Wednesday, September 09, 2020

"wasabi peas" can be made with horseradish without injuring consumers given widespread use

Yothers v. JFC Int’l, Inc., No. 20-cv-01657-RS, 2020 WL 5015262 (N.D. Cal. May 14, 2020)

Defendants sell “wasabi peas,” which, “allegedly like 95–99% of ‘wasabi’ products sold in North America, contains not Wasabia japonica but Amoracia rusticana, more commonly known as horseradish.” Plaintiffs alleged that they wouldn’t have bought the product if they’d known it didn’t contain wasabi. Wasabi allegedly “is the most expensive crop in the world to grow because it is very difficult to cultivate.” While fresh wasabi can cost as much as $113 a pound, horseradish has a similar taste but costs only about $6 a pound. Thus, plaintiffs alleged, “95–99% of the wasabi products sold in North America substitute horseradish and green dye for authentic wasabi.” Defendants’ product is labeled as “wasabi coated green peas,” but the ingredients list includes not wasabi but horseradish and green food coloring.

The court found that plaintiffs failed to show statutory standing. They couldn’t show they paid a premium when the product they bought was not, apparently, priced differently from other similar products. “Importantly, plaintiffs have not alleged why they selected defendants’ product, as compared to other products which are labelled and priced almost identically,” but instead alleged that almost all other products on the market had the same defect (and didn’t specify whether they knew that at the time of purchase).  “Unless that fact has recently become known to them, ‘wasabi coated’ must have implied ‘horseradish coated’ to plaintiffs at the time of purchase.” Plus, they alleged they reviewed the “labelling, packaging, and marketing materials” before purchasing, and the package as a whole clearly discloses that the product contains not wasabi but horseradish. Williams v. Gerber Product Co., 552 F.3d 934 (9th Cir. 2008), which held that reasonable consumers don’t have to “look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box,” was inapposite because that was about a Rule 12(b)(6) motion, not a jurisdictional motion under Rule 12(b)(1). “The analysis in the present case involves not what a ‘reasonable consumer’ would do, but what [plaintiffs] actually did do.” Further, plaintiffs alleged that they wouldn’t have bought this product “on the same terms” if they’d known the truth, but they didn’t allege whether they would have bought another competing horseradish product instead or a more expensive wasabi product. “Whether plaintiffs would have spent the same amount of, more, or less money had they known about the substitution determines whether they suffered an economic injury.”

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