Congress vested authority to promulgate regulations to prevent nonfunctional slack-fill in the Secretary of Health and Human Services, as to food, cosmetics, devices and drugs, and the Federal Trade Commission, as to other consumer commodities. Pursuant to that authority, the secretary elected to regulate nonfunctional slack-fill as to food products, but not as to other commodities. The FTC has thus far declined to enact regulations.
The federal slack-fill regulations state that a food is impermissibly misbranded if its container is made, formed or filled to be misleading. A container is presumed to be misleading if (a) it does not allow consumers to fully view the contents and (b) it contains nonfunctional slack-fill. “Nonfunctional slack-fill is the empty space in a package that is filled to less than its capacity for reasons other than” the following safe-harbors:
(1) Protecting the contents of the package;
(2) The requirements of the machines used for packaging the product;
(3) Unavoidable product settling during shipping and handling;
(4) The extra packaging is needed to perform a specific function such as preparing the food;
(5) The container has a value and use that is independent of the food it contains; or
(6) Some minimum package size is necessary to accommodate required food labeling, discourage pilfering, facilitate handling, or accommodate tamper-resistant devices.
California Regulatory Regime For Nonfunctional Slack-Fill
California law has two separate provisions regulating nonfunctional slack-fill. Section 12606.2 of the California Business & Professions Code governs nonfunctional slack-fill regarding food packaging, and Section 12606 governs other commodities. Some courts have held that these provisions are preempted by federal law as to certain products. Accordingly, preemption should be considered as a defense in any slack-fill litigation. However, until there is more robust case law on the issue, or the regulations are ruled to be entirely preempted, it is advisable to consider California law addressing slack-fill compliance.
Section 12606.2, governing food packaging, imposes largely the same requirements as the federal regulations in this area, although it adds the word “substantially” to the following phrase: “Nonfunctional slack fill is the empty space in a package that is filled to substantially less than its capacity …” This suggests that, de minimis or insubstantial nonfunctional slack-fill in food packaging would not give rise to liability under the California statute.
Section 12606, governing all nonfood commodities, differs from federal and California slack-fill food regulations in several significant respects requiring careful analysis.
First, Section 12606(a) prohibits “false” sides to packaging, stating that “[n]o container wherein commodities are packed shall have a false bottom, false sidewalls, false lid or covering, or be otherwise so constructed or filled, wholly or partially, as to facilitate the perpetration of deception or fraud.” Arguably, the “deception or fraud” portion of that section applies to the whole sentence. However, since “deception” is often in the eyes of the beholder, in this situation regulators, plaintiffs’ counsel, and the courts, companies may choose to avoid false sides in California if possible, whether deceptive or not, until further guidance is provided by the courts.[1]
Second, California regulations for nonfood commodities includes language suggesting that only “substantial” nonfunctional slack-fill will support litigation.
Third, Section 12606 expands the available safe harbors from six to 15. The first six safe-harbors codified at Section 12606(b)(1)-(6) of the California Business & Professions Code mirror the federal safe-harbors for food packaging. California law adds safe-harbors seven through 15 as follows:
(7) The product container bears a “reasonable relationship” to the actual amount of product contained.
(8) The dimensions of the product are visible, or the actual size of the product is clearly depicted on the exterior packaging, with a notation that the product is “actual size.”
(9) The presence of headspace is necessary to facilitate the mixing, adding, shaking, or dispensing of liquids or powders by consumers prior to use.
(10) The exterior packaging contains a product delivery or dosing devise, the existence of which is readily apparent from the packaging.
(11) It is a kit designed to produce a particular result that is not dependent upon the quantity of the contents.
(12) The exterior packaging is routinely displayed using tester units or demonstrations to consumers in retail stores, so that customers can see the actual, immediate container of the product being sold, or a depiction of the actual size prior to purchase.
(13) Exterior packaging consists of holiday or gift packages and the purchaser can adequately determine the quantity and sizes of the immediate product container at the point of sale.
(14) The exterior packaging is larger due to the inclusion of a free sample or gift, the presence of which is conspicuously disclosed.
(15) The packaging encloses computer hardware or software designed to serve a particular function which is clearly and conspicuously disclosed on the exterior packaging.
Slack-Fill Litigation
Recent N.D. Cal. Cases Have Had Recent Success
Consumer class actions attacking slack-fill are relatively new, since enforcement has mostly been the province of state law enforcement. One recent successful case is Hendricks v. Starkist, N.D. Cal., where a consumer who had purchased tuna in cans that were allegedly under-filled and substantially underweight filed suit against seller alleging breach of express and implied warranties, unjust enrichment, negligent misrepresentation, fraud, and violations of California’s Consumer Legal Remedies Act (CLRA), Unfair Competition Law (UCL), and False Advertising Law (FAL).
Holdings: The District Court, Yvonne Gonzalez Rogers, J., held that:
- consumer’s state law claims were not expressly preempted by federal Food, Drug, and Cosmetic Act’s (FDCA);
- under-filling claims were not within special competence of the Food and Drug Administration (FDA), as required for primary jurisdiction doctrine;
- complaint sufficiently alleged both reliance and deception, as required for CLRA, UCL, and FAL claims;
- complaint stated claim for breach of express warranty;
- complaint stated claim for breach of implied warranty of merchantability; but
- claim for unjust enrichment was duplicative of claims under CLRA and UCL;
- complaint alleged fraud with sufficient particularity; and
- consumer had standing to bring claims based on products he had not purchased.
A narrow settlement and release has yet to be approved by the court, but has been in progress since last year with $12 million agreed to in February 2016.
