The Challenges Of Measuring Harm In Slack-Fill Cases

Law360

03.11.2024

“Slack-fill,” the empty space in the containers of packaged products, has been the subject of several class action suits in recent years. While only a small minority of federal class action filings have reached the class certification stage since 2009 (when plaintiffs began filing these cases), all instances in which courts have certified a class have occurred in the last few years.^[1] Measuring harm to consumers in these cases may, however, be more complicated than in typical product misrepresentation matters due, in part, to the difficulty of defining the “but-for” world.  

Defined as the difference between the actual capacity of a container and the volume of the product in it, slack-fill is “nonfunctional” under the Code of Federal Regulations if its existence cannot be explained by any of the following six reasons:^[2]

• “Protection of the contents of the package;”
• “The requirements of the machines used for [packaging];”
• “Unavoidable product settling during shipping and handling;”
• “The need for the package to perform a specific function (e.g., where packaging plays a role in the preparation or consumption of a food) (…);”
• “The fact that the product consists of a food packaged in a reusable container where the container is part of the presentation of the food and has [significant independent] value (…);” or
• “Inability to increase [the] level of fill or to further reduce the size of the package (e.g., where some minimum package size is necessary to accommodate required food labeling (…), discourage pilfering, facilitate handling, or accommodate tamper-resistant devices).”

Nonfunctional slack-fill in “[a] container that does not allow the consumer to fully view its contents” is deemed to be misleading under federal law.^[3] 

Plaintiffs have brought suits alleging nonfunctional slack-fill in the packaging of an array of consumer products ranging from candy to potato chips to pasta, as well as non-food products.^[4] As seen in the figure below, the number of filings in federal court increased dramatically from an average of one filing a year during 2009-2014 to an average of 28 filings a year during 2015-2017 before declining to nine filings a year, on average, during 2018-2023.^[5]

The decline in filings may, to some extent, be the result of the fact that courts have dismissed a vast majority of cases before the certification stage, typically, on grounds that plaintiffs have failed to plausibly establish that the slack-fill at issue is nonfunctional or that reasonable consumers would have been misled by the packaging.^[6] Since 2009, courts have certified a class in only a handful of slack-fill cases.^[7] Most recently, in August 2023, the district court for the Central District of California granted partial certification to a class alleging that the packaging of powdered nutritional supplement products contained nonfunctional slack-fill.^[8]    

While slack-fill allegations fall under the umbrella of product labeling and false advertising litigation, slack-fill plaintiffs face additional challenges when it comes to measuring damages.  In a typical product labeling case involving alleged misrepresentations about the product, plaintiffs claim that consumers would have paid a lower price or not purchased the product had they known the truth. Plaintiffs’ experts propose methods to calculate a purported “price premium” that consumers paid as a result of the allegedly false claims.  While the methods they propose—conjoint survey analysis or hedonic price modeling—have several shortcomings, plaintiffs can usually point to some notion of the product but for the alleged conduct.  For example, if the allegation arises from a label describing the product as “All-Natural” or “Builds Muscle,” then in the but-for world, plaintiffs assert that the product label would not include that allegedly false phrase. 

In slack-fill cases, plaintiffs claim that consumers paid a price premium because they were deceived by the misleading size of the container and the nonfunctional slack-fill.^[9] However, the definition of the but-for world is not always obvious. Plaintiffs are faced with the challenge of establishing the “functional” level of slack-fill or the “but-for” slack-fill level. For instance, if plaintiffs allege that a food product sold with 60 percent slack-fill is deceptive, they must define the but-for or acceptable slack-fill level, given the safe harbors under the law. Is it 50 or 40 or 30 percent?  Moreover, it is not clear if the but-for slack-fill level would be achieved using a container of the same size with more product in it, or a smaller container with the same product quantity, or some combination of the two. Alternatively, the product could be sold in the but-for world in a clear container or in an identical container with a line marking the fill level. The product’s but-for price, and the resulting price premium, will depend on these but-for packaging choices, not least among which is the but-for slack-fill level.  Unlike in a typical false labeling matter, these choices are not always self-evident in cases with slack-fill allegations. 

In response to motions to dismiss, plaintiffs have cited, with mixed success, the slack-fill levels of competitors’ products as support for their claims.  In Morrison v. Barcel USA, the court found unpersuasive the plaintiff’s argument that some of the 59 percent slack-fill in a bag of tortilla chips must be nonfunctional because a competitor sold a similar bag with 43 percent slack-fill.  The court cited FDA guidance, which states: “there is significant variability in the amount of the slack-fill in packages, both between and within commodity classes and even within a single-product line.”^[10]  Conversely, in Escobar v. Just Born, a matter involving slack-fill in boxes of candy, the court appeared to view favorably the plaintiff’s argument that the greater slack-fill percent in the container of the accused product, Mike and Ike^® branded candy, relative to a competitor’s candy product supported the existence of some nonfunctional slack-fill.^[11] In a damages context, however, the variability between products sold by two different companies makes it difficult to rely on the slack-fill level of one product as a benchmark for that of another.

