Food and Beverage Class Actions: Litigating False Advertising, Labeling, Slack-Fill Packaging or Food Safety Claims

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Food and Beverage Class Actions: Litigating False Advertising, Labeling, Slack-Fill Packaging or Food Safety Claims Navigating Issues of Ascertainability, Predominance, Preemption, Standing and More THURSDAY, JULY 13, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Robert E. Boone, III, Partner, Bryan Cave, Los Angeles Yvonne M. McKenzie, Partner, Pepper Hamilton, Philadelphia Robert D. Phillips, Jr., Partner, Alston & Bird, San Francisco Charles C. Sipos, Partner, Perkins Coie, Seattle The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Agenda Filing Trends - Overview - Slack-fill - Sugar - Natural claims Litigation Strategies - Dispositive motions - Class certification - Trial 5

6 6 Food and Beverage Class Actions

7 Food and Beverage Class Actions: 2017 Filings Above Pace 7 * 2017 Filings as of March 2017

8 Food and Beverage Class Actions: Type of Filings a Mixed Bag 8 * 2017 Filings as of March

9 Food and Beverage Class Actions: Renewed Focus on California? Food Industry Class Actions by Jurisdiction 9 * 2017 Filings as of March

10 Class Cert Decisions: Brazil Remand: Damages Ruling Affirmed Brazil v. Dole (9th Cir. Sept. 30, 2016) (mem. dispo.) Clarified proof necessary to defeat SJ Third-party surveys qualify FDA guidance qualifies Affirmed damages-based decertification Regression model to prove premium not common to the class No activity in N.D. Cal. post-remand Not cited for damages holding 10

11 Food and Beverage Class Actions: Ascertainability Struck Down In re Conagra Foods (Jan. 2017) Published opinion: Rejects ascertainability as not required under Rule 23 Not consistent with language or purpose of Rule 23 Unpublished opinion: Affirms same damages model rejected in Brazil Tees up Ascertainability Circuit Split: Cert petition filed Apr. 10, 2017 Industry supporting petition 11

12 Food and Beverage Class Actions: Supreme Court Docket Modest Microsoft v. Baker Can plaintiff get interlocutory review of class cert with voluntary dismissal? Court highly skeptical of Plaintiff s at Mar. 21 argument Consolidated NLRB Decisions Do class action waivers apply in labor agreements covered by NLRA? Possible NLRB will moot case 12

13 13 Food and Beverage Class Actions: Effect of Judge Gorsuch Hammond v. Stamps.com Deferential reading of CAFA Shook v. Board of Comm n Affirm denial of 23(b)(2) class due to lack of common question on treatment of disabled prisoners BP v. Edmonson CAFA remand order appealable Likely to vote similarly to Scalia Kennedy will remain key Gorsuch influence?

14 Food and Beverage Class Actions: New Breed Natural : Glyphosate 14 Glyphosate: Targets residual presence of glyphosate in products labeled natural Tethered to WHO reports re: glyphosate as alleged carcinogen But, present in produces at levels below EPA 30PPM standard And, may be subject to primary jurisdiction defense Motions remain pending Beyond Pesticides v. Monsanto (D.C. Sup. Ct.) (Apri. 2017) Targets Monsanto directly Challenges Monsanto s claim that glyphosate only targets enzymes found in plants

15 Food and Beverage Class Actions: Status of Natural Stays Natural Nov FDA request for comments on natural ; 7,600+ received Most stays remain in place But signs of impatience (Morales v. Kraft; In re Hain Celestial (C.D. Cal.)) Healthy Sept FDA request for comments on healthy and related terms March 2017 FDA seminar signaled possible movement Comment period closes April 26, 2017 (1,000 comments so far) Effect of E.O / Gottleib? 15

16 Food and Beverage Class Actions: Corporate Responsibility Dismissals on Appeal Corporate Responsibility Class Actions Allege defendants failed to disclose use of forced labor in supply chain Multiple Rule 12 Dismissals Safe Harbor based on CTSCA compliance No duty to disclose Appeals now before Ninth Circuit Pending motions to certify duty to disclose issue to California Supreme Court 16

17 Food and Beverage Class Actions: 2017 Key Settlements CSPI / Naked Juice Settlement Private settlement on CSPI website Changes to labeling including Statement of identity and juice content Images to reflect predominant ingredients Minimizing no sugar added claims Monetary settlement undisclosed 17

