Consumer class actions alleging deceptive labeling and advertising claims have become a significant—if not the most significant—risk food and supplement companies face. Where once claim enforcement concerns stemmed from government actors, now lawsuits brought by a cottage industry of private plaintiff attorneys, purportedly representing consumers who have been deceived by claims, has proliferated to unprecedented levels.
Many of these private suits follow a pattern and involve the same types of claims. Recently, claims that have not been widely targeted before are starting to get more attention. Nutrient-content claims are facing a growing number of challenges, which can be more vexing than other cases because few defenses are available for non-compliant claims, and settlements can be extortionate.
FDA has detailed regulations specifying how nutrition information is presented on food and supplement labels. The most obvious example is the Nutrition Facts and Supplement Facts panels, but the requirements go deeper. The regulations cover a surprisingly large number of claims about the nutritional content of the product. Certain terms are explicitly identified and have specific requirements for making the claim. For example, for a food product to claim it is “low calorie,” it must (1) have fewer than 40 calories per reference amount customarily consumed (RACC, and if the RACC is small—less than 30 g or 2 tablespoons—per 50 g as well), and (2) if this is not a result of special formulation or processing, disclose all foods of this type are low calorie (e.g., “celery, a low-calorie food”) (21 Code of Federal Regulation [CFR] 101.60(b)(2)). If the product makes a claim, and does not meet FDA’s definition or conditions, it is considered to be misbranded.
At first glance, if a product makes a non-compliant nutrient-content claim, it would seem as though this is only an FDA issue because they are FDA regulations, and only FDA can enforce its rules. Unfortunately, private plaintiffs have found ways to indirectly enforce FDA’s rules. Class action suits are generally premised on an argument that a reasonable consumer has been deceived by a claim—this is the case with claims such as “natural” and “no preservatives.” But other legal theories bypass this deception requirement, and in essence, they allow enforcement of FDA’s definitions and requirements without having to show a consumer was deceived.
Many states, including California, have enacted “mini” versions of the Federal Food, Drug and Cosmetic Act (FD&C) that incorporate FDA’s regulations; and courts have allowed private plaintiffs to pursue actions alleging “unlawful” conduct based on violations of state law as a basis for the claim, even if the true nature of the claim is compliance with FDA regulations.
Actions based on FDA’s nutrient-content claim requirements have increased; however, the full extent of this trend is hard to gauge as many of these suits never become publicly filed. In a typical situation, the class action attorney will send a private letter to a company, asserting a nutrient-content claim is not in compliance with FDA rules and disclose their intent to file a class action lawsuit unless a pre-litigation settlement is reached.
Whether a nutrient-content claim meets FDA’s requirements is usually a black-and-white issue. Some defenses are available for the unlawful conduct allegation overall, but these often cannot resolve a suit in its early stages. Even the initial stages of litigation can be costly, and many companies opt to privately and confidentially settle claims prior to a suit being publicly filed to avoid the time, expense and headache.
The good news is these types of suits are easily avoidable. Because the claims are premised on non-compliance with specific regulations, ensuring all nutrient-content claims meet these requirements can prevent even getting a demand letter in the first place. The regulations can be nuanced, complex and even conflicting. Often, what is an FDA-defined claim is not intuitive, and a label may unintentionally be making a claim. For example, if a product touts apples are a good source of vitamin C (which is true) and the product contains apples, there may be an implied claim the product overall is a “good source” (defined by FDA as 10 to 19 percent of the daily value) of vitamin C (which may not necessarily be the case). Another tricky situation is the regulations may require disclaimers, even for truthful statements. An example is a “no sugar added” claim—even if the claim is accurate, if the product overall is not “low calorie,” it must disclose that fact in immediate proximity to the claim. Review by a skilled compliance team can help sift through the technical FDA requirements and ensure labels are compliant before printing.
As the number of consumer class actions continues to grow, staying one-step-ahead is more important than ever. While cases challenging FDA nutrient-content claims are on the rise, a good compliance offense can stop these cases in their tracks.
Jennifer Adams, associate, Amin Talati Upadhye, focuses on defending companies in challenges from FDA, USDA, FTC, state attorney generals, advertising class action lawsuits and the National Advertising Division (NAD). She also counsels on developing and verifying advertising claim substantiation, as well as labeling and cGMPs (current good manufacturing practices) compliance. Adams additionally advises clients on GRAS (generally recognized as safe) and new dietary ingredients (NDI) requirements, California Proposition 65 compliance and disputes, facility inspections, form 483 observations, FDA warning letters, import and export of FDA regulated products, detentions, seizures, injunctions and import alerts.