Filippo Berio and Bertolli Distributors Face Class Action over Olive Oil Quality

Summary

Two class action suits were filed against com­pa­nies rep­re­sent­ing a sig­nif­i­cant por­tion of mass mar­ket olive oil imported to the US from Italy, alleg­ing that the oil labeled as ​‘extra-vir­gin’ actu­ally con­tained refined oil and did not meet qual­ity stan­dards. The law­suits also claim that the mis­lead­ing front-label ​“Imported from Italy” led con­sumers to believe the olives were pressed in Italy, and that fail­ure to pack­age the oil in light-proof con­tain­ers resulted in qual­ity degra­da­tion. Despite motions to dis­miss being denied, the cases raise ques­tions about label­ing require­ments and poten­tial trade impli­ca­tions between the US and the EU.

Two class action suits, Koller et al v. Deoleo USA, Inc. and Med Foods, Inc. (‘Koller’) and Kumar et al v. Salov et al (‘Kumar’) were filed last year in the United States District Court, Northern District of California, against com­pa­nies that together rep­re­sent a con­sid­er­able por­tion of the mass mar­ket olive oil imported to the US from Italy.

The claims in the two actions are roughly the same: first, that what was labeled ​‘extra-vir­gin’ con­tained refined oil and was there­fore not enti­tled to the ​‘extra vir­gin’ label.

Secondly, des­ig­na­tion of the actual ori­gin of the oil was only pro­vided on the back-label while the promi­nent dis­play of ​“Imported from Italy” on the front allegedly mis­led con­sumers into think­ing the olives orig­i­nated and were pressed in Italy.
See Also:The World’s Best Olive Oils
And thirdly, fail­ure to pack­age the oil in light-proof con­tain­ers resulted in qual­ity degra­da­tion such that even if the oil was ​‘extra-vir­gin’ at the time of bot­tling, it was no longer so when it reached the con­sumer due to expo­sure to heat and light.

Plaintiffs in both cases allege that defen­dant distributors/bottlers knew the oil did not qual­ify as ​‘extra-vir­gin’ by the time it reached the con­sumer.

Under California law, these actions allegedly vio­lated California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act, as well as com­mon law fraud and mis­rep­re­sen­ta­tion. .

Subsequent to the fil­ings, United States dis­trict judge Richard G. Seeborg issued a stip­u­lated pro­tec­tive order in the Koller case on October 14, 2014, for ​“infor­ma­tion that might come out of dis­clo­sure and dis­cov­ery activ­ity which might involve pro­duc­tion of con­fi­den­tial, pro­pri­etary, or pri­vate infor­ma­tion.” Presumably, this was on the request of the defen­dant, but the order does not spec­ify who requested such pro­tec­tion.

It is only tan­gen­tially inter­est­ing at this point, given the fact that the area of law known as ​‘trade secrets’ has gen­er­ally gained con­sid­er­able impor­tance in the past two years across a wide array of legal actions and pro­ce­dures. It is there­fore worth watch­ing.

More impor­tantly, on January 6, 2015, Judge Seeborg denied defen­dants’ motions to dis­miss the Koller action, on the grounds that the facts pleaded were suf­fi­cient to allow it to go for­ward, and that it was not nec­es­sary to put forth evi­dence at this stage suf­fi­cient to prove the claims.

If the oils in ques­tion do prove to con­tain ​‘refined oil’ (olive oil that has been chem­i­cally treated to hide, or neu­tral­ize defects and high acid­ity and then usu­ally mixed with higher grade oil to mask any unde­sir­able tastes), it would seem to be a fore­gone con­clu­sion that some degree of fraud as well as vio­la­tion of the above men­tioned statutes, is involved. This will no doubt be deter­mined by sci­en­tific test­ing. It is note­wor­thy how­ever that Judge Seeborg stip­u­lates that plain­tiff Koller need not prove that the bot­tle he pur­chased and tested did in fact con­tain refined oil, only that some bot­tles labeled ​‘extra-vir­gin’ failed to meet that stan­dard.

“In the event Koller is able to prove his alle­ga­tions that the oil gen­er­ally does not war­rant that label because of its qual­ity when first bot­tled and/or because of Deoleo’s pack­ag­ing and han­dling prac­tices, it would hardly be a defense that some bot­tles may nev­er­the­less meet the min­i­mum stan­dards when pur­chased,” Judge Seeborg wrote.

“As the California Supreme Court has held, labels do mat­ter to con­sumers,” said an attor­ney for the plain­tiffs, Hassan A. Zavareei, accord­ing to Law360. ​“And con­sumers are enti­tled to get what they think they are pay­ing for when they try to buy extra vir­gin olive oil from Italy.”

Then there is the ques­tions of whether bot­tles of oil labeled with the actual coun­try of cul­ti­va­tion and press­ing as required under EU law is insuf­fi­cient to com­ply with California law. This would be prob­lem­atic for all European bot­tlers given the neces­sity of dis­tin­guish­ing between the mere require­ment of indi­cat­ing where the olives orig­i­nate on the one hand, and the Protected Designation of Origin regime in effect through­out the EU, a much stricter des­ig­na­tion requir­ing appli­ca­tion, scrutiny of claims and reg­is­tra­tion.

Also of inter­est is whether bot­tlers have a legal respon­si­bil­ity, despite the fact that no reg­u­la­tions either in the EU or in California so require, to pack­age extra vir­gin oil in dark bot­tles and keep them below a cer­tain tem­per­a­ture through tran­sit, stor­age and shelf dis­play, so as to min­i­mize dam­age from light and heat. While keep­ing olive oil in dark bot­tles has been found to be bet­ter at main­tain­ing qual­ity, some con­sumers appear to pre­fer clear bot­tles which let them see the color of the oil.

If the class actions suc­ceed to impose on bot­tlers a legal require­ment to store in dark bot­tles and cooled trans­port, stor­age and dis­play, it will trans­form not only the legal regime reg­u­lat­ing the olive oil trade, but no doubt cause seri­ous trade prob­lems between the US and the EU, espe­cially in light of the ​‘reg­u­la­tory con­ver­gence’ mea­sures at issue in nego­ti­at­ing the Transatlantic Trade and Investment Partnership (TTIP). These are def­i­nitely cases worth watch­ing.

• Koller v. Med Foods, Inc. et al case docket


• Justia dock­ets and fil­ings


• Law360