Proposed “All Natural” Mislabeling Class Action Against Diamond Foods Dismissed

A California federal court has dismissed a putative class action against Diamond Foods Inc. alleging that its Kettle tortilla chips are mislabeled as “All Natural” despite containing synthetic ingredients. Surzyn v. Diamond Foods Inc., No. 14-cv-136 (N.D. Cal., order entered May 28, 2014). Citing a lack of basic factual assertions such as which product was the subject of the lawsuit, the court granted plaintiff Dominika Surzyn leave to amend within 21 days. Diamond Foods argued that its “All Natural” label is not misleading within the context of the rest of the packaging, which lists some of the ingredients—maltodextrin and dextrose—at issue in the case, and cited a Federal Trade Commission (FTC) determination that consumers’ understanding of “natural” is context-specific. The court rejected Diamond Foods’ assertions, finding that FTC had reached its conclusion not to dismiss any meaning and implication of the world “natural” but to decline to offer guidance on the use of the word without more particular facts about its context.

Issue 525