Last week, in a substantial win for the dietary supplement industry, the Ninth Circuit Court of Appeals upheld the Northern District of California’s grant of summary judgment to Target, ruling that state law false advertising challenges to permissible structure/function claims are preempted by the Federal Food, Drug and Cosmetic Act (“FDCA”).

Plaintiff Todd Greenberg alleged that he bought a bottle of Up & Up Biotin, a private label vitamin sold by Target, as part of his battle with hair loss.  Up & Up Biotin’s label states that biotin “helps support healthy hair and skin.”  The label also states that  “[t]his statement has not been evaluated by the Food and Drug Administration.  This product is not intended to diagnose, treat, cure, or prevent any disease.” Greenberg conceded that biotin is a nutrient that supports healthy hair and skin, but nevertheless claimed the label was misleading because most people obtain all the biotin they need from their diet, rendering the vitamin superfluous to all but a tiny percentage of people who have a biotin deficiency.

Under the FDCA, dietary supplement labels are required to be truthful and not misleading.  The statute also authorizes certain categories of statements, including structure/function claims, provided they are adequately substantiated. As a general matter, structure/function claims “describe the role of a nutrient or dietary ingredient intended to affect the structure or function in humans or that characterizes the documented mechanism by which a nutrient or dietary ingredient acts to maintain such structure or function[.]”  21 C.F.R. § 101.93(f).  Statements suggesting an ingredient’s ability to “strengthen,” “improve,” or “protect” a structure or function in the human body are structure/function claims so long as they do not suggest disease prevention or treatment.  The FDCA was intended to establish a national and uniform labeling standard for dietary supplements, expressly preempting any state law labeling requirement “that is not identical to” the labeling requirements in the FDCA.

The Ninth Circuit affirmed the District Court’s ruling that Up & Up Biotin’s label satisfied all of the statutory requirements for a structure/function claim under the FDCA, namely that: (1) there was substantiation for the claim, (2) the label included the proper disclosures, and (3) the label did not suggest the product could treat diseases.  More specifically, and in contrast to a disease claim, the FDCA “only requires substantiation for the ingredient’s function on the human body, not the health impact of the product as a whole.”  In other words, “manufacturers may make structure/function claims about a nutrient’s general role on the human body without disclosing whether the product will provide a health benefits to each consumer.”

Accordingly, the Court found that the plaintiff’s state law false advertising claims “essentially s[ought] to impose an additional requirement that dietary supplement labels can make structure/function claims only if consumers are likely to benefit from the product.”  Because this requirement “is not identical to” the labeling requirements in the FDCA, the claims were preempted.

Dietary supplement companies are often targeted by class action plaintiffs asserting various theories about how carefully-drafted label claims are nevertheless deceptive to the proverbial “reasonable consumer.”  This decision brings a new level of comfort to the industry that if a structure/function claims complies with the FDCA, it is less likely to be challenged (at least in the Ninth Circuit).

This month’s update kicks off spring with a Best in Show throwback ad comparing dog flea and tick medication, pivots to claims for survivalist ready-to-eat meals (don’t even try to act like you saw that coming), highlights FDA’s recently-issued voluntary recall guidance, provides a food court update on the latest ingredient class actions and cleans up with a pet food win in the Tenth Circuit on “fresh” and “regional” claims.  Call it March madness because there’s a lot going on. Let’s get started…

NAD

Best in Show NAD evaluated whether flea and tick medications were fairly compared via a television advertisement reminiscent of the beloved film Best in Show.  The challenged ad featured a comparison of NexGard and Bravecto in a dog show setting.  The host announces: “Welcome. It’s time to see which chew is best in show for long-lasting flea and tick protection.”  As shown below, a disclosure appears on the bottom the screen stating “BRAVECTO Chews for Dogs kills fleas, prevents flea infestations, and kills ticks (black-legged tick, American dog tick, and brown dog tick) for 12 weeks. BRAVECTO Chews also kills lone star ticks for 8 weeks. NexGard is approved for 30 days.”  By week 12, the host declares Bravecto the “clear winner”.

NAD determined that, viewing the commercial in its entirety, the commercial blends duration of action claims with a comparative superiority message and that one reasonable interpretation of  the commercial is that Bravecto is superior to NexGard in protecting dogs from flea infestations. Further, NAD determined that the presentation and plain language of the disclosure were inadequate to explain that dosing intervals were the basis for the product comparison, not overall efficacy.  NAD recommended discontinuing the advertisement.  Merck is appealing to the NARB.  For more on this “apples to oranges” comparison and, better yet, a picture of cute dogs, check out Gonzalo Mon’s blog post and podcast episode here.

