defendant would be forced to accept class members estimates without the benefit of cross-examination; this was not a case in which the consumers were likely to have retained receipts or where the defendant would have access to a master list of consumers.

Second, there was a standing issue. California courts require plaintiffs who are seeking injunctive relief under these claims -- a change in defendant's sales practices -- to express an intent to purchase the products in the future. See, e.g., Rahman v. Mott’s LLP, 2014 WL 325241, at *10 (N.D. Cal. Jan. 29, 2014) (“to establish standing [for injunctive relief], plaintiff must allege that he intends to purchase the products at issue in the future”); Jou v. Kimberly-Clark Inc., No. 13-3075, 2013 WL 6491158, at *4 (N.D. Cal. Dec. 10, 2013) (“[b]ecause Plaintiffs fail to identify any allegation in their
Complaint that suggests that they maintain an interest in purchasing the diapers or wipes, or
both, in the future, Plaintiffs have not sufficiently alleged standing to pursue injunctive relief").

Here, plaintiffs could point to no evidence that the class reps intended to buy the specific products again. Some still had leftover product and had not used them at all since the litigation was filed. Without any evidence that plaintiffs planned to buy such products in the future, they did not have standing to bring an injunctive class. 

Turning to the damages classes, the court found additional problems. Here, there was a lack of cohesion among the class members, both because consumers were exposed to label statements that varied by can size, variety, and time period (and the challenged ingredients also differed), but more importantly because even if the challenged statements were facially uniform, consumers’
understanding of those representations would not be. Plaintiff's' expert did not explain how the challenged statements, together or alone, were a factor in any consumer’s purchasing decisions. She did not survey any customers to assess whether the challenged statements were in fact material to their purchases, as opposed to, or in addition to, price, promotions, retail positioning, taste, texture, or brand recognition. The expert acknowledged in her deposition that some
customers have never noted the “natural claim,” some have never looked at the ingredients list, some would buy a product regardless of whether the product says “natural,” and some do not care about labeling statements.

This rather startling admission might have something to do with the fact that there is no single, controlling definition of the word “natural.” See Pelayo v. Nestle USA, Inc., 2013 WL 5764644, at *4-5 (C.D. Cal. 2013) (discussing lack of a common understanding of the term “all natural” that is shared by reasonable consumers). It is undisputed that the FDA has not defined the word “natural.” See Lockwood v. ConAgra Foods, Inc., 597 F. Supp. 2d 1028, 1034 (N.D. Cal. 2009). Moreover, it was not clear that the challenged ingredients here are not “natural.”

Here, there are numerous reasons why a customer might buy the products, such as Hunt’s tomatoes, and there was a lack of evidence demonstrating the impact of the challenged label statements. Accordingly, Plaintiffs lacked common proof of materiality.

Multiple courts have refused to certify classes where such individual purchasing inquiries predominated, and the court was not convinced that the common questions would predominate over the individual questions. Who purchased what, when during the relevant class period, which kind of products they purchased, how many they purchased, and whether the kinds they purchased contained the alleged false nutritional information. Whether this is viewed as a predominance question, an ascertainability question, or a manageability question, it was clear that the defendant had no way to determine who the purchasers of its products are, i.e., the identity of class members. And thus it was true that individualized purchasing inquiries will be required to determine how many and which kind of products each class member bought.

Finally, In Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1433-34 (2013), the Supreme Court
held that in order to satisfy the predominance inquiry, plaintiff must also present a model that
(1) identifies damages that stem from the defendant’s alleged wrongdoing and (2) is
“susceptible of measurement across the entire class.” 133 S.Ct. at 1433-34. “At class certification, plaintiff must present a likely method for determining class damages, though it is not necessary to show that his method will work with certainty at this time.” Chavez, 268 F.R.D. at 379.  Here plaintiffs' first theory called for return of the purchase price. That method did not account for the value class members received from the products, and so it was incorrect. The products were not
“economically worthless.”  In the alternative, plaintiffs proposed calculating damages via a benefit-of-the-bargain analysis.  But their expert failed to identify a comparator product in order to calculate the alleged percentage of overpayment.  

For a variety of good reasons, certification denied.

Ice Cream Class Action Melts

Happy New Year to all our readers. Let's start 2014 with a delicious class action decision, a Late night snack for our readers.

A California court recently rejected a proposed statewide class in a suit accusing Ben & Jerry's Homemade Inc. of falsely advertising ice cream products as “all-natural.”  See Astiana v. Ben & Jerry’s Homemade Inc., No. 4:10-cv-04387 (N.D. Cal., 1/7/14).  Yes, we are starting off the year right where we left off, another all natural complaint.

Readers probably know that with a $5 correspondence course from Penn State in making ice cream, two regular guys named Ben and Jerry opened their first ice cream scoop shop in Burlington, Vermont, in 1978. 

Here, plaintiffs claimed that both the packaging and the advertising for the Ben & Jerry's ice cream products were deceptive and misleading to the extent that the cocoa in some of them was allegedly alkalized with a "synthetic" agent. Plaintiff filed the complaint in this action in 2010, alleging six causes of action – "unlawful business practices" in violation of Business & Professions Code § 17200; "unfair business practices" in violation of § 17200; "fraudulent business practices" in violation of § 17200; false advertising, in violation of Business & Professions Code § 17500; restitution based on quasi-contract/unjust enrichment; and common law fraud.  Everything but the ...pretty typical in these kinds of label attacks.

The parties originally reached a tentative settlement, which fell apart because of cy pres problems and S'mores issues regarding settlement distribution procedures.

Eventually, plaintiffs moved for class certification. Before certifying a class, the trial court must conduct a rigorous analysis to determine whether the party seeking certification has met the prerequisites of Federal Rule of Civil Procedure 23. Mazza v. American Honda Motor Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012). The party seeking class certification must affirmatively demonstrate that the class meets the requirements of Rule 23. See Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011); see also Gen'l Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 156 (1982).  As a threshold matter, and apart from the explicit requirements of Rule 23, the party seeking class certification must also demonstrate that an identifiable and ascertainable class exists. Mazur v. eBay Inc., 257 F.R.D. 563, 567 (N.D. Cal. 2009).

The court here found that the motion must be denied, for two primary reasons – plaintiff had not established that the class was ascertainable, and she had not established that common issues predominated over individual issues.

While there is no explicit requirement concerning the class definition in Rule 23, courts have held that the class must be adequately defined and clearly ascertainable before a class action may proceed. See Xavier v. Philip Morris USA Inc., 787 F.Supp. 2d 1075, 1089 (N.D. Cal. 2011); Schwartz v. Upper Deck Co., 183 F.R.D. 672, 679-80 (S.D. Cal. 1999). A class definition need not be Berry, berry extraordinary, but should be precise, objective and presently ascertainable. See Rodriguez v. Gates, 2002 WL 1162675 at *8 (C.D. Cal. May 30, 2002). That is, the class definition must be sufficiently definite so that it is administratively feasible to determine whether a particular person is a class member. See Xavier, 787 F.Supp. 2d at 1089.

Defendant contended that because cocoa can be alkalized using one of several alkalis – some of which are "natural" and some of which are allegedly "non-natural" (i.e., "synthetic") – it would be necessary to determine which class members bought an ice cream containing alkalized cocoa processed with a synthetic ingredient.  However, there was no way to identify which class members bought which type of ice cream, particularly given that Ben & Jerry's is a wholesale manufacturer that does not maintain records identifying the ultimate customers or their purchases. What a cluster it would be.

The district court agreed with the defendant that the class was not sufficiently ascertainable. The class was defined as persons who bought Ben & Jerry's labeled "all natural" which contained alkalized cocoa processed with a synthetic ingredient. However, plaintiffs provided no evidence as to which ice cream contained the allegedly "synthetic ingredient" (assuming that alkali can even be considered an "ingredient"). More importantly, plaintiffs had not shown that a means exists for identifying the alkali in every class member's ice cream purchases. The packaging labels said only "processed with alkali," because that is all the FDA required.

A second basis for rejecting the class was the predominance requirement. This inquiry requires the weighing of the common questions in the case against the individualized questions, and the predominance analysis under Rule 23(b)(3) can be more stringent than the commonality requirement of Rule 23(a)(2).  Rule 23(b)(3) focuses on the relationship between the common and individual issues. The inquiry is rigorous as it tests whether proposed class is sufficiently cohesive to warrant adjudication by representation. See AmChem Prods., 521 U.S. at 623-24. 

Defendant asserted that reliance, materiality, and causation were all inherently individual; for example, its experts established that consumer choice is affected by many different factors, and plaintiff had no evidence to show that "all natural" has any uniform meaning or that it would have any major impact on a consumer's decision to purchase (or not to purchase) a particular brand of ice cream. Defendant also contended that the likelihood of confusion from the label must be "probable," not just "possible," and that studies showed that at most 3% of consumers who saw "all natural" on the packaging expected that the alkali used to process the cocoa was "natural."

Defendant similarly argued that the only way to test materiality and reliance would be to determine how much each consumer would have de-valued the ice cream products given the alleged presence of the "synthetic" alkalizing agent. However, this also could not be done on a class-wide basis, because consumer choice is affected by myriad factors. 

Most importantly, the damages claim was Half-baked, as the evidence showed that no one paid a premium for the "all natural" Ben & Jerry's ice cream, as Ben & Jerry's charges its wholesale customers the same price regardless of flavor and regardless of the contents of the label. When Ben & Jerry's changed its label and removed the "all natural" label from some ice cream packages, the prices did not decrease (neither the wholesale nor the retail prices);  so there was no support for plaintiff's speculation that "all natural" ice creams command a premium.

The Court agreed. Whichever way one approached it, plaintiff had not met her burden of showing that there was a class-wide method of awarding relief that was consistent with her theory of deceptive and fraudulent business practices, false advertising, or common law fraud (or the alternative theory of restitution based on quasi-contract). Plaintiff had not offered any expert testimony demonstrating that the market price of Ben & Jerry's ice cream with the "all natural" designation was higher than the market price of Ben & Jerry's without the "all natural" designation. More importantly, plaintiff had not offered sufficient expert testimony demonstrating a gap between the market price of Ben & Jerry's "all natural" ice cream and the price it purportedly should have sold for if it had not been labeled "all natural" – or evidence demonstrating that consumers would be willing to pay a premium for "all natural" ice cream that was made with cocoa alkalized with a "natural" alkali, and did in fact pay such a premium.

Under Comcast, the plaintiff is required to provide evidentiary proof showing a class-wide method of awarding relief that is consistent with plaintiff's theory of liability. See 133 S.Ct. at 1432. Here, however, plaintiff provided no such damages evidence, and the failure to offer a damages model that was capable of measurement across the entire class for purposes of Rule 23(b)(3) barred her effort to obtain certification of the class. 

Federal Court Rejects Consumer Class Action

 A California court recently rejected the class certification motion by a Chipotle Mexican Grill Inc. customer alleging the chain falsely advertised its meat as humanely raised and free of antibiotics and hormones. See Alan Hernandez v. Chipotle Mexican Grill Inc. et al., No. 2:12-cv-05543 (C.D. Cal. 2013). While the case was initially broader, plaintiff’s allegations came to center on the
representations allegedly made in Chipotle’s in-store menu signboards and Chipotle’s paper menus.

The court concluded that the proposed class action failed to satisfy the requirements of Rule 23(b)(3). Class certification under Rule 23(b)(3) is proper, inter alia, only when common questions present a significant portion of the case and can be resolved for all members of the class in a single adjudication. The predominance inquiry under Rule 23(b) tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623 (1997).  Rule 23(b)(3) also requires the court to find that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.

Here, the court found that common questions did not predominate over individual issues, and the class action device was not a fair and efficient way to provide a fair opportunity for class members to obtain relief, or for Chipotle to defend itself against claims. Many key issues could only be handled individually. Most fundamentally, the questions of when a class member ate at Chipotle,
the exact location where he or she ate, and which meat (if any) he or she ate are all not subject to class treatment.  Here, the dispute concerned a very low price transaction that neither the class members nor Chipotle maintained any specific record of, or could be expected to recall. 

More importantly, the alleged misconduct took place only with regard to certain products at varying locations within limited time frames. That was critical, because certain stores were allegedly serving certain conventional meats only at certain times because of shortages. Therefore, a class member would need to know with some certainty – and Chipotle should be allowed some mechanism for confirming or contesting that certainty – the date, location, and particular meat purchased. That kind of certainty in a class action that  encompasses purchases more than five years ago and, said the court, was not practical. Credit card records could provide some evidence of class members’ purchases, but credit card records would not provide the critical detail of which meat was purchased in any given transaction. 

Further, the important question of whether a class member saw a point-of-purchase sign when a particular purchase was made cannot be handled on a class-wide basis. For each purchase when naturally raised meat was allegedly not being served, the court observed there were at least four possibilities: (1) the sign was there and the class member saw it, (2) the sign was there and the class member did not see it due to Chipotle’s conduct, (3) the sign was there and the class member did not see it due to the class member’s negligence, and (4) the sign was not there. Many of the individual issues regarding liability were also reasons why the class action mechanism was not fair and efficient in this case.

In a burst of realism, the court was "confident" that very few people in a class would be able to provide the necessary information. People will either (1) lie, (2) attempt to present the facts but be unable to do so accurately, or, most likely, (3) not know.  This would even impact a theoretical future settlement.  Money would be given out basically at random to people who may or may not actually be entitled to restitution. This is unfair both to legitimate class members and to Chipotle.

The decision is the latest instance of an emerging trend in consumer class action cases: a recognition of the often insurmountable task of reliably identifying disparate members of a proposed class where few, if any members, have documentary proof of their purchases.  Here, it is treated as part of the predominance inquiry, and in other cases as part of ascertainability.

 

Energy Drink Case Subject to Primary Jurisdiction

We have posted before about the important doctrine of primary jurisdiction.  Last week, a defendant obtained dismissal of a proposed class action over its energy drinks under this theory. See Fisher v. Monster Beverage Corp., No. 12-2188 (C.D. Cal. 11/12/13).

Plaintiffs sued individually and as putative class representatives for  allegedly "unfair and deceptive business and trade practices on behalf of anyone who purchased for personal consumption any of the Monster-branded energy drinks sold under the Monster Rehab® brand name and the original Monster Energy®."  Plaintiffs alleged various misrepresentations on the labels of the Original Monster and Rehab Varieties cans, including language that the drink "quenches thirst, hydrates like a sports drink, and brings you back after a hard day's night", that it would "RE-FRESH, RE-HYDRATE, REVIVE," and is "the ideal combo of the right ingredients in the right proportion to deliver the big bad buzz that only Monster can."  Plaintiffs alleged these statements were  misrepresentations because the cans do not hydrate like a sports drink, and allegedly cause dehydration; because "it is not the ideal combo of the right ingredients in the right proportion" and because the statement omits the potential health risks associated with such drinks.  Plaintiffs also alleged claims related to Monster's advertising "strategy."  Plaintiffs alleged that Monster specifically "targets" youth despite the caffeine levels in Monster Drinks.

The court tackled a number of challenges, including standing, preemption (some claims were preempted by the Nutrition Labeling and Education Act), and the absence of particularity in many of the fraud allegations.  But our focus here is on primary jurisdiction.  The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency; it is most often invoked if a claim involves an issue of first impression or a particularly complicated issue Congress has committed to a regulatory agency.  The courts traditionally weigh four factors in deciding whether to apply the primary jurisdiction doctrine: (1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration.  The court determines that an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch.

Defendants argued that the FDA has jurisdiction over issues involving food safety and labeling, and the FDA has specialized expertise in the "technical and policy" questions involved here; the FDA has commenced a science-based evaluation of the safety of caffeine-containing food products, including energy drinks. They also argued that the FDA has primary jurisdiction because the agency has special competence over the matters involving the alleged inadequate warnings and failure to warn issues in this case.  The court agreed that the matters at issue here have been placed by Congress within the jurisdiction of the FDA pursuant to statute and regulations that require the FDA's expertise. The FDA has regulatory authority over food labeling. The FDCA establishes a uniform federal scheme of food regulation to ensure that food is labeled in a manner that does not mislead consumers. Second, plaintiffs' claims ultimately involve "technical and policy claims" about the effects of caffeine and whether Monster should be allowed to advertise and label their products in a way that appeals to a younger demographic. Plaintiffs cited to studies examining the effects of "energy drinks" in general, demonstrating that issues raised in the complaint may affect an entire industry. 

Third, the FDA has taken an interest in investigating and resolving whether energy drinks, including Monster, contain proper levels of caffeine. The FDA's interest in regulating the safety of caffeine weighed in favor of exercising the primary jurisdiction doctrine.  Thus, the Court found that plaintiffs' claims were covered under the Primary  Jurisdiction Doctrine.  

 

 

Class Action Rejected Per Primary Jurisdiction Defense

A California federal court recently rejected a putative class action alleging meal replacement bars sold in General Nutrition Centers Inc. stores somehow defrauded customers into thinking they were healthy because they were labeled with the term “zero impact.”  See Gabe Watkins v. Vital Pharmaceuticals, et al., No. 2:12-cv-09374 (C.D. Cal. 2013).  Readers may be interested in the discussion of primary jurisdiction.

On September 25, 2012, Plaintiff filed a Class Action Complaint in the Superior Court of California
for Los Angeles County. Plaintiff alleged that Defendants falsely labeled the Bars in violation of the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et seq., and the Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750, et seq.  Defendants removed the action to federal court, asserting federal subject matter jurisdiction in reliance on the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2).

Plaintiff asserted that while Vital and GNC marketed and advertised the Bars as 'ZERO IMPACT,' the Bars have an impact on consumers' carbohydrate, sugar and overall caloric intake, and to claim otherwise was "false and misleading."  However, the back of the wrapper features nutritional facts, an ingredient list, and a marketing statement, which notes that the low Dextrose Equivalent sugars contained in the Bars have less impact on blood sugar and glycemic index than most whole grain carbohydrates.  Plaintiff responded that the location and type size of the nutritional information and marketing statement allegedly made it too difficult to see and read.

Defendant moved to dismiss, arguing that the court should defer the question of whether the "ZERO IMPACT" label is misleading, to the Food and Drug Administration under the doctrine of primary jurisdiction.  Primary jurisdiction is a doctrine specifically applicable to claims properly cognizable in court that contain some issue within the special competence of an administrative agency.  Reiter v. Cooper, 507 U.S. 258, 268 (1993). While it is not to intended to secure expert advice for the courts from regulatory agencies every time a court is presented with an issue conceivably within the agency's ambit, it is a doctrine used by the courts to allocate initial decision-making responsibility between agencies and courts where such jurisdictional overlaps and potential for conflicts exist.  Syntek Semiconductor Co., Ltd. v. Microchip Tech. Inc., 307 F.3d 775, 780 (9th Cir. 2002). Typically, there are four factors present in cases where the doctrine properly is invoked: (1) the need to resolve an issue that (2) has been placed within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory scheme that (4) requires expertise or uniformity in administration. See United States v. Gen. Dynamics Corp., 828 F.2d 1356, 1362 (9th Cir. 1987). The doctrine is often most applicable where a claim requires resolution of an issue of first impression or of a particularly complicated issue that Congress has committed to a regulatory agency.

Here, the court concluded that the relevant factors weighed in favor of dismissing plaintiff's claims in deference to the FDA's primary jurisdiction.

Defendants contended that the FDA has primary jurisdiction over how a manufacturer may name
and label its food products and that the resolution of plaintiff's UCL and CLRA claims would clearly invade the FDA's primary jurisdiction. Indeed, Congress has granted the FDA regulatory authority over false and misleading food labeling as part of the Food, Drug, and Cosmetic Act. The primary jurisdiction doctrine was applicable in this case because the FDA has yet to consider the nutritional import of the claim "ZERO IMPACT" or in what context the claim might possibly mislead consumers about a product's nutritional content.

Plaintiff's claims centered on the argument that the nature of the marketing claim "ZERO IMPACT," combined with its location on the wrapper and larger type size, somehow created the impression that the Bars have no dietary impact at all.  But could not direct the court to any FDA rule, regulation, or guidance document discussing how the claim "ZERO IMPACT" or even the word "impact" can or should be used to describe a food product's nutritional content. Nor is there any evidence of the FDA bringing an enforcement action against anyone regarding the "ZERO IMPACT" claim or the nutrient content on its label.  Without any guidance about the context in which the FDA would find the claim "ZERO IMPACT" to be permissible, any determination on whether the term is misleading risked undermining, through private litigation, the FDA's considered judgments.

The FDA has issued some regulations with regard to the word "zero," but these are designed to
make sure that foods with claims like "zero calorie," "zero sodium," and "zero fat" contain the type
and amount of nutrients that a reasonable consumer would expect. See 21 C.F.R. §§ 101.60-101.62. Without more, however, there is no reasoned way for a court to determine whether the FDA regulations associated with labeling items as "zero calorie" and "zero fat" could encompass a claim like "ZERO IMPACT."   Calories, sugar, and fat are specific nutritional elements, but "impact" may refer to the effect those elements have on the human body.

In the absence of any FDA rules or regulations (or even informal policy statements) regarding the
use of the word 'impact' on food labels, the court declined to make any independent determination on whether defendant's use was false or misleading.  The court  concluded it lacked the FDA's expertise in guarding against deception in the context of food labeling.  See Pom Wonderful, 679 F.3d at 1178, and so it deferred this issue to the FDA to consider administrative action regarding the use of the "ZERO IMPACT" claim.

 

Consumer Fraud Class Claim Dismissed in Beverage Case

Readers have seen our warning about the trend in food and beverage claims attacking virtually every aspect of the product's label as a supposed consumer fraud act violation. A federal court earlier this month dismissed just such a proposed class action challenging the labeling on VitaRain Tropical Mango Vitamin Enhanced Water Beverage.  See Maple v. Costco Wholesale Corp., No. 12-5166 (E.D. Wash., 8/1/13).

Plaintiffs alleged in their amended complaint that one defendant manufactured and bottled a product known as VitaRain Vitamin Enhanced Water Beverage. VitaRain came in four flavors: Tropical Mango, Raspberry Green Tea, Kiwi Strawberry, and Dragonfruit. The product was marketed and distributed by another defendant and sold at Costco warehouses throughout the
country. Plaintiffs alleged that the VitaRain Tropical Mango drink in particular was marketed as a natural product but in fact contained “unnatural” ingredients, including large amounts of “synthetic caffeine.” Specifically, plaintiffs alleged that the VitaRain Tropical Mango drink (1) lacked a front-facing disclosure that the beverage contained caffeine; (2) failed to disclose the relative amount of caffeine in the beverage; and (3) falsely claimed that the beverage is a “natural tonic” and
contains “natural caffeine.” Plaintiffs further alleged they “reasonably believed that they [had] purchased a Drink similar to vitamin water.” 

On behalf of a putative class consisting of all Washington residents who purchased the product over the four years preceding the filing of the lawsuit, the named plaintiff asserted claims for (1) violations of the Washington Consumer Protection Act; (2) misrepresentation; and (3) negligence.

Defendant Costco moved to dismiss the amended complaint, contending, inter alia, that some
of plaintiff’s claims were preempted by federal law; and that parts of the amended complaint failed to meet the pleading standards of Rules 8 and 9(b) of the Federal Rules of Civil Procedure.

To withstand dismissal, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “Naked assertion[s],” “labels and conclusions,” or “formulaic recitation[s] of the elements of a cause of action will not do.” Id. at 555, 557.  A claim has facial plausibility only "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

First an interesting civil procedure issue. Ordinarily, when the district court considers matters outside the pleadings it must convert a motion to dismiss brought under Civil Rule 12(b)(6) into a Civil Rule 56 motion for summary judgment. Fed. R. Civ. P. 12(d). However, a court may consider certain materials without converting the motion to dismiss into a motion for summary judgment. See, e.g., United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Such materials include documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice.  A document may be incorporated by reference into a complaint where the
plaintiff refers extensively to the document or the document forms the basis of plaintiff’s claim. In such cases, the defendant may offer that document and the district court may treat the document as part of the complaint for the purposes of a motion to dismiss. Here, the court concluded that judicial notice of the product label was appropriate and that it could consider the labeling without converting Costco’s motion to dismiss into one for summary judgment.

Defendants argued that plaintiff’s claims were expressly preempted by the Federal Food Drug and Cosmetics Act (“FDCA”), as amended by the National Labeling and Education Act (“NLEA”), 21 U.S.C. § 301 et seq. The FDCA “comprehensively regulates food and beverage labeling.” Pom Wonderful LLC v. Coca-Cola Co., 679 F.3d 1170, 1175 (9th Cir. 2012).  And specifically, they govern whether and how a label must disclose the presence of caffeine.  Here, the Amended Complaint sought "to create and impose”  two new requirements which would directly conflict with federal law: (1) a requirement that caffeinated beverages disclose the fact that they contain caffeine on the front label; and (2) a requirement that labels state the “relative amount” of caffeine by providing a “daily value” amount.  By virtue of imposing these new and conflicting requirements, defendants contended, plaintiff’s claims were preempted.  The court agreed; defendants showed that these food labeling requirements are expressly covered by the regulations. Federal law preempts any state law that would impose additional requirements on how food labels present nutrition information.  See Turek v. Gen. Mills, Inc., 662 F.3d 423, 426 (7th Cir. 2011).  Specifically, the court held that federal law preempts plaintiff’s claims that (1) defendants were required to disclose that the drink contained caffeine on the front label of the drink and (2) that defendants were required to state the “relative amount” of caffeine in the drink. Therefore Costco’s motion to dismiss was granted as to these claims.

Next, defendants contended that plaintiff had also failed to adequately plead causation, an element of the remaining consumer fraud-based allegations. Specifically, defendants argued that plaintiff had not alleged that he even read the complained-of labels before purchasing the VitaRain drink. The court noted that while the amended complaint contained detailed allegations about what was, and what was not, on the label of the VitaRain Tropical Mango drink he allegedly purchased, nowhere did he state that he actually read the label, or that his purchasing decision was driven by the alleged deceptive statements on the label.  Broad conclusory statements on causation. such as that class members have suffered "as a result of" purchasing the energy Drink, were insufficient, especially in light of Plaintiff’s failure to allege that he even read the allegedly deceptive labels prior to purchasing the drink.

Finally, on the misrepresentation claims, defendants suggested that plaintiff could not prove the reliance elements of his fraudulent misrepresentation and negligent misrepresentation claims because he had not alleged that he saw the alleged misrepresentations prior to purchasing
the drink. The court dismissed plaintiff’s misrepresentation claim for the same reason that the CPA claim was dismissed: Plaintiff failed to adequately plead reliance because he had not alleged that he based his purchasing decision on the complained-of labels or that he even read the labels
prior to purchasing the drink.  The court refused to credit the naked assertion that he would not have purchased the drink had the label not contained such statements in light of the missing averments.

Claims dismissed (with leave to amend).

 

FDA Proposes Two New Food Regulations for Imports

 The U.S. Food and Drug Administration proposed two new rules last week that would impact imported food, including by establishing a program to accredit third-party auditors to certify foreign food facilities.  The rules were called for by the Food Safety Modernization Act of 2011, which revised the regulatory system to deal with risks of food-borne illness. We have posted before about the litigation that can arise from such situations. 

 

Under the proposed rules, which follow on regulations proposed earlier this year, importers would be accountable for verifying that their foreign suppliers are implementing modern, prevention-oriented food safety practices, and achieving the same level of food safety as domestic growers and processors. The FDA is also proposing rules to strengthen the quality, objectivity, and transparency of foreign food safety audits on which many food companies and importers currently rely to help manage the safety of their global food supply chains.

Imported food comes into the United States from about 150 different countries and accounts for about 15 percent of the U.S. food supply, including about 50 percent of the fresh fruits and 20 percent of the fresh vegetables consumed by Americans.

Under the proposed regulations for Foreign Supplier Verification Programs (FSVP), U.S. importers would have a clearly defined responsibility to verify that their suppliers produce food to meet U.S. food safety requirements. In general, importers would be required to have a plan for imported food, including identifying hazards associated with each food that are reasonably likely to occur. Importers would be required to conduct activities that provide adequate assurances that these identified hazards are being adequately controlled.

