In re Kind LLC "Healthy & All Natural" Litigation

209 F. Supp. 3d 689, 2016 U.S. Dist. LEXIS 125752, 2016 WL 4991471
District Court, S.D. New York·Decided September 15, 2016·No. 15-MD-2645 (WHP); 15-MC-2645 (WHP)·Published·Cited by 34 cases

Opinion

[690] OPINION & ORDER

WILLIAM H. PAULEY III, District Judge:

Plaintiffs bring this putative class action alleging that KIND LLC and KIND Management, Inc. (together, “KIND”) deceptively marketed certain products as “healthy,” “all natural,” and/or “non GMO.” The Consolidated Class Action Complaint (ECF No. 52) asserts claims for breach of express warranty, unjust enrichment, and negligent misrepresentation, as well as violations of New York General [691] Business Law §§ 349, 350 (“GBL”); California’s Consumers Legal Remedies Act, Cal. Civ. Code § 1750 (“CLRA”); the California False Advertising Law, Cal. Bus & Prof. Code § 17500 (“FAL”); the California Unfair Competition Act, Cal. Bus & Prof. Code § 17200 (“UCA”); the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Cop. Stat. 505/1 (“ICFDBPA”); and the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §§ 501.201, et seq (“FDUTPA”). Plaintiffs seek to represent a national class of all individuals who purchased certain KIND products since April 17, 2011, as well as subclasses of purchasers from New York, California, Illinois and Florida.

KIND moves to dismiss Plaintiffs’ claims or, in the alternative, to stay the action pending the Food and Drug Administration’s (“FDA’s”) promulgation of rules addressing use of the word “natural” on food labels. Plaintiffs’ “healthy” claims are dismissed, and the “all natural” claims are stayed pending the FDA’s rulemaking process. To the extent Plaintiffs assert a separate claim concerning representations that products were “non GMO,” that claim is dismissed without prejudice.

BACKGROUND

I. Plaintiffs’ Allegations

KIND markets, advertises, and distributes popular snack foods with labels that include the words “Healthy,” “All Natural” and “Non GMO.” (Compl. ¶ 1.) Plaintiffs allege that KIND uses these descriptors to capitalize on the highly profitable and fast-growing health food market. (Compl. ¶¶ 19-22.)

In March 2015, the Food and Drug Administration (“FDA”) issued a “warning letter” challenging, among other things, the following “about KIND” statement that appeared on some labels:

At KIND we do things differently and try to avoid false compromises. Instead of “or” we say “and” Healthy and tasty, convenient and wholesome, economically sustainable and socially impactful.

Specifically, the FDA asserted • that KIND’S “healthy and tasty” language was an “implied nutrient content claim” subject to regulations set forth in 21 C.F.R. § 101.65, and that certain KIND products did not meet the FDA’s saturated fat content requirements necessary to describe food as “healthy.” (ECF 52-1, Ex. A at 1-2.)

That warning letter spawned numerous copycat private actions—eventually consolidated in this MDL—alleging that consumers were somehow deceived by the “about KIND” statement. In response, KIND protested that many universally recognized healthy foods such as almonds, avocados, or salmon contain saturated-fat levels exceeding the limits prescribed by 21 C.F.R. § 101.65. Eventually, in April 2016—after the briefing of KIND’S motion to dismiss in this action but prior to oral argument—the FDA withdrew its objections and conceded that its “regulations concerning nutrient content claims are due for a reevaluation in light of evolving nutrition research.” (ECF No. 73-5.) One month later, Plaintiffs voluntarily dismissed their “healthy” claims. (ECF No. 74.)

Plaintiffs also allege that rather than being “all natural,” KIND products contain synthetic, chemically synthesized, and highly processed ingredients such as soy lecithin, soy protein isolate, citrus pectin, glucose syrup, vegetable glycerine, palm kernel oil, canola oil, ascorbic acid, vitamin A acetate, D-Alpha tocopheryl acetate, and annatto. According to Plaintiffs, these ingredients render KIND’S labeling false and misleading based on the New Oxford American Dictionary’s definition of “natural” as “existing in or caused by nature; not made or caused by humankind.” [692] (Compl. ¶40.)1 Additionally, Plaintiffs allege that “[t]esting has detected the presence of GMOs in at least some of the products” (Compl. ¶ 38), and that “approximately 90% of canola, 89% of corn, and 94% of soybeans grown in the United States are genetically modified, as are a majority of U.S. sugar beet crops.” (Compl. ¶ 48.) “The World Health Organization defines [GMOs] as ‘organisms in which the genetic material (DNA) has been altered in a way that does not occur naturally.’ ” (Compl. ¶ 2.)

II. The FDA’s “Natural” Guidance

The Federal Food, Drug, and Cosmetic Act of 1938 (“FDCA”), Pub. L. No. 75-717, 52 Stat. 1040 (1938), established the FDA within the Department of Health and Human Services. See 21 U.S.U § 393. “The FDCA grants the FDA authority to regulate the field of food safety.” Fellner v. Tri-Union Seafoods, L.L.C., 539 F.3d 237, 251 (3d Cir.2008) (citing 21 U.S.C. § 371). The Nutrition Labeling and Education Act of 1990 (“NLEA”), Pub. L. No. 101-535, 104 Stat. 2353 (1990) (codified at 21 U.S.C. § 343), further reformed and standardized the requirements for nutrition labeling and health claims on nearly all food products. See Hoik v. Snapple Beverage Corp., 575 F.3d 329, 332 (3d Cir.2009).

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In re Kind LLC "Healthy & All Natural" Litigation, 209 F. Supp. 3d 689, 2016 U.S. Dist. LEXIS 125752, 2016 WL 4991471 (S.D.N.Y. 2016).

209 F. Supp. 3d 689 (In re Kind LLC "Healthy & All Natural" Litigation) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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