Natural Products Insider

MAR-APR 2019

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42 INSIDER March/April 2019 From Cheez-It snacks to shampoo products and supplements, courts across the United States have recently weighed-in on consumer perception of claims made on product packaging. Given the inherent risks associated with false and misleading product packaging, it is mission critical that manufacturers undertake best efforts to ensure the accuracy of claims made on packaging. Failure to undertake such efforts could result in legal action by consumers. Second Circuit Reinstates Suit Against Kellogg's re Whole Grain Labels A federal appellate court recently allowed consumers to continue their lawsuit against the Kellogg Co., claiming that the labels on boxes of Cheez-It crackers were misleading (Mantikas v. Kellogg Co., 910 F.3d 633 [2d Cir. 2018]). Consumers who purchased boxes of Cheez-It crackers labeled "whole grain" or "made with whole grain" in large print in the center of the boxes' front panels alleged the labels were false and misleading because they would cause a reasonable consumer to believe the grain was predominantly whole grain when, in fact, the primary grain was enriched white fl our. The district court dismissed the complaint, and the plaintiffs appealed to the U.S. Court of Appeals for the Second Circuit. On appeal, the court ruled that plaintiffs' complaint should not have been dismissed. In its decision, the court explained that the plaintiffs' "core allegation" was the whole grain statements were misleading because they communicated to the reasonable consumer that the grain in the product was predominantly, if not entirely, whole grain. Contrary to the "reasonable expectations" communicated by the whole-grain claims, the court said the grain in the Cheez-Its was predominantly enriched white fl our. The court decided that although the front of the boxes accurately set forth the amount of whole grain in the crackers per serving—one version said it had 5 g per serving and the other said it had 8 g per serving—the labeling was "nonetheless misleading" because the labels falsely implied the grain content was "entirely or at least predominantly whole grain," but the amount of enriched white fl our "substantially" exceeded the whole grain portion. The court was not persuaded by Kellogg's contention that a reasonable consumer would not be deceived by the whole-grain claims because the side panels of the packaging disclosed "Nutrition Facts" that revealed that a serving size of Cheez-Its was 29 g and the list of ingredients named "enriched white fl our" as the fi rst (and thus the predominant) ingredient. The court reasoned that the specifi cation on the side panels of the packaging did not adequately dispel the inference communicated by the front of the package that the grain was predominantly whole grain because it did not tell what part of the 29 g total weight a grain of any kind and it did "not indicate the ratio of whole grain to white fl our." The court concluded the disclosures on the side of the box did not render the consumers' allegations of deception implausible because "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." Federal Court Allows Class Action Claims to Proceed Against Shampoo Manufacturers A federal district court ruled that consumers could bring class action claims against L'Oréal USA Inc., and Matrix Essentials LLC (collectively, the "defendants") over a hair care product line called Matrix Biolage Advanced Keratindose Pro-Keratin + Silk (Price v. L'Oreal USA, Inc., 2018 U.S. Dist. LEXIS 138473 [S.D.N.Y. Aug. 15, 2018]). Consumers alleged that the names of the three products in the product line—Matrix Biolage Advanced Keratin + Silk Shampoo, Pro-Keratin + Silk Conditioner, and Pro-Keratin + Silk Renewal Spray—would lead reasonable consumers to believe that the three products contained keratin, when in fact they did not. The consumers asserted that everyone who purchased the products paid a price premium because of the defendants' misrepresentations on the product labels. Defendants denied the product labels were misleading and that they had any effect on the products' pricing. The consumers moved to certify various classes against the defendants. The court certifi ed two classes to proceed as a class action. First, it certifi ed a class of all persons residing in the state of New York who purchased any of the three products after Jan. 26, 2013, for the plaintiffs' consumer protection and breach of contract claims. Second, it certifi ed a separate class of all persons residing in California who purchased any of the three products after Jan. 26, 2013, for the plaintiffs' consumer protection and breach of warranty claims. The court explained that, during the class period, millions of units of the products were sold nationwide to salons for resale to consumers, and a substantial portion of those sales came from New York and California. It added that a common question was whether a reasonable consumer would expect the products contained keratin. The court pointed out consumer class actions of the type brought by the plaintiffs in this case—designed to recover Litigation Trends in Packaging Claims by Michael C. Cannata and Frank Misiti Legal: Lawsuits CBD Regulatory Update at SupplySide East Get the latest insights around regulatory issues related to cannabidiol (CBD) at an international, national and local level from Steven Shapiro and Marc Ullman, of counsel, Rivkin Radler LLP, during the "What Is the Regulatory Current State of Play With CBD?" session at SupplySide East in Secaucus, New Jersey, on April 10 at 1:30 p.m., at the Presentation Theater. supplysideeast.com Scan Here

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