Tuesday, June 02, 2020

"Belgium 1926" label on chocolate plausibly indicates current Belgian origin

Hesse v. Godiva Chocolatier, Inc., 2020 WL 2793014 No. 19-cv-972 (AJN) (S.D.N.Y. May 29, 2020) 

The forgiving plausibility standard allows consumer protection claims about Godiva’s use of “Belgium 1926” on its American-made chocolates to continue. The court points out that, although “founded in Belgium in 1926 but not still there” might be a plausible interpretation, “founded in Belgium in 1926 and still there” is at least as plausible if not more so. Other moments of note: (1) injunctive standing lacking because plaintiffs now know the truth and future desire to buy properly labeled chocolate isn’t concrete enough; (2) Godiva raises a First Amendment defense to this garden-variety consumer protection claim. Expect more of this even though the court disposes it in a footnote as putting the cart before the horse: if this is misleading commercial speech, it’s not protected by the First Amendment.


example of challenged packaging

Godiva puts “Belgium 1926” “prominently ... on the front packaging of all the Godiva chocolates.” Amended Complaint, and “across its entire marketing campaign, such as on its Godiva storefronts, supermarket display stands, and print and social media advertising,” but made all its chocolates in Reading, Pennsylvania during the relevant time period. Plaintiffs alleged that “Belgium is widely understood and recognized as producing among the highest quality chocolates in the world” and that American chocolate differs in taste from that produced in Belgium, due “to the use of different butters, creams, and alcohol.” 

Article III standing for injunctive relief: the court reasoned that plaintiffs’ injury was “hypothetical—if they choose to purchase Godiva’s products in the future, then they may be harmed.” But isn’t the injury the ongoing lack of ability to rely on the label? That doesn’t require a choice to buy Godiva; it’s about interference with the decisional environment. But anyway, plaintiffs know the truth so they couldn’t be harmed by the continued representation of Belgian origin. (Again, the 9th Circuit pointed out that products can change, so that doesn’t necessarily mean that they never face Godiva-related choices again.)

New York General Business Law the usual California statutory claims survived. The reasonable consumer applied to all these claims. Godiva claimed that its statement was “unambiguous and historically accurate message” about the founding, but “an equally, if not more, plausible inference is that the phrase represents both the provenance of the company—Belgium, in 1926—and a representation that its chocolates continue to be manufactured there.” Godiva relied on a trademark registration, several pages on Godiva’s website, and a CBS News article stating that Godiva’s chocolates are manufactured in Pennsylvania. “Godiva asks the Court to draw an inference in its favor: that because these documents were public record, reasonable consumers were aware of where its manufacturing occurs. That inference is couched in assumptions—that everything in the public record is universal knowledge and that, even if this information was widely disseminated, Godiva’s label could not lead a reasonable consumer astray, to name a few.” Not on a motion to dismiss! 

This is especially true because reasonableness takes the entire context of product labeling into account. Part of the “mosaic” was that “some of Godiva’s packaging and social-media advertising describe its chocolates as Belgian. The front packaging of one of its boxes, for example, contains the phrase “ASSORTED BELGIAN CHOCOLATE CARAMELS,” and its social-media advertising states “Delicious Belgian chocolates brought to you ...” Those facts bolstered the conclusion that a reasonable consumer could conclude that its chocolates are manufactured in Belgium. The court distinguished other cases “where the label in question expressly disclaims its actual origin—which is not the case here.” Though disclosures aren’t always curative, “the absence of a disclosure counsels strongly against Godiva’s argument.”  Fundamentally, “it is reasonable that a consumer would view a label touting the location and year of a company’s founding as representing the products’ continued place of production,” even if reasonable consumers would not think that individual chocolates were produced in 1926. 

Most of the warranty claims also survived, but common-law fraud, intentional misrepresentation, and negligent misrepresentation did not.

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