Alston & Bird’s Food & Beverage Digest | February 2023

FOOD D I G E S T F E B R U A R Y 2 0 2 3 BEVERAGE % reading value Edition Facts 3 Sections This Edition Cases Per Section 1-13 Reading Calories 0 New Lawsuits Filed 100% Motions To Dismiss 100% Regulatory Highlight 100%

FOOD BEVERAGE D I G E S T F E B R U A R Y 2 0 2 3 | 3 New Lawsuits Filed Don’t Got Milk? Build Strong Bones with Cereal Jones v. Kellogg Sales Co., No. 1:23-cv-00049 (W.D.N.Y. Jan. 19, 2023). Pull out your calculator, folks—here’s your daily brain teaser. A cereal company advertises that a serving of its Smart Start cereal contains “11g OF PROTEIN,” which is composed of 5 grams of protein from the cereal itself, plus 6 grams of protein from added milk. (For those of you who went to law school to avoid these complex equations, stick with us: 5 + 6 = 11). According to the complaint, however, the product’s representation that it contains an almost equivalent amount of protein as the added milk doesn’t add up and is actually misleading consumers. The mathematically savvy plaintiff claims that while 5 and 6 grams are approximately equivalent, the product’s nutrition label shows that the cereal’s 5 grams of protein equals 4% of the nutrient’s daily value (DV) for protein, but that the 11 grams of protein from cereal and milk together equals 16% DV. According to the complaint, that means that the protein from milk alone equals 12% DV, while the cereal contributes only 4% … and 4% does not approximate 12%! So, this mathematician alleges, the cereal’s packaging is false and misleading and allows the product to be sold at a premium price. The plaintiff brings this action individually and as a representative of a consumer fraud multistate class and a New York class for claims of violation of state consumer fraud acts, breaches of warranty, fraud, and unjust enrichment. Tastes Like Heaven, What the …? Marquez v. Sazerac Company Inc., No. 1:23-cv-00097 (N.D. Ill. Jan. 07, 2023). Garnering media attention frommajor news outlets, a new class action against the maker of the popular cinnamon whisky brand Fireball alleges that the defendant misled consumers with the sale of its minisize Fireball products because those minisized bottles don’t actually contain Fireball Whisky. Citing to two local newspaper articles, the complaint notes that for the past few years, purchasers had begun to notice the apparent availability of mini Fireball bottles in supermarkets and convenience stores for only 99 cents. Both articles noted that gas stations in New York were selling what appeared to be 50 mL bottles of the cinnamon whisky and questioned whether a few drunken merchants were blatantly violating state liquor laws. Upon closer inspection, however, the miniature bottles don the same label as the full-size product except for one important omission: while the typical bottle is labeled “Fireball Cinnamon Whisky,” the mini is simply labeled “Fireball Cinnamon.” Trading off of consumer’s familiarity with the Cinnamon Whisky product, the complaint alleges that the defendant intended for consumers not to take a closer look. In reality, the Fireball Cinnamon product is a flavored malt beverage that the label discloses is made “with natural whisky & other flavors.” But according to the complaint, even this disclosure is misleading. While the label suggests that the malt beverage is made with (1) natural whisky; and (2) other flavors, even consumers that read the fine print will not realize that the whisky component is simply flavoring as well. And that’s putting aside how consumers with a little fire in their belly might perceive the product. The plaintiff seeks to represent both an Illinois class and a multistate class of consumers and alleges violations of state consumer fraud acts, breach of warranty, negligent misrepresentation, fraud, and unjust enrichment. The complaint is among a spate of false labeling claims directed at alcohol packaging—a trend that will likely continue to catch some heat. An Authentically Californian Complaint Moore v. Iovate Health Sciences U.S.A. Inc., No. 2:23-cv-00357 (C.D. Cal. Jan. 18, 2023). When the sun is shining, the breeze is blowing, and the waves are crashing, what is there for a Californian to complain about? According to a suit recently removed from the California Superior Court, the sodium content of organic plant-based nutritional shakes can be pretty irksome. The plaintiff in this new suit claims that he set out to purchase a low-sodium protein drink and chose the defendant’s product based on the nutritional information on the packaging. In what can only be described as an … unusual turn of events, the complaint alleges that the