Not 'All Natural': Modernizing Privity to Allow Breach of Contract Claims for Mislabeled Food Products

Author:Cecelia MacDonald
Position:J.D. Candidate, The University of Iowa College of Law, 2018; B.A., Saint Francis University, 2015
Pages:785-816
SUMMARY

Unknown to most consumers, the U.S. Food & Drug Administration does not regulate "all natural" food labels. Manufacturers commonly abuse this loophole by placing the "all natural" label on products that are clearly not "all natural." In doing so, some manufacturers intentionally deprive consumers of a free choice regarding what they put into their bodies. This deception leads consumers to ingest... (see full summary)

 
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785
Not “All Natural”: Modernizing Privity to
Allow Breach of Contract Claims for
Mislabeled Food Products
Cecelia MacDonald *
ABSTRACT: Unknown to most consumers, the U.S. Food & Drug
Administration does not regulate “all natural” food labels. Manufacturers
commonly abuse this loophole by placing the “all natural” label on products
that are clearly not “all natural.” In doing so, some manufacturers
intentionally deprive consumers of a free choice regarding what they put into
their bodies. This deception leads consumers to ingest artificial chemicals
under the guise of “all natural.” In one particular case, consumers allegedly
ate a substance derived from woodchips when the manufacturer had labeled
the product as “100%” Parmesan cheese. To the benefit of manufacturers,
plaintiffs’ available legal remedies have proved to be insufficient and have
failed to significantly deter manufacturers from continuing the mislabeling
practices. Plaintiffs have tried to bring breach of contract claims against the
manufacturers, but courts across the nation have consistently found the
claims fail for lack of privity. Privity is an outdated requirement that has been
relaxed in other areas of the law. Since privity fails to achieve a fair result,
the privity requirement should be relaxed in the food-label litigation context.
The privity requirement should either be extended between the consumer and
manufacturer or abandoned entirely. Modernizing the privity requirement to
fit the realities of modern society will produce the fairest result by providing
an adequate remedy for consumers and preventing future mislabeling
practices.
I. INTRODUCTION ............................................................................. 786
II.FOOD LABEL LITIGATION HISTORY ............................................... 787
*
J.D. Candidate, The University of Iowa College of Law, 2018; B.A., Saint Francis
University, 2015. Thank you to Adam and my parents for their love, support, and patience as I
rambled about food labels and privity; to Professor Christopher Drahozal for providing guidance
and thoughtful feedback as I navigated the complexities of contract law; and to the Iowa Law
Review Editorial Board for its unwavering commitment to the student writer experience, especially
Tessa Register, Logan Eliasen, and Brandon Pakkebier.
786 IOWA LAW REVIEW [Vol. 103:785
III.THE UNNECESSARY PRIVITY OBSTACLE ......................................... 793
A.THE PRIVITY REQUIREMENT ................................................... 794
B.THE FALL OF PRIVITY .............................................................. 795
C.PRIVITY: AN OUTDATED REQUIREMENT .................................... 801
IV.THE PRIVITY REQUIREMENT SHOULD BE MODERNIZED ............... 805
A.EXTENDING PRIVITY FROM THE CONSUMER TO THE
MANUFACTURER ..................................................................... 805
B.ABANDONING PRIVITY IN FOOD LABEL LITIGATION ................... 807
C.THE CONSUMER PROTECTION ACT OPTION .............................. 808
V. CONTRACT FORMATION AND FOOD LABELS AS A TERM OF
THE CONTRACT ............................................................................. 810
VI.CONCLUSION ................................................................................ 815
I. INTRODUCTION
More than half of Americans purchase foods with “all natural” food
labels,1 yet the FDA has no definition of “all natural” foods. In fact,
manufacturers are free to place the label on any of their products, even when
the food is anything but “all natural.” Although the FDA has opened the
question of an “all natural” definition up to the public, a regulation seems far
away.2 In the meantime, consumers are limited to breach of warranty claims
against manufacturers who falsely label foods “all natural.” However, the fact
