Monday, September 19, 2022

A little more than kin and less than kind: KIND bar "All Natural" class action fails

In re Kind LLC “Healthy and All Natural” Litig., 2022 WL 4125065, 15-MD-2645 (NRB), 15-MC-2645 (NRB) (S.D.N.Y. Sept. 9, 2022)

Plaintiffs alleged that KIND products displaying an “All Natural/Non GMO” label were deceptive or misleading. Previously, the court allowed NY, Florida, and California classes to proceed. But, because they abandoned any claims based on the non-GMO part, the court found that they lacked a viable claim that “All Natural” was misleading and decertified the classes.

In 2015, FDA issued a warning letter to Kind about its “healthy and tasty” claims, stating that the language was an “implied nutrient content claim” and that certain KIND products did not meet the FDA’s saturated fat content requirements necessary to describe food as “healthy.” “In response, KIND argued that many universally recognized healthy foods such as almonds, avocados, or salmon contain saturated-fat levels exceeding [FDA’s] limits.” 

All Natural/Non GMO label, L, and revised Non GMO only label

The resulting lawsuit was paused because the FDA pretended that it might actually do something about “natural” represenations. It didn’t, so eventually the case was unpaused. Other developments “sharply contracted” the scope of the claims to the “All Natural” claim on three product lines.

For all the claims, an objective reasonable consumer standard applied. The court adopted a relatively new proposition—imported from the Lanham Act and not traditionally part of consumer protection cases—that “[t]o satisfy the reasonable consumer standard, a plaintiff must adduce extrinsic evidence—ordinarily in the form of a survey—to show how reasonable consumers interpret the challenged claims.” Thus, the claims required evidence showing a reasonable consumer’s understanding of “All Natural” plus evidence that the Kind products fell outside that understanding. Plaintiffs failed at both points.

The earlier definition used in the case was heavily dependent on now-abandoned “Non GMO” claims. “Non GMO” might give context to the “All Natural” right in front of it on the label, but now there’s no falsity claim about that. Without the GMO context, the court found that there was no objective definition of “all natural.” FDA has some guidance, but its application would depend here on what a consumer would expect to be in the food, which is precisely what’s at issue. Plaintiffs’ own statements offered a variety of understandings, which if not inconsistent were not all coextensive: “that is, a product can meet the criteria in the FDA guidance that it does not contain unexpected artificial ingredients without meeting the criteria in the dictionary definition proffered by plaintiffs that it is ‘existing in or caused by nature; not made or caused by humankind,’” and so on. “Given this diversity of views, none of these definitions supplies, or purports to be, a reasonable consumer’s definition of ‘All Natural.’” [Note: That’s not logically true: each could be a reasonable consumer’s definition, but reasonable consumers could be all over the map. For completeness, it would be useful to ask whether, given all these definitions, Kind didn’t qualify according to a substantial number/percentage of reasonable consumers.]

Nor did plaintiffs’ survey report provide a way to define a reasonable consumer’s understanding of “All Natural,” because the court excluded it.

The survey presented individuals with “a mock-up of a product, that, in many respects, resembled the packaging of a KIND bar.”

Note the omission of the non-GMO representation.

Then it asked them about whether they agreed, disagreed, or didn’t know/weren’t sure about whether “All Natural” products would contain “artificial or synthetic ingredients.” The survey found that 86.4% of consumers said no.

The survey also asked consumers to select one of the following options regarding their expectations of an “All Natural” product: (1) that it is not “made using these chemicals: Phosphoric Acid, Hexane, Potassium Hydroxide, Ascorbic Acid”; (2) that it “is made using these chemicals: Phosphoric Acid, Hexane, Potassium Hydroxide, Ascorbic Acid”; or (3) that they were “Not sure/No expectation.” The court really didn’t like this question, considering it misleading (e.g., Vitamin C is another name for ascorbic acid; some of the chemicals aren’t in Kind bars) and found that the surveyor’s “decision to blindly include items listed by plaintiff’s counsel in the complaint, without any investigation or consideration of the appropriateness of those items, only underscores his survey’s lack of reliability.”

The court found the survey inadmissible because it was biased and leading.  The first question asked only about one potential definition and only allowed participants to select whether they agreed, disagreed, or didn’t have an expectation. There was no contrast with other possible meanings, and there were no open-ended questions. At deposition, he said he was “test[ing]” the plaintiffs’ theory of liability, but the court interpreted his answers as showing that his questions were designed to support that theory. Relatedly, he chose to display the “All Natural” claim in isolation, rather than as part of the “All Natural/Non GMO” statement, as it always appeared on KIND labels, out of concern that the two “would interact.” This made his survey less relevant.

Likewise, his second question listed “chemicals” drawn from plaintiffs’ complaint, “without personally reaching any understanding of what those ‘chemicals’ were, or whether they were ingredients that cannot be considered ‘All Natural.’” [If the court had liked the theory better, he probably would have been able to rely on other experts/facts provided by the client for these points.] The word “chemicals” was leading, given “the common-sense intuition that, when prompted by the word ‘chemicals,’ consumers’ consideration of the listed substances described as chemicals is tainted by the connotation that ‘chemicals’ carries.” The failure of the survey to define the terms and including Vitamin C under the name “ascorbic acid” to parallel “phosphoric acid” was “a clear attempt to manipulate consumers into selecting the answer that plaintiffs preferred.”

Even without the leading questions, the court concluded that the survey profided “no useful information” about how a reasonable consumer understands “All Natural.” The survey didn’t define “artificial” or “synthetic,” or what it means for a product to “contain” or be “made with” those ingredients. So, for example, the survey required further inquiries:

• What processing, if any, does a reasonable consumer believe can occur to an ingredient or product before that ingredient or product is considered artificial or synthetic?

• Are ingredients that do occur naturally, such as Vitamin A or C, but potentially manmade in the specific form that appears in KIND products, artificial or synthetic?

• Are trace or residual amounts of chemicals that were used in processing ingredients in KIND bars enough to cause the KIND products to contain “artificial or synthetic ingredients”?

Here, the answers to those questions were “central” to plaintiffs’ theory of falsity. But the survey left a factfinder guessing at them.

Plaintiffs argued that they didn’t need “a universally accepted definition of ‘All Natural’ ” as long as they showed that a reasonable consumer would interpret the claim to mean that the product didn’t contain those specific artificial and synthetic ingredients. But they didn’t show that; all they showed was that, “when provided with the definition of ‘All Natural’ that plaintiffs’ counsel constructed for this litigation,” respondents would click a check box saying that they agree to it. That wasn’t enough to show that reasonable consumers would be deceived when they saw the label.

Contra the FTC’s position on claims like “environmentally friendly,” the court further held: “Nor can defendant be held responsible for a host of possible, even if potentially reasonable, consumer beliefs about the meaning of ‘All Natural.’ Such multiplicity distorts the reasonable consumer standard.”

Without expert testimony, plaintiffs failed to show how a reasonable consumer would understand “All Natural” on Kind products. Internal KIND documents, statements of KIND’s founder, and a survey referenced in the FDA’s solicitation of comments regarding the “All Natural” claim were insufficient substitutes. The internal statements “just represent the views of KIND employees or internal KIND survey data,” not reasonable consumers’ beliefs. [I don’t understand why the internal survey data aren’t about consumer beliefs.] And the FDA noted that “consumers regard many uses of this term as non-informative.”

Even if the survey did establish a reasonable consumer’s understanding, the plaintiffs failed to develop evidence that any KIND product claiming to be “All Natural” contained “artificial or synthetic” ingredients or any of the chemicals the survey listed, due to deficiencies in that area of proof. To the extent that three ingredients were lab-made—Vitamin E acetate; ascorbic acid (Vitamin C); and Vitamin A acetate—they were only present in a bar that displays prominetly on the front of the packaging that it is a KIND bar “plus” “50% DV Antioxidants,” namely, “Vitamins A, C, and E.” “As such, no reasonable consumer could have been deceived by the addition of added vitamins…. No reasonable consumer could believe that they would receive 50% of their daily value of vitamins from a single bar without an artificial or synthetic vitamin being added to the product.”

Antioxidant bar

Given all this, the court also decertified the class.

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