Herceg v. Chobani, LLC

Background

Agnes Herceg brought a proposed class action against Chobani, LLC, alleging that statements on Chobani’s Fair Trade USA-certified dairy products were deceptive and misleading. The packaging stated that consumers were choosing products made under the “highest standards,” promoting “sustainable livelihoods,” supporting safe working conditions, and supporting “safe” animal care. Herceg alleged that the Fair Trade USA standards were weaker than other worker-protection programs, did not provide benefits beyond some existing legal requirements, and did not adequately address animal welfare.

Herceg asserted claims under sections 349 and 350 of the New York General Business Law, claims under consumer-protection laws of other states on behalf of herself and proposed class members, and a common-law breach-of-express-warranty claim. Chobani moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.

New York Consumer-Protection Claims

The court held that Herceg failed to state claims under New York General Business Law sections 349 and 350. Those provisions generally prohibit materially misleading consumer practices and false advertising. The court explained that Herceg mainly criticized the adequacy of the Fair Trade USA certification and argued that better standards existed. She did not allege that Chobani failed to comply with the Fair Trade USA standards or identify actual dairy-farm practices that contradicted the packaging’s representations.

The court found that the allegations about “highest standards” and “promoting sustainable livelihoods” amounted to criticism of the certification’s methodology, rather than a plausible allegation that Chobani’s statements were false or misleading to reasonable consumers. The court also rejected the animal-care theory. Although Herceg alleged that the relevant agricultural standard was silent about animal welfare, the document incorporated into the complaint required dairies to comply with local and national laws governing the care and treatment of farm animals. The court concluded that the allegations were therefore implausible and that disagreement with the adequacy of those requirements did not make the statements actionable.

The court also rejected Herceg’s omission theory. It reasoned that Chobani did not alone possess the allegedly omitted information because the complaint referred to publicly available standards and resources. The court stated that the New York statutes do not require businesses to provide every piece of information a consumer might want to know.

Other State-Law Class Claims

The court dismissed the proposed claims under other states’ consumer-protection laws because Herceg had not stated a valid New York consumer-protection claim and the court therefore lacked jurisdiction over those claims involving unnamed out-of-state class members.

Express-Warranty Claim

The court also dismissed Herceg’s express-warranty claim. An express warranty is a seller’s factual statement or promise about goods that becomes part of the bargain. The court concluded that Herceg had not plausibly alleged a breach because her allegations showed, at most, that Chobani followed the Fair Trade USA standards described on the packaging. She did not allege that the products failed to match those representations.

Disposition

Judge Kenneth M. Karas granted Chobani’s motion to dismiss. The dismissal of Herceg’s claims was without prejudice because this was the first adjudication of the claims on the merits. The court allowed Herceg 30 days to file an amended complaint if she had a good-faith basis to do so. The court stated that failure to amend properly and on time would result in dismissal of the claims with prejudice.