“If you use that word [natural], you’d better be sure you can defend every ingredient,” says Stern.
Consumers are eager to know more about the food they buy, and companies are eager to tell them. But the companies face a legal minefield, as plaintiffs’ lawyers parse every word on every label for something they can claim is misleading.
More than 200 cases of so-called misbranding have been filed in California’s Ninth Circuit since its 2008 ruling that factually correct disclosure on the FDA-mandated nutrition facts box isn’t a defense against possibly misleading labeling. A year later, Dannon paid $35 million in a settlement over the claim it overstated its yogurt’s ability to improve digestion. Untold numbers of cases have settled since. The threat of being class certified and of having to undergo “bone-crunching” electronic discovery has forced many companies to settle, says William Stern, a Morrison & Foerster partner in San Francisco.
Last November, voters rejected a proposition that would have required labeling of food products with any genetically modified ingredients. The measure might have taken a toll on California’s huge but low-margin food industry, in part because the enforcement mechanisms are virtually the same as those of Proposition 65, the controversial law aimed at protecting consumers from harmful chemicals. The vast majority of claims under that law have settled because the price of defending a case on the merits is too high, observes Michèle Corash, a Morrison & Foerster partner and recognized authority on Proposition 65.
Even without new labeling laws on the books, expect more litigation. Certain words are especially likely to attract a litigant’s attention. One is “natural”—“if you use that word, you’d better be sure you can defend every ingredient,” says Stern, who consults on labeling. Ultimately, he says, legal exposure can be contained—but not eliminated.