plaintiff“became concerned” that manufacturers“were misleading consumers as to what was actually in their products” and retained counsel to have the product tested in a lab. The results of that testing, which included 13 different samples of the product, revealed that the actual sodium content was at least 20% higher than what was disclosed on the packaging. The complaint asserts that, because of this mislabeling, the product was misbranded and not fit for sale. The plaintiff alleges violations of California’s consumer protection laws and breach of warranty. Drama over Dark Chocolate Gets Darker Herd v. Trader Joe’s Co., No. 1:23-cv-00065 (S.D.N.Y. Jan. 4, 2023). Ferrante v. Trader Joe’s Co. & T.A.C.T. Holding Inc., No. 2:23-cv-00046 (E.D.N.Y. Jan. 4, 2023). Grausz v. Hershey Co., No. 3:23-cv-00028 (S.D. Cal. Jan. 6, 2023). Rodriguez v. Mondelēz Global LLC, No. 3:23-cv-00057 (S.D. Cal. Jan. 11, 2023). Millman v. Mars Inc., No. 2:23-cv-00079 (E.D.N.Y. Jan. 5, 2023). Valentine’s Day has come and gone, but you can bet consumers didn’t send major grocery manufacturers any chocolate this year. In a series of lawsuits filed fromcoast to coast, plaintiffs contend that major grocers were manufacturing, marketing, and selling various types of dark chocolate, all of which contained unsafe levels of lead and cadmium. According to the plaintiffs, a public report released in December 2022 examined 28 different types of dark chocolate bars. The report found that 23 of the 28 chocolate bars tested contained levels of lead and cadmium so high that consumption of just one ounce could be harmful. The plaintiffs allege that the heavy metals make their way into the cacao bean through the soil in which the cacao plant grows or from the shell of cacao beans after they are harvested. But

FOOD BEVERAGE D I G E S T F E B R U A R Y 2 0 2 3 | 5 the plaintiffs explain that exposure to these metals is not inevitable because other products available in the market were tested and found to contain lower amounts of the heavy metals. We’ve seen this suit before. In our January 2023 edition, we highlighted a suit brought in New York federal court just days before the end of the year. There, a consumer alleged based on an unidentified report that a major chocolate manufacturer was advertising its candy bars as safe for consumption despite high levels of lead and cadmium. Now it seems the flavor has caught on, and manufacturers are facing similar suits nationwide. These plaintiffs bring a variety of claims, including unjust enrichment, violations of state consumer protection statutes, false advertising, breach of implied warranties, and unfair competition. Plaintiff Sour over Sips of Citric Acid Forbes v. Kraft Heinz Foods Co., No. 1:23-cv-00007 (S.D.N.Y. Jan. 2, 2023). A New York plaintiff brought suit against a defendant apple juice manufacturer. The plaintiff alleges that the defendant’s labeling statements—“All Natural Ingredients” and “No Artificial Colors, Flavors or Preservatives”—are false and misleading because the apple juice contains citric acid, an artificial ingredient that purportedly functions as a preservative. Citing to FDA regulations, the plaintiff contends that the citric acid ingredient listed on the product should be followed by a parenthetical that describes the citric acid’s use as a preservative. According to the complaint, the description of the citric acid on the juice’s ingredients list discloses that the ingredient is used “FOR TARTNESS,” which only describes the citric acid as impacting the product’s flavor. This, says the plaintiff, misleads consumers into believing that the product’s citric acid ingredient also functions to preserve and maintain the juice’s taste. The plaintiff brings this action on behalf of a New York class of purchasers and on behalf of a consumer fraud multistate class, claiming violation of state consumer protection laws, breaches of express and implied warranty, violation of the Magnuson–Moss Warranty Act, fraud, and unjust enrichment. Consumer Cries “Too Sweet to Be True” Daly v. Glanbia Performance Nutrition Inc., No. 2023CH000096 (Ill. Cir. Ct. Jan. 5, 2023). A class action filed in Illinois state court accuses a protein bar manufacturer of deceiving customers by claiming that its protein bars contain “no artificial sweeteners” when they allegedly contain maltitol syrup. The plaintiff claims that maltitol is formed after an unnatural chemical reaction, making it a “synthetic chemical,” and so falling in the category of artificial sweeteners. The complaint also alleges, based on information and belief, that because the manufacturer uses professional chemists to create the formula for its