Food for Thought: Food Industry Decisions with Bite

Food for Thought: Motion to Dismiss Denied in Renewed False "GMO" Advertising Class Action Against Chipotle

Mass Tort and Product Liability   |   November 4, 2016
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A federal judge in California declined to dismiss a (renewed) proposed class action case against Chipotle Mexican Grill, Inc., accusing the company of violating consumer protection laws in California, Florida, Maryland, and New York by deceptively advertising that its menu no longer contained GMOs. The plaintiffs alleged, in short, that Chipotle’s menu is not GMO-free as advertised, because its meat and dairy products are sourced from animals raised on genetically engineered or GMO-derived feed and its soft drinks contain GMO-derived ingredients.

Chipotle moved to dismiss the complaint on the grounds that the plaintiffs failed to state a claim under the "reasonable consumer" test since the company’s website clarifies that its meat and dairy products are likely to come from animals that may receive GMO-feed and its beverages may contain genetically modified ingredients. Chipotle further argued that the complaint should be dismissed because no reasonable consumer would assume that the company’s advertisements about moving to only "non-GMO ingredients" extended to anything other than the ingredients of the food prepared or cooked at one of its store locations. The district judge disagreed.

The judge started his analysis by taking judicial notice of: (i) the Order denying Chipotle’s Motion to Dismiss in Reilly v. Chipotle Mexican Grill, Inc., No. 15-cv-23245-MGC (S.D. Fla. Apr. 20, 2016); (ii) the pleadings in Gallagher v. Chipotle Mexican Grill, Inc., No. 15-cv-03592-HSG (N.D. Cal. Feb. 5, 2016); (iii) United States Senate Bill 764 establishing a national disclosure standard for bioengineered foods; and, (iv) Chipotle’s April 27, 2015 press release titled, "Chipotle Becomes the First National Restaurant Company to Use Only Non-GMO Ingredients."

Based on the foregoing and accepting as true the plaintiffs’ allegation(s) that a reasonable consumer would assign the same definition to the terms "non-GMO" and "GMO-free" as that employed by the Non-GMO Project and the federal government (as supported by the market research and consumer survey findings alleged in the complaint), the judge found the plaintiffs had sufficiently alleged at this stage that a reasonable consumer would be deceived by Chipotle’s non-GMO claims. The judge further found that disclaimers located on a company’s website cannot override misimpressions created by a product label as a matter of law, so Chipotle’s non-GMO advertisement claims constitute affirmative representations sufficient to support the plaintiffs’ claims of misrepresentation for purposes of defeating the motion to dismiss.

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