Not #1 NAD reviewed baby wipes testing to determine whether Water Wipes could substantiate claims that its wipes were the “#1 wipe against the causes of diaper rash” and a similar “clinically proven” claim.  As support for its claims, the advertiser relied on the results of its “Baby Skin Integrity Comparison Survey” (BaSICS Study), involving home use tests of three baby wipe brands on infants from birth to eight weeks old.  NAD identified several concerns about the design of the BaSICS Study, including:

  • The study universe was too narrow to support the broad #1 claims;
  • The study’s failure to attempt to control for the use of skin creams and lotions to treat infants with diaper rash, which could significantly impact the role of the wipes in preventing diaper rash; and
  • The study did not attempt to blind the branding and marketing on the packaging itself, which could have biased the survey participants’ responses.

Based on this, NAD found that the “#1” and “clinically proven” claims were unsubstantiated.

Delivering Social Justice?  NAD initiated a challenge against app-based delivery service DoorDash relating to the following claim: “We are donating $1 million, with $500,000 going to Black Lives Matter and $500,000 to create a fund to be directed by the Black@DoorDash  ERG  (Employee  Resource  Group)  towards  state  and  local organizations.”  In response to the inquiry, DoorDash provided documentation that substantiated donations exceeding $1 Million to various state and local organizations pursuant to its Black@DoorDash ERG.  NAD determined that the documentation adequately substantiated the claim.

These kinds of campaigns, frequently called commercial co-ventures, are subject to various state registration and bonding requirements in addition to advertising laws.  For more resources on these campaigns, check out our commercial co-ventures resources.

Sign of the Times And finally, if your tastes tend more toward preparing for the end of days, check out NAD’s decision regarding advertising for survival food kits. In a challenge that explores a range of advertising issues, one among them is whether the name of the meal kit – “3-Month Survival Food Kit” or “1-Year Survival Food Kit” conveys any messages about serving size, caloric content, or adverse effects of consuming the food for the stated period.  NAD determined that no implied claims were conveyed by the names alone but suggested that the advertiser modify disclosures regarding the number of calories offered in each kit to ensure that they are clear and conspicuous.

This decision stands in contrast to FTC’s Dietary Supplements: An Advertising Guide for Industry, which explains that product names can convey claims.  See the Identifying Express and Implied Claims section here.

 

FDA + USDA

Updated Voluntary Recalls Guidance FDA published Initiation of Voluntary Recalls under 21 CFR Part 7, Subpart C, which is an update to draft guidance issued in April 2019.  The guidance describes steps that all FDA-regulated firms should take to prepare for recalls, including identifying appropriate personnel and training them on their responsibilities, identifying reporting requirements, use of adequate coding, and maintaining records.  In addition, the guidance discusses procedures relating to initiating and executing a recall and how FDA works with recalling firms.  Comments may be submitted here.

PFAS  FDA issued new test results regarding PFAS levels in a range of foods and shared an update on the voluntary market phase-out of certain short-chain PFAS used in food packaging.  From the agency’s summary: Results from the FDA’s most recent survey of the general food supply show that 89 of 92 food samples had no detectable levels of PFAS. Three seafood samples—tilapia, cod, and shrimp—had detectable levels of PFAS. The food samples analyzed were collected for the FY2021 regional collection of the Total Diet Study (TDS) and are the fifth set of general food supply testing done by the FDA. To date, there have been 10 samples with detectable PFAS out of 532 TDS samples the FDA has tested since 2019. Based on the best available current science, the FDA has no scientific evidence that the levels of PFAS found in the TDS samples tested to date indicate a need to avoid any particular food.

  • Alleged presence of PFAS in non-food products is being used as the basis for false advertising lawsuits involving a range of cosmetics and even underwear.  Check out this link for a few recent examples.   Companies seeking to evaluate risk around PFAS should look carefully at ingredients and warning language to determine whether disclosures are adequate.
  • On a related note, our friends at Kelley Green Law Blog wrote about EPA’s recent release of PFAS data and plans to eliminate a de minimis exemption for PFAS here.
  • In addition, Washington state is considering legislation to ban PFAS and other chemicals from cosmetics and personal care products.  SB 5703, the Toxic-Free Cosmetics Act, would ban PFAS, phthalates, and formaldehyde, among other chemicals.  If enacted, the new law would become effective in 2025.

Tech Talk  As part of FDA’s New Era of Smarter Food Safety initiatives, on March 21, the agency will air the third episode in a quarterly podcast series which focuses on the development and use of new technologies to accelerate prevention of food safety problems and speed responses to foodborne-illness outbreaks.

Climate Smarts USDA announced details of the Partnerships for Climate-Smart Commodities opportunity on February 7, 2022. Through this new program, USDA will finance partnerships to support the production and marketing of climate-smart commodities via a set of pilot projects lasting one to five years. Pilots will provide technical and financial assistance to producers who implement climate-smart practices on a voluntary basis on working lands; pilot innovative and cost-effective methods for quantification, monitoring, reporting and verification of greenhouse gas benefits; and market the resulting climate-smart commodities.

  • As we wrote about last month, climate-beneficial claims are getting an are likely to continue to get a significant amount of attention from consumers, regulators, and the plaintiffs’ bar.

FTC + State AGs

Looking to Make Money?  Whether it’s food or package delivery, sale of cosmetics or dietary supplements, or another interest-earning venture, the FTC is concerned about potentially deceptive earnings claims.  To that end, the FTC released an Advanced Notice of Proposed Rulemaking (ANPR) on earnings claims as it embarked on a mission to adopt a rule that would give the FTC, in its own words, “an important new tool to return money to consumers injured by deceptive income claims, and to hold bad actors accountable with civil penalties.”  Importantly, the ANPR also suggests that the rule could do more than just change the FTC’s enforcement tools and also seek to substantively change the standard that has long been applied in analyzing earnings and lifestyle claims.  Interested parties will have 60 days from publication in the Federal Register to submit comments and respond to the FTC’s questions and requests for evidence.  Check out the full blog post and podcast from Donnelly McDowell and John Villafranco to learn more about past enforcement and where the agency is headed.

But Are You Who You Say You Are? The State AG’s joined the FTC in expressing concern about impersonation scams such as deceptive mail solicitations and phone calls that appear to come from government agencies.  Our State AG team analyzes the multi-state efforts and what’s likely to happen here.

Class Action Update

The courts served up a bit of a mixed bag in February, deciding a number of dispositive motions in the voluminous “ingredient” class action docket.

Starting with the dismissals:  A New York federal court dismissed a lawsuit alleging that Mars falsely advertised its vanilla ice cream bars as having “milk chocolate” coating when, in fact, the coating contained vegetable oils.  The court ruled it was “nothing more than a conclusory leap” to allege that reasonable consumers read statements about milk chocolate “to implicitly mean that the product necessary contains no vegetable oils.”  Additionally, two different judges in the Northern District of California dismissed cases filed against Kind, LLC and Kashi Co., alleging that various food products were miscalculating the products’ protein content in the Nutrition Facts panel.  Applicable FDA regulations only require identification of the raw of number of grams of protein in a food product, and allow that calculation to be made using what is known as the “nitrogen” method.  If a label makes a protein nutrient claim on the front of the package, however, the Nutrition Facts panel must also include a “% Daily Value” calculated using a different method, the Protein Digestibility Corrected Amino Acid Score (“PDCAAS”).  The plaintiffs in both of these cases argued that if a protein nutrient claim is on the label, then both the raw protein content and the % Daily Value must be calculated using the PDCAAS method. The court disagreed, finding that such claims are preempted by the FDCA because they would impose labeling requirements that go beyond what the FDA regulations require.

Some courts took a different approach, denying motions to dismiss in several “ingredient” cases and sending them into discovery.  For example, an Illinois court sustained a complaint alleging that a product labeled “smoked almonds” suggested that the nuts were actually roasted over an open fire, particularly because the product’s red packaging was “evocative of fire.” And in California, a judge allowed a “vanilla” yogurt class action to proceed despite three prior dismissals.  The court previously ruled that dismissal of the California Unfair Competition Law (“UCL”) claim was appropriate because no reasonable consumer would conclude that the yogurt’s vanilla flavor was derived only from natural sources and therefore the plaintiff had failed to plausibly allege reliance as required by the UCL.  The amended complaint, however, contained allegations that the yogurt violated various FDA regulations, which are incorporated into California state law through the state Sherman Food, Drug, and Cosmetic Law.  Since the Sherman Act does not require reliance as measured by a reasonable consumer, nor should the plaintiffs’ UCL claim.

And some new filings:  We saw a number of new food class action filings following the same trends we have been seeing in recent months including: (1) challenges to the use of “natural flavoring” in Poland’s sparkling water (N.D. Illinois); (2) alleged misrepresentation of cacao content in various Mondelez’s dark chocolate products; and (3) allegations relating to the amount of whole grains used in The Cheesecake’s Factory’s “brown bread” (N.D. Illinois).  Infant formula and baby food products were also a target in February, with new actions filed against Abbott Laboratories alleging that various Similac infant formulas are causing infants to develop bacterial infections and gastrointestinal illness (N.D. Illinois and S.D. Florida), against CVS for allegedly misleading label similarities between its infant and toddler formula products (N.D. Illinois), and against Sprout Foods for suggesting its baby food products are healthier than its competitors’ products (N.D. California).

In the personal care, supplement, and drug space, new filings included:  (1) multiple actions challenging “non-drowsy” claims for over-the-counter cough and flu medicine (C.D. California, S.D.N.Y., M.D. Florida, N.D. Illinois, and E.D. Michigan); and (2) a number of efficacy challenges including to claims that E.T. Browne Drug Co.’s “Tummy Butter” drastically reduces the appearance of stretch marks (Illinois state court) and Mommy’s Bliss’s gripe water reduces symptoms of colic in newborns (N.D. California).

Finally, the Tenth Circuit affirmed the dismissal of various challenges to pet food marketing claims in Renfro v. Champion Petfoods USA, Inc.  Specifically, the court ruled that “Fresh” and “Regional” claims were subjective, and that the plaintiffs’ suggested meaning—that all ingredients were “fresh”—were belied by the rest of the products’ packaging.  The court also found that Champion’s “Trusted Everywhere” claims were inactionable puffery.  Finally, the court disagreed with the plaintiffs’ allegations relating to Champion’s “Biologically Appropriate” claims, finding that no reasonable consumer would interpret the claim to mean that the dog food mirrored the “richness, freshness, and variety” of a dog’s natural prey, and was “protein rich and carbohydrate limited.”

