Wednesday, March 06, 2013

Oranges are not the only lawsuit (though this one is)

In re Simply Orange Juice Marketing & Sales Practices Litigation, 2013 WL 781785 (W.D. Mo.)

This multidistrict litigation involves Simply Orange Juice, Minute Maid Pure Squeezed, and Minute Maid Premium. Plaintiffs alleged that Coca-Cola falsely advertised these products as natural, when in fact they’re heavily processed, pasteurized, deaerated, and flavored. FDA standards allegedly require Coca-Cola to label Simply Orange and MM Pure Squeezed to show that they’ve been processed above levels of “incidental additives” with orange oil, orange essence, and other volatile and chemically engineered compounds, causing the basic composition of the juice to differ from that of pure freshly squeezed juice and requiring the addition of orange oil, orange essence, etc. to the ingredients list on the product.  In addition, MM Premium isn’t labeled to show that it has been dewatered, frozen, and reconstituted by melting frozen concentrate and mixing with water.  Thus, plaintiffs alleged, consumers have been paying premium prices for juice they otherwise would’ve paid less for.

The challenged claims for Simply Orange were “100% pure squeezed,” “not from concentrate,” “Simply Orange,” “pure,” and “natural.”  For MM Pure Squeezed: “pure-squeezed,” “100% pure squeezed,” and “never from concentrate.” For MM Premium: “100% pure squeezed,” “100% orange juice,”  and “natural orange goodness.”  Coca-Cola moved to dismiss.

Coca-Cola argued that the claims were expressly preempted, since the FDA has established standards for producing orange juice and labeling it, or relatedly barred by the safe harbor doctrine in that the FDA expressly permitted these practices.  State requirements identical to federal requirements or not within the scope of the FDCA and NLEA aren’t preempted; this was the case here, since plaintiffs alleged noncompliance with the FDCA.  This also disposed of the safe harbor argument.

Next, Coca-Cola argued that plaintiffs might never have seen ads for the products, but that didn’t matter.  “Although some courts have established that a plaintiff lacks standing to challenge ads they did not see, these courts have done so because a presumption of reliance does not arise when class members are exposed to quite disparate information from various representatives of a defendant.”  But when the alleged falsity comes from an extensive and long-term ad campaign, reliance on specific ads isn’t required.  This was alleged here.  In addition, plaintiffs pled sufficient injury to have standing: that they paid premium prices they wouldn’t have paid for truthfully labeled juice.

Coca-Cola argued that the challenged statements were mere puffery.  Puffery can be exaggerated claims on which no reasonable consumer would rely or vague/highly subjective claims of superiority. By contrast, a factual statement can be empirically falsified or proven.  The court couldn’t find that the statements identified were puffery as a matter of law.

Discovery could proceed, limited to whether the products “contain synthetic flavors or orange pulp, oil, or essence at levels significantly in excess of those found in raw processed orange juice or otherwise permitted by FDA regulations” and whether defendants added any water-soluble constituents of orange essence to their not-from-concentrate products.

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