Judge Partially Reinstates Trade Group's Lawsuit

Summary

A fed­eral judge par­tially rein­stated a law­suit filed by the North American Olive Oil Association against Veronica Foods and its retail­ers, accus­ing them of mak­ing false, mis­lead­ing, and sci­en­tif­i­cally unsub­stan­ti­ated com­ments about olive oil. The NAOOA argued that the court over­looked facts in the com­plaint that estab­lish the asso­ci­a­tion’s stand­ing to sue on its own behalf, but the judge main­tained that the NAOOA failed to prove indi­vid­ual mem­bers expe­ri­enced tan­gi­ble losses or that the asso­ci­a­tion has legal stand­ing to recu­per­ate losses for its mem­bers.

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.

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.

“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.