Many recent consumer class actions against food and beverage manufacturers have related to label claims that a particular category of ingredient is not used in the product—e.g., “No Preservatives,” “No Artificial Flavors.” These lawsuits follow a predictable formula: the plaintiff, relying on the product’s ingredient list, alleges that a particular ingredient in the product functions as an artificial flavor and/or chemical preservative, and that the “no preservatives” or “no artificial flavors” claim is therefore false.

Plaintiffs have tended to pick on acidic ingredients—citric, malic, phosphoric, and ascorbic—as the culprits in these lawsuits, presumably because these are common multi-purpose food ingredients. And because these lawsuits are easy and cheap to bring, plaintiffs have churned them out relentlessly over the past several years, using state consumer protection statutes to challenge the labeling on everything from pasta sauce to crackers to gummy fruit snacks. In this post, we examine why these cases have been so nettlesome for the industry, and discuss some strategies defendants should consider when faced with suits of this kind.

How These Complaints Often Survive Dismissal

Formulaic though they are, these complaints are not always easy to get rid of quickly or cheaply. You might think that a defendant could say, “Citric acid was right there on the ingredient list, so how could this plaintiff claim she didn’t know about it?” But many courts have been unreceptive to the argument that an allegedly false statement on the product’s front label (such as “No Artificial Flavors”) could be cured by information provided on its back label (such as its ingredient list). See, e.g., Williams v. Gerber Prods. Co., 523 F.3d 934 (9th Cir. 2008). So, if the court accepts the premise that citric acid is an artificial flavor, a manufacturer typically cannot defend a “No Artificial Flavors” claim by noting that citric acid was disclosed on the ingredient list.

Another argument that many courts have been reluctant to accept is that these lawsuits are preempted by the federal Food, Drug and Cosmetic Act (“FDCA”), which sets forth requirements for what is an “artificial flavor,” what is a “preservative,” and how those ingredients should be labeled. The FDCA contains an “express preemption” clause prohibiting states from imposing requirements for the labeling of artificial flavors and preservatives that are “not identical to” those of the FDCA and its implementing regulations. 21 U.S.C. § 343-1(a)(3), 343(k). In other words, if the FDCA says that an ingredient does not need to be labeled as a “preservative” or “artificial flavor,” a state cannot establish a different requirement— either directly or by interpretation of state consumer protection laws.

Many food manufacturers have argued persuasively that this stops the “acid” cases dead in their tracks. Nothing in the FDCA or its implementing regulations supports the idea that citric acid, malic acid, or the other ingredients commonly targeted in these lawsuits are properly classified as “artificial flavors” and/or “preservatives.” The statute’s implementing regulations also make clear that not every man-made ingredient that affects taste is an “artificial flavor.” Rather, an ingredient must be produced in a certain way, and must also impart a “characteristic” flavor (such as strawberry or banana), in order to qualify as an “artificial flavor.” Thus, manufacturers have argued, consumers cannot use state law to classify ingredients as “artificial flavors” or “preservatives” when there is no basis for that classification in the FDCA.

This argument may sound picayune or technical, but in fact it lines up with the policy objectives of FDCA preemption. The reason for the preemption provision’s existence is that permitting every state to impose its own food labeling requirements would create an untenable situation for both manufacturers (who would have to create 50 distinct labels to satisfy each state’s requirements) and consumers (who would have to orient themselves to new food labeling guidelines whenever traveling to, or buying food from, other states). A situation in which citric acid is an “artificial flavor” in New Jersey, a “preservative” in New York, and neither in Connecticut is therefore just the scenario that the FDCA preemption provision is intended to avoid.

Alas, many courts have refused to dismiss these cases on preemption grounds. These courts have reasoned that, although ingredients such as citric acid are not classified as per se “flavors” or “preservatives,” the FDCA also makes clear that they can be used for multiple purposes, and does not explicitly foreclose their use as artificial flavors or preservatives. Accordingly, these courts conclude, an ingredient’s function in a particular product —i.e., whether it operates as an artificial flavor and/or preservative in that product—is a fact issue that is not appropriate for resolution on a motion to dismiss. This rationale not only permits these lawsuits to proceed, but can also subject manufacturers to burdensome and competitively sensitive discovery regarding their reasons for using particular ingredients in their products.

What’s a Food and Beverage Manufacturer to Do?

Despite these obstacles, manufacturers faced with these lawsuits need not abandon all hope. Most of these lawsuits are not meritorious, and food and beverage manufacturers can consider a few ways to establish that early in the litigation.