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Stay tuned for our next monthly update and, in the meantime, check out www.adlawaccess.com for regularly-posted content on all things advertising, privacy, and consumer protection.

The Pink Tax: A Litigation and Legislation UpdateWe previously reported on an emerging legislative and litigation trend relating to the “pink tax” – a gender-based pricing phenomenon that allegedly results in higher prices for goods and services marketed towards women as compared to substantially similar alternatives marketed towards men.  As predicted, the last two years have shown an uptick in litigation (which has been largely unsuccessful) and legislative action (some finalized and some pending).

Litigation

Last year, we discussed an early blow to the pink tax theory of liability in Schulte v. Conopco, d/b/a Unilever, et al.  In Schulte, the plaintiffs alleged that various personal care manufacturers and retailers violated the Missouri Merchandizing Practices Act (MMPA) by charging more for deodorants marketed for women than allegedly similar deodorants marketed for men.  The product lines at issue contained similar, but not identical, ingredients, came in different sizes, and were available in different scents (fifteen “feminine” scents in the line marketed for women and five “masculine” scents in the line marketed for men).  The Eastern District of Missouri dismissed the complaint, ruling that “Missouri law does not compel identical products to be sold at the same price” and that the plaintiff’s remedy “lies with legislation, not litigation.”  The Eighth Circuit affirmed on the grounds that the plaintiff mistook “gender-based marketing for gender discrimination.”  In order to state a claim, the court ruled that the plaintiff would have to allege that the only difference between the products was the price and the intended target of the marketing.  Here, because the plaintiff conceded that the products were, in fact, different, thus dismissal was appropriate. Continue Reading The Pink Tax: A Litigation and Legislation Update

Welcome to our monthly digest of litigation and regulatory highlights impacting the food and beverage industry.  As it has been for many months, the story was mostly about what’s going on in the food court.  Let’s take a look….

Litigation

Vanilla, vanilla, and more vanilla….The plaintiff’s bar remains skeptical of any product labeled as vanilla.  Among the many vanilla-related lawsuits filed, McDonald’s, Whole Foods and Trader Joe’s defended suits alleging that their vanilla ice cream, vanilla almond milk, and vanilla almond cereal respectively were falsely labeled as vanilla.  However, in a win for industry, a NY federal judge found that Topco did not improperly label its vanilla almond milk, ruling that although the product is not exclusively flavored with real vanilla, the suit failed to allege that a reasonable consumer would believe that a vanilla milk’s flavor was solely sourced from vanilla.

Other flavorings haven’t been immune from scrutiny, though.  Frito-Lay appears to have settled a case involving allegations that the company’s cheddar and sour cream chips are misleadingly labeled.  The plaintiff alleged that the images of cheddar cheese and sour cream on the front of Ruffles-brand and Baked Lays Cheddar + Sour Cream Flavor potato chips, reasonable buyers would think that those ingredients flavor the chips.  In fact, plantiff claimed that Frito Lay used synthetic diacetyl to provide the sour cream flavor in the chips, but did not disclose the artificial flavor on the front of the packaging, as required per the FDCA regulations.

Consumers were also dismayed to find out that 7-Eleven’s Yumions may not, in fact, be made from real onions and, separately, that the Keebler elves allegedly may not be making their cookies with “real fudge”.

The lesson from these cases and others is that flavor and ingredient-related representations continue to face considerable scrutiny.  If businesses are updating labels or branding for the new year, it’s worth the time to review flavor descriptions and consider the arguments that these plaintiffs are asserting to help understand and assess risk.

(links from Law360, subscription req’d.)

FDA

FDA warning letters focused on claims that cause products to be considered unapproved new drugs, including claims featured on an aloe product relating to joint mobility, inflammation, and acid reflux.  In other enforcement, a Washington-state federal judge entered a consent decree against a juice processor accused of distributing adulterated juice products.

FDA published findings of its leafy greens e. coli outbreak investigation, identifying cattle grazing upslope from the growing area as the likely source of contamination.

In a recall turned class action litigation story, Midwestern Pet Foods, Inc., initiated a recall of multiple pet foods on December 30, related to the presence of aflatoxin.  Consumers whose pets perished after consuming the food recently filed suit alleging that the foods caused their pets’ deaths.

Undeclared allergens and potential presence of listeria monocytogenes and other contaminants were the most common reasons for food recall listed in FDA’s recall database.

Prop 65

Our sister blog, Kelley Green Law, featured two Prop 65 developments that may impact certain products, including Prop 65 warnings required on products that may expose consumers to THC and a proposal to minimize use of the short form warning format.  Also, although not directly in the personal care space, given the proliferation of many products that feature disinfectant claims, companies may want to note this post regarding EPA enforcement on unregistered disinfectants.

