By: Matthew G. Ball
Energy bar-maker Kind, LLC (“Kind”) has won a decisive victory in a multidistrict litigation matter pending in the Southern District of New York. In re Kind LLC “Healthy and All Natural Litigation”, No. 15-MD-2645 (NRB) (September 9, 2022) (“Order”). In the Kind Order, the district court made various rulings – of which the consumer class action defense bar should take note. Before the Court were Kind’s Motions for Summary Judgment, to exclude Plaintiffs’ experts, and to decertify the class. Kind ran the table, with the Court granting all three motions, and giving defense counsel a roadmap to victory in similar cases.
The Plaintiffs’ claims turned entirely on the reasonable consumer’s understanding of the “All Natural” claim. Order at 18-19. The Court defined the reasonable consumer standard with reference to the Ninth Circuit’s decision in Ebner v. Fresh, Inc., 838 F.3d 958 (9th Cir. 2016). According to Ebner, the “reasonable consumer” standard “requires a probability that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” Id. at 965. To survive summary judgment, Plaintiffs had to introduce extrinsic evidence that could support a finding that reasonable consumers believe the plaintiffs’ proffered theory of deception – such as survey evidence showing how reasonable consumers interpret the term “All Natural.” Order at 19-20 (citing Tran v. Sioux Honey Ass’n, Coop., 471 F. Supp. 3d 1019, 1026 (C.D. Cal. 2020) (granting summary judgment to defendant where plaintiff challenged honey displaying a “100 % Pure” label because plaintiff failed “to introduce evidence that could support a finding that reasonable consumers believe the word ‘Pure’ on the label means that there will be no trace amounts of pesticide in their honey[.]”); Hughes v. Ester C Co., 330 F. Supp. 3d 862, 872 (E.D.N.Y. 2018) (“To 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.”)). Plaintiffs were also required to present sufficient evidence to demonstrate that the products fell outside that understanding. Order at 19.
The Court held that Plaintiffs could not meet their burden to show that a factfinder could determine a reasonable consumer’s understanding of “All Natural,” and granted summary judgment. Order at 20. An initial problem that the Court identified is that the phrase “All Natural” does not have a single objective definition, but rather, is subject to numerous and distinct definitions. Id. at 23. For example, the FDA solicited comments and proposals as to (1) the type(s) of ingredients that would disqualify the food from bearing the term natural; (2) whether the manner in which an ingredient is produced or sourced should affect whether a food containing that ingredient may be labeled as “natural”; ( 3) whether certain production practices used in agriculture, for example, genetic engineering be a factor in defining “natural”; and (4) whether the term “natural” should only apply to “unprocessed” foods and if so, how should “unprocessed” and “processed” be defined?” Id. at 23-24. The Court also noted that the Food and Drug Administration found evidence that consumers generally view the phrase as “noninformative.” Id. at 24.
The Court further observed that there were five different definitions of the word “natural” in Plaintiffs’ amended complaint, taken from, inter alia, the New Oxford American Dictionary, the FDA’s policy, the USDA’s definition, and Congress’ definition of synthetic. Order at 25. Moreover, the named Plaintiffs themselves could not agree on the definition of “natural,” and defined it differently in their depositions. One testified that she believed that “natural” meant the Products were made with whole nuts, fruits, and whole grains; another testified her understanding of “All Natural” was that the ingredients were not synthetic, not chemicals, but were natural ingredients; yet another testified that a natural product is pulled out of the Earth or dirt, or untouched; the last testified that an “all natural” product would be one without Genetically Modified Organism (GMO) ingredients and one that would be “good for” her. Id. The plaintiff based her challenge on the assumption that at least some portion of Kind’s ingredients (e.g., canola oil) were derived from GMOs and processed using synthetic chemicals.
Plaintiffs were required to prove that reasonable consumers shared a specific definition of “all natural;” the fact that there was no objective definition of the term, and that consumers, and even the named Plaintiffs themselves, held different definitions substantially undercut Plaintiffs’ claims.
The Court then considered Plaintiffs’ survey evidence of consumer understanding – and granted Defendant’s Daubert motion because the survey was both biased and leading. Order at 29. The expert’s survey presented respondents with a mockup of the Kind product, and asked:
The product packaging has this descriptor: ALL NATURAL. Because of this descriptor, what is your expectation for this product? The product … Please select one.
- Will NOT contain artificial and synthetic ingredients
- Will contain artificial and synthetic ingredients
- Not sure/No expectation
Id. at 30. The Court found that this survey was designed to get respondents to agree with Plaintiffs’ theory of consumer understanding, rather than to discover the consumer’s actual understanding of the “All Natural” claim. Id. at 29-37. Specifically, the Court found that it was problematic that the expert only tested one theory of consumer understanding, rather than competing theories. Id. at 30. The Court also found that Plaintiffs’ expert had constructed a question designed to get survey respondents to say that certain “chemicals” were not “all natural.” Id. at 33. Finally, the Court discounted Plaintiffs’ survey because it did not define key terms, such as “artificial” or “synthetic,” or what it means for a product to “contain” or be “made with” those ingredients. Id. at 34. Without any admissible evidence of consumer understanding of the term “all natural,” Plaintiffs’ claim failed, and the Court granted summary judgment in Kind’s favor.
Even if the expert’s survey was admissible, however, the Court found that Plaintiffs’ second expert failed to demonstrate that the Products contained “artificial or synthetic” ingredients. Order at 40. The problem with the second expert’s opinion, which was essentially that various ingredients did not satisfy the expert’s definition of natural, was that the expert’s definition was irrelevant to the inquiry before the Court. Id. at 42-43. What was important was the consumers’ definition, which Plaintiffs had failed to establish. Id. In addition, the expert’s opinion was faulty because he had done no testing or analysis of the product, and had failed to account for the possibility that some of the ingredients were processed in a way that would place them outside of the definitions of “artificial” and “synthetic” that Plaintiffs had advanced in the case. Id. at 44. The Court therefore excluded Plaintiffs’ second expert’s testimony.
Finally, the Court granted Kind’s motion to decertify the class. The class had previously been certified on a theory that GMOs were not “natural,” and the class consisted of persons who had consumed a Kind product containing a GMO within the relevant time period. Order at 45-46. Plaintiffs had earlier abandoned the GMO theory, and the Court found that individual issues now predominated because Plaintiffs had not established a common consumer understanding of what was and was not “natural.” Id.
Kind’s complete victory provides a road map for Defendants facing similar actions. In “natural” cases with multiple plaintiffs, defendants should seek to establish that the named plaintiffs’ definition of “natural” is different from the theory addressed in the complaint, and different from each other. In attacking plaintiffs’ expert survey, create as much daylight as possible between that survey, and the various definitions of “natural” advanced by the named plaintiffs and the complaint. Seek to demonstrate at every turn the difference between the expert’s work and the plaintiffs’ theory of consumer deception.