18 Food and Beverage Class Actions: Stealth Claims Settlement at the CLRA Letter Stage Plaintiff s counsel Tim Howard Bursor & Fisher Michael T. Fraser (via Rubenstein) Joseph Kravec David Greenstein 18

19 Food and Beverage Proposition 65 Actions: Acrylamide & Heavy Metals Notices on the Rise 19 * 2016 Filings as of October

20 Food and Beverage Proposition 65 Actions : Acrylamide Litigation and Notices Coffee: 2017 Phase II Trial Cereal: pending SJ motion on preemption grounds 2017 notices set to triple 2016 notices Potato / Sweet Potato Snack Foods Vegetable Chips Prune Juice Bread Molasses Olives 20

21 Food and Beverage Proposition 65 Actions : Heavy Metals Cadmium Cocao nibs and cocoa powder Seaweed and shellfish products Lead Fruits, teas, cocoa powder Spices Supplements 87 lead notice in cadmium notices in

22 Food and Beverage Proposition 65 Actions : New Clear and Reasonable Warnings Regulations Effective August 30, 2018 Focuses responsibility on manufacturers Warning language Tailored to specific chemical Effectively requires additional testing and analysis by manufacturers prior to warning Requires reference to Prop 65 website Allows for shelf warnings WARNING: Consuming this product can expose you to chemicals including lead and cadmium, which are known to the State of California to cause cancer and birth defects or other reproductive harm. For more information go to 22

23 Slack Fill Class Actions Presented by Robert E. Boone III July 13,

24 WHAT IS SLACK FILL? Slack fill is the difference between the actual capacity of a container and the volume of product contained therein in other words, the empty space in the package. 24

25 SLACK FILL STATUTES Federal slack fill regulation = 21 C.F.R California slack fill statute = Bus. & Prof. Code Purpose of slack fill statutes = Avoid consumer confusion over how much product the consumer is purchasing. Manufacturer s goal should be to allow the consumer enough information be it appropriate labeling and/or the ability to view the contents of the package to make an informed decision when buying the product. 25

26 NONFUNCTIONAL SLACK FILL Slack fill in and of itself is not illegal or misleading. What is prohibited is nonfunctional slack fill. Not misleading/no violation if the consumer can clearly see through the packaging to determine how much how much product is in the container, no violation e.g., a clear glass jar or a clear plastic bag. Translucent materials may or may not violate the statute e.g. if it must be held up to light or to transparent containers with labels or graphics that impede the consumer s clear view of the contents, arguably a violation. 26

27 SAFE HARBORS Slack fill is nonfunctional, and thus prohibited, unless it: (1) is required for the protection of the contents of the package (2) is needed for the operation of manufacturing machinery (3) results from unavoidable product settling during shipping/handling (4) is necessary for a specific function, such as the preparation or consumption of the food, if that function is inherent to the nature of the food and is clearly communicated to consumers (5) results from packaging that contains a reusable container (like gift products) (6) is needed to meet mandatory labeling requirements 27

28 LEGISLATIVE HISTORY U.S. Food & Drug Administration Misleading Containers; Nonfunctional Slack-Fill, 58 Federal Register (Jan. 6, 1993) U.S. Food & Drug Administration Misleading Containers; Nonfunctional Slack-Fill, 58 Federal Register (Dec. 6, 1993) 28

29 FDA s POSITION Any portion of the empty space in the package that does not serve the functional purpose of any of the safe harbors constitutes nonfunctional slack fill. Accurately stating the net weight or volume of the contents of the package does not protect the consumer against misleading slack fill 29

30 WHAT SHOULD MANUFACTURERS DO TO COMPLY? Optimize packaging design to minimize/eliminate empty spaces Know the physical characteristics of the products and the capabilities (and limitations) of packaging machinery If cannot minimize or eliminate empty spaces, make sure you satisfy one or more of the safe harbors Adequately label product to avoid consumer confusion over amount of contents 30

31 PRACTICAL TIPS Transparent packaging. Use whenever possible. Clear and conspicuous disclosures. Provide information on the package about the need for empty space. Clear internal records. Maintain re packaging design decisions, including what other options were considered, why the chosen design was selected, and why the need for slack fill. Product quantity changes. Re-evaluate packaging whenever reducing amount of product being offered. Reducing the amount of food or drink in a package without changing the package size can create risk to claims of misrepresentation or deception. Multi-packs. Packaging containing multiple packages of product e.g., bulk sales may be susceptible to attack even if the individual packages are not. 31

