Food and Beverage Class Actions: Litigating False Advertising, - - PowerPoint PPT Presentation

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Food and Beverage Class Actions: Litigating False Advertising, Labeling, Slack-Fill Packaging or Food Safety Claims

Navigating Issues of Ascertainability, Predominance, Preemption, Standing and More

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific WEDNESDAY, JULY 13, 2016

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Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

David T . Biderman, Partner , Perkins Coie, Los Angeles Michael R. Reese, Founder , Reese, New York

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LITIGATING CLASS ACTIONS IN THE FOOD

AND BEVERAGE INDUSTRY

Presenters: Michael R. Reese, Esq. David Biderman, Esq.

Michael R. Reese

• Lead counsel in numerous, multi-million

dollar food class action settlements in the United States

• Adjunct law professor in New York

teaching on topics of class actions and food law and frequent lecturer at food law conferences in U.S.

• Author of Typical Claims and Defenses in

Class Action Food Litigation, ABA Health Lawyer Journal, April, 2016. David T. Biderman

• More than 30 years of

experience defending food and

• ther companies in federal and

state courts

• Counsel in a significant

number of defense victories including Turek v. General Mills, Inc. and In re Cheerios Cereal Litigation

• Regular contributor to Food

Litigation News Michael R. Reese

• Lead counsel in numerous, multi-million

dollar food class action settlements in the United States

• Adjunct law professor in New York

teaching on topics of class actions and food law and frequent lecturer at food law conferences in U.S.

• Author of Typical Claims and Defenses in

Class Action Food Litigation, ABA Health Lawyer Journal, April, 2016. David T. Biderman

• More than 30 years of

experience defending food and

• ther companies in federal and

state courts

• Counsel in a significant

number of defense victories including Turek v. General Mills, Inc. and In re Cheerios Cereal Litigation

• Regular contributor to Food

Litigation News

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Agenda

• Part I - Introduction
• Part II- Typical Claims and Latest Filing Trends
• False Advertising and Mislabeling
• Slack-Fill
• Food Safety

Part III - Litigation Strategies and Defenses

• Plaintiffs’ Perspective
• Defendants’ Perspective

Part IV - Future Trends and Predictions Part I - Introduction Part II- Typical Claims and Latest Filing Trends

• False Advertising and Mislabeling
• Slack-Fill
• Food Safety
• Part III - Litigation Strategies and Defenses
• Plaintiffs’ Perspective
• Defendants’ Perspective
• Part IV - Future Trends and Predictions

7 7

Part I Introduction – A Brief Background

• Explosion in “food” cases in the United States
• Increased awareness of:

– Food-related illnesses – Societal problems

Reflected in U.S. media and other sources: Explosion in “food” cases in the United States Increased awareness of:

Food-related illnesses – Societal problems

• Reflected in U.S. media and other sources:

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Introduction (cont’d)

• Common theme of growing mistrust and

distrust of food system; who should control?

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Introduction (cont’d)

• U.S. Arenas for debate:

Courts & Legislative Bodies

– Justice is the tolerable accommodation

• f the conflicting interests of society,

and I don't believe there is any royal road to attain such accommodation

• concretely. -Judge Learned Hand

Some circumstantial evidence is very strong, as when you find a trout in the

• milk. -Henry David Thoreau

U.S. Arenas for debate: Courts & Legislative Bodies

Justice is the tolerable accommodation

• f the conflicting interests of society,

and I don't believe there is any royal road to attain such accommodation

• concretely. -Judge Learned Hand

– Some circumstantial evidence is very strong, as when you find a trout in the

• milk. -Henry David Thoreau

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Introduction (cont’d) Number of Filings in the United States

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PART II

TYPICAL CLAIMS AND LATEST FILING TRENDS

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Food Class Actions: Typical Claims

MOST OF THESE CASES ALLEGE VIOLATION OF STATE CONSUMER PROTECTION LAWS. Food claims are often brought under state law equivalents of 15 U.S.C. §45(a)(1) that prohibits unfair or deceptive acts or practices in or affecting commerce.