In cases where an increase in the amount of slack-fill in a product’s container triggered a lawsuit, plaintiffs may point to the previous version of the product as the but-for version of the product.  Alternatively, if the defendant sells a product similar to the accused product but with less slack-fill, plaintiffs may point to that as a benchmark. Of course, such analyses would have to account for other differences between the products, especially anything that relates to the six safe harbors.  Importantly, in a case in which the accused product has always been sold with the same amount of slack-fill and the defendant doesn’t sell a sufficiently similar product with a different (lower) slack-fill level, defining the but-for slack-fill level is non-trivial.  Without a definition of the but-for slack-fill, plaintiffs’ experts cannot estimate price premium damages.             

While very few slack-fill cases have made it far enough for a damage method to be of consequence, the lack of an obvious definition of the but-for world is an issue with which plaintiffs will have to contend in cases that make it to the damages stage.

CITATIONS

[1] All case counts in this article refer to class action suits filed in federal district courts between January 1^st, 2000, and December 31^st, 2023, that come up in Lex Machina’s search engine using the search terms “slack fill” and “21 C.F.R. § 100.100.”

[2] 21 C.F.R. § 100.100(a).  https://www.ecfr.gov/current/title-21/chapter-I/subchapter-B/part-100/subpart-F/section-100.100

[3] Ibid.

[4] See, for instance, Escobar v. Just Born, Inc., No. 2:17-cv-01826 (C.D.Cal. January 14, 2021) (candy), Alce v. Wise Foods, Inc., No. 1:17-cv-2402 (S.D.N.Y. March 28, 2018) (chips), Stewart v. Riviana Foods, Inc., No. 7:16-cv-6157 (S.D.N.Y. September 12, 2017) (pasta), Stoltz v. Henkel Corporation, No. 1:14-cv-05547 (E.D.N.Y. September 22, 2015) (anti-perspirants and deodorants).

[5] This refers to class actions filed in federal district court between January 1, 2000, to December 31, 2023, that come up when searching for the terms “slack-fill” and “21 C.F.R. § 100.100” in Lex Machina’s search engine.

[6] Memorandum Opinion July 10, 2019, pp.7-8, In Re: McCormick & Company, Inc., Pepper Products Marketing and Sales Practices Litigation, No. 1:15-mc-01825 (D.D.C. June 6, 2020).

[7] Courts have granted certification or partial class certification in: Clevenger v. Welch Foods, Inc., No. 8:20-cv-01859 (C.D. Cal. May 30, 2023); Escobar v Just Born, Inc., No. 2:17-cv-01826 (C.D.Cal. January 14, 2021); In Re: McCormick & Company, Inc., Pepper Products Marketing And Sales Practices Litigation, No. 1:15-mc-01825 (D.D.C. June 6, 2020); Schoonover v. Iovate Health Sciences U.S.A. Inc., No. 2:20-cv-01487 (C.D. Cal. Filed on February 13, 2020). Courts granted class certification for settlement purposes in Padilla v. The Whitewave Foods Company, No. 2:18-cv-09327 (C.D.Cal. July 15, 2021); Berni v. Barilla S.p.A., No. 1:16-cv-04196 (E.D.N.Y. May 24, 2021); Iglesias v. Ferrara Candy Co., No. 3:17-cv-00849 (N.D.Cal. October 31, 2018); Kline v. Post Holdings, Inc., No. 3:15-cv-02348 (S.D.Cal. April 6, 2017).

[8] Order Granting in Part Plaintiff’s Motion for Class Certification [Dkt. 79] August 21, 2023, Schoonover v. Iovate Health Sciences U.S.A. Inc., No. 2:20-cv-01487 (C.D. Cal. Filed on February 13, 2020).

[9] See, for example, Class Action Complaint February 13, 2020, ¶6, Schoonover v. Iovate Health Sciences U.S.A. Inc., No. 2:20-cv-01487 (C.D. Cal. Filed on February 13, 2020).

[10] Opinion and Order January 2, 2019, p.6, Morrison v. Barcel USA, LLC, No. 7:18-cv-00531-VB (S.D.N.Y. January 3, 2019).

[11] Order re Defendant’s Motion to Dismiss June 12, 2017, pp. 259-260, Escobar v Just Born, Inc., No. 2:17-cv-01826 (C.D.Cal., January 14, 2021).