The FSMA also directs the FDA to establish a program for the Accreditation of Third-Party Auditors for imported food. Under this proposed rule, the FDA would recognize accreditation bodies based on certain criteria such as competency and impartiality. The accreditation bodies, which could be foreign government agencies or private companies, would in turn accredit third-party auditors to audit and issue certifications for foreign food facilities and food, under certain circumstances.
Importers will not generally be required to obtain certifications, but certifications may be used by the FDA to determine whether to admit certain imported food that poses a safety risk into the United States.

The FSVP proposed rule and the third-party accreditation proposed rule are available for public comment for the next 120 days. 

 

Another Un-natural "Natural" Claim Dismissed

We have posted before about the disturbing trend of plaintiffs parsing food labels to find something to complain about -- not that the product is unhealthy or harmful or doesn't taste good -- but a "gotcha" game raised to the level of a consumer fraud act violation or a breach of warranty class action.  So we like to note when common sense prevails in this arena.  A federal court recently held that a food manufacturer cannot be in breach of an express warranty for using the term "natural" on its label when that same label discloses the identity and presence of any ingredients the plaintiffs claim were not "natural."   See Chin v. General Mills Inc., No. 12-02150 (D.Minn. 6/3/13).


General Mills produces, markets, and sells a line of Nature Valley products, including “Protein Chewy Bars,” “Chewy Trail Mix Granola Bars,” “Yogurt Chewy Granola Bars,” “Sweet & Salty Nut Granola Bars,” and “Granola Thins.” By all accounts these are excellent products that taste great and offer nutritious ingredients. Plaintiffs were consumers who allegedly purchased one or more of the Nature Valley products. The plaintiffs alleged the products were deceptively labeled as “100 percent Natural” because they contained fructose corn syrup and high maltose corn syrup.  Plaintiffs alleged they relied on the representations, and would not have purchased the products or paid as much if they had known of the actual ingredients. Plaintiffs sought a national class, and sub-classes for New York and New Jersey.

The first problem was that plaintiffs sought relief for alleged representations made on bars that they never purchased; plaintiffs lacked Article III standing for these products and plaintiffs could not represent a class of consumers who purchased products that the named plaintiffs did not purchase. The named plaintiffs in a class action may not rely on injuries that the putative class may have suffered, but instead, said the court, must allege that they personally have been injured. Lewis v. Casey, 518 U.S. 343, 357 (1996); Thunander v. Uponor, Inc., 887 F. Supp. 2d 850, 863 (D. Minn. 2012).

The express warranty claim failed because the term “100% Natural” on a label cannot be viewed in isolation and must be read in the context of the entire package, including the ingredient panel. The specific terms included in the ingredient list must inform the more general term “Natural.” The specific terms determine the scope of the express warranty that was allegedly made to the plaintiffs. And here, a defendant cannot be in breach of an express warranty by including in the product an ingredient that it expressly informed consumers was included.  It is typical of plaintiffs in these cases to elevate one word or phrase in a label, while ignoring all the other information provided the consumer.

Finally, the fraud based claims were dismissed for failure to satisfy the heightened pleading requirements of Rule 9(b). Plaintiffs failed to plead how they were deceived by the “100% Natural” statement. Plaintiffs did not allege with any specificity what they believed “100% Natural” to mean.

Motion to dismiss granted.

 

 

No Purchase, No Standing

Earlier this month a federal court reaffirmed that a named class representative in a proposed consumer class action against Ghirardelli Chocolate Co. lacked standing to assert claims about products he never bought. See Miller v. Ghirardelli Chocolate Co., No. 12-04936 (N.D. Cal. 4/5/13). We have posted before about plaintiffs overreaching in consumer fraud class actions. If a tree falls and no one is there, does it make a sound? If you never bought and used a product, how can you bring a “consumer” claim?

Plaintiff Scott Miller allegedly bought a package of “Ghirardelli® Chocolate Premium Baking Chips –Classic White” and then, on behalf of himself and other consumers, sued the Ghirardelli
Chocolate Company, complaining that defendant somehow deceived customers into thinking that this and four other products contained “artificial” or “imitation” ingredients, in violation of United States Food and Drug Administration (“FDA”) and state regulations.

Readers may know that Ghirardelli is one of America’s longest continuously operating chocolate manufacturers (more than 150 years) and that it is one of very few American manufacturers that make chocolate starting from the cocoa bean through to finished products. Ghirardelli accepts
only the highest-quality beans, rejecting as many as 30% of the beans that are offered it. Ghirardelli roasts the cocoa beans in-house to ensure the company’s signature flavor profile is consistently maintained in all chocolate products.

Miller filed suit in San Francisco County Superior Court, and Ghirardelli removed to federal
court and moved to dismiss the complaint. The court initially agreed that Miller lacked standing for products he had not purchased. At oral argument, however, plaintiff argued that the branding on the label meant that – under the FDA regulations and standards – the alleged harm was identical across product lines, and that established standing as to products he never used. Miller filed an amended complaint and Ghirardelli again moved to dismiss.

Hard as it may be to believe, there are a few cases that suggest that a plaintiff who does not purchase a product nonetheless may have standing if the products and alleged misrepresentations were substantially similar. E.g., Astiana v. Dreyer’s Grand Ice Cream, Inc., No. C-11-2910 EMC, 2012 WL 2990766, at *11 (N.D. Cal. July 20, 2012). But certainly where the alleged misrepresentations or accused products are dissimilar, courts tend to dismiss claims to the extent they are based on products not purchased. E.g., Larsen v. Trader Joe’s Co., No. 11-cv-5188-SI (Docket No. 41) (N.D. Cal. June 14, 2012), the court found that the plaintiffs lacked standing to bring claims based on products they did not purchase (wide range of Trader Joe’s products (cookies, apple juice, cinnamon rolls,biscuits, ricotta cheese, and crescent rolls). See also Stephenson v. Neutrogena, No. C-12-0426 PJH, 2012 U.S. Dist. LEXIS 1005099, at *1 (N.D. Cal. Jul. 27, 2012) (plaintiff brought suit over six Neutrogena Naturals products but had only purchased the purifying facial cleanser).

Even under the Astiana approach, here the products were too different: they look different; they have different uses (baking chips, drink powders, and wafers); they have different labels and different representations on packaging, and they are marketed and sold differently in that, for example, some are sold alongside each other, and some are sold in commercial markets and others in consumer markets. The logo, which plaintiff put so much emphasis on, was relatively unimportant considering the varying products, packaging and representations, and markets. Logos cannot be dispositive of what a product is and that a consumer determines what a product or characterizing flavor is by reviewing the label. Finally, the identity of the commodity here under FDA regulations was “white chocolate,” not “chocolate” as in the logo. That in turn means that a determination of standing required an examination of the entire label, and again, the five products and the alleged misrepresentations were not sufficiently similar.

Another "Natural" Food Claim Falls to Common Sense

A  federal district court recently dismissed a putative class action alleging the defendant food company mislabeled its Florida's Natural products as 100% orange juice despite the alleged addition of compounds to mask the taste caused by pasteurization. See Veal v. Citrus World Inc., No. 2:12-cv-00801 (N.D. Ala. 1/8/13).

The plaintiff asserted that because the label did not mention that flavoring and aroma are added, consumers desirous of 100% pure and fresh squeezed orange juice had been deceived into purchasing Florida’s Natural.  The plaintiff did not aver that he personally ever consumed Florida’s Natural orange juice or that he suffered any ill health effects from consumption of the same, but rather alleged only that he purchased it, repeatedly, over the six years preceding the first complaint.  The essence of his claim concerned the question of how much processing is permissible in a product labeled as “fresh” “100%” or “pure.”

Despite plaintiff’s numerous allegations as to the general conduct of the orange juice industry, the court found the plaintiff had failed to state an actual, concrete injury. He stated he did not know store-bought orange juice was not fresh squeezed, but nowhere alleged any harm from its purchase or consumption. He did not even claim that upon learning packaged orange juice was not truly “fresh”, he had to resort to squeezing his own oranges. In other words, despite plaintiff’s protestations that he did not receive the product he believed he was purchasing, he made no allegation that he had stopped purchasing what he considered to be an inferior product in favor of
purchasing what he actually sought, which is apparently unpasteurized fresh squeezed orange juice.

In an attempt to save his claim and demonstrate an injury worthy of finding standing, the plaintiff argued that he did not receive the “benefit of the bargain” of what he believed he was actually purchasing. He professed to compare the cost of defendant’s orange juice to an orange juice concentrate, and alleged the difference between them is proof of his loss. This theory did not rise to the level of a “concrete and particularized” injury as opposed to a “conjectural or hypothetical” one. Plaintiff did not allege what the “higher value charged” was or what the orange juice supposedly “would have been worth” if it was “as warranted.” He did not show what products he actually bought, when he bought them, or where he bought them, much less what he paid.

From a legal standpoint, many courts have held that “benefit of the bargain” theories of injury like plaintiff’s, where a plaintiff claims to have paid more for a product than the plaintiff would have paid had the plaintiff been fully informed (or that the plaintiff would not have purchased the product at all), do not confer standing. See In re Fruit Juice Products Marketing and Sales Practices
Litigation, 831 F.Supp.2d 507 (D. Mass. 2011); see also Birdsong v. Apple, Inc., 590 F.3d 955, 961-62 (9th Cir. 2009) (noting potential for hearing loss from improper iPod use was not sufficient to state an injury for standing); cf. Rivera v. Wyeth-Ayerst Labs., 283 F.3d 315, 319-21 (5th Cir. 2002); McKinnis v. Kellogg USA, 2007 WL 4766060, *4 (C.D.Cal.2007); Sugawara v. Pepsico, Inc., 2009 WL 1439115 (E.D.Cal.2009). Young v. Johnson & Johnson, 2012 WL 1372286 (D.N.J.2012).

The plaintiff also complained that even though the FDA does require that defendant label its product as “pasteurized orange juice,” all of defendant’s other alleged representations were voluntary, and thus not within the protection of the FDA. Because the court found the plaintiff lacked standing to pursue his claims, the court did not have to rely on the impact of the extensive FDA regulations governing orange juice,  Nevertheless, the court noted, defendant labeled its orange juice in accordance with FDA regulations. The plaintiff could not dispute that the defendant’s product is “squeezed from our Florida oranges” or “100% orange juice.” Rather, his focus was that the squeezing and pasteurization is performed on a massive scale, and that the pasteurization process destroyed the flavor, causing ingredients already present in orange juice to be replaced in the marketed juice.

However, said the court, the fact that the plaintiff may have believed defendant hired individuals to hand squeeze fresh oranges one by one into juice cartons, then boxed up and delivered the same all over the country does not translate into a concrete injury to plaintiff upon his learning that beliefs about commercially grown and produced orange juice were incorrect.  By its very definition under FDA guidelines, pasteurized orange juice is orange juice (1) that has been processed and treated with heat, (2) in which the “pulp and orange oil may [have] been adjusted in accordance with good manufacturing practice,” and (3) which may have been “adjusted” by the addition of concentrated orange juice ingredients or sweeteners. Clearly, the defendant was selling pasteurized orange juice while labeling it “pasteurized orange juice.” Although the plaintiff objected to such labeling, in the light most favorable to the plaintiff, he purchased a product labeled as pasteurized orange juice and then complained that it was pasteurized.

 No standing, complaint dismissed with no leave to amend yet again.

FDA Issues Proposed Food Safety Rules

The FDA last week issued two highly anticipated proposed rules relating to food process safety, with a stated goal of preventing foodborne illnesses. Readers will recall our posts on the litigation that can arise from food safety issues. FDA has now released for public comment a proposed rule on Preventive Controls for Human Food and a proposed rule on Standards for Produce Safety.

These rules are two of the proposed rules that FDA says are key to the preventive food safety approach established by the 2011 FDA Food Safety Modernization Act. The proposed rules build on existing voluntary industry guidelines for food safety, which many producers, growers and others currently follow. FDA expects to soon issue its proposed rule on importer foreign supplier verification; future proposed rules will address preventive controls for animal food, and accreditation of third-party auditors.

The FDA will accept comments on the proposals for 120 days. While the effective date for the rules would be 60 days from publication of the final rule, the general compliance date would be two years after the effective date. For small businesses, the compliance date would be three years after the effective date, and for very small businesses four years after the effective date.

The proposed rule on preventive controls for human food would apply to facilities that manufacture, process, pack or hold human food. In general, with some exceptions, the new preventive control provisions would apply to facilities that are required to register with FDA under FDA’s current food facility registration regulations. The rule proposes firms have written plans in place to identify potential hazards, put in place steps to address them, verify that the steps are working, and outline how to correct any problems that arise. FDA says the proposed hazard analysis rules are similar to the "HACCP” (Hazard Analysis and Critical Control Points) regulations that govern the production of certain seafoods and meats. The proposed produce rule covers all fruits and vegetables except those rarely consumed raw, produced for personal consumption, or destined for commercial processing that will reduce microorganisms of public health concern.

FDA estimates that the total annual compliance costs for the two regulations will exceed $1 billion.  million, depending on the scope of the exemption for “very small businesses.” The draft appears not to offer an estimate of the benefits that might result from the new rules.

Primary Jurisdiction Doctrine Leads to Dismissal of Food Claim

As our loyal readers know, the plaintiffs bar is poised to bring proposed class action litigation against food and beverage sellers over virtually any ingredient, marketing, label, or advertising it can shoehorn into an alleged unlawful trade practice.  It is gratifying when a court recognizes that proper forum for many such complaints is the Food and Drug Administration, not in court.  A recent example arises from the proposed class action over an ingredient in yogurt.  See Taradejna v. General Mills Inc., No. 12-993 (D. Minn.,12/10/12).

Plaintiff Martin Taradejna brought this putative class action alleging violations under the Minnesota Prevention of Consumer Fraud Act, the Minnesota Unlawful Trade Practices Act, and the Minnesota Uniform Deceptive Trade Practices Act, related to the alleged mislabeling of Greek yogurt. Plaintiff alleged that Greek yogurt is typically strained to remove the whey, resulting in a creamier product, richer in protein and lower in lactose.  Taradejna alleged that rather than straining, Defendants chose to use Milk Protein Concentrate (“MPC”) when they entered the Greek yogurt market in 2010. A blend of dry dairy products, MPC is sold in a powdered form that typically retains all protein components of milk.  Defendants’ use of MPC in the manufacture of its Greek yogurt results in a product with the thickness and protein content typical of Greek yogurt.  And the labeling of Defendant’s Greek yogurt discloses MPC as an ingredient. Taradejna contended, however, that this Greek yogurt failed to comply with legal and regulatory rules governing the labeling of food because it contained significant amounts of  MPC, and thus was not true Greek   yogurt.  Consequently, Taradejna alleged that Defendants’ actions in marketing this product violated the various Minnesota consumer protection statutes.

The FDA regulates food product ingredients and labeling and creates definitions and “standards of identity” for certain foods. Standards of identity define the particular food, and describe its ingredients, and approved processes of manufacture; as far back as 1981, the FDA promulgated such standards of identity for yogurt, 21 C.F.R. § 131.200, low-fat yogurt, 21 C.F.R. § 131.203, and nonfat yogurt, 21 C.F.R. § 131.206.  Plaintiff alleged use of MPC as an ingredient is not permitted in yogurt. Defendants pointed to a publicly available response to questions raised with the FDA at a 2004 milk seminar, stating that milk protein concentrate can be used as an ingredient in yogurt to increase the nonfat solids content.  And in 2009, the FDA proposed additional regulations to permit the optional use of any safe and suitable milk-derived ingredient as an optional dairy ingredient in the manufacture of yogurt to increase the nonfat solids content of the food above the minimum required 8.25 percent.

Plaintiff sought to represent a national class that had allegedly paid too much for this Greek yogurt made another way.  Defendant moved to dismiss on several grounds, but the district court focused on primary jurisdiction, a common-law doctrine that is utilized to coordinate judicial and administrative decision making. See Access Telecomms. v. Southwestern Bell Tel. Co., 137 F.3d 605, 608 (8th Cir. 1998). The doctrine applies where a claim may be cognizable in the courts, but where enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body. See Alpharma, Inc. v. Pennfield Oil Co., 411 F.3d 934, 938 (8th Cir. 2005).  Agency expertise is the most common reason that courts apply the doctrine of primary jurisdiction. In addition, courts apply the doctrine to promote uniformity and consistency within the particular field of regulation.

The underlying issue here was whether MPC is a proper or permitted ingredient in the yogurt. The court concluded that resolution of this question falls squarely within the competence and expertise of the FDA, pursuant to the authority granted to the Agency by Congress. Issues of food labeling are sufficiently complex that they are best left to FDA for consideration prior to judicial review.  See Lever Bros. Co. v. Mauer, 712 F. Supp. 645, 651 (S.D. Ohio 1989); Heller v. Coca-Cola Co., 230 A.D.2d 768, 769-70 (N.Y. App. Div. 1996).)  The current standard of identity for yogurt, the  Agency’s public statements about the standard, and the 2009 Proposed Rule all may impact the question, and the FDA is in the best position to resolve any ambiguity about the standard of identity for yogurt – a matter requiring scientific and nutritional expertise.

Moreover, said the court, given that the FDA has issued its 2009 Proposed Rule on the standard of identity for yogurt, it would be imprudent for a court, at this juncture, to substitute its judgment for that of the Agency’s while revision of the standard is pending. Moreover, the FDA’s ultimate decision on the permitted ingredients in yogurt would ensure national uniformity in labeling, utilizing the Agency’s special expertise in this regard.

So, bottom line, the court used primary jurisdiction to put these issues where they belong—with the FDA.

 

Consumer Fraud Claim on "All Natural" Beverage Rejected

One trend we are keeping an eye on here at MassTortDefense is plaintiffs' aggressive and excessive use of consumer fraud act claims, micro-analyzing every ad, turning traditional puffing into some kind of nefarious marketing scheme.  Class certification in such cases can trigger the need to think about "blackmail settlements."

So all victories are worth noting, and last week South Beach Beverage Co. Inc., maker of SoBe drinks, garnered dismissal of a California putative class action alleging false claims about their "0 Calories Lifewater" drinks. See Charles Hairston v. South Beach Beverage Co. Inc,. et al., No. 2:12-cv-01429 (C.D. Cal. 5/18/12).

SoBe manufactures a diverse range of beverages, including teas and enhanced waters, that are characterized by exotic flavor combinations and added vitamins. In his First Amended Complaint, plaintiff alleged that during the last three to four years, he regularly purchased SoBe 0 Calorie Lifewater beverages (“Lifewater”), which are no-calorie, vitamin-enhanced, flavored water drinks. Plaintiff raised three challenges to Lifewater’s labeling, which he claimed he “read and relied on.” First, plaintiff alleged that the “all natural” label was potentially deceptive because Lifewater contains “deceptively labeled ingredients” that are “synthetic or created via chemical processing.” Second, plaintiff alleged that Lifewater’s labels are potentially misleading because the names of various fruits are used to describe the different flavors of Lifewater even though Lifewater allegedly does not contain any actual fruit or fruit juice. Third, plaintiff alleged that the use of the common vitamin name (e.g., B12) on the product labels is misleading because the vitamins added to Lifewater are "synthetic" or created via chemical processing.

As is typical, plaintiffs alleged causes of action including for: (1) California Consumers Legal Remedies Act – California Civil Code §§ 1750, et seq. (“CLRA”); (2) California False Advertising Law – California Business & Professions Code §§ 17500, et seq. (“FAL”); (3) California Unfair Competition Law – California Business & Professions Code §§ 17200, et seq. (“UCL”).

Defendants argued first that the claims alleged related to the use of fruit names to describe the various flavors of Lifewater and their use of common vitamin names were preempted by the express preemption provisions in the Federal Food, Drug, and Cosmetic Act (“FDCA”) and by the specific labeling regulations promulgated by the Food and Drug Administration (“FDA”). The court concluded that plaintiff’s claims related to defendants’ use of the names of various fruits to describe the different flavors of Lifewater were indeed preempted. See, e.g., Dvora v.
General Mills, Inc., 2011 WL 1897349 (C.D. Cal. May 6, 2011) (holding that CLRA and UCL claims
were preempted where the plaintiff was challenging the use of the words “Blueberry Pomegranate”
in labeling a cereal not containing any blueberries or pomegranates because FDA regulations
explicitly permit manufacturers “to use the name and images of a fruit on a product’s packaging to
describe the characterizing flavor of the product even where the product does not contain any of
that fruit, or contains no fruit at all”); McKinnis v. General Mills, Inc., 2007 WL 4762172 (C.D. Cal.
Sept. 18, 2007) (holding that use of “Strawberry Kiwi” to designate the flavor of yogurt containing
no fruit ingredients was “permissible to demonstrate the ‘characterizing flavor’ of the product”).

The court also concluded that plaintiff’s claims related to defendants’ use of the common names
of vitamins were preempted. See, e.g., 21 C.F.R. § 101.9(c)(8)(v) (recognizing that “Vitamin C” and
“Ascorbic acid” are “synonym[s]” that may be used in the alternative in a product’s nutritional
information labeling); 21 C.F.R. § 101.9(k)(4) (stating that the FDA will consider a food
“misbranded” if its “label or labeling represents, suggests, or implies” that “a natural vitamin in food is superior to an added or synthetic vitamin”).

Significantly, the court concluded that plaintiff could not avoid preemption of these claims by arguing that his claim related solely to defendants’ “all natural” representations and that he included his fruit name and vitamin name claims only as support for his “all natural” claim. Such an argument would effectively allow a plaintiff to always avoid preemption of those claims, and would undermine the purpose of the federal labeling standards which includes avoiding
a patchwork of different state standards.  These claims were dismissed with prejudice.

Plaintiff also alleged that the “all natural” labeling on defendants’ products was potentially deceptive because the product contains “deceptively labeled ingredients” that are
“synthetic or created via chemical processing.” However, plaintiff could not state a claim under the
CLRA, FAL, or UCL regarding defendants’ allegedly deceptive “all natural” labeling because once
the preempted statements regarding fruit names and vitamin labeling were removed, plaintiff’s claim is based on a single out-of-context phrase found in one component of Lifewater’s label.

The court concluded that plaintiff’s selective interpretation of individual words or phrases from a product’s labeling could not support a CLRA, FAL, or UCL claim. See, e.g., Carrea v. Dreyer’s Grand Ice Cream, 2012 WL 1131526 (9th Cir. Apr. 5, 2012).  Lifewater’s label did not simply state that it is “all natural” without elaboration or explanation. Instead, the “all natural” language was immediately followed by additional statements, like “with vitamins” or “with B vitamins.”  Lifewater did not use the “all natural” language in a vacuum. Thus, it was impossible for plaintiff to allege how the “all natural” language would be deceptive without relying on the preempted statements regarding fruit names and vitamins.

In addition, the court concluded that no reasonable consumer would read the “all natural”
language as modifying the “with vitamins” language and somehow believe that the added vitamins are suppose to be “all natural vitamins.”  Moreover, to the extent there was any ambiguity, it was  clarified by the detailed information contained in the ingredient list, which explained the exact contents of Lifewater. In this case, the ingredient list was consistent with the front label statement of “all natural with vitamins.”

The court concluded that the challenge to the “all natural” language on Lifewater was not deceptive as a matter of law.

 

Junk Food Junk Science Exposed

Much of the litigation our clients confront on a daily basis seems predicated on the philosophy that all predicaments, all injuries, must be the fault of someone else.  There is no such thing as personal responsibility; individuals need not face the consequences of choices they make. Why change your risky behavior when you can sue someone else for it?

This same approach is the foundation of the effort to remove all soda and so-called “junk foods” from our schools.  But, is the mere availability of such products in schools actually the cause of  childhood obesity -- certainly an important public health concern?

Readers may want to note a recent study published in the journal Sociology of Education.  See VanHook & Altman, Competitive Food Sales in Schools and Childhood Obesity: A Longitudinal Study, 85 Sociology of Education 23 (January 2012).

The study followed  nearly 20,000 students who started kindergarten back in 1998. The researchers recorded the students’ BMI (body mass index) in fifth grade and again in eighth grade, and correlated these data points with the availability of  junk food at their schools (like snacks, candy, and soda).  (The researchers did factor in race and ethnicity, socio-economic status, and other factors that might affect weight gain.)

Surprise, surprise?  They found no link between children’s weight and the sale of these foods in the nearly 1000 schools.  About 1/3 were overweight in schools with and schools without. This actually makes compete sense, and follows on other studies that showed when students couldn’t buy soda at school, they simply compensated by drinking more at home, before and after. See Taber, et al., Banning All Sugar-Sweetened Beverages in Middle Schools, Arch. Pediatr. Adolesc. Med. 2011; 0: 20112001-7.

Bashing food companies may make some feel better, and banning sales in schools may allow some to pat themselves on the back for a job well done, but selling these foods in school has little or nothing to do with whether children will become overweight.  The real issue is parental responsibility --  how, what, and how much parents are feeding their children at home; what eating patterns they instill, and what exercise parents encourage in their kids. Admittedly, changing parental behavior is a lot harder than banning the soda machine, but it is also the only approach likely to make a significant impact on this issue.  Regulation and litigation are not the answers.

Fruit Juice MDL Court Dismisses Claims

The Massachusetts federal court overseeing multidistrict litigation against 11 beverage companies, including Coca-Cola Co. and Del Monte Corp., alleging that their fruit juices contained trace amounts of lead, dismissed the claims last week.  In re Fruit Juice Products Marketing and Sales Practices Litigation, No. 11-2231 (D. Mass., 12/21/11).

Plaintiffs alleged that the defendants misled them into believing that certain of their products were safe, whereas the products in fact contained lead and posed a health risk, especially to children.  The issue had caught the attention of the FDA, which concluded that while several of the products contained trace amounts of lead, in each case the level found would not pose an unacceptable risk to health.  (The FDA’s conclusion was based in part on a guidance report it issued in 2004. The agency concluded that many food products contain small amounts of lead because the substance is in the environment naturally and also released through many human activities.)

The majority of plaintiffs’ claims were for violations of the consumer protection laws of states in which defendants maintained their principal places of business. Plaintiffs also brought claims under the consumer protection laws of all states in which potential class members purchased the  products. Finally, the plaintiffs alleged breach of the implied warranties of merchantability and fitness for a particular purpose and for unjust enrichment.

Defendants moved to dismiss on several grounds, but the foundational argument that plaintiffs lacked standing was fatal to all of plaintiffs’ claims, and was in the eyes of the court so compelling that it was unnecessary for the court to reach the numerous satellite theories that defendants offered.

To establish Article III standing, a plaintiff must first demonstrate that he has suffered an injury in fact.  Whitmore v. Arkansas, 459 U.S. 149, 155 (1990). The injury must be concrete and the alleged harm actual or imminent, and not conjectural or hypothetical. Los Angeles v. Lyons, 461 U.S. 95, 101-02 (1983). If a plaintiff fails to allege sufficient facts to satisfy this requirement, the case must be dismissed.

In this case, plaintiffs did not allege a sufficient injury in fact. Plaintiffs offered two potential theories of injury in fact. First, they alleged that the lead in defendants’ products posed a health risk and that, by consuming these products, they placed themselves and their children at risk of future harm from lead poisoning. Second, plaintiffs alleged that they suffered economic injury when they purchased products that defendants advertised as safe, but that in fact contained allegedly dangerous amounts of lead. Both theories, according to the court, ran into the same problem -- plaintiffs
failed to allege any actual injury caused by their purchase and consumption of the products.

The claim of exposure to “potential adverse health effects” or “potential harm” was insufficient for Article III standing. A threatened future injury must be “certainly impending” to grant Article III
standing.  In product liability cases, courts have held that to establish standing based on a threat of future harm, plaintiffs must plead a credible, substantial threat to their health.  E.g., Herrington v. Johnson & Johnson Consumer Cos., Inc., 2010 WL 3448531, at *3 (N.D. Cal. Sept. 1, 2010); see also Public Citizen, Inc. v. Nat’l Highway Traffic Safety Admin., 489 F.3d 1279, 1293-96 (D.C. Cir. 2007); Sutton v. St. Jude Medical S.C., Inc.,419 F.3d 568, 570-75 (6th Cir. 2005).  But the complaint here contained no allegations that either plaintiffs or anyone else ever suffered any type of injury from consuming the products. The products were not recalled, and in fact, the FDA found that at least some of the specific products did NOT pose an unacceptable risk to human health.

