Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Consumer lacked standing to proceed with food product mislabeling claims, (Dec 2, 2013)

By Linda O’Brien, J.D., LL.M.

In a consumer class action against an organic food manufacturer, a consumer lacked standing to proceed with claims of mislabeling of an ingredient in several products due to his failure to allege actual reliance on the products’ labeling, the federal district court in San Francisco has decided (Figy v. Amy’s Kitchen, Inc., November 25, 2013, Illston, S.).

Robert Figy filed a consumer class action against Amy’s Kitchen, Inc., a manufacturer of natural and organic food products, alleging mislabeling of the ingredient “evaporated cane juice” in five of its products in violation of California’s Unfair Competition Law (UCL), Sherman Law, and Health and Safety Code. Figy claimed that the ingredient was required to be labeled as “sugar”, its common and usual name. The defendant moved to dismiss the complaint on several grounds, including lack of standing.

Amy’s Kitchen argued that Figy’s complaint should be dismissed because he failed to allege that he relied on the products’ ingredient labeling in making his purchases.

To assert a claim under the UCL, a person must have suffered injury in fact and lost money or property as a result of such unfair competition. Actual reliance was required to prosecute a private enforcement action under the Act, according to the court. In rejecting Figy’s contention that the predicate unlawful conduct in his claim is a labeling violation and not a misrepresentation, the court noted that the UCL which Figy relied upon prohibits specific types of misrepresentations on food labels and the plaintiff must allege that the “misrepresentations were an immediate cause of the injury-causing conduct.” Figy failed to allege that he read the product ingredient labels, saw the term “evaporated cane juice,” and relied on the misbranding in purchasing the products. Absent allegations of actual reliance, Figy lacked standing to bring claims under the UCL.

The case is No. CV 13-03816.

Attorneys: Ben F. Pierce Gore (Pratt & Associates) for Robert E. Figy. Dale Joseph Giali (Mayer Brown LLP) for Amy’s Kitchen, Inc.

Companies: Amy’s Kitchen, Inc.

Cases: StateUnfairTradePractices CaliforniaNews