Mislabeling Claims Under California Law

In 1970, California enacted the Consumer Legal Remedies Act (CLRA), creating what remains the most comprehensive state consumer protection statute in the country. Under the CLRA, consumers who bought goods or services that were sold through “unfair methods of competition” and “unfair or deceptive acts” may bring an individual or class action lawsuit seeking damages or injunctive relief.  Accompanied by similar consumer protection statutes such as California’s Unfair Competition Law (UCL) and False Advertising Law (FAL), the CLRA has created a complex minefield of legal pitfalls for companies conducting business in the state. In recent years, litigation under the CLRA and other California consumer protection laws has increased substantially, encouraged by the success of specialized consumer protection law firms, large class action settlements, and favorable judicial outcomes.

Companies with food and beverage products are particularly vulnerable to consumer lawsuits that allege the use of “false or misleading” or otherwise deficient labeling under California law. California courts are increasingly a hotbed for these types of mislabeling claims. Barilla, a multinational Italian food company and the world’s largest producer of pasta, is the most recent company under fire. They were recently sued in a putative class action under the CLRA, UCL, and FAL, with plaintiffs taking issue with the company’s slogan, printed on every box: “Italy’s #1 Brand of Pasta.” Other mainstream food brands such as Nestlé, Kodiak Cakes pancake batter, and Celsius energy drinks have also fallen victim to mislabeling claims.

The main problem facing the food and beverage industry is a compliance nightmare of confusing regulations. Under California’s Sherman Food, Drug, and Cosmetic Law (Sherman Law), which regulates the packaging, labeling, and advertising of food, the state adopted all of the FDA’s food-labeling rules. Applicable regulations include the FDA’s complex requirements for representing sugar, protein, or nutrient content on a label. These rules are ill-defined and subject to inconsistent interpretation. As a result, companies that sell food products in California must comply with hundreds of vague and complicated federal regulations to the “T,” or potentially face substantial losses in consumer class actions.

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The views and opinions expressed in the article represent the view of the author and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is it intended to be a substitute for professional legal advice.