Food and beverage companies should evaluate packaging sizes now.
You know the feeling when you open a family-size box of candy – that you are not planning to share – and find it only about half full? Sure, the weight of the box and the pronounced rattle that could only be possible with significant empty space might have foretold your imminent disappointment, but disappointed you are.
The food and beverage industry is seeing that same consumer disappointment turn into a new wave of class action “slack-fill” cases, and the costs to defend these cases can be extraordinary. The plaintiffs in these cases argue that the size of a package misleads consumers into thinking it contains more than it does. Fortunately, there are ways to reduce the risks of being on the receiving end of a slack-fill case, and there are proactive steps companies can take to be in a better position to defend themselves.
Slack-fill cases are one of the fastest-growing types of claims aimed at the food and beverage industry. The number of slack-fill cases increased six-fold between 2013 and 2016, and slack-fill claims now represent around 11 percent of all food and beverage industry cases. A few enterprising firms have filed cases in volume by using template complaints. They primarily target the snack food industry, which, in some cases, has good reason to include some extra space in packaging for foods such as chips and candy. Some of these “cookie-cutter” complaints have failed to allege enough to survive early motions to dismiss, but others have survived the defendants’ initial resistance or have settled for significant sums.
Unlike “natural” and “non-GMO” claims, which the food industry has wrestled with for years due to the lack of regulation of those terms, the Food & Drug Administration defines slack-fill in Title 21 of the Code of Federal Regulations (the Federal Food, Drug and Cosmetic Act) as “the difference between the actual capacity of a container and the volume of product contained therein.” Specifically, 21 CFR §100.100 “Misleading Containers” states as follows:
In accordance with section 403(d) of the act, a food shall be deemed to be misbranded if its container is so made, formed, or filled as to be misleading.
(a) A container that does not allow the consumer to fully view its contents shall be considered to be filled as to be misleading if it contains nonfunctional slack-fill. Slack-fill is the difference between the actual capacity of a container and the volume of product contained therein. Nonfunctional slack-fill is the empty space in a package that is filled to less than its capacity for reasons other than:
(1) Protection of the contents of the package;
(2) The requirements of the machines used for enclosing the contents in such package;
(3) Unavoidable product settling during shipping and handling;
(4) The need for the package to perform a specific function (e.g., where packaging plays a role in the preparation or consumption of a food), where such function is inherent to the nature of the food and is clearly communicated to consumers;
(5) The fact that the product consists of a food packaged in a reusable container where the container is part of the presentation of the food and has value which is both significant in proportion to the value of the product and independent of its function to hold the food, e.g., a gift product consisting of a food or foods combined with a container that is intended for further use after the food is consumed; or durable commemorative or promotional packages; or
(6) Inability to increase level of fill or to further reduce the size of the package (e.g., where some minimum package size is necessary to accommodate required food labeling (excluding any vignettes or other nonmandatory designs or label information), discourage pilfering, facilitate handling, or accommodate tamper-resistant devices).
Accordingly, if the package is not transparent enough for the consumer to see its full contents and if the manufacturer’s reason for the empty space does not fit within one of the above exceptions, a plaintiff has a basis to argue that the package is misbranded. Often that argument is enough to force a settlement.
Companies have experienced mixed results defending slack-fill claims. Plaintiffs have survived early motions to dismiss in two similar ongoing cases against Just Born Inc., maker of Mike and Ike and Hot Tamales candies, and Ferrara Candy Company the maker of Jujyfruits candy. The foundation of the plaintiffs’ claims in these “big box candy” cases is the oversized candy boxes, the significant empty space and circumstances at some points of sale that might limit the consumers’ chances to inspect the product before a purchase. The Mike and Ike and Hot Tamales boxes both measure 3.5-by-0.75-by-6 inches, and the plaintiffs in that case allege that the boxes are 35 percent slack-fill. In the Ferrara Candy case, the Jujyfruits box is 5.5-by-0.75-by-3 inches and the plaintiffs argue it contains 41 percent slack-fill.
