'Healthy' Food Labeling

Changing Ideas

As a result of the expansion and evolution of scientific understanding and nutrition guidance since that time, the “healthy” labeling regulations are being challenged from without and within the FDA. For example, total fat is now deemed an insufficient descriptor of nutritional content. Rather, the subcategories monounsaturated and polyunsaturated fat are viewed positively while saturated fat and trans fat are not. Vitamin D and potassium are added to the list of encouraged vitamins and minerals. Added sugars — syrups and other caloric sweeteners not naturally occurring in food — face increased scrutiny and recommendations for limited intake.

That the 1993 guidelines were outmoded was highlighted by a row in 2015 over the labeling of KIND-brand snack bars. After the FDA warned KIND that its “healthy” labeling ran afoul of the regulations due to an excess total fat level, the company petitioned the FDA to reconsider those regulations. It pointed out that the current science did not support expressing fat content as a single measure of total fat. Though its snack bars contained total fat above the recommended maximum for “healthy” labeling, most of it was fat of the “good” type, e.g., from nuts or avocados.

The FDA's apparent agreement is embodied in guidelines issued last September, which essentially said the FDA would not enforce the “healthy” labeling regulations for total fat provided the fat content was mostly “good” monounsaturated and polyunsaturated fat and the label reflected that fact. At the same time, it indicated it would relax enforcement regarding vitamin and mineral content provided a food contained a specified level of the newly important vitamin D and potassium.

The FDA also indicated it would consider updating its definition of “healthy” for the food labeling regulations and opened a public comment period, which ended in April 2017. The FDA's subsequent public comments suggest it is considering changes to the regulations that will go beyond tinkering with nutrient metrics, and will instead revisit the fundamental definition of “healthy.” It can be expected any reformulation of the regulations will take months, if not longer.

Based on the U.S. government's 2015-2020 Dietary Guidelines for Americans, upon which the FDA relies heavily, it can be anticipated that updated healthy labeling regulations will target food characteristics and contents that are linked to chronic conditions on the increase among Americans, such as cardiovascular disease, type 2 diabetes and obesity. It can be anticipated that revised regulations will formalize the distinction between “good fats” and saturated and trans fats, limiting “healthy” labeling for foods containing the latter, and will raise scrutiny of sodium content. Finally, it can be anticipated that added sugars — largely untouched by the current regulations — will be targeted by revised regulations.

Proposed Class Actions

The plaintiffs' bar is not waiting for the new FDA labeling regulations. It is trying to squeeze the industry by filing proposed class actions targeting a variety of industry sectors' use of “healthy” claims on food packaging. Recent decisions addressing pleading standards and preemption provide a preview of where plaintiffs might find traction for their claims.

Central to plaintiffs' claims are the nutrient content of the targeted foods. In one trio of proposed class actions, the plaintiffs target added sugar in breakfast cereals and snack bars. In another, the target is artificial trans-fat content in canned soups. And in a different series of proposed class actions, the target is overall fat content in coconut oil nutritional supplements. The plaintiffs claim that various statements on labels and in other marketing materials constitute false or misleading claims about the positive health effects of the targeted foods. Examples include “start with a healthy spoonful” and “great taste that does your heart good” in the case of breakfast cereals; “heart healthy” in the case of soup; and “variety of healthy uses” in the case of coconut oil.

Citing the alleged unhealthy effects of added sugars, trans fats, etc., the plaintiffs allege violations of California consumer protection statutes called the Consumer Legal Remedies Act (CLRA), False Advertising Law (FAL) and Unfair Competition Law (UCL), as well as common law breach of express and implied warranties. They seek money damages and injunctions against continued labeling practices. They allege that the labels, and other marketing materials, including websites, improperly employ the term “healthy” or its derivatives, either expressly or impliedly, in a way that is misleading to consumers, given the nutritional content of the subject foods.

The CLRA, FAL and UCL prohibit untrue, deceptive or misleading advertising, acts or practices. The UCL additionally prohibits unlawful and unfair business practices, including in advertising. The courts that have considered these claims typically consider the CLRA, FAL and the untrue, deceptive or misleading prong of the UCL as one claim, and the unlawful business practices and unfair business practices prongs of the UCL as additional separate claims.

