Date: Nov 08, 2018
Reproduced with permission from the WLF Legal Pulse Blog.
By Robert S. Niemann, a Partner with Keller and Heckman LLP in the firm’s San Francisco, CA office, and Jill M. Mahoney, an Associate in the firm’s Washington, DC office.
Editor’s note: This blog is an update to the February 2, 2018 WLF Legal Backgrounder, “Litigating over Empty Space: Public and Private Plaintiffs Target Consumer Class Actions at “Slack Fill.”
Defendants of would-be “slack fill”1 lawsuits may have found some reprieve from litigation in California. On September 19, 2018, California Governor Jerry Brown signed into law Assembly Bill 2632, which amends the state’s slack fill law2 to provide manufacturers facing nonfunctional slack fill allegations with additional safe harbors. While specious slack fill lawsuits have been on the rise in recent years, the amendment is a step forward for the food manufacturing industry and demonstrates that California, the home to many slack fill suits,3 may also be growing tired of such claims.
Understanding California’s New Slack Fill Safe Harbors
As background, California law states that “no container shall be made, formed, or filled as to be misleading.” Section 12606(b). Further, the law states that “a container that does not allow the consumer to fully view its contents shall be considered to be filled as to be misleading if it contains nonfunctional slack fill.” Whereas slack fill is the difference between the actual capacity of a container and the volume of the product, nonfunctional slack fill is “the empty space in a package that is filled to substantially less than its capacity” for reasons other than the enumerated exemptions provided in the Code. The amendment added to the list of exemptions several circumstances in which slack fill would not be deemed “nonfunctional”:
The exemption for packaging sold in a “mode of commerce that does not allow the consumer to view or handle the physical container or product” is arguably intended to exempt online sales and delivery. Over the past decade, commerce has been driven by the online marketplace, specifically by companies like Amazon, where consumers purchase items over the internet, without physically interacting with the product or product packaging prior to purchase. The change in purchasing behavior and the desire to protect this new mode of commerce from an onslaught of slack fill litigation may have catalyzed California’s amendment.
The “mode of commerce” exemption recognizes that plaintiffs should not be able to sue online retailers claiming deceit, because (1) a consumer cannot be misled or deceived by product packaging that they did not physically handle or manipulate prior to purchase, and (2) online retailers should not be held liable for product packaging they did not design or implement. For example, an online marketplace that sells and ships a third-party seller’s product that was packaged by the third-party seller should not be named a defendant in a slack fill lawsuit because the online marketplace was not responsible for the creation of the alleged slack fill.
Over the years, defendants have argued in court for similar safe harbor provisions, but without the codification of such language, their arguments were often unsuccessful. California’s amendment is a positive sign that slack fill lawsuits, which comprise approximately 12% of consumer-product-fraud litigation, may be on the decline with the help of these safe-harbor provisions. Nonetheless, the amendment shows that even California’s government is tired of these lawsuits and willing to cut food manufacturers some slack.