Antitrust Law Daily Wrap Up, ADVERTISING—D. Conn.: Nestlé lawsuit advances over ‘Spring Water’ marketing claims, (Jan 3, 2025)

By George Basharis, J.D.

Federal judge allows class action to proceed alleging Nestlé’s “Spring Water” labels misled consumers about the source of the company’s Poland Spring bottled water.

The federal district court in Connecticut has ruled that Nestlé Waters North America must face most claims in a class action lawsuit alleging the company deceived consumers by marketing Poland Spring water as “100% Natural Spring Water” when it allegedly does not meet the legal definition of spring water. In a 61-page decision, the U.S. district court in New Haven denied Nestlé’s attempt to dismiss the bulk of the lawsuit’s advertising and consumer protection claims, finding sufficient evidence for a jury to decide whether the company’s spring water marketing was misleading (Patane v. Nestlé Waters North America, Inc., No. 3:17-cv-01381-JAM (D. Conn. Dec. 30, 2024)).

Background. The suit, filed in 2017 by consumers across eight northeastern states, contends that Poland Spring water fails to meet state and federal standards for spring water, which require the water to flow naturally to the surface through a natural spring orifice. The plaintiffs argue they paid a premium price for what they believed was genuine spring water but received ordinary groundwater instead.

The case centers on Nestlé’s “100% Natural Spring Water” labeling, which plaintiffs claim violates the U.S. Food and Drug Administration’s detailed regulatory definition distinguishing spring water from other types of bottled water. The lawsuit seeks to represent customers who purchased Poland Spring water since November 2003, though the court has limited some claims to more recent purchases.

In a previous ruling, the court limited allegations that Nestlé fraudulently labeled its Poland Spring water products as "100% Natural Spring Water" to three years prior to filing the suit, and denied deny Nestlé’s motion for summary judgment as to other causes of action. The court rejected arguments that earlier purchases should be included under a continuing course of conduct doctrine, finding that each bottle purchase represented a separate transaction.

Expert evidence creates factual dispute. The court found that evidence from the plaintiffs’ expert witness, Dr. Donald Siegel, raised genuine questions about whether Poland Spring qualifies as spring water under regulatory definitions. According to the court, Dr. Siegel provided evidence that some of Nestlé’s alleged springs are man-made rather than natural, that the company extracted pond water and surface water from some bore holes rather than spring water, and that water from Nestlé’s bore holes differs substantially from water emerging naturally from spring orifices. While Nestlé’s expert disputed these conclusions, the court determined these conflicting expert opinions created factual issues that must be resolved at trial rather than summary judgment.

The court rejected Nestlé’s argument that Dr. Siegel’s conclusions were technically deficient, observing that Nestlé had not moved to exclude his expert testimony and had failed to adequately demonstrate in its briefing why his evidence and methodologies were unreliable. The court emphasized that resolving conflicts between competing expert testimony is particularly inappropriate at the summary judgment stage. The court also found it significant that even Nestlé’s own expert acknowledged differences in sodium and chlorine levels between bore hole samples and natural spring water samples, though he argued these components should not be considered determinative when comparing water chemistry composition.

Consumer understanding vs. technical requirements. The court rejected Nestlé’s argument that consumers needed to understand the technical regulatory requirements for spring water to bring deceptive marketing claims. The court found it sufficient that consumers expected to receive genuine spring water based on the label claims, regardless of their knowledge of the specific technical criteria that define spring water under state and federal regulations.

In reaching this conclusion, the court distinguished cases in which plaintiffs relied on federal labeling regulations as evidence of consumer expectations. Instead, the court emphasized that plaintiffs’ claims centered on the fundamental disparity between what was promised (spring water) and what was allegedly delivered (ordinary ground water), rather than technical compliance with regulations. The court noted that plaintiffs' expert survey evidence demonstrated that reasonable consumers understand bottled water labeled as “100% Natural Spring Water” to contain spring water rather than purified, well, or other types of water, establishing a basis for their expectations independent of regulatory definitions.

Regulatory approval defense falls short. The court also dismissed Nestlé’s defense that state regulatory approvals shield it from liability. While Nestlé pointed to various state permits and licenses, the court found insufficient evidence that any state agency specifically approved marketing the water as “spring water” rather than just approving it for safety and potability.

State claims trimmed. While allowing the core deception claims to proceed, the court did dismiss some state-specific claims. He threw out claims under Connecticut’s and Maine’s consumer protection statutes, certain New York contract claims, and some claims by plaintiffs who were part of an earlier class action settlement involving specific Poland Spring water sources. The court also dismissed all claims for injunctive relief that would have blocked future “spring water” marketing, finding the named plaintiffs lacked standing since they are now aware of the alleged deception.

Price premium theory upheld. Importantly for the plaintiffs, the court upheld their theory of damages based on paying a price premium for water labeled as spring water. The court distinguished this from cases where courts rejected price inflation theories, noting that here the plaintiffs allege they received an entirely different product than advertised (ground water instead of spring water) rather than just paying too much for what they got.

The ruling allows the plaintiffs to pursue their claim that Nestlé was able to charge more for Poland Spring by marketing it as spring water rather than ordinary bottled water. Expert analysis suggested this premium was approximately 10 percent of the purchase price.

The Case is No. 3:17-cv-01381-JAM.

Judge: Meyer, J.

Attorneys: Amanda K. Bonn (Susman Godfrey L.L.P.) for Mark J. Patane. Jeffrey M. Garrod (Orloff Lowenbach Stifelman & Siegel, PA) for Nestle Waters North America Inc.

Companies: Nestle Waters North America Inc.

Cases: Advertising StateUnfairTradePractices ConnecticutNews GCNNews