FTC

The FTC did not announce any food-specific settlements or litigation in January 2021.

NAD

NAD did not issue any food-specific decisions in January 2021, but see select dietary supplement highlights here.

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Thanks for reading our first installation of the food industry litigation and regulatory highlights.  See you in March!

Ad Law News and Views Newsletter - https://www.kelleydrye.com/News-Events/Publications/Newsletters/Ad-Law-News-and-Views

Subscribe to our Ad Law News and Views where we compile the recent advertising and privacy law news and analysis all in one place, including new State Privacy Legislation Update.

 

Welcome to our monthly roundup of regulatory and litigation highlights impacting the dietary supplement and personal care products industries.

NAD

NAD tackled substantiation for “#1 Dermatologist Recommended” claims in a challenge involving L’Oreal’s CeraVe moisturizer and use of syndicated survey data to support related claims.

Health claim substantiation was front and center in a Council for Responsible Nutrition-led challenge involving glutathione and the level of evidence required to support claims relating to low-glutathione levels.

FTC

Indirectly related to dietary supplements and consumer care, the FTC announced a settlement with app-maker Flo regarding allegations that the company shared the health information of users with outside data analytics providers after promising that such information would be kept private.

As we noted here, the FTC has new civil penalty authority relative to false COVID-related advertising claims and practices.

FDA

As it has since relaxing the regulatory standards relative to manufacturing of hand sanitizers in March 2020, FDA continued issuing warning letters related to hand sanitizer products that contain active ingredients other than those allowed per the hand sanitizer tentative final monograph, primarily methanol, and relative to hand sanitizers that are allegedly sub-potent.

The agency also continued its enforcement relative to COVID-related claims with warning letters issued to AusarHerbs and Allimax US (joint warning letter with the FTC), as well as non-COVID-related letters to companies whose products featured claims relating to joint health, hair loss, and inflammation, which caused the products to be considered unapproved new drugs.  The letters rely heavily on evidence from social media posts, blog posts, and product websites.

Prop 65

Our sister blog, Kelley Green Law, featured two Prop 65 developments that may impact certain products, including Prop 65 warnings required on products that may expose consumers to THC and a proposal to minimize use of the short form warning format.  Also, although not directly in the personal care space, given the proliferation of many products that feature disinfectant claims, companies may want to note this post regarding EPA enforcement on unregistered disinfectants.

Class Action Litigation

In a significant win for the dietary supplement industry, the Ninth Circuit Court of Appeals upheld the Northern District of California’s grant of summary judgment to Target Corp., ruling that state law false advertising challenges to permissible structure/function claims are preempted by the Federal Food, Drug and Cosmetic Act.  See our blog post discussing the case here.

Other highlights from courtrooms around the country include…

Southern California skincare company Yes To Inc. agreed to pay $775,000 to a proposed class of consumers to resolve allegations it misrepresented the dangers of its Grapefruit Vitamin C Glow-Boosting Unicorn Paper Mask, which was recalled after a flood of consumers reported facial skin irritation and burning. (Law360 subs. req’d.)

A California federal judge has thrown out for the last time a proposed class action alleging that Johnson & Johnson Consumer Inc. and Bausch Health US LLC misled customers about the safety of their talc products, saying even after five chances to amend the complaint, the pleadings still fall short.  (Law360 subs. req’d.)

Skincare company Murad LLC was hit with a proposed class action claiming the company deceived buyers by wrongly representing its moisturizer as “oil-free” when the product actually contains oils.  (Law360 subs. req’d.)

A woman suing Charlotte’s Web Holdings Inc. argued that the CBD company shouldn’t be able to pause or escape her proposed class action over its labeling of products as dietary supplements, saying that identifying them as such violates state and federal laws. (Law360 subs. req’d.)  There are several cases involving this issue.  See a recent post on this issue on Cannabis Law Update.

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Thanks for reading our first installation of the dietary supplement and personal care monthly highlights.  See you in March!

Advertising and Privacy Law Resource Center

In a victory for cosmetics companies everywhere, the Second Circuit has affirmed the dismissal of slack fill allegations claiming that L’Oréal’s pump dispense mechanism for serums, lotions, and liquid makeup prevents consumers from utilizing every drop of product.

Last August, we reported on the Southern District of New York’s decision granting L’Oréal’s motion to dismiss a putative class action alleging that a common pump dispense mechanism used on L’Oréal’s cosmetics bottles deceptively prevented consumers from accessing the entirety of the product.  Judge Koetl disagreed, finding that consumers are familiar with pump dispensers on cosmetics packaging, and that the plaintiffs’ alleged “disappointment” did not “establish deception” or “transform [L’Oréal’s] accurate labeling of the product’s net weight into fraud by omission.”  Judge Koetl also found that the plaintiffs’ claims were preempted by the Federal Food, Drug and Cosmetics Act (“FDCA”).  Because federal law requires L’Oréal to label its cosmetics products with the net quantity of the product, irrespective of the amount that is accessible through the pump, Judge Koetl found that the plaintiffs’ claims were preempted.