• California’s Consumer Legal Remedies Act, Cal Civ. Code P. §§1750-1784; New York General

Business Law §349; and, Florida Statute §§ 501.201-501.213 are some of the more frequently asserted consumer protection claims. “[T]hese laws prohibit ‘not only advertising which is false, but also advertising which although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.’” Kasky v. Nike, Inc., 27 Cal. 4th 939, 951 (Cal. 2002); Williams v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008)(same); see also Ackerman v. Coca-Cola Co., CV-09-0395(JG), 2010 WL 2925955 (E.D.N.Y. July 21, 2010)(same for New York consumer protection claim); Rollins, Inc. v. Butland, 951 So. 2d 860 (Fla. 2d DCA 2006)(same for Florida consumer protection claim). MOST OF THESE CASES ALLEGE VIOLATION OF STATE CONSUMER PROTECTION LAWS. Food claims are often brought under state law equivalents of 15 U.S.C. §45(a)(1) that prohibits unfair or deceptive acts or practices in or affecting commerce.

• California’s Consumer Legal Remedies Act, Cal Civ. Code P. §§1750-1784; New York General

Business Law §349; and, Florida Statute §§ 501.201-501.213 are some of the more frequently asserted consumer protection claims. “[T]hese laws prohibit ‘not only advertising which is false, but also advertising which although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.’” Kasky v. Nike, Inc., 27 Cal. 4th 939, 951 (Cal. 2002); Williams v. Gerber Products Co., 552 F.3d 934, 938 (9th Cir. 2008)(same); see also Ackerman v. Coca-Cola Co., CV-09-0395(JG), 2010 WL 2925955 (E.D.N.Y. July 21, 2010)(same for New York consumer protection claim); Rollins, Inc. v. Butland, 951 So. 2d 860 (Fla. 2d DCA 2006)(same for Florida consumer protection claim).

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Filing Trends by Jurisdiction

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Typical Claims – False Advertising/Mislabeling

• “Natural” Cases

– “Non-natural” Ingredients “GMO” Ingredients Corn; Soy; Sugar Beets

“Natural” Cases

“Non-natural” Ingredients – “GMO” Ingredients Corn; Soy; Sugar Beets

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Typical Claims - Slack-Fill

McCormick’s Pepper StarKist Tuna

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Typical Claims – Health/Safety

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Typical Claims – Health/Safety (cont’d)

• FDA Warning Letters

– Kind Bars, March 17, 2015 “Your Kind Fruit & Nut Almond & Apricot, Kind Fruit & Nut Almond & Coconut, Kind Plus Peanut Butter Dark Chocolate + Protein…products are misbranded…[because they] bear the claim “Healthy and tasty, convenient and wholesome”” Kind Bars, May 10, 2016 “In our discussions with KIND, we understood the company’s position as wanting to use “healthy and tasty” as part of its corporate philosophy, as opposed to using “healthy” in the context of a nutrient content claim. The FDA evaluates the label as a whole and has indicated that in this instance it does not object.”

FDA Warning Letters

Kind Bars, March 17, 2015 “Your Kind Fruit & Nut Almond & Apricot, Kind Fruit & Nut Almond & Coconut, Kind Plus Peanut Butter Dark Chocolate + Protein…products are misbranded…[because they] bear the claim “Healthy and tasty, convenient and wholesome”” – Kind Bars, May 10, 2016 “In our discussions with KIND, we understood the company’s position as wanting to use “healthy and tasty” as part of its corporate philosophy, as opposed to using “healthy” in the context of a nutrient content claim. The FDA evaluates the label as a whole and has indicated that in this instance it does not object.”

18

Typical Claims – Health/Safety (cont’d)

• Failure to warn

– Alleges ingredients unsafe/carcinogenic – UCL, FAL, and CRLA class claims (sometimes grounded in Prop 65) – 4-MEI in soda and malt beverages Arsenic in wine Partially-Hydrogenated Oils

Failure to warn

Alleges ingredients unsafe/carcinogenic UCL, FAL, and CRLA class claims (sometimes grounded in Prop 65) – 4-MEI in soda and malt beverages – Arsenic in wine – Partially-Hydrogenated Oils

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Filing Trends by Category

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PART III

TYPICAL PLAINTIFF LITIGATION STRATEGIES AND DEFENSES

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Food Class Actions: Important Cases

22

Jurisdiction; Role of Class Action Device

MOST OF THE CASES ARE BROUGHT AS CLASS ACTIONS IN FEDERAL COURT.

• Class actions allow for the claims of many to be litigated in one case. This is often thought

to be deemed necessary in food litigation, where individual damages are typically small, such that individual actions for damages would not be worth pursuing.

• Since the passage of the Class Action Fairness Act in 2005, federal courts have jurisdiction
• ver class actions where there is diversity jurisdiction, which is almost always the case.
• Federal Civil Procedure Rule 23 governs class actions in federal court.

