Consumer expectations about “All Natural”: SDNY order worth special attention for consumer protection defense bar
A recent important order from the Southern District of New York provides useful guidance regarding key legal issues that may arise in putative class actions alleging that “all natural” labeling (or other phrases characterizing products) is misleading based on consumer expectations of various phrases.
The order addresses the objective reasonable consumer standard in such cases, how it impacts class certification, and certain types of expert testimony that may be excludable in this context.
In Re KIND LLC “healthy and all natural litigation”
On September 9, 2022, the District Court for the Southern District of New York issued an order in In re KIND LLC “Healthy and All Natural Litigation” granting the defendants’ motion for summary judgment, decertifying the class, and disqualifying the opinions of the plaintiffs’ experts.
Instructively, the order validated several positions taken by Kind, which were:
- Eliminating key fact-based allegations of misrepresentation (“Non GMO”), so that only expectation-based misrepresentations (“reasonable consumer would expect…”) remained
- Showing, through class representative depositions, the divergent expectations from named plaintiffs regarding the key alleged false phrase (“all natural”) and
- Disqualifying experts by illustrating structural biases in consumer surveys and the lack of relevance of expert opinion in defining “reasonable” consumer expectations.
The order is good authority that, without allegations of factual misrepresentations (like “Non GMO”), when plaintiffs are left with expectation-based misrepresentations, they must show that (a) they have a coherent and shared understanding of what the challenged statements mean; (b) their understanding is what an objective, reasonable consumer would expect; and (c) they have not substituted expert testimony for actual consumer views.
Consequences of dropping “Non GMO” statement
In In re KIND, the plaintiffs initially challenged KIND product labels that described the product as “All Natural” and “Non GMO.” After discovery, the plaintiffs dropped their challenge to the “Non GMO” statement, leaving them with only the “All Natural” statement.
Granting Kind’s summary judgment motion, the court held that the plaintiffs failed to demonstrate that the “All Natural” claim on KIND products was false or misleading because the plaintiffs could not meet the reasonable consumer standard.
The court held that the plaintiffs’ decision to abandon the “Non GMO” claim was “not without consequence to their ‘All Natural’ claim” because the “Non GMO” claim would have provided a coherent theory for what “All Natural” meant to the plaintiffs and would have justified class certification.
Moreover, when the defendants deposed the plaintiffs, each plaintiff had a different explanation for what “All Natural” meant, and those explanations “demonstrate the diversity of views about how to understand the term “All Natural.”
Further, the plaintiffs’ first expert report was excluded because it relied on a multiple-choice survey asking participants to agree or disagree with very specific, leading statements about a label that closely resembled the KIND product label. For example, the survey asked:
“Because of this descriptor [ALL NATURAL], what is your expectation for this product? Please select one:
- Is NOT made using these chemicals: Phosphoric Acid, Hexane, Potassium Hydroxide, Ascorbic Acid;
- is made using these chemicals: Phosphoric Acid, Hexane, Potassium Hydroxide, Ascorbic Acid;
- Not sure/no expectation”
The court held that opinion based on this survey was inadmissible because the survey was “plainly designed to validate plaintiffs’ theory.”
The plaintiffs’ second expert was also excluded because he analyzed the ingredients in the KIND products to determine if they were consistent with an “All Natural” claim. The court held that this survey was irrelevant because it was completely untethered from the question of how a reasonable consumer would view the “All Natural” statement. Additionally, the expert’s methods did not take into account the ingredients and sourcing that KIND actually used.
Given the lack of fact-based alleged misstatement, the inconsistent testimony on expectations, and a lack of admissible expert testimony, the court concluded that the plaintiffs had failed to provide an objective definition of “All Natural” for a reasonable consumer. Because there was no objective definition of “All Natural” that applied to the whole class, the court also decertified the class.Learn more about the implications of this order for disputes you may be facing by contacting any of the authors.