Plaintiffs made no allegations as to the amount of lead actually in these products, did not claim that any particular amount in the products is dangerous, and did not allege that any specific amount had caused actual injuries to any plaintiff. The court also stressed that plaintiff did not allege that the levels of lead in the products violated any FDA standards. Under these circumstances, the allegations of risk of future harm to class members were insufficient to meet the “credible or substantial threat” standard. The claim of potential future injury was simply too hypothetical or conjectural to establish Article III  standing.

The court cited a series of cases involving lead in lipstick, which we have posted on, making clear that the type of speculative future injury here cannot form the basis of a lawsuit. See Koronthaly v. L’Oreal USA, Inc., 374 F. App’x 257(3d Cir. 2010), aff’g 2008 WL 2938045 (D.N.J. July 29, 2008); Frye v. L’Oreal USA, Inc., 583 F. Supp. 2d 954 (N.D. Ill. 2008).

Plaintiffs’ second theory of injury in fact was equally flawed. Plaintiffs alleged that defendants promised to provide products that were safe for consumption, but that plaintiffs received products that posed a health risk to them and their children. Consequently, the products were unsuitable for their intended purpose -- consumption -- and supposedly valueless. Because plaintiffs supposedly would not have purchased these products if they had known the products contained any lead, they suffered an economic injury -- the price of the product -- when they purchased the products.

But because plaintiffs were unable to show that any actual harm resulted from consumption of the fruit juice products, their allegation of “economic” injury lacked substance. The fact is that plaintiffs paid for fruit juice, and they received fruit juice, which they consumed without suffering harm. Again, the products were not recalled, did not cause any reported injuries, and did not violate any federal standards. The products thus had no diminished objective value due to the presence of the lead. These plaintiffs received the benefit of the bargain, as a matter of law, when they purchased these products and were able to consume them.

Other courts that have addressed similar “benefit of the bargain” standing arguments agree that plaintiffs who have not been injured by an allegedly defective product generally do not have standing to sue the product’s manufacturer. See, e.g., Rivera v. Wyeth-Ayerst Labs., 283
F.3d 315 (5th Cir. 2002).  Plaintiffs’ allegations only support the contention that the levels of lead in the products were unsatisfactory to them. This allegation was simply insufficient to support a claim for injury in fact. 

 

 

Class Action Complaint on 100% Natural Oil Dismissed

A federal court recently dismissed a proposed class action accusing a food company of misleadingly labeling cooking oils as 100% natural when they allegedly were made from genetically modified plants. Robert Briseno, et al. v. ConAgra Foods Inc., No. 2:11-cv-05379 (C.D. Calif.).

Quick research reveals that 88-94% of the nation’s crops of corn, soy and canola are grown from seeds that are the product of bioengineering.  There is no credible science that there are serious health issues with these products, and multiple peer reviewed studies on "GM" crops worldwide show farmers in underdeveloped countries have seen an increase in yield of about 29% from using them, along with decreased use of insecticide applications.

Plaintiff alleged that he regularly purchased Wesson Canola Oil, bearing labels that state the product is “100% Natural.” Plaintiff contended that contrary to these representations, ConAgra used plants grown from genetically modified organism seeds that have been engineered to allow for greater yield, and to be pest-resistant, to make Wesson-branded oils. He asserted that the genetically modified organisms are somehow not “100% natural,” and thus the labels and advertising are deceptive. Plaintiff filed a complaint seeking to represent a class of all persons in the United States who have purchased Wesson Oils from 2007 on. As is typical, he alleged
violation of California’s false advertising law (“FAL”), California’s unfair competition law (“UCL”), and California’s Consumer Legal Remedies Act (“CLRA”).

Defendant moved to dismiss. The first issue was preemption of the state law causes of action, based on FDA guidance regarding food labels. Federal preemption occurs, generally, when: (1) Congress enacts a statute that explicitly pre-empts state law; (2) state law actually conflicts with federal law; or (3) federal law occupies a legislative field to such an extent that it is reasonable to conclude that Congress left no room for state regulation in that field. Specifically, ConAgra argued that Briseno’s claims were preempted because the FDA has repeatedly concluded that bioengineered foods are not meaningfully different from foods developed by traditional plant breeding, and thus that the fact that a food product is derived from bioengineered plants need not be reflected on a product’s label. Plaintiff responded that he was not arguing that ConAgra was required to state whether its products were made from genetically modified plants. Rather, he contended that the decision to label its products “100% Natural” was misleading.

Courts have split on food preemption issues. Compare Dvora v. General Mills, Inc., 2011 WL 1897349 (C.D. Cal. May 16, 2011)(cereal-yes); Turek v. General Mills, Inc., 754 F.Supp.2d 956 (N.D. Ill. 2010)(snack bars-yes); Yumul v. Smart Balance, Inc., 2011 WL 1045555 (C.D. Cal. Mar. 14, 2011)(yes), with Lockwood v. Conagra Foods, Inc., 597 F.Supp.2d 1028 (N.D. Cal. Feb. 3, 2009)(pasta-no); Wright v. General Mills, Inc., 2009 WL 3247148 (S.D. Cal. Sept. 30, 2009)(granola bars-no).

Here, the court found no preemption on most of the complaint. The bulk of the complaint, said the court, alleged that use of the phrase “100% Natural” is misleading, and did not contend that additional information must be added to Wesson Oil labels. Regulations requiring that each product list its ingredients by their “common or usual name,” together with the regulations requiring that vegetable oils be denominated “ oil,” were inapplicable since plaintiff’s central argument was not that ConAgra cannot use the common or usual names of canola oil, vegetable oil or corn oil.

The FDA has expressed that it has no basis for concluding that bioengineered foods differ from other foods in any meaningful or uniform way, or that, as a class, foods developed by the new techniques present any different or greater safety concern than foods developed by traditional plant breeding. So, plaintiff, in essence, sought to create a distinction – between “natural” oils and those made from bioengineered plants when the FDA has determined that no such distinction exists. The court rejected this argument, refusing to read the FDA guidance as formal enough or clear enough on the issue.

Plaintiff did also seek an order requiring defendant to adopt and enforce a policy that requires appropriate disclosure of GM ingredients. Entering an order of this type would impose a
requirement that is not identical to federal law, and thus this particular prayer for such relief was preempted.

Rule 9(b) requires that in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. The pleading must identify the circumstances constituting fraud so that a defendant can prepare an adequate answer to the allegations. While statements of the time, place and nature of the alleged fraudulent activities are often sufficient, mere conclusory allegations of fraud are insufficient. Even if fraud is not a necessary element of a claim under the CLRA and UCL, when a plaintiff alleges fraudulent conduct then the claim can be said to be grounded in fraud or to sound in fraud.

Plaintiff alleged that he regularly purchased Wesson Canola Oil for his own and his family’s consumption. But his complaint contained no allegations as to whether he became aware of the
representation through advertising, or labeling, or otherwise. He provided no information about how often he was exposed to the allegedly misleading statement. He did not allege how
frequently he purchased the product and over what period of time, whether he relied on
statements on canola oil labels, on a website, in advertisements, or all of the above,
whether the statements remained the same throughout the class period, or, if they did not, on
which label(s), advertisement(s) or statement(s) he relied.

Thus, this complaint did not afford ConAgra adequate opportunity to respond. Consequently, defendant's motion to dismiss was granted (without prejudice).


 

Food Spread Class Action Certified: What Happened to Wal-mart?

A California federal judge recently denied certification of a nationwide class, but certified a statewide class of plaintiffs in a suit over allegedly misleading promotion of the hazelnut spread Nutella as part of a healthy breakfast for kids. Hohenberg et al. v. Ferrero USA Inc., No. 3:11-cv-00205 (S.D. Calif.).

This type of case falls squarely in the zone we have warned readers about: the aggressive and excessive use of consumer fraud act claims by plaintiff attorneys, and certification triggering the need to think about "blackmail settlements."

Plaintiffs brought a putative consumer class action lawsuit on behalf of people who purchased Ferrero’s Nutella spread after relying on allegedly deceptive and misleading labeling and advertisements. Specifically, Plaintiffs alleged that Ferrero misleadingly promoted its spread as healthy and beneficial to children when in fact it contains levels of fat and sugar inconsistent with that claim.  We have posted on this product before.

Typically, plaintiffs brought causes of action alleging (1) violations of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq.; (2) violations of California’s False Advertising Law, (“FAL”), Cal. Bus. & Prof. Code §§ 17500 et seq.; (3) violations of California’s Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code §§ 1770 et seq.; (4) breach of express warranty; and (5) breach of implied warranty of merchantability.

Plaintiffs moved for class certification. Defendant Ferrero argued that plaintiffs did not satisfy the commonality requirement as clarified by the United States Supreme Court in Wal-Mart, because they did not offer evidence of a common injury. Indeed, plaintiffs did not support their motion with expert declarations that, for example, all class members were misled by a common advertising campaign that had little to no variation.  But the court, relying in part on pre-Wal-Mart decisions, e.g., Hanlon v. Chrysler Corp., 150 F.3d 1011, 1019-20 (9th Cir. 1998), stressed that commonality under Rule 23(a)(2) only requires there be some common issues of fact. To the extent that defendant interpreted the decision in Wal–Mart as requiring plaintiffs to prove common class-wide injury at the class certification stage, the court disagreed. Rather, all plaintiffs must show, said the court, is that the claims of the class depend upon a common contention of such a nature that it is capable of class-wide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. While that clearly was part of Wal–Mart, the decision is best read as finding that commonality requires the plaintiff to demonstrate that the class members have suffered the same injury, which means more than merely that they have all suffered a violation of the same provision of law.  Nevertheless, in this case, the court found sufficient the claims made on behalf of the proposed class based on a common advertising campaign,

But then there was the predominance issue of Rule 23(b).  Defendant disputed that common issues predominate, arguing that proposed class members’ injuries would require individualized assessment. Notably, one named plaintiff did not regret buying Nutella despite the alleged marketing, and continued using the spread after she learned about its sugar content. Another named plaintiff testified that her family loved Nutella and was upset when she took it away. Clearly, this case involved class members’ individual expectations, dietary preferences, nutritional knowledge, and the availability or non-availability of substitutes in the market. The court conceded that plaintiffs’ dietary choices may prove relevant to the merits of their case, but felt that it need not "decide the merits" of the case at this stage. However, as we have posted before, the Ninth Circuit has noted that it is not correct to say a district court may consider the merits to the extent that they overlap with class certification issues; rather, a district court must consider the merits if they overlap with the Rule 23(a) requirements. 


The court did reject the proposed national class, because plaintiffs made no showing that non-California class members saw the advertising at issue in California, purchased Nutella in California, or that their claims arise out of conduct that occurred in California. The choice of law issue thus overwhelmed the alleged common issues. So the certified class included “all persons who, on or after Aug. 1, 2009, bought one or more Nutella products in the state of California” for personal use.  Wal-Mart needs to have more impact than this.

Chew on This: Consumer Fraud Claim on Snack Bars Preempted

The Seventh Circuit ruled earlier this month that federal food labeling law expressly preempts state law claims seeking certain additional health-related disclosures on chewy bars. Turek v. General Mills Inc., No. 10-3267 (7th Cir. 10/17/11).

The bars have been around since at least the early 1980's, but have grown into a nearly $2 billion segment of the food industry.  Consumers love their portability, and relatively low calorie count.

Plaintiffs brought a diversity class action suit under the Illinois Consumer Fraud and Deceptive Business Practices Act, and the Illinois Uniform Deceptive Trade Practices Act, alleging that the label of certain "chewy bars" was misleading regarding fiber content.  Specifically, the complaint alleged that the principal fiber, by weight, in the bars was inulin extracted from chicory root. The complaint describes inulin so extracted as a processed, "non-natural” fiber which was not as beneficial to consumer health as other fiber.

Those state law claims ran smack into a provision of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 343-1(a)(5), added by the Nutrition Labeling and Education Act of 1990, which forbids states to impose “any requirement respecting any claim of the type described in section 343(r)(1)
[of the Food, Drug, and Cosmetic Act] . . . made in the label or labeling of food that is not identical to the requirement of section 343(r).”  A state thus can impose the identical requirement or requirements, and by doing so be enabled, because of the narrow scope of the preemption provision in the Nutrition Labeling and Education Act, to enforce a violation of the Act as a violation of state law. See also In re Pepsico, Inc. Bottled Water Marketing and Sales Practices Litigation, 588 F. Supp. 2d 527, 532 (S.D.N.Y. 2008); “Beverages: Bottled Water,” 60 Fed. Reg. 57076, 57120 (Final Rule, Nov. 13, 1995). This is important because the Food, Drug, and Cosmetic Act does not create a private right of action. Medtronic, Inc. v. Lohr, 518 U.S. 470, 487 (1996).

The question thus became what requirements the federal law imposes on the labeling of dietary fiber. Section 343(q)(1) of the Act contains a requirement that the “label or labeling” of food products intended for human consumption state “the amount of . . . dietary fiber . . . contained in each serving size or other unit of measure.” Other requirements for labeling claims relating to dietary fiber are set forth in implementing regulations.  

The labeling of the products challenged by the plaintiff was compliant with these regulations relating to health claims for dietary fiber. See, e.g., 21 C.F.R. § 101.76. All the FDA’s requirements relating to labeling dietary fiber are requirements to which any labeling disclosures required by a state must be identical.  But the disclaimers that the plaintiff wants added to the labeling of the defendants’ inulin-containing chewy bars were not identical to the labeling requirements imposed on such products by federal law, and so they were barred, held the court of appeals. The information required by federal law does not include disclosing that the fiber in the product includes inulin or that a product containing inulin allegedly produces fewer health benefits than a product that contains only product that contains only “natural” fiber, for example. 

Even if the disclaimers that the plaintiff wants added would be "consistent" with the requirements imposed, importantly, consistency is not the test. Identity is, said the court.

The Seventh Circuit thus affirmed dismissal of the case. But clarified, procedurally, that when a state law claim is expressly preempted under section 403A of the Federal Food, Drug, and Cosmetic Act,” a dismissal on the merits is the proper outcome, with prejudice like other merits judgments, not dismissal for want of federal jurisdiction, as the district court had ordered.

This is a victory for consumers when one considers why Congress did not want to allow states to impose disclosure requirements of their own on packaged food products, most of which are sold nationwide. Manufacturers might have to print 50 different labels, driving consumers who buy the food products crazy. A granola bar you buy in California ought to look just like the one you buy in Maine.

 

House Hearing on Food Marketing to Kids -- Seller Beware

Two subcommittees of the House Energy and Commerce Committee, the Subcommittee on Commerce, Manufacturing, and Trade and the Subcommittee on Health, held a joint hearing last week on the issue of “Food Marketing: Can ‘Voluntary’ Government Restrictions Improve Children’s Health?”

Speakers came from the CDC, the U.S. Department of Agriculture, the FTC, Campbell Soup Company, and the Association of National Advertisers.

The background of the hearing is that the 2009 Consolidated Appropriations Act contained report language forming an Interagency Working Group (IWG), comprised of the Federal Trade Commission, the Department of Health and Human Services, and the Department of Agriculture. The IWG was tasked with conducting a study and issuing a report to Congress concerning standards for marketing food to children.  Instead of conducting the prescribed study or providing a report to Congress, the IWG issued a document entitled “Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts.”

The document presented a a sweeping set of “voluntary” principles for marketing foods to kids,  based on nutritional standards that exceed and conflict with those of other government programs. They also reflect a tenuous grasp of science, lacking evidence, critics say, showing that childhood obesity is related to advertising of food that doesn’t comply with the proposed principles.  The guidelines are so restrictive that many healthy foods, like low-fat yogurts, whole wheat bread, and 2% milk could not be marketed to those 17 and under. Even non-sweetened cereals would not meet the IWG guidelines.  According to one analysis, 88 out of the 100 most advertised foods and drinks would be in violation of these standards.

Regardless of whether a child sees a commercial for an item, the ultimate purchasing decision rests with the parent who purchases the groceries – and those groceries carry nutrition labels that every parent can read.  Of course, this is the nanny state rearing its head again. And there are serious issues of infringement of constitutionally protected commercial speech.

But a legitimate concern to our readers is that while these guidelines are labeled as voluntary, what happens when a litigious group sues a food manufacturer because it showed a commercial advertising a new kind of chocolate treat or drink that does not comply?  Our readers are surely familiar with example of courts allowing plaintiff experts to note "voluntary" or "recommended" guidelines.

Don't Forget the Cocktail Sauce: Second Circuit Tosses Shrimp Tray Class Action

We have warned readers of MassTortDefense of the alarming trend of plaintiff lawyers seeking to attack every aspect of a product's packaging and labeling as somehow a case of consumer fraud -- often ignoring common sense in the process.

The latest example comes from a case rightly rejected by the Second Circuit last week. See Verzani v. Costco Wholesale Corp., No. 10-04868, 2011 WL 4359936  (2d Cir., Sept. 20, 2011).

Plaintiffs brought a putative class action against Costco Wholesale Corp. over the size of its "shrimp trays." (We love em, especially for football parties.) Plaintiffs claimed that the wholesaler misled customers by labeling its shrimp trays as 16 ounce trays when the shrimp part of the tray itself only weighed about 13 1/2 ounces. The other few ounces were allegedly made up of  the cocktail sauce and lemon wedges. (We pause and ask, how can you eat shrimp without those two accompaniments?)

The case had a somewhat lengthy procedural history, with issues of preliminary injunctions, choice of law, motions to dismiss, and jurisdiction, in play; the class issue was never reached. In relevant part, the trial court dismissed the claims in 2009, concluding that the plaintiffs' contention that a “reasonable consumer” would not assume that the net weight of the product included the cocktail sauce and other (useful and edible) elements was not well founded. The district court later denied the plaintiffs' motion to amend, 2010 WL 3911499 (S.D.N.Y.), noting that a reasonable consumer would not believe that the net weight disclosed on the label for the shrimp tray refers to only the shrimp. The label lists the ingredients in descending order based on their relative weight --shrimp, lemon wedges, leaf lettuce -- followed by a number of ingredients that comprise the cocktail sauce, such as, tomato paste, distilled vinegar, and horseradish; it clearly states “Net WT 160z (1.00 lb).”

Verzani's interpretation of “net weight” as including 16 ounces of shrimp alone was objectively unreasonable; a simple visual inspection of the tray, with its clear plastic top,  would reveal that shrimp is not the only edible item inside. In fact, the product's name alone, “Shrimp Tray with Cocktail Sauce,” suggested that a consumer (at a minimum) is purchasing shrimp and cocktail sauce. A reasonable consumer reading the tray's label would not pick out “shrimp” to the exclusion of all the information on the label (including the product's name and the listed ingredients) when assessing the net weight of the product.

Plaintiffs appealed, but in a summary order, the panel found that court had been right to throw out the case and deny the motion to file an amended complaint.

Reconsideration Denied in Rejected "All Natural" Class Action

Here is an update on an interesting case we posted on before. A federal court last week denied a motion for reconsideration of its ruling that denied class certification to a consumer alleging that Arizona Beverages deceptively marketed its drinks as “all natural.”  See Coyle v. Hornell Brewing Co. et al., No.1:08-cv-02797 (D.N.J. 8/30/11). 

Plaintiff alleged that she was misled by labels on bottles of Arizona brand beverages touting “All Natural” ingredients, and thereby induced into buying bottles of Arizona beverages that contained High Fructose Corn Syrup (“HFCS”), which she claimed is not “natural”. Plaintiff sought to certify, under Fed. R. Civ. P. 23(b)(2), a class of consumers who purchased similarly labeled Arizona beverages that contained HFCS, seeking only declaratory and injunctive relief.

During the course of discovery in this case, plaintiff produced a retainer agreement she signed in anticipation of this lawsuit. But, the agreement was signed on August 9, 2007, more than seven months before plaintiff alleged that she was first misled by defendants’ “all natural” labeling in her product purchase on March 30, 2008. Indeed, plaintiff repeated the 3/08 purchase date in her deposition. She later changed her story.

The court originally observed that it need not find plaintiff to have intentionally lied to hold that she did not meet the adequacy element of Rule 23(a)(4). The issue was not simply whether plaintiff in fact lied, but whether her inconsistent testimony made her vulnerable to a unique factual or legal defense not faced by other class members, thereby rendering her interests potentially too antagonistic to the interests of the other class members. And that is exactly the case; the court found that plaintiff’s factual inconsistencies raised sufficiently grave credibility problems as to prevent her from serving as an adequate class representative.

Plaintiff filed a reconsideration motion. The court did reconsider its finding as to the adequacy of plaintiff’s counsel as a result of plaintiff’s repeated pleadings and certified discovery responses including the March 30, 2008 allegation. This "serious error" did not necessarily disqualify counsel.

But the court re-affirmed its decision as to the adequacy of plaintiff as class representative. Plaintiff argued that any defenses that she would face as a result of the credibility problems identified by the court could not become the focus of the entire litigation.  But the controlling rule does not hold that the only defenses that will disqualify a proposed named plaintiff on adequacy grounds are those which could become the focus of the entire litigation.  Indeed, to deny certification, a court need not conclude that credibility problems would ultimately defeat the class representative’s claim; rather, the court may deny class treatment if that unique defense is even arguably present. 

In any event, the court disagreed with plaintiff’s contention that the unique credibility-related defenses could not become the focus of the litigation in this matter. The court noted that plaintiff would have real trouble surviving summary judgment on the issue of "ascertainable loss" with a record  showing no dispute of fact that plaintiff’s only qualifying purchase of defendants’ product took place after plaintiff herself had concluded that the product was not “all natural.”  Plaintiff’s entire action would be vulnerable to a motion for summary judgment on the issue of ascertainable loss, which would prevent plaintiff (and the class she would seek to represent) from pursuing even injunctive relief.

Determining whether this plaintiff made her purchase of defendants’ product on the date she repeatedly claimed, after she had retained a lawyer to file the suit, would become a major focus and quite probably a show-stopper for this class. Reconsideration denied.

FDA Releases New Strategic Plan for Regulatory Science

This week the FDA released a plan for fostering innovative science. It is entitled the “Strategic Plan for Regulatory Science,” and it focuses on the agency’s goal to enhance the processes for developing and evaluating new medical products and materials.

The strategic plan describes the agency’s intent to collaboratively enhance the process for developing and evaluating promising new products and novel materials from fields such as cell therapy, tissue engineering, genomics, personalized medicine, advanced computing, and information technology. It reportedly also underscores the agency’s emphasis on food safety.

The plan also emphasizes the agency’s intention to study and improve how it communicates health information to consumers, particularly as communication technologies rapidly evolve and change the way people receive that information.

The priority areas listed in the report are:

  • Modernize Toxicology to Enhance Product Safety
  • Stimulate Innovation in Clinical Evaluations and Personalized Medicine to Improve Product Development and Patient Outcomes
  • Support New Approaches to Improve Product Manufacturing and Quality
  • Ensure FDA Readiness to Evaluate Innovative Emerging Technologies
  • Harness Diverse Data through Information Sciences to Improve Health Outcomes
  • Implement a New Prevention-Focused Food Safety System to Protect Public Health
  • Facilitate Development of Medical Countermeasures to Protect Against Threats to U.S. and Global Health and Security
  • Strengthen Social and Behavioral Science to Help Consumers and Professionals Make Informed Decisions about Regulated Products
     

 

FDA Releases Draft Guidance on Nanotechnology

The U.S. Food and Drug Administration last week released draft guidance designed to move the process forward of providing its regulated industries with greater certainty about the use of nanotechnology (which generally involves materials made up of particles that are one billionth of a meter in size). The guidance outlines the agency’s current view on certain issues about regulated products that contain nanomaterials or involve the application of nanotechnology.

FDA has not to date established regulatory definitions of “nanotechnology,” “nanoscale” or related terms. The term is perhaps most commonly used to refer to the engineering (i.e., deliberate manipulation, manufacture or selection) of materials that have at least one dimension in the size range of approximately 1 to 100 nanometers. For example, theNational Nanotechnology Initiative Program defines nanotechnology as the understanding and control of matter at dimensions between approximately 1 and 100 nanometers, where unique phenomena enable novel applications. Other factors such as function, shape, charge, the ratio of surface area to volume, or other physical or chemical properties have also been mentioned in various published definitions.

Our readers know that nanotechnology, the science involving manipulation of materials on an atomic or molecular scale, is an emerging technology with a broad range of potential applications, such as increasing bio-availability of a drug, improving food packaging, and in cosmetics.

The draft guidance document, “Considering Whether an FDA-Regulated Product Involves the Application of Nanotechnology,” represents a first step toward providing some regulatory clarity on the FDA’s approach to nanotechnology. Specifically, the agency named certain characteristics – such as the size of nanomaterials used and the exhibited properties of those materials – that may be considered when attempting to identify applications of nanotechnology in regulated products.

For products subject to premarket review, the FDA intends to apply the points contained in the draft guidance, when finalized, to better understand the properties and behavior of engineered nanomaterials. For products not subject to premarket review, the FDA will urge manufacturers to consult with the agency early in the product development process so questions related to the regulatory status, safety, effectiveness, or public health impact of these products can be adequately addressed.

In 2006, the FDA formed the Nanotechnology Task Force, charged with identifying and addressing ways to better enable the agency to evaluate possible adverse health effects from FDA-regulated nanotechnology products.  The agency issued a report by the task force in 2007 that recommended that the FDA issue additional guidance and take steps to address the potential risks and benefits of drugs, medical devices and other FDA-regulated products using nanotechnology.

 

Proposed Class Rep Not Adequate: Got Your Dates Straight?

A federal court in New Jersey last week joined the small but growing trend (call it a simmer not a boil) of courts putting some real meaning into the prerequisites to class certification found in Rule 23(a).  The court in Coyle v. Hornell Brewing Co., No. 1:08-cv-02797-JBS-JS (D.N.J. 2011) found that the factual inaccuracies and/or inconsistencies in the proposed class representative's testimony constituted fatal flaws under Rule 23(a)(4) requiring an adequate class representative.

Plaintiff alleged that she was misled by labels on bottles of Arizona brand beverages touting “All Natural” ingredients, and thereby induced into buying bottles of Arizona beverages that contained High Fructose Corn Syrup (“HFCS”), which she claimed is not “natural”. Plaintiff sought to certify, under Fed. R. Civ. P. 23(b)(2), a class of consumers who purchased similarly labeled Arizona beverages that contained HFCS, seeking only declaratory and injunctive relief.  The underlying claims were based on the New Jersey Consumer Fraud Act (“NJCFA”). [Full disclosure, we are partial to their Arizona Sports thirst-quenchers.]

The court denied plaintiff’s motion for class certification because she could not satisfy the adequacy requirement of Rule 23(a)(4).  The reasoning is instructive. During the course of discovery in this case, plaintiff produced a retainer agreement she signed in anticipation of this lawsuit. But, the agreement was signed on August 9, 2007, more than seven months before plaintiff alleged that she was first misled by defendants’ “all natural” labeling in her product purchase on March 30, 2008.  Indeed, plaintiff repeated the 3/08 purchase date in her deposition.

Problem. Solution? Nearly two months after her deposition, plaintiff produced a signed declaration that contradicted her deposition testimony (and prior answers to interrogatories and the allegations in both her original Complaint and subsequent Amended Complaints).  She now said she meant to claim the alleged purchase occurred in March, 2007 rather than on March 30, 2008. But she offers no explanation for why she had previously alleged the March 30, 2008 date in her Complaints and in certified answers to interrogatories.

