Chipotle Hit with Class Action on use of GMO Ingredients


After several years of primarily filing suit against packaged food companies, a recently-filed lawsuit is targeting Chipotle Mexican Grill, Inc. for allegedly falsely labeling its menu as GMO free.  In the Complaint, plaintiff sets forth how Chipotle launched a “Food with Integrity” program as part of its “carefully tailored … public image” to market to “healthy-lifestyle and environmentally conscious consumers that it knows are willing to pay premium prices for its food products because they align with the consumers’ ethical eating choices.”  In April 2015, Plaintiff alleges, Chipotle “capitalized on this perception” by taking “the unprecedented step among fast-food restaurants [of] launching a multi-media publicity campaign touting that it was the ‘first national company’ in the food industry to serve a menu devoid of GMOs.”

Plaintiff claims that the foregoing marketing statements were false because:

Among other things, Chipotle serves meat products that come from animals which feed on GMOs, including corn and soy.  Chipotle’s tacos and burritos are also usually served with sour cream and cheese from dairy farms that feed animals with GMOs. And, Chipotle also sells Coca-Cola and other soft drinks that are made with corn-syrup—a GMO.  While Chipotle knows that its menu contains ingredients with GMOs, it takes no meaningful steps to clarify consumer misconceptions in its advertisements and on its billboards, both in stores and in print, which instead say “all” of the ingredients used in its Food Products are “non-GMO”.

Notably, plaintiff minimizes disclaimers on Chipotle’s website which state that “there is currently not a viable supply of responsibly raised meats and dairy from animals raised without GMO feed.”  Specifically, plaintiff asserts that “Chipotle only discloses this information on its website because it knows its fast-food customers never need to visit Chipotle’s website to buy food, and are highly unlikely to seek out this information” and that consumers are instead “likely to rely on Chipotle’s internet, mass media, and in-store advertising ….”

And, of course, plaintiff alleges that,”[h]ad they known of the true character and quality of the ingredients used in Chipotle’s Food Products, Plaintiff and the putative class members would not have purchased (or would have paid less for) such products.”

Putting aside whether this lawsuit has merit, it serves as an important reminder that restaurants and even grocery stores are potential targets for litigation and must carefully review their marketing and in-store signage for statements that might increase their risk of being sued.

My Comments on the Blue Diamond “Almond Milk” Class Action Suit.

Blue Diamond Growers has been targeted in a class action lawsuit alleging that its “almond milk” products mislead consumers because they only contain 2% almond milk.  I provided some thoughts on this case to FoodNavigator-USA, which can be found here.

Update: Settlement Reached in Lawsuit Over Templeton Rye Whiskey

I previously wrote about a complaint filed in Illinois state court on September 9, 2014, that alleged that Templeton Rye’s engaged in deceptive marketing by claiming that its namesake rye whiskey is “Made in Iowa” using small-scale production methods and is produced pursuant to “a prohibition-era whiskey recipe.”  Plaintiff alleged that, contrary to these representations, the whiskey is actually mass produced and aged in Indiana using a stock recipe” and “the only activity that occurs in Iowa is the emptying of the barrels and the filling of the bottles….”

The Des Moines Register is now reporting that a settlement was reached that “requires the company to change labeling on its bottles and the language on its website” and also “requires Templeton Rye to set aside a cash pool that could be used to refund customers who bought bottles of the whiskey.”

Templeton Rye’s website presently states that the product is “based on” a prohibition-era recipe and there is no reference to the product being “Made in Iowa.”  These changes will no doubt carry over to the product’s label which will likely state that the product is “Distilled in Indiana” and “Bottled” and/or “Produced in Iowa.”

Coca-Cola Denied Summary Judgment in Class Action Over Minute Maid Pomegranate Blueberry Juice Blend


On Monday, a California federal judge rejected Coca-Cola’s motion for summary judgment in a putative class action over the allegedly misleading marketing of its Minute Maid Enhanced Pomegranate Blueberry juice blend.  The court’s ruling was based, in part, on the Supreme Court’s 8-0 ruling last year in POM Wonderful v. Coca-Cola.   As that case highlighted, despite the name of the product and the label’s display of pomegranates and blueberries (along with raspberries), those fruits made up only 0.6% of the juice’s content.  Coca-Cola discontinued this product sometime over the past year.

The class action lawsuit was filed in 2009 but was stayed for approximately four years as POM Wonderful v. Coca-Cola made its way through the appeals process.  The key allegations from the lawsuit are the following:

By characterizing this product as “Pomegranate Blueberry” on the front and back label, including the prominent display of a pomegranate and blueberries on the front label, emphasizing the “antioxidants” which will help defend against “free radicals” on the back label, and creating an artificially darkened juice, Coca-Cola misled Plaintiff and other consumers, who reasonably expected that the juice product was an antioxidant-rich product consisting primarily of pomegranate and blueberry juices when they purchased the product.

Plaintiff’s state law claims are aimed at the features of the naming and labeling which are voluntary, and not required by the FDA regulations, which Coca-Cola selected in order to maximize the label’s deceptive impact upon Plaintiff and other members of the Class.

In its motion for summary judgment, Coca- Cola correctly pointed out that the express preemption provision of the Food Drug and Cosmetic Act’s (“FDCA”) was not at issue in POM Wonderful because that case involved Lanham Act claims under federal law.  That provision provides that “no State or political subdivision of a State may directly or indirectly establish under any authority or continue in effect as to any food in interstate commerce . . . any requirement for the labeling of food of the type required by” various sections of the FDCA “that is not identical to the requirement of such section . . . .”  Coca-Cola asserted that the Plaintiff’s state law claims were preempted because the labeling rules Plaintiff argues should apply have not been adopted by the FDA and therefore any resulting violation of state law could not possibly constitute “identical” obligations to the FDCA.