32 LITIGATION CONSIDERATIONS Privilege. Should you cloak your package design analysis with the attorney-client privilege and/or attorney work product doctrine? If you doubt the outcome of the analysis will be favorable, you may want to do so. If the analysis is favorable, you may at some point want or need to waive those privileges in order to use that information to defend your packaging design. Evidentiary standards. Ensure that you use a scientifically sound and accepted methodology for how you analyze and test your packaging designs so that such evidence is admissible under the applicable evidentiary standards, such as the Daubert test used in federal courts. You don t want to spend valuable resources on an expert consultant to validate your design and then not be able to get that evidence admitted in court. 32

33 SLACK FILL CLAIMS/THEORIES Packaging violates federal and/or state slack fill statute by including nonfunctional empty space. Packaging is deceptive and unlawful because its runs afoul of the reasonable consumer standard. Reasonable consumer expects more product and would not have bought it had they known i.e., I didn t get my money s worth. Packaging violates state UDAP laws California Unfair Competition Law (Bus. & Prof. Code et. seq.) Missouri Merchandising Practices Act ( MMPA ) and unjust enrichment Unjust enrichment 33

34 PRODUCTS ATTACKED Hershey s Whoppers and Reese s candy Barilla pasta products Sour Patch Watermelon candy M&M s Minis Nabisco Go-Paks Rice-A-Roni Pasta Roni McCormick pepper Starbucks lattes and iced beverages Tropicana orange juice 34

35 CHALLENGING THE PLEADINGS Decisions mixed but the courts getting tougher on plaintiffs pleadings. Courts are conducting a more rigorous analysis of their factual allegations to determine if they state valid slack fill claims, using a reasonable consumer standard. Prior decisions were much more lenient and held less factual allegations sufficed. A court may determine as a matter of law that an allegedly deceptive practice would not have misled a reasonable consumer. 35

36 CHALLENGING THE PLEADINGS A reasonable consumer cannot suspend common sense or ignore other methods of observation such as feeling the contents of the package, or avoid reading the cooking instructions on the package. By picking up a bag and either feeling its contents or reading the package labeling, a reasonable consumer should, in many cases, be able to ascertain and understand that the package is not bursting at the seams with product and generally to what extent it is filled. Manufacturers are making these arguments more frequently and submitting evidence on motions to dismiss (via requests for judicial notice) for courts to consider, with increasing success. 36

37 IMPORTANT COURT DECISIONS Bush v. Mondelez Int l, No. 16-CV RS, 2016 WL (N.D. Cal. Oct. 7, 2016) ( Bush I ) and 2016 WL (N.D. Cal. Dec. 16, 2016) ( Bush II ) Mini Chips Ahoy!, Mini Oreo, Golden Oreo Mini, Nutter Butter Bites, Mini Nilla Wafers, Ritz Bits, and Teddy Grahams Court twice granted a motion to dismiss defectively pleaded slack fill claims. Plaintiff argued that the container size leads consumers to believe that there will be more snack food than there actually is and that he would not have purchased the products had he known the containers were not adequately filled. Plaintiff recited the six safe harbors under the federal regulation and, in conclusory fashion, alleged that none of these circumstances apply here. Court: Such allegations are conclusory and insufficient to support a claim of unlawful packaging. Now on appeal 37

38 IMPORTANT COURT DECISIONS Bautista v. Cytosport Inc., 2016 WL (S.D.N.Y. Dec. 13, 2016) Court held that a plaintiff must possess some factual basis before bringing a [nonfunctional slack fill claim]. Dismissed the plaintiff s conclusory allegations as insufficient to state a nonfunctional slack fill claim. 38

39 IMPORTANT COURT DECISIONS Strumlauf v. Starbucks Corporation, 192 F. Supp. 3d 1025 (N.D. Cal. 2016) Plaintiffs adequately stated UCL, CLRA, false advertising and breach of express warranty claims that Starbucks deceptively selling its latte drinks by providing less liquid than stated on its menu. Starbucks argued that reasonable customer would know stated quantity includes foam from steamed milk, not just the liquid. Court: Question of fact that can t be decided on motion to dismiss. Plaintiffs failed to state breach of implied warranty of merchantability claim because made to order lattes are not packaged goods. Plaintiffs failed to allege Art. III standing for injunctive relief because they would not buy lattes if knew drink did not contain fluid equal to ounces stated on menu. Court: Now they now. 39

