Whole Foods Wins Partial Summary Judgment in Sugar Dispute
A federal court in Texas has granted partial summary judgment to WFM Private Label L.P., a subsidiary of Whole Foods Market Inc., in a contract dispute related to 365 Everyday Value Greek yogurt’s sugar content. WFM Private Label, L.P., v. 1048547 Ontario Inc., No. 14-1013 (W.D. Tex., entered June 18, 2018). Whole Foods hired Skotidakis Goat Farm (SGF) to supply Greek yogurt products for the 365 Everyday Value brand, and SGF provided the company with nutritional information. SGF later received additional lab results indicating a higher sugar content than previous testing indicated, but it did not notify Whole Foods of the new results until a few days before Consumer Reports published an article alleging that the company’s plain yogurt contained five times the sugar content listed on the product labeling. Eleven putative class actions were filed against Whole Foods; according to the vendor agreement, SGF had an obligation to indemnify Whole Foods in the lawsuits.
The court held that Whole Foods was entitled to summary judgment on its breach-of-contract claims related to SGF’s obligation to indemnify and defend, failure to pay reasonable product withdrawal expenses, failure to provide accurate sugar content disclosures, duty to promptly notify Whole Foods of the product’s failure to comply with product specifications, and counterclaim for termination of the contract without cause. The court denied Whole Foods summary judgment on three fraud claims and its request for exemplary damages.