A federal judge gave a go to a class action lawsuit against Nestle claiming the company violated federal and state laws by applying its unverified “No GMO” label to products.
The lawsuit was filed by California resident Jennifer Latiff who claims that Nestle USA’s “No GMO Ingredients” label was deceitful and cheated her and other consumers into buying the product. She said she would never buy it if she knew it contained genetically modified organisms.
According to the claim, Nestle violated the Federal Trade Commission’s food certification guidelines and California’s unfair competition laws.
Nestle, on the other hand, claims that Latiff’s allegations have no standing and could not demonstrate a “real and immediate threat” of injury.
But U.S District Judge Otis D. Wright II ruled in a 9-page order Thursday that Latiff had the standing to submit the claim. The judge said that, in fact, the plaintiff suffered harm because she relied on Nestle’s label when making her purchases.
“Since plaintiff alleges that she relied on defendant’s label, thereby paying higher market prices than she would have otherwise paid, plaintiff has standing,” Wright wrote.
In fact, the claim was made on two grounds. First, the plaintiff argued that Nestle’s used a self-awarded seal which can make consumers think that the seal had been awarded by a neutral third party. She also said Nestle’s seal was likely to mislead consumers because it was similar to the Non-GMO Project’s seal, which held products to a higher standard. Second, the plaintiff argued Nestle’s products may be made from animals that are fed GMO feed.
According to the Federal Trade Commission’s Guides for the Use of Environmental Marketing Claims, it is deceptive to misrepresent that a product has been endorsed or certified by an independent third party. The guides say that it should make clear whether the seal is self-awarded or is a third party seal.
A few years ago, FTC Senior Attorney Lesley Fair wrote on the FTC’s blog, “General certifications can convey a wide range of meaning to consumers, including that a product has specific and far-reaching environmental benefits and that a product has no negative environmental impact.”
Although we’ll have to wait and see how this case develops, it will have some implications for self-created seals.
