Business

Judge Partially Reinstates Trade Group's Lawsuit

A federal judge has ruled that the North American Olive Oil Association may sue Veronica Foods on its own behalf, but not on behalf of its members. An attorney for Veronica Foods has again filed a motion to dismiss the case.

Aug. 29, 2018
By Daniel Dawson

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A fed­eral judge in a Long Island Dis­trict Court has ruled to par­tially rein­state a law­suit filed against Veron­ica Foods and seven of its asso­ci­ated retail­ers by the North Amer­i­can Olive Oil Asso­ci­a­tion (NAOOA), a trade group that rep­re­sents olive oil importers.

Con­sumers should not be mis­led into think­ing they have to buy super-expen­sive olive oils from a spe­cialty store to get health ben­e­fits.- Joseph R. Pro­faci, NAOOA

Veron­ica Foods sup­plies olive oils to hun­dreds of spe­cialty retails shops through­out the U.S. where oils are dis­played in stain­less con­tain­ers, called fusti, and cus­tomers are invited to taste oils before they make a pur­chase.

We are pleased with this deci­sion, and it reaf­firms the NAOOA’s com­mit­ment to take on those in our indus­try who unfairly and inac­cu­rately dis­par­age oth­ers in the cat­e­gory to gain a com­pet­i­tive advan­tage,” Joseph R Pro­faci, exec­u­tive direc­tor of the NAOOA, said in a press release.

We also believe that the cir­cum­stances of the case should per­mit the NAOOA to sue on behalf of its mem­bers who are dam­aged by such mis­rep­re­sen­ta­tions, and we are con­sid­er­ing how best to respond to the court’s deci­sion to the con­trary on that issue,” he added.

Arthur Spatt, the judge pre­sid­ing over the case, over­turned parts of his orig­i­nal deci­sion after the NAOOA argued that the court had over­looked facts in the com­plaint that allege the trade asso­ci­a­tion has stand­ing to sue on its own behalf.

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In the instant case, NAOOA […] claims that it may sue on its own behalf because it has spent con­sid­er­able finan­cial resources to com­bat mis­rep­re­sen­ta­tion from the Defen­dants’ alleged false adver­tis­ing and dis­parag­ing state­ments,” Spatt wrote in his deci­sion. In the Court’s view, these alle­ga­tions are suf­fi­cient to estab­lish an association’s indi­vid­ual stand­ing.”

How­ever, Spatt reaf­firmed that the NAOOA failed to prove that any of its indi­vid­ual mem­bers had expe­ri­enced tan­gi­ble losses due to the claims made by Veron­ica Foods and also failed to prove that the asso­ci­a­tion has legal stand­ing to recu­per­ate losses for its mem­bers.

Pro­faci told Olive Oil Times that he dis­agreed with the judge’s deci­sion for these lat­ter two points and planned to go ahead with the suit.

We don’t agree with the judge’s deci­sion not to rec­og­nize asso­ci­a­tional stand­ing on behalf of NAOOA’s mem­bers,” he said. This is a legal ques­tion, and our coun­selors have told us that they believe we have met the legal stan­dard.”

He declined to com­ment any fur­ther about the case while the lit­i­ga­tion is pend­ing.

Adam Gutride, Veron­ica Foods’ attor­ney, told Olive Oil Times that he is dis­ap­pointed by the judge’s rul­ing and plans to con­tinue fight­ing the mat­ter on his client’s behalf.

The court ruled that NAOOA has passed one tech­ni­cal hur­dle of show­ing stand­ing to sue, but only for a por­tion of the case,” he said. We already moved to dis­miss the case on other grounds that the Court has not yet con­sid­ered. The Court agreed to address that motion after NAOOA dis­misses its appeal.”

The com­plaint was orig­i­nally filed in 2016 against Veron­ica Foods and sev­eral of its New York-based retailer for what the NAOOA claimed were false, mis­lead­ing and sci­en­tif­i­cally unsub­stan­ti­ated com­ments the com­pany had made about olive oil sold in super­mar­kets.

We are very sup­port­ive of efforts to mar­ket high-qual­ity extra vir­gin olive oils, but con­sumers should not be mis­led into think­ing they have to buy super-expen­sive olive oils from a spe­cialty store to get health ben­e­fits,” Pro­faci said. Con­sumers should be con­fi­dent in the qual­ity of the vast major­ity of olive oil being sold in the U.S. retail mar­ket, includ­ing their local super­mar­kets.”

The NAOOA went on to accuse Veron­ica Foods of a tar­geted and con­certed effort to attack the NAOOA and its mem­bers’ olive oil prod­ucts sold in super­mar­kets.”

Veron­ica Foods has denied these claims.

Our com­pany has been built on import­ing and sell­ing the high­est qual­ity extra vir­gin olive oils,” Gutride said. Our core mis­sion is to offer the con­sumer trans­parency, trace­abil­ity and edu­ca­tion in an often con­fus­ing mar­ket.”

Last Novem­ber the law­suit was dis­missed by Spatt, the same fed­eral judge, after the defen­dants’ motion to dis­miss the case was granted. The defen­dants asserted that the NAOOA had not suf­fi­ciently proven that its mem­bers had suf­fered injury due to the defen­dants’ claims.

Gutride said that Veron­ica Foods had already refiled their motion to dis­miss the case, well before the 30-day dead­line granted by the court.

We intend to con­tinue to fight the mat­ter,” Gutride said.


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