protein bars, the manufacturer knew or should have known that maltitol is not a natural sweetener. As a result of this alleged deception, the plaintiff claims that, among other injuries and harms, he has suffered a“loss of serenity.”Seeking remuneration for all that lost“serenity,”the plaintiff asserts violations of Illinois consumer protection laws, common-law fraud, and unjust enrichment on behalf of both a nationwide class and Illinois subclass. Plaintiff Crunches on Spoonful of “Natural Flavors” Collyer v. Catalina Snacks Inc., No. 5:23-cv-00296 (N.D. Cal. Jan. 20, 2023). A West Coast plaintiff is trying to take a bite out of a defendant cereal manufacturer. She claims that four of the defendant’s “keto friendly” cereal flavors (“Chocolate Banana,”“Apple Cider Donut,”“Honey Graham,” and “Mint Chocolate”) do not contain the actual ingredients purportedly promised in the cereal flavors’names and on the packaging for each cereal flavor. Instead, the plaintiff claims that a spoonful of the defendant’s cereals contains only “natural flavors,”but no actual banana, apple or apple cider, mint, or honey. The complaint also points to the defendant’s website, which purportedly touts the cereals as being made with “real ingredients.” But the plaintiff contends that consumers perceive the apparently absent banana, apple or apple cider, honey, and mint as “healthful” ingredients that reasonable consumers would expect to find in the defendant’s keto-friendly cereals. The plaintiff brings this suit individually and as a representative of a class of California purchasers, claiming violation of the California consumer protection statutes and breach of implied warranty of merchantability. Consumer Sees Sparkling Water Through Lime-Colored Lenses McCoy v. Nestlé USA Inc., No. 3:23-cv-02218 (N.D. Fla. Jan. 29, 2023). An East Coast plaintiff enters the limelight with the help of notorious plaintiffs’ counsel Spencer Sheehan in a putative class action filed in Florida federal court. The plaintiff alleges that the defendant’s Perrier brand products are mislabeled because they deceive consumers into thinking they contain a “non-de minimis” amount of lime. The complaint accuses the defendant of giving purchasers the false impression that the sparkling water contains a significant amount of actual fruit ingredients, including by using “green tinted” glass bottles with the word “lime” next to images of lime wedges. Right in lime with these allegations, the plaintiff seeks to represent classes of consumers from Florida and other states. The complaint asserts claims for violations of various states’ consumer protection statutes, breaches of warranty, negligent misrepresentation, fraud, and unjust enrichment. Among other requested relief, the complaint seeks damages, injunctive relief, and attorneys’ fees and costs. Another Less Protein, Mo’ Problems for Plant-Based-Meat Manufacturer? Zakinov v. Beyond Meat Inc., No. 1:23-cv-00840 (N.D. Ill. Jan. 13, 2023). Echoing similar suits filed in California (and elsewhere), a class action originally filed in Texas federal court (but recently transferred to N.D. Illinois as part of multidistrict litigation) alleges that a plant-based-meat manufacturer overstates the amount of protein in its plant-

FOOD BEVERAGE D I G E S T F E B R U A R Y 2 0 2 3 | 7 based products. The complaint points to advertising materials that promote the products as delivering “greater or equal levels of protein than their animal-based counterparts” as misleading consumers into believing the plant-based products contain more protein than they actually do. According to the plaintiff, the actual amount of protein and percent daily value of protein in the products is substantially lower than the amount advertised on the packages. The suit also takes issue with the defendant’s past representations in interviews and on its website that its products are “all-natural,” “organic,” and “healthy” and contain “no artificial ingredients” or “synthetically produced ingredients” because the products allegedly contain the synthetically produced ingredient methylcellulose. The complaint alleges that the defendant’s current website “backtracks on that promise,” now disclosing the presence of methylcellulose in the products. However, that’s not enough for this plaintiff, who is holding on to the false-labeling claim. This suit seeks certification of classes of purchasers in Texas and alleges fraudulent misrepresentation, fraud by omission, unjust enrichment, breach of warranty, and violations of Texas law. Manufacturer in a Pickle over Labeling Claims Grillo’s Pickles Inc. v. Patriot Pickle Inc., No. 2:23-cv-00011 (D.N.J. Jan. 3, 2023). Counts