40 IMPORTANT COURT DECISIONS Forouzesh v. Starbucks Corp., 2016 WL (C.D. Cal. Aug. 19, 2016) Plaintiffs alleged Starbucks deceptively marketed its iced drinks because they did not contain the stated amount of liquid, if you excluded the amount of space taken by ice. Court granted motion to dismiss on grounds that reasonable consumer knows an iced drink contains ice and that the drink would contain some portion of liquid and some portion of ice in the designated cup size. 40

41 IMPORTANT COURT DECISIONS Izquierdo v. Mondelez Foods, 2016 WL (SDNY Oct. 26, 2016) Plaintiffs failed to state a claim under NY s UDAP statute because they did not allege facts establishing that they paid more for the Sour Patch candy than they otherwise would have, absent the alleged deceptive packaging. Court rejected Mondelez arguments that a reasonable consumer would have been able to determine how much candy was in the package, and that it contained slack fill, by handling/shaking it. Court: Question of fact not appropriate for motion to dismiss. 41

42 IMPORTANT COURT DECISIONS Ebner v. Fresh, Inc., 838 F.3d 958 (9 th Cir. 2016) Not a food case but a good decision for manufacturers. 9 th Circuit affirmed district court s dismissal with prejudice of plaintiff s claims that (1) Fresh had used deceptively large packaging that was misleading to the reasonable consumer, and (2) its packaging violated California s slack fill rules. Ebner claimed Fresh s Sugar lip balm is packaged in an oversized tube that actually dispenses only 75% of the product and therefore is deceptive, and the unaccessible 25% of the product constituted nonfunctional slack fill. 9 th Circuit: Industry standard that some portion of product does not get pushed out of the tube. Reasonable consumer understands this, and can see it and actually access it if he/she wants (with their finger). Space with inaccessible product is not slack fill. 42

43 STATE AG ACTIONS State of California v. Tropicana Products, Inc., Cal. Superior Ct., Los Angeles Cty, Case No AG sued Tropicana for non-functional slack fill in its cardboard OJ containers; alleged containers too big for amount of product inside. Alleged violations of California s Unfair Competition Law ( 17200) and False Advertising ( 17500). Consent judgment entered March 2017 $700,000 civil money penalty California s costs of investigation (approx. $65,000) Injunction requiring Tropicana to increase by 10% the font size of ounces per carton designation Future compliance with CA slack fill statutes 43

44 CLASS CERTIFICATION CONSIDERATIONS None of the recent slack fill class actions have reached class certification stage yet. Plaintiffs in the McCormick & Co. Pepper Products Marketing & Sales Practices MDL must file their class certification motion by mid-july. May be difficult to defeat class certification because: Federal slack fill statute applies re any unlawful claims Reasonable consumer test applies re unfair/deceptive claims Uniform packaging may not create many individualized issues 44

45 Sugar Class Actions Yvonne M. McKenzie Partner Strafford CLE/July 13,

46 46 Sugar: The Latest Target

47 Regulators Views on Added Sugar FDA: - The scientific evidence underlying the 2010 and the Dietary Guidelines for Americans support reducing caloric intake from added sugars; and expert groups such as the American Heart Association, the American Academy of Pediatrics, the Institute of Medicine and the World Health Organization also recommend decreasing intake of added sugars - In addition, it is difficult to meet nutrient needs while staying within calorie requirements if you consume more than 10 percent of your total daily calories from added sugars World Health Organization: - Endorses a 10 percent cap on sugars, excluding those in fresh fruits, vegetables and milk - Encourages people to aim even lower, limiting sugars to 5 percent of caloric intake for greater health benefits 47

48 48 Added Sugar

49 No added sugar Litigation Lawsuits filed against a broad spectrum of food and beverage manufacturers. Many cases brought by Jack Fitzgerald Added sugar described as toxic and alleged to increase the risk of heart disease, diabetes and other chronic illness Plaintiffs allege that no sugar added labeling implies that the products contain less sugar, and are healthier than other comparable products without such labels 49

50 No added sugar Litigation Plaintiffs rely on 21 C.F.R (c)(2)(iv), which prohibits the use of phrases like "no added sugar unless "the food that it resembles and for which it substitutes normally contains added sugars" Plaintiffs also rely on 21 C.F.R (c)(2)(v), which provides that a no added sugar claim can only be made if the product bears a statement that the food is not low calorie... and that directs consumers attention to the nutrition panel for further information on sugar and calorie content 50

