Whole Foods Class Actions Creep Toward Trial

SAN FRANCISCO (CN) - Two class actions claiming Whole Foods Market mislabeled its baked goods as "all natural" will move forward, despite scant evidence on the purchases plaintiffs made, a federal judge ruled Tuesday.

Lead plaintiff Mary Garrison filed two class actions against the grocery chain, in 2013 and 2014, saying customers paid premium prices for " all natural " cookies, muffins and other goods that contained synthetic ingredients.

The two suits separately address claims about gluten-free and non-gluten free products.

Even though Mary and co-plaintiff Grace Garrison had no receipts and could not say precisely when they bought the products, they testified in depositions that they bought "all natural"-labeled baked goods multiple times.

Their deposition testimony "is sufficient to create a factual issue for a jury," U.S. District Judge Vince Chhabria wrote in his March 29 ruling on a motion for summary judgment.

Assuming a jury might believe the Garrisons' testimony and letters they sent to Whole Foods before filing suit, a jury could find the plaintiffs paid more than they would have had they known the baked goods contained a synthetic ingredient, Chhabria wrote in a 4-page ruling.

The "all natural" labeled goods were made with the additive sodium acid pyrophosphate. Whole Foods has since removed the "all natural" label from those products.

During a hearing this month, Whole Foods attorneys told Chhabria the plaintiffs lack evidence to support their claim for damages.

But though the Garrisons offer only "baseless speculation" on how much they overpaid, Chhabria said, it would be unfair to grant summary judgment at this stage because discovery on damages and expert testimony is not over.

"Expert discovery is still open, and evidence about a price premium would most likely come from expert testimony, so it would be reasonable to interpret the court's scheduling order as saying discovery has not closed on the question of damages," Chhabria said.

Whole Foods also argued the plaintiffs could not seek restitution from the manufacturing entity Whole Foods Market Group because it sold baked goods at cost to the retailer, Whole Foods Market California, and made no profit.

But Chhabria found that argument "vaguely worded" and its accuracy untested, and said it would be "premature" to enter judgment in favor of the defendants on those grounds now.

However, Whole Foods did shed two claims through its motion for summary judgment.

Because plaintiffs sent the required pre-suit notice to the wrong Whole Foods entity and "never bothered to cure this defect," Whole Foods need not face claims that it violated California's Consumer Legal Remedies Act.

Chhabria also threw out the breach of contract claim, finding the customers never entered into an agreement with the grocery chain.

A settlement conference before U.S. Magistrate Judge Elizabeth Laporte has been set for June 2.

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