v. ARKK Food Co., No. 1:23-cv-00236 (N.D. Ill. Jan. 16, 2023). A Massachusetts-based pickle purveyor alleges that its New Jersey–based competitor deceives its customers by marketing its pickles as “fresh,” “all natural,” and containing “no preservatives.” According to the complaint and attached laboratory analysis certificates, the defendant’s pickle products contain sodium benzoate, “an artificial chemical preservative designed to lengthen the pickles’ shelf life.” The complaint alleges the defendant’s use of an artificial chemical preservative renders its labeling and ingredient list (which omits the preservative) misleading. The plaintiff avers that this allegedly deceptive advertising allows the defendant to compete in the same market for fresh, preservative-free pickles as the plaintiff and misleads consumers into believing that the defendant’s pickles are substitutes for the plaintiff’s pickles. Accordingly, the plaintiff has brought a common-law unfair competition claim and a false advertising claim under the Lanham Act. Less than two weeks after the pickle producer’s competitor popped the top on its alleged deception, an Illinois-based consumer latched on to the same allegations and filed his own class action complaint, alleging that the representations mislead consumers. This plaintiff seeks to represent both a nationwide class and an Illinois andmultistate subclasses to pursue claims under various states’ consumer fraud acts and for unjust enrichment. Forever Chemicals May Be a Forever Wave of Litigation Smith v. Wm. Bolthouse Farms Inc., No. 2:23-cv-00373 (E.D.N.Y. Jan. 19, 2023). Bedson v. BioSteel Sports Nutrition Inc., No. 1:23-cv-00620 (E.D.N.Y. Jan 27, 2023). Plaintiffs don’t appear to be getting tired of litigating claims against companies whose product may contain alleged per- and polyfluoroalkyl substances (PFAS). In fact, it feels like these suits have been going on forever…. In the past decade, and as we’ve previously covered, a multitude of lawsuits have alleged various health and environmental claims related to “forever chemicals,” collectively known as PFAS. Today, there is a new wave of suits targeting companies that use PFAS in packaging for food, beverage, and cosmetic products. Generally, these suits allege that the product packaging for certain food and beverages contains trace to toxic amounts of PFAS. Add to the list two suits filed in the EasternDistrict of NewYork against two“healthy”beverage manufacturers. In these suits, the plaintiffs claim they relied on the drink product’s “no sugar added,”“feel good nutrition,”“good for you and the environment,” and “clean” claims (among others) to mean that the products did not contain harmful chemicals. Much to the plaintiff’s surprise, these drinks allegedly contain PFAS, which makes the “clean” and better-for-you marketing tactics of the defendants false andmisleading. Fueled by ongoing scientific studies into the effects of PFAS, the plaintiffs here are drinking the Kool-Aid and allege NewYork and nationwide class claims on behalf of all purchasers of the drink products. The plaintiffs bring claims under New York state consumer protection statutes, as well as claims for violation of the Magnuson–Moss Warranty Act, breach of warranty, fraud, and unjust enrichment. A Spoon Full of Sugar Makes the Medicine Go Down, but Menthol Doesn’t Soothe Your Sore Throat Perugia v. Mondelēz Global LLC, No. 5:23-cv-00069 (N.D.N.Y Jan. 20, 2023). The flavor police—Spencer Sheehan—is back again representing yet another plaintiff who purchased cough drops thinking that they would indeed soothe his sore throat and contain real ingredients to derive their flavor. This plaintiff claims that certain honey-lemon-flavored cough drops don’t satisfy the customer the way they should. First, the plaintiff alleges the numbing effect from the cough drop’s active ingredient (menthol) is short-lived and he was deceived because the product doesn’t include a “temporary” qualifier on the front label. Second, the plaintiff claims that menthol itself is not “soothing” and there are no other ingredients in the product that could soothe his sore throat. Finally, the plaintiff alleges he was attracted to the honeycomb and lemon wedge on the product’s packaging like a bee to a flower. But according to this plaintiff, the ingredient list doesn’t actually include more than a de minimis amount of real honey or lemon. Based on these claims, the plaintiff seeks to represent a New York and multistate class of purchasers for state consumer fraud act statutes, breach of warranty, implied warranty of merchantability/fitness for a particular purpose, fraud, and unjust enrichment claims.

