SAN FRANCISCO (CN) – Reconsidering his previous dismissal, a federal judge has decided to advance a class action accusing Chipotle Mexican Grill of falsely advertising its food as made from only non-GMO ingredients.
U.S. District Judge Haywood Gilliam Jr. said he’d changed his mind in light of Davidson v Kimberly-Clark Corp., a recent case involving supposedly “flushable” toilet wipes. In that case, the Ninth Circuit held that under some circumstances it may be possible for a consumer to seek injunctive relief after already buying a product and knowing or suspecting the label or advertising to be false.
Gilliam said that situation applies to this case, in which several Chipotle customers sued after eating at the chain.
“Importantly, the Ninth Circuit’s conclusion is narrower than a blanket conclusion that plaintiffs seeking injunctive relief in mislabeling class actions always have standing,” he wrote in the Sept. 29 order.
The case was originally brought by Colleen Gallagher in August 2015. She claimed Chipotle’s much-touted “Food With Integrity” campaign, which promoted Chipotle as the first fast food chain in the United States to use only ingredients derived from non-genetically modified sources. But according to Gallagher, Chipotle’s tacos, burritos, sour cream and cheese all come from cows fed with genetically modified feed.
Gallagher dropped out of the case in April 2016, and Gilliam dismissed it. But another group of Chipotle customers – Martin Schneider, Sarah Deigert, Theresa Gamage, and Nadia Parikka – took up the fight and filed another class action later that month, which Gilliam also dismissed for lack of standing.
But on Monday, Gilliam granted the plaintiffs’ motion for reconsideration and denied Chipotle’s motion for summary judgment.
“Plaintiffs have offered sufficient evidence to create a disputed issue of material fact that named plaintiffs would not have purchased the Chipotle meat and/or dairy products were it not for the allegedly misleading branding,” he wrote.
Gilliam said Chipotle hadn’t shown the plaintiffs weren’t harmed by the alleged misleading campaign and rejected the restaurant’s argument the plaintiffs failed to show they paid a premium for the supposedly non-GMO food, accepting a report from economic expert Dr. Jon Krosnick.
“Dr. Krosnick’s report is relevant to plaintiffs’ theory that Chipotle, by displaying ‘non-GMO’ representations, misled consumers into believing that the meat and dairy products came from animals that did not consume GMO feed,” Gilliam wrote. “The report therefore provides extrinsic evidence of some weight that a reasonable consumer would pay less for Defendant’s products if not for the alleged misrepresentation. Whether or not a jury is likely to find the evidence persuasive, this is sufficient to present a genuine issue of material fact as to whether plaintiffs have suffered economic harm.”
Gilliam also said the fact that Chipotle took down its non-GMO ads does not render the case moot, writing, “Defendant has not met this high burden by demonstrating that the alleged misrepresentations have totally and irrefutably ceased.”
The judge also certified three separate classes of customers in California, Maryland and New York who bought Chipotle products between April 27, 2015, and June 30, 2016.
In an email, Chipotle spokesperson Laurie Schawlow said the chain doesn’t comment on pending litigation.
Class attorney Mario Man-Lung Choi did not immediately respond to an email seeking comment.
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