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On September 29, the U.S. District Court in the Northern District of California granted a motion for class certification in Schneider, et al v. Chipotle Mexican Grill, Inc., Case No. 16-cv-02200-HSG. The four plaintiffs in the case are alleging that Chipotle’s claims that its products were “non-GMO” and “GMO-free” violated California, Maryland, and New York consumer protection laws.
According to Maryland’s consumer protection law, a "[f]alse, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers" is a deceptive trade practice (Md. Code, Commercial Law Article § 13-301(1)). Similarly, a "[f]ailure to state a material fact if the failure deceives or tends to deceive" is a deceptive practice under § 13-301(3).
The Plaintiffs claim representations on three in-store signs displayed during the class period (between April 27, 2015 and June 30, 2016), were misleading. The signs stated, respectively, (1) “[w]hen it comes to our food, genetically modified ingredients don’t make the cut,”; (2) “all of our food is nonGMO,”, and; (3) “only non-GMO ingredients.” Specifically, the Plaintiffs allege that Chipotle’s advertising and labeling was misleading and deceptive because consumers reasonably understood these representations to mean “that Chipotle does not serve food sourced from animals that have been raised on GMOs or genetically engineered feed.” Chipotle, however, during the class period served protein products such as beef, chicken, and pork from poultry and livestock raised on GMO feed, dairy products such as cheese and sour cream produced by milk from such animals, and beverages made with corn-syrup from GMO corn.
There are a number of factors a court considers when deciding whether a case should be able to proceed as a class action lawsuit.
In order to proceed as a class action, the Plaintiffs had to prove that case met the four requirements of Rule 23(a) of the Federal Rules of Civil Procedure. The four requirements are: numerosity, commonality, typicality, and adequacy of representation.
Numerosity (Rule 23(a)(1)) requires that the class is “so numerous that joinder of all members is impracticable.” The Plaintiffs and Defendant agreed this standard was met based on the “millions of units” sold by Chipotle.
Commonality (Rule 23(a)(2)) requires that “there are questions of law or fact common to the class.” Plaintiffs argued that claims of all members of the proposed classes will share common questions of law as to whether Chipotle’s advertising was misleading and likely to deceive a reasonable consumer. The Court agreed that the alleged issues were common enough to satisfy this requirement.
Typicality (Rule 23(a)(3)) requires that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” The Court found that typicality was satisfied because the class members’ claims arose the same course of events, and each class member will have similar legal arguments to prove the Chipotle’s liability.
Adequacy of representation (Rule 23(a)(4)) requires that the “named parties will fairly and adequately represent the interests of the class.” The Court found the named parties had no conflicts to prevent them from vigorously carrying out the action on behalf of the class members.
The Court also found Plaintiffs’ misleading labeling claims satisfied Federal Rule of Civil Procedure 23(b)(2) which requires claims to be so similar that a single form of legal relief (an injunction) would provide relief to each member of the class.
Finally, Plaintiffs were also able to satisfy Federal Rule of Civil Procedure 23(b)(3), which required Plaintiffs to show predominance and superiority. Plaintiffs were able to meet the predominance element by demonstrating the parties have common questions of law because they share common exposure to the alleged misleading labeling. The Court also found a class action type lawsuit was superior to other available methods for fairly and efficiently dealing with the case.
Based on the findings outlined above, the classes the Court certified are as follows:
California: All persons in California who purchased Chipotle’s Food Products containing meat and/or dairy ingredients during the Class Period (between April 27, 2015 and June 30, 2016).
Maryland: All persons in Maryland who purchased Chipotle’s Food Products containing meat and/or dairy ingredients during the Class Period (between April 27, 2015 and June 30, 2016).
New York: All persons in New York who purchased Chipotle’s Food Products containing meat and/or dairy ingredients during the Class Period (between April 27, 2015 and June 30, 2016).
This ruling did not decide the merits of the Plaintiffs’ claims but simply authorized the case to move forward as a class action rather than a typical lawsuit. Only time will tell if Chipotle will be found to have violated consumer protection laws and, what if any, damages members of the classes will be awarded. Although the case is far from resolved, it serves as a good reminder of the importance of careful labeling of food products.