100% Natural chicken claims might mislead about antibiotics and other features

Friends of the Earth v. Sanderson Farms, Inc., 2018 WL
7197394, No. 17-cv-03592-RS (N.D. Cal. Dec. 2, 2018)
FOE sued Sanderson, alleging FAL and UCL claims against Sanderson’s
“100% Natural” advertising for its chicken, in particular that that the ads falsely
and misleadingly suggest that its process and resulting product meet reasonable
consumer expectations for “natural” poultry, including: (1) no pharmaceutical
residues remain in the product; (2) pharmaceuticals, including antibiotics, are
not routinely administered to the chickens during the majority of their lives;
(3) Sanderson is not contributing to the spread of antibiotic-resistant
bacteria; and (4) Sanderson chickens were raised in natural conditions, such as
going outdoors.
The court found the complaint sufficient insofar as it
alleged that Sanderson’s advertisements and statements describe “natural” “in a
way that confuses consumers as to whether the chicken product was raised
without antibiotics versus raised with antibiotics and subsequently cleared of
it prior to sale, … taking advantage of consumer expectations that a ‘natural’
food product has never been exposed to antibiotics and the attendant consumer
willingness to spend more for such products.”
Sanderson argued that the ads’ full context dispelled any
potential confusion, pointing to: (1) the infographic on Sanderson’s “100%
Natural” webpage, (2) Sanderson’s “How We Grow Our Chicken” video, and (3)
Sanderson’s “Bob
and Dale”
commercials. 
Sanderson argued that the infographic had only true statements about
what’s not added to the chicken and says nothing about antibiotic use or
nonuse.  The court didn’t accept
Sanderson’s expressio unius argument “that because antibiotics are not included
in the list of excluded artificial ingredients, a reasonable consumer could not
conclude that antibiotics are also excluded.” 
Statements about the nonuse of hormones, steroids, seaweed, etc., didn’t
provide sufficient context for a reasonable consumer to conclude that “100%
Natural” chicken had been treated with antibiotics as part of the production
process. Instead, a reasonable consumer, considering the “100% Natural” slogan,
“could plausibly believe that the infographic’s ‘no additives or artificial
ingredients’ statement means no synthetic pharmaceuticals.” There was no
unequivocal disclosure about the use of antibiotics, and “the infographic’s
silence on the issue is not a disclosure.” The affirmative representations “100%
Natural” and “no additives or artificial ingredients” were plausibly contrary
to the undisclosed characteristic of antibiotic treatment. (Likewise, the
entire webpage claimed that there were “no unpronounceable ingredients” in Sanderson
chicken and that its feed is “corn and soy-based,” which plausibly implied that
there were no antibiotics/their names would be easily pronounced, “a stretched
argument at best.”)
A link on the webpage went to the FAQ, which disclosed the
use of antibiotics. But the entire context of the website need not be
considered—review is limited to the four corners of the page.  “No authority suggests a reasonable consumer
is expected to search a company’s entire website (or certainly all of a
company’s statements across all forms of advertisements) to find all possible
disclaimers.”  The reasonable consumer
standard doesn’t require them to be “private investigators.”
The “Bob and Dale” ads said “all chickens must be cleared of
antibiotics before they leave the farm.” Sanderson argued that this could not
plausibly leave a reasonable consumer with the impression that Sanderson does
not use antibiotics, because “if the process was devoid of antibiotics, surely
there would be nothing to ‘clear’ before the birds left the farm.”  Not so. “A lawyer may well catch this turn of
phrase, but the reasonable consumer standard does not demand that consumers
interpret advertisements the same way a judge interprets statutes.” This
negative inference isn’t required of a reasonable consumer, any more than she’s
expected to use ingredient lists on the back of a box to contradict claims on
the front. The ad didn’t focus on the fact that Sanderson uses antibiotics and
then clears its chickens of the drugs before sale, nor was it merely making
literally true statements regarding federal law requiring all chicken to be
clear of antibiotics before point of sale. Instead, the ad focused on
Sanderson’s competitors, and their use of phrases “no antibiotics ever” or
“raised without antibiotics” as essentially being redundant in light of federal
law requiring no chicken products contain antibiotics at point of sale. “By
criticizing its competitor’s advertising as misleading to consumers,
Sanderson’s commercial is likely to mislead reasonable consumers into believing
that Sanderson products were no different than its competitors who never used
antibiotics in their chicken production.” This was plausibly misleading to
consumers who were willing to pay a premium for chicken that had never been
exposed to antibiotics.
As to allegations about chicken cultivation, plaintiffs
cited surveys  indicating that at least
half of consumers understand “natural” to mean the animal roamed outdoors. This,
plus the allegation that Sanderson chickens don’t roam, sufficiently alleged
misleadingness.
Allegations about Sanderson’s contribution to antibiotic
resistance were also sufficient at the pleading stage. Plaintiffs alleged that
Sanderson’s process contributes to the build-up of unnatural
antibiotic-resistant bacteria, and “100% Natural” thereby misleads the public
regarding the threat to public health the product entails. Sanderson argued
that it never said anything about antibiotic resistance.  However, plaintiffs sufficiently alleged that
the ads “mask the difference between Sanderson’s products—which are raised with
antibiotics and cleared of the drugs before point of sale—and competitors’
products which never encounter antibiotics,” misleading consumers into thinking
the key concern is whether antibiotics residues remain on the product, and not
how the use of antibiotics in the production of chicken can contribute to
antibiotic resistance even after the drugs are cleared from the animal’s
system. Plaintiffs sufficiently alleged falsehood by citing numerous studies
and reports about how the overuse of antibiotics in agriculture contributes to
antibiotic resistance and alleging that Sanderson chickens do in fact contain
antibiotic-resistant bacteria when they leave their facilities.
The video “How We Grow Our Chicken” allegedly didn’t disclose
the full extent of Sanderson’s antibiotic use. Sanderson’s statements that the
“only time we inject antibiotics” is a single time under the shell and that
broiler chickens are not injected with anything were true standing alone, but
together their combined message was potentially misleading. “Injection is not
the only means of administering antibiotics to chickens, and Plaintiffs aver
Sanderson routinely feeds antibiotics to its broiler chickens.”

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