(CN) – Quaker must face a lawsuit that claims it misleads customers to paying top-dollar prices for products falsely advertised as having zero trans fats, a federal judge ruled.
Daniel Askin sued Quaker Oats in January 2011, hoping to represent a nationwide class of consumers who purchased Quaker products with allegedly deceptive labels. The claims echo those of a February 2010 federal class action currently pending in San Jose.
Askin’s complaint claims that Quaker has “engaged in a wide-spread marketing campaign to mislead consumers about the nutritional and health qualities of its products” since 2006.
While Quaker products state on their packages that they contain “0 grams of trans fat” and are “heart healthy,” they actually contain less than 0.5 grams per serving and up to 5 grams per box, Askin claimed. The complaint cited studies finding that trans fats “contribute to heart disease, Type 2 diabetes, and cancer.”
Askin alleged that he paid a premium for Quaker products, especially Chewy granola bars and instant oatmeal, because he believed the allegedly deceptive statements on the labels.
U.S. District Judge Young Kim rejected Quaker’s claim that the complaint should be dismissed for lack of jurisdiction.
Quaker had argued that the alleged premium Askin paid for Quaker products is not a real injury and, additionally, his “health concern is hypothetical at best given the ‘insignificant’ amounts of trans fat” in the products.
Kim disagreed, however, saying that Askin “paid more for those products than he would have had he known they contain an ingredient he was determined to avoid because of its known health risks. That price differential represents a concrete injury-in-fact.”
The judge analogized Askin’s decision not to purchase products containing trans fat to a vegan’s decision not to eat meat.
“Suppose Askin were a vegan, and that he purchased food products that were labeled as containing ‘0 grams of animal products,’ only to find out later that the food contained trace amounts of animal fat,” Kim wrote. “Askin could not argue in that situation that he had been harmed physically, but it would be obvious that he would not have purchased the products absent the labeling message.”
“Regardless of whether Askin was physically harmed by the products he consumed, he alleges that he would not have purchased them absent the allegedly misleading statements,” Kim added. “That allegation states the kind of economic injury that is redressable through this suit.”
Both Quaker and the named plaintiffs in the California action filed motions to dismiss under the first-to-file rule. The court will next determine whether this case will survive those attacks.