51 No added sugar Litigation Major v. Ocean Spray Cranberries, Inc., 12- cv (N.D. Cal.) - Ninth Circuit affirmed summary judgment Wilson v. Odwalla, 17-cv (C.D. Cal.) - District Court denied MTD Rahman v. Mott's,13-cv (N.D. Cal.) - Ninth Circuit upheld denial of cert for liabilityonly class Lipkind v. PepsiCo, 16-cv (E.D.N.Y) - Brought by CSPI (Center for Science in the Public Interest) - Settled 51

52 Evaporated Cane Juice October 2009: FDA characterizes ECJ as misleading in nonbinding Draft Guidance. - Guidance triggers litigation, but many cases are stayed under primary jurisdiction doctrine May 2016: FDA issues Final Guidance. - ECJ is (still) misleading - Recommends the term sugar 52

53 Current Landscape Suits stayed under primary jurisdiction are reactivated and new suits are on the rise Some courts have issued decisions on MTD: - Swearingen v. Santa Cruz Natural, Inc., 2016 U.S. Dist. LEXIS (N.D. Cal. Aug. 17, 2016) (MTD granted in part) (now settled) - Swearingen v. Late July Snacks LLC, 2017 U.S. Dist. LEXIS (N.D. Cal. May 5, 2017) (MTD granted in part) - Swearingen v. Healthy Bev., LLC, 2017 U.S. Dist. LEXIS (N.D. Cal. May 2, 2017) (MTD granted) 53

54 Natural Class Action Lawsuits Robert D. Bo Phillips, Jr. Partner, Alston & Bird LLP Jonathan J. Kim Associate, Alston & Bird LLP Alston & Bird LLP

55 Natural or All Natural Claims No general consensus on definition of natural with respect to labeling on products. Consumers purchase products labeled natural often in the false belief that they are purchasing a product without GMOs, hormones, pesticides, or artificial ingredients. FDA sought public comments in November 2015 seeking to regulate the industry s use of the term natural on food labeling where most natural labeling was found. Public comment period closed on May 10, 2016 with 7,690 comments received. Since then, FDA has not issued a rule or opinion. Alston & Bird LLP

56 Importance of Defining Natural Over the last few years, plaintiffs have aggressively sued food and beverage manufacturers asserting that natural food labeling is misleading because of the ingredients contained in the products. Plaintiffs claim that natural labeling misrepresents health benefits or ingredients of the products. The term natural in these lawsuits may be dispositive of the entire action. Alston & Bird LLP

57 Natural Food Labeling Class Actions In re: KIND LLC Healthy & All Natural Litigation, 2016 WL (S.D.N.Y. Sept. 15, 2016) In KIND, plaintiffs alleged that KIND falsely labeled its products as all natural and Non-GMO despite containing synthetic and artificial ingredients. The court stayed the all natural claims under the primary jurisdiction doctrine, concluding that the case should be stayed in deference to the FDA s discretion and superior technical expertise. Court states that this would harmonize court rulings with regard to the term natural. Alston & Bird LLP

58 Natural Food Labeling Class Actions Scholder v. Riviana Foods Inc., 2017 U.S. Dist. LEXIS (E.D.N.Y. June 23, 2017) Plaintiff filed a class action against defendant for violation of NY s consumer protection statute for labeling its dry pasta products as All Natural and 100% Whole Grain. Dry pasta products contained glyphosate, an agricultural herbicide. Based on the authorities in this growing area of natural and all natural litigation, court found that the trend amongst courts was to stay actions pending pertinent guidance from the FDA. Plaintiff s action was stayed under primary jurisdiction doctrine with a direction to apprise the court of any material developments by the FDA. Alston & Bird LLP

59 Natural Food Labeling Class Actions Burton v. Hudgson Mill, Inc., 2017 U.S. Dist. LEXIS (S.D. Ill. Apr. 6, 2017) However, some courts have allowed plaintiffs actions to proceed despite the trend to stay actions pending the FDA s guidance. In Burton, plaintiff filed a class action lawsuit against defendant for labeling its pancake mix as all natural when in fact it contained synthetic agents such as monocalcium phosphate. Defendant moved to dismiss plaintiff s complaint on various grounds including, that because there was no fixed definition for all natural, such use of that label could not form the basis for an affirmative misrepresentation. Court noted that the definition of all natural was a question left best for members of the jury. Alston & Bird LLP

60 Natural Food Labeling Class Actions Martin v. Tradewinds Bev. Co., 2017 U.S. Dist. LEXIS (C.D. Cal. Apr. 27, 2017) In Martin, plaintiff filed a class action lawsuit against a defendant after the company packaged its iced tea products with the statement 100% Natural and 100% Natural Ingredients. Iced tea products contained a caramel color additive, an artificial ingredient. Defendant sought to dismiss plaintiff s complaint under primary jurisdiction doctrine arguing that FDA was pending determination of the definition of natural with respect to all natural food labeling. Alston & Bird LLP

