Monday, February 09, 2009

Truthful Statements Cannot Always Cure a False or Misleading One

In Williams v. Gerber, the Ninth Circuit recently reinstated a law suit against Gerber that alleged labeling on “fruit juice snacks” constituted misrepresentation and breach of warranty under California law. Gerber’s “Graduates for Toddlers Fruit Juice Snacks,” juxtaposed the product name with images of fruit (such as oranges, peaches, strawberries, and cherries) on the front of the package. However, the product contained none of those fruit juices, but only white grape juice from concentrate.

The product also stated that the Fruit Juice Snacks were made with “fruit juice and other all natural ingredients.” The court found that a reasonable consumer could interpret that to mean that all the ingredients were natural, which appeared to be false. The court also found that the label “claim that Snacks is ‘just one of a variety of nutritious Gerber Graduates foods and juices that have been specifically designed to help toddlers grow up strong and healthy’ adds to the potential deception.”

An important part of the defense in this case was that the product offered a full ingredient listing on the side panel, which cured any potentially misleading representations on the package। In abstract, this may seem reasonable. But here are the ingredients: “corn syrup, sugar, white grape juice from concentrate, contains less than 2% of the following: carrageenan, ascorbic acid (vitamin C), corn starch, natural flavors, citric acid, hydrogenated coconut oil, carnauba wax, red cabbage extract color, paprika color, beeswax, annatto color and elderberry juice concentrate color.” What do you think? Are these “Fruit Juice Snacks” or Fruit-flavored Candy”?

Basically, the court held that reasonable consumers should not be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box:

We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception. Instead, reasonable consumers expect that the ingredient list contains more detailed information about the product that confirms other representations on the packaging.

This decision follows the line of the classic “lollipop” case, “However, even though the actual ingredients are stated on the outside of a carton, false or misleading statements inside the carton may lead to the conclusion that the labeling is misleading, since a true statement will not necessarily cure or neutralize a false one contained in the label.” United States v. 432 Cartons Individually Wrapped Candy Lollipops, 292 F. Supp. 839 (1968). (Shameless plug: In chapter three of my book, Food Regulation: Law, Science, Policy, and Practice.)

Ken Odza in Food Liability Law Blog, When Is Labeling Misleading and Actionable Under State Law? Is There Any Clearly Understood Standard? found the Williams decision troubling:

As a practical matter, the only way manufacturers can mitigate against these types of putative class actions is to involve lawyers directly in the marketing and labeling process. Under the world imagined in the Williams case, legal training seems to be a prerequisite to understanding which labels may give rise to litigation and which may not.

Good advice, Ken, because lawyers should be on the product development team early on—before the marketing gurus get too far out. Labeling can be simple, but it can also enter some tangled swamps. The marketing people need to know when they are entering a swamp and seek a competent guide.

Frankly, I don’t have much sympathy for those who wring their hands over the expense of hiring an experienced guide for the swamp. If you cannot bear the expense, it is simple to stay out of the swamp. The Williams court quoted another classic labeling law case, “It is not difficult to choose statements, designs, and devices which will not deceive.” United States v. Ninety-Five Barrels More or Less of Alleged Apple Cider Vinegar, 265 U.S. 438, 443 (1924). (Also in chapter three of my book, Food Regulation: Law, Science, Policy, and Practice.)

Gerber also offered compliance with FDA’s requirements as a defense. Surprisingly, the district court bought into this, noting that it believed that “the FDA authorizes the way in which Gerber labels snacks.” The lower court should have known better. Food Law 101: FDA does not authorize or approve labels.

This is one of the inherent tradeoffs involved in the policy decision regarding pre-market approval. If you want federal pre-emption of states, you have to be willing to grant more authority to the federal government. You can’t have your fruit juice snacks and eat them too.

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