In food and beverage trends, during May 2023, the Supreme Court of the United States issued a significant ruling regarding pork farming under the Dormant Commerce Clause, holding that a California law requiring pork sold in California be raised in stalls of a minimum size did not impermissibly burden interstate commerce. Additionally, the restaurant industry saw verdicts entered in personal injury cases involving burns and slip and fall claims. Filings in consumer fraud class actions alleging deceptive labeling claims continued, with one federal court granting a motion to dismiss a claim that gum labeling was deceptive, and another federal court denying a motion to dismiss and allowing a suit to proceed against a liquor manufacturer.

Supreme Court Upholds California Limits on Pork Production

The U.S. Supreme Court recently issued a significant decision for pork farmers, upholding California’s Proposition 12, which requires that all pork sold in California be raised in stalls large enough to allow the pigs to lay down, stand up or turn around. The pork industry had challenged the law in federal district court, arguing the law violated the Dormant Commerce Clause — the implied constitutional principle that prohibits states from “discriminating” against or impermissibly burdening out-of-state commerce by, for example, favoring in-state commerce. The pork industry argued Proposition 12 impermissibly burdened interstate commerce because the majority of pork sold in California is in fact raised and produced outside of the state and, thus, the law impermissibly imposed extra costs on out-of-state producers. The district court dismissed the case, holding that Proposition 12 did not violate the Dormant Commerce Clause and the Ninth Circuit affirmed.

The Supreme Court affirmed the lower courts’ decisions; though the Court was fractured in its rationale, the key takeaway from the Court’s opinion was that laws that, in practice, have “extraterritorial effects” (ie, effects on interstate commerce) without intentionally seeking to burden out-of-state commerce, withstand muster under the Dormant Commerce Clause. In fact, because the interstate marketplace is so connected, many laws unintentionally impact out-of-state commerce, and the Court was clear that, so long as a law is not facially discriminatory, it would not be considered an impermissible burden on interstate commerce. The decision signals to the food and beverage industry the High Court’s reluctance to disturb a state law regulating the industry so long as the law is not discriminatory against out-of-state commerce on its face.

Personal Injury Verdicts and Filings Against Restaurant Franchisees

Burn Litigation

A Florida jury recently awarded damages to a plaintiff after a McDonald’s Chicken McNugget fell onto a child’s thigh and was caught between her thigh and the seatbelt for two minutes, purportedly resulting in a second-degree burn. The jury found both McDonald’s and Upchurch Foods (the franchisee) liable for failure to warn of the food’s temperature, though the jury found both defendants not liable on the breach of implied warranty and defect claims.

A New Jersey plaintiff recently commenced a similar action against Dunkin’, claiming she sustained burns from hot tea that spilled in her lap, which allegedly caused burns, because the tea was purportedly brewed at too high a temperature. Similar lawsuits have been filed against other New Jersey Dunkin’ franchises over the past several years after customers who spilled drinks in their laps purportedly sustained burns.

All of the above burn lawsuits are reminiscent of the famous (or perhaps infamous) case involving Stella Liebeck’s spilling of McDonald’s coffee in her lap in a car in the 1990s, which resulted in the award of damages for injuries sustained.

Slip and Fall Litigation

A Florida jury recently awarded a plaintiff nearly $8 million after the plaintiff slipped and fell at a Burger King restaurant, allegedly sustaining a lower back injury and resultant surgery. The franchise owner has filed a motion for a new trial, which is currently pending before the court. Harris Beach attorneys are continuing to track developments and will provide further updates on significant litigations impacting the restaurant industry.

Labeling Consumer Fraud Claims Continue

Consumer fraud lawsuits alleging that labels deceived customers into buying products they believed were “natural” or “healthy,” or contained ingredients that they did not in fact contain — similar to those we previously reported in a first quarter food and beverage trends update and again in an April update on trends in the food and beverage industry — continued into May. Significant rulings on motions to dismiss were also issued in two pending deceptive labeling cases.

“Natural” Labeling Claims

Food and beverage manufacturers continued to see deceptive labeling claims filed, with several suits filed against popular beverage manufacturers for using purportedly artificial ingredients where the products’ labeled contained the words, or for misrepresenting the healthfulness of the products. As to claims of “natural” ingredients, consumers have filed a putative class action against LifeAid Beverage LLC in the Southern District of California. The complaint focuses on alleged misrepresentations on powder stick packs that state the products are “naturally flavored” despite containing purportedly artificial manufactured DL malic acid. The lawsuit also contains claims that the products’ packaging does not comply with California state law, which requires disclosures regarding the use of artificial flavors.

Labeling Claims Involving Health Benefits

A similar suit was filed in the Northern District of New York against the manufacturer of GoodBelly juice as a result of the juice’s labels that state that they are beneficial to “digestive health” and “overall health;” plaintiffs claim these phrases are misleading because the sugar content in the beverages makes them detrimental to digestive and overall health. Plaintiffs’ claims in this lawsuit are unique as compared to the claims against manufacturers for allegedly misrepresenting artificial ingredients as natural, as the claims against GoodBelly will almost certainly require scientific and expert evidence of a causal link between the levels of sugar in the products and the claimed health detriments.

Motions to Dismiss in Labeling Claims: One Granted, Another Denied

A judge in the Northern District of Illinois recently granted a motion to dismiss a class action lawsuit against the manufacturer of Trident gum, in which plaintiffs claimed the presence of a blue leaf on the gum’s packaging deceived customers into believing the gum contained real mint or peppermint. The court held that the mere image of a mint leaf would not lead customers to believe that real mint was an ingredient in the gum, particularly where the flavor of the gum is simply “Original Flavor” and the word “mint” does not appear anywhere in the name or on the product packaging. The court also pointed out that a reasonable consumer would not be deceived, given that the image on the packaging was a blue mint leaf and real mint leaves are green.

In contrast, a federal judge in the Northern District of California denied a motion to dismiss and allowed claims to proceed in a case alleging the manufacturer of Fireball Cinnamon Whisky has misled consumers into believing miniature sized bottles of “Fireball Cinnamon” contain whisky, when they, in fact, contain a malt beverage and whisky flavoring. The court premised the denial on the fact the product names are similar and the labels on the regular-sized bottles of Fireball Whisky and on the miniature sized bottles of Fireball Cinnamon look substantially similar in that they both contain the same logo, the words “RED HOT” and “CINNAMON,” the same color scheme, the same font, and the same edging on the labels.

The above rulings illustrate the importance of the “reasonable consumer” test applied by courts in evaluating whether product labeling is deceptive. Harris Beach attorneys are continuing to monitor deceptive labeling claims and developments arising in these class actions after filing.