Rohini Kumar, as readers will remember from my earlier article, initiated a class action suit against Salov in the Northern District Federal Court of California in July 2014 alleging that Salov, the importer of Filippo Berio olive oil from Italy, committed fraud by giving prominence on the label of its product to ‘Imported from Italy’ while minimizing notification of the actual origins of the oil.
The plaintiff also alleged that Salov committed fraud by characterizing the oil as extra virgin. This fraud entailed both mixing ‘refined’ oil with what once may have been extra virgin, the complaint alleges, and by ensuring that even it had been extra virgin, it was degraded by the time it reached the consumer due to the use of clear packaging.
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On Feb 3, 2015, the court denied Salov’s motion to dismiss Kumar’s claims, basically finding that ‘the reasonable consumer’ could well have been deceived into thinking the oil was in fact from Italian olives (in spite of the fact that Kumar acknowledged having read the ‘best by’ dates positioned next to the indication of origin) and that the claims for fraudulent labeling of the oil as ‘extra-virgin’ were sufficiently substantiated for this stage of the pleadings.
Three claims that Kumar Lacked Standing Rejected
The Court rejected Salov’s argument that Kumar had no standing to bring the action because, having become aware of the misstatement, Kumar faced no danger of being further deceived in the future. District Judge Yvonne Gonzalez Rogers stated, “The possibility of future injury is alleged sufficiently if the plaintiff would encounter the same statements today and could not be any more confident that they were true.”
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Salov’s second claim that Kumar lacked standing to bring the ‘extra-virgin’ fraud claim because she failed to show that the actual bottle of olive oil she purchased was not in fact extra-virgin, and therefore failed to show injury in fact, was also rejected. The Judge stated that Kumar needed not “prove that the particular bottle of oil she purchased had, in fact, degraded to the point of not being extra virgin,” and quoted Judge Seeborg in a companion case to the effect that “each consumer who purchases extra virgin olive oil, is entitled to receive oil that meets that definition by design, not by happenstance.”
Salov’s third claim that Kumar lacked standing because she purchased only one product and brings claims against a range of products was also rejected as “a matter to be considered at the class certification stage, not the pleading stage.”
Tariff Act Claim
Salov’s claim that “Kumar cannot rely on the Tariff Act as a basis for her UCL claim because Congress has vested exclusive enforcement authority in the U.S. Customs and Border Protection agency”, was also rejected. The Judge relied on a 2014 US Supreme Court holding to the effect that “even if a private plaintiff is not permitted to enforce a federal statute or regulation directly, the federal law may form the predicate for a private right of action under another federal or state law where the federal law does not expressly prohibit such an action.”
Insufficiency of Claim of Fraud Rejected
Finally, the Judge rejected Salov’s dismissal claim that Kumar’s allegations of fraud were not sufficiently substantiated. She found the claims, which outline the “the who, what, when, where, and how of the misconduct charged,” adequate for this stage of the pleading.
In Salov’s Favor
The Judge did, however, reject Kumar’s claims for breach of contract (finding no contract existed) and found her claim of breach of covenant of good faith and fair dealing insufficiently pleaded and therefore granted Salov’s motion to dismiss these claims. No permission to amend these claims was granted. Salov’s request for judicial notice of a Filippo Berio Extra Virgin Olive Oil bottle label was granted and Salov was given until February 24 to file a response. Check back for updates.
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