The court noted that in the procedural posture, the substantive allegations of the complaint must be taken as true.  But class certification questions are sometimes enmeshed in the factual and legal issues comprising the plaintiff's cause of action, and courts may delve beyond the pleadings to determine whether the requirements for class certification are satisfied.  The Third Circuit calls for a “rigorous analysis”  of a motion to certify a class. In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 309 (3d Cir. 2008). Specifically, the district court must make findings that each Rule 23 requirement is met.  Id. at 310. Plaintiff has the burden of proof by a preponderance of the evidence that she has met each and every element of Rule 23.

Rule 23(a)(4) seeks to ensure “that the representatives and their attorneys will competently, responsibly, and vigorously prosecute the suit and that the relationship of the representative parties’ interests to those of the class are such that there is not likely to be divergence in viewpoint or goals in the conduct of the suit.”  Bogosian v. Gulf Oil Corp., 561F.2d 434, 449 (3d Cir. 1977). On the subsidiary question whether the named plaintiff has interests antagonistic to those of the class, courts often have to evaluate attacks on the named plaintiff’s credibility.

Here, defendants argued that plaintiff’s inconsistent allegations and testimony regarding the date of her qualifying purchase of an Arizona product render her an inadequate class representative. See Friedman-Katz v. Lindt & Sprungli (USA), Inc., 270 F.R.D. 150, 159 (S.D.N.Y. 2010). Plaintiff  responded that, to the extent that defendant raised a problem of plaintiff’s credibility, such a credibility question is one for the jury to decide; it would be improper for the court to make a credibility determination, on the factual dispute of when plaintiff last purchased an Arizona product, at this certification stage of the litigation.  However, the court properly recognized it had an independent obligation at the class certification stage to make findings on whether the named plaintiff satisfied each of the Rule 23 elements. The court thus had an obligation to look at whether the credibility problems raised by plaintiff’s contradictory testimony and subsequent declaration rendered her an inadequate class representative.

The court observed that it need not find plaintiff to have intentionally lied to hold that she does not meet the adequacy element of Rule 23(a)(4). The issue was not simply whether plaintiff in fact lied, but whether her inconsistent testimony makes her vulnerable to a unique factual or legal defense not faced by other class members, thereby rendering her interests potentially too antagonistic to the interests of the other class members.  And that is exactly the case; the court found that plaintiff’s factual inconsistencies raised sufficiently grave credibility problems as to prevent her from serving as an adequate class representative.

First, she filed three separate Complaints alleging with specificity that she was misled by  defendants’ labeling when she first purchased an Arizona beverage in March, 2008, but she had retained an attorney on this issue seven months previously.  She repeated these claims in at least two answers to interrogatories, assisted by counsel, and again repeated the claim in her  deposition, even after being confronted with the apparent inconsistency of such a claim. Her subsequent declaration, in which she attempted to “clarify” the time-line in her deposition, did not explain how she had repeatedly asserted the incorrect date in her Complaints and discovery answers.  This level of inconsistency logically demonstrated either (1) an effort to disguise the fact that she did purchase the Arizona beverage in 2008 as alleged, but for the sole purpose of bringing the lawsuit she had already hired a lawyer for, or (2) a significant carelessness about the specific highly material facts she has alleged in the case, said the court.

Under either scenario, the court would find that plaintiff was not an adequate class representative.  Were she to be a class representative, she would be required to address defendants’ argument that she made her only documented purchase of Arizona iced tea in March of 2008 solely for the purpose of bringing the instant lawsuit and therefore suffered no ascertainable loss. This argument would divert attention from the substance of the claims advanced on behalf of the class.  That would risk that the class could fail in its claim because its representative was unable to prove she made a qualifying purchase, noted the court.

Finally, the court found, as an alternative basis to deny class certification, that plaintiff’s counsel’s adequacy was also brought into question through the existence of these material discrepancies. Under the "most charitable interpretation" of these facts, counsel submitted three separate Complaints to the court alleging an incorrect date of purchase, at least two answers to interrogatories repeating the same purportedly incorrect purchase date. The court thought that was insufficient attention to detail to show the ability to effectively represent the interests of a class.

 

FDA Holds Meeting on Food Safety Modernization Act Regulations

We have posted before about the Food Safety Modernization Act.  The FDA held a public hearing last week to take input on the implementation of the new food safety law.

FDA was seeking information on preventive controls used by facilities to identify and address hazards associated with specific types of food and specific processes.

After an intro from several FDA officials, the program included several breakout listening sessions. One covered FDA guidance documents for industry on preventive controls. FDA has recognized that it cannot provide a guidance document for each type of food or each type of food facility. Another breakout session focused on the relationship between CGMPs and the preventive controls. A third was on Product Testing and Environmental Monitoring. 

The session concluded with comments from stakeholders, including representatives of consumer groups, the food and feed industries, state regulatory officials, and small business groups.  Among those weighing in were the American Frozen Food Institute and the American Feed Industry Association.  One of the key requests from industry was the need for flexibility and the risks of too-rigid guidance to prevent contamination.  One size does not fit all, and each industry may be in the best position to figure out the specific tools they need.  Indeed, different facilities within an industry may need to employ different systems to prevent food safety hazards. Industry also called for FDA to recognize robust third-party food safety certification programs that are already in place in some food areas. 

Self-appointed consumer groups, on the other hand, called for extensive and detailed regulations of testing, with test protocols to be submitted to FDA in advance and approved.  

Federal Court Dismisses Soda Misrepresentation Claim

A New Jersey federal recently dismissed a putative class action accusing The Coca-Cola Co. of misleading consumers about the health value of the carbonated beverage Diet Coke Plus.  Mason et al. v. The Coca-Cola Co., No. 09-cv-00220 (D.N.J. 3/31/11).

This is another in the series of cases we have warned readers about: plaintiffs are not injured, are not at risk of injury, have gotten the benefit of their bargain, but claim they were somehow duped by marketing. Here, plaintiffs alleged that they “were persuaded to purchase the product because the term ‘Plus’ and the language ‘Diet Coke with Vitamins and Minerals’ suggested to consumers that the product was healthy and contained nutritional value,” when it allegedly did not.

Defendants moved to dismiss under the Twombly/Iqbal doctrine.  Of course, claims alleging fraud or mistake must also meet the heightened pleading requirements of Fed. R. Civ. P. 9(b), which requires such claims to be pled with “particularity.”

To state a claim under the New Jersey Consumer Fraud Act., a plaintiff must allege: “(1) unlawful conduct by the defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendants’ unlawful conduct and the plaintiff’s ascertainable loss.” Frederico v. Home Depot, 507 F.3d 188, 202 (3d Cir. 2007). Plaintiffs claimed that defendant committed affirmative acts of fraud and deception, and that they were persuaded to purchase the product because the term ‘Plus’ and the language ‘Diet Coke with Vitamins and Minerals’ somehow suggested to consumers that the product was healthy and contained extra nutritional value.

However, the FDA's warning letter about the product attached by plaintiffs to their own complaint shows that it is not false that Diet Coke Plus contains vitamins and minerals.  Plaintiffs failed to allege with particularity what further expectations beyond these ingredients they had for the product or how it fell short of those expectations. Plaintiffs simply made a broad assumption that defendant somehow intended for Diet Coke Plus’s vitamin and mineral content to deceive plaintiffs into thinking that the beverage was really “healthy.”  Without more specificity as to how defendant made false or deceptive statements to plaintiffs regarding the healthiness or nutritional value of the soda, the court found that plaintiffs failed to plead the “affirmative act” element with sufficient particularity to state a viable NJCFA claim.

Plaintiffs also failed to plead an ascertainable loss. When plaintiffs purchased Diet Coke Plus, they received a beverage that contained the exact ingredients listed on its label. Plaintiffs could not explain how they experienced any out-of-pocket loss because of their purchases, or that the soda they bought was worth an amount of money less than the soda they consumed. Mere subjective  dissatisfaction with a product is not a quantifiable loss that can be remedied under the NJCFA.  The same defects doomed the common law misrepresentation claims.

Although the FDA had issued the warning letter (on a somewhat arcane and technical issue), the court noted that not every regulatory violation amounts to an act of consumer fraud. The court also noted that it is simply not plausible that consumers would be aware of FDA regulations regarding “nutrient content” and restrictions on the enhancement of snack foods. The complaint actually did not allege that consumers bought the product because they knew of and attributed something meaningful to the regulatory term “Plus” and therefore relied on it. Rather, plaintiffs alleged merely that they subjectively thought they were buying a “healthy” product that happened to also apparently run afoul of a technical FDA regulation.

Snapple Prevails in All Natural Suit

A federal court granted summary judgment to defendant Snapple in a lawsuit accusing
Snapple Beverage Corp. of misleading consumers by labeling drinks as "all natural" even though they are sweetened with high fructose corn syrup. Weiner et al. v. Snapple Beverage Corp., No. 1:07-cv-08742 (S.D.N.Y.).

We have commented on the growing and alarming trend of plaintiffs' lawyers concocting consumer fraud class action claims against products, even when consumers were not injured and got basically what they paid for, because of some alleged ambiguity in the label or old-fashioned puffing.

Snapple Beverage Corporation was founded in New York’s Greenwich Village in 1972. Snapple began selling and marketing its teas and juice drinks in the late 1980s. In marketing its beverages, Snapple focused on, among other things, flavor, innovation, and humor. Snapple became known for its quirky personality and funny advertising, as well as its colorful product labels and beverage names. For instance, Snapple’s television advertisements featured, among other things, Snapple bottles dressed in wigs and hats, singing in a Backstreet-esque “boy-band,” running with the bulls (hamsters with cardboard horns) in Spain, and performing synchronized swimming.

When Snapple entered the beverages market in the late 1980s, it avoided putting preservatives, which were then commonly found in some similar beverages, in its teas and juice drinks. Snapple was able to do so by using a “hot-fill” process, which uses high-temperature heat pasteurization to preserve products immediately before bottling. Snapple also used 16-ounce glass bottles instead of aluminum cans or plastic. Hence the term on their label "All Natural."

From their inception, Snapple’s beverages were sweetened with high fructose corn syrup. HFCS is made from corn ( a natural product last time we checked), and its primary constituents are glucose and fructose, the sugars that comprise table sugar and honey (which also sound pretty natural). It is undisputed that Snapple disclosed the inclusion of HFCS in the ingredient list that appears on the label of every bottle of Snapple that was labeled “All Natural.”

Readers may recall from our previous post, that here plaintiffs sued seeking to represent a nationwide class of consumers who made purchases between 2001 and 2009 in New York of Snapple beverages labeled “all natural” and which contained high fructose corn syrup.  The plaintiffs alleged they paid a premium for the company's drinks as a result of the all natural claim.

Judge Cote denied the plaintiffs' motion for class certification last year, finding that plaintiffs had not proposed a suitable methodology for establishing the critical elements of causation and injury on a class-wide basis. Without a reliable methodology, plaintiffs had not shown that they could prove at trial, using common evidence, that putative class members in fact paid a premium for the beverage. Because individualized inquiries as to causation, injury, and damages for each of the millions of putative class members would predominate over any issues of law or fact common to the class, plaintiffs’ claim could not be certified under Rule 23(b)(3).

Snapple then moved for summary judgment on the two named plaintiffs' individual claims
under New York's consumer protection laws, as well as claims of unjust enrichment and breach of express warranty.

Jurisdiction was predicated on CAFA, so a preliminary issue was whether the court retained jurisdiction after the denial of class certification. The statute does not speak directly to
the issue of whether class certification is a prerequisite to federal jurisdiction, and the Second Circuit has not addressed the issue. The circuits that have considered the issue, however, have uniformly concluded that federal jurisdiction under CAFA does not depend on class certification. See Cunningham Charter Corp. v. Learjet, Inc., 592 F.3d 805, 806 (7th Cir. 2010); United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int’l Union, AFL-CIO, CLC
v. Shell Oil Co., 602 F.3d 1087, 1092 (9th Cir. 2010); Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1268 n.12 (11th Cir. 2009).

The court granted the motion, finding that the named plaintiffs had failed to show that they were injured as a result of Snapple's labeling.  According to Snapple, because the plaintiffs had not offered evidence showing either the price they paid for Snapple or the prices charged by competitors for comparable beverages, they could not demonstrate that they paid a premium for the “All Natural” Snapple product and thus could not show harm stemming from the allegedly misleading label.  Neither of the plaintiffs had any record of his purchases of Snapple. Their most recent purchases were made in 2005 and 2007, or 3 to 5 years before their deposition testimony was taken. Not surprisingly, they had only vague recollections of the locations, dates, and prices of their purchases of Snapple. Besides being unable to establish the actual price they paid for the Snapple products at issue here, the plaintiffs have offered no other evidence from which to
calculate the premium they paid for Snapple. The court agreed that plaintiffs failed to prove that they paid more for Snapple's products than they would have for comparable beverages.

As for the breach of expressed warranty claim, an injured party is entitled to the benefit of its bargain, measured as the difference between the value of the product as warranted by the manufacturer and its true value at the time of the transaction. Because the plaintiffs
had not demonstrated that they purchased Snapple's drinks in reliance on the “all natural”
label, they could not show any such difference in value. 

Food Safety Bill Passes Senate

An update on the food safety legislation, which we posted about last week.

The Senate passed the Food Safety Modernization Act by a vote of 73-25. The chamber rejected a series of final amendments. One of them would have replaced the entire bill with a more modest version authored by Sen. Tom Coburn, R-Okla.; it failed by a 62-36 vote. 

Despite bipartisan support for an overhaul of FDA’s authority to regulate food, the bill faces an uncertain future since it appears there is insufficient time for a conference to reconcile the House and Senate versions.The Senate legislation differs from the House version in several respects, including the fees the FDA can charge, regulation of small food businesses and farms, and frequency of required inspections. It may be that the House will vote to pass the Senate version.  There is also some concern that the Senate invaded the tax authority that belongs to the House when it included revenue-raising fees in the Senate bill.

The expanded inspections and recall authority may lead to additional litigation down the road involving the food industry.

City Passes Ban on Happy Meals

We haven't weighed in yet on the latest crazy development in the food world, that attack by some of the San Francisco Board of Supervisors on "Happy Meals."  And no, this is not sour grapes for the Giants having beaten the Phillies. The Board of Supervisors recently voted to ban meals packaged with toys unless the meal contains fruits and vegetables, is less than 600 calories and is very low in fat and sodium, and, presumably, doesn't taste good and won't make your kid happy. 

So much is wrong with that, it's hard to know where to start. 

It undercuts the rights of consumers to choose. If more people wanted these kinds of meals, more fast food restaurants would sell them. (You can get carrots and milk with a Happy Meal by the way.) That's the way a free economy is supposed to work. San Francisco (or at least a majority of the Board) is simply taking choice away from consumers, the right to eat or drink what he or she chooses.  Apparently, these Board members are part of that new government mindset in which individuals are incapable of making decisions for themselves.  Only the government can make those choices.
 

But, it's about obesity in children, argues the Board.  We say parents, not politicians, should decide what their children eat. So the impact on kids is actually another reason this bill is a bad idea, an unwise and unprecedented governmental intrusion into parental responsibilities and family choices.  It is a parents' right and responsibility — not the government's — to make their own decisions and to choose what’s right for their children.

On this basis, San Francisco Mayor Gavin Newsom wisely vetoed the ban on Happy Meals, but the Board of Supervisors voted 8-3 just this week to override Newsom’s veto.

Put aside the policy debate, one of the most troubling aspects is the quote from a sponsor that this bill was part of "an agenda of food justice.”  Seen in this light, the bill is part of a broader legal campaign that will include litigation against food companies.  Indeed, as we have posted on before, the so-called Center for Science in the Public Interest has threatened to  file a lawsuit against McDonald’s, attacking the company's marketing of Happy Meals. In our view, the CSPI needs to worry more about junk science than junk food.

 

Food Safety Bill Advances in Senate

The U.S. Senate last week voted to move forward to the final debate on legislation aimed at amending regulatory controls on both domestic and foreign food supplies.  The Senate voted 74-25 to invoke cloture on S. 510, the Food Safety Modernization Act.  The bill is sponsored by Senate Majority Whip Dick Durbin, D-Ill., and a bipartisan group of 20 other Senators.

The procedural vote was designed to open the final round of the Senate's food safety debate, although it is unclear wither the Senate Democratic leaders will allow additional amendments to the bill on the Senate floor.  Some Senate Republicans have urged that they be allowed unlimited amendments during floor debate leading up to the vote on final passage.  While some amendments may be designed to strengthen the FDA inspection process of both domestic and foreign food production facilities, one highly controversial step would be if Sen. Dianne Feinstein, D-Calif. again offers an amendment to the bill that would impose a federal ban on the
use of bisphenol A in children's food packaging. 

That position does not hold substantial support in the Senate, and her shrill insistence on the ban delayed Senate action on a much larger and more comprehensive legislative package.  Indeed, a member of her own party, Rep. John Dingell (D-Mich.), criticized her in a public letter for holding up this bill.  Other key remaining issues include treatment of small farmers, and the role, if any, of local and state food inspections.

The bill would give the FDA new authority to track and halt contaminated food coming from domestic and foreign suppliers. Food facilities would be required to provide additional information to the FDA, submit to more frequent inspections and to develop their own tracking systems. The agency would also get new mandatory recall authority over tainted food, and additional authority to deal with misbranded or adulterated products.

The House passed a companion bill, H.R. 2749, the Food Safety Enhancement Act, by a vote of 283-142, in July 2009.  The typical conference committee to iron out differences may be an issue given the lateness in the lame-duck session in Congress. It is possible the House could vote to accept the Senate version, if it indeed passes.

There are about 76 million cases of food-borne illnesses every year in the U.S., leading to 325,000 hospitalizations and 5,000 deaths, according to the CDC.

 

Class Action Claims Against Labeling of Snack Food Preempted

Last week, a federal district court held that federal food labeling law does preempt state law claims attacking the use of phrases such as “0 Grams of Trans Fat” on snack food packaging. See Peviani v. Hostess Brands Inc., No. 2:10-cv-02303 (C.D. Cal., 11/3/10).

 In this putative class action, plaintiffs alleged that the defendant used misleading and deceptive statements to market the "Hostess 100 Calorie Packs" baked goods. In particular, plaintiffs alleged that the label noting "0 Grams of Trans Fat" was inconsistent with the products containing partially hydrogenated oils (PVHO).  Plaintiffs alleged that PVHO is linked to various health problems, and therefore is supposedly a "dangerous trans fat."

Plaintiffs alleged they purchased the 100 Calorie Pack foods relying on the no trans fat claim.  They asserted false advertising under the Lanham Act, violations of the California Unfair Competition Law, the California False Advertising Law, and the Consumer Legal Remedies Act. The two classes proposed were a restitution and damages nationwide class of those that purchased the foods, and an injunctive relief class of those who commonly purchase such foods.

Defendants filed a motion to dismiss, arguing that the claims were preempted by federal law.  The  court noted that the FDCA sets forth a comprehensive federal scheme for the regulation of food. In 1990, Congress passed the Nutrition Labeling and Education Act, 21 U.S.C. 341, which clarified FDA's authority to require and regulate nutrition labeling on food.  Two provisions directly apply to use of phrases like "0 Grams of Trans Fat."  One provision requires the labeling in the Nutrition Facts Panel to include the amount of saturated fat and total fat in each serving; and this regulation requires that if a serving contains less than 0.5 grams of trans fat, the amount "shall be expressed as zero."  Second, a regulation permits certain nutrient claims outside the Facts Panel about the level or range of a nutrient in the food, such as sodium, or calories or fat.  The NLEA permits such a statement as long as it is not false or misleading. 21 U.S.C. §§ 343(q) and (r).

The court noted that laws regulating the proper marketing of food are within the states' historic police powers, and thus subject to a presumption against preemption.  Nevertheless, consumer protection laws, such as those invoked here, are nonetheless preempted if they seek to impose requirements (through their use in litigation) that contravene the provisions of the federal law.  The NLEA contains an express preemption clause relating to any requirement  in state law that is not identical to the federal provisions.  But the court noted that implied preemption can accompany express preemption, as the essential inquiry always remains the substance and scope of Congress' intent to displace state law.

Plaintiffs alleged that the trans fat label outside of the Nutrition Facts Panel was an express nutrient content claim, and was false and misleading.  But the court noted that the FDA has declined to promulgate any regulation as to whether actual values must be used in labeling or rounded values may be used. In fact, the FDA has said that the difference between actual and rounded values are nutritionally insignificant, and thus either value relays the same basic information.  Here, since the phrase "0 grams of Trans Fat" is not false or misleading when used in the Nutrition Facts Panel, defendant's use of the exact same phrase elsewhere on the product label cannot be found false or misleading. If 0 and less than 0.5 grams mean, nutritionally, the same thing in the important Panel section, use of the exact same claim could not be misleading elsewhere on the label.

In essence, plaintiffs were trying, under state law, to enjoin on the label the use of the very phrase that federal law permits on another part of the label.  Plaintiffs' claims failed because they would impose a state law obligation for trans-fat disclosure that is not required by federal law.  (The plaintiffs' federal claim, for false advertising under the Lanham Act, failed for lack of standing,.)

The decision echoed Chacanaca v. Quaker Oats Co.,  No. 5:10-cv-00502 (N.D. Cal., Oct. 14, 2010), which dismissed similar claims over the phrase “0 Grams Trans Fat” on preemption grounds.

These types of claims illustrate the lengths to which plaintiffs are going to attack the food and beverage industries.  No one was sick from the snacks, which were labeled in exact accordance with explicit federal requirements.  Yet, a multi-count claim is brought in state court, with the legal theory that, in essence, federally approved language in one part of a food label is false and misleading under state law when it appears in another part of the same label. This is not about helping consumers.  How could it benefit consumers and clarify the information they have to make their own free and individual purchase decisions (with all the factors that go into what we decide to buy and eat) if the FDA-approved language in the Nutrient Facts Panel is allowed to be called false and misleading by a state court jury in California?


 

Class Action Alleging False Food Ads Rejected

Plaintiffs have failed in a proposed class action against McDonald's in which they alleged that the food company's advertising somehow misleads customers into believing that they can eat fast food daily without any potential health consequences.  Pelman v. McDonald's Corp., No. 02-civ-07821 (S.D.N.Y. 10/27/10).  Yes, loyal readers, you read that correctly: the claim is that the people of New York only know about fast food what they read in (or into) ads.

Plaintiffs in this action were New York State consumers claiming, pursuant to Section 349 of New York’s General Business Law, injury from defendant McDonald’s Corporation’s allegedly deceptive marketing scheme.  Plaintiffs claimed that the effect of defendant’s marketing – from 1985 until the filing of this case in 2002 – was to mislead consumers into falsely believing that defendant’s food products can be consumed on a daily basis without incurring any adverse health effects.  They alleged that, as a result of this marketing scheme, class members suffered injury. Specifically, plaintiffs alleged that defendant attempted to mislead plaintiffs and putative class members with misleading nutritional claims, in widespread advertising campaigns, that its foods were healthy, nutritious, of a beneficial nutritional nature, and/or were easily part of anyone’s healthy daily diet, each and/or all claims supposedly being in contradiction to medically and nutritionally established acceptable guidelines. Plaintiffs claimed that  they suffered injury in the form of the financial costs of defendant’s  products; “false beliefs and understandings" as to the nutritional content and effects of defendant’s food products, and physical injuries in the nature of obesity, elevated levels of  cholesterol, pediatric diabetes, high blood pressure, etc.

Plaintiffs moved for class certification pursuant to Federal Rule of Civil Procedure 23(b)(3).  The court "begins and ends" its analysis of class certification with consideration of the predominance requirement of Rule 23(b)(3). The court concluded that establishment of the causation and injury elements of plaintiffs’ claims would necessitate extensive individualized inquiries; the questions of law and fact which would be common to putative class members would not predominate over questions affecting only individual members. Accordingly, certification of this action for class litigation under Rule 23(b)(3) was not appropriate. 

The court found that the focus was on whether the elements of plaintiffs’ cause of action under GBL § 349 may be established by common, class-wide proof.  The court had earlier in the case ruled that in accordance with GBL § 349’s requirement that plaintiffs’ injuries be "by reason of" defendant’s conduct, the plaintiffs had be aware of the nutritional scheme they alleged to have been deceptive, and that the injuries that were suffered by each plaintiff  were by reason of defendant’s alleged deceptive marketing.  However, allegations of “false beliefs and understandings” did not state a claim for actual injury under GBL § 349.  Neither did allegations of pecuniary loss for the purchase of defendant’s products. (In some states that kind of "the product worked and didn't harm me but I wouldn't have purchased it" argument does fly.)

Accordingly, the only alleged injuries for which putative class members could claim damages under GBL § 349 were those related to the development of certain medical conditions; and the causal connection, if any, for those kinds of injuries depended heavily on a range of factors
unique to each individual. Defendant’s nutritional expert concluded there are many factors that contribute to obesity and to obesity-related illnesses, and thus it is improper to generalize and make assumptions as to causation in any individual.  Many foods, not just defendant's, are high in fat, salt, and cholesterol, low in fiber and certain vitamins, and contain beef and cheese, and there is no evidence to suggest that all who consume such foods develop the kinds of medical conditions which were at issue in this case. 

Moreover, whether or not plaintiffs’ claims (that they ate McDonald’s food because they believed it to be healthier than it was in fact) are true for any particular person was an inquiry which also required individualized proof. A person’s choice to eat at McDonald’s and what foods (and how much) he eats may depend on taste, past experience, habit, convenience, location, peer
choices, other non-nutritional advertising, and cost, etc.

Plaintiffs also argued for issue classes, asserting that the 1) existence; 2) consumer-orientation; and 3) materially misleading nature of the marketing scheme alleged by plaintiffs were each
questions which could be settled upon a showing of objective evidence and legal  argument. Even if true, the court noted that all elements of the class action rule have to be met even for issue classes. Named plaintiffs did not present any specific evidence about the number of other persons within the relevant age group who were exposed to the nutritional marketing at issue, then regularly ate at McDonald’s, and subsequently developed the same medical injuries as those allegedly suffered by named plaintiffs.  So they hadn't even shown numerosity.


 

European Regulators Reaffirm Stance on BPA

Readers of MassTortDefense are accustomed to European regulatory approaches that are much stricter than in North America, under a co-called "precautionary" approach.  So what does it say about the hysteria in the U.S. over BPA when the European Food Safety Authority (EFSA) concludes that there is no new evidence to suggest the tolerable daily intake (TDI) for bisphenol A  needs to be changed?  EFSA recently reconfirmed that current levels of exposure pose no significant threat to human health.

Bisphenol A is a chemical used as a monomer in polycarbonate plastic and epoxy resins, in food contact materials used in the manufacture of some plastic bottles and food and drink can linings.  EFSA had an expert panel perform a detailed and comprehensive review of recent scientific literature and studies on the toxicity of bisphenol A at low doses.  The latest work carried out by EFSA scientists followed a request from the European Commission to: a) carry out a review of recent scientific literature on the toxicity of BPA to assess whether the TDI should be updated; b) assess a new study on possible neurodevelopmental effects (i.e. possible effects to the brain and central nervous system) of BPA in rats, known as the Stump study; and c) advise on the BPA risk assessment by Denmark’s DTU Food Institute.

The agency reaffirmed its positions stated over the last couple years, and concluded that it would maintain the current TDI of 0.05mg/kg/bodyweight.  The scientists on the EFSA CEF Panel concluded they could not identify any new evidence which would lead them to revise the current Tolerable Daily Intake for BPA as set by EFSA in its 2006 opinion and re-confirmed in its 2008 opinion. (In 2006, EFSA set the TDI for BPA at 0.05 mg BPA/kg body weight (b.w.)/day. This is based on the No-Observed-Adverse-Effect-Level (NOAEL) of 5 mg/kg b.w./day that has been identified in multi-generation reproductive toxicity studies in rodents, where the critical effects were changes in body and organ weights in adult and offspring rats and liver effects in adult mice, respectively. In 2008, EFSA reaffirmed this TDI, concluding that age-dependent toxicokinetics differences of BPA in animals and humans would have no implication for the TDI.) 

