A California federal court has rejected a settlement in a lawsuit that alleged Kellogg Sales Co. misled consumers by marketing its products as "healthy." Hadley v. Kellogg Sales Co., No. 16-4955 (N.D. Cal., San Jose Div., entered February 20, 2020). The court found the settlement agreement to be invalid for several reasons: (i) "the release of the claims is overbroad"; (ii) the parties did not show that certification was appropriate; (iii) the parties failed "to provide sufficient information to justify a proposed reversion to Kellogg"; (iv) several forms associated with class participation contained errors; and (v) the "settlement structure is currently inconsistent with the fact that the voucher portion of the settlement constitutes a coupon settlement under the Class Action Fairness Act." Shook Partner Lindsey Heinz and Associate Elizabeth Fessler wrote an article for Law360 on the settlement when it was announced in late 2019, focusing on the lessons companies…
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Miyoko's Kitchen Inc. has filed a lawsuit asserting that California infringed its First Amendment right to free speech by requiring the removal of "truthful messages and images from its website and its product labels—including the phrase '100% cruelty and animal free,' the use of the word 'butter' in the phrase 'vegan plant butter,' and even an image of a 'woman hugging a cow.'" Miyoko's Kitchen v. Ross, No. 20-0893 (N.D. Cal., filed February 6, 2020). The company reportedly received a letter from California in December 2019 that "orders Miyoko's to remove claims that its vegan products are '100% cruelty and animal free,' 'cruelty free,' and 'lactose free'—all entirely truthful statements." "For decades, plant-based producers have used terms like 'vegan cheese,' 'soy milk,' and 'cashew yogurt,'" the complaint asserts. "Consumers are not confused by these labels. In fact, plant-based dairy terms are so widely used that the [U.S. Food and Drug…
A California appeals court has determined that the "no sugar added" phrasing on Califia Farms' Cuties tangerine juice does not imply to consumers that competitors add sugar to their products. Shaeffer v. Califia Farms LLC, No. B291085 (Cal. App. Ct., entered February 6, 2020). The lower court dismissed the complaint, ruling that the "no sugar added" representation was truthful. The appeals court considered "statements a business affirmatively and truthfully makes about its product and which do not on their face mention or otherwise reference its competing products at all." The court found that a "statement may be 'fraudulent' (and hence actionable) if it is 'deceptive and misleading in its implications,'" but declined to hold as actionable truthful statements about a company's own product when the argument is that a reasonable consumer would "(1) likely to infer from such a statement that the very same statement is untrue as to comparable,…
Four consumers have filed a putative class action alleging that BA Sports Nutrition's BodyArmor SuperDrink sports drinks are "unlawfully fortified junk food." Silver v. BA Sports Nutrition LLC, No. 20-0633 (N.D. Cal., filed January 28, 2020). "BodyArmor does not provide 'superior' or 'better' hydration to Plaintiffs and other consumers than other beverages, nor are the Plaintiffs or the general public hydration deficient and/or in need of its characteristics to replenish them from dehydration," the complaint asserts. The plaintiffs argue that BodyArmor is a sugar-sweetened beverage "that scientifically links to serious medical conditions, including obesity, type 2 diabetes, and cardiovascular disease, when regularly consumed." They allege that they "would not have purchased BodyArmor, purchased as much of it, or paid as much for it, had they understood that consumption does not provide them with a drink comprised of natural ingredients and/or that was more, natural, better for them than other drinks."…
A California federal court has refused to approve a $6.5 million settlement between Tri-Union Seafoods and commercial food preparers. In re Packaged Seafood Prods. Antitrust Litig., No. 15-2670 (S.D. Cal., entered January 17, 2020). The court found that the proposed $6.5 million, half of which would go to attorney's fees and $2 million to costs and expenses, "would provide at most $1.5 million" to the class. The gross settlement amount "is approximately one-third of the damages," the court noted, and "a rough calculation suggests that [the class] will collectively receive approximately 6.85% of the damages they attribute to [the defendant]."
