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
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.”
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.,
In November 2015, the FDA “an-nounc[ed] the establishment of a docket to receive information and comments on the use of the term ‘natural’ in the labeling of human food products, including foods that are genetically engineered or contain ingredients produced through the use of genetic engineering.” Use of the Term “Natural” in the Labeling of Human Food Products; Request for Information and Comments, 80 FR 69905-01,
LEGAL STANDARD
On a motion to dismiss, the factual allegations in a complaint are accepted as true and all reasonable inferences are drawn in the plaintiffs favor. Rescuecom Corp. v. Google Inc.,
DISCUSSION
After briefing on the motion to dismiss was complete but prior to oral argument, Plaintiffs voluntarily dismissed their “healthy” claims. (ECF 74.) Defendants move to stay Plaintiffs’ “all natural” claims under the primary jurisdiction doctrine, and further argue that Plaintiffs fail to plead a “non GMO” claim separate from the “all natural” claims.
I. Plaintiffs’ “Healthy” Claims
Because plaintiffs Kaufer, Karnezis and Livingston are only alleged to have purchased KIND products “in reliance on the representations on the product labels that the products were ‘healthy’ ” (Compl. ¶¶ 11, 13, 14)—and not in reliance on any “all natural” representations—their claims are dismissed. And because Karnezis and Livingston are the only plaintiffs from Illinois and Florida, respectively, Plaintiffs’ ICFDBPA.and FDUTPA claims and the Illinois and Florida subclasses are likewise dismissed.
II. Plaintiffs’ “All Natural” Claims
“The doctrine of primary jurisdiction is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties. Thus, the doctrine’s central aim is to allocate initial decision-making responsibility between courts and agencies and to ensure that they do not work at cross-purposes.” All Am. Tel. Co. v. AT & T, Inc., No. 07-cv-861 (WHP),
Recent Ninth Circuit precedent strongly supports KIND’S argument that Plaintiffs’ “all natural” claims should be stayed pending the FDA’s rulemaking process. In Astiana v. Hain Celestial Grp., Inc.,
While the Ninth Circuit’s decisions are instructive, they are not controlling. The Second Circuit has enumerated four factors to consider when determining whether to stay an action under the primary jurisdiction doctrine:
(1) whether the question at issue is within the conventional experience of judges or whether it involves technical or policy considerations within the agency’s particular field of expertise;
(2) whether the question at issue is particularly within the agency’s discretion;
(3) whether there exists a substantial danger of inconsistent rulings; and
(4) whether a prior application to the agency has been made.
Ellis,
A. Conventional Experience of Judges or FDA’s Field of Expertise
Courts are split as to whether the issues presented by Plaintiffs’ “all natural” claims are more within the conventional experience of judges or whether they involve technical or policy considerations within the FDA’s particular field of expertise. In addition to the Ninth Circuit cases discussed above, numerous other courts have found that such questions are within the FDA’s field of expertise. See, e.g., Coyle v. Homell Brewing Co., No. 08-cv-02797 (JBS),
Other courts have found that cases such as these are “far less about science than [they are] about whether a label is misleading, and the reasonable-consumer inquiry upon which some of the claims ... depend[] is one to which courts are eminently well suited, even well versed.” In re
This Court is reluctant to declare that issues of alleged consumer deception are necessarily outside the conventional wisdom of judges (or even juries). Moreover, although food labeling issues involving scientific determinations arguably fall within the FDA’s field of expertise, judges and triers of fact regularly address complex scientific issues absent regulatory guidance. Thus, in view of the split among courts and well-reasoned arguments on both sides, this factor does not weigh in favor of the FDA’s primary jurisdiction.
B. The FDA’s Discretion
As discussed above, the FDA seems to be prepared to address core issues in this case, including what types of processed foods may be labeled “natural” and whether genetically engineered foods may be labeled “natural.” Even before the FDA announced its intent to delve into these issues, courts had found that “the use of the term ‘natural’ as it pertains to food and beverage labeling falls within the FDA’s discretion.” Coyle,
C. Substantial Danger of Inconsistent Rulings
KIND argues that declining to stay the claims could spawn a patchwork of judicial determinations regarding the appropriate definition for “natural” on food labels that would make uniform food labeling impossible. Plaintiffs respond that because any forthcoming guidance from the FDA would not conclusively resolve this issue, staying this action would not decrease any danger of inconsistent rulings.
Both arguments have some merit. As the Frito-Lay MDL court held, “[tjhere is no telling ... how the FDA would define the term, and whether its definition would shed any further light on whether a reasonable consumer is deceived by the “All Natural” food label when it contains bioen-gineered ingredients.” In re Frito-Lay N. Am., Inc. All Nat. Litig.,
Should this Court independently decide whether [the challenged ingredients] are natural ingredient[s], it is possible that other federal courts or the FDA will come to a different conclusion, resulting in inconsistent' outcomes for essentially identical claims and affecting food and beverage purveyors with nationwide businesses. The prospect that different labels would be permissible in different jurisdictions would impose a burden on this industry that may be alleviated if the FDA chooses to speak directly to the question.