The plaintiff’s claims may not be plausible. At the pleading stage, manufacturers should consider whether the plaintiff really has a plausible basis for alleging that the challenged ingredient functions in the food as he/she claims. That is, even assuming the ingredient can sometimes be a preservative, what basis does a plaintiff have for alleging that the ingredient serves that function in the particular product? If it is sheer speculation, then it does not satisfy the pleading standards of Iqbal and Twombly.

One court recently accepted this argument in a citric acid case, dismissing the complaint for failure to allege a factual basis for the plaintiff’s contention that citric acid functioned as a preservative in the product in question. See Hu v. Herr Foods, Inc., 251 F. Supp. 3d 813, 820 (E.D. Pa. 2017). The Hu court pointed out the plaintiff’s references to how citric acid might function as a preservative in other products—such as pineapple, croutons, and chicken carcasses—lacked any relevance to citric acid’s preservative qualities in chips and other salty snacks. Id. at 821.

The plaintiff may not be able to plead or prove materiality. The “misrepresentation” alleged in these complaints is highly technical: the plaintiffs allege that they were misled as to the function of the ingredients used in the product. So a plaintiff who challenges a “No Preservatives” claim based on the presence of malic acid is saying he would not have purchased the product if he had known (1) that it contained malic acid and (2) that malic acid (allegedly) functioned as a preservative in the product. He cannot prevail just by saying that avoids malic acid, because malic acid does not always function as a preservative. Therefore, it is not reasonable for him to have relied on a “No Preservatives” claim as assuring that the product is free of malic acid. So to show that he relied on the claim to his detriment, he has to prove both that malic acid functioned as a preservative in the product and that that function mattered to his purchasing decisions.

This is a long shot. Why would a consumer be fine with buying a product that contained malic acid, but averse to buying the same product after learning that the malic acid operated as a preservative? Because this theory is so improbable, many plaintiffs have a hard time sticking with it at deposition, and some even include allegations in their complaint that are contrary to it. So manufacturers should be on the lookout for admissions at either of these points that the plaintiff’s true concern was with the ingredient, not with its function.

Proving materiality only becomes more difficult when the plaintiff seeks class certification, and must prove that this arcane distinction between “malic acid as preservative” and “malic acid as something else” mattered to consumers generally. In many instances, it is not necessary to get to that level of granularity because survey evidence demonstrates that the “No Preservatives” claim does not matter to consumers at all. But even when there is a dispute on that point, plaintiffs’ survey evidence must demonstrate that consumers care about the function, as opposed to the identity, of the ingredients in the products they purchase. Manufacturers should keep these distinctions in mind and emphasize, when opposing class certification, any lack of fit between the plaintiff’s liability theory and survey evidence.

It may be possible to limit initial discovery to a particular issue and move for early summary judgment. A primary reason that these cases are headaches for manufacturers is that the plaintiffs often seek discovery on many sensitive topics: revenue data, consumer research, ingredient sourcing, and product formulation, to name just a few. Meanwhile, there is typically no corresponding burden on the plaintiffs, who are individuals with few relevant documents in their possession.

Food manufacturers should thus consider whether “phasing” of discovery by topic can put them in a position to obtain early summary judgment (or defeat class certification) without incurring the cost and burden of discovery on every potentially relevant issue. The mechanics of the “phasing” will vary depending on the manufacturer’s prospects for success on particular issues, as well as its relative sensitivity to discovery on those issues. For example, a manufacturer who is not concerned about sharing formulation information subject to a protective order, and who is confident that the ingredient does not serve the function alleged by the plaintiff, may propose that discovery initially focus on the core “merits” question of whether the challenged ingredient actually functioned as an artificial flavor and/or preservative. The manufacturer can propose a short period of discovery on that issue followed by a motion for summary judgment.

A manufacturer who is less inclined to “open the hood” on its product formulation processes could suggest focusing initial discovery on the statement’s materiality to the plaintiff’s purchasing decisions, teeing up a motion for summary judgment on that issue. Or the manufacturer could suggest that initial discovery focus on all “class certification issues,” giving the manufacturer an opportunity to defeat class certification before proceeding to discovery on the product formulation issues.

Although judges vary in their receptivity to phased discovery, many are sympathetic to the one-way discovery burdens of these cases and open to disposing of them based on narrow issues. Moreover, a manufacturer can always move for summary judgment when the evidence warrants it, whether or not a “phased” discovery schedule is in place. Thus, even when these nuisance cases proceed to discovery, manufacturers can position themselves to prevail quickly and efficiently by focusing initial discovery on key dispositive issues.