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California Cuts Manufacturers Some Slack




by:
Daniel J. Herling
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. - San Francisco Office

 
October 22, 2013

Previously published on October 22, 2013

As this space has pointed out on several occasions, California’s laws are nothing, if not unique.  One such law is California’s Business & Professions Code Section 12606.2 which prohibits a container or package from having false bottoms, false sidewalls, a false lid or covering or to “facilitate the perpetration of deception or fraud”.  A container that does not allow a consumer to fully view its contents violates the law if the container or package contains “non-functional slack-fill”.

Slack fill is the difference between the actual capacity of a container and the volume of product contained therein.  CA B&P Code 12606.2(c).

The slack fill law makes sense when one experiences buying a bag of potato chips and the bag is mostly air.  These types of claims are often prosecuted by the County DA’s office (usually in combination with the County’s Weights and Measurements office) under CA’s unfair Competition Law (CA B&PC 17200) and CA’s False Advertising Law(CA B&PC 17500).  The penalties sought include injunctive relief, i.e. change the package size or shape which can result in an expensive undertaking, civil penalties and fees.  The civil penalties criteria are listed in the statute.

Where the “slack fill” law becomes problematic for companies doing business in California is in the subjective nature of the enforcement.  There is little or no case law on what standards exist to determine what is functional or non-functional slack fill. Additionally, a container can have on its label the correct weight of the product sold (not a short fill situation) and still be accused of violating the slack fill rules.  The calculation of civil penalties and fees appear to be an art; certainly not a science.

Slack fill cases cover all types of consumer products including food products, candies and OTC drugs.  Most recently, five district attorneys: Riverside in Southern California, Tulare and Fresno in the Central Valley, and Sacramento and Shasta in Northern California, named Novartis Pharmaceuticals Corp. in an unfair competition and false advertising suit over allegedly oversized packaging for its Zaditor eye drops, alleging consumers were deceived by “substantially empty” boxes far larger than the bottles inside.

The complaint, filed in the rural county of Shasta, includes pictures of boxes that appear roughly four times larger than the bottles, which hold a little less than one-fifth of an ounce of antihistamine eye drops and typically retail for about $12 apiece.

“The products were sold in large boxes disproportionate to the small amount of product contained therein, and the product was not viewable to the consumer, and the interior of the packages had false walls or inserts,” the complaint asserts, seeking an injunction to change the packaging as well as civil penalties and fees.

The suit also names Novartis unit Alcon Laboratories Inc., which specializes in eyecare.  Makers of over-the-counter retail products have offered varied defenses over the years to their use of packages that might appear needlessly large. Sometimes extra space is needed to comply with FDA labeling requirements (an exception to the non-functional slack fill claims at 12606(c)(4)) and sometimes bigger boxes can help deter theft. (B&PC 12606(c)(6)).

Shasta and Sacramento were among three California counties that in 2008 obtained a $300,000 settlement from Reckitt Benckiser Group PLC over packaging of chest congestion drug Mucinex, which allegedly was sold in boxes that consisted of 90 percent air and packaging materials and only 10 percent pills.

On September 30, 2013, California Governor Jerry Brown approved SB 465 which amended the “slack fill” statute.

The bill defines nonfunctional slack fill for all of these provisions as the empty space in a package that is filled to “substantially less” than its capacity for other than any one or more of the applicable reasons (B&PC 12606(c)(1-15). The bill provides that slack fill in a package shall not be used as grounds to allege a violation of the applicable provisions based solely on its presence in any of these types of packages unless it is nonfunctional slack fill, except that, for food containers, this would be operative only to the extent it is identical to the federal requirement.

SB 465 was opposed by the California DA’s Association.

Though SB 465 is a step in the right direction, slack fill cases in California are a real challenge: the DAs prosecute them, the standards are subjective (the “substantially less” standard remains in the eye of the prosecutor), compliance with Federal rules is no bar to state action, other than non-food containers, and there is a paucity of case law to guide manufacturers.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Daniel J. Herling
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
 
San Francisco Office
 
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