Stay ADvised: 2024, Issue 20

In This Issue:

• Battle of the Tortillas: NAD Challenger Says Competitor Needs To Up Its Serving Size for Claims
• Nothing "Strange" About It: 6th Circuit Affirms Dismissal of "Conclusory" Honey False Ad Suit
• Bayer "Natural" One a Day Vitamins False Ad Suit Gets Class Certification
• Plaintiffs Claim Aldi's "100% Pure Avocado Oil" Isn't All It's Advertised To Be

Battle of the Tortillas: NAD Challenger Says Competitor Needs To Up Its Serving Size for Claims

In a recent challenge brought by Olé Mexican Foods Inc., the National Advertising Division (NAD) reviewed certain labeling claims made by Gruma Corporation for its tortilla products. The NAD found some of Gruma's claims to be misleading with an eye to existing FDA regulatory standards regarding serving size and recommended several modifications.

The NAD reviewed Gruma's claims about its line of carb-conscious tortillas, including claims the tortillas contain "1.5G Total Fat Per Serving," "Zero Net Carbs," "0G Sugar" and "Zero Sugar." While Gruma based its claims on a smaller serving size of one tortilla (18 grams), FDA regulations dictate that a standard serving size for the challenged product is three tortillas, equating to 54 grams. This discrepancy raised concerns about the comparability of Gruma's products to those of its competitors, who followed the FDA guidelines.

NAD explained that consumers cannot evaluate or accurately compare the label claims on competitive products if the serving sizes among a product category are inconsistent." In this case consumers would not likely understand that a zero net carb claim is different for a one-tortilla serving size versus a three-tortilla serving size. Taking this into consideration, NAD determined that the zero net carbs, zero sugar, and 1.5g total fat claims based on a one-tortilla serving size were misleading.

NAD next turned to Gruma's argument that its testing supports its "zero net carbs" and "zero sugar" claims even on the three-tortilla serving size. Although Gruma's testing supported the "zero net carbs" claim based on the 54-gram serving size, NAD recommended that Gruma modify its net carb calculation to reflect total carbohydrates minus dietary fiber for this serving size. Additionally, NAD upheld the accuracy of "zero sugar" claims for most products but recommended discontinuation for one, indicating that not all claims were uniformly supported across Gruma's product line.

Key Takeaways

This decision highlights NAD's interest in harmonizing its decision with regulatory authority—where appropriate—and the importance of accurate labeling and serving size consistency in the food industry, particularly for products marketed to health-conscious consumers. As competition in the low-carb and healthy-eating sectors intensifies, adherence to FDA guidelines will be crucial for maintaining consumer trust and avoiding misleading claims.

Nothing "Strange" About It: 6th Circuit Affirms Dismissal of "Conclusory" Honey False Ad Suit

Honey seller Strange Honey Farm successfully ended a consumer challenge alleging the company's honey was falsely marketed as "100% raw Tennessee honey." The Court of Appeals for the 6th Circuit affirmed a federal district court's dismissal of a putative class action by honey buyers in several states and refused to give plaintiffs leave to amend to cure deficiencies in the complaint.

The plaintiffs claimed that Strange Honey's "100% raw Tennessee honey" label was misleading because the honey was (1) not raw, (2) not from Tennessee, and (3) not 100% honey. However, the appeals court found "the complaint fail[ed] to adequately allege why these claims on the labels were false or when these allegedly fraudulent statements were made to plaintiffs." Accordingly, the appellate court affirmed the lower court's decision dismissing the class action plagued by "conclusory allegations of fraudulent statements related to Strange Honey's labels."

The court found plaintiffs' allegations concerning Strange Honey's use of the word "raw" to be insufficient. The plaintiffs argued that Strange Honey heats its honey to facilitate packaging, which destroys beneficial compounds found in raw honey. They cited high 5-hydroxymethylfurfural (HMF) values from their own testing as evidence. However, the court noted that the plaintiffs did not detail their testing methods and failed to show that the jars they purchased had high HMF values or were even part of the tested samples.

The court found plaintiffs' allegations that the honey was neither from Tennessee nor 100% honey to be even weaker. While the plaintiffs suggested possible motives for mislabeling, the court emphasized that this is not the same as providing factual evidence that Strange Honey actually mislabeled its products.

The plaintiffs also failed to allege with particularly when the allegedly fraudulent statements were made. When challenged, plaintiffs argued that Federal Rule of Civil Procedure 9(b) does not require specific dates. The panel distinguished the cases cited by plaintiffs in support of this theory, finding that the facts in those cases clearly pointed to a specific date range.

Unlike repeated promises of accreditation or ongoing Internet service, a jar of honey is a single, discrete product purchased on a particular date. That jar of honey, on the date it is purchased, either complies with the claims on the label or it does not…. [T]he nature of plaintiffs' case here requires more specificity as to the purchase dates.

Key Takeaways

The decision disposes of the Strange Honey case, but it could also serve as a primer for a class on Pleading with Specificity 101: False Advertising Litigation in the 6th Circuit. Do include detailed information about the scientific studies supporting your claims. Don't rely on vague time periods when alleging deceptive marketing.

