Last week, the Southern District of New York dismissed with prejudice a putative consumer class action alleging that containers for Muscle Milk protein powder violated New York consumer protection laws because they were approximately one-third empty at the time of purchase. More specifically, the plaintiff’s Amended Complaint contended that “Defendant CytoSport, Inc. intentionally packaged its Muscle Milk powder products . . . in large, opaque containers that contain approximately 30% or more of empty space” and that “[c]onsumers, in reliance on the size of the containers, paid a premium price for [the products] which they would not have purchased had they known the containers were substantially empty.”
This case involves a challenge to what is known in the legal vernacular as food container “slack-fill,” which is the empty space in a food product container (usually the space between the food itself and the container’s opening; think of a bag of potato chips). More technically, the FDA defines slack-fill as “the difference between the actual capacity of the container and the volume of the product contained therein.” Under the federal Food, Drug and Cosmetic Act (FDCA) and FDA regulations implemented thereunder, a food product is considered misbranded “[i]f its container is so made, formed or filled as to be misleading.” Similarly, a container is misleading under FDA regulations if its contents cannot be fully viewed and it contains “nonfunctional slack fill.” So unless you are using clear plastic packaging or some other form of packaging where consumers can easily see exactly how much is inside, you need to look at how much slack-fill is present and why.
Now not all slack-fill is misleading, only “nonfunctional slack-fill” or in other words, empty space that serves no purpose. There can be lots of good and necessary reasons for extra space in a container. But unless you fit into one of the categories the FDA details, your packaging can be ripe for an attack. FDA regulations provide that slack-fill “is nonfunctional and, therefore, misleading, unless it exists for one of six reasons set forth in the regulation,” which are: (1) the protection of the contents of the package; (2) the requirements of the machines used to enclose the contents in the package; (3) settling during shipping and handling; (4) the need for the package to perform a specific function; (5) the food is packaged in a reusable container with empty space as part of the presentation of the food; or (6) inability to increase the fill level or reduce the package size because, for example, the size is necessary to accommodate food labeling requirements or discourage theft.
For a very long time, slack-fill cases were nuisance actions largely brought by district attorneys in California. California has its own slack-fill laws. One that relates to food and one for non-food items. But that has changed in recent years as there has been a significant uptick in class actions filed with slack-fill allegations. There is no private right of action under the FDCA or FDA regulations for misleading, nonfunctional slack-fill claims. Instead, private plaintiffs usually sue under state consumer protection laws, arguing that because the product’s container allegedly violates FDA slack-fill regulations, it is misleading to consumers under state law.
Here, the plaintiff sued under New York’s Deceptive Trade Practices Act, which “does not, itself, contain safe harbors for functional slack-fill.” However, the statute does make it “a complete defense that the act or practice is . . . subject to and complies with the rules and regulations of, and the statutes administered by, . . . any official . . . agency of the United States as such rules, regulations or statutes are interpreted by . . . federal courts.” In other words, “if slack-fill passes muster under federal law, there is no state-law violation.”
The fatal problem with the plaintiff’s complaint in this case was that he only generally alleged that the slack-fill in the Muscle Milk containers was nonfunctional, simply claiming that “[n]one of the above-referenced safe-harbor provisions applie[d].” The plaintiff identified no facts tending to show that the alleged slack-fill was non-functional, i.e., that it existed for reasons other than the six instances where the presence of slack-fill is permissible for functional purposes under FDA regulations. While the court noted that “[i]t may be challenging for a plaintiff to present such facts before discovery,” that is not an excuse for the failure to plead such facts at the outset: “where a claim is valid it is not impossible; for example, experts in the relevant field can be consulted or comparisons to similar products can be made.” “[T]he law is clear that ‘the doors of discovery’ are not unlocked ‘for a plaintiff armed with nothing more than conclusions,’ . . . and thus that a plaintiff must possess some factual basis before bringing a lawsuit like this one.”
Because the plaintiff had previously been permitted to amend his complaint twice and failed to fix the deficiencies therein, the Court dismissed the case with prejudice without permitting any further amendments.
As the case law discussed in the court’s dismissal opinion makes clear, this decision is one of several in recent years that have dismissed consumer complaints that only generally alleged — without any supporting facts — that a defendant violated FDA regulations and, therefore, state law. In the specific context of nonfunctional slack-fill challenges, the court’s decision provides additional support for the argument that a complaint should be dismissed at the outset of a case if the plaintiff fails to plead facts showing that alleged slack-fill was present in a product’s container for reasons other than those permitted under FDA regulations.
It is refreshing to see a court cutting the defendants a little well-deserved slack and actually putting the plaintiffs to their burden. Unfortunately there are other courts with a “guilty until proven innocent” bent. In these cases, the best defense is solid scientific evidence showing a product meets one or more of the exceptions. With food packaging, it is often a combination of some slack needed to protect the contents and related to machine constraints, coupled with some settling that occurs during shipping and placement on product shelves. There is much science behind food manufacturing, packaging and shipping and often the manufacturing logistics folks can be very helpful in explaining exactly what extra space is designed to accomplish. These folks have every interest in using the smallest packaging possible, as it cuts down on their materials and shipping costs. A critical time to examine potential slack-fill issues is anytime changes are made to the contents of food, either making the net contents smaller due to cost constraints or if offering bonus free product. In the former case, anytime less product is being sold, many times (though not always) the product packaging should be downsized as well. If you are offering bonus product for a limited time, if the additional product can fit in the same container with no modifications, it is a good time to look at the size of the regular packaging and whether it meets the functional/nonfunctional slack-fill test. Unfortunately, the eyeball test of “my product is as full as my competitors’ products” is not a recognized exception, and marketers need to have more under their muscle shirts than competitive benchmarking to squeeze out a victory like Muscle Milk did.