Defending Against the Claims

The defendants' first point of attack is the plaintiffs' pleading of claims under the statutes and common law. At issue is whether the plaintiffs properly plead their claims under strict federal pleading standards, particularly as to fraud. On motions to dismiss, the courts wrestle with labeling and marketing statements that do not make explicit claims to healthfulness, but arguably imply such. For example, where a coconut oil label suggests using it in place of butter, margarine or other cooking oils, plaintiffs allege this to be an implied claim that the coconut oil has less fat and is healthier than butter, margarine or other cooking oils. Other examples of implied health claims include simply stating “breakfast brainpower,” or adding the American Heart Association symbol on a package label. Defendants attacking the plaintiffs' complaints at the pleading stage argue that such allegations, to the extent they require a significant extrapolative leap to conclude a reasonable consumer would be misled, fail to meet strict federal pleading standards.

In August 2016, Judge William Q. Hayes of the Southern District of California denied a coconut oil manufacturers' motion to dismiss a proposed class action, giving wide latitude to the pre-discovery pleadings. He noted that dismissals on the pleadings in consumer-protection lawsuits are rare, and that misrepresentation under the statutes is a question of fact that may be found even where representations were truthful and did not contradict the ingredients on the label; such labels could still be deemed deceptive to the public under the statutes. Similarly, the breach of warranty claims were allowed to stand because the claims made on the labels could constitute affirmations of fact or promises.

On the other hand, in April 2017, Judge Lucy H. Koh of the Northern District of California dismissed the complaint against one of the three breakfast cereal companies in its entirety. She held that the plaintiff's allegations lacked the specificity required by heightened pleading requirements for claims for false or misleading statements. The plaintiff had failed to distinguish between the amounts of naturally occurring sugar and added sugar in the product, and thereby could not articulate how the companies had misled customers about added sugars. As of this writing, the defendant has moved to dismiss the plaintiff's second amended complaint.

Soon after, in June 2017, in a largely similar proposed class action filed against another breakfast cereal/snack bar company, Northern District Judge William H. Orrick held just the opposite, upholding the majority of substantially similar claims. Judge Orrick was not troubled by the natural sugar/added sugar distinction, and provided the plaintiff wide latitude in pleading.

Another avenue of attack for defendants is federal preemption. Last year, a class action was filed in the Southern District of California alleging that certain canned soup labels using the term “healthy” violated California statutes prohibiting false or misleading statements to consumers, as well as common law, due to the presence of artificial trans fats. In March 2017, the district court dismissed the complaint on grounds that the U.S. Department of Agriculture (USDA) had preapproved the labels (the soup contained meat and poultry) and that the two statutes requiring such preapproval preempted state statutes and common law that would effectively hold the labels to more stringent requirements. The decision is under appeal.

In contrast, in his June 2017 decision, Judge Orrick denied preemption of the plaintiff's claims, at least at the pleadings stage. The breakfast cereal maker had contended that the plaintiff's claims regarding cereal box statements that the product was healthy were preempted because they attempted to impose non-identical requirements above and beyond those required by the FDA. Judge Orrick held that such claims were not preempted because the applicable FDA rule did not proscribe or prohibit statements about health or wellness in connection with added sugars.

Injunctive Relief Is More Elusive

Claims for injunctive relief — e.g., ceasing allegedly misleading labeling and marketing and recalling prior labeled products — have fared less well. The judges in both the coconut-oil and breakfast cereal lawsuits dismissed claims for injunctive relief, albeit with leave to amend. Because the representative plaintiffs claimed the purported unhealthy nature of the products they previously purchased would prevent them from purchasing those products in the future, they did not face the prospect of future harm and thus lacked standing to pursue such claims.

Class Certification Questions

Of course, the next battle after the pleadings-stage motions to dismiss is class certification. In the proposed coconut-oil class action, the certification motion is briefed and awaits a decision. The plaintiffs claim that the allegedly misleading healthy labeling affected all potential class members similarly, and that the proposed class' claims turn on objective standards testable with classwide evidence. The defendants counter with the class representative's deposition testimony to argue that her purpose for purchasing the coconut oil may differ from other purchasers (it is also used as skin lotion and hair conditioner, for example), and that her interpretation of label statements may differ from that of other purchasers.

Conclusion

Looking into the near future, the parameters of labeling and marketing of “healthy” food products are likely to remain murky as the FDA considers fundamental changes to old regulations and as the courts grapple with prospective consumer class actions.

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Benjamin R. Dwyer is counsel and Vivian Quinn is a partner at Nixon Peabody LLP. Ms. Quinn, a member of this newsletter's Board of Editors, is co-chair of the firm's Food and Beverage Team.