Moreover, the research pointed to by those out to ban BPA had “many shortcomings” and uncertain relevance to human health.   In particular, the panel dismissed concerns over the alleged neurobehavioral toxicity of BPA attributed to the Stump study and a risk assessment by Denmark's National Food Institute,  finding the alleged link uncertain and pointing out a variety of flaws in the analysis of the Stump data after further evaluation from EFSA’s Assessment and Methodology group. The careful review of the scientific literature failed to provide any convincing evidence that BPA has any adverse effects "on aspects of behavior, such as learning and memory.”

EFSA's conclusions, after intense scientific scrutiny, get little play in the mainstream press, but continue to reaffirm the safety of BPA in food contact applications.

  

Senate Moves Forward With Compromise Food Safety Act

U.S. Senate negotiators apparently reached an agreement last week on food safety legislation in order to have it ready for the full Senate to consider when lawmakers return from the summer recess.

The group that negotiated the framework for the new Senate version of the Food Safety Modernization Act included Tom Harkin, D-Iowa; Mike Enzi, R-Wyo.; the bill's authors Dick Durbin, D-Ill., and Judd Gregg, R-N.H.; and lead co-sponsors Christopher Dodd, D-Conn., and Richard Burr, R-N.C.

The bill would require facilities that manufacture, process, pack, or hold food to have in place risk-based preventive control plans to address identified hazards and prevent adulteration.  It requires importers to verify the safety of foreign suppliers and imported food. It would give the FDA additional resources to hire new inspectors and requires FDA to inspect food facilities more frequently. The bill gives the FDA authority to order a mandatory recall of a food product if the food will cause serious adverse health consequences or death and a company has failed to voluntarily recall the product upon FDA’s request. It has provisions to enhance surveillance systems to detect food-borne illnesses.

Significantly, this version does not include language banning BPA, as originally demanded by Sen. Feinstein.  Her prior insistence, despite a lack of scientific evidence supporting such a ban, was one of the major logjams for the bill. She says she still plans to introduce an amendment to ban BPA from children’s products as soon as the bill arrives on the Senate floor.  Clearly, an abrupt and unnecessary ban on packaging containing BPA would affect consumer ability to find nutritious, valuable, and shelf-stable foods and beverages. The proposed ban runs counter to the fact that BPA has been used for over 30 years to improve the safety and quality of food and beverages, including by providing protective coating for cans. The overwhelming scientific evidence points to the conclusion that at current human exposure levels, BPA is not toxic. What is in fact occurring is that anti-chemical activists are simply manipulating consumers’ fears, and opportunistic politicians are jumping in.



 

 

Federal Court Misses Opportunity To Support Common Sense

A federal court last week refused to dismiss most claims by a putative class challenging health claims in vitaminwater beverage labeling. Ackerman v. Coca-Cola Co., CV-09-0395 (E.D.N.Y., 7/21/10).

Here at MassTort Defense we have warned companies about the dangers of consumer fraud class actions and highlighted some of the many ridiculous, far-fetched, beyond belief claims that plaintiffs make about being misled about some product.  This one is near the top of the list. Plaintiffs allege that the name, "vitaminwater," along with a description of the vitamins in the water are somehow deceptive because they supposedly mislead people to believe that the beverages do not have sugar or calories in them. Plaintiffs are not alleging that vitaminwater doesn't have water or doesn't have vitamins or that the particular vitamins in vitaminwater fail to provide the benefit claimed. Rather, they claim that vitaminwater’s labeling and marketing are misleading because they "bombard" consumers with a message that supposedly draws consumer attention away from the significant amount of sugar in the product. About the sugar? The FDA-mandated label on each bottle bears the true facts about the amount of sugar per serving.

(The opinion also rejected defendant's argument that the claim was expressly and/or impliedly preempted by statutes and regulations preventing states from imposing labeling requirements that are different from those imposed by the FDA.)

The complaint alleged claims of unlawful business acts and practices in violation of California Business and Professions Code (“Cal. BPC”) § 17200 et seq. (“Unfair Competition Law” or “UCL”); Cal. BPC § 17500 et seq. (“False Advertising Law” or “FAL”); and California’s Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et seq. (“CLRA”); (2) unfair business acts and practices in violation of California UCL; (3) fraudulent business acts and practices in violation of California UCL; (4) misleading and deceptive advertising in violation of California FAL; (5) untrue advertising in violation of California FAL; (6) unfair methods of competition or unfair or fraudulent acts or
practices in violation of § 1770(a)(7) of the CLRA; (7) deceptive acts or practices in violation of
New York General Business law (“GBL”) § 349; (8) false advertising in violation of New York
GBL § 350; (9) violation of New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. 56:8-1 et
seq.; (10) breach of an express warranty; (11) breach of an implied warranty of merchantability;
(12) deceit and/or misrepresentation; and (13) unjust enrichment.

The claims were brought on behalf of three purported classes of plaintiffs: all California Residents who purchased vitaminwater at any time from January 15, 2005 to the present, (the “California Class”); all New York residents who purchased vitaminwater at any time from January 30, 2003 to the present, (the “New York Class”); and all New Jersey residents who purchased vitaminwater at any time from January 22, 2003 to the present (the “New Jersey Class”).

So what's misleading? The court found that plaintiffs had sufficiently pleaded that the collective effect of the marketing statements was to mislead a reasonable consumer into believing that vitaminwater is either composed solely of vitamins and water, or that it is a beneficial source of nutrients.   Despite the fact that the sugar content was plain as day to anyone who would look at the label. The court found that the fact that the actual sugar content of vitaminwater was accurately stated in an FDA-mandated label on the product does not eliminate the possibility that "reasonable" consumers may be misled. The court relied on Williams v. Gerber Products Co., 552 F.3d 934 (9th Cir. 2008), for the notion that the mere fact that an FDA-mandated nutritional panel provided
accurate nutritional information on a product did not bar claims that reasonable consumers could
be misled. Reasonable consumers should not, said the court, be expected to look beyond representations on the front of the box to discover the truth from the ingredient list in smaller print on the side of the box. But unlike the Gerber case, there were no allegations here that the packaging for vitaminwater contained any false statements or pictures. As noted, plaintiffs concede that vitaminwater actually contains the vitamins the marketing says it does. And it hardly seems like an unfair burden on a "reasonable" consumer to turn from the word "vitaminwater" on one part of the bottle to the label in close proximity on the very same bottle.

As a matter of law, plaintiffs should not be permitted to move forward with a claim about the presence of an ingredient that is clearly disclosed on the Nutrition Facts label, exactly where FDA tells the manufacturer to put that information.  And, of course, the problem with allowing the claim to proceed past the motion to dismiss claim is that the case will proceed through expensive discovery to reach a stage where common sense prevails and summary judgment is granted -- if a defendant is not blackmailed into settling.  And a common thread in many of these consumer fraud class actions is the fundamental notion by plaintiffs' attorneys --implicit in their theory-- that the public must be stupid, cannot read labels, and cannot make legitimate product choices for itself. In fact, the public speaks just fine with its wallets and pocketbooks. Fortified beverages are not new and are one of the fastest-growing market segments. Consumers are indeed able to read nutrition labels and ingredient listings and make smart choices, for themselves, without the help of the plaintiffs' bar.  Contrast this case with recent comon sense decisions.

Cap'n Crunch Defeats Class Action Marauders

 A federal court has dismissed a proposed class action against PepsiCo Inc. alleging that consumers were somehow being misled to believe that the company's Cap'n Crunch's Crunch Berries breakfast cereal contain real fruit.  Roy Werbel v. PepsiCo Inc., No: C 09-04456 SBA (N.D. Cal. 7/1/2010).

Here at MassTortDefense we have railed against the trends in consumer fraud class actions, as plaintiff lawyers seek class status for alleged economic-only harm claims, when they find some word or image in advertising that they can quibble about or argue is somehow ambiguous to a client.  No one is really harmed; no one is misled; no one is defrauded.  The theories of the case make a mockery of common sense and personal responsibility. But, hey, fees may be available. This case is part of an appropriate response to such claims.

Cap'n Crunch debuted in 1963, and Crunch Berries came along in 1967. The Cap'n was drawn by the same guy that created Dudley Do-Right, George of the Jungle, and Moose and Squirrel (Rocky and Bullwinkle.)  Perhaps some of our readership will remember the original commercials featuring the canine Sea Dog, who sailed with the Cap’n on his ship, The Good Ship Guppy. The crew was tasked with keeping the cereal safe from the Cap’n’s nemesis, Jean LaFoote, the Barefoot Pirate.  Trivia question: what is the Cap'n's full name?  See below.

Plaintiff Roy Werbel brought the putative class action against defendant on behalf of consumers who allegedly were misled into believing that “Cap’n Crunch’s Crunch Berries” cereal derives some of its nutritional value from real berries or fruit.  On the package, immediately below the product name is a product description, which states: “SWEETENED CORN & OAT CEREAL.”  The display panel also depicts a ship’s captain in cartoon form standing behind a bowl of cereal, and holding a spoonful of multi-colored Crunch Berries. Plaintiff alleged that the colorful Crunchberries [sic] on the box conveyed only one message: that Cap’n Crunch "has some nutritional value derived from fruit.”  Although the product contains strawberry juice concentrate, that ingredient allegedly is for flavoring only.  According to plaintiff, the only reason that the front display panel on the Cap’n Crunch cereal box refers to “berries” is “to lead consumers to believe that the Product contains nutritional content derived from fruit.”

Plaintiff alleged statutory violations under California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200, et seq., False Advertising Law (“FAL”), id. § 17500, et seq., and Consumer Legal Remedies Act (“CLRA”), Cal. Civ.Code § 1750, et seq., along with common law causes of action for intentional misrepresentation and breach of express and implied warranty. Claims made under these statutes are governed by the “reasonable consumer” test which focuses on whether “members of the public are likely to be deceived.” Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (citing Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir. 1995)).

In response to the theory that members of the public were likely to be deceived into believing that Cap’n Crunch derives nutrition from actual fruit by virtue of the reference to Crunch Berries, the court gave a one word conclusion: "Nonsense."   It was obvious from the product packaging that no
reasonable consumer would believe that Cap’n Crunch derived any nutritional value from
berries. As an initial matter, the term “Berries” was not used alone, but always was preceded by the
word “Crunch,” to form the term, “Crunch Berries.”  Even the image of the Crunch Berries showed four cereal balls with a rough, textured surface in hues of deep purple, teal, chartreuse green and bright red. These cereal balls do not even remotely resemble any naturally occurring fruit of any kind we have ever seen; there are no pictures or images of any berries or any other fruit depicted on the Cap’n Crunch cereal box.  

Moreover, there were no representations that the Crunch Berries are derived from real fruit or are nutritious because of fruit content. To the contrary, the packaging clearly stated that product is a “SWEETENED CORN & OAT CEREAL.” In short, no reasonable consumer would be deceived into believing that Cap’n Crunch has some nutritional value derived from fruit. 

The warranty claim, that defendant allegedly warranted that Cap’n Crunch “contains berries” and “was a substantially fruit-based product deriving nutritional value from fruit,” was deemed "frivolous." No such claim was made expressly or impliedly anywhere on the Cap’n Crunch packaging or marketing material cited by plaintiff.

Case dismissed, with NO leave to amend to try to salvage some treasurer from nothing.  The Cap'n lives on.

Trivia answer: In May 2007 Cap'n Crunch's full name was revealed as Captain Horatio Magellan Crunch.

Self-Annointed Watchdogs, Eat Your Own Unhappy Meals

We are generally hesitant to post about some of the ridiculous industry-bashing that many anti-science, anti-capitalism groups spout -- for fear of spreading their misguided word one inch farther.  But sometimes, when litigation is threatened, you just have to stop biting your tongue.

The self-proclaimed Center for Science in the Public Interest has apparently threatened to sue McDonald’s if the popular food company does not stop marketing toys with its Happy Meals.  The claim is that the toys included in the meals instill unhealthy eating habits in children.  CSPI sent a letter to McDonald's last week demanding that the company immediately pull toys from its Happy Meal children’s meals. By advertising that Happy Meals include toys, McDonald’s somehow supposedly unfairly and deceptively markets directly to children.   Advertising a small toy in a Happy Meal box is supposedly deceptive because children under the age of 8 are not advanced enough to understand the "intent" of the marketing.

Well, how wrong can one misguided group be?  Let's count the ways.  Last time we checked, in a democracy with a free market economy, product sellers were free to make their products attractive to consumers, free to advertise them, and free to market their wares with accurate and truthful statements.  A Happy Meal is advertised to contain a toy.  It does.  It has a meal, just like promised.  And as a dad, I can attest to the fact the box meal does make kids happy.  Where is the deception?  There is none. The group cites a variety of state consumer fraud acts in the letter, but not a single case supporting its preposterous legal theories -- because there aren't any. For example, the group cites the Massachusetts law (93A), but the recent case Rule v. Ford Dodge Animal Health Inc., 2010 WL 2179794 (1st Cir. 6/2/10), makes clear that there is no valid consumer claim when the customer does not suffer a traditional and real economic injury.

Next, last time we checked, very few small children were behind the wheel in the drive-through line.  Parents can decide what their kids eat.  And parents can still say "no" when little Johnny or Suzie wants burgers and fries too often. When did we cross the line from parents raising their kids to the best of their ability, to the government (regulators or the courts through a suit) determining how kids should be raised, down to what they can eat and whether they get a small toy to play with after dinner?  According to CSPI, many children will pester their parents to take them to McDonald’s.  So what?  Kids pester; that's what they do.  Parents say "no."  That's what they do.  Problem solved -- without a class action.

Next, the rabble rousers complain that the Happy Meals are slightly higher in calories than the group thinks is reasonable.  Thank goodness for the self-appointed calorie police who think that the best way to tackle the issue of weight in this country is to have the courts force all food companies to make food that looks and tastes like cardboard and is boring, anything but "happy."  How about we get kids to put down the remote control and exercise and play sports more?  Problem solved -- without the litigation.

But, cries the group, the toys build brand loyalty and send the customers back again in the future.  Since when was it an actionable wrong to actually provide your customers with a product they like so much they come back and buy it again in the future?  What kind of economy does this group want?

CSPI needs to worry more about junk science than junk food.  In fact, in my area, McDonald's heavily advertises the four-piece Chicken McNuggets Happy Meal, which includes Apple Dippers, low-fat caramel dip and 1 percent low-fat white milk.  Maybe the issue is that the parents of the CSPI members never told them "no."  Not to worry, they will soon hear it from the courts if they pursue this threatened litigation.
 

IOM Issues Food Safety Report Calling for Reform of FDA

report issued last week by the Institute of Medicine (IOM) and the National Research Council (at the request of Congress) concludes that the FDA is not well equipped to handle potential problems with the food supply.  "Enhancing Food Safety: The Role of the Food and Drug Administration" notes that food-borne illnesses cause more than 300,000 hospitalizations and 5,000 deaths in the U.S each year. Food-borne diseases are caused by a variety of bacteria—such as Escherichia coli or Salmonella—viruses, parasites, or chemical residues.  

The severity of these diseases and the frequency with which they occur spurred this evaluation of how well the current food safety system protects the public’s health. While food safety is regulated by several agencies, the FDA oversees approximately 80 percent of the U.S. food supply, including all produce, seafood, and cheeses. Some food safety experts and some in the media have criticized the FDA’s food safety system and questioned whether it properly safeguards Americans from food-borne diseases. Congress asked the IOM to examine the possible gaps in the current food safety system under the purview of the FDA and to identify the tools needed to improve food safety.

Readers know that many of these food issues have led to litigation.

The IOM determined that the FDA lacks a comprehensive vision for food safety and should take a risk-based approach in order to properly protect the nation’s food. In addition, the FDA should provide standards for food inspection so that states and the federal government follow the same rigorous methods for inspections, surveillance, and outbreak investigations. Most notably, the IOM recommends that Congress take legislative action to provide the FDA with the authority it needs to fulfill its food safety mission. Americans will continue to suffer from food-borne illnesses unless the FDA reevaluates and reworks its approach to food safety management, claims the report.

The FDA, which sponsored the report, responded that through the President's Food Safety Working Group, which includes all agencies involved in food safety, it feels it is making significant progress to ensure government agencies are working seamlessly to protect the American public. But the IOM concludes that in order for the FDA to better ensure food safety, legislative and organizational changes may be necessary. Most notably, it says, Congress should consider taking legislative action to provide the FDA with the additional authority it needs to fulfill its food safety mission. Within the FDA, authority over field activities should shift from its Office of Regulatory Affairs to its Office of Foods. Such a change will ensure that responsibility lies with well-trained personnel with specialized expertise in food safety and risk-based principles of food safety management, says the IOM.

Recognizing that organizational reform will pose challenges, the report recommends that the federal government move toward the establishment of a single food safety agency to unify the efforts of all agencies and departments with major responsibility for safety of the U.S. food supply. The committee recommends establishing a centralized, risk-based analysis and data management center in order to improve efficiency and work toward a safer food supply. This center would include staff and support resources necessary to conduct rapid and sophisticated assessments of short- and long-term food safety risks and to ensure that the comprehensive data needs to support the risk-based system are met.

With regard to legislative changes, Senator Harkin (D-Iowa), head of the Health, Education, Labor and Pension Committee is trying to bring legislation overhauling the food safety system to the Senate floor later this month. He is pushing S. 510, the Food and Drug Administration
Food Modernization Act
, which is co-sponsored by Sens. Dick Durbin (D-Ill.), and Judd Gregg (R-N.H.), among others.  The  bill would give the FDA new authority to track, detect, and halt contaminated food coming from either domestic or foreign suppliers. Food-handling facilities would be required to share additional information with the FDA. Inspections would be more frequent and industry would nee to construct risk-based preventive control plans. The FDA would also get new recall authority.

The House passed its own version of food safety legislation in July, 2009, as we noted.

Proposed BPA Ban Undermines Food Safety Bill

Sen. Dianne Feinstein (D-Calif.) announced last week that she would seek to ban the chemical bisphenol-A in food and drink containers as part of an amendment to the proposed Food Safety Modernization Act (S.510). That move has the double distinction of lacking in scientific merit and threatening to undermine the bipartisan support for the good parts of the pending bill.  The Grocery Manufacturers of America and the Chamber of Commerce had expressed support for the food safety bill, but may oppose it if the bill contains language banning the chemical. The food safety bill is expected to come up after Congress returns from its Memorial Day break.

The Senator's ill-supported approach by-passes the safety review that belongs with the FDA, and is ongoing, with a re-review assessment due in 2011. NIH has also launched a study on the safety of low level exposure to BPA.  World-wide regulatory agencies who have reviewed BPA have thus far concluded that BPA is safe for use in canned products.  The European Food Safety Authority has announced a delay in delivering its own latest BPA report, needing more time to review the body of research on the chemical.

Clearly, an abrupt and unnecessary ban on packaging containing BPA would affect consumer ability to find nutritious, valuable, and shelf stable foods and beverages.  The proposed ban runs counter to the fact that BPA has been used for over 30 years to improve the safety and quality of food and beverages, including by providing protective coating for cans. The overwhelming scientific evidence points to the conclusion that at current human exposure levels, BPA is not toxic.  What is in fact occurring is that anti-chemical activists are simply manipulating consumers’ fears, and opportunistic politicians are jumping in.

Even though there is no persuasive scientific evidence that BPA causes the type of harm the politicians speculate about, litigation is well underway in both the Western District of Missouri (MDL 1967) and the Western District of Kentucky (MDL 2137). The former involves class action suits against manufacturers of baby bottles and sippy cups. The claims include alleged violation of state consumer protection acts, fraud, breach of warranty, unjust enrichment, strict product liability, and negligence. MDL 2137, on the other hand, involves suits against an aluminum bottle manufacturer claiming that the manufacturer marketed its product as an alternative to BPA-containing plastic even though its metal bottles were allegedly lined with an epoxy resin containing BPA.  

 

House Hearing on FDA Progress on Food Safety

Last week, the House Subcommittee on Oversight and Investigations of the Energy and Commerce Committee, held a hearing to discuss the recent performance of FDA in ensuring food safety.

Witnesses included Michael R. Taylor, Deputy Commissioner for Foods, Food and Drug Administration; Steven M. Solomon, Assistant Commissioner for Compliance Policy, Office of Regulatory Affairs, Food and Drug Administration; Lisa Shames, Director, Agriculture and Food Safety, Government Accountability Office; Jodi Nudelman, Regional Inspector General for Evaluation and Inspections, Region II, Health and Human Services Office of Inspector General.

The hearing examined two reports relating to the Food and Drug Administration's management of international food imports and inspections of domestic food facilities. In September 2009, the Government Accountability Office (GAO) released a report on the safety of imported food, entitled Food Safety: Agencies Need to Address Gaps in Enforcement and Collaboration to Enhance Safety of Imported Food.  In the report, GAO examined FDA’s difficulties in coordinating information-sharing and enforcement efforts with Customs and Border Protection. CBP provides information on imported food shipments to FDA, but GAO found that the two agencies’ failure to assign unique identification numbers to import firms limited FDA’s ability to tackle problems with high-risk food shipments.  GAO also opined that FDA does not have sufficient authority to ensure importer compliance with existing requirements. After imported food enters the United States, it remains in the possession of the importing firm until the FDA approves its release. The importer posts a monetary bond with CBP that is intended to discourage the shipment’s unauthorized release prior to FDA approval. However, the report found that because the value of the bond penalty is low, GAO previously concluded that the system may not provide an effective deterrent.

FDA testimony last week acknowledged that GAO has raised some important issues in its report on imported food. The Agency apparently agrees with many of the GAO recommendations and will incorporate them, as appropriate, into both short-term and long-term initiatives to help ensure the safety of imported foods. FDA also admitted it has encountered certain problems with rolling out PREDICT (the Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting system to improve import screening and targeting nationwide), due to difficulties with incorporating it into the Agency’s information technology infrastructure, which itself is in the process of undergoing major upgrades.


FDA officials also testified that enacting new food safety legislation is critical to strengthening FDA’s oversight of imported foods. H.R. 2749 would, among other things, provide valuable new tools, said the agency, for ensuring that importers reliably verify that the foods they import are produced in compliance with the same prevention-oriented standards that would be applicable to foods produced in the United States. For our food safety system to be effective, prevention must begin at the point of production, not at the port of entry, according the FDA.

The second report was from the Department of Health and Human Services Office of the Inspector General (OIG), and was entitled FDA Inspections of Domestic Food Facilities; it identified a number of challenges confronting FDA in safeguarding domestically produced food.  OIG found that, on average, FDA inspects only 24% of domestic food facilities annually; in addition, the number of inspections declined from 2004 to 2008.  The report also found that over the past five years, FDA has not inspected 56% of the food facilities subject to its authority.  OIG found that when violations were identified, FDA did not always take swift and effective action to ensure that these violations were remedied.  Additionally, OIG claimed that some facilities that had violations significant enough to warrant regulatory action refused to grant FDA inspectors access to their official records.

FDA claims the agency has already addressed many of the issues and recommendations noted in the report, and considerable progress is being made on others. FDA agrees with OIG’s assessment of the gaps in the Agency’s inspection authority. FDA is seeking more effective enforcement tools in accordance with OIG’s legislative recommendations. H.R. 2749 seeks to provide enhancements to FDA’s ability to trace the origin and distribution of tainted food. FDA would issue regulations that require food producers, manufacturers, processors, transporters, or holders to maintain a pedigree of the origin and previous distribution history of the food and to link that history with the subsequent distribution history of the food.  


 

Federal Court Sends Melamine Contamination Claims To China

A federal court recently sent back to China various Chinese families' product liability cases stemming from alleged melamine contamination of infant formula. See Tang v. Synutra International Inc., 2010 WL 1375373 (D. Md.).

Plaintiffs, one hundred Chinese citizens residing in China, brought suit on their own behalf as parents and on behalf of fifty-three minor children who allegedly suffered adverse health
conditions, predominantly the development of kidney stones, as a result of ingesting contaminated milk products produced by Defendants’ Chinese subsidiaries.  The principal place of business of both defendants, Synutra International, Inc., and Synutra, Inc., is in Maryland. Plaintiffs sought compensatory damages of at least $5.5 million for each child and $1.5 million for each parent, as well as a collective punitive damages award of $500 million. Defendants filed their motion to
dismiss on, inter alia,  the grounds of forum non conveniens.

In September 2008, the Chinese Administration of Quality Supervision, Inspection and
Quarantine (“AQSIQ”) initiated an emergency testing program of the country’s dairy supplies. Later that month, AQSIQ announced that certain lots of infant formula were found to have contained melamine, a chemical commonly used as an industrial component in plastics, adhesives, countertops, etc.  Melamine is not a food additive. It is not approved for human consumption.

By December 2008, approximately 300,000 Chinese infants were found to have ingested dairy products contaminated with melamine. Allegedly as a result, at least six infants have died and scores of others have required medical treatment for maladies associated with kidney damage. AQSIQ found varying amounts of melamine in sixty-nine batches of infant milk powder produced by several companies, including defendants' subs. In response to this crisis, the Chinese government, in conjunction with the China Dairy Industry Association, established a compensation program, funded by the dairy companies, that produced the contaminated milk products and totals approximately $160 million. It offered a lump-sum payment to the families of affected children, according to the extent of injury. To date, the families of approximately ninety-five percent of the injured children have reportedly accepted the remedies provided by the plan. Of those who have not, some have opted instead to bring suits in Chinese or U.S. courts.

The adequacy of the Chinese courts to adjudicate these suits was a significant point of contention between the parties; indeed, it was the critical factor of the forum non conveniens analysis in this case.

At the outset of any forum non conveniens inquiry, the court must determine whether there exists an alternative forum. The defendant bears the burden of establishing that the alternative forum is
available to all parties and that an adequate remedy is available to the plaintiff.  Although some courts conflate these issues, the availability and adequacy of the supposed forum are better seen as raising independent issues that warrant separate consideration by the court.

Ordinarily, a defendant can satisfy the availability element by showing that it is “amenable to process” in the alternative forum. Where the remedy offered by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all, however, the court may conclude that dismissal would not be in the interests of justice. Many courts have presumed the adequacy of the alternative forum and placed at least the burden of production on the plaintiff to establish otherwise.

Although plaintiffs here challenged both the availability and adequacy of the alternative forum to adjudicate their claims, there was no question in the court's mind that the Chinese forum was
available, since the defendant showed that it is “amenable to process” in the alternative forum.

Whether China constitutes an adequate forum was the primary issue in dispute. The dispute as to the adequacy of the Chinese forum boiled down to the competing declarations of the parties' China law experts. Defendants’ declarant opined that Chinese courts are adequate to resolve plaintiffs’ dispute and described that Chinese law provides causes of action for personal injury and products liability, a right to present evidence and argument in court, the power to compel witness testimony, and a right to appeal. Plaintiffs would be entitled to recover compensatory damages for expenses such as loss of income, related travel expenses, food subsidies, living expenses for dependents, as well as compensation for emotional damages, but not punitive damages.

Plaintiffs' experts claimed that “several volunteer milk attorneys” were summoned to a meeting held at the Beijing Bureau of Justice, a government entity, where an official demanded all attorneys to withdraw from representation on tainted-milk cases. The experts also asserted that the Chinese courts have denied litigants access to the courts, as well as the right to appeal an adverse ruling, because none of the complaints filed by contaminated-milk victims has been “either accepted or formally denied,”  resulting in the cases remaining perpetually in limbo. They also asserted that families of “seriously sickened children” receive $4,400, and “those suffering from other kidney problems” receive $292 under the government compensation scheme, and this is not “a legal remedy,” but rather “a settlement offer" made by the dairy companies,  In essence, plaintiffs asserted that the Chinese courts were deviating from normal process with respect to melamine claims and pressuring lawyers to withdraw representation of these claimants, thereby forcing the
unfortunate victims into a Hobson’s choice between pursuing futile litigation or accepting the "meager remedy" provided by the compensation program.

The court granted the motion, finding China an adequate forum.  The guiding principles included that the prospect of delay presented by the alternative forum does not typically render the alternative forum inadequate. The complaints had not yet been rejected in China. The court was not wiling to make the value judgment, on the basis of what it called limited evidence presented, that corruption in the Chinese judiciary would systematically deny access to a legal remedy there.  Courts have traditionally been reluctant to cast such aspersions on foreign judicial systems absent a substantial showing of a lack of procedural safeguards.