61 Natural Food Labeling Class Actions Martin v. Tradewinds Bev. Co., 2017 U.S. Dist. LEXIS (C.D. Cal. Apr. 27, 2017) Court disagreed with defendant, holding that FDA had already determined that added coloring to food rendered the food not natural. Court doubted that any guidance from the FDA was imminent or in the foreseeable future. May signal a new trend by courts to take a narrow view of the FDA s rulemaking process with regard to natural food labeling where distinctions are made between type of ingredients for example, between food coloring and other artificial or synthetic ingredients for purposes of natural food labeling. Indicates that courts may not be willing to stay cases under primary jurisdiction doctrine for all natural food labeling claims. Alston & Bird LLP

62 New Trends in Natural Class Actions Brittany Sebastian v. Kimberly-Clark Corporation et al., No. 3:17-cv WQH-JMA (S.D. Cal. Mar. 3, 2017) One response by plaintiffs has been to pivot toward cleaning products, personal care products, and cosmetics. In Sebastian, plaintiff purchased Huggies Natural Care wipes after she allegedly relied on defendant s representation that the wipes had natural qualities to the product. Wipes contained non-natural, synthetic, and/or artificial ingredients, including phenoxyethanol, caprylyl glycol, cocamidopropyl betaine, and sodium citrate. Plaintiff alleges that defendant marketed and labeled its wipes as natural, causing consumers to purchase defendant s wipes under a misrepresentation. Alston & Bird LLP

63 New Trends in Natural Class Actions Garret Shank v. Presidio Brands, Inc., No. 3:17-cv (N.D. Cal. Jan. 1, 2017) In Shank, plaintiff purchased defendant s company s lotion, face scrub, and face wash, after its products were labeled as all-natural, and the packaging labeled naturally derived. Defendant s products contained several synthetic ingredients including cocamidopropyl betaine, dimethicone, ethylhexyglycerin, and phenoxyethanol, which are artificially produced in a lab. Plaintiff filed class action on January 1, Takeaway: likely we will see a rise in natural class actions in cleaning, personal care, and cosmetic products. Alston & Bird LLP

64 Recent Trends In Class Actions In Food, Beverage and Nutrition Litigation Rigorous analysis of Rule 23 requirements post-dukes Rule 23(a) commonality Rule 23(b)(3) predominance Focus on labeling and advertising issues Alston & Bird LLP

65 Key Issues In Recent Litigation Reliance on label information Reliance on advertising claims Healthy claims Natural claims Efficacy claims for nutrition products and dietary supplements Alston & Bird LLP

66 Key Issues In Current Litigation Ascertainability Price premium/product superiority claims Article III injury in fact Materiality of label information/claims Alston & Bird LLP

67 Thank You Robert D. Bo Phillips, Jr. Partner, Alston & Bird LLP Alston & Bird LLP

68 68 Litigation Strategies

69 Defense Strategy: Motions to Dismiss Standing - Products plaintiff did not buy - Injunctive relief Preemption Primary Jurisdiction FRCP 9(b) - Courts usually allow plaintiffs to amend Reasonable Consumer 69

70 Reasonable Consumer Test Whether a statement is false/misleading is judged under a reasonable consumer standard The test is whether it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled 70

71 MTD Granted/Upheld on Reasonable Consumer Grounds Cruz v. Anheuser-Busch, Cos., 2017 U.S. App. LEXIS 4673 (9th Cir. Mar. 16, 2017) (unpub) Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016) Hadley v. Kellogg Sales Co., 2017 U.S. Dist. LEXIS (N.D. Cal. Mar. 21, 2017) Dumas v. Diageo PLC, 2016 U.S. Dist. LEXIS (S.D. Cal. Apr. 6, 2016) [similar conclusion reached in Bowring v. Sapporo] Galanis v. Starbucks Corp., 2016 U.S. Dist. LEXIS (N.D. Ill. Oct. 14, 2016) 71

72 Takeaways on Reasonable Consumer Some success with slack-fill and place of origin claims Ingredient list cannot cure potentially deceptive labeling claims Disclaimers are helpful, but not always feasible Generally difficult to win on a motion to dismiss unless rare circumstances exist 72

73 Litigation Strategies Class certification Trial Best practices 73