Food labeling cases alleging false or misleading advertising are fertile ground for gaining a better understanding of the application and use of conjoint surveys in class-action litigation. The production and marketing of food have changed dramatically in the past hundred years, and even more dramatically in the past twenty. Litigation over false or misleading claims on food packaging has been on the rise and shows no sign of slowing. One of the most famous cases involving a conjoint survey that was excluded in a food labeling case is Mohamed v. Kellogg Co.
Case Facts: The People vs Gardenburger
The plaintiff, Tasmeen Mohamed, filed a putative class-action suit in California, alleging unfair competition, false advertising, and breach of express warranty. The plaintiff alleged that the claim to be “Made with Natural Ingredients” on the labeling of the Kellogg product Gardenburger was false and misleading because it contained hexane-processed soy ingredients. These ingredients are a byproduct of a process whereby whole soybeans are bathed in hexane, a chemical that can irritate the eyes, nose, and respiratory tract, to separate the oil from the protein. At the time of filing, the claim “Made with Natural Ingredients” was removed from the labels.
Court Accepted and Court Rejected Surveys and Conjoint Survey Complications
The plaintiffs retained a consumer survey expert to measure whether a reasonable consumer would believe “Made with Natural Ingredients” includes hexane, and whether consumers are willing to pay a higher price for products marketed as “natural.” The plaintiffs’ expert provided survey testimony and evidence that showed that consumers believe “Made with Natural Ingredients” would not include hexane, and that the natural ingredients claim was material to consumer purchasing behavior. The court accepted this evidence.
The plaintiffs further submitted a conjoint analysis to help quantify the price premium for the “Made with Natural Ingredients” claim, which was intended to help determine damages. However, the conjoint survey did not supply an analysis of supply-side factors that influence price. As a result, the court found that the plaintiffs advanced a flawed theory of liability.
Since the plaintiff did not propose to conduct a regression or any other type of analysis to calculate the price premium, which would account for the supply and market factors that influence price, the court found that the plaintiffs failed to show that their proposed method of calculating damages on a classwide basis would measure damages attributable to their theory of liability.
The “Natural” Conclusion
The court noted that the definition of the word “natural” is murky, and stressed that it’s imperative for the FDA to provide a definition of what “natural” means. Until that definition is law or a federal rule, the issue of what a reasonable consumer believes is natural continues to be defined by courts, especially in litigation regarding genetically modified foods or foods with additives. A conjoint survey‘s ability to measure the importance (or lack of importance) of modified ingredients in foods is a key ingredient in determining damages. To best protect your products and your interests, be clear in your labeling and transparent in your processes on the packaging.