Exposing Naked Juice10 Jan, 2012 By: Jeffrey Richter, Cathy Polisoto
Is your product labeled or advertised as “All Natural” or some variation thereof? Determining whether a product may properly be labeled “All Natural” is not as simple as it sounds, and this issue has resulted in some new litigation.
A class action complaint for false and misleading labeling was filed against Naked Juice Co., and its parent company, PepsiCo Inc., in the United States District Court for the Central District of California on September 27, 2011. Sandys v. Naked Juice Company, et al. seeks to certify a national class of consumers who purchased Naked Juice products that were labeled as not containing genetically modified organisms (“GMOs”) when the defendants allegedly knew that the beverages contained GMOs. The plaintiff also seeks to certify a national class of consumers who purchased Naked Juice products that were labeled as “100% JUICE,” “100% FRUIT,” and “ALL NATURAL,” although they allegedly contained synthetic ingredients, including synthetic fiber and chemical compounds that are not the vitamins they were claimed to be.
The complaint alleges that defendants knew: that the target market would pay more for all-natural and non-GMO 100-percent juice beverages than for conventional beverages; that federal agencies generally define “natural” products as excluding synthetic compounds; and that the average consumer understands the word “natural” to exclude synthetic substances. The complaint further alleges that defendants’ false and misleading representations and omissions violated civil and criminal federal and state law, including, California’s Unfair Competition Law, California’s Consumer Legal Remedies Act, common law and federal statutes.
The case raises several interesting points:
1. Labeling of Products Containing GMOs. This case alleging false labeling of food possibly containing GMOs may be a case of first impression in California. On October 28, 2011, another California resident filed a putative class action – Lewis v. General Mills, Inc. – in Los Angeles Superior Court, alleging that the genetically modified corn in certain General Mills’ cereals renders its “All Natural Corn” representations false and misleading. This may portend a trend in state and federal courts of attacking products that contain GMOs and that are labeled or advertised as “All Natural” or “100% Natural.”
2. Labeling a Product as “All Natural.” Although the Food and Drug Administration (FDA) has declined to define the term “natural,” generally its position is that a product is not natural if it contains synthetic ingredients. Similarly, the U.S. Department of Agriculture defines a “natural” product as one that does not contain any artificial or synthetic ingredient and does not contain any ingredient that is more than “minimally processed.” Litigation arising from labeling or advertising products as “Natural,” “All Natural,” or “100% Natural” is likely to increase.
3. Extending Liability. The plaintiff intends to sue not just Naked Juice and Pepsi, but all “suppliers, manufacturers, examiners, certifiers, formulators, engineers, resellers of synthetic substances or agents . . . or representatives of PepsiCo or Naked Juice.” If this lawsuit proceeds to trial, it will be interesting to see whether liability is imposed on any of the suppliers or manufacturers, even though they were not directly involved in labeling or advertising the products.
If you market “natural” products or products containing GMOs, now, more than ever, it is advisable to have counsel review the claims in your labeling and advertising.