Antitrust Law Daily Wrap Up, ADVERTISING—S.D.N.Y.: Snapple fruit beverages ‘all natural’ labeling not misleading, (Mar 25, 2024)

By Jody Coultas, J.D.

Reasonable consumers would not be misled by the addition of coloring agents or citric acid.

Snapple Beverage Corporation was granted dismissal of a suit alleging that it falsely and misleadingly labeled its beverages as “All Natural”, according to the federal district court in New York City. The consumer alleged that purchasers do not expect “All Natural” beverages to contain added coloring even if the coloring comes from natural sources, nor do they expect citric acid that is industrially produced, as all citric acid nowadays allegedly is. The court held that the consumer failed to show that the all-natural labeling was misleading because Snapple included fruit and vegetable concentrate for coloring. Further, the consumer failed to provide sufficient evidence that citric acid is not natural or that a reasonable consumer would understand the process in which citric acid is created. The court declined to grant the consumer leave to amend the complaint as she lacked any facts that would change the outcome (Valencia v. Snapple Beverage Corp., March 18, 2024, Seibel, C.).

Snapple sells fruit beverages, including “Mango Madness” and “Snapple Apple”, with the statement “All Natural” displayed on the front of the bottles. A New York consumer alleged that the statement “All Natural” was false and misleading because the products contain vegetable and fruit juice concentrates for color, and citric acid. The consumer alleged that she “paid more for the Products than she would have or would not have bought them had she known ‘All Natural’ did not truthfully represent all of the ingredients,” and that the value of the beverages was materially less than as represented.

GBL. To state a New York General Business Law (GBL) claim, a plaintiff must plausibly allege “first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act.”

The consumer failed to sufficiently allege that a significant portion of reasonable consumers acting reasonably would be misled by the “All Natural” representation because some of the natural fruit and vegetable concentrates are included for color, according to the court. The consumer alleged that although the coloring in the products is from natural sources, “it is misleading to describe beverages with any added colors as natural because consumers do not expect them to be part of such drinks.” The FDA’s opinion that added coloring from any source is inconsistent with an “all natural” label simply does not render plausible the conclusion that a reasonable consumer would think such a label is misleading or deceptive because ingredients from natural sources have been added for color as disclosed by the ingredient list. Also, a reasonable consumer acting reasonably in this context would not think that such a designation renders the natural ingredients or the drink unnatural. It was not plausible that a reasonable consumer would think that adding a natural product to a natural product renders the latter not natural.

Also, the consumer failed to adequately alleged that the “All Natural” label was misleading because the products contained citric acid. The consumer’s description of citric acid as “an industrially produced, synthetic ingredient” was insufficient to adequately allege the citric acid used in the beverages was industrially produced. The bare claim that citric acid today is made from mold rather than citrus fruit cannot, absent any allegation specific to the beverages and absent any basis for her assertion about all citric acid, be sufficient. Also, the court found that a reasonable consumer would not think that a compound found in nature is artificial even if it is produced in a different way than nature produces it, if the way it is produced is that it is derived from a natural product and does not contain anything synthetic.

Unjust enrichment. The consumer failed to make any factual allegations unique to her unjust enrichment claim and failed to explain why the unjust enrichment claim was distinct from the other claims. Because the unjust enrichment claim relied on the same operative facts as the other claims, the unjust enrichment claims would either be duplicative, or fail as the other claims fail. Thus, the claim was dismissed.

Leave to amend. The court declined to grant the consumer leave to amend a second time. The consumer had already amended the complaint once after receiving a pre-motion letter outlining the grounds on which Snapple planned to move and was offered the opportunity to amend again at the pre-motion conference, which she declined. Also, the consumer did not suggest that she was in possession of facts that would cure the deficiencies identified.

The case is No. 23-CV-1399 (CS).

Attorneys: Katherine Lalor and Spencer Sheehan (Sheehan & Associates, PC) for Selina Valencia. Charles C. Sipos and Thomas J. Tobin (Perkins Coie LLP) for Snapple Beverage Corp.

Companies: Snapple Beverage Corp.

Cases: Advertising NewYorkNews