Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Cal.: Olive oil seller’s “Imported from Italy” and “extra virgin” claims might be false, deceptive, (Feb 4, 2015)

By Greg Hammond, J.D.

A consumer stated adequate false advertising and unfair competition claims against an olive oil seller’s representations that its product was “Imported from Italy” and qualified as “extra virgin,” the federal district court in Oakland, California found. In denying the seller’s motion to dismiss the putative class action, the court found that the consumer had standing and plausibly alleged her claims under California’s False Advertising Law (FAL), Unfair Competition Law (UCL), and Consumer Legal Remedies Act (CLRA) (Kumar v. Salov North America Corp., February 3, 2015, Rogers, Y.).

Background. Salov North America Corp. imports, markets, and sells various olive oils under the “Filippo Berio” brand. The words “Imported from Italy” appear on the front label of each product, but a small statement on the back of the bottles states that the olives are grown and pressed in other countries and the oils are shipped to Italy, where they are blended and bottled. Consumer Rohini Kumar filed a putative class action against Salov, alleging that the “Imported from Italy” statement is false and violates federal regulations. She additionally alleged that two of Salov’s products—Extra Virgin Olive Oil and Organic Extra Virgin Olive Oil—did not meet extra virgin standards. Kumar asserted that Salov adulterates its olive oil with cheaper, refined olive oil and uses substandard, non-light protective bottles and unprotected transport/storage methods. She brings claims, in part, under the FAL, UCL, and CLRA. Salov moved to dismiss.

Import claims. In support of its motion to dismiss, Salov first argued that the complaint did not allege a plausible claim, or allege a basis for Kumar’s standing. Specifically, Salov claimed that a reasonable consumer would not understand “Imported from Italy” to mean that the product was made entirely from Italian-grown olives. In addition, Salov argued that Kumar had to have read the statement on the back of the bottle—“Packed in Italy with select extra virgin olive oils from Italy, Spain, Greece & Tunisia”—in order to read the “best by” statement, which she alleged she read. The court rejected Salov’s arguments, concluding that it could not find as a matter of law that Kumar saw or should have seen the statement demonstrating that the olive oil was made from non-Italian olives, or that a reasonable consumer would not understand “Imported from Italy” to mean that the product was made exclusively from olives grown in Italy.

Salov also asserted that Kumar lacked standing for purposes of injunctive relief, arguing that her allegations that she was misled by the supposedly false statements meant that she cannot demonstrate a “real or immediate threat” that she will be misled in the future. The court disagreed, noting that Salov’s argument would lead to the result that a class action plaintiff alleging mislabeling or false advertising would never be able to seek injunctive relief on behalf of a class. Kumar therefore had standing for injunctive relief under the FAL, UCL, and CLRA.

Lastly, Salov’s argument that Kumar could not rely on the Tariff Act as a basis for her UCL claim was discarded by the court, as the Supreme Court recently held in POM Wonderful LLC v. Coca-Cola Co. (134 S. Ct. 2228, 2014-1 Trade Cases ¶78,800) that private plaintiffs may use federal law to form the predicate for a private right of action under another federal or state law where the federal law does not expressly prohibit such an action.

“Extra Virgin” claims. Salov also argued that Kumar’s “Extra Virgin” claims should be dismissed because Kumar failed to allege that the bottle of olive oil she bought was not extra virgin when she purchased it, that she failed to allege injury in fact, and that she therefore lacks standing. The court was not persuaded by the argument, concluding that if the product—as alleged in Kumar’s complaint—does not meet the extra virgin standard by design, then Kumar and other consumers who paid a premium for the product based upon the extra virgin representation have stated a cognizable injury. Kumar has therefore adequately alleged standing at this stage of litigation, the court concluded.

The case number is14-CV-2411-YGR.

Attorneys: Seth Adam Safier (Gutride Safier LLP) for Rohini Kumar. Collin Partington Wedel (Sidley Austin LLP) for Salov North America Corp.

Companies: Salov North America Corp.

Cases: Advertising StateUnfairTradePractices CaliforniaNews