Chobani, LLC v. Dannon Co., No. 16-CV-30 (N.D.N.Y. Jan. 29, 2016)
Chobani sued for a declaratory judgment that it wasn’t falsely advertising about Dannon; Dannon immediately filed its answer and counterclaims, and the court a bit over two weeks later granted a preliminary injunction against Chobani.
Dannon Light & Fit is the leading brand of light yogurt in the US, and Dannon’s top seller. Dannon added Light & Fit Greek as an eighty-calorie Greek nonfat yogurt. Dannon alleged that its highest proportion of light yogurt sales routinely occurs during the first three months of the year, “as this is the time when most American consumers resolve to make positive changes relating to weight loss, fitness, and overall health and diet.” It’s also the time of year when consumers experiment with new yogurt products, making marketing and sales efforts during each year’s first quarter crucial.
Chobani, meanwhile, actively seeks to differentiate itself from its competitors in the Greek yogurt market by emphasizing its commitment to “natural, non-GMO ingredients” and “environmental sustainability practices.” Its latest offering, Chobani Simply 100 Greek Yogurt, has “100 calories per serving with no preservatives or artificial sweeteners.” Its January 2016 campaign included a TV ad, a print ad, and digital/social media content, all on the same theme.
The video ad’s opening shot focuses on a cup of Dannon Light & Fit Greek Yogurt sitting on a table, which is immediately picked up by a young woman lounging in a pool chair. As she scrutinizes the ingredients label, a voiceover proclaims: “Dannon Light & Fit Greek actually uses artificial sweeteners like sucralose. Sucralose? Why? That stuff has chlorine added to it!” The woman scrunches her face in disgust and tosses away the cup of Dannon yogurt. She then chooses Chobani Simply 100 Greek Yogurt, which is sitting on a table to her right, as a swimming pool becomes visible in the background. Voiceover: “Now, there's Chobani Simply 100. It's the only 100 calorie light yogurt sweetened naturally.” “As she tears open the packaging, the Commercial pans to a wide shot of the swimming pool, where a child jumps in, making a big splash. The camera returns to the woman, now smiling contentedly, before finishing with a wide shot.” The final shot includes a hashtag: #NOBADSTUFF.
The print ad’s headline is “Did You Know Not All Yogurts Are Equally Good For You?” It continues, “[y]ou think you are doing something good for yourself and your family [b]y buying yogurt and instead of bad stuff [a]nd then you find that the bad stuff* [i]s in your yogurt!” The asterisk refers to a mouseprint footnote explaining that “bad stuff” means “Artificial Ingredients.” The text above and below the Dannon product displayed is the same as that in the ad. Further: “If you want to do healthy things, know what’s in your cup. Chobani Simply 100 is the only 100-[c]alorie Greek Yogurt without a trace of any artificial sweeteners or artificial preservatives.”
The digital content is similar. The website asks “Do You Know What’s In Your Cup? . . . . Scroll over to compare our ingredients with those in other light yogurts to see what’s really inside[.]” Ingredients of Dannon’s product are identified as “artificial,” and the site has a link to the print ad.
Sucralose, which Dannon uses, has been approved by the FDA since 1999, and Dannon provided evidence that the FDA reviewed more than 110 safety studies in connection with its use as a general purpose sweetener for food. Sucralose is a molecule with twelve carbon, nineteen hydrogen, eight oxygen, and three chlorine atoms linked together in a stable form that is safe to consume. It’s made through a process in which three atoms of chlorine are substituted for three hydrogen-oxygen groups on a sucrose molecule. This trio of chlorine atoms is known as a chloride, that is, a compound of chlorine that is bound to another element or group. Chlorides are found in many natural food sources, from table salt to cow’s milk.
Pool chlorine, by contrast, is a lay term for calcium hypochlorite, “a powerful bleach and disinfectant that is harmful if added to food or ingested.” It’s distinct chemically and practically from the chlorine atoms found in sucralose, and it’s not in, or used to manufacture, any of Dannon’s products.
First, the court ruled that Dannon sought a prohibitory injunction to return the parties to the status quo ante, rather than a mandatory injunction requiring affirmative acts by Chobani. Thus, the standard was no higher than that applied as a result of Winter/eBay.
Likely success on the merits: Chobani argued that it was literally true that sucralose had chlorine added to it, and that the other challenged messages about “good” or “bad stuff” were mere puffery. Nope. Although “no bad stuff” might be puffery if it weren’t tethered to a comparative claim about Dannon, here Chobani used that phrase in connection with statements and images that portrayed Dannon’s yogurt as a safety risk because it contains sucralose. Some of the digital content didn’t give the full comparison, but it did include a link to the full print ad.
Even if Chobani’s statements about “chlorine” were literally true, there could still be literal falsity if the clear meaning, in context, was false. (The court wasn’t so sure about literal truth. The statement that chlorine was “added to” sucralose was inaccurate, if sucralose is created by adding chlorine to a precursor compound; sucralose doesn’t exist until the chlorine is combined with the precursor, and adding additional chlorine to a stable sucralose compound would likely have no effect. Chobani’s own expert claimed that it was scientifically accurate to say “chlorine has been added to form sucralose.” A factfinder is likely to conclude that the campaign unambiguously conveys the literally false message that Dannon’s product contains sucralose and is therefore unsafe to consume. Chobani argued that sucralose’s safety was the subject of legitimate scientific debate, but the record didn’t support that claim: “the balance of record evidence reflects that sucralose is an unusually well-studied compound repeatedly determined to be safe for ordinary consumption.” While some research suggested that high doses could be toxic, that’s also true of salt and water. Further, it was “telling” that Chobani’s own products contained the same type of “chlorine”—the chloride found in all-natural, non-GMO milk, but Chobani made no mention of that fact.
Dannon was entitled to a presumption of irreparable harm given the literally false direct comparative advertising at issue. Even if such presumptions are illegitimate because “categorical” in a way precluded by eBay, Dannon still showed irreparable harm. Given the difficulty of showing how many sales or how much goodwill would be lost, it was enough to show (1) competition in the relevant market and (2) a logical causal connection between the alleged false advertising and the claimaint’s own sales position. That’s a no-brainer here.
The balance of hardships also favored relief, since Chobani has no protectable interest in advertising falsely. And barring false advertising is in the public interest, especially when it comes to serious issues like food safety.
The parties agreed on a $1 million bond, which the court accepted. The injunction blocked the existing ads, as well as similar claims related to chlorine content, healthfulness because of the presence or absence of chlorine, the presence of pool chlorine in Dannon yogurt, the danger of sucralose, the lack of safety of Dannon products, or “bad stuff” in connection with Dannon products.