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Food Court Report: Trial Court Dismissed Suit Alleging Deceptive Practices in Use of Non-GMO Claims

A federal trial court in California recently dismissed a complaint alleging that a restaurant chain had failed properly to disclose genetically modified ingredients in certain menu items. The case we are referring to is Gallagher v. Chipotle Mexican Grill, Inc.

Facts of the Case

At some time after April 2015, Plaintiff Colleen Gallagher purchased food and beverage items from an unspecified Chipotle Mexican Grill (Chipotle) location. When Ms. Gallagher purchased those products, she claims that she had relied on Chipotle's representation that its products did not contain any genetically modified organisms (GMOs). Ms. Gallagher complained to the Court that Chipotle failed to disclose or intentionally concealed the fact that certain meat, dairy and soft drink products contained GMO ingredients.  Ms. Gallagher claims that she would not have purchased items from Chipotle had she known this.

Ms. Gallagher based these allegations on her claim that Chipotle's meat and dairy products were derived from animals that allegedly consumed genetically modified feed. She also claimed that third-party soft drinks sold at Chipotle contained GMOs.

On this basis, Ms. Gallagher sued Chipotle under: 1) the California Consumers Legal Remedies Act (CLRA); 2) the California False Advertising Law (FAL); and 3) the California Unfair Competition Law (UCL).

What the Court Said

The Court dismissed Ms. Gallagher's complaint with leave to amend upon Chipotle's Motion to Dismiss for Plaintiff's failure to plead legally sufficient claims. The plaintiff has since amended her complaint, but the Court's decision remains instructive. The Court noted that claims of deceptive business practices involved questions of fact and, as such, these claims are usually not appropriate for resolution at the Motion to Dismiss stage. In this case, however, the Court found that Ms. Gallagher's complaint amounted to the rare set of claims for which granting a motion to dismiss was appropriate.

Specifically, Ms. Gallagher did not allege that any of the ingredients used by Chipotle were themselves GMO; she alleged that meat and dairy ingredients were derived from animals that in turn consumed GMOs in their feed. Additionally, and more significantly, the Court questioned whether a reasonable consumer would believe that meat or dairy was genetically modified merely because the animal from which it was produced had consumed GMO feed products. Ms. Gallagher also failed to specify which of the alleged "GMO" menu items she consumed.

Finally, Chipotle had specifically disclosed on its website that it sells soft drinks that contain GMO's, and that its meat and dairy items are derived from animals that consumed GMO products.

What Food Producers Should Do

This case is significant because the Court stated that, at least as pled, consumers reasonably would not believe that meat or dairy ingredients - which themselves had not been genetically modified - would fail to qualify as non-GMO. Stated another way, given how the complaint was pled, the Court found as a matter of law that the term "non-GMO" only describes the actual meat or dairy product itself or, at most, the animal from which they derive, but should not be reasonably taken to include the feed that those animals consumed. Significantly, the Court noted as an aside that the case may have been decided differently with "organic" claims because the organic certification by definition excludes meat and dairy products from animals that consumed GMOs.

Food producers should also take note that a website disclaimer was further indication, for this Court, to counter any misperception that might arise out of a more general statement in advertisements or signage. While we can expect the plaintiffs' bar to continue to try to expand the law of deceptive business practices with regard to non-GMO claims,(and indeed, the plaintiff in this case has already amended her complaint), this decision represents a significant victory for food producers.