FOOD BEVERAGE D I G E S T F E B R U A R Y 2 0 2 3 | 9 Motions to Dismiss Procedural Posture: Granted Another Malic Acid Suit Bites the Dust Gouwens v. Target Corp., No. 3:22-cv-50016 (N.D. Ill. Dec. 30, 2022). A major manufacturer is no longer taking punches from one putative class action plaintiff, following a district court’s dismissal of the plaintiff’s fruit-punch-flavored malic acid suit. The suit, filed last year in Illinois federal court, alleged that the defendant was manufacturing, labeling, marketing, and selling a “fruit punch” flavored concentrate for water that identified only generic malic acid as an ingredient. According to the complaint, the plaintiff purchased the concentrate believing that the flavoring originated from naturally-occurring malic acid rather than artificial DL-malic acid, but later learned through unidentified“laboratory analysis” that the product contained only the artificial iteration. She alleged that she would not have purchased the product, or would have paid less, had she known of its artificial origins. Even accepting as true the plaintiff’s allegations that the product contained only artificial DL-malic acid based on the plaintiff’s laboratory analysis, the court granted the defendant’s motion to dismiss and dismissed the suit with prejudice. The court held that the product’s front labeling statement, “Natural flavor with other natural flavors” is not an affirmative representation that the product is free from artificial flavors and concluded that the plaintiff failed to plausibly allege that the labeling statement would mislead consumers. Indeed, the court stated, “A reasonable consumer would not believe that a shelf-stable, bright red fruit punch flavored liquid water enhancer was free of artificial ingredients absent an affirmative statement to the contrary.” The court also found that the product’s listing of “malic acid” using its common or usual name (as opposed to“artificial DL-malic acid”) complied with FDA regulations. The court similarly dismissed the plaintiff’s consumer fraud claims and commonlaw claims for failure to plausibly allege deception in the product’s labeling. Plaintiff’s Bread Claims Crumble Away Hamidani v. Bimbo Bakehouse LLC, No. 1:22-cv-01026 (N.D. Ill. Jan. 12, 2023). An Illinois federal court dismissed a putative class action challenging the labeling representations on the defendant’s The Cheesecake Factory brand Our Famous “Brown Bread”product. The complaint alleged that the product’s“Brown Bread”label and appearance misled the plaintiff into thinking that it contained more whole grains than refined grains, when in reality the bread primarily contains enriched wheat flour made from refined grains. The plaintiff sought injunctive relief and monetary damages under state consumer fraud statutes, the Magnuson–Moss Warranty Act, and a handful of run-of-the-mill tort and contract claims. These claims quickly crumbled under the court’s scrutiny. First, while the plaintiff alleged that she would buy the product again, the court determined that the plaintiff lacked standing to pursue her claim for injunctive relief because she was unlikely to repurchase the product now that she knew of its alleged deficiencies. In doing so, the court “align[ed] itself”with likeminded courts that have concluded that unsatisfied plaintiffs won’t be fooled twice. Second, the court dismissed the statutory and common-law fraud claims because the product’s label and appearance did not explicitly or implicitly guarantee a specific amount of whole grains, and therefore, no reasonable consumer could conclude what percentage of whole wheat the bread contains, meaning that the plaintiff failed to identify any plausible deception in the product’s packaging. Third, the court determined that the economic loss doctrine barred the negligent misrepresentation claim and that the plaintiff’s position that an exception to the economic loss rule applied because the defendant “holds itself out as having special knowledge and expertise that created a duty to refrain from misleading consumers about its product” was made “without legal support.” Finally, the court found that the plaintiff failed to allege that she satisfied Illinois’s pre-suit notice requirements to bring a breach of warranty claim. Procedural Posture: Granted in Part Mac & Cheese Suit (Partially) Survives Another Day Stuve v. The Kraft Heinz Co., No. 1:21-cv-01845 (N.D. Ill. Jan. 12, 2023). An Illinois federal judge sliced off some, but not all, of the plaintiffs’cheesy allegations against the manufacturer of a popular macaroni and cheese product. In the underlying complaint, the plaintiffs alleged that the defendant deceived consumers into believing its mac & cheese products did not contain harmful chemicals known as phthalates. The plaintiffs claimed that the defendant failed to disclose information to consumers related to the risk of phthalates in its products. The plaintiffs also alleged that the