Whole Foods’ Motion to Dismiss False Advertising Suit Granted

Judge Rachel P. Kovner has granted Whole Foods Market Group, Inc.’s motion to dismiss a class action suit filed against them in late 2019 in the Eastern District of New York. The plaintiff, Amy Warren, had filed suit against the defendant due to their alleged misrepresentation of sugar as “organic dehydrated cane juice solids” on their oatmeal product.

Whole Foods produces and markets an instant oatmeal product as a part of their 365 Everyday Value brand. The product is sold at Whole Foods across the United States as well as on Amazon. The packaging represents the product as low fat, vegan, a good source of fiber, non-GMO project verified, USDA organic, among other things. The ingredients label lists four ingredients – organic rolled oats, organic dehydrated cane juice solids, organic flaxseed, and sea salt.

Sugar is disguised on the label as organic dehydrated cane juice solids, which the plaintiff claimed was misleading since “consumers expect ingredients on a product to be declared by their common or usual name.” Further, Warren asserted that when an ingredient is listed as juice, is it reasonable to expect that the ingredient comes from a fruit or vegetable. The Food and Drug Administration (FDA) has previously stated that consumers may be misled if an ingredient is listed as cane juice since is suggests that the ingredient is derived from a fruit or vegetable.

The complaint explained that “by declaring ‘sugar’ by a term which fails to describe the basic function and qualities of the ingredient, reasonable consumers are deceived into purchasing a product with added sugar.” Warren argued that misleading consumers by disguising sugar as an ingredient is intentional since the oatmeal is marketed as being more nutritious than alternatives, all while being sold in a grocery store with “a reputation for selling health food products of high nutritional quality.” The misleading terminology also affects the price, as the defendant can sell the product for a higher price since it is marketed as being healthier.

The complaint cited violations of the New York General Business Law and Consumer Protection Statutes, negligent misrepresentation, breach of express warranty, implied warranty of merchantability, fraud, unjust enrichment, and more. Warren sought class certification, injunctive relief, monetary and punitive damages, litigation fees, and any other relief deemed necessary by the Court.

On Friday, Judge Kovner granted the defendant’s motion to dismiss the class allegations. The order detailed that in order for a claim to be considered plausible, the allegations must be true and raise a claim of entitlement to relief. The claims must also satisfy requirements of knowledge, intent, and the presence of facts in the complaint must give rise to a strong inference of fraudulent intent.

Judge Kovner explained that the regulations cited by the plaintiff “bear little weight in determining liability,” that the terms dehydrated cane juice solids and whole grain are not misleading and that the negligent misrepresentation claims are insufficient. The order also dismissed both the express and implied warranty claims since there was no allegation in the complaint of a warranty having been violated by the defendant.

The plaintiffs’ claims for negligent misrepresentation, breach of express warranty, breach of implied warranty, breach of written warranty, and unjust enrichment were all dismissed without prejudice. Warren has 30 days to amend her complaint to address the defects, otherwise judgement will be entered.

Warren is represented by Sheehan & Associates, P.C. in the ongoing litigation, while Whole Foods is represented by Blaxter Blackman LLP.