maintaining outdated article on website about former supplier wasn't false association

Archi’s Acres, Inc. v. Whole Foods Market Service, Inc., 2021 WL 424286, No. 19-CV-2478 JLS (MSB) (S.D. Cal. Feb. 8, 2021)

Plaintiffs are farmers and growers of high-quality living organic basil. Whole Foods began purchasing small quantities of basil from them and selling the product in Whole Foods Market stores in the San Diego area in 2007. In 2012, they allegedly signed a contract committing to purchase $573,000 in basil from plaintiffs per year, and then Whole Foods gave plaintiffs a “local producer loan” to buy greenhouse equipment, presenting them with an oversized check for $100,000 at the opening of a Whole Foods in Del Mar, California. Whole Foods allegedly used and continued to use a photograph of this event in its advertising materials “to show Defendants’ purported commitment to local farms and giving back to the local community.” Yet, after completing the greenhouse project, they abandoned plaintiffs, ultimately ceasing orders from plaintiffs.

Lanham Act false association: Whole Foods argued that the complaint was unrelated to any products. Plaintiffs argued initial interest confusion: the ads and website allegedly confused consumers into thinking the parties were associated, and that plaintiffs’ products were available for sale in Whole Foods stores, luring them to those stores where they would have to buy something other than plaintiffs’ products.

Honestly that seems more persuasive than most IIC claims, and yet the court dismissed the claim as not sufficiently pled. Plaintiffs alleged only a possibility of diversion. The uses were on the Whole Foods website as an article from 2013 describing “[a] recent Local Producer Loan from Whole Foods,” a picture of them receiving the oversized loan check, and videos of plaintiffs/their farm. “These facts do not tend to mislead consumers about the association between Plaintiffs and Defendants because Plaintiffs and Defendants were associated at the time of the article; Defendants did issue Plaintiffs a local producer loan.” And the article didn’t make specific representations about when or in what quantities plaintiffs’ basil would be available in Whole Foods stores; it was available for several years.

In addition, plaintiffs didn’t plausibly allege intended diversion, which is vital to IIC. It was more plausible that Whole Foods was promoting a specific event—the loan.

False advertising: Plaintiffs didn’t plausibly plead a false or misleading statement in a commercial advertisement or promotion. The picture and videos weren’t false or misleading; the article didn’t say that plaintiffs’ products were currently available for purchase in Whole Foods stores, but that the loan “will help...bring Archi’s Acres basil into all Whole Foods Market stores in Southern California.”