defendant’s labeling statements—including “NO Artificial Flavors,” “The Taste You Love,” and “gooey, cheesy goodness”—mislead consumers to believe that the defendant’s mac & cheese products are safe and do not contain dangerous, artificial substances like phthalates. On a motion to dismiss, the federal court partially shredded the plaintiffs’ complaint. The court rejected the plaintiffs’ claims that the defendant’s labeling statements would lead reasonable consumers to believe that the products are safe and do not contain dangerous chemicals like phthalates. The court held that the plaintiffs failed to make allegations related to the specific labeling representations on the defendant’s mac & cheese products. The court stated that the plaintiffs did not allege that the phthalates believed to be present in the products functioned as an artificial flavor or preservative, and that the defendant’s “The Taste You Love” and “gooey, cheesy goodness” statements speak to the products’ taste and say nothing to consumers about whether the mac & cheese is “safer” than it truly is. However, the court did find that the plaintiffs’ contentions that the defendant failed to disclose material information related to the risk of phthalates in the mac & cheese products had legs. The court found that the plaintiffs plausibly alleged that reasonable consumers care about the presence of phthalates in their food, even if present in small amounts. Thus, the court found it plausible that the defendant had a duty to disclose the safety risks associated with phthalates (even if present in only small amounts), leaving this claim on the table.

FOOD BEVERAGE D I G E S T F E B R U A R Y 2 0 2 3 | 1 1 Procedural Posture: Denied “Natural Flavor” Claims Stay Above Water Adams v. The Kraft Heinz Co., No. 5:22-cv-00290 (M.D. Fla. Jan. 9, 2023). Out of the recent flood of false labeling lawsuits taking issue with “Natural Flavoring” claims on various products, a Florida federal judge tossed one plaintiff a life raft. The complaint alleges that the defendant’s “NATURAL FLAVOR WITH OTHER NATURAL FLAVOR” labeling statements mislead consumers into believing that the defendant’s water-enhancer products contain only natural flavoring ingredients. The court distinguished the plaintiff’s claims in this case from similar “natural flavoring” allegations that claim consumers are misled by “all natural” or similar labels. Under the facts, the court concluded that reasonable consumers confronted with the defendant’s “natural flavor with other natural flavor” labeling statement could expect the products to be free from artificial flavor. The court held that although true that the defendant’s labels do not state that the products contain only natural flavors, without indicating the products’ artificial flavoring, “a consumer could reasonably rely on this disclosure as representing that the Products contain only natural flavor.” The court also drowned the defendant’s contention that the malic acid contained in its products did not function as a flavor, but rather functioned as a flavor enhancer or pHbalancer. The court gave ample space to the plaintiff’s arguments to the contrary, pointing to the plaintiff’s “comprehensive” description and use of “scientific detail” to demonstrate how the defendant purportedly used artificial DL-malic acid to flavor its products. Ultimately, though, the court concluded that this is a factual issue unfit for resolution at the motion to dismiss stage. In denying the defendant’s motion to dismiss, the court found that the plaintiff plausibly alleged that the defendant uses artificial DL-malic acid to flavor its products, which “crosse[d] ‘the line from conceivable to plausible.’” This should go without saying by now, but you can count on us to stay on top of the tides for these “natural flavoring” claims. Regulatory Highlight No Rulemaking to Permit Use of CBD in Food and Supplements In response to three separate citizen petitions requesting the FDA to conduct rulemaking to permit the use of cannabidiol (CBD) in dietary supplements, the FDA finally responded with a resounding “no.” The agency also confirmed that it does not intend to pursue rulemaking to permit CBD’s use in food more broadly. The FDA’s basis is that available evidence suggests CBD presents potential harm to the liver, interactions with certain medications, and possible harm to the male reproductive system without any adequate evidence of safe consumption levels. Therefore, according to the FDA, “it is not apparent” how CBD could meet the safety standards that apply to dietary supplements or food additives. According to the FDA, the appropriate path forward is for Congress to establish a new regulatory pathway. The FDA suggests that this pathway could include additional safeguards (e.g., labeling, limits on CBD content, minimum purchase age) and oversight to better manage risk related to CBD products.

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