Wednesday, December 12, 2012

I'm dreaming of (a) white chocolate

Miller v. Ghirardelli Chocolate Co., 2012 WL 6096593 (N.D. Cal.)

Miller bought a package of “Ghirardelli Chocolate Premium Baking Chips Classic White” and then brought a putative class action against Ghirardelli, complaining that this and four other Ghirardelli Chocolate products were marketed as “White” or “White Chocolate Flavored” when they did not contain any white chocolate, asserting the usual California claims, including fraud.  Ghirardelli argued that Miller didn’t have standing as to the other four products; the court agreed, but denied Ghirardelli’s motion to dismiss in other respects.

Miller alleged that he set out to buy white chocolate chips; reviewed the package before purchase; later tasted the chips and thought they didn’t taste right; and then checked the ingredients list and discovered that they contained no white chocolate, cocoa, or cocoa butter.  “White chocolate” and “white chocolate flavor” are regulated by the FDA. Products labeled as “white chocolate” must contain a minimum of 20 percent cocoa butter, and “a product may cannot be called ‘white chocolate flavored’ unless it has some natural derivative of cocoa butter or cacao fat.” Miller alleged that he wouldn’t have bought the chips or would have paid less for them but for Ghirardelli’s misrepresentations.  Miller also challenged Ghirardelli’s White Chocolate Flavored Confectionary Coating Wafers; Sweet Ground White Chocolate Flavor; Premium Hot Beverage—White Mocha; and Frapp√© Classico—Classic White.  (I suppose one lesson is: when someone offers you a “hot beverage,” it makes sense to ask “what is it?”)

As for the baking chips, Miller alleged that the package’s use of “Classic White,” and “Premium,” misleads consumers into believing the baking chips contain classic or premium white chocolate.  Further, the packaging says:

The luxuriously deep flavor and smooth texture of Ghirardelli Premium Baking Chocolate delivers the ultimate chocolate indulgence. We hand-select the world's finest cocoa beans and roast them to perfection and then blend the purest ingredients to achieve our awardwinning chocolate. For our Classic White Baking Chips, pure vanilla and whole milk powder combine to create rich, melt-in-your-mouth bliss. Experience the Ghirardelli difference:
• All Natural ingredients
• Luxuriously smooth and creamy
• Finest grind for smoothest texture and easiest melting.

This “romance” language misleads, he alleged, because it suggests that the packaging contents are white chocolate and because identical language appears on another product that does contain white chocolate—the Ghirardelli® Chocolate Premium Baking Bar.

The wafers allegedly misled with the name “White Chocolate Flavored Confectionary Coating Wafers,” used even though though the wafers are not flavored with white chocolate and contain no cocoa butter or cacao fat. Plus, a Ghirardelli chocolate product likely to be shelved near it at a similar price used a similar label.   As for Sweet Ground White Chocolate Flavor, the label indicated that the product can be used in white chocolate hot cocoas and white mochas and that it has a “luxuriously rich and complex white chocolate flavor.”  Miller alleged this was misleading because the product does not contain a cocoa derivative, and is misleadingly sold alongside similarly labeled products that do contain cocoa.  For Premium Hot Beverage—White Mocha, the packaging said: “The rich indulgent flavor of Ghirardelli Premium White Mocha creates the pleasurable moment cocoa lovers cherish,” though it contains no cocoa and though “white mocha” allegedly implies a combination of white chocolate and coffee.  The final product's packaging said: “The luxuriously rich and complex flavor of Ghirardelli's Classic White Frapp√© Classico creates the pleasurable moment cherished by white chocolate lovers,” allegedly implying derivation from white chocolate; Miller also alleged that the product was likely to be sold alongside a similarly labeled Ghirardelli frappe product which actually contains chocolate.

In addition, Miller alleged shared misrepresentations: the packaging prominently uses the term “chocolate” in the company name; the labels for the baking chips and frappe employ the terms “Classic White” and “Classico,” respectively, to deceptively suggest the products are unchanged from an original white chocolate product; Ghirardelli sells the products for the same price as analogous products containing real chocolate.

