Court Orders Injunctive Relief for Olive Oil Association in False Ad Suit

A federal court in New York has agreed to impose some of the preliminary
injunctive relief requested by the North American Olive Oil Association in
litigation alleging that Kangadis Food Inc., doing business as The Gourmet
Factory, falsely labeled its product as “100% Pure Olive Oil” when it actually
contained Pomace or was 100 percent refined olive oil. N. Am. Olive Oil Ass’n
v. Kangadis Food Inc., No. 13-868 (N.D.N.Y., order entered April 25,
2013).

The court agreed that consumers would likely be confused about Pomace, “an
industrially processed oil produced from olive pits, skins, and pulp,” labeled
as “100% Pure Olive Oil,” and agreed that the defendant, which had changed
its product as of March 1, 2013, to remove the Pomace and sell instead
100 percent refined olive oil as “100% Pure Olive Oil,” likely had a significant
amount of its old product on store shelves. Accordingly, the court continued
an earlier preliminary injunction preventing Kangadis from selling as “100%
Pure Olive Oil” any product containing Pomace and preliminarily ordered the
company to take steps to inform potential consumers that tins of its product
packed before March 1 contain Pomace.

The court declined, however, to extend its injunction to stop Kangadis from selling 100 percent refined olive oil as “100% Pure Olive Oil,” finding that the trade association plaintiff failed to present extrinsic evidence that “the perceptions of ordinary consumers align with [state and federal] labeling standards such that they would understand a product labeled ‘100% Pure Olive Oil’ to contain a blend of refined and virgin olive oil.” While “olive oil industry insiders and certain regulators likely would understand Kangadis’s label to describe a blend containing at least some virgin olive oil,” the court stated, “in the absence of any evidence to the contrary, it is far from clear that an ordinary consumer, unfamiliar with industry lingo, would perceive those terms the same way.” The court refused to impose a $10-million bond on the plaintiff, finding it “wildly unreasonable” and stating, “In the event the injunction has issued in error, a $10,000 bond likely will adequately compensate Kangadis for the costs of the ordered notice and any damages they may cause.”