that consumers can bring breach of warranty claims has not deterred
manufacturers from falsely labeling foods. This is likely due to the fact that so
far, consumers’ attempts to sue for breach of contract have failed because
courts consistently hold that there is no privity between the parties.
With more Americans focusing on nutritional habits, manufacturers
need to be held accountable for the accuracy of the labels they place on
products. Without regulation of “all natural” labels, consumers are at a
disadvantage. At a minimum, consumers could accidentally ingest unhealthy
doses of artificial sugar when they think they are consuming 100% natural
ingredients.3 In more drastic scenarios, consumers believe they are eating “all
natural” food, when what they are ingesting is not food at all. This allegedly
happened to consumers who purchased a certain type of Parmesan cheese,
1. This Note focuses on products bearing an “all natural” label. There are several variations
of this label that manufacturers use. A reference to “all natural” can be used interchangeably with
any of these variations, including “natural,” “all natural ingredients,” and “100% natural.”
2. See infra note 14.
3. Carina Storrs, ‘Natural’ and Other Food Labels that Sound Legitimate but May Not Be, CNN
(May 18, 2015, 2:16 PM), http://www.cnn.com/2015/05/18/health/natural-food-labels
(discussing the possible inaccuracy of the “100% juice” labels on Juicy Juice products).
2018] NOT “ALL NATURAL” 787
which the manufacturer had labeled as “100%” Parmesan cheese; in reality,
the suit alleged that it contained cellulose, a substance derived from wood
pulp.4
This Note argues that consumers should be able to sue manufacturers for
breach of contract claims when manufacturers falsely promote their products
as “all natural.”5 At the moment, courts do not even reach the question of
whether purchasing a food product forms a contract because all claims would
fail for lack of privity even if a contract were formed. Privity is the “[l]egal
connection or relationship between two parties” and traditionally was
required to ensure that the parties shared an interest in a transaction.6
However, privity should be extended to the consumer when the consumer
purchases the product from a middleman (such as the grocery store) or,
alternatively, the outdated privity requirement should fall away, like the privity
requirements in other areas of the law have. The result of privity falling away
will be contract formation because each party in the distribution chain agrees
to buy and/or sell the packaged food.
To understand the pitfalls of the current claim options available to
consumers, Part II of this Note details the history of food label litigation
arising in the absence of regulation by the U.S. Food & Drug Administration .
Part III explains the privity requirement in traditional contract law and the
subsequent fall of privity in certain areas of the law. Part IV argues that the
privity requirement should be extended through the chain of contracts from
manufacturers to consumers. In the alternative, if the court is unwilling to
extend the reach of privity, then the privity requirement should be
abandoned in food-label litigation. Also, legislatures could enact consumer
protection acts to extend or eliminate privity. Finally, Part V demonstrates
how all elements of a contract have been satisfied in this food label litigation
context. Once a contract has been formed between the consumer and
manufacturer, the food label becomes a term of the contract. The injured
consumers can then sue the manufacturers for a breach of contract.
II. FOOD LABEL LITIGATION HISTORY
To better understand the failure of current claims available to
consumers, Part II tracks the history of food-label litigation combined with
the absence of regulation by the U.S. Food & Drug Administration. The “all
natural” label entices more than half of consumers to select those foods,7 yet
4. Complaint at ¶ 2, Sims v. Albertsons, LLC, 1:16-cv-06169 (N.D. Ill. Mar. 21, 2016)
(emphasis omitted).
5. While the focus of this Note is on the “all natural” label, the privity and contract concepts
could extend to all mislabeling scenarios.
6. Privity, BOUVIER LAW DICTIONARY (2012). The privity requirement is discussed in depth
infra Part III.
7. Andrea Rock, Peeling Back the ‘Natural’ Food Label, CONSUMER REP. (Jan. 29, 2016),
http://www.consumerreports.org/food-safety/peeling-back-the-natural-food-label (citing CONSUMER

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