Stanley ‘heavy metals’ class action: When silence is not so golden
A heavy metals controversy shows why brands should carefully assess claims made in adverts—including that which is unsaid, warns Jennifer Fried of Finnegan, Henderson, Farabow, Garrett & Dunner.
Failure to disclose heavy metal content has become a familiar theme in false advertising class actions. In recent years, the food and beverage industry has faced an onslaught of lawsuits alleging that packaging and advertising has mislead consumers by virtue of not disclosing the inclusion of various heavy metals.
A class action complaint against Pacific Market International (“PMI”) signals that the trend of metals-disclosure false advertising actions could be leaching into other industries. Unlike foods and beverages, whose metals content is sure to be ingested or at least touched by humans, the purported lead content in Stanley tumblers is said to lay beneath an enclosed seal at the base of each container.
Whether this physical barrier also proves to be a legal barrier remains to be seen.
Complaint against PMI
The suit against PMI follows the company’s acknowledgement, in January, that its popular Stanley tumblers contain lead—albeit enclosed beneath a stainless steel barrier at the base of each container.
Plaintiffs brought suit, in part, under California’s False Advertising Law (Bus. & Prof. Code § 17500 et seq.) According to plaintiffs, the deception arose because PMI simultaneously held its products out as safe while also failing to disclose the presence of lead.
The complaint alleges that “PMI’s false advertisements include, without limitation, falsely holding out their products as risk-free for children, mothers, and other consumers when PMI knew the products contained the toxic material lead.”
Unlike metals-disclosure allegations against food and beverage industry, the mechanics of any lead exposure in this case are less clear. While the complaint alleges that the lead found in the base of Stanley tumblers can be exposed during “ordinary use,” PMI insists that the lead in its products is “inaccessible to consumers,” but also notes that its Lifetime Warranty would cover the “rare occurrence” of the base cap coming off “due to ordinary use.”
False advertising metals-disclosure class actions
On one hand, the complaint against PMI is all too familiar. Scores of companies have faced false advertising class action suits on the basis of failure to disclose lead or other heavy metals.
The Southern District of California, for example, recently allowed a putative class action against The Hershey Co. to move forward, in part, allowing plaintiffs’ to seek an injunction requiring the disclosure of the presence of heavy metals in the company’s dark chocolate products.
Walmart faced a comparable complaint based on the heavy metals purportedly found in some of its Great Value-branded spices. The baby food industry has also been the subject of an onslaught of heavy metals-related litigation, some of which is rooted in false advertising claims.
Regulatory and self-regulatory actions based on non-disclosure
“Failure to disclose,” as a basis for a false advertising claim, is not limited to the courts. The Federal Trade Commission—an agency tasked with regulating advertising—has found, for example, that advertising can be deceptive where a food contains a “risk-increasing nutrient” that is not disclosed.
In its Enforcement Policy Statement on Food Advertising, the FTC notes that “[u]nqualified health claims in advertising for such foods are likely to be deceptive when the risk-increasing nutrient is closely related to the subject health claim.
Often the presence and significance of such a nutrient will have to be disclosed. Without such disclosures, consumers could infer from the health message that the food does not present any related health risks.”
The FTC has initiated several enforcement actions along these lines. For example, the Commission found that Campbell Soup’s “heart-healthy” claims were deceptive because the company had failed to disclose that the soups were high in sodium.
In another case, the FTC found that North American Philips wrongly failed to disclose the fact that its water filter introduced a harmful chemical into the water.
The advertising industry’s self-regulatory forum has also found deception in the absence of disclosures alerting consumer to potentially undesirable substances. Searching the NAD archives for the phrase “failure to disclose” turns up no less than ninety NAD decisions.
While many of these cases involve advertisers’ failure to disclose the presence of unsafe or undesirable ingredients in foods or beverages, the necessity of disclosing material facts and limitations extends far beyond the issue of ingestible substances.
Whether NAD instructs marketers to disclose the basis of a comparative claim, disclose the taxes and fees that are not included in a pricing claim, or disclose that an endorser has a material connection to the advertiser, the principle remains the same: advertisers can be held accountable not only for the claims they make, but also for what is not said in the advertising.
Looking forward
Whatever the fate of the suit against PMI, advertisers would be wise to consider risk from two standpoints: the claims made in any given advertisement, and that which is unsaid. Silence can be a particular liability where an advertiser’s claims are limited by, or rendered misleading by, an unspoken fact.
Risk mitigation, whether fending off potential litigation, regulatory action, or self-regulatory challenges, requires a holistic review of advertising that considers both positive and negative space.
Jennifer Fried is a partner at Finnegan, Henderson, Farabow, Garrett & Dunner.
