August 22, 2018 Article

Taking Up the Slack: An Update on Food and Beverage Slack-Fill Litigation

By Kyle Diamantas

Most food and beverage companies are well aware of the rising tide in “slack-fill” class action litigation. Slack fill refers to the difference between the actual capacity of a container and the volume of product contained therein—think of the empty space in a bag of potato chips or a box of candy.

A claim generally goes something like this: A consumer (or, more realistically, a member of the plaintiffs’ bar) identifies a product appearing to have slack fill in its packaging. A prospective plaintiff is next identified, and a putative class action is filed, usually under state consumer protection statutes, alleging that the slack-fill packaging is misleading because it deceives consumers into believing that they are getting more product than they actually paid for.

At this point, a company’s options are generally limited to defending the lawsuit or settling the claim—regardless of the merits—to avoid the uncertainties and expenses of litigation. Oftentimes, the decision comes down to the company’s financial well-being, the functionality or nonfunctionality of the slack fill in question, the availability of insurance, public relations considerations, and the realities of the environment in which the company operates.

Case Law
Recently, an increasing number of courts have shown a willingness to toss slack-fill cases at the dismissal stage, bolstering companies’ confidence to fight these often nonmeritorious claims. For example, on March 27, 2018, in the case of ALCE v. Wise Foods, Inc., the U.S. District Court for the Southern District of New York dismissed a claim alleging that Wise Foods’s potato chips were misleading because they contained an excessive amount of slack fill. In dismissing the claim, the court noted that the plaintiffs could not establish that the slack fill in Wise’s potato chip bags was “nonfunctional” (more on that later); and, more importantly, even if the slack fill was nonfunctional, consumers have come to expect such slack fill in potato chip bags, and thus no reasonable consumer would be misled. In reaching its conclusion, the court was persuaded by the fact that the weight of the chips inside the bag was “prominently displayed on the front of each product, in large sized font, in a color differentiated from the package background”; in addition, there was no allegation that the full weight represented was not actually in the bag.

A growing number of courts have reached conclusions similar to the decision handed down in Wise Foods. For example, in Strumlauf v. Starbucks Corp., No. 16-CV-01306-YGR, 2018 WL 306715, at *6 (N.D. Cal. Jan. 5, 2018), the court granted early summary judgment in a putative slack-fill class action because, in part, it determined that reasonable consumers would not be misled into believing that milk foam does not count toward some portion of the volume of their Starbucks latte.

Despite recent successes, the trend in filing slack-fill cases has not slowed down; and, in some cases, plaintiffs have succeeded in moving complaints beyond the dismissal stage. For example, in May 2018, Ferrara Candy Co., the maker of Jujubes, Lemonhead, and Now and Later candies, agreed to pay $2.5 million to settle a putative slack-fill class action filed in a California federal court after that court earlier denied Ferrara’s motion to dismiss and the plaintiffs pushed forward seeking to certify a class.

Best Practices
Although the law appears to be inching toward a position slightly more favorable to manufacturers and brand owners, food and beverage companies utilizing or packaging products with slack fill should consider these tips to avoid finding themselves in potentially burdensome litigation:

  • Determine whether the slack fill is considered “functional.” Title 21 of the Code of Federal Regulations provides that slack fill is generally considered “nonfunctional” unless it serves one of six useful functions: (1) it protects the contents of the package; (2) it is necessary to meet requirements of the machines used to enclose the contents in the package; (3) it results from unavoidable settling during shipping and handling; (4) it serves a need for the package to perform a specific function; (5) the product is packaged in a reusable container with empty space as part of the presentation of the product; or (6) there is an inability to increase the fill level of the product or reduce the package’s size because, for example, the size is necessary to accommodate federal food labeling requirements or to discourage theft. Importantly, if you determine that your product’s slack fill satisfies one of these statutory exemptions and is therefore functional, be sure to adequately document the regulatory decision-making process in reaching that conclusion.
  • Consider using clear packaging or packaging with transparent components like a window into the package to allow consumers to fully view the contents.
  • If practical, list the total numerical count of the contents on the product’s labeling. For example, if your product contains 10 minimuffins, clearly and conspicuously disclose the count on the product’s labeling in addition to listing the federally required net weight of the contents.
  • Consider adding fill lines or other statements or logos to alert the consumer (and the plaintiffs’ bar) to the approximate location of the contents within the package.
  • If applicable, include statements about how the slack fill serves a functional purpose, for example, to allow settling of the product during transportation, to protect the contents, or to prevent spillage of the product when opened.
  • Finally, consider eliminating or reducing the size of unnecessary slack fill that serves no valid purpose or function.

Conclusion
Although slack-fill litigation continues to expand across the country, courts have slowly begun to show a willingness to dispose of these cases at the dismissal stage when not properly pleaded or when the risk of consumers being misled is not meritorious. Nevertheless, food and beverage companies would be wise to routinely evaluate their products and take affirmative steps to revise packaging where necessary to stave off the threat of slack-fill litigation.

 

Kyle Diamantas is an associate at Baker Donelson Bearman Caldwell & Berkowitz, PC, in the firm’s offices in Baltimore, Maryland and Orlando, Florida.


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