Hard Candy: Kraft and Cadbury Face Class Action

A putative class action lawsuit was recently filed against Kraft Foods Global Inc. and Cadbury Adams USA LLC in the U.S. District Court for the Northern District of California alleging that the defendants deceived consumers over the health benefits of Trident, Dentyne, Halls cough drops, and other hard candy products.

The lawsuit alleges that Kraft and Cadbury failed to include disclaimers on their product packaging informing consumers that the sweets contained within are not low in calories and do not help with weight control because all of them contain more than the 40 calories per 50 grams, which is the maximum amount allowed under federal law when making health claims.  The Plaintiff further alleges that the defendants’ sugar-free gums contain more than 80 calories per 50 grams, their product labeling does not include any of the required FDA disclosures: “not a reduced calorie food,” “not a low calorie food,” or “not for weight control.”

Plaintiff also claims that Kraft and Cadbury ignored FDA guidance letters sent to the food industry warning the industry about using deceptive “sugar free” claims or deceptively advertising serving sizes in order to mislead consumers into thinking that the products contain low calories and low sugar, arguing that they designed their “business models and marketing strategies” on “sugar free” and “sugarless” claims to promote the health benefits of their products to meet “consumer demand for sugar free, low-calorie food….”

Based on these allegedly deceptive strategies, plaintiff argues that Kraft and Cadbury unlawfully “misbrand” their products in violation of federal and unfair business acts and practices and deceptive advertising laws, along with violations of California’s Consumer Legal Remedies Act, Song-Beverly Act, and Magnuson-Moss Warranty Act.  On behalf of herself and all class members, plaintiff seeks to enjoin the challenged advertisements and product labeling and seeks restitution, disgorgement, punitive damages, interest, attorneys’ fees and costs.

To read the plaintiff’s complaint, click here.

Product health claims have long been a target of regulatory scrutiny, and have increasingly formed the basis for a number of civil class actions.  The reason for this is simple: when it comes to sales, health claims work.  As detailed in an earlier post, they’ve worked for more than a century.   Nevertheless, in an increasingly litigious environment, food manufacturers should think twice before yielding to the temptation of making unsubstantiated health claims, or failing to make prudent disclosures on their product packaging.  Although profits are always nice,  money is worse than useless if you can’t keep it.

Author: Seth Heyman
Seth D. Heyman is a California attorney with extensive experience in advertising and marketing law, corporate law, contracts, governmental regulations, international business, and Internet law. He has counseled numerous successful companies, both public and private, and was responsible for regulatory compliance, contract management, corporate governance, and HR best practices for multiple organizations in many diverse industries, including marketing, telecommunications, energy, and technology development. He offers insight and guidance on federal and state direct mail, TV, radio, telemarketing, and Internet marketing laws, as well as online promotions, Internet privacy, data protection regulations, and similar matters.

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