A Label Of Their Own: Floodgates Opening in

Consumer Fraud Litigation?

Presented by:Kenneth Odza, Partner, Stoel Rives LLP

Scott Rickman, Associate General Counsel, Del Monte Foods

GMA Food Claims & Litigation Conference

February 25, 2010

Where Are We?

Class Claims For:

• Natural

• FOP Labeling

• Health Claims

• Past Sins

“Natural” (HFCS)

2009:

Beverages:

Holk v. Snapple (3rd Cir.)

Pasta Sauce:

Lockwood v. Conagra

Products with HFCS advertised as "all natural."

Williams v. Gerber

9th Cir. Issues:

• Fruit Depictions

• “Natural” and HFCS

Ninth Circuit’s Bottom Line

"We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations."

Health Claims

FOP Labeling Claims

Frivolous Claims

Judge: “reasonable consumer would not be deceived into believing that the Product in the instant case contained a fruit that does not exist.”

How did we get here?

• Preemption

• Federal Enforcement

• State Consumer Protection Laws

Preemption

Fellner v. Tri-Union (3rd Cir)

• No Preemption Without Rule Making

• FDA letter merits “a particularly low level of deference” because it is not “the product of an agency proceeding.”

Wyeth v. Levine (S.Ct)

• “Impossibility pre-emption is a demanding defense”

• No deference to FDA’s preemption finding

Preemption (cont.)

Federal Enforcement

• No Private Right Of Action Under FFDCA

• Private Plaintiffs Plead As:

A. CPA Claims (e.g. Zupnik v. Tropicana)

B. Advertising and Marketing Claims (e.g POM Wonderful v. Ocean Spray)

State Consumer Protection Laws

• Varied – ABA 50 State Survey

• WA:

1) Unfair/deceptive act/practice,

2) Trade or commerce,

3) Public interest impact,

4) Business/Property injury, and

5) Causal link

Where Are We Going?

• Federal Enforcement

• Piggy-Back Class Action Claims

• Pleading Requirements

Increased Federal Enforcement

WSJ: “The FDA is showing signs of taking a more aggressive stance toward the companies it regulates . . .”

Result:

In Re Cheerios Marketing & Sales Practices Litigation,

MDL No. 2094 (D.N.J)

http://www.cspinet.org/new/200912291.html

Based on the Center for Science in the Public Interest Report

• Successful Motion Practice

• Scrutiny of Marketing

• Congruency Between R&D and Marketing

• FDA Rule-Making

What Can Your Company Do About Prevention and Mitigation of These Claims?

• Wright v. General Mills (S.D. CA)

Iqbal/Twombly “Plausibility” Challenge

“Defendant caused Plaintiff and other members of the Class to purchase, purchase more of, or pay more for, these Nature Valley products.”

Successful Motion Practice:

Damages Allegations

Zupnik v. Tropicana (C.D.CA)

• No Injury-In-Fact

• No Reliance on Advertising

• “Got What She Paid For”

Successful Motion Practice:

Damages Allegations (cont.)

Picus v. Walmart (D. Nevada)

• Individual Issues of Causation and Reliance Predominate

• No “class-wide inference of reliance”

• Class Action Not “Superior” B/C 8 State Laws and Differing Issues of Reliance

Successful Motion Practice:

Class Certification

Kennedy v. Nat. Balance Pet Foods

• Predominance requirement: Rule 23(b)(3)

• “Understanding which law will apply before making a predominance determination is important when there are variations in applicable state law.” (citing Zinser)

Successful Motion Practice:

Class Certification (cont.)

• More Involvement By Lawyers (Unfortunately)

• Congruency between R&D and marketing claims

• Simplicity?

Scrutiny of Labels and Advertising

FDA Rule-Making

• Increases Preemption Odds

– Natural

– FOP Labeling

– Others???

Questions?

www.foodliabilitylaw.com

Twitter:@KenOdza