"all Natural" Class Actions: a Plaintiff Perspective

• Publication year: 2014
• Author: By Jill M. Manning

"ALL NATURAL" CLASS ACTIONS: A PLAINTIFF PERSPECTIVE

By Jill M. Manning¹

"Organic," "100% Natural," "Pure," "Free-Range," "Pesticide-Free," "Whole Wheat," "Reduced Fat," "0g Trans Fats," "Low Sodium." The formerly routine trip to the grocery store has turned into a maddening, thesaurus-requiring, label-deciphering exercise. Why the sudden explosion of health-related food labels? The consumers' desire and willingness to pay more for "healthy" products has caught the attention of the food industry. Food manufacturers, in turn, are seeking to take advantage of this trend by advertising their products as "All Natural" and "100% Natural," even when they are not. Consumers are challenging the legality of these types of labels when products contain artificial ingredients, such as genetically modified organisms ("GMOs"). The federal courts of California have become a common venue for these cases, due to California's expansive consumer protection statutes, with many now referring to the federal court in the Northern District of California as the "Food Court."²

How can a plaintiff successfully prosecute an "all natural" class action? Surviving a motion to dismiss is the first step. Defendants' primary jurisdiction arguments have lost steam since the FDA expressly declined the invitation of several federal courts to define what the term "natural" means on a food product label. With most cases now proceeding to the class certification phase of litigation, defendants have most often challenged the requirements of ascertainability and predominance of common issues. Although courts have issued opinions both granting and denying class certification in "all natural" cases for a variety of reasons, plaintiffs who can demonstrate that the class is ascertainable and that common issues predominate over those affecting individual ones are most likely to prevail on a class certification motion.

I. SURVIVING A MOTION TO DISMISS BASED ON PRIMARY JURISDICTION

Most defendants move to dismiss a plaintiff's false labeling claim on the ground that the United States Food and Drug Administration ("FDA") has primary jurisdiction over the claims. Primary jurisdiction is a common-law doctrine that is used to coordinate judicial and administrative decision-making. The doctrine allows courts, at their discretion, to stay or dismiss actions requiring technical expertise in deference to the administrative agency with "special competence" in that area.³

One area not currently regulated by the FDA, however, is the use of the word "natural." This inactivity has allowed plaintiffs to challenge the validity of "natural" labels under their state consumer protection laws. For example, in In re ConAgra Foods, Inc., the plaintiffs allege that ConAgra's "100% Natural" label on its Wesson Oil products is misleading because the product is made from unnatural genetically modified corn, soybean and canola.⁴ ConAgra moved to dismiss the case under the doctrine of primary jurisdiction. The court overruled the motion, in part, because the FDA has not regulated what "natural" means or does not mean on food labels.⁵ The court concluded that absent FDA regulation, the court could adjudicate plaintiffs' claim because "every day courts decide whether conduct is misleading."⁶

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Other courts have granted motions to dismiss and referred cases to the FDA for an administrative determination as to "whether and under what circumstances food products containing ingredients produced using bioengineered seed may or may not be labeled 'Natural' or 'All Natural' or '100% Natural.'"⁷ The FDA responded that it would take no position on the matter, citing its limited resources that must be devoted to food safety issues.⁸ It also noted that if it were to define "natural," it would do so through a public process, and not in the context of litigation.⁹

Following the FDA's response, the previously stayed cases now are proceeding through the court system, and the courts, not the FDA, will determine whether "natural" labels on food products are misleading.

II. CERTIFYING CLASS ACTIONS ALLEGING FALSE AND DECEPTIVE LABELING CLAIMS

Food manufacturers are vigorously defending cases that survive motions to dismiss at the class certification stage. They most often have challenged the ascertainability and predominance requirements under Rule 23, arguing that it is impossible to identify customers who purchased the products at issue, and that customers purchase products for a whole host of reasons unrelated to any representations made on the product's label. Courts are just now starting to issue opinions on whether these types of cases are suitable for class certification, with varying results.

On deciding a motion to certify the class, a court considers whether a plaintiff has demonstrated that the requirements of Rule 23 of the Federal Rules of Civil Procedure have been satisfied by a preponderance of the evidence. First, a plaintiff must show that the four requirements of Rule 23(a) — numerosity, commonality, typicality, and adequacy — are met. Second, a plaintiff must establish that one of the bases for certification in Rule 23(b) is met. A plaintiff seeking damages must demonstrate that "questions of law or fact common to class members predominate over any questions affecting only individual class members," and that a class action would be "superior to other available methods for fairly and efficiently adjudicating the controversy."¹⁰ A class seeking injunctive relief may be certified when "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole."¹¹

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A. Ascertainability: Courts in the Ninth Circuit Reject the Third Circuit's Heightened Ascertainability Requirement

Although not an express requirement of Rule 23, courts have required plaintiffs to demonstrate that the class is ascertainable.¹² "Ascertainability" has two requirements: (1) the class must be adequately defined; and (2) class members must be ascertainable by reference to objective criteria.¹³ Courts have concluded that "[t]he class definition must be sufficiently definite so that it is administratively feasible to determine whether a particular person is a class member."¹⁴

The Court of Appeals for the Third...