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From Health Law Daily, April 9, 2013

Case proceeds against Ghirardelli for white chocolate claims, but only as to baking chips that were purchased

By Sheila Lynch-Afryl, JD, MA

A customer alleging that a chocolate company deceived purchasers because its white chocolate baking chips did not contain chocolate or white chocolate did not have standing to sue over products he never purchased (Miller v Ghirardelli Chocolate Company, April 5, 2013, Beeler, L). While consumers may sue for products they did not purchase if the products and misrepresentations are sufficiently similar, the five white chocolate products in question came in different forms and were marketed and sold differently. The customer’s remaining claims as to the white chocolate he purchased could proceed, however, since the court rejected the chocolate company’s argument that the complaint failed to state a claim.

Background. Scott Miller alleged that in 2012, he bought Ghirardelli Chocolate Company’s (Ghirardelli) white chocolate baking chips; after tasting them he discovered that they contained no white chocolate, cocoa, or cocoa butter. Miller filed a class action suit on behalf of purchasers of five Ghirardelli products marketed and sold as white chocolate, including baking chips, confectionary coating wafers, ground white chocolate flavor, and drink mixes. He alleged common law fraud and violations of California’s Consumer Legal Remedies Act, False Advertising Law, and Unfair Competition Law (UCL), which adopts federal regulations.

The court previously granted Ghirardelli’s motion to dismiss on the ground that Miller lacked standing for the products he did not purchase and allowed him to file an amended complaint. Miller filed that complaint and Ghirardelli once again filed a motion to dismiss, arguing that Miller lacked standing and that he failed to state a claim.

Standing. Miller’s amended complaint contained a UCL “unlawful” prong claim based on the five products’ use of the word “chocolate” displayed under “Ghirardelli” on the labels. He argued that he had standing to sue for all five white chocolate products because the “chocolate” statement was identical on all five products.

The court found, however, that an “unlawful” claim based on the use of the word “chocolate” reached back to the FDA’s “imitation regulation” (21 C.F.R. sec 101.3), which required that the statement of identity on the principal display panel of a food package be the name required by federal law or regulation. The identity of the commodity in question was white chocolate, not chocolate, which meant a determination of standing required an examination of the entire label. Despite the use of the word “chocolate” on the label, the court found that the five products were not sufficiently similar, since they looked different, had different uses, and had different labels and representations on their packaging. The court concluded, therefore, that Miller and the subclass had standing to sue only for the product he purchased.

Health & Safety Code. Ghirardelli argued that parts of the California Health & Safety Code were unconstitutional because they incorporated federal regulations promulgated after their effective date. The court rejected this argument, finding that the California legislature did not totally abdicate its legislative power. The court noted that the law provided that any person could object to the incorporation and trigger a delay and review period before the regulation became California law.

The case number is C 12-04936 LB.

Attorneys: Deborah Kristina Barron (Farella Braun & Martell LLP) for Ghirardelli Chocolate Company.

Companies: Ghirardelli Chocolate Company

MainStory: TopStory LabelingNews FoodNews AdvertisingNews CaliforniaNews

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