Stay ADvised: 2025, Issue 10

In This Issue:

• Turns Out That Goldfish "No Artificial Flavors or Preservatives" Claim Was a Red Herring, New York Federal Court Says
• Certain Arizona Iced Tea Citric Acid Claims Neutralized, While Other Claims Survive Summary Judgment
• NAD and CARU Pop "Bubble Beauty" Advertising to Kids as Young as 5
• Lana Del Rey, Other Skims Influencer Must Conspicuously Disclose Partnership, NAD Says

 

Turns Out That Goldfish "No Artificial Flavors or Preservatives" Claim Was a Red Herring, New York Federal Court Says

A federal court in the Southern District of New York found that Veronika Ward, the plaintiff in a proposed class action, had plausibly alleged that Pepperidge Farm falsely advertises its Goldfish Crackers as having no artificial flavors or preservatives, since the product contains citric acid.

The court denied Pepperidge Farm's motion to dismiss the complaint, which alleged that Pepperidge Farms misleads consumers by promoting the Goldfish Crackers as having "No Artificial Flavors or Preservatives" via a statement on the side label of the product's packaging, even though the popular fish-shaped cheese crackers contains citric acid, which is an artificial preservative.

Pepperidge Farms argued that the proposed class action complaint failed to include a factual basis for the plaintiff's claim that the citric acid found in Goldfish Crackers acts as a preservative or is artificial. Pepperidge Farms also asserted that the plaintiff's claim is preempted by the FDA's labeling requirements, which only requires product labels to identify an ingredient as a preservative if that is how it is being used.

The court disagreed. First, it found that the plaintiff had sufficiently alleged that citric acid "stabilizes and preserves food products," and this sufficed to allege that the product is being used as a preservative in the goldfish crackers.

The second and more complex question facing the court was whether the plaintiff had sufficiently pled that citric acid is artificial. Again, the court found Ward's pleading sufficient. Plaintiff argued that the product contained manufactured citric acid (rather than naturally occurring citric acid), citing multiple articles detailing the decline in the production of natural citric acid and the rise in use of synthetic citric acid. Ward further alleged that manufactured citric acid should be considered artificial by citing a combination of the adverse health effects attributed to manufactured citric acid, evidence that manufactured citric acid is the industry standard, and case law detailing a chemical difference in manufactured versus natural citric acid. In both instances, the court held that plaintiff's factual allegations were sufficient to proceed.

Pepperidge Farms countered that even if plaintiff had alleged that the citric acid is an artificial preservative, a reasonable consumer looking at the ingredients list would not be deceived by the package statement that the product contains "No Artificial Flavors or Preservatives" because they could turn to the back label for clarification.

However, the court concluded that, since the "No Artificial Flavors or Preservatives" statement was featured on the side label rather than the front label, a consumer would still have to "maneuver and rotate" the product to view the back label in order to correct the misleading statement, which consumers should not be required or expected to do. In reaching its conclusion, the court relied on precedent in Mantikas v. Kellog Co., holding that a reasonable consumer should not have to consult the nutrition panel to correct misleading information: "contextual information on the reverse of the product's packaging [can]not overcome clearly inaccurate factual representations on the front labeling."

Even without applying Mantikas, the court explained that it would have reached the same conclusion given that a reasonable consumer should not be expected to understand the natural or artificial provenance of many of the ingredients on the back label enough to assess the veracity of the label's claims.

Finally, the court declined to uphold Pepperidge Farms' assertion that Ward's claim is preempted by the Food and Drug Administration's (FDA) labeling requirements. Pepperidge Farms argued that the claims were preempted by the FDA's requirement that citric acid need only be labeled as a preservative if it is used as a preservative in a given product. However, the court held that Pepperidge Farms had failed to show how a challenge to a deceptive label would "upend the FDA's judgment and national uniform food label laws." Further, "the FDA does not regulate what must be excluded from a label regarding preservatives, only what must be stated on the label," said the court.

Key Takeaways

This case is another in a series where some courts consider the fine line that often separates expressly false as distinct from ambiguous front (here, side) of pack claims to determine whether consumers should refer to nutrition facts for a better understanding. This time, the court swung toward plaintiff's view—in particular given what it seemed to consider an expressly false statement coupled by a nutrition facts label consumers might well not be able to interpret, in any case.

 

Certain Arizona Iced Tea Citric Acid Claims Neutralized, While Other Claims Survive Summary Judgment

Speaking of citric acid, certain New York and California false advertising claims survived summary judgment in a class action lawsuit alleging that Arizona Beverages falsely advertised its drinks as preservative-free even though they contain citric acid—which can act as a preservative. The false advertising claims had survived two prior motions to dismiss.

