“All Natural” Guacamole Claim Could Be Deceptive Labeling

This posting was written by Jody Coultas, Editor of CCH State Unfair Trade Practices Law.

Guacamole purchasers could bring California consumer protection law claims against a manufacturer of guacamole and bean dip products that allegedly mislabeled its product to deceive purchasers into buying its products, according to a federal district court in Los Angeles.

Allegedly deceived into purchasing the manufacturer’s guacamole and spicy bean dip products by deceptive labeling, the purchasers filed the consumer protection claims. The products allegedly misled consumers as to the nutritional content of the products, which allegedly contained substantial and dangerous levels of transfats.

Standing

The purchasers had standing to pursue California Unfair Competition Law(UCL) and False Advertising Law (FAL) claims, the court held. To establish standing, the purchasers needed to show an injury in fact and lost money or property as a result of unfair competition and actual reliance on the deceptive labeling when deciding to purchase the products.

In cases concerning product labels, purchasers have standing if they can show that they were deceived by the label into purchasing a product they would not have otherwise purchased. Although the manufacturer argued the alleged injury was de minimis and trivial, similar injuries have been held to be sufficient for standing. Thus, the purchasers’ alleged loss was sufficient to meet the injury requirement for standing in the UCL and FAL claims.

The purchasers also presented sufficient evidence that they read and relied on the misleading label statements concerning the nutrition and contents of the product, and would have purchased a cheaper product had they not relied on those statements.

Remedies

The purchasers could pursue injunctive relief under the UCL and FAL, according to the court. To have standing to seek injunctive relief, the purchasers needed to show the threat of future injury.

The manufacturer argued that there was no threat of a future injury because the purchasers were aware of the labeling issues and will not purchase the product again. While purchasers involved in the suit may not purchase the guacamole at issue again, the advertising remains on the products and the purchaser could pursue injunctive relief on behalf of other consumers.

However, the purchasers could not pursue disgorgement under the FAL, according to the court. The purchasers sought disgorgement via an order requiring the manufacturer to disgorge all monies, revenues, and profits obtained by means of any wrongful act or practices. The request was overly broad and constituted nonrestitutionary disgorgement, a remedy that is not available under the FAL.

Mere Puffery

Several statements made by the manufacturer in its advertising and labeling were not actionable under the California’s consumer protection laws because they were mere puffery, while others were actionable deceptive statements. Statements are actionable only if they are likely to deceive a reasonable consumer.

A claim that the guacamole was made in “the authentic tradition” was stricken from the purchasers’ claims because it was neither specific nor measurable. The statement that the guacamole contained garden vegetables was true and therefore not actionable. However, the “all natural” description was deceptive, and the labeling of the product as “guacamole” was false. Thus, the consumer protection claims based on those two statements survived the motion to dismiss.

Preemption

The Nutrition Labeling and Education Act of 1990 (NELA) preempted the California consumer protection claims concerning advertising statements made by the guacamole manufacturer about the nutritional content of its guacamole. The NELA prohibits states from directly or indirectly establishing requirements made on the label or labeling of food. Thus, the statements made on the label that the guacamole contained “0 g transfats” and “0 g cholesterol” were not actionable under the consumer protection statutes.

The April 11 decision in Henderson v. Gruma Corp. appears at CCH State Unfair Trade Practices Law ¶ 32,234.

Further information regarding CCH State Unfair Trade Practices Law appears here.