Court Dismisses Consumer Fraud and Related Claims Against Yogurt Maker
On reconsideration, a federal court in California has dismissed a lawsuit against Chobani, Inc., in a putative class action alleging that its yogurt products are mislabeled because they include “evaporated cane juice” (ECJ) as an ingredient and state that they have no added sugar and contain only “natural ingredients.” Kane v. Chobani, Inc., No. 12-2425 (N.D. Cal., San Jose Div., order entered September 19, 2013). Details about the order the court reconsidered appear in Issue 491 of this Update. The court dismissed the Unfair Competition Law (UCL), False Advertising Law (FAL) and Consumers Legal Remedies Act (CLRA) claims without prejudice and gave the plaintiffs 21 days to file a third amended complaint. Claims for unjust enrichment and violation of the Song-Beverly and Magnuson-Moss Warranty Act were dismissed with prejudice.
Essentially, the court found that the plaintiffs lacked standing to pursue their UCL, FAL and CLRA claims because they failed to allege a “coherent, plausible theory of reliance.” Regarding the claim that the plaintiffs were deceived by the inclusion of ECJ on the label, the court stated, “Absent some factual allegation concerning what Plaintiffs believed ECJ to be if not a form of sugar or a juice containing some form of sugar, Plaintiffs’ allegations that they read the label, were aware that the Yogurts contained ECJ, and nevertheless concluded that the Yogurts contained ‘only natural sugars from milk and fruit and did not contain added sugars or syrups’ is simply not plausible.”
As to the “no sugar added” claims, the court determined that the plaintiffs could not have relied on them in making their purchasing decision because these product representations appear on the defendant’s website, and “Plaintiffs do not allege that they ever viewed Defendant’s website.” The court rejected the plaintiffs’ reliance on In re Tobacco II Cases, 46 Cal. 4th 298 (2009), because it “does not stand for the proposition that a consumer who was never exposed to an alleged false or misleading advertising or promotional campaign may bring a claim for relief.” The court also rejected their “illegal product” theory—that the products were misbranded under Food and Drug Administration labeling requirements and were not capable of being sold legally—finding that it would “eviscerate the enhanced standing requirements imposed by Proposition 64 and the California Supreme Court’s decision in Kwikset.”
The court further ruled that it was not plausible that the plaintiffs believed
on the basis of the defendant’s “only natural ingredients” or “all natural”
representations that the yogurt products did not contain added fruit juice
because “the labels clearly disclosed the presence of fruit or vegetable juice
concentrate in the Yogurts.” And because the plaintiffs failed to adequately
allege the substantial similarity of the product representations as to products
they did not purchase, the court found that they lacked standing with regard
to those products.
