FDA warning letter to Hampton Creek could trigger new wave of lawsuits, predict attorneys

And while Hampton Creek has thus far managed to dodge legal bullets (click HERE and HERE) over Just Mayo – which the FDA says does not comply with federal standards of identify for the labeling of mayonnaise – it may now face a new wave of consumer class actions, predict legal experts.

FDA: The term ‘mayo’ has long been used and understood as shorthand or slang for mayonnaise

In the warning letter, the FDA told Hampton Creek:  “Your Just Mayo and Just Mayo Sriracha products are misbranded… in that they purport to be the standardized food mayonnaise due to the misleading name and imagery used on the label, but do not qualify as the standardized food mayonnaise [21.CFR.169.140 stipulates that mayonnaise must contain ‘one or more… egg yolk-containing ingredients’].

And shortening ‘mayonnaise’ to ‘mayo’ does not get Hampton Creek off the hook, claimed the FDA: “The term ‘mayo’ has long been used and understood as shorthand or slang for mayonnaise. Additionally, the use of the term ‘Just’ together with ‘Mayo’ reinforces the impression that the products are real mayonnaise by suggesting that they are ‘all mayonnaise’ or ‘nothing but’ mayonnaise.   

“Additionally, the products contain additional ingredients that are not permitted by the standard of identity for mayonnaise, such as modified food starch.”

Separately, Just Mayo does not meet the requirements for a ‘cholesterol-free’ nutrient content claim (by failing to disclose the level of total fat per serving next to the said claim), while its website also includes an unauthorized implied heart health claim (the product contains too much fat to qualify), alleged the FDA.

Hampton Creek CEO Josh Tetrick: We hope to find some common ground with the FDA  

Hampton Creek CEO Josh Tetrick told FoodNavigator-USA that he had "had a really great conversation with the FDA earlier today and we're going to sit down and hopefully find some common ground".

Asked about the threat of lawsuits, he said: "We're a company that's grown really fast and sometimes this kind of stuff comes up."

In an emailed statement sent to reporters subsequently, Tetrick added: "FDA gets the import of what we're doing - and why it matters to our food system. This is larger than a conversation about mayo, as innovation, especially when it has a positive impact, is important to them. We'll sit down with them shortly, and are excited to talk with them about our approach. They get it much more than folks realize.

"And we're solid on keeping our name. "

However, its options may be fairly limited, said attorneys.

David L. Ter Molen, a partner in the Chicago offices of law firm Freeborn & Peters LLP, told FoodNavigator-USA: “Given today’s climate, Hampton Creek should have known the risks that have subsequently arisen when it moved forward with the 'Just Mayo' brand name which includes a depiction of an egg on the label.

“And given the additional health claim issues noted in the warning letter, I would be surprised if there isn’t another lawsuit that piggy-backs off that aspect of the warning letter.”

Attorney: I imagine they will try to come to a resolution that addresses the concerns but falls short of having to change the name

Asked what options are now open to Hampton Creek, Ivan Wasserman, partner in the Washington DC office at law firm Manatt, Phelps and Phillips, added: “I imagine they will try to come to a resolution that addresses the concerns but falls short of having to change the name, maybe by providing additional information or clarifications on the label.

"Maybe they have consumer survey data showing that consumers know Just Mayo is not like regular mayonnaise, but it’s going to be tough.”

Meanwhile, plaintiffs attorneys – who regularly trawl through FDA warning letters looking for firms that may be in breach of labeling rules – will likely pay close attention to this letter, he predicted.

“These days warning letters routinely trigger class actions.”

Attorney: They might be able to negotiate something with the FDA

David Biderman, a partner in Perkins Coie’s Consumer Class Action Defense practice, also noted that “Litigation often follows these FDA warning letters” with KIND (which received an FDA warning letter recently that was immediately followed by a wave of consumer class action lawsuits) serving as “the paradigm case where a number of follow on suits have been filed”.

As for Hampton Creek’s options, he said: “They might be able to negotiate something [with the FDA]. Or if [Hampton Creek wants to be] truly aggressive [it could] challenge the claim that Mayo is equivalent to Mayonnaise.”

He added: “Hampton Creek took an aggressive stance with Unilever, and while we don’t know what happened in the background, appeared to make the Unilever challenge appear to be a David and Goliath battle.  I am not sure if that strategy will work with the FDA.” 

 Attorney: Letter shows that FDA is serious about enforcing standards of identity

Bruce Silverglade, principal at law firm Olsson Frank Weeda Terman Matz PC, meanwhile, said that the warning letter "shows that the FDA is serious about enforcing standards of identity".

The fact the letter also cites violations of health and nutrition claim regulations also makes it "precisely the type of document that Plaintiffs’ attorneys use as a basis for class action cases", he added. 

"In the old days, the company might have simply resolved the matter by changing its label and informing the FDA.  These days, Hampton Creek may face a spate of class action cases as well.  Today’s political and legal environment is no time to push the envelope.  Caution should be the watchword when it comes to label claims."

Developed by San Francisco-based Hampton Creek, the egg-free spread Just Mayo has been phenomenally successful, and is now available in well over 15,000 stores from a standing start in 2013.