MOST OF THE CASES ARE BROUGHT AS CLASS ACTIONS IN FEDERAL COURT.

• Class actions allow for the claims of many to be litigated in one case. This is often thought

to be deemed necessary in food litigation, where individual damages are typically small, such that individual actions for damages would not be worth pursuing.

• Since the passage of the Class Action Fairness Act in 2005, federal courts have jurisdiction
• ver class actions where there is diversity jurisdiction, which is almost always the case.
• Federal Civil Procedure Rule 23 governs class actions in federal court.

23

Food Class Actions: Defense Strategies

• Motion to Dismiss
• Summary Judgment
• Class Certification

24

Food Class Actions: Defenses

• Motions to Dismiss

– Reasonable consumer: limited successes – Standing for non-purchased products – NLEA preemption “Primary Jurisdiction”

Summary Judgment

Reasonable consumer Specific Class Representative issues. Merits of the deception

Motions to Dismiss

Reasonable consumer: limited successes Standing for non-purchased products – NLEA preemption – “Primary Jurisdiction”

• Summary Judgment

– Reasonable consumer – Specific Class Representative issues. – Merits of the deception

25

Food Class Actions: Defense: Class Certification Appeals

• “Natural” cases on appeal:

– Jones (N.D. Cal.); In re ConAgra Foods (C.D. Cal.); Brazil (N.D. Cal.) on appeal – Issues: (1) Ascertainability; (2) Damages; (3) Materiality; (4) Proof for Summary Judgment

“Natural” cases on appeal:

Jones (N.D. Cal.); In re ConAgra Foods (C.D. Cal.); Brazil (N.D. Cal.) on appeal – Issues: (1) Ascertainability; (2) Damages; (3) Materiality; (4) Proof for Summary Judgment

26

Food Class Actions: Defense: Ascertainability Post-Carrera

• Ascertainability

– Heightened standard solid within Third Circuit (Carrera, Byrd)

• Eleventh Circuit has adopted (Karhu)
• Fourth Circuit appears to follow (EQT)

– Rejected by Sixth, Seventh and Eighth Circuits

Mullins (7th Cir.) Rikos (6th Cir.) Sandusky (8th Cir.)

District courts within the Ninth Circuit currently split

Some Northern District of California cases approve Carrera (Clorox), but others reject (Jamba Juice) Central District of California rejects (McCrary, Morales, Rahman) Ninth Circuit may resolve split in Jones v. ConAgra; In re ConAgra Foods

Ascertainability

Heightened standard solid within Third Circuit (Carrera, Byrd)

Eleventh Circuit has adopted (Karhu) Fourth Circuit appears to follow (EQT)

– Rejected by Sixth, Seventh and Eighth Circuits

• Mullins (7th Cir.)
• Rikos (6th Cir.)
• Sandusky (8th Cir.)

– District courts within the Ninth Circuit currently split

• Some Northern District of California cases approve Carrera

(Clorox), but others reject (Jamba Juice)

• Central District of California rejects (McCrary, Morales, Rahman)
• Ninth Circuit may resolve split in Jones v. ConAgra; In re

ConAgra Foods

27

U.S. Food Class Actions: Summary of Defenses

• Standing

– Split of authority on non-purchased products

• Preemption

– Implications for trans-fat cases

Reasonable Consumer

At pleading stages At summary judgment

Standing

Split of authority on non-purchased products

Preemption

– Implications for trans-fat cases

• Reasonable Consumer

– At pleading stages – At summary judgment

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PART IV Future Trends and Predictions

• 1. ConAgra Decision in Ninth Circuit
• 2. FDA rule-making regarding the term Natural
• 3. Continued legislative efforts at the state and

federal levels

• 1. ConAgra Decision in Ninth Circuit
• 2. FDA rule-making regarding the term Natural
• 3. Continued legislative efforts at the state and

federal levels

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Questions? Please feel free to contact:

Michael R. Reese REESE LLP 100 West 93rd Street, 16th Floor New York, New York 10025 mreese@reesellp.com 1 (212) 643-0500 David T. Biderman Perkins Coie LLP 1888 Century Park East, Suite 1700 Los Angeles, California 90067 DBiderman@perkinscoie.com 1 (310) 788-9900 Michael R. Reese REESE LLP 100 West 93rd Street, 16th Floor New York, New York 10025 mreese@reesellp.com 1 (212) 643-0500 David T. Biderman Perkins Coie LLP 1888 Century Park East, Suite 1700 Los Angeles, California 90067 DBiderman@perkinscoie.com 1 (310) 788-9900

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