SAN FRANCISCO (CN) — A federal judge refused to dismiss fraud and false advertising claims accusing Starbucks of ripping off consumers by under-filling lattes by 25 percent.
Californians Siera Strumlauf and Benjamin Robles claim in court that Starbucks instituted a “standardized recipe” in 2009 that saves money on milk by under-filling lattes by 25 percent. The recipe allegedly applies to the coffee giant’s Tall, Grande and Venti-sized lattes.
“At its retail locations, Starbucks represents on its menu that its lattes contain ’12 fl. oz.’ for a Tall, ’16 fl. oz.’ for a Grande, and ’20 fl. oz.’ for a Venti,” according to a 24-page complaint filed in March 2016. “However, Starbucks lattes are uniformly under-filled pursuant to a standardized recipe…Starbucks cheats purchasers by providing less fluid ounces in their lattes than represented.”
U.S. District Judge Thelton Henderson said on Friday that Strumlauf and Robles can advance a class-action lawsuit that seeks damages based on fraud and false advertising. Starbucks had filed a motion to dismiss the claims in April.
“While it is certainly possible that consumers would understand that defendant’s representation intended that the milk foam be part of the fluid ounce measurement, or understand that steamed milk takes up more space than cold milk, it is also possible that consumers would expect the serving cups to be slightly larger, such that the consumers would receive 16 ounces of the fluid portion of the latte when ordering a ‘Grande,'” he wrote in Friday’s 14-page order.
He added that the alleged deception is implausible as a matter of law and that the case should go in front of a jury.
“At this stage, the court finds it probable that a significant portion of the latte-consuming public would believe that a ‘Grande’ contains 16 ounces of fluid, measured without milk foam or in its cooled state,” Henderson wrote. “If nothing else, it is probable enough that the issue should be decided by a trier of fact, not on a motion to dismiss.”
Strumlauf and Robles sued Starbucks Corporation for breach of express warranty, breach of implied warranty of merchantability, unjust enrichment, violation of California’s Consumers Legal Remedies Act, violation of the state’s Unfair Competition and False Advertising Laws, negligent misrepresentation and fraud.
Henderson granted Starbucks’ motion to dismiss the implied warranty of merchantability, unjust enrichment and negligent misrepresentation claims.
He said that the negligent misrepresentation claim is governed by the economic-loss doctrine, which states that tort recovery of economic damages “is barred unless such damages are accompanied by some form of harm to person or property, or the action falls under an exception.”
Henderson said that is not the case in the plaintiffs’ underlying action.
“Thus, in actions for negligence, liability is limited to damages for physical injuries and recovery of economic loss is not allowed,” he explained. “There was no threat of physical harm as a result of defendant’s actions, and no other special situations apply that would warrant finding an exception to the economic loss doctrine.”
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