Second, even if the Chinese courts were not open to plaintiffs, another remedy was indisputably available to them, namely, the compensation program. While the plaintiffs characterized the
program as a “government-sanctioned settlement plan” from the companies that produced the contaminated milk products, as opposed to a legal remedy , they cited no authority for the proposition that the available remedy need be purely “legal” in nature. Regardless of whether it was enacted by the Chinese legislature or sanctioned by the judiciary, it is undisputed that the compensation program developed in China in the wake of the melamine contamination crisis was organized and sanctioned by government entities working in conjunction with the dairy industry and administered through an insurance provider.

Third, although the remedy offered by the compensation program was far less lucrative than what plaintiffs sought in the U.S., the courts have made clear, that the test is not to compare the rights, remedies, and procedures available under the law that would be applied in each forum to determine whether the law applied by the alternative forum is as favorable. 

New Food Safety Article Discusses Future Trends

From time to time, we have noted the significant litigation that may arise from food recalls.  For those readers interested in this area, we flag a recent article in the International Journal of Food Microbiology. Questeda, et al.,  "Trends in technology, trade and consumption likely to impact on microbial food safety," 10 I.J. Food Micro. 1016 (2010).

Experts from Unilever, the UK Food Standards Authority, and the US National Center for Food Safety and Technology outline what they think of as the key future threats to food safety, and strategies to tackle them. The article looks at current and potential future trends in technology, consumption, and trade of food that may impact on food-borne disease.  Among the most important factors driving an increase in the burden of food-borne disease in the next few decades were found to be the anticipated doubling of the global demand for food; the growing international trade in food; and a significantly increased consumption of certain high-value food commodities such as meat and poultry and fresh produce.

The article opines that the most important factor in reducing the burden of food-borne disease was an improved ability to first detect and investigate a food safety issue and then to develop effective control measures. Given the global scale of impact on food safety that current and potentially future trends have, it is observed that a key role may be played by intergovernmental organizations and by international standard setting bodies.

  

Nanotechnology Legislation Introduced in Senate

Two Democratic legislators have introduced a bill that would create an FDA program to assess the potential health and safety effects of nano-technology ingredients in various consumer products.  Sens. Mark Pryor (D-Ark.) and Benjamin L. Cardin (D-Md.) introduced the "Nanotechnology Safety Act of 2010," S. 2942, last week. Their introductory remarks here.

The FDA established a Nanotechnology Task Force, which issued a report in July 2007. In the task force report, recommendations were made regarding FDA’s future direction for regulating nanomaterial-containing products. Guidance development was included as one the recommendations. The FDA’s Advisory Committee for Pharmaceutical Science and Clinical Pharmacology met In 2008. Among the agenda topics was a discussion of issues pertaining to the use of nanotechnology in drug manufacturing, drug delivery, or drug products.  Later, FDA held a public meeting to gather information that will assist the agency in further implementing the recommendations of the Nanotechnology Task Force Report relating to the development of agency guidance documents concerning nanotechnology.

The bill would create a program for the scientific investigation of nanoscale materials included or intended for inclusion in FDA-regulated products, to address the potential toxicology of such materials, the effects of such materials on biological systems, and interaction of such materials with biological systems.  Specifically, FDA would be charged to assess scientific literature and data on general nanoscale material interactions with biological systems and on specific nanoscale materials of concern to Food and Drug Administration, and collect, synthesize, interpret, and disseminate scientific information and data related to the interactions of nanoscale materials with biological systems.

Nanotechnology applications in drug development are likely to have a significant impact on the products that FDA regulates. Products containing nanomaterials are being investigated for potential applications as therapeutics, and some products containing nanoscale materials are already on the market. While some of these nanomaterials are nanoscale versions of larger materials used in approved products, other nanomaterials are novel and have never been used in drug products. In 2009, the FDA introduced the "Nanotechnology Initiative", a collaborative effort between FDA and the Alliance for NanoHealth.

The proposed law would also require a report from FDA by 2012 that includes a review of the coordination of activities under the program with other departments and agencies participating in the National Nanotechnology Initiative. The bill would send $25 million annual funding to the agency for the program. The bill was referred to the Committee on Health, Education, Labor, and Pensions,

Many readers of MassTortDefense know that nanotechnology refers to a new field of technology that seeks to manipulate and control products, really matter, on the atomic and molecular scale, typically 100 nanometers or smaller. To give some sense of scale, one nanometer is one billionth, or 10-9 of a meter. A nanometer compared to a meter is the roughly the same ratio as that of a baseball to the size of the Earth. Or another analogy, a nanometer is the length a man's whiskers grow in the time it takes him to lift his razor to his face to shave. We have posted on this topic here, here, and here.
 

BPA Update- Part II

Yesterday, we posted about events in the MDL.  Today, the science, and it probably shouldn’t surprise readers of MassTortDefense that studies suggesting a product bears some risk get far more media attention than studies showing a product is safe, even when the latter are more rigorous. Similarly, studies funded by industry are dismissed by the media as hopelessly biased, as if product sellers have no interest in exploring their products, but studies from a pro-plaintiff, pro-litigation, anti-business, pro-regulation, big government biased interest group are deemed “neutral.”

Such continues to be the case with BPA. Consumer Union came out with a report of BPA levels detectable in 19 canned foods. They admitted that the study was limited and that the tests only “convey a snapshot of the marketplace and do not provide a general conclusion about the levels of BPA in any particular brand or type of product tested.”  Levels in the same product purchased at different types or places or in other brands of similar foods might differ from CU test results, they acknowledged. Published reports have noted that the group refuses to release the names of the external laboratories they used for testing; and the "study" would not have been published in a peer-reviewed scientific journal without a detailed description of the analytical methods used. The CU also apparently relies on animal studies in which the animals were injected with BPA, instead of ingesting it. Basic toxicology would indicate that the route of administration is important.

However, BPA has been confirmed as safe for use in food contact materials by the world’s major regulatory agencies. The food contact materials in your supermarket, including epoxy can linings, meet current regulatory standards, and as importantly, actually enhance food safety and extend product shelf life. Thus, BPA-based epoxy coatings in metal packaging provide important and measurable health benefits by reducing the potential for the serious and often deadly effects from food-borne illnesses. This packaging enables the high-temperature sterilization of food products when initially packaged and continuously protects against microbial contaminants. The head-long rush by a few zealots to ban BPA overlooks the need to balance this factor.

The levels CU says it detected are substantially below the advisory level of 600 parts per billion established by the European Union as a level of safe consumption for all ages, and below current U.S. guidelines that establish the daily upper limit of safe exposure as 50 micrograms per kilogram of body weight. They thus do not pose a health risk to consumers, of all ages.

The media gave far less attention to a study released that is a significant development in better understanding the safety of BPA. See Ryan, et al., In Utero and Lactational Exposure to Bisphenol A, in contrast to Ethinyl Estradiol, Does not Alter Sexually Dimorphic Behavior, Puberty, Fertility and Anatomy of Female LE Rats (Toxicological Sciences 2009). The study was sponsored by the Environmental Protection Agency. The study conclusion states: “The lack of effect of BPA on female and male rat offspring after oral exposure to low doses in our studies is consistent with the lack of adverse effects on growth, vaginal opening, fertility and fecundity of low doses of BPA in several other robust, well designed, properly analyzed multigenerational studies (Cagen, et al.,1999; Ema, et al., 2001; Tinwell, et al., 2002; Tyl, et al., 2002).”  This new rodent study thus finds that low-dose exposures to BPA showed no effects on the broad range of reproductive functions and behavioral activities measured. Well-conducted, peer-reviewed studies such as this should provide the basis for reasoned government assessments and regulatory decisions -- not the murky at best, results driven CU report.


 

FDA Launches Two Food Safety Initiatives

The U.S. Food and Drug Administration has launched two Internet-based initiatives that may be noteworthy for MassTortDefense readers involved in food safety issues.

First, the FDA has launched an Internet-based registry to track patterns in contaminated food.  The site, explained here, is a result of 2007 legislation requiring food facilities to report potentially dangerous products. Food industry officials are required to use the Reportable Food Registry to alert the FDA when they discover a risk that  their products might injure people or animals, the agency stated last week. By fostering real-time submission to the FDA of information on food safety hazards, the registry is supposed to enhance the agency’s ability to act quickly to prevent food-borne illness. The goal is to catch the problem before people get sick. 

Facilities that manufacture, process, or hold food for consumption in the U.S. must now tell the FDA within 24 hours if they find a “reasonable probability” that an article of food will cause severe health problems or death to a person or an animal. The reporting requirement, which applies to all foods and animal feed regulated by the FDA, does not reach infant formula and dietary supplements.

Any person who has to submit registration information to the FDA for a food facility that
manufactures, processes, packs, or holds food for human or animal consumption is deemed a “responsible party” and must follow the reporting requirement. A responsible party also must investigate the cause of the adulteration if the adulteration of food may have originated with the responsible party. 

The registry's proposal drew criticism from some industries, and they in fact had asked the FDA last month to extend the effective date for reporting. For example, national organizations representing the grain, feed, grain processing and pet food industries said that, at the very least, the FDA should exercise enforcement discretion in order to provide an appropriate phase-in period. FDA did not do so.

The launch of the FDA registry comes just as Congress is considering a new food safety bill that would give the FDA more funding and greater authority to order recalls of products. The House passed a food safety bill in the summer, and the Senate is expected to take up the issue later this fall.

At the same time, the administration is rolling out a new Web site designed to streamline food safety information for the public. Health and Human Services Secretary Sebelius announced the new Web site  last week. The site is a joint effort among HHS, the Department of Agriculture and the FDA.

The site will put food-related information from all federal agencies in one place.  It includes sections on how to "Keep Food Safe"; what to do in the case of suspected "Food Poisoning"; a section for industry relating to "Inspections & Compliance"; as well as food news, agency events (such as workshops, meetings, and conferences) for FDA, CDC, USDA; and educational materials on food safety.  Of particular interest to our readers may be the links to agency speeches and presentations, communications to Congress, and Congressional testimonies.

 

FDA Considering Rules on Acrylamide in Food

The FDA is considering issuing guidelines on acrylamide content in food.  The agency has published a notice seeking comments from industry on the issue.

Acrylamide is a chemical formed primarily in baked and fried foods by a reaction between sugars and the amino acid asparagine. The reaction is partly responsible for the golden color and tasty flavor of baked, fried, and toasted foods. In 2002, some Swedish scientists reported unexpectedly high levels of acrylamide in carbohydrate-rich foods and also published a study associating the chemical to cancer in laboratory rats. Further research subsequently determined that acrylamide can form in some foods during certain types of high-temperature cooking.

FDA has not yet issued guidance for manufacturers on reducing acrylamide in food. However, it is anticipated by the agency that new information will soon be available about the toxicology of acrylamide, which may shed light on acrylamide's potential carcinogenicity in laboratory animals. Readers of MassTortDefense know how difficult it is to leap from animal studies to causation conclusions in human beings, because of the physiological and metabolism differences between species, the excessive dosages that are (and typically must be) given to experimental animals, and the varying biological defense mechanisms that species have to environmental insults.

International efforts to develop approaches to acrylamide mitigation are also beginning to prove successful. Moreover, FDA is aware that at least some manufacturers in the United States are seeking ways to reduce acrylamide in their products. In this context, FDA is considering issuing guidance for industry on reduction of acrylamide levels in food products.

Health Canada recently added acrylamide to that nation’s toxic substances list, as part of its ongoing review of over 200 chemical substances in commercial use. It stated that current consumption levels “may constitute a danger in Canada to human life or health,” but it also acknowledged that research into a possible carcinogenic link for humans has so far been inconclusive.

In fact, dietary intakes of acrylamide are not related to increased risks of brain cancer, according to a recently released study of 58,279 men and 62,573 women, published by Maastricht University in the Netherlands. J.G.F. Hogervorst, et al., “Dietary Acrylamide Intake and Brain Cancer Risk,” 18 Cancer Epidemiology, Biomarkers & Prevention (2009).  Researchers have also reported in the Journal of the National Cancer Institute that dietary acrylamide was not linked to lung cancer risk, and that the compounds may even reduce the risk in women. "Lung Cancer Risk in Relation to Dietary Acrylamide Intake," 101(9) JNCI 651-662 (2009).

 

 

In seeking comments, the FDA has asked food manufacturers to respond with details of any manufacturing changes they have made, the success and cost-effectiveness of those changes, methods for acrylamide reduction that could be appropriate for smaller manufacturers, and changes to on-pack instructions for consumers to mitigate acrylamide formation.

 

 

BPA Update

The FDA's Science Board earlier this week heard  an update from the agency regarding the continued assessment of Bisphenol-A (BPA) in FDA-regulated products. (The Science Board to the Food and Drug Administration provides advice primarily to the Commissioner and other government officials on complex and technical issues as well as emerging issues within the scientific community.  The Board consists of a core of 21 members who are supposed to be authorities knowledgeable in the fields of food safety, nutrition, chemistry, pharmacology, toxicology, clinical research, and other scientific disciplines. Members represent academia and industry.)

At the meeting's update from the agency regarding the continued assessment of BPA,  the FDA Acting Deputy Commissioner briefed the agency's Science Board about agency plans to complete its evaluation of bisphenol A;  Dr. Goodman, who is also FDA's acting chief scientist, reportedly stated that the FDA will decide by Nov. 30 whether it will regulate bisphenol A in food packaging. FDA's National Center for Toxicological Research also described a variety of rodent and monkey studies that FDA is undertaking to further assess bisphenol A and potential health effects.

A representative of the Natural Resources Defense Council was among the public speakers who urged FDA to ban bisphenol A, despite the fact that the few studies of laboratory animals that have suggested an association with reproductive or developmental issues have used nonstandard test methods. Studies using standard protocols have not found any significant problems. The American Chemistry Council, BPA Joint Trade Association, and other industry groups argue that food and beverage containers made with BPA pose no undue risk of harm.  BPA is used in the lining of some food and beverage cans to prevent spoilage and is also used in a variety of other consumer products to enhance the structural integrity of plastic containers. Assessments conducted by Health Canada and California's Environmental Protection Agency suggest that dietary exposure would not pose risk to infants. Infant formula may be the most highly regulated food in the world.

Earlier this month, the Massachusetts Department of Public Health issued a health advisory   to parents and caretakers of children up to the age of two years suggesting they avoid the use of products that contain BPA for making or storing infant formula and breast milk. The state health agency further advised pregnant and breastfeeding women to avoid products that may contain BPA. The agency also noted that researchers caution that more research needs to be conducted.

Readers of MassTortDefense interested in BPA issue may want to look at "Science Suppressed: How America became obsessed with BPA,"  an in-depth examination by the STATS program at George Mason University of the science, risk assessment, and media coverage of the chemical, based on interviews with the lead authors of two major risk assessments, and focusing on the accuracy of the media's campaign to have the chemical banned. Some newspapers' coverage has had a knack, says the study, for avoiding research that showed BPA was safe, including risk assessments by the European Union, NSF International, Japan, and a lot more. Some of the media coverage has relied on a small circle of researchers whose work on BPA has been rejected by risk assessments across the world.


After the National Toxicology Program draft report was issued in early 2008, plaintiffs' attorneys nationwide began filing consumer class action complaints claiming violations of state consumer protection laws, fraud, breach of warranty, unjust enrichment, strict product liability, breach of contract and negligence. The lawsuits were consolidated as an MDL in the Western District of Missouri, last year (MDL-1967).  This multidistrict litigation consists of more than 25 cases that involve allegations concerning in baby bottles.

FDA Commissioner Outlines New Enforcement Plans

Readers of MassTortDefense know how FDA actions can instigate and affect potential mass tort litigation involving drugs and devices. Last week, in a presentation to the Food and Drug Law Institute (FDLI), new FDA Commissioner Margaret A. Hamburg revealed that the FDA will implement procedural reforms designed to allow the agency to act more quickly and aggressively on the enforcement of food, drug, and medical device regulations. The FDA commissioner told FDLI that the federal watchdog will be a leaner and meaner organization under her leadership.


In her remarks, the Commissioner noted that while impressed by the commitment to compliance that many companies have made – both in terms of their corporate culture and their investment in compliance systems -- her goal is for all companies to make and implement such a commitment in order to prevent harm to the public. A key part of the strategy to support private sector compliance is more effective enforcement against violations of the law. She suggested that such enforcement helps industry too – by maintaining a level playing field for safe products. Making sure that offenders are held legally accountable prevents companies from having to choose between doing the right thing and staying competitive.

An effective enforcement strategy depends on several key elements she said:

  • The FDA must be vigilant. Through regular inspections and follow-up on signals indicating problems, the FDA must work to identify and resolve problems early. Companies must have a realistic expectation that if they are crossing the line, they will be caught, and that if they fail to act, FDA will.
  • The FDA must be strategic, she continued. The agency must place greater emphasis on significant risks and violations, and use meaningful penalties to send a strong message to discourage future offenses.
  • The FDA must be quick. The agency must be able to respond rapidly to egregious violations or violations that jeopardize public health.

More specifically, she said the pathways for enforcement action can be too long and arduous. To address this, the FDA will set post-inspection deadlines. When the FDA finds that a firm is significantly out of compliance, it will expect a prompt response to the findings, generally no more than fifteen working days before the FDA moves ahead with a warning letter or enforcement action.

Second, the FDA will take steps to speed the issuance of warning letters. There will be a new policy to limit warning letter review to significant legal issues.

Third, the FDA will work more closely with regulatory partners to develop effective risk control and enforcement strategies. In many food safety cases, for example, local, state, and international officials have more authority to take action quickly than the FDA.

Fourth, the FDA will prioritize enforcement follow-up. After a warning letter is issued or a major product recall occurs, FDA will make it a priority to follow up promptly with appropriate action, such as an inspection or investigation to assess whether or not a company has made required changes in its practices.

Fifth, she said, the FDA will no longer issue multiple warning letters to non-compliant firms before taking enforcement action. And, in the case of significant health concerns or egregious violations, FDA will consider immediate action – even before issuing a formal warning letter.

Finally, the FDA is developing a formal warning letter “close-out” process. If the FDA can determine, usually based on a re-inspection, that a firm has fully corrected the violations raised in a warning letter, it will provide to the firm a “close-out” letter, indicating that the issues in the warning letter have been successfully addressed. One can imagine how the obtaining or failure to obtain a close-out letter may be anissue in litigation.
 

FDA Risk Communication Advisory Committee To Hold Food Meeting

FDA has announced a forthcoming meeting of the Risk Communication Advisory Committee.  This advisory committee provides advice and recommendations to the agency on a variety of regulatory issues. The meeting will be held on August 13, 2009, from 8 a.m. to 5 p.m. and August 14, 2009, from 8 a.m. to 2 p.m.

The Committee will discuss FDA’s external research on, and internal assessment of,  communications about food safety problems. This discussion will address research on consumer
knowledge of food recalls and plans for how to monitor communication effectiveness during the course of a recall. The goal of the discussion is to advise FDA on developing more effective communication strategies. The Committee will discuss FDA's external research on, and internal assessment of, communications about food safety problems. This discussion will address research on consumer knowledge of food recalls and plans for how to monitor communication effectiveness during the course of a recall. 

 

As background for this topic, the FDA directs the public to following sites:
FDA Peanut Product website.

 


•2006 FDA/FSIS Food Safety Survey Top-line Report

•Rutgers University Food Recall Surveys – Consumer Responses to Food Recalls: 2008 National Survey Report
Public Response to the Salmonella Saintpaul Outbreak of 2008
Public Response to the Contaminated Spinach Recall of 2006

Readers of MassTortDefense are well aware of the signifcant food recall issues, and subsequent litigation, in recent years.
 

Bill to Beef Up FDA Food Safety Power Passes Committee

The House Energy and Commerce Committee last week approved legislation that would give the FDA more funding and power to police food safety.  The unanimous voice vote for a version of the bill offered by committee Chairman Henry Waxman (D., Calif.) came after extensive negotiations between Democrats and Republicans. The "Food Safety Enhancement Act of 2009,"  H.R. 2749, will now go to the entire House.

The bill comes at least in part in response to recent outbreaks of illnesses traced to tainted spinach, peanuts, hot peppers and other foods. The legislation would give the FDA greater authority to order food recalls, impose new civil penalties, and require inspections of so-called high-risk food facilities at least once a year.  It also calls for companies to keep detailed records to help the FDA more quickly trace the distribution of tainted foods and track the source of the contamination.  Specifically, the FDA would be required to issue regulations that require food producers, manufacturers, processors, transporters or holders to maintain the full pedigree of the origin and previous distribution history of the food and to link that history with the subsequent distribution history of the food.
 

The Grocery Manufacturers Association, a food industry group, released a statement in support of the bill, after Democrats agreed to a number of changes. (For example, they added a cap so no company would be charged more than $175,000 in fees to pay for the new bill.)  Critics of the bill argue that it would impose a one-size-fits-all regulatory scheme on big and small farms and on national and local food producers; does not address the major underlying causes of food safety problems such as industrial agriculture practices and the consolidation of our food supply. Others assert that the bill, by apparently empowering the FDA to regulate how crops are raised and harvested, puts the federal government right on the farm, dictating to farmers "good farming practices" on organic farming, use of manure, GMO animal feed, animal drugs, and petrochemical fertilizers and pesticide issues.

At last report, the House hasn't scheduled a vote on the legislation. In the Senate, Illinois Democrat Dick Durbin has introduced similar food-safety legislation.

 

Federal Food Safety Working Group Invites Suggestions

The administration's Food Safety Working Group is collecting suggestions on its website for reforming federal food safety policy. Earlier this Spring, President Obama announced the creation of the Food Safety Working Group, chaired by the Secretaries of the Department of Health and Human Services and the Department of Agriculture. The President said in his address that the working group was designed to "bring together cabinet secretaries and senior officials to advise me on how we can upgrade our food safety laws for the 21st century; foster coordination throughout government; and ensure that we are not just designing laws that will keep the American people safe, but enforcing them."

The Working Group's charge is to ensure the country has safe food, to enhance food safety systems by fostering coordination throughout the government, and to enhance food safety laws for the 21st century. Apparently, the first work product from the Food Safety Working Group will be a set of principles and guidelines for improving food safety. The Working Group is receiving input from a broad range of stakeholders about their ideas for improving the food safety system. Others are invited to send their suggestions for reforming food safety policy, along with questions, comments, concerns. The Working Group can be reached through the White House comment form, or on twitter (hashtag #WHsafefood) or at their Facebook page.

Interested readers of MassTortDefense should think about reaching out to the Working Group with ideas for food safety that properly balance the importance of an adequate supply, the need for rapid transportation of foodstuffs, the public benefit of dietary choice and food options, the harmfulness of excessive governmental red tape; the need to avoid significant costs increases to the consumer in this challenging economic period, the inefficiency of government bureaucracy, the diversity and scope of the food service industry and its complex, multi-layered linkage with the supply chain, and other relevant concerns.

Most importantly to litigators, any thoughts would be welcome on safety steps that will not support or encourage additional litigation against the food industry. The CDC estimates that, each year, nearly 76 million people are affected by some type of food-borne illness, and approximately 325,000 Americans are hospitalized with a food-borne illness. Ultimately, this is because many pathogens continue to exist naturally in raw animal foods such as meat and poultry. Unfortunately, most food illness outbreak investigations fail to identify the real culprit, and some even identify the wrong source. In many cases, the claimants (who mistakenly think they got sick from the last thing they ate) sue the wrong party. Arguably, a significant part of the federal approach to food safety should focus on consumer and industry education, i.e., food safety educational programs that span the entire farm-to-table continuum, educating farmers, producers, distributors, food-handlers and consumers.

Class Certification Rejected in French Fry MDL

A federal court has rejected class certification in the multidistrict litigation concerning McDonald's Corp.'s french fries. In Re McDonald’s French Fries Litigation, MDL No. 1784, Civ. No.06-C-4467 (N.D. Ill. May 6, 2009). Plaintiffs in all 50 states and Washington, D.C., brought claims against McDonald's for allegedly putting hydrolyzed wheat bran and hydrolyzed casein in a beef flavoring for oil used in production of french fries and hash browns. Plaintiffs included individuals with celiac disease; galactosemia; autism; and wheat or gluten allergies. Defendant was alleged to have falsely claimed the "Potato Products" were gluten, wheat, and dairy-free through its website and in literature available at the restaurants.

The plaintiffs did not claim that they were physically harmed by the presence of trace amounts of wheat gluten and casein — a milk protein — in the beef flavoring. Rather, they based their claims on theories of consumer fraud and alleged economic losses. Plaintiffs claim they purchased Potato Products based solely on defendant’s representations that those products were free of gluten, milk and/or wheat ingredients, that the Potato Products in fact contained these allergens, and that absent defendant’s misrepresentations, plaintiffs would not have purchased the Potato Products.

The court first addressed the class definition. Named plaintiffs had testified in their depositions that they were quite satisfied with the Potato Products they consumed. (This shows the importance of pre-certification discovery, and the common common disconnect between the theories of class counsel and the reality of the class). None of the named plaintiffs had any physical reaction to eating the Potato Products. It was clear, therefore, that many persons in the class as defined by plaintiffs had gone on eating defendant’s Potato Products even after defendant clarified its product disclosures. Expert testimony showed that many patients with food allergies conduct their own ‘trials’ to determine what foods with gluten they have previously enjoyed that they may eat in moderation without experiencing symptoms. People who continued to use the products suffered no injury, not even the economic one claimed in this lawsuit. So the class was both over-inclusive and too indefinite for certification.

Regarding a narrower possible class of persons who because of their diagnosis of celiac disease, galactosemia, autism or a wheat, gluten or dairy allergy would not have eaten McDonald’s french fries or  hash browns if they had known they contained, potentially, a small amount of hydrolyzed wheat bran and hydrolyzed casein in the beef flavor that makes up one percent of the oil in which the potato suppliers par-fry the potatoes before shipping them to McDonald’s, and who relied on a representation by defendant that its Potato Products were wheat or milk free in purchasing and eating the french fries or hash browns….the court found that individual issues and individualized proofs would destroy manageability of a class action. That class in essence asked the court or jury to, at a minimum, review and evaluate potentially millions of letters from doctors for each class member. In addition, each claimant would have to individually affirm that he or she had seen the representation, purchased Potato Products on the basis of the representation, and no longer did so following defendant’s expanded product disclosure in February, 2006. Such a necessary separate evidentiary inquiry into each class member’s claim precluded certification.

Finally, choice of law issues ensured that individual issues of law clearly predominated over
common issues, making a nationwide class unmanageable. In at least some jurisdictions, reliance is necessary to connect the representations with the economic harm claimed, and in others individual proof is necessary to show that any injury was proximately caused by the misrepresentation made by a defendant.
 

FDA Food Inspection Audits At Issue

Published reports cite data suggesting that the FDA is having difficulty meeting its audit goals for food-safety inspections done contractually by states on its behalf.  The FDA is ultimately responsible for the safety of about 80% of the U.S. food supply.  It tends to focus on high risk foods, and contracts with approximately 40 states for inspections of other foods. Nationally, about half of all inspections are performed by states, according to the GAO.

The FDA audits state inspections done on its behalf, with a goal of auditing 7% of the state efforts so as to ensure quality inspections. Recently released data suggests the agency did not meet this audit target in at least 17 states, with five states receiving no audits in the last reporting period. The quality of state inspections came under intense scrutiny this year during the salmonella outbreak allegedly traced to Peanut Corp. of America in Georgia. And, as readers of MassTortDefense realize, the end result can involve mass tort litigation.  Experts hypothesize that so many state and federal resources are devoted to major food-borne illness outbreaks, audits may get postponed.

