Consumer Products and Services Litigation Update
Right now, one of the most pervasive types of class actions is the lawsuit challenging "all natural" products for containing ingredients (often inactive ingredients or ingredients in minute quantities) that are allegedly synthesized, processed, genetically modified, or otherwise "unnatural" under Plaintiff's purported understanding of the term "natural."
While these types of claims are filed throughout the country, the critical mass of these class actions in California has helped create a California bench that is very familiar with the relevant laws and industries. But judicial familiarity with "all natural" class actions (and related litigation) does not yield uniformity in court decisions.
In a recent article published in Law 360, Sidley's Amy Lally and Naomi Igra reviewed the year's California court opinions (to date) in "all natural" class actions. Their analysis revealed a legal landscape in which success depends on creative defense arguments and analogies to past cases. In two cases (Pelayo v. Nestle, Kane v. Chobani), courts found that the plaintiffs had failed to allege either a plausible objective definition of the term “all natural,” or a subjective definition shared by reasonable consumers. But in a trio of other cases (Janney v. General Mills, Bohac v. General Mills, Rojas v. General Mills), another court explicitly declined to follow Pelayo and found it sufficient that plaintiffs alleged that natural means not artificial, synthetic or highly processed.
At the time that article went to print, interested stakeholders were waiting to see how the decision in Surzyn v. Diamond Foods would impact the food fight playing out in California's courts. Last week, Judge Sandra Brown Armstrong weighed in dismissing Plaintiff's case for failure to plead with particularity under Rule 9 of the Federal Rules of Civil Procedure. Specifically, the Court found it insufficient for Plaintiff to allege that she purchased "one or more" of Defendant's multiple varieties of a product.
Importantly, the Court also held that Plaintiff’s claims failed to the extent they were predicated on Diamond’s "wide spread marketing and advertising campaign" because she had not alleged that she was personally exposed to the alleged campaign. Leave to amend was granted and Plaintiff's ability (or inability) to successfully replead these claims will provide useful guidance in future actions.
The Diamond Foods decision is also notable for its rejection of Judge John Walter's reasoning in Pelayo v. Nestlé. In Pelayo, Judge Walter dismissed Plaintiff's class action challenging "all natural" claims on pasta because plaintiff failed to identify an objective, reasonable and class wide definition of the word "natural" that would exclude the pasta at issue. In so doing, Judge Walter referenced an FTC report noting that "natural" may convey different meanings in different contexts and found it "implausible" that consumers would be misled by the "all natural" label on the pasta.
Judge Armstrong declined to rule at the pleading stage that it was "implausible" for all consumers to be misled by the phrase "all natural" on the Diamond Food products. However, she suggested that success in later proceedings, for example class certification, may depend on consumer perception evidence indicating how consumers of the products at issue understand the term "natural" in the context of those products. If Plaintiffs are compelled to bear this evidentiary burden, the food fight could be cleaned up by the truth.
If you have any questions regarding this update, please contact:
Amy P. Lally
Naomi A. Igra
Sidley has extensive experience defending many types of consumer class actions and non-class representative actions in state and federal courts throughout the country, at trial and on appeal. Our consumer product and services clients draw on Sidley’s deep experience in litigation areas such as products liability, complex commercial, intellectual property, privacy law, employment, real estate, and antitrust. Our lawyers have broad experience defending claims against all businesses in the chain of commerce for consumer products including suppliers, manufacturers, distributors, retailers, and consumer services such as call centers, warranty providers, and e-commerce sites.
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