Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—C.D. Cal.: Claim that goji berry packaging misled consumers survives motion to dismiss, (Sep 7, 2016)

By Michael Menzhuber, J.D., LL.M.

Purchasers of "Himalania" brand goji berries adequately alleged that they were misled by representations on product packaging about the origin of the berries, the federal district court in Los Angeles has decided. The court found that a reasonable consumer could be misled by a picture and statements appearing on the product’s packaging for purposes of claims under the California Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA) (Torrent v. Ollivier, September 2, 2016, Pregerson, D.).

Natierra and Brandstorm, Inc. market and sell "Himalania" brand goji berries. At the time Nicolas Torrent purchased the product, the packaging included images of mountains along with statements that the goji berries originated and were the most famous berry in the Himalayas.

Torrent alleged that the berries came from Ningxia, a province in China that was far north of the Himalayas, and brought a putative class action against the companies and their founder, Thierry Ollivier. The action sought an injunction, restitution under the UCL, and damages under the CLRA.

The court dismissed the UCL and CLRA claims to the extent that they related to consumers’ knowledge of the Ningxia province of China because a reasonable consumer would not be well-versed enough in Chinese geography to have any beliefs about Ningxia’s location or whether it qualifies as "Himalayan." However, the court denied the defendants’ motion to dismiss the UCL and CLRA claims because the assertion that the defendants intended to create an impression that the goji berries were harvested from the Himalayas was supported by factual allegations regarding the picture and statements appearing on the product’s packaging.

The court determined that dismissing Torrent’s CLRA damages claim, which did not comply with notice requirement, with prejudice would be unduly harsh and would not serve the interest of protecting consumers. However, it also found that a mere dismissal with leave to amend would be not be appropriate. Therefore, the court dismissed Torrent’s CLRA damages claim without leave to amend but also without prejudice to the refiling of the claim.

Finally the court: (1) dismissed the action against Ollivier because Torrent did not sufficiently alleged that he was the alter ego of the defendant companies; and (2) denied Torrent’s request that it use its equitable powers to find an independent cause of action for attorney’s fees because there was no authority or reason justifying the action.

The case is No. 2:15-cv-02511-DPR-JPR.

Attorneys: Eric M. Raines (Law Office of Eric M. Raines) for Nicolas Torrent. Lee H. Roistacher (Daley & Heft, LLP) for Thierry Ollivier.

Companies: Brandstrom, Inc.; Natierra

Cases: Advertising StateUnfairTradePractices CaliforniaNews