This round, the U.S. District Court for the Southern District of New York allowed the New York General Business Law (GBL) 349 and 350 claims and a single California Consumer Legal Remedies Act (CLRA) claim to survive Arizona's summary judgment motion and granted summary judgment on plaintiff's California Unfair Competition Law, False Advertising Law, breach of express warranty and unjust enrichment claims.

On the surviving CLRA claim, Arizona had argued that this claim should be nixed because the plaintiff said he purchased certain varieties to try out a new flavor, showing that he purchased the tea for its flavor rather than because it was labeled preservative-free. However, the court concluded that a reasonable jury could nonetheless conclude that the purported lack of preservatives was a contributing factor to plaintiff's decision to purchase the products in question.

Arizona argued that the court should nonetheless grant summary judgment on this claim because the plaintiff did not know how often he purchased the product or for what price, so he could not show a measurable loss. This didn't fly with the court either, which pointed out that California's "reasonable certainty" standard does not require a plaintiff to provide exact itemized amounts to prove damages. The plaintiff had testified to the approximate price he paid for the product and estimated how often he purchased it. According to the Court, this was enough to give rise to a "genuine issue of material fact" as to whether the plaintiff could show a "measurable" loss.

Plaintiff's other CLRA claim fell flat, however, because, as the Court noted, the evidence showed that the plaintiff continued to buy the products even after the plaintiff discovered they contained citric acid. Given this evidence, the Court found that there was nothing to suggest that plaintiff considered the alleged misrepresentations in the decision to purchase the product, since he purchased the product even after he knew about them.

On the New York false advertising claims, Arizona likewise argued that because the plaintiff continued to purchase the products after learning that they had citric acid, a reasonable jury would not find that the plaintiff suffered an injury. However, because the standard in New York does not require plaintiff to prove reliance, the Court rejected this argument.

Under the GBL, a plaintiff can prove that the alleged misrepresentation caused injury by showing a price premium injury—that is, that the misleading statement caused a price premium and paying this price premium was itself the injury. Since the plaintiff demonstrated that she paid more for the products than she otherwise would have absent the "no preservatives" claim, the Court found that her GBL cause of action could proceed for those purchases she made before she knew the products contained citric acid.

Key Takeaways

Cases alleging inclusion of "citric acid" coupled with preservative-free claim continue apace—and the courts are giving them the space to thrive. Time will tell.

 

NAD and CARU Pop "Bubble Beauty" Advertising to Kids as Young as 5

Advertising cosmetic products to children has become of particular concern for the National Advertising Division (NAD) as well as the Children's Advertising Review Unit (CARU), which jointly looked into advertising for popular skin care brand Bubble. Here, the self-regulatory bodies found that social media advertising targeted to children under 13 crossed the line in part because the social media videos reviewed included seemingly very young influencers.

In one, a TikTok video shows a girl under 5 years old demonstrating how she uses the brand's skincare routine. The advertiser responded in a comment: "Love this so much." In another, a girl who appears to be under 10 invites her followers to follow her on her first beauty product shopping trip. One of the brands she purchases—Bubble Beauty—comments: "Honored to be a part of your first skincare routine, bestie!!"

NAD and CARU expressed concern about what it sees as burgeoning beauty brand advertising of multi-step skin care routines to younger kids—in particular where those products are not appropriate for children.

Here, in addition to the influencer videos, Bubble Beauty itself posted as follows: "Cleanser. Moisturizer. SPF. If you're under 13, those are going to be our only product recommendations, ever. We're happy to be able to provide safe, effective and accessible products to everyone at every age." These products are not inappropriate for younger consumers, but NAD and CARU found that the brand post conveyed that the Bubble cleanser, moisturizer, and SPF products have been tested on girls under age 13 and have been found to be safe and effective. NAD also found that Bubble's interactions with the two TikTok videos showing the products being used on children under age 13 likewise conveyed that the products are safe and effective on children's skin.

Turning to an analysis of whether these express and implied claims that were substantiated, NAD noted the trend of beauty brands advertising multi-step beauty routines to girls under age 13 and asserted that products formulated for adults may be "inappropriate and unnecessary" for girls. NAD expressed concern that teens and tweens are "very impressionable," "susceptible to pressure from peers" and being marketed to at a time when their "self-image is vulnerable."

Ultimately, however, NAD found the safety claims supported but determined that the efficacy claims were not. On the safety issue, testing provided by Bubble showed that its cleansers, moisturizers, and SPF did not have any adverse effect on the skin of users ages 8 to 18. Additionally, NAD said that as in the recent NAD Drunk Elephant decision, Bubble's Cosmetic Product Safety Reports (CPSRs) confirm that the products are safe for both adults and for children.

