Will FDA's Call for ‘Natural' Comment Temporarily Halt the Litigation?

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By Julie A. Steinberg

Nov. 19 — The FDA's recent call for public comment on whether it should define the word “natural” on food packaging could bring to a halt, at least for now, the most prevalent claims in scores of false advertising food and beverage suits filed across the country, attorneys tell Bloomberg BNA.

But while attorneys defending food and beverage makers said the agency's announcement means courts should stay the pending suits and wait for the FDA to act, those representing consumers cite the preliminary nature of the request for input and the lengthy regulatory process as reasons to let the cases, many of which have been filed against some of the U.S.'s most well known brands, to proceed.

After more than two decades without a formal policy on what is and isn't “natural,” the Food and Drug Administration Nov. 10 invited the public to weigh in on use of the word, including whether it's false or misleading on food labels.

Lack of a uniform definition has launched hundreds of would-be class suits challenging as misleading or false the labels on food and drinks that contain allegedly synthetic ingredients, or ingredients derived from genetically modified crops such as corn or soy.

“Natural” challenges, including those to products made by companies like ConAgra Foods and the Procter & Gamble Co., represent the most common claims in the labeling litigation when the cases are considered in the aggregate, according to several attorneys interviewed between Nov. 12 and 16 for this Bloomberg BNA Special Report.

Some 37 percent of pending food labeling cases involve “natural” wording; 35 percent deal with a false statement of fact such as misstating calorie or fat content; 20 percent are categorized as “other,” and 8 percent address a health misrepresentation such as the benefits of antioxidants, according to data compiled by Perkins Coie, which defends food and beverage product makers.

‘One-Two Punch'

The agency's about-face on whether to weigh in on the term, coupled with a recent Ninth Circuit decision that said the issues in a suit challenging “natural” cosmetics labeling were within the FDA's primary jurisdiction, gives defense attorneys “a one-two punch” to ask courts to put on hold food labeling suits contesting use of the word, attorney Dale Giali of Mayer Brown in Los Angeles told Bloomberg BNA in an interview.

Under the primary jurisdiction doctrine, a court may stay proceedings or dismiss a complaint without prejudice pending the resolution of an issue that falls within the special competence of an administrative agency.

“Everyone is talking about” whether the FDA seeking comment will convince courts to stay the cases under the primary jurisdiction doctrine. “My hope is, it will, and my thought is, it should,” said Giali, who represents food and beverage makers.

“Courts have stayed cases before pending potential FDA action and with this more formal announcement, the motions should have a good basis for a primary jurisdiction stay,” attorney David Biderman of Perkins Coie LLP in San Francisco, who also represents food and beverage makers, said Nov. 13 in an e-mail.

Evaporated Cane Juice

Recent examples exist of where the primary jurisdiction argument has worked well for the food industry in getting similar cases put on the legal back burner. In 2014, food companies successfully argued that suits challenging “evaporated cane juice” as a deceptive euphemism for “sugar” should be put on hold while FDA decides if ECJ is a permissible term.

All the pending ECJ cases have now been stayed, Giali said, following the FDA's 2014 announcement that it was reopening the comment period on a 2009 guidance about whether and when ECJ may be used as a word for sweetener (15 CLASS 232, 3/14/14).

The FDA said earlier this year it didn't expect to issue final guidance until 2016 (16 CLASS 801, 7/24/15).

Not So Fast

But attorneys representing consumers say the agency's action is merely the first step in a lengthy process, and not a reason for the litigation to grind to a halt.

“It’s about time FDA stepped up to the plate on this issue,” attorney Stephen Gardner, who heads the food law practice at the Stanley Law Group of Dallas, told Bloomberg BNA. But Gardner said, “it’s unlikely that we’d see any final definition for five years or more.”

Gardner said he would be surprised if defense counsel didn't move to stay based on primary jurisdiction, but suggested a court might not choose to wait that long.

“After all, the doctrine of primary jurisdiction is about pausing a case to give a regulator a chance to act, not blindly dismissing a case in hopes of FDA action in the probable-distant future. The doctrine is based on deference to regulatory agencies, not capitulation to ongoing deception with current economic harm, in hope of FDA action,” he said.

Gardner, formerly litigation director at the Center for Science in the Public Interest, also said the FDA's initial announcement doesn't necessarily indicate it's going to take definitive action, weakening the contention that courts should back off.

“[T]he FDA action isn’t to the level of an advanced notice of proposed rulemaking—it’s little more than some preliminary thoughts,” he said.

Tim Blood, another attorney representing plaintiffs in deceptive labeling cases, agreed the FDA's action isn't grounds to stop them.

It's unknown at this point whether the agency will actually define “all natural,” and if it does, whether it will be done in a context useful to either side in the false advertising litigation, Blood told Bloomberg BNA in a Nov. 13 e-mail.

