Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Whole Foods’ “All Natural” and “Organic” labels alleged to be misleading, (Jul 28, 2014)

By Linda O’Brien, J.D., LL.M.

Supermarket chain Whole Foods misled consumers by misrepresenting on the labels of certain products that the products were all natural or organic, when the products contained artificial and nonorganic ingredients, according to a complaint filed in the circuit court of Pulaski County, Arkansas (Stafford v. Whole Foods Market California, July 22, 2014).

Whole Foods is a leading producer and distributor of packaged grocery products, specializing in organic and natural products. Connie Stafford is a customer of Whole Foods who purchased grocery items, including the 365 Everyday Value brand, cola, ginger ale, root beer, organic tomato ketchup, and organic chicken broth.

The complaint states that Whole Foods cola, ginger ale, and root beer products are labeled as “All Natural,” but they actually contain artificial ingredients and flavorings. The 365 Everyday Value brand cola, ginger ale, root beer contain caramel coloring, citric acid, and carbon dioxide. Consumers reasonably expect that products with an “All Natural” label do not contain artificial flavoring, color ingredients, chemical preservatives, or synthetic ingredients. The plaintiff alleged that she would not have purchased the products or paid a premium for them if she had known that the representation was false.

According to the complaint, the Whole Foods organic tomato ketchup and organic chicken broth are labeled as “Organic.” The term “Organic” adds a premium to food products and makes them appear fresher, minimally processed, and safer. Whole Foods unlawfully labeled some of its food products as being organic when they actually contain nonorganic ingredients. The 365 Everyday Value brand organic tomato ketchup and organic chicken broth contain nonorganic ingredients. Consumers reasonably expect that products with an “Organic” label do not contain synthetic, artificial, or excessively processed ingredients. The plaintiff would not have purchased the products or paid a premium for them if she had known that the representation was false.

Under state law, a food product that is misbranded cannot legally be manufactured, advertised, distributed, or sold. The sale, purchase, or possession of misbranded food is a criminal act and food companies are subject to seizure of misbranded products, Stafford maintained.

The label on the Whole Foods products was alleged to be misleading, deceptive, unfair, fraudulent, and unlawful under state law. The use of the terms “All Natural” and “Organic” are allegedly deceptive representations that hide from consumers that the products contain unnatural and nonorganic ingredients. The plaintiff reviewed the label on the products, reasonably relied on the label, and was deceived when deciding to purchase the products. If the plaintiff had been informed that the products were illegal to possess, she would not have purchased them, the complaint alleged.

Stafford asserts claims for unjust enrichment, breach of implied warranty of merchantability, breach of express warranty, negligence, and violations of the Arkansas Deceptive Trade Practices Act. The action seeks declaratory relief, damages, restitution, disgorgement, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 4:14-cv-00420-JLH.

Attorneys: Thomas P. Thrash (Thrash Law Firm, P.A.) and Kenneth R. Shemin (Shemin Law Firm, PLLC) for Connie Stafford.

Companies: Whole Foods Market California, Inc.

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