Coyle,
D. Prior Application to the FDA
“[T]his inquiry ... requires [courts] to consider whether prior application to the agency has been made. If prior application to the agency is present, this factor provides support for the conclusion that the doctrine of primary jurisdiction is appropriate.” Ellis v. Tribune Television Co.,
E. Potential Delay
This Court acknowledges that staying the case under the primary jurisdiction doctrine would necessarily delay Plaintiffs’ case. However, the Second Circuit has cautioned against weighing such considerations too heavily in view of the fact that “the Supreme Court has consistently held that there are only two purposes to consider in determining whether to apply the primary jurisdiction doctrine—uniformity and expertise,” and “the Supreme Court has never identified judicial economy as a relevant factor.” Tassy v. Brunswick Hosp. Ctr., Inc.,
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In sum, the Second Circuit’s primary jurisdiction test weighs in favor of staying the action. Accordingly, Plaintiffs’ “all natural” claims are stayed pending the FDA’s rulemaking process. This Court may reconsider the appropriateness of continuing the stay as the FDA’s process unfolds.
III. Plaintiffs’ “Non GMO” Claims
The parties dispute whether Plaintiffs’ “non GMO” claims are pled as a separate count of the Complaint or merely as a subset of the “all natural” claims, which are now stayed. Under the consumer protection laws invoked in the Complaint, Plaintiffs must plausibly allege that they were deceived by KIND’S labeling, that an objective, reasonable consumer also would have been deceived, and that such deception injured them.
Plaintiffs allege that some KIND products tested positive for GMOs, and that the presence of certain ingredients, such as corn, further indicates the presence of GMOs because 89% of corn in the United States is derived from genetically-modified ingredients. In its motion, KIND does not directly dispute Plaintiffs’ GMO allegations. Instead, it cites an FDA “Letter Decision” stating that “foods derived from [GMO] sources ... do not present any different or greater safety risks or otherwise differ from other foods in any meaningful or uniform way.” Letter Decision, FDA Docket No. 2011-P-0723 (Nov. 19, 2015.) That may be true, but it is also true that some consumers may seek to avoid GMO-derived food, regardless of what the FDA says about their safety. Accordingly, allegations that consumers were deceived by misleading “non GMO” labels are potentially cognizable.
Nevertheless, to the extent Plaintiffs assert a stand-alone “non GMO” claim (and it is not entirely clear from the Complaint that this was their original intent) such claims are insufficiently pled. Critically, it is unclear whether Plaintiffs have standing because no plaintiff alleges that they read and relied on the “non-GMO” labeling statement prior to purchasing the products. To the contrary, the remaining Plaintiffs allege that they purchased certain KIND products based on representations that they were “all natural.” (Compl. ¶¶ 9, 10, 12). Additionally, while Plaintiffs allege that “testing has detected the presence of GMOs in at least some [KIND] products,” their failure to specify which products included GMOs and whether they actually
CONCLUSION
In view of Plaintiffs’ voluntary dismissal of their “healthy” claims, the claims brought by Kaufer, Karnezis and Livingston are dismissed. In addition, the ICFDBPA and FDUTPA claims of the Illinois and Florida subclasses are dismissed.
Plaintiffs Short, Thomas and Busta-monte’s “all-natural” claims are stayed pending the FDA’s rulemaking regarding the use of the term “natural” on food labels. The parties should timely apprise this Court of any material developments •with respect to the FDA’s rulemaking. In any event, they should file a joint status report by December 15, 2016.
To the extent Plaintiffs wish to assert an independent claim based on representations that KIND’S products were “non GMO,” they may file an Amended Complaint no later than October 31, 2016.
SO ORDERED.
Notes
. The Complaint also notes that the United States Department of Agriculture only permits use of the word "natural” for meat and poultry products if "(1) the product does not contain any artificial flavor or flavorings, color ingredient, or chemical preservatives ... or any other artificial or synthetic ingredient; and (2) the product and its ingredients are not more than minimally processed.” (Compl. ¶ 44.)
. See In re Gen. Mills, Inc. Kix Cereal Litig., No. CIV-A-12-249 (KM),
. Plaintiffs attempt to distinguish Kane because that case, unlike this one, involved additional claims regarding the term "evaporated cane juice," which the FDA planned to define by the end of 2016. This distinction is immaterial because Kane was also stayed pending the FDA's promulgation of regulations concerning the word "natural.”
. See, e.g., McLaughlin v. Am. Tobacco Co.,