Sanderson can’t chicken out of false advertising claims

Organic Consumers Assoc. v. Sanderson Farms, Inc., 2018 WL
922247, No. 17-cv-03592 (N.D. Cal. Feb. 9, 2018)
OCA sued Sanderson, a poultry processor, over ads that
allegedly mislead consumers about the nature of Sanderson’s chicken products
and farming practices. OCA and co-plaintiffs FoE, and CFS are non-profit
organizations that “work to safeguard the rights and promote the views and
interests of socially responsible consumers and farmers.”  OCA challenged claims that Sanderson’s
chicken is “100% Natural,” has no “hidden ingredients,” and that “at Sanderson
Farms, being 100% natural means there’s only chicken in our chicken.” In TV
ads, two men wearing Sanderson Farms baseball caps make comments such as, “no
antibiotics to worry about here” and “good, honest chicken.” But USDA testing found
49 instances in which Sanderson’s products tested positive for antibiotics,
pharmaceuticals, and other unnatural substance residues, causing the plaintiffs
to undertake efforts to warn customers and educate the public about the true
nature of Sanderson’s products and chicken raising practices.
The court found organizational standing under the UCL and
FAL, which is available where there is  “(1) frustration of [the plaintiff’s]
organizational mission; and (2) diversion of its resources” to combat the
challenged actions by defendant. OCA’s research into Sanderson’s farming practices
and advertising, preparation of internal memoranda, strategy meetings, and coordination
of a multi-organization consumer outreach plan diverted resources and staff
time away from OCA’s policy and consumer education work on other issues.  So too with the other organizational
plaintiffs.
The court also rejected Sanderson’s argument that state law
claims challenging its advertising were impliedly preempted by the Poultry
Products Inspection Act (PPIA) and Federal Meat Inspection Act (FMIA), given
the congressional intent to provide uniform national standards for monitoring
food producers and ensuring they do not mislead consumers as to the contents of
meat products. Also, the USDA approved the “100% Natural” language.
But consumer protection laws “are within the historic police
powers resting with the states and are therefore subject to the presumption
against preemption.” There was no manifest purpose to displace them, and
avoiding misleading advertising was consistent with the federal statutes’ aims
to ensure quality and proper labeling. And USDA approval wasn’t enough to avoid
misleadingness: “Label language is reviewed for technical and scientific
accuracy. Yet common sense suggests even ‘language that is technically and
scientifically accurate on a label can be manipulated in an advertisement to
create a message that is false and misleading to the consumer.’”  Also, Sanderson’s ads included “images,
representations, and language that go beyond what is included on the USDA
approved label.”
Plausibility: Sanderson argued that a reasonable consumer wouldn’t
interpret “natural” as stringently as the plaintiffs propose or be surprised to
learn that Sanderson’s products have trace amounts of synthetic materials like
antibiotics.  The court disagreed:
Plaintiffs alleged the existence of surveys indicating a majority of consumers
believe: a) a “natural” poultry product is produced without the use of
antibiotics or other drugs at any point; and b) it is important to reduce
antibiotic use in food production and improve the living conditions of animals.
The allegations were plausible.

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