The fast-casual restaurant chain that promises “food with integrity” was just informed its marketing campaign is without integrity.
U.S. District Judge Haywood Gilliam Jr., ruled that Chipotle Mexican Grill’s non-GMO claims are misleading, opening the door for customers in Maryland, California and New York to proceed to trial in a class action lawsuit. You might say Judge Gilliam thinks the company's marketing scheme has a fast-casual relationship with the truth.
The lawsuit, filed in 2016, alleges that Chipotle’s “only non-GMO ingredients” claims on signs in its restaurants were “false, misleading, and deceptive.” That’s because the meat and dairy products sold by Chipotle almost assuredly came from animals given at least some GMO feed.
The ruling from the U.S. District Court for the Northern District of California, certified three separate classes and denied the company’s motion to throw out the case. Legal experts say it was notable in important areas of class action and consumer law.
The ruling “was without a doubt a victory for Chipotle consumers,” Laurence D, King of Kaplan Fox & Kilsheimer LLP in San Francisco., one of their attorneys, told Bloomberg Law. “Plaintiffs have maintained from the outset that Chipotle’s ‘non-GMO’ campaign was false and misleading,” he said.
Chipotle argued that a strict interpretation of “non-GMO” extending back to animal feed was not shared by “reasonable” consumers or federal regulators, and that its website clearly noted “the meat and dairy served at Chipotle are likely to come from animals given at least some GMO feed.”
However, Judge Gilliam, in calling the claims to be misleading, specifically noted that plaintiffs supported their allegations with “definitions used by the Non-GMO Project,” which states that products containing milk and meat from animals fed genetically engineered feed do not qualify for its Non-GMO project verified seal.
Regarding Chipotle’s website disclaimer, Judge Gilliam said, “It would not be reasonable to expect a consumer to search for disclaimers on a website to clarify a purported misrepresentation on in-store signage.”
Only a few food and beverage false advertising suits have been certified as class actions. Class actions rarely go to trial, and class certification increases settlement pressure, legal experts say.
This suit. which raises concerns about the food production chain, differs from other suits over marketing food that’s allegedly made with genetically modified ingredients, says defense attorney Dale J. Giali, of Mayer Brown in Los Angeles.
“This theory of liability is an extreme, outlier position,” he said. “Other cases with this theory of liability, that GMO seed in the supply chain is incompatible with a ‘no GMO ingredients’ advertising claim, have not obtained this type of result.”
In addition to money damages, the plaintiffs may seek injunctive relief, or marketing changes, the court said. Attorneys who represent consumers have said such damages, aimed at stopping allegedly misleading marketing practices, is more valuable than financial damages in consumer suits.