Welcome to our selected regulatory and procedural highlights that will affect the food and beverage industry in March 2021. The food court saw its own March Madness brand having disputes over food delivery fees, which kicked off this month’s update.
Process developments
Hidden shipping costs
A number of undisclosed delivery fee lawsuits were filed in March. These suits are framed in different ways. One such lawsuit against Chipotle (Dundon v Chipotle Mexican Grill, Inc., NDNY) alleges that Chipotle offered “free” or “$ 1” delivery but offered more for delivery orders than for personal purchases or collection orders for the same items. According to the complaint, Chipotle is adding a 10% service charge to delivery orders, which is not charged for pick-up orders or personal purchases. The complaint also alleges that when ordered for delivery, Chipotle charged more for individual groceries than for the same items bought in person or ordered for pickup. Similar class action lawsuits have been filed against Chipotle in Florida federal court (Hopkins v Chipotle Mexican Grill, Inc.) and Chick-Fil-A in California state court (Ortega v Chick-Fil-A Inc.).
Natural flavors and ingredients
Four new class action lawsuits against natural flavors and ingredients were filed in March. One action (Kinman v The Kroger Co., ND Illinois) claims that Kroger’s smoked Gouda products get their smoky flavor from artificial aroma as opposed to the natural smoking process. Another (Romaine v Globus Food Products LLC, Missouri State Court) claims that Globus Food Products “all-natural” pizza products actually contained a synthetic ingredient called powdered cellulose. The third (Vanlaningham v Sara Lee Bakery LLC, Illinois State Court) claims that Sara Lee’s waffle products are all natural if they contain citric acid, an artificial preservative. Finally, the fourth lawsuit (Annmarie St. John v The Price Chopper Inc., New York State Court) alleges that The Price Chopper’s PICS almond milk was represented as containing natural vanilla when it actually contained artificial flavors.
Health related information
In McMorrow v Mondelez International, Inc., the Southern District of California certified a statewide and New York class in an action claiming that Mondelez’s belVita breakfast products are misleadingly advertised as “nutritious, steady energy all morning.” and “Part of a balanced state” is breakfast “when it is actually high in sugar. The court blessed the plaintiffs’ compensation model (at least for the purposes of class certification), which proposed conducting a survey isolating all of the price premiums associated with the term “nutritious” for Mondelez’s marketing of its belVita breakfast products. Mondelez submitted an application to the Ninth Electric Circuit for an intermediate examination of the currently pending certification contract. You can find more information in our blog post here.
In Hadley et al. v. Kellogg Sales Co., the parties filed a third motion for preliminary approval of a class action lawsuit alleging that Kellogg falsely advertised various cereal products as “heart healthy” and / or “lightly sweetened”, despite the fact that plaintiffs added what they called high percentages of sugar . This version of the comparison (1) eliminated a coupon component that was included in previous versions of the comparison. (2) increased the cash payment amount to $ 13 million; (3) extends the previously agreed injunction; and (4) limit the scope of the release to claims based on the identical factual predicate as claimed in the complaint, including the specific products that were part of the previous Classification Regulation.
Finally, the plaintiff in Rand v. Kilwins Quality Confections, Inc. (ND Ill.) Argues that various labels for caramel and chocolate products have significantly misrepresented both the number of servings and the number of calories per serving. Plaintiff is making thirty pleas in law, including claims of breach of a variety of state consumer protection laws, breach of contract and unjust enrichment, and seeks to represent both a statewide class and a number of state-specific classes.
Claims of origin
In Corker et al. v. Costco Wholesale Corp. et al., coffee farmers in the Kona region of Hawaii, alleged that defendants (a number of suppliers and retailers) misleadingly labeled and sold non-Kona coffee as “Kona” coffee. The parties sought approval of a settlement with three suppliers / retailers that included substantial injunctive relief in the form of labeling changes and, in the event of a settlement, a payment of $ 6.1 million to the class.
(Links from Law360, Subsc. Required.)
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National advertising department
Grocer Aldi has agreed to finally cease several price advertising claims, including the following:
- “The lowest prices every day”
- “Lowest possible prices for groceries”
- “It’s official. We have the lowest prices on Long Island”
- “ALDI has the lowest prices on Long Island”
The decision followed a challenge with grocer Lidl competing through NAD’s SWIFT process.
Chobani LLC also finally discontinued the challenged express claims that its 5.3-ounce yogurt jar, Chobani Complete, contained 25 grams of protein.
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FDA
The FDA has published its survey on food safety and nutrition. The main results include:
- Most consumers are familiar with the nutrition label
- Most consumers have seen menu labeling in restaurants
- Consumers are familiar with the use of package claims
- Hand washing practices vary depending on the occasion
- The majority of consumers own a food thermometer, but usage varies depending on what is being cooked
The FDA also announced that it is further extending the deadline for obtaining a unique facility identifier for food facilities to December 31, 2022.
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Thank you for coming back this month. See you in May!
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