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Reconciling National Uniformity with the Ongoing Class Action Trend

[Editor’s note: OFW Law Principal Attorney Michael J. O’Flaherty provided this blog piece regarding the need for federal oversight regarding the ongoing trend of class action lawsuits filed against food companies regarding product labeling.]

Since its enactment in 1938, the Federal Food, Drug, and Cosmetic Act (FD&C Act), along with FDA regulations implementing it, has served to safeguard consumer interests by requiring food labeling that is not false or misleading, and that declares specified mandatory information. While legally authorized to regulate food labeling, even the Federal Trade Commission (FTC), since 1971, has acknowledged that FDA “will exercise primary jurisdiction over all matters regulating the labeling of foods.” [See: Memorandum of Understanding Between the Federal Trade Commission and the Food and Drug Administration (MOU 225-71-8003).]

FDA’s exercise of such primary jurisdiction has “stood the test of time.” Whereas in 1938 most food was both produced and sold locally, today most foods are made in one locality and sold nationwide (and globally). The FD&C Act, as administered by FDA, has continued to serve its purpose very well throughout this food market evolution.

Recognizing and fostering successful continuance of this evolution, in 1990 Congress legislated that mandatory aspects of food labeling must be nationally uniform. [See: Pub. L. No. 101-535 § 6 (Nov. 8, 1990) (now codified at 21 U.S.C. § 343-1).] This legislation was mutually beneficial both for consumers — because it harmonized presentation of important food labeling information — and for food manufacturers — because it foreclosed being subjected to differing food labeling requirements across our 50 States. Moreover, the law placed responsibility for administering the harmonized aspects of food labeling within the experienced purview of FDA. Finally, while not required by the law, the FTC expressly committed to keeping its enforcement practices for nutrient content claims and health claims made in food advertising in essential harmony with FDA’s food labeling requirements. [See: Enforcement Policy Statement on Food Advertising (May 13, 1994); See also Federal Trade Commission Act, 15 U.S.C. §§ 45(a)(1), 5255(a)-(b).]

The U.S. food marketplace has evolved further — albeit differently — since 1990, especially over the past decade. During this period, plaintiffs’ class action attorneys annually have sent food manufacturers hundreds of “demand letters” that allege a company’s food labeling and/or advertising representations are false or misleading/deceptive and, therefore, in violation of some State consumer protection law(s) (i.e., laws other than the FFD&C Act, which may not be privately enforced). These demand letters assert that class action litigation will ensue, unless the matter is settled by the food manufacturer by (i) instituting corrective action that addresses the alleged misrepresentation, and (ii) paying the alleged class members monetary damages — which sub silencio include substantial attorneys’ fees.

This class action trend has been helpful to the extent that it has removed some misrepresentations about foods from the marketplace in situations where FDA lacks enough resources to intervene. Nonetheless, from a public policy perspective, condoning its continuance is ill-advised:

  • The demand letters invariably challenge food labeling representations that are not the subject of national uniformity and, therefore, are not preempted. This being the case, the allegations may be theoretical and/or contrary to FDA’s authoritative perspective and/or administrative regulatory goals.
  • Class action cases are filed in a limited number of jurisdictions, perceived by plaintiffs’ counsel as having a receptive jury pool. For example, the federal District Court for the Central District of California is now characterized as the “Food Court.”
  • The class action trend has renewed the legal landscape that historically prompted enactment of 21 U.S.C. § 343-1. Consumers and food manufacturers are not guaranteed a uniform meaning for a representation nationwide. Judicial decisions have binding legal effect solely in the jurisdiction of the deciding court.  
  • Courts rendering decisions that do not defer to FDA’s primary jurisdiction in regulating food representations can facilitate/foster non-uniformity.
  • The plaintiffs’ class action attorneys that identify food misrepresentation cases have other than uniformity/regulatory motivations in mind. 
  • Dollars would be better allocated as FDA appropriations, to fund its assurance of uniform meanings for food representations nationwide, than as attorneys’ fees for food labeling resolutions having no such effect. 

A legislative endeavor presently is warranted once again to safeguard and foster national uniformity in regulation and enforcement of food labeling representations.

As a potential model, California’s Prop 65 requires that private attorneys give at least 60-days’ notice to the Attorney General (AG) and the relevant district attorney, city attorney, or prosecutor — and find no public action commenced and diligently prosecuted by these authorities — before commencing a private action for Prop 65 enforcement. Cal. Health & Safety Code § 25249.7(d). In appropriate circumstances, the AG may notify the private attorney that the AG believes there is no merit to the action. Cal. Health & Safety Code § 25249.7(e)(1)(A). A similar prior notice approach would be beneficial for food labeling representations.

Congress should be approached and persuaded to re-engage national uniformity as it did in 1990. The FD&C Act ought to be amended to require that private attorneys give prior notice to FDA before sending a demand letter or initiating litigation challenging, under a consumer protection law, any representation made in food labeling. This would give FDA, our federal agency with most expertise in such matters, an opportunity — bearing national uniformity in mind — to prohibit the challenge, to pursue the challenge itself, or to authorize the private attorney to proceed.

A food industry trade association(s) should assume responsibility for reconciling national uniformity in food labeling with the ongoing class action trend.