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May 9 — “Made in the USA,” “100 percent” and “Healthy” representations on food and drink product labels are new red flags likely to trigger consumer class litigation, according to an industry defense attorney.
No federal law or regulation specifically defines or addresses “Made in the USA” claims, Justin Prochnow of Greenberg Traurig LLP in Denver said. These claims fall under general principles that they must be “truthful and not misleading,” Prochnow said.
The Federal Trade Commission has interpreted the phrase to mean not only that the product was assembled or manufactured in the U.S., but that the parts are also of domestic origin, he said.
The FTC has had little, if any, discussion about “Made in the USA” claims with respect to food, beverages and dietary supplements, Prochnow said.
But a recent onslaught of would-be class actions has been filed over these words in the past six to nine months, he said.
Prochnow said plaintiffs' attorneys are looking for products whose labels include the statement despite containing ingredients not grown in the U.S.
Energy drinks, for example, may contain guarana, he said. Guarana, a plant high in caffeine, is native to the Amazon basin.
Prochnow offered some suggestions for “qualified” U.S.-origin statements, to reduce the likelihood of suits or notice of potential suits challenging the terminology.
Companies may opt to describe a product as “Bottled in the USA,” or “Made in the USA with domestic and foreign ingredients,” he said.
Prochnow cautioned that general words like “produced,”“created” or “manufactured” could still be taken to mean “Made in the USA.”
And any “100 percent” representations are at risk for drawing class complaints, he said.
Companies must be aware of consumers' perception before labeling a product as being “100 percent” something, he said. The statement is evaluated as to what a typical person would think, not just what the company's intention was.
Any 100 percent claim must evaluate what the “100 percent” refers to, Prochnow said.
He cited recent suits challenging “100 percent parmesan” labels on cheese products found to include an anti-clumping agent that contains wood pulp (17 CLASS 220, 3/11/16).
Does the label mean that all the cheese in the product is parmesan, or that the product is all parmesan cheese?
“Be careful, it better be 100 percent,” he cautioned.
The Judicial Panel on Multidistrict Litigation is set to consider later in May whether to combine the numerous cheese suits against food makers and retailers.
Similarly, products touted as “100 percent natural” or “all natural” continue to result in claims.
Prochnow suggested that a phrase like “Sourced from Natural Ingredients” on the label “may leave less room for a plaintiffs' attorney.”
The Food and Drug Administration in 2015 asked for public input on use of the term “natural” in food labeling (16 CLASS 1305, 11/27/15).
Also, the word “Healthy” on a label has given rise to new consumer litigation, he said.
The FDA monitors use of that word, and consumer litigation typically follows warning letters from the agency, he said.
Prochnow noted that the FDA issued a warning letter to Kind LLC in March 2015 saying some of its bars had too much fat to be called “healthy” under FDA regulations .
About a dozen would-be consumer class suits came after the warning letter (16 CLASS 665, 6/12/15).
The FDA issued a closure letter to Kind April 20, 2016, saying the company “satisfactorily addressed the violations contained in the Warning Letter.”
Prochnow spoke at the Food and Drug Law Institute's annual conference in Washington May 5.
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