The Second Circuit agreed.  Because the plaintiffs conceded that L’Oréal’s packaging complied with the FDCA with respect to the net-quantity of the product, the court found that, in order to avoid liability under the plaintiff’s theory, L’Oréal would have to “make an additional disclosure on its packaging, indicating that some cream cannot be retrieved or that the cream that is accessible is less than the net quantity displayed on the package label.”  (emphasis added).  Because such a theory would “impose labeling requirements on top of those already mandated in the FDCA,” the claims were preempted.

The Second Circuit did not reach the “reasonable consumer” grounds for the District Court’s decision, and we expect that the plaintiffs’ bar will continue to try to plead around FDCA preemption in slack fill cases.  But this decision will severely hinder their ability to do so—at least in the Second Circuit—and plaintiffs may start looking elsewhere to pursue these allegations.

Advertising and Privacy Law Resource Center - Another Slack Fill Preemption Win for the Cosmetics Industry (Jaclyn Metzinger)

Despite the lack of a private right of action to enforce the U.S. Federal Food, Drug and Cosmetics Act (“FDCA”), the plaintiffs’ bar continually tries to use the FDCA to support other causes of action, and more often than not class actions, challenging the marketing or labeling of cosmetics.  A recent decision by the Southern District of California, where many of these cases are filed, will hopefully deter this practice.  See Franz v. Beiersdorf Inc. et al., Case No. 3:14-cv-02241, (S.D. Cal. Apr. 15, 2020).

The FDCA defines cosmetics as “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body… for cleansing, beautifying, promoting attractiveness, or altering the appearance.”  Drugs, by contrast, are articles “intended to affect the structure or any function of the body of man.”  While a seller must seek approval from the FDA before selling a drug, there is no pre-approval requirement for cosmetics, and Congress gave FDA the sole authority to police violations of the FDCA.

The original complaint in Franz, filed in 2014, alleged that Beiersdorf’s Nivea Skin Firming Hydration Body Lotion (the “Lotion”) claimed on its label that it provided skin firming hydration, improved skin’s firmness in as little as two weeks, and was proven to firm and tighten skin’s surfaces in as little as two weeks.  According to the plaintiff, because the Lotion was marketed to affect the structure or function of the skin, it was a drug (not a cosmetic), and should have gone through FDA’s pre-approval process.

After an amended complaint and two motions to dismiss, as well as an appeal to the Ninth Circuit, the Defendant filed a third motion to dismiss, arguing that the complaint failed to state a claim that the Lotion was, in fact, a drug.  The Court denied the motion.  Beiersdorf then filed a motion for summary judgment arguing that the plaintiff was preempted by the FDCA from privately enforcing the federal pre-market approval process for drugs and, in the alternative, asked the court to find that the Lotion was a cosmetic as a matter of law.

The Court granted Beiersdorf’s motion, explaining that claims seeking to enforce the FDCA must thread a “narrow gap” to escape preemption – the plaintiff must be suing for conduct that violates the FDCA, but not because the conduct violates the FDCA.  The plaintiff failed to meet this standard because she repeatedly referenced provisions of the FDCA and specifically alleged that “Defendant engaged in illegal conduct by unlawfully making skin firming representations about [the Lotion] that resulted in its being deemed a drug under FDA regulations, but did so without obtaining required FDA approval through the FDA NDA [New Drug Approval] process.”  Because there was “no reasonable way to construe this allegation except as an attempt to privately enforce the FDCA,” the claim was preempted.

Interestingly, the Court noted that because the relevant facts were not in dispute and because the motion largely turned on a question of law, a motion to dismiss would have been the better procedural vehicle for resolving the issue.  Cosmetics companies should always consider whether they have valid preemption arguments at the motion to dismiss stage.  This decision (from one of the more plaintiff-friendly jurisdictions in the country no less) is hopefully another tool to resolve costly class actions litigation at an early stage.

The decision was appealed to the 9th circuit on May 18, 2020.

Imagine you are perusing the coffee aisle in the grocery store and see a product described as “freshly ground,” “100% Arabica Coffee,” “Hazelnut Crème,” “Medium Bodied,” and “Rich, Nutty Flavor.”  Would you think that the coffee contains hazelnuts?  Should consumers be expected to consult the ingredient list to clarify any confusion?  And what exactly is “Hazelnut Crème?”

The First Circuit addressed these issues in Dumont v. Reily Foods Co., in which a split panel concluded that a reasonable consumer could be deceived into thinking that the product contained hazelnuts when, in actuality, it contained only naturally and artificially flavored coffee.  The court reversed the District of Massachusetts’ dismissal of the plaintiff’s Massachusetts General Law Chapter 93A claim, and permitted the case to proceed into discovery.