Ghirardelli argued that Miller lacked standing for the four proudcts he didn’t buy.  Some courts have accepted that argument on a blanket basis.  Other courts have waited for a motion for class certification to resolve the issue.  “The majority of the courts that have carefully analyzed the question hold that a plaintiff may have standing to assert claims for unnamed class members based on products he or she did not purchase so long as the products and alleged misrepresentations are substantially similar.”  Thus, there may be standing to assert claims based on all flavors of a product when the alleged misrepresentations are the same across flavors (just as there’d be standing to assert claims based on all sizes of a product).  In non-food cases, courts have also examined whether alleged misrepresentations are sufficiently similar across product lines, for example “environmentally friendly” claims on glass cleaner and stain remover.

Here, the court found, the products and alleged misrepresentations weren’t sufficiently similar to confer standing on Miller.  They did have some similarities in packaging, composition, and labeling: they were labeled Ghirardelli Chocolate, which suggested a connection to chocolate; they didn’t contain cacao butter; they were sold next to products that do contain chocoloate or white chocolate; and they used words creatng a connection to white chocolate.  But the products were different: baking chips, three drink powders, and wafers.  They looked different, had different labels, and only one other product was a baking product, and confectionary wafers are different from chips for cookies.  They also had different customers; two of the drink powders’ labels said they were marketed to retailers.

The baking chips’ use of “Classic White,” “Premium,” and the “romance language” on the package set up a connection among “Premium Baking Chocolate,” the roasting of cocoa beans, the creation of award-winning chocolate, and the challenged “Classic White Baking Chips.” In addition, the complaint alleged that the product was sold alongside of and equivalently priced to “Ghirardelli Chocolate White Chocolate Premium Baking Bar,” a similarly-labeled product that does contain white chocolate (the other products were allegedly sold alongside regular, or as my father would say, real, chocolate products). “This alleged connection to chocolate is arguably stronger and at least different than that for the other products.”  Only the frappe label used “Classic White,” and its “romance language” was very different: on the label, it said it was “[d]esigned exclusively for specialty coffee retailers,” and had a  “luxuriously rich and complex flavor ... that creates the pleasurable moment cherished by white chocolate lovers.” (If Miller’s correct about misleadingness, I wonder if Ghirardelli is inducing false advertising by retailers.) 

Miller also alleged that the labels for the wafers and white chocolate flavor employ the words “flavor” and “flavored” in a manner that violates FDA regulations and the Sherman Food, Drug and Cosmetic Law, but those words weren’t on the baking chips packaging, and the mocha mix also had “little discernable similarity” to the baking chips.  “Miller's best argument is that the labels imply white chocolate content, but the alleged misrepresentations vary widely.”  His final argument, that the combination of the “Ghirardelli Chocolate” branding on the front of the label on top of the characterization of the product “means that—under the FDA regulations and standards—the harm is identical across product lines,” as in cases finding standing.  But this argument was better considered in the context of a motion to dismiss an amended complaint with factual allegations targeted this theory.

Ghirardelli then argued that Miller’s allegations about the baking chips were legally insufficient to state a claim; the court disagreed.  A reasonable consumer could be deceived, at least on these allegations.  This wasn’t a case about clearly fake products like FROOT LOOPS, which contain no fruit.  Ghirardelli argued that the product was called “Classic White Baking Chips” and not “white chocolate chips” (which is, in my opinion, chopping the not-chocolate a little fine: white what?); that “Finest grind for smoothest texture” describes the product's consistency and does not imply chocolate content; that reasonable consumers couldn’t misinterpret references to the flavor and texture of Ghirardelli's Premium Baking Chocolate; and that, by referring to the baking chips as containing “pure vanilla and whole milk powder,” the label disclosed that it contained no white chocolate.  These arguments merely raised factual questions inappropriate on a motion to dismiss.

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