(CN) - Class claims that Dole Foods misleadingly touted its frozen berries and fruit cups as "all natural" may proceed, the Ninth Circuit ruled, reversing a district court's judgment in favor of Dole.
Josh Schiller, with Boies, Schiller & Flexner in New York, said in an interview that the decision was a "setback" for Dole.
Schiller represented Hampton Creek against similar false advertising claims in March 2015 for its "Just Mayo" vegan spread, although that lawsuit was ultimately dropped.
"Although the appeals court has allowed these claims to proceed, the panel also limited the damages claims that the plaintiff was trying to bring," Schiller said. "It is possible that this could be the rare case that goes to trial and asks a jury to decide whether the food packaging label is misleading."
Lead plaintiff Chad Brazil initially sued Dole Packaged Foods in San Jose Federal Court in 2012.
Brazil claimed 38 Dole products labeled as "all natural fruit" contained "synthetic ingredients," including ascorbic and citric acid.
Food and Drug Administration (FDA) regulations require companies to eschew the "all natural" tag, Brazil claimed, if a product contains "unnatural ingredients such as added color, [or] synthetic and artificial substances."
Brazil referenced a 12-ounce bag of Dole mixed fruit labeled "all natural fruit," even though it contained ascorbic, citric and malic acids, and added flavors.
Brazil, who says he spent more than $25 on Dole products, added that the company's products were mislabeled because they contained ingredients that precluded use of the term "natural."
Dole Food Co. was removed from the original lawsuit in June 2014.
Its frozen blueberries and smoothie shaker products, which Brazil testified that he never purchased, were also dismissed.
U.S. District Judge Lucy Koh denied Brazil's request for a nationwide class in 2014, but she allowed for a plaintiff class of Californians who purchased Dole fruit products labeled "all natural fruit," in April 2008 or later.
Dole and its subsidiaries and affiliates, governmental entities, and the court involved were excluded from the class.
Brazil's narrowed lawsuit included 10 products: "(1) Tropical Fruit (can), (2) Mixed Fruit (cup), (3) Diced Peaches, (4) Diced Apples, (5) Diced Pears, (6) Mandarin Oranges, (7) Pineapple Tidbits, (8) Red Grapefruit Sunrise, (9) Tropical Fruit (cup), (10) Mixed Fruit (bag)."
In December 2014, Koh ruled that Dole's "all natural fruit" label was not misleading to reasonable consumers under California's unfair competition, false advertising and consumer legal remedies laws.
Koh agreed with Dole that Brazil offered no evidence that citric acid and ascorbic acid, the two allegedly synthetic ingredients found in the challenged products, "would not normally be expected to be in" those products.
"As binding Ninth Circuit precedent makes clear, 'a few isolated examples of actual deception are insufficient' to survive summary judgment," Koh wrote.
The Ninth Circuit partially reversed her decision Friday.
The three-judge panel pointed to the FDA's informal definition of "natural" from 1993, which judge Koh referenced in her ruling. That definition specified that "natural" meant "that nothing artificial or synthetic ... has been included in, or has been added to, a food that would not normally be expected to be in the food."
But, the panel added, Brazil also cited recent FDA warning letters to food sellers that described their products as "100 percent natural" or "all natural," even though they contained synthetic citric acid and other substances.
"Taken together, this evidence could allow a trier of fact to conclude that Dole's description of its products as 'All Natural Fruit' is misleading to a reasonable consumer," the 8-page unpublished memorandum states.
"The evidence here - including the conflicting testimony of expert witnesses and Dole employees - could also allow a trier of fact to find that the synthetic citric and ascorbic acids in Dole's products were not 'natural,'" the panel added.
But the appeals court backed the lower court's dismissal of Brazil's claims against Dole for the sale of "illegal products" because he referenced representations on the company's website that he did not actually see before purchasing its products.
Nonetheless, Brazil is free to once more more take up his pursuit to change Dole's product labels on behalf of a class as well as his individual claims for restitution, the Ninth Circuit ruled.
U.S. Circuit Judges William Fletcher, Morgan Christen and Michelle Friedland reviewed the appeal.
Dole representatives did not immediately respond to requests for comment on Monday.
Earlier this month, a separate lawsuit against Dole Foods was unanimously revived by the Third Circuit.
In that suit, banana plantation workers claimed the company, along with non-parties Chiquita and Dow Chemicals, knowingly exposed them to a chemical that caused cancer and sterility.
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