Kashi agrees to pay up to $3.99m to settle 'all-natural' lawsuit; Campbell Soup under fire over Prego labels

By Elaine Watson contact

- Last updated on GMT

Kashi denies it misled shoppers with 'all-natural' claims but has agreed to settle a class action in Florida to avoid the cost of protracted litigation
Kashi denies it misled shoppers with 'all-natural' claims but has agreed to settle a class action in Florida to avoid the cost of protracted litigation
New developments in three high-profile false advertising lawsuits underline the risks associated with making ‘all-natural’ claims on foods made with genetically engineered ingredients, with Kashi and Karlin Foods agreeing to sizeable settlements, and Campbell under fire over Prego labels.

Kashi has agreed to pay up to $3.99million to settle an ‘all-natural’ false advertising class action in Florida​*; Karlin Foods agreed to pay up to $825,000 to settle a lawsuit over ‘all-natural’ labels on cornstarch (also in Florida); and Campbell Soup has been hit with an amended lawsuit over ‘100% natural’ claims on Prego sauces in California.

Kashi – which agreed to settle a similar case in California last year for $5m​ – was accused of misleadingly and unlawfully labeling cereals, bars, snacks, and pizzas as ‘All-Natural’ and/or containing ‘Nothing Artificial’ when in fact they contain “bio-engineered, artificial, and synthetic ingredients”​.

The plaintiffs took particular issue with: “GMO soy, GMO soy-derivatives, GMO corn, GMO corn-derivatives, pyridoxine hydrochloride ​[vitamin B6], alpha-tocopherol acetate ​[vitamin E], hexane-processed soy ingredients, and calcium pantothenate ​[vitamin B5],” which they argued, a reasonable consumer would not expect to find in products labeled ‘all-natural’.

Kashi will reimburse shoppers, change its labels and provide compliance info on non-GMO claims

While Kashi has not admitted any liability, it has opted to settle the case to avoid the cost of protracted litigation, and agreed to allocate between $2m and $3.99m to reimburse shoppers.

Under the proposed settlement – which is subject to court approval – Kashi will also remove ‘all-natural’ and ‘nothing artificial’ claims from products containing the contested ingredients “unless such ingredient is approved or determined as acceptable by a federal agency or controlling regulatory body to be designated as ‘natural’​”.

Finally, it has agreed to provide “compliance information​” on products in its range that feature the Non-GMO Project Verified label twice a year for the next three years.

Karlin Foods will settle to avoid the expense of protracted litigation

Karlin Foods, meanwhile, has agreed to settle a false advertising lawsuit** over all-natural claims on Walmart's Great Value cornstarch, without admitting liability, in order to “avoid the costs, disruption and distraction of further litigation”.

prego-natural
“A reasonable California consumer... would not expect a product labeled 100% natural to contain ingredients from genetically modified crops, which by definition are artificial and synthetic,” claims a lawsuit filed vs Campbell Soup on June 8

Under the proposed settlement - to which a Florida court has given its preliminary seal of approval – Karlin has agreed to stop labeling the cornstarch ‘all-natural’ [the plaintiffs argued that the cornstarch was from GE corn], and allocate up to $825,000 for payments to the settlement class and administrative expenses.

Campbell Soup hit with amended lawsuit over ‘100% natural’ claims on Prego sauces

Finally, Campbell Soup has been targeted in an amended lawsuit*** (originally filed in Sept 2014 and dismissed with leave to amend in May 2015), alleging it deceived shoppers with ‘100% natural’ claims on Prego sauces that contained oil from genetically engineered canola.  

“A reasonable California consumer, such as the plaintiff, would not expect a product labeled 100% natural to contain ingredients from genetically modified crops, which by definition are artificial and synthetic,” ​said the complaint.

While Campbell Soup removed the ‘100% natural’ claim from Prego labels in 2013, it was on pack during the period in which Nelson purchased the products (during the three years prior to the filing of the lawsuit), added the complaint.

However, Campbell Soup told FoodNavigator-USA it had “confidence in the accuracy of our labels and in our defense of this case​”.

Status of ‘all-natural’ lawsuits

While scores of ‘all-natural’ lawsuits are still moving through the courts, none have yet gone to trial.

Sunflower-Dream
In an unsuccessful motion to dismiss a lawsuit over all-natural claims on its Sunflower Dream drinks, Hain celestial recently noted that “multiple courts… have dismissed ‘all natural’ claims at the pleading stage where plaintiffs fail to show plausibility, specificity, or Article III standing”.

Many of these cases are withdrawn or ultimately thrown out, but mounting a defense can be costly and time consuming, and several high-profile defendants including Kellogg, Trader Joe’s, Pepsi and Pop Chips have chosen to settle to avoid the expense of protracted litigation.

As to the settlements, while some defendants have agreed to cough up millions, others have only had to amend labels (injunctive relief) as plaintiffs were unable to present a viable model for calculating damages (eg. Jamba Juice​).

None of the food crops grown commercially today would have occurred ‘naturally’

The issue of whether GMOs belong in ‘all-natural’ products has also featured heavily in the debate over GMO labeling, with the GMO labeling law in Vermont (effective July 1, 2016), for example, stipulating that products containing GMOs cannot be labeled as ‘natural’ [see p5 of the law HERE​). 

However, some crop scientists argue there is nothing ‘natural’ about many conventional (non-GMO) plant breeding techniques, and that none​ of the food crops grown commercially today would have occurred ‘naturally’.

*Katrina Garcia, Laura Eggnatz & Julie Martin et al v Kashi Company, 12-cv-21678.

** Teufel v. Karlin Foods Corp., No. 1:14-cv-23100

***Nelson v Campbell Soup Company et al 3:14-cv-02647  

Class action lawsuits, and how to avoid being targeted in them, is a hot topic at Food Vision USA​ in Chicago this October. Get full details HERE​ or click on the link below: 

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