President Obama's selection to head the FDA, Dr. Margaret Hamburg, has pledged to make protecting the country’s food supply a major priority. And the new proposed federal budget calls for a $260-million increase for the FDA's food safety program. Part of the new funding would go to rebuild the ranks of inspectors; the number of FDA food inspectors has dropped since 2003. Hamburg has noted that the globalization of food production (about 20% of our food supply comes from abroad), the emergence of new and complex food technologies, and the risk of adulteration or deliberate terror attacks on our food supplies all raise major concerns. She proposes a shift from chasing outbreaks after they have occurred to trying to prevent them in the first place.
 

New Study On Diet And Heart Disease Makes Important Point About Epidemiology

Readers may have heard the response by the person warned by a family member that what he or she was eating was bad for their heart. “Wait a month and there will be a different study showing it is good for me.”  What we know for sure about diet and the heart is actually a surprisingly short list.

This week comes the study, A Systematic Review of the Evidence Supporting a Causal Link Between Dietary Factors and Coronary Heart Disease, by Drs. Mente, de Koning, et al. , 2009 Arch Intern Med. 169(7):659-669. This review study did an analysis of nearly 200 studies involving millions of people.


The authors concluded that strong evidence supports valid associations of protective factors for vegetables, nuts, and "Mediterranean" diet patterns, but that associations of harmful factors included intake of trans–fatty acids and foods with a high glycemic index.


Significantly, insufficient evidence of association was present for intake of supplementary vitamin E and ascorbic acid (vitamin C); saturated and polyunsaturated fatty acids; total fat; meat; eggs; and milk. 


One of the interesting features is that the authors used the traditional Bradford Hill guidelines on drawing causation conclusions from evidence of association to derive a causation score, basing it on 4 criteria (strength, consistency, temporality, and coherence) for each dietary exposure in cohort studies; they also examined the results for consistency with the findings of randomized trials.

Epidemiology involves judgment; it is not an absolute science, and the presence of confounding factors and the difficulty in finding an adequate control/comparison group for many food issues are similar to the issues seen in toxic tort litigation. 


No surprise, then, that the authors conclude that future evaluation of dietary patterns, including their nutrient and food components, in cohort studies and randomized trials is recommended.
 

FDA To Hold Meeting on Risk Communication Strategies

The Food and Drug Administration’s Risk Communication Advisory Committee will be holding a public meeting on April 30, 2009, and May 1, 2009, at the Center for Drug Evaluation and Research Advisory Committee Conference Room, in Rockville, MD. On both days the Committee will discuss the Agency’s draft risk communication strategic plan and will be asked for comment and further advice on strategic priorities for research on effective risk communication.

That draft plan describes FDA’s strategy for improving how the agency communicates about regulated products. The strategy is intended to guide program development and research planning in a dynamic environment where rapidly evolving technologies enable patients and consumers to become increasingly involved in managing their own health and well-being. FDA has been looking to improve how it produces communications about the risks and benefits of regulated products, as well as how it oversees those communications produced by regulated entities. For example, as the Internet and emerging technologies have both enabled and fed the public’s demand for greater transparency and communication frequency, the traditional waiting periods for FDA guidance have given way to communication in real time. Designing a contemporary risk communication strategy is key to FDA’s efforts to reposition itself to realize its potential for effective protection and promotion of health, enabled by 21st century knowledge and technology.

Effective communication supports both optimal use of medical products and safe consumption of foods to maximize health. The IOM report on The Future of Drug Safety: Promoting and Protecting the Health of the Public (2006) focused on drug safety, but also highlighted communication more generally, referencing FDA’s mission of helping the public get the accurate, science-based information it needs. In response to an IOM recommendation, FDA launched its Risk Communication Advisory Committee in 2007 to give advice about FDA’s risk communication approaches for all FDA-regulated products.

The FDA has begun to identify research needs in this area, including on the broad topics of:

  • When and what to communicate
  • Reaching the audience (dissemination)
  • Ensuring audience understanding
  • Motivating audiences
  • Evaluating effectiveness of communications
     

CDC Report Indicates Lack of Recent Progress on Food Safety

A new report from the U.S. Centers for Disease Control and Prevention indicates that after "important declines" seen in previous years, the incidence of many food-borne illnesses in the United States has leveled off in the past few years.  U.S. health officials conclude that progress on food safety has plateaued, and that further measures are needed to prevent more food-borne illness.

The findings are from 2008 data reported by the Foodborne Diseases Active Surveillance Network (FoodNet), a collaborative project of CDC, the Department of Agriculture’s Food Safety and Inspection Service (FSIS), the FDA, and 10 state sites. Preliminary data from FoodNet indicate that diagnosed and reported illnesses from an array of bacteria, including campylobacter, cryptosporidium, cyclospora, listeria, shiga toxin-producing escherichia coli (STEC), shigella, vibrio and yersinia, have basically stayed the same since 2004.

In the case of salmonella, the bacteria recently found in peanuts and pistachios, infections may be trending upward. The report said that in 2008, 16 of every 100,000 people in the United States had laboratory-confirmed cases of salmonella infections. That translates into about 48,000 serious illnesses, since individual stool samples are generally sent to laboratories only when someone is suffering a severe bout. In 2005, the figure was 14 people per 100,000, or about 42,000 cases of laboratory-confirmed salmonella infections.

Part of the problem is that as food supply chains get longer, and global distribution networks more complex, there are simply more opportunities for things to go wrong, according to the CDC. If a manufacturer or distributor has wider reach, a single tainted ingredient can potentially infect large numbers of people. Often, therefore, outbreaks of food-borne disease can result in mass tort litigation.

Roughly 76 million people in the United States suffer food-borne illnesses each year, 300,000 are hospitalized, and 5,000 die, according to CDC estimates. Children younger than 4 are sickened by food more than those in any other age group, but adults over age 50 suffer more hospitalizations and death as a result of food-related infections.
 

The CDC report follows on the heels of a report released last week by the Inspector General of the U.S. Department of Health and Human Services finding that identifying the actual suppliers and distributors of tainted food products remains a serious issue. 

Report Reveals Issues With Traceability Of Food Products

Identifying the suppliers and distributors of food products remains a serious issue according to a report released last week by the Inspector General of the U.S. Department of Health and Human
Services.

Beginning in 2005, FDA required certain food facilities to maintain records identifying the sources, recipients, and transporters of food products. The purpose of these records is to allow FDA to trace an article of food through each stage of the food supply chain—from a retail shelf back to a farm—if FDA has a reasonable belief that a food product is adulterated and presents a serious health threat.

This new report was based on two primary data sources: (1) a traceability exercise of 40 selected food products and (2) structured interviews with the managers at the food facilities that handled the selected food products. Traceability is the ability to follow the movement of a food product
through the stages of production, processing, and distribution. Traceability includes both traceback and trace forward. Traceback is the ability to trace a food product from the retail shelf back to the farm. Conversely, trace forward is the ability to trace a food product from the farm forward to the retail shelf. Traceability is often needed to identify the sources of food contamination and the recipients of contaminated food in product recalls and seizures.

The issue of tracking the sources of food-borne disease outbreaks has gained attention since the massive recall of peanut-related products from Peanut Corp. of America earlier this year, which we have posted on.

For the traceability exercise, the agency purchased food products from different retail stores and attempted to trace them through each stage of the food supply chain back to the farm(s) or the border. The government asked the facilities that handled the food product for information about
their sources, recipients, and transporters, which was used in an effort to trace the product. The HHS inspector general's office and FDA representatives purchased 10 individual food products from retail stores in four metropolitan areas – New York, Chicago, San Francisco and Washington. The products included bottled water, manufactured ice, whole milk, eggs, plain yogurt, milled unbleached flour, plain oatmeal, fresh whole tomatoes, cut vegetables and fruit juice.


The department's inspector general's office found that retailers and distributors could trace the component ingredients of just five of 40 products purchased to the farm or country where the ingredients were produced. The inspectors were only able to locate facilities that likely handled the products for 31 of the products.

Several factors limited the ability to trace the specific food products through each stage of the food supply chain. These factors included: (1) processors, packers, and manufacturers not always maintaining lot-specific information, as required; (2) other types of facilities not maintaining lot-specific information because it is not required; (3) retailers receiving products not labeled with lot-specific information; and (4) the mixing of products from a large number of farms. These factors also affect the speed with which FDA can trace specific food products through the food supply
chain. In fact, more than half the 220 facilities contacted failed to meet federal requirements to maintain records about their sources, recipients and transporters of food. The report found that a quarter of the companies contacted did not even know about the requirements. 

In a food emergency, there could be serious health consequences if FDA cannot — at a
minimum — identify the facilities that potentially handled a contaminated food product.

The report recommends that:

  • FDA  should seek statutory authority, if necessary, to require all processors, packers, and manufacturers to create and maintain lot-specific information for food products. FDA should also extend the requirements regarding lot-specific information to other types of facilities, such as distributors, storage facilities, and retailers, in order to further strengthen the traceability of food products.
  • FDA should consider seeking additional statutory authority requiring food facilities to further strengthen the traceability of food products.
  • FDA should work with the food industry to develop additional guidance on traceability.
  • FDA should work with the food industry to develop standards for mixing raw food products from a large number of farms.
  • FDA should seek statutory authority to request facilities’ records at any time, as opposed to its current authority to request records only when FDA has a reasonable belief that an article of food presents a serious health threat.
  • FDA should develop education activities that focus on appropriate and reliable record-keeping systems.

 

Bills to Ban BPA Introduced in Congress

In the past few days, bills were introduced in both houses of Congress to ban bisphenol A in all food and beverage containers in the U.S.

The so-called Ban Poisonous Additives Act of 2009 is sponsored Rep. Edward Market, D-Mass. in the House, and by Sen. Dianne Feinstein, D-Calif. and Sen. Charles Schumer, D-N.Y. in the Senate. In the House it is H.R. 1523. In the Senate it is S.593

The proposed legislation would ban the sale of reusable beverage containers like baby bottles and thermoses that contain BPA and prohibit other food and beverage containers, including canned food and formula, containing the chemical from entering the market.

The bill, which would take effect 180 days after it is enacted, allows manufacturers who can show that a particular container cannot be made without BPA to obtain a renewable one year waiver to the ban. During that time, the company must label the product as containing BPA and submit a plan for removing the chemical in the future.

The bill also requires the secretary of HHS to conduct a periodic review of the list of substances that have been deemed safe for food and beverage containers, to determine whether new scientific research shows that the substances pose health risks. This review must take place “not less than once every 5 years,” under the bill.

MassTortDefense has posted about BPA issues before. With regard to BPA generally, based on all available evidence, the consensus of regulatory agencies in the United States, Canada, Europe, and Japan is that the current levels of exposure to BPA through food packaging do not pose an immediate health risk to the general population, including infants and young children.

Also in the press, six manufacturers — Avent, Disney First Years, Gerber, Dr. Brown, Playtex and Evenflo — announced that they would ban BPA in baby bottles they sell in the U.S. And Sunoco indicated that it had stopped selling BPA to anyone who would not promise to prohibit its use in products intended for children ages three and under.

Many of these companies are defendants in the ongoing BPA litigation, and their voluntary actions reflect the legal risks far more than the science. The companies noted this decision may address growing public concern and confusion regarding products made with polycarbonate plastic, but was not because these FDA-regulated products are not safe.

Any wide-spread ban of this product – or litigation accomplishing the same result -- may risk the public safety more than enhance it. Epoxy resins derived from bisphenol A are used to manufacture protective polymer coatings for the inner surface of metal food and beverage containers. This critical technology protects the contents of these containers from aggressive food products, thereby assuring a safe, wholesome, and nutritious food supply. Compared to other coating technologies, coatings derived from epoxy resins provide superior adhesion to the metal surface, greater durability, and higher resistance to the wide range of chemistry found in foods and beverages. These attributes are essential to protect the packed food from microbiological contamination, which is a significant food safety issue.

Canning might be the single most important innovation in the preservation of food in history. More than 1500 food items are regularly packed in cans, making out of season foods globally accessible year-round. More than 90% of food and beverage cans use epoxy-based coatings because of their strength, adhesion, formability and resistance to chemical reactions in the food and drinks -- without affecting the taste or smell of the product. They protect the food from the container and from bacterial contamination. They give canned foods their long shelf-life.

 

 

 

New Food Safety Bill Introduced in Congress

Two years ago, there was a nationwide outbreak of E. coli linked to consumption of contaminated spinach from a California supplier. That was the 25th reported U.S. outbreak of E. coli infection that had been traced to contaminated leafy green vegetables since 1993. Each year, approximately 110,000 persons get this infection, and 50 of them die. This is despite greatly intensified efforts during the past decade on the part of federal food-safety agencies — the U.S. Department of Agriculture (USDA), the Food and Drug Administration (FDA), and the Centers for Disease Control and Prevention (CDC) — to prevent the spread of such infections.


In a 2008 outbreak, Salmonella was diagnosed in 1407 persons in 43 states. At least 282 patients were hospitalized, and 2 patients died. Although initial epidemiologic evidence suggested that contamination of tomatoes grown in the southwestern United States might be the cause, eventually the outbreak was isolated from jalapeño and serrano peppers that had been grown on a Mexican farm. In the mean time, tomato consumption plummeted, and the industry lost an estimated $200 million in sales.

This year, the disease was diagnosed in 600 persons in 44 states and Canada traced to contamination of one Georgia producer's peanut butter and the processed foods of other manufacturers that contained the company's peanut butter or paste. Beyond a recall of all peanut products produced by the company since January 1, 2008, more than 400 food products (including cookies, crackers, cereal, candy, ice cream, and pet foods) have been recalled.

Many of incidents like these have led to products liability and mass tort litigation. E.g., In Re ConAgra Peanut Butter Products Liability Litigation, MDL-1845, 2008 WL 2885951 (N.D. Ga., July 22, 2008). And this issue has caught Congress’ attention. Senator Durbin last week introduced S.510, the “FDA Food Safety Modernization Act,” a new bill to amend the Federal Food, Drug, and Cosmetic Act with respect to the safety of the food supply. The bill calls for food manufacturers to conduct a Hazard Analysis and implement Risk-Based Preventive Controls; it calls for regulations to establish science-based minimum standards for the safe production and harvesting of those types of fruits and vegetables that are raw agricultural commodities for which the agency has determined that such standards minimize the risk of serious adverse health consequences or death.

The bill also calls for inspection of food makers’ facilities, according to their risk profile, based on the facility's history of food recalls, outbreaks, and violations of food safety standards, and the rigor of the facility's hazard analysis and risk-based preventive controls. Some facilities would be designated as high-risk facilities and subject to annual inspections. the proposed legislation would also upgrade the nation’s food-borne illness surveillance systems to improve the collection, analysis, reporting, and usefulness of data on food-borne illnesses by coordinating Federal, State and local food-borne illness surveillance systems, including complaint systems, and increasing participation in national networks of public health and food regulatory agencies and laboratories.

Regarding imports, the bill would require each United States importer to perform risk-based foreign supplier verification activities, and the FDA would be required to establish by 2010 an office in not less than 5 new foreign countries to provide assistance to the appropriate governmental entities of such countries with respect to measures to provide for the safety of articles of food and other products regulated by the FDA and exported by such country to the United States.
 

China To Set Up Food Safety Commission

China will set soon up a central food safety commission, according to state-owned media last week. The new commission will be organized under the State Council, and is to help enforce new food-safety legislation meant to tighten supervision of manufacturers and impose tougher penalties on those who manufacturer defective items. The new law, approved by the standing committee of the National People's Congress, has been in the making for two years. It also sets up a system to recall problem products and authorizes the enforcement of uniform nationwide standards on nutritional labeling.


Reportedly, the commission's task will be "to strengthen the country's food monitoring system, whose low efficiency has long been blamed for repeated food scandals," as China seeks to restore public confidence after a number of problems with tainted food. Presumably, that refers in part to the melamine scandal in which at least six infants died last year and nearly 300,000 were sickened by baby formula tainted by an industrial chemical that had been added to milk supplies to give the appearance of higher protein.


How effectively China maintains the safety of its food supply is increasingly important to consumers in other countries as well, as Chinese ingredients end up in foodstuffs sold around the world. Between 2004 and 2007, Chinese food exports climbed about 63%. Several tainted Chinese products led to mass tort litigation in the U.S.


The national food-safety commission is supposed to coordinate work by other government agencies, and reduce the number of agencies involved. United Nations public health experts last year called for an overhaul of China's food-safety system, criticizing the country's use of a patchwork of various local and national government agencies to police the food supply.
 

District Court Permits Consumer Fraud Putative Class Action to Proceed on "All Natural" Claims

A federal district court recently denied defendant’s motion to dismiss in a putative class action under California's Unfair Competition Law alleging that defendant engaged in misleading conduct by advertising its “Healthy Choice” pasta sauce as “all natural” even though it includes some “high fructose corn syrup.” Lockwood v. Conagra Foods, Inc., 2009 WL 250459 (N.D.Cal. Feb. 3, 2009).

Defendant moved to dismiss on several grounds: arguing plaintiffs' claims were expressly preempted by the Nutrition Labeling and Education Act; were impliedly preempted by comprehensive FDA regulations under the Federal Food and Drug Cosmetic Act; that the court should defer to the FDA under the “primary jurisdiction” doctrine. Finally, defendants asserted that the court should strike the class allegations because plaintiffs cannot prove reliance on a class-wide basis.

Regarding the field preemption argument, the court noted that the purpose of the NLEA was to clarify and to strengthen FDA's authority to require nutrition labeling on foods, and to establish the circumstances under which claims may be made about the nutrients in foods. Under the Act, states may impose labeling requirements for artificial favors, colors or preservatives only if such requirements are identical to those imposed by the FDCA; any differences are preempted. But, the court held, this provision does not apply to plaintiffs' complaint as currently pled. Plaintiffs did not allege that defendant's pasta sauce contains artificial flavoring, coloring or a chemical preservative; rather, they allege that the “high fructose corn syrup” is not produced by a natural process and therefore the pasta sauce is not “all natural.”  One wonders why the claims of not all "natural" due to the use of an "artificial" flavor isn't squarely in that ballpark.

Turing to implied field preemption, the court noted that NLEA's provisions suggest Congress did not intend to occupy the field of food and beverage labeling. The FDA's policy as to the word “natural” similarly suggested an intent not to occupy the field of food labeling. Under the policy, the agency has considered natural to mean merely that nothing artificial or synthetic (including colors regardless of source) is included in, or has been added to, the product that would not normally be there. Although the FDA acknowledges that some consumers may be misled by the use of the term “natural,” it has declined to adopt any regulations governing this term. This inaction is consistent with an intent not to occupy the field. This is especially so given that at the time the FDA declined to formally define “natural” it was aware of and had reviewed state regulation of the use of the term, yet it made no mention of the need for uniformity or a preemptive federal regulation.

On conflict preemption, the court found that the defendant had not proved as a matter of law that plaintiffs' claims, if successful, make compliance with federal law a physical impossibility. A manufacturer could comply, that is, not violate, the FDA's policy as to use of the term “natural” and still comply with state law as articulated by plaintiffs in this case, thought the court. Nor does California law stand as an obstacle to the accomplishment and execution of the objectives of the FDCA. Again, it seems questionable that this type of claim wouldn't risk imposing labeling requirements for "artificial" favors, directly in contrast to federal regulations.

Regarding primary jurisdiction, the court found application of the doctrine was not appropriate here. At a minimum, various parties have repeatedly asked the FDA to adopt formal rulemaking to define the word natural and the FDA has declined to do so because it is not a priority and the FDA has limited resources. Moreover, the court did not feel this was a technical area in which the FDA has greater technical expertise than the courts. Finally, plaintiffs' claims were based on state law and, thus, federal law would not dispose of plaintiffs' state law claims.

Finally, the court declined to strike the class allegations at this juncture, finding that if a misrepresentation is material an inference of class-wide reliance may be inferred under the California law. MassTortDefense has posted about the growing trend of plaintiffs to use consumer fraud act claims in place of traditional product theories. Plaintiffs continue to believe that claims based on unfair and deceptive trade practices acts are somehow easier to certify as class actions because of differing notions of reliance and causation.
 

GAO Adds To Critiques of FDA

The Government Accountability Office issued a report last week that listed the FDA as a "high-risk" area of the federal government. The GAO said the U.S. Food and Drug Administration was being hampered by globalization, more complex products, and laws that have made it more difficult for the FDA to ensure the safety of pharmaceuticals, biologic drugs, and medical devices. GAO says its work examining a variety of issues at FDA echoes the conclusions reached by others (think IOM) that the agency is facing significant challenges that compromise its ability to protect Americans from unsafe and ineffective products. FDA needs to, among other things, improve the data it uses to manage the foreign drug inspection program, conduct more inspections of foreign establishments, systematically prioritize and track promotional materials for review, and adopt management tools to ensure that drug sponsors comply with regulations on the presentation of clinical trial results.
 

The perception of the FDA and its ability to do an effective job is a crucial underlying feature in product liability litigation involving regulated drugs, devices, and food products. Jurors’ perceptions of the agency can affect a myriad of issues and themes the defense may wish to present.

Meanwhile, the Pharmaceutical Research and Manufacturers of America (PhRMA) asserts that the issue is a need for more resources for the FDA, to keep drugs safe. The agency “is being asked to do more than it can do” with current resources, the trade group says. Specifically, FDA needs more resources to conduct foreign inspections so the drug supply can be kept safe. PhRMA also said that FDA needs more resources to modernize because, for example, the agency still looks at clinical trial information on paper.
 

FDA Reports on Salmonella Outbreak

The FDA has reported on its investigation into the source of the recent Salmonella Typhimurium outbreak. At this time, the FDA and the Centers for Disease Control and Prevention (CDC) say they have traced sources of Salmonella Typhimurium contamination to a plant owned by Peanut Corporation of America (PCA), which manufactures peanut butter and peanut paste—a concentrated product consisting of ground, roasted peanuts—that are both distributed to food manufacturers to be used as an ingredient in many commercially produced products including cakes, cookies, crackers, candies, cereal and ice cream. In addition, PCA peanut butter is reportedly distributed to and institutionally served in such settings as long-term care facilities and cafeterias.

The FDA has notified PCA that product samples originating from its Blakely, Georgia processing plant have been tested and found positive for Salmonella by laboratories in the states of Minnesota and Connecticut. Connecticut and Minnesota have reported to FDA that samples of King Nut peanut butter tested in those states are a genetic match to the strain of Salmonella associated with the nationwide outbreak of Salmonella Typhimurium. The results from the Connecticut Department of Health Laboratory are from an unopened container of King Nut peanut butter.
 

On January 18, PCA expanded its previous voluntary recall to include more products and lot numbers relating to peanut butter and peanut paste products manufactured on or after July 1, 2008, at its plant because of potential Salmonella contamination. The peanut butter products being recalled are sold by PCA in bulk containers ranging in size from five (5) to 1700 pounds. The peanut paste is sold in sizes ranging from 35-pound containers to product sold by the tanker container. These products are not sold directly to consumers. PCA has stopped all production at its Blakely, Ga. plant as the FDA continues its investigation.


At least 85 companies bought peanut butter and peanut paste produced in the Georgia plant. More than 125 products including cookies, crackers, ice cream and even some pet food have been recalled in connection with the outbreak. Six deaths may be associated with the outbreak, the U.S. Centers for Disease Control and Prevention has said. The CDC said at least 486 people from 43 states and one person in Canada have been reported ill from the outbreak of the Salmonella typhimurium strain, with 107 of them being hospitalized. Salmonella can cause abdominal cramping, diarrhea and fever. 

Litigation has ensued, with at least one products liability suit in the Middle District of Georgia.

 

FDA Studies A Revised Advisory On Mercury In Fish

The issue of mercury levels in fish has spawned litigation, including some controversial decisions about the preemptive effect of FDA policies on the regulation of labels of tuna. Now, the FDA is urging amendment of the 2004 advisory that women and children should limit how much fish they eat, saying that the benefits of seafood outweigh the health risks. Bottom line, people should eat more fish, even if it contains mercury.


Currently, the government suggests that women of childbearing years, pregnant women, nursing mothers, infants and children, can be harmed by the mercury in fish and should limit their consumption. In a draft report, FDA proposes to update the existing health advisory. The report argues that nutrients in fish, including omega-3 fatty acids, selenium and other minerals could boost a child's IQ. The greatest benefits, the FDA report said, would come from eating more than 12 ounces of fish a week, which is the current limit advised for pregnant women, women of childbearing age, nursing mothers and young children.


The FDA and the EPA both play a role in protecting the public from mercury contamination. The EPA investigates and regulates mercury and other contaminants in recreationally caught fish, while the FDA regulates mercury in seafood sold in markets and restaurants. States rely on the federal agencies in issuing their own advisories.


Not surprisingly, the Environmental Working Group attacked the draft report. But the National Fisheries Institute applauded the FDA's science-based approach, pointing out the amount of research since the advisory was last updated in 2004 suggesting the real risk to women and children is not eating enough seafood. A Harvard University study released in September of 2008 highlighted the benefits of a seafood rich diet. New research published in the Lancet in 2007 found that mothers who ate the most seafood during pregnancy had children with the highest developmental outcomes. A 2006 Institute Of Medicine report encouraged women to include seafood in their diets. The Harvard Center for Risk Analysis in 2005 wrote that curtailing fish consumption could lead to an increase risk of adverse health outcomes. 


 

Nanotechnology Update

Many readers of MassTortDefense know that nanotechnology refers to a new field of technology that seeks to manipulate and control products, really matter, on the atomic and molecular scale, typically 100 nanometers or smaller. To give some sense of scale, one nanometer is one billionth, or 10-9 of a meter. A nanometer compared to a meter is the roughly the same ratio as that of a baseball to the size of the Earth. Or another analogy, a nanometer is the length a man's whiskers grow in the time it takes him to lift his razor to his face to shave.

First, the European Food Safety Authority (EFSA) recently called for public comments on its draft scientific opinion document assessing the potential risks of engineered nanomaterials used in food and feed. EFSA opinions provide guidance for the European Commission and European Union member state food safety organizations.

EFSA has noted that complete information about engineered nanomaterials in food is lacking, leading to uncertainties in risk assessment. In particular, the agency said knowledge is limited about how engineered nanomaterials in food should be characterized, detected, and measured. It also said more information is needed on the toxicological and environmental impacts of using such nanomaterials.

The comment period on the draft opinion is open until Dec. 1, after which the scientific opinion will be revised and finalized, taking the comments into account.

Second, back in the US, the activist group Consumers Union released new product tests this week, claiming to show that some sunscreens claiming not to contain nanoparticles appeared to contain them.
 
The group is concerned because nano-size particles are known in some applications to have different properties than the conventional versions of these chemicals. Sunscreen manufacturers use nano-size particles of these ingredients for several reason, including because they help make the products clear rather than opaque, something consumers prefer. The European Union has required manufacturers to submit data on sunscreens containing nanoparticles.

Third, the EPA has issued an announcement intended to give notice of the potential application of the Toxic Substances Control Act (TSCA) requirements to carbon nanotubes (CNTs). Carbon nanotubes are generally made from sheets of graphite no thicker than an atom—about a nanometer, or one billionth of a meter wide—and formed into cylinders, with the diameter varying from a few nanometers up to tens of nanometers. They are excellent conductors of electricity. Carbon nanotubes can also be used to reinforce polymers to create very strong plastics. Carbon nanotubes show promise as building blocks for computer chips that are smaller and faster than those made of silicon. Economists predict that the market for carbon nanotubes will grow to more than $1 billion by 2014.

EPA generally considers CNTs to be chemical substances distinct from graphite or other allotropes of carbon already listed on the TSCA Inventory. Many CNTs may therefore be new chemicals under TSCA. If a particular CNT is not on the TSCA Inventory, anyone who intends to manufacture or import that CNT is required to submit a premanufacture notice (PMN) at least 90 days before commencing manufacture. MassTortDefense has posted about carbon nanotubes before.

Apparently, inquiries to the Agency and questions in public forums indicated a lack of clarity on this issue. Some of the misunderstanding may be the result of an EPA communication to a chemical manufacturer a number of years ago pertaining to a substance the Agency now considers to be a carbon nanotube material. EPA understands that the earlier communication may have been misunderstood by some companies as a possible indication that all CNTs may be equivalent to other allotropes of carbon already on the TSCA Inventory. Hence the clarification.
 

Food Allergies In Kids

According to some media outlets, food allergies in American children are on the rise, now affecting about 3 million kids. The media is citing a recent report by the CDC, a comprehensive federal study of the problem. Branum and Lukacs, NCHS Data Brief No. 10, “Food Allergy Among U.S. Children: Trends in Prevalence and Hospitalizations,” (October 2008). The study reports that about 1 in 26 children had food allergies last year, up from 1 in 30 kids in 1997.


Food allergy is a potentially serious immune response to eating specific foods or food additives. Eight types of food account for over 90% of allergic reactions in affected individuals: milk, eggs, peanuts, tree nuts, fish, shellfish, soy, and wheat. About 1 in 50 are allergic to shellfish and nearly 1 in 100 react to peanuts. Other research suggests that about 1 in 40 Americans will have a milk allergy at some point in their lives, and 1 in 50 percent will be allergic to eggs. Reactions to these foods by an allergic person can range from a tingling sensation around the mouth and lips to hives to death, depending on the severity of the allergy.


The report:
• In 2007, approximately 3 million children under age 18 years (3.9%) were reported to have a food or digestive allergy in the previous 12 months.
• From 1997 to 2007, the prevalence of reported food allergy increased 18% among children under age 18 years.
• Children with food allergy are two to four times more likely to have other related conditions such as asthma and other allergies, compared with children without food allergies.
• From 2004 to 2006, there were approximately 9,500 hospital discharges per year with a diagnosis related to food allergy among children under age 18 years.


While some are quick to blame product manufacturers, nobody knows for sure what's driving the increase. The mechanisms by which a person develops an allergy to specific foods are largely unknown. Food allergy is more prevalent in children than adults, and a majority of affected children will "outgrow” food allergies with age.


A likely big part of the explanation of the new data is a from of reporting bias, as parents are more aware and quicker to have their kids checked out by a doctor these days. Parents and doctors are both more likely to consider food as the trigger for generic symptoms like vomiting, skin rashes and breathing problems. Parents today are quicker to take their kids to specialists to check out the possibility of food allergies. Thus, the findings could be related to increased awareness, reporting, and use of specific medical diagnostic codes for food allergy rather than a real increase in the number children who are experiencing food-allergic reactions.

The fact that a small number of the population is so constituted that they may suffer severe reactions to products which may be harmless or generally beneficial to others poses a dilemma to the legal scholars and courts. Generally speaking, the allergic or unusually susceptible plaintiff has found the road to financial recovery a difficult one, irrespective of the theory of recovery, the manufacturer of a reasonably safe product generally having been held not liable for damages where the basis of the injury was an allergy, hypersensitivity, or unusual susceptibility on the part of the user. See 63 Am. Jur. 2d, Products Liability § 1453. Plaintiffs’ main theory in allergy cases is that the supplier should be liable for damages arising from an allergenic, idiosyncratic reaction to its product where it has failed to give adequate and timely warning. E.g., Livingston v. Marie Callender's, Inc., 85 Cal. Rptr. 2d 528, 533 (Cal. App. 1999) (warning for allergy to MSG); Brown v. McDonald's Corp., 655 N.E.2d 440, 444 (Ohio App. 1995) (warning for allergy to seaweed); Advance Chem. Co. v. Harter, 478 So.2d 444, 448 (Fla. App. 1985) (warning for allergy to ammonia); Gober v. Revlon, Inc., 317 F.2d 47, 50 (4th Cir. 1963) (warning for allergy to nail polish). At times, plaintiffs will also try to add a manufacturing defect claim in the nature of an alleged failure to reduce or minimize the amount of the allergen in the product by washing, for example. This was seen in the latex glove mass tort.
 

Group Demands Regulation Of Energy Drinks

A group of scientists and physicians have petitioned the Food and Drug Administration asking for more regulation of popular energy drinks, because their caffeine content. The group contends the ingredient puts drinkers at possible risk for caffeine intoxication and other ailments. The letter was written by Dr. Roland Griffiths, of the Johns Hopkins School of Medicine.

The United States is the world's largest consumer by volume of energy drinks, roughly 290 million gallons in 2007. That works out to about 3.8 quarts per person per year. The U.S. market for the drinks is estimated at $5.4 billion. Pretty much any successful product these days is likely to become a target of plaintiffs’ attorneys or Big Brother regulations designed to prevent people from making voluntary choices and excusing them from taking responsibility for their choices.
Caffeine is found in coffee beans, tea leaves, cocoa beans and other plants. Caffeine is an ingredient that consumers have enjoyed in many drinks for more than 100 years. The beverage industry offers both caffeine-free and caffeinated drinks. And customers are free to choose their drink of choice, whether caffeinated or non-caffeinated.

Caffeine is one of the most comprehensively studied ingredients in the food supply, with centuries of safe consumption in foods and beverages. In 1959, the FDA designated caffeine in cola drinks as "Generally Recognized As Safe" (GRAS). The FDA considers caffeine safe for all consumers, including children. In 1987, following extensive review, the FDA "found no evidence to show that the use of caffeine in carbonated beverages would render these products injurious to health." More than 140 countries have specifically considered the safety of caffeine and allow its use in beverages at various levels.

Red Bull, the best-selling energy drink in the USA, contains 80 milligrams of caffeine per 8.3-ounce can, about the equivalent of a cup of coffee. The "pick me up" quality long associated with many drinks reflects a complex mix of ingredients, including caffeine. The bitter taste of caffeine also adds to the complex overall flavor profile of soft drinks.
 

Consumers can easily find out how much caffeine is in a beverage by calling a company's 1-800 number or visiting its website for those drinks that don't list content on their labels. As with all foods and beverages, parents should use common sense in deciding whether to give their children caffeinated foods and beverages, and how much. That’s a parent’s job, not the government’s.
In the most recent version of the Diagnostic and Statistical Manual of Mental Disorders, caffeine is specifically excluded from the category of substances classified as causing "substance dependence." Unlike drugs of abuse, people who choose to consume foods and beverages that contain caffeine can control or moderate their caffeine intake. Scientific studies confirm that although many people enjoy caffeinated products, those who choose to stop consuming or reduce caffeine in their diets can do so without difficulty.
 

FDA Releases Melamine Risk Assessment

The FDA has issued the results of its interim safety and risk assessment of melamine and melamine-related compounds in food, including infant formula. The purpose of the FDA interim safety/risk assessment, which was conducted by scientists in the Center for Food Safety and Applied Nutrition, was to identify the level of melamine and melamine-related compounds in food which would not raise public health concerns.

For infant formula, the safety/risk assessment concludes that at this time FDA is unable to establish any level of melamine and melamine-related compounds in infant formula that does not raise public health concerns. Melamine in baby formula has sickened more than 54,000 infants in China. The government there ordered the recall of more than 10,000 tons of formula. Last week, 12 more Chinese dairy companies were named as violators after tests found 31 batches of milk powder contaminated with melamine.Chinese officials believe that the contamination was intentional and  occurred at milk collecting stations, rather than on dairy farms. MassTortDefense has posted on this before.

In food products other than infant formula, the safety/risk assessment concludes that levels of melamine and melamine-related compounds below 2.5 ppm do not raise public health concerns. This conclusion assumes a worst case exposure scenario in which 50% of the diet is contaminated at this level, and applies a 10-fold safety factor to the Tolerable Daily Intake (TDI) to account for uncertainties.


According to the CDC, melamine is a synthetic chemical with a variety of industrial uses including the production of resins and foams, cleaning products, fertilizers and pesticides. It does not occur naturally in food. Animal studies have demonstrated that exposure to low levels of melamine produced no observable toxic effects. Exposures to high levels of melamine, or exposures to lower doses of melamine together with certain other chemicals, have caused urinary tract problems in animals. These have included urinary tract and kidney crystal and stone formation, and kidney failure. Exposures of animals to high doses of melamine over long time periods (years) have been associated with cancer of the bladder.

Because melamine is a component in plastics, there may be melamine in dinnerware, cups, and even Formica counter tops. But the amount of melamine that actually transfers from those products into food is very, very small, according to FDA.


Several melamine-contaminated foods found in recent weeks in the United States had far more than that amount of the chemical. White Rabbit candies from China were recalled after authorities in at least two states found melamine. And a New Jersey company announced that it was recalling Blue Cat Flavor Drink, after FDA testing found melamine. The chemical has also turned up in dairy products sold across Asia and, to a lesser extent, Europe.


The FDA guidelines were issued to help federal and state investigators checking for contaminated Chinese products as they enter the country and in grocery stores. To date, there have been no reports of illness from contaminated Chinese milk products in the United States. There are no approved uses for melamine to be added to food in the United States.

Melamine contamination was at the center of the tainted pet food scandal that resulted in more than 80 class actions and the creation of MDL 1850.  The federal judge overseeing the multidistrict pet food litigation has just issued final approval of a $24 million settlement that seeks to resolve claims over a massive recall of more than 90 contaminated dog and cat foods last year.

 

China Dairy Product and Infant Formula Issues Grow

Quality control investigators in China have announced they had found a dangerous protein substitute in dairy products produced by 20% of the Chinese companies that make infant formula. Reports are that more than 12,000 children had been hospitalized, most with kidney ailments, and 40,000 with less severe symptoms have been treated without admission. At least three have been killed.

Melamine, a protein imitator that is toxic, was used as a cheaper fill, and was found in the test samples. Melamine is the same protein replacement used in the Chinese-made pet food that killed thousands of cats and dogs last year.

What is the impact for readers of MassTortDefense? Several major Chinese dairy companies involved have international investors. But none of the formula products were exported to North America. The FDA said there is no known threat of contamination in infant formula manufactured by companies that have met requirements to sell the formula in the United States. However, FDA is investigating whether infant formula manufactured in China is being sold in markets here that serve the Asian community. And the FDA is alerting consumers that seven "Mr. Brown" instant coffee and milk tea products are being recalled by a Taiwanese company, due to possible contamination with melamine.

The developing food safety scandal has called into question, yet again, the effectiveness of China’s quality control system in general, and the country's new food safety regime in particular. Last year’s spate of product recalls, including drugs, toys, pet food and tires, placed the spotlight on China's quality control problems. MassTortDefense has posted on this here and here. Now comes the news that the newly enacted food safety recall system was not activated for at least two weeks after the problem became known to local officials, and the prime minister of New Zealand (an importer) charged the matter was covered up for several weeks while the Beijing Olympics were underway. Thus, thoughts naturally turn to efforts importers may mitigate the risks. A recent article in Risk Management Magazine offers a broad perspective on this. (Kent Kedl, Risk Strategies for the Chinese Market , published by the Risk and Insurance Management Society, which targets corporate risk managers.) At bottom, it is risk management to avoid a potential mass tort.

First, plan Strategy before Structure. In recent years, the Chinese government has changed its investment regulations to allow --and even encourage-- a variety of business arrangements, from strategic partnerships to wholly foreign-owned enterprises, to full acquisitions. RM suggests that companies coming to China must first ignore the "how" of structure and first focus on the "why" of their strategic intent for China: What products will have the most play? What segments of the market should they target? What distribution channels should they use? Who will be the major competition and how can they structure a defensible and sustainable value proposition?

Second, they advise companies to Get Close to the Market. Clearly, there are Chinese factories that have had quality issues, but the fact remains that there are millions of products coming out of China every month, most of which have no problems whatsoever. Maybe, then, the question should be how best to manage product quality, because someone is doing it right. Kedl and RM suggest that foreign companies need to manage their vendors on an ongoing basis. Meet with suppliers; validate the supply chain; don’t worry about price and on-time delivery to the exclusion of all else. Companies sourcing from China should consider putting their own people on the ground to manage their supply chain, establish and monitor their own quality systems, and maintain ongoing relationships with the vendors. This approach may raise a company's fixed costs but, in the long run, may greatly lower the risk associated with having products made in an emerging market.

Third, recognize that Relationships Matter. Early successful foreign entrants to China worked hard to build a relationship network for themselves. As China has developed a more credible legal framework and a more predictable market environment, however, foreign companies too often have believed they no longer need that social network and that, instead, they can do it on their own. RM suggests that may be a mistake.

Ongoing events put a premium on efforts by both China and the U.S. in implementing the 2007 Memorandum of Agreement (MOA) on food and feed safety. The MOA established a bilateral mechanism to provide greater information and other assurances to enhance the safety of food and feed products traded between the two countries. The countries have improved the exchange of information on food safety and on the relevant regulatory systems. The U.S. has agreed to conduct training for Chinese officials on U.S. regulatory standards. Each has designated new emergency contacts and notification thresholds for import safety issues. The two countries have also been working towards an electronic certification system between the FDA and China's General Administration of Quality Supervision, Inspection and Quarantine to ensure that Chinese exports meet FDA standards for safety and manufacturing quality. The countries also agreed to increase their focus on inspection, supervision and laboratory testing of Chinese imports. Finally, the report described the establishment of a cooperative mechanism to notify each other of significant risks to public health related to product safety or the gross deception of consumers, and to share information to facilitate each other’s investigation.
 

BPA Update

The U.S. Food and Drug Administration has released a draft report finding that the chemical bisphenol A does not pose a serious health risk. BPA is used in several products, including some plastic baby bottles, food containers, and water bottles. The chemical is added to make polycarbonate plastic bottles clear and shatterproof.

As MassTortDefense has noted before, and here, BPA has been much in the news. In May, 2008, FDA officials told a congressional panel that the agency had no reason to recommend that consumers stop using products containing BPA.  FDA has been examining the data on BPA in anticipation of a September meeting on the issues surrounding the potential toxicity of the chemical. The new draft document will be reviewed by the Bisphenol A Subcommittee of the FDA Science Board on Sept. 16th. Details on the science panel's meeting can be found here.

The new assessment was particularly focused on the concerns for developmental toxicity identified in recent assessments of BPA, including those of the National Toxicology Program and their expert panel, based on animal data. FDA concluded that this data was insufficient to merit a change in the exposure levels the agency currently allows for BPA. FDA concluded that an adequate margin of safety exists for BPA at current levels of exposure from food contact uses, for infants and adults. This assessment represents a full examination of data considered pivotal to the relevant exposure levels associated with food contact substances, the FDA said.


To avoid underestimating risk, FDA said it made the conservative assumption that an infant drank only formula from cans lined with a bisphenol A-based enamel coating and that the parents heated that formula in polycarbonate baby bottles. Based on such assumptions, FDA estimated that an infant might consume up to 2.42 micrograms bisphenol A per kilogram body weight. Based on animal studies, FDA estimated that the no observed adverse effect level (NOAEL) for bisphenol A would be 5 milligrams per kilogram body weight. That means the margin of exposure, or the difference between infants' exposure and the NOAEL, is about 2,000x. That is, FDA said, "an adequate margin of safety...."

FDA's draft conclusion is consistent with the European Food Safety Authority's July 23 statement that it considers current uses of bisphenol A to be safe. FDA's draft assessment called for more research, and said data from nonhuman primates would be helpful, along with measurements of bisphenol A in the U.S. population. 
 

In other BPA news, the California Assembly rejected a bill (S.B. 1713) that would have banned bisphenol A in children's products, specifically BPA at levels above 0.1 part per billion in baby bottles, cups, food containers, or any other container designed for children under the age of 3 years. By Jan. 1, 2012, S.B. 1713 would have barred the sale of any liquid, food, or beverage in any can or jar containing 0.5 ppb or more of bisphenol A. The American Chemistry Council and numerous experts have contended the products the bill would ban are safe.
 

Think Tank Releases Nano-Technology Report

A Washington, DC think tank last week released a new report with suggestions on how the next administration should approach regulation of nano-technology in products.  The Project on Emerging Technologies is based at the Woodrow Wilson Center in Washington. The Project was established in 2005 as a partnership between the Woodrow Wilson International Center for Scholars and the Pew Charitable Trusts. The Project is dedicated to helping ensure that as nanotechnologies advance, possible risks are minimized, public and consumer engagement remains strong, and the potential benefits of these new technologies are realized.

Nanotechnologies are hailed by many as the next industrial revolution. They promise to change everything from the cars we drive to the clothes we wear, from the medical treatments our doctors can offer to our energy sources and workplaces. Although focused on very small particles, nanotechnologies offer large potential benefits. From new cancer therapies to pollution-eating compounds, from more durable consumer products to detectors for bio-hazards like anthrax, from novel foods to more efficient solar cells, nanotechnologies are changing the way people think about the future.

The Project on Emerging Nanotechnologies collaborates with researchers, government, industry, NGOs, policymakers, and others to look long term, to identify gaps in knowledge and regulatory processes, and to develop strategies for closing them. The Project's stated mission is to try to provide independent knowledge and analysis that can inform critical decisions affecting the development and commercialization of nanotechnologies.

A source of uncertainty for nanotechnology is regulation. The Project released a 28-page regulatory agenda for the next administration, noting that whichever candidate wins is going to have to deal with this issue, probably sooner rather than later. The next president has the opportunity to ensure that nanotechnology’s benefits will be maximized and its risks identified and mitigated, says the group. 

The report, Nanotechnology Oversight: An Agenda for the Next Administration, calls for the White House and federal agency policymakers to maximize the use of existing laws to improve nanotechnology oversight. Such measures include defining nanomaterials as “new” substances under federal toxics and food laws, thereby enabling the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA) to consider the novel qualities and effects of nanomaterials. The group addresses whether the Federal Food, Drug and Cosmetic Act, the Toxic Substances Control Act and the Consumer Product Safety Act need to be amended to cover nanotechnology.

The Project notes that more nanotech products are hitting the market. From March, 2006 to February, 2007, the number of manufactured goods using nanotech tripled to 600.  For fiscal 2009, the federal government has devoted $1.5 billion to nanotech, a sum split up between various agencies. Under the Bush administration, EPA has a Nanoscale Materials Stewardship Program, which is endorsed by the Synthetic Organic Chemical Manufacturers Association, the American Chemistry Council and the NanoBusiness Alliance. Some state governments, however, are pushing forward with their own rules on nanotech.

Coincidentally, consumer advocates said this week that food produced by using nanotechnology is quietly coming onto the market, and they want U.S. authorities to force manufacturers to identify them. New consumer products created through nanotechnology are coming on the market at the rate of 3 to 4 per week, according to The Project on Emerging Nanotechnologies.

MassTortDefense has posted on nanotechnology here and here.

 

Class Certification Denied In Peanut Butter MDL Litigation

A federal court last week refused to certify two different classes of plaintiffs in multidistrict litigation that accuses ConAgra Foods Inc. of selling salmonella-contaminated peanut butter. In Re ConAgra Peanut Butter Products Liability Litigation, MDL-1845, 2008 WL 2885951 (N.D.Ga., July 22, 2008). 

The MDL transferee court ruled that the plaintiffs' economic claims (unjust enrichment) and personal injury claims were not suitable for class certification on predominance, manageability (choice of law), and superiority grounds (alternative means for resolution).

The litigation arises from the illness of several hundred people in numerous states; plaintiff class action lawyers allege the clients became ill from salmonella poisoning after eating ConAgra's peanut butter manufactured at its Sylvester, Ga., plant.

The plaintiffs had asked the court to certify two classes: a class of purchasers of the peanut butter, which was allegedly rendered “unusable and valueless” when the product was recalled; and a class of plaintiffs who consumed the peanut butter and claimed personal injury.

The court first rejected the plaintiffs' argument that it should apply Georgia's choice of law rules in the case. In multidistrict litigation, under 28 U.S.C. § 1407, the transferee court applies the state law that the transferor court would have applied. Murphy v. F.D.I.C., 208 F.3d 959, 965 (11th Cir. 2000). When this action was consolidated, separate actions had been filed in 10 different states. Thus, the MDL court needed to apply choice of law rules from each of the transferor courts, the court said. The obvious inference from that situation alone is that the class would be unmanageable.  Even if a class is not ipso facto unmanageable due to the application of different choice of law rules, there is substantial conflict between Georgia substantive law and other jurisdictions on the issues raised. On unjust enrichment, some states have a common law claim; others have a preemptive statute.  Privity is required in some; some but not all states require a direct benefit conferred by the plaintiff upon the defendant as a prerequisite; some but not all states have a state of mind requirement for recovery, etc. The court also found that proving damages under the unjust enrichment claim would require individualized determinations.

The un-manageability arsing from the choice of law issue also impacted the absence of superiority, what the court called the “inferiority of classwide resolution due to discerning the many differing legal standards.” Moreover, the defendant's refund program provided an alternate way of addressing the claim.

The court also declined to certify the class pursuing a personal injury claim, even a  limited "issues" class. The court found that such an issues class would not promote judicial economy or materially advance the litigation. “Although the defendant has not formally admitted liability, it is highly unlikely that it will deny that salmonella-contaminated peanut butter is a defective product and makes people sick who eat it,” the court said.

The importance of this reasoning to readers of MassTortDefense is that it points out that in balancing predominance, and assessing superiority and manageability, the court needs to take a realistic view of what issues will actually be litigated. The trial plan proposed by the parties has to reflect the real issues to be litigated.  The allegedly predominant common issue of defect or defendant negligence is immaterial if that is not an issue on which the parties will spend considerable time and effort.

Moreover, although the court focused on the predominance issue in denying the personal injury class, it made an important observation about the constitutional implications of an issue class or a bifurcated class proceeding. Denying the common issues personal injury class here also avoided "potential constitutional problems." Rule 23(c)(4) issues classes can violate the parties' Seventh Amendment jury trial rights, especially in personal injury cases. Many jurisdictions differ on the details of even a negligence claim.  Such nuances "can be important, and its significant is suggested by a comparison of differing state pattern instructions on negligence and differing judicial formulations of the meaning of negligence and the subordinate concepts.” In re Rhone-Poulenc Rorer, Inc ., 51 F.3d 1293, 1300 (7th Cir.1995).  And there is the very real risk that a second jury (even if just on damages) would have to reconsider some of the liability issues decided by the first jury: too substantial a risk to certify the issues class. The Court thus heeded the "binding authority" which cautions that separate trials of liability and damages must be approached "with trepidation” to avoid offending the Seventh Amendment. State of Alabama v. Blue Bird Body Co., Inc., 573 F.2d 309, 318 (5th Cir.1978).

Yet another important observation by the court was that the plaintiffs' case for class certification collapses when it confronts the fact that certification of a common issues class will not dispose of a single case or eliminate the need for a single trial. Any saving in judicial resources is speculative at best. See Castano v. American Tobacco Co., 84 F.3d 734, 749 (5th Cir.1996). Under the plaintiffs' trial plan, at least 6,000 individual trials on exposure, injury, causation, damages and other individual issues would have to be prosecuted whether or not a class is certified, presumably by the lawyers already retained by the personal injury claimants. The lesson here is the court was willing to "look down the road" to how the case would go.

Finally, another gem on the issue of superiority: While it would be possible, said the court, to have a common issues trial on the issue of, “Can eating peanut butter that is contaminated with the bacteria listed above cause illness?” (i.e. the general causation issue), "why bother having a trial on issues of such abstract generality?"  And a class trial of issues such as what the defendant allegedly knew or should have known and the adequacy of its general plant sanitation practices in relation to the onset of illness for thousands of people -- plaintiffs' quintessential "common" issues -- would require special interrogatories and a verdict form "of unimaginable complexity. I cannot imagine how to fashion a verdict form that would provide meaningful answers...."  

Update on Salmonella

Quick follow-up to our recent post on salmonella in which we noted a current focus on peppers rather than tomatoes: Federal officials announced yesterday that they have found the bacteria in a jalapeño pepper from a small distribution facility in McAllen, Tex. Accordingly, they warned consumers to avoid eating raw jalapeños or products that contain them.


The company has stopped distributing jalapeño peppers and is recalling jalapeños sold since June 30 to customers in Georgia and Texas. Investigators don't know where the contamination occurred. CDC officials are hoping that another round of interviews with people who got sick since early June in Arizona and New Mexico will shed more light on the source of the outbreak.

FDA Still Puzzled By Salmonella Outbreak

Federal officials announced last week that all tomatoes currently on the U.S. market are safe to eat. But they admit they still don't know what's causing a salmonella outbreak that has affected thousands over the past three months. Jalapeno and other peppers remain under investigation. Tomatoes had been identified in early June as the likely source of one of the largest food-borne illness outbreaks in the past decade. There were more than 1200 confirmed illnesses linked to the outbreak. While new cases are still being found, the rate has slowed, according to the CDC.

The FDA says it's possible tomatoes caused some illnesses and that it's impossible to prove that they didn't cause any. But not a single contaminated tomato has been found. FDA tested 1,700 samples without finding traces of the outbreak. Apparently, this is not unusual: In half of all produce disease outbreaks, health investigators have never determined what made the people sick. The short shelf life of most fresh fruits and vegetables means it's less likely the items will still be in people's refrigerators when investigators arrive. And the complexity of the produce distribution system can be a large impediment.

Industry leaders are not so sure. They worry it was not a failure of traceability, but a lack of imagination. When the trace-back did not support the tomato hypothesis, investigators should have more quickly tried alternative hypotheses, they say.

In any event, a broad coalition of growers, distributors, restaurants, and retailers have been working on a national tracking system. The current proposal would utilize a global trade item number (GTIN). Every part of the distribution chain would be required to use a bar code encoded with the GTIN and the grower or shipper who produced it, the production lot it was part of, and the date it was packed or harvested. If the GTIN system were to be adopted, investigators could quickly determine where a box of fruit or vegetables came from, and thus whether it needs to be isolated or recalled.

This ability to better link up the product may impact product liability litigation: cause in fact is a basic element requiring plaintiffs to show that the product of the defendant caused his or her injury.  But industry recognizes that it is in everyone's interest to be able to trace back the source as quickly as possible and thus to take immediate action that will limit the number of people possibly affected.  And the inability to quickly trace back may have significant financial impact: The tomato warning, issued for varieties of fresh tomatoes, likely cost the industry millions of dollars, according to trade associations.

The L.A. Times recently reported on an AP poll that finds that nearly half of consumers have changed their eating and buying habits in the past six months because they're afraid they could get sick by eating contaminated food. Also, 86% of those polled said produce should be labeled so it can be tracked through layers of processors, packers and shippers, all the way back to the farm. The poll found that 80 percent of Americans said they would support new federal standards for fresh produce.

The Professors at the Mass Tort Litigation Blog have posted on this as well.

FDA and China Issue Joint Progress Report on Food Safety

The United States and China issued a joint progress statement last week that described the measures both have recently taken to improve the safety of international food and feed imports.
The safety of a variety of products and substances imported from China have been in the news, ranging from pet food, to toothpaste, to toys, to pharmaceutical ingredients. MassTortDefense has posted on this here and here.

According to the statement, both countries have improved the exchange of information on food safety and on the relevant regulatory systems. The U.S. has agreed to conduct training for Chinese officials on U.S. regulatory standards. Each has designated new emergency contacts and notification thresholds for import safety issues. The two countries have also been working towards an electronic certification system between the FDA and China's General Administration of Quality Supervision, Inspection and Quarantine to ensure that Chinese exports meet FDA standards for safety and manufacturing quality. The countries also agreed to increase their focus on inspection, supervision and laboratory testing of Chinese imports.

The document outlines steps taken by both nations in implementing the 2007 Memorandum of Agreement (MOA) on food and feed safety. The MOA established a bilateral mechanism to provide greater information and other assurances to enhance the safety of food and feed products traded between the two countries.

Finally, the report described the establishment of a cooperative mechanism to notify each other of significant risks to public health related to product safety or the gross deception of consumers, and to share information to facilitate each other’s investigation.

The report comes as Senator Sherrod Brown (D.-Ohio), in a letter to the FDA's Center for Drug Evaluation & Research, called on the agency to investigate outsourcing of drug ingredients, and just as China has granted diplomatic approval for the FDA to open three inspections offices in China that also will help increase China's ability to ensure delivery of safe foods, drugs and other products. The FDA reportedly hopes to open the offices in Beijing, Shanghai and Guangzhou before the end of this year, with a total staff of around 12 people.