Regulations of food in Japan tend to be stricter than those in the United States but, in at least one way, activity in the U.S. is heating up. Companies would be wise to take notice of the many food related class action matters being filed in California.
Dubbed “Food Court,” the U.S. District Court for the Northern District of California has seen a raft of food labeling lawsuits against food, beverage, and cosmetics companies in recent years. These suits frequently focus on front-of-package labeling statements such as “All Natural,” “Good Source of Antioxidants,” or “0 Grams Trans Fat,” but may also target more obscure portions of the label such as the ingredient list, the serving size, or even the size of the packaging itself. They have been filed against both Fortune Global 500 corporations like Procter & Gamble and Nestle as well as smaller companies like Bromley Tea and Redwood Hill Farm.
While these labeling lawsuits may seem silly or trivial at first blush, they can be difficult to dispense of at the pleading stage, requiring costly discovery and preparation for a critical fight at the class-certification stage — not to mention the risk of a multi-million dollar judgment. The result is substantial settlement leverage, leading to ever-more innovative theories by class action plaintiffs’ lawyers and frequent copycat lawsuits filed in federal and state courts throughout California, as well as in other jurisdictions such as Florida, Illinois, New Jersey, and New York.
In addition to an understanding of class action procedural requirements, these cases often require knowledge of principles of federal preemption, as well as technical regulations and guidance issued by the Food and Drug Administration, U.S. Department of Agriculture, and other state and federal agencies. This is becoming more and more evident as plaintiffs’ lawyers run out of foods labeled “100% Natural” – which have been their primary target for the past few years – and grasp at what they contend to be technical regulatory violations.
For example, a group of attorneys who made their names suing tobacco companies has filed over 40 lawsuits in the Northern District of California asserting that various portions of food and beverage labels violate FDA regulations. The allegations in these lawsuits range from asserting that the ingredient referred to by many manufacturers as “evaporated cane juice” should actually be called “dried cane syrup” to arguing that breath mints should be labeled as having a four-mint serving size rather than one mint. While it remains to be seen whether any of these suits will succeed on the merits, they can be costly to fight and serve as a reminder to manufacturers of consumer products to carefully review labels and other marketing materials before they are issued.