Judge William J. Kayatta Jr., writing for the majority, explained that while some reasonable consumers might be motivated to consult the ingredient label on the reverse side of the package, others might “find in the product name sufficient assurance so as to see no need to search the fine print on the back of the package, much like one might easily buy a hazelnut cake without studying the ingredients list to confirm that the cake actually contains some hazelnut.”  As support for this, Judge Kayatta noted that the plaintiff’s complaint set forth that the industry practice—in large part due to federal labeling requirements—is to state on the front of a package containing a product that is nut flavored (but that contains no nuts) that the product is naturally or artificially flavored.

The majority also found ambiguity in the phrase “Hazelnut Crème,” with one judge believing that “‘crème’ was a fancy word for cream, with Hazelnut Crème being akin, for example, to hazelnut butter.”

Finally, the majority held that the plaintiff’s state-law consumer fraud claim was not preempted by the Federal Food, Drug, and Cosmetic Act (“FDCA”), which imposes specific labeling requirements for the coffee product at issue.  The court ruled that such a claim must fit within a “narrow gap” to avoid preemption:  the plaintiff must be suing for conduct that actually violates the FDCA (otherwise the claim would be expressly preempted by the FDCA), but the plaintiff must not be suing because the conduct violates the FDCA (which would be implicitly preempted).  Because the complaint sought “to vindicate the separate and independent right to be free from deceptive and unfair conduct” separate and apart from any alleged FDCA violations, the chapter 93A claim was not preempted.

Former Chief Judge Sandra L. Lynch dissented, reasoning that the package as a whole undermined any reasonable belief that the coffee actually contained hazelnuts:  “the front label plainly states that the package contains ‘100% Arabica Coffee.’  It does not say it contains anything other than coffee.  The package here did not contain any misstatement of its contents, did not feature any pictures or illustrations of hazelnuts, and did not have any error in the ingredient list.”

Judge Lynch then addressed the phrase “Hazelnut Crème,” differentiating between the definition of cream—the oily or butyraceous part of milk—and that of crème—a “‘cream or cream sauce as used in cookery’ or ‘a sweet liqueur.’”  In her opinion, “[i]n the context of a package of ground, dry coffee, . . . the two words, ‘Hazelnut Crème,’ together plainly state the flavoring of the coffee.”  Judge Lynch similarly rejected the majority’s analogy to a hazelnut cake which, presumably, contains multiple ingredients and could very well contain hazelnuts.  In contrast, she noted that reasonable consumers would not approach a package of ground coffee in the same manner, especially one that was prominently labeled as “100% Arabica Coffee.”  Judge Lynch concluded that any consumer who was confused by the label, or specifically concerned with the presence of hazelnuts, could simply consult the ingredient label on the reverse side of the package to confirm the absence of hazelnuts.

While the majority found the case to present a close question for the very reasons set forth in Judge Lynch’s dissent, it ruled that the complaint stated a plausible claim for relief and reversed the lower court’s grant of the defendants’ motion to dismiss.

The First Circuit’s analysis resembles a recent Second Circuit decision involving Cheez-It crackers labeled as “WHOLE GRAIN” or “Made With WHOLE GRAIN” when the predominant ingredient was enriched white flour.  In Mantikas v. Kellogg Co., the Second Circuit concluded that while the product did, indeed, contain some whole grains, a reasonable consumer could be misled into believing that it was the predominant ingredient in the crackers.

While Dumont did not cite the Second Circuit’s opinion, it is based on the same premise that reasonable consumers should not be expected to consult an ingredient list to correct allegedly misleading information on the front label.  Judge Lynch’s dissent, however, cautioned that permitting “meritless labeling litigation” like this one to continue beyond the pleadings stage “will have the effect of driving up prices for consumers” and cause an entirely different type of “harm to the consumer.”  For now, the Dumont decision marks another plaintiff-friendly outcome sure to be relied on by class action plaintiffs in the First Circuit and elsewhere.

A label contains an accurate net weight of the amount of product inside.  The packaging is clear, allowing consumers to view a pump mechanism common in the cosmetics world.  So, where’s the deception?

According to the Southern District of New York – there is none.  In Critcher et al. v. L’Oreal USA, Inc., et al., 1:18-cv-05639 (S.D.N.Y.), the Court recently held that reasonable consumers would not be deceived by a cosmetics bottle utilizing a pump dispense mechanism.

The plaintiffs claimed that the pump mechanism prevented them from being able to access the entire product inside of the bottle.  But Judge Koeltl was not swayed.  He held that consumers are familiar with pump dispensers on personal care products such as soaps, shampoos and lotions, and are therefore aware that “they will not be able to extract every bit of product from such containers.”  Accordingly, the court held that a “reasonable consumer” would not be deceived by the packaging of the products, and that plaintiffs’ alleged “disappointment” did not “establish deception” or “transform [L’Oreal’s] accurate labeling of the product’s net weight into fraud by omission.”

The Court also found that plaintiffs’ claims were preempted by the Federal Food, Drug and Cosmetics Act (FDCA).  Because federal law permits – and requires – L’Oreal to label its cosmetics products with the net quantity of the containers’ contents irrespective of the amount accessible through the pumps, the labels followed the “federal regulatory scheme [that] addresses measurement and labeling of product quantity head-on.”  And since plaintiffs were seeking labeling that was different from the labeling requirements set forth in the FDCA, their claims were expressly pre-empted.