The Ferrara case is indicative of the kind of detailed complaint that is more likely to survive a defendant’s motion to dismiss. In Ferrara, the plaintiff focused on a specific purchasing setting—a movie theater—and argues that the circumstances at a movie theater point-of-sale contribute to consumer deception. They argued that “the size of the box in and of itself is a representation by defendant as to the amount of candy contained in the box.” The plaintiff argues that where candy is kept behind a glass case, consumers are only afforded a visual observation of the product; therefore, there is no reasonable opportunity to inspect the net weight on the package and the serving disclosures (on the back of the package) are not visible. The plaintiff argues further that even if the consumer were able to review the back of the package, he or she would not reasonably translate the quantity of the candy expressed in the nutrition facts panel meaningfully differently than his or her impression based on the size of the box. In anticipation of the defendant’s argument that the slack-fill is functional, the plaintiff compared the Jujyfruits product to Ferrara’s Boston Baked Beans candy product, alleging that Boston Baked Beans are similarly sized candies sold in packaging identical to Jujyfruits.
The plaintiff’s arguments survived Ferrara’s early motion to dismiss. The court, relying on a similar decision on the defendant’s motion to dismiss in the Just Born case (a case with parallel facts), denied Ferrara’s motion to dismiss. Among other considerations, the court determined that the size of the product’s packaging could contribute to a consumer’s purchasing decision. Then the court recognized that even if the defendant’s packaging does not contain any false claims, provided the net weight and serving size information is accurate, the package may still mislead consumers due to other factors like its size. Such an analysis is a factual one not appropriate for determination on the pleadings. The court also highlighted support for the plaintiff’s argument that consumers may not accurately equate the information conveyed on the package, net weight/serving, with its total contents. The denial of the defendants’ early motions in the Ferrara and Just Born cases may encourage other cases and should cause candy makers and other food companies to take a closer look at their packaging.
The slack-fill cases are not limited to boxed candy products, as other foods, beverages and even pharmaceuticals have been targeted. Citing the clear and conspicuous display of total pill count on the front of its Advil packaging, the court dismissed a slack-fill case against Pfizer. The Pfizer case involved a product sold in circumstances where consumers have ample time to inspect the package, the package clearly displayed the number of pills in the bottle, and the safety features of some bottles require some empty space at the top of the bottle, thereby rendering that space functional. CytoSport, which makes Muscle Milk supplement drinks, also successfully defended a slack-fill claim. In the CytoSport case, the court said the “plaintiff provides no facts rendering plausible his ‘naked assertion’ that the slack fill in defendant’s products is nonfunctional.” In CytoSport, the plaintiff failed to present more than a conclusory argument in support of its slack-fill claims. Starbucks is also facing a claim that its lattes and other coffee and milk-based beverage cups are misleading as to their contents. The plaintiffs argue that Starbucks intentionally designed its formulas to reduce the amount of milk, an expensive ingredient, in its drinks. Starbucks has succeeded in narrowing the plaintiffs’ claims, but the case remains ongoing.
What’s been learned? First, the best defense is to avoid the possibility of consumer deception based on product packaging. The easiest way to do that is to make the packaging transparent. If this is not practical, giving the consumer a clear view of the contents can similarly reduce risk, but beware that partial views may not be sufficient. Understandably, manufacturers may not want to sell their products in transparent boxes or bags. However, manufacturers should evaluate the need for empty space in non-transparent packaging and should clearly document the justification for the space during the development of the packaging. The manufacturer should also attempt to convey information about the contents to consumers, taking into account the various circumstances where consumers might encounter the product. An accurate representation of the size of the product and a clear and conspicuous statement of the number of contents (not just the net weight) may reduce the risk of misleading consumers.
Brian Gregg chairs the McNees Food & Beverage Group and practices in the Intellectual Property Group with a focus on trademark and copyright protection, software and technology services contracts, franchising, food labeling law, internet law and other issues related to the protection and licensing of intellectual property. He can be reached at email@example.com.
Published January 11, 2018.