September 17, 2019

September 17, 2019

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September 16, 2019

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California Federal Trial Court Dismissed Suit Alleging Deceptive Practices in Use of Non-GMO Claims

A federal trial court in California recently dismissed a complaint alleging that a restaurant chain had failed properly to disclose genetically modified ingredients in certain menu items. The case we are referring to is Gallagher v. Chipotle Mexican Grill, Inc.

Facts of the Case

At some time after April 2015, Plaintiff Colleen Gallagher purchased food and beverage items from an unspecified Chipotle Mexican Grill (Chipotle) location. When Ms. Gallagher purchased those products, she claims that she had relied on Chipotle's representation that its products did not contain any genetically modified organisms (GMOs). Ms. Gallagher complained to the Court that Chipotle failed to disclose or intentionally concealed the fact that certain meat, dairy and soft drink products contained GMO ingredients.  Ms. Gallagher claims that she would not have purchased items from Chipotle had she known this.

Ms. Gallagher based these allegations on her claim that Chipotle's meat and dairy products were derived from animals that allegedly consumed genetically modified feed. She also claimed that third-party soft drinks sold at Chipotle contained GMOs.

On this basis, Ms. Gallagher sued Chipotle under: 1) the California Consumers Legal Remedies Act (CLRA); 2) the California False Advertising Law (FAL); and 3) the California Unfair Competition Law (UCL).

What the Court Said

The Court dismissed Ms. Gallagher's complaint with leave to amend upon Chipotle's Motion to Dismiss for Plaintiff's failure to plead legally sufficient claims. The plaintiff has since amended her complaint, but the Court's decision remains instructive. The Court noted that claims of deceptive business practices involved questions of fact and, as such, these claims are usually not appropriate for resolution at the Motion to Dismiss stage. In this case, however, the Court found that Ms. Gallagher's complaint amounted to the rare set of claims for which granting a motion to dismiss was appropriate.

Specifically, Ms. Gallagher did not allege that any of the ingredients used by Chipotle were themselves GMO; she alleged that meat and dairy ingredients were derived from animals that in turn consumed GMOs in their feed. Additionally, and more significantly, the Court questioned whether a reasonable consumer would believe that meat or dairy was genetically modified merely because the animal from which it was produced had consumed GMO feed products. Ms. Gallagher also failed to specify which of the alleged "GMO" menu items she consumed.

Finally, Chipotle had specifically disclosed on its website that it sells soft drinks that contain GMO's, and that its meat and dairy items are derived from animals that consumed GMO products.

What Food Producers Should Do

This case is significant because the Court stated that, at least as pled, consumers reasonably would not believe that meat or dairy ingredients - which themselves had not been genetically modified - would fail to qualify as non-GMO. Stated another way, given how the complaint was pled, the Court found as a matter of law that the term "non-GMO" only describes the actual meat or dairy product itself or, at most, the animal from which they derive, but should not be reasonably taken to include the feed that those animals consumed. Significantly, the Court noted as an aside that the case may have been decided differently with "organic" claims because the organic certification by definition excludes meat and dairy products from animals that consumed GMOs.

Food producers should also take note that a website disclaimer was further indication, for this Court, to counter any misperception that might arise out of a more general statement in advertisements or signage. While we can expect the plaintiffs' bar to continue to try to expand the law of deceptive business practices with regard to non-GMO claims, (and indeed, the plaintiff in this case has already amended her complaint), this decision represents a significant victory for food producers. 

© 2019 Keller and Heckman LLP

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Douglas Behr, white collar criminal defense lawyer, Keller and Heckman, D.C. law
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Douglas Behr joined Keller and Heckman in 1994. He practices civil litigation and white collar criminal defense. He handles matters regulated by the Drug Enforcement Administration.

Mr. Behr represents business, trade associations, and individuals before federal and state trial and appellate courts, regulatory bodies, and licensing forums with a concentration on Lanham Act false advertising, contract disputes, white collar crime defense, product liability, and trade regulation controversies. He also advises members of the business community on...

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Arthur S. Garrett III, Keller Heckman, National Litigation Attorney, Insurance Coverage Lawyer,
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Arthur Garrett joined Keller and Heckman in 1990. Mr. Garrett is co-chair of Keller and Heckman's national litigation practice, along with Robert S. Niemann. He also serves as the Firm's General Counsel.

Mr. Garrett's litigation practice focuses on product liability, with an emphasis on defending manufacturers of food, chemicals and pharmaceuticals. His trial experience has taken him all over the United States to try cases in state and federal courts and mediate/arbitrate disputes on behalf of corporations and trade associations. Mr. Garrett was recently trial counsel in a breach of contract/indemnity action that was selected as a Top 10 Defense verdict in the State of California. 

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Eric Gotting, Keller Heckman, ligation attorney, appeals lawyer, personal injury
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Eric Gotting joined Keller and Heckman in 2011. He serves as a partner in the firm's litigation and environmental practice groups specializing in complex civil and appellate matters, with a focus on toxic tort, environmental, and corporate litigation.

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Mr. Gotting has handled cases across the country, having tried matters to verdict and argued appeals before federal and state appellate courts. His experience includes class actions, mass tort litigation, and...

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Robert S. Niemann, Trial Lawyer, Complex Business Attorney, Keller Heckman Law Firm
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Robert Niemann is a trial lawyer in the litigation department concentrating his practice in the areas of complex business and commercial litigation, trade secrets, restrictive covenants, unfair business practices, products liability, and environmental toxic torts. Mr. Niemann is co-chair of Keller and Heckman's national litigation practice, along with Arthur S. Garrett III. He is also the co-chair of the Food Law Committee of the Litigation Section of the California State Bar Association, along with Christopher Van Gundy.

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Manesh K. Rath, Keller Heckman, Occupational Safety lawyer, Associations Attorney
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Manesh Rath is a trial and appellate attorney with experience in general commercial litigation, food litigation, wage and hour and class action litigation, occupational safety and health law, association law, accessibility, and labor law.

Mr. Rath has been the lead amicus counsel on several cases before the U.S. Supreme Court, including Staub v. Proctor Hospital and Vance v. Ball State University.

Mr. Rath is a co-author of three books in the fields of OSHA law, wage and hour law, and labor and...

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