But not all cases land on the side of the consumer. In Ebner v. Fresh, a consumer brought putative class action against cosmetics manufacturer, alleging that manufacturer’s label, tube design, and packaging for its lip treatment product were deceptive and misleading in violation of California’s Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA). The United States District Court for the Central District of California, James V. Selna, J., 2013 WL 9760035, entered an order granting manufacturer’s motion to dismiss, and consumer appealed.
Holdings: The Court of Appeals, Tashima, Circuit Judge, affirmed and held that:
- safe harbor doctrine barred claim that manufacturer’s label was deceptive in that only 75% of product was reasonably accessible;
- safe harbor doctrine did not bar claim that manufacturer omitted a supplemental statement about amount of product that was accessible;
- federal law did not preempt claim that manufacturer omitted such a statement;
- manufacturer did not violate California law by omitting a supplemental statement; and
- any product falling below dispenser’s stop device was not prohibited slack fill.
This case might be an outlier, since “slack-fill” is defined as empty space, meaning that even though part of the lip balm was inaccessible due to packaging, the space still had “fill” in it and was not empty. This could apply in some food packages, but mostly would apply to cosmetic product packaging and similar.
In Dachauer v. NBTY, N.D. Cal., a class action just survived a motion to dismiss in a suit against a vitamin manufacturer for misleading labeling on vitamin E pill boxes. The court held that the boxes were sufficiently misleading, consistent with the FDCA, to the extent that they make claims about the health benefits of mega-dose Vitamin E supplements rather than Vitamin E in general. And it’s possible that a reasonable consumer would, in fact, understand the labels to be making claims about mega-dose Vitamin E supplements. The product labels here contain appropriate disclaimers, so the question is whether the labels “describe[ ] the role of a nutrient or dietary ingredient,” and whether the defendants have “substantiation” for those statements. To the extent the statements concern Vitamin E itself, the labels aren’t misleading, because Vitamin E is a “nutrient,” and the defendants point to studies substantiating their view that Vitamin E promotes immune function and helps support cardiovascular health. Dachauer, however, distinguishes between the nutrient Vitamin E itself and the defendants’ dietary supplements: according to the complaint, “the nutrient Vitamin E is not and should not be confused with Defendants’ mega-dose Vitamin E supplements.” “While the nutrient Vitamin E is known as an essential nutrient, this does not mean that Defendants’ mega-dose Vitamin E supplements provide any health benefits,” because “Americans are getting sufficient amounts of Vitamin E from their diets,” and taking too much Vitamin E might even be harmful.
A reasonable consumer could understand the defendants’ labels to be making a statement about mega-dose Vitamin E supplements, rather than Vitamin E itself. The statements on the fronts of the labels are ambiguous: they say things like “Promotes Immune Function & Healthy Heart” and “Promotes: Immune Health / Heart Health / Circulatory Health / Healthy Skin,” but they don’t specify what actually promotes those things. A reasonable consumer could assume that those statements referred to the bottles’ specific contents – that is, the defendants’ mega-dose supplements – rather than Vitamin E in the abstract. Underscoring this point, the ambiguous statements appear directly underneath text emphasizing the fact that the bottles contain large doses of Vitamin E – for example, “E-400 IU” or “E-1000 IU / Pure dl-Alpha.” Additionally, the ambiguous statements appear next to pictures of the defendants’ specific softgel supplements. And while the backs of the labels assert, more precisely, that “Vitamin E” – the nutrient itself – “promotes immune function and helps support cardiovascular health,” the Ninth Circuit has stressed that “reasonable consumers should [not] be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box.” Williams v. Gerber Products Co., 552 F.3d 934, 939 (9th Cir. 2008); see also Jou v. Kimberly-Clark Corp., No. 13-cv-03075-JSC, 2013 WL 6491158, at *9 (N.D. Cal. Dec. 10, 2013).
More recently, in Strumlauf v. Starbucks, in a class action alleging that starbucks does not fill their cups up to the advertised fluid ounces amount on their menu. The complaint alleged the following eight claims for relief: (1) Breach of Express Warranty; (2) Breach of the Implied Warranty of Merchantability; (3) Unjust Enrichment; (4) Violation of California’s Consumers Legal Remedies Act (“CLRA”); (5) Violation of California’s Unfair Competition Law (“UCL”); (6) Violation of California’s False Advertising Law (“FAL”); (7) Negligent Misrepresentation; and (8) Fraud.
Plaintiffs survived a motion to dismiss on June 17, 2016, where the court denied a motion to dismiss and held that in terms of “underfilling”: Plaintiffs’ three theories of underfilling are sufficient for Plaintiffs to establish standing because the allegations allow the Court to make the following reasonable inference: If all Starbucks lattes are made pursuant to a standardized recipe which results in the lattes being uniformly underfilled, and Plaintiffs allege that they purchased lattes, it is reasonable to conclude that – even without measuring – Plaintiffs’ lattes were underfilled. Having established their own individual standing, Plaintiffs in this putative class action may also allege claims of other class members “based on transactions in which the named plaintiffs played no part.” Garrison v. Whole Foods Mkt. Grp., Inc., No. 13-cv-5222-VC, 2014 WL 2451290 at *5 (N.D. Cal. June 2, 2014).
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[1] http://www.consumerreports.org/cro/magazine/2015/09/packaging-downsizing-less-is-not-more/index.htm
[2] See Steinberg, “FDA Won’t Formally Define ‘Natural’, Judges Request in GMO suits Declined” Bloomberg BNA Jan. 8, 2014.