Trader Joe’s Settles ‘All Natural’ Class Action Challenge4 Mar, 2014 By: John Waller, Blank Rome LLP, Jeffrey Richter
In another sign that private plaintiffs continue to pursue consumer-oriented claims that regulatory agencies have failed to pursue (or have chosen not to pursue) — including claims relating to advertising and labeling food products as “natural” — a putative consumer class action that was filed several years ago against Trader Joe’s has now been certified for settlement purposes and tentatively settled. In that action, Trader Joe’s was alleged to have engaged in false advertising, misbranding and unfair competition as a result of its use of small amounts of allegedly “synthetic” ingredients to process, stabilize or flavor certain of its food products that were labeled and advertised as “All Natural” or “100% Natural.”
Trader Joe’s is alleged to have used potassium carbonate, ascorbic acid, sodium acid pyrophosphate, sodium citrate, xanthan gum and vegetable mono or diglycerides in a small number of its grocery products that were labeled and advertised as “All Natural” or “100% Natural.” As alleged in the complaint, each of those commonly used food processing substances is alleged to be “synthetic” within the meaning of the Food and Drug Act, which defines “synthetic” to mean “a substance that is formulated or manufactured by a chemical process or by a process that chemically changes a substance extracted from naturally occurring plant, animal, or mineral sources, except that such term shall not apply to substances created by naturally occurring biological processes.”
In this case, the potassium carbonate was used to process the cocoa used in some of the products. The other allegedly ”synthetic” substances in issue were used to flavor, preserve or otherwise stabilize the products at issue.
In agreeing to settle the plaintiffs’ claims, Trader Joe’s does not admit that its actions violated any statute or regulation, or that it engaged in any wrongdoing whatsoever. Furthermore, the $3.375 million settlement is small in comparison to Trader Joe’s overall sales.
Nevertheless, Trader Joe’s decision to settle this action for a non-de minimis amount reflects the difficulty that marketers and manufacturers face today when they advertise or label food products as “Natural,” “All Natural” or “100% Natural.” Any use in such products of food coloring, artificial flavors or synthetic substances, no matter how minimal the amount — and regardless of whether it is an additive or a processing agent — is increasingly likely to lead to private plaintiffs filing class action lawsuits challenging those actions.
Manufacturers and marketers of food products that make “Natural,” “All Natural” or “100% Natural” claims would be well served to review the ingredients and substances in their products, even those used to process their products, for any substances that might be considered to be “synthetic.” Spending a few dollars on such a review now should lessen the likelihood that they will need to spend much more in the future on legal fees and settlement costs should a challenge to their practices be filed.