The Critcher decision comes on the heels of two recent dismissals of slack fill class actions in the Southern District.  Last year, Ad Law Access covered Daniel, et al. v. Tootsie Roll Industries LLC, Case No. 1:17-cv-07541, 2018 WL 3650015 (S.D.N.Y. Aug. 2, 2018), in which plaintiffs claimed that different-sized boxes of Junior Mints contained between 35 to 43 percent of empty air.  Judge Buchwald rejected these allegations, finding that no reasonable consumer would have been deceived because the Junior Mints boxes “provide more than adequate information for a consumer to determine the amount of product contained therein” and that the weight of the candy was “prominently displayed on the front” of each box.  Id. at *11-12.  Judge Buchwald then questioned the validity of slack fill cases more generally where the product’s label accurately reflects the weight of the product:  “[C]onsumers are not operating on a tabula rasa with respect to their expectations of product fill.  To the contrary,…‘no reasonable consumer expects the weight or overall size of the packaging to reflect directly the quantity of product contained therein.’….The law simply does not provide the level of coddling plaintiffs seek, [and] the Court declines to enshrine into the law an embarrassing level of mathematical illiteracy.”  Id. at *13.

Similarly, in Hu v. Iovate Health Sciences, U.S.A., Inc., 2018 WL 4954105 (S.D.N.Y. Oct. 12, 2018), plaintiff alleged that a protein powder sold by the defendant was packaged in containers that were not adequately filled, yielding a slack fill of 41 percent, but conceded that the package accurately disclosed the amount of protein powder inside.  Citing Daniel, Judge Ramos stated that “generally, courts within this District have found that labels on packages that clearly indicate the product’s weight prevent plaintiffs from succeeding on non-functional slack-fill claims.”  Id. at *2.  Given the accuracy and prominence of the label’s statement of net weight, Judge Ramos concluded “that the allegedly nonfunctional slack fill would not mislead a reasonable consumer acting reasonably under the circumstances.”  Id. at *3.

*                      *                      *

The Critcher decision marks another welcome victory for cosmetics and consumer product companies, and demonstrates that judges (at least those in the Southern District) are viewing slack fill claims with increasing skepticism and willing to dismiss them at the pleadings stage.

The FDA and FTC jointly issued warning letters to three companies selling CBD products online.  The letters allege violations of the Federal Food, Drug, and Cosmetic Act (“FDCA”) and the Federal Trade Commission Act (“FTCA”).  Although this is the first time the FDA and FTC have issued joint warning letters relating to CBD, the FDA has been involved in CBD enforcement for the past few years.

Since the passing of the 2018 Farm Bill, which descheduled hemp and hemp derivatives under the federal Controlled Substances Act, the FDA has become the primary federal regulator relative to foods, drugs, cosmetics, and dietary supplements that contain CBD from hemp.  The FDA’s most visible enforcement on CBD products to date has been in the form of warning letters issued to online retailers of products labeled as dietary supplements that feature aggressive disease treatment claims. The FDA also tested CBD products in conjunction with warning letters issued in 2015 and 2016 to determine whether they contained the CBD levels listed on the labels.

In the letters from last week, the FDA turned its focus onto various CBD products marketed online as “drugs,” including “CBD Salve,” “CBD Oil,” “CBD for Dogs,” “Hemp Oil,” “CBD Softgels,” “Liquid Gold Gummies (Sweet Mix),” “Liquid Gold Gummies (Sour Mix),” and “blue CBD Crystals Isolate 1500mg.”  The FDA determined that the companies’ websites contained claims about their CBD products that established them as unapproved “drugs” under section 201(g)(1) of the FDCA. The letters also referenced the FTC’s substantiation standard, stating the FTC had concerns that certain efficacy claims that were made may not be substantiated by competent and reliable scientific evidence. They also warned that violations of the FTCA may result in legal action seeking a Federal District Court injunction or Administrative Cease and Desist Order, possibly including a requirement to pay back money to consumers.

As noted above, these letters are unique, as it is the first time the FDA has issued a joint FDA/FTC warning letter relating to CBD. This is also the first time the FDA has referenced the FTC’s substantiation standard or threaten any specific penalty for violations of the FTCA.  For companies marketing CBD, it is important to keep in mind that although the market has flourished despite a host of regulatory uncertainties, it is the regulators’ opinion that the rules regarding advertising and health claims are clear.  Competent and reliable scientific evidence remains the standard.

Over the last few years, however, the FTC’s health claim enforcement has featured several false cure-type products. Cases against Regenerative Medical Group, Cellmark, iV Bars, and Nobetes challenged unproven representations for products promising to treat Parkinson’s disease, macular degeneration, cancer, multiple sclerosis, and diabetes.  Although we have yet to see the FTC announce any settlements relating to CBD products, these letters signal that FDA is not alone in its concern over aggressive CBD treatment claims.

The warning letters can be found here: