Crisis Law and Strategy Update - October 2024

Strategies for Early Stage Defenses Against False Advertising Lawsuits Targeting Health and Wellness Companies

            In recent years, and especially after the release of the 2018 and 2019 films The Devil We Know and Dark Waters regarding the case against the chemical manufacturing corporation DuPont, litigation involving “forever chemicals” has proliferated. A cottage industry of lawsuits now centers on false advertising claims against companies that market themselves as natural products, targeting existing (as well as new and upcoming) brands in the popular health and wellness space – a trillion-dollar industry. These lawsuits target a multitude of brands that line grocery store shelves with any sort of “all natural” or “plant based” products and claim that they use manmade “forever chemicals” known as PFAS (per- and polyfluoroalkyl) substances they allege are toxic, even at low levels, to human health. 

            For instance, in the last few months, class action complaints have been filed against Coterie Baby Inc., an eco-friendly diaper company, and Risewell, an eco-friendly toothpaste company, alleging that each deceptively marketed products as “PFAS-free” See Saedi v. Coterie Baby, Inc.(S.D.N.Y. No. 1:24-cv-03893; Watkins et al v. RiseWell LLC, (N.D. Cal. No. 5:24-cv-03529).  Plaintiffs’ firms have also targeted such Fortune 500 companies as Unilever, alleging it falsely branded hydration electrolyte drinks as preservative free See Meza-Soliven et al v. The Liv Group, Inc. et al, (S.D., Cal, No. 3:24-cv-00019-TWR-DDL).

​            Although these lawsuits are oftentimes premised on the thinnest of allegations, regardless of their merit, the impact on defendant companies is felt far beyond the courtroom.  Any defense must include a strategy and approach that works in both the court of law and court of public opinion. The defendant companies must consider a multi-faceted approach with the judge, customers, and regulators, including the Food and Drug Administration, which is why early resolution of such matters is critical. Based on our significant experience with complex problems involving litigation, government investigations, and crisis management, we have developed a suite of strategies to protect consumer products companies’ businesses and reputations. We work with scientific experts, public relations consultants, and other experts to help companies navigate through these complicated issues.  When a company is hit with these types of lawsuits, winning early-stage strategies include the following:

Identify Routes to Challenge the Complaint at the Pleading Stage: Many false advertising complaints in the “PFAS” space fail even to allege which chemicals are purportedly contained in the product, nor do many of the complaints attempt to quantify an individual chemical based on how much PFAS is contained in the product. Forever chemicals are part of a class of chemicals that numbers well into ten thousand, and many of these chemicals remain useful, approved, and regulated.  Indeed, there is mixed literature on whether these forever chemicals actually have the health impacts plaintiffs assert.  Often plaintiffs file generic “PFAS” complaints and lump any and all chemicals in their pleading without specificity, paving the way for a motion to dismiss for failure to state a claim upon which relief can be granted. It is also important to assess the advertising and marketing statements made by the defendant. Is the company making broad-based claims they are “100% all natural,” “chemical free” or “toxin free”? Typically, companies do not make such unequivocal absolute statements.  Motions to dismiss have often had success in arguing that no reasonable consumer could be misled by this advertising, especially where statements are less than absolute. 

            For instance, in 2022 two courts dismissed lawsuits against The Kraft Heinz Co. in false-advertising class actions where plaintiffs alleged that Kraft misled consumers about its Bagel Bites Pizza Snacks by failing to include a disclosure on the label that the product is made with supposed imitation mozzarella cheese.  On May 6, 2022, the Western District of Wisconsin dismissed one case, with prejudice, for failure to state a claim. On August 3, 2022, the Northern District of Illinois dismissed, with prejudice, another, saying the complaint did not allege that the products don’t contain real cheese or tomato sauce, only that the front label does not also include the additives.  See Lemke v. Kraft Heinz Foods Co. (Case No. 3:21-cv-00278, W.D. Wis.); Jackson v. Kraft Heinz Foods Co. (Case No. 1:21-cv-05219, N.D. Ill.). Although the action was not at the pleading stage, the Second Circuit in May 2024 affirmed summary judgment for defendant food manufacturer KIND in a false advertising class action challenging its’ “all natural” marketing claims. The Plaintiffs alleged that they were misled by the phrase “all natural” on the labeling of snack bar products. The Defendant moved for summary judgment, arguing that Plaintiffs had failed to carry their burden to present admissible evidence establishing how the challenged “All Natural” statement would mislead reasonable consumers acting reasonably and the district court agreed. (Bustamante, et al. v. KIND, LLC, 2024 WL 1917155 (2d Cir. May 2, 2024)).

Make Yourself an Unattractive Target: Many of these “PFAS” lawsuits are handled by the same cohort of plaintiffs’ law firms who file so many class action cases that they become overextended dealing with hundreds of cases at once.  A defendant should aim to make itself as unattractive a target as possible, so that when the plaintiffs’ firm is looking at their portfolio of cases and doing necessary triaging, they make the decision that the case is not worth the battle. Quinn Emanuel’s well-known reputation as the “most feared” law firm and nearly 90 percent trial success rate aids in this effort, helping make our clients unattractive targets. We lay out for plaintiffs’ attorneys early on how things will play out should they proceed, but ensure they understand that our clients may consider very modest early-stage settlements.  If opposing counsel is not ready to assess the reasonable value of their lawsuit, we will file aggressive pleadings seeking to dispose of the case at the motion to dismiss or summary judgment stages.

If Considering Early Settlement, Look Down the Road: Some companies, especially new and upcoming startups, want to resolve the case through settlement quickly and quietly, but it is pivotal that any settlement negotiations be made on a class-wide basis and not solely for the individual named plaintiff.  For example, in August 2024, Breyers Ice Cream settled a recently filed lawsuit for $8.85 million on a class-wide basis over claims that the Defendants’ labelling of their Natural Vanilla ice cream gave consumers the impression the ice cream contained vanilla flavor derived only from the vanilla plant, and not from non-vanilla plant sources. Under the terms of the Breyers settlement, class members can receive $1 per purchased product. (McKinley, et al. v. Conopco, Inc., et al., Index No. 805260/2024E).  Similarly, this summer the company Earth Rated agreed to pay $825,000 to resolve a false advertising class action lawsuit against it alleging its dog poop bags were falsely advertised as compostable to mislead purchasers. Under the terms of the Earth Rated class action settlement, class members can receive $2 per purchased product. (Natale, et al. v. 9199-4467 Quebec Inc. d/b/a Earth Rated Case, 2:21-cv-06775-JS-SIL).

            Settlement with the named plaintiff alone does nothing to prevent another customer from coming in and suing.  If a class-wide settlement cannot be achieved, an individual settlement should be for no more than the cost of preparing a motion to dismiss because, again, nothing prevents another plaintiff from involving the company in further litigation.  A desire to get rid of the case quickly and at a low cost must be balanced against the possibility of future suits of the same kind.

Get Us on Your Side: Quinn Emanuel has successfully defended companies in PFAS-related litigation, including on behalf of footwear brand Wolverine Worldwide.  Our firm is national litigation counsel for all of Red Bull’s product liability cases and has dealt directly with its FDA issues, toxicology issues, and other scientific issues. Our firm has also served as national coordinating counsel for Colgate, including managing a nationwide docket of over two hundred talcum powder cases, where we tried five cases to verdict and obtained defense verdicts in four of the five. We have also represented lip balm manufacturer EOS in eleven class action cases and related FDA inquiries and Right Guard/Henkels in litigation related to alleged harmful contaminants in its spray deodorant. Just last year, we secured a dismissal on behalf of McCormick after the plaintiffs alleged the company’s spices contained heavy metals. We have a proven track record of guiding companies to early-stage successes when they are faced with lawsuits involving forever chemicals.