‘Red Herring'

Blood, of Blood Hurst & O'Reardon LLP in San Diego, also said the issue of FDA rulemaking, even if FDA issues guidance on the meaning of “all natural,” is a “red herring.”

Any definition the agency comes up with “will only affect claims of ‘all natural' made after the FDA issues its rules. If it defined ‘all natural' (and we are still a long way from that possibility), it would not apply to advertising claims made before it issued those rules,” he said.

“That is, if the advertising is false or deceptive today, it will not be made truthful because FDA provides a definition in the future.”

Blood also said the FDA's rules apply only within the context of the agency's regulatory framework—the agency doesn't have the authority to define “all natural” for purposes of state false advertising laws.

“With few exceptions that are unlikely to arise, if something is false or deceptive, even if it technically complies with an FDA rule, it is still actionable under state false advertising laws,” he said.

Giali, the defense attorney, acknowledged that a request for input isn't rulemaking, “but once the FDA is engaged and on the job, it's an argument that courts should stand down,” he said.

‘Big Bonus'

The FDA's announcement, combined with a Ninth Circuit decision, Astiana v. Hain Celestial Grp. Inc., 783 F.3d 753 (9th Cir. 2015), provides a “big bonus” in support of primary jurisdiction arguments, Giali said.

In Astiana, the U.S. Court of Appeals for the Ninth Circuit said a district court correctly found the FDA had primary jurisdiction over the issues in a suit challenging “natural” cosmetics labels, even though the FDA hadn't started formal rulemaking proceedings.

“Without doubt, defining what is ‘natural' for cosmetics labeling is both an area within the FDA's expertise and a question not yet addressed by the agency,” the court said.

Plaintiffs' attorneys will argue that the deception cases shouldn't wait the length of time it will take to complete the rulemaking process, Giali acknowledged, echoing the comments by the plaintiffs' attorneys interviewed by Bloomberg BNA.

But the point should be that the question is in the FDA's area of expertise; it shouldn't matter how long the FDA is taking to decide, he said.

Another attorney who represents plaintiffs in food labeling cases cautioned defendants to be careful what they wish for.

“Some food companies that prevail on primary jurisdiction now may later end up wishing they hadn't,” Greg S. Weston of The Weston Firm in San Diego said.

Weston, referring to the large share of false advertising cases litigated in California, said in a Nov. 14 e-mail, “The FDA could rule against their prior practice in administrative proceedings, the cases against them would then be revived and stronger, and meanwhile California's high 7 percent prejudgment interest would continuously increase their potential liability.”

On the Downswing?

Some plaintiffs' attorneys suggested the pace of “natural” case filings is slowing anyway.

“I suspect that the lawsuits are on the decline, because the deceptive use of ‘natural' appears to be dropping considerably. Largely because these lawsuits have succeeded in letting companies know that they can’t count on FDA inaction allowing them to escape responsibility for violations of state consumer protection laws,” Gardner said.

Blood agreed.

“My general sense is that fewer all natural cases are being filed, which is what should be expected. The smart and ethical manufacturers have stopped labelling products as ‘all natural' if they are not really all-natural and most of the lawsuits that could be filed, have been,” he told Bloomberg BNA.

Turning Point

The FDA's recent announcement marks a turning point from the agency's long-standing position on “natural.”

In 1991, the FDA considered whether it should establish a definition for the word. But the agency opted in 1993 not to start formal rulemaking.

Instead, the agency said it would “maintain its current policy regarding the use of `natural,' as meaning that nothing artificial or synthetic (including all color additives regardless of source) has been added to a food that would not normally be expected to be in the food.”

In its call for comment, the agency noted that it had declined requests to define the term from several federal judges overseeing food labeling cases, most recently in 2014 in the context of foods containing ingredients derived from genetically modified organisms.

When it denied the judges' requests, the FDA said if it were to decide to define “natural,” it likely wouldn't do so in the context of private litigation, but would follow the public rulemaking process.

But the agency said in November it received petitions from both industry and consumer advocates—the Grocery Manufacturers' Association, Consumers Union, Sara Lee Corp. and The Sugar Association—prompting it to take another look.

The FDA seeks input on various issues, including whether it should prohibit the term “natural” entirely as Consumers Union wants; what types of food should be allowed to bear the term; and whether consumers associate “natural” with “healthy.”

The agency also said it's working with the Department of Agriculture to examine the use of the term in meat, poultry and egg products regulated by USDA.

The USDA's definition says, in part, that “natural” may be used on labeling if meat or poultry doesn't contain any artificial flavor or flavoring, coloring ingredient, chemical preservative or any other artificial or synthetic ingredient. The product and its ingredients also must not be more than minimally processed, the FDA said.

To contact the reporter on this story: jsteinberg@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com