Tuesday, February 05, 2019

100% Natural chicken claims might mislead about antibiotics and other features

Friends of the Earth v. Sanderson Farms, Inc., 2018 WL 7197394, No. 17-cv-03592-RS (N.D. Cal. Dec. 2, 2018)

FOE sued Sanderson, alleging FAL and UCL claims against Sanderson’s “100% Natural” advertising for its chicken, in particular that that the ads falsely and misleadingly suggest that its process and resulting product meet reasonable consumer expectations for “natural” poultry, including: (1) no pharmaceutical residues remain in the product; (2) pharmaceuticals, including antibiotics, are not routinely administered to the chickens during the majority of their lives; (3) Sanderson is not contributing to the spread of antibiotic-resistant bacteria; and (4) Sanderson chickens were raised in natural conditions, such as going outdoors.

The court found the complaint sufficient insofar as it alleged that Sanderson’s advertisements and statements describe “natural” “in a way that confuses consumers as to whether the chicken product was raised without antibiotics versus raised with antibiotics and subsequently cleared of it prior to sale, … taking advantage of consumer expectations that a ‘natural’ food product has never been exposed to antibiotics and the attendant consumer willingness to spend more for such products.”

Sanderson argued that the ads’ full context dispelled any potential confusion, pointing to: (1) the infographic on Sanderson’s “100% Natural” webpage, (2) Sanderson’s “How We Grow Our Chicken” video, and (3) Sanderson’s “Bob and Dale” commercials.  Sanderson argued that the infographic had only true statements about what’s not added to the chicken and says nothing about antibiotic use or nonuse.  The court didn’t accept Sanderson’s expressio unius argument “that because antibiotics are not included in the list of excluded artificial ingredients, a reasonable consumer could not conclude that antibiotics are also excluded.”  Statements about the nonuse of hormones, steroids, seaweed, etc., didn’t provide sufficient context for a reasonable consumer to conclude that “100% Natural” chicken had been treated with antibiotics as part of the production process. Instead, a reasonable consumer, considering the “100% Natural” slogan, “could plausibly believe that the infographic’s ‘no additives or artificial ingredients’ statement means no synthetic pharmaceuticals.” There was no unequivocal disclosure about the use of antibiotics, and “the infographic’s silence on the issue is not a disclosure.” The affirmative representations “100% Natural” and “no additives or artificial ingredients” were plausibly contrary to the undisclosed characteristic of antibiotic treatment. (Likewise, the entire webpage claimed that there were “no unpronounceable ingredients” in Sanderson chicken and that its feed is “corn and soy-based,” which plausibly implied that there were no antibiotics/their names would be easily pronounced, “a stretched argument at best.”)

A link on the webpage went to the FAQ, which disclosed the use of antibiotics. But the entire context of the website need not be considered—review is limited to the four corners of the page.  “No authority suggests a reasonable consumer is expected to search a company’s entire website (or certainly all of a company’s statements across all forms of advertisements) to find all possible disclaimers.”  The reasonable consumer standard doesn’t require them to be “private investigators.”

The “Bob and Dale” ads said “all chickens must be cleared of antibiotics before they leave the farm.” Sanderson argued that this could not plausibly leave a reasonable consumer with the impression that Sanderson does not use antibiotics, because “if the process was devoid of antibiotics, surely there would be nothing to ‘clear’ before the birds left the farm.”  Not so. “A lawyer may well catch this turn of phrase, but the reasonable consumer standard does not demand that consumers interpret advertisements the same way a judge interprets statutes.” This negative inference isn’t required of a reasonable consumer, any more than she’s expected to use ingredient lists on the back of a box to contradict claims on the front. The ad didn’t focus on the fact that Sanderson uses antibiotics and then clears its chickens of the drugs before sale, nor was it merely making literally true statements regarding federal law requiring all chicken to be clear of antibiotics before point of sale. Instead, the ad focused on Sanderson’s competitors, and their use of phrases “no antibiotics ever” or “raised without antibiotics” as essentially being redundant in light of federal law requiring no chicken products contain antibiotics at point of sale. “By criticizing its competitor’s advertising as misleading to consumers, Sanderson’s commercial is likely to mislead reasonable consumers into believing that Sanderson products were no different than its competitors who never used antibiotics in their chicken production.” This was plausibly misleading to consumers who were willing to pay a premium for chicken that had never been exposed to antibiotics.

As to allegations about chicken cultivation, plaintiffs cited surveys  indicating that at least half of consumers understand “natural” to mean the animal roamed outdoors. This, plus the allegation that Sanderson chickens don’t roam, sufficiently alleged misleadingness.

Allegations about Sanderson’s contribution to antibiotic resistance were also sufficient at the pleading stage. Plaintiffs alleged that Sanderson’s process contributes to the build-up of unnatural antibiotic-resistant bacteria, and “100% Natural” thereby misleads the public regarding the threat to public health the product entails. Sanderson argued that it never said anything about antibiotic resistance.  However, plaintiffs sufficiently alleged that the ads “mask the difference between Sanderson’s products—which are raised with antibiotics and cleared of the drugs before point of sale—and competitors’ products which never encounter antibiotics,” misleading consumers into thinking the key concern is whether antibiotics residues remain on the product, and not how the use of antibiotics in the production of chicken can contribute to antibiotic resistance even after the drugs are cleared from the animal’s system. Plaintiffs sufficiently alleged falsehood by citing numerous studies and reports about how the overuse of antibiotics in agriculture contributes to antibiotic resistance and alleging that Sanderson chickens do in fact contain antibiotic-resistant bacteria when they leave their facilities.

The video “How We Grow Our Chicken” allegedly didn’t disclose the full extent of Sanderson’s antibiotic use. Sanderson’s statements that the “only time we inject antibiotics” is a single time under the shell and that broiler chickens are not injected with anything were true standing alone, but together their combined message was potentially misleading. “Injection is not the only means of administering antibiotics to chickens, and Plaintiffs aver Sanderson routinely feeds antibiotics to its broiler chickens.”

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