The Court, however, rejected that argument in light of recent district court cases finding that the FDCA’s proscription of statements that are “false or misleading in any particular” is broad enough that it is effectively identical to similar proscriptions in state law.  In this regard, the Court stated:

Further, the Supreme Court’s later opinion in POM Wonderful, though addressing the issue of preclusion rather than preemption, explicitly rejected the “[assumption] that the FDCA and its regulations are at least in some  circumstances a ceiling on the regulation of food and beverage labeling.”

Accordingly, the Court denied Coca-Cola’s argument that the state law claims were expressly preempted by the FDCA.

Needless to say, this case, along with the recent precedent it cites, suggests a new path exists for class action plaintiffs to assert state law claims amenable to class action status while avoiding the express preemption provision of the FDCA.

Q&A with Food Business News on Clean Label Claims and other Hot Topics

It was my pleasure to participate in a Q&A with Food Business News on clean label claims and a other hot topics.   Please see here.

Trademark Battle over “Umami Burger” in Chicago

On June 17th, Umami Restaurant Group Inc. (“URG”) filed a trademark infringement lawsuit against Wsong, Inc., d/b/a as bopNgrill, a Korean inspired burger restaurant located in Chicago.  URG complains that BopNgrill is selling a “Umami Burger”menu item and that this creates a likelihood of consumer confusion between the two restaurants.

URG operates a chain of burger joints called Umami Burger, most of which are in California.   The first location in the Midwest opened in Chicago in 2014.  It owns several U.S. trademark registrations relating to UMAMI BURGER, the earliest of which was filed on August 4, 2011.

URG will likely face two hurdles in pursuing its lawsuit.  First, bopNgrill opened its first restaurant in 2009 and has been at its current location since 2011.  Although it is unclear when bopNgrill first sold an “umami burger,” if it was prior to the filing date of URG’s trademark application, then bopNgrill can argue that it has priority to the name “Umami Burger” in the Chicago area.  That is because trademark use is the key to establishing priority in a particular territory.  Although a federal trademark registration gives a trademark owner rights at the national level, those rights only start on the filing date of the application and prior use in a geographic area trumps a later-filed application where the registrant didn’t use the mark in that particular territory.

Second, umami is a descriptive term for a savory taste, which is considered one of the five basic tastes (along with sweet, bitter, sour and salty).  Accordingly, bopNgrill can argue that URG’s trademark rights are weak since trademark law limits the protections given descriptive trademarks.  After all, a burger joint has a right to describe its burgers as savory.  This argument has more force for bopNgrill as well because it’s using “umami” in connection with a menu item rather than the store itself.   Although bopNgrill is apparently not using “umami” in a strictly descriptive manner, it can assert that this case is analogous to someone trying to prevent others from selling “salty pretzels.”

This case underscores the risks of having a brand name tied to a descriptive mark which can increase the time and effort that must be expended to police the associated trademark rights.

Bulleit Bourbon is Latest Target of Deceptive Advertising Lawsuits Against the Spirits Industry

Bulleit Bourbon, owned by Diageo plc, has been sued for false advertising, deceptive trade practices and unfair competition in light of allegedly misleading statements on its bottles.  In a spate of recent lawsuits,  Tito’s Vodka, Maker’s Mark, and Jim Beam were targeted because of “handmade” claims.  The Bulleit lawsuit targets a different but common practice in the spirits industry.  Specifically, the Complaint alleges that Bulleit’s label erroneously states that the product is “DISTILLED BY THE BULLEIT DISTILLING CO … IN LAWRENCEBURG, KENTUCKY.”  Rather, the complaint alleges, Bulleit does “not currently operate a distillery in Lawrenceburg, Kentucky” and its products are actually “’distilled’ and/or produced by the Kirin Brewing Company, Limited.”

For support, Complaint refers to an article by Bloomberg Business titled Bourbon Bait and Switch: What’s Really in Your Glass? which asserts that Bulleit, “[d]espite saying on the label that it’s ‘distilled by the Bulleit Distilling Company in Lawrenceburg, Kentucky,’ there is in fact, no such thing.”  Reference is also made to an article from Fox Business, titled Global Liquor Giant Diageo To Produce Bulleit Bourbon, Rye Whiskeys At New Kentucky Distillery, which notes that Bulleit is currently made at a non-Diageo distillery in Kentucky.

What the Complaint doesn’t mention is that it is generally known that Bulleit Bourbon sources their bourbon from Four Roses Distillery which is, in fact, located in Lawrenceburg, Kentucky (and owned by Kirin Brewing Co. Ltd).  And that this practice of sourcing whiskey is quite common but not generally highlighted on labels.

Nevertheless, the key questions in the lawsuit are likely to be: How was anyone harmed by Bulleit sourcing its bourbon from a respected distiller in Kentucky as opposed to distilling the bourbon in Kentucky itself?  And is there an identifiable class of consumers that reasonably relied on the alleged misrepresentations in purchasing the product?

For its part, the Complaint offers the usual allegations for damages, i.e., that “Plaintiff and other similarly situated consumers” were presented with “the false impression that the bourbon was of superior quality by virtue” the misrepresentations, that they therefore overpaid for the bourbon, and “had they been made aware that Bulleit Bourbon was not was not distilled by or at ‘THE BULLEIT DISTILLING CO.,’ they would have not purchased the bourbon, or would have paid less for the product, or would have purchased a different product from another manufacturer.”

A spokesperson for Diageo has labeled the lawsuit as  a “baseless and frivolous action.”