Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Hain Celestial may be liable for labeling organic waffles as “all natural”, (Oct 7, 2014)

By Linda O’Brien, J.D., LL.M.

In an action by a consumer against an organic food manufacturer for false advertising and misrepresentation, the consumer plausibly alleged that the “All Natural” label on organic waffles was misleading from the perspective of a reasonable consumer, since the waffles contained a synthetic substance, the federal district court in San Francisco has ruled (Ham v. Hain Celestial Group, Inc., October 3, 2014, Orrick, W.).

Hain Celestial Group, a manufacturer of natural and organic foods and personal care products, manufactures Earth’s Best brand organic mini waffles. Consumer Ana Belen Ham purchased two varieties of the waffles, which were labeled “All Natural.”

Ham filed a complaint against Hain, asserting violations of California’s False Advertising Law (FAL), Consumers Legal Remedies Act (CLRA), and Unfair Competition Law (UCL), among other claims. Ham alleged that the waffles were not “all natural” because one of the ingredients was sodium acid pyrophosphate (SAPP), a nonorganic synthetic substance. SAPP is a leavening agent and was included in the ingredient label on the product packaging. Hain moved to dismiss Ham’s complaint.

For claims arising under California’s FAL, CLRA, and UCL, the plaintiff must show that reasonable consumers are likely to be deceived by the label. In rejecting Hain’s argument that Ham did not provide a plausible definition of “All Natural,” the court noted that the question was whether a reasonable consumer would expect to find SAPP in waffles labeled “All Natural.” Although it is reasonable to expect some degree of processing, it is plausible that a reasonable consumer would expect that an “All Natural” product would contain only natural ingredients.

Hain’s contention that consumers would not be misled by the “All Natural” label because they could simply look at the ingredient list to determine whether the product contains any synthetic ingredients was also rejected. A product label could be misleading even if the alleged misrepresentation was corrected on the ingredient list. Thus, the ingredient list provided no shield from liability for the alleged deception, the court concluded.

The case is No. 14-cv-02044-WHO.

Attorneys: Molly Ann DeSario (Scott Cole & Associates, APC) for Ana Belen Ham. Dean N. Panos (Jenner and Block LLP) for Hain Celestial Group, Inc.

Companies: Hain Celestial Group, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews