TORT TWITS OF THE MONTH: Yahoos Against Yoo-Hoo!
It ain't often -- the occasional Saturday afternoon when I'm feeling particularly indulgent -- but I sometimes enjoy buying and drinking a cold, chocolaty Yoo-hoo soft drink. Nobody would mistake this for a diet soft drink. Indeed, the calorie content is right on the bottle, as federal labeling law requires.
The three Tort Twits of the Month for July are lawyers at Reese Richman right here in NYC: Michael R. Reese, Kim E. Richman, and Belinda L. Williams. They have brought a putative class action in the Eastern District of New York on behalf of "all persons in the United States who purchased Yoo-hoo and other similar products from Defendants" from June 22, 2004 to the present. They want in excess of $5 million, including the profits the defendants made on the sales, as well as damages, punitive damages, and injunctive relief.
What gripe could these lawyers possibly have against Yoo-hoo, you ask?
It boils down to an alleged failure "to properly disclose [that Yoo-hoo products] contain a highly unhealthy, non-nutritious ingredient known as partially hydrogenated oil." Compl. para. 6. Of course, the list of ingredients on Yoo-hoo's label includes: "soybean oil (partially hydrogenated)." The complaint cites other statements as improperly conveying a sense of healthiness about the product, but it is careful never to say that these statements are actually false. These include: "7 Vitamins and Minerals;" "NO PRESERVATIVES;" "99% FAT FREE;" and "99% CAFFEINE FREE."
Here is the plaintiff's key allegation regarding loss causation:
Defendants' widespread advertising and marketing of the Product represented to Plaintiff that it was nutritious, healthy and better than similar products. Based upon these misrepresentations, Plaintiff reached the conclusion that the Product was in fact healthy and relied upon these representations in making his decision to purchase the Product at a premium price. As stated herein, Defendants' representations are misleading and deceptive because the Product contains dangerous, unhealthy, non-nutritious partially hydrogenated oil. Plaintiff suffered injury in that he would not have paid a premium when purchasing the Product had these misrepresentations not been made.
Compl. para. 10.
Note what the Complaint does not say -- namely, that Plaintiff would not have bought the product at all if he had known about the partially hydrogenated soybean oil that was disclosed right on the label. Instead, he simply would not have paid a so-called "premium" price for it.
And what, pray tell, is the "premium" to which Plaintiff refers? The complaint compares the price of a 15.5 ounce bottle of Yoo-hoo ($1.75) to the price of an 8 ounce carton of "Horizon Organic Chocolate Reduced Fat Milk," which sells for $1.50. It sounds to me like Yoo-hoo is quite a bargain over that reduced-fat, organic nonsense; for only a quarter more, you get nearly twice as much Yoo-hoo!
The complaint alleges that parents are deceived into believing that Yoo-hoo is a "healthy milk-based drink, but [it] is instead a 'chocolate drink', not 'chocolate milk.' According to the ingredients in Yoo-hoo, the Product contains virtually no milk and instead is mostly water, sugars, milk by-products and chemicals." Compl. para. 20.
But that's the whole point. Yoo-hoo is what it is -- a chocolaty, sugared beverage -- and its ingredients are clearly stated right on the label. One read tells you that it ain't milk. And anyone who is concerned about hydrogenated oils can look at the ingredients and choose to avoid the product. But if lawsuits like this one were allowed to succeed, then any product that includes hydrogenated oils as allowed by the FDA would be subject to suit, even though the ingredient was properly disclosed on the label in the ingredients section.
This month's Torts Twits are creative, as they found 8 causes of action to assert against Yoo-hoo. They pled false advertising under the Lanham Act, violation of the Texas DTPA, violation of New York's General Business Law section 349, breach of express warranty, breach of the implied warranty of merchantability, breach of the implied warranty of fitness for a particular purpose, deceit and misrepresentation, and unjust enrichment.
There are, of course, no facts specific to the plaintiff that are pled in this complaint, and thus it should be easily dismissed under the Twombly/Iqbal pleading standard. The implied warranty claims are particularly weak, as it seems well-nigh impossible for a drinks manufacturer to have interaction with a consumer in which it makes representations or judgments that would form implied warranties. And there is no express warranty identified in the complaint -- nor could one be identified that would not be mere puffery. The statutory causes of action seem particularly implausible where the very fact allegedly concealed -- the use of partially hydrogenated oils -- is disclosed in the ingredient section on the product's label. And the last two causes of action are tag-along, me-too causes of action that are typically thrown out by courts where there are no underlying tort causes of action.
In sum, this is a ridiculous lawsuit. It's a shame the defendants have to expend money to get it dismissed -- a cost that, no doubt, will be passed along to consumers. And that's why Messrs. Reese and Richman and Ms. Williams are the Tort Twits of the Month for July.