With respect to efficacy, NAD found that what it considered to be objective claims about product efficacy should be supported by objective evidence. Bubble offered consumer surveys asking users how their skin felt after using the products, but these were subjective consumer opinions. Another flaw: this survey only asked the over-18 crowd.

CARU's own separate analysis zeroed in on two product bundles featuring branding for a PG-rated animated film making the products particularly attractive to kids.

In its inquiry, CARU first analyzed whether the product bundles were directed at children. Bubble argued they were not because the company does not target its products to kids under 13 and doesn't use young influencers to promote the products. In support of this claim, Bubble noted that its products are not available in stores associated with the film producer and are not advertised in media geared toward kids.

CARU was unconvinced by these arguments. It was clear that Bubble was aware that its products were being used by kids, said CARU (and NAD). Bubble, via its official TikTok account, interacted with social media posts by kids younger than 13 demonstrating the skin care routines. CARU also observed that Bubble's own website features testimonials from parents of kids under 13 touting their kids' love for the products.

Nor did CARU accept Bubble's argument that the product packaging was not meant to appeal to kids, noting that one parent review even complimented how the use of characters from the film helped her child know the order in which to use the products.

After determining that the products were geared toward kids, CARU concluded (relying on NAD's findings) that the evidence showed the products were safe for kids but that the evidence did not support the efficacy claims and said any efficacy claims should be discontinued. The decisions were a bit ambiguous as to the SPF claims—in particular given that sun-protection efficacy is guided by the FDA sunscreen monograph with which Bubble was presumably in compliance.

Key Takeaways

Regulators in essence consider cleansers and moisturizers advertised to kids as the equivalent of gateway drugs but in the consumer beauty world. And, they are keeping a close eye, which will certainly give brands pause as they seek to capitalize on this market.

 

Lana Del Rey, Other Skims Influencer Must Conspicuously Disclose Partnership, NAD Says

Did entertainer Lana Del Rey and soccer star-slash-influencer Brittany Mahomes adequately disclose that Kim Kardashian's Skims Body line was paying them to endorse the brand?

The National Advertising Division (NAD) weighed in on this question as part of yet another self-monitoring inquiry into the relationship between celebrities and brands and the steps Skims takes to ensure its influencers comply with the Federal Trade Commission (FTC)'s Guides Concerning the Use of Endorsements and Testimonials (FTC Endorsement Guides).

NAD focused its inquiry on social media posts by Del Rey that showed her wearing Skims and either mentioning Skims by name or tagging the company and on social posts by Mahomes showing her wearing Skims and tagging the company. Both influencers have a contract with the brand to promote Skims, and the contract includes a requirement that they post on social media.

Skims argued that it had made appropriate efforts to ensure compliance with the FTC Guides by these influencers (and other contracted influencers). This included contractual requirements that influencers comply with the Guides, provision to influencers of instructions requiring the use of either the #ad or #sponsored disclosure, and monitoring of the influencers' social media posts. In addition, in the case of Del Rey, Skims contacted her team to inform them of insufficient material connection disclosures.

The company also argued that Mahomes' posts are not endorsements because they do not specifically mention Skims in copy or identify the Skims brand. It also contended that the photos of both Del Rey and Mahomes are so stylized that "it is []likely that most consumers viewing the posts would understand that the posts were part of a paid partnership between the parties, precluding the need for a material connection" disclosure.

Not so, said NAD. The FTC Endorsement Guides require that when there is a material connection between an advertiser and influencer that might affect the credibility of the endorsement, it must be clearly and conspicuously disclosed. Further, tagging a brand constitutes endorsing a brand, though it does not qualify as a sufficient disclosure of the material connection. If the influencer has a relationship with the brand, a social media post tagging the brand requires a disclosure of the material connection.

NAD concluded that although Mahomes' posts did not mention or tag Skims in the description, the tagging of Skims in the posts was an endorsement. NAD noted that "when a viewer puts their cursor over the picture, the brands and people that are tagged appear and the Skims brand appears as tagged." NAD also determined that the photos in the posts were not so highly or unusually stylized so as to indicate to the audience that there was a "clear partnership" between influencer and brand. NAD characterized the photos as appearing to be ones that Mahomes "could have easily created herself."

As for Del Rey's posts, because Skims specifically asked the singer to discontinue or modify the posts that lacked appropriate disclosure, NAD treated this as if it had recommended the modification and Skims had complied.

Key Takeaways

NAD is regularly and consistently bringing self-monitoring inquiries regarding influencer posts, and its reach has become quite broad. Individually and collectively these cases make very clear the breadth of the FTC Guides as interpreted by NAD, and advertisers would do well to take heed. This case also confirms the importance of brands having—and implementing—compliance programs that include not only monitoring of influencers, but actually taking action when disclosures are lacking.