The National Pork Producers Council and American Farm Bureau Federation have filed a lawsuit against the secretary of the California Department of Food and Agriculture alleging that Proposition 12, which was passed in November 2018 and established minimum requirements for the confinement of farm animals, "has thrown a giant wrench into the workings of the interstate market in pork." Nat'l Pork Producers Council v. Ross, No. 19-2324 (S.D. Cal., filed December 5, 2019). The complaint alleges that "Proposition 12 institutes a wholesale change in how pork is raised and marketed in this country. Its requirements are inconsistent with industry practices and standards, generations of producer experience, scientific research, and the standards set by other states. They impose on producers costly mandates that substantially interfere with commerce among the states in hogs and whole pork meat. And they impose these enormous costs on pork producers, which will ultimately increase costs for…
A California federal court has denied Clif Bar & Co.'s motion to dismiss a lawsuit alleging that its products marketed as containing white chocolate lack the claimed ingredients. Joslin v. Clif Bar & Co., No. 18-4941 (N.D. Cal., entered December 2, 2019). A previous version of the complaint was dismissed for failure to show that members of the public were likely to be deceived. The court again found that the plaintiffs failed to allege standing for the injunctive relief they sought, but it held that the amended complaint properly alleged facts that satisfy the "reasonable consumer" standard. "This is a close case," the court stated. "Having considered Plaintiffs’ amendments, the Court concludes Plaintiffs have nudged their claims over the line from possible to plausible. The Court concludes Plaintiffs’ allegations are sufficient to allege the Products’ labels would be likely to deceive a reasonable consumer and sufficiently allege facts to state…
A California federal court has granted summary judgment to The Hershey Co. in a lawsuit alleging that its Brookside chocolates are misleadingly labeled as made with "no artificial flavors" because they contain malic acid. Clark v. Hershey Co., No. 18-6113 (N.D. Cal., entered November 15, 2019). The court found that the named plaintiffs admitted in depositions that they did not rely on the contested label. One plaintiff "did suffer an injury as required by California law—he would not have purchased the Brookside products if he had known they contained artificial ingredients," the court noted. "However, his injury was not caused by the alleged mislabeling of the product, but rather his misunderstanding that the 'No Artificial Flavors' statement meant there were no artificial ingredients whatsoever in the product. Accordingly, regardless of defendant's alleged mislabeling, [the plaintiff] would have suffered the injury." A second and third plaintiff argued that they had relied…
Ocean Spray Cranberries Inc. has agreed to pay $5.4 million to settle claims that it misleadingly advertised its beverages as lacking artificial flavors despite containing malic avid. Hilsley v. Ocean Spray Cranberries Inc., No. 17-2335 (S.D. Cal., filed November 8, 2019). Under the agreement, the company will stop using the phrase "no artificial flavors" on its labeling or in other marketing materials within 12 months. Class members may receive $1 per bottle up to 20 bottles, and no proof of purchase will be required.
The parties in a lawsuit alleging Kellogg Sales Co. misrepresented its cereals as healthy have reached an agreement that would require the company to pay $20 million in payments and make marketing changes valued at more than $11 million. Hadley v. Kellogg Sales Co., No. 16-4955 (N.D. Cal., filed October 21, 2019). The lawsuit alleged that Kellogg's Smart Start, Raisin Bran, Krave, Crunchy Nut and Frosted Mini-Wheats cereals, along with its Nutri-Grain bars, were misleadingly marketed as healthy despite containing high levels of sugar. Under the settlement agreement, Kellogg will (i) remove or limit the use of "Heart Health" claims on Smart Start and Raisin Bran; (ii) use "healthy" as an implied nutrient content claim only; (iii) remove "lightly sweetened" from Frosted Mini-Wheats and Smart Start; (iv) refrain from using "No High Fructose Corn Syrup" or an equivalent phrase; and (v) use "wholesome," "nutritious" and "benefits" or equivalent words only…