Bayer "Natural" One a Day Vitamins False Ad Suit Gets Class Certification

Plaintiffs in the class action lawsuit alleging that Bayer Healthcare falsely advertised its One A Day multivitamins as "natural" have obtained class certification.

In a case pending in the Southern District of California, the complaint alleged that Bayer engaged in a deceptive, misleading, and false marketing campaign by claiming that its products are "natural," despite containing synthetic ingredients. Plaintiffs, two adult women, alleged that they read the word "natural" on the label and relied on the representation in purchasing the products in California and New York.

After plaintiffs survived two motions to dismiss, the court has now granted plaintiffs' motion for certification of two statewide classes in California and New York, consisting of persons that purchased certain One A Day Natural Fruit Bites products in California and New York from early to mid-2020 to May 30, 2023.

Bayer argued that the proposed classes failed to meet the typicality requirement for class certification because it was "unlikely" that plaintiffs purchased the product, the word "natural" was not material to their purchasing decisions, and plaintiffs were "overwhelmingly ignorant of the nature of this action." The court disagreed, noting that plaintiffs testified multiple times that they purchased the product specifically because of the "natural" representation on the label, which it deemed enough to "assure that the interest of the named representative aligns with the interests of the class."

Bayer next argued that plaintiffs' counsel were inadequate to protect the interests of the class. The court concluded that the behaviors Bayer complained of, primarily discovery violations, did not rise to the level that suggests plaintiffs' counsel were inadequate given they had plenty of experience with consumer class actions and no conflicts with the proposed classes.

Defendant next challenged the predominance requirement for class certification, arguing that plaintiffs could not show that the disputed claims were material, could not show classwide deception/reliance, and failed to present a proper damages model. The court rejected each of these arguments in turn.

Regarding materiality, the court found plenty of evidence in support. This included both plaintiffs' testimony in their depositions that they bought the products because the label said "natural" and Bayer's own internal emails from its marketing team and "senior brand manager" indicating that Bayer had internal discussions on whether to include the word "natural" on the label, indicating that even the company understood that this word was important to consumers.

Regarding reliance, Bayer argued that plaintiffs could not show that there was a common, classwide interpretation of each disputed claim and failed to present expert testimony or survey evidence showing uniform interpretation of each claim. But the court swiftly threw back this argument given plaintiffs had already established materiality, and that was sufficient to show that the issue of reliance does not vary from consumer to consumer.

Finally, regarding the plaintiffs' damages model, Bayer criticized the expert's proposed model because his analysis had not been applied to the proposed classes and because the report referred to "natural ingredients" rather than "natural vitamins." The court, however, found there was no existing 9th Circuit precedent holding that an otherwise reliable damages model need be applied to the proposed class to demonstrate that damages are susceptible to common proof and that the use of "natural ingredients" did not impact the analysis, either, because plaintiffs had always argued that the "natural" label was deceptive because Bayer's products contained synthetic ingredients. 

Key Takeaways

Challenges to the word "natural" in advertising are as prevalent as the number of supplements available at your local pharmacy, partly due to the ambiguity of the term (does "natural" mean all natural and what is "natural" anyway) and partly thanks to the fact that the FDA has not yet weighed in with a definition. That has both increased the legal exposure for advertisers while also allowing them more leeway to argue they are within the bounds of the (ambiguous) law.

Plaintiffs Claim Aldi's "100% Pure Avocado Oil" Isn't All It's Advertised To Be

The newest entrant in the class action food wars is supermarket chain Aldi, the defendant in a recently filed class action lawsuit alleging claims for the chains' "100% Pure Avocado Oil" don't authentically reflect the product.

According to the suit filed in federal court for the Southern District of New York, the popular Illinois-based supermarket chain falsely advertises its in-house avocado oil product as "100% Pure Avocado Oil," a claim that appears on the front label as the name of the product beside a picture of a succulent halved avocado. 

Plaintiff contends that this representation falsely "conveys the unequivocal message" that Aldi's Simply Nature avocado oil is indeed "100% pure avocado oil." This message is even reinforced by the ingredients list which features just one ingredient: refined avocado oil. To the contrary, alleges the complaint, an independent third-party analysis shows that Aldi's "100% Pure Avocado Oil" is adulterated with other oils.

Citing a Washington Post article, the complaint further notes that Aldi is not alone—in fact, according to plaintiffs, a University of California, Davis, study showed that the avocado oil industry suffers from a rampant adulteration problem. The complaint alleges that this study confirms plaintiff's own findings that the products contain other oils like sunflower and safflower oil, not purely avocado oil.

Plaintiff alleges that Aldi's misrepresentations are material to the reasonable consumer because avocado oil is known as one of the healthiest cooking oils (with a high burning point), making it in high demand and because consumers may have other reasons for not consuming non-avocado oils (such as allergies).

The complaint alleges violations of New York consumer protection laws, General Business Law Sections 349 and 350, prohibiting deceptive acts and false advertising in commerce, breach of express warranty and fraud.

Key Takeaways

Unlike many false advertising food lawsuits, where the front label and ingredients panel often contain different, and often contradictory, representations, here the lawsuit alleges that the ingredients information on the back label is equally deceptive to front-of-pack claims. This is not the first class action case attacking similar claims of "pure avocado oil," and with the recent Washington Post article highlighting the UC Davis study, we may expect to see more.