Antitrust Law Daily Wrap Up, ADVERTISING—SDFla: Labeling of Soups Containing Genetically Modified Corn as “All Natural” May Constitute False Advertising, (May 30, 2013)

By Tobias J. Gillett, J.D., LL.M.

A purchaser of certain Campbell soups has stated claims for false and misleading advertising under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) against the soup company over its labeling of the soups as “All Natural” when they contained genetically modified corn, the federal district court in Fort Lauderdale, Florida, has ruled (Krzykwa v. Campbell Soup Co., May 24, 2013, Dimitrouleas, W.).

According to the complaint, Campbell manufactures vegetable soups labeled as “All Natural” that contain genetically modified (GMO) corn. The complaint alleged that studies have indicated that GMOs may be harmful to a consumer’s health, and that the “All Natural” claim was false because “genetic engineering is different from natural/conventional plant breeding and poses distinct risks.” The plaintiff alleged that he relied on the labeling, and would not have paid the premium price for the “All Natural” soups if he had known they contained GMO corn.

The complaint asserted claims for false and misleading advertising in violation of the FDUTPA and unjust enrichment. Campbell filed a motion to dismiss.

Preemption. The court rejected Campbell’s argument that the claims were preempted because the U.S. Department of Agriculture (USDA) preapproved a “100% natural” statement on two cans of poultry meat soup that also contained GMO corn from the same line of soups as those at issue in the present case. Campbell had claimed that the FDA, which regulated the vegetable soups at issue here, and the USDA had similar policies regarding the labeling of foods with “natural” claims, and that neither agency had determined that bioengineered foods materially differed from other foods.

The court observed that if it adopted Campbell’s position it would also have to conclude “that because the USDA approved two Campbell poultry meat soups not at issue in this case that no claims can be made in any case against any defendant that it is misleading to label a food product containing GMO corn as ‘100% Natural.’” Moreover, the USDA’s approval of the label was not necessarily binding on other agencies, and the USDA may not even have known that the soup it evaluated contained GMO corn, since it was not labeled as such.

Primary jurisdiction. The court also rejected Campbell’s contention that the claims should be dismissed under the primary jurisdiction doctrine because the FDA has particular expertise with respect to the soups at issue, and had stated that no “special labeling’ was required when GMOs were used in foods. The court noted that the fact that the FDA does not require labeling regarding GMOs does not decide whether particular labeling may mislead consumers in violation of consumer protection laws. Moreover, the FDA had refused to issue rules defining the word “natural,” and therefore “[c]ourts have declined to dismiss false advertising claims premised on food companies’ ‘natural’ claims because the FDA simply does not regulate those claims.”

Safe harbor. Finally, because it rejected Campbell’s previous arguments, the court concluded that the claims did not fall within the FDUTPA’s safe harbor provision, which stated that the FDUTPA did not apply to “[a]n act or practice required or specifically permitted by federal or state law.”

The court also concluded that the plaintiff had adequately pled his unjust enrichment claim.

The case is No. 12-62058-CIV-DIMITROULEAS.

Attorneys: Howard Weil Rubinstein for Mark Krzykwa. Francis Augustine Zacherl, III (Shutts & Bowen) for Campbell Soup Co.

Companies: Campbell Soup Co.

Cases: Advertising StateUnfairTradePractices FloridaNews