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A Guide to Navigating COVID-19 Price-Gouging Litigation Against Manufacturers, Suppliers, and Retailers of Food and Consumer Goods in the U.S.

The COVID-19 pandemic has led to sharp spikes in demand for basic necessities, alcohol-based disinfecting products, and essential food staples. Consumers have been willing to pay a premium to stock up on these items from both brick-and-mortar and online marketplaces.  While there is no federal law establishing clear guidelines regarding price gouging, many states have laws that limit or prohibit sellers from charging excessive prices for certain consumer products, which are triggered by the declaration of an emergency by federal, state, and/or local officials. Plaintiffs’ lawyers and states’ attorneys general have begun bringing state and nationwide class actions for price gouging against suppliers, distributors, and retailers of essential products, and we expect this litigation to increase in coming months.

In this three part series, we provide the statutory landscape and analyze the newly filed litigation, outline some key litigation strategies, and advise on best practices for manufacturers and retailers to

FDA and FTC Warn Against Making Unapproved Disease Claims Regarding COVID-19

April 10, 2020

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In response to the outbreak of COVID-19, the Food and Drug Administration (FDA) and Federal Trade Commission (FTC) have issued several new warning letters to companies claiming their products prevent, treat or cure the novel coronavirus.  This follows the seven warning letters jointly issued by the agencies in early March.

  • Gaia’s Whole Healing Essentials LLC was warned for selling colloidal silver products with claims that the products can build immunity and possess anti-viral properties for the treatment or prevention of COVID-19.
  • Homeomart Indibuy was warned for claiming that its homeopathic drug products treat respiratory illnesses and act as a prophylactic to protect from COVID-19 infection.
  • Health Mastery Systems DBA Pure Plant Essentials was warned for selling essential oils with claims that the products are safe and/or effective for the treatment or prevention of COVID-19. In addition to identifying improper claims made on the manufacturer’s website, the warning letter also

Pepper Purchasers Reach $2.5 Million Class Settlement Over Underfilled Containers

In a multidistrict litigation accusing McCormick & Co. of deceptively underfilling the pepper it sells in grinders and tins, a D.C. federal judge preliminarily approved a $2.5 million class settlement last week.

Consumers first sued McCormick in 2015, challenging the spice manufacturer’s response to economic pressures in the black pepper marketplace.  Facing rising wholesale prices and a decreased market share, McCormick reduced the weight of ground pepper in its tins and peppercorns in its pepper grinders by 25% and 19%, respectively, but did not reduce the container size or change the price.   Retailers sold the containers with reduced amounts between March 2015 and June 2016.  The plaintiffs’ original complaint alleged that McCormick and other brands it supplied misled consumers by constructing the packages to hide the reduction of product with “nonfunctional slack-fill,” or empty space.

Within months of the first case against McCormick, additional copycat consumer suits followed. In late

California Amends Slack Fill Law

California Amends Slack Fill Law

October 3, 2018

Authored by: Bob Boone and Sarah Burwick

Governor Jerry Brown recently signed into law Assembly Bill 2632, which amended California’s slack fill statute to create several exemptions.  This amendment will be an additional hurdle to the plaintiff bar, which has been flooding the courts with slack fill related lawsuits in recent years.  These lawsuits, typically filed as class actions, allege that product packaging is misleading to the extent it contains nonfunctional empty space, known as slack fill, which causes consumers to believe they are receiving more of the product than they actually are.

The new law, which will amend California Business and Professions Code Sections 12606 and 12606.2, includes the following key changes:

  • The amended law exempts packaging sold in a mode of commerce that “does not allow the consumer to view or handle the physical container or product.” It could be argued that this exempts online sales.
  • The amended law exempts product packaging that clearly

End of the Road for Mike and Ike Slack Fill Litigation

In another victory for a candy manufacturer, a federal court in Missouri denied class certification earlier this month, effectively ending the plaintiff’s attempt to seek damages on a class-wide basis for all consumers of Hot Tamales and Mike and Ike candies.

The lawsuit, White v. Just Born, alleged that boxes of the candy were underfilled, leaving unusable empty space, known as “slack fill,” that deceived the consumer into thinking he was receiving more candy than was actually in the package.  The plaintiff sought certification of a Missouri class, and two multi-state unjust enrichment classes, on the theory that the actual value of the candy was less than the consumers paid for it.

The court declined to certify all three classes, ruling that proving class-wide violation of Missouri’s Merchandising Practices Act “will involve predominantly individual inquiries as to whether each class member purchased the candy.” Because most consumers purchase this type

California’s Cage-Free Eggs Law Faces Supreme Court Challenge By Other States

Briefing is now complete in a lawsuit filed by more than a dozen states asking the United States Supreme Court to block a California law requiring any eggs sold within the state to come from chickens that have sufficient space to stretch out in their cages.

In the lawsuit, filed directly with the high court in December, Missouri, Iowa and 11 other states allege that “California has single-handedly increased the costs of egg production nationwide by hundreds of millions of dollars each year” due to its stringent regulations prohibiting confinement of egg-laying hens. The complaint contends that California’s requirements violate the Constitution’s interstate commerce clause. The lawsuit also alleges that California’s regulations are preempted by the Egg Products Inspection Act (EPIA), a federal law requiring uniformity of labeling, standards, and other provisions allowing for free movement of eggs and egg products in interstate commerce. To support their claims, plaintiffs rely

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