Food and beverage manufacturers face an ever-challenging legal and regulatory landscape defined by Make America Healthy Again (MAHA) initiatives, a patchwork of new state laws and a surge of lawsuits targeting trending products like protein and probiotics.
Law firms representing CPG companies are preparing their clients for regulatory changes at the state and federal levels and positioning food and beverage companies to protect themselves from the proliferation of legal challenges.
At the federal level, this includes an expected overhaul of the self-affirmed Generally Recognized As Safe (GRAS) pathway – a process becoming increasingly complex as states establish their own disclosure requirements.
The regulatory volatility comes at a time of government belt-tightening and organizational restructuring that have led to mass departures at the Food and Drug Administration and Department of Health and Human Services.
The thinning government workforce has led many to wonder, “What’s going to happen next? Who’s going to enforce all these initiatives?” Rend Al-Mondhiry, partner and co-chair of the Regulatory Group at Amin Wasserman Gurnani LLP, said in a recent webinar on legal and regulatory trends hosted by Naturally Chicago.
In short, the states are stepping in to fill the void.
“MAHA, of course, had a huge impact and continues to have a huge impact, not just on FDA and related agency initiatives, but also the states,” she said.
Prop 65 lawsuits target protein
One of those state initiatives, Prop 65 in California (formally known as the Safe Drinking Water and Toxic Enforcement Act of 1986), just celebrated its 40th birthday and shows no signs of slowing down, according to Al-Mondhiry.
The law, which requires food and beverage makers to label products that contain chemicals correlated to cancer and reproductive harm, continues to inspire plaintiffs’ attorneys, legal experts said.
Lead, cadmium, mercury and arsenic are among the top targets for lawsuits against CPG companies, according to Al-Mondhiry.
“I hate to be alarmist, but truly, if your products include ingredients that are sourced from the earth, sourced from soil, it has been and likely will be targeted for an enforcement action,” she said.
Lawsuits against protein powders and bars are becoming more common, a trend partly driven by a Consumer Reports investigation in October that found unsafe lead levels in more than two-thirds of the products it tested, according to Jenny Singh, a partner at Amin Wasserman Gurnani LLP.
Protein on trial
Protein lawsuits often target content claims, such as “high protein,” “good source of protein” or “10g protein.”
Food and beverage manufacturers must be prepared to prove that the product not only contains 10 grams of protein but that those 10 grams are fully digestible, according to Matthew Orr, a partner at Amin Wasserman Gurnani LLP.
“If you’re making a protein claim on the front of the product, particularly if you’re using a plant-based protein, you’ve got to have a percent DV (Daily Value) on the back that takes into account the digestibility of that protein,” he said.
Beyond Meat reached a settlement agreement with food and beverage manufacturer Don Lee Farms in 2022 over such a lawsuit, which accused the plant-based food company of exaggerating the amount of protein in its products due to digestibility.
Clean label’s risk factor
Protein-rich products aren’t the only ones on the firing line, Al-Mondhiry said. “Nothing is sacred – seeds, cocoa, spices, noodles, cookies, greens, supplements, drinks, you name it, are all being regularly targeted of late,” she said.
Clean-label products also are facing increased legal scrutiny on microcontamination claims under Prop 65, according to Orr, who said plaintiffs are targeting product labels.
“If it says pure or clean or something similar to that, you’re going to be a target for these types of claims,” he said.
PFAS, microcontaminants and flavor claims in court
One bright spot for CPG companies is the decline in lawsuits challenging companies for perfluoroalkyl and polyfluoroalkyl substances (PFAS), or so-called “forever chemicals,” in packaging.
Plaintiffs argue that the presence of PFAS in packaging negates health claims made on the product due to microcontaminants..
Hershey currently faces two PFAS lawsuits claiming the company misled consumers by saying its products meet the “highest quality, safety and sustainability standards.” Those cases remain active, but PFAS cases are slowing down, Orr said.
“There’s not as much PFAS litigation recently, and I think that has to do with the fact that there’s been some good rulings from judges recently that have identified the shortcomings in a lot of the PFAS testing that’s out there,” according to Orr.
Among those cases is Castillo v. Prime Hydration LLC, where the sports drink company was accused of containing PFAS, which plaintiffs argue rendered various health claims false and misleading.
According to law firm Perkins Coie’s 2024 Food & Consumer Packaged Goods Litigation Year in Review, the court dismissed the misrepresentation claim, determining that “no reasonable consumer would be misled by the statements on the label.”
“The court explained that statements such as ‘refresh, replenish, and refuel’ and ‘hydration drink’ were vague. Moreover, nowhere on the label was any claim that the products were free from PFAS,” according to Perkins Coie. “The court also dismissed the omission claims, finding the plaintiff failed to allege defendant ‘knew about the existence of PFAS in [the product] when it was sold.’”
While PFAS claims are declining, claims over natural flavors and preservatives are on the rise, Orr noted.
Products containing malic, citric or ascorbic acid remain on the firing line for litigation when food and beverage manufacturers claim the products contain all-natural flavors or no preservatives.
“They’re generally frivolous claims, but they can pass the motion to dismiss stage, and that’s really what the plaintiffs’ lawyers are looking for here – just a quick money grab with the cost of defense,” Orr said.
Lawsuits making a comeback
So-called slack-fill lawsuits are making a comeback, according to Orr.
The lawsuits challenge packaging that plaintiffs claim misleads consumers by making it appear the box holds more product than it actually does.
Among the most recent slack-fill lawsuits was one filed in California in December against General Mills. Plaintiffs argue that the food manufacturer’s Fruity Cheerios cereal is packaged in an oversized box that is half empty.
Similar to all-natural flavor and no preservative claims cases, slack-fill lawsuits are increasingly surviving the motion to dismiss, Orr explained.
“They’ve been around for a decade, and they’ve just been up and down,” Orr said, noting that there are strategies for mitigating the risk of these lawsuits. “You can use a fill line. You can include the number of servings on the front panel of the product.”
The rise of slack-fill cases is accompanied by the return of place-of-origin lawsuits, Orr added. Claims that a product was made in the USA could put CPG companies in a precarious position and open them up to lawsuits, he said.
Irrespective of where the product was actually made, plaintiffs will challenge Made in USA claims if any of the individual ingredients are sourced outside the country, according to Orr.
“Really take a close look at your ingredients and your packaging,” he warned food and beverage makers. “A lot of our clients are moving away from pure, unadulterated USA claims and going to ‘sourced with global ingredients’ type claims.”
Place-of-origin lawsuits are giving pause to CPG companies for products perceived to be manufactured outside the US as well.
Perkins Coie’s 2024 legal roundup noted in the 2023 case of La Barbera v. Ole Mexican Foods Inc. that a court found that using Mexican words, phrases and imagery led consumers to believe the products were made in Mexico.
A similar case – Hardy v. Ole Mexican Foods, Inc. – in a different court involving the same complaint, however, went in the opposite direction and the judge sided with plaintiffs.
“The US Court of Appeals for the Second Circuit affirmed dismissal in a nearly identical case involving the same products, finding the labels not misleading, especially where the back of the labels stated “Made in USA,” according to the Perkins Coie report.
State laws and AG actions
Lawsuits from plaintiffs aren’t the only legal challenges food and beverage manufacturers are facing – state laws and investigations from attorneys general across the country also are heating up.
States are piggybacking on MAHA health initiatives, filling the void left by layoffs at FDA, according to a blog post by global law firm Paul Hastings LLP.
The law firm noted that Texas Attorney General Ken Paxton launched investigations against General Mills and other home goods manufacturers connected to the MAHA agenda.
Paxton targeted General Mills in May, claiming the food company misrepresented the safety of cereals such as Trix and Lucky Charms, calling them a “good source” of vitamins and minerals and marketing them as “healthy.”
“In addition, the attorney general faults General Mills for failing to include any warnings about the potential negative health effects of these dyes,” the law firm noted.
Paxton similarly accused WK Kellogg Co. and Mars of including dyes and preservatives in its products. The Texas AG’s office reached settlements with Kellogg and General Mills, both of which agreed to remove the synthetic dyes from their products.
