A federal court in California has dismissed some of the consumer fraud claims filed against Chobani, Inc. in putative class litigation alleging that the company mislabels its yogurts as containing “evaporated cane juice,” misleads consumers by stating that its products do not contain added sugar and falsely states that its products are “all natural” because they contain artificial ingredients, flavorings, coloring, and chemical preservatives. Kane v. Chobani, Inc., No. 12-2425 (U.S. Dist. Ct., N.D. Cal., San Jose Div., order entered July 12, 2013).
The court granted with leave to amend (i) the motion to dismiss as to the evaporated cane juice claims to the extent they are based on products not purchased by the plaintiffs; and (ii) the motion to dismiss the plaintiffs’ Unfair Competition Law (UCL), False Advertising Law (FAL) and Consumers Legal Remedies Act (CLRA) claims based on the “no sugar added” and “all natural” representations, finding that the plaintiffs did not sufficiently allege reliance. The plaintiffs have 30 days to file an amended complaint.
The court granted the motion to dismiss the plaintiffs’ UCL, FAL and CLRA claims based on the defendant’s alleged violation of the standard of identity for yogurt on the ground of primary jurisdiction, but allowed the plaintiffs to seek leave to amend if “FDA retracts its previous notice that it intends to amend the Standard of Identity for Yogurt.” The court dismissed with prejudice the unjust enrichment, Song-Beverly Act and Magnuson-Moss Warranty Act claims, but denied the defendant’s motion to dismiss “in all other respects.”
The court has also denied the plaintiffs’ motion for a preliminary injunction to stop the defendant from selling its yogurt products and order the company to remove and recall the products from its distributors and retailers. Applying federal standards to the request, the court was not persuaded that the plaintiffs would experience “any significant, much less irreparable harm, if Defendant is not required to re-label its yogurts at this time.” Rather, according to the court, the harm to the defendant and retailers “would be substantial.”
Meanwhile, an organization opposed to genetically modified foods—GMO Inside—has reportedly called on Chobani to cease marketing its Greek yogurt products as “real” and “natural” until the company stops using milk from cows fed with genetically modified feed. The group is urging consumers to sign a petition and post comments on Chobani’s Facebook page. Chobani reportedly issued a statement in response: “GMO is complex and weighs on the balance of our commitments, particularly affordability, as non-GMO ingredients are fewer and more costly. We are in the infancy of exploring how we as a company, together with our suppliers, will navigate this important issue. We have never made claims that our products are GMO-free.” See Advertising Age, July 17, 2013.