Consumer Law

maintaining outdated article on website about former supplier wasn’t false association

maintaining outdated article on website about former supplier wasn’t false association

Archi’s Acres, Inc. v. Whole Foods Market Service, Inc., 2021
WL 424286, No. 19-CV-2478 JLS (MSB) (S.D. Cal. Feb. 8, 2021)

Plaintiffs are farmers and growers of high-quality living
organic basil. Whole Foods began purchasing small quantities of basil from them
and selling the product in Whole Foods Market stores in the San Diego area in
2007. In 2012, they allegedly signed a contract committing to purchase $573,000
in basil from plaintiffs per year, and then Whole Foods gave plaintiffs a
“local producer loan” to buy greenhouse equipment, presenting them with an
oversized check for $100,000 at the opening of a Whole Foods in Del Mar,
California. Whole Foods allegedly used and continued to use a photograph of
this event in its advertising materials “to show Defendants’ purported
commitment to local farms and giving back to the local community.” Yet, after
completing the greenhouse project, they abandoned plaintiffs, ultimately
ceasing orders from plaintiffs.

Lanham Act false association: Whole Foods argued that the
complaint was unrelated to any products. Plaintiffs argued initial interest
confusion: the ads and website allegedly confused consumers into thinking the
parties were associated, and that plaintiffs’ products were available for sale
in Whole Foods stores, luring them to those stores where they would have to buy
something other than plaintiffs’ products.

Honestly that seems more persuasive than most IIC claims,
and yet the court dismissed the claim as not sufficiently pled. Plaintiffs
alleged only a possibility of diversion. The uses were on the Whole Foods
website as an article from 2013 describing “[a] recent Local Producer Loan from
Whole Foods,” a picture of them receiving the oversized loan check, and videos
of plaintiffs/their farm. “These facts do not tend to mislead consumers about
the association between Plaintiffs and Defendants because Plaintiffs and
Defendants were associated at the time of the article; Defendants did issue
Plaintiffs a local producer loan.” And the article didn’t make specific
representations about when or in what quantities plaintiffs’ basil would be
available in Whole Foods stores; it was available for several years.

In addition, plaintiffs didn’t plausibly allege intended
diversion, which is vital to IIC. It was more plausible that Whole Foods was
promoting a specific event—the loan.

False advertising: Plaintiffs didn’t plausibly plead a false
or misleading statement in a commercial advertisement or promotion. The picture
and videos weren’t false or misleading; the article didn’t say that plaintiffs’
products were currently available for purchase in Whole Foods stores, but that
the loan “will help…bring Archi’